Document:

f8k012214ex10_lilisenergy.htm

 

Exhibit 10.1

 

Subscription Agreement

 

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. THERE ARE FURTHER RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES DESCRIBED HEREIN.

 

THE PURCHASE OF THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT.

 

Lilis Energy, Inc.

1900 Grant Street, Suite #720

Denver, Colorado 80203

 

Ladies and Gentlemen:

 

The undersigned understands that Lilis Energy, Inc., a corporation organized under the laws of Nevada (the “Company”), has authorized the sale and issuance to certain investors of 3,750,000 Units with each Unit consisting of (i) one share of the Company’s common stock, par value $0.0001 (the “Common Stock”) and (ii) one Warrant to purchase one share of Common Stock, at an exercise price equal to $2.50 per share (the “Warrants”).  The Units, Common, Stock and Warrants are referred to herein as the “Securities.”

 

This offering is made pursuant to the Confidential Private Offering Memorandum, dated January 7, 2014, and the documents incorporated therein by reference  (the “Offering Documents”), all as more particularly described and set forth in the Offering Documents. The undersigned further understands that the offering is being made without registration of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or of any other jurisdiction, and is being made only to “accredited investors” (as defined in Rule 501 of Regulation D under the Securities Act).

 

1.             Subscription. Subject to the terms and conditions hereof and the provisions of the Offering Documents, the undersigned hereby irrevocably subscribes for the Securities set forth in Appendix A hereto for the aggregate purchase price set forth in Appendix A, which is payable as described in Section 4 hereof. The undersigned acknowledges that the Securities will be subject to restrictions on transfer as set forth in this subscription agreement (the “Subscription Agreement”).  The Investor acknowledges that the Offering is not being underwritten by T.R. Winston & Company, LLC (the “Placement Agent”), the placement agent for the Offering named in the Confidential Private Offering Memorandum, and that there is no minimum offering amount.

 

  

 

  

 

2.             Acceptance of Subscription and Issuance of Securities. It is understood and agreed that the Company shall have the sole right, at its complete discretion, to accept or reject this subscription, in whole or in part, for any reason and that the same shall be deemed to be accepted by the Company only when it is signed by a duly authorized officer of the Company and delivered to the undersigned at the Closing referred to in Section 3 hereof.  Subscriptions need not be accepted in the order received, and the Securities may be allocated among subscribers. Notwithstanding anything in this Subscription Agreement to the contrary, the Company shall have no obligation to issue any of the Securities to any person who is a resident of a jurisdiction in which the issuance of Securities to such person would constitute a violation of the securities, “blue sky” or other similar laws of such jurisdiction (collectively referred to as the “State Securities Laws”).

 

3.             The Closing.  The closing of the purchase and sale of the Securities (the “Closing”) shall take place at such time and place as the Company may designate by notice to the undersigned (the “Closing Date”).  This offering will continue until the earlier of (i) the date upon which subscriptions for all of the Securities offered have been accepted; or (ii) January 31, 2014, unless extended by the Company and the Placement Agent with their mutual consent.  It is expected that subscriptions may be accepted on multiple occasions prior to the Closing Date of the Offering.

 

4.             Payment for Securities. Payment for the Securities shall be received by Signature Bank (the “Escrow Agent”) from the undersigned by cashier's check, wire transfer of immediately available funds or other means approved by the Company at or prior to the Closing, in the amount as set forth in Appendix A hereto. The Company shall deliver certificates representing the Securities to the undersigned at the Closing bearing an appropriate legend referring to the fact that the Securities were sold in reliance upon an exemption from registration under the Securities Act.

 

5.             Representations and Warranties of the Company.

 

(a)           As of the Closing, the Company represents and warrants that the Company is duly formed and validly existing under the laws of Nevada, with full power and authority to conduct its business as it is currently being conducted and to own its assets; and has secured any other authorizations, approvals, permits and orders required by law for the conduct by the Company of its business as it is currently being conducted.

 

(b)           The Company has all such corporate power and authority to enter into, deliver and perform this Subscription Agreement.

