SUBSCRIPTION
AGREEMENT
This Subscription
Agreement (this “ Agreement” ) is made as of
September __, 2009 by and between HALLADOR PETROLEUM COMPANY,
a Colorado corporation (the “ Corporation ”) and
[ ],
a [ ]
(“ Subscriber ”).
(a)
Subscriber hereby subscribes for
[ ]
shares (the “ Shares ”) of the
Corporation’s common stock, par value $0.01 per share (the
“ Common Stock ”), at a subscription price of
$6.00 per share (the “ Per Share Subscription Price
”), for a total subscription price of $[ ] (the “
Total Subscription Price ”).
(b)
The closing
of the sale and purchase of the Shares (the “ Closing
”) will take place in the offices of Morgan, Lewis &
Bockius LLP, 300 S. Grand Avenue, Suite 2200, Los Angeles,
California 90071 at 7:00 a.m. local time on September [
],
2009, or such later date and time as the Corporation and Subscriber
agree (the “ Closing Date ”). At the
Closing, (i) the Corporation will deliver to Subscriber a copy
of this Agreement countersigned by the Corporation, and
(ii) Subscriber will pay the Total Subscription Price to the
Corporation by wire transfer of immediately available funds to one
or more accounts as designated by the Corporation to Subscriber in
writing. Subject to the Closing, the Corporation shall
cause its transfer agent to issue a certificate or direct
registration program statement representing the Shares in the name
of Subscriber and to deliver such certificate or direct
registration program statement to Subscriber at the address set
forth on the signature page hereto, within five (5) business days
after the date on which the Closing occurs.
2.
Acknowledgments
. Subscriber
hereby acknowledges that Subscriber, either alone or together with
Subscriber’s advisors (if any), has read, understands and
agrees with and to the following:
(a)
AN
INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK; THE
CORPORATION MAY NEED ADDITIONAL CAPITAL IN THE FUTURE TO REACH ITS
GROWTH OBJECTIVES OR MEET ITS EXPENSES AND THE SHARES MAY LOSE ANY
VALUE OR MAY NOT GAIN ANY VALUE; THE SHARES ARE NOT REGISTERED AND
MAY NOT BE SOLD EXCEPT IN COMPLIANCE WITH STATE AND FEDERAL
SECURITIES LAWS AND REGULATIONS.
(b)
Subscriber
acknowledges and agrees that the Corporation may at any time sell
shares of its capital stock at a price greater or less than the Per
Share Subscription Price pursuant to this
Agreement. Subscriber acknowledges and agrees that the
Shares may ultimately prove to be worth significantly more or
significantly less than Subscriber perceives them to be worth now,
and that no representation or warranty is made by the Corporation
as to the “fair value” of the Shares or the interest in
the Corporation that they represent, either now or in the
future.
(c)
The Shares
have not been registered under the Securities Act of 1933, as
amended (the “ Securities Act ”), or any state
securities laws by reason of specific exemptions under the
provisions thereof which depend in part upon the representations
made by Subscriber in this Agreement. The Corporation is
relying upon Subscriber’s representations contained in this
Agreement for the purpose of determining whether this transaction
meets the requirements for such exemptions.
(d)
The Shares
are “restricted securities” under applicable federal
securities laws and the Securities Act and the rules of the
Securities and Exchange Commission provide, in substance, that
Subscriber may only dispose of the Shares pursuant to an effective
registration statement under the Securities Act or an exemption
from such registration if available. The Corporation has
no obligation or intention to register any of the Shares under, or
to take action so as to permit sales pursuant to, the Securities
Act. Accordingly, Subscriber may dispose of the Shares
only in certain transactions that are exempt from registration
under the Securities Act, including “private
placements,” in which event the transferee will acquire
“restricted securities” subject to the same limitations
as in the hands of Subscriber. Additionally, applicable
state securities laws may allow sales of the Shares only if the
Shares are registered or the transaction is subject to an
applicable exemption. As a consequence, Subscriber must
bear the economic risks of an investment in the Shares for an
indefinite period of time.
(e)
The
certificate(s) or direct registration program statement evidencing
the Shares will bear the following legend, which shall be in
addition to any other legends required by law or
contract:
THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS.
(f)
Neither the
Corporation nor any person acting on its behalf has offered or sold
the
