SECURITIES PURCHASE AGREEMENT
EXHIBIT 10.17
This
Securities Purchase Agreement (this “Agreement”) is dated as of _____________,
2007, among Xxxxx Petroleum Corporation (formerly known as Express Systems
Corporation), a Nevada corporation (the “Company”), and each purchaser
identified on the signature pages hereto (each, including its successors and
assigns, a “Purchaser” and collectively the “Purchasers”).
BACKGROUND
A. On
April 10, 2007, the Company finalized the share transaction with DWM Petroleum
AG of Switzerland.
B. Subject
to the terms and conditions set forth in this Agreement, and pursuant to Section
4(2) of the Securities Act (as defined below), Rule 506 promulgated thereunder,
and/or Regulation S (defined below), the Company desires to issue and sell
to
each Purchaser, and each Purchaser, severally and not jointly, desires to
purchase from the Company, in the aggregate, up to $ 10 million (green-shoe
$ 5
million) divided by the “Purchase Price” per Share. The “Purchase Price” is $
4.50 until July 13, 2007 and thereafter is determined based on the following
formula: 90% of the Average Price per Share of the previous 10 trading days
at
the closing date of the transaction (the “Purchase Price”).
.
NOW,
THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and
for other good and valuable consideration the receipt and adequacy of which
are
hereby acknowledged, the Company and each Purchaser agrees as follows with
the
intent to be legally bound:
ARTICLE
I
PURCHASE
AND SALE
1.1 Closing. On
the Closing Date, each Purchaser shall purchase from the Company, severally
and
not jointly with the other Purchasers, and the Company shall issue and sell
to
each Purchaser, the Shares set forth under each Purchaser’s name on the
signature pages hereto. The aggregate Subscription Amounts for Shares
sold hereunder shall be up to $10,000,000 (green-shoe $
5,000,000). Promptly (but no later than five (5) Trading Days) after
satisfaction of the conditions set forth in Section 1.2 and 1.3, the Closing
shall occur at the offices of the Escrow Agent or such other location as the
parties shall mutually agree.
1.2 Deliveries.
(a) On
the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
certificate evidencing all Shares of Common Stock registered in the name of
such
Purchaser purchased by such Purchaser;
(b) On
the Closing Date, each Purchaser shall deliver, or cause to be delivered by
the
Escrow Agent, to the Company the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) such
Purchaser’s Subscription Amount by wire transfer to the account of the Company;
and
(iii) the
Escrow Agreement duly executed by such Purchaser.
1.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;
(ii) all
obligations, covenants and agreements of the Purchasers required to be performed
at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Purchasers of the items set forth in Section 1.2(b) of this
Agreement;
(iv) the
consummation of the Acquisition which is subject to receipt by the Company
of a
Fund Balance Notice (as defined in the Escrow Agreement) indicating an aggregate
of $3,000,000 in Subscription Amounts from the Purchasers
hereunder.
(b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to
the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations
and
warranties of the Company contained herein;
(ii) all
obligations, covenants and agreements of the Company required to be performed
at
or prior to the Closing Date shall have been performed;
(iii) the
consummation of the Acquisition
(iv) the
delivery by the Company of the items set forth in Section 1.2(a) of this
Agreement.
1.4 Irrevocable
Commitments. Prior to the Closing Date, the Purchasers will be
delivering (i) executed signature pages to this Agreement and the other
Transaction Documents to the Placement Agents (who will deliver such signature
pages to the Company) and (ii) their respective Subscription Amounts, by wire
transfer to the account provided below, to the Escrow Agent to be held and
disbursed in the manner provided in the Escrow Agreement. Each
Purchaser acknowledges and agrees that, subject to applicable law, their
commitments to purchase Units hereunder will be irrevocable upon delivery of
their Subscription Amounts (and signature pages to the Transaction Documents)
as
provided above, and the Subscription Amounts will only be returned to the
Purchasers (if ever) in the manner described in the Escrow
Agreement. All Subscription Amounts should be delivered by the
Purchasers to the Escrow Agent by wire transfer to the following
account:
Wire
Transfer to:
Bank: Commerce
Bank
000-000
0xx
Xxxxxx
Xxx
Xxxx, Xxx Xxxx
00000
ABA#: 000-000-000
Swift#: CBNAUS
33
Title
of
Account: Rubin,
Bailin, Ortoli, Mayer & Xxxxx LLP
Account #7916582815
Reference: Xxxxx
Petroleum Corporation
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
2.1 Representations
and
Warranties of the Company. Except as set forth under the
corresponding section of the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof, the Company hereby makes the representations
and
warranties set forth below to each Purchaser. Notwithstanding
anything contained herein or in any other Transaction Documents to the contrary,
the representations and warranties of the Company below assume the consummation
of the Acquisition and the giving effect thereto.
(a) Organization
and
Qualification. Each of the Company and the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles
of
incorporation, bylaws or other organizational or charter
documents. Each of the Company and the Subsidiaries is duly qualified
to conduct its business and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business or
financial condition of the Company and the Subsidiaries, taken as a whole,
or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”), and no
Proceeding has been instituted in any such jurisdiction revoking, limiting
or
curtailing or seeking to revoke, limit or curtail such power and authority
or
qualification.
(b) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by
each
of the Transaction Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further corporate authorization is required by the
Company in connection therewith, other than in connection with the Required
Approvals. Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms except
(i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(c) No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Units and
the
consummation by the Company of the other transactions contemplated thereby
do
not and will not (i) conflict with or violate any provision of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of,
any material agreement, credit facility, debt or other instrument (evidencing
a
Company or Subsidiary debt or otherwise) or other agreement to which the Company
or any Subsidiary is a party or by which any material property or material
asset
of the Company or any Subsidiary is bound, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject, or
by
which any material property or material asset of the Company or a Subsidiary
is
bound, except, in each case, as could not reasonably be expected to result
in a
Material Adverse Effect.
(d) Issuance
of the
Securities. The Shares and Warrants are duly authorized and,
when issued and paid for in accordance with the Transaction Documents, will
be
validly issued, fully paid and nonassessable, free and clear of all Liens,
other
than restrictions provided for in the Transaction Documents and applicable
securities laws. The Warrant Shares, when issued in accordance with
the terms of the Transaction Documents, will be validly issued, fully paid
and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions provided for in the Transaction Documents and applicable securities
laws. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement
and the Warrants.
(e) Capitalization. The
capitalization of the Company is as described in Schedule 2.1(e). No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as (i) set forth on Schedule 2.1(e),
(ii) contemplated by the Transaction Documents, or (iii) a result of the
purchase and sale of the Securities, there are no outstanding options, warrants,
script rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound
to
issue additional shares of Common Stock, or securities or rights convertible
or
exchangeable into shares of Common Stock. The issue and sale of the
Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers and their designees)
and will not result in a right of any holder of Company securities to adjust
the
exercise, conversion, exchange or reset price under such
securities. Except as set forth on Schedule 2.1(e), there are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.
(f) Litigation. Except
as set forth on Schedule 2.1(f), there is no action, suit, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or
the
Securities or (ii) would, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect.
(g) Compliance. To
the Company’s knowledge, neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default
by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any material indenture, loan or credit agreement or any other
material agreement or instrument to which it is a party or by which it or any
of
its properties is bound, (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is in violation of any statute, rule
or regulation of any governmental authority, including without limitation all
foreign, federal and state laws applicable to its business, except, in each
case
as would not have a Material Adverse Effect.
(h) Regulatory
Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such permits would
not have, or reasonably be expected to result in, a Material Adverse Effect
(“Material Permits”), and neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification of any
Material Permit.
(i) Title
to
Assets. The Company and the Subsidiaries have good title in
fee simple to all real property owned by them that is material to the business
of the Company and the Subsidiaries and good title in all personal property
owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for (i) Liens
as
do not materially affect the value of such property and do not materially
interfere with the use made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, the payment
of
which is neither delinquent nor subject to penalties. The Company and
the Subsidiaries are in substantial compliance with all leases covering real
property or facilities leased by them.
(j) Certain
Fees. Each
Purchaser hereby acknowledges that at the Closing the Company will pay to the
Placement Agent a commission equal to 6% of the gross purchase price paid for
the Securities at Closing and Brokerage Warrants equal to 5% of the gross
purchase price paid for the Securities at Closing. Except to the Persons set
forth on Schedule 3.1(j), no brokerage or finder’s fees or commissions are or
will be payable by the Company to any broker, financial advisor or consultant,
finder, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no direct
obligation with respect to any fees or with respect to any claims made by or
on
behalf of other Persons for fees of a type contemplated in this Section that
may
be due in connection with the transactions contemplated by this
Agreement.
(k) Private
Placement. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 2.2, no registration under
Section 5 of the Securities Act is required for the offer and sale of the
Securities by the Company to the Purchasers as contemplated hereby.
(l) No
Registration
Rights. No Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the
Company.
(m) Disclosure. All
disclosure provided to the Purchasers regarding the Company, its business and
the transactions contemplated hereby, including the Disclosure Schedules to
this
Agreement, furnished by or on behalf of the Company with respect to the
representations and warranties made herein are true and correct with respect
to
such representations and warranties and do not contain any untrue statement
of a
material fact or omit to state any material fact necessary in order to make
the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect
to
the transactions contemplated hereby other than those specifically set forth
in
Section 2.2 hereof.
2.2 Representations
and
Warranties of the Purchasers Each Purchaser hereby, for itself
and for no other Purchaser, represents and warrants as of the date hereof and
as
of the Closing Date to the Company as follows:
(a) Organization;
Authority. Such Purchaser, if not a natural person, is an
entity duly organized, validly existing and in good standing under the laws
of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which a Purchaser is a party
has been duly executed by such Purchaser, and, subject to Section 1.4, when
delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against
such Purchaser in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
(b) Purchaser
Representation. Such Purchaser understands that the Securities
are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Securities
as an
investment as principal for its own account and not with a view to or for
distributing or reselling such Securities or any part thereof, has no present
intention of distributing any of such Securities and has no arrangement or
understanding with any other Persons regarding the distribution of such
Securities. Such Purchaser is acquiring the Securities hereunder in
the ordinary course of its business. Such Purchaser does not have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises
any
Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act, or (ii)
a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act. Each Person who
is purchasing pursuant to Regulation S promulgated by the Commission under
the
Securities Act represents that he, she or it is not a “U.S. Person” as that term
is defined in Regulation S and agrees to be bound by all of the terms and
conditions of Regulation S.
(d) Experience
of Such
Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks
of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time,
is
able to afford a complete loss of such investment.
(e) General
Solicitation. Such Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
(f) Relationship
to Company;
Access to Information. The Purchaser either has a preexisting
personal or business relationship with the Company or its officers, directors
or
controlling persons, or, by reason of Purchaser’s business or financial
experience, the Purchaser has the capacity and has taken all steps necessary
to
protect the Purchaser’s own interests in connection with an investment in the
Securities. The Purchaser has received and read or reviewed with his
Purchaser Representative, if any, and represents that he is familiar with this
Agreement, the other Transaction Documents, the Disclosure Schedules and the
other documents delivered to the Purchaser as part of the offering of the
Securities. The Company has made available to the Purchaser such
information and documents regarding the Company as Purchaser deems necessary
to
enable him to make an informed decision concerning the purchase of the
Securities and the Company has provided answers to all of Purchaser’s questions
relating to this investment in the Securities. The Purchaser
acknowledges that no federal or state agency has made any finding or
determination as to the fairness of the offering for investment or any
recommendation or endorsement of the Securities.
(g) Purchaser’s
Liquidity. The Purchaser has adequate means of providing for
the Purchaser’s current needs and personal contingencies and has no need for
liquidity in connection with the investment in the Securities. The
Purchaser acknowledges that the Purchaser must bear the economic risk of
investment in the Securities for an indefinite period of time, and that the
Purchaser could sustain a loss of the Purchaser’s entire investment in the
Securities without materially impairing the Purchaser’s financial
wherewithal. The Purchaser’s overall commitment to investments which
are not readily marketable is not disproportionate to the net worth of the
Purchaser, and the Purchaser’s investment in the Securities will not cause such
overall commitment to become excessive.
(h) Short
Sales. Without limiting anything in Article IV, each Purchaser
represents that from the date it was notified of the transactions contemplated
hereby until the Closing, neither it nor any Person over which the Purchaser
has
direct control, have made, or will make, any net short sales of, or granted,
or
will grant, any option for the purchase of, or entered into any hedging or
similar transaction with the same economic effect as a net short sale in the
Common Stock. Each Purchaser, severally and not jointly with the
other Purchasers, understands and acknowledges that the Commission currently
takes the position that coverage of short sales of shares of the Common Stock
“against the box” with the Securities purchased hereunder prior to the Closing
Date is a violation of Section 5 of the Securities Act. Accordingly,
each Purchaser hereby agrees not to use any of the Securities to cover any
short
sales prior to the Closing Date. Additionally, each Purchaser,
severally and not jointly with the other Purchasers, agrees to comply in all
respects with Regulation M under the federal securities laws.
