EXHIBIT 4.7
GASCO ENERGY, INC.
SUBSCRIPTION AND REGISTRATION RIGHTS AGREEMENT
This Subscription and Registration Rights Agreement (this "Agreement"),
dated as of _______, 2004, by and between Gasco Energy, Inc. (the "Company") and
______________ (the "Subscriber"), is intended to set forth certain
representations, covenants and agreements between the Company and the
Subscriber, with respect to the offering (the "Offering") for sale by the
Company of share of Common Stock, par value $.0001 per share (the "Common
Stock").
1. Subscription. Subject to the terms and conditions hereof, the
Subscriber hereby irrevocably subscribes for and agrees to purchase
from the Company ___________ shares of Common Stock (the "Shares") at
a purchase price of $1.50 per share (the "Offering Price"), and the
Company agrees to sell such Shares to the Subscriber at the Offering
Price.
2. Delivery of Subscription Amount; Acceptance of Subscription; Delivery
of Shares. Subscriber understands and agrees that this subscription is
made subject to the following terms and conditions:
(a) Contemporaneously with the execution and delivery of this
Agreement, Subscriber shall execute and deliver the Certificate
of Accredited Investor Status, and shall wire to the Company to
hold in a separate, non-interest bearing account, immediately
available funds in the amount equal to the Offering Price
multiplied by the number of Shares for which the Subscriber has
subscribed (the "Subscription Amount") in accordance with the
instructions set forth on Exhibit A hereto.
(b) The subscription for Shares shall be deemed to be accepted only
when this Agreement has been signed by an authorized officer of
the Company, and the deposit of the Subscription Amount for
clearance will not be deemed an acceptance of this Agreement;
(c) Certificates representing the Shares purchased will be issued in
the name of each Subscriber within 5 days of the consummation of
the Offering as set forth under Section 3 hereof; and
(d) The representations and warranties of the Company and Subscriber
set forth herein shall be true and correct as of the date that
the Company accepts this subscription.
3. Terms of Subscription.
(a) The consummation of the Offering (the "Closing") will occur on
___________, 2004, or such later date as the parties hereto shall
mutually agree (the "Closing Date").
(b) If the Subscriber is not a United States person, the Subscriber
hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this
Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Shares, (ii) any foreign
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exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may
be relevant to the purchase, holding, redemption, sale or
transfer of the Shares. The Subscriber's subscription and payment
for, and his or her continued beneficial ownership of the Shares,
will not violate any applicable securities or other laws of the
Subscriber's jurisdiction.
4. Registration Rights.
(a) Subscriber acknowledges that it is acquiring the Shares for its
own account and for the purpose of investment and not with a view
to any distribution or resale thereof within the meaning of the
Securities Act of 1933, as amended, (the "Securities Act"). The
Subscriber further agrees that it will not sell, assign or
transfer the Shares at any time in violation of the Securities
Act and acknowledges that, in taking unregistered securities, it
must continue to bear the economic risk of its investment for an
indefinite period of time because of the fact that the Shares
have not been registered under the Securities Act, and further
realizes that the Shares can not be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available. The Subscriber further recognizes that
the Company is not assuming any obligation to register the Shares
except as expressly set forth herein. The Subscriber also
acknowledges that appropriate legends reflecting the status of
the Shares under the Securities Act may be placed on the face of
the certificates for such shares at the time of their transfer
and delivery to the holder thereof.
(b) The Shares may not be transferred except in a transaction which
is in compliance with the Securities Act. Except as provided
hereafter with respect to registration of the Shares, it shall be
a condition to any such transfer that the Company shall be
furnished with an opinion of counsel to the holder of such
shares, reasonably satisfactory to the Company, to the effect
that the proposed transfer would be in compliance with the
Securities Act.
(c) On or prior to April 19, 2004 (the "Filing Date"), the Company
shall use its commercially reasonable efforts to prepare and file
with the Securities and Exchange Commission (the "SEC"), a
registration statement and such other documents as may be
necessary in the opinion of counsel for the Company, and use its
commercially reasonable efforts to have such registration
statement declared effective within 65 days after the Filing Date
in order to comply with the provisions of the Securities Act so
as to permit the registered resale of the Shares for a period of
two (2) years following the Closing Date by Subscriber. The
Shares that are registered for resale under such registration
statement are referred to herein as the "Offering Shares," and
the Subscriber, together with its affiliates, are hereafter
referred to as "Offering Holders." The Company will include in
such registration statement (i) the information required under
the Securities Act to be so included concerning the Offering
Holders, as provided by the Offering Holders on the signature
page hereto, including any changes in such information that may
be provided by the Offering Holders in writing to the Company
from time to time, and (ii) a section entitled "Plan of
Distribution," substantially in the form of Exhibit C hereto,
that describes the various procedures that may be used by the
Offering Holders in the sale of Shares. Notwithstanding anything
to the contrary in this Section 4, the Company may, at its
option, terminate such registration statement at any time after a
period of one year following the Closing Date, if at such time no
Offering Holder beneficially owns more than 1,000,000 of the
Shares that such Offering Holder purchased in the Offering.
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(d) If the registration statement referred to in Section 4(c) above
has not been declared effective by the SEC within 65 days after
the Filing Date and the cause of the delay is not related to
circumstances beyond the Company's control (such as failure of
the SEC to review and act on the registration statement or
amendments to the registration statement in a timely manner), the
Company shall pay liquidated damages of 1% of the Offering Price
per share for every Share for each 30 day period of delay
following such initial 65 day period ("Liquidated Damages"). For
any period of delay that is less than 30 days, the Company shall
pay liquidated damages equal to the product of 1% of the Offering
Price multiplied by the quotient of such number of days of delay
divided by 30, and such amount shall be included in the total of
Liquidated Damages. The foregoing payment shall constitute the
sole monetary remedy available to the Subscriber in the event
that the Company does not comply with the deadlines set forth in
Section 4(c) with respect to the filing and effectiveness of the
registration statement referred to therein.
(e) Notwithstanding the foregoing provisions of this Section 4, the
Company may voluntarily suspend the effectiveness of any such
registration statement for a limited time, which in no event
shall be longer than 60 days in any three-month period and no
longer than 120 days in any twelve month period, if the Company
has been advised in writing by counsel or underwriters to the
Company that the offering of any Offering Shares pursuant to the
registration statement would materially adversely affect, or
would be improper in view of (or improper without disclosure in a
prospectus), a proposed financing, a reorganization,
recapitalization, merger, consolidation, or similar transaction
involving the Company. If any event occurs that would cause any
such registration statement to contain a material misstatement or
omission or not to be effective and usable during the period that
such registration statement is required to be effective and
usable, the Company shall promptly file an amendment to the
registration statement and use its commercially reasonable
efforts to cause such amendment to be declared effective as soon
as practicable thereafter. Notwithstanding any provision
contained herein to the contrary, the Company's obligation to
include, or continue to include, Offering Shares in any such
registration statement under this Section 4 shall terminate to
the extent such shares are eligible for resale under Rule 144(k)
promulgated under the Securities Act.
(f) If and whenever the Company is required by the provisions of this
Agreement to use its commercially reasonable efforts to effect
the registration of the Offering Shares under the Securities Act
for the account of an Offering Holder, the Company will, as
promptly as possible:
(i) prepare and file with the SEC a registration statement with
respect to such securities and use its commercially
reasonable efforts to cause such registration statement to
become and remain effective;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply
with the requirements of the Securities Act and the rules
and regulations promulgated by the SEC thereunder relating
to the sale or other disposition of the securities covered
by such registration statement; and
(iii)furnish to each Offering Holder such numbers of copies of a
prospectus, including a preliminary prospectus, complying
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with the requirements of the Securities Act, and such other
documents as such Offering Holder may reasonably request in
order to facilitate the public sale or other disposition of
the Offering Shares owned by such Offering Holder, but such
Offering Holder shall not be entitled to use any selling
materials other than a prospectus and such other materials
as may be approved by the Company, which approval will not
be unreasonably withheld.
(g) Except as provided below in this Section 4, the expenses incurred
by the Company in connection with action taken by the Company to
comply with this Section 4, including, without limitation, all
registration and filing fees, printing and delivery expenses,
accounting fees, fees and disbursements of counsel to the
Company, consultant and expert fees, premiums for liability
insurance, if the Company chooses to obtain such insurance,
obtained in connection with a registration statement filed to
effect such compliance and all expenses, including counsel fees,
of complying with any state securities laws ("State Acts"), shall
be paid by the Company. All fees and disbursements of any
counsel, experts, or consultants employed by any Offering Holder
shall be borne by such Offering Holder. The Company shall not be
obligated in any way in connection with any registration pursuant
to this Section 4 for any selling commissions or discounts
payable by any Offering Holder to any underwriter or broker of
securities to be sold by such Offering Holder. Subscriber agrees
to pay all expenses required to be borne by such Offering Holder.
