ex10_1.htm


Exhibit 10.1






 





 


RESPECT YOUR UNIVERSE, INC.


 







 


PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT


(UNITS)


 


INSTRUCTIONS TO PURCHASER


 


 



	
1.

	
All purchasers must complete all the information on page 14 and sign where indicated.







 



	
2.

	
All purchasers, must complete and sign Exhibit A “Canadian Investor Questionnaire” that starts on page 16. The purpose of the form is to determine whether you meet the standards for participation in a private placement under applicable Canadian securities law (National Instrument 45-106).







 



	
3.

	
If you are resident in the United States, you must complete and sign Exhibit B “United States Accredited Investor Questionnaire” that starts on page 18.







 



	
4.

	
If the subscriber is a corporation, partnership, trust or entity other than an individual or you are a portfolio manager, then complete and sign Exhibit E “Corporate Placee Registration Form” (Form 4C) that starts on page 28.  If you have previously submitted this form to the TSX Venture Exchange and there have been no changes to its content, then please check the box to that effect on page 14.







 



	
5.

	
If you are paying for your subscription with funds drawn from a Canadian bank, you may pay by certified cheque or bank draft drawn on a Canadian chartered bank or by wire transfer to legal counsel for the Company pursuant to the wiring instructions set out in Exhibit C that is on page 20. If you are paying for your subscription with funds drawn on any source other than a Canadian chartered bank, you may only pay by wire transfer to the legal counsel for the Company pursuant to the wiring instructions set out in Exhibit C that is on page 20.







 




  





  











  






 


NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE “AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.


 


IF YOU ARE A RESIDENT OF CANADA, UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.


 


WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.


 


CONFIDENTIAL


PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT


(Subscribers Resident in the United States, Canada, and International Jurisdictions)


 


 



	
TO:                         

	
Respect Your Universe, Inc. (the “Company”)


	  	
818 North Russell St.


	  	
Portland, OR 97227







 


 



PURCHASE OF UNITS




 



	
1.

	
Subscription







 


1.1                           On the basis of the representations and warranties and subject to the terms and conditions set forth herein, the undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase units (each, a ”Unit”) of the Company at a price of US$0.10 per Unit (such subscription and agreement to purchase being the “Subscription”), for an aggregate purchase price as set out on the signature page of this Subscription Agreement (the “Subscription Proceeds”) which is tendered herewith, on the basis of the representations and warranties and subject to the terms and conditions set forth herein.


 


1.2                         Each Unit will consist of one common share in the capital of the Company (each, a “Share”) and one common share purchase warrant (each warrant, a “Warrant”) subject to adjustment. Each Warrant shall be non-transferable. Each Warrant shall entitle the holder thereof to purchase one common share in the capital of the Company (each, a “Warrant Share”), as presently constituted, for a period of three years commencing from the Closing Date (defined herein) at an exercise price of US$0.25 per Warrant Share.  Certificates representing the Warrants will be in the form attached as Exhibit D hereto. The Shares, Warrants and Warrant Shares are referred to herein as the “Securities”.


 


1.3                          The Company hereby agrees to sell, on the basis of the representations and warranties and subject to the terms and conditions set forth herein, the Units to the Subscriber.  Subject to the terms hereof, the Subscription Agreement will be effective upon its acceptance by the Company.


 


1.4                         The Subscriber acknowledges that a finder’s fee or a broker’s commission may be paid by the Company in connection with the Subscription.


 




  





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1.5                         Unless otherwise provided, all dollar amounts referred to in this Subscription Agreement are in lawful money of the United States of America.


 


1.6                         The Subscriber hereby irrevocably authorizes Peter Pan of China Rich Garments Limited (“China Rich”) to act as the Subscriber’s agent in all matters related to this agreement and Clark Wilson LLP and the Company can expressly rely on such authorization.


 



	
2.

	
Payment







 


2.1                        The Subscription Proceeds must accompany this Subscription and shall be wired to Clark Wilson LLP pursuant to wiring instructions attached hereto as Exhibit C or sent directly to the Company. If the Subscription Proceeds are wired to Clark Wilson LLP, those Subscription Proceeds are to remain in trust with Clark Wilson LLP until the Closing (defined herein).


 


2.2                        In the event that this Subscription Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, within 45 days of the delivery of an executed Subscription Agreement by the Subscriber, this Subscription Agreement, the Subscription Proceeds (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in this Subscription Agreement. The Subscriber (or China Rich as agent) may provide written notice to the Company requiring the return of the Subscription Proceeds as soon as practicable if the Closing Date has not occurred within 14 days of receipt of the Subscription Proceeds by Clark Wilson LLP.


 



	
3.

	
Documents Required from Subscriber







 


3.1                        The Subscriber must complete, sign and return to the Company the following documents:


 



	
  

	
(a)

	
an executed copy of this Subscription Agreement;







 



	
  

	
(b)

	
the Canadian Investor Questionnaire in the form attached as Exhibit A (the “CDN Questionnaire”);







 



	
  

	
(c)

	
if resident in the United States, a United States Accredited Investor Questionnaire in the form attached as Exhibit B (together with the CDN Questionnaire, the “Questionnaires”); and







 



	
  

	
(d)

	
if applicable, a completed Corporate Placee Registration Form.







 


3.2                       The Subscriber shall complete, sign and return to the Company as soon as possible, on request by the Company, any additional documents, questionnaires, notices and undertakings as may be required by any regulatory authorities and applicable law.


 


3.3                       Both parties to this Subscription Agreement acknowledge and agree that Clark Wilson LLP has acted as counsel only to the Company and is not protecting the rights and interests of the Subscriber. The Subscriber acknowledges and agrees that the Company and Clark Wilson LLP have given the Subscriber the opportunity to seek, and have recommended that the Subscriber obtain, independent legal advice with respect to the subject matter of this Subscription Agreement and, further, the Subscriber hereby represents and warrants to the Company and Clark Wilson LLP that the Subscriber has sought independent legal advice or waives such advice.


 



	
4.

	
Closing







 


4.1                        Closing of the purchase and sale of the Units (the “Closing”) shall occur on such date or dates as may be determined by the Company and the Subscriber, each in their sole discretion (the “Closing Date”). The Subscriber acknowledges that Securities may be issued to other subscribers under this offering (the “Offering”) before or after the Closing Date. The Company may, at its discretion, elect to close the Offering in one or more closings, in which event the Company may agree with one or more subscribers (including the Subscriber hereunder) to complete delivery of the Securities to such subscriber(s) against payment therefore at any time on or prior to the Closing Date. No Subscription Proceeds will be released to the Company (or to the direction of the Company) unless such release is authorized by the Subscriber or China Rich, as agent for the Subscriber, as part of the Closing.


 




  





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4.2                        The Subscriber acknowledges that the certificates representing the Securities will be available for delivery upon Closing provided that the Subscriber has satisfied the requirements of Section 3 hereof and the Company has accepted this Subscription Agreement. The delivery of the certificates representing the Securities to China Rich (or as otherwise directed by China Rich) and the delivery of the written authorization by China Rich to Clark Wilson LLP to release the Subscription Proceeds shall constitute conclusive evidence that the Closing has occurred.


 



	
5.

	
Acknowledgements and Agreements of Subscriber







 


5.1                        The Subscriber acknowledges and agrees that:


 



	
  

	
(a)

	
none of the Securities have been registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S under the 1933 Act (“Regulation S”), except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable securities laws;







 



	
  

	
(b)

	
the Subscriber acknowledges that the Company has not undertaken, and will have no obligation, to register any of the Securities under the 1933 Act or any other securities legislation;







 



	
  

	
(c)

	
by completing the CDN Questionnaire, the Subscriber is representing and warranting that the Subscriber satisfies one of the categories of prospectus exemptions provided in National Instrument 45-106 (“NI 45-106”) adopted by the British Columbia Securities Commission (the “BCSC”) and other provincial securities commissions;







 



	
  

	
(d)

	
the decision to execute this Subscription Agreement and purchase the Securities agreed to be purchased hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company and such decision is based entirely upon a review by the Subscriber of any public information which has been filed by the Company with the Securities and Exchange Commission (the “SEC”) and/or the BCSC in compliance, or intended compliance, with applicable securities legislation including, but not limited to, the Company’s annual report on Form 10-K for the year ended December 31, 2013;







 



	
  

	
(e)

	
the Subscriber and the Subscriber’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the distribution of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Company;







 



	
  

	
(f)

	
the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Securities hereunder have been made available for inspection by the Subscriber, the Subscriber’s lawyer and/or advisor(s);







 




  





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(g)

	
the Subscriber will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained in this Subscription Agreement, the Questionnaires or in any document furnished by the Subscriber to the Company in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Company in connection therewith;









 



	
  

	
(h)

	
the Company will refuse to register any transfer of the Securities not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and in accordance with any other applicable securities laws;







 



	
  

	
(i)

	
the Subscriber has been advised to consult the Subscriber’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:







 



	
  

	
(i)

	
any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Securities hereunder, and







 



	
  

	
(ii)

	
applicable resale restrictions;







 



	
  

	
(j)

	
neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of any of the Securities and the Shares;







 



	
  

	
(k)

	
no documents in connection with the sale of the Securities hereunder have been reviewed by the SEC or any securities administrators;







 



	
  

	
(l)

	
there are risks associated with the purchase of the Securities;







 



	
  

	
(m)

	
there are restrictions on the Subscriber’s ability to resell the Securities and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Securities;







 



	
  

	
(n)

	
the Company has advised the Subscriber that the Company is relying on an exemption from the requirements to provide the Subscriber with a prospectus, registration statement or other similar document and to sell the Securities through a person registered to sell securities under the relevant securities legislation and, as a consequence of acquiring the Securities pursuant to this exemption, certain protections, rights and remedies provided by such securities legislation, including any statutory rights of rescission or damages, will not be available to the Subscriber;







 



	
  

	
(o)

	
there is no government or other insurance covering any of the Securities; and







 



	
  

	
(p)

	
this Subscription Agreement is not enforceable by the Subscriber unless it has been accepted by the Company.







 



	
6.

	
Representations, Warranties and Covenants of the Subscriber







 


6.1                        The Subscriber hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants shall survive the Closing) that:


 



	
  

	
(a)

	
the Subscriber (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies; (ii) has no need for liquidity in this investment; (iii) is able to bear the economic risks of an investment in the Securities for an indefinite period of time; and (iv) can afford the complete loss of such investment;







 




  





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(b)

	
if applicable, all information contained in the Questionnaires is complete and accurate and may be relied upon by the Company, and the Subscriber will notify the Company immediately of any material change in any such information occurring prior to the Closing;







 



	
  

	
(c)

	
the Subscriber is purchasing the Units for its own account for investment purposes only and not for the account of any other person and not for distribution, assignment or resale to others, and no other person has a direct or indirect beneficial interest is such Securities, and the Subscriber has not subdivided his interest in the Securities with any other person;







 



	
  

	
(d)

	
the Subscriber (i) is able to fend for itself in the Subscription; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Securities; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;







 



	
  

	
(e)

	
the Subscriber is aware that an investment in the Company is speculative and involves certain risks, including the possible loss of the investment;







 



	
  

	
(f)

	
the Subscriber has received and carefully read this Subscription Agreement;







 



	
  

	
(g)

	
the Subscriber has made an independent examination and investigation of an investment in the Securities and the Company and has depended on the advice of its legal and financial advisors and agrees that the Company will not be responsible in anyway whatsoever for the Subscriber’s decision to invest in the Securities and the Company;







 



	
  

	
(h)

	
the Subscriber has the requisite knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Securities and the Company and the Subscriber is providing evidence of such knowledge and experience in these matters through the information requested in the Questionnaires;







 



	
  

	
(i)

	
the Subscriber understands and agrees that the Company and others will rely upon the truth and accuracy of the acknowledgements, representations and agreements contained in this Subscription Agreement and the Questionnaires and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached, it shall promptly notify the Company;







 



	
  

	
(j)

	
the Subscriber has the legal capacity and competence to enter into and execute this Subscription Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporation, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Subscription Agreement on behalf of the Subscriber;







 



	
  

	
(k)

	
the entering into of this Subscription Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable, the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;







 



	
  

	
(l)

	
the Subscriber has duly executed and delivered this Subscription Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber;







 



	
  

	
(m)

	
the Subscriber is not an underwriter of, or dealer in, the Shares, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Securities;







 



	
  

	
(n)

	
the Subscriber will not exercise any stock options or warrants (directly or indirectly) if such exercise would result in the Subscriber beneficially owning 20% or more of the then issued and outstanding Shares;







 




  





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(o)

	
the Subscriber is not aware of any advertisement of any of the Securities and is not acquiring the Securities as a result of any form of general solicitation or general advertising including 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;







 



	
  

	
(p)

	
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; or







 



	
  

	
(iii)

	
as to the future price or value of any of the Securities;







 



	
  

	
(q)

	
if the Subscriber is resident outside of United States:







 



	
  

	
(i)

	
the Subscriber is not a U.S. Person (as defined in Regulation S), is outside the United States when receiving and executing this Subscription Agreement and is acquiring the Units as principal for its own account, as applicable, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Securities;







 



	
  

	
(ii)

	
None of the Securities may be offered or sold to a U.S. Person or for the account or benefit of a U.S. Person (other than a distributor) prior to the end of the Distribution Compliance Period (as defined below);







 



	
  

	
(iii)

	
the statutory and regulatory basis for the exemption claimed for the offer and issuance of the Securities, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act;







 



	
  

	
(iv)

	
the Subscriber is acquiring the Shares as principal for investment purposes only and not with a view to resale or distribution and, in particular, the undersigned has no intention to distribute, either directly or indirectly, any of the Shares in the United States or to U.S. Persons;







 



	
  

	
(v)

	
the undersigned understands and agrees that offers and sales of any of the Securities prior to the expiration of a period of six months after the date of original issuance of the Shares (the six month period hereinafter referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the U.S. Securities Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the U.S. Securities Act or an exemption therefrom and in each case only in accordance with applicable state securities laws;







 



	
  

	
(vi)

	
the undersigned acknowledges that it has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the U.S. Securities Act) in the United States in respect of any of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the undersigned may sell or otherwise dispose of any of the Securities pursuant to registration of any of the Securities pursuant to the U.S. Securities Act of 1933 and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein;







 




  





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(vii)

	
the Subscriber agrees that the Securities will bear a legend, in addition to any other legend required by this agreement, in substantially the following form:







 


NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT OR ANY U.S. STATE SECURITIES LAWS AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.


