Document:

ex104.htm

UNIT SUBSCRIPTION AGREEMENT

 

	
TO:

	
Big North Graphite Corp. (the “Issuer”)

 

	 FROM: 	 	 
	 	 (Subscriber Name)	 

 

	
RE:

	
Purchase of Units of the Issuer (each consisting of one Common Share and one Warrant) of the Issuer at CDN$0.075 Per Unit

 

REFERENCE DATE:  August 21, 2013

 

THIS DOCUMENT CONTAINS A NUMBER OF FORMS REQUIRED BY SECURITIES LEGISLATION AND POLICY, SOME OF WHICH YOU MUST COMPLETE AND OTHERS NOT DEPENDING ON SEVERAL FACTORS.  PLEASE READ THE FOLLOWING GUIDE CAREFULLY AS IT WILL ASSIST YOU IN COMPLETING THIS SUBSCRIPTION AGREEMENT CORRECTLY. automatic numbering, no scheme

 

	
STEP 1

	
Enter the number of Units you are purchasing, and your name, address and telephone number and sign this document on page 18.

 

	
STEP 2

	
Please complete the Registration and Delivery Instructions on page 19 if your Units are to be registered or delivered differently from your name and address on page 18.

 

	
STEP 3

	
All Subscribers must complete “Information Regarding the Subscriber” appearing on page 2.

 

	
STEP 4

	
All Subscribers who are not individuals must complete Schedule A – “Corporate Placee Registration Form” for filing with the TSX Venture Exchange, UNLESS THIS FORM IS ALREADY ON FILE WITH THE TSX VENTURE EXCHANGE AND THERE IS NO CHANGE IN THE INFORMATION ALREADY FILED.

 

	
STEP 5

	
If you are an “Accredited Investor” as defined in National Instrument 45-106 (generally a high net worth or high income investor), you must complete and sign Schedule B – “Accredited Investor Certificate”.

 

	
STEP 6

	
If you are a resident in an International Jurisdiction other than in the United States, please review Section 7 for an exemption available to you.  Please complete and sign Schedule A – “Accredited Investor Certificate” if you are an “Accredited Investor”.

 

	
STEP 7

	
Subscribers resident in Canada, and who are not “Accredited Investors” but who are officers, directors, employees, family, close friends or business associates thereof, must complete and sign Schedule C – “Representation Letter For Family, Friends and Business Associates”.

 

	
STEP 8

	
If you are a resident of Saskatchewan that is a close personal friend or a close business associate of a director, executive officer or a control person of the Issuer or of an affiliate of the Issuer, you must complete and sign Schedule D – “Form 45-106F5 - Risk Acknowledgement”.

 

	
STEP 9

	
If you are subscribing in the United States or are a U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) you must be an “Accredited Investor” under US law – please complete and sign Schedule E – “Certificate of U.S. Person”.

 

Please courier completed forms and subscription funds to the Issuer at Suite 350 - 885 Dunsmuir Street, Vancouver, BC  V6C 1N5 (Attention: Connie Norman).  Funds may be attached to the forms by certified cheque or bank draft payable to “Big North Graphite Corp.”  All monetary amounts herein are in Canadian dollars.

Documents and funds to be received no later than August 30, 2013.

  

1

 

INFORMATION REGARDING THE SUBSCRIBER

 

Please check the appropriate box (and complete the required information, if applicable) in each section:

 

	
1.

	
Security Holdings. Prior to giving effect to the securities being subscribed for under this Subscription Agreement, the Subscriber and all persons acting jointly and in concert with the Subscriber currently own, directly or indirectly, or exercise control or direction over (provide additional detail as applicable):

 

	
  o

	
_________________ common shares of Big North Graphite Corp. (the “Issuer”) and/or the following other kinds of shares and convertible securities (including but not limited to convertible debt, warrants and options) entitling the Subscriber to acquire additional common shares or other kinds of shares of the Issuer:

 

	
  o

	
No shares of the Issuer or securities convertible into shares of the Issuer.

 

	
2.

	
Insider Status. The Subscriber either:

 

	
  o

	
Is an “Insider” of the Issuer as defined in the Policies of the TSX-V by virtue of being:

 

	
  

	
(a)

	
a director or senior officer of the Issuer;

 

	
  

	
(b)

	
a director or senior officer of a company that is an Insider or subsidiary of the Issuer;

 

	
  

	
(c)

	
a person that beneficially owns or controls, directly or indirectly, voting shares of the Issuer carrying more than 10% of the voting rights attached to all the Issuer’s outstanding voting shares; or

 

	
  

	
(d)

	
the Issuer itself if it holds any of its own securities.

 

	
  o

	
Is not an Insider of the Issuer.

 

	
3.

	
Pro Group Status. The Subscriber either:

 

	
  o

	
Is a Member of the “Pro Group”, which is defined in the Rules of the TSX-V as either individually or as a group:

 

	
  

	
1.

	
the member (i.e. a member of the TSX-V under the TSX-V requirements);

 

	
  

	
2.

	
employees of the member;

 

	
  

	
3.

	
partners, officers and directors of the member;

 

	
  

	
4.

	
affiliates of the member;

 

	
  

	
5.

	
such other persons as the TSX-V may determine; and

 

	
  

	
6.

	
associates of any parties referred to in paragraphs 1 through 5 above.

 

	
  o

	
Is not a member of the Pro Group.

 

	
4.

	
Corporate Placee Registration Form.  If the Subscriber is not an individual, the Subscriber acknowledges that:

 

	
  o

	
a Corporate Placee Registration Form is already on file with the TSX Venture Exchange and there is no change in the information already filed;

 

	
  o

	
the Subscriber will complete Schedule A – “Corporate Placee Registration Form” for filing with the TSX Venture Exchange.

 

	
5

	
Registrant status. The Subscriber either:

 

	
  o

	
is a person registered or required to be registered under the Securities Act (British Columbia);

 

	
  o

	
is not a person registered or required to be registered under the Securities Act (British Columbia).

  

2

 

Re:           Purchase of CDN$0.05 Units Exempt from Prospectus Requirements Scheme C here

 

	
1.

	
Definitions

 

	
1.1

	
(a)           “Accredited Investor” means a Subscriber resident in Canada who is an accredited investor as defined in Section 1.1 of NI 45-106;

 

(b)           “Applicable Securities Laws” means the securities legislation having application and the rules, policies, notices and orders issued by applicable securities regulatory authorities, including the TSX-V, having application over this Offering and the Issuer in the Qualifying Jurisdictions;

 

(c)           “consultant” means, for an issuer, a person, other than an employee, executive officer, or director of the issuer or of a related entity of the issuer, that

 

(i)           is engaged to provide services to the issuer or a related entity of the issuer, other than services provided in relation to a distribution,

 

(ii)           provides the services under a written contract with the issuer or a related entity of the issuer, and

 

(iii)           spends or will spend a significant amount of time and attention on the affairs and business of the issuer or a related entity of the issuer

 

and includes, for an individual consultant, a corporation of which the individual consultant is an employee or shareholder, and a partnership of which the individual consultant is an employee or partner;

 

(d)           “Closing” means a completion of an issue and sale by the Issuer and the purchase by the Subscriber of the Securities pursuant to this Subscription Agreement on the Closing Date.  Closings may occur on one or more dates as the Issuer may determine within the requirements of the TSX-V;

 

(e)           “Closing Date” means a day following TSX-V acceptance of this Subscription Agreement and others which form part of the Offering which is expected to be on or about August 30, 2013, as the Issuer may determine within the requirements of the TSX-V.  On the Closing Date, the Shares and Warrants comprising the Units will be issued and mailed to the Subscriber;

 

(f)           “Employee, Executive Officer, Director and Consultant Exemptions” means the exemption from the prospectus requirements found in Section 2.24 of NI 45-106;

 

(g)           “Exempt Amount Exemption” means the exemption from the prospectus requirements under Applicable Securities Laws for subscriptions of CDN$150,000 paid in cash at the time of Closing and which does not require the Subscriber to be an Accredited Investor;

 

(h)           “Exemptions” means the exemptions from the registration and prospectus or equivalent requirements under Applicable Securities Laws;

 

(i)           “Family, Friends and Business Associates Exemptions” means the exemptions from the prospectus requirements found in Sections 2.5 – 2.7 of NI 45-106;

 

(j)           “fully managed” in relation to an account, means that the Subscriber has the discretion as to the account as contemplated by Applicable Securities Laws;

 

(k)           “International Jurisdiction” means a country other than Canada or the United States;

 

(l)             “material” means material in relation to the Issuer and any subsidiary considered on a consolidated basis;

  

3

 

(m)           “material change” means any change in the business, operations, assets, liabilities, ownership or capital of the Issuer and any subsidiary considered on a consolidated basis that would reasonably be expected to have a significant effect on the market price or value of the Issuer’s securities;

 

(n)           “material fact” means any fact that significantly affects or would reasonably be expected to have a significant effect on the market price or value of the Issuer’s securities;

 

(o)           “misrepresentation” is as defined under Applicable Securities Laws;

 

(p)           “NI 45-106” means National Instrument 45-106 – Prospectus and Registration Exemptions in the form adopted by the securities commissions in all provinces and territories of Canada (a copy is available online at www.bcsc.bc.ca);

 

(q)           “Offering” means the sale by the Issuer of up to 10,000,000 Units of the Issuer on the terms set forth in this Subscription Agreement.  There is no minimum aggregate Offering and the Issuer reserves the right to decrease or increase the size of the Offering at its discretion;

 

(r)           “permitted assign” means, for a person that is an employee, executive officer, director or consultant of the Issuer or of a related entity of the Issuer,

 

(i)           a trustee, custodian, or administrator acting on behalf of, or for the benefit of the person,

 

(ii)           a holding entity of the person,

 

(iii)           an RRSP or a RRIF of the person,

 

(iv)           a spouse of the person,

 

