EXHIBIT 10.3
SUBSCRIPTION AND REGISTRATION
RIGHTS AGREEMENT
WYOMING OIL & MINERALS, INC.
100,000 Units,
Offering Price $5 Per Unit
This Subscription and Registration Rights Agreement (the "Agreement") is
made between Wyoming Oil & Minerals, Inc., a Wyoming corporation (the "Company")
and the undersigned prospective purchaser that is subscribing for the purchase
of Units (defined in the next paragraph).
The Company is offering 100,000 Units at an offering price of $5 per Unit,
each Unit consisting of one share of Series A Convertible Preferred Stock of the
Company, without par value (the "Series A Preferred Stock"), and one common
stock purchase warrant (a "Warrant;" one share of Series A Preferred Stock and
one Warrant shall be sold as a "Unit" or "Units"). Each Warrant is exercisable
for a period of two years from the date the subscription is accepted by the
Company at an exercise price of $1.25 per share of common stock.
In consideration of the Company's agreement to sell the Units to the
undersigned upon the terms and conditions set forth below, the undersigned
agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby irrevocably subscribes for and agrees to purchase
One Hundred Thousand (100,000) Units at a purchase price of $5 per Unit, for a
total purchase price of $500,000. No discounts or commissions shall be payable
in connection with the subscription. Simultaneously with the execution of this
Agreement, the undersigned is paying $500,000 (the "Payment") in the form of a
check, money order, banker's draft or wire transfer of funds, payable to Wyoming
Oil & Minerals, Inc.
2. No other sales of Series A Preferred Stock are contemplated at this
time, and the undersigned understands that if the this subscription is accepted,
the Payment will be immediately deposited into the corporate bank account of the
Company and available for all corporate purposes.
3. The undersigned understands that the Payment will be held by the Company
for its benefit. The Payment (or, in the case of rejection of a portion of the
undersigned's subscription, the part of the Payment relating to such rejected
portion) will be returned promptly, without interest, if the undersigned's
subscription is rejected in whole or in part. This subscription is and shall be
irrevocable except that the undersigned shall have no obligations in the event
that this subscription is rejected in full for any reason.
4. The undersigned agrees that the Company has the right to reject any
subscription in whole or in part, to accept one subscription over another, and
to allocate available Units among subscribers in any manner that it deems
appropriate. The undersigned hereby irrevocably appoints the Company and each
officer of the Company and each of the foregoing acting singly, in each case
with full power of substitution, the true and lawful agent and attorney-in-fact
of the undersigned, with full power and authority in the undersigned's name,
place and stead, to amend this Agreement to effect any of the foregoing
provisions of this Paragraph 4.
B. REPRESENTATIONS AND WARRANTIES
1. The Company hereby represents and warrants as follows:
(a) The Company is a Wyoming corporation, duly organized, validly existing
and in good standing under the laws of that State. The Company is
authorized to issue 27,000,000 shares of stock, of which 2,000,000 are
Preferred Shares, no par value, and 25,000,000 are Common Shares, par value
$.01 per share. The Company has full corporate power and authority to own,
lease or operate its properties and assets and to conduct its business as
currently being conducted.
(b) The Company has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement by the Company has been duly and validly
authorized by all necessary corporate action, including the approval of the
Board of Directors, and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
assuming the proper execution and delivery of this Agreement by the
undersigned, constitutes a valid and binding Agreement of the Company,
enforceable against it in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally, and general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity). Neither the execution of this Agreement nor the consummation of
the transactions contemplated hereby will result in the violation of any
provision of the Company's certificate of incorporation or bylaws.
(c) The Company has a total of 10,271,680 shares of Common Stock issued and
outstanding (excluding shares underlying options and warrants). No shares
of Preferred Stock are outstanding prior to the contemplated issuance of
the Series A Preferred Stock.
(d) There is no suit, action, claim, investigation or inquiry by any
governmental authority, and no legal, administrative or arbitration
proceeding pending or, to the knowledge of the Company, threatened against
the Company with respect to the execution, delivery and performance of this
Agreement or any document delivered or agreement entered into in connection
herewith, or the transactions contemplated hereby or thereby. The
execution, delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby do not and will
not contravene or constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of the
Company or to a violation of any provision of applicable law or regulation
or of any agreement, judgment, injunction, order, decree, or other
instrument binding on the Company or result in the imposition of any lien
on any asset of the Company.
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(e) The Company has delivered to the undersigned true and correct copies of
all reports filed by it with the Securities and Exchange Commission since
its Annual Report on Form 10-K for the fiscal year ended February 28, 2001
(the "SEC Reports"). All of the SEC Reports set forth the financial
condition, results of operations and assets of the Company at the time that
the Reports were filed, to the best knowledge of the Company.
(f) The designations, preferences, limitations and relative rights of the
Series A Preferred Stock are set forth in Articles of Amendment to the
Articles of Incorporation of the Company previously filed with the Wyoming
Secretary of State. A copy of the Articles of Amendment to the Articles of
Incorporation is on file at the Company's principal office and is available
for inspection.
2. The undersigned hereby represents and warrants to the Company as
follows:
(a) The Units are being purchased for the undersigned's own account, for
investment purposes only, not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. No other person has or will have a
direct or indirect beneficial interest in the undersigned's Units. The
undersigned will not sell, hypothecate or otherwise transfer his Units
unless (a) the Units are registered under the Securities Act of 1933, as
amended (the "Act"), and applicable state securities laws or (b) in the
opinion of counsel acceptable to the Company, an exemption from the
registration requirements of the Act and such state laws is available.
(b) The undersigned, either alone or with the assistance of the
undersigned's own professional advisor, has such knowledge and experience
in financial and business matters that the undersigned is capable of
evaluating the merits and risks of an investment in the Units and has the
net worth to undertake such risks.
(c) The undersigned is aware and has evaluated the substantial risks
involved in purchasing the Units, including those factors set forth in the
SEC Reports. The undersigned hereby affirmatively states that it has read
the SEC Reports, and understands that the Units as an investment involve a
high degree of risk, including but not limited to, the risk of economic
loss of its investment.
(d) That the undersigned realizes that (i) the purchase of the Units is a
long-term investment; (ii) the purchaser of the Units must bear the
economic risk of investment for an indefinite period of time because
neither the Units, the Series A Preferred Stock, the Warrants nor the
common stock underlying the Warrants (the "Securities") have not been
registered under the Securities Act of 1933 or under the securities laws of
any state and, therefore, the securities cannot be resold unless they are
subsequently registered under said laws or exemptions from such
registrations are available; (iii) there is presently no public market for
the Units, the Series A Preferred Stock or the Warrants and the undersigned
may be unable to liquidate the undersigned's investment in the event of an
emergency, or pledge the securities as collateral for a loan; (iv) the
transferability of the Securities will be restricted and requires
conformity with the restrictions contained herein; and (v) legends will be
placed on the certificate(s) representing the Securities referring to the
applicable restrictions on transferability.
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3. The Company has made available to the undersigned all documents and
information that the undersigned has requested relating to an investment in the
Units. The Company makes no representations or warranties other than those
contained herein.
4. The undersigned believes that he has received all information that it
considers necessary or appropriate for deciding whether to purchase the Units.
The undersigned further represents that it has had the opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Units, the business, prospects and financial
condition of the Company.
5. The undersigned understands that if the Employee Retirement Income
Security Act of 1974 ("ERISA") applies to this investment, that in making the
proposed investment the undersigned is aware of and has taken into consideration
diversification requirements of ERISA and has concluded that the proposed
investment is a prudent one even though no public market for the Units currently
exists.
6. Assuming the due authorization, execution, and delivery of this
Agreement by the Company, this Agreement is the valid and binding Agreement of
the undersigned, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). If this Agreement is being executed in a representative or fiduciary
capacity, the person signing this Agreement has full power and authority to
execute and deliver this Agreement and to perform the transactions contemplated
hereby and thereby.
7. The undersigned is a limited liability company, duly organized, validly
existing and in good standing under the laws of its jurisdiction.
8. The undersigned represents and warrants that the undersigned is a bona
fide resident of, is domiciled in and received the offer and made the decision
to invest in the Units in the State of Oklahoma and the Units are being
purchased by the undersigned in the undersigned's name solely for the
undersigned's own beneficial interest and not as nominee for, or on behalf of,
or for the beneficial interest of, or with the intention to transfer to, any
other person, trust or organization.
9. The undersigned hereby represents and warrants that the undersigned is
an "accredited investor" with within the meaning of Rule 501 of regulation D of
the 1933 Act, and meets one of the following criteria:
(Please Initial the Category or Categories Which Apply)
A. A bank or savings and loan institution.
---------
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B. A broker or dealer registered with the Securities and
--------- Exchange Commission.
C. An insurance or investment company.
---------
D. A natural person whose individual net worth, or joint
--------- net worth with that person's spouse, at the time of
the purchase of the Units, exceeds $1,000,000.
E. A natural person who had an individual income of $200,000
-------- in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 each of those
years and has a reasonable expectation of reaching the
same income level in the current year.
F. A partnership, corporation or other entity in which all
--------- of the equity owners of such entity meet the requirements
of paragraphs D or E above.
G. A corporation, business trust or partnership not formed
--------- for the specific purpose of acquiring the Units, with
total assets in excess of $5,000,000.
H. Any trust with total assets in excess of $5,000,000, not
--------- formed for the specific purpose of acquiring the Units.
or
I. None of the above apply.
---------
The undersigned shall indemnify and hold harmless the Company and its
affiliates, or any partner, officer, director, agent or control person of the
Company or its affiliates which was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of or
arising from (i) any breach of the undersigned's warranties, covenants or
agreements set forth herein or arising out of the sale or distribution of the
Units in violation of applicable law; or (ii) any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning the undersigned or the
undersigned's financial position in connection with the offering or sale of the
Units, including, without limitation, any such misrepresentation, misstatement
or omission regarding the undersigned's status as an accredited investor,
against losses, liabilities and expenses for which the Company or any officer,
director, agent, or control person of the Company or the affiliates has not
otherwise been reimbursed (including attorneys' fees, judgment, fines and
amounts paid in settlement) actually and reasonably incurred by such person or
the Company in connection with such action, suit or proceeding.
