BREK ENERGY CORPORATION SUBSCRIPTION AGREEMENT October 17, 2007
Exhibit
10.1
THE
SECURITIES TO WHICH THIS AGREEMENT RELATES ARE “RESTRICTED SECURITIES” AS THAT
TERM IS DEFINED UNDER RULE 144 OF THE SECURITIES ACT OF 1933 (the “1933 ACT”).
THE RESTRICTED SECURITIES HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR
UNDER
ANY STATE SECURITIES LAWS (“BLUE SKY LAWS”), AND MAY NOT BE OFFERED OR SOLD
WITHOUT REGISTRATION UNDER THE 1933 ACT, AND AS REQUIRED BY BLUE SKY LAWS
IN
EFFECT AS TO SUCH TRANSFER, UNLESS AN EXEMPTION FROM REGISTRATION UNDER STATE
AND FEDERAL LAWS IS AVAILABLE.
BREK
ENERGY CORPORATION
October
17, 2007
This
subscription agreement
is made
between Brek
Energy Corporation,
a
Nevada corporation (the ACompany@),
and
the undersigned, (the
ASubscriber@),
for
the purchase of restricted securities of the Company pursuant to this
agreement.
The
Company is offering for sale up to 937,500
unregistered and restricted shares of common stock in the capital of the
Company
(the ARestricted
Shares@)
at the
purchase price of $0.16
per
Restricted Share in consideration of cash pursuant to the exemptions from
registration contained under Section 4(2) of the Securities Act of 1933.
The
Restricted Shares are Arestricted
securities@
as that
term is defined under Rule 144 of the Securities Act of 1933 and may not
be sold
without being first registered or an exemption from registration is
available.
On
the
foregoing premises, the Subscriber subscribes for the purchase of the Restricted
Shares on the following terms and conditions (the ASubscription@):
1) Subscription
to Purchase Restricted Units
a) Offer
to Purchase.
Subject
to the terms and conditions of this agreement, the Subscriber irrevocably
offers
to purchase at the Closing (as defined in section 1.b.) the number of Restricted
Shares specified in the attached Signature Page for the amount that is equal
to
the number of Restricted Units multiplied by the purchase price (the
ASubscription
Amount@).
The
Subscriber will tender with this agreement (I) payment of the full Subscription
Amount in cash, (ii) a subscriber questionnaire, as applicable, and (iii)
a
representative questionnaire, as applicable. These documents are sometimes
collectively referred to as the ASubscription
Documents@.
b) Acceptance
or Rejection.
The
Company will accept or reject this offer to purchase the Restricted Shares
within 30 days of the date of this agreement at the time and place specified
by
the Company (the AClosing@).
At the
Closing, the Company will either (I) accept this Subscription (in whole or
in
part) and deliver to the Subscriber certificates for the Restricted Shares,
all
against the Subscriber=s
delivery to the Company of cash for the Subscription Amount, or (ii) reject
this
Subscription and return the tendered payment of the Subscription Amount to
the
Subscriber (or as much of it as the Company does not accept) within 10 days
of
the rejection without interest or deduction. If accepted, the Subscriber
will
sign and deliver any additional documents that are necessary to effect the
issuance of the Restricted Shares subscribed for and accepted.
2) Representations
of the Subscriber
The
Subscriber represents and warrants to the Company as follows and acknowledges
and understands the significance to the Company of the following
representations, and that the Company is relying upon such representations
and
warranties in connection with the subscription for the Restricted Shares
and
that the Company would not have entered into this Agreement without such
representations and warranties:
a) Age
and Citizenship.
The
Subscriber, or signatory if the Subscriber is a business entity, is over
the age
of majority. The Subscriber is a bona fide resident of the state set forth
next
to the Subscriber=s
signature and this state is the Subscriber=s
principal residence.
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b) Information
Provided by the Subscriber.
The
information that the Subscriber has provided to the Company or its agents
or
representatives is complete, accurate, truthful and correct as of the date
of
the signature on the attached Signature Page. The information includes, but
is
not limited to, information concerning the Subscriber=s
personal financial affairs, business position, and the knowledge and experience
of the Subscriber and the Subscriber=s
advisers. If any of the information changes materially before the Company
accepts this subscription, the Subscriber will immediately provide the new
information. The Company will maintain this information regarding the Subscriber
in strict confidence, but may disclose it to governmental agencies to support
its reliance on an available exemption from the registration requirements
of
applicable securities laws, rules and regulations for this offer and sale
of the
Restricted Shares.
c) Financial
Condition of the Subscriber.
The
Subscriber has adequate means of providing for the Subscriber=s
current
needs and possible personal contingencies and does not need, or anticipate
needing in the foreseeable future, to sell the Restricted Shares that are
the
subject of this agreement. The Subscriber represents that the Subscriber
is able
to bear the economic risks of this investment and is able to hold the securities
for an indefinite period of time and has sufficient net worth to sustain
a loss
of the entire investment if it should be lost.
d) Purchase
Entirely for Own Account.
The
Subscriber is the only party with an interest in this agreement, and is
acquiring the Restricted Shares for investment purposes and for the
Subscriber=s
own
account for long-term investment only, and not with any intent or arrangement
to
resell, fractionalize, divide or redistribute all or any part of the Restricted
Shares to any other person. The Subscriber has no present intention of dividing
the Restricted Shares with others or of reselling or otherwise disposing
of any
portion of the Restricted Shares.
e) No
Reliance on Unauthorized Representations.
The
Subscriber has not specifically relied on any oral representations from the
Company or any broker or salesman or their partners, shareholders, directors,
officers, employees or agents, except the following:
f) Knowledge
and experience.
The
Subscriber (I) has sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of a prospective
investment in the Restricted Shares; (ii) is experienced in making investments
which involve a high degree of risk; (iii) is sophisticated in making investment
decisions; (iv) can bear the economic risk of an investment in the Restricted
Shares, including the total loss of such investment; (v) understands and
takes
full cognizance of the risk factors related to the purchase of the Restricted
Shares; and (vi) has had prior personal or business relationships with the
Company or affiliates of the Company, or broker, or by any reason of his
business or financial experience, the Subscriber has the capacity to protect
the
his own interest in connection with the subscription for Restricted Shares.
The
Subscriber understands that the Company is relying upon these representations
and upon the information provided in the Subscription Documents for the purposes
of confirming the Subscriber=s
subscription for the Restricted Shares complies with the requirements of
the
Securities Act of 1933.
g) Authority.
The
Subscriber has the full power and authority to sign, deliver and perform
this
agreement. This agreement, when signed and delivered by the Subscriber,
constitutes a legal, valid and binding obligation on the
Subscriber.
Brek
Energy Corporation
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h) No
Legal Advice from Company.
The
Subscriber acknowledges that he has had the opportunity to review this agreement
and the transactions contemplated by it with his legal counsel. The Subscriber
is relying solely on his counsel and not on any statements or representations
of
the Company or any of its agents for legal advice with respect to this
investment or the transactions contemplated by this agreement except for
the
representations, warranties and covenants specifically stated.
i) Independent
Investigation.
The
Subscriber has received and carefully read and is familiar with this agreement,
the Subscription Documents, and all other documents in connection with this
offering, and the Subscriber confirms that all documents, records, and books
pertaining to the investment in the Company have been made available to the
Subscriber, and, if retained by the Subscriber, to the Subscriber=s
personal tax and legal advisors. The Company has provided the Subscriber
with
copies of all material information requested by the Subscriber or by the
Subscriber=s
purchaser representative or others representing the Subscriber, including
any
information requested to verify any information furnished (the AInformation@).
The
Subscriber and the Subscriber=s
representatives and advisors have communicated directly with each other in
connection with this offer to purchase the Restricted Shares and each has
had
the opportunity to ask questions of and receive answers from the Company or its
directors, officers, employees or representatives concerning the terms and
conditions of this offering and to obtain any additional Information (to
the
extent that the Company possesses such information or can acquire it without
unreasonable effort or expense) desired or necessary to verify the accuracy
of
the Information provided. The Subscriber will maintain in strict confidence
any
proprietary Information disclosed to or discovered by the Subscriber in
reviewing the Information made available by the Company in connection with
this
offer. The Subscriber has relied only on the information contained in this
agreement and no written or oral representations have been made, nor any
oral or
written information furnished to the Subscriber in connection with the offering
of the Restricted Shares that was in any way inconsistent with this agreement.
In deciding to purchase the Restricted Shares, the Subscriber has read the
Information and has made an independent investigation without the assistance
of
the Company.
j) Subscriptions
Subject to Acceptance.
The
Subscriber acknowledges that the Company may accept or reject this agreement
in
whole or in part and will return to the Subscriber without interest or deduction
of expenses the portion of the Subscription Amount tendered that exceeds
the
part of the Subscription that is accepted.
k) No
Governmental Approval.
The
Subscriber acknowledges that neither the United States Securities and Exchange
Commission nor the securities commission of any state or other federal agency
or
foreign government has made any determination of the merits of purchasing
the
Restricted Shares.
l) No
registration.
