exv10w1



 





Exhibit 10.1




Subscription Terms




American Oil & Gas Inc.

1050 17th Street

Suite 2400

Denver, Colorado 80265




Ladies and Gentlemen:



The undersigned (the “Investor”) hereby confirms and agrees with you as follows:



1. The subscription terms set forth herein (the “Subscription”) are made as of the date
set forth below between American Oil & Gas Inc., a Nevada corporation (the “Company”), and the
Investor.



2. As of the Closing (as defined below) and subject to the terms and conditions hereof,
the Company and the Investor agree that the Investor will purchase from the Company and the Company
will issue and sell to the Investor, such number of shares (the “Shares”) of common stock, par
value $0.001 per share, of the Company (the “Common Stock”), as is set forth on the signature page
hereto (the “Signature Page”) for a purchase price
of $4.75 per Share. The Investor
acknowledges that the offering is not a firm commitment underwriting and that there is no minimum
offering amount.



3. The completion of the purchase and sale of the Shares shall occur at a closing (the
“Closing”) that, in accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended, is expected to occur on or about April 17, 2007. At the Closing, (a) the
Company shall cause its transfer agent to release to the Investor the number of Shares being
purchased by the Investor and (b) the aggregate purchase price for the Shares being purchased by
the Investor will be delivered by or on behalf of the Investor to the Company. If the Investor
chooses to settle via DWAC (by checking the appropriate space on the Signature Page hereto), the
provisions set forth in Exhibit A hereto shall be incorporated herein by reference as if
set forth fully herein.



4. The offering and sale of the Shares are being made pursuant to the Registration
Statement and the Prospectus (as such terms are defined below). The Investor acknowledges that the
Company intends to enter into subscriptions in substantially the same form as this Subscription
with certain other third party investors and intends to offer and sell (the “Offering”) up to an
aggregate of 6,001,390 Shares pursuant to the Registration Statement and Prospectus.



5. The Company has filed with the Securities and Exchange Commission (the “Commission”) a
prospectus (the “Base Prospectus”), and will file with the Commission a final prospectus supplement
(together with the Base Prospectus, the “Prospectus”) with respect to the registration statement
(File No. 333-120987) reflecting the Offering, including all amendments thereto, the exhibits and
any schedules thereto, the documents otherwise deemed to be a part thereof or included therein by
the rules and regulations of the Commission (the “Rules and Regulations”) and any registration
statement relating to the Offering and filed pursuant to Rule 462(b) under the Rules and
Regulations (collectively, the “Registration Statement”), in conformity with the Securities Act of
1933, as amended (the “Securities Act”), including Rule 424(b) thereunder. The Investor hereby
confirms that it has had full access to the Base Prospectus and the Company’s periodic reports and
other information incorporated by reference therein, and was able to read, review, download and
print such materials.




 









 







6. The Company has entered into a Placement Agency Agreement (the “Placement Agreement”),
dated April 11, 2007 with A.G. Edwards & Sons, Inc. and C.K. Cooper & Company (the “Placement
Agents”), which will act as the Company’s placement agents with respect to the Offering and receive
a fee in connection with the sale of the Shares. The Placement Agreement contains certain
representations and warranties of the Company. The Company acknowledges and agrees that the
Investor may rely on the representations and warranties made by it to the Placement Agents in
Section 3 of the Placement Agreement to the same extent as if such representations and warranties
had been incorporated in full herein and made directly to the Investor. Capitalized terms used,
but not otherwise defined, herein shall have the meanings ascribed to such terms in the Placement
Agreement.



7. The obligations of the Company and the Investor to complete the transactions
contemplated by this Subscription shall be subject to the following:




     a. The Company’s obligation to issue and sell the Shares to the Investor shall be subject to:
(i) the receipt by the Company of the purchase price for the Shares being purchased hereunder as
set forth on the Signature Page and (ii) the accuracy of the representations and warranties made by
the Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior to the
Closing Date.



     b. The Investor’s obligation to purchase the Shares will be subject to the condition that the
Placement Agents shall not have: (i) terminated the Placement Agreement pursuant to the terms
thereof or (ii) determined that the conditions to closing in the Placement Agreement have not been
satisfied.


8. The Company hereby makes the following representations, warranties and covenants to
the Investor:




     a. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Subscription and otherwise to carry out its obligations
hereunder. The execution and delivery of this Subscription by the Company and the consummation by
it of the transactions contemplated hereunder have been duly authorized by all necessary action on
the part of the Company. This Subscription has been duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except as may be limited
by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ and contracting parties’ rights generally or by
general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).



     b. The Company shall (i) before the opening of trading on the American Stock Exchange on the
next trading day after the date hereof, issue a press release, disclosing all material aspects of
the transactions contemplated hereby and before the opening of trading on the American Stock
Exchange on the next trading day after the Closing Date, issue a press release, disclosing that the
Closing has occurred and (ii) make such other filings and notices in the manner and time required
by the Commission with respect to the transactions contemplated
hereby. Upon the issuance of the first press release described in the
immediately preceding sentence, the Investor will not be in receipt
from the Company, its officers or directors, of any material,
non-public information. The Company shall not
identify the Investor by name in any press release or public filing, or otherwise publicly disclose
the Investor’s name, without the Investor’s prior written consent, unless required by law or the
rules and regulations of any self-regulatory organization which the Company or its securities are
subject.



