TEKOIL & GAS CORPORATION SUBSCRIPTION AGREEMENT
Exhibit
10.72
TEKOIL
& GAS CORPORATION
THE
COMMON STOCK AND CONVERTIBLE PROMISSORY NOTE DESCRIBED BELOW HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
144
UNDER SUCH ACT.
1. Subscription.
Subscriber (as identified on the signature page attached hereto) hereby
subscribes for and agrees to be issued the Convertible Promissory Note of Tekoil
& Gas Corporation, a Delaware corporation (the “Company”),
a
form of which is attached hereto as Exhibit A (the “Note”) in the amount
described on the signature page hereto, and upon conversion of the Note in
accordance with its terms, the shares of restricted Common Stock of the Company
into which any portion or amount of the Note is so converted (the “Conversion
Stock” and such Note and Conversion Stock are referred to together as
“Securities” and each is referred to separately as a “Security”) of Tekoil &
Gas Corporation, a Delaware corporation (the “Company”).
2. Payment;
Documents.
(a) Subscriber
agrees to tender to the Company the amounts described on the signature page
attached hereto for the Note subscribed for herein by either (i) a check made
payable to the Company or (ii) wire transfer to the Company’s bank account as
specified by the Company.
(b) The
amounts due shall be due upon transmittal of the subscription documents to
the
Company. Subscriber acknowledges that the Company may request additional
information in connection with the subscription.
3. Approvals.
Subscriber acknowledges and agrees that this subscription is subject to, and
limited by, the appropriate consent and approvals by the Company’s Board of
Directors and, if applicable, shareholders.
4. Acceptance
or Rejection of Subscription.
Subscriber acknowledges and agrees that this subscription shall not be effective
until accepted in writing by the Company, and that the Company reserves the
right to reject this Subscription in whole or in part in its sole discretion.
Subscriptions may be rejected for failure to conform to the requirements of
the
offering, insufficient documentation, oversubscription of the offering or for
any such other reason as the Company may determine, in its sole discretion,
to
be in the best interests of the Company. In the event of rejection of this
subscription Subscriber's funds, together with any earnings thereon, will
promptly be returned to Subscriber without deduction and this Subscription
Agreement shall have no further force or effect.
5. Acceptance
of Subscription.
In the
event Subscriber's subscription is accepted by the Company, Subscriber's
Securities shall be issued as of the date specified by the Company at the time
of acceptance.
6. Subscriber's
Representations and Warranties.
Subscriber represents, warrants, acknowledges and agrees that:
(a) Subscriber
is a resident of the state indicated on the signature page hereof, is legally
competent to execute this Subscription Agreement, and:
(i) if
Subscriber is an individual, has his or her principal residence in such
state;
(ii) if
Subscriber is a corporation, partnership, trust, limited liability company
or
other form of business organization, has its principal office in such state;
or
(iii) if
Subscriber is a corporation, partnership, trust, limited liability company
or
other form of business organization, Subscriber has not been organized for
the
specific purpose of acquiring any of the Securities.
(b) Subscriber
has not been offered the Securities by any form of general solicitation or
general advertising, including but not limited to any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(c) Subscriber
has had access during the course of this transaction and prior to the issuance
of any of the Securities to all information necessary to enable Subscriber
to
evaluate the merits and risks of a prospective investment in the Company
(including, without limitation, the periodic and other reports filed by the
Company with the U.S. Securities and Exchange Commission (the “SEC”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and
Subscriber has had the opportunity to ask questions of and receive answers
from
the officers and directors of the Company, or a person or persons acting on
its
behalf, concerning the terms and conditions of the offering and all questions
raised by Subscriber have been answered to the full satisfaction of Subscriber.
(d) There
are
substantial restrictions on the transferability of the Securities and,
accordingly, Subscriber will need to bear the economic risk of the investment
in
the Securities for an indefinite period of time and will not be readily able
to
liquidate the investment in case of an emergency.
(e) Subscriber
understands that the Company has a limited financial or operating history,
each
of the Securities is a speculative investment which involves a high degree
of
financial risk, and there is no assurance of any economic, income or tax benefit
from such investment.
(f) In
making
this investment, Subscriber is relying solely upon the advice of Subscriber's
personal tax advisors, and not the Company nor its advisers and counsel, with
respect to the tax aspects of an investment in the Securities.
(g) If
Subscriber is a corporation, partnership, trust, limited liability company,
employee benefit plan or other entity, Subscriber is authorized and qualified
to
become a stockholder of the Company and the person signing this Subscription
Agreement on behalf of such entity has been duly authorized by such entity
to do
so.
(h) No
representations or warranties have been made to Subscriber by the Company or
any
officer, employee, agent or affiliate of the Company, and Subscriber's
investment decision has been based solely upon Subscriber's independent
evaluation and due diligence, if any, of the Company.
2
(i) Subscriber
is experienced in evaluating and investing in early stage companies such as
the
Company. Subscriber is experienced in business matters and regards himself,
herself or itself as a sophisticated investor able to evaluate investment and
financial information and to choose independent professional advisors to assist
in such evaluation and, either alone or with such advisers, has such knowledge
and experience in financial and business matters that Subscriber is capable
of
evaluating the merits and risks of an investment in each of the Securities
and
has the capacity to protect Subscriber’s own interests in connection with
Subscriber’s proposed investment in the Securities.
(j) Subscriber’s
aggregate commitments to investments that are not readily marketable are not
disproportionate to Subscriber’s net worth and an investment in the Securities
will not cause such aggregate commitment to become excessive. Subscriber has
adequate means of providing for Subscriber’s current needs and possible personal
and family contingencies. Subscriber will not be readily able to liquidate
the
investment in the case of an emergency, and Subscriber has no need for liquidity
in this investment in the Company.
(k) Subscriber
has a preexisting business or personal relationship with the Company or with
one
or more of its officers or directors. Subscriber is purchasing the Securities
solely for Subscriber’s own account for investment (and not for the account of
any other person), and not with a view to, or for, any resale, distribution,
fractionalization or other transfer thereof, and Subscriber has no present
plans
to enter into any contract, undertaking, agreement or arrangement for any such
resale, distribution, fractionalization or transfer.
(l) Subscriber
acknowledges and agrees that the Company may at any time hereafter increase
the
amount of any of the Securities authorized to be issued by it, at the Company’s
sole and absolute discretion.
7. Representations
and Warranties Concerning Suitability and Accredited Investor
Status.
Subscriber hereby represents and warrants to the Company that Subscriber is
an
“Accredited Investor” (as defined under Regulation D as promulgated and
amended by the SEC pursuant to the Securities Act) on the basis of the
representations made by Subscriber to the Company below. Subscriber hereby
represents and warrants that:
(a) Subscriber
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Company
and
has obtained sufficient information from the Company to evaluate the merits
and
risks of an investment in the Company.
(b) Subscriber
has determined that the Securities are a suitable investment for Subscriber.
Subscriber is able to bear the economic risk of the investment in the Company
(including a complete loss thereof) and has adequate financial or other means
for providing for Subscriber's current needs and contingencies and has no need
for liquidity in this investment.
8. Indemnification.
Subscriber recognizes that the offer and sale of the Securities to Subscriber
were and will be based upon the representations, warranties, acknowledgments
and
agreements of Subscriber contained in this Subscription Agreement and hereby
agrees to defend and indemnify the Company (and anyone acting on its behalf)
with respect to the sale of the Securities, and to hold each such person or
entity harmless from and against all losses, liabilities, costs, or expenses
(including reasonable attorneys' fees) arising by reason of or in connection
with any misrepresentation or any breach of such warranty by Subscriber, or
arising as a result of the sale or distribution of any of the Securities by
the
undersigned in violation of the Securities Act, or any applicable state
securities laws, or Subscriber's failure to fulfill any of Subscriber's
covenants or agreements set forth herein. This Subscription Agreement and the
representations, warranties, and agreements contained herein shall be binding
upon the heirs, legal representatives, successors and assigns of
Subscriber.
