ex10-1.htm


    
      
        

      
Exhibit 10.1


      PACIFIC
ASIA PETROLEUM, INC.

      


      SUBSCRIPTION
AGREEMENT FOR SHARES

      


      March 2,
2009

      


      To:           The
Board of Directors of Pacific Asia Petroleum, Inc.

      


      


      Ladies
and Gentlemen:

      


      The undersigned, Richard Grigg
(“Subscriber”), hereby offers to purchase and subscribe for Nine Hundred Seventy
Thousand (970,000) shares (the “Shares”) of the common stock, par value $0.001
per share, of Pacific Asia Petroleum, Inc., a Delaware corporation (the
“Corporation”), in exchange for 3,825,000 shares of Ordinary Fully Paid Shares
of Sino Gas & Energy Holding Limited (“SG&E Shares”), effective as of
the Transfer Date (as defined below).  The Shares are being issued by
the Corporation to Subscriber pursuant to an exchange of Subscriber’s interest
in Sino Gas & Energy Holding Limited (“SG&E”) for the
Shares.  As further consideration for the subscription and purchase of
the Shares pursuant to this Agreement, Subscriber hereby represents, warrants
and acknowledges to the Corporation as follows:

      


      
        	
                 
      

              	
                A.

              	
                Subscriber
      has full power, authority and legal right to enter into this Agreement and
      transfer the SG&E Shares to the Corporation, Subscriber is the
      absolute owner and owner or record of the SG&E Shares, and such
      SG&E Shares are free of any and all liens, claims or other
      encumbrances.

              


      

       

      
        	
                 
      

              	
                B.

              	
                Subscriber
      shall do all things reasonable and necessary to transfer the interest in,
      and the absolute right of legal ownership of, the SG&E Shares to the
      Corporation as the registered holder of the SG&E Shares in accordance
      with applicable law, the ASTC Operating Rules and the Constitution of
      SG&E, including, but not limited to, execution of a proper ASTC
      transfer, an instrument of transfer in compliance with the Constitution of
      SG&E, or any other method permitted by applicable law.  The
      date that the transfer of the absolute right of legal ownership of the
      SG&E Shares is completed and reflected in the SG&E record books
      shall be the “Transfer Date.”

              


      

       

      
        	
                 
      

              	
                C.

              	
                Subscriber
      acknowledges that neither the Corporation nor any its officers, directors,
      agents or affiliates have made any representation to Subscriber regarding
      the Corporation, its business or
prospects.

              


      

       

      
        	
                 
      

              	
                D.

              	
                Subscriber
      is purchasing the Shares for investment for Subscriber’s own account only,
      not as a nominee or agent, and not with a view to, or for resale in
      connection with, any “distribution” of the Shares within the meaning of
      the Securities Act of 1933, as amended (the “Securities
      Act”).  By executing this Agreement, Subscriber represents that
      Subscriber does not have any contract, undertaking, agreement, or
      arrangement with any person to sell, transfer or grant participations to
      such person or to any third person, with respect to any of the
      Shares.

              


      

       

      
        	
                 
      

              	
                E.

              	
                Subscriber
      represents and warrants to the Corporation that Subscriber is not a U.S.
      Person (as defined in Annex
      A).  Subscriber further makes the representations and
      warranties to the Corporation set forth on Exhibit
      A.

              


      

       


      
        
           


        

        
          - 1
-

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                F.

              	
                Subscriber
      understands that the Shares have not been registered under the Securities
      Act and, if issued in accordance with the provisions of this Agreement,
      will be issued by reason of a specific exemption from the registration
      provisions of the Securities Act which depends upon, among other things,
      the bona fide nature of the investment intent and the accuracy of
      Subscriber’s representations as expressed herein.  The
      non-registration shall have no prejudice with respect to any rights,
      interests, benefits and entitlements attached to the Shares in accordance
      with the Corporation’s charter documents or the laws of its jurisdiction
      of incorporation.

              


      

       

      
        	
                 
      

              	
                G.

              	
                Subscriber
      understands that the Shares are characterized as “restricted securities”
      under the Securities Act inasmuch as this Agreement contemplates that, if
      acquired by Subscriber pursuant hereto, the Shares would be acquired in a
      transaction not involving a public offering.  The issuance of
      the Shares hereunder have not been registered under the Securities Act or
      the securities laws of any state of the U.S. and that issuance of the
      Shares is being effected in reliance upon an exemption from registration
      afforded either under Section 4(2) of the Securities Act for transactions
      by an issuer not involving a public offering or Regulation S for offers
      and sales of securities outside the U.S.  Subscriber further
      acknowledges that if the Shares are issued to Subscriber in accordance
      with the provisions of this Agreement, such Shares may not be resold
      without registration under the Securities Act or the existence of an
      exemption therefrom.  Subscriber represents that it is familiar
      with Rule 144 promulgated under the Securities Act, as presently in
      effect, and understands the resale limitations imposed thereby and by the
      Securities Act.

