GASCO ENERGY, INC.
SUBSCRIPTION AND REGISTRATION RIGHTS AGREEMENT
This Subscription and Registration Rights Agreement (this "Agreement"),
made as of the date set forth below by and between Gasco Energy, Inc. (the
"Company") and the undersigned ("Subscriber"), is intended to set forth certain
representations, covenants and agreements between the Company and the
Subscriber, with respect to the offering (the "Offering") for sale by the
Company of shares of common stock, par value $.0001 per share (the "Common
Stock"), as described in the Company's Private Placement Memorandum dated August
2, 2002 (the "Memorandum"), a copy of which has been delivered to Subscriber.
1. Subscription. Subject to the terms and conditions hereof, the Subscriber
hereby irrevocably subscribes for and agrees to purchase from the Company the
number of shares of Common Stock, par value $.0001 per share of the Company (the
"Shares") set forth under the Subscriber's name on the signature page hereto at
a purchase price of $1.00 per share (the "Offering Price"), and the Company
agrees to sell such Shares to the Subscriber at the Offering Price, subject to
the Company's right to sell to the Subscriber such lesser number of Shares as
the Company may, in its sole discretion, deem necessary or desirable.
2. Delivery of Subscription Amount; Acceptance of Subscription; Delivery of
Shares. Subscriber understands and agrees that this subscription is made subject
to the following terms and conditions:
(a) Subscriber understands that separate subscription agreements will be
executed with other Subscribers for the remainder of the Shares to be sold in
the Offering;
(b) Contemporaneously with the execution and delivery of this Agreement,
Subscriber shall execute and deliver the Registration Rights Agreement and the
Certificate of Accredited Investor Status, and shall wire to the Company to hold
in a separate, non-interest bearing account, immediately available funds in the
amount equal to the Offering Price multiplied by the number of Shares for which
the Subscriber has subscribed (the "Subscription Amount") in accordance with the
how to subscribe instructions set forth on Exhibit A hereto.
(c) The subscription for Shares shall be deemed to be accepted only when
this Agreement has been signed by an authorized officer of the Company, and the
deposit of the Subscription Amount for clearance will not be deemed an
acceptance of this Agreement;
(d) The Company shall have the right to reject this subscription, in whole
or in part and shall have the right to allocate Shares among Subscribers in any
manner it may desire;
(e) The payment of the Subscription Amount (or, in the case of rejection of
a portion of the Subscriber's subscription, the part of the payment relating to
such rejected portion) will be returned promptly, without interest, if
Subscriber's subscription is rejected in whole or in part or if the Offering is
withdrawn or canceled;
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(f) Certificates representing the Shares purchased will be issued in the
name of each Subscriber within 5 days of the consummation of the Offering as set
forth under Section 3 hereof; and
(g) The representations and warranties of the Company and Subscriber set
forth herein shall be true and correct as of the date that the Company accepts
this subscription.
3. Terms of Subscription.
(a) The subscription period will begin as of August 4, 2002 and will
terminate at 11:59 p.m. Eastern time on October 15, 2002, unless extended by the
Company, on one or more occasions, for up to an additional sixty (60) days (the
"Termination Date"). Such extension may be effected without notice to the
Subscribers.
(b) As compensation for advisory services, the Company's advisor Energy
Capital Solutions, LLC ("ECS") will receive a fee equal to five (5%) percent of
the aggregate purchase price of the Shares sold and the Company's advisor
EnerCom, Inc. will receive a fee equal to one (1%) percent of the aggregate
purchase price of the Shares sold. The Company shall pay these fees and shall
also pay all expenses in connection with the Offering.
(c) If the Subscriber is not a United States person, the Subscriber hereby
represents that it has satisfied itself as to the full observance of the laws of
its jurisdiction in connection with any invitation to subscribe for the Shares
or any use of this Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Shares. The Subscriber's subscription and payment for,
and his or her continued beneficial ownership of the Shares, will not violate
any applicable securities or other laws of the Subscriber's jurisdiction.
4. Registration Rights.
(a) Subscriber acknowledges that it is acquiring the Shares for its own
account and for the purpose of investment and not with a view to any
distribution or resale thereof within the meaning of the Securities Act of 1933,
as amended, (the "Securities Act"). The Subscriber further agrees that it will
not sell, assign or transfer the Shares at any time in violation of the
Securities Act and acknowledges that, in taking unregistered securities, it must
continue to bear the economic risk of its investment for an indefinite period of
time because of the fact that the Shares have not been registered under the
Securities Act, and further realizes that the Shares cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available. The Subscriber further recognizes that the Company is
not assuming any obligation to register the Shares except as expressly set forth
herein. The Subscriber also acknowledges that appropriate legends reflecting the
status of the Shares under the Securities Act may be placed on the face of the
certificates for such Shares at the time of their transfer and delivery to the
holder thereof.
(b) The Shares may not be transferred except in a transaction which is in
compliance with the Securities Act. Except as provided hereafter with respect to
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registration of the Shares, it shall be a condition to any such transfer that
the Company shall be furnished with an opinion of counsel to the holder of such
Shares, reasonably satisfactory to the Company, to the effect that the proposed
transfer would be in compliance with the Securities Act.
(c) Within 30 days after the Closing Date, the Company shall use its
commercially reasonable efforts to prepare and file with the Securities and
Exchange Commission (the "SEC"), a registration statement and such other
documents as may be necessary in the opinion of counsel for the Company, and use
its commercially reasonable efforts to have such registration statement declared
effective within 75 days after the Closing Date in order to comply with the
provisions of the Securities Act so as to permit the registered resale of the
Shares for a period of two (2) years following the Closing Date by each and
every holder of Shares sold in the Offering, except for those holders who
designate on the signature page hereto that they do not wish to have their
Shares included in the registration statement. The Shares that are registered
for resale under such registration statement are referred to herein as the
"Offering Shares," and the Subscribers who are eligible to sell their Shares
under such registration statement, together with their affiliates, are hereafter
referred to as "Offering Holders." The Company will include in such registration
statement (i) the information required under the Securities Act to be so
included concerning the Offering Holders, as provided by the Offering Holders on
the signature page hereto, including any changes in such information that may be
provided by the Offering Holders in writing to the Company from time to time,
and (ii) a section entitled "Plan of Distribution," substantially in the form of
Exhibit C hereto, that describes the various procedures that may be used by the
Offering Holders in the sale of their Shares. Notwithstanding anything to the
contrary in this Section 4, the Company may, at its option, terminate such
registration statement at any time after a period of one year following the
Closing Date, if at such time no Offering Holder beneficially owns more than
1,000,000 of the Shares that such Offering Holder purchased in the Offering.
(d) If the registration statement referred to in Section 4(c) above has not
been declared effective by the SEC within 75 days after the Closing Date and the
cause of the delay is not related to circumstances beyond the Company's control
(such as failure of the SEC to review and act on the registration statement or
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amendments to the registration statement in a timely manner), the Company shall
pay liquidated damages of 2% of the Offering Price per share for every Share for
each 30 day period of delay following such initial 75 day period ("Liquidated
Damages"). The foregoing payment shall constitute the sole monetary remedy
available to the Subscriber in the event that the Company does not comply with
the deadlines set forth in Section 4(c) with respect to the filing and
effectiveness of the registration statement referred to therein.
(e) Notwithstanding the foregoing provisions of this Section 4, the Company
may voluntarily suspend the effectiveness of any such registration statement for
a limited time, which in no event shall be longer than 60 days in any
three-month period and no longer than 120 days in any twelve month period, if
the Company has been advised in writing by counsel or underwriters to the
Company that the offering of any Offering Shares pursuant to the registration
statement would materially adversely affect, or would be improper in view of (or
improper without disclosure in a prospectus), a proposed financing, a
reorganization, recapitalization, merger, consolidation, or similar transaction
involving the Company. If the effectiveness of any such registration statement
is suspended for a period of time in violation of the preceding sentence and the
cause of the delay is not related to circumstances beyond the Company's control
(such as the failure of the SEC to review and act on a post-effective amendment
to the registration statement in a timely manner), the Company shall pay
Liquidated Damages for each such violation, subject to the limitation set forth
in the last sentence of Section 4(d). If any event occurs that would cause any
such registration statement to contain a material misstatement or omission or
not to be effective and usable during the period that such registration
statement is required to be effective and usable, the Company shall promptly
file an amendment to the registration statement and use its commercially
reasonable efforts to cause such amendment to be declared effective as soon as
practicable thereafter. Notwithstanding any provision contained herein to the
contrary, the Company's obligation to include, or continue to include, Offering
Shares in any such registration statement under this Section 4 shall terminate
to the extent such shares are eligible for resale under Rule 144(k) promulgated
under the Securities Act.