9. The Investor hereby makes the following representations, warranties and covenants to
the Company:




     a. The Investor represents that (i) it has had full access to the Base Prospectus and the
Company’s periodic reports and other information incorporated by reference therein, prior to or in



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connection with its receipt of this Subscription, (ii) it is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to investments in
securities representing an investment decision like that involved in the purchase of the Shares,
and (iii) it is acquiring the Shares for its own account, or an account over which it has
investment discretion, and does not have any agreement or understanding, directly or indirectly,
with any person or entity to distribute any of the Shares.



     b. The Investor has the requisite power and authority to enter into this Subscription and to
consummate the transactions contemplated hereby. The execution and delivery of this Subscription
by the Investor and the consummation by it of the transactions contemplated hereunder have been
duly authorized by all necessary action on the part of the Investor. This Subscription has been
executed by the Investor and, when delivered in accordance with the terms hereof, will constitute a
valid and binding obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).



     c. The Investor understands that nothing in this Subscription or any other materials presented
to the Investor in connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with its purchase of Shares.



     d. Neither the Investor nor any Person acting on behalf of, or pursuant to any understanding
with or based upon any information received from, the Investor has, directly or indirectly, as of
the date of this Subscription, engaged in any transactions in the securities of the Company
(including, without limitation, any Short Sales involving the Company’s securities) since the
earlier to occur of (i) the time that the Investor was first contacted by the Placement Agents or
the Company with respect to the transactions contemplated hereby and (ii) the date that is the
third (3rd) trading day prior to the date of this Subscription. “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Investor covenants that
neither it, nor any Person acting on behalf of, or pursuant to any understanding with or based upon
any information received from, the Investor will engage in any transactions in the securities of
the Company (including, without limitation, Short Sales) prior to the time that the transactions
contemplated by this Subscription are publicly disclosed.



     e. The Investor represents that, except as set forth below, (i) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (ii) it is not a, and it has no direct or indirect affiliation or
association with any, NASD member or an Associated Person (as such term is defined under the NASD
Membership and Registration Rules Section 1011) as of the date hereof, and (iii) neither it nor any
group of investors (as identified in a public filing made with the Commission) of which it is a
member, acquired, or obtained the right to acquire, 20% or more of the Common Stock (or securities
convertible or exercisable for Common Stock) or the voting power of the Company on a
post-transaction basis. Exceptions:



 




(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)



10. Notwithstanding any investigation made by any party to this Subscription, all
covenants, agreements, representations and warranties made by the Company and the Investor herein
will survive the execution of this Subscription, the delivery to the Investor of the Shares being
purchased and the payment therefor.




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11. This Subscription may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.



12. In case any provision contained in this Subscription should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
contained herein will not in any way be affected or impaired thereby.



13. This Subscription will be governed by, and construed in accordance with, the internal
laws of the State of New York, without giving effect to the principles of conflicts of law that
would require the application of the laws of any other jurisdiction.



14. This Subscription may be executed in one or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute but one instrument,
and will become effective when one or more counterparts have been signed by each party hereto and
delivered to the other parties.



15. The Investor acknowledges and agrees that the Investor’s receipt of the Company’s
counterpart to this Subscription shall constitute written confirmation of the Company’s sale of
Shares to such Investor.



16. In the event that the Placement Agreement is terminated by the Placement Agents
pursuant to the terms thereof, this Subscription shall terminate without any further action on the
part of the parties hereto.




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INVESTOR SIGNATURE PAGE




	 	 	 	 	 
	Number of Shares:

	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	Purchase Price Per Share: $

	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	Aggregate Purchase Price: $

	 	 	 	 
	 

	 	 	 	 




Please confirm that the foregoing correctly sets forth the agreement between us by signing in the
space provided below for that purpose.




Dated as of: April ___, 2007




	 	 	 
	 	 
	INVESTOR





	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	Print Name:

	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	Title:

	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	Name that Shares are to be registered: 

	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	Mailing Address:

	 	 	 	 
	 

	 	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 
	 	 	 	 
	 

	 	 
	 	 





	 	 	 	 	 
	Taxpayer Identification Number:

	 	 	 	 
	 

	 	 	 	 





Manner of Settlement (check one):




                          DWAC (see Exhibit A for explanation and instructions)



                          DVP (see Exhibit B for explanation and instructions)



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Agreed and Accepted this _____ day of April 2007:



AMERICAN OIL & GAS INC.




