1
EXHIBIT 10.3
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement is executed in
reliance upon the transaction exemption afforded by Regulation S ("Regulation
S") as promulgated by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of
FORTUNE PETROLEUM CORPORATION
30101 Agoura Court
Agoura Hills, California 91301
TRADING SYMBOL ("FPX"), a corporation organized under the laws of
Delaware, United States of America (hereinafter referred to as the "ISSUER").
The undersigned
NAME: ISRAEL MANDEL
ADDRESS: 21 SOKOLOFF STREET
BNAI BRAK
[a Corporation organized under the laws of ISRAEL, a non USA Jurisdiction]
(hereinafter referred to as the "PURCHASER") hereby represents and warrants
to, and agrees with ISSUER as follows:
1. AGREEMENT TO SUBSCRIBE; ADJUSTMENTS.
a. The undersigned hereby subscribes for sixty one
thousand eight hundred thirty five (61,835) Shares
at a Price Per Share of $3.234375, payable in
United States Dollars for a total of $200,000
("Gross Purchase Price").
2
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement is executed in
reliance upon the transaction exemption afforded by Regulation S ("Regulation
S") as promulgated by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of
FORTUNE PETROLEUM CORPORATION
30101 Agoura Court
Agoura Hills, California 91301
TRADING SYMBOL ("FPX"), a corporation organized under the laws of
Delaware, United States of America (hereinafter referred to as the "ISSUER").
The undersigned
NAME: M.M. BEGUN
ADDRESS: ALAMEVA FRANCO 760/61
SAO PAUL, BRAZIL
[a Corporation organized under the laws of BRAZIL, a non USA Jurisdiction]
(hereinafter referred to as the "PURCHASER")
hereby represents and warrants to, and agrees with ISSUER as follows:
1. AGREEMENT TO SUBSCRIBE; ADJUSTMENTS.
a. The undersigned hereby subscribes for one hundred
fifty four thousand five hundred eighty nine
(154,589) Share of $3.234375, payable in United
States Dollars for a total of $500,000 ("Gross
Purchase Price").
3
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement is executed in
reliance upon the transaction exemption afforded by Regulation S ("Regulation
S") as promulgated by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of
FORTUNE PETROLEUM CORPORATION
30101 Agoura Court
Agoura Hills, California 91301
TRADING SYMBOL ("FPX"), a corporation organized under the laws of
Delaware, United States of America (hereinafter referred to as the "ISSUER").
The undersigned
NAME: SHULSMITH PRITAKER
ADDRESS: 28 RECHON DOV SADAAN
PISGAT ZEV MIZRACH
JERUSALEM, ISRAEL
[a Corporation organized under the laws of ISRAEL, a non USA Jurisdiction]
(hereinafter referred to as the "PURCHASER")
hereby represents and warrants to, and agrees with ISSUER as follows:
1. AGREEMENT TO SUBSCRIBE; ADJUSTMENTS.
a. The undersigned hereby subscribes for two hundred
thirty-one thousand eight hundred eighty four
(231,884) Shares at a Price Per Share of $3.234375,
payable in United States Dollars for a total of
$750,000 ("Gross Purchase Price").
4
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement is executed in
reliance upon the transaction exemption afforded by Regulation S ("Regulation
S") as promulgated by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of
FORTUNE PETROLEUM CORPORATION
30101 Agoura Court
Agoura Hills, California 91301
TRADING SYMBOL ("FPX"), a corporation organized under the laws of
Delaware, United States of America (hereinafter referred to as the "ISSUER").
The undersigned
NAME: YAAKOV BARBER
ADDRESS: 386 NORTH ROAD
ORMUND, MELBOURNE 3204
AUSTRALIA
[a Corporation organized under the laws of AUSTRALIA, a non USA Jurisdiction]
(hereinafter referred to as the "PURCHASER")
hereby represents and warrants to, and agrees with ISSUER as follows:
1. AGREEMENT TO SUBSCRIBE; ADJUSTMENTS.
a. The undersigned hereby subscribes for one hundred
fifty four thousand five hundred eighty nine (154,589)
Shares at a Price Per Share of $3.234375, payable in
United States Dollars for a total of $500,000 ("Gross
Purchase Price").
