-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FeEXnga4UNBXguXxt/7/CdDugxleCB5gc+eX6Vu2CYIovo6mAeH7Zk7S+g1LLFPO BDDyvsIab/G4Pu2xJoX6Ag== 0001144204-10-052276.txt : 20101004 0001144204-10-052276.hdr.sgml : 20101004 20101004172916 ACCESSION NUMBER: 0001144204-10-052276 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20101004 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20101004 DATE AS OF CHANGE: 20101004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZION OIL & GAS INC CENTRAL INDEX KEY: 0001131312 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 200065053 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33228 FILM NUMBER: 101106826 BUSINESS ADDRESS: STREET 1: 6510 ABRAMS RD STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2142214610 MAIL ADDRESS: STREET 1: 6510 ABRAMS RD STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75231 8-K 1 v198213_8k.htm


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

October 4, 2010

____________________________________
Date of Report (Date of earliest event reported)

Zion Oil & Gas, Inc.
_______________________________________
(Exact name of registrant as specified in its charter)

Delaware
______________________________
(State or other jurisdiction of incorporation)

 
001-33228
(Commission File Number)
20-0065053
(IRS Employer Identification No.)
 
 
6510 Abrams Road, Suite 300, Dallas, TX 75231
_____________________________________
(Address of Principal Executive Offices)

Registrant's telephone number, including area code: 214-221-4610
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
o
Pre-commencement communications pursuant to 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

Item 8.01
Other Events.
 
 

 
On September 29, 2010, Zion Oil & Gas, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”) the prospectus supplement dated as of September 29, 2010 and accompanying base prospectus (collectively, the “Prospectus”) relating to the Company’s previously announced rights offering of non-transferable subscription rights to the holders of the Company’s common stock, par value $0.01 per share (“Common Stock”) on September 28, 2010, to purchase up to 3,820,391 of Units (as defined below) of the Company’s securities. The Prospectus forms a part of the Company’s Registration Statement on Form S-3 (File No. 333-164563) which was declared effective on April 16, 2010 (the “Registration Statement”).
 
The Company is filing the items included in Exhibits 4.1, 4.2, 4.3 and 5.1 to this Current Report on Form 8-K, each of which relates to the rights offering, for the purpose of incorporating such items as exhibits to the Registration Statement.

Under the previously announced rights offering, the Company is distributing, at no cost to stockholders, non-transferable subscription rights to purchase units (each a “Unit” and collectively the “Units”) of its securities to persons who owned shares of its Common Stock on September 28, 2010, with each Unit consisting of (a) one (1) share of Common Stock and (b) one (1) warrant to purchase an additional share of the Company’s Common Stock at an exercise price of $4.00 per share (each a “Warrant” and collectively the “Warrants”).  Each shareholder will receive 0.18 of a subscription right (i.e., EIGHTEEN subscription rights for each ONE HUNDRED shares) for each share of Common Stock owned as of close of business on September 28, 2010.

Each whole subscription right represents the right to purchase one Unit at a price of $5.00 per Unit, and may be exercised at any time prior to 5:00 p.m. Eastern Standard time on November 15, 2010, the scheduled expiration of the offer; however, the Company may extend the offering period at its sole discretion. The Warrant is exercisable for a two (2) year period beginning after the expiration of the rights offering, at an exercise price of $4.00 per share.

If the rights offering for the Units is fully subscribed, then the gross proceeds of the offering will be approximately $19 million. The rights offering will also include an over-subscription privilege, that will entitle a stockholder who exercises all of their basic subscription privilege the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among stockholders exercising their over-subscription right.

If the Company receives valid subscriptions for all of the Units available under the rights offering, then the gross proceeds of the offering will be approximately $19 million, before offering related expenses which the Company estimates should not exceed $150,000. This figure does not include proceeds, if any, from any future exercise, if any, of the Warrants included in the Units.

The rights offering will be conducted via an existing effective shelf registration statement. On October 4, 2010, the Company began mailing rights offering materials, including a prospectus supplement and a subscription rights certificate, to stockholders of record on the record date of September 28, 2010. The proceeds from the rights offering are expected to be used to further Zion's oil and gas exploration program and, depending on the amounts raised, implement its plans to establish a drilling company to acquire control of the rig currently being used in its drilling and for general corporate purposes.

Item 9.01
Financial Statements and Exhibits.
 
(d) Exhibits
 
4.1           Form of Warrant included in the Units
 
4.2           Form of Non-transferable Subscription Certificate to purchase Units
 
4.3           Warrant Agreement dated as of September 28, 2010 between Zion Oil & Gas Inc, and Registrar and Transfer Company, as Warrant Agent
 
5.1           Opinion of Aboudi & Brounstein regarding the validity of the Units, the Common Stock and Warrants included in the Units and the shares of Common Stock issuable upon exercise of the Warrant.
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.
 
     
 
Zion Oil and Gas, Inc.
 
     
       
Date: October 4, 2010
By:
/s/ Richard J. Rinberg
 
   
Richard J. Rinberg
 
   
Chief Executive Officer
 
       
 
EX-4.1 2 v198213_ex4-1.htm

 
EXHIBIT 4.1
 
[Face of Certificate - ZION OIL & GAS, INC.]
 
(SEE REVERSE SIDE FOR LEGEND)
 
W
 
WARRANTS
 
(THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M., EASTERN STANDARD TIME, ________, 2012)
 
ZION OIL & GAS, INC.
 
CUSIP  989696 125
 
WARRANT
 
THIS CERTIFIES THAT, for value received _____________ is the registered holder of a Warrant or Warrants expiring _______, 2012 (the "Warrant") to purchase one fully paid and non-assessable share of Common Stock, par value $.01 per share (the "Shares"), of ZION OIL & GAS, INC., a Delaware corporation (the "Company"). The Warrant entitles the holder thereof to purchase from the Company, commencing on ________ 1, such number of Shares of the Company at the price of $4.00 per share, upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent, Registrar and Transfer Company (such payment to be made by check made payable to the order of the Company), but only subject to the conditions set forth herein and in the Warrant Agreement between the Company and the Warrant Agent. In no event shall the registered holder of this Warrant be entitled to receive a net-cash settlement or other consideration in lieu of physical settlement in Shares of the Company. The Warrant Agreement provides that, upon the occurrence of certain events, the Warrant Price and the number of Warrant Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. The term Warrant Price as used in this Warrant Certificate refers to the price per Share at which Shares may be purchased at the time the Warrant is exercised.
 
This Warrant may expire on the date first above written if it is not exercised prior to such date by the registered holder pursuant to the terms of the Warrant Agreement.
 
No fraction of a Share will be issued upon any exercise of a Warrant. If, upon exercise of a Warrant, a holder would be entitled to receive a fractional interest in a Share, the Company will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder.
 
Upon any exercise of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof or his/her/its assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.
 
Warrant Certificates, when surrendered at the office or agency of the Warrant Agent by the registered holder hereof in person or by attorney duly authorized in writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants.


1 The exercise period of this warrant is for two years, with such exercise period beginning on the closing date of the rights offering until 5:00 p.m., Eastern Standard time, on the second anniversary date thereof, and, if such expiration date falls on a day other than a trading day, on the immediately preceding trading day
 
 

 

Upon due presentment for registration of transfer of the Warrant Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax or other governmental charge.

The Company and the Warrant Agent may deem and treat the registered holder as the absolute owner of the Warrants represented by this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof, of any distribution to the registered holder, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
 

 
This Warrant does not entitle the registered holder to any of the rights of a stockholder of the Company.
 
Registrar and Transfer Company
 
WARRANT AGENT
BY:
AUTHORIZED OFFICER
 
DATED:
 
(Signature)
CHIEF EXECUTIVE OFFICER
 
(Seal)
 
(Signature)
SECRETARY

 

 
 
SUBSCRIPTION FORM
 
To Be Executed by the Registered Holder in Order to Exercise Warrants
 
The undersigned Registered Holder irrevocably elects to exercise _________ Warrants represented by this Warrant Certificate, and to purchase the shares of Common Stock issuable upon the exercise of such Warrants, and requests that Certificates for such shares shall be issued in the name of
 
___________________________________________________________________________________________________________________
 
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
 
___________________________________________________________________________________________________________________
 
___________________________________________________________________________________________________________________
 
___________________________________________________________________________________________________________________
 
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
 
and be delivered to____________________________________________________________________________________________________
 
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
 
___________________________________________________________________________________________________________________
 
and, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated below:
 
Dated:
 
 
    
   
(SIGNATURE)
 
 
   
   
(ADDRESS)
 
       
 
  
 
  
 
(TAX IDENTIFICATION NUMBER)

 

 
 
THE SIGNATURE TO THE ASSIGNMENT OF THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

 

 
 
ASSIGNMENT
 
To Be Executed by the Registered Holder in Order to Assign Warrants
 
For Value Received,_____________________hereby sell, assign, and transfer unto
 
_____________________________________________________
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
 
_____________________________________________________
 
_____________________________________________________
 
_____________________________________________________
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
 
and be delivered to__________________________________________________________________________________
 
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
 
 

 
Of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitute and
 
appoint________________________________Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
 
Dated:
 
 
    
 
(SIGNATURE)
 
Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
 
Signature(s) Guaranteed:
 
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
 
 
EX-4.2 3 v198213_ex4-2.htm

 
EXHIBIT 4.2

FORM OF NON-TRANSFERABLE SUBSCRIPTION CERTIFICATE
   
For use by Zion acting as Subscription Agent
 
ZION OIL & GAS, INC.
 
NON-TRANSFERABLE SUBSCRIPTION CERTIFICATE FOR RIGHTS OFFERING
 
FOR HOLDERS OF RECORD ON SEPTEMBER 28, 2010
 
ZION OIL & GAS, INC. (the “Company”) is conducting a rights offering (the “Rights Offering”) that entitles the holders of the Company’s common stock, $0.01 par value per share (the “Common Stock”), as of the close of business on September 28, 2010 (the “Record Date”), to receive 0.18 of a subscription right (each, a “Right”) for each share of Common Stock held of record on the Record Date (i.e., EIGHTEEN subscription rights for each ONE HUNDRED shares). Each whole Right entitles the holder to subscribe for and purchase one (1) unit (each a “Unit”) of the Company’s securities, with each Unit consisting of (i) one (1) share of  the Company’s common stock, par value $0.01 per share (the “Common Stock”), and (ii) one (1) warrant to purchase an additional share of the Company’s Common Stock at an exercise price of $4.00 per share (each a “Warrant” and collectively the “Warrants”; the “Basic Subscription Right”). Each Unit may be purchased at a per Unit subscription price of $5.00. The Warrant is exercisable for a two (2) year period beginning on the closing date after the expiration of the Rights Offering.
 
Set forth above is the number of shares of Units to which the holder whose name and address is set forth above is entitled to subscribe pursuant to the Basic Subscription Right. If you exercise your rights in full, you may also exercise an over-subscription right (the “Over-Subscription Right”) to purchase additional Units that remain unsubscribed at the expiration of the Rights Offering, subject to availability and allocation of Units among persons exercising this Over-Subscription Right. If there is a change of address and you wish to subscribe, please note the new address on Form 2.  Your records will be updated with the new information.

No fractional subscription rights or fractional Units will be issued in this offering. