Form of Subscription Agreement by and among the Registrant and the non-U.S. investor

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Heavy Earth Resources, Inc.

625 Second Street, #280

San Francisco, CA 94107

Gentlemen:

1. Subscription. On the terms and subject to the conditions of this Subscription Agreement (“Subscription Agreement”), the undersigned investor (“Investor”) hereby subscribes for the number of shares of $.001 par value common stock (“Shares”) of Heavy Earth Resources, Inc., a Florida corporation (“Company”), specified below for a price of $0.40 per Share. In connection with the purchase of the Shares pursuant to the Subscription Agreement, the Company and the Investor shall enter into a Registration Rights Agreement, which shall provide that the Company shall register the Shares within one hundred fifty (150) days of the date of this Subscription Agreement. The Registration Rights Agreement is attached hereto as Exhibit A.

The offering will only be made to non-U.S. persons and to U.S. persons whom the Company believes are “accredited investors”, as that term is defined in Rule 501 of Regulation D, and who have the qualifications necessary to permit the Shares to be offered and sold in reliance upon an exemption from the registration and prospectus delivery requirements of the Securities Act of 1933 for transactions not involving any public offering.  All non-U.S. persons must subscribe pursuant to this Subscription Agreement.  All U.S. persons must subscribe pursuant to the Rule 506 Subscription Agreement.

The Investor shall deliver to the Company:  (1) an executed copy of this Subscription Agreement; (2) an executed copy of the Registration Rights Agreement; and (3) a wire transfer in immediately available U.S. funds for the full amount of the purchase price of the Shares for which the Investor is subscribing plus all wire transfer fees.

2.           Representations and Warranties.  In order to induce the Company to accept this subscription, the Investor hereby represents and warrants to, and covenants with, the Company as follows:

(a)           The Investor has received and carefully reviewed such information and documentation relating to the Company that the Investor has requested, including without limitation, (i) the Company’s filings with the U.S. Securities and Exchange Commission, and (ii) the PowerPoint presentation, which is attached hereto as Exhibit B and describes certain oil and gas assets located in Columbia which the Company intends to acquire. Investor acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to acquire the Shares, including, but not limited to, the Company’s proposed business, operations, properties, and financial condition. The Investor understands that where information furnished to the Investor contains numerical illustrations or discussions of anticipated results, projections, or statements containing, without limitation, the words “believes,” “anticipates,” “intends,” “expects,” “projects,” “estimates,” or words of similar import or effect, these are “projections.”  Projections involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from the results, performance, or achievements expressed or implied by such projections.  Such factors include, among others, the following: (i) general economic conditions affecting the Company’s proposed business, (ii) the ability of the Company to raise the additional capital required to perform the business plan, (iii) competitive factors in the market(s) in which the Company intends to operate; (iv) risks associated with oil and gas operations inside and outside the United States, and (v) challenges to the Company’s rights to any oil and gas interests that it may acquire. Given these uncertainties, the Investor acknowledges and understands that the Investor must not place undue reliance on such projections, but must make its own determination as to the likelihood of success of the Company.

(b)           The Investor has had a reasonable opportunity to ask questions of and receive answers from the Company and its management concerning the Company and terms and conditions of his or her proposed investment in the Company, and all such questions, if any, have been answered to the full satisfaction of the Investor;

 

(c)           The Investor is an investor in securities of companies in the development stage and acknowledges that it can bear the economic risk of its investment, is able to afford a complete loss of such investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares;

(d)           The Investor understands that the Company has determined that the exemption from the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”), provided by Regulation S with respect to non U.S. purchasers is applicable to the offer and sale of the Shares, based, in part, upon the representations, warranties and agreements made by the Investor herein;

(e)           Except as set forth herein, no representations or warranties have been made to the Investor by the Company or any agent, employee or affiliate of the Company and in entering into this transaction the Investor is not relying upon any information, other than the results of independent investigation by the Investor;

(f)           The Investor acknowledges that it has been called to his or her attention by those persons with whom the Investor has dealt in connection with his or her proposed investment in the Company, that the Company has a limited operating history with no revenues and the Company may never have any significant revenues or earnings, and that the Investor’s proposed investment in the Company involves significant risks which may result in the loss of that investment, or a portion thereof;

(g)           The Investor has full power and authority to execute and deliver this Subscription Agreement and to perform the obligations of the Investor hereunder and this Subscription Agreement is a legally binding obligation of the Investor in accordance with its terms; and

(h)           Regulation S.

3. The Investor acknowledges and agrees that the Company has no obligation to assist the Investor in obtaining any exemption from any registration requirements imposed by applicable law. The Investor also acknowledges and agrees that he or she shall be responsible for compliance with all conditions on transfer imposed by a securities administrator or similar person of any state, province or territory.

5. The Investor understands that this subscription is not binding upon the Company until the Company accepts it, which acceptance is at the sole discretion of the Company and is to be evidenced by the Company’s execution of this Subscription Agreement where indicated.  This Subscription Agreement shall be null and void if the Company does not accept it as aforesaid.  The Investor further understands that all the offering proceeds will be placed directly in the Company’s bank account.  In the event the Company does not accept the offering proceeds, the offering will not be completed and all offering proceeds will thereafter be promptly returned to investors without interest or deduction. Proceeds from the Offering will be used to pay for the costs of the Offering and for working capital.  The Investor further acknowledges and agrees that the Company and its management have absolute discretion to adjust the application and allocation of proceeds of the Offering in order to adjust and respond to various circumstances and opportunities.

6. The Investor understands that the Company may, in its sole discretion, reject this subscription, in whole or in part, and/or reduce this subscription in any amount and to any extent, whether or not pro rata reductions are made of any other investor’s subscription.

7. The Investor agrees to indemnify the Company and hold it harmless from and against any and all losses, damages, liabilities, costs and expenses which it may sustain or incur in connection with the breach by the Investor of any representation, warranty or covenant made by the Investor.

8. Neither this Subscription Agreement nor any of the rights of the Investor hereunder may be transferred or assigned by the Investor.

9. Except as otherwise provided herein, this Subscription Agreement (i) may only be modified by a written instrument executed by the Investor and the Company; (ii) sets forth the entire agreement of the Investor and the Company with respect to the subject matter hereof; (iii) shall be governed by the laws of the State of Florida applicable to contracts made and to be wholly performed therein; and (iv) shall inure to the benefit of, and be binding upon the Company and the Investor and their respective heirs, legal representatives, successors and permitted assigns.

10. Unless the context otherwise requires, all personal pronouns used in this Subscription Agreement, whether in the masculine, feminine or neuter gender, shall include all other genders.

11. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or mailed by certified or registered mail, return receipt requested, postage prepaid, as follows:  if to the Investor, to the address set forth on the signature page hereto; and if to the Company, to 625 Second Street, #280, San Francisco, CA 94107, Attention: President or to such other address as the Company or the Investor shall have designated to the other by like notice.

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IN WITNESS WHEREOF, the Investor has executed this Subscription Agreement this _____ day of April 2012.

Number of Shares Subscribed for:   _____________

Subscription Amount: US$______________(number of Shares Subscribed for multiplied by $____)

 

 

 

Organization Signature:			Individual Signature:
Name:
			Signature
By:
Name:			Print Name
Title:
			Additional Signature of Joint Owner
			Print Name

 

 

Name:		Taxpayer/Corporate I.D. Number
Address:		Address for notices if different:
Number and Street		Number and Street
City                Country     Postal Code		City                Country     Postal Code

Please check the box to indicate form of ownership (if applicable):

tenants-in-common ÿ (Both Parties must sign above)

joint tenants with right of survivorship ÿ (Both Parties must sign above)

community property ÿ (Both Parties must sign above)

	Heavy Earth Resources, Inc.
	By:
		Grant W. Draper
	Its:	Chief Executive Officer