 

(c)            All necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance of this Subscription Agreement by the Company, and the issuance and sale of the Securities to be sold by the Company pursuant to this Subscription Agreement.  Upon acceptance by the Company, this Subscription Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

  

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6.             Representations and Warranties of the Undersigned. The undersigned hereby represents and warrants to and covenants with the Company that:

 

(a)           General.

 

(i)            The undersigned has all requisite authority (and in the case of an individual, the capacity) to purchase the Securities, enter into this Subscription Agreement and to perform all the obligations required to be performed by the undersigned hereunder, and such purchase will not contravene any law, rule or regulation binding on the undersigned or any investment guideline or restriction applicable to the undersigned.

 

(ii)           The undersigned is a resident of the state set forth on the signature page hereto and is not acquiring the Securities as a nominee or agent or otherwise for any other person.

 

(iii)          The undersigned will comply with all applicable laws and regulations in effect in any jurisdiction in which the undersigned purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which the undersigned is subject or in which the undersigned makes such purchases or sales, and the Company shall have no responsibility therefor.

 

(b)           Information Concerning the Company.

 

(i)            The undersigned has received a copy of the Offering Documents. The undersigned has not been furnished any offering literature other than the Offering Documents and has relied only on the information contained therein.

 

(ii)           The undersigned understands and accepts that the purchase of the Securities involves various risks, including the risks outlined in the Offering Documents and in this Subscription Agreement. The undersigned represents that it is able to bear any loss associated with an investment in the Securities.

 

(iii)          The undersigned confirms that it is not relying on any communication (written or oral) of the Company or any of its affiliates, as investment advice or as a recommendation to purchase the Securities. It is understood that information and explanations related to the terms and conditions of the Securities provided in the Offering Documents or otherwise by the Company or any of its affiliates shall not be considered investment advice or a recommendation to purchase the Securities, and that neither the Company nor any of its affiliates is acting or has acted as an advisor to the undersigned in deciding to invest in the Securities. The undersigned acknowledges that neither the Company nor any of its affiliates has made any representation regarding the proper characterization of the Securities for purposes of determining the undersigned's authority to invest in the Securities.

 

  

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(iv)          The undersigned is familiar with the business and financial condition and operations of the Company, all as generally described in the Offering Documents. The undersigned has had access to such information concerning the Company and the Securities as it deems necessary to enable it to make an informed investment decision concerning the purchase of the Securities.

 

(v)           The undersigned understands that, unless the undersigned notifies the Company in writing to the contrary at or before the Closing, each of the undersigned's representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the Closing, taking into account all information received by the undersigned.

 

(vi)          The undersigned acknowledges that the Company has the right in its sole and absolute discretion to abandon this private placement at any time prior to the completion of the offering. This Subscription Agreement shall thereafter have no force or effect and the Company shall return the previously paid subscription price of the Securities, without interest thereon, to the undersigned.

 

(vii)         The undersigned understands that no federal or state agency has passed upon the merits or risks of an investment in the Securities or made any finding or determination concerning the fairness or advisability of this investment.

 

(c)           Non-reliance.

 

(i)            The undersigned represents that it is not relying on (and will not at any time rely on) any communication (written or oral) of the Company, as investment advice or as a recommendation to purchase the Securities, it being understood that information and explanations related to the terms and conditions of the Securities and the other transaction documents that are described in the Offering Documents shall not be considered investment advice or a recommendation to purchase the Securities.

 

(ii)           The undersigned confirms that the Company has not (A) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of investment in the Securities or (B) made any representation to the undersigned regarding the legality of an investment in the Securities under applicable legal investment or similar laws or regulations. In deciding to purchase the Securities, the undersigned is not relying on the advice or recommendations of the Company and the undersigned has made its own independent decision that the investment in the Securities is suitable and appropriate for the undersigned.

 

  

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(d)           Status of Undersigned.

 

(i)            The undersigned has such knowledge, skill and experience in business, financial and investment matters that the undersigned is capable of evaluating the merits and risks of an investment in the Securities. With the assistance of the undersigned's own professional advisors, to the extent that the undersigned has deemed appropriate, the undersigned has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Securities and the consequences of this Subscription Agreement. The undersigned has considered the suitability of the Securities as an investment in light of its own circumstances and financial condition and the undersigned is able to bear the risks associated with an investment in the Securities and its authority to invest in the Securities.

