SUBSCRIPTIONAGREEMENT FOR FLOW-THROUGH SHARES APOLLOGOLD CORPORATION THEFLOW-THROUGH SHARES BEING OFFERED FOR SALE MAY ONLY BE PURCHASEDBY RESIDENTS OF ONTARIO, BRITISH COLUMBIA AND ALBERTA, INEACH CASE PURSUANT TO AVAILABLE EXEMPTIONS UNDER APPLICABLESECURITIES LEGISLATION

 

(g)           The Subscriber and each beneficial purchaser for whom it is acting shall execute and file, together with the prescribed fees, all documentation required by the applicable Securities Laws or by any legislation or order in force in its jurisdiction of residence or to which it may be subject, within the time limits prescribed to permit the subscription for, and issuance of, the Subscribed Shares and thereafter for any subsequent disposition thereof and agrees that it will furnish to the Corporation such certificates, legal opinions and other documentation as may be required by the Corporation.

 

(h)           If required by applicable Securities Laws or by the Corporation, the Subscriber and each beneficial purchaser for whom it is acting will execute, deliver and file or assist the Corporation in filing such reports, undertakings and other documents with respect to the issue of the Subscribed Shares as may be required by any securities commission, stock exchange or other regulatory authority.

 

(i)           The Subscriber, and each beneficial purchaser for whom it is acting, have been advised to consult their own legal advisors with respect to trading in the Subscribed Shares and with respect to the resale restrictions imposed by the Securities Laws of the United States or any province or territory in which the Subscriber resides and other applicable securities laws, and acknowledges that no representation has been made respecting the applicable hold periods imposed by the Securities Laws or other resale restrictions applicable to such securities which restrict the ability of the Subscriber (or others for whom it is acting) to resell such securities, that the Subscriber (or others for whom it is acting) is solely responsible to find out what these restrictions are and the Subscriber is solely responsible (and the Corporation is in no way responsible) for compliance with applicable resale restrictions, and that the Subscriber is aware that it (or the beneficial purchaser for whom it is acting) may not be able to resell such securities except in accordance with limited exemptions under the Securities Laws and other applicable securities laws.

 

(j)           The Subscriber has not received or been provided with a prospectus, offering memorandum (within the meaning of the Securities Laws) or any sales or advertising literature in connection with the Offering and the Subscriber’s decision to subscribe for Flow-Through Shares was not based upon, and the Subscriber has not relied upon, any verbal or written representations as to facts made by or on behalf of the Corporation. The Subscriber’s decision to subscribe for Flow-Through Shares was based solely upon the Term Sheet attached hereto as Schedule "B" and information about the Corporation which is publicly available.

 

(k)           The Corporation and its counsel are relying on the representations, warranties and covenants contained herein and in the applicable Schedules attached hereto to determine the Subscriber’s eligibility to subscribe for Flow-Through Shares under applicable Securities Laws and the Subscriber agrees to indemnify the Corporation and its directors and officers against all losses (other than loss of profits), claims, costs, expenses, damages or liabilities which any of them may suffer or incur as a result of or arising from reliance thereon.

 

(l)           The Corporation is relying on an exemption from the requirement to provide the Subscriber with a prospectus under the Securities Laws and, as a consequence of acquiring Flow-Through Shares pursuant to such exemption, certain protections, rights and remedies provided by the Securities Laws, including statutory rights of rescission and/or damages, will not be available to the Subscriber.

 

(m)           The Flow-Through Shares are being offered and sold in reliance on the exemption from registration contained in Regulation S of the U.S. Securities Act.  Following the Closing, the Corporation has agreed to register the resale of the Flow-Through Shares under the U.S. Securities Act pursuant to the Registration Rights Agreement.

 

(n)           The Subscriber, and each beneficial purchaser for whom it is acting, is responsible for obtaining such independent legal and tax advice as it considers appropriate in connection with the execution, delivery and performance of this Subscription Agreement and the transactions contemplated under this Subscription Agreement, including without limitation for the proposes of giving representations, warranties and covenants under this Subscription Agreement.

 

(o)           There is no government or other insurance covering the Flow-Through Shares.

 

(p)           The Subscriber acknowledges that the Corporation’s counsel is acting as counsel to the Corporation and not as counsel to the Subscriber.

(q)           The Subscriber acknowledges 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 Subscribed Shares shall be borne by the Subscriber.

