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EXHIBIT 10.1
THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE
AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO PURCHASE ANY OF THE SECURITIES
REFERRED TO HEREIN.
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION
AGREEMENT (this "Subscription Agreement") is entered
into by and between the Investor signing the Signature Page
attached hereto and
Blackwater Midstream Corp., a Nevada corporation (the
"Corporation"). The
Corporation is offering for the sale of restricted shares of Common
Stock at a
price of $.25 per share. For each 4 shares subscribed to, the
investor will
receive 1 free share of Common Stock. The Investor subscribes for
and agrees to
purchase the following:
Name of
Investor:
_____________________________
Number of Shares
Subscribed For:
_____________________________
Cash Purchase Price
($0.25/ share): _____________________________
Address of
Investor:
___________________________________
___________________________________
The amount of cash or
good funds as tender of the purchase price for the
Shares is enclosed (in the case of a check, the check should be
payable to the
order of "Blackwater Midstream Corp.") or will be sent via wire
transfer to the
Corporation's account.
INVESTOR RIGHTS
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1. ANTI-DILUTION
RIGHTS. Except for "Excluded Securities" described
below, in the event that the Corporation conducts any private
placement of
shares of common stock for cash consideration at a price of less
than $0.25 per
share, as adjusted for splits, combinations and similar events (the
"Base
Price"), during the first year following the Investor's purchase of
the Shares
(a "Dilutive Issuance"), so long as the Investor currently owns the
Shares, then
Investor shall be entitled to receive for each Share purchased
hereunder owned
as of the date of the Dilutive Issuance (the "Base Shares"), and
for no
additional consideration, an additional amount of shares of common
stock of the
Corporation equal to (i) the number of Base Shares divided by (ii)
(X +Y)/(X+Z)
minus (iii) the number of Base Shares, where:
X equals the
number of common shares outstanding prior to the Dilutive
Issuance;
Y equals the gross
proceeds to the Corporation in the Dilutive Issuance
divided by the
Base Price; and
Z equals the
number of shares sold in the Dilutive Issuance.
The anti-dilution provision of this Section 1 shall not apply to
the issuance of
any shares of capital stock of the Corporation (i) issued upon the
exercise of
any options, warrants or similar rights outstanding as of the date
of this
Agreement or to be issued pursuant to the 2008 Employee Incentive
Plan to the
maximum of the currently reserved issuance there under, (ii) issued
and sold in
any public offering, (iv) issued as a result of this Section 1
(collectively,
the "Excluded Securities").
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2. PREEMPTIVE
RIGHTS. In the event that the Corporation conducts any
private placement sale of shares of common stock during the first
year following
the Investor's purchase of the Shares, and provided the Investor is
still the
owner of all Shares purchased hereunder, the Investor shall be
entitled to
purchase his pro rata portion of the shares offered for sale in the
private
placement. An Investor's pro rata share shall be equal to the
number of shares
offered for sale in the private placement multiplied by the
Investor's
percentage ownership of the outstanding shares of common stock
immediately prior
to such private placement. The Corporation shall provide the
Investor fifteen
(15) days advance notice, including the material terms of such
offering, and the
Investor shall provide its binding commitment to purchase its pro
rata portion
no later than the 10th day following receipt of such notice. The
Investor's
rights hereunder are subject to the completion of the private
placement by the
Corporation- and in the event the Corporation decides to abandon
the private
placement for any reason the Investor's rights and commitment to
purchase such
shares shall become null arid void. The provisions of this Section
2 shall not
apply to the issuance of any Excluded Securities.
INVESTOR REPRESENTATIONS
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The Investor hereby
represents and warrants to, and covenants with, the
Corporation as follows, recognizing that the Corporation will rely
to a material
degree on such representations, warranties and covenants, each of
which shall
survive any acceptance of this subscription in whole or in part by
the
Corporation and the issuance and sale of any Shares to the
Investor:
1. ORGANIZATION
AND GOOD STANDING. The Investor, if the Investor is a
corporation. partnership, trust or other entity, is duly organized,
validly
existing and in good standing under the laws of the jurisdiction of
its
organization and has full power, authority and legal right to
execute, deliver
and perform its obligations under this Subscription Agreement.
2. AGREEMENT DULY
AUTHORIZED. The execution, delivery and performance
by the investor of this Subscription Agreement has been duly
authorized by all
necessary action, this Subscription Agreement has been duly
executed and
delivered, and, when executed and delivered by the Corporation,
this
Subscription Agreement will constitute the legal, valid, binding
and enforceable
obligation of the Investor, subject to bankruptcy; insolvency,
reorganization,
moratorium, fraudulent conveyance or other similar laws,
regulations or
procedures of general applicability now or hereafter in effect
relating to or
affecting creditors' or other obligees' rights generally and
subject, as to
enforceability, to general principles of equity (regardless of
whether
enforcement is sought in a proceeding in equity or at law).
3. SOPHISTICATION
OF INVESTOR. The Investor either (i) has a
pre-existing personal or business relationship with the Corporation
or its
controlling persons, such as would enable a reasonably prudent
purchaser to be
aware of the character and general business and financial
circumstances of the
Corporation or its controlling persons, or (ii) by reason of the
Investor's
business or financial experience, individually or in conjunction
with the
Investor's unaffiliated professional advisors who are not
compensated by the
Corporation or any affiliate: or selling agent of the Corporation,
directly or
indirectly, is capable of evaluating the merits and risks of an
investment in
the Shares, making an informed investment decision and protecting
the Investor's
own interests in connection with the transactions contemplated
hereby.
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4. STATEMENTS OF
INVESTOR TRUE AND ACCURATE. All statements and
representations made in Annex I attached hereto ("Nature of
Investor; Form of
Ownership"); which has been or is being furnished concurrently
herewith to the
Corporation by the Investor, continue to be and are true, accurate
and complete
as of the date hereof The Investor agrees to provide such
additional information
as reasonably may be required by the Corporation for compliance
with the
securities laws of the state in which the Investor is located.
5. INVESTOR AWARE
OF RISKS. The Investor has been informed and is aware
that an investment in the Shares involves a high degree of risk and
speculation,
and the Investor has read carefully and considered any information
provided by
the Corporation and its affiliates in their entirety. The Investor
has read and
understands the "Risk Factors" attached hereto as Exhibit A.
6. INVESTOR
RELYING UPON OWN ADVISORS. The Investor confirms that the
Investor has been advised that the Investor should rely on, and
that the
Investor has consulted and relied on. the Investor's own
accounting, legal and
financial advisors with respect to this investment in the Shares.
The Investor
and the Investor's professional advisor(s), if any, have been
afforded an
opportunity to meet with the officers and directors of the
Corporation and to
ask .and receive answers to all questions about this offering and
the proposed
business and affairs of the Corporation and to obtain any
additional information
that the Corporation possesses or can acquire without unreasonable
effort or
expense, and the Investor and the Investor's professional
advisor(s) therefore
have obtained, in the judgment of the Investor and/or the
Investor's
professional advisor(s), sufficient information to evaluate the
merits and risks
of investment in the Shares.
7. SUITABILITY.
The Investor understands and has fully considered for
purposes of this investment the risks of this investment and
understands that
(i) this investment is suitable only for an investor who is able to
bear the
economic consequences of losing the Investor's entire investment;
(ii) the
Corporation is a starting a new business and has no significant
operating
history in such business; (iii) the purchase of the Shares is a
speculative
investment which involves a high degree of risk of loss by the
Investor of the
Investor's entire investment, and (iv) there are substantial
restrictions on the
transferability of, and there will be no public market for. the
Shares, and
accordingly, it may not be possible for the Investor to liquidate
the Investor's
investment in the Shares.
8. ACCREDITED
INVESTOR. The Investor is an "Accredited Investor" within
the meaning of Rule 501 of Regulation D.
9. LACK OF
LIQUIDITY. The Investor is able (i) to bear the economic
risk of this investment, (ii) to hold the Shares for an indefinite
period of
time, and (iii) to afford a complete loss of the Investor's
investment; and
represents that the Investor has sufficient liquid assets so that
the lack of
liquidity associated with this investment will not cause any undue
financial
difficulties or affect the Investor's ability to provide for the
Investor's
current needs and possible financial contingencies.
10. INVESTMENT
INFORMATION. At the request of the Investor, the
Corporation may provide to the Investor various offering documents
related to
the Corporation and the terms of the offer and sale of the Common
Stock (the
"Offering Documents"). The Investor acknowledges that such Offering
Documents,
if any, contain the views of the management of the Corporation, and
that the
analysis of the market and of the Corporation's strategy contained
therein
represents a subjective assessment about which reasonable persons
could
disagree.
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11. ACCESS TO
INFORMATION. The Investor, in making the Investor's
decision to purchase the Shares, has relied solely upon
independent
investigations made by the Investor and the representations and
warranties of
the Corporation contained herein and the Invest6r has been given
(i) access to
all material books and records of the Corporation; (ii) access to
all material
contracts and documents relating to this offering; and (iii) an
opportunity to
ask questions of, and to receive answers from, the appropriate
executive
officers and other persons acting on behalf of the Corporation
concerning the
Corporation and the terms and conditions of this offering, and to
obtain any
additional information, to the extent such persons possess such
information or
can acquire it without unreasonable effort or expense, necessary to
verify the
accuracy of the information set forth in the Offering Documents.
The Investor
acknowledges that no valid request to the Corporation by the
Investor for
information of any kind about the Corporation has been refused or
denied by the
Corporation or remains unfulfilled as of the date thereof. The
Investor has
carefully read the Offering Documents, including without limitation
this
Subscription Agreement. In evaluating the suitability of an
investment in the
Corporation, the Investor has not relied upon any representations
or other
information (whether oral or written) other than as set forth in
the Offering
Documents or as contained in any documents or answers to questions
furnished by
the Corporation.
12. NO ENDORSEMENT
BY FEDERAL OR STATE AGENCIES. The Investor
understands and acknowledges that no federal or state agency has
made any
finding or determination as to the fairness or suitability for
investment in, or
any recommendation or endorsement of, the Corporation or the
Shares.
13. INVESTOR HAS
EVALUATED RISKS. Based on the review of the materials
and information described above, and relying solely thereon and on
the knowledge
and experience of the Investor and/or the Investor's professional
advisor(s), if
any, in business and financial matters, the Investor has evaluated
the merits
and risks of investing in the Shares and has determined that the
Investor is
both willing and able to undertake the economic risk of this
investment.
14. SHARES
ACQUIRED FOR PERSONAL ACCOUNT, NO VIEW TO DISTRIBUTION. The
Investor is acquiring the Shares for the personal account of the
Investor for
investment and not with a view to, or for resale in connection
with, any
distribution thereof or of any interest therein, and no one else
has any
beneficial ownership or interest in the Shares being acquired by
the Investor,
nor is any of the Shares being acquired by the Investor to be
subject to any
lien or pledge. The Investor has no present obligation,
indebtedness or
commitment pending, nor is any circumstance in existence, that will
compel the
Investor to secure funds by the sale, transfer or other
distribution of any of
the Shares or any interest therein.
15. RESTRICTED
SECURITIES. The Investor understands and acknowledges
that the Shares will be offered and sold, if at all, pursuant to
one or more
exemptions from the registration and qualification requirements of
the
Securities Act of 1933, as amended, and the securities laws of the
various
states in which the Shares are