5
b. FORM OF PAYMENT. The PURCHASER shall pay the
purchase price for the Shares by delivering good
funds in United States Dollars to the escrow agent
identified in the Joint Escrow Instructions attached
hereto as ANNEX II (the "Escrow Agent"). Delivery of
such funds to the ISSUER by the Escrow Agent shall be
made against delivery by the ISSUER of one or more
certificates for the Shares in accordance with this
Agreement. Promptly following notice by the Escrow
Agent of receipt of payment from the PURCHASER of the
subscription price for the Shares, the ISSUER shall
determine whether to accept such subscription and, if
so accepted, shall deliver one or more certificates
for the Shares to the Escrow Agent. By signing this
Agreement, the PURCHASER and the ISSUER each agrees
to all of the terms and conditions of, and becomes a
party to, the Joint Escrow Instructions attached
hereto as ANNEX II, all of the provisions of which
are incorporated herein by this reference as if set
forth in full.
c. ADJUSTMENT. (i) In the event that the average of
the daily Market Price (as hereinafter defined) of
the Common Stock during a period of five (5) trading
days, commencing on the last day of the Restricted
Period (as defined in 5) (the "Average Price"), is
less than $3.965 (90% of the Price Per Share), then
the Company shall deliver to the Purchaser, a number
of Additional Shares, if any, determined in
accordance with the following formula:
Gross
Number of Purchase Price
= ---------------------- less No. of Initial Shares
Additional Shares Average Price x .75
For purposes of the foregoing calculation, "Market
Price" shall mean the closing bid price per share of
the Common Stock as reported by the American Stock
Exchange for any trading day, or if no such price is
reported, then the reported closing bid price per
share on the last preceding trading day for which a
trade was reported.
(ii) The Additional Shares, if any, shall be
issued at a closing (the "Additional Closing") to
occur on a date that is mutually agreed to by the
Company and the Purchaser not later than five (5)
business days after the last day of the period used
to calculate the Average Price (the "Additional
Closing Date").
d. (i) In the event that the average of the daily
Market Price (as hereinafter defined) of the Common
Stock during a period of five (5) trading days,
commencing on the last day of the Restricted Period
(the
2
6
"Average Price"), is greater than $4.487 (110% of the
Price Per Share), then the Escrow Agent shall
re-deliver to the Company prior to the Additional
Closing Date, a number of Initial Shares, if any,
determined in accordance with the following formula:
Gross
Number of Purchase Price
less ---------------------- = Shares to be redelivered
Initial Shares Average Price x .75
For purposes of the foregoing calculation, "Market
Price" shall mean the closing bid price per share of
the Common Stock as reported by the American Stock
Exchange for any trading day, or if no such price is
reported, then the reported closing bid price per
share on the last preceding trading day for which a
trade was reported.
e. METHOD OF PAYMENT. Payment of the purchase price for
the Shares shall be made by wire transfer of
funds to:
Bank of New York
350 Fifth Avenue
New York, New York 10001
ABA# 021000018
For Further Credit to A/C# 637-1415554
for credit to the account of Krieger &
Prager, Attorneys - Escrow Account
2. SUBSCRIBER REPRESENTATIONS; ACCESS TO INFORMATION; INDEPENDENT
INVESTIGATION.
a. OFFSHORE TRANSACTION. PURCHASER represents and
warrants to ISSUER as follows:
(i) PURCHASER is not a U.S. person as that term
is defined under Regulation S.
(ii) PURCHASER is outside the United States as of
the date of the execution and delivery of
this agreement.
(iii) PURCHASER is purchasing the Shares for its
own account and not on behalf of any U.S.
person, and the sale has not been
pre-arranged with purchaser in the United
States.
3
7
(iv) PURCHASER represents and warrants and hereby
agrees that all offers and sales of the
Shares prior to the expiration of a period
commencing on the date of the transaction and
ending 40 days thereafter shall only be made
in compliance with the safe harbor contained
in Regulation S, pursuant to registration of
securities under the Securities Act of 1933
or pursuant to an exemption from
registration, and all offers and sales after
the expiration of the 40 day period shall be
made only pursuant to such registration or to
such exemption from registration.
(v) The Shares have not been registered under the
Securities Act of 1933 and may not be offered
or sold in the United States or to U.S.
Persons unless the Shares are registered
under the Securities Act of 1933 or an
exemption from the registration requirements
is available.
(vi) PURCHASER acknowledges that the purchase of
the Shares involves a high degree of risk and
further acknowledges that it can bear the
economic risk of the purchase of the Shares,
including the total loss of its investment.
(vii) PURCHASER understands that the Shares are
being offered and sold to it in reliance on
specific exemptions from the registration
requirements of Federal and State securities
laws and that the ISSUER is relying upon the
truth and accuracy of the representations,
warranties, agreements, acknowledgements and
understandings of PURCHASER set forth herein
in order to determine the applicability of
such exemptions and the suitability of
PURCHASER to acquire the Shares.
(viii) PURCHASER is sufficiently experienced in
financial and business matters to be capable
of evaluating the merits and risks of its
investments, and to make an informed decision
relating thereto.
(ix) In evaluating its investment, PURCHASER has
consulted its own investment and/or legal
and/or tax advisors.
(x) PURCHASER understands that in the view of the
SEC the statutory basis for the exemption
claimed for this transaction would not be
present if the offering of Shares, although
in technical compliance with Regulation S, is
part of a plan or scheme to evade the
registration provisions of the 1933 Act.
PURCHASER is acquiring the Shares for
investment purposes and has no present
intention to sell the Shares in the United
States or to a U.S. Person
4
8
or for the account or benefit of a U.S.
Person either now or after the expiration of
the Restricted Period.
(xi) PURCHASER is not an underwriter of, or dealer
in, the Shares, and PURCHASER is not
participating, pursuant to a contractual
agreement, in the distribution of Shares.
(xii) During the Restricted Period (as hereinafter
defined), neither PURCHASER nor any of its
affiliates will, directly or indirectly,
maintain any short position in the securities
of the ISSUER.
b. CURRENT PUBLIC INFORMATION. PURCHASER acknowledges
that PURCHASER has been furnished with or has
acquired copies of the Company's most recent Annual
Report on the form 10-K filed with the Securities and
Exchange Commission and the forms 10-Q and 8-K filed
thereafter (collectively the "SEC Filings"), and
other publicly available documents.
c. INDEPENDENT INVESTIGATION; ACCESS. PURCHASER
acknowledges that PURCHASER, in making the decision
to purchase the Shares subscribed for, has relied
upon independent investigations made by it and it's
purchaser representatives, if any, and PURCHASER and
such representative, if any, have, prior to any sale
to it, been given access and the opportunity to
examine all material books and records of the
Corporation, all material contracts and documents
relating to this offering and an opportunity to ask
questions of, and to receive answers from ISSUER or
any person acting on its behalf concerning the terms
and conditions of this offering. PURCHASER and its
advisors, if any, have been furnished with access to
all publicly available materials relating to the
business, finances and operation of the ISSUER and
materials relating to the offer and sale of the
Shares which have been requested. PURCHASER and its
advisors, if any, have received complete and
satisfactory answers to any such inquiries.
d. NO GOVERNMENT RECOMMENDATION OR APPROVAL. PURCHASER
understands that no federal or state agency has
passed on or made any recommendation or endorsement
of the Shares.
e. ENTITY PURCHASERS. If PURCHASER is a partnership,
corporation or trust, the person executing the
Offshore Securities Subscription Agreement on its
behalf represents and warrants that:
(i) He or she has made due inquiry to determine
the truthfulness of the representations and
warranties made pursuant to this Offshore
5
9
Securities Subscription Agreement.
(ii) He or she is duly authorized (if the
undersigned is a trust, by the trust
agreement) to make this investment and to
enter into and execute this Offshore
Securities Subscription Agreement on behalf
of such entity.
3. ISSUER REPRESENTATIONS.
a. REPORTING COMPANY STATUS. ISSUER is a reporting
issuer as defined by Rule 902 of Regulation S.
ISSUER is in full compliance, to the extent
applicable, with all reporting obligations under
either Section 12(b), 12(g) or 15(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"). ISSUER has registered its common
stock pursuant to Section 12 of the Exchange Act and
the common stock trades on the American Stock
Exchange.
b. OFFSHORE TRANSACTION. ISSUER has not offered these
securities to any person in the United States or to
any U.S. person as that term is defined in
Regulation S.
c. NO DIRECTED SELLING EFFORTS. In regard to this
transaction, ISSUER has not conducted any "direct
selling efforts" as that term is defined in Rule 902
of regulation S nor has ISSUER conducted any general
solicitation relating to the offer and sale of the
within securities to persons resident within the
United States or elsewhere.
d. SHARES. The Shares when issued and delivered will
be duly and validly authorized and issued, fully paid
and non-assessable and will not be subject the
holders thereof to any liability by reason of being
such holders.
e. LEGALITY. The ISSUER has the requisite corporate
power and authority to enter into this Agreement and
to sell and deliver the Shares; this Agreement and
the issuance of the Shares have been duly and validly
authorized by all necessary corporate action by the
ISSUER; this Agreement has been duly and validly
executed and delivered by and on behalf of the
ISSUER, and is a valid and binding agreement of the
ISSUER, enforceable against it in accordance with its
terms, except as enforceability may be limited by
general equitable principles, bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other laws affecting creditors rights generally.
f. NON-CONTRAVENTION. The execution and delivery of
this Agreement and the consummation of the issuance
of the Shares, and the consummation of
6
10
the transactions contemplated by this Agreement by
the ISSUER do not and will not conflict with or
result in a breach by the ISSUER of any of the terms
or provisions of, or constitute a default under, the
Certificate of Incorporation or by-laws of the
ISSUER, or any material indenture, mortgage, deed of
trust, or other material agreement or instrument to
which the ISSUER is a party or by which it or any of
its properties or assets are bound or (assuming that
the representations and warranties of the PURCHASER in
Section 2 hereof, and the representations and
warranties of the distributor to the ISSUER, are true
and correct), any existing applicable U.S. law, rule,
or regulation or any applicable decrees, judgment or
order of any U.S. court, federal or state regulatory
body, administrative agency or other U.S.
governmental body having jurisdiction over the ISSUER
or any of its properties or assets, the conflict,
breach, violation or default of or under which would
have a material adverse effect on the ISSUER'S
business or financial condition.
g. PRIOR SHARE ISSUES UNDER REGULATION S. ISSUER has
not issued any shares of stock under Regulation S
subsequent to its current SEC filings except for
680,000 Shares on February 24, 1995.
h. FILINGS. The ISSUER undertakes and agrees to make
all necessary filings in connection with the sale of
the Shares as required by United States laws and
regulations or any domestic securities exchange or
trading market.
i. ABSENCE OF CERTAIN CHANGES. Since September 30,
1995, there has been no material adverse development
in the assets, liabilities, business, properties,
operations, financial condition or results of
operations of the ISSUER, except as disclosed in the
SEC filings or in Annex V.
4. SHARE CERTIFICATES.
a. The Company will cause the Certificates representing
the Shares to be delivered in escrow, free of restrictive legend, to Krieger &
Prager, Esqs. ("Escrow Agent") under the form of Joint Escrow Instructions
annexed hereto, until the forty-seventh (47th) day following the Closing.
b. If, solely as a result of the ISSUER'S wrongful
refusal to honor PURCHASER'S instruction, or wrongful refusal or failure to
transfer or issue the Shares, PURCHASER incurs any loss (other than any
consequential, indirect, incidental or special damages), the ISSUER shall
reimburse PURCHASER for such loss unless PURCHASER shall have breached any of
its representations, warranties or covenants set forth in this Agreement, or
otherwise taken or omitted to take actions, which actions or omissions
constitute gross negligence, bad faith or willful misconduct.
7
11
5. EXPIRATION OF RESTRICTED PERIOD.
The transaction restriction in connection with this offshore
offer and sale restricts the PURCHASER from offering and selling to U.S.
persons or for the account or benefit of a U.S. Person for a forty (40) day
period following the Closing Date ("Restricted Period"). The rules do not
require the placement of such a restrictive legend on the share certificate.
Rule 903(c)(2) governs the forty (40) day transaction restriction. In the
event that multiple subscriptions are accepted by the ISSUER, each separate
subscription agreement shall be deemed to be a separate offering under
Regulation S and the forty (40) day restriction period shall begin for each
transaction separately on the date payment is released to the ISSUER for that
specific transaction. Title to the Shares may be transferred by PURCHASERS to
other Non United States persons or entities in accordance with Regulation S.
6. EXEMPTION; RELIANCE ON REPRESENTATION. PURCHASER understands
that the offer and sale of the Shares is not being registered under the 1933
Act. ISSUER is relying on the rules governing offers and sales made outside
the United States pursuant to Regulation S. Rules 901 through 904 of the
Regulation S govern this transaction.
7. [OMITTED]
8. CLOSING DATE AND ESCROW AGENT. The date of the issuance of
the Shares and the sale of the Shares (the "Closing Date") shall be no later
than five (5) business days after execution hereof or such other mutually
agreed to time. Closing shall be effected through delivery of funds and
certificates to the Escrow Agent. PURCHASER shall forthwith deliver the
necessary funds as indicated in Paragraph 1 to the Escrow Agent. Share
Certificates will be delivered at the instructions of the Issuer to the Escrow
Agent, on a delivery versus payment basis.
9. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. PURCHASER
understands that ISSUER'S obligation to sell the Stock is conditioned upon:
a. The receipt and acceptance by ISSUER of this
Subscription Agreement for all of the Shares as
evidenced by execution of this Subscription Agreement
by the President or any Vice President or Treasurer
of the ISSUER. The acceptance of funds by the ISSUER
shall be deemed to be constructive acceptance of this
Subscription Agreement.
b. Delivery to the Escrow Agent by PURCHASER of good
funds as payment in full for the purchase of the
shares.
c. The accuracy on the Closing Date of the
representations and warranties of PURCHASER contained
in this Agreement and the performance by PURCHASER on
or before the Closing Date of all covenants and
agreements of PURCHASER required to be performed on
or before the
8
12
Closing Date.
d. There shall not be in effect any law, rule or
regulation prohibiting or restricting the
transactions contemplated hereby, or requiring any
consent or approval which shall not have been
obtained.
10. CONDITION TO PURCHASER'S OBLIGATION TO PURCHASE. ISSUER
understands that PURCHASER'S obligation to purchase the Stock is conditioned
upon:
a. Acceptance by PURCHASER of a Subscription Agreement
for the sale of Shares;
b. Delivery of shares of common stock to Escrow Agent
without restrictive legend.
c. The accuracy on the Closing Date of the
representations and warranties of the ISSUER
contained in this Agreement and the performance by
the ISSUER on or before the Closing Date of all
covenants and agreements of the ISSUER required to be
performed on or before the Closing Date; and
d. Delivery to the Escrow Agent of an opinion of counsel
for the ISSUER, dated the Closing Date and addressed
to PURCHASER, in the form attached hereto as ANNEX
III.
11. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to its choice
of law provision. A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto.
12. REGISTRATION OF THE SECURITIES. ISSUER hereby agrees that,
upon demand of holder of the Securities as a result of a regulatory development
including, but not limited to, an amendment or proposed amendment of Regulation
S, or any "no-action" or interpretive guidance whether oral or written from the
Securities and Exchange Commission, which call into question the ability of
PURCHASER to resell the Securities without registration, ISSUER will file, and
use its reasonable best efforts to cause to become effective a registration
statement on Form S-3 under the 1933 Act covering the resale of the Shares
issuable upon conversion of the Shares. Any such registration statement shall
remain effective for up to twelve (12) months, or until all of the Securities
are sold, whichever is earlier. The ISSUER shall provide the PURCHASER with
such number of copies of the prospectus as shall be reasonably requested to
facilitate the sale of the Shares issuable upon conversion of the Shares. The
ISSUER shall bear and pay all expenses incurred in connection with any such
registration, excluding discounts and commissions.
13. FURTHER OFFERINGS. ISSUER agrees that, for a period of 180
days from the
9
13
Closing Date, it will not offer for sale or sell any securities other than the
Shares issuable upon conversion of the Shares issued to the PURCHASER and to
other purchasers contemporaneously herewith, unless, in the opinion of ISSUER's
counsel, such offer or sale does not jeopardize the availability of exemptions
from the registration and qualification requirements under all applicable
securities laws with respect to the Shares. ISSUER hereby warrants that it has
not engaged in any such offering during the six months prior to the Closing
Date, except as disclosed in ANNEX V hereof.
14. NOTICES. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given upon personal delivery or three business days after deposit
in the United States Postal Service, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses, or at such other addresses as a party may
designate by ten days advance written notice to each of the other parties
hereto.
ISSUER: FORTUNE PETROLEUM CORPORATION
30101 Agoura Court, Suite 110
Agoura Hills, California 91301
PURCHASER: At the address set forth on the first page of this
Agreement.
ESCROW AGENT: Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
10
14
SIGNATURES FOR INDIVIDUAL SUBSCRIBER
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that he, she or they have executed this
Subscription Agreement this 7th day of December, 1995.
MENACHEM M. BEGUN MENACHEM M. BEGUN
- ------------------------------------ ------------------------------------
Printed Name Signature
- ------------------------------------ ------------------------------------
Printed Name Signature
11
15
SIGNATURES FOR INDIVIDUAL SUBSCRIBER
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that he, she or they have executed this
Subscription Agreement this 7th day of December, 1995.
___________________________________ ____________________________________
Printed Name Signature
SHULSMITH PRITAKER SHULSMITH PRITAKER
- ----------------------------------- ------------------------------------
Printed Name Signature
11
16
SIGNATURES FOR INDIVIDUAL SUBSCRIBER
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that he, she or they have executed this
Subscription Agreement this ______ day of ______________, 1995.
___________________________________ ____________________________________
Printed Name Signature
YACOV BARBER YACOV BARBER
- ----------------------------------- ------------------------------------
Printed Name Signature
11
17
SIGNATURES FOR INDIVIDUAL SUBSCRIBER
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that he, she or they have executed this
Subscription Agreement this 7th day of December, 1995.
ISRAEL MANDEL ISRAEL MANDEL
- ----------------------------------- ------------------------------------
Printed Name Signature
___________________________________ ____________________________________
Printed Name Signature
11
18
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the following
statements are true and correct and that it has caused the Subscription
Agreement to be duly executed on its behalf this 7th day of December, 1995.
ISRAEL MANDEL
-------------------------------------
Printed Name of Subscriber
By:
---------------------------------
(Signature of Authorized Person)
-------------------------------------
Printed Name and Title
Accepted this 11th day of the month of December 1995.
FORTUNE PETROLEUM CORPORATION
By: TYRONE J. FAIRBANKS
-----------------------------------
Title: President, CEO and CFO
-----------------------------
12
19
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the following
statements are true and correct and that it has caused the Subscription
Agreement to be duly executed on its behalf this ________ day of
___________________, 1995.
YACOV BARBER
-------------------------------------
Printed Name of Subscriber
By:
---------------------------------
(Signature of Authorized Person)
-------------------------------------
Printed Name and Title
Accepted this 11th day of the month of December 1995.
FORTUNE PETROLEUM CORPORATION
By: TYRONE J. FAIRBANKS
-----------------------------------
Title: President, CEO and CFO
-----------------------------
12
20
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the following
statements are true and correct and that it has caused the Subscription
Agreement to be duly executed on its behalf this 7th day of December, 1995.
SHULSMITH PRITAKER
-------------------------------------
Printed Name of Subscriber
By:
---------------------------------
(Signature of Authorized Person)
-------------------------------------
Printed Name and Title
Accepted this 11th day of the month of December 1995.
FORTUNE PETROLEUM CORPORATION
By: TYRONE J. FAIRBANKS
-----------------------------------
Title: President, CEO and CFO
-----------------------------
12
21
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the following
statements are true and correct and that it has caused the Subscription
Agreement to be duly executed on its behalf this 7th day of December, 1995.
MENACHEM M. BEGUN
-------------------------------------
Printed Name of Subscriber
By:
---------------------------------
(Signature of Authorized Person)
-------------------------------------
Printed Name and Title
Accepted this 11th day of the month of December, 1995.
FORTUNE PETROLEUM CORPORATION
By: TYRONE J. FAIRBANKS
-----------------------------------
Title: President, CEO and CFO
-----------------------------
12
22
ANNEX II
JOINT ESCROW INSTRUCTIONS
Dated as of the date of the Offshore
Securities Subscription Agreement to
Which These Joint Escrow
Instructions Are Attached
Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
Attention: Samuel M. Krieger, Esq.
