Document:

loop_ex101.htm

EXHIBIT 10.1
  
 NOTE AND WARRANT PURCHASE AGREEMENT
  
 This Note and Warrant Purchase Agreement, dated as of ____________, 2018 (this “Agreement”), is entered into by and among Loop Industries, Inc., a Nevada corporation (the “Company”), and the person or entities listed on the schedule attached hereto as Schedule I (the “Investor”), as such Schedule I may be amended in accordance with Section 7 hereof.
  
 RECITALS 
  
 A. On the terms and subject to the conditions set forth herein, the Investor is willing to purchase from the Company, and the Company is willing to sell to such Investor, a convertible promissory note in the principal amount set forth opposite such Investor’s name on Schedule I hereto, together with a related warrant to acquire shares of the Company’s capital stock.
  
 B. Capitalized terms not otherwise defined herein shall have the meaning set forth in the form of Note (as defined below) attached hereto as Exhibit A. 
  
 AGREEMENT 
  
 NOW THEREFORE, in consideration of the foregoing, and the representations, warranties, and conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:
  
 1. The Note and the Warrant.
  
 (a) Issuance of Note. Subject to all of the terms and conditions hereof, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase, a convertible promissory note in the form of Exhibit A hereto (the “Note”) in the principal amount set forth opposite the respective Investor’s name on Schedule I hereto.
  
 (b) Issuance of Warrant. Concurrently with the issuance of the Note to the Investor, the Company will issue to the Investor a warrant in the form attached hereto as Exhibit B (the “Warrant”) to purchase up to a number of shares of Common Stock equal to the number of shares set forth opposite the Investor’s name on Schedule I hereto.
  
 (c) Delivery. The sale and purchase of the Note and Warrant shall take place at a closing (the “Closing”) to be held at such place and time as the Company and the Investor may determine (the “Closing Date”). At the Closing, the Company will deliver to the Investor the Note and Warrant to be purchased by such Investor, against receipt by the Company of the corresponding purchase price set forth on Schedule I hereto (the “Purchase Price”). 
  
 (d) Use of Proceeds. The proceeds of the sale and issuance of the Note shall be used for general corporate purposes.
  
 (e) Payments. The Company will make all cash payments due under the Note in immediately available funds by 5:00 p.m. eastern time on the date such payment is due at the address for such purpose specified below the Investor’s name on Schedule I hereto, or at such other address, or in such other manner, as an Investor or other registered holder of a Note may from time to time direct in writing.
  
  	 
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 2. Representations and Warranties of the Company. The Company represents and warrants to the Investor that:
  
 (a) Due Incorporation, Qualification, etc. The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada; (ii) has the power and authority to own, lease and operate its properties and carry on its business as now conducted; and (iii) is duly qualified, licensed to do business and in good standing as a foreign corporation in each jurisdiction where the failure to be so qualified or licensed could reasonably be expected to have a material adverse effect on the Company.
  
 (b) Authority. The execution, delivery and performance by the Company of each Transaction Document to be executed by the Company and the consummation of the transactions contemplated thereby (i) are within the power of the Company and (ii) have been duly authorized by all necessary actions on the part of the Company.
  
 (c) Enforceability. Each Transaction Document executed, or to be executed, by the Company has been, or will be, duly executed and delivered by the Company and constitutes, or will constitute, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
  
 (d) Non-Contravention. The execution and delivery by the Company of the Transaction Documents executed by the Company and the performance and consummation of the transactions contemplated thereby do not and will not (i) violate the Company’s Articles of Incorporation or Bylaws (as amended, the “Charter Documents”) or any material judgment, order, writ, decree, statute, rule or regulation applicable to the Company; (ii) violate any provision of, or result in the breach or the acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or both), any material mortgage, indenture, agreement, instrument or contract to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any Lien upon any property, asset or revenue of the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties. 
  
 (e) Subsidiaries. Each of the Company’s subsidiaries is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and is in good standing under such laws and has the power and authority to own, lease and operate its properties and carry on its business as now conducted. None of the Company’s subsidiaries owns or leases property or engages in any activity in any jurisdiction that might require its qualification to do business as a foreign corporation in such jurisdiction and in which the failure to qualify as such would have a material adverse effect on the Company and its subsidiaries, taken as a whole.
  
 (f) Approvals. No consent, approval, order or authorization of, or registration, declaration or filing with, any governmental authority or other Person (including, without limitation, the shareholders of any Person) is required in connection with the execution and delivery of the Transaction Documents executed by the Company and the performance and consummation of the transactions contemplated thereby, other than such as have been obtained and remain in full force and effect and other than such qualifications or filings under applicable securities laws as may be required in connection with the transactions contemplated by this Agreement.
  
 (g) No Violation or Default. The Company is not is in violation of or in default with respect to (i) its Charter Documents or any material judgment, order, writ, decree, statute, rule or regulation applicable to such Person; or (ii) any material mortgage, indenture, agreement, instrument or contract to which such Person is a party or by which it is bound (nor is there any waiver in effect which, if not in effect, would result in 
  
  	 
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 (h) No “Bad Actor” Disqualification. The Company has exercised reasonable care, in accordance with Securities and Exchange Commission rules and guidance, to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act (“Disqualification Events”). To the Company’s knowledge, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of the Company; any director, executive officer, other officer participating in the offering, general partner or managing member of the Company; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Note and the Warrant; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Note and the Warrant (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor.
  
 3. Representations and Warranties of Investor. The Investor represents and warrants to the Company upon the acquisition of a Note and Warrant as follows:
  
 (a) Binding Obligation. Such Investor has full legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement and the Transaction Documents constitute valid and binding obligations of such Investor, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
  
 (b) Securities Law Compliance. Such Investor has been advised that the Note, the Warrant and the underlying securities have not been registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Such Investor is aware that, the Company is under no obligation to effect any such registration with respect to the Note, the Warrant or the underlying securities or to file for or comply with any exemption from registration. Such Investor has not been formed solely for the purpose of making this investment and is purchasing the Note or Warrant to be acquired by such Investor hereunder for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Such Investor has such knowledge and experience in financial and business matters that such Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing such Investor’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time. Such Investor is an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act and shall submit to the Company such further assurances of such status as may be reasonably requested by the Company. Such Investor has furnished or made available any and all information requested by the Company or otherwise necessary to satisfy any applicable verification requirements as to accredited investor status. Any such information is true, correct, timely and complete. The residency of the Investor (or, in the case of a partnership or corporation, such entity’s principal place of business) is correctly set forth beneath such Investor’s name on Schedule I hereto.
  
  	 
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 (c) Own Account. The Investor is acquiring the Note and Warrant for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof, and that the Investor has no present intention of selling the same. The Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity or to any third person or entity with respect to any of the Note, the Warrant or the underlying securities.
  
 (d) Economic Risk. The Investor understands and acknowledges that the Company has a limited financial and operating history and that an investment in the Company is highly speculative and involves substantial risks. The Investor can bear the economic risk of the Investor’s investment and is able, without impairing the Investor’s financial condition, to hold the Note, the Warrant or the underlying securities for an indefinite period of time and to suffer a complete loss of the Investor’s investment.
  
 (e) Access to Information. Such Investor acknowledges that the Company has given such Investor access to the corporate records and accounts of the Company and to all information in its possession relating to the Company, has made its officers and representatives available for interview by such Investor, and has furnished such Investor with all documents and other information required for such Investor to make an informed decision with respect to the purchase of the Note and the Warrant.
  
 (f) Tax Advisors. Such Investor has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, such Investor relies solely on any such advisors and not on any statements or representations of the Company or any of its agents, written or oral. Such Investor understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment and the transactions contemplated by this Agreement.
  
 (g) No “Bad Actor” Disqualification Events. Neither (i) such Investor, (ii) any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any beneficial owner of any of the Company’s voting equity securities (in accordance with Rule 506(d) of the Securities Act) held by such Investor is subject to any Disqualification Event (as defined in Section 2(h)), except for Disqualification Events covered by Rule 506(d)(2) or (d)(3) under the Securities Act and disclosed reasonably in advance of the Closing in writing in reasonable detail to the Company.
  
 (h) Legends. The Investor understands and agrees that the certificate(s) or statement(s) of ownership evidencing the shares of Common Stock then issued pursuant to the conversion of the Note or the exercise of the Warrant (the “Shares”), or any other securities issued in respect of the Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall bear the following legend:
  
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
  
  	 
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 (i) Canadian Securities Laws. In addition to the representations and warranties set forth above, for purposes of complying with Canadian securities laws applicable to the Company, the Investor represents and warrants to the Company that it is purchasing the Shares as principal for its own account, not for the benefit of any other person, for investment only and not with a view to the resale or distribution of all or any of the Shares, and if the Investor is acting for a principal, such principal is purchasing as principal for its own account, not for the benefit of any other person, for investment only and not with a view to resale or distribution, and such Investor is either (a) an “accredited investor” as such term is defined in National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”); provided however: (i) it was not created or used solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the definition of “accredited investor” in NI 45-106, and (ii) it has concurrently executed and delivered an “Accredited Investor’s Representation Letter” in the form attached to this Subscription Agreement as Schedule A (including Appendix B to Schedule A thereto if the Investor is an individual) and specifically represents and warrants that one or more of the categories set forth in Appendix A attached to the Accredited Investor’s Representation Letter, in all respects, describes the Investor and will describe the Investor as at the time of Closing, and the Investor has so indicated by initialing next to the category in such Appendix A which so described it; or (b) is purchasing the Shares pursuant to another exemption from the prospectus and registration requirements (particulars of which have been enclosed herewith by the Investor, subject to the satisfaction of the Company) available to such Investor under applicable Canadian securities laws and shall deliver to the Company such further particulars of the exemption(s) and the Investor’s qualifications thereunder as the Company or its counsel may request. 
  
 (j) Canadian Resale Restrictions. The Investor understands and agrees that the Shares are subject to resale restrictions under applicable Canadian securities legislation, regulation, rules, order and policies relating to the sale of the Shares, including a four (4) month restricted period on resale under National Instrument 45-102 – Resale of Securities, and agrees that it will comply with all relevant Canadian securities legislation concerning any resale of the Shares and acknowledges that it has been advised to consult with its legal advisors with respect to complying with all restrictions applicable to any such resale. In addition to any other applicable legends, the Shares will also be subject to the following resale restriction:
  
 “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (i) [●], 2018 AND (ii) THE DATE THAT THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.”
  
 4. Conditions to Closing of the Investor. The Investor’s obligations at the Closing are subject to the fulfillment, on or prior to the Closing Date, of all of the following conditions, any of which may be waived in whole or in part by the Investor:
  
 (a) Representations and Warranties. The representations and warranties made by the Company in Section 2 hereof shall have been true and correct when made, and shall be true and correct on the Closing Date. 
  
 (b) Governmental Approvals and Filings. Except for any notices required or permitted to be filed after the Closing Date with certain federal and state securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful sale and issuance of the Note and Warrant.
  
  	 
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 (c) Legal Requirements. At the Closing, the sale and issuance by the Company, and the purchase by the Investor, of the Note and Warrant shall be legally permitted by all laws and regulations to which the Investor or the Company are subject.
  
 (d) Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to the Investor.
  
 (e) Transaction Documents. The Company shall have duly executed and delivered to the Investor the following documents:
  
 (i) This Agreement; and
  
 (ii) The Note and Warrant issued hereunder.
  
 5. Miscellaneous.
  
 (a) Waivers and Amendments. Any provision of this Agreement, the Warrant and the Note may be amended, waived or modified only upon the written consent of the Company and the Investor. 
  
 (b) Governing Law. This Agreement and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York or of any other state. 
  
 (c) Survival. The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement.
  
 (d) Successors and Assigns. Subject to the restrictions on transfer described in Sections 7(e) and 7(f) below, the rights and obligations of the Company and the Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
  
 (e) Piggy-Back Registration. For two (2) years following the Closing, if at any time the Company shall determine to prepare and file with the Securities and Exchange Commission’s (the “SEC”) a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to the Investor written notice of such determination and if, within ten days after receipt of such notice, any such Investor shall so request in writing, the Company shall use commercially reasonable efforts to include in such registration statement all or any part of the Shares and held by such Investor that such Investor requests to be registered. If an offering in connection with which an Investor is entitled to registration under this Section is an underwritten offering, then the Investor whose Shares are included in such registration statement shall, unless otherwise agreed by the Company, (i) offer and sell his, her or its Shares in an underwritten offering using the same underwriter(s) and on the same terms and conditions as other shares of the Common Stock included in such underwritten offering, (ii) enter into the underwriting agreement and lock-up agreements as agreed upon by the Company and the underwriter(s) and (iii) cooperate with and provide any documentation agreed upon by the Company and the underwriter(s) to effectuate such offering. 
  
  	 
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 (f) Registration, Transfer and Replacement of the Note. Company will keep, at its principal executive office, books for the registration and registration of transfer of the Note. Prior to presentation of any Note for registration of transfer, the Company shall treat the Person in whose name such Note is registered as the owner and holder of such Note for all purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to any restrictions on or conditions to transfer set forth in any Note, the holder of any Note, at its option, may in person or by duly authorized attorney surrender the same for exchange at the Company’s chief executive office, and promptly thereafter and at the Company’s expense, except as provided below, receive in exchange therefor one or more new Note(s), each in the principal requested by such holder, dated the date to which interest shall have been paid on the Note so surrendered or, if no interest shall have yet been so paid, dated the date of the Note so surrendered and registered in the name of such Person or Persons as shall have been designated in writing by such holder or its attorney for the same principal amount as the then unpaid principal amount of the Note so surrendered. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it; or (b) in the case of mutilation, upon surrender thereof, the Company, at its expense, will execute and deliver in lieu thereof a new Note executed in the same manner as the Note being replaced, in the same principal amount as the unpaid principal amount of such Note and dated the date to which interest shall have been paid on such Note or, if no interest shall have yet been so paid, dated the date of such Note.
  
 (g) Assignment by the Company. The rights, interests or obligations hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of the Investor.
  
 (h) Entire Agreement. This Agreement together with the other Transaction Documents constitute and contain the entire agreement among the Company and Investor and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.
  
 (i) Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall in writing and emailed, mailed or delivered to each party as follows: (i) if to a Investor, at such Investor’s address or email set forth in the Schedule of Investor attached as Schedule I, or at such other address as such Investor shall have furnished the Company in writing, or (ii) if to the Company, at 480 Fernand-Poitras, Terrebonne, Quebec, Canada, J6Y 1Y4 , (450) 951-8555, info@loopindustries.com, or at such other address or email as the Company shall have furnished to the Investor in writing. All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) when received after being delivered by email (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service of recognized standing or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.
  
 (j) Severability of this Agreement. If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
  
 (k) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile and scanned copies of signed signature pages will be deemed binding originals.
  
 (Signature Page Follows)
  
  	 
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 The parties have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the date and year first written above.
  
  	  
	 COMPANY:
	  

	  
	  
	  
	  

	  
	 LOOP INDUSTRIES, INC.
 a Nevada corporation
	  

	  
	  
	  
	  

	  
	 By:
		  

	  
	 Name:
		  

	  
	 Title:
		  

	  
	  
	  
	  

	  
	 INVESTOR:
	  

	  
	  
	  
	  

	  
	 [INSERT NAME]
	  

	  
	  
	  
	  

	  
	 By:
		  

	  
	 Name:
		  

	  
	 Title:
		  

  
 [Signature page for Note and Warrant Purchase Agreement]
  
  	 
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 SCHEDULE I
  
 SCHEDULE OF INVESTOR
  
 	 Name and Address 
	  
	 Note Amount 
	  
	 Warrant

	  
	  
	  
	  
	  

	 [INSERT NAME]
  
 Address for all notices:
  
 ________________________
 ________________________
 Attn: ___________________
 Tel.:( ) ___-____
 Email:__________
	  
	 $[INSERT AMOUNT]
	  
	 50% of the shares issued upon the conversion of the note

  
  	 
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 Exhibit A
  
 FORM OF NOTE
  
  
  
  
  
  	 
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 Exhibit B
  
 FORM OF WARRANT
  
  
  
  
  
  
 	-11-nink_ex102.htm

EXHIBIT 10.2
  
 DATED THE [day] DAY OF [month,year]
  
 BETWEEN
  
 SBS MINING CORP MALAYSIA SDN. BHD.
 (Incorporated in Malaysia)
 (Company No. 829349-K)
  
 AND
  
 [Name]
 [Identification Number]
  
 _________________________________________
  
  
 SUBSCRIPTION AGREEMENT FOR PREFERENCE SHARES
 IN
 SBS MINING CORP MALAYSIA SDN. BHD.
 (Company No. 829349-K) 
  
 __________________________________________
  
  
 Prepared by:
  
  	 
	 
	 
  
	 

  
  	 Subscription Agreement for Preference Shares   
	   1

  
 THIS AGREEMENT is made on the date set out in the Item 1 of the First Schedule.
  
 BETWEEN:-
  
  	1.	SBS MINING CORP MALAYSIA SDN. BHD. (Company No. 829349-K), a private company limited by shares duly incorporated and existing under the laws of Malaysia and its registered address at 23-2, Jalan 45A/26 Sri Rampai, Setapak, 53300 Kuala Lumpur, Malaysia (hereinafter referred to as the “Company”) of the one part;

  
 AND
  
 2. The person or company whose names, particulars and addresses are set out in the Item 2 of First Schedule hereto (hereinafter referred to as the “Investor”) of the other part.
  
 RECITALS:-
  
  	A.	The Company is principally engaged in prospecting of minerals and to carry out mining of minerals. The Company is proposing to venture into dredging of marine sand (hereinafter referred to as the “Business”).
	  
	  

	B.	The Company requires additional funds of up to Ringgit Malaysia Fifty Million (RM50,000,000.00) only for its capital expenditure and business expansion requirements. The Company proposes to raise such funds through the issue and allotment of new redeemable cumulative preference shares to be issued at an issue price of RM1.00 each (hereinafter referred to as the “Preference Shares” or “RPS”) in the share capital of the Company. For the avoidance of doubt, the Investor hereby agrees that the Company shall have the right to invite additional investor(s) to subscribe for the Preference Shares.
	  
	  

	C.	The Investor is desirous of investing in the Business after considering and understanding the presentation proposal in respect of the nature of the Business and the terms of the RPS (hereinafter referred to as the “Proposal”) by the Company and thereafter has agreed to subscribe for the Subscription Preference Shares (as defined below) in accordance with the terms and conditions of this Agreement.