              


      

       

      Subscriber
further agrees to indemnify and hold harmless the Corporation from and against
all liability, damage, losses, costs and expenses (including reasonable
attorneys’ fees and court costs) which they may incur by reason of any breach of
the representations and warranties made by Subscriber herein, or in any document
provided by Subscriber to the Corporation.

       

      Subscriber
hereby agrees that the Shares will bear the following legend or one that is
substantially similar to the following legend:

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.

      


      Additionally,
the Shares will bear any legend required by the “blue sky” laws of any state to
the extent such laws are applicable to the securities represented by the
certificate so legended. Subscriber consents to the Corporation making a
notation on its records or giving instructions to its Transfer Agent in order to
implement the restrictions on transfer of the Shares.

      


      


      


      [Signature
Pages Follow]


      
        
           


        

        
          - 2
-

          
            

          

        

        
           


        

      

       

       

      The
parties have executed this Agreement on the date first set forth
above.

      


      


      RICHARD
GRIGG

      


      /s/ Richard
Grigg                                                                                                              
                                                                

      


      Address:

                                              c/o Pacific Asia Petroleum,
Inc.

                                              250 East Hartsdale
Ave.             


                                              Hartsdale, NY
10530                    

       

       

       

      AGREED
AND ACKNOWLEDGED:

      


      


      PACIFIC
ASIA PETROLEUM, INC.

      


      


      By:  /s/ Frank C.
Ingriselli                                                                                                                      
                                                       

      


      Name: Frank C.
Ingriselli                                                       

      


      Title:  President and
CEO                                                       

                    March
2, 2009


      
        
           


        

        
          - 3
-

          
            

          

        

        
           


        

      


      EXHIBIT
A

      


      Non U.S. Person
Representations

      


      Subscriber,
a non-U.S. person, further represents and warrants to the Corporation as
follows:

      


      1.           At
the time of (a) the offer by the Corporation and (b) the acceptance of the offer
by Subscriber, of the Shares, Subscriber was outside the United
States.

      


      2.           No
offer to acquire the Shares or otherwise to participate in the transactions
contemplated by this Agreement was made to Subscriber or its representatives
inside the United States.

      


      3.           Subscriber
is not purchasing the Shares for the account or benefit of any U.S. person, or
with a view towards distribution to any U.S. person, in violation of the
registration requirements of the Securities Act.

      


      4.           Subscriber
will make all subsequent offers and sales of the Shares either (x) outside of
the United States in compliance with Regulation S; (y) pursuant to a
registration under the Securities Act; or (z) pursuant to an available exemption
from registration under the Securities Act. Specifically, Subscriber will not
resell the Shares to any U.S. person or within the United States prior to the
expiration of a period commencing on the Shares’ issuance date and ending on the
date that is one year thereafter (the “Distribution Compliance Period”), except
pursuant to registration under the Securities Act or an exemption from
registration under the Securities Act.

      


      5.           Subscriber
is acquiring the Shares for Subscriber’s own account, for investment and not for
distribution or resale to others.

      


      6.           Subscriber
has no present plan or intention to sell the Shares in the United States or to a
U.S. person at any predetermined time, has made no predetermined arrangements to
sell the Shares and is not acting as a distributor of the
securities.

      


      7.           Neither
Subscriber, its affiliates nor any person acting on Subscriber’s behalf, has
entered into, has the intention of entering into, or will enter into any put
option, short position or other similar instrument or position in the U.S. with
respect to the Shares at any time after the Shares’ issuance date through the
Distribution Compliance Period except in compliance with the Securities
Act.

      


      8.           Subscriber
consents to the placement of a legend on any certificate or other document
evidencing the Shares substantially in the form as set forth in the
Agreement.

      


      9.           Subscriber
is not acquiring the Shares in a transaction (or an element of a series of
transactions) that is part of any plan or scheme to evade the registration
provisions of the Securities Act.

      


      10.           Subscriber
has sufficient knowledge and experience in finance, securities, investments and
other business matters to be able to protect Subscriber’s interests in
connection with the transactions contemplated by this Agreement.

      


      11.           Subscriber
has consulted, to the extent that it has deemed necessary, with its tax, legal,
accounting and financial advisors concerning its investment in the
Shares.

      



      
        
           


        

        
          - 4
-

          
            

          

        

        
           


        

      


      12.           Subscriber
understands the various risks of an investment in the Shares and can afford to
bear the risks for an indefinite period of time, including, without limitation,
the risk of losing its entire investment in the Shares.

      


      13.           Subscriber
has had access to the Corporation’s publicly filed reports with the SEC, if
any.

      


      14.           Subscriber
has been furnished during the course of the transactions contemplated by this
Agreement with all other public information regarding the Corporation, if any,
that Subscriber has requested and all such public information is sufficient for
Subscriber to evaluate the risks of investing in the Shares.

      


      15.           Subscriber
has been afforded the opportunity to ask questions of and receive answers
concerning the Corporation and the terms and conditions of the issuance of the
Shares.

      


      16.           Subscriber
is not relying on any representations and warranties concerning the Corporation
made by the Corporation or any officer, employee or agent of the
Corporation.

      


      17.           Subscriber
will not sell or otherwise transfer the Shares, unless either (A) the transfer
of such securities is registered under the Securities Act or (B) an exemption
from registration of such securities is available.

      


      18.           Subscriber
understands and acknowledges that the Corporation is under no obligation to
register the Shares for sale under the Securities Act.

      


      19.           Subscriber
represents that the address furnished by Subscriber in this Agreement is
Subscriber’s principal business address.

      


      20.           Subscriber
understands and acknowledges that the Shares have not been recommended by any
federal or state securities commission or regulatory authority, that the
foregoing authorities have not confirmed the accuracy or determined the adequacy
of any information concerning the Corporation that has been supplied to
Subscriber and that any representation to the contrary is a criminal
offense.

      


      21.           Subscriber
acknowledges that the representations, warranties and agreements made by
Subscriber herein shall survive the execution and delivery of this Agreement and
the purchase of the Shares.


      
        
           


        

        
          - 5
-

          
            

          

        

        
           


        

      


      ANNEX
A

      


      Definition of “U.S.
Person”

      


      (1)           “U.S.
person” (as defined in Regulation S) means:

      


      (i)           Any
natural person resident in the United States;

      


      (ii)           Any
partnership or corporation organized or incorporated under the laws of the
United States;

      


      (iii)           Any
estate of which any executor or administrator is a U.S. person;

      


      (iv)           Any
trust of which any trustee is a U.S. person;

      


      (v)           Any
agency or branch of a foreign entity located in the United States;

      


      (vi)           Any
non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S.
person;

      


      (vii)           Any
discretionary account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated, or (if an individual)
resident in the United States; and

      


      (viii)           Any
partnership or corporation if: (A) organized or incorporated under the laws of
any foreign jurisdiction; and (B) formed by a U.S. person principally for the
purpose of investing in securities not registered under the Securities Act,
unless it is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a)) who are not natural persons, estates or
trusts.

      


      (2)           Notwithstanding
paragraph (1) above, any discretionary account or similar account (other than an
estate or trust) held for the benefit or account of a non-U.S. person by a
dealer or other professional fiduciary organized, incorporated, or (if an
individual) resident in the United States shall not be deemed a “U.S.
person.”

      


      (3)           Notwithstanding
paragraph (1), any estate of which any professional fiduciary acting as executor
or administrator is a U.S. person shall not be deemed a U.S. person
if:

      


      (i)           An
executor or administrator of the estate who is not a U.S. person has sole or
shared investment discretion with respect to the assets of the estate;
and

      


      (ii)           The
estate is governed by foreign law.

      


      (4)           Notwithstanding
paragraph (1), any trust of which any professional fiduciary acting as trustee
is a U.S. person shall not be deemed a U.S. person if a trustee who is not a
U.S. person has sole or shared investment discretion with respect to the trust
assets, and no beneficiary of the trust (and no settlor if the trust is
revocable) is a U.S. person.

      


      (5)           Notwithstanding
paragraph (1), an employee benefit plan established and administered in
accordance with the law of a country other than the United States and customary
practices and documentation of such country shall not be deemed a U.S.
person.


      
        
           


        

        
          - 6
-

          
            

          

        

        
           


        

      


      


      (6)           Notwithstanding
paragraph (1), any agency or branch of a U.S. person located outside the United
States shall not be deemed a “U.S. person” if:

      


      (i)           The
agency or branch operates for valid business reasons; and

      


      (ii)           The
agency or branch is engaged in the business of insurance or banking and is
subject to substantive insurance or banking regulation, respectively, in the
jurisdiction where located.

      


      (7)           The
International Monetary Fund, the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development Bank,
the African Development Bank, the United Nations, and their agencies, affiliates
and pension plans, and any other similar international organizations, their
agencies, affiliates and pension plans shall not be deemed “U.S.
persons.”

      


      


      


      


      


      


      


      


      



      
        
           


        

        
          - 7
-