1. EVENTS
(a) Token Sale. In the event that the Company or any Nominated Entity operates a Qualifying Token Sale, the Company will automatically issue to the Purchaser, or will take all reasonable steps to procure that the Nominated Entity promptly issues to the Purchaser, a number of Tokens equal to the Purchase Amount multiplied by the Bonus Rate. If the Qualifying Token Sale is offered at different prices depending on the time at which Tokens are purchased, the Purchase Amount will be considered to have been at the most advantageous rate publicly marketed.
If the Company elects to operate the Qualifying Token Sale using a Nominated Entity, it will inform the Purchaser in writing. The performance by the Nominated Entity of the obligations of the Company under this agreement will duly discharge the obligations of the Company to the Purchaser.
(b) Dissolution Event. If there is a Dissolution Event before this SAFT expires or terminates, the Company will pay an amount equal to the Purchase Amount, due and payable to the Purchaser immediately prior to, or concurrent with, the consummation of the Dissolution Event. The Purchase Amount will be paid prior and in preference to any Distribution of any of the assets of the Company to holders of outstanding shares in the capital of the Company by reason of their ownership thereof. If immediately prior to the consummation of the Dissolution Event, the assets of the Company legally available for distribution to the Purchaser and all holders of all other SAFTs (the "Dissolving Purchasers"), as deter*mined in good faith by the Company's board of directors, are insufficient to permit the payment to the Dissolving Purchasers of their respective Purchase Amounts, then the entire assets of the Company legally available for distribution will be distributed with equal priority and pro rata among the Dissolving Purchasers in proportion to the Purchase Amounts they would otherwise be entitled to receive pursuant to this Section 1(b).
(c) Termination. This SAFT will expire and terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this SAFT) upon either (i) the issuance of Tokens to the Purchaser pursuant to Section 1(a); or (ii) the payment, or setting aside for payment, of amounts due the Purchaser pursuant to Section 1(b).
2. DEFINITIONS
"Dissolution Event" means (i) a voluntary termination of operations, (ii) a general assignment for the benefit of the Company's creditors or (iii) any other liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any entity exercising legislative, judicial or administrative functions of or pertaining to government, including, without limitation, any government authority, agency, department, board, commission or instrumentality, and any court, tribunal or arbitrator(s) of competent jurisdiction, and any self-regulatory organization.
"Nominated Entity" means a company or other organization, nominated by the Company to operate the Qualifying Token Sale.
"Oleum Project" is designed as a method for raising debt servicing capital for the junior oil and gas industry in Alberta, Canada. The funds raised through the Qualifying Token Sale are to be deployed by the Company to acquire interests in oil and gas assets or companies located in Alberta, Canada and the profits from such interests are to be applied in connection with a potential buy-back of the Tokens.
"Qualifying Token Sale" means the operation by the Company or any subsidiary thereof of a public sale of the Tokens necessary for the operation of the Oleum Project.
"SAFT" means an agreement containing a future right to Tokens, similar in form and content to this agreement, purchased by Purchasers for the purpose of funding the Company's business operations.
"Subscription Agreement" means the subscription agreement executed and delivered by the Purchaser and accepted by the Company for the purchase rights for Tokens pursuant to the SAFTs, in the Purchase Amount.
3. COMPANY REPRESENTATIONS
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the province of its incorporation, and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.
(b) The execution, delivery and performance by the Company of this agreement is within the power of the Company and, other than with respect to the actions to be taken when equity is to be issued to the Purchaser, has been duly authorized by all necessary actions on the part of the Company. This agreement constitutes 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. To the knowledge of the Company, it is not in violation of (i) its current articles of incorporation or bylaws, (ii) any material statute, rule or regulation applicable to the Company or (iii) any material indenture or contract to which the Company is a party or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or defaults, could reasonably be expected to have a material adverse effect on the Company.
(c) The performance and consummation of the transactions contemplated by this agreement do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company;
(ii) result in the acceleration of any material indenture 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, forfeiture, or nonrenewal of any material permit, license or authorization applicable to the Company, its business or operations.
(d) To the knowledge of the Company, no consents or approvals are required in connection with the performance of this agreement, other than: (i) the Company's corporate approvals; and (ii) any qualifications or filings under applicable securities laws.
(e) To its knowledge, the Company owns or possesses (or can obtain on commercially reasonable terms) sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, processes and other intellectual property rights necessary for its business as now conducted and as currently proposed to be conducted, without any conflict with, or infringement of the rights of, others.
(f) THE COMPANY MAKES NO WARRANTY WHATSOEVER WITH RESPECT TO THE TOKENS, INCLUDING ANY (i) WARRANTY OF MERCHANTABILITY; (ii) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; (c) WARRANTY OF TITLE; OR (iii) WARRANTY AGAINST INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY; WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE. EXCEPT AS EXPRESSLY SET FORTH HEREIN, PURCHASER ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY THE COMPANY, OR ANY OTHER PERSON ON THE COMPANY’S BEHALF.
4. PURCHASER REPRESENTATIONS
(a) The Purchaser has full legal capacity, power and authority to execute and deliver this agreement and to perform the Purchaser's obligations hereunder. This agreement constitutes valid and binding obligation of the Purchaser, enforceable 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.
(b) The Purchaser is a person eligible to subscribe for securities under Section 2.4 (Private Issuer) of National Instrument 45-106 Prospectus Exemptions ("NI 45-106") by virtue of being a person described in the Private Issuer Exemption Certificate (attached as Schedule C to the Subscription Agreement) and:
(i) the Purchaser is delivering with this SAFT a completed and signed Private Issuer
Exemption Certificate (attached as Schedule B to the Subscription Agreement); and
(ii) if applicable, the Purchaser is delivering with this SAFT a completed and signed
Accredited Purchaser Certificate (attached as Schedule C to the Subscription Agreement);
(iii) if the Purchaser is a resident of Ontario, the Purchaser is delivering with this SAFT a completed and signed Form 45-106F12 – Risk Acknowledgement Form for Family, Friend and Business Associate Purchasers (attached as Schedule D to the Subscription Agreement);
(iv) if the Purchaser is a resident of Saskatchewan and is subscribing based on a close personal friendship or a close business association, the Purchaser is delivering with this SAFT a completed and signed Form 45-106F5 – Risk Acknowledgement (attached as Schedule E to the Subscription Agreement); and
(v) if the Purchaser is an "accredited Purchaser" and a resident of a jurisdiction other than Canada, the Purchaser is delivering with this SAFT a fully executed and completed Offshore Purchaser Certificate (attached as Schedule F to the Subscription Agreement).
(c) The Purchaser is purchasing this agreement 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 the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser has such knowledge and experience in financial and business matters that
the Purchaser is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing the Purchaser’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time.
(d) The Purchaser understands that the Tokens involve risks, all of which the Purchaser fully and completely assumes, including, but not limited to, the risk that (i) the technology associated with the Oleum Project and/or the Qualifying Token Sale will not function as intended; (ii) the Oleum Project and/or the Qualifying Token Sale will not be completed; (iii) the Oleum Project will fail to attract sufficient interest from key stakeholders; and (iv) the Company, the Qualifying Token Sale and/or the Oleum Project may be subject to investigation and punitive actions from Governmental Authorities. The Purchaser understands and expressly accepts that the Tokens will be created and delivered to the Purchaser at the sole risk of the Purchaser on an “AS IS” and “UNDER DEVELOPMENT” basis. The Purchaser understands and expressly accepts that the Purchaser has not relied on any representations or warranties made by the Company outside of this agreement, including, but not limited to, conversations of any kind, whether through oral or electronic communication, or any white paper. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE PURCHASER ASSUMES ALL RISK AND LIABILITY FOR THE RESULTS OBTAINED BY THE USE OF ANY TOKENS AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY THE COMPANY, BY WAY OF TECHNICAL ADVICE OR OTHERWISE, RELATED TO THE USE OF THE TOKENS.
(e) The Purchaser understands that Purchaser has no right against the Company or any other Person except in the event of the Company’s breach of this agreement or intentional fraud. THE COMPANY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE TOTAL OF THE AMOUNTS PAID TO THE COMPANY PURSUANT TO THIS AGREEMENT. NEITHER THE COMPANY NOR ITS REPRESENTATIVES SHALL BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF THIS AGREEMENT.
(f) The Purchaser understands that Purchaser bears sole responsibility for any taxes as a result of the matters and transactions the subject of this agreement, and any future acquisition, ownership, use, sale or other disposition of Tokens held by the Purchaser. To the extent permitted by law, the Purchaser agrees to indemnify, defend and hold the Company or any of its affiliates, employees or agents (including developers, auditors, contractors or founders) harmless for any claim, liability, assessment or penalty with respect to any taxes (other than any net income taxes of the Company that result from the issuance of Tokens to the Purchaser pursuant to Section 1(a) of the agreement) associated with or arising from the Purchaser’s purchase of Tokens hereunder, or the use or ownership of Tokens.
(g) The Purchaser has been advised that this agreement is a security and that the offers and sales of this agreement have not been registered under any country’s securities laws and, therefore, cannot be resold except in compliance with the applicable country’s laws. The Purchaser is purchasing this agreement 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 the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing the Purchaser’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time.
5. PROCEDURES FOR PURCHASE OF RIGHTS AND VALUATION OF PURCHASE AMOUNT
(a) The Company will accept payment for the Right purchased under this SAFT in U.S. dollars, Canadian dollars, Bitcoin and Ether. Purchaser shall make the required payment to the Company in consideration for Purchaser’s purchase of the Right pursuant to the SAFT through the procedures set forth on the Subscription Agreement.
(b) For purposes of this agreement, the value of the Purchase Amount shall be deemed in U.S. dollars whether the Purchaser pays in Canadian dollars, Bitcoin or Ether.
(c) Canadian dollars will be valued at the noon rate of exchange as reported by the Bank of Canada on the date that the Canadian dollar funds are received by the Company in its bank account.
(d) Bitcoin and Ether will be valued at the Applicable Exchange Rate The term “Applicable Exchange Rate” shall mean the volume-weighted average hourly price of Bitcoin and Ether across exchanges in the one hour preceding the Effective Time; provided, however, that in the event that such exchanges experience technical issues in such period that affect the accuracy of the volumeweighted average price, the Company will use its reasonable best efforts to determine the volumeweighted average price of Bitcoin and Ether for such period.
6. MISCELLANEOUS
(a) The Purchaser will provide to the Company an Ethereum address to which Purchaser’s Tokens will be sent after a Qualifying Token Sale.
(b) Any provision of this agreement may be amended, waived or modified only upon the written consent of the Company and the Purchaser.
(c) Any notice required or permitted by this agreement will be deemed sufficient when delivered personally or by overnight courier or sent by email to the relevant address listed on the signature page, or 48 hours after being deposited in the Canadian mail system as certified or registered mail with postage prepaid, addressed to the party to be notified at such party's address listed on the
signature page, as subsequently modified by written notice.
(d) The Purchaser is not entitled, as a holder of this agreement, to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor will anything contained herein be construed to confer on the Purchaser, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise until shares have been issued upon the terms described herein.
(e) Neither this agreement nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; and provided, further, that the Company may assign this agreement in whole, without the consent of the Purchaser, in connection with a reincorporation to change the Company’s domicile.
(f) In the event any one or more of the provisions of this agreement is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this agreement operate or would prospectively operate to invalidate this agreement, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this agreement and the remaining provisions of this agreement will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.
(g) All rights and obligations hereunder will be governed by the laws of the Province of Alberta, without regard to the conflicts of law provisions of such jurisdiction.
(h) The Purchaser shall, and shall cause its affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably requested by Company to carry out the provisions of this agreement and give effect to the transactions contemplated by this agreement, including, without limitation, to enable the Company or the transactions contemplated by this agreement to comply with applicable laws.
(i) The Company shall not be liable or responsible to the Purchaser, nor be deemed to have defaulted under or breached this agreement, for any failure or delay in fulfilling or performing any term of this agreement, including without limitation, launching the Oleum Project or consummating the Qualifying Token Sale, when and to the extent such failure or delay is caused by or results from acts beyond the affected party's reasonable control, including, without limitation: (a) acts of God;
(b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, or other civil unrest; (d) Law; or (e) action by any Governmental Authority.