The
Subscriber understands and has been advised that (I) the Restricted Shares
offered have not been registered under the Securities Act of 1933 (the
A1933
Act@),
or any
applicable state securities laws, and that the Subscriber must bear the economic
risk of the investment for an indefinite period of time because no part of
the
Restricted Shares can be sold unless they are registered under the 1933 Act
or
applicable state securities laws or exemptions from them are available; (ii)
the
Company is not obligated to file a registration statement under the 1933
Act or
take any action that will make any part of the Restricted Shares available
for
resale with registration or pursuant to an exemption; and (iii) Rule 144,
adopted under the 1933 Act governing the possible disposition of any part
of the
Restricted Shares, is applicable to the Restricted Shares, but may not be
available for the resale of any part of the Restricted Shares. The Subscriber
agrees not to resell any part of the Restricted Shares without registration
under the 1933 Act and the applicable state securities laws unless in an
exempt
transaction as set forth in Rule 144 or any other federal securities
act.
m) Transferability.
The
Subscriber understands and acknowledges that (I) there are substantial
restrictions on transferability on the Restricted Shares; and (ii) the
Restricted Shares will not, and the shareholders in the Company have no rights
to require that any part of the Restricted Shares, be registered under the
1933
Act or any state securities laws. The Subscriber will not sell, hypothecate
or
otherwise transfer any part of the Restricted Shares, except in accordance
with
this agreement and unless the Restricted Shares are registered under the
1933
Act and qualified under applicable state securities laws, or unless, in the
opinion of counsel for the Company, an exemption from the registration
requirements of the 1933 Act and such laws is available.
Brek
Energy Corporation
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n) Speculative
nature of investment.
The
Subscriber acknowledges and understands that (I) the purchase of the Restricted
Shares is a highly speculative investment and involves a high degree of risk;
(ii) the Company may need additional financing in the future; (iii) the Company
makes no assurance whatever concerning the present or prospective value of
the
Restricted Shares; (iv) the Company does not intend to pay dividends on the
Restricted Shares in the future; (v) no United States federal or state agency
or
foreign government has passed upon or recommended or endorsed the Company,
this
transaction or the purchase of the Restricted Shares; (vi) this transaction
and
the material provided to the Subscriber have not been reviewed by the United
States Securities and Exchange Commission or by any state=s
or
foreign government=s
securities authorities; and (vii) there is no market for the Restricted Shares
and none may be developed, and as a result it may not be possible for the
Subscriber to readily liquidate his investment in the Company whenever
desired.
3) Joint
Representation
If
more
than one person is signing this agreement as the Subscriber or on behalf
of the
Subscriber, then each representation, warranty, and agreement made in this
agreement will be a joint and several representation, warranty, or agreement
of
each person.
4) Representations
of the Company
The
Company represents and warrants to the Subscriber as follows and acknowledge
that the Subscriber is relying upon such representations and warranties in
connection with the subscription for the Restricted Shares and that the
Subscriber would not have entered into this Agreement without such
representations and warranties:
a) Corporate
Organization and Standing.
The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada. The Company has the requisite corporate
power to carry on its business as presently conducted, and as proposed or
contemplated to be conducted in the future, and to enter into and carry out
the
provisions of this agreement and the transactions contemplated in this
agreement.
b) Authorization.
All
corporate action on the part of the Company, its directors, and shareholders
necessary for the authorization, signing, delivery and performance of this
agreement by the Company and the performance of all of the Company=s
obligations under this agreement have been taken. This agreement, when accepted,
signed and delivered by the Company, will constitute a valid and binding
obligation of the Company, enforceable in accordance with its terms, except
as
may be limited by principles of public policy, and subject to laws of general
application relating to bankruptcy, insolvency, and the relief of debtors
and
rules governing specific performance, injunctive relief and other equitable
remedies. The Restricted Shares, when issued in compliance with the provisions
of this agreement, will be validly issued, fully paid, and non-assessable
and
will be Arestricted
securities@
as that
term is defined under Rule 144 of the Securities Act of 1933. No part of
the
Restricted Shares may be sold without being first registered or an exemption
from registration is available.
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5)
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Indemnification
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The
Subscriber will indemnify the Company and any person participating in the
offering and will hold them harmless from and grants them a right of set-off
against any liability, damages, costs or expenses (including, but not limited
to, reasonable attorney=s
fees),
including any amount paid in settlement whether or not a suit is commenced,
incurred on account of any inaccuracy in the Subscriber=s
declarations, representations and warranties made in this agreement or the
Subscription Documents signed and delivered by the Subscriber in connection
with
this Subscription (the ADamages@).
Brek
Energy Corporation
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6) Set-off
Notwithstanding
the provisions in section 5 or the enforceability of them, the Subscriber grants
the Company the right to set off against any amounts payable by the Company
to
the Subscriber for whatever reason, before any Damages incurred on account
of or
arising out of any of the items referred to in section 5.
7) Restrictive
Legends
The
Subscriber acknowledges and understands that each certificate evidencing the
Restricted Shares, and any other securities issued on any stock split, stock
dividend, recapitalization, merger, consolidation, or similar event (unless
no
longer required in an opinion of the counsel for the Company) will be imprinted
with legends substantially in the following form:
"The
securities represented by this
instrument to which this agreement relates have not been registered under
the
Securities Act of 1933 (the "1933
Act"),
or
under any state securities laws ("Blue
Sky
Laws"),
and
may not be offered or sold without registration under the 1933 Act, and as
required by Blue Sky Laws in effect as to such transfer, unless an exemption
from such registration under state and federal law is
available."
The
Company will be entitled to enter stop transfer notices on its transfer books
with respect to the Restricted Shares.
8) Miscellaneous
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a)
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Entire
Agreement.
This agreement and the Subscription Documents represent the entire
agreement between the Company and the Subscriber and supersedes all
prior
agreements, understandings or conversations with respect to any
transactions of the type contemplated by this
agreement.
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b)
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Notice.
Any notice that must be given or delivered under this agreement must
be in
writing and delivered by hand to the address or transmitted by fax
to the
fax number given for the party and is deemed to have been received
when it
is delivered by hand or transmitted by fax unless the delivery or
transmission is made after 4:00 p.m.(PST) or on a non-business day
where
it is received, in which case it is deemed to have been delivered
or
transmitted on the next business day. Any payments of money must
be
delivered by hand or wired as instructed in writing by the receiving
party. Any delivery other than a written notice or money must be
made by
hand at the receiving party's
address.
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c)
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Waiver
and Amendment.
Notwithstanding any of the representations, warranties, acknowledgments
or
agreements made by the Subscriber in this agreement, the Subscriber
does
not waive any rights granted to the Subscriber under federal or
state
securities laws. Any right granted to either the Subscriber or the
Company
under this agreement may be waived only in writing signed by both
parties.
No delay in exercising any right granted under this agreement operates
as
a waiver of the right, and no partial exercise of any right precludes
the
respective party from exercising that right or any other right in
the
future. Any amendment of this agreement must be written and signed
by the
Company and the Subscriber.
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d)
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Assignment.
The Subscriber may not assign or transfer this
agreement.
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e)
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No
Shareholder Rights.
This agreement does not entitle the Subscriber to any rights as a
shareholder of the Company until the Restricted Shares are registered
in
the name of the Subscriber.
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f)
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Governing
Law and Jurisdiction.
This agreement is governed by, and construed in accordance with,
the laws
of the State of Nevada, except for matters arising under the 1933
Act or
the Securities Exchange Act of 1934 which matters must be construed
and
interpreted in accordance with those laws. The parties irrevocably
and
unconditionally consent to submit to the exclusive jurisdiction
of the
courts of the State of Nevada and of the United States of America
located
in Nevada (the ANevada
Courts@)
for any litigation arising out of or relating to this agreement
and the
transactions contemplated hereby, consent to waive any objection
to the
laying of venue of any such litigation in the Nevada Courts, and
agree not
to plead or claim in any Nevada Court that such litigation brought
therein
has been brought in an inconvenient forum; provided that any judgment
obtained in any such litigation may be enforced in any court having
jurisdiction over a party or its
assets.
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SIGNATURE
PAGE
This
page
is attached to the Subscription Agreement between Brek Energy Corporation and
the Subscriber and is signed by the Subscriber as of the date given. The
undersigned Subscriber, by signing and delivering this page, intends to be
legally bound by the terms of the agreement.
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Date:
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Subscriber:
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Signature
of Subscriber
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Name
of Subscriber
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Address
of Subscriber
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Subscriber's
telephone number
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Number
of Restricted Shares
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$
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Total
Subscription Amount
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Brek
Energy Corporation
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ACCEPTANCE
and RECEIPT
Brek
Energy Corporation accepts this subscription and acknowledges receipt of the
Subscription Agreement set forth above and acknowledges receipt of $
from
_____________________________________________ this __________
day
of ___________________,
2007.
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Brek
Energy Corporation
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Per:
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Authorized
Signatory
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