C. UNDERSTANDINGS
The undersigned understands, acknowledges and agrees with the Company as
follows:
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1. No Federal or state agency has made any finding or determination as to
the accuracy or adequacy of this Agreement or as to the fairness of the terms of
this offering for investment, nor any recommendations or endorsement of the
Units.
2. The offering and sale of the Units is intended to be exempt from
registration under the Act by virtue of Section 4(2) or 3(b) of the Act and/or
the provisions of Regulation D. Except as set forth in the next succeeding
paragraph, the Company is under no obligation to register the Units or any of
the Securities issued in this offering on behalf of the undersigned or to assist
the undersigned in complying with any exemption from registration.
3. (a) Not later than six months from the date of acceptance of this
Agreement, the Company shall file a registration statement for the common
stock underlying the Warrants and the common stock into which the Series A
Preferred Stock is convertible (the "registrable securities") on any
appropriate form under the 1933 Act. The Company shall use its best efforts
to cause such registration to become effective as promptly as possible
after such filing and thereafter to keep such registration effective for a
period of at least one year.
b) Notwithstanding the foregoing, the Company may postpone the filing
of a registration statement (for a period not exceeding 90 days) if its
Board of Directors in good faith determines that the filing or the
distribution of the registrable securities will adversely interfere with a
public offering by the Company or with a financing, acquisition, corporate
reorganization or similar corporate transaction.
c) In connection with the registration, the Company will use its best
efforts to effect such registration to permit the sale of such registrable
securities and accordingly will:
(i) prepare and file with the SEC a Registration Statement or
registration statements on any appropriate form under the 1933 Act,
which form shall be available for the sale of the registrable
securities and shall include all financial statements required by the
SEC to be filed therewith;
(ii) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the registration statement effective;
(iii) prior to any public offering of registrable securities,
register or qualify or cooperate with the selling holders of
registrable securities, the underwriters, if any, and their respective
counsel on a best efforts basis to register or qualify such
registrable securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any selling holder or underwriter
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions
of the registrable securities covered by the Registration Statement.
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d) All expenses incident to the Company's performance of or compliance
with this Agreement including without limitation all registration and
filing fees, fees with respect to listings or filings required, fees and
expenses of compliance with securities or Blue Sky laws, printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and of all independent certified public accountants
of the Company, and reasonable fees and expenses of other persons retained
by the Company in connection with the registration, will be borne by the
Company.
4. There is no public or other market for the Units, and no such public or
other market is expected to develop. There can be no assurance that the
undersigned will be able to sell or dispose of the undersigned's Units, should
he desire to do so. No assignment, sale, transfer, exchange or other disposition
of the undersigned's Units can be made other than in accordance with the
provisions hereof.
5. All certificates evidencing the Securities will contain or be endorsed
with the following, or substantially equivalent, legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT OF 1933, APPLICABLE STATE SECURITIES LAWS AND THE
APPLICABLE RULES AND REGULATIONS THEREUNDER.
6. There can be no assurance as to the Federal or state tax consequences of
an investment in the Units.
7. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND OF THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THE UNITS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
8. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
D. MISCELLANEOUS
1. Neither this Agreement nor any provisions hereof shall be waived,
modified, changed, discharged, terminated, revoked or canceled except by an
instrument in writing signed by the party against whom any change, discharge or
termination is sought.
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2. Notices required or permitted to be given hereunder shall be in writing
and shall be deemed to be sufficiently given when personally delivered or sent
by registered mail, return receipt requested, addressed to the other party at
the address given for such party in the signature below.
3. Failure of the Company to exercise any right or remedy under this
Agreement or any other agreement, between the Company and the undersigned, or
otherwise, or delay by the Company in exercising such right or remedy, will not
operate as a waiver thereof. No waiver by the Company will be effective unless
and until it is in writing and signed by an authorized officer of the Company.
4. This Agreement shall be enforced, governed and construed in all respects
in accordance with the laws of the State of Colorado, without regard to
conflicts of laws,, and shall be binding upon the undersigned, the undersigned's
heirs, estate, legal representatives, successors and permitted assigns and shall
inure to the benefit of the Company, its successors and assigns. If any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the enforceability of any other
provision hereof.
5. This Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and may be amended only by a writing
executed by all parties hereto.
XXXXXXX CONSULTING GROUP, LLC
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxxx, Manager
Social Security Number
or Employee ID No.:
------------------------
Address of Subscriber:
------------------------------------------
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Accepted this 30th day of September 2002.
-------- ---------------------------------
WYOMING OIL & MINERALS, INC.,
a Wyoming corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx, President
0000 X. Xxxxxxxx Xxxxx,, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
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