(v)           a trustee, custodian, or administrator acting on behalf of, or for the benefit of the spouse of the person,

 

(vi)           a holding entity of the spouse of the person, or

 

(vii)           an RRSP or a RRIF of the spouse of the person;

 

(s)           “person” means and includes any individual, corporation, partnership, firm, joint venture, syndicate, association, trust, government, governmental agency or board or commission or authority, and any other form of entity or organization;

 

(t)           “Portfolio Manager” means an adviser who manages the investment portfolio of clients through discretionary authority granted by one or more clients;

 

(u)           “Public Record” means information which has been publicly filed at www.sedar.com by the Issuer under Applicable Securities Laws;

 

(v)           “Qualifying Jurisdictions” means British Columbia, Alberta and Ontario and certain other jurisdictions referred to in National Instrument 45-102;

 

(w)           “Regulation D” means Regulation D under the U.S. Securities Act;

 

(x)           “Regulation S” means Regulation S under the U.S. Securities Act;

  

4

 

 

(y)          “Reporting Jurisdictions” means British Columbia and Alberta being the jurisdictions where the Issuer has continuous reporting obligations;

 

(z)           “Schedules” means the schedules attached hereto and forming part hereof and comprising of:

 

(i)           A           Corporate Placee Registration Form;

 

(ii)           B           Accredited Investor Certificate;

 

(iii)           C           Representation Letter For Family, Friends and Business Associates;

 

(iv)           D           Form 45-106F5 – Saskatchewan Risk Acknowledgement Form; and

 

(v)           E           U.S. Accredited Investor Certificate.

 

(aa)           “Securities” means, collectively, the Shares, Warrants and Warrant Shares;

 

(bb)           “Share” means a common share without par value in the capital of the Issuer;

 

(cc)           “Subscriber” means the person or persons named as a Subscriber on the execution page of this Subscription Agreement and if more than one person is so named, means all of them jointly and severally;

 

(dd)           “Subscription Agreement” or “Agreement” means this subscription agreement between the Subscriber and the Issuer, including all Schedules incorporated by reference, as it may be amended or supplemented from time to time;

 

(ee)           “TSX-V”  means the TSX Venture Exchange;

 

(ff)           “Unit” means one Share and one half of a Warrant sold together hereunder;

 

(gg)           “U.S. Person” means a U.S. Person as defined in Regulation S (the definition of which includes, but is not limited to, (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any partnership or corporation organized outside of the United States by a U.S. Person principally for the purpose of investing in securities not registered under the U.S. Securities Act, unless it is organized, or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts, and (iv) any estate or trust of which any executor or administrator or trustee is a U.S. Person;

 

(hh)           “U.S. Purchaser” is (a) any “U.S. Person” as defined in Regulation S, (b) any person purchasing the Units on behalf of any “U.S. Person” or any person in the United States, (c) any person who receives or received an offer of the Units while in the United States, or (d) any person who is or was in the United States at the time the Subscriber’s buy order was made or this Agreement was executed or delivered;

 

(ii)           “U.S. Securities Act” means the Securities Act of 1933, as amended, of the United States of America;

 

(jj)           “United States” means the United States of America, its territories, any State of the United States and the District of Columbia;

 

(kk)           “Warrant” means a whole common share purchase warrant with additional terms described in Section 3; and

 

(ll)           “Warrant Share” means a Share to be issued upon exercise of a Warrant.

  

	
1.2

	
Words and phrases which are used in this Subscription Agreement and all Schedules thereto and which are defined in NI 45-106 will have the meaning ascribed thereto in NI 45-106, unless otherwise specifically defined in Section 1.1 of this Subscription Agreement.

  

5

 

	
2.

	
Prospectus Exempt Subscription Commitment

 

2.1                      The Subscriber hereby irrevocably subscribes for and agrees to purchase from the Issuer, subject to the terms and conditions set forth herein, that number of Units set out above the Subscriber’s name on the execution page of this Subscription Agreement at the price of CDN$0.075 per Unit. Subject to the terms hereof, this Subscription Agreement will be deemed to have been made and be effective only upon its acceptance by the Issuer.

 

2.2                      The Subscriber acknowledges and agrees that the Issuer reserves the right, in its absolute discretion, to reject this subscription for Units, in whole or in part, at any time prior to the Closing Date notwithstanding prior receipt by the Subscriber of a notice of acceptance of this subscription.  Upon the Issuer’s acceptance of this subscription, this Subscription Agreement will constitute an agreement for the purchase by the Subscriber from the Issuer, and for the Issuer to issue and sell to the Subscriber, the number of Units set out on page 18 hereof and on the terms and conditions set out herein.  If this subscription is rejected in whole, any cheques or other forms of payment delivered to the Issuer representing payment for the Units subscribed for herein will be promptly returned to the Subscriber without interest or deduction.  If this subscription is accepted only in part, a cheque representing any refund for that portion of the subscription for the Units which is not accepted will be promptly delivered to the Subscriber by the Issuer without interest or deduction.

 

	
3.

	
Description of Securities – Shares and Warrants

 

3.1                      The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that there is no minimum number of Units that must be subscribed for under the Offering for the Offering to close and therefore the subscription amount tendered herewith may be releasable to the Issuer at the Closing Time notwithstanding the number of Units issued pursuant to the Offering.

 

3.2                      Each Unit consists of one Share and one half of one Warrant.

 

3.3                      Each Warrant will entitle the Subscriber to purchase one Warrant Share for a 24 month period after the Closing Date at a price of $0.12 per Warrant Share.

 

3.4                      The Warrants will be governed by the terms and conditions set out in the certificate representing the Warrants (the “Warrant Certificates”) delivered to the Subscriber at Closing.  The Warrant Certificate will contain, among other things, provision for the appropriate adjustment in a class, number and exercise price of the Warrant Shares upon the occurrence of certain events, including any subdivision, consolidation or re-classification of the common shares of the Issuer or payments of stock dividends or upon the merger or re-organization of the Issuer.

 

	
4.

	
Closing

 

4.1                      Prior to Closing, the Subscriber will deliver to the offices of the Issuer aggregate subscription funds and subscription documents completed in accordance with the instructions on the face page of this Agreement, or arrange for electronic transfer of certified funds. Alternatively, the Subscriber will deliver certified funds to the Issuer against concurrent delivery by the Issuer of certificates representing the Shares and Warrants. On request by the Issuer, the Subscriber agrees to complete and deliver any other documents, questionnaires, notices and undertakings as may possibly be required by regulatory authorities, stock exchanges and Applicable Securities Laws to complete the transactions contemplated by this Agreement. Closing will occur on the Closing Date at which time certificates representing the Shares and Warrants will be available against payment of funds for delivery to the Subscriber as the Subscriber will instruct. The Subscriber hereby waives receiving any prior notice of Closing.

 

4.2                      Closing is subject to certain conditions including the TSX-V approval being obtained.

  

6

 

  

	
5.

	
Privacy Legislation

  

5.1                      The Subscriber acknowledges and consents to the fact that the Issuer is collecting the Subscriber’s (and any beneficial purchaser for which the Subscriber is contracting hereunder) personal information (as that term is defined under applicable privacy legislation, including, without limitation, the Personal Information Protection and Electronic Documents Act (Canada) and any other applicable similar replacement or supplemental provincial or federal legislation or laws in effect from time to time) for the purpose of completing the Subscriber’s subscription. The Subscriber acknowledges and consents to the Issuer retaining the personal information for so long as permitted or required by applicable law or business practices. The Subscriber further acknowledges and consents to the fact that the Issuer may be required by Applicable Securities Laws, stock exchange rules and/or Investment Industry Regulatory Organization of Canada rules to provide regulatory authorities any personal information provided by the Subscriber respecting itself (and any beneficial purchaser for which the Subscriber is contracting hereunder). The Subscriber represents and warrants that it has the authority to provide the consents and acknowledgements set out in this paragraph on behalf of all beneficial purchasers for which the Subscriber is contracting. In addition to the foregoing, the Subscriber agrees and acknowledges that the Issuer may use and disclose the Subscriber’s personal information, or that of each beneficial purchaser for whom the Subscriber are contracting hereunder, as follows:

 

(a)           for internal use with respect to managing the relationships between and contractual obligations of the Issuer and the Subscriber or any beneficial purchaser for whom the Subscriber is contracting hereunder;

 

(b)           for use and disclosure to the Issuer’s transfer agent and registrar;

 

(c)           for use and disclosure for income tax related purposes, including without limitation, where required by law, disclosure to Canada Revenue Agency;

 

(d)           disclosure to securities regulatory authorities (including the TSX-V) and other regulatory bodies with jurisdiction with respect to reports of trade and similar regulatory filings;

 

(e)           disclosure to a governmental or other authority (including the TSX-V) to which the disclosure is required by court order or subpoena compelling such disclosure and where there is no reasonable alternative to such disclosure;

 

(f)           disclosure to professional advisers of the Issuer in connection with the performance of their professional services;

 

(g)           disclosure to any person where such disclosure is necessary for legitimate business reasons and is made with the Subscriber’s prior written consent;

 

(h)           disclosure to a court determining the rights of the parties under this Subscription Agreement; or

 

(i)           for use and disclosure as otherwise required or permitted by law.

 

The Subscriber further acknowledges and agrees that the TSX-V collects personal information in forms submitted by the Issuer, which will include personal information regarding the Subscriber.  The Subscriber agrees that the TSX-V may use this information in the manner provided for in Appendix 6A to the TSX-V Corporate Finance Policy Manual, a copy of which may be viewed at the TSX-V website, www.tsx.com and is incorporated herein by reference.  The Subscriber further acknowledges that the Ontario Securities Commission collects personal information in forms submitted to it by the Issuer, including information about the Subscriber, the Subscriber’s address and contact information, and the Subscriber’s subscription.  The Subscriber acknowledges that the Ontario Securities Commission is entitled to collect the information under authority granted to it under Applicable Securities Laws for the purpose of administration and enforcement of the Applicable Securities Laws in Ontario.  The Subscriber acknowledges that it may obtain information regarding the collection of this information by contacting the Administrative Assistant to the Director of Corporate Finance, Ontario Securities Commission, Suite 1903, Box 5520, Queen Street West, Toronto, Ontario M5H 3S8, Telephone: (416) 593-3682, Facsimile: (416) 593-8252. The Subscriber consents to the collection of personal information by the Ontario Securities Commission.

  

7

 

 

	
6.

	
Subscriber’s Acknowledgements – Regarding Risk, Restrictions, Independent Advice and Advancement of Subscription Proceeds to the Issuer

 

6.1           The Subscriber represents and warrants and acknowledges and agrees with (on its own behalf and, if applicable, on behalf of each beneficial purchaser for whom the Subscriber is contracting hereunder) the Issuer that:

 

(a)           its 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 Issuer, and that its decision is based entirely upon its review of information about the Issuer in the Public Record;

 

(b)           no prospectus has been filed by the Issuer with any securities commission or similar authority, in connection with the issuance of the Securities, and the issuance and the sale of the Securities is subject to such sale being exempt from the prospectus/registration requirements under Applicable Securities Laws and accordingly:

 

(i)           the Subscriber is restricted from using certain of the civil remedies available under such legislation;

 

(ii)           the Subscriber may not receive information that might otherwise be required to be provided to it under such legislation; and

 

(iii)           the Issuer is relieved from certain obligations that would otherwise apply under such legislation;

 

(c)           the Subscriber (or others for whom the Subscriber is contracting hereunder) has been advised to consult its own legal advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions and it (or others for whom it is contracting hereunder) is solely responsible (and the Issuer is in no way responsible) for compliance with applicable resale restrictions;

 

(d)           to the knowledge of the Subscriber, the sale of the Securities was not accompanied by any advertisement;

 

(e)           the offer made by this Subscription Agreement is irrevocable (subject to the right of the Issuer to terminate this Subscription Agreement) and requires acceptance by the Issuer;

 

(f)           this Subscription Agreement is not enforceable by the Subscriber unless it has been accepted by the Issuer and the Subscriber waives any requirement on the Issuer’s behalf to communicate immediately its acceptance of this Subscription Agreement to the Subscriber;

 

(g)           the Securities are speculative investments which involve a substantial degree of risk and the Subscriber may lose its entire investment in the Securities;

 

(h)           the Subscriber is sophisticated in financial investments, has had access to and has received all such information concerning the Issuer that the Subscriber has considered necessary in connection with the Subscriber’s investment decision and the Subscriber will not receive an offering memorandum or similar disclosure document;

 

(i)           the subscription proceeds will be available to the Issuer on Closing and this subscription is not conditional on any other subscription completing;

 

 

  

8

 

 

(j)         no agency, governmental authority, regulatory body, stock exchange or other entity has made any finding or determination as to the merit for investment of, nor have any such agencies or governmental authorities made any recommendation or endorsement with respect to, the Securities;

 

(k)         the Subscriber acknowledges that the Issuer may complete additional financings in the future which may have a dilutive effect on existing shareholders at such time, including the Subscriber; and

 

(l)          the Issuer will rely on the representations and warranties made herein or otherwise provided by the Subscriber to the Issuer in completing the sale and issue of the Units to the Subscriber.

 

6.2                      The Subscriber hereby acknowledges and agrees that the subscription proceeds, together with all subscription documents completed in the manner described herein, subject to any statutory rights of the Subscriber, will be provided to the Issuer prior to the Closing Date.  All subscription proceeds provided to the Issuer as contemplated herein may be used by the Issuer forthwith and from time to time in its sole discretion and will form an interest-free loan from the Subscriber to the Issuer and in the event that the Closing fails to occur, for any reason, the Subscriber will be deemed to have loaned the purchase funds to the Issuer, repayable on demand.

 

	
7.

	
Subscriber’s Exemption Status

 

7.1                      The Subscriber, by its execution of this Subscription Agreement, hereby further represents, warrants to, and covenants with, the Issuer (which representations, warranties and covenants will survive the Closing of the Offering) that the Subscriber is purchasing the Units as principal for its own account, it is purchasing such Units not for the benefit of any other person, and not with a view to the resale or distribution of the Units and one of the following Exemptions applies to the Subscriber:

 

(a)           Family, Friends and Business Associates Exemptions

 

(i)           The Subscriber is a resident of a Province or Territory of Canada other than Ontario, and is:

 

(A)           a director, executive officer or control person of the Issuer, or of an affiliate of the Issuer,

 

(B)           a spouse, parent, grandparent, brother, sister, child or grandchild of a director, executive officer or control person of the Issuer, or of an affiliate of the Issuer,

 

(C)           a parent, grandparent, brother, sister, child or grandchild of the spouse of a director, executive officer or control person of the Issuer or of an affiliate of the Issuer,

 

(D)           a close personal friend of a director, executive officer or control person of the Issuer, or of an affiliate of the Issuer,

 

(E)           a close business associate of a director, executive officer or control person of the Issuer, or of an affiliate of the Issuer,

 

(F)           a founder of the Issuer or a spouse, parent, grandparent, brother, sister, child, grandchild , close personal friend or close business associate of a founder of the Issuer,

 

(G)           a parent, grandparent, brother, sister, child or grandchild of a spouse of a founder of the Issuer,

 

(H)           a person 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 (G), or

  

9

 

 

(I)            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 (G);

 

If the Subscriber is a resident of Saskatchewan, the Subscriber must complete and sign the Risk Acknowledgement Form - 45-106F5 attached hereto as Schedule D;

 

(ii)           The Subscriber is a resident of Ontario and is:

 

(A)           a founder of the Issuer,

 

(B)           an affiliate of a founder of the Issuer,

 

(C)           a spouse, parent, brother, sister, grandparent, grandchild or child of an executive officer, director or founder of the Issuer, or

 

(D)           a person that is a control person of the Issuer;

 

(b)           Employee, Executive Officer, Director and Consultant Exemptions

 

The Subscriber is:

 

(i)           an employee, executive officer, director or consultant of the Issuer,

 

(ii)           an employee, executive officer, director or consultant of a related entity of the Issuer, or

 

(iii)           a permitted assign of a person referred to in paragraphs (i) or (ii)

 

	
  

	
and the Subscriber’s purchase is voluntary;

 

(c)           Minimum Amount Exemption

 

(i)           The aggregate acquisition cost of purchasing the Units will not be less than CDN$150,000 paid in cash at the time of purchase, and the Subscriber has not been created or used solely to purchase or hold the Units in reliance on this Exemption; or

 

(d)           Accredited Investor Exemption

 

The Subscriber is an “Accredited Investor” and the Subscriber has properly completed and duly executed the Accredited Investor Certificate attached to this Subscription Agreement as Schedule B indicating the means by which the Subscriber is an Accredited Investor and confirms the truth and accuracy of all statements made by the Subscriber in such certificate.

 

7.2                      Subscriber Outside of Canada

 

If the Subscriber is resident in an International Jurisdiction or in the United States, it certifies in particular that it is not resident in British Columbia and further acknowledges and certifies that:

 

(a)           no securities commission or similar regulatory authority has reviewed or passed on the merits of the Units or the Securities;

 

(b)           there is no government or other insurance covering the Units or the Securities;

 

(c)           there are risks associated with the purchase of the Units;

  

10

 

 

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

 

(e)           the Issuer has advised the Subscriber that the Issuer is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell the Securities through a person registered to sell the Securities under Applicable Securities Laws and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by Applicable Securities Laws, including statutory rights of rescission or damages, will not be available to the Subscriber;

 

(f)           the Subscriber is knowledgeable of securities legislation having application or jurisdiction over the Subscriber and the Offering (other than the laws of Canada and the United States) which would apply to this Subscription Agreement;

 

(g)           the Subscriber is purchasing the Units pursuant to exemptions from any prospectus, registration or similar requirements under the laws of that International Jurisdiction and or, if such is not applicable, the Subscriber is permitted to purchase the Units, and the Issuer has no filing obligations in the International Jurisdiction;

 

(h)           no laws in the International Jurisdiction require the Issuer to make any filings or seek any approvals of any kind whatsoever from any regulatory authority of any kind whatsoever in the International Jurisdiction; and

 

(i)           the Units are being acquired for investment only and not with a view to resale and distribution within the International Jurisdiction.

 

7.3                      Additional Representations Applicable to U.S. Purchasers.  If the Subscriber is a U.S. Purchaser, the Subscriber represents and warrants either:

 

(a)           the Subscriber is a discretionary or similar account (other than an estate or trust) that is excluded from the definition of “U.S. Person” pursuant to Rule 902(k)(2)(i) of Regulation S under the U.S. Securities Act and is held on behalf of a person that is not a U.S. Person by a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States; or

 

(b)           the Subscriber is a U.S. Person who is an “accredited investor” as defined in Regulation D of the U.S. Securities Act (a “U.S. Accredited Investor”), and is acquiring the Units for its own account or for the account of a U.S. Accredited Investor as to which it exercises sole investment discretion, to be held for investment only and not with a view to any resale, distribution or other disposition of the Units in violation of United States securities laws or applicable state securities laws; and

 

IN EITHER CASE, the Subscriber has properly completed and duly executed a U.S. Accredited Investor Certificate attached to this Subscription Agreement as Schedule E, and confirms the truth and accuracy of all statements made by the Subscriber in such certificate.

