Exhibit 10.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made as of this 15th day of
September, 2006 by and among Storm Cat Energy Corporation, a company
incorporated under the laws of the Province of British Columbia, Canada (the
"Company"), and Trapeze Capital Corp., a company incorporated under the laws of
Ontario, Canada (the "Investor").
Recitals:
A.
The Investor desires to purchase from the Company, and the Company
desires to issue and sell its common shares, without par value per share (the
"Common Shares"), to the Investor at a per share purchase price of (1) CDN$1.80
with respect 6,172,839 Common Shares that will qualify as flow-through shares
(the "Flow-Through Shares"), and (2) CDN$1.58 with respect 7,594,937 Common
Shares (the "Ordinary Shares" and together with the Flow-Through Shares, the
"Shares"), together with warrants to acquire 2,126,582 Common Shares, at an
exercise price of CDN$1.90 per share (the "Warrants"), in the form to be
attached to the Subscription Agreement to be entered into between the Company
and the Investor (the "Subscription Agreement") preceding the closing of this
offering (the "Private Placement"); and
B.
The Company and the Investor are executing and delivering this
Agreement in connection with an offering in Canada with respect to Foreign
Investor (as defined below) in reliance upon Regulation S ("Regulation S"), as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "1933 Act"), and on the "accredited investor" exemption from
applicable Canadian prospectus and registration requirements contained in
Section 2.3 of National Instrument 45-106 of the Canadian Securities
Administrators.
NOW, THEREFORE, in consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1.
PURCHASE AND SALE OF THE SHARES AND WARRANTS.
SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT AND THE SUBSCRIPTION AGREEMENT, ON THE
CLOSING DATE (AS DEFINED BELOW), THE INVESTOR SHALL PURCHASE, AND THE COMPANY
SHALL SELL AND ISSUE TO THE INVESTOR, 6,172,839 FLOW-THROUGH SHARES AT AN
AGGREGATE PURCHASE PRICE OF CDN$11,111,110, 7,594,937 ORDINARY SHARES AT AN
AGGREGATE PURCHASE PRICE OF CDN$12,000,000, AND 2,126,582 WARRANTS.
THE
FLOW-THROUGH SHARES WILL BE USED TO INCUR EXPLORATION AND DEVELOPMENT EXPENSES
WHICH QUALIFY AS CEE UNDER THE INCOME TAX ACT (CANADA).
2.
CLOSING.
UPON THE DATE OF CONFIRMATION THAT THE CONDITIONS TO
CLOSING SPECIFIED IN THIS AGREEMENT OR IN THE SUBSCRIPTION AGREEMENT HAVE BEEN
SATISFIED OR DULY WAIVED BY THE INVESTOR OR THE COMPANY, AS APPLICABLE (THE
"CLOSING DATE"), THE CERTIFICATES REPRESENTING THE SHARES AND THE WARRANTS SHALL
BE RELEASED TO THE INVESTOR UPON PAYMENT IN FULL OF THE AGGREGATE PURCHASE PRICE
TO THE COMPANY (AS SET FORTH ABOVE) BY THE INVESTOR (THE "CLOSING").
THE
PURCHASE AND SALE OF THE SHARES AND THE WARRANTS IN THE CLOSING SHALL TAKE PLACE
AT SUCH LOCATION AND ON SUCH DATE AS THE COMPANY AND THE INVESTOR SHALL MUTUALLY
AGREE.
3.
REPRESENTATIONS, WARRANTIES AND