 

(ii)           The undersigned is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned acknowledges that the undersigned has completed the Investor Questionnaire contained in Appendix B hereto and that the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the date hereof. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

 

(e)            Restrictions on Transfer or Sale of Securities. As applies to the undersigned:

 

(i)            The undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Securities. The undersigned understands that the Securities have not been registered under the Securities Act or any State Securities Laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the undersigned and of the other representations made by the undersigned in this Subscription Agreement. The undersigned understands that the Company is relying upon the representations and agreements contained in this Subscription Agreement (and any supplemental information) for the purpose of determining whether this transaction meets the requirements for such exemptions.

 

(ii)           The undersigned understands that the Securities are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the U.S. Securities and Exchange Commission (the “Commission”) provide in substance that the undersigned may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom, and the undersigned understands that the Company has no obligation or intention to register any of the Securities, or to take action so as to permit sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the undersigned understands that under the Commission's rules, the undersigned may dispose of the Securities principally only in “private placements” which are exempt from registration under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations as in the hands of the undersigned. Consequently, the undersigned understands that the undersigned must bear the economic risks of the investment in the Securities for an indefinite period of time.

 

  

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(iii)          The undersigned agrees: (A) that the undersigned will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (B) that the certificates representing the Securities will bear a legend making reference to the foregoing restrictions; and (C) that the Company and it affiliates shall not be required to give effect to any purported transfer of such Securities except upon compliance with the foregoing restrictions.

 

(iv)          The undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising, including but not limited to: (A) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (B) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

 

(v)           The undersigned understands that there is no established public trading market for the Warrants being offered in the Offering, and that the Company does not expect such a market to develop. In addition, the Company does not intend to apply for listing of the Warrants on any securities exchange. The undersigned understands that without an active market, the liquidity of the Warrants will be limited.

 

7.             Conditions to Obligations of the Undersigned and the Company. The obligations of the undersigned to purchase and pay for the Securities specified in Appendix A and of the Company to sell the Securities are subject to the satisfaction at or prior to the Closing of the following conditions precedent: the representations and warranties of the Company contained in Section 5 hereof and of the undersigned contained in Section 6 hereof shall be true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing.

 

8.             Obligations Irrevocable. The obligations of the undersigned shall be irrevocable.

 

9.             Legend. The certificates representing the Securities sold pursuant to this Subscription Agreement will be imprinted with a legend in substantially the following form:

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

 

  

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10.           Waiver, Amendment. Neither this Subscription Agreement nor any provisions hereof shall be modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom any waiver, change, discharge or termination is sought.

 

11.           Assignability. Neither this Subscription Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the undersigned without the prior written consent of the other party.

 

12.          Waiver of Jury Trial. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT.

 

13.           Submission to Jurisdiction. With respect to any suit, action or proceeding relating to any offers, purchases or sales of the Securities by the undersigned (“Proceedings”), the undersigned irrevocably submits to the jurisdiction of the federal or state courts located in the Borough of Manhattan in New York City, which submission shall be exclusive unless none of such courts has lawful jurisdiction over such Proceedings.

 

14.           Governing Law. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.

 

15.           Section and Other Headings. The section and other headings contained in this Subscription Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Subscription Agreement.

 

16.           Counterparts. This Subscription Agreement may be executed in any number of counterparts (including by facsimile, PDF or other electronic means), each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.

 

17.           Notices. All notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid to the following addresses (or such other address as either party shall have specified by notice in writing to the other):

 

  

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If to the Company:

	

Lilis Energy, Inc.

1900 Grant Street, Suite #720

Denver, Colorado 80203

Attn: A. Bradley Gabbard

Facsimile No.: (303) 957-2234

 

	
with a copy to:

	
Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, CO 80202

Attention: Ron Levine

Facsimile No.: (303) 893-1379

 

	
If to the undersigned:

	
________________________________________

________________________________________

________________________________________

Facsimile: ________________________________

E-mail: __________________________________

Telephone: _______________________________

Attention: ________________________________

 

18.           Binding Effect. The provisions of this Subscription Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

 

19.           Survival. All representations, warranties and covenants contained in this Subscription Agreement shall survive (i) the acceptance of the subscription by the Company, (ii) changes in the transactions, documents and instruments described in the Offering Documents which are not material or which are to the benefit of the undersigned and (iii) the death or disability of the undersigned.

 

20.           Notification of Changes. The undersigned hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the closing of the purchase of the Securities pursuant to this Subscription Agreement which would cause any representation, warranty, or covenant of the undersigned contained in this Subscription Agreement to be false or incorrect.

 

21.           Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

 

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this ______ OF ______________, 2014.

 

 

	
PURCHASER (if an individual):

	
PURCHASER (if an entity):

	
By___________________________

Name:

	
______________________________

Legal Name of Entity

By____________________________

Name:

Title:

 

State/Country of Domicile or Formation: ______________________________________

 

Aggregate Subscription Amount: US$_________________________________________

 

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to __________ Units.

 

	  	
LILIS ENERGY, INC.

 

	  	
By____________________________

Name:

Title:

 

  

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APPENDIX A

 

CONSIDERATION TO BE DELIVERED

 

	
Securities to Be Acquired

	 	
Aggregate Purchase Price to be Paid

	
 

_________ Units

	 	
 

US$ ___________

	  	 	  

 

 

  

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COVER SHEET WITH SUBSCRIPTION INSTRUCTIONS

 

Enclosed herewith are the documents necessary to subscribe for _______________ Units, with each Unit consisting of (i) one share of the Company’s common stock, par value $0.0001 (the “Common Stock”) and (ii) one Warrant to purchase one share of Common Stock, at an exercise price equal to $2.50 per share (the “Warrants”). The Units, Common Stock, and Warrants are referred to herein as the “Securities.”  The Securities are being offered to qualified investors pursuant to the Confidential Private Offering Memorandum, dated January 7, 2014, and the documents incorporated therein by reference  (collectively, the “Offering Documents”). Set forth herein are instructions for the execution of the enclosed documents.

 

A. Instructions. 

 

Each person considering subscribing for Securities should review the following instructions:

 

	
·  

	
Subscription Agreement:  The Subscription Agreement must be completed, executed and delivered to T.R. Winston & Company, LLC (the “Placement Agent”) at the address set forth below.  The Company will execute and deliver a counterpart to the Subscription Agreement to the Placement Agent. The Company shall have the right to accept or reject any subscription, in whole or in part. An acknowledgment of the acceptance of your subscription for the Securities subscribed will be returned to you promptly after acceptance.

 

	
·  

	
Payment:  Payment of US$________________________ for the Securities subscribed for shall be made by delivery at the Closing (as defined in Section 3 of the Subscription Agreement) by cashier's check, wire transfer of immediately available funds or other means approved by the Company to Signature Bank (the “Escrow Agent”), at either the address set forth below or by wire transfer to Signature Bank, 261 Madison Avenue, New York, New York 10016, ABA No. 026013576 (Swift Code: SIGNUS33) for credit to Lilis Energy, Inc., Signature Bank as Escrow Agent, Account No. __________, in each case, with the name and address of the individual or entity making payment.

 

 

B. Communications.

 

Placement Agent:

376 Main Street

Bedminster, New Jersey 07921

Attn: Tyler Runnels

           Karen Ting

E-mail: karen@trwinston.com

Fax No.: (310) 424-1990

Escrow Agent:

261 Madison Avenue

New York, New York 10016

Attn:  Cliff Broder, Group Director and Senior Vice President

 

 

11fs82014ex4i_geiglobal.htm

EXHIBIT 4.1

GEI GLOBAL ENERGY CORP.

2014 EMPLOYEE AND CONSULTANT STOCK COMPENSATION PLAN

1. Purpose. The purpose of this 2014 Employee and Consultant Stock Plan (this “Plan”) is to provide compensation in the form of common stock (“Common Stock”), $0.001 par value, of GEI Global Energy Corp (the “Company”) to employees and “eligible consultants” (as defined in Section 3 hereof) who have previously rendered services to the Company or who will render services to the Company in the future.

2. Administration. (a) This Plan shall be administered by the Board of Directors of the Company who may from time to time (i) issue orders or adopt resolutions not inconsistent with the provisions of this Plan and (ii) interpret the provisions and supervise the administration of the Plan. The Chief Executive Officer of the Company shall make initial determinations as to which employees and “eligible consultants” (including professionals and advisors) will be considered to receive shares of Common Stock under the Plan and on what terms and conditions. The Chief Executive Officer of the Company will provide a list of such individuals to the Board of Directors. All final determinations under the Plan shall be made by the affirmative vote of a majority of the members of the Board of Directors at a meeting called for such purpose, or reduced to writing and signed by a majority of the members of the Board of Directors. Subject to the Company’s Bylaws, all decisions by the Board of Directors in selecting employees and “eligible consultants,” establishing the number of shares and construing the provisions of this Plan shall be final, conclusive and binding on all persons, including the Company, shareholders, employees and “eligible consultants.”

3. Eligible Consultants. The Company may engage “advisors” and/or “consultants,” who may participate in this Plan in the future, as long as such “advisors” and/or “consultants” fit the definition of “employee” included the General Instructions to Securities and Exchange Commission (“SEC”) Form S-8, which define the term “employee” to include any employee, director, general partner, officer, consultant or advisor.  Such General Instructions impose three essential limitations on “consultants” and “advisors” eligible for participation in a plan covered by SEC Form S-8. Therefore, in order for a “consultant” or “advisor” to the Company to be an “eligible consultant” under this Plan and to be eligible to receive shares of Common Stock under this Plan and pursuant to a Form S-8 filed by the Company with the SEC, such “consultant” and/or “advisor” (i) must be a natural person; (ii) must provide bona fide services to the Company; and (iii) the services rendered by such “consultant” or “advisor” may not be in connection with the offer or sale of securities in a capital-raising transaction and may not directly or indirectly promote or maintain a market for the Company’s securities.

4. Shares Subject to the Plan. The total number of shares of Common Stock subject to this Plan is as follows: 40,000,000 shares of Common Stock, par value $0.001, to be awarded to employees and eligible consultants as provided herein and as the Board of Directors may determine.

 

  

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5. Investment Intent. Unless and until the sale and issuance of Common Stock subject to the Plan are registered under the Securities Act of 1933, as amended (“Securities Act”). or shall be exempt from registration pursuant to the rules promulgated thereunder, each grant of Common Stock under the Plan shall provide that the acquisitions of Common Stock hereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof.  Further, unless the issuance and sale of the Common Stock has been registered under the Securities Act, each grant of Common Stock shall provide that no shares shall be sold unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel; and (ii) if requested to do so by the Company, the person who is to receive a grant of Common Stock pursuant to the Plan shall have executed and delivered to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require.

6. Stock Splits, Stock Dividends, Combinations or Reclassifications. In the event of any change in the outstanding stock of the Company by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger or similar event (“Adjusting Event”), the Board of Directors may adjust proportionally (a) the number of shares of Common Stock reserved under the Plan, which have not been granted as of the effective date of such Adjusting Event.

7. Withholding. The Company shall have the right to deduct from any grant of Common Stock an appropriate number of shares for payment of taxes by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Common Stock is used to satisfy tax withholding, such stock shall be valued in good faith by the Board of Directors, who may use reported trading data from the principal exchange or trading platform upon which the Company’s stock is traded for such period of time as the Board of Directors may determine in compliance with applicable law.

8. Governing Law. The Plan and all determinations made and action taken pursuant hereto, shall be governed by the securities laws of the United States or State of Nevada and construed accordingly.

9. Termination of the Plan. This Plan shall terminate upon the issuance of all shares available under the Plan or when it is otherwise terminated by the Board of Directors.

10. Effective Date of the Plan. This Plan shall become effective upon its adoption by the Board of Directors.

 

 

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