  
 IT IS HEREBY AGREED as follows:-
  
  	1.	DEFINITIONS & INTERPRETATION

  
  	1.1	In this Agreement, unless the subject or context otherwise requires:-

   
  	  
	1.1.1	the following words and expressions shall have the following meanings:-

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   2

    
  	  
	 “Act”
	 means the Companies Act 2016 of Malaysia;

	  
		
	  
	 “Business Day”
	 means a day except a Saturday, Sunday or public holiday (gazetted or ungazetted and whether scheduled or unscheduled) on which banks are open for business in Kuala Lumpur, Malaysia and the expression “Business Days” shall have a corresponding meaning;

	  
		
	  
	 “Company”
	 means SBS MINING CORP MALAYSIA SDN. BHD. (Company No. 829349-K);

	  
		
	  
	 “Completion” 
	 means, the completion of the subscription of the Subscription Preference Shares in accordance with the provisions of Clause 3;

	  
		
	  
	 “Completion Date”
	 means the date of which Completion takes place;

	  
		
	  
	 “Investor”
	 means such person or company whose particulars are as set out in Item 2 of the First Schedule;

	  
		
	  
	 “Ordinary Shares”
	 means the ordinary shares in the share capital of the Company, and the expression "Ordinary Share" means any of them;

	  
		
	  
	 “Parties”
	 means, collectively, the Company, the Investor and the Shareholders, and the expression "Party" means any one of them as the context dictates;

	  
		
	  
	 “Preference Shares”
	 means 12% redeemable cumulative preference shares of RM1.00 each to be created as a separate class of shares in the share capital of having the terms set out in the Second Schedule;

	  
		
	  
	 “Proposal Slides’
	 means the presentation proposal slides in respect of the nature of the Business and terms of the RPS;

	  
		
	  
	 “RM”
	 means the lawful currency of Malaysia;

	  
		
	  
	 “Security Interest” 
	 includes any interest or equity of any person (including any right to acquire, option or right of first refusal) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement;

	  
		
	  
	 “Shareholders”
	 means collectively, the holders of the Ordinary Shares of the Company, and the expression “Shareholder” means a person who is registered as a holder for the time being of the Ordinary Shares of the Company;

	  
	 “Subscription Preference Shares”
	 means such number of new Preference Shares that may be subscribed hereunder by the Investor as set out in Item 3 of the First Schedule at the Subscription Price, and the expression “Subscription Preference Shares” means any one of them; and

	  
		
	  
		
	  
	 “Subscription Price”
	 means the total consideration payable by the Investor for the Subscription Preference Shares computed on the basis of an issue price of RM1.00 per Subscription Preference Share as set out in Item 4 of the First Schedule;

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   3

    
  	  
	1.1.2	any reference to a statutory provision shall include (i) all subordinate legislation made from time to time under that provision (whether or not amended, modified, re-enacted or consolidated) and (ii) such provision as from time to time amended, modified, re-enacted or consolidated, whether before or after the date of this Agreement;
	  
	  
	  

	  
	1.1.3 	any reference to “accounts” shall include the directors' and auditors' reports, relevant balance sheets and profit and loss accounts (on a consolidated basis where relevant) and related notes together with all documents which are or would be required by law to be annexed to the accounts of the company concerned to be laid before the company in general meeting for the accounting reference period in question;
	  
	  
	  

	  
	1.1.4	any reference to “law” includes common law and any constitution, decree, judgement, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, having the force of law);
	  
	  
	  

	  
	1.1.5	references to Recitals, Clauses, Schedules are to recitals and clauses of and schedules to this Agreement;
	  
	  
	  

	  
	1.1.6	any reference to this Agreement or any other agreement or deed or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or deed or document as the same may be or have been or may from time to time be amended, varied or supplemented;
	  
	  
	  

	  
	1.1.7	unless the context otherwise requires, references to the singular number shall include references to the plural number and vice versa, references to natural persons shall include corporate bodies, and the use of any gender shall include all genders;
	  
	  
	  

	  
	1.1.8	“including” and “in particular” and similar expressions are not and must not be treated as words of limitation;
	  
	  
	  

	  
	1.1.9	the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and
	  
	  
	  

	  
	1.1.10	where a word or phrase is given a defined meaning in this Agreement, any other part of speech or other grammatical form in respect of such word or phrase shall have a corresponding meaning.

   
  	1.2	No provision of this Agreement will be construed adversely to a Party solely on the ground that the Party was responsible for the preparation of this Agreement or that provision.

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   4

   
 	1.3 	The Recitals and Schedules to this Agreement, shall be taken, read and construed as essential parts of this Agreement.
	  
	  

	1.4 	The headings and sub-headings to the clauses in this Agreement shall not be taken into consideration in the interpretation or construction thereof or of this Agreement.
	  
	  

	1.5	A period of days from the occurrence of an event or the performance of any act or thing shall be deemed to exclude the day on which the event happens or the act or thing is done or to be done (and shall be reckoned from the day immediately following such event or act or thing), and if the last day of the period is not a Business Day, then the period shall include the next following day which is a Business Day.

   	2.

 	AGREEMENT FOR SUBSCRIPTION

  
  	2.1 	Subject to the terms and conditions of this Agreement, the Investor agrees to subscribe for such number of the Preference Shares more particularly set out in Item 3 of the First Schedule (hereinafter referred to as the “Subscription Preference Shares”) at the Subscription Price and the Company agrees to issue and allot to the Investor the Subscription Preference Shares free from all Security Interest. The Subscription Preference Shares shall upon issue rank pari passu in all respects with each other. The Investor shall subscribe the Subscription Preference Shares in a lump sum basis.
	  
	  

	2.2 	Subject to the terms and conditions of this Agreement, the Parties agree that the Subscription Price shall be utilised by the Company only for the Business.
	  
	  

	2.3	The Parties expressly declare, acknowledge and agree that the issue and allotment by the Company of and the subscription by the Investor for the Subscription Preference Shares is on the basis that on Completion (as hereinafter defined) of the Subscription Preference Shares,

  
  	  
	2.3.1	the Company will have full right, power and authority to allot and issue the Subscription Preference Shares without any restriction or impediment, whether legal or otherwise, and is capable of granting the Investor absolute title and full ownership rights to such Subscription Preference Shares together with all rights and benefits attaching thereto;
	  
	  
	  

	  
	2.3.2	the Subscription Preference Shares when issued and allotted to the Investor will be free of any Security Interest; and
	  
	  
	  

	  
	2.3.3	the Company remains as a going concern.

  
  	2.4	The terms of and the rights and privileges attached to the Subscription Preference Shares are set out in Second Schedule.

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   5

    
  	3.

 	COMPLETION 
	  
	  

	3.1 	Subject to Clause 4, Completion shall take place upon the completion of the subscription of the Subscription Preference Shares when the full payment of the Subscription Price is being made by the Investor and the date of which Completion take place is referred to as the Completion Date.
	  
