THE SECURITIES REPRESENTED HEREBY
HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT
A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT").
NONE OF THE SECURITIES
REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY
U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS
DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE 1933 ACT. "UNITED STATES" AND "U.S.
PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933
ACT.
STOCK OPTION AND SUBSCRIPTION
AGREEMENT
For Non – U.S.
Persons
This AGREEMENT is entered into as of
the 14th day of October, 2009 (the "Date of Grant").
BETWEEN:
ARKANOVA ENERGY
CORPORATION , with an
office at 2441 High Timbers Drive, Suite 120, The Woodlands, Texas
77380 (the "Company")
AND:
ERICH HOFER
, a person with a business address
at Grossackerstrasse 64, Zurich, Switzerland V8 CH-8041 (the
"Optionee")
WHEREAS:
A. The
Company's board of directors (the "Board") has approved an Amended
Stock Option Plan (the "Plan"), whereby the Board is authorized to
grant stock options to purchase common shares of the Company to the
directors, officers, employees, management company employees and
consultants of the Company;
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B.
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The Optionee provides services as a
director of the Company (the "Services"); and
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C. The
Company seeks to grant stock options to purchase a total of THREE
HUNDRED THOUSAND (300,000) shares of Common Stock to the Optionee
in consideration for the provision of the Services.
NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the covenants and agreements set
forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
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1.1
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In this Agreement, the following
terms shall have the following meanings:
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(a)
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" Common Stock " means the
shares of common stock of the Company;
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(b)
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" Exercise Payment " means
the amount of money equal to the Exercise Price multiplied by the
number of Optioned Shares specified in the Notice of
Exercise;
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(c)
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" Exercise Price " means
$0.20;
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(d)
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" Expiry Date " means October
14, 2014;
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(e)
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" Notice of Exercise " means
a notice in writing addressed to the Company at its address first
recited (or such other address of the Company as may from time to
time be notified to the Optionee in writing), substantially in the
form attached as Appendix "A" hereto, which notice shall specify
therein the number of Optioned Shares in respect of which the
Options are being exercised;
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(f)
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" Options " means the
irrevocable right and option to purchase, from time to time, all,
or any part of the Optioned Shares granted to the Optionee by the
Company pursuant to Section 1.2 of this Agreement;
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(g)
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" Optioned Shares " means the
shares of Common Stock, subject to the Options;
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(h)
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" Securities " means,
collectively, the Options and the Optioned Shares;
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(i)
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" Shareholders " means
holders of record of the shares of Common Stock;
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(j)
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" U.S. Person " shall have
the meaning ascribed thereto in Regulation S under the 1933
Act, and for the purpose of the Agreement includes any person in
the United States; and
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(k)
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" Vested Options " means the
Options that have vested in accordance with Section 1.3 of this
Agreement.
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1.2 The
Company hereby grants to the Optionee, on the terms and conditions
set out in this Agreement and in the Plan, Options to purchase a
total of THREE HUNDRED THOUSAND (300,000) Optioned Shares at the
Exercise Price.
1.3 All
of the THREE HUNDRED THOUSAND (300,000) Options shall vest
immediately upon the Date of Grant.
1.4 The
Options shall, at 5:00 p.m. (Vancouver time) on the Expiry Date,
expire and be of no further force or effect whatsoever.
1.5 Vested
Options shall terminate, to the extent not previously exercised, in
accordance with Section 5(g) of the Plan. Each unvested Option
granted pursuant hereto shall terminate immediately upon
termination of or resignation from the Optionee's employment or
contractual relationship with the Company for any reason
whatsoever.
1.6 Subject
to the provisions of this Agreement and the Plan and subject to
compliance with any applicable securities laws, the Options shall
be exercisable, in full or in part, at any time after vesting,
until termination; provided, however, that if the Optionee is
subject to the reporting and liability provisions of Section 16 of
the Securities Exchange Act of 1934 with respect to the
Common Stock, the Optionee shall be precluded from selling,
transferring or otherwise disposing of any Common Stock underlying
any Options during the six (6) months immediately following the
grant of that Option. If less than all of the shares included in
the vested portion of any Options are purchased, the remainder may
be purchased at any subsequent time prior to the Expiry Date. Only
whole shares may be issued pursuant to the exercise of any Options,
and to the extent that any Options covers less than one (1) share,
it is unexercisable.
1.7 Each
exercise of the Options shall be by means of delivery of a Notice
of Exercise (which may be in the form attached hereto as Appendix
A) to the President of the Company at its principal executive
office, specifying the number of shares of Common Stock to be
purchased and accompanied by payment in cash by certified check or
cashier's check in the amount of the full exercise price for the
Common Stock to be purchased. In addition to payment in cash by
certified check or cashier's check, an Optionee or transferee of
the Options may pay for all or any portion of the aggregate
exercise price by complying with one or more of the following
alternatives:
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(a)
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by delivering a properly executed
Notice of Exercise together with irrevocable instructions to a
broker promptly to sell or margin a sufficient portion of the
Common Stock and deliver directly to the Company the amount of sale
or margin loan proceeds to pay the exercise price; or
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(b)
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by complying with any other payment
mechanism approved by the Board at the time of exercise.
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1.8 It
is a condition precedent to the issuance of Optioned Shares that
the Optionee execute and/or deliver to the Company all documents
and withholding taxes required in accordance with applicable
laws.
1.9 Nothing
in this Agreement shall obligate the Optionee to purchase any
Optioned Shares except those Optioned Shares in respect of which
the Optionee shall have exercised the Options in the manner
provided in this Agreement.
1.10 Reference
is made to the Plan for particulars of the rights and obligations
of the Optionee and the Company in respect of:
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(a)
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the terms and conditions on which
the Options are granted; and
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(b)
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a consolidation or subdivision of
the Company's share capital or an amalgamation or
merger;
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all to the same effect as if the
provisions of the Plan were set out in this Agreement and to all of
which the Optionee assents.
1.11 The
terms of the Options are subject to the provisions of the Plan, as
the same may from time to time be amended, and any inconsistencies
between this Agreement and the Plan, as the same may be from time
to time amended, shall be governed by the provisions of the
Plan.
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2.
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Documents Required from
Optionee
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2.1 The
Optionee must complete, sign and return an executed copy of this
Agreement to the Company.
2.2 The
Optionee shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires,
notices and undertakings as may be required by regulatory
authorities, and applicable law.
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3.
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Acknowledgements of the
Optionee
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3.1
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The Optionee acknowledges and agrees
that:
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(a)
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the Optionee is a director of the
Company;
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(b)
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none of the Securities have been
registered under the 1933 Act or under any state securities or
"blue sky" laws of any state of the United States, and, unless so
registered, may not be offered or sold in the United States or,
directly or indirectly, to U.S. Persons, except in accordance with
the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act, or pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the 1933 Act and in each case only in
accordance with applicable state securities laws;
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(c)
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the Company has not undertaken, and
will have no obligation, to register any of the Securities under
the 1933 Act;
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(d)
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the Optionee has received and
carefully read this Agreement and the public information which has
been filed with the SEC in compliance or intended compliance with
applicable securities legislation (collectively, the "Company
Information");
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(e)
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the decision to execute this
Agreement and acquire the Securities hereunder has not been based
upon any oral or written representation as to fact or otherwise
made by or on behalf of the Company, and such decision is based
entirely upon a review of the Company Information (the receipt of
which is hereby acknowledged);
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(f)
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no securities commission or similar
regulatory authority has reviewed or passed on the merits of the
Securities;
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(g)
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there is no government or other
insurance covering the Securities;
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(h)
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there are risks associated with an
investment in the Securities;
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(i)
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the Optionee has not acquired the
Securities as a result of, and will not itself engage in, any
"directed selling efforts" (as defined in Regulation S under the
1933 Act) in the United States in respect of the Securities which
would include any activities undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning
the market in the United States for the resale of the Securities;
provided, however, that the Optionee may sell or otherwise dispose
of the Securities pursuant to registration thereof under the 1933
Act and any applicable state securities laws or under an exemption
from such registration requirements;
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(j)
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the Optionee and the Optionee's
advisor(s) (if applicable) have h
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