SUBSCRIPTION AND REGISTRATION RIGHTS AGREEMENT
(▇▇▇▇▇▇ ▇. Vessels)
Double Eagle Petroleum And Mining Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen and Ladies:
The undersigned desires to invest in Double Eagle Petroleum And Mining Co.
(the "Company") on the terms and conditions described in this Subscription And
Registration Rights Agreement (the "Subscription Agreement") and the Company's
letter dated November 24, 1998 (the "Company Letter"). Pursuant to the terms
described in the Company Letter and this Subscription Agreement, the Company is
offering to subscribers a minimum of $206,250 and a maximum of $515,625 of units
(the "Units") at a price of $1.375 per Unit (the "Unit Offering"). Each Unit
consists of one share of the Company's $.001 par value common stock (the "Common
Stock") and one Warrant to purchase one share of Common Stock for $1.375 per
share until October 16, 2003. The form of Warrant Agreement with respect to the
Warrants is attached to and made a part of this Subscription Agreement as
Exhibit A. The Units, including the Common Stock and the Warrants constituting
the Units, and the Common Stock issuable upon the exercise of the Warrants
included in the Units are referred to collectively as the "Securities".
1. Subscription
Subject to and in accordance with the terms and conditions of this
Subscription Agreement, the undersigned hereby offers to purchase 75,000 Units.
The undersigned hereby delivers to the Company the full purchase price for the
subscription for the Units in the form of a check or wire transfer to the
Company. The undersigned understands and agrees that this Subscription Agreement
constitutes the binding obligation of the undersigned to deliver the full
purchase price to the Company for the portion of the subscription accepted by
the Company. Promptly after receipt of this Subscription Agreement, the
undersigned will be notified promptly by the Company whether the undersigned's
subscription has been accepted.
2. Representations And Warranties Of The Undersigned
The undersigned hereby represents and warrants to, and agrees with, the
Company as follows:
(a) (i) the undersigned can bear the economic risk of losing the
undersigned's entire investment;
(ii) the undersigned is or will be acquiring the Securities for
investment purposes only and the Securities the undersigned is or will
be acquiring will be held by the undersigned without sale, transfer or
other disposition for an indefinite period unless the transfer of the
Securities subsequently is registered under the U.S. federal
securities laws or unless exemptions from registration are available;
(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 Securities will not
cause such overall commitments to become excessive;
(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 Securities to satisfy any existing or
contemplated undertaking, need or indebtedness;
(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 Securities; and
(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 the undersigned's true and correct residence, and the undersigned has
no present intention of becoming a resident of any other state or jurisdiction.
(c) The undersigned confirms that all documents, records and books
pertaining to an investment in the Securities that have been requested by the
undersigned have been made available or delivered to the undersigned. Without
limiting the foregoing, the undersigned has received and reviewed the Company's
Annual Report on Form 10-KSB for the year ended August 31, 1997 and Quarterly
Reports on Form 10-QSB for each of the quarters ended November 30, 1997,
February 28, 1998 and May 31, 1998, and the other documents included with the
Company Letter, and the undersigned has had the opportunity to discuss the
acquisition of the Securities with the Company, and 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: the Company has limited
financial resources, has incurred negative cash flow, and has not operated at a
profit; and the Company has not concurrently, and may not in the future, receive
additional investment funds. The undersigned further represents the undersigned
is cognizant of the operations, financial condition and capitalization of the
Company; is cognizant of the use of proceeds from this financing, and has
available full information concerning the Company's affairs to evaluate the
merits and risks of the investment in the Securities.
(d) The undersigned has had the opportunity to ask questions of, and
receive answers from, the Company concerning the terms of an investment in the
Securities and to receive additional information necessary to verify the
accuracy of the information delivered to the undersigned.
(e) The undersigned understands that the Securities have not been, and the
Warrant Shares issuable upon the exercise of the Warrants, will not be,
registered under the U.S. Securities Act of 1933, as amended (the "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 Securities.
(f) The Securities for which the undersigned hereby subscribes are being or
will be acquired solely for the undersigned's own account, for investment, and
is not being purchased with a view to or for the resale, distribution,
subdivision or fractionalization thereof; the undersigned has no agreement or
arrangement for any such resale, distribution, subdivision or fractionalization
thereof.
(g) The undersigned acknowledges that, in making the decision to purchase
the Securities, it has relied solely upon independent investigations made by it.
(h) The undersigned has the full right, power and authority to enter this
Subscription Agreement and to carry out and consummate the transactions herein.
The Subscription Agreement constitutes the legal, valid and binding obligation
of the undersigned.
(i) The Undersigned represents that an investment in the Securities is a
suitable investment for the Undersigned.
(j) The Undersigned is not an associate person or affiliate of any member
firm of the National Association of Securities Dealers, Inc.
(k) The undersigned acknowledges and is aware that the following legend
will be imprinted on the Securities subscribed to by the undersigned:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
UNDER THE U.S. 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."
(l) The undersigned acknowledges and is aware of the following, in addition
to other information included in the information provided to the undersigned:
(i) The Securities are a speculative investment and involve a high
degree of risk of loss by the undersigned of the undersigned's total
investment.
(ii) There are substantial restrictions on the transferability of the
Securities. The Securities can not be transferred, pledged,
hypothecated, sold or otherwise disposed of unless they are registered
under the Act, or an exemption from such registration is available and
established to the satisfaction of the Company; except as provided in
Section 3 below, investors in the Company have no rights to require
that any transfer of the Securities be registered under the Act; there
will be no public market for the Warrants and a limited public market
for the Company's Common Stock; and accordingly, the undersigned may
have to hold the Securities indefinitely; and it may not be possible
for the undersigned to liquidate the undersigned's investment in the
Company.
(m) 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 these and other losses in
accordance with Section 4 of this Subscription Agreement.
The foregoing representations and warranties are true and accurate as of
the date hereof and shall survive the delivery of the subscription amount and
the completed Subscription Packet.
3. Registration Rights
3.1 The Company will, no later than 120 days after each date on which the
Company receives written notice from the holders (the "Holders") of at least a
majority of the shares of Common Stock and Warrants or Warrant Shares issued in
connection with the Units Offering that are then outstanding, together with the
payment by the Holders to the Company of $10,000 for registration expenses in
accordance with Section 3.4 below, file with the Securities And Exchange
Commission (the "SEC") a registration statement on Form S-3, Form SB-2 or other
appropriate Form under the Securities Act of 1933, as amended (the "1933 Act"),
covering the Holders' sale in the open market of the Common Stock issued in the
Units Offering and of the Warrant Shares issuable upon the exercise of the
Warrants (collectively, the "Registrable Securities"). The Company will
undertake due diligence to cause the registration statement to become effective
with the SEC as soon as possible after its filing.
3.2 As to any registration statement, the Company's obligations contained
in this Section 3 shall be conditioned upon timely receipt by the Company in
writing of information as to the terms of the contemplated transfer to be
registered furnished by and on behalf of the Holders, and such other information
as the Company reasonably may require from the Holders or any underwriter for
any Registrable Securities for inclusion in the registration statement. Such
information shall be provided to the Company in writing within 30 days after the
request for that information by the Company.
3.3 In connection with any registration undertaken by the Company on behalf
of the Holders pursuant to this Section 3, the Company shall (a) furnish to each
Holder such numbers of copies of a summary prospectus or other prospectus,
including a preliminary prospectus or any amendment or supplement to any
prospectus, in conformity with the requirements of the 1933 Act, and such other
documents, as such Holder may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities owned by such
Holder; and (b) notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such regisration statement is required to be delivered under the 1933 Act, of
the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
3.4 All registration expenses incurred by the Company in connection with
any registration, qualification or compliance pursuant to this Section 3,
including reasonable printing expenses, fees and disbursements of the Company's
counsel, and registration and filing fees relating to the sale of the
Registrable Securities to be registered on behalf of the Holders pursuant to any
registration statement required to be filed by the Company on behalf of the
Holders pursuant to this Section 3, and expenses, fees and disbursements in
connection with the registration or qualification of the sale of the Registrable
Securities in various states pursuant to Section 3.6 shall be borne by the
Holders. A check in the amount of $10,000 as prepayment of these expenses shall
be delivered by the Holders to the Company in accordance with Section 3.1 above.
Any additional costs in excess of the $10,000 will be billed to and paid by the
Holders, jointly and severally, as incurred by the Company. All selling
expenses, including commissions, allocable to the sale of the shares of the
Registrable Securities registered on behalf of the Holders shall be borne by the
Holders.
3.5 In the case of a registration, qualification or compliance effected by
the Company on behalf of the Holders pursuant to this Section 3, the Company
shall keep the Holders advised in writing as to the initiation of such
registration, qualification, and compliance and as to the completion thereof. At
the Holders' expense, the Company will keep such registration, qualification or
compliance effective until the later to occur of (a) one year after the date on
which the registration statement becomes effective with the SEC, or (b) until
the Holders have completed the distribution described in the registration
statement relating thereto, or (c) the Registrable Securities become eligible
for sale without restriction under Rule 144(k) under the 1933 Act or another or
successor provision. The Company and the undersigned acknowledge and agree that
the Registrable Securities will not be eligible for sale under Rule 144(k) at
times that the undersigned is an affiliate of the Company.
3.6 In the case of a registration, qualification or compliance effected by
the Company on behalf of the Holders pursuant to this Section 3, the Company
shall, at the expense of the Holders, take such action as may be reasonably
necessary to register or qualify the sale by the Holders of the Registrable
Securities under the securities acts or blue sky laws of such jurisdictions as
the Holders may reasonably request and to do any and all other acts and things
which may be necessary or advisable to enable the Holders to complete such
proposed sale or other distribution by the Holders of Registrable Securities in
any such jurisdiction; provided however, that in no event shall the Company be
obligated to register or qualify under the blue sky laws of any state in which
the Common Stock of the Company currently is not qualified for resale pursuant
to a currently effective registration or an exemption from registration, or be
obligated to register or qualify the securities in any jurisdiction which would
require the Company to qualify to do business. All expenses, fees and costs of
such registration or qualification shall be borne by the Holders and shall be
payable in accordance with Section 3.4.
3.7 The Company will indemnify and hold harmless the Holders against any
loss, claim, damage or liability (or action in respect thereof) to which the
Holders may become subject, under the 1933 Act, or otherwise, insofar as any
such loss, claim, damage or liability (or action in respect thereof) is caused
by any untrue statement or alleged untrue statement of any material facts
contained in the registration statement, any prospectus contained in the
registration statement, or any amendment or supplement thereto, or arises out of
or is based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements made
therein not misleading. Notwithstanding the foregoing provisions of this
paragraph, the Company will not be liable in any such case to the extent that
any such loss, claim, damage, expense or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by the Holders or any
agent or other representative of the Holders.
3.8 The Holders will indemnify and hold harmless the Company and any
underwriter (as defined in the ▇▇▇▇ ▇▇▇) for the Company and each person, if
any, who controls the Company or such underwriter against any loss, claim,
damage or liability (or action in respect thereof) to which the Company or such
underwriter or controlling person may become subject, under the 1933 Act or
otherwise, insofar as any such loss, claim, damage or liability (or action in
respect thereof) is caused by any untrue statement or alleged untrue statement
or omission or alleged omission made in conformity with information furnished by
the Holders or any agent or other representative of the Holders or other
representative of the Holders for use in the registration statement.
4. Indemnification
The undersigned acknowledges that the undersigned understands the meaning
and legal consequences of the representations, warranties, agreements, and
certifications contained above, and the undersigned hereby agrees to indemnify
and hold harmless each of the Company, its 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
undersigned contained in this Subscription Agreement or any other document
submitted by the undersigned in connection with the undersigned's subscription
for the Securities. 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.
5. 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
Subscription Agreement and supersedes all prior and contemporaneous agreements
between the undersigned and the Company with respect to the subject matter of
this Subscription Agreement.
(d) This Subscription Agreement will be construed and enforced in
accordance with and governed by the laws of the State of Colorado, except for
matters arising under the 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 the purchase of the Securities
being offered by the Company as described herein and in the Memorandum. The
undersigned does further acknowledge the undersigned's understandings of all the
terms and provisions of this Subscription Agreement and agrees to be bound by
all of the terms and conditions of this Subscription Agreement.
SIGNATURE PAGE FOR INDIVIDUALS
Please complete the following:
Date:
▇▇▇▇▇▇ ▇. Vessels
Exact Name in Which Title is to be Held
Signature Signature of Co-Owner
Print Name Print Name of Co-Owner
Social Security Number or Tax Social Security Number or Tax
Address
City, State, Postal or Zip Code, Country
STATE OF )
) ss.
COUNTY OF )
On this _____ day of __________, 1998, before me personally appeared
___________________, who being duly sworn by me, acknowledged that (s)he
executed the foregoing instrument for the uses and purposes therein stated.
My commission expires:
Notary Public Address
* If the Securities are to be held in joint tenancy or as tenants in common,
both persons must sign above and please indicate the manner in which the
Securities are to be held:
_____ Tenants in Common _____ Joint Tenants
This subscription is accepted by Double Eagle Petroleum And Mining Co. on
this _____ day of __________, 1998.
DOUBLE EAGLE PETROLEUM
AND MINING CO.
By:
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SIGNATURE PAGE FOR ENTITIES
Please complete the following if the subscriber is an entity:
Date:
Printed Name of Entity
By:
Signature
Printed Name and Title
Address
City, State, Postal or Zip Code, Country
Tax Identification Number
STATE OF )
) ss.
COUNTY OF )
On this _____ day of __________, 1998, before me personally appeared
___________________, who being duly sworn by me, acknowledged that (s)he
executed the foregoing instrument in the name of said entity, that (s)he had the
authority to execute the same, and that (s)he executed the same as the act and
deed of said entity for the uses and purposes therein stated.
My commission expires:
Notary Public Address
This subscription is accepted by Double Eagle Petroleum And Mining Co. on
this _____ day of __________, 1998.
DOUBLE EAGLE PETROLEUM
AND MINING CO.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