	  

	3.2 	On the Completion Date,

  
  	  
	3.2.1	the Company shall cause the shareholders and directors of the Company to approve the issue and allotment to the Investor of the Subscription Preference Shares at the Subscription Price upon the terms herein; and
	  
	  
	  

	  
	3.2.2	the Investor shall pay the Subscription Price for the Subscription Preference Shares.

  
  	3.3	Within 45 Business Days from the Completion Date, the Company shall deliver to the Investor the following documents:-

  
  	  
	3.3.1	the original share certificate(s) representing the Subscription Preference Shares subscribed by it;
	  
	  
	  

	  
	3.3.2	a certified true copy of the Return of Allotment of Shares (under the Act) in respect of the issue and allotment of the Subscription Preference Shares to the Investor, together with confirmation in writing that the same has been lodged with the Companies Commission of Malaysia; and
	  
	  
	  

	  
	3.3.3	a certified true copy of the register of members of the Company evidencing the registration of the Investor as holder of the Subscription Preference Shares subscribed by it.

  
  	3.4	The Company agrees to do all acts and things and procures the passing of all necessary resolutions required to issue and allot the Subscription Preference Shares to the Investor in accordance with the terms of this Agreement.

  
  	4.

 	EVENT OF DEFAULT & TERMINATION
	  
	  

	4.1	If, during the subsistence of this Agreement:-

  
  	  
	4.1.1	the Company is in breach of any of the provisions of this Agreement; or
	  
	  
	  

	  
	4.1.2	the Company:-

  
  	  
	(i)	shall have a winding up petition presented against it in a court of law;
	  
	  
	  

	  
	(ii)	shall have a decree or order of a court having jurisdiction over it entered against it adjudicating it insolvent, or approving a petition seeking its reorganisation under any applicable insolvency law (otherwise than for the purpose of reconstruction or amalgamation);

  
  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   6

   
 	  
	(iii)	shall have a resolution of its shareholders passed for its winding up, liquidation or dissolution;
	  
	  
	  

	  
	(iv)	shall make any arrangement or composition with, or any assignment for the benefit of its creditors;
	  
	  
	  

	  
	(v)	shall have an administrator, receiver or receiver and manager appointed over any part of its undertaking or assets; or
	  
	  
	  

	  
	(vi)	shall cease or threaten to cease to carry on its business;

   	  
	 the Investor shall be entitled at its sole and absolute discretion to elect any of the following:- 

	  
	  

	  
	(a)	to effect completion for the said subscription (without prejudice to any of its rights and remedies against the Company) so far as practicable having regard to the defaults which have occurred; or
	  
	  
	  

	  
	(b)	to revoke the said subscription and terminate this Agreement and shall claim all costs and expenses incurred by the Investor as a result of or in connection with revocation of the said subscription or the termination of this Agreement, as the case may be including the Redemption Price for each of the Preference Shares.

  
  	4.2	If, during the subsistence of this Agreement, the Investor fails to pay the Subscription Price on the Completion Date, the Company shall be entitled to and at the sole and absolute discretion of the Company:-

  
  	  
	4.2.1	by written notice to the Investor deem the Investor to have effectively withdrawn from the Company and cancel all the subscription; or
	  
	  
	  

	  
	4.2.2	commence legal proceedings against the Investor to collect the due and unpaid Subscription Price, including interest and any expenses incurred in the proceedings and collection process.

  
  	5.

 	WARRANTIES
	  
	  

	5.1	As a material inducement to the Investor to enter into this Agreement and consummate the transactions contemplated hereby, the Company hereby represents and warrants to the Investor as follows:-

  
  	  
	5.1.1	that each Subscription Preference Share when issued will be duly authorised and free from any and all Security Interest;
	  
	  
	  

	  
	5.1.2	that each Subscription Preference Share when issued will be fully paid up and upon issuance rank pari passu with the then preference shares of the Company;
	  
	  
	  

	  
	5.1.3	that the Company has the capacity, authority and power to enter into, exercise their rights and lawfully perform and comply with their obligations under this Agreement;

  
  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   7

  
 	  
	5.1.4	 that all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents) in order to enable the Company to lawfully enter into, exercise their rights and perform and comply with their obligations under this Agreement and to ensure that those obligations are legally binding and enforceable have been taken, fulfilled and done;
	  
	  
	  

	  
	5.1.5	that no litigation, arbitration or administrative proceedings is current or pending or, so far as the Company is aware, threatened (a) to restrain the entry into, exercise of the Company’s rights under or performance or enforcement of or compliance with its obligations under this Agreement or (b) which has or could have a material adverse effect on the Company; and
	  
	  
	  

	  
	5.1.6	that the Company’s entry into, exercise of their rights and/or performance of or compliance with their obligations under this Agreement do not and will not violate, or exceed any power or restriction granted or imposed by (a) any law to which any of them is subject, (b) the Company’s constitution, or (c) any agreement or arrangement to which any of them is a party.

   	5.2	The Investor warrants and represents to and agrees with the Company that the Investor is aware of the following:-

  
  	  
	5.2.1	that the Investor has full power and authority to enter into and perform the Agreement;
	  
	  
	  

	  
	5.2.2	that compliance with the terms of this Agreement does not and will not conflict with or result in the breach of or constitute a default under any of the terms, conditions or provisions of the constitution of the Investor (if applicable);
	  
	  
	  

	  
	5.2.3	that the Investor is not subject to any bankruptcy or winding-up proceedings (as the case may be);
	  
	  
	  

	  
	5.2.4	that the Investor acknowledges that the Company has entered into this Agreement in full reliance upon and on the basis of each of the warranties which have been given by the Investor as representations for the Company to enter into this Agreement;
	  
	  
	  

	  
	5.2.5	that the Investor has received and carefully read and understood this Agreement and understood the contents of the Proposal Slides (if presentation of the Proposal Slides was made to the Investor);
	  
	  
	  

	  
	5.2.6	that the Investor has relied only on the Proposal Slides (if presentation of the Proposal Slides was made to the Investor) and that no written or oral representation or information that is in any way inconsistent with the Proposal Slides has been made or furnished to the Investor in connection with the subscription of the Preference Shares;
	  
	  
	  

	  
	5.2.7	that the Investor is capable of evaluating the merits and risk of the Subscription Preference Shares and has carefully considered the suitability of the subscription before executing this Agreement;

  
  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   8

   
 	  
	5.2.8	that the Investor has been advised to seek independent legal advice before entering into this Agreement;
	  
	  
	  

	  
	5.2.9	that the Investor acknowledges that the Proposal Slides (if presentation of the Proposal Slides was made to the Investor) reflect the Company’s current intentions and projections/estimates at the time of presentation and as with any business, the direction of the Business of the Company may be expected to change from time to time; and
	  
	  
	  

	  
	5.2.10	that the Subscription of the Preference Shares does not require the approval of the Securities Commission of Malaysia as it falls within the exemption as provided under paragraph 8(a) of Schedule 5 and paragraph 17 of Schedule 7 of the Capital Markets and Services Act 2007 (Act 671) (Incorporating latest amendment up to 15 September 2015).