(h) In the event of any registration of Shares pursuant to this
Section 4, the Company will indemnify and hold harmless each
Offering Holder, its officers, directors, investment advisors and
each underwriter of such securities, and any person who controls
such Offering Holder or underwriter within the meaning of Section
15 of the Securities Act, against all claims, actions, losses,
damages, liabilities and expenses, joint or several, to which any
of such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement of
any material fact contained in any registration statement under
which such securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are
based upon the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein
not misleading, and will reimburse such Offering Holder, its
officers, directors and each underwriter of such securities, and
each such controlling person or entity for any legal and any
other expenses reasonably incurred by such Offering Holder, such
underwriter, or such controlling person or entity in connection
with investigating or defending any such loss, action, claim,
damage, liability, or action; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises directly out of
or is based primarily upon an untrue statement or omission made
in said registration statement, said preliminary prospectus or
said prospectus, or said amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by such Offering Holder or such underwriter specifically
for use in the preparation thereof, and provided further however,
that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability or action
arises directly out of or is based primarily upon an untrue
statement or omission made in any preliminary prospectus or final
prospectus if (i) such Offering Holder failed to send or deliver
a copy of the final prospectus or prospectus supplement with or
prior to the delivery of written confirmation of the sale of the
Offering Shares, and (ii) the final prospectus or prospectus
supplement would have corrected such untrue statement or
omission.
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(i) At any time when a prospectus relating to the Offering is
required to be delivered under the Securities Act, the Company
will notify the Offering Holder of the happening of any event,
upon the notification or awareness of such event by an executive
officer of the Company, as a result of which the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances then existing.
(j) In the event of any registration of any Shares under the
Securities Act pursuant to this Section 4, Subscriber agrees to
indemnify and hold harmless the Company, its officers, directors
and any person who controls the Company within the meaning of
Section 15 of the Securities Act, against any losses, claims,
damages, liabilities, or actions, joint or several, to which the
Company, its officers, directors, or such controlling person or
entity may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities, or actions
arise out of or are based upon any untrue statement of any
material fact contained in any registration statement under which
such Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent and only to the extent
that any such loss, claim, damage, liability, or action arises
out of or is based upon an untrue statement or omission made in
said registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement in reliance upon and
in conformity with written information furnished to the Company
by Subscriber or any affiliate (as defined in the Securities Act)
of Subscriber specifically for use in the preparation thereof.
(k) Any party entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to
the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent
(which consent may not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim.
(l) With a view to making available to the Offering Holder the
benefits of Rule 144 promulgated under the Securities Act, the
Company agrees that it will use its commercially reasonable
efforts to maintain registration of its Common Stock under
Section 12 or 15 of the Securities and Exchange Act of 1934, as
amended, (the "Exchange Act") and to file with the SEC in a
timely manner all reports and other documents required to be
filed by an issuer of securities registered under the Exchange
Act so as to maintain the availability of Rule 144. Upon the
request of any record owner, the Company will deliver to such
owner a written statement as to whether it has complied with the
reporting requirements of Rule 144.
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5. Representations and Warranties of the Subscriber. Subscriber hereby
represents and warrants to the Company as follows:
(a) Subscriber is acquiring the Shares for its own account, for
investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the
meaning of the Securities Act, and applicable state securities
laws.
(b) The Subscriber understands that (A) the Shares (1) have not been
registered under the Securities Act or any state securities laws,
(2) will be issued in reliance upon an exemption from the
registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) and/or Regulation D
thereof and (3) will be issued in reliance upon exemptions from
the registration and prospectus delivery requirements of state
securities laws which relate to private offerings, and (B) the
Subscriber must therefore bear the economic risk of such
investment indefinitely unless a subsequent disposition thereof
is registered under the Securities Act and applicable state
securities laws or is exempt therefrom. Subscriber further
understands that such exemptions depend upon, among other things,
the bona fide nature of the investment intent of the Subscriber
expressed herein. Pursuant to the foregoing, the Subscriber
acknowledges that the certificates representing the Shares shall
bear a restrictive legend substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS (I) REGISTERED UNDER THE
APPLICABLE SECURITIES LAWS OR (II) AN OPINION OF COUNSEL,
WHICH OPINION AND COUNSEL ARE BOTH REASONABLY SATISFACTORY
TO THE COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH
OPINION STATES THAT THE SHARES MAY BE TRANSFERRED WITHOUT
SUCH REGISTRATION."
(c) The Subscriber has knowledge, skill and experience in financial,
business and investment matters relating to an investment of this
type and is capable of evaluating the merits and risks of such
investment and protecting the Subscriber's interest in connection
with the acquisition of the Shares. The Subscriber understands
that the acquisition of the Shares is a speculative investment
and involves substantial risks and that the Subscriber could lose
the Subscriber's entire investment in the Shares. To the extent
deemed necessary by the Subscriber, the Subscriber has retained,
at its own expense, and relied upon, appropriate professional
advice regarding the investment, tax and legal merits and
consequences of purchasing and owning the Shares. The Subscriber
has the ability to bear the economic risks of the Subscriber's
investment in the Company, including a complete loss of the
investment, and the Subscriber has no need for liquidity in such
investment.
(d) The Subscriber has been furnished by the Company all information
(or provided access to all information) regarding the business
and financial condition of the Company, its expected plans for
future business activities, the attributes of the Shares and the
merits and risks of an investment in the Shares which the
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Subscriber has requested or otherwise need to evaluate the
investment in the Company.
(e) Subscriber is in receipt of and has carefully read and
understands the following items:
(i) Annual Report on Form 10-K for the period ending December
31, 2002, filed by the Company with the Securities and
Exchange Commission on March 31, 2003;
(ii) Quarterly Reports on Form 10-Q for each of the periods
ending March 31, 2003, June 30, 2003 and September 30, 2003
filed by the Company with the Securities and Exchange
Commission on May 15, 2003, August 13, 2003 and November 10,
2003, respectively;
(iii)Definitive Proxy Statement on Form 14A, filed by the
Company with the Securities and Exchange Commission on
August 25, 2003; and,
(iv) Current Reports on Form 8-K filed by the Company with the
Securities and Exchange Commission on April 9, 2003, June 6,
2003, October 15, 2003, October 16, 2003, October 24, 2003,
November 6, 2003, December 2, 2003, December 23, 2003 and
January 21, 2004; (together with the exhibits thereto,
collectively, items (i) through (iv), the "Disclosure
Documents").
(f) In making the proposed investment decision, the Subscriber is
relying solely on investigations made by the Subscriber and the
Subscriber's representatives. The Subscriber acknowledges that
documents listed in Section 5(e) are the only information
provided to the Subscriber by the Company and that the Subscriber
is not relying on any other information in making the proposed
investment decision. The offer to sell the Shares was
communicated to the Subscriber in such a manner that the
Subscriber was able to ask questions of and receive answers from
the management of the Company concerning the terms and conditions
of the proposed transaction and that at no time was the
Subscriber presented with or solicited by or through any leaflet,
public promotional meeting, television advertisement or any other
form of general or public advertising or solicitation.
(g) The Subscriber acknowledges that the Subscriber has been advised
that:
(i) The Shares offered hereby have not been approved or
disapproved by the SEC or any state securities commission
nor has the SEC or any state securities commission passed
upon the accuracy or adequacy of any representations by the
Company. Any representation to the contrary is a criminal
offense.
(ii) In making an investment decision, the Subscriber must rely
on its own examination of the Company and the terms of the
Offering, including the merits and risks involved. The
Shares have not been recommended by any federal or state
securities commission or regulatory authority. Furthermore,
the foregoing authorities have not confirmed the accuracy or
determined the adequacy of any representation. Any
representation to the contrary is a criminal offense.
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(iii)The Shares are "Restricted Securities" within the meaning of
Rule 144 under the Securities Act, are subject to
restrictions on transferability and resale and may not be
transferred or resold except as permitted under the
Securities Act and applicable state securities laws,
pursuant to registration or exemption therefrom. The
Subscriber is aware that the Subscriber may be required to
bear the financial risks of this investment for an
indefinite period of time.