 



	
  

	
(viii)

	
the Subscriber is knowledgeable of, or has been independently advised as to, the applicable laws of the securities regulators having application in the jurisdiction in which the Subscriber is resident (the “International Jurisdiction”) which would apply to the offer and sale of the Securities,







 



	
  

	
(ix)

	
the Subscriber is purchasing the Securities pursuant to exemptions from prospectus or equivalent requirements under applicable laws or, if such is not applicable, the Subscriber is permitted to purchase the Securities under the applicable laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions,







 



	
  

	
(x)

	
the applicable laws of the authorities in the International Jurisdiction do not require the Company to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Securities,







 



	
  

	
(xi)

	
the purchase of the Securities by the Subscriber does not trigger:







 



	
  

	
A.

	
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction, or







 



	
  

	
B.

	
any continuous disclosure reporting obligation of the Company in the International Jurisdiction, and







 



	
  

	
(xii)

	
the Subscriber will, if requested by the Company, deliver to the Company a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv) above to the satisfaction of the Company, acting reasonably.







 


6.2                         In this Subscription Agreement, the term “U.S. Person” shall have the meaning ascribed thereto in Regulation S promulgated under the 1933 Act and for the purpose of the Subscription Agreement includes any person in the United States.


 



	
7.

	
Representations and Warranties will be Relied Upon by the Company







 


7.1                        The Subscriber acknowledges that the representations and warranties contained herein, and in the Questionnaires are made by it with the intention that such representations and warranties may be relied upon by the Company and its legal counsel in determining the Subscriber’s eligibility to purchase the Securities under applicable securities legislation, or (if applicable) the eligibility of others on whose behalf it is contracting hereunder to purchase the Securities under applicable securities legislation. The Subscriber further agrees that by accepting delivery of the certificates representing the Securities on the Closing Date, it will be representing and warranting that the representations and warranties contained herein and in the Questionnaires are true and correct as at the Closing Date with the same force and effect as if they had been made by the Subscriber on the Closing Date and that they will survive the purchase by the Subscriber of the Securities and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of such Securities.


 




  





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8.

	
Acknowledgement and Waiver







 


8.1                        The Subscriber has acknowledged that the decision to purchase the Securities was solely made on the basis of publicly available information. The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber might be entitled in connection with the distribution of any of the Securities.


 



	
9.

	
Legending of Subject Securities







 


9.1                      The Subscriber hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates or other document representing any of the Securities will bear a legend in substantially the following form:


 



“NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.”


 


“WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL [DATE THAT IS FOUR MONTHS AND A DAY AFTER THE CLOSING.”




 


9.2                         If a resident of Canada, the Subscriber hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates or other document representing any of the Securities will bear a legend, in addition to the legend set out in Section 9.1, in substantially the following form:


 


“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.]”


 


9.3                         The Subscriber hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Subscription Agreement.


 



	
10.

	
Resale Restrictions







 


10.1                      The Subscriber acknowledges that any resale of any of the Securities will be subject to resale restrictions contained in the securities legislation applicable to the Subscriber or proposed transferee. The Subscriber acknowledges that none of the Securities have been registered under the 1933 Act or the securities laws of any state of the United States. The Securities may not be offered or sold in the United States unless registered in accordance with federal securities laws and all applicable state securities laws or exemptions from such registration requirements are available.


 




  





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10.2                      If the Subscriber is resident in Canada, then:


 



	
  

	
(a)

	
the Subscriber is acquiring the Securities pursuant to an exemption from the prospectus requirements of the applicable securities laws and regulations (collectively, the “Legislation”) in all jurisdictions relevant to the purchase, and, as a consequence, the Subscriber will not be entitled to use most of the civil remedies available under the Legislation, including statutory rights of rescission and damages, and the Subscriber will not receive information that would otherwise be required to be provided to the Subscriber pursuant to the Legislation; and







 



	
  

	
(b)

	
any transfer, resale or other subsequent disposition of the Securities may be subject to restrictions contained in the Legislation applicable to the holder of the Securities or to the proposed transferee, including, but not limited to, resale restrictions under the Legislation and the certificates representing the Securities may bear a restrictive legend.







 


10.3                         The Subscriber acknowledges that the Securities are subject to resale restrictions in Canada and may not be traded in Canada except as permitted by the applicable provincial securities laws and the rules made thereunder.


 



	
11.

	
Collection of Personal Information







 


11.1                       The Subscriber acknowledges and consents to the fact that the Company is collecting the Subscriber’s personal information for the purpose of fulfilling this Agreement and completing the Offering. The Subscriber’s personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) may be disclosed by the Company to (a) stock exchanges or securities regulatory authorities, (b) the Company’s registrar and transfer agent, (c) Canadian tax authorities, (d) authorities pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and (e) 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 Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber’s personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) for the foregoing purposes and to the retention of such personal information for as long as permitted or required by law or business practice and for the purposes described in Exhibit “F” to this Agreement. Notwithstanding that the Subscriber may be purchasing Units as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the nature and identity of such undisclosed principal, and any interest that such undisclosed principal has in the Company, all as may be required by the Company in order to comply with the foregoing.


 


11.2                       Furthermore, the Subscriber is hereby notified that:


 



	
  

	
(a)

	
the Company may deliver to any securities commission having jurisdiction over the Company, the Subscriber or this subscription, including any Canadian provincial securities commissions and/or the SEC (collectively, the “Commissions”) certain personal information pertaining to the Subscriber, including such Subscriber’s full name, residential address and telephone number, the number of shares or other securities of the Company owned by the Subscriber, the number of Units purchased by the Subscriber and the total purchase price paid for such Units, the prospectus exemption relied on by the Company and the date of distribution of the Units,







 



	
  

	
(b)

	
such information is being collected indirectly by the Commissions under the authority granted to them in securities legislation, and







 



	
  

	
(c)

	
such information is being collected for the purposes of the administration and enforcement of the securities laws.







 




  





- 10 -











  






 



	
12.

	
Costs







 


12.1                      The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the purchase of the Securities shall be borne by the Subscriber.


 



	
13.

	
Governing Law







 


13.1                      This Subscription Agreement is governed by the laws of the State of Nevada. The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the courts of the State of Nevada.


 



	
14.

	
Survival







 


14.1                      This Subscription Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the purchase of the Securities by the Subscriber pursuant hereto.


 



	
15.

	
Assignment







 


15.1                      This Subscription Agreement is not transferable or assignable.


 



	
16.

	
Severability







 


16.1                      The invalidity or unenforceability of any particular provision of this Subscription Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Subscription Agreement.


 



	
17.

	
Entire Agreement







 


17.1                      Except as expressly provided in this Subscription Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Subscription Agreement contains the entire agreement between the parties with respect to the sale of the Securities and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company or by anyone else.


 



	
18.

	
Notices







 


18.1                      Any notice required or permitted to be given to the Company will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of the Company set forth below or such other address as the Company may specify by notice in writing to the Subscriber, and any such notice will be deemed to have been given and received by the Company to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time or mailing or between the time of mailing and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered:


 


Respect Your Universe, Inc.


818 North Russell St.


Portland, OR 97227


 


Attention:               Jim Nowodworski, Chief Financial Officer


Fax No.                   503-766-6496


 


with a copy to:


 




  





- 11 -











  






 


Clark Wilson LLP


900-885 West Georgia Street


Vancouver, BC, Canada V6C 3H1




 


Attention:               Cam McTavish


Fax No.:                   604-687-6314


 



	
19.

	
Counterparts and Electronic Means







 


19.1                      This Subscription Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument. Delivery of an executed copy of this Subscription Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Subscription Agreement as of the date hereinafter set forth.


 


 


 


 


 


 




  





- 12 -











  






 


IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement as of the date of acceptance by the Company.


 








	  	  	  	  
	
(Number of Units being purchased)

	  	
(Name of Subscriber – Please type or print)

	  
	  	  	  	  
	 	 	 	 
	  	  	  	  
	
(Total Subscription Price)

	  	
(Signature and, if applicable, Office)

	  
	  	  	  	  
	  	  	  	  
	  	  	
(Address of Subscriber)

	  
	  	  	  	  
	  	  	  	  
	  	  	
(City, State or Province, Postal Code of Subscriber)

	  
	  	  	  	  
	  	  	  	  
	  	  	
(Country of Subscriber)

	  
	  	  	  	  
	  	  	  	  
	  	  	
(Email Address)

	  
	  	  	  	  
	  	  	  	  
	  	  	
(Telephone Number)

	  





 


The Purchaser directs the Issuer to issue, register and deliver the certificates representing the Securities as follows:


 



	
 


REGISTRATION INSTRUCTIONS

	  	
 


DELIVERY INSTRUCTIONS


	  	  	  
	 	 	 
	
Name to appear on certificate

	  	
Name and account reference, if applicable


	  	  	  
	 	 	 
	 	 	 
	
Account reference if applicable

	  	
Contact name


	  	  	  
	 	 	 
	 	 	 
	
Address

	  	
Address


	  	  	  
	 	 	 
	 	 	 
	
Tax ID Number


(for US citizens only)

	  	
Telephone Number


	
1.

	
State whether the Subscriber is an Insider of the Issuer:


	  	
      Yes     o

	
No      o


	
2.

	
State whether Subscriber is a member of the Pro Group:


	  	
      Yes     o

	
No     o


	
3.

	
State whether the Subscriber has a current Form 4C on file with the TSX Venture Exchange (if not an individual):


	  	
      Yes     o

	
No      o


	
4.

	
State whether the Subscriber is a registrant:


	  	
      Yes     o

	
No      o


	
5.

	
Number of Shares of the Company held:







 




  





- 13 -











  











 


A C C E P T A N C E


 


The above-mentioned Subscription Agreement in respect of the Units is hereby accepted by Respect Your Universe, Inc.


 


DATED at ___________________________________________ the ________ day of __________________, 2014.


 


RESPECT YOUR UNIVERSE, INC.


 


 



	
Per:         

	  	  
	  	
Authorized Signatory

	  





 


 


 


 


 


 




  





- 14 -











  






 


EXHIBIT A


 


CANADIAN INVESTOR QUESTIONNAIRE


 


All capitalized terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement between Respect Your Universe, Inc. (the “Company”) and the undersigned (the “Subscriber”).


 


The purpose of this Questionnaire is to assure the Company that the Subscriber will meet certain requirements of National Instrument 45-106 (“NI 45-106”).  The Company will rely on the information contained in this Questionnaire for the purposes of such determination.


 


The Subscriber covenants, represents and warrants to the Company that:


 



	
  

	
1.

	
the Subscriber is (tick one or more of the following boxes):







 



	
o

	
(A)

	
a director, executive officer, founder or control person of the Company or an affiliate of the Company


	 	 	 
	
o

	
(B)

	
a spouse, parent, grandparent, brother, sister or child of a director, executive officer, founder or control person of the Company or an affiliate of the Company


	 	 	 
	
o

	
(C)

	
a parent, grandparent, brother, sister or child of the spouse of a director, executive officer, founder or control person of the Company or an affiliate of the Company


	 	 	 
	
o

	
(D)

	
a close personal friend of a director, executive officer, founder or control person of the Company


	 	 	 
	
o

	
(E)

	
a close business associate of a director, executive officer, founder or control person of the Company or an affiliate of the Company


	 	 	 
	
o

	
(F)

	
an accredited investor


	 	 	 
	
o

	
(G)

	
a company, partnership or other entity of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, persons described in paragraphs A to F


	 	 	 
	
o

	
(H)

	
a trust or estate of which all of the beneficiaries or a majority of the trustees or executors are persons described in paragraphs A to F







 



	
  

	
2.

	
if the Subscriber has checked box B, C, D, E, G or H in Section 1 above, the director, executive officer, founder or control person of the Company with whom the undersigned has the relationship is:







 



	 
	 





 


(Instructions to Subscriber: fill in the name of each director, executive officer, founder and control person which you have the above-mentioned relationship with. If you have checked box G or H, also indicate which of A to F describes the securityholders, directors, trustees or beneficiaries which qualify you as box G or H and provide the names of those individuals. Please attach a separate page if necessary).


 




  





- 15 -











  






 



	
  

	
3.

	
if the Subscriber has ticked box F in Section 1 above, the Subscriber satisfies one or more of the categories of “accredited investor” (as that term is defined in NI 45-106) indicated below (please check the appropriate box):







 



	
  

	o	
(a) an individual who either alone or with a spouse beneficially owns, directly or indirectly, financial assets (cash or securities) having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds CDN$1,000,000;







 



	
  

	o	
(b) an individual whose net income before taxes exceeded CDN$200,000 in each of the two more recent calendar years or whose net income before taxes combined with that of a spouse exceeded CDN$300,000 in each of those years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;







 



	
  

	o	
(c) an individual who, either alone or with a spouse, has net assets of at least CDN $5,000,000;







 



	
  

	o	
(d) a person, other than an individual or investment fund, that had net assets of at least CDN$5,000,000 as reflected on its most recently prepared financial statements.