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 




Sales of the Shares purchased hereunder were made pursuant to a registration statement or in a
transaction in which a final prospectus would have been required to have been delivered in the
absence of Rule 172 promulgated under the Securities Act.





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EXHIBIT A




TO BE COMPLETED BY INVESTOR




SETTLING VIA DWAC



Delivery by electronic book-entry at The Depository Trust Company (“DTC”), registered in the
Investor’s name and address as set forth on the Signature Page of the Subscription to which this
Exhibit A is attached, and released by Corporate Stock Transfer, the Company’s transfer
agent (the “Transfer Agent”), to the Investor at the Closing.




	 	 	 	 	 	 	 
	 

	 	Name of DTC Participant (broker-dealer at
which the account or accounts to be credited
with the Shares are maintained)
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DTC Participant Number	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name of Account at DTC Participant being credited with
the Shares	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Account Number at DTC Participant being credited with
the Shares	 	 	 	 
	 

	 	 	 	 	 	 




NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE SUBSCRIPTION TO WHICH THIS
EXHIBIT A IS ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:





	 	(I)	 	DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE
CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN
(“DWAC”) INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
SHARES, AND
	 
	 	(II)	 	REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE
PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING
ACCOUNT:




PNC Bank New Jersey

ABA#: 031207607

Account Name: Lowenstein Sandler PC Special Trust Account V

Account #: 8025720123




          Such funds shall be held in escrow pursuant to an escrow agreement entered into between
Lowenstein Sandler PC (the “Escrow Agent”), the Placement Agents and the Company (the “Escrow
Agreement”) until the Closing and delivered by the Escrow Agent on behalf of the Investor to the
Company upon the satisfaction, in the sole judgment of the Representative, of the conditions set
forth in Section 7(b) of the Subscription to which this Exhibit A is attached. The Company
and the Investor agree to indemnify and hold the Escrow Agent harmless from any and all
liabilities, obligations, damages, losses, claims, encumbrances, costs or expenses (including,
without limitation, court costs, reasonable attorneys’




 









 







fees and expenses) (any or all of the foregoing herein referred to as a “Loss”) with respect to the
funds held in escrow pursuant hereto or arising under the Escrow Agreement, unless it is finally
determined that such Losses resulted directly from the willful misconduct or gross negligence of
the Escrow Agent. Anything in this paragraph to the contrary notwithstanding, in no event shall
the Escrow Agent be liable for any special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised
of the likelihood of such loss or damage and regardless of the form of action.




          Investor acknowledges that the Escrow Agent acts as counsel to the Placement Agents, and shall
have the right to continue to represent the Placement Agents, in any action, proceeding, claim,
litigation, dispute, arbitration or negotiation in connection with the Offering, and Investor
hereby consents thereto and waives any objection to the continued representation of the Placement
Agents by the Escrow Agent in connection therewith based upon the services of the Escrow Agent
under the Escrow Agreement, without waiving any duty or obligation the Escrow Agent may have to any
other person





 









 









Exhibit B




TO BE COMPLETED BY INVESTOR




SETTLING VIA DVP



Delivery versus payment (“DVP”) through DTC (i.e., the Company shall deliver Shares registered in
the Investor’s name and address as set forth on the Signature Page of the Subscription to which
this Exhibit B is attached and released by Corporate Stock Transfer, the Company’s transfer
agent (the “Transfer Agent”), to A.G. Edwards at the Closing for settlement with such Investor
directly to the account(s) at A.G. Edwards identified by the Investor and simultaneously therewith
payment shall be made from such account(s) to the Company through A.G. Edwards). NO LATER THAN ONE
(1) BUSINESS DAY AFTER THE EXECUTION OF THE SUBSCRIPTION TO WHICH THIS EXHIBIT B IS
ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:





	 	(I)	 	NOTIFY THE PLACEMENT AGENTS OF THE ACCOUNT OR ACCOUNTS AT A.G. EDWARDS
TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR, AND
	 
	 	(II)	 	CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT A.G. EDWARDS TO BE CREDITED
WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM CASH BALANCE EQUAL
TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR.




If the Investor has an A.G. Edwards account and wishes to settle DVP, the Investor must provide the
following:




     A.G. Edwards Account #:                                        


If the Investor does not have an existing A.G. Edwards account and wishes to settle DVP, the
Investor must open an account with A.G. Edwards. To open an account, the Investor must provide
A.G. Edwards with the following:




	 	 	 	 	 	 	 
	 

	 	Account Name:
	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 

	 	Contact Name:
	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 

	 	Tax ID:
	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 

	 	Institutional #:
	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 

	 	Agent ID #: