Document:

EX-10.3

  Exhibit 10.3

  QUANTUMSCAPE BATTERY, INC.

  SCIENTIFIC ADVISORY BOARD AGREEMENT

  This Scientific Advisory Board Agreement (this “Agreement”) is effective as of June 6, 2022 (the “Effective Date”) by and between QuantumScape Battery, Inc. (the “Company”) and Celina Mikolajczak (“Advisor”) (each herein referred to individually as a “Party,” or collectively as the “Parties”).  For the purposes of this Agreement, the Company’s publicly listed parent corporation, QuantumScape Corporation, is referred to as “QuantumScape.”

  The Company desires to retain Advisor as an independent contractor to serve on the Company’s Scientific Advisory Board (“SAB”) and provide services related to Advisor’s expertise in the areas of next generation solid state battery design, engineering and manufacturing (the “Field”). In consideration of the mutual promises contained herein, the Parties agree as follows: 

  1.Services and Compensation

  a.The Company hereby retains Advisor to (i) serve as a member of the Company’s Scientific Advisory Board with respect to the Field; (ii) review activities and developments in the Field in a mutually agreed upon manner, including but not limited to reviewing activities and developments relating to the Company’s core solid state battery technology and business; (iii) provide advice to the Company on strategic business direction with respect to the Field (collectively, the “Services”).  In connection with performing the Services, Advisor will make herself reasonably available via telephonic or video conference, or other locations, as reasonably requested in advance exclusively by the Company’s CEO, for no more than five hours per month. 

  b.In consideration for Advisor’s Services, Advisor shall continue to vest without interruption in the equity awards under the existing Aug 2021 RSU Agreement (as identified in the Separation Agreement and Release (the “Separation Agreement”), to which this Agreement is attached as its Exhibit A), subject to the terms thereof and the Company’s 2020 Equity Incentive Plan (the Aug 2021 RSU Agreement and the Company’s 2020 Equity Incentive Plan are collectively referenced herein as the “Equity Agreements”) and the Separation Agreement, provided that this Agreement remains in effect on each vesting date and subject to the other terms and conditions as set forth herein.  It is not the purpose of this Agreement to enable Advisor to vest in a specific number of shares or to continue vesting until the entire equity award under the Aug 2021 RSU Agreement is fully vested. Advisor acknowledges that other than with respect to the Aug 2021 RSU Agreement, the equity awards subject to all other Stock Agreements (as defined in the Separation Agreement) will have been terminated and are no longer available for vesting.

  c.The Company will timely and fully reimburse Advisor, in accordance with Company policy, for all reasonable expenses incurred by Advisor in performing the Services pursuant to this Agreement, if Advisor receives written consent from an authorized agent of the Company prior to incurring such expenses and submits receipts for such expenses to the Company in accordance with Company policy.

   

  

  2.Confidentiality

  a.Definition of Confidential Information. “Confidential Information” means any information that relates to the actual or anticipated business and/or products, research or development of the Company, its affiliates or subsidiaries, or to the Company’s, its affiliates’ or subsidiaries’ technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s, its affiliates’ or subsidiaries’ products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on whom Advisor called or with whom Advisor became acquainted during the Term of this Agreement), software, developments, inventions, discoveries, ideas, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information disclosed by the Company, its affiliates or subsidiaries, either directly or indirectly, in writing, orally or by drawings or inspection of premises, parts, equipment, or other property of the Company, its affiliates or subsidiaries. Notwithstanding the foregoing, Confidential Information shall not include any such information which Advisor can establish (i) was publicly known or made generally available prior to the time of disclosure to Advisor; (ii) becomes publicly known or made generally available after disclosure to Advisor through no wrongful action or inaction of Advisor; or (iii) is in the rightful possession of Advisor, without confidentiality obligations, at the time of disclosure as shown by Advisor’s then-contemporaneous written records; provided that any combination of individual items of information shall not be deemed to be within any of the foregoing exceptions merely because one or more of the individual items are within such exception, unless the combination as a whole is within such exception.

  b.Nonuse and Nondisclosure. During and after the period of Advisor’s relationship with the Company, Advisor will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and Advisor will not (i) use any Confidential Information for any purpose whatsoever other than as necessary for the performance of the Services on behalf of the Company, or (ii) subject to Advisor’s right to engage in Protected Activity (as defined below), disclose Confidential Information to any third party without the prior written consent of an authorized representative of the Company, except that Advisor may disclose Confidential Information to the extent compelled by applicable law; provided however, prior to such disclosure, Advisor shall provide prior written notice to the Company and seek a protective order or such similar confidential protection as may be available under applicable law. Advisor agrees that no ownership of Confidential Information is conveyed to the Advisor. Without limiting the foregoing, Advisor shall not use or disclose any Company property, intellectual property rights, trade secrets or other proprietary know-how of the Company to invent, author, make, develop, design, or otherwise enable others to invent, author, make, develop, or design identical or substantially similar designs as those developed under this Agreement for any third party. Advisor agrees that Advisor’s obligations under this Section 2.B shall continue after the termination of this Agreement. 

  c.Other Client Confidential Information. Advisor agrees that Advisor will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former or then current employer of Advisor or other person or entity with which Advisor has an obligation to keep in confidence. Advisor also agrees that Advisor will not bring onto the Company’s premises or transfer onto the Company’s technology systems any unpublished document, proprietary information, or trade secrets belonging to any third party unless disclosure to, and use by, the Company has been consented to in writing by such third party. 

  d.Third Party Confidential Information. Advisor recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Advisor agrees that at all times during the Term of this Agreement and thereafter, Advisor owes the Company and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to use it or to disclose it to any person, firm, corporation, or other third party except as necessary in carrying out the Services for the Company consistent with the Company’s agreement with such third party.

  3.Other Obligations

  Advisor will not disclose to the Company any information that Advisor is obligated to keep secret pursuant to any confidentiality agreement with a third party, and nothing in this Agreement will impose any obligation on the Advisor to the contrary.

  -2-

  

  4.Conflicting Obligations

  a.Advisor represents and warrants that Advisor has no agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Advisor’s obligations to the Company under this Agreement, and/or Advisor’s ability to perform the Services.

  b.During the Term of this Agreement, Advisor shall notify the Company in advance of changes in her employment or significant consulting or advisory relationships in the field of batteries.  If Advisor provides services for a third party that is reasonably determined by the Company to be a competitor of the Company in the field of solid state batteries, then upon receipt of notice from the Company (the “Competitor Notice”), Advisor agrees to cease to publicly represent herself as a service provider or advisor to the Company; provided that Advisor shall be permitted to disclose to such third party the terms of this Agreement.  Moreover, if Advisor provides services to a third party that is reasonably determined by the Company to be a then current competitor, then this Agreement automatically shall terminate at the later of (a) the one-year anniversary of this Agreement; and (b) the date the Competitor Notice is sent.   

  5.Return of Company Materials 

  Upon the termination of this Agreement, or upon the Company’s earlier request, Advisor will promptly deliver to the Company, and will not keep in Advisor’s possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Confidential Information, all devices and equipment belonging to the Company, all electronically-stored information and passwords to access such property, and any reproductions of any of the foregoing items that Advisor may have in Advisor’s possession or control. However, should Advisor later discover additional Company property in her inadvertent possession, she will return such property to the Company within three (3) business days thereafter.  It is agreed that any such subsequent return of inadvertently retained Company property would not constitute a violation of this Agreement.

  6.Term and Termination

  a.Initial Term. This Agreement will begin on the Effective Date of this Agreement and will continue thereafter for a period of 52 weeks  (the “Initial Term”), unless and until terminated as provided in Section 6.B.  The Initial Term may be extended only by mutual agreement of the Parties.  Neither Party is required to agree to extend the Agreement or to provide notice of non-extension.  If the Agreement is not so extended before the end of either the Initial Term or any extension to it, it shall expire by its terms without any action required on the part of either of the Parties. 

  b.Termination. The Advisor has the right to terminate this Agreement at any time, for any reason or no reason, after giving the Company fourteen (14) days’ written notice of such termination.  Only following the completion of the Initial Term, the Company will  have the right to terminate this Agreement at any time, for any reason or no reason, after giving Advisor fourteen (14) days’ written notice of such termination. The Company also has the right to terminate this Agreement as set forth in Section 4.B above. At any time during the effectiveness of this Agreement, the Company also may terminate this Agreement immediately by written notice if Advisor refuses to or is unable to perform the Services or is in breach of any provision of this Agreement or the Separation Agreement. All notices pursuant to this Section 6.B. shall be provided pursuant to Section 9.G of this Agreement.

  -3-

  

  c.Survival. Upon any termination, all rights and duties of the Company and Advisor toward each other shall cease except:

  i.The Company will pay, within thirty (30) days after the termination of this Agreement, all amounts owing to Advisor for Services performed in accordance with the provisions of Section 1 of this Agreement; and

  ii.The Sections in this Agreement entitled Confidentiality, Other Obligations, Conflicting Obligations, Return of Company Materials, Term and Termination, Independent Contractor; Benefits, Limitation of Liability, and Miscellaneous will survive termination or expiration of this Agreement in accordance with their terms.

  iii.The foregoing rights and remedies will be without prejudice to any other rights or remedies that have accrued to the benefit of any Party prior to such termination or expiration under this or any other then existing agreement (e.g., the Separation Agreement and Releases, and the Equity Agreements).

  7.Independent Contractor; Benefits

  a.Independent Contractor. It is the express intention of the Company and Advisor that Advisor perform the Services as an independent contractor to the Company. Nothing in this Agreement shall in any way be construed to constitute Advisor as an employee (including executive) of the Company. Without limiting the generality of the foregoing, Advisor is not authorized to bind the Company to any liability or obligation or to represent that Advisor has any such authority. Advisor agrees to furnish (or reimburse the Company for) all tools and materials necessary to accomplish this Agreement and shall initially incur (but be subsequently reimbursed by the Company for as provided herein) all expenses associated with performance. Advisor acknowledges and agrees that Advisor is obligated to report as income all compensation received by Advisor pursuant to this Agreement. Advisor agrees to and acknowledges the obligation to pay all self-employment and other taxes on such income. 

  b.Benefits.  The Company and Advisor agree that Advisor is not entitled to and will not receive any Company-sponsored benefits from the Company. If Advisor is reclassified by a state or federal agency or court as the Company’s employee, Advisor will become a reclassified employee and will receive no other benefits from the Company, even if by the terms of the Company’s benefit plans or programs of the Company in effect at the time of such reclassification, Advisor would otherwise be eligible for such benefits.

  8.Limitation of Liability

  IN NO EVENT SHALL THE COMPANY BE LIABLE TO ADVISOR OR TO ANY OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS OR LOSS OF BUSINESS, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER THE COMPANY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. 

  9.Miscellaneous

  a.Governing Law; Consent to Personal Jurisdiction. This Agreement shall be governed by the laws of the State of California, without regard to the conflicts of law provisions of any jurisdiction. To the extent that any lawsuit is permitted to be brought in court under this Agreement, the Parties hereby expressly consent to the exclusive personal jurisdiction and venue of the state and federal courts located in Santa Clara County, California.

  b.Assignability. Neither Party may sell, assign or delegate any rights or obligations under this Agreement without the express advance written approval of the other Party. 

  -4-

  

  c.Entire Agreement. This Agreement, together with the concurrently implemented Separation Agreement (including the surviving agreements as set forth in the “Entire Agreement” Section of the Separation Agreement, which are hereby incorporated by reference) constitutes the entire agreement and understanding between the Parties with respect to the subject matter herein and supersedes all other prior written and/or oral agreements, discussions, or representations between the Parties or between Advisor and the Company. Advisor represents and warrants that Advisor is not relying on any statement or representation not contained in this/ those Agreements. To the extent any terms set forth in any exhibit or schedule conflict with the terms set forth in this/ those Agreements, the terms of this/ those Agreements shall control unless otherwise expressly agreed by the Parties in such exhibit or schedule.

  d.Headings. Headings are used in this Agreement for reference only and shall not be considered when interpreting this Agreement.

  e.Severability. If a court or arbitrator (based in Santa Clara, California) finds, or the Parties mutually believe, any provision of this Agreement, or portion thereof, to be invalid or unenforceable, such provision will be enforced to the maximum extent permissible so as to effect the intent of the Parties, and the remainder of this Agreement will continue in full force and effect. 

  f.Modification, Waiver. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in a writing signed by the Parties. Waiver by either Party of a breach of any provision of this Agreement will not operate as a waiver of any other or subsequent breach.

  g.Notices. Any notice or other communication required or permitted by this Agreement to be given to a Party shall be in writing and shall be deemed given (i) if delivered personally or by commercial messenger or courier service, (ii) when sent by email (so long as such email is not returned as undelivered), or (iii) if mailed by U.S. registered or certified mail (return receipt requested), to the Party at the Party’s address written below or at such other address as the Party may have previously specified by like notice. If by mail, delivery shall be deemed effective three business days after mailing in accordance with this Section 10.G.  If by email, delivery shall be deemed effective as of the date it is sent.

  i.If to the Company, to:

  QuantumScape Battery, Inc.
1730 Technology Drive
San Jose, CA 95110

  Attention: Chief Legal Officer

  ii.If to Advisor, to the address for notice on the signature page to this Agreement or, if no such address is provided, to the last address of Advisor provided by Advisor to the Company.

  h.Attorneys’ Fees. In any arbitration or court action at law or equity that is brought by one of the Parties to this Agreement to enforce or interpret the provisions of this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees and costs from the other Party, in addition to any other relief to which the prevailing Party may be entitled.

  i.Signatures. This Agreement may be signed separately in two separate counterparts, each of which (upon the completed exchanges of them physically or by PDF/ email) shall be deemed an original, with the same force and effectiveness as though executed in a single document.

  j.Protected Activity Not Prohibited. Advisor understands that nothing in this Agreement shall in any way limit or prohibit Advisor from engaging in any Protected Activity as defined and described in the Separation Agreement. Advisor acknowledges that she has received proper notice pursuant to the Defend Trade Secrets Act of 2016 as set forth in the Separation Agreement.

  -5-

  

  IN WITNESS WHEREOF, the Parties hereto have executed this Scientific Advisory Board Agreement as of the date(s) below.

   

   

  		
	 
ADVISOR
 
	QUANTUMSCAPE BATTERY, INC.

	By:	/s/Celina Mikolajczak
	By:  /s/Michael McCarthy

	        Celina Mikolajczak 
	 Michael McCarthy

	 
	Chief Legal Officer and

	 
	Head of Corporate Development

	Date: June 6, 2022  
	Date: June 6, 2022

	 
	 

	ALSO APPROVED
	 

	 
	QUANTUMSCAPE CORP.

	 
	By:  /s/Michael McCarthy

	 
	Michael McCarthy

	 
	Chief Legal Officer and 

	 
	Head of Corporate Development

	 
	Date: June 6, 2022

  	 

  Address for Notice to Advisor:

  189 Glasgow Lane, San Carlos, CA 94070

  celinamik.sc@gmail.com

  -6-ex_400034.htm

 

 

Exhibit 10.1

 

CONTRACTUAL INVESTMENT AGREEMENT

 

 

This Contractual Investment Agreement (“Agreement”) is made this 25th day of February 2022, by and between Alpha Energy, Inc.(“the Company”), a publicly traded Colorado Corporation (Colorado filing number 2013155940) at 4162 Meyerwood Dr., Houston, TX. 77025, USA and 20 Shekels, Inc. at  (hereinafter “Investor”, also considered to be participant in a group of other investors each and all of whom has entered into this Agreement as an “arm’s length” Agreement between the parties hereto, and not as a result of any offer made by the Company to them for the purchase and sale of any of the Company’s securities, collectively referred to as the “Investor Group”). This Agreement is made by and between the Company and the Investor, for the reasons clearly set forth and for no other.

 

WHEREAS, the Company, as a publicly traded and fully reporting company under Securities and Exchange Commission (“SEC”) Rule 12 (g), and as a result thereof is required to file, on an annual basis, certain quarterly and annual reports, specifically denominated as “10 Qs” and “10 Ks, to remain in current reporting status, and WHEREAS, the Company has certain mandatory past filings due under this regulatory regime, such filings to be adequately completed requiring significant expenditures in accounting, auditing, legal, EDGAR filing and administrative expenses, and WHEREAS, the Company has filings to be adequately completed requiring significant expenditures in accounting, auditing, legal, administrative expenses, and WHEREAS the Company shall incur significant start up, acquisition, and operational costs, which, when taken together with the aforedescribed expenses, are expected to approximate $5,000,000, and WHEREAS, the Investor Group is willing jointly to provide such funding as is set forth above in the amount of $5,000,000 to the Company, in terms of contributions made by the Investor Group participants, jointly and severally, such contributions totaling the needed $5,000,000 to complete the aforementioned operational and filing expenses, and WHEREAS, the parties hereto have agreed that as consideration for the provision of the needed funding amount of $5,000,000 Investor Group shall receive a Convertible Promissory Note at a rate per annum of seven and twenty-five hundredth percent (7.25%), from the date of this Convertible Promissory Note (“Convertible Note”), with a conversion feature into Company’s common stock at $5.00 per share. Upon conversion of the Convertible Note into Company common stock, the Noteholders would be issued 1,000,000 shares by the Company to the participants of the Investor Group, jointly and severally, for a total receipt of the needed $5,000,000.

 

	 	 	 	 
	Initials	 	Initials	 

 

1

APHE – CIA 2022

 

 

NOW THEREFORE, the parties hereto agree as follows:

 

WARRANTIES OF INVESTOR

 

Investor hereby warrants that they have full authority and legal capacity to lawfully provide to the Company their portion of the needed $5,000,000 required for the Company’s completion of all matters requisite for the aforementioned mandated SEC filings and acquisition and operational costs, and that they will do so in accordance with the terms of this Agreement, and that their full contribution constitutes funds of their own, and they further warrant that the funds are from their sole origin and come from no other source.

 

Investor further warrants that while they have had available to them all public information lodged with the SEC in reference to the Company, these funds are being provided for the specific purpose referenced in this Agreement, namely the provision of funds for the needed SEC filings, and acquisition and operational costs and not as a general investment in the Company. The investment described herein is made for the sole purpose described herein.

 

Investor further warrants that either (i) appurtenant to this Agreement they have not received now, nor shall they ever seek to receive, any “non-public” information in reference to the Company in relation to this Agreement or at any other time, or (ii) the Investors have executed a company NDA (dated 6/1/2020), not to disclose material, nonpublic information, or trade in the open markets upon receiving material, nonpublic information.

 

Investor further warrants that they shall take reasonable steps to ensure that this $5,000,000 investment shall be used by the Company for the purposes recited herein relating to the aforementioned mandated filings and acquisition and operational costs and for no other purpose.

 

	 	 	 	 
	Initials	 	Initials

 

2

APHE – CIA 2022

 

 

WARRANTIES OF THE COMPANY

 

The Company warrants that is a duly formed and licensed corporation, formed in the State of Colorado and currently in good standing in all respects, bearing the Colorado filing number 2013155940 and that it is fully compliant with reference to all filings required by the State of Colorado.

 

The Company also warrants that it is a fully reporting Rule 12 (g) company under the aforesaid SEC Rule and that its securities are currently traded in the public market and that it is in the process of completing all mandated filings with the SEC, the completion of such filings being the complete and sole reason for it having entered into this Agreement.

 

The Company warrants that it has full authority to issue $5,000,000 in the form of a Senior Secured Convertible Promissory Note at a rate per annum of seven and twenty-five hundredth percent (7.25%), from the date of this Senior Secured Convertible Promissory Note (“Convertible Note”), with a conversion feature into Company’s common stock at $5.00 per share. Upon conversion of the Convertible Note into Company common stock, the Noteholders would be issued 1,000,000 shares by the Company to the Investors, jointly and severally, for a total receipt of the needed $5,000,000. and that the shares so Contemplated for issuance by this Agreement and that the issuance of such shares as are contemplated hereby shall breach no pre-existing agreement or condition. The Company further warrants that the $5,000,000 funding contemplated by this Agreement shall be used exclusively for the accounting, auditing, legal, EDGAR filing, and administrative costs involved in completing the mandated filings with the SEC, and for the aforementioned acquisition and operational costs, and for no other purpose. The Company assumes full responsibility to ensure that these funds are used for this and no other purpose and shall allow the Investors to examine the relevant Company records to determine and ensure that the funds have been so exclusively used.

OBLIGATIONS OF THE INVESTOR

 

Upon signature to this Agreement, Investor as a participant in the Investor Group, jointly, shall be obligated to provide to the Company $5,000,000 USD (in total or in part pursuant to the amount subscribed herein) in good and free funds, and shall, forthwith, cause this amount of funding to be wired to the Company in accordance with the details in the enumerated wiring instructions set forth in Exhibit “B” hereto or in some other form suitable to the Company as detailed in Exhibit “C”.

 

	 	 	 	 
	Initials	 	Initials

 

3

APHE – CIA 2022

 

 

Once the funds described above have been so wired to the credit of the Company, Investors shall have fully completed and fulfilled all of their obligations, other than the ongoing obligations referred to under Warranties of Investors in this Agreement and shall, as a result, be issued a dually executed Convertible Promissory Note.

 

OBLIGATIONS OF THE COMPANY

 

Once the $5,000,000 funding amount has been received by the Company, the Company shall have the obligation to cause its Secretary/Board of Directors to issue the Convertible Promissory Note at a rate per annum of seven and twenty-five hundredth percent (7.25%), from the date of this Convertible Promissory Note (“Convertible Note”), with a conversion feature into Company’s common stock at $5.00 per share. Upon conversion of the Convertible Note into Company common stock, the Noteholders would be issued 1,000,000 shares by the Company to the Investors, jointly and severally, for a total receipt of the needed $5,000,000.

 

MISCELLANEOUS PROVISIONS

 

GOVERNING LAW: This Agreement shall be interpreted and enforced in accordance with the Laws of the State of Colorado, in all respects as to both its making and performance, and any and all disputes arising from, or relating to, this Agreement shall be interpreted, in all respects, under the laws of the State of Colorado.

 

JURISDICTION: All parties hereto agree that this Agreement is to be subject to the jurisdiction of the State of Colorado in all respects, including personal jurisdiction, and all parties affixing their signatures hereto agree, by the affixing of such signatures, that they are doing business in Colorado for the purpose of personal jurisdiction as required by the laws of the State of Colorado.

 

VENUE: All parties hereto agree, jointly and severally, that the appropriate venue for the resolution of any disputes which may arise under this Agreement shall be that of Adams County, Colorado, whether any such proceeding is lodged in any Court of the State of Colorado in Adams County or in any Court of the United States found at that location.

 

	 	 	 	 
	Initials	 	Initials

 

4

APHE – CIA 2022

 

 

SUPERSEDENCE: This Agreement, when signed by the parties, supersedes any and all previous agreements by and between the parties hereto, whether oral or in writing. This Agreement constitutes the full and complete agreement by and between the parties hereto.NOTICES: Any and all notices made by any of the parties to this Agreement may be made by regular U.S. Mail, certified U.S. Mail, express delivery, fax transmission, or by properly sent electronic (“email’) transmission. Any and all such notices shall be remitted to the addresses reflected herein for each and all of the parties. The Notices to be remitted to any of the Investors herein shall be sent to the actual address, facsimile address, and/or electronic (“email”) as any and all Investors shall set such addresses forth on Exhibit “A” hereto.

 

NON-ASSIGNABILITY: This Agreement may not be assigned by any party hereto to any third party without the express written permission of all parties hereto. Upon such agreement, any assignment so made shall be deemed valid.

 

NON- WAIVER OF BREACH: No failure by any party hereto to enforce any singular obligation under this Agreement shall prejudice and such party’s right to enforce any other right or obligation under this Agreement.

 

ARM’S LENGTH AGREEMENT: This Agreement as made by and between the parties hereto is made only for the purposes found within the four corners of this Agreement, and for no other reason or other intended purpose.

 

THIS AGREEMENT MAY BE EXECUTED IN IDENTICAL COUNTERPARTS, such counterparts shall be deemed to constitute one and the same Agreement.

 

 

[SIGNATURE PAGE TO FOLLOW]

 

	 	 	 	 
	Initials	 	Initials

 

5

APHE – CIA 2022

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the

 

___ day of ____________, 2022.

 

	
			Alpha Energy, Inc.

				
			INVESTOR HEREIN: 20 Shekels, Inc.

			
	
			4162 Meyerwood Dr.

				
			 

			
	
			Houston, Texas 77025

				
			 

			
	 	
			(More fully identified on Exhibit “A”)

			
	 	 
	 	 
	
			By: _________________________________

				
			By: _________________________________

			
	
			John Lepin, CFO

				
			Jay Leaver, President

			
	
			Alpha Energy, Inc.

				
			20 Shekels, Inc.

			

 

6

APHE – CIA 2022

 

 

 

 

Exhibit “A”

 

SUBSCRIPTION AGREEMENT

Alpha Energy, Inc.

(February 2022)

 

The purchase of a Convertible Note involves a high degree of risk. Only Investors who are 

able to afford the risk of loss of their entire investment should purchase a Convertible Note.

 

These securities have not been registered with the U.S. Securities and Exchange 

Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), 

and are being offered in reliance on exemptions from registration provided in Section

4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and

 

preemption from the registration and qualification requirements

(other than provisions) of applicable state laws under the National

Securities Markets notice filing and fee Improvement Act of 1996.

 

 

These securities have not been approved or disapproved by the SEC or any state and other

regulatory authority, nor has the SEC or any state and other regulatory authority

 

passed on the accuracy and adequacy of this disclosure document 

or endorsed the merits of this offering. Any representation to the 

contrary is a criminal offense.

 

 

This Subscription Agreement (“Agreement”) constitutes the undersigned’s irrevocable offer to purchase from Alpha Energy, Inc., a Colorado corporation (the “Company”), an convertible promissory note (the “Convertible Note”) in the principal amount set forth on the signature page of this Agreement, subject to the terms and conditions set forth in this Agreement. The undersigned hereby delivers to the Company the full purchase price for the subscription for the Shares in the form of a check or wire transfer to the wiring instructions attached as Exhibit “B”. 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. The undersigned will be notified by the Company whether, and to what extent, the undersigned’s subscription has been accepted. The Company reserves the right in its sole discretion to reject all or part of any subscription. If a subscription is not accepted in whole for any other reason, the subscription amount that was not accepted will be returned to the undersigned without interest. The undersigned understands and agrees that this subscription is irrevocable. On execution by both parties, this Agreement shall become a bilateral agreement binding on both the undersigned and the Company. Each part of this Agreement must be completed by the undersigned and, by execution below, the undersigned acknowledges and understands that the Company is relying on the accuracy and completeness hereof in complying with the obligations under applicable securities laws.

 

Convertible Notes

 

The Company was originally formed under the laws of the state of Colorado as a limited liability company and subsequently converted to a Colorado corporation. Copies of the Company’s articles of incorporation, bylaws, and shareholder agreements will be provided to the undersigned upon request. The Company is offering the Convertible Notes as investment securities only and not with a view to, or for resale in connection with, any distribution thereof. These securities are “restricted” (within the meaning of the Securities Act) and are subject to limitations on transfer as set forth in state and federal laws and in the articles of incorporation, bylaws, and shareholder agreements. Investors in the Convertible Notes will be creditors of the Company and on conversion of the Convertible Note they will be issued shares of the Company’s common stock (the “Common Stock”) and become stockholders of the Company “Stockholders”).

 

7

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

Suitability Information

 

	 	
			1.

				
			Representations of Subscriber. The undersigned hereby represents and warrants as follows:

			

 

(a)    The undersigned has received and read the Company’s business plan and power point presentation (the “Offering Materials”), together with additional information and documentation provided pursuant thereto, including information furnished on his request. The undersigned understands and acknowledges that such information contains certain forward- looking statements and information relating to the Company that are based on the beliefs of management, as well as assumptions made by and information currently available to management, and that when used in the offering information, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” and similar expressions, as they relate to the Company and its management, are intended to identify forward-looking statements. The undersigned understands and acknowledges that these statements reflect the current view of the Company respecting future events and are subject to certain risks, uncertainties, and assumptions, including the risks and uncertainties noted, and that, should one or more of such risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the Offering Materials as anticipated, believed, estimated, expected, and intended. The undersigned understands the risks associated with a business enterprise with no revenue and limited capitalization in a highly competitive business characterized by rapid technological change.

 

(b)    The undersigned has had sufficient interactions with the Company’s management and has been provided with supporting documentation, if requested, which he has read and understands, in order to make an informed investment decision. The undersigned is basing his decision to invest solely on the information provided and has not relied on any other representations made by the Company and its affiliates.

 

(c)    The undersigned understands that an investment in a Convertible Note is speculative and involves numerous significant risks, the occurrence of any one of which could result in the loss of his entire investment. The undersigned is fully cognizant of, and understands all of, the risks relating to a purchase of a Convertible Note, including those risks set forth in the Offering Materials.

 

(d)    The undersigned understands that the Company is in the process of raising up to $5,000,000 for the purposes set forth in the Offering Materials and for general working capital.

 

(e)    The undersigned’s overall commitment to investments that are not readily marketable is not disproportionate to his individual net worth, and his investment in a Convertible Note will not cause his overall commitment to become excessive.

 

(f)    The undersigned has adequate means of providing for his financial requirements, both current and anticipated, and has no need for liquidity in an investment in a Convertible Note.

 

(g)    The undersigned was at no time solicited by any leaflet, public promotional meeting, circular, newspaper and magazine article, internet contact, radio and television advertisement, and any other form of general advertising and solicitation in connection with the offer, sale, and purchase of a Convertible Note through this Agreement.

 

8

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

(h)    The undersigned can bear and is willing to accept the economic risk of losing his entire investment.

 

(i)    The undersigned is acquiring a Convertible Note for his own account and for investment purposes only and has no present intention, agreement, and arrangement for the distribution, transfer, assignment, resale, and subdivision of a Convertible Note or of the Common Stock, either currently or after the passage of a fixed or determinable period or on the occurrence or nonoccurrence of any predetermined event and circumstance.

 

(j)    The undersigned has such knowledge and experience in financial and business matters that he is capable of evaluating the Company, the proposed activities thereof, and the risks and merits of investing in a Convertible Note and is not using a purchaser representative (as defined in Regulation D) in connection with the evaluation of such risks and merits, or the undersigned and his purchaser representatives listed below, together, have such knowledge and experience in financial and business matters that they are capable of evaluating the Company, the proposed activities thereof, and the risks and merits of investing in a Convertible Note.

 

(k)    If a resident of the United States, the undersigned is a resident of the state set forth on the signature page of this Agreement and has a principal residence within such state, maintains a driver’s license and voter registration only within such state, pays income taxes (when applicable) only to such state, and intends to remain a citizen of such state for the foreseeable future, or if the undersigned cannot make this representation, his reason is satisfactory to the Company, in its sole and absolute discretion.

 

(l)    The undersigned is an “accredited investor” as defined under Rule 501 of Regulation D of the Securities Act, as summarized in Exhibit “A”.

 

(m)   The undersigned understands the offering has not been registered under the Securities Act and applicable state and other securities laws, that the Convertible Notes are subject to significant restrictions on transfer under such securities laws, and that the undersigned cannot sell, distribute, and otherwise transfer the Convertible Note or the Common Stock unless the Convertible Note or Common Stock is registered under the Securities Act and applicable state and other securities laws or unless an exemption from registration is available. The undersigned may, therefore, be required to hold the Convertible Note until maturity and, if converted, the Common Stock for an indefinite period.

 

(n)    The undersigned acknowledges that neither the SEC nor the securities commission of any state or other federal agency has made any determination as to the merits of purchasing the Convertible Notes.

 

(o)    All information that the undersigned has provided to the Company and its agents and representatives concerning his suitability to invest in the Company is complete, accurate, and correct as of the date of the signature on the last page of this Agreement, including information concerning his personal financial affairs and business position and the knowledge and experience of the undersigned and his advisers.

 

(p)    The undersigned acknowledges that this Agreement may be accepted or rejected, in whole or in part, by the Company and that, to the extent the subscription may be rejected, the accompanying subscription payment will be refunded without payment of interest and without deduction of expenses.

 

9

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

(q)    The undersigned acknowledges and agrees that no portion of the Offering Materials may be reproduced and redistributed, except to his advisers, without the Company’s prior written consent, which consent may be withheld and conditioned in the Company’s sole discretion. The undersigned will not, without the Company’s prior written permission and consent, use any of the information in the Offering Materials for any purpose whatsoever other than evaluating a potential purchase of a Convertible Note.

 

(r)    Neither the undersigned nor any of his affiliates will effect any transactions in the Convertible Note or Common Stock while in possession of material, nonpublic information regarding the Company.

 

2.        Additional Information. The undersigned acknowledges that he has previously been advised of the opportunity to review all of the pertinent facts concerning the Company and to obtain any additional information that he may request, to the extent the Company possesses or can obtain such information without unreasonable effort and expense. The undersigned has been provided with all materials and information requested by him and his representatives, including any information requested to verify any information furnished, and he has been provided the opportunity for direct communication with the Company and its representatives regarding the purchase made hereby, including the opportunity to ask questions of and receive answers from the Company’s management.

 

	 	
			3.

				
			Representations Regarding Exemptions and Restrictions on Transfer.

			

 

(a)    In connection with the undersigned’s acquisition of a Convertible Note, he represents that the Convertible Note is being acquired without a view to, or for resale in connection with, any distribution of the Convertible Note or the Common Stock and any interest therein without registration and other compliance under the Securities Act and that he has no direct or indirect participation in any such undertaking or in the underwriting of such an undertaking.

 

(b)    The undersigned acknowledges that the Convertible Note must be held and may not be sold, transferred, and otherwise disposed of for value unless subsequently registered under the Securities Act or an exemption from such registration is available; the Company is under no obligation to register the Convertible Note or the Common Stock under the Securities Act or under Section 12 of the Securities Exchange Act of 1934, as amended, except as expressly agreed to in writing by the Company; no assurance is given that the exemption provided by Rule 144 under the Securities Act and any other exemption will be available; and the Convertible Note and certificate, if any, representing the Common Stock and the Company’s stock transfer records will bear a legend listing the restriction on the sale of the Convertible Note and Common Stock.

 

(c)    The undersigned understands that the Convertible Note and the Common Stock have not been registered, but they are being acquired by reason of a specific exemption under the Securities Act as well as under certain state statutes for transactions by an issuer not involving any public offering and that any disposition of the Convertible Note may, under certain circumstances, be inconsistent with this exemption and may make the undersigned an “underwriter” within the meaning of the Securities Act.

 

(d)    The undersigned understands that the resale of the Convertible Note or Common Stock must be effected in reliance on exemptions from registration under the Securities Act and applicable state securities laws. The undersigned understands that such an exemption may not be available, and, in such case, the undersigned would not be able to resell the Convertible Note and Common Stock held.

 

10

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

4.     Indemnity. The undersigned hereby agrees to indemnify the Company, the Company’s controlling persons, and any person participating in the offering and to hold them harmless from and against all liability, damage, cost, and expense (including reasonable attorneys’ fees) incurred on account of and arising out of:

 

(a)    any inaccuracy in the undersigned’s declarations, representations, and warranties set forth herein or made by him to the Company in connection with his subscription;

 

(b)    the disposition of the Convertible Note and the Common Stock that the undersigned will receive, contrary to his declarations, representations, and warranties set forth herein and to the provisions of the articles of incorporation, bylaws, and shareholder agreements; and

 

(c)    any action, suit, and proceeding based on: (i) the claim that said declarations, representations, and warranties made by the undersigned were inaccurate and misleading or otherwise cause for obtaining damages and redress from the Company; (ii) the disposition of the Convertible Note or Common Stock contrary to the terms hereof; and (iii) the breach by the undersigned of any part of this Agreement.

 

5.     Setoff. Notwithstanding the provisions of the last preceding section and the enforceability thereof, the undersigned hereby grants to the Company the right to a setoff against any amounts payable by the Company to the undersigned, for whatever reason, of all damages, costs, and expenses (including reasonable attorneys’ fees) that are incurred on account and arising out of any of the items referred to in clauses (a) through (c) of the last preceding section.

 

6.      Miscellaneous. The undersigned further understands, acknowledges, and agrees that:

 

(a)    This Agreement shall be construed in accordance with, and governed by, the laws of the state of Colorado.

 

(b)    This Agreement constitutes the entire agreement between the parties respecting the subject matter hereof.

 

(c)    Notwithstanding any of the representations, warranties, acknowledgments, and agreements made herein by the undersigned, he does not waive any rights granted to him under federal and state securities laws.

 

(d)    This Agreement does not entitle the undersigned to any rights as a holder of the Convertible Note or Common Stock purchasable hereunder for which he has not fully paid.

 

(e)    All subscription payments should be made payable to “Alpha Energy, Inc.” The Company will thereafter deliver the Convertible Note subscribed for pursuant to this Agreement.

 

(Subscription details, signatures, and contact information on following page.)

 

11

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

Alpha Energy, Inc.

SUBSCRIPTION AGREEMENT COUNTERPART SIGNATURE PAGE

Subscription Details

 

The undersigned hereby subscribes for the Convertible Note set forth below and agrees to be bound by the terms of this Subscription Agreement:

 

Principal Amount of Convertible Note Subscribed For         $ 854,300.21

 

Subscriber:

 

	20 Shekels, Inc.	 	 
	Full Name of Person or Entity	 	Date

 

	 	 	 
	Signature of Person or Entity Authorized Representative	 	Signature of Joint Subscriber, If Any

                       

	 	 	President
	Street Address	 	Title of Authorized Representative Signing for Entity

    

	 	 	 
	City, State, and Zip	 	Tax Identification or Social Security Number

                                                    

	 	 	 
	E-mail Address	 	Daytime Telephone Number

                         

	Title to be held as follows:	☐	Community Property	☐	Joint Tenants, with Right of Survivorship
	 	☐	Tenants in Common	☐	Separate Property
	 	☐	Tenants by the Entirety	 	 

	 	☐	Other (corporation, single person, trust, etc., please indicate)	corporation

  

Purchaser Representatives, if any:

 

	 	 	 
	Full Name	 	Full Name

 

	 	 	 
	Number and Street	 	Number and Street

      

	 	 	 
	City, State and Zip Code	 	City, State and Zip Code

 

ACCEPTANCE OF SUBSCRIPTION

 

The foregoing subscription is hereby accepted this ___________________________ 2022.

 

 

ALPHA ENERGY, INC.

 

By:______________________________________________

Name: John F. Lepin                                             

Its: CFO                                                               

 

12

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

Please complete this certificate if you are a corporation, general or limited partnership, limited liability company, or trust.

 

CERTIFICATE OF PARTNERSHIP, CORPORATION, OR OTHER ENTITY

 

 

The undersigned, 20 Shekels, Inc. (“Subscriber”), a corporation organized under the laws of the state of Colorado, with its principal offices located at the address set forth below, hereby certifies as follows to induce Alpha Energy, Inc. (the “Company”) to accept the undersigned’s offer to purchase a secured convertible promissory note (“Convertible Note”):

 

1.      Pursuant to valid and legally binding documents filed at the time and in the manner required by the laws of the state under which Subscriber was organized as stated above, Subscriber was formed on _1/25/2022_______.

 

2.      Subscriber wasorganized to engage in the business of __technology___________________. Since its organization, Subscriber’s business activities have included the following: _holding assets_.

 

3.      Subscriber: (a) was not organized or reorganized for the specific purpose of acquiring the Convertible Note; and (b) has made substantive and substantial investments before the date hereof, and each beneficial owner thereof has and will share in the same proportion in each investment.

 

4.      The offer to purchase the Convertible Note to be sold by the Company has been approved by the governing authority of Subscriber in accordance with the power vested in it by applicable law and the documents under which Subscriber was organized and exists.

 

5.      Subscriber has determined that the purchase of the Convertible Note is consistent with its purposes and policies, is of benefit to it, and involves risks that it can reasonably bear.

 

6.      If Subscriber is a trust, in an attachment hereto please identify each grantor and beneficiary and indicate the circumstances under which the trust is revocable by the grantor.

 

7.      On request of the Company, Subscriber shall deliver a certified copy of resolutions duly adopted by the board of directors, general partners, trustees, or other governing authority of Subscriber and provide further evidence of the authority and power of Subscriber to make the investment described herein.

 

The undersigned has caused this document to be executed by its representative, hereunto duly authorized as of          , 2022.

 

	 	 	20 Shekels, Inc.
	Address:	 	Name of Subscriber

 

	 	 	 
	 	 	Signature of Authorized Signatory

         

	 	 	 
	 	 	 

 

13

APHE – CIA 2022- Exhibit “A”

Subscription Agreement

 

 

 

 

EXHIBIT “A” TO SUBSCRIPTION AGREEMENT

 

Accredited Investor as defined in § 230.501 of the Securities Act of 1933:

 

	 	
			(1)

				
			Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Securities Act; Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Securities Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investor;

			

 

	 	
			(2)

				
			Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

			

 

	 	
			(3)

				
			Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

			

 

	 	
			(4)

				
			Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

			

 

	 	
			(5)

				
			Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000. For purposes of calculating net worth under this paragraph (5):

			

 

	 	
			(a)

				
			The person’s primary residence shall not be included as an asset;

			

 

	 	
			(b)

				
			Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and

			

 

	 	
			(c)

				
			Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability;

			

 

	 	
			(6)

				
			Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

			

 

	 	
			(7)

				
			Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in §230.506(b)(2)(ii); and

			

 

	 	
			(8)

				
			Any entity in which all of the equity owners are accredited investor.

			

 

14

APHE – CIA 2022 – Exhibit “A”

Subscription Agreement - Exhibit “A”

 

 

 

 

 

 

Exhibit “C”

INVESTOR CONTRIBUTION

 

 

Investor:       20 Shekels, Inc.                                                                

 

Investor shall make the following contribution(s):

 

	
			Source

				
			Amount

				 
	
			Promissory Note dated 2/22/2022 between 20 Shekels as Holder and Alpha Energy, Inc. as Maker, to be tendered to the Company by Assignment.

				
			$ 406,754.38

				 
	
			Cash contribution, to be wired to Company as per Exhibit “B”

				
			$ 499,995.62

				 
	
			Total

				
			$ 906,750.00

				
			= 181,350 shares @ $5/share

			

 

15

APHE – CIA 2022 – Exhibit “C”

Investor Contribution

 

 

 

[INSERT NOTE + Exhibits]

 

APHE – CIA 2022 – Exhibit “A”

Subscription Agreement - Exhibit “A”

 

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00346-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00346-of-00352.parquet"}]]