 



	
  

	o	
(e) a person registered under securities legislation of a jurisdiction of Canada as an advisor or dealer, or an individual registered or formerly registered as a representative of such an adviser or dealer, other than a limited market dealer registered under the Securities Act (Ontario) or the Securities Act (Newfoundland);







 



	
  

	o	
(f) an investment fund that distributes it securities only to persons that are accredited investors at the time of distribution, a person that acquires or acquired a minimum of CDN$150,000 of value in securities, or a person that acquires or acquired securities under Sections 2.18 or 2.19 of NI 45-106; or







 



	
  

	o	
(g) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law are persons or companies that are accredited investors.







 


The Subscriber acknowledges and agrees that the Subscriber may be required by the Company to provide such additional documentation as may be reasonably required by the Company and its legal counsel in determining the Subscriber’s eligibility to acquire the Securities under relevant legislation.


 


IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ________ day of __________, 2014.


 








	
If an Individual:

	  	
If a Corporation, Partnership or Other Entity:


	  	  	  
	  	  	  
	
Signature

	  	
Print or Type Name of Entity


	  	  	  
	  	  	  
	
Print or Type Name

	  	
Signature of Authorized Signatory


	  	  	  
	  	  	  
	  	  	
Type of Entity







 




  





- 16 -











  






 


EXHIBIT B


 


UNITED STATES ACCREDITED INVESTOR QUESTIONNAIRE


 


All capitalized terms herein, unless otherwise defined, have the meanings ascribed thereto in the Agreement.


 


This Questionnaire is for use by each Subscriber. The purpose of this Questionnaire is to assure the Company that each Subscriber will meet the standards imposed by the 1933 Act and the appropriate exemptions of applicable state securities laws. The Company will rely on the information contained in this Questionnaire for the purposes of such determination. The Securities will not be registered under the 1933 Act in reliance upon the exemption from registration afforded by Section 3(b) and/or Section 4(2) and Regulation D of the 1933 Act. This Questionnaire is not an offer of the Securities or any other securities of the Company in any state other than those specifically authorized by the Company.


 


All information contained in this Questionnaire will be treated as confidential. However, by signing and returning this Questionnaire, each Subscriber agrees that, if necessary, this Questionnaire may be presented to such parties as the Company deems appropriate to establish the availability, under the 1933 Act or applicable state securities law, of exemption from registration in connection with the sale of the Securities hereunder.


 


The Subscriber covenants, represents and warrants to the Company that it satisfies one or more of the categories of “Accredited Investors”, as defined by Regulation D promulgated under the 1933 Act, as indicated below: (Please initial in the space provide those categories, if any, of an “Accredited Investor” which the Subscriber satisfies.)


 



	
_______

	
Category 1

	
An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of US $5,000,000.


	 	 	 
	
_______

	
Category 2

	
A natural person whose individual net worth, or joint net worth with that person’s spouse, on the date of purchase exceeds US $1,000,000 excluding the value of the primary residence of such person(s) and the related amount of indebtedness secured by the primary residence up to its fair market value.


	 	 	 
	
_______

	
Category 3

	
A natural person who had an individual income in excess of US $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of US $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.


	 	 	 
	
_______

	
Category 4

	
A director or executive officer of the Company.


	 	 	 
	
_______

	
 Category 5

	
A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act.


	 	 	 
	
_______

	
Category 6

	
An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories.







 


Note that prospective Subscribers claiming to satisfy one of the above categories of Accredited Investor may be required to supply the Company with a balance sheet, prior years’ federal income tax returns or other appropriate documentation to verify and substantiate the Subscriber’s status as an Accredited Investor.


 


If the Subscriber is an entity which initialled Category 8 in reliance upon the Accredited Investor categories above, state the name, address, total personal income from all sources for the previous calendar year, and the net worth (exclusive of home, home furnishings and personal automobiles) for each equity owner of the said entity:


 




  





- 17 -











  











The Subscriber hereby certifies that the information contained in this Questionnaire is complete and accurate and the Subscriber will notify the Company promptly of any change in any such information. If this Questionnaire is being completed on behalf of a corporation, partnership, trust or estate, the person executing on behalf of the Subscriber represents that it has the authority to execute and deliver this Questionnaire on behalf of such entity.


 


IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ________ day of __________________, 2014.


 








	
If a Corporation, Partnership or Other Entity

	 	
If an Individual:


	  	 	  
	 	 	 
	 	 	 
	
Print of Type Name of Entity

	 	
Signature


	  	 	  
	  	 	  
	
Signature of Authorized Signatory

	 	
Print or Type Name


	  	 	  
	  	 	  
	
Type of Entity

	 	
Social Security/Tax I.D. No.







 


 


 


 


 


 




  





- 18 -











  






 


EXHIBIT C


 


US DOLLAR WIRE INSTRUCTIONS


 


INSTRUCTIONS FOR WIRING FUNDS TO CLARK WILSON LLP


 



	
Beneficiary: Clark Wilson LLP, 900 - 885, West Georgia Street, Vancouver BC V6C 3H1


 


Beneficiary Bank: HSBC Bank Canada, 885 West Georgia Street, Vancouver, BC V6C 3G1


 


SWIFT Code: HKBCCATT


 


Beneficiary Account number: 491689-096


 


Transit Number: 10020 Bank Code: 016


 


Intermediary Bank: HSBC Bank USA, New York, NY, USA


 


ABA Number: 021 000 018


 


SWIFT Code: IRVTUS3N







 


PLEASE ALSO INSTRUCT YOUR BANKER TO QUOTE


YOUR NAME AND OUR FILE NO. 39149-0001


 


PLEASE ENSURE THAT APPLICABLE WIRE FUNDS FOR YOUR BANK AND $25.00 FOR THE RECEIVING BANK’S WIRE CHARGES ARE ADDED TO YOUR WIRED SUBSCRIPTION AMOUNT.


 




  





- 19 -











  






 


EXHIBIT D


 


Form of Warrant


 


THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.


 


IF YOU ARE A RESIDENT OF CANADA, UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.







 


Warrant No. ___________


 


THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID


AT _____________ (______________ TIME) ON ____________________, 2017.


 


SHARE PURCHASE WARRANTS TO PURCHASE COMMON SHARES OF


 


RESPECT YOUR UNIVERSE, INC.


 


THIS IS TO CERTIFY THAT _____________________, (the “Holder”) of ___________________________, has the right to purchase, upon and subject to the terms and conditions hereinafter referred to, up to _______________ fully paid and non-assessable common shares (the “Shares”) in the capital of Respect Your Universe, Inc. (the “Company”) on or before _______ p.m. (________ time) on ____________________, 2017 (the “Expiry Date”) at a price per Share of US$0.25 (the “Exercise Price”) on the terms and conditions attached hereto as Appendix A (the “Terms and Conditions”).