   	5A.

 	CONFIRMATION AND UNDERTAKING FROM THE INVESTOR
	  
	  

	5A.1	In entering into this Agreement, the Investor hereby acknowledges and confirms that he/ she/ it does not rely on any statement, representation, assurance or warranty of any person (whether a party to this Agreement or not and whether made in writing or not) other than as expressly set out in this Agreement.

  
  	6.	WAIVER OR INDULGENCE
	  
	  

	6.1	No delay or failure by any of the Parties to exercise or enforce at any time any right or provision of this Agreement shall be considered a waiver thereof, unless made in writing. No single waiver shall constitute a continuing or subsequent waiver.
	  
	  

	6.2	The single or partial exercise by a Party of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

  
  	7.	TIME OF ESSENCE
	  
	  

	7.1	Any time, date or period mentioned in any provision of this Agreement may be extended by mutual agreement between the Parties, but as regards any time, date or period originally fixed and not extended or any time, date or period so extended as aforesaid time is of the essence.

 
  	8.

 	COSTS & EXPENSES
	  
	  

	8.1 	The Company shall bear all costs and expenses incurred in the preparation, negotiation, signing and implementation of this Agreement and the stamp duty thereof.
	  
	  

	8.2 	The Company shall bear all fees and charges in issuing, allotting and redeeming the Subscription Preference Shares.

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   9

    
  	9.	NOTICES
	  
	  

	9.1	All notices, demands or other communications required or permitted to be given or made hereunder shall be in writing and delivered personally and/or sent by courier and/or sent by registered post at its address set out in this Agreement (or to such other address as a Party may from time to time notify the other Parties). Any such notice, demand or communication shall be deemed to have been duly served (i) if given personally or sent by courier, upon delivery; and (ii) if sent by post, three (3) days after posting. The initial addresses and facsimile numbers of the Parties for the purpose of this Agreement are:-

	   
 	  
	 The Company

 
	  
	  

	  
	 SBS MINING CORP MALAYSIA SDN. BHD. 

	  
	 Registered Address: 23-2, Jalan 45A/26 Sri Rampai, Setapak, 53300 Kuala Lumpur, Malaysia

	  
	   

	  
	 Attn: Director

	  
	  

	  
	 Investor

	  
	  

	  
	 Residential address: 
 NRIC No.: 

  
  	 10.
	 PREVIOUS AGREEMENTS

		   
	 10.1
	 This Agreement in substitution of all previous agreements (whether in writing or verbal) between the Parties in respect of the subject matter of this Agreement contains the whole agreement between the Parties relating to the subject matter of this Agreement.

	  
	
	11.	REMEDIES
	  
	
	11.1	No remedy conferred by any of the provisions of this Agreement is intended to be exclusive of any other remedy which is otherwise available at law, in equity, by statute or otherwise, and each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise. The election of any one or more of such remedies by the Investor shall not constitute a waiver by the Investor of the right to pursue any other available remedies.

 
 	12.	SEVERANCE
	  
	  

	12.1	Any term, condition, stipulation, provision, covenant or undertaking in this Agreement which is illegal, void, prohibited or unenforceable shall be ineffective to the extent of such illegality, voidness, prohibition or unenforceability without invalidating the remaining provisions hereof, and any such illegality, voidness, prohibition or unenforceability shall not invalidate or render illegal, void or unenforceable any other term, condition, stipulation, provision, covenant or undertaking herein contained.

  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   10

    
  	13.	GOVERNING LAW & JURISDICTION
	  
	  

	13.1	This Agreement is governed by and is to be construed in accordance with the laws of Malaysia.
	  
	  

	13.2	In relation to any legal action or proceedings arising out of or in connection with this Agreement, the Parties hereby irrevocably submit to the exclusive jurisdiction of the courts of Malaysia.

 
  	14.	ASSIGNMENT 
	  
	  

	14.1	Each Party shall not be entitled to assign or transfer any of its rights and/or obligations hereunder without the prior written consent of the other Parties.

 
  	15.	CONFIDENTIALITY
	  
	  

	15.1	The Investor:-

 
  	  
	15.1.1	shall treat as strictly confidential information obtained or received by it as a result of entering into or performing its obligations under this Agreement save and except for such information as is in the public domain (in this Clause 15 collectively referred to as the “Confidential Information”); and
	  
	  
	  

	  
	15.1.2 	shall not except with the prior written approval of the Company publish or otherwise disclose to any person any Confidential Information or use any Confidential Information;

  
  	  
	 unless if (but only to the extent that) it can demonstrate that:-

	  
	  
	  

	  
	(a)	such disclosure is required by law or by any securities exchange or regulatory or governmental body having jurisdiction over it, wherever situated; or
	  
	  
	  

	  
	(b)	the Confidential Information has come into the public domain other than through its fault.

  
  	15.2	The restrictions and obligations contained in this Clause 15 shall survive the termination of this Agreement.

  
  	16.	VARIATION 
	   
	  

	16.1	This Agreement may be supplemented, amended, or varied only by the mutual agreement of the Parties. No supplement, amendment or variation of this Agreement shall be effective unless it is made in writing and signed by the Parties.

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
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  	17.	CONTINUING EFFECT OF AGREEMENT
	   
	  

	17.1	All provisions of this Agreement shall so far as they are capable of being performed or observed, continue in full force and effect notwithstanding the full subscription of the Subscription Preference Shares, except in respect of those matters then already duly performed.

  
  	18.	BINDING EFFECT
	    
	  

	18.1	This Agreement shall be binding on and inure to the benefit of the successors, permitted assigns, heirs, estate and personal representatives, as the case may be, of each Party.

   
  	19.	AMICABLE SETTLEMENT
	    
	  

	19.1	If any dispute arises between the Parties during the subsistence of this Agreement or thereafter, in connection with the validity, interpretation, implementation or alleged breach of any provision of this Agreement or regarding a question, including the question as to whether the termination of this Agreement by one Party hereto has been legitimate ("Dispute"), the disputing Parties hereto shall endeavour to settle such Dispute amicably.

 
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  	 Subscription Agreement for Preference Shares   
	   12

   
 IN WITNESS WHEREOF the Parties have hereunto caused their respective hands to be set down hereunder the day and year first above written.
  
  	 Company
	
	   	
	 THE COMMON SEAL of 
	 )

	 SBS MINING CORP MALAYSIA SDN. BHD.
	 )

	 (Company No. 829349-K)
	 )

	 was hereunto affixed in accordance with
	 )

	 its Articles of Association in the presence of:-
	 )

		
	 ______________________
	 ________________________

	 Director 
	Director 
	 Name: Lok Khing Ming 
	 Name: Liew Chin Loong

	 NRIC No.: 
	 NRIC No.: 

	  
	
	 Investor 
	
		
	 SIGNED BY
	 )

	 Name: 
	 )

	 NRIC No.:
	 )

	  
	 )

	 in the presence of:-
	
		 ________________________

	   
	  

	 Name:
	
	 NRIC No.:
	

  
  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   13

  
 FIRST SCHEDULE
  
 	 No.
	 Item
	 Particulars

	 1
	 Date of Subscription Agreement
	
	 2
	 Particulars of Investor
 (Name/ Company Number/ NRIC Number/ Passport No. / Address)
	 Name: 
 NRIC No.: 
 Address: 

	 3
	 Subscription Preference Shares
	 Preference Shares= 

	 4
	 Subscription Price
	
	 5
	 Subscription Interest 
	 12 % per annum of the total subscription price

	 6
	 Redemption in shares after subscription period
	 RM[xx] will be converted into [xx] units of NAMI SHARES @ USD1.50 per NAMI Share (described in the term of preferences shares in second schedule) 

  
 (End of First Schedule)
   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   14

  
 SECOND SCHEDULE
  
 Terms of the Preference Shares 
  
 The following words and expressions used in this Second Schedule shall have the following meanings:- 
  
  	 “Act”
	 means the Companies Act 2016 and any amendments thereto;

		
	 “Company Redemption Date” or “Maturity
	 means the date corresponding to the 2nd anniversary of the Issue Date;

		  
	 “Issue Date”
	 means, the completion date of the subscription of the Subscription Preference Shares where the Subscription Preference Shares were first issued; 

		 
	 “Issue Price”
	 means the sum of RM1.00, being the issue price of each Preference Share; 

		 
	 “NAMI Shares”
	 NAMI Corp, a company incorporated in the State of Nevada, United States of America and where its common stock are quoted on the OTCQB counter of the Over-the-Counter market.

		 
	 “Preference Shareholder”
	 means a holder for the time being of Preference Shares;

		 
	 “Preference Shares”
	 means the redeemable cumulative preference shares of the Company and the expression “Preference Share” means any one of them;

		 
	 “RPS Dividends”
	 bears the meaning ascribed to it in paragraph 1 of this Second Schedule;

		 
	 “Redemption Date”
	 bears the meaning ascribed to it in paragraph 4.3 of this Second Schedule;

		 
	 “Redemption Price”
	 bears the meaning ascribed to it in paragraph 4.2 of this Second Schedule; and

		 
	 “Redemption Right”
	 bears the meaning ascribed to it in paragraph 4.1 of this Second Schedule.

  
 Subject to Clause 5.2 of this Agreement, the terms of the Preference Shares are as follow:-
  
  	1.	Dividend
	  
	  

	  
	 Each Preference Share shall be paid a fixed cumulative preferential dividend at the pre-determined rate per annum on the average calculation based on the Issue Price (hereinafter referred to as the “RPS Dividends”). Notwithstanding the foregoing, no dividend shall be declared in respect of Ordinary Shares unless the RPS Dividends are first declared and paid on the Preference Shares. All RPS Dividends declared shall be paid to the Preference Shareholder in preference to any dividend declared over the Ordinary Shares or any other class of shares in the share capital of the Company. The RPS Dividends shall be paid to the Preference Shareholder on a quarterly basis.

  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
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	 The RPS Dividends:- 

	  
	  
	  

	  
	(i)	shall accrue on each Preference Share from the date of declaration of the dividend and shall accrue from day to day until full redemption or payment, as the case may be;
	  
	  
	  

	  
	(ii)	shall, unless otherwise agreed by the Preference Shareholder entitled thereto, be payable to the Preference Shareholder, within 7 days from each quarter of the year provided in the event of the commencement of the winding up of the Company all accrued RPS Dividends shall become immediately payable upon such commencement [the phrase “commencement of the winding up” shall have the meaning ascribed to it in the Act];
	  
	  
	  

	  
	(iii)	shall be pro-rated for any part of a financial year of the Company until full redemption or payment, as the case may be;
	  
	  
	  

	  
	(iv)	shall be paid out of distributable profits as calculated according to prevailing accounting standard.
	  
	  
	  

	  
	 For the avoidance of doubt, all RPS Dividends which are payable but are not paid to the Preference Shareholder due to lack of profits in a particular quarter will accumulate and be carried forward to and be payable in the subsequent quarter together with the RPS Dividends for such following quarter. Any dividends carried forward to subsequent financial quarters/years are not subject to compounding.

	  
	  
	  

	  
	 No dividends shall be declared and paid on the Ordinary Shares until all outstanding RPS Dividends have been paid in full to the Preference Shareholder.

  
  	2.	Premium
	  
	  

	  
	 No premium on Preference Share shall be paid on the Company Redemption Date. 

 
  	3.	Liquidation Preference/Repayment of Capital
	  
	  

	  
	 In the event of any liquidation, dissolution, winding up or other repayment of capital of the Company, the Preference Shareholder shall be entitled to have the assets available for distribution among the members applied first in payment of a sum equivalent to the aggregate of the Issue Price for the Preference Shares held by the Preference Shareholder together with all unpaid RPS Dividends in respect of each Preference Shares, in priority to any capital, dividend or other payment to holders of any other class of shares of the Company.

 
 	4.	Redemption on Company Redemption Date / Redemption on Maturity
	  
	  

	4.1	The Preference Shares shall be redeemed on the Company Redemption Date by the Company and at the Redemption Price (as hereinafter defined) and on the Redemption Date. The redemption is redeemed by NAMI shares (as defined herein). The Directors of the Company have irrevocably provided an option other than cash to the Shareholders of Preference Shares B via their personal interests in NAMI Shares for redemption purposes.

  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   16

  
 	4.2	The Redemption Price for each Preference Share shall be an amount of NAMI Shares equivalent to the Subscription Price plus the unpaid RPS Dividends in respect of each Preference Shares (hereinafter referred to as the “Redemption Price ”). The Redemption Right shall be exercised in respect of Subscription Preference Shares on a lump sum basis only.
	  
	  

	4.5	All outstanding Preference Shares not redeemed by the Company Redemption Date must be redeemed by the Company on the Company Redemption Date at the Redemption Price PROVIDED THAT in the event the Company shall fail to effect a redemption of such outstanding Preference Shares, for any reason whatsoever, on or before the expiry of 45 Business Days from the Company Redemption Date, the Preference Shareholder shall be entitled at its discretion to deal with such Preference Shares in any manner.
	  
	  

	  
	 For the purposes of redemption by the Company, the Company shall issue to the Preference Shareholder a Redemption Notice 30 Business Days prior to the Company Redemption Date. 

	  
	  

	  
	 The Redemption Notice shall state (a) the number of Preference Shares to be redeemed; (b) the date of redemption (which shall not be earlier than 30 Business Days from the date of the Redemption Notice) (hereinafter referred to as the “Redemption Date”) and (c) the Redemption Price. Upon receipt of the relevant share certificate(s), the Company shall record and effect the redemption, whereupon the redemption shall be deemed to take effect, and the Company shall cancel the Preference Shares that have been redeemed and within [45] Business Days from such redemption pay the Redemption Price (as defined above) to the Preference Shareholder. Delivery of the original share certificates to the company secretary of the Company would be sufficient discharge of the obligations of the Preference Shareholder to deliver the same. Notwithstanding the foregoing, in the event that the Investor fails to deliver the original share certificates in respect of the Preference Shares and the Company had already paid the Redemption Price to the Preference Shareholder, the original share certificates in respect of the Preference Shares held by the Preference Shareholder are deemed cancelled. 

	  
	  

	  
	 For the avoidance of doubt, redemption is deemed to be effected on the date the Company records and effects the redemption through payment of the Redemption Price in clear and transferable funds. 

	  
	  

	  
	 The Redemption Notice shall be substantially in the form set out in the Third Schedule hereto duly completed and signed by the Company. 

	  
	  

	  
	 Failure by the Company to redeem any of the outstanding Preference Shares for any reason whatsoever shall in any event be regarded as a default by the Company of the terms of the Preference Shares. 

	  
	  

	  
	 The Redemption Price of the Preference Shares on the Company Redemption Date or Maturity are illustrated by the following formula:-

  	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   17

    
 	  
	 Illustration Of Redemption Price B by Preference Shares B on Company Redemption Date or Maturity

 
 	  
	  
	 Applying the Redemption Price formula:-

	  
	   
	  

	  
	  
	 Redemption = [(RM1.00 * X)/Y]/Z + D

 
 	  
	  
	 Assuming:

	  
	  
	 (a)
	 X is the X number of shares to be redeemed

	  
	  
	  (b)
	 Y is the prevailing exchange rate of USD1: RM4.00 fixed

	  
	  
	  (c)
	 Z is the predetermined price for NAMI Shares at USD1.50 

	  
	  
	  (d)
	 D is the unpaid RPS Dividends for X number of shares

  
  	5.	Voting Rights
	  
	  

	  
	 The Preference Shareholder shall have the right to receive notices of and to attend all general meetings of the Company as an observer PROVIDED ALWAYS THAT the Preference Shares shall not carry any right to vote at any general meetings of the Company except in the following circumstances:- 

 
  	  
	(i)	on all resolutions put forth during such period as the Preference Shares dividends remain in arrears and unpaid, such period commencing from the date immediately following the due date for payment of such dividend and expiring on the day the outstanding RPS Dividends are paid;
	  
	  
	  

	  
	(ii)	upon any resolution that varies, whether directly or indirectly, the rights attached to the Preference Shares;
	  
	  
	  

	  
	(iii)	upon any resolution for the winding up of the Company or any subsidiary of the Company;
	  
	  
	  

	  
	(iv)	upon any resolution to approve a capital reduction or capital repayment or any capital distribution by the Company or any subsidiary of the company; and
	  
	  
	  

	  
	(v)	upon any proposal to effect any scheme of arrangement; and
	  
	  
	  

	  
	(vi)	in such other circumstances as may be expressly provided under law from time to time in respect of the Preference Shares.
	  
	   
	  

	  
	 In any of the aforesaid circumstances, each Preference Share shall carry one (1) vote. Any Preference Shareholder may demand a poll at a general meeting of the Company on any resolutions on which that Preference Shareholder may vote.

   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   18

  
  	6.	General
	  
	  

	6.1	The Preference Shares shall rank pari passu among themselves in all respects and shall rank pari passu to all existing and future preference shares issued or to be issued by the Company and in priority to all existing and future Ordinary Shares issued or to be issued by the Company.
	  
	  

	6.2	For the avoidance of doubt, redemption is deemed to be effected on the date the Company records and effects the redemption through payment of the Redemption Price in clear and transferable funds.

 
 (End of Second Schedule)
   	 
	 
	 
 
	 

  
  	 Subscription Agreement for Preference Shares   
	   19

  
 THIRD SCHEDULE
  
 REDEMPTION NOTICE
  
 Date:
  
 To: 
  
 Re: Subscription Agreement dated [ ]                                                        
  
 We refer to the Subscription Agreement between our Company and yourself. Terms defined in the Subscription Agreement have the same meanings herein.
  
 We hereby give you notice that we intend to redeem the Subscription Preference Shares.
  
 We further give you notice as follows:
  
  	(a)	Number of Preference Shares to be redeemed:
	  
	  

	(b)	Proposed Redemption Date: [ ]
	  
	  

	(c)	Redemption Price: [xx] units of NAMI SHARES

  
 We confirm that our above notice and instructions are irrevocable.
  
 Yours faithfully,
  
 ______________________________
 (Authorised Signatory of the Company)
  
 (End of Third Schedule)

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