3
9. Fees
and Expenses.
Subscriber shall pay for all its own fees and expenses in connection with this
subscription, including without limitation legal fees and fees of its advisors
and counsel, if any.
10. Revocation.
Subscriber acknowledges and agrees that Subscriber shall not and cannot cancel,
terminate or revoke this Subscription Agreement or any agreement of Subscriber
made hereunder, except as otherwise provided by applicable state law, and that
(if Subscriber is an individual) this Subscription Agreement shall survive
the
death, disability, or incompetence of Subscriber.
11. Restrictions.
The
Subscriber agrees that he will not at any time make any disposition of any
of
the Securities except in accordance with applicable federal and state securities
laws and the legend set forth below. The certificates for the Securities to
be
issued to the undersigned will bear a legend in substantially the following
form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES
MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 OR SUCH LAWS.
12. Miscellaneous.
The
terms and conditions contained in this Subscription Agreement constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersede all previous agreements and under-standings, whether oral or
written, between the parties hereto with respect to the subject matter hereof.
This Subscription Agreement shall be construed in accordance with and governed
by the laws of the State of Florida. This Subscription Agreement may be amended
only by a writing executed by the Company and Subscriber.
IN
WITNESS WHEREOF,
Subscriber has executed this Subscription Agreement on the date indicated on
the
signature page hereof.
[Signatures
on Next Page]
4
The
undersigned Subscriber confirms and certifies that Subscriber has read this
entire Subscription Agreement and understands the provisions hereof, and that
the undersigned has executed this Subscription Agreement as of the date set
forth below.
DATED:
March __, 2008
Subscriber
agrees to purchase the Note on the terms and conditions set forth herein in
exchange for ONE MILLION DOLLARS ($1,000,000).
The
Note
and such shares will be held by Subscriber(s) in the following manner, if
applicable:
|
o
|
Community
Property
|
o
|
Joint
Tenants with Right of Survivorship
|
|
o
|
Tenants
in Common
|
o
|
Separate
Property
|
|
o
|
Other: (e.g. individual, corporation, partnership, limited liability company, trust, investment company). Please indicate:_________________________ . | ||
Subscriber
Signature(s)
| /s/ Xxxxxxxxxx Energy, LP | ||
|
Name
of Subscriber (as it is to appear on the share certificate(s)):
|
Name
of Joint Subscriber, if any (appear on the share
certificate(s)):
|
|
|
Name
and Title of Signatory if Subscriber is an entity
|
||
|
Signature
|
Signature
of Joint Subscriber
|
|
|
|
|
|
|
Address
|
Address
of Joint Subscriber
|
|
|
Accepted
By:
|
||
|
TEKOIL
& GAS CORPORATION,
|
||
|
a
Delaware corporation
|
||
|
|
/s/ Xxxx Xxxxxxx, CEO | |
|
Signature
|
||
|
|
||
|
Name/Title
|
5
Note:
In
the
case of subscription by,
|
·
|
Joint
Tenants
with Rights of Survivorship or Tenants
in Common,
all tenants must execute this
subscription,
|
|
·
|
Husband
and Wife,
as community property, one signature only is
required.
|
|
·
|
A
Trust,
the Trustee must sign and a copy of the Trust Agreement should be
provided.
|
|
·
|
A
Partnership,
a
copy of the Statement of Partnership or the Partnership Agreement
should
be provided, and execution must be by the number of partners required
therein to bind the Partnership.
|
|
·
|
A
Corporation,
a
resolution of the Board of Directors authorizing the subscription
and
certified by the Secretary should be
included.
|
6
EXHIBIT
A
CONVERTIBLE
PROMISSORY NOTE
7