(i) Special
Representations for
Regulation S Purchasers. Each Purchaser who is purchasing
Securities hereunder pursuant to Regulation S promulgated by the Commission
under the Securities Act hereby makes the following additional representations
and warranties to the Company:
(i) It
understands and acknowledges that the Securities have not been registered under
the Securities Act or any other applicable securities laws, and the Securities
may not be sold or otherwise transferred except in compliance with the
registration requirements of the Securities Act and any other applicable
securities law or pursuant to an exemption therefrom and in each case in
compliance with the conditions for transfer set forth in (iii)
below.
(ii) It
is a person that, at the time the buy order for the Securities was originated,
was outside the United States and was not a U.S. person (and was not purchasing
for the account or benefit of a U.S. person) within the meaning of Regulation
S.
(iii) It
acknowledges that it will offer, sell or otherwise transfer the Securities,
prior to the date which is two years after the later of the original issue
date
hereof and the last date on which the Company or any affiliate of the Company
was the owner of any of the Securities (or any predecessor of the Securities),
only (A) to the Company, (B) pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S under the
Securities Act in a transaction meeting the Requirements of Rule 904 under
the
Securities Act, or (C) pursuant to another available exemption from the
registration requirements of the Securities Act, subject to the Company’s
right prior to any offer, sale or transfer pursuant to clause (B) or (C) to
require the delivery of an opinion of counsel, certificates and/or other
information reasonably satisfactory to the Company.
(iv) It
agrees that it will not engage in hedging transactions involving the Securities
unless such transactions are in compliance with the Securities
Act.
(v) If
it is a “dealer” or a person “receiving a selling concession fee or other
remuneration” within the meaning of Regulation S under the Securities Act,
it acknowledges that until the expiration of the one-year “restricted
period” within the meaning of Rule 903 of Regulation S under the Securities Act,
any offer or sale of the Securities shall not be made by it to a U.S. person
or
for the account or benefit of a U.S. person within the meaning of Rule 902(k)
of
the Securities Act.
(vi) It
acknowledges that the Company and others will rely upon the truth and accuracy
of the foregoing representations, warranties and agreements and agrees that,
if
any of the representations, warranties and agreements made by Purchaser of
the
Securities are no longer accurate, it shall promptly notify the
Company.
(j) Indemnification
Representations of Purchaser. Each Purchaser represents and
warrants that none of the representations or warranties made by the Purchaser
herein (“Purchaser Statements”) contain any false or misleading statement or
omit to state a material fact. The Purchaser shall indemnify the
Company to the extent the Company incurs or suffers any damage, expenses, loss,
claim, judgment or liability resulting from the Company’s reliance upon any
Purchaser Statement that is false or misleading.
(k) Additional
Representations
and Warranties of Purchasers.
Each
Purchaser represents and warrants that:
(i) Purchaser
has been furnished with all additional documents and information which Purchaser
has requested;
(ii) Purchaser
has had the opportunity to ask questions of, and received answers from, the
Company concerning the Company and the Securities and to obtain any additional
information necessary to verify the accuracy of the information
furnished;
(iii) Purchaser
has relied only on the foregoing information and documents in determining to
make an investment in the Securities;
(iv) The
documents and information furnished by the Company to the Purchasers in
connection with the offering of the Securities do not constitute investment,
accounting, legal or tax advice, and Purchaser is relying on its own
professional advisers for such advice;
(v) All
documents, records and books pertaining to Purchaser’s investment have been made
available for inspection by Purchaser and by Purchaser’s attorney, and/or
Purchaser’s accountant and/or Purchaser’s purchaser representative;
(vi) Purchaser
understands, acknowledges and agrees that the Company is relying solely upon
the
representations and warranties of the Purchasers made herein in determining
to
sell Purchaser the Securities;
(vii) The
Purchaser has not paid or given any commission or other remuneration in
connection with the purchase of the Securities;
(viii) The
Purchaser understands the meaning and legal consequences of the foregoing
representations and warranties. The Purchaser certifies that each of
the foregoing representations and warranties is true and correct as of the
date
hereof and shall survive the execution hereof and the purchase of the
Securities;
(ix) The
Purchaser has not traded in securities of the Company in violation of Rule
10b-5
under the Exchange Act or any other federal or state xxxxxxx xxxxxxx or
anti-fraud securities law.
ARTICLE
III
OTHER
AGREEMENTS OF THE PARTIES
3.1 Transfer
Restrictions.
(a) The
Purchasers acknowledge and agree that the Securities may only be disposed of
in
compliance with state and federal securities laws. In connection with
any transfer of Securities, the Company may require the transferor thereof
to
provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under
the
Securities Act.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section
3.1(b), of a legend on any of the Securities in substantially the following
form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
(c) Certificates
evidencing the Shares and Warrant Shares shall not contain any legend (including
the legend set forth in Section 3.1(b)), (i) following any sale of such Shares
or Warrant Shares pursuant to Rule 144, (ii) if such Shares or Warrant Shares
are eligible for sale under Rule 144(k), (iii) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission) and
(iv) in the case of (i) and (ii) above, if the registered owner of such
certificate delivers an appropriate representation letter to the Company and
its
counsel. The Company agrees that at such time as such legend is no
longer required under this Section 3.1(c), it will, no later than three Trading
Days following the delivery by a Purchaser to the Company or the Company’s
transfer agent of a certificate representing Shares or Warrant Shares, as the
case may be, issued with a restrictive legend, deliver or cause to be delivered
to such Purchaser a replacement certificate representing such Securities that
is
free from such legends.
(d) Each
Purchaser, severally and not jointly with the other Purchasers, agrees that
the
removal of the restrictive legend from certificates representing Securities
as
set forth in this Section 3.1 is predicated upon the Company’s reliance that the
Purchaser will sell any Securities pursuant to the registration requirements
of
the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.
(e) Notwithstanding
anything contained herein to the contrary, and in addition to any other legends
required by law or hereunder, Securities purchased hereunder in reliance on
Regulation S promulgated by the Commission under the Securities Act shall be
imprinted with a legend in substantially the following form:
THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND
SOLD ONLY PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT. THESE
SECURITIES MAY NOT BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY), ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT
PRIOR TO ANY OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION
REASONABLY SATISFACTORY TO THE COMPANY. THE HOLDER OF THIS SECURITY
BY ITS ACCEPTANCE HEREOF FURTHER AGREES NOT TO ENGAGE IN HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES UNLESS SUCH TRANSACTIONS MEET THE REQUIREMENTS AND
COMPLY WITH THE SECURITIES ACT.
Notwithstanding
anything contained
herein to the contrary, the Company will not, and is not permitted to, register
the transfer of any Securities sold hereunder on the Company’s books or records,
unless such Securities have been transferred in accordance with or pursuant
to
(A) the provisions of Regulation S, (B) a registration statement declared
effective by the Commission or (C) another available exemption from registration
under the Securities Act.
3.2 Indemnification
of
Purchasers. Subject to the provisions of this Section
3.4, the Company will indemnify and hold the Purchasers and their directors,
officers, shareholders, partners, employees and agents (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims,
damages, costs and expenses, including all judgments, amounts paid in
settlements (subject to the provisions below), court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in
this
Agreement or (b) any action instituted against a Purchaser, or any of their
respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser or any other Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action
is
based upon a breach of such Purchaser’s representation, warranties or covenants
under the Transaction Documents or any agreements or understandings such
Purchaser may have with any such stockholder or any violations by the Purchaser
of state or federal securities laws or any conduct by such Purchaser which
constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of
its
own choosing. Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but
the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel (assuming
an obligation to so assume the defense) or (iii) in such action there is, in
the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Company and the position of such Purchaser
Party. The Company will not be liable to any Purchaser Party under
this Agreement (i) for any settlement by an Purchaser Party effected without
the
Company’s prior written consent, which shall not be unreasonably withheld or
delayed, or (ii) to the extent, but only to the extent that a loss, claim,
damage, judgment or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by the
Purchasers in this Agreement or in the other Transaction Documents.
3.3 Reservation
of Common
Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants.
3.4 No
Variable Rate
Transactions. In addition to the limitations set forth herein,
from the Closing Date until one (1) year after the Closing Date, the Company
shall be prohibited from effecting or enter into an agreement to effect any
Subsequent Financing involving a “Variable Rate Transaction” (as defined
below). The term “Variable Rate Transaction” shall mean a transaction
in which the Company issues or sells (i) any debt or equity securities that
are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time
after
the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock.