 

(r)           The Subscriber and each beneficial purchaser for whom it is acting acknowledge that the Flow-Through Shares are speculative in nature and that there are risks associated with the purchase of Flow-Through Shares and the Subscriber and each beneficial purchaser for whom it is acting has such knowledge, sophistication and experience in business and financial matters as to be capable of evaluating the merits and risks of its investment in the Subscribed Shares, fully understands the speculative nature of the Subscribed Shares and is able to bear the economic risk of loss of its entire investment.

 

6.3    Reliance on Representations, Warranties, Covenants and Acknowledgements

 

The Subscriber acknowledges and agrees that the representations, warranties, covenants and acknowledgements made by the Subscriber in this Subscription Agreement are made with the intention that they may be relied upon by the Corporation in determining the Subscriber’s eligibility (and, if applicable, the eligibility of others for whom the Subscriber is acting) to purchase Flow-Through Shares under the Securities Laws.  The Subscriber further agrees that by accepting Flow-Through Shares, the Subscriber shall be representing and warranting that such representations, warranties, acknowledgements and covenants are true as at the Closing Time with the same force and effect as if they had been made by the Subscriber at the Closing Time and that they shall survive the purchase by the Subscriber of Flow-Through Shares and shall continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of any of such Flow-Through Shares.

 

ARTICLE 7    SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

 

7.1    Survival of Representations, Warranties and Covenants of the Corporation

 

The representations, warranties and covenants of the Corporation contained in this Subscription Agreement shall survive the Closing and, notwithstanding such Closing or any investigation made by or on behalf of the Subscriber with respect thereto, shall continue in full force and effect for the benefit of the Subscriber.

 

7.2    Survival of Representations, Warranties and Covenants of the Subscriber

 

The representations, warranties and covenants of the Subscriber contained in this Subscription Agreement shall survive the Closing and, notwithstanding such Closing or any investigation made by or on behalf of the Corporation with respect thereto, shall continue in full force and effect for the benefit of the Corporation.

 

ARTICLE 8    FINDER'S COMPENSATION

 

8.1    Finder's Commission and Warrants

 

Subject to the Securities Laws, other applicable law and regulatory approval, the Corporation may pay a finder’s fee to one or more parties (the "Finders") at arm’s length to the Corporation who introduce Subscribers to the Corporation.  Eligible Finders may receive a cash commission of up to 8.5% of the gross proceeds received by the Corporation from the sale of Flow-Through Shares to Subscribers introduced to the Corporation by such Finder, together with non-transferable Common Share purchase warrants (the "Finder's Warrants") entitling the Finder to purchase such number of Common Shares ("Finder's Warrant Shares") as is equal to  8.5%  of the number of Flow-Through Shares sold to Subscribers introduced to the Corporation by the Finder in connection with this Offering.  Each Finder's Warrant is exercisable at a price of $0.30 into one Finder's Warrant Share within twenty-four (24) months of Closing.  No other fees or commissions will be paid by the Issuer in connection with the Offering.

ARTICLE 9    COLLECTION OF PERSONAL INFORMATION

 

9.1    Collection of Personal Information

 

By executing this Subscription Agreement, the Subscriber hereby consents to the collection, use and disclosure of the personal information provided herein and other personal information provided by the Subscriber or collected by the Corporation or its agents as reasonably necessary in connection with the Subscriber’s subscription for the Subscribed Shares (collectively, "personal information") as follows: (a) the Corporation may use personal information and disclose personal information to intermediaries such as the Corporation’s legal counsel and withholding and/or transfer agents for the purposes of determining the Subscriber’s eligibility to invest in the Subscribed Shares and for managing and administering the Subscriber’s investment in the Subscribed Shares; (b) if the Subscriber purchased securities through a registered dealer, the Corporation may disclose and collect such personal information relating to the Subscriber’s holding of the Subscribed Shares to and from the dealer; (c) the Corporation and its agents may use the Subscriber’s social insurance number for income reporting purposes in accordance with applicable law; (d) the Corporation, its agents and advisors, may each collect, use and disclose personal information for the purposes of meeting legal, regulatory, self-regulatory, security and audit requirements (including any applicable tax, securities, money laundering or anti-terrorism legislation, rules or regulations) and as otherwise permitted or required by law, which disclosures may include disclosures to tax, securities or other regulatory or self-regulatory authorities in Canada and/or in foreign jurisdictions, if applicable, in connection with the regulatory oversight mandate of such authorities; (e) the Corporation and its agents and advisors may use personal information and disclose personal information to parties connected with the proposed or actual transfer, sale, assignment, merger or amalgamation of the Corporation or its business or assets or similar transactions, for the purpose of permitting such parties to evaluate and/or proceed with and complete such transaction.  Purchasers, assignees and successors of the Corporation or its business or assets may collect, use and disclose personal information as described in this Subscription Agreement.  The Subscriber acknowledges that the Corporation’s agents or intermediaries may be located outside of Canada, and personal information may be transferred and/or processed outside of Canada for the purposes described above, and that measures the Issuer may use to protect personal information while handled by agents, intermediaries or other third parties on its behalf, and personal information otherwise disclosed or transferred outside of Canada for the purposes described above, are subject to legal requirements in foreign countries applicable to Issuer or such third parties, for example lawful requirements to disclose personal information to government authorities in those countries.

 

If the Subscriber is resident in, or otherwise subject to the applicable securities legislation of Ontario, the Subscriber acknowledges (i) the delivery to the Ontario Securities Commission of the Subscriber’s full name, residential address and telephone number, the number and type of securities purchased by the Subscriber, the total purchase price, the exemption relied on, and the date of distribution, (ii) that such information is being collected indirectly by the Ontario Securities Commission under the authority granted to it in securities legislation, (iii) that such information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario, and (iv) that the Administrative Assistant to the Director of Corporate Finance at the Ontario Securities Commission, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8, telephone ###-###-####, can be contacted to answer questions about the Ontario Securities Commission’s indirect collection of such information. The Subscriber hereby authorizes the indirect collection of such information by the Ontario Securities Commission.

 

ARTICLE 10    MISCELLANEOUS

 

10.1   Further Assurances

 

Each of the parties hereto upon the request of each of the other parties hereto, whether before or after the Closing Time, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein.

10.2    Notices

 

(a)           Any notice, direction or other instrument required or permitted to be given to any party hereto shall be in writing and shall be sufficiently given if delivered personally, or transmitted by facsimile tested prior to transmission to such party, as follows:

 

(i)           in the case of the Corporation, to:

 

 

(ii)          in the case of the Subscriber, at the address specified on the face page hereof.

 

(b)           Any such notice, direction or other instrument, if delivered personally, shall be deemed to have been given and received on the day on which it was delivered, provided that if such day is not a Business Day then the notice, direction or other instrument shall be deemed to have been given and received on the first Business Day next following such day and if transmitted by fax, shall be deemed to have been given and received on the day of its transmission, provided that if such day is not a Business Day or if it is transmitted or received after the end of normal business hours then the notice, direction or other instrument shall be deemed to have been given and received on the first Business Day next following the day of such transmission.

 

(c)           Any party hereto may change its address for service from time to time by notice given to each of the other parties hereto in accordance with the foregoing provisions.

 

10.3    Time of the Essence

 

Time shall be of the essence of this Subscription Agreement and every part hereof.

 

10.4    Costs and Expenses

 

All costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Subscription Agreement and the transactions herein contemplated shall be paid and borne by the party incurring such costs and expenses.

 

10.5    Applicable Law

 

This Subscription Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal laws of the Province of Ontario and the laws of Canada applicable therein, without reference to any conflicts of law rules that would impose a law of another jurisdiction. Any and all disputes arising under this Subscription Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of the Province of Ontario and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such province.

10.6    Entire Agreement

 

This Subscription Agreement, including the Schedules hereto, constitutes the entire agreement between the parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the parties.  There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the parties hereto other than those expressly set forth in this Subscription Agreement or in any such agreement, certificate, affidavit, statutory declaration or other document as aforesaid. This Subscription Agreement may not be amended or modified in any respect except by written instrument executed by each of the parties hereto.

 

10.7    Counterparts

 

This Subscription Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Subscription Agreement. Counterparts may be delivered either in original or faxed form and the parties adopt any signature received by a receiving fax machine as original signatures of the parties.

 

10.8    Assignment

 

This Subscription Agreement may not be assigned by either party except with the prior written consent of the other party hereto.

 

10.9    Enurement

 

This Subscription Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns.

 

10.10    Language

 

The parties hereto acknowledge and confirm that they have requested that this Subscription Agreement as well as all notices and other documents contemplated hereby be drawn up on the English language. Les parties aux présentes reconnaissent et conferment qu’elles ont convenu que la présente convention ainsi que tous les avis et documents qui s’y rattachent soient rédigés dans la langue anglaise.