SUBSCRIPTION AGREEMENT
Exhibit 10.8
Gentlemen and Ladies:
The undersigned desires to exchange and convert all of the outstanding principal and interest
owed to Profit Consultants, Inc. (“Profit Consultants”) by Global Clean Energy, Inc., a Maryland
corporation (the “Company”), pursuant to that certain Promissory Note, dated August 16, 2007,
executed by the Company (the “Promissory Note”), for shares of the Company’s common stock, par
value $.001 per share (the “Common Stock”). In order to induce the Company to authorize the
conversion and enter into this Subscription Agreement, Profit Consultants has agreed to provide
certain representations, warranties, and obligations to the Company as follows.
1. Subscription
Subject to and in accordance with the terms and conditions of this Subscription Agreement, the
undersigned hereby offers to purchase 78,300 shares of Common Stock (the “Shares”). The
undersigned hereby delivers to the Company the full purchase price of $78,300 (the “Purchase
Price”) for the Shares in the form of cancelling all principal and interest outstanding under the
Promissory Note and surrendering the Promissory Note to the Company for cancellation.
2. Representations and Warranties of the Undersigned
(a) The undersigned hereby represents and warrants to, and agrees with, the Company as
follows:
| (i) | the undersigned can bear the economic risk of losing the undersigned’s entire
investment; |
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| (ii) | the undersigned is acquiring the Shares for its own account and
not with a view to, or for resale in connection with, a distribution of the
Shares in violation of the Securities Act of 1933, as amended (the “1933 Act”); |
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| (iii) | the undersigned’s overall commitments to investments that are
not readily marketable is not disproportionate to the undersigned’s net worth
and the undersigned’s investment in the Shares will not cause such overall
commitments to become excessive; |
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| (iv) | the undersigned’s financial condition is such that the
undersigned is under no present or contemplated future need to dispose of any
portion of the Shares to satisfy any existing or contemplated undertaking, need
or indebtedness; |
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| (v) | the undersigned has adequate means of providing for the
undersigned’s current needs and personal contingencies and has no need for
liquidity in the undersigned’s investment in the Shares; and |
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| (vi) | the undersigned has sufficient knowledge and experience in
business and financial matters to evaluate, and has evaluated, the merits and
risks of this investment. |
(b) The address set forth below on the signature page of this Subscription Agreement is the
undersigned’s true and correct principal office, and the undersigned has no present intention of
relocating its principal office to any other state or jurisdiction.
(c) The undersigned is an “accredited investor” as that term is defined in Rule 501 of
Regulation D, as promulgated under the 1933 Act because the undersigned meets one of the following
criteria (if the undersigned is not an “accredited investor”, place an “X” in the following
blank:
_____
):
| (i) | An individual with a net worth, individually or jointly with
the undersigned’s spouse, of $1,000,000; or |
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| (ii) | An individual with income in excess of $200,000 in each of the
two most recent years, or joint income with the undersigned’s spouse in excess
of $300,000 in each of those years, and the undersigned has a reasonable
expectation of reaching the same income level in the current year; or |
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| (iii) | An individual who is an officer or director of the Company; or |
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| (iv) | A corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000; or |
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| (v) | A trust with total assets in excess of $5,000,000 not formed
for the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D, as promulgated under the 1933 Act; or |
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| (vi) | An entity in which all of the equity owners are accredited
investors; or |
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| (vii) | A bank as defined in section 3(a)(2) of the Act, or a savings
and loan association or other institution as defined in section 3(a)(5)(A) of
the Act whether acting in its individual or fiduciary capacity; a broker or
dealer registered pursuant to section 15 of the Securities Exchange Act of
1934; an insurance company as defined in section 2(a)(13) of the Act; an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a)(48) of that Act; a
Small Business Investment Company licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business Investment Act
of 1958; a plan established and maintained by a state, its political
subdivisions, or an agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets
in excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors; or |
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| (viii) | A private business development company as defined in section 202(a)(22) of
the Investment Advisers Act of 1940. |
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(d) The undersigned confirms that all documents, records and books pertaining to an investment
in the Shares that have been requested by the undersigned have been made available or delivered to
the undersigned. Without limiting the foregoing, the undersigned has reviewed the Company’s public
filings with the Securities and Exchange Commission and any other documents requested and received
by the undersigned, and the undersigned has had the opportunity to discuss the acquisition of the
Shares with the Company. The undersigned has obtained or been given access to all information
concerning the Company that the undersigned has requested. As a result of its review of the
Company, including the review of the materials provided to the undersigned, the undersigned
understands, among other things, the following: (a) the Company has limited financial resources;
(b) the Company began its current operations on or about November 2006; and (c) the Company has not
earned or received any revenues since it began its current operations. The undersigned further
represents that the undersigned is cognizant of the operations, financial condition and
capitalization of the Company, has read and understood all risk factors in the Company’s most
recent Report on Form 10-KSB for fiscal year ended December 31, 2006, and has available full
information concerning the Company’s affairs to evaluate the merits and risks of an investment in
the Shares.
(e) The undersigned has had the opportunity to ask questions of, and receive answers from, the
Company concerning the terms of an investment in the Shares and to receive additional information
necessary to verify the accuracy of the information delivered to the undersigned.
(f) The undersigned understands that the issuance of the Shares has not been registered under
the 1933 Act or any state securities laws in reliance on an exemption for private offerings and no
U.S. federal or state agency has made any finding or determination as to the fairness of this
investment or any recommendation or endorsement of the offering of the Shares.
(g) The undersigned acknowledges that, in making the decision to purchase the Shares, it has
relied solely upon independent investigations made by it.
(h) The undersigned has the full right, power and authority to enter into this Subscription
Agreement and to carry out and consummate the transactions herein. This Subscription Agreement
constitutes the legal, valid and binding obligation of the undersigned.
(i) The undersigned represents that an investment in the Shares is a suitable investment for
the undersigned.
(j) The undersigned acknowledges and is aware that the following legend will be imprinted on
the certificate(s) representing the Common Stock:
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“THE SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS
THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS
TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY THROUGH REASONABLE
MEANS AS DETERMINED BY THE COMPANY, INCLUDING AN OPINION OF SELLER’S COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY.”
(k) The undersigned acknowledges and is aware of the following, in addition to other
information included in the information provided to the undersigned:
| (i) | The Shares constitute a speculative investment and involve a
high degree of risk of loss by the undersigned of the undersigned’s total
investment. |
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| (ii) | There are substantial restrictions on the transferability of
the Shares. |
(l) The undersigned understands and agrees that the Company is relying upon the accuracy,
completeness, and truth of the undersigned’s representations, warranties, agreements, and
certifications contained in this Subscription Agreement, in determining the undersigned’s
suitability as an investor in the Company and in establishing compliance with federal and state
securities laws. The undersigned understands that any incomplete, inaccurate, or untruthful
response, or the breach of the undersigned’s representations, warranties, agreements, or
certifications may result in the undersigned or the Company, or both, being in violation of federal
or state securities laws, and any person, including the Company, who suffers damage as a result may
have a claim against the undersigned for damages. The undersigned also acknowledges that the
undersigned is indemnifying the Company and others for any such losses in accordance with Section 3
of this Subscription Agreement.
(m) The undersigned acknowledges and agrees that it will be responsible for any and all tax
consequences to the undersigned that may result from exchanging the Promissory Note for the Shares.
The foregoing representations and warranties are true and accurate in all material respects as
of the date hereof and shall survive the delivery of the subscription amount and the completed
Subscription Agreement.
3. Indemnification
Both the Company and the undersigned acknowledge and understand the meaning and legal
consequences of the representations, warranties, agreements, and certifications contained above,
and the Company and the undersigned hereby agree to indemnify and hold harmless the other party
(including, without limitation, its respective managers, officers, directors, representatives and
agents) from and against any and all loss, damage, or liability due to or arising out of a breach
of any representation, warranty, agreement, or certification, or the inaccuracy of any statement,
of the Company or the undersigned, as the case may be, contained in this Subscription Agreement or
any other document submitted by the Company or the undersigned in connection with the undersigned’s
subscription for the Shares. The foregoing notwithstanding, nothing in this Subscription Agreement,
including the
representations, warranties, agreements and certifications contained above, shall be deemed to
constitute a waiver of any rights that the undersigned may have under the 1933 Act and other
federal and state securities laws.
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4. Miscellaneous
(a) This Subscription Agreement may be executed in one or more counterparts all of which taken
together shall constitute a single instrument.
(b) This Subscription Agreement shall be governed and construed as binding upon the parties
hereto, and their respective successors, and no other person shall have any right or obligation
hereunder. This subscription shall be irrevocable, and may not be assigned by the undersigned.
Subject to the foregoing, this Subscription Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives, successors and assigns of
the undersigned.
(c) This Subscription Agreement constitutes the entire agreement between the undersigned and
the Company with respect to the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements between the undersigned and the Company with respect to the subject
matter of this Agreement.
(d) This Subscription Agreement will be construed and enforced in accordance with and governed
by the laws of the State of Maryland, except for matters arising under the 1933 Act, without
reference to principles of conflicts of law.
With such full understandings and acknowledgements, the undersigned does hereby affirm the
undersigned’s subscription to purchase the Shares. The undersigned does further acknowledge the
undersigned’s understandings of all the terms and provisions of this Subscription Agreement and,
upon acceptance of this Subscription Agreement by the Company, agrees to be bound by all the terms
and conditions of this Subscription Agreement.
[Signature page follows]
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SIGNATURE PAGE
| Date: |
| By: |
This subscription is accepted by Global Clean Energy, Inc. on this
_____
day of
_____
,
2008.
| GLOBAL CLEAN ENERGY, INC. |
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| By: | ||||
| Name: | _____________________ | |||
| Title: | ______________________ | |||
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