(f) If and whenever the Company is required by the provisions of this
Agreement to use its commercially reasonable efforts to effect the registration
of the Offering Shares under the Securities Act for the account of an Offering
Holder, the Company will, as promptly as possible:
(i) prepare and file with the SEC a registration statement with
respect to such securities and use its commercially reasonable efforts to
cause such registration statement to become and remain effective;
(ii) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the requirements of the Securities Act and the rules and
regulations promulgated by the SEC thereunder relating to the sale or other
disposition of the securities covered by such registration statement;
(iii) furnish to each Offering Holder such numbers of copies of a
prospectus, including a preliminary prospectus, complying with the
requirements of the Securities Act, and such other documents as such
Offering Holder may reasonably request in order to facilitate the public
sale or other disposition of the Offering Shares owned by such Offering
Holder, but such Offering Holder shall not be entitled to use any selling
materials other than a prospectus and such other materials as may be
approved by the Company, which approval will not be unreasonably withheld;
and
(g) Except as provided below in this Section 4, the expenses incurred by
the Company in connection with action taken by the Company to comply with this
Section 4, including, without limitation, all registration and filing fees,
printing and delivery expenses, accounting fees, fees and disbursements of
counsel to the Company, consultant and expert fees, premiums for liability
insurance, if the Company chooses to obtain such insurance, obtained in
connection with a registration statement filed to effect such compliance and all
expenses, including counsel fees, of complying with any state securities laws
("State Acts"), shall be paid by the Company. All fees and disbursements of any
counsel, experts, or consultants employed by any Offering Holder shall be borne
by such Offering Holder. The Company shall not be obligated in any way in
connection with any registration pursuant to this Section 4 for any selling
commissions or discounts payable by any Offering Holder to any underwriter or
broker of securities to be sold by such Offering Holder. Subscriber agrees to
pay all expenses required to be borne by such Offering Holder.
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(h) In the event of any registration of shares of Common Stock pursuant to
this Section 4, the Company will indemnify and hold harmless each Offering
Holder, its officers, directors, investment advisors and each underwriter of
such securities, and any person who controls such Offering Holder or underwriter
within the meaning of Section 15 of the Securities Act, against all claims,
actions, losses, damages, liabilities and expenses, joint or several, to which
any of such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
such Offering Holder, its officers, directors and each underwriter of such
securities, and each such controlling person or entity for any legal and any
other expenses reasonably incurred by such Offering Holder, such underwriter, or
such controlling person or entity in connection with investigating or defending
any such loss, action, claim, damage, liability, or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises directly out of or is based
primarily upon an untrue statement or omission made in said registration
statement, said preliminary prospectus or said prospectus, or said amendment of
supplement in reliance upon and in conformity with written information furnished
to the Company by such Offering Holder or such underwriter specifically for use
in the preparation thereof, and provided further however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability or action arises directly out of or is based primarily upon an
untrue statement or omission made in any preliminary prospectus or final
prospectus if (i) such Offering Holder failed to send or deliver a copy of the
final prospectus or prospectus supplement with or prior to the delivery of
written confirmation of the sale of the Offering Shares, and (ii) the final
prospectus or prospectus supplement would have corrected such untrue statement
or omission.
(i) At any time when a prospectus relating to the Offering is required to
be delivered under the Securities Act, the Company will notify the Offering
Holder of the happening of any event, upon the notification or awareness of such
event by an executive officer of the Company, as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing.
(j) In the event of any registration of any shares of Common Stock under
the Securities Act pursuant to this Section 4, Subscriber agrees to indemnify
and hold harmless the Company, its officers, directors and any person who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages, liabilities, or actions, joint or several,
to which the Company, its officers, directors, or such controlling person or
entity may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, liabilities, or actions arise out of or are based upon
any untrue statement of any material fact contained in any registration
statement under which such shares of Common Stock were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
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or necessary to make the statements therein not misleading, in each case to the
extent and only to the extent that any such loss, claim, damage, liability, or
action arises out of or is based upon an untrue statement or omission made in
said registration statement, said preliminary prospectus or said prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by Subscriber or any affiliate (as defined
in the Securities Act) of Subscriber specifically for use in the preparation
thereof.
(k) Any party entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (which consent may not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(l) With a view to making available to the Offering Holder the benefits of
Rule 144 promulgated under the Securities Act, the Company agrees that it will
use its commercially reasonable efforts to maintain registration of its Common
Stock under Section 12 or 15 of the Securities and Exchange Act of 1934, as
amended, (the "Exchange Act") and to file with the SEC in a timely manner all
reports and other documents required to be filed by an issuer of securities
registered under the Exchange Act so as to maintain the availability of Rule
144. Upon the request of any record owner, the Company will deliver to such
owner a written statement as to whether it has complied with the reporting
requirements of Rule 144.
5. Representations and Warranties of the Subscriber. Subscriber hereby
represents and warrants to the Company as follows:
(a) Subscriber is acquiring the Shares for its own account, for investment
and not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act, and applicable
state securities laws.
(b) The Subscriber understands that (A) the Shares (1) have not been
registered under the Securities Act or any state securities laws, (2) will be
issued in reliance upon an exemption from the registration and prospectus
delivery requirements of the Securities Act pursuant to Section 4(2) and/or
Regulation D thereof and (3) will be issued in reliance upon exemptions from the
registration and prospectus delivery requirements of state securities laws which
relate to private offerings, and (B) the Subscriber must therefore bear the
economic risk of such investment indefinitely unless a subsequent disposition
thereof is registered under the Securities Act and applicable state securities
laws or is exempt therefrom. Subscriber further understands that such exemptions
depend upon, among other things, the bona fide nature of the investment intent
of the Subscriber expressed herein. Pursuant to the foregoing, the Subscriber
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acknowledges that the certificates representing the Shares acquired by the
Subscriber shall bear a restrictive legend substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF UNLESS (I) REGISTERED UNDER THE APPLICABLE
SECURITIES LAWS OR (II) AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL
ARE BOTH REASONABLY SATISFACTORY TO THE COMPANY, HAS BEEN DELIVERED TO THE
COMPANY AND SUCH OPINION STATES THAT THE SHARES MAY BE TRANSFERRED WITHOUT
SUCH REGISTRATION."
(c) The Subscriber has knowledge, skill and experience in financial,
business and investment matters relating to an investment of this type and is
capable of evaluating the merits and risks of such investment and protecting the
Subscriber's interest in connection with the acquisition of the Shares. The
Subscriber understands that the acquisition of the Shares is a speculative
investment and involves substantial risks and that the Subscriber could lose the
Subscriber's entire investment in the Shares. To the extent deemed necessary by
the Subscriber, the Subscriber has retained, at its own expense, and relied
upon, appropriate professional advice regarding the investment, tax and legal
merits and consequences of purchasing and owning the Shares. The Subscriber has
the ability to bear the economic risks of the Subscriber's investment in the
Company, including a complete loss of the investment, and the Subscriber has no
need for liquidity in such investment.
(d) The Subscriber has been furnished by the Company all information (or
provided access to all information) regarding the business and financial
condition of the Company, its expected plans for future business activities, the
attributes of the Shares and the merits and risks of an investment in the Shares
which the Subscriber has requested or otherwise need to evaluate the investment
in the Company.
(e) Subscriber is in receipt of and has carefully read and understands the
following items:
(i) the Memorandum;
(ii) Annual Report to the SEC on Form 10-K of the Company for its
fiscal year ended December 31, 2001, as amended;
(iii) Quarterly Reports to the SEC on Form 10-Q of the Company for the
three months ended March 31, 2002, as amended, and for the six months ended
June 30, 2002, as amended; and
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(iv) Current Reports to the SEC on form 8-K of the Company filed with
the SEC on May 9, 2002 and July 31, 2002.
(f) In making the proposed investment decision, the Subscriber is relying
solely on investigations made by the Subscriber and the Subscriber's
representatives. The offer to sell the Shares was communicated to the Subscriber
in such a manner that the Subscriber was able to ask questions of and receive
answers from the management of the Company concerning the terms and conditions
of the proposed transaction and that at no time was the Subscriber presented
with or solicited by or through any leaflet, public promotional meeting,
television advertisement or any other form of general or public advertising or
solicitation.
(g) The Subscriber acknowledges that the Subscriber has been advised that:
(i) The Shares offered hereby have not been approved or disapproved by
the SEC or any state securities commission nor has the SEC or any state
securities commission passed upon the accuracy or adequacy of any
representations by the Company. Any representation to the contrary is a
criminal offense.
(ii) In making an investment decision, the Subscriber must rely on its
own examination of the Company and the terms of the Offering, including the
merits and risks involved. The Shares 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 any representation. Any representation to the
contrary is a criminal offense.
(iii) The Shares are "Restricted Securities" within the meaning of
Rule 144 under the Securities Act, are subject to restrictions on
transferability and resale and may not be transferred or resold except as
permitted under the Securities Act and applicable state securities laws,
pursuant to registration or exemption therefrom. The Subscriber is aware
that the Subscriber may be required to bear the financial risks of this
investment for an indefinite period of time.
(h) The Subscriber acknowledges and is aware that there has never been any
representation, guarantee or warranty made by the Company or any officer,
director, employee or agent or representative of the Company, expressly or by
implication, as to (i) the approximate or exact length of time that the
Subscriber will be required to remain an owner of the Shares; (ii) the
percentage of profit and/or amount of or type of consideration, profit or loss
to be realized, if any, as a result of this investment; or (iii) that the
limited past performance (if any) or experience on the part of the Company, or
any future expectations will in any way indicate the predictable results of the
ownership of Shares or of the overall financial performance of the Company.
(i) The Subscriber agrees to furnish the Company such other information as
the Company may reasonably request in order to verify the accuracy of the
information contained herein and agrees to notify the Company immediately of any
material change in the information provided herein that occurs prior to the
Company's acceptance of this Agreement.
(j) The Subscriber further represents and warrants that the Subscriber is
an "accredited investor" within the meaning of Rule 501 of Regulation D under
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the Securities Act, and Subscriber has executed the Certificate of Accredited
Investor Status, attached hereto as Exhibit B.
(k) As of the date of this Agreement the Subscriber and its affiliates do
not have, and during the 30 day period prior to the date of this Agreement the
Subscriber and its affiliates have not entered into, any "put equivalent
position" as such term is defined in Rule 16a-1 of under the Exchange Act or
short sale positions with respect to the common stock of the Company. Until the
registration statement referred to in Section 4(c) is declared effective, the
Subscriber hereby agrees not to, and will cause its affiliates not to, enter
into any such "put equivalent position" or short sale position.
The foregoing representations and warranties and undertakings
are made by the Subscriber with the intent that they be relied upon in
determining its suitability as an investor and the Subscriber hereby agrees that
such representations and warranties shall survive its purchase of the Shares.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Subscriber as follows:
(a) The Company is duly incorporated, validly existing and in good standing
under the laws of its state of incorporation, and is duly qualified to do
business as a foreign corporation in all jurisdictions in which the failure to
be so qualified would materially and adversely affect the business or financial
condition, properties or operations of the Company. The Company has all
requisite corporate power and authority (i) to own and lease the properties and
assets it currently owns and leases (if any) and it contemplates owning and
leasing and (ii) to conduct its activities as such activities (if any) are
currently conducted and as currently contemplated to be conducted.
(b) The authorized capital of the Company immediately prior to the Closing
will consist of: (i) 5,000,000 shares of Preferred Stock, of which 1,000 shares
are designated as Series A Preferred Stock and none of which are issued and
outstanding, and (ii) 100,000,000 shares of Common Stock, 35,188,800 of which
were issued and outstanding as of July 31, 2002.
(c) The Company has duly authorized the issuance and sale of the Shares in
accordance with the terms of this Agreement (as described herein) by all
requisite corporate action, including the authorization of the Company's Board
of Directors of the issuance and sale of the Shares in accordance herewith, and
the execution, delivery and performance of any other agreements and instruments
executed in connection herewith. This Agreement constitutes a valid and legally
binding obligation of the Company, enforceable 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, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained
herein may be limited by applicable federal or state securities laws.
(d) The Shares, when issued and paid for in accordance with this Agreement,
will represent validly authorized, duly issued and fully paid and nonassessable
shares of Common Stock of the Company, and the issuance thereof will not
9
conflict with the certificate of incorporation or bylaws of the Company and will
be in full compliance with. all federal and state securities laws applicable to
such issuance and sale.
(e) The execution and delivery of this Agreement, the fulfillment of the
terms set forth herein and the consummation of the transactions contemplated
hereby will not conflict with, or constitute a breach of or default under, any
agreement, indenture or instrument by which the Company is bound or any law,
administrative rule, regulation or decree of any court or any governmental body
or administrative agency applicable to the Company.
(f) As of the date of this Agreement, the Memorandum does not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(g) The documents incorporated by reference in the Memorandum at the time
they were filed with the SEC, complied in all material respects with the
requirements of the Exchange Act, and, when read together and with the other
information in the Memorandum, do not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(h) Subsequent to the dates as of which information is given in the
Memorandum and the documents incorporated by reference therein, except as
described therein, there has not been any material adverse change with regard to
the assets or properties, results of operations or financial condition of the
Company.
7. Survival; Indemnification. All representations, warranties and covenants
contained in this Agreement and the indemnification contained in this Section 7
shall survive (i) the acceptance of this Agreement by the Company, (ii) changes
in the transactions, documents and instruments described herein which are not
material or which are to the benefit of Subscriber, and (iii) the death or
disability of Subscriber. Subscriber acknowledges the meaning and legal
consequences of the representations, warranties and covenants in Section 5
hereof and that the Company has relied upon such representations, warranties and
covenants in determining Subscriber's qualification and suitability to purchase
the Shares. Subscriber hereby agrees to indemnify, defend and hold harmless the
Company, its officers, directors, employees, agents and controlling persons,
from and against any and all losses, claims, damages, liabilities, expenses
(including attorneys' fees and disbursements), judgments or amounts paid in
settlement of actions arising out of or resulting from the untruth of any
representation of Subscriber herein or the breach of any warranty or covenant
herein by Subscriber. Notwithstanding the foregoing, however, no representation,
warranty, covenant or acknowledgment made herein by Subscriber shall in any
manner be deemed to constitute a waiver of any rights granted to it under the
Securities Act or state securities laws.
8. Notices. All notices and other communications provided for herein shall
be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid:
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(a) if to the Company, to the following address:
Gasco Energy, Inc.
00 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Herald
Telephone: (000) 000-0000
(b) if to Subscriber, to the address set forth on the signature page
hereto.
(c) or at such other address as any party shall have specified by notice in
writing to the others.
9. Notification of Changes. Subscriber agrees and covenants to notify the
Company immediately upon the occurrence of any event prior to the consummation
of this Offering that would cause any representation, warranty, covenant or
other statement contained in this Agreement to be false or incorrect or of any
change in any statement made herein occurring prior to the consummation of this
Offering.
10. Assignability. This Agreement is not assignable by the Subscriber, and
may not be modified, waived or terminated except by an instrument in writing
signed by the party against whom enforcement of such modification, waiver or
termination is sought.
11. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and assigns, and
the agreements, representations, warranties and acknowledgments contained herein
shall be deemed to be made by and be binding upon such heirs, executors,
administrators, successors, legal representatives and assigns.
12. Obligations Irrevocable. The obligations of the Subscriber shall be
irrevocable, except with the consent of the Company, until the consummation or
termination of the Offering.
13. Entire Agreement. This Agreement constitutes the entire agreement of
the Subscriber and the Company relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or written.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without regard to the
principles of conflicts of law thereof that would require the application of the
laws of any jurisdiction other than Colorado.
15. Severability. If any provision of this Agreement or the application
thereof to Subscriber or any circumstance shall be held invalid or unenforceable
to any extent, the remainder of this Agreement and the application of such
provision to other subscriptions or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by law.
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16. Headings. The headings in this Agreement are inserted for convenience
and identification only and are not intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provision hereof.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
18. Counsel. Subscriber hereby acknowledges that the Company and its
counsel, Xxxxxx & Xxxxxx L.L.P., represent the interests of the Company and not
those of the Subscriber in any agreement (including this Agreement) to which the
Company is a party.
[Signature Page to follow]
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IN WITNESS WHEREOF, Subscriber has executed this Subscription and
Registration Rights Agreement as of August __, 2002.
SUBSCRIBER
-------------------------------------------------------------------------------
Number of Shares: ____________________
Offering Price per Share: $__________________________
Subscription Amount: $______________________________
By: ________________________________________________
Name:________________________________________________
Title:_______________________________________________
Address: ___________________________________________
===============================================================================
The Company hereby accepts the foregoing subscription subject to the terms
and conditions hereof as of August __, 2002.
Gasco Energy, Inc.
a Nevada corporation
By:__________________________________________________
Xxxx X. Xxxxxxx, President and
Chief Executive Officer
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