(h) The Subscriber acknowledges and is aware that there has never
been any representation, guarantee or warranty made by the
Company or any officer, director, employee or agent or
representative of the Company, expressly or by implication, as to
(i) the approximate or exact length of time that the Subscriber
will be required to remain an owner of the Shares (ii) the
percentage of profit and/or amount of or type of consideration,
profit or loss to be realized, if any, as a result of this
investment; or (iii) that the limited past performance or
experience on the part of the Company, or any future expectations
will in any way indicate the predictable results of the ownership
of the Shares or of the overall financial performance of the
Company.
(i) The Subscriber agrees to furnish the Company such other
information as the Company may reasonably request in order to
verify the accuracy of the information contained herein and
agrees to notify the Company immediately of any material change
in the information provided herein that occurs prior to the
Company's acceptance of this Agreement.
(j) The Subscriber further represents and warrants that the
Subscriber is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act, and Subscriber has
executed the Certificate of Accredited Investor Status, attached
hereto as Exhibit B.
(k) As of the date of this Agreement the Subscriber and its
affiliates do not have, and during the 30 day period prior to the
date of this Agreement the Subscriber and its affiliates have not
entered into, any "put equivalent position" as such term is
defined in Rule 16a-1 of under the Exchange Act or short sale
positions with respect to the Common Stock of the Company.
The foregoing representations and warranties and undertakings are made by
the Subscriber with the intent that they be relied upon in determining its
suitability as an investor and the Subscriber hereby agrees that such
representations and warranties shall survive its purchase of the Shares.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Subscriber as follows:
(a) The Company is duly incorporated, validly existing and in good
standing under the laws of its state of incorporation, and is
duly qualified to do business as a foreign corporation in all
jurisdictions in which the failure to be so qualified would
materially and adversely affect the business or financial
condition, properties or operations of the Company. The Company
has all requisite corporate power and authority (i) to own and
lease the properties and assets it currently owns and leases (if
any) and it contemplates owning and leasing and (ii) to conduct
its activities as such activities (if any) are currently
conducted and as currently contemplated to be conducted.
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(b) The authorized capital of the Company immediately prior to the
Closing will consist of: (i) 5,000,000 shares of Preferred Stock,
of which 1,000 shares are designated as Series A Preferred Stock,
none of which are issued and outstanding, and of which 20,000
shares are designated as Series B Preferred Stock, 11,734 of
which are issued and outstanding, and (ii) 100,000,000 shares of
Common Stock, 45,602,236 of which were issued and outstanding as
of December 31, 2003.
(c) The Company has duly authorized the issuance and sale of the
Shares in accordance with the terms of this Agreement (as
described herein) by all requisite corporate action, including
the authorization of the Company's Board of Directors of the
issuance and sale of the Shares in accordance herewith and the
execution, delivery and performance of any other agreements and
instruments executed in connection herewith. This Agreement
constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by
laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained herein may be
limited by applicable federal or state securities laws.
(d) The Shares, when issued and paid for in accordance with this
Agreement, will represent validly authorized, duly issued and
fully paid and nonassessable shares of Common Stock of the
Company, and the issuance thereof will not conflict with the
certificate of incorporation or bylaws of the Company and will be
in full compliance with all federal and state securities laws
applicable to such issuance and sale.
(e) The execution and delivery of this Agreement, the fulfillment of
the terms set forth herein and the consummation of the
transactions contemplated hereby will not conflict with, or
constitute a breach of or default under, any agreement, indenture
or instrument by which the Company is bound or any law,
administrative rule, regulation or decree of any court or any
governmental body or administrative agency applicable to the
Company.
(f) As of the date of this Agreement, the Disclosure Documents do not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Disclosure Documents that have been filed with the SEC, at
the time they were filed with the SEC, complied in all material
respects with the requirements of the Exchange Act, and, when
read together and with the other information in the Disclosure
Documents, do not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(h) Subsequent to the dates as of which information is given in the
Disclosure Documents, except as described therein, there has not
been any material adverse change with regard to the assets or
properties, results of operations or financial condition of the
Company.