ARTICLE
IV
MISCELLANEOUS
4.1 Fees
and
Expenses. The Company shall pay up to an aggregate of $20,000
in legal fees actually accrued to one or more legal counsel, mutually chosen
by
the Placement Agents, for such counsel’s services in representing the Purchasers
in connection with this Agreement and the other Transaction
Documents. Except as otherwise set forth in this Agreement, each
party shall pay the fees and expenses of its advisers, counsel, accountants
and
other experts, if any, and all other expenses incurred by such party incident
to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all stamp and other taxes and duties
levied in connection with the sale of the Securities.
4.2 Entire
Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements
and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
4.3 Notices. Any
and all notices or other communications or deliveries required or permitted
to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth
on
the signature pages attached hereto or email (if provided by the Purchaser)
to
the email address set forth on the signature pages hereto, in each case, prior
to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day
after the date of transmission, if such notice or communication is delivered
via
facsimile at the facsimile number set forth on the signature pages attached
hereto or email (if provided by the Purchaser) to the email address set forth
on
the signature pages hereto, in each case, on a day that is not a Trading Day
or
later than 6:30 p.m. (New York City time) on any Trading Day, (c) the second Trading
Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice
is
required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto.
4.4 Amendments;
Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company and Purchasers
holding a majority of the Shares purchased hereunder and then
outstanding. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.
4.5 Construction. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules
of
strict construction will be applied against any party.
4.6 Successors
and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each
Purchaser.
4.7 No
Third-Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and
is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.
4.8 Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed
by
and construed and enforced in accordance with the internal laws of the State
of
Nevada, without regard to the principles of conflicts of law
thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in British Columbia,
Canada, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including
with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or inconvenient venue
for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address
in
effect for notices to it under this Agreement and agrees that such service
shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. The
parties hereby waive all rights to a trial by jury. If either party
shall commence an action or proceeding to enforce any provisions of the
Transaction Documents, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
4.9 Survival. The
representations and warranties of the Company herein shall survive for a period
of eighteen (18) months after the Closing.
4.10 Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement, and subject to Section
1.4, shall become effective when counterparts have been signed by each party
and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature
is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
4.11 Severability. If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
4.12 Rescission
and Withdrawal
Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever any Purchaser exercises a right, election, demand or option under
a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon timely written notice
to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights.
4.13 Replacement
of
Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested by the Company. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement
Securities.
4.14 Remedies. In
addition to being entitled to exercise all rights provided herein or granted
by
law, including recovery of damages, each of the Purchasers and the Company
will
be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive
in
any action for specific performance of any such obligation the defense that
a
remedy at law would be adequate.
4.15 Payment
Set
Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or
the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
4.16 Independent
Nature of
Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in
any
way for the performance of the obligations of any other Purchaser under any
Transaction Document. Nothing contained herein or in any Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are
in
any way acting in concert or as a group with respect to such obligations or
the
transactions contemplated by the Transaction Document. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation, the rights arising out of this Agreement or out of the
other
Transaction Documents, and it shall not be necessary for any other Purchaser
to
be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate
legal counsel in their review and negotiation of the Transaction
Documents.
IN
WITNESS WHEREOF, the
parties hereto have caused this Securities Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Address
for
Notice:
XXXXX
PETROLEUM
CORPORATION XXXXX
PETROLEUM CORP.
XXXXXXXXXXXXXX
0
0000
XXXX
By:
SWITZERLAND
Name:
Title:
President
With
a copy to (which shall not constitute notice)
Xxxxxxx
Xxxxxxxxxx, Esq.
Rubin,
Bailin, Ortoli, LLP
000
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx, 00000-0000
Tel:
000 000-0000
Fax:
000 000 0000
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
[PURCHASER
SIGNATURE PAGES TO
XXXXX
PETROLEUM CORPORATION SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
Name
of Investing Entity: ________________________________
Signature
of Authorized Signatory of Investing Entity:
Name
of Authorized Signatory:
Title
of Authorized Signatory:
Email
Address of Authorized Entity:
Address
for Notice of Investing Entity:
Address
for Delivery of Securities for Investing Entity (if not same as
above):
Subscription
Amount :
Units:
EIN
Number:
[SIGNATURE
PAGES CONTINUE]