RE: _______________________________
(Purchaser)
Dear Mr. Krieger:
As escrow agent for both Fortune Petroleum Corporation, a
______________ corporation (the "Company"), and the Purchaser (the
"Purchaser") of Shares of the Company, who is named in the Offshore Securities
Subscription Agreement (the "Agreement") between the Company and the Purchaser
to which a copy of these Joint Escrow Instructions is attached as Annex I (the
"Agreement"), you (hereafter, the "Escrow Agent") are hereby authorized and
directed to hold the documents and funds (together with any interest thereon,
the "Escrow Funds") delivered to the Escrow Agent pursuant to the terms of the
Agreement in accordance with the following instructions:
1. Upon its acceptance of the Subscription Agreement, the
Company shall deliver or cause to be delivered to Escrow Agent, common stock
share certificates ("Share Certificates") for ____________ Shares in
increments of 50,000 shares each, as provided in the Subscription Agreement.
2. The Escrow Agent shall, as promptly as feasible, notify the
Company of receipt of the purchase price from the Purchaser, and notify the
Purchaser (or such agent as the Purchaser may designate in writing) of receipt
of certificates for the Shares (each a "Certificate"
1
23
and collectively the "Certificates"). As promptly as feasible upon receipt of
notice (whether oral or in written form) from the Company and the Purchaser
that the respective conditions precedent to the purchase and sale have been
satisfied (which notice shall not be unreasonably withheld), the Escrow Agent
shall, after reduction by the amounts referred to in the next succeeding
sentence of this paragraph, release the Escrow Funds to or upon the order of
the Company (it being understood that such notice will be deemed given by the
Purchaser if no such notice is given to the Escrow Agent within two (2)
business days following delivery by telecopy of the photocopied Certificates)
and shall release the Certificates to the Purchaser. After receipt of such
notice, a portion of the Escrow Funds shall be released by the Escrow Agent
as follows: an amount equal to the fees due to Whitechapel Management Ltd.
("Distributor") and 1/2 of 1% of the Escrow Funds to the Escrow Agent, shall
be released to or upon the order of Escrow Agent. If such Certificates are not
deposited with the Escrow Agent within ten (10) days after receipt by the
Company of notice of receipt by the Escrow Agent of the funds from the
Purchaser, Escrow Agent shall notify the Purchaser and Purchaser shall be
entitled to cancel the subscription and demand repayment of the funds. If
the Company or the Purchaser notifies the Escrow Agent that on the Closing
Date (as defined in the Agreement) the conditions precedent to the obligations
of the Company or the Purchaser, as the case may be, under the Agreement were
not satisfied or waived, then the Escrow Agent shall return the Escrow Funds
to the Purchaser and shall return the Certificates to the Company. Prior to
return of the Escrow Funds to the Purchaser, the Purchaser shall furnish such
tax reporting or other information as shall be appropriate for the Escrow
Agent to comply with applicable United States laws. The Escrow Agent shall
deposit all funds received hereunder in the Escrow Agent's attorney escrow
account at The Bank of New York.
3. The Share Certificates delivered to the Escrow Agent pursuant
hereto shall be deposited for safekeeping with the Escrow Agent (the "Escrow
Account"). During the Escrow Period (hereinafter defined), none of the Share
Certificates deposited in the Escrow Account shall become the property of
Investor or any other entity or be subject to the debts of investor or any
other entity except as expressly provided herein, and the Escrow Agent shall
neither make nor permit any disbursements or deliveries from the Escrow
Account except as expressly provided herein.
4. The Escrow Period shall begin on the effective date of the
Subscription Agreement and, except as provided in Section 4 below, shall
continue until terminated on the 47th day after the Closing Date, or as
otherwise provided in Section 1 of the Subscription Agreement
Notwithstanding the foregoing, if there remain Share Certificates in the
Escrow Account, all such Share Certificates then remaining in the Escrow
Account shall forthwith be forwarded to the Company upon written request given
to Escrow Agent by the Company.
5. The Company shall deliver to the Escrow Agent appropriate
written notice of any extension or amendment to the Subscription Agreement.
6. The Escrow Agent's duties hereunder may be altered, amended,
modified or
2
24
revoked only by a writing signed by the Company, the Purchaser and the Escrow
Agent.
7. The Escrow Agent shall be obligated only for the performance
of such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed by the Escrow Agent to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall not be personally
liable for any act the Escrow Agent may do or omit to do hereunder as Escrow
Agent while acting in good faith, and any act done or omitted by the Escrow
Agent pursuant to the advice of the Escrow Agent's attorneys-at-law shall be
conclusive evidence of such good faith.
8. The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person
or corporation, excepting only orders or process of courts of law and is
hereby expressly authorized to comply with and obey orders, judgments or
decrees of any court. In case the Escrow Agent obeys or complies with any
such order, judgment or decree, the Escrow Agent shall not be liable to any
of the parties hereto or to any other person, firm or corporation by reason of
such decree being subsequently reversed, modified, annulled, set aside, vacated
or found to have been entered without jurisdiction.
9. The Escrow Agent shall not be liable in any respect on
account of the identity, authorities or rights of the parties executing or
delivering or purporting to execute or deliver the Agreement or any documents
or papers deposited or called for hereunder.
10. The Escrow Agent shall be entitled, at its own expense, to
employ such legal counsel and other experts as the Escrow Agent may deem
necessary properly to advise the Escrow Agent in connection with the Escrow
Agent's duties hereunder, may rely upon the advice of such counsel, and may
pay such counsel reasonable compensation therefor. The Escrow Agent has acted
as legal counsel for Purchaser and may continue to act as legal counsel for
Purchaser, from time to time, notwithstanding its duties as Escrow Agent
hereunder.
11. The Escrow Agent's responsibilities as Escrow Agent
hereunder shall terminate if the Escrow Agent shall resign by written notice
to the Company and the Purchaser. In the event of any such resignation, the
Purchaser and the Company shall appoint a successor Escrow Agent.
12. If the Escrow Agent reasonably requires other or further
instruments in connection with these Joint Escrow Instructions or
obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.
13. It is understood and agreed that should any dispute arise
with respect to the delivery and/or ownership or right of possession of the
documents or Escrow Funds held by the Escrow Agent hereunder, the Escrow
Agent is authorized and directed in the Escrow Agent's sole discretion (1) to
retain in the Escrow Agent's possession without liability to anyone all or
any part of said documents or Escrow Funds until such disputes shall have been
settled either
3
25
by mutual written agreement of the parties concerned or by a final order,
decree or judgment of a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but the Escrow Agent shall
be under no duty whatsoever to institute or defend any such proceedings or
(2) to deliver the Escrow Funds and any other property and documents held by
the Escrow Agent hereunder to a state or federal court having competent
subject matter jurisdiction and located in the State and City of New York
in accordance with the applicable procedure therefor.
14. The Company and the Purchaser agree jointly and severally to
indemnify and hold harmless the Escrow Agent from any and all claims,
liabilities, costs or expenses in any way arising from or relating to the
duties or performance of the Escrow Agent hereunder other than any such
claim, liability, cost or expense to the extent the same shall have been
determined by final, unappealable judgment of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of the Escrow Agent.
15. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or three business days after deposit in the
United States Postal Service, by registered or certified mail with postage
and fees prepaid, addressed to each of the other parties thereunto entitled
at the following addresses, or at such other addresses as a party may
designate by ten days advance written notice to each of the other parties
hereto.
COMPANY: Fortune Petroleum Corporation
30101 Agoura Court, Suite 110
Agoura, California 91301
ATT: General Counsel
PURCHASER: At the address set forth on the first page of the
Agreement.
ESCROW AGENT: Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
Telecopier No. (212) 213-2077
16. By signing these Joint Escrow Instructions, the Escrow Agent
becomes a party hereto only for the purpose of these Joint Escrow Instructions;
the Escrow Agent does not become a party to the Agreement. The Company and
the Purchaser have become parties hereto by their execution and delivery of
the Agreement, as provided therein.
17. This instrument shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted
assigns and shall be governed by the laws of the State of New York without
giving effect to principles governing the conflicts of laws. A facsimile
transmission of these instructions signed by the Escrow Agent shall be legal
and binding on all parties hereto.
4
26
18. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings provided in the Agreement.
19. The rights and obligations of any party hereto are not
assignable without the written consent of the other parties hereto.
ACCEPTED BY ESCROW AGENT:
KRIEGER & PRAGER
By:
----------------------------------
Date: December 7, 1995
--------------------------------
5