ROCK CITY ENERGY CORP. SUBSCRIPTION AGREEMENT (Entity)
THE
SECURITIES TO WHICH THIS AGREEMENT RELATES ARE ARESTRICTED
SECURITIES@
AS THAT TERM IS DEFINED UNDER RULE 144 OF THE SECURITIES ACT OF 1933 (THE
A1933
ACT@)
. THE RESTRICTED SECURITIES HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR
UNDER
ANY STATE SECURITIES LAWS (ABLUE
SKY LAWS@),
AND MAY NOT BE OFFERED OR SOLD WITHOUT REGISTRATION UNDER THE 1933 ACT, AND
AS
REQUIRED BY BLUE SKY LAWS IN EFFECT AS TO SUCH TRANSFER, UNLESS AN EXEMPTION
FROM REGISTRATION UNDER STATE AND FEDERAL LAWS IS
AVAILABLE.
ROCK
CITY ENERGY CORP.
(Entity)
This
subscription agreement
is made
between Rock
City Energy Corp.,
a
Nevada corporation (the ACompany@),
and
the undersigned, Brek
Energy Corporation
(the
ASubscriber@)
for the
purchase of securities of the Company pursuant to this agreement.
The
Company is offering for sale 4,000,000 unregistered and restricted Common shares
of the Company (the ARestricted
Shares@)
at the
purchase price of $0.15 per Restricted Share in consideration of cash pursuant
to the exemptions from registration contained under Section 4(2) of the
Securities Act of 1933. The Restricted Shares are Arestricted
securities@
as that
term is defined under Rule 144 of the Securities Act of 1933, and the Restricted
Shares may not be sold without being first registered or an exemption from
registration is available.
On
the
foregoing premises, the Subscriber subscribes for the purchase of the Restricted
Shares on the following terms and conditions (the ASubscription@):
1. Subscription
to Purchase Restricted Shares
a. Offer
to Purchase.
Subject
to the terms and conditions of this agreement, the Subscriber irrevocably offers
to purchase at the Closing (as defined in paragraph 1.b.) the number of
Restricted Shares specified in the attached Signature Page for the amount that
is equal to the number of Restricted Shares multiplied by the purchase price
(the ASubscription
Amount@).
The
Subscriber will tender with this agreement (i) payment of the full Subscription
Amount in cash, (ii) a subscriber questionnaire, and (iii) a representative
questionnaire, as applicable. These documents are sometimes collectively
referred to as the ASubscription
Documents@.
b. Acceptance
or Rejection.
The
Company will accept or reject this offer to purchase the Restricted Shares
within 30 days of the date of this agreement at the time and place specified
by
the Company (the AClosing@).
At the
Closing, the Company will either (i) accept this Subscription (in whole or
in
part) and deliver to the Subscriber certificates for the Restricted Shares,
all
against the Subscriber=s
delivery to the Company of cash for the Subscription Amount, or (ii) reject
this
Subscription and return the tendered payment of the Subscription Amount to
the
Subscriber (or as much of it as the Company does not accept) within 10 days
of
the rejection without interest or deduction. If accepted, the Subscriber will
sign and deliver any additional documents that are necessary to effect the
issuance of the Restricted Shares subscribed for and accepted.
2. Representations
of the Subscriber
The
Subscriber represents and warrants to the Company as follows and acknowledges
and understands the significance to the Company of the following
representations, and that the Company is relying upon such representations
and
warranties in connection with the subscription for the Restricted Shares and
that the Company would not have entered into this Agreement without such
representations and warranties:
a. Age
and Citizenship.
The
Subscriber, or signatory if the Subscriber is a business entity, is over the
age
of majority. The Subscriber is a bona fide resident of the state set forth
next
to the Subscriber=s
signature and this state is the Subscriber=s
principal residence.
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City Energy Corp.
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b. Information
Provided by the Subscriber.
The
information that the Subscriber has provided to the Company or its agents or
representatives is complete, accurate, truthful and correct as of the date
of
the signature on the attached Signature Page. The information includes, but
is
not limited to, information concerning the Subscriber=s
personal financial affairs, business position, and the knowledge and experience
of the Subscriber and the Subscriber=s
advisers. If any of the information changes materially before the Company
accepts this subscription, the Subscriber will immediately provide the new
information. The Company will maintain this information regarding the Subscriber
in strict confidence, but may disclose it to governmental agencies to support
its reliance on an available exemption from the registration requirements of
applicable securities laws, rules and regulations for this offer and sale of
the
Restricted Shares.
c. Financial
Condition of the Subscriber.
The
Subscriber has adequate means of providing for the Subscriber=s
current
needs and possible personal contingencies and does not need now, or anticipate
needing in the foreseeable future, to sell the Restricted Shares that are the
subject of this agreement. The Subscriber represents that the Subscriber is
able
to bear the economic risks of this investment and is able to hold the securities
for an indefinite period of time and has sufficient net worth to sustain a
loss
of the entire investment if it should be lost.
d. Purchase
Entirely for Own Account.
The
Subscriber is the only party with an interest in this agreement, and is
acquiring the Restricted Shares for investment purposes and for the
Subscriber=s
own
account for long-term investment only, and not with any intent or arrangement
to
resell, fractionalize, divide or redistribute all or any part of the Restricted
Shares to any other person. The Subscriber has no present intention of dividing
the Restricted Shares with others or of reselling or otherwise disposing of
any
portion of the Restricted Shares.
e. No
Reliance on Unauthorized Representations.
The
Subscriber has not specifically relied on any oral representations from the
Company or any broker or salesman or their partners, shareholders, directors,
officers, employees or agents, except the following:
The
Subscriber further represents and warrants that it has conducted its own due
diligence with respect to the information received from the Company, which
information in any event is not to be construed as warranties or representations
or promises of future performance.
f. Knowledge
and experience.
The
Subscriber (i) has sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of a prospective
investment in the Restricted Shares; (ii) is experienced in making investments
which involve a high degree of risk; (iii) is sophisticated in making investment
decisions; (iv) can bear the economic risk of an investment in the Restricted
Shares, including the total loss of such investment; (v) understands and takes
full cognizance of the risk factors related to the purchase of the Restricted
Shares; and (vi) has had prior personal or business relationships with the
Company or affiliates of the Company, or broker, or by any reason of its
business or financial experience, the Subscriber has the capacity to protect
the
its own interest in connection with the subscription for Restricted Shares.
The
Subscriber understands that the Company is relying upon these representations
and upon the information provided in the Subscription Documents for the purposes
of confirming the Subscriber=s
subscription for the Restricted Shares complies with the requirements of the
Securities Act of 1933.
g. Authority.
The
Subscriber has the full power and authority to sign, deliver and perform this
agreement. This agreement, when signed and delivered by the Subscriber,
constitutes a legal, valid and binding obligation on the
Subscriber.
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City Energy Corp.
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h. No
Legal Advice from Company.
The
Subscriber acknowledges that it has had the opportunity to review this agreement
and the transactions contemplated by it with its legal counsel. The Subscriber
is relying solely on its counsel and not on any statements or representations
of
the Company or any of its agents for legal advice with respect to this
investment or the transactions contemplated by this agreement except for the
representations, warranties and covenants specifically stated.
i. Independent
Investigation.
The
Subscriber has received and carefully read and is familiar with this agreement,
the Subscription Documents, and all other documents in connection with this
offering, and the Subscriber confirms that all documents, records, and books
pertaining to the investment in the Company have been made available to the
Subscriber, and, if retained by the Subscriber, to the Subscriber=s
personal tax and legal advisors. The Company has provided the Subscriber with
copies of all material information requested by the Subscriber or by the
Subscriber=s
purchaser representative or others representing the Subscriber, including any
information requested to verify any information furnished (the AInformation@).
The
Subscriber and the Subscriber=s
representatives and advisors have communicated directly with each other in
connection with this offer to purchase the Restricted Shares and each has had
the opportunity to ask questions of and receive answers from the Company or
its
directors, officers, employees or representatives concerning the terms and
conditions of this offering and to obtain any additional Information (to the
extent that the Company possesses such information or can acquire it without
unreasonable effort or expense) desired or necessary to verify the accuracy
of
the Information provided. The Subscriber will maintain in strict confidence
any
proprietary Information disclosed to or discovered by the Subscriber in
reviewing the Information made available by the Company in connection with
this
offer. The Subscriber has relied only on the information contained in this
agreement and no written or oral representations have been made, nor any oral
or
written information furnished to the Subscriber in connection with the offering
of the Restricted Shares that was in any way inconsistent with this agreement.
In deciding to purchase the Restricted Shares, the Subscriber has read the
Information and has made an independent investigation without the assistance
of
the Company.
j. Subscriptions
Subject to Acceptance.
The
Subscriber acknowledges that the Company may accept or reject this agreement
in
whole or in part and will return to the Subscriber without interest or deduction
of expenses the portion of the Subscription Amount tendered that exceeds the
part of the Subscription that is accepted.
k. No
Governmental Approval.
The
Subscriber acknowledges that neither the United States Securities and Exchange
Commission nor the securities commission of any state or other federal agency
or
foreign government has made any determination of the merits of purchasing the
Restricted Shares.
l. No
registration.
The
Subscriber understands and has been advised that (i) the Restricted Shares
offered have not been registered under the Securities Act of 1933 (the
A1933
Act@),
or any
applicable state securities laws, and that the Subscriber must bear the economic
risk of the investment for an indefinite period of time because the Restricted
Shares cannot be sold unless they are registered under the 1933 Act or
applicable state securities laws or exemptions from them are available; (ii)
the
Company is not obligated to file a registration statement under the 1933 Act
or
take any action that will make the Restricted Shares available for resale with
registration or pursuant to an exemption; and (iii) Rule 144, adopted under
the
1933 Act governing the possible disposition of the Restricted Shares, is
applicable to the Restricted Shares, but may not be available for the resale
of
the Restricted Shares. The Subscriber agrees not to resell the Restricted Shares
without registration under the 1933 Act and the applicable state securities
laws
unless in an exempt transaction as set forth in Regulation D, Rule 144 or any
other federal securities act.
m. Transferability.
The
Subscriber understands and acknowledges that (i) there are substantial
restrictions on transferability on the Restricted Shares; and (ii) the
Restricted Shares will not, and the shareholders in the Company have no rights
to require that the Restricted Shares, be registered under the 1933 Act or
any
state securities laws. The Subscriber will not sell, hypothecate or otherwise
transfer the Restricted Shares, except in accordance with this agreement and
unless the Restricted Shares are registered under the 1933 Act and qualified
under applicable state securities laws, or unless, in the opinion of counsel
for
the Company, an exemption from the registration requirements of the 1933 Act
and
such laws is available.
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City Energy Corp.
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n. Speculative
nature of investment.
The
Subscriber acknowledges and understands that (i) the purchase of the Restricted
Shares is a highly speculative investment and involves a high degree of risk;
(ii) the Company may need additional financing in the future; (iii) the Company
makes no assurance whatever concerning the present or prospective value of
the
Restricted Shares; (iv) the Company does not intend to pay dividends on the
Restricted Shares in the future; (v) no United States federal or state agency
or
foreign government has passed upon or recommended or endorsed the Company,
this
transaction or the purchase of the Restricted Shares; (vi) this transaction
and
the material provided to the Subscriber have not been reviewed by the United
States Securities and Exchange Commission or by any state=s
or
foreign government=s
securities authorities; and (vii) there is no market for the Restricted Shares
and none may be developed, and as a result it may not be possible for the
Subscriber to readily liquidate its investment in the Company whenever
desired.
o. Entity
Investors.
The
person signing on behalf of the Subscriber represents and warrants that (i)
such
partnership, corporation, trust, or other entity is an existing entity and
has
not been organized for the purpose of making this investment; (ii) the
undersigned has the authority to sign this agreement, and any other documents
in
connection with an investment in the Restricted Shares, on the
Subscriber=s
behalf;
(iii) the Subscriber has the power, right, and authority to invest in the
Restricted Shares and enter into the transactions contemplated thereby; and
(iv)
all documents signed by the Subscriber in connection with the Company are valid
and binding documents or agreements on the Subscriber enforceable in accordance
with their terms.
3. Representations
of the Company
The
Company represents and warrants to the Subscriber as follows and acknowledge
that the Subscriber is relying upon such representations and warranties in
connection with the subscription for the Restricted Shares and that the
Subscriber would not have entered into this Agreement without such
representations and warranties:
a. Corporate
Organization and Standing.
The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada. The Company has the requisite corporate
power to carry on its business as presently conducted, and as proposed or
contemplated to be conducted in the future, and to enter into and carry out
the
provisions of this agreement and the transactions contemplated in this
agreement.
b. Authorization.
All
corporate action on the part of the Company, its directors, and shareholders
necessary for the authorization, signing, delivery and performance of this
agreement by the Company and the performance of all of the Company=s
obligations under this agreement have been taken. This agreement, when accepted,
signed and delivered by the Company, will constitute a valid and binding
obligation of the Company, enforceable in accordance with its terms, except
as
may be limited by principles of public policy, and subject to laws of general
application relating to bankruptcy, insolvency, and the relief of debtors and
rules governing specific performance, injunctive relief and other equitable
remedies. The Restricted Shares, when issued in compliance with the provisions
of this agreement, will be validly issued, fully paid, and non-assessable and
will be Arestricted
securities@
as that
term is defined under Rule 144 of the Securities Act of 1933. The Restricted
Shares may not be sold without being first registered or an exemption from
registration is available.
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City Energy Corp.
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4.Indemnification
The
Subscriber will indemnify the Company and any person participating in the
offering and will hold them harmless from and grants them a right of set-off
against any liability, damages, costs or expenses (including, but not limited
to, reasonable attorney=s
fees),
including any amount paid in settlement whether or not a suit is commenced,
incurred on account of any inaccuracy in the Subscriber=s
declarations, representations and warranties made in this agreement or the
Subscription Documents signed and delivered by the Subscriber in connection
with
this Subscription (the ADamages@).
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City Energy Corp.
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5. Set-off
Notwithstanding
the provisions in paragraph 4 or the enforceability of them, the Subscriber
grants the Company the right to set off against any amounts payable by the
Company to the Subscriber for whatever reason, before any Damages incurred
on
account of or arising out of any of the items referred to in paragraph
4.
6. Restrictive
Legends
The
Subscriber acknowledges and understands that each certificate evidencing the
Restricted Shares and any other securities issued on any stock split, stock
dividend, recapitalization, merger, consolidation, or similar event (unless
no
longer required in an opinion of the counsel for the Company) will be imprinted
with legends substantially in the following form:
AThe securities represented by this instrument to which this agreement relates have not been registered under the Securities Act of 1933 (the A1933 Act@), or under any state securities laws (ABlue Sky Laws@), and may not be offered or sold without registration under the 1933 Act, and as required by Blue Sky Laws in effect as to such transfer, unless an exemption from such registration under state and federal law is available.@
The
Company will be entitled to enter stop transfer notices on its transfer books
with respect to the Restricted Shares.
7.
Miscellaneous
a.
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Entire
Agreement.
This agreement and the Subscription Documents represent the entire
agreement between the Company and the Subscriber and supersedes all
prior
agreements, understandings or conversations with respect to any
transactions of the type contemplated by this
agreement.
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b.
|
Notice.
Any notice that must be given or delivered under this agreement must
be in
writing and delivered by hand to the address or transmitted by fax
to the
fax number given for the party and is deemed to have been received
when it
is delivered by hand or transmitted by fax unless the delivery or
transmission is made after 4:00 p.m.(PST) or on a non-business day
where
it is received, in which case it is deemed to have been delivered
or
transmitted on the next business day. Any payments of money must
be
delivered by hand or wired as instructed in writing by the receiving
party. Any delivery other than a written notice or money must be
made by
hand at the receiving party=s
address.
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c.
|
Waiver
and Amendment.
Notwithstanding any of the representations, warranties, acknowledgments
or
agreements made by the Subscriber in this agreement, the Subscriber
does
not waive any rights granted to the Subscriber under federal or state
securities laws. Any right granted to either the Subscriber or the
Company
under this agreement may be waived only in writing signed by both
parties.
No delay in our exercising any right granted under this agreement
operates
as a waiver of the right, and no partial exercise of any right precludes
our exercising that right or any other right in the future. Any amendment
of this agreement must be written and signed by the Company and the
Subscriber.
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d.
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Assignment.
The Subscriber may not assign or transfer this
agreement.
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e.
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No
Shareholder Rights.
This agreement does not entitle the Subscriber to any rights as a
shareholder of the Company until the Restricted Shares are registered
in
the name of the Subscriber.
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City Energy Corp.
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f.
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Governing
Law and Jurisdiction.
This agreement is governed by, and construed in accordance with,
the laws
of the State of Nevada, except for matters arising under the 1933
Act or
the Securities Exchange Act of 1934 which matters must be construed
and
interpreted in accordance with those laws. The parties irrevocably
and
unconditionally consent to submit to the exclusive jurisdiction of
the
courts of the State of Nevada and of the United States of America
located
in Nevada (the ANevada
Courts@)
for any litigation arising out of or relating to this agreement and
the
transactions contemplated hereby, consent to waive any objection
to the
laying of venue of any such litigation in the Nevada Courts, and
agree not
to plead or claim in any Nevada Court that such litigation brought
therein
has been brought in an inconvenient forum; provided that any judgment
obtained in any such litigation may be enforced in any court having
jurisdiction over a party or its
assets.
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THIS
SPACE INTENTIONALLY BLANK
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City Energy Corp.
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SIGNATURE
PAGE
This
page
is attached to the Subscription Agreement between Rock City Energy Corp. and
the
Subscriber and is signed by the Subscriber as of the date given. The undersigned
Subscriber, by signing and delivering this page, intends to be legally bound
by
the terms of the agreement.
Date:
March
7, 2007
Subscriber
Brek
Energy Corporation
Name
of
Subscriber
Authorized
Signatory
Xxxxxxx
X. Xxxxx, President
Name
and
Title of Authorized Signatory
0000
Xxx
Xxxx, Xxxxxx Xxxxx
Xxxxxxx
Xxxxx XX 00000
Address of Subscriber
Subscriber=s
tax
I.D.
4,000,000
Number
of
Restricted Shares
$600,000
Total
Subscription Amount
Rock
City Energy Corp.
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Subscription
Agreement
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Page 9
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ACCEPTANCE
and RECEIPT
Rock
City
Energy Corp. accepts this subscription and acknowledges receipt of the
Subscription Agreement set forth above and acknowledges receipt of $600,000
from
Brek
Energy Corporation
this
7th
day of March, 2007.
Rock
City Energy Corp.
Per:
Xxxxxxx
X. Xxxxx, President