 



	
  

	
1.

	
ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO PURCHASE ONE SHARE. THIS CERTIFICATE REPRESENTS __________________ WARRANTS.







 



	
  

	
2.

	
These Warrants are issued subject to the Terms and Conditions, and the Warrant Holder may exercise the right to purchase Shares only in accordance with those Terms and Conditions.







 



	
  

	
3.

	
Nothing contained herein or in the Terms and Conditions will confer any right upon the Holder hereof or any other person to subscribe for or purchase any Shares at any time subsequent to the Expiry Date, and from and after such time, this Warrant and all rights hereunder will be void and of no value.







 


IN WITNESS WHEREOF the Company has executed this Warrant Certificate this ________ day of ______________, 2014.


 


RESPECT YOUR UNIVERSE, INC.


 



 



	
Per:         

	  	  
	  	
Authorized Signatory

	  





 






  





- 20 -











  






 


APPENDIX A







TERMS AND CONDITIONS dated _________________, 2014 attached to the Warrants issued by Respect Your Universe, Inc.


 



	
1. 

	
INTERPRETATION







 



	
(a) 

	
Definitions







 


In these Terms and Conditions, unless there is something in the subject matter or context inconsistent therewith:


 



	
  

	
(i)

	
“Company” means Respect Your Universe, Inc. until a successor corporation will have become such as a result of consolidation, amalgamation or merger with or into any other corporation or corporations, or as a result of the conveyance or transfer of all or substantially all of the properties and estates of the Company as an entirety to any other corporation and thereafter “Company” will mean such successor corporation;







 



	
  

	
(ii)

	
“Company’s Auditors” means an independent firm of accountants duly appointed as auditors of the Company;







 



	
  

	
(iii)

	
“Director” means a director of the Company for the time being, and reference, without more, to action by the directors means action by the directors of the Company as a Board, or whenever duly empowered, action by an executive committee of the Board;







 



	
  

	
(iv)

	
“herein”, “hereby” and similar expressions refer to these Terms and Conditions as the same may be amended or modified from time to time; and the expression “Article” and “Section,” followed by a number refer to the specified Article or Section of these Terms and Conditions;







 



	
  

	
(v)

	
“person” means an individual, corporation, partnership, trustee or any unincorporated organization and words importing persons have a similar meaning;







 



	
  

	
(vi)

	
“Shares” means the common shares in the capital of the Company as constituted at the date hereof and any shares resulting from any subdivision or consolidation of the shares;







 



	
  

	
(vii)

	
“Warrant Holders” or “Holders” means the holders of the Warrants; and







 



	
  

	
(viii)

	
“Warrants” means the warrants of the Company issued and presently authorized and for the time being outstanding.







 



	
(b) 

	
Gender







 


Words importing the singular number include the plural and vice versa and words importing the masculine gender include the feminine and neuter genders.


 



	
(c) 

	
Interpretation not affected by Headings







 


The division of these Terms and Conditions into Articles and Sections, and the insertion of headings are for convenience of reference only and will not affect the construction or interpretation thereof.


 



	
(d) 

	
Applicable Law







 


The Warrant and the terms hereof are governed by the laws of the State of Nevada. The Holder, in its personal or corporate capacity and, if applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably attorns to the jurisdiction of the courts of the State of Nevada.


 



	
2. 

	
ISSUE OF WARRANTS







 



	
(a) 

	
Additional Warrants







 




  





- 21 -











  






 


The Company may at any time and from time to time issue additional warrants or grant options or similar rights to purchase shares of its capital stock.


 



	
(b) 

	
Warrants to Rank Pari Passu







 


All Warrants and additional warrants, options or similar rights to purchase shares from time to time issued or granted by the Company, will rank pari passu whatever may be the actual dates of issue or grant thereof, or of the dates of the certificates by which they are evidenced.


 



	
(c) 

	
Issue in substitution for Lost Warrants







 



	
  

	
(i)

	
In case a Warrant becomes mutilated, lost, destroyed or stolen, the Company, at its sole discretion, may issue and deliver a new Warrant of like date and tenor as the one mutilated, lost, destroyed or stolen, in exchange for and in place of and upon cancellation of such mutilated Warrant, or in lieu of, and in substitution for such lost, destroyed or stolen Warrant and the substituted Warrant will be entitled to the benefit hereof and rank equally in accordance with its terms with all other Warrants issued or to be issued by the Company.







 



	
  

	
(ii)

	
The applicant for the issue of a new Warrant pursuant hereto will bear the cost of the issue thereof and in case of loss, destruction or theft furnish to the Company such evidence of ownership and of loss, destruction, or theft of the Warrant so lost, destroyed or stolen as will be satisfactory to the Company in its discretion and such applicant may also be required to furnish indemnity in amount and form satisfactory to the Company in its sole discretion, and will pay the reasonable charges of the Company in connection therewith.







 



	
(d) 

	
Warrant Holder Not a Shareholder







 


The holding of a Warrant will not constitute the Holder thereof as a shareholder of the Company, nor entitle him to any right or interest in respect thereof except as in the Warrant expressly provided.


 



	
3. 

	
NOTICE







 



	
(a) 

	
Notice to Warrant Holders







 


Any notice required or permitted to be given to the Holders will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of the Holder appearing on the Holder’s Warrant or to such other address as any Holder may specify by notice in writing to the Company, and any such notice will be deemed to have been given and received by the Holder to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time or mailing or between the time of mailing and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.


 



	
(b) 

	
Notice to the Company







 


Any notice required or permitted to be given to the Company will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of the Company set forth below or such other address as the Company may specify by notice in writing to the Holder, and any such notice will be deemed to have been given and received by the Company to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time or mailing or between the time of mailing and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered:


 


Respect Your Universe, Inc.


818 North Russell St.


Portland, OR 97227


 




  





- 22 -











  






 


Attention:               Jim Nowodworski, Chief Financial Officer


Fax No.                    503-766-6496


 


with a copy, which shall not constitute notice, to:


 


Clark Wilson LLP


900-885 West Georgia Street


Vancouver, BC, Canada  V6C 3H1




 


Attention:              Cam McTavish


Fax No.:                  604-687-6314


 



	
4. 

	
EXERCISE OF WARRANTS







 



	
(a) 

	
Method of Exercise of Warrants







 


The right to purchase shares conferred by the Warrants may be exercised by the Holder surrendering the Warrant Certificate representing same, with a duly completed and executed subscription in the form attached hereto and a bank draft or certified cheque payable to the Company for the purchase price applicable at the time of surrender in respect of the shares subscribed for in lawful money of the United States of America, to the Company at the address set forth in, or from time to time specified by the Company pursuant to, Section 3 (a).