 

7.4                      Other General Representations Applicable to All Subscribers

 

(a)           the Subscriber has no knowledge of a “material fact” or “material change”, as those terms are defined herein, in respect of the affairs of the Issuer that has not been generally disclosed to the public;

 

(b)           the Subscriber (and, if applicable, any beneficial purchaser for whom it is acting) is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the execution page of this Subscription Agreement;

  

11

 

 

(c)         the Subscriber is of legal age and 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 of this Subscription Agreement on behalf of the Subscriber;

 

(d)           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 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;

 

(e)           the Subscriber has duly and validly authorized, executed and delivered this Subscription Agreement and understands it is intended to constitute a valid and binding agreement of the Subscriber enforceable against the Subscriber;

 

(f)           in connection with the Subscriber’s investment in the Units, the Subscriber has not relied upon the Issuer for investment, legal or tax advice, and has, in all cases sought the advice of the Subscriber’s own personal investment advisor, legal counsel and tax advisers or has waived its rights thereto and the Subscriber is either experienced in or knowledgeable with regard to the affairs of the Issuer, or either alone or with its professional advisors is capable, by reason of knowledge and experience in financial and business matters in general, and investments in particular, of evaluating the merits and risks of an investment in the Units and is able to bear the economic risk of the investment and it can otherwise be reasonably assumed to have the capacity to protect its own interest in connection with the investment in the Units;

 

(g)           no person has made to the Subscriber any written or oral representations:

 

(i)           that any person will resell or repurchase the Units;

 

(ii)           that any person will refund the purchase price for the Units;

 

(iii)           as to the future price or value of the Units; or

 

(iv)           that the Units will be listed and posted for trading on a stock exchange or that application has been made to list and post the Units for trading on a stock exchange, other than the TSX-V;

 

Not a person in the United States or a U.S. Person

 

(h)           Unless the Subscriber completes the U.S. Accredited Investor Certificate included herein as Schedule E (in which case the Subscriber represents, warrants and covenants to the Issuer as to the accuracy of all matters set out therein) in connection with a purchase of the Securities made in reliance on Regulation D, the Subscriber represents and warrants that:

 

(i)           the Securities are not being acquired, directly or indirectly, for the account or benefit of a U.S. Person or a person in the United States and the Subscriber does not have any agreement or understanding (either written or oral) with any U.S. Person or a person in the United States respecting:

 

(A)           the transfer or assignment of any rights or interests in any of the Securities;

 

(B)           the division of profits, losses, fees, commissions, or any financial stake in connection with this Subscription Agreement; or

 

(C)           the voting of the Securities; and

 

(D)          the Subscriber has no intention to distribute either directly or indirectly any of the Shares in the United States or to U.S. Persons;

  

12

 

 

(ii)           the Subscriber represents that the current structure of this transaction and all transactions and activities contemplated hereunder is not a scheme to avoid the registration requirements of the U.S. Securities Act;

 

(iii)           the Subscriber is a not a “U.S. Person” (the definition of which includes, but is not limited to, a natural person resident in the United States and an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the United States) and is not purchasing the Securities for the account or benefit of any U.S. Person or for offering, resale or delivery for the account or benefit of any U.S. Person or for the account or benefit of any person in any jurisdiction set out in the name and address of the Subscriber below; or

 

(iv)           the Subscriber was outside the United States at the time of execution and delivery of this Subscription Agreement within the meaning of Regulation S;

 

(v)           no offers to sell the Securities were made by any person to the Subscriber while the Subscriber was in the United States;

 

(vi)           the Subscriber acknowledges that the Securities have not been registered under the U.S. Securities Act, and may not be offered or sold in the United States or to a U.S. Person unless an exemption from such registration requirements is available.  The Subscriber understands that the Issuer has no obligation or present intention of filing a registration statement under the U.S. Securities Act in respect of the Securities;

 

(vii)           the Subscriber will not engage in any directed selling efforts (as defined by Regulation S under the U.S. Securities Act) in the United States in respect 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 the Securities; and

 

(viii)           the Subscriber acknowledges that any person who exercises a Warrant will be required to provide to the Issuer either:

 

(A)           written certification that it is not a U.S. Person and that such Warrant is not being exercised within the United States or on behalf of, or for the account or benefit of; a U.S. Person; or

 

(B)           a written opinion of counsel or other evidence satisfactory to the Issuer to the effect that the Warrants and the Warrant Shares have been registered under the U.S. Securities Act and applicable state securities laws or are exempt from registration thereunder;

 

Compliance with Resale Laws

 

(i)           the Subscriber will comply with Applicable Securities Laws and, if applicable, Rule 904 of Regulation S concerning the resale of the Securities and all related restrictions (and the Issuer is not in any way responsible for such compliance) and will speak and consult with its own legal advisors with respect to such compliance;

 

(j)           Own Expense

  

13

 

 

(k)           the Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel or other advisors retained by the Subscriber) relating to the purchase of the Units will be borne by the Subscriber;

 

Indemnity

 

(l)           The foregoing acknowledgements are made by the Subscriber with the intent that they be relied upon by the Issuer in determining its suitability as a purchaser of the Units, and the Subscriber hereby agrees to indemnify the Issuer against all losses, claims, costs, expenses and damages or liabilities which the Issuer may suffer or incur as a result of reliance thereon.

 

	
8.

	
The Issuer’s Representations

 

8.1                      The Issuer represents and warrants to the Subscriber that, as of the date of this Subscription Agreement and at Closing hereunder:

 

(a)           the Issuer and any subsidiaries are valid and subsisting corporations duly incorporated and in good standing under the laws of the jurisdictions in which they are incorporated, continued or amalgamated;

 

(b)           the Issuer has complied, or will comply, with all applicable corporate and securities laws and regulations in connection with the offer, sale and issuance of the Securities;

 

(c)           the Issuer and any subsidiaries are the beneficial owners of the properties, business and assets or the interests in the properties, business or assets referred to in its Public Record and except as disclosed therein, all agreements by which the Issuer or its subsidiaries holds an interest in a property, business or asset are in good standing according to their terms, and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated;

 

(d)           no offering memorandum has been or will be provided to the Subscriber;

 

(e)           the financial statements comprised in the Public Record accurately reflect the financial position of the Issuer as at the date thereof, and no adverse material changes in the financial position of the Issuer have taken place since the date of the Issuer’s last financial statements except as filed in the Public Record;

 

(f)           the creation, issuance and sale of the Securities by the Issuer does not and will not conflict with and does not and will not result in a breach of any of the terms, conditions or provisions of its constating documents or any agreement or instrument to which the Issuer is a party;

 

(g)           the Securities will, at the time of issue, be duly allotted, validly issued, fully paid and non-assessable and will be free of all liens, charges and encumbrances and the Issuer will reserve sufficient shares in the treasury of the Issuer to enable it to issue the Securities;

 

(h)           this Subscription Agreement, when accepted, will have been duly authorized by all necessary corporate action on the part of the Issuer and, subject to acceptance by the Issuer, will constitute a valid obligation of the Issuer legally binding upon it and enforceable in accordance with its terms;

 

(i)           neither the Issuer nor any of its subsidiaries is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings have been threatened as at the date hereof, except as disclosed in the Public Record;

  

14

 

 

(j)           no order ceasing or suspending trading in the securities of the Issuer nor prohibiting sale of such securities has been issued to the Issuer or its directors, officers or promoters and to the best of the Issuer’s knowledge no investigations or proceedings for such purposes are pending or threatened; and

 

(k)           except as set out in the Public Record or herein, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option for the issue or allotment of any unissued common shares of the Issuer or any other security convertible or exchangeable for any such shares or to require the Issuer to purchase, redeem or otherwise acquire any of the issued or outstanding shares of the Issuer.

 

	
9.

	
Covenants of the Issuer

 

9.1                      The Issuer hereby covenants with each Subscriber that it will:

 

(a)           offer, sell, issue and deliver the Securities pursuant to exemptions from the prospectus filing, registration or qualification requirements of Applicable Securities Laws and otherwise fulfil all legal requirements required to be fulfilled by the Issuer (including without limitation, compliance with all Applicable Securities Laws in connection with the Offering;

 

(b)           within the required time, file with the TSX-V any documents, reports and information, in the required form, required to be filed by Applicable Securities Laws in connection with the Offering, together with any applicable filing fees and other materials;

 

(c)           the Issuer will use reasonable commercial efforts to satisfy as expeditiously as possible any conditions of the TSX-V required to be satisfied prior to the TSX-V’s acceptance of the Issuer’s notice of the Offering; and

 

(d)           use its reasonable commercial efforts to obtain all necessary approvals for this Offering.

 

	
10.

	
No Contractual Right of Action for Rescission

 

10.1                      The Subscriber acknowledges that it is purchasing the Securities issued hereunder pursuant to an exemption which does not require delivery to the Subscriber of an offering memorandum, that it will not receive any offering memorandum in connection with this Subscription Agreement and therefore is not entitled to contractual rights of action or rescission.

 

	
11.

	
Resale Restrictions and Legending of Shares

 

11.1           The Subscriber acknowledges that any resale of the Securities will be subject to resale restrictions contained in the Applicable Securities Laws applicable to the Issuer, the Subscriber or any proposed transferee.  Subscribers with a Canadian or international address will receive a certificate bearing the following legend imprinted thereon:

 

“Unless permitted under securities legislation, the holder of this security must not trade the security before [four months plus one day from the Closing Date]”; and

 

“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 [four (4) months from the Closing Date.]”

 

11.2         Certificates representing the Warrants will bear the following legends imprinted thereon:

  

15

 

11.3          “Unless permitted under securities legislation, the holder of this security must not trade the security before [4 months and a day from the closing date]”; and

 

“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 [four (4) months from the closing date.]”

 

“The warrants represented hereby will be void and of no value after 5:00 pm (Vancouver time) on [24 months from the closing date].”

 

11.4          If Subscriber is a U.S. Purchaser, in addition to the legends set forth in paragraphs 11.1 and 11.2 above, the certificates representing the Securities will bear a U.S. restrictive legend set forth in Schedule E hereto.

