Exhibit 10.2

 

EXECUTION COPY

 

SHARE REPURCHASE AGREEMENT

 

SHARE REPURCHASE AGREEMENT (the “Agreement”) made as of this 12th day of
February, 2018, by and between Ervington Investments Ltd, a company organized
under the laws of Cyprus (the “Seller”) and Pledge Petroleum Corp., a Delaware
corporation (the “Company”).

 

WITNESSETH:

 

WHEREAS, the Seller owns (i) 64,302,467 shares of common stock of the Company;
(ii) 4,500,000 shares of Series C Preferred Stock of the Company; and (iii)
3,137,500 shares of Series A-1 Preferred Stock of the Company (collectively, the
“Shares”), and the Company desires to purchase from the Seller, and Seller
desires to sell, the Shares upon the terms and conditions hereinafter set forth
herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained and upon the terms and conditions hereinafter set forth, the parties
hereto, intending to be legally bound, agree as follows:

 

1.           PURCHASE AND SALE OF THE STOCK.

 

Upon the terms and conditions herein contained, at the Closing (as hereinafter
defined), the Seller hereby sells, assigns and transfers to the Company and the
Company hereby purchases from the Seller all rights of the Seller in and to the
Shares, as of the date of the Closing, free and clear of all liens, claims,
pledges, mortgages, restrictions, obligations, security interests and
encumbrances of any kind, nature and description (collectively, “Liens”) other
than any Liens (a) arising under federal or state securities laws or (b) any
Liens created by or through the Company (“Permitted Liens”).

 

2.           CONSIDERATION.

 

The purchase price to be paid by the Company to the Seller in connection with
the purchase and sale of the Shares (the “Purchase Price”) is Eight Million Five
Hundred Thousand Dollars ($8,500,000.00).

 

3.           CLOSING.

 

The parties hereto have heretofore placed the Shares together with stock powers
duly executed by the Seller and the Purchase Price in escrow pending the closing
the transactions contemplated by this Agreement with Delaware Trust Company as
escrow agent (the “Escrow Agent”) under a separate escrow agreement, dated as of
the date hereof (the “Escrow Agreement”). The Seller has also delivered to the
Company the written resignation of Ivan Persiyanov as a director of the Company
and all of its subsidiaries and as an officer of the Company and its
subsidiaries effective by its terms as of the Closing (as defined below) (the
“Resignation Documents”). The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place simultaneously with the consummation
of the transactions contemplated by that certain Asset Purchase Agreement
annexed hereto as Exhibit A (the “Asset Purchase Agreement” and such
transactions, the “Asset Sale”). The concurrent consummation of the Asset Sale
is a condition precedent to the Closing. At the Closing, pursuant to the terms
of the Escrow Agreement (a) the Resignation Documents shall become effective in
accordance with their terms and be released to the Company, (b) the Purchase
Price shall be released to the Seller by wire transfer of immediately available
funds (less the $650,000 due to the Company under the Asset Purchase Agreement
in respect of the Asset Sale that the Company instructed be paid to the Seller
pursuant to Section 2 of the Asset Purchase Agreement) and (c) the Shares
together with the duly executed stock powers shall be released to the Company.
The Seller acknowledges and agrees that (i) it shall have no rights to any
distribution of Company assets upon the consummation of the Asset Sale and that
all of its rights as a shareholder of the Company shall cease immediately upon
the Closing and (ii) immediately upon the Closing, (A) all accrued dividends
shall be forgiven and are no longer owed and (B) the Investor’s Rights Agreement
and Stockholder’s Rights Agreement entered into on February 19, 2015 will
terminate in their entirety. This Agreement shall automatically terminate and be
of no further force and effect without any action on the part of the parties
hereto concurrently with any termination of the Asset Purchase Agreement in
accordance with its terms; provided that Article 6 shall survive any such
termination and that no such termination shall relieve any party from any
liability or damages arising out of such party’s fraud or willful or material
breach prior to such termination, in which case the non-breaching party shall be
entitled to all rights and remedies available at law or in equity. Upon the
termination of this Agreement for any reason, including pursuant to the previous
sentence, pursuant to the terms of the Escrow Agreement, the Purchase Price
shall be returned to the Seller and the Resignation Documents and the Shares
(and stock powers) shall be returned to the Buyer.

 

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4.          SELLER REPRESENTATIONS AND WARRANTIES. Seller hereby represents and
warrants to, and agrees with, Company as follows:

 

4.1        Organization and Good Standing. Seller is duly organized, validly
existing and in good standing under the laws of Cyprus.

 

4.2        No Liens. Seller will transfer to the Company good title to the
Shares, free and clear of any Liens other than Permitted Liens. The Seller has
full right to transfer the Shares.

 

4.3        Authority. Seller has full authority or capacity to execute and to
perform this Agreement in accordance with its terms; the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
does not and will not result in a breach, violation or default or give rise to
an event which, with the giving of notice or after the passage of time, or both,
would result in a breach, violation or default of any of the terms or provisions
or of any indenture, agreement, judgment, decree or other instrument or
restriction to which Seller is a party or by which Seller may be bound or
affected; and no further authorization or approval, whether of governmental
bodies or otherwise, is necessary in order to enable Seller to enter into and
perform the same; and this Agreement constitutes a valid and binding obligation
enforceable against Seller in accordance with its terms.

 

4.4        No Conflict. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby, will not result in a
breach, violation or default or give rise to an event which with the giving of
notice or after the passage of time, or both, would result in a breach,
violation or default of any of the terms or provisions of the Seller's
Certificate of Incorporation, By-Laws or of any statute, indenture, mortgage,
deed of trust, loan agreement or other material agreement, instrument or
restriction to which the Seller is a party or by which the Seller or its assets
may be materially bound or affected, or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Seller.

 

4.5       Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best of Seller's knowledge, threatened against or affecting
the Shares, business or properties of the Seller whether at law or in equity or
admiralty or before or by any federal, state, municipal or other governmental
department, commission, board, agency, court or instrumentality, domestic or
foreign that would reasonably be expected to prohibit or restrain the ability of
Seller to enter into this Agreement or consummate the transactions hereby.

 

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4.6        No Other Representations and Warranties. Except for the
representations and warranties contained in this Article IV, the Seller has not
made or makes any other express or implied representation or warranty, either
written or oral, including any representation or warranty as to the accuracy or
completeness of any information regarding the Shares furnished or made available
to the Company, or any representation or warranty arising from statute or
otherwise in law. Except for the representations and warranties contained in
this Article IV, Seller hereby disclaims all liability and responsibility for
any representation, warranty, projection, forecast, statement, omission, or
information made, not made, communicated, or furnished (whether orally or in
writing) to the Company or any of its affiliates or representatives.

 

5.          COMPANY REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to, and agrees with, Seller as follows:

 

5.1        Organization and Good Standing. The Company is duly organized,
validly existing and in good standing under the laws of the State of Delaware.

 

5.2        Authority. The Company has full authority or capacity to execute and
to perform this Agreement in accordance with its terms; the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby does not and will not result in a breach, violation or default or give
rise to an event which, with the giving of notice or after the passage of time,
or both, would result in a breach, violation or default of any of the terms or
provisions or of any indenture, agreement, judgment, decree or other instrument
or restriction to which the Company is a party or by which the Company may be
bound or affected; and no further authorization or approval, whether of
governmental bodies or otherwise, is necessary in order to enable the Company to
enter into and perform the same; and this Agreement constitutes a valid and
binding obligation enforceable against the Company in accordance with its terms.

 

5.3        No Conflict. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby, will not result in a
breach, violation or default or give rise to an event which with the giving of
notice or after the passage of time, or both, would result in a breach,
violation or default of any of the terms or provisions of the Buyer’s
Certificate of Incorporation, By-Laws or of any statute, indenture, mortgage,
deed of trust, loan agreement or other material agreement, instrument or
restriction to which the Buyer is a party or by which the Buyer or its assets
may be materially bound or affected, or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Buyer.

 

5.4       Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best of the Company’s knowledge, threatened against or
affecting the business or properties of the Company whether at law or in equity
or admiralty or before or by any federal, state, municipal or other governmental
department, commission, board, agency, court or instrumentality, domestic or
foreign that would reasonably be expected to prohibit or restrain the ability of
the Company to enter into this Agreement or consummate the transactions hereby.

 

6.           MISCELLANEOUS.

 

6.1       Binding Effect. This Agreement shall insure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors and
permitted assigns. Except as otherwise set forth herein, this Agreement may not
be assigned by any party hereto without the prior written consent of the Company
and of the other parties hereto. Except as otherwise set forth herein, nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

 

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6.2      Notices. All notices, requests, demands and other communications which
are required to be or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in person, or transmitted
by telecopy or telex, or upon receipt after dispatch by certified or registered
first class mail, postage prepaid, return receipt requested, to the party to
whom the same is so given or made, at the following addresses (or such others as
shall be provided in writing hereinafter):

 

(a)If to the Seller, to:

 

Ervington Investments Limited

Emmanouil Roidi, 10-12

Agia Zoni, 3031, Limassol, Cyprus

Attention: Natalia Khudyk

 

(b)If to the Company, to:

 

Pledge Petroleum Corp.

11811 North Freeway, Suite 513

Houston, TX 77060

Attention: John Zotos

Email: zotozulu@mac.com 

 

  With a copy to:       Leslie Marlow   Gracin & Marlow, LLP   405 Lexington
Avenue, 26th Floor   New York, New York 10174   Facsimile: (212) 208-4657

Email: lmarlow@gracinmarlow.com

 

6.3     Entire Agreement. This Agreement and the related Escrow Agreement
constitute the entire agreement and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof, including but not limited to that certain Series C
Preferred Stock Purchase Agreement, dated February 19, 2015, Investors’ Rights
Agreement, dated February 19, 2015, and Stockholders Agreement, dated February
19, 2015.

 

6.4     Further Assurances. After the Closing, at the request of either party,
the other party shall execute, acknowledge and deliver, without further
consideration, all such further assignments, conveyances, endorsements, deeds,
powers of attorney, consents and other documents and take such other action as
may be reasonably requested to consummate the transactions contemplated by this
Agreement, including, but not limited to, any documentation reasonably required
by any banking institution to change the signatories on the Company’s bank
accounts to the Company’s new designees.

 

6.5     Headings. The section and other headings contained in this Agreement are
for reference purposes only and shall not be deemed to be a part of this
Agreement or to affect the meaning or interpretation of this Agreement.

 

6.6     Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.

 

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6.7     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS RULES
OF CONFLICT OF LAWS. Each of the parties hereto (i) consents to submit itself to
the personal jurisdiction of the Delaware Court of Chancery or, if such court
does not have jurisdiction over a particular matter, any court of the United
States located in the State of Delaware or of any Delaware state court in the
event any dispute arises out of this Agreement or the Transactions, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will not
bring any action relating to this Agreement or the Transactions in any court
other than a court of the United States located in the State of Delaware or a
Delaware state court and (d) consents to service of process in the manner
provided for in Section 6.2. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

6.8     Severability. If any term or provision of this Agreement shall to any
extent be invalid or unenforceable, the remainder of this Agreement shall not be
affected thereby, and each term and provision of this Agreement shall be valid
and enforced to the fullest extent permitted by law.

 

6.9     Amendments. This Agreement may not be modified or changed except by an
instrument or instruments in writing executed by the parties hereto.

 

6.10       Publicity. None of the Seller, the Company or any of their respective
affiliates shall issue any press release or make public announcement (including
any filing with the U.S. Securities and Exchange Commission) concerning this
Agreement or the transactions contemplated herein without obtaining the prior
written approval of the other parties hereto, which approval will not be
unreasonably withheld or delayed, unless the content of such press release or
public announcement is substantially consistent in form and substance with the
disclosures set forth in the Proxy Statement; provided that the party intending
to make such release shall use its commercially reasonable efforts to consult
with the other party with respect to the timing and content thereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

  SELLER:      

ERVINGTON INVESTMENTS LTD

 

      By:  /s/ Natalia Khudyk       Name: Natalia Khudyk       Title: Director  
     

 

 

 

COMPANY:

 

    PLEDGE PETROLEUM CORP.                 By: /s/ John Zotos       Name: John
Zotos       Title: Corporate Secretary  

 

  

 

 

 

 

 

 

 

Signature page to Stock Purchase Agreement

 

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