 



	
(b) 

	
Effect of Exercise of Warrants







 



	
  

	
(i)

	
Upon surrender and payment as aforesaid the shares so subscribed for will be deemed to have been issued and such person or persons will be deemed to have become the Holder or Holders of record of such shares on the date of such surrender and payment, and such shares will be issued at the subscription price in effect on the date of such surrender and payment.







 



	
  

	
(ii)

	
Within ten business days after surrender and payment as aforesaid, the Company will forthwith cause to be delivered to the person or persons in whose name or names the shares so subscribed for are to be issued as specified in such subscription or mailed to him or them at his or their respective addresses specified in such subscription, a certificate or certificates for the appropriate number of shares not exceeding those which the Warrant Holder is entitled to purchase pursuant to the Warrant surrendered.







 



	
(c) 

	
Subscription for Less Than Entitlement







 


The Holder of any Warrant may subscribe for and purchase a number of shares less than the number which he is entitled to purchase pursuant to the surrendered Warrant. In the event of any purchase of a number of shares less than the number which can be purchased pursuant to a Warrant, the Holder thereof upon exercise thereof will in addition be entitled to receive a new Warrant in respect of the balance of the shares which he was entitled to purchase pursuant to the surrendered Warrant and which were not then purchased.


 



	
(d) 

	
Warrants for Fractions of Shares







 


To the extent that the Holder of any Warrant is entitled to receive on the exercise or partial exercise thereof a fraction of a share, such right may be exercised in respect of such fraction only in combination with another Warrant or other Warrants which in the aggregate entitle the Holder to receive a whole number of such shares.


 



	
(e) 

	
Expiration of Warrants







 


After the expiration of the period within which a Warrant is exercisable, all rights thereunder will wholly cease and terminate and such Warrant will be void and of no effect.


 



	
(f) 

	
Time of Essence







 


Time will be of the essence hereof.


 




  





- 23 -











  






 



	
(g) 

	
Subscription Price







 


Each Warrant is exercisable at the Exercise Price of US$0.25.  One (1) Warrant and the Exercise Price are required to subscribe for each share during the term of the Warrants.


 



	
(h) 

	
Adjustment of Exercise Price







 



	
  

	
(i)

	
The Exercise Price and the number of shares deliverable upon the exercise of the Warrants will be subject to adjustment in the event and in the manner following:







 



	
  

	
A.

	
if and whenever the shares at any time outstanding are subdivided into a greater or consolidated into a lesser number of shares the Exercise Price will be decreased or increased proportionately as the case may be; upon any such subdivision or consolidation the number of shares deliverable upon the exercise of the Warrants will be increased or decreased proportionately as the case may be;







 



	
  

	
B.

	
in case of any capital reorganization or of any reclassification of the capital of the Company or in the case of the consolidation, merger or amalgamation of the Company with or into any other Company (hereinafter collectively referred to as a “Reorganization”), each Warrant will after such Reorganization confer the right to purchase the number of shares or other securities of the Company (or of the Company’s resulting from such Reorganization) which the Warrant Holder would have been entitled to upon Reorganization if the Warrant Holder had been a shareholder at the time of such Reorganization.







 


In any such case, if necessary, appropriate adjustments will be made in the application of the provisions of this Section 4(h) relating to the rights and interest thereafter of the Holders of the Warrants so that the provisions of this Section 4(h) will be made applicable as nearly as reasonably possible to any shares or other securities deliverable after the Reorganization on the exercise of the Warrants.


 


The subdivision or consolidation of shares at any time outstanding into a greater or lesser number of shares (whether with or without par value) will not be deemed to be a Reorganization for the purposes of this clause.


 



	
  

	
(ii)

	
The adjustments provided for in this Section 4(h) are cumulative and will become effective immediately after the record date or, if no record date is fixed, the effective date of the event which results in such adjustments.







 



	
(i) 

	
Determination of Adjustments







 


If any questions will at any time arise with respect to the Exercise Price or any adjustment provided for in Section 4(h), such questions will be conclusively determined by the Company’s Auditors, or, if they decline to so act any other firm of certified public accountants in the United States of America or chartered accountants in Canada that the Company may designate and who will have access to all appropriate records and such determination will be binding upon the Company and the Holders of the Warrants.


 



	
5. 

	
WAIVER OF CERTAIN RIGHTS







 



	
(a) 

	
Immunity of Shareholders, etc.







 


The Warrant Holder, as part of the consideration for the issue of the Warrants, waives and will not have any right, cause of action or remedy now or hereafter existing in any jurisdiction against any past, present or future incorporator, shareholder, Director or officer (as such) of the Company for the issue of shares pursuant to any Warrant or on any covenant, agreement, representation or warranty by the Company herein contained or in the Warrant.


 




  





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6. 

	
MODIFICATION OF TERMS, ETC.







 



	
(a) 

	
Modification of Terms and Conditions for Certain Purposes







 


From time to time the Company may, subject to the provisions of these presents, modify the Terms and Conditions hereof, for the purpose of correction or rectification of any ambiguities, defective provisions, errors or omissions herein.


 



	
(b) 

	
Warrants Not Transferable







 


The Warrant and all rights attached to it are not transferable.


 


DATED as of the date first above written in these Terms and Conditions.


 




	 	

RESPECT YOUR UNIVERSE, INC.


	 	 
	 	 
	 	
Per:         

	  
	 	  	
Authorized Signatory







 




 


 


 


 


 




  





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FORM OF SUBSCRIPTION


 




	
TO:

	
Respect Your Universe, Inc.










	
  

	
818 North Russell St.








	
  

	
Portland, OR 97227







 


The undersigned Holder of the within Warrants hereby subscribes for ____________ common shares (the “Shares”) of Respect Your Universe, Inc. (the “Company”) pursuant to the within Warrants at US$0.25 per Share on the terms specified in the said Warrants.  This subscription is accompanied by a certified cheque or bank draft payable to or to the order of the Company for the whole amount of the purchase price of the Shares.


 


The undersigned represents that, at the time of the exercise of these Warrants, all of the representations and warranties contained in the Subscription Agreement between the Company and the undersigned pursuant to which these Warrants were issued are true and accurate.


 


The undersigned hereby directs that the Shares be registered as follows:


 



	
NAME(S) IN FULL

	  	
ADDRESS(ES)

	  	
NUMBER OF SHARES


	  	  	  	  	  
	  	  	  	  	  
	  	  	
TOTAL:

	  	  





 


(Please print full name in which share certificates are to be issued, stating whether Mr., Mrs. or Miss is applicable).


 


DATED this ________  day of __________________ , 201_.


 


In the presence of:


 




	  	  	 
	
Signature of Warrant Holder

	  	

Signature of Witness







 


Please print below your name and address in full.