 

11.5          The Subscriber is aware that the Shares have not been and will not be registered under the U.S. Securities Act or the securities laws of any state and that the Shares may not be offered or sold in the United Sates without registration under the U.S. Securities Act or compliance with requirements of an exemption from registration and the applicable laws of all applicable states and acknowledges that the Issuer has no present intention of filing a registration statement under the U.S. Securities Act in respect of the Shares.

 

	
12.

	
General

 

12.1                      Time is of the essence hereof.

 

12.2                      Neither this Subscription Agreement nor any provision hereof will be modified, changed, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

 

12.3                      The parties hereto will execute and deliver all such further documents and instruments and do all such acts and things as may either before or after the execution of this Subscription Agreement be reasonably required to carry out the full intent and meaning of this Subscription Agreement.

 

12.4                      This Subscription Agreement will be subject to, governed by and construed in accordance with the laws of British Columbia and the laws of Canada as applicable therein and the Subscriber hereby irrevocably attorns to the jurisdiction of the Courts situate therein.

 

12.5                      This Subscription Agreement may not be assigned by any party hereto.

 

12.6                      Without limitation, this Subscription Agreement and the transactions contemplated hereby are conditional upon and subject to the Issuer receiving the acceptance of the TSX-V for this Subscription Agreement and the transactions contemplated hereby.

 

12.7                      The Issuer will be entitled to rely on delivery of a facsimile copy of this Subscription Agreement, and acceptance by the Issuer of a facsimile copy of this Subscription Agreement will create a legal, valid and binding agreement between the Subscriber and the Issuer in accordance with its terms.

 

12.8                      This Subscription Agreement may be signed by the parties in as many counterparts as may be deemed necessary, each of which so signed will be deemed to be an original, and all such counterparts together will constitute one and the same instrument.

 

12.9                      This Subscription Agreement is deemed to be entered into on the acceptance date by Issuer, notwithstanding its actual date of execution by the Subscriber.

  

16

 

12.10                   This Subscription Agreement, including, without limitation, the representations, warranties, acknowledgements and covenants contained herein, will survive and continue in full force and effect and be binding upon the parties notwithstanding the completion of the purchase of the Units by the Subscriber pursuant hereto, the completion of the issue of Units of the Issuer and any subsequent disposition by the Subscriber of the Shares or Warrants.

 

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

 

12.12                      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, by common law, by the Issuer, by the Subscriber, or by anyone else.

 

12.13                      All monetary amounts expressed herein are Canadian Dollars.

 

[Signature Page Follows]

  

17

 

IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement as of the date first above mentioned.

 

Total Number of Units Subscribed:                                                                 Units @ CDN$0.075

 

Total Purchase Price:                                                      CDN$                                

 

Name, Address and Telephone Number

 

(Name of Subscriber - Please type or print)

 

(Signature and, if applicable, Office)

 

(Address of Subscriber)

 

(City, Province, Postal Code of Subscriber)

 

(Telephone number)

 

If the Subscriber is signing as agent or other person, please complete below with the name, address and telephone number of the beneficial owner of the Units purchased.  OR if the Subscriber is a corporation, please complete below with the name, address and telephone number of the beneficial owner of the Subscriber:

 

(Name of Subscriber - Please type or print)

 

(Signature and, if applicable, Office)

 

(Address of Subscriber)

 

(City, Province, Postal Code of Subscriber)

 

(Telephone Number)

  

18

 

REGISTRATION AND DELIVERY INSTRUCTIONS

 

	
1.

	
Registration - registration of the single certificate which is to be delivered at Closing should be made as follows:  (Registration must reflect legal ownership in accordance with Subscriber’s disclosure made on the execution page and must be in the form required by Subscriber’s broker.)

 

 in trust for                                                                                       

 

(name of registered holder) (name of beneficial holder & account reference, if applicable)

 

(address)

 

	
2.

	
Delivery - please deliver the Share and Warrant certificate(s) to the following street address (include contact name and contact telephone number):

 

(address)

 

(contact name) (contact telephone number)

 

A C C E P T A N C E

 

The above-mentioned Subscription Agreement is hereby accepted and the terms hereof agreed to by the Issuer and the Subscriber.

 

DATED at Vancouver, British Columbia, the                                                                                      day of, 2013.

 

BIG NORTH GRAPHITE CORP.

 

Per:____________________________           

 

Authorized Signing Officer

  

19

 

 

	 	 

 

SCHEDULE A

 

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 CDN$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.

  

  

 

	
  

	
(f)

	
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.

 

	
4.

	
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

  

  

 

SCHEDULE B

 

ACCREDITED INVESTOR CERTIFICATE

 

(To be completed by Accredited Investors only)

 

The undersigned (the “Subscriber”) hereby confirms and certifies to Big North Graphite Corp. (the “Issuer”) that the Subscriber is purchasing the Units as principal and that the Subscriber is an “Accredited Investor” as defined in NI 45-106 and is: [check appropriate boxes]

 

	
  o

	
(a)

	
an individual who, either alone or with a spouse, beneficially owns financial assets 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 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded CDN$300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

 

	
  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 has net assets of at least CDN$5,000,000 as shown on its most recently prepared financial statements and that has not been created or used solely to purchase or hold securities as an accredited investor in this paragraph (d);

 

	
  o

	
(e)

	
a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

 

	
  o

	
(f)

	
a Canadian financial institution, or a Schedule III bank;

 

	
  o

	
(g)

	
the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

 

	
  o

	
(h)

	
a subsidiary of any person referred to in paragraphs (f) or (g), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

 

	
  o

	
(i)

	
a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);

 

	
  o

	
(j)

	
an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (i);

 

	
  o

	
(k)

	
the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

 

	
  o

	
(l)

	
a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec;

 

	
  o

	
(m)

	
any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

  

  

 

 

	
  o

	
(n)

	
a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada;

 

	
  o

	
(o)

	
an investment fund that distributes or has distributed its securities only to

 

	
  

	
(i)

	
a person that is or was an accredited investor at the time of the distribution;

 

	
  

	
(ii)

	
a person that acquires or acquired securities in the circumstances referred to in Sections 2.10 [Minimum amount investment], or 2.19 [Additional investment in investment funds] of NI 45-106; OR

 

	
  

	
(iii)

	
a person described in paragraph (i) or (ii) that acquires or acquired securities under Section 2.18 [Investment fund reinvestment] of NI 45-106;

 

	
  o

	
(p)

	
an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

 

	
  o

	
(q)

	
a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be;

 

	
  o

	
(r)

	
a person acting on behalf of a fully managed account managed by that person, if that person

 

	
  

	
(i)

	
is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; and

 

	
  

	
(ii)

	
in Ontario, is purchasing a security that is not a security of an investment fund;

 

	
  o

	
(s)

	
a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

 

	
  o

	
(t)

	
an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (f) to (i) or paragraph (n) in form and function;

 

	
  o

	
(u)

	
an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; OR

 

	
  o

	
(v)

	
a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor;

  

  

 

 

	
  

	
and for purposes hereof, words and phrases which are used in this Accredited Investor Certificate and which are defined in NI 45-106 will have the meaning ascribed thereto in NI 45-106.  Certain definitions that are relevant to qualifications as an “Accredited Investor” are attached hereto as Appendix I.  You must review these definitions carefully.

 

EXECUTED by the Subscriber at _____________________, this ________ day of ___________________, 2013.

 

	 If a corporation, partnership or other entity:	 	 If an Individual:
	 	 	 
	 	 	 
	 Signature of Authorized Signatory	 	 Signature
	 	 	 
	 Name and Position of Signatory	 	 Print Name
	 	 	 
	 Name of Purchasing Entity	 	Jurisdiction of Residence
	 	 	 
	 Jurisdiction of Residence	 	 

 

  

  

 

APPENDIX I TO SCHEDULE B

 

DEFINITIONS RELEVANT TO QUALIFICATIONS AS AN ACCREDITED INVESTOR

 

(a)           “Canadian financial institution” means

 

(i)           an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of the Cooperative Credit Associations Act (Canada), or

 

(ii)           a bank, loan corporation, trust company , trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

 

(b)           “control person” has the meaning ascribed to that term in securities legislation except Ontario where “control person” means any person that holds or is one of a combination of persons that hold

 

(i)           a sufficient number of any of the securities of an issuer so as to affect materially the control of the issuer, or

 

(ii)           more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holding of those securities does not affect materially the control of that issuer;

 

(c)           “eligibility adviser” means a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed;

 

(d)           “executive officer” means, for an issuer, an individual who is

 

(i)           a chair, vice-chair or president,

 

(ii)           a vice-president in charge of a principal business unit, division or function including sales, finance or production, or

 

(iii)           performing a policy-making function in respect of the issuer;

 

(e)           “financial assets” means (i) cash, (ii) securities or (iii) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

 

(f)           “founder” means, in respect of an issuer, a person who,

 

(i)           acting alone, in conjunction or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and

 

(ii)           at the time of the trade is actively involved in the business of the issuer;

 

(g)           “fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client's express consent to a transaction;

 

(h)           “investment fund” has the meaning ascribed thereto in National Instrument 81-106 - Investment Fund Continuous Disclosure;

  

  

 

(i)           “person” includes

 

(i)           an individual,

 

(ii)           a corporation,

 

(iii)           a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

 

(iv)           an individual or other person in that person's capacity as a trustee, executor, administrator or personal or other legal representative;

 

(j)           “related liabilities” means

 

(i)           liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

 

(ii)           liabilities that are secured by financial assets.

 

(k)           “spouse” means, an individual who,

 

(i)           is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual,

 

(ii)           is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or

 

(iii)           in Alberta, is an individual referred to in paragraph (i) or (ii) immediately above or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

 

(l)           “subsidiary” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary;

 

Affiliated Entities and Control

 

1.           An issuer is considered to be an affiliate of another issuer if one of them is a subsidiary of the other, or if each of them is controlled by the same person.

 

2.           A person (first person) is considered to control another person (second person) if

 

(a)           the first person beneficially owns or directly or indirectly exercises control or direction over securities of the second person carrying votes which, if exercised, would entitle the first person to elect a majority of the directors of the second person, unless the first person holds the voting securities only to secure an obligation,

 

(b)           the second person is a partnership, other than a limited partnership, and the first person holds more than 50% of the interests in the partnership, or

 

(c)           the second person is a limited partnership and the general partner of the limited partnership is the first person.

  

  

 

SCHEDULE C

 

REPRESENTATION LETTER

 

(To be completed by Officers, Directors, Employees, Family, Close Friends and Business Associates Only)

 

	
TO:

	
Big North Graphite Corp.

 

In connection with the purchase of Units of Big North Graphite Corp. (the “Issuer”) by the undersigned Subscriber, or if applicable, the principal on whose behalf the undersigned is purchasing as agent, the Subscriber hereby represents, warrants, covenants and ratifies to the Issuer that:

 

1.                      The Subscriber is resident in or is subject to the laws of a Province of Canada other than Ontario;

 

2.                      The Subscriber is purchasing the Units as principal for its own account;

 

3.                      It is (please initial):

 

	
  

	
___

	
(a)

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

 

	
  

	
___

	
(b)

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

 

	
  

	
___

	
(c)

	
a parent, grandparent, brother, sister, child or grandchild of the spouse of a director, senior officer or control person of the Issuer or of an affiliate of the Issuer; or

 

	
  

	
___

	
(d)

	
a close personal friend of a founder, director, executive officer or control person of the Issuer, or of an affiliate of the Issuer, the details of whose relationship is as follows; or

 

(insert name of applicable person)

Length of Relationship

Details of Relationship

 

	
  

	
___

	
(e)

	
a close business associate of a founder, director, executive officer or control person of the Issuer, or of an affiliate of the Issuer, the details of whose relationship is as follows; or

 

(insert name of applicable person)

Length of Relationship

 

Prior Business Dealings

Details of Relationship

  

  

 

 

	
  

	
___

	
(f)

	
a person or company of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, persons or companies described in paragraphs (a) to (e) (and in the case of paragraphs (d) or (e), the following information is provided):

 

(insert name of applicable person)

Length of Relationship

 

Prior Business Dealings (if applicable)

 

Details of Relationship

 

	
  

	
___

	
(g)

	
a trust or estate of which all of the beneficiaries or a majority of the trustees are persons or companies described in paragraphs (a) to (e) (and in the case of paragraphs (d) or (e), the following information is provided):

 

(insert name of applicable person)

 

Length of Relationship

Prior Business Dealings (if applicable)

 

Details of Relationship

 

4.                      The Subscriber represents and warrants that it is not resident in Saskatchewan.

 

5.                      For the purposes hereof, words and phrases used in this representation letter and which are defined in NI 45-106 will have the meaning ascribed thereto in NI 45-106.

 

6.                      Upon execution of this Schedule C by the Subscriber, this Schedule C will be incorporated into and form a part of the Subscription Agreement.

 

Dated:  ____________________________________, 2013.

 

 

	 	 	 
	 	  Print name of Subscriber	 
	 	 	 
	 By:	 	 
	 	 Signature	 
	 	 	 
	 	 Print name of Signatory	 
	 	 (if different from Subscriber)	 
	 	 	 
	 	Title	 

 

  

  

 

SCHEDULE D

FORM 45-106F5

(To be completed by Residents of Saskatchewan Only)

 

	 Risk Acknowledgement 

Saskatchewan Close Personal Friends and Close Business Associates

	  

I acknowledge that this is a risky investment:

 

●I am investing entirely at my own risk.

●No securities regulatory authority or regulator has evaluated or endorsed the merits of these securities.

●The person selling me these securities is not registered with a securities regulatory authority or regulator and has no duty to tell me whether this investment is suitable for me. [Instruction: Delete if sold by registrant]

●I will not be able to sell these securities except in very limited circumstances. I may never be able to sell these securities. [Instruction: Delete if issuer is reporting]

●The securities are redeemable, but I may only be able to redeem them in limited circumstances. [Instruction: Delete if securities are not redeemable]

●I will not be able to sell these securities for 4 months. [Instruction: Delete if issuer is not reporting]

●I could lose all the money I invest.

●I do not have a 2-day right to cancel my purchase of these securities or the statutory rights of action for misrepresentation I would have if I were purchasing the securities under a prospectus. I do have a 2-day right to cancel my purchase of these securities if I receive an amended offering document. 

 

I am investing $____________ [total consideration] in total; this includes any amount I am obliged to pay in future.

 

I am a close personal friend or close business associate of ____________ [state name], who is a ____________ [state title - founder, director, executive officer or control person] of ____________ [state name of issuer or its affiliate – if an affiliate state “an affiliate of the issuer” and give the issuer’s name].

 

I acknowledge that I am purchasing based on my close relationship with ____________ [state name of founder, director, executive officer or control person] whom I know well enough and for a sufficient period of time to be able to assess her/his capabilities and trustworthiness.

	
 W

 A

 R

 N

  I

 N

 G

	
 

I acknowledge that this is a risky investment and that I could lose all the money I invest.

 

Date    ______________________________                                                                                          Signature of Purchaser________________________________

 

                                                                                                                                                                            Print name of Purchaser_______________________________

  

Sign 2 copies of this document. Keep one copy for your records.

 

You are buying Exempt Market Securities

 

They are called exempt market securities because two parts of securities law do not apply to them. If an issuer wants to sell exempt market securities to you:

	
·

	
the issuer does not have to give you a prospectus (a document that describes the investment in detail and gives you some legal protections), and

	
·

	
the securities do not have to be sold by an investment dealer registered with a securities regulatory authority or regulator.

  

  

 

There are restrictions on your ability to resell exempt market securities.  Exempt market securities are more risky than other securities.

You may not receive any written information about the issuer or its business

If you have any questions about the issuer or its business, ask for written clarification before you purchase the securities.  You should consult your own professional advisers before investing in the securities.

You will not receive advice  [Instruction:  Delete if sold by registrant]

Unless you consult your own professional advisers, you will not get professional advice about whether the investment is suitable for you.

The issuer of your securities is a non-reporting issuer  [Instruction: Delete if issuer is reporting]

A non-reporting issuer does not have to publish financial information or notify the public of changes in its business. You may not receive ongoing information about this issuer.  You can only sell the securities of a non-reporting issuer in very limited circumstances.  You may never be able to sell these securities.

The securities you are buying are not listed [Instruction:  Delete if securities are listed or quoted]

The securities you are buying are not listed on any stock exchange, and they may never be listed. There may be no market for these securities.  You may never be able to sell these securities.

For more information on the exempt market, refer to the Saskatchewan Financial Services Commission’s website at http://www.sfsc.gov.sk.ca.

[Instruction:  The purchaser must sign 2 copies of this form.  The purchaser and the issuer must each receive a signed copy.]

  

  

 

SCHEDULE E

 

U.S. ACCREDITED INVESTOR CERTIFICATE

 

(To be completed by United States Investors)

 

A “United States investor” means any person located in the United States or any U.S. Person as defined in Regulation S (the definition of which includes, but is not limited to, (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate of which any executor or administrator is a U.S. Person, (iv) any trust of which any trustee is a U.S. person, and (v) any partnership or corporation organized outside of the United States by a U.S. Person principally for the purpose of investing in securities not registered under the U.S. Securities Act, unless it is organized, or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts). Scheme D

 

1.           The Investor covenants, represents and warrants to Big North Graphite Corp. (the “Issuer”) that:

 

(a)           it understands that the Securities have not been and will not be registered under the U.S. Securities Act, that the sale contemplated hereby is being made in reliance on the exemption from such registration requirement provided by Rule 506 of Regulation D, that as such the Securities will be “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act, and the Investor is familiar with such rule and understands the resale limitations imposed thereby and the U.S. Securities Act;

 

(b)           it acknowledges that it has not purchased 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, television or the Internet, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

 

(c)           it understands and agrees that there may be material tax consequences to the Investor of an acquisition, disposition or exercise of any of the securities.  The Issuer gives no opinion and makes no representation with respect to the tax consequences to the Investor under United States, state, local or foreign tax law of the undersigned’s acquisition or disposition of such securities.  In particular, no determination has been made whether the Issuer will be a “passive foreign investment company” (“PFIC”) within the meaning of Section 1291 of the United States Internal Revenue Code;

 

(d)           it understands and agrees that the financial statements of the Issuer have been prepared in accordance with International Financial Reporting Standards, which differ in some respects from United States generally accepted accounting principles, and thus may not be comparable to financial statements of United States companies;

 

(e)           it understands and acknowledges that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable state securities laws and regulations, the certificates, or an ownership statement issued under a direct registration system or other electronic book-entry system, representing the Shares, and any Warrant Shares issued upon exercise of the Warrants,  will bear a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.

  

  

 

SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT.

 

THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT “GOOD DELIVERY” OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE.”

 

If the Issuer is a “foreign issuer” within the meaning of Regulation S under the U.S. Securities Act at the time of sale, a new certificate, which will constitute “good delivery”, will be made available to the Investor upon provision by the Investor to the transfer agent of a declaration (in the form attached as Appendix “A”) that the sale of the securities represented thereby is being made in compliance with Rule 904 of Regulation S under the U.S. Securities Act;

 

(f)           it understands and agreed that the certificates representing the Warrants, and all certificates issued in exchange therefore or in substitution thereof, shall bear the legend set forth in paragraph (e) above as well as the following legend:

 

“THESE WARRANTS AND THE SECURITIES DELIVERABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THESE WARRANTS MAY NOT BE EXERCISED BY OR ON BEHALF OF A U.S. PERSON OR A PERSON IN THE UNITED STATES UNLESS THESE WARRANTS AND THE SHARES ISSUABLE UPON EXERCISE OF THESE WARRANTS HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.”;

 

(g)           it consents to the Issuer making a notation on its records or giving instruction to the registrar and transfer agent of the Issuer in order to implement the restrictions on transfer set forth and described herein;

 

(h)           it understands and acknowledges that the Issuer is not obligated to remain a “foreign issuer”;

 

(i)           if an individual, it is a resident of the state or other jurisdiction listed in its address on the execution page of the Subscription Agreement, or if the Investor is not an individual, the office of the Investor at which the Investor received and accepted the offer to purchase the Issuer’s Securities is the address listed on the execution page of the Subscription Agreement.

 

(j)           it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities and it is able to bear the economic risk of loss of its entire investment;

 

(k)           the Issuer has provided to it the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and it has had access to such information concerning the Issuer as it has considered necessary or appropriate in connection with its investment decision to acquire the Securities;

 

(l)           it is acquiring the Securities for its own account, for investment purposes only and not with a view to any resale, distribution or other disposition of the Securities in violation of the United States securities laws;

 

(m)           if it decides to offer, sell or otherwise transfer any of the Securities, it will not offer, sell or otherwise transfer any of such Securities directly or indirectly, unless

  

  

 

 

(i)           the sale is to the Issuer;

 

(ii)          the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations;

 

(iii)          the sale is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder and in accordance with any applicable state securities or “Blue Sky” laws; or

 

(iv)          the Securities are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities;

 

and, in the case of clauses (iii) or (iv) above, it has prior to such sale furnished to the Issuer an opinion of counsel or other evidence of exemption in form and substance reasonably satisfactory to the Issuer; and

 

(n)           the funds representing the purchase price which will be advanced by the Subscriber to the Corporation hereunder will not represent proceeds of crime for the purposes of the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “PATRIOT Act”), and the Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscriber’s name and other information relating to the subscription agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PATRIOT Act.  No portion of the purchase price to be provided by the Subscriber (i) has been or will be derived from or related to any activity that is deemed criminal under the laws of the United States of America, or any other jurisdiction, or (ii) is being tendered on behalf of a person or entity who has not been identified to or by the Subscriber, and it shall promptly notify the Corporation if the Subscriber discovers that any of such representations ceases to be true and provide the Corporation with appropriate information in connection therewith.

 

2.           The Investor further covenants, represents and warrants to the Issuer that it is an “accredited investor” as defined in Regulation D by virtue of satisfying  one or more of the categories indicated below (please place your initials on the appropriate line(s)):

 

	
1. Initials _______

	
Any bank as defined in Section 3(a)(2) of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the U.S. Securities Exchange Act of 1934; any insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; any investment company registered under the U.S. Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of US$5,000,000; any employee benefit plan within the meaning of the U.S. Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of US$5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are “accredited investors” (as such term is defined in Rule 501 of Regulation D of the U.S. Securities Act);

 

	
2. Initials _______

	
Any private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940;

 

	
3. Initials _______

	
Any organization described in Section 501(c)(3) of the U.S. Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US$5,000,000;

 

	
4. Initials _______

	
Any trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person (being defined as a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment);

 

	
5. Initials _______

	
A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of purchase, exceeds US$1,000,000 (for the purposes of calculating net worth, (i) the person’s primary residence shall not be included as an asset; (ii) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of this certification, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of this certification exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (iii) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence shall be included as a liability);

 

	
6. Initials _______

	
A natural person who had annual gross income during each of the last two full calendar years in excess of US$200,000 (or together with his or her spouse in excess of US$300,000) and reasonably expects to have annual gross income in excess of US$200,000 (or together with his or her spouse in excess of US$300,000) during the current calendar year, and no reason to believe that his or her annual gross income will not remain in excess of US$200,000 (or that together with his or her spouse will not remain in excess of US$300,000) for the foreseeable future;

 

	
7. Initials _______

	
Any director or executive officer of the Company; or

 

	
8. Initials _______

	
Any entity in which all of the equity owners meet the requirements of at least one of the above categories.

 

ONLY UNITED STATES SUBSCRIBERS NEED TO COMPLETE AND SIGN

 

	
Dated:

	
____________________

	  	
Signed:

	
________________________________

	  	  	  
	  	  	
_________________________________________

Print the name of Subscriber

	  	  	  
	  	  	
_________________________________________

Print official capacity or title, if applicable

	  	  	  
	  	  	
_________________________________________

Print name of individual whose signature appears above if different than the name of the Subscriber printed above.

 

  

  

 

APPENDIX “A” TO

 

U.S. ACCREDITED INVESTOR CERTIFICATE

 

Form of Declaration for Removal of Legend

 

TO:           Registrar and transfer agent for the shares of Big North Graphite Corp. (the “Issuer”)

The undersigned (A) acknowledges that the sale of the ____________common shares in the capital of the Issuer represented by certificate number _______________, to which this declaration relates, is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and (B) certifies that (1) the undersigned is not an “affiliate” (as defined in Rule 405 under the U.S. Securities Act) of the Issuer or a “distributor”, as defined in Regulation S, or an affiliate of a “distributor”; (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believe that the buyer was outside the United States, or (b) the transaction was executed on or through the facilities of the TSX Venture Exchange or any other designated offshore securities market within the meaning of Rule 902(b) of Regulation S under the U.S. Securities Act, and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged in any directed selling efforts in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act); (5) the seller does not intend to replace the securities sold in reliance on Rule 904 of Regulation S under the U.S. Securities Act with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S, is part of a plan or a scheme to evade the registration provisions of the U.S. Securities Act. Unless otherwise specified, terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

Dated:  ____________________________

 

	 	 X 
	 	 Signature of individual (if Seller is an individual)
	 	 X
	 	 Authorized signatory (if Seller is not an individual)
	 	 
	 	 Name of Seller (please print)
	 	 
	 	 Name of authorized signatory (please print)
	 	 
	 	Official capacity of authorized signatory (please print)

 

  

  

 

Affirmation by Seller’s Broker-Dealer

 

(Required for sales pursuant to Section (B)(2)(b) above)

 

We have read the representations of our customer ____________________ (the “Seller”) contained in the foregoing Declaration for Removal of Legend, dated _____________, 20__, with regard to the sale, for such Seller’s account, of _________________ common shares (the “Securities”) of the Corporation represented by certificate number ______________.  We have executed sales of the Securities pursuant to Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), on behalf of the Seller.  In that connection, we hereby represent to you as follows:

 

	
(1)

	
no offer to sell Securities was made to a person in the United States;

 

	
(2)

	
the sale of the Securities was executed in, on or through the facilities of the Toronto Stock Exchange, the TSX Venture Exchange or another designated offshore securities market (as defined in Rule 902(b) of Regulation S under the U.S. Securities Act), and, to the best of our knowledge, the sale was not pre-arranged with a buyer in the United States;

 

	
(3)

	
no “directed selling efforts” were made in the United States by the undersigned, any affiliate of the undersigned, or any person acting on behalf of the undersigned; and

 

	
(4)

	
we have done no more than execute the order or orders to sell the Securities as agent for the Seller and will receive no more than the usual and customary broker’s commission that would be received by a person executing such transaction as agent.

 

For purposes of these representations: “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; “directed selling efforts” means any activity 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 Securities (including, but not be limited to, the solicitation of offers to purchase the Securities from persons in the United States); and “United States” means the United States of America, its territories or possessions, any State of the United States, and the District of Columbia.

 

Legal counsel to the Corporation shall be entitled to rely upon the representations, warranties and covenants contained herein to the same extent as if this affirmation had been addressed to them.                                                                         

 

	 Name of Firm:	 	 
	 By:	 	 
	 	 Authorized SignatoryNON-QUALIFIED STOCK OPTION AGREEMENT

Exhibit 10.4

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) entered into as of May 14, 2013 (the “Grant Date”) between Aspen Group, Inc. (the “Company”) and Michael Matte (the “Optionee”). 

WHEREAS, by action taken by the Board of Directors (the “Board”) it has adopted the 2012 Equity Incentive Plan (the “Plan”); and

WHEREAS, pursuant to the Plan, it has been determined that in order to enhance the ability of the Company to attract and retain qualified employees, consultants and directors, the Company has granted the Optionee the right to purchase the common stock of the Company pursuant to stock options.

NOW THEREFORE, in consideration of the mutual covenants and promises hereafter set forth and for other good and valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows:

.

Grant of Non-Qualified Options.  On the Grant Date, the Company irrevocably granted to the Optionee, as a matter of separate agreement and not in lieu of salary or other compensation for services, the right and option to purchase all or any part of 1,291,211 shares of authorized but unissued or treasury common stock of the Company (the “Options”) on the terms and conditions herein set forth.  The Optionee acknowledges receipt of a copy of the Plan, as amended.  The Options were granted in connection with that certain Employment Agreement dated May 16, 2013 between the Company and the Optionee (the “Employment Agreement”).  If any terms contained in this Agreement conflict with the terms of the Employment Agreement, the terms of the Employment Agreement shall prevail

.

Price.  The exercise price of the Options is $0.35 per share.  

.

Vesting - When Exercisable.  

(a)

Of the Options, (i) 791,211 shall vest in seven equal monthly increments on the last calendar day of each month (with the first vesting date being June 30, 2013) and (ii) 500,000 shall vest in three equal increments on April 30, 2014, 2015 and 2016, subject to continued employment on each applicable vesting date.  Any fractional vesting shall be rounded up to the extent necessary without increasing the number of Options granted.  In the event of a Change of Control as defined in the Plan, the Options shall be assumed or substituted by the successor corporation or a parent or subsidiary of the successor corporation.  If the successor corporation refuses to assume or substitute for the Options, all Options immediately prior to the closing of the Change of Control event will automatically be exercised by a net exercise of the Options, under which the Company will not require a payment of the exercise price of the Options in cash but will reduce the number of shares of stock issued upon exercise by a whole number of shares based upon 

1

the price paid per share by the successor corporation. For example, if the successor corporation pays $2.00 per share and your exercise price is $0.50, if you hold 1,000 options, the Company will issue you 750 shares immediately prior to the Change of Control event.  If the successor corporation pays a price per share which is below the exercise price under Section 2, then the Options will terminate immediately upon the Change of Control event if they are not assumed.  

(b)

Subject to Section 24 of the Plan, any of the Options may be exercised prior to and until 6:00 p.m. New York time seven years from the Grant Date (the “Expiration Date”).  

(c)

Notwithstanding any other provision of this Agreement, upon resolution of the Board or the Committee (as defined in the Plan), the Options shall be immediately forfeited if any of the events specified in Sections 24(a) or (b) of the Plan, as applicable, occur.

4.

Termination of Relationship.  The Options granted hereunder shall be subject to the termination provisions under Sections 10 and 11 of the Plan.

5.

Profits on the Sale of Certain Shares; Redemption.  The Options granted hereunder shall be subject to the redemption provisions under Section 24(c) of the Plan.

6.

Method of Exercise.  The Options shall be exercisable by a written notice in the form attached to this Agreement, which shall:

(a)  

be signed by the person or persons entitled to exercise the Options and, if the Options are being exercised by any person or persons other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons to exercise the Options; 

(b) 

be accompanied by full payment of the exercise price by tender to the Company of an amount equal to the exercise price multiplied by the number of underlying shares being purchased either in cash, by wire transfer, or by certified check or bank cashier’s check, payable to the order of the Company; 

(c)

be accompanied by payment of any amount that the Company, in its sole discretion, deems necessary to comply with any federal, state or local withholding requirements for income and employment tax purposes.  If the Optionee fails to make such payment in a timely manner, the Company may: (i) decline to permit exercise of the Options or (ii) withhold and set-off against compensation and any other amounts payable to the Optionee the amount of such required payment. Such withholding may be in the shares underlying the Options at the sole discretion of the Company.

The certificate or certificates for shares of common stock as to which the Options shall be exercised shall be registered in the name of the person or persons exercising the Options.

2

7.

Anti-Dilution Provisions.  The Options granted hereunder shall have the anti-dilution rights set forth in Section 14 of the Plan.

8.

Necessity to Become Holder of Record.  Neither the Optionee, the Optionee’s estate, nor any Transferee shall have any rights as a shareholder with respect to any shares underlying the Options until such person shall have become the holder of record of such shares.  No dividends or cash distributions, ordinary or extraordinary, shall be provided to the holder if the record date is prior to the date on which such person became the holder of record thereof.

9.  

Reservation of Right to Terminate Relationship.  Nothing contained in this Agreement shall restrict the right of the Company to terminate the relationship of the Optionee at any time, with or without cause.  The termination of the relationship of the Optionee by the Company, regardless of the reason therefor, shall have the results provided for in Section 24 of the Plan.  

10.  

Conditions to Exercise of Options.  If a Registration Statement on Form S-8 (or any other successor form) is not effective as to the shares of common stock issuable upon exercise of the Options, the remainder of this Section 10 is applicable as to federal law.  In order to enable the Company to comply with the Securities Act of 1933 (the “Securities Act”) and relevant state law, the Company may require the Optionee, the Optionee’s estate, or any Transferee as a condition of the exercising of the Options granted hereunder, to give written assurance satisfactory to the Company that the shares subject to the Options are being acquired for such person’s own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares either shall be made pursuant to a registration statement under the Securities Act and applicable state law which has become effective and is current with regard to the shares being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable state law.

The Options are further subject to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification of the shares of common stock underlying the Options upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issue or purchase of shares underlying the Options, the Options may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected.  

11.

Sale of Shares Acquired Upon Exercise of Options.  If the Optionee is an officer (as defined by Section 16(b) of the Securities Exchange Act of 1934 (“Section 16(b)”)) or a director of the Company, any shares of the Company’s common stock acquired pursuant to the Options cannot be sold by the Optionee until at least six months elapse from the Grant Date except in case of death or disability or if the grant was exempt from the short-swing profit provisions of Section 16(b). 

12.  

Transfer.  No transfer of the Options by the Optionee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the letters testamentary or such other evidence as 

3

the Board may deem necessary to establish the authority of the estate and the acceptance by the Transferee or Transferees of the terms and conditions of the Options.

13.  

Duties of the Company.  The Company will at all times during the term of the Options:

(a)  

Reserve and keep available for issue such number of shares of its authorized and unissued common stock as will be sufficient to satisfy the requirements of this Agreement;

(b)  

Pay all original issue taxes with respect to the issuance of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith;

(c)  

Use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

14.

Parties Bound by Plan.  The Plan and each determination, interpretation or other action made or taken pursuant to the provisions of the Plan shall be final and shall be binding and conclusive for all purposes on the Company and the Optionee and the Optionee’s respective successors in interest.

15.

Severability.  In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

16.

Arbitration.  Except to the extent a party is seeking equitable relief, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in New York County, New York (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the rules of the American Arbitration Association then in effect.  The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.

17.

Benefit.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.

18.

Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing and shall be delivered to the addresses in person, by FedEx or similar receipted delivery as follows:

The Optionee:

Michael Matte

4600 N. Ocean Dr. #404

Singer Island, Florida 33404

4

The Company:

Aspen Group, Inc. 

                                

224 West 30th Street, Suite 604 

New York, New York 10001

Attention: Michael Mathews

with a copy to:

Michael D. Harris, Esq.

Nason, Yeager, Gerson, White & Lioce, P.A. 

1645 Palm Beach Lakes Blvd., 

Suite 1200

West Palm Beach, FL 33401

or to such other address as either of them, by notice to the other may designate from time to time.  

19.

Attorney’s Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorneys’ fees, costs and expenses.

20.

Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance whether sounding in contract, tort or otherwise shall be governed or interpreted according to the laws of Delaware without regard to choice of law considerations.  

21.

Oral Evidence.  This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

22.

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

23.

Section or Paragraph Headings.  Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

24.

Stop-Transfer Orders.  

(a)

The Optionee agrees that, in order to ensure compliance with the restrictions set forth in the Plan and this Agreement, the Company may issue appropriate “stop transfer” instructions to its duly authorized transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

5

(b)

The Company shall not be required (i) to transfer on its books any shares of the Company’s common stock that have been sold or otherwise transferred in violation of any of the provisions of the Plan or the Agreement or (ii) to treat the owner of such shares of common stock or to accord the right to vote or pay dividends to any purchaser or other Transferee to whom such shares of common stock shall have been so transferred.

25.

Exclusive Jurisdiction and Venue. Any action brought by either party against the other concerning the transactions contemplated by or arising under this Agreement shall be brought only in the state or federal courts of New York and venue shall be in New York County or appropriate federal district and division.  The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  

[Signature Page to Follow]

6

IN WITNESS WHEREOF the parties hereto have set their hand and seals the day and year first above written.

					
	WITNESSES:

	 
	ASPEN GROUP, INC.

	 

	  

	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By: 

	/s/ Michael Mathews     

	 

	 
	 
	 
	Michael Mathews

	 

	 
	 
	 
	Chief Executive Officer

	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	OPTIONEE:

	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	/s/ Michael Matte

	 

	 
	 
	Michael Matte

	 

7

NOTICE OF EXERCISE

To: 

__________________________

__________________________

__________________________

Attention _________, _______________

Facsimile: (____) _____-______

Please be advised that I hereby elect to exercise my option to purchase shares of ___________, pursuant to the Stock Option Agreement dated __________________.  

Number of Shares to Be Purchased:

_______________

Multiplied by: Purchase Price Per Share

$______________

Total Purchase Price

$_______________

Please check the payment method below:  

____

Enclosed is a check for the total purchase price above.  

____

Wire transfer sent on _____________, 20__.  

Please contact me as soon as possible to discuss the possible payment of withholding taxes and any other documents we may require.   

Name of Option Holder (Please Print): ________________________________

Address of Option Holder

________________________________________________________________

Telephone Number of Option Holder: 

________________________________

Social Security Number of Option Holder: 

________________________________

8

If the certificate is to be issued to person other than the Option Holder, please provide the following for such person: 

________________________________

(Name)

________________________________

(Address)

________________________________

________________________________

________________________________

(Telephone Number)

________________________________

(Social Security Number)

In connection with the issuance of the Common Stock, if the Common Stock may not be immediately publicly sold, I hereby represent to the Company that I am acquiring the Common Stock for my own account for investment and not with a view to, or for resale in connection with, a distribution of the shares within the meaning of the Securities Act of 1933 (the “Securities Act”). 

I am______ am not ______ [please initial one] an accredited investor for at least one of the reasons on the attached Exhibit A.  If the SEC has amended the rule defining the definition of accredited investor, the new provisions shall be applicable. I acknowledge that as a condition to exercise the Options, the Company may request updated information regarding the Holder’s status as an accredited investor.  My exercise of the Options shall be in compliance with the applicable exemptions under the Securities Act and applicable state law.

________________________________

Dated: _________________

Signature of Option Holder

9

Exhibit A 

To Stock Option Agreement

For Individual Investors Only:

1.

A person who has an individual net worth, or a person who with his or her spouse has a combined net worth, in excess of $1,000,000. For purposes of calculating net worth under this paragraph (1), (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to exercising the stock options, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

2a.

A person who had individual income (exclusive of any income attributable to the person’s spouse) of more than who has $200,000 in each of the two most recently completed years and who reasonably expects to have an individual income in excess of $200,000 this year. 

2b.

Alternatively, a person, who with his or her spouse, has joint income in excess of $300,000 in each applicable year.

3.

A director or executive officer of the Company.

Other Investors:

4.

Any bank as defined in Section 3(a)(2) of the Securities Act of 1933 (“Securities Act”) whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance company as defined in Section 2(13) of the Securities Act; investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

5.

A private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

10

6.

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

7.

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

8.

An entity in which all of the equity owners are accredited investors.

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}]]