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7. Survival; Indemnification. All representations, warranties and
covenants contained in this Agreement and the indemnification
contained in this Section 7 shall survive (i) the acceptance of this
Agreement by the Company, (ii) changes in the transactions, documents
and instruments described herein which are not material or which are
to the benefit of Subscriber, and (iii) the death or disability of
Subscriber. Subscriber acknowledges the meaning and legal consequences
of the representations, warranties and covenants in Section 5 hereof
and that the Company has relied upon such representations, warranties
and covenants in determining Subscriber's qualification and
suitability to purchase the Shares. Subscriber hereby agrees to
indemnify, defend and hold harmless the Company, its officers,
directors, employees, agents and controlling persons, from and against
any and all losses, claims, damages, liabilities, expenses (including
attorneys' fees and disbursements), judgments or amounts paid in
settlement of actions arising out of or resulting from the untruth of
any representation of Subscriber herein or the breach of any warranty
or covenant herein by Subscriber. Notwithstanding the foregoing,
however, no representation, warranty, covenant or acknowledgment made
herein by Subscriber shall in any manner be deemed to constitute a
waiver of any rights granted to it under the Securities Act or state
securities laws.
8. Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return
receipt requested, postage prepaid:
(a) if to the Company, to the following address:
Gasco Energy, Inc.
14 Inverness Drive East
Building H, Suite 236
Englewood, CO 80112
Attn: Peggy Herald
Telephone: (303) 483-0044
(b) if to Subscriber, to the address set forth on the signature page
hereto.
(c) or at such other address as any party shall have specified by
notice in writing to the others.
9. Notification of Changes. Subscriber agrees and covenants to notify the
Company immediately upon the occurrence of any event prior to the
consummation of this Offering that would cause any representation,
warranty, covenant or other statement contained in this Agreement to
be false or incorrect or of any change in any statement made herein
occurring prior to the consummation of this Offering.
10. Assignability. This Agreement is not assignable by the Subscriber, and
may not be modified, waived or terminated except by an instrument in
writing signed by the party against whom enforcement of such
modification, waiver or termination is sought.
11. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal
representatives and assigns, and the agreements, representations,
warranties and acknowledgments contained herein shall be deemed to be
made by and be binding upon such heirs, executors, administrators,
successors, legal representatives and assigns.
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12. Obligations Irrevocable. The obligations of the Subscriber shall be
irrevocable, except with the consent of the Company, until the
consummation or termination of the Offering.
13. Entire Agreement. This Agreement constitutes the entire agreement of
the Subscriber and the Company relating to the matters contained
herein, superseding all prior contracts or agreements, whether oral or
written.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without regard to
the principles of conflicts of law thereof that would require the
application of the laws of any jurisdiction other than Colorado.
15. Severability. If any provision of this Agreement or the application
thereof to Subscriber or any circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other subscriptions or circumstances
shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.
16. Headings. The headings in this Agreement are inserted for convenience
and identification only and are not intended to describe, interpret,
define, or limit the scope, extent or intent of this Agreement or any
provision hereof.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which together shall be deemed to
be one and the same agreement.
18. Counsel. Subscriber hereby acknowledges that the Company and its
counsel, Vinson & Elkins L.L.P., represent the interests of the
Company and not those of the Subscriber in any agreement (including
this Agreement) to which the Company is a party.
[Signature Page to follow]
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IN WITNESS WHEREOF, Subscriber has executed this Subscription and
Registration Rights Agreement as of ___________________, 2004.
SUBSCRIBER
Number of Shares: ____________________
Offering Price per Share: $1.50
Subscription Amount: $_______________________
By: _________________________________________
Name:_________________________________________
Title:________________________________________
Address: ____________________________________
The Company hereby accepts the foregoing subscription subject to the terms
and conditions hereof as of ______________, 2004.
Gasco Energy, Inc.
a Nevada corporation
By:____________________________________________
Mark A. Erickson, President and
Chief Executive Officer
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Exhibit A
HOW TO SUBSCRIBE
(1) If you are subscribing for the purchase of Shares, please date and
sign the signature page to this Subscription and Registration Rights Agreement
in the applicable spaces. Please signify the amount of Shares you are purchasing
by inserting such amount in the space provided for on the signature page to the
Agreement.
(2) Complete and sign the accompanying Accredited Investor Certificate.
(3) Send all completed documents to:
Gasco Energy, Inc.
14 Inverness Drive East
Building H, Suite 236
Englewood, CO 80112
Attn: Peggy Herald
Telephone: (303) 483-0044
(4) Transmit funds in an amount equal to the number of Shares you are
purchasing multiplied by the Offering Price via wire to the following account:
Domestic
Usbank
601 2nd Ave. South
Minneapolis, MN 55402-7020
ABA 091-000-022
Piper Jaffray Inc.
Acct # 1731-0311-4547
For Further Credit To: Gasco Energy Offering Proceeds
3595-9612 EH08
Foreign
Us Bank MNPLS
Swift USBKUS441MT
Acct # 1731-0311-4547 Piper Jaffray
For Further Credit To: ___Gasco Energy Offering Proceeds
_________ 3595-9612 EH08
ATTENTION SUBSCRIBERS: NO SUBSCRIPTION WILL BE ACCEPTED UNLESS ALL DOCUMENTATION
PRESCRIBED HEREIN IS FULLY COMPLETED AND EXECUTED. ANY MATERIALS RECEIVED THAT
ARE INCOMPLETE IN ANY RESPECT WILL BE RETURNED BY THE COMPANY.
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Exhibit B
CERTIFICATE OF ACCREDITED INVESTOR STATUS
Except as may be indicated by the undersigned below, the undersigned is
an individual "accredited investor," as that term is defined in Regulation D
under the Securities Act of 1933, as amended (the "Securities Act"). The
undersigned has checked the box below indicating the basis on which he is
representing his status as an "accredited investor":
__ a 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; a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the "Securities Exchange
Act"); an insurance company as defined in Section 2(13) of the Securities
Act; an investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48) of
that Act; a 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; a 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, and such plan has
total assets in excess of $5,000,000; an 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 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 investors";
__ a private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940;
__ an 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;
__ a natural person whose individual net worth, or joint net worth with the
undersigned's spouse, at the time of this purchase exceeds $1,000,000;
__ a natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with the undersigned'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;
__ a trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
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directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of
the prospective investment; or
__ an entity in which all of the equity holders are "accredited investors" by
virtue of their meeting one or more of the above standards.
__ an individual who is a director or executive officer of Gasco Energy, Inc.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Accredited Investor Status effective as of __________________, 2004.
____________________________________
Name of Subscriber
By: ________________________
Name: ______________________
Title: _______________________
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Exhibit C
PLAN OF DISTRIBUTION
As of the date of this prospectus, we have not been advised by the selling
stockholders as to any plan of distribution. Distributions of the shares by the
selling stockholders, or by their partners, pledgees, donees (including
charitable organizations), transferees or other successors in interest, may from
time to time be offered for sale either directly by such individual, or through
underwriters, dealers or agents or on any exchange on which the shares may from
time to time be traded, in the over-the-counter market, or in independently
negotiated transactions or otherwise. The methods by which the shares may be
sold include:
o a block trade (which may involve crosses) in which the broker or
dealer so engaged will attempt to sell the securities as agent but may
position and resell a portion of the block as principal to facilitate
the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its own account pursuant to this prospectus;
o exchange distributions and/or secondary distributions;
o sales in the over-the-counter market;
o underwritten transactions;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o privately negotiated transactions.
Such transactions may be effected by the selling stockholders at market
prices prevailing at the time of sale or at negotiated prices. The selling
stockholders may effect such transactions by selling the Common Stock to
underwriters or to or through broker-dealers, and such underwriters or
broker-dealers may receive compensations in the form of discounts or commissions
from the selling stockholders and may receive commissions from the purchasers of
the Common Stock for whom they may act as agent. The selling stockholders may
agree to indemnify any underwriter, broker-dealer or agent that participates in
transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. We have agreed to
register the shares for sale under the Securities Act and to indemnify the
selling stockholders and each person who participates as an underwriter in the
offering of the shares against certain civil liabilities, including certain
liabilities under the Securities Act.
In connection with sales of the Common Stock under this prospectus, the
selling stockholders may enter into hedging transactions with broker-dealers,
who may in turn engage in short sales of the Common Stock in the course of
hedging the positions they assume. The selling stockholders also may sell shares
of Common Stock short and deliver them to close our the short positions, or loan
or pledge the shares of Common Stock to broker-dealers that in turn may sell
them.
The selling stockholders and any underwriters, dealers or agents that
participate in distribution of the shares may be deemed to be underwriters, and
any profit on sale of the shares by them and any discounts, commissions or
concessions received by any underwriter, dealer or agent may be deemed to be
underwriting discounts and commissions under the Securities Act.
There can be no assurances that the selling stockholders will sell any or
all of the shares offered under this prospectus.
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