 



	
Name (Mr./Mrs./Miss)

	  	  
	 	 	 
	
Address

	  	  
	  	  	  
	 	 	 





 




 


INSTRUCTIONS FOR SUBSCRIPTION


 


The signature to the subscription must correspond in every particular with the name written upon the face of the Warrant without alteration or enlargement or any change whatever.  If there is more than one subscriber, all must sign.  In the case of persons signing by agent or attorney or by personal representative(s), the authority of such agent, attorney or representative(s) to sign must be proven to the satisfaction of the Company.  If the Warrant certificate and the form of subscription are being forwarded by mail, registered mail must be employed.


 




  





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EXHIBIT E







FORM 4C


CORPORATE PLACEE REGISTRATION FORM




 


 


This Form will remain on file with the Exchange and must be completed if required under section 4(b) of Part II of Form 4B.  The corporation, trust, portfolio manager or other entity (the “Placee”) need only file it on one time basis, and it will be referenced for all subsequent Private Placements in which it participates.  If any of the information provided in this Form changes, the Placee must notify the Exchange prior to participating in further placements with Exchange listed Issuers.  If as a result of the Private Placement, the Placee becomes an Insider of the Issuer, Insiders of the Placee are reminded that they must file a Personal Information Form (2A) or, if applicable, Declarations, with the Exchange.








 




	
1.      

	
Placee Information:







 



	         	           	
(a)                

	
Name:   

	  





 



	         	           	
(b)                

	
Complete Address:   

	  





 



	         	           	
(c)                

	
Jurisdiction of Incorporation or Creation:  

	  







 


 




	
2.      

	
(a)       

	

Is the Placee purchasing securities as a portfolio manager: (Yes/No)?  

	 





 



	         	            	
(b)                

	
Is the Placee carrying on business as a portfolio manager outside of Canada:


	  	  	  	
(Yes/No)? __________









 


 




	
3.      

	If the answer to 2(b) above was “Yes”, the undersigned certifies that:
	 	 	 
	  	         	
(a)                

	
it is purchasing securities of an Issuer on behalf of managed accounts for which it is making the investment decision to purchase the securities and has full discretion to purchase or sell securities for such accounts without requiring the client’s express consent to a transaction;


	 	 	 	 
	  	 	
(b)

	
it carries on the business of managing the investment portfolios of clients through discretionary authority granted by those clients (a “portfolio manager” business) in ____________________ [jurisdiction], and it is permitted by law to carry on a portfolio manager business in that jurisdiction;


	 	 	 	 
	  	 	
(c)

	
it was not created solely or primarily for the purpose of purchasing securities of the Issuer;


	 	 	 	 
	  	 	
(d)

	
the total asset value of the investment portfolios it manages on behalf of clients is not less than $20,000,000; and


	 	 	 	 
	  	 	
(e)

	
it has no reasonable grounds to believe, that any of the directors, senior officers and other insiders of the Issuer, and the persons that carry on investor relations activities for the Issuer has a beneficial interest in any of the managed accounts for which it is purchasing.











 




  





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4.

	
If the answer to 2(a). above was “No”, please provide the names and addresses of Control Persons of the Placee:







 





	
Name *

	
City

	
Province or State

	
Country


	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  





*   If the Control Person is not an individual, provide the name of the individual that makes the investment decisions on behalf of the Control Person.


 



	
5. 

	
Acknowledgement - Personal Information and Securities Laws













	
  

	
(a)

	
“Personal Information” means any information about an identifiable individual, and includes information contained in sections 1, 2 and 4, as applicable, of this Form.







 


The undersigned hereby acknowledges and agrees that it has obtained the express written consent of each individual to:








	
  

	
(i)

	
the disclosure of Personal Information by the undersigned to the Exchange (as defined in Appendix 6B) pursuant to this Form; and













	
  

	
(ii)

	
the collection, use and disclosure of Personal Information by the Exchange for the purposes described in Appendix 6B or as otherwise identified by the Exchange, from time to time.







 



	
  

	
(b)

	
The undersigned acknowledges that it is bound by the provisions of applicable Securities Law, including provisions concerning the filing of insider reports and reports of acquisitions.







 


 



Dated and certified (if applicable), acknowledged and agreed, at _______________________________________ on ___________________________________








	 	 
	 	
(Name of Purchaser - please print)


	 	  
	 	 
	 	
(Authorized Signature)


	 	  
	 	 
	 	
(Official Capacity - please print)


	 	  
	 	 
	 	

(Please print name of individual whose signature


	 	

appears above)









 


 


THIS IS NOT A PUBLIC DOCUMENT


 




  





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EXHIBIT F


 


ACKNOWLEDGEMENT – PERSONAL INFORMATION


 



	
1.

	
TSX Venture Exchange Inc. and its affiliates, authorized agents, subsidiaries and divisions, including the TSX Venture Exchange (collectively referred to as the “Exchange”) collect Personal Information in certain Forms that are submitted by the individual and/or by an Issuer or Applicant and use it for the following purposes:







 



	
  

	
(a)

	
to conduct background checks;







 



	
  

	
(b)

	
to verify the Personal Information that has been provided about each individual;







 



	
  

	
(c)

	
to consider the suitability of the individual to act as an officer, director, insider, promoter, investor relations provider or, as applicable, an employee or consultant, of the Issuer or Applicant;







 



	
  

	
(d)

	
to consider the eligibility of the Issuer or Applicant to list on the Exchange;







 



	
  

	
(e)

	
to provide disclosure to market participants as to the security holdings of directors, officers, other insiders and promoters of the Issuer, or its associates or affiliates;







 



	
  

	
(f)

	
to conduct enforcement proceedings; and







 



	
  

	
(g)

	
to perform other investigations as required by and to ensure compliance with all applicable rules, policies, rulings and regulations of the Exchange, securities legislation and other legal and regulatory requirements governing the conduct and protection of the public markets in Canada.







 


As part of this process, the Exchange also collects additional Personal Information from other sources, including but not limited to, securities regulatory authorities in Canada or elsewhere, investigative, law enforcement or self-regulatory organizations, regulations service providers and each of their subsidiaries, affiliates, regulators and authorized agents, to ensure that the purposes set out above can be accomplished.


 


The Personal Information the Exchange collects may also be disclosed:


 



	
  

	
(a)

	
to the agencies and organizations in the preceding paragraph, or as otherwise permitted or required by law, and they may use it in their own investigations for the purposes described above; and







 



	
  

	
(b)

	
on the Exchange’s website or through printed materials published by or pursuant to the directions of the Exchange.







 


The Exchange may from time to time use third parties to process information and/or provide other administrative services. In this regard, the Exchange may share the information with such third party service providers.


 



	
2.

	
The Commissions may indirectly collect the Personal Information under the authority granted to them by securities legislation. The Personal Information is being collected for the purposes of the administration and enforcement of the securities legislation of the jurisdiction of each such Commission.







 


For questions about the collection of Personal Information by the British Columbia Securities Commission, please contact the Administrative Assistant to the Director of Corporate Finance, 12th Floor, 701 West Georgia Street, Box 10142, Vancouver, BC V7Y 1L2, phone: (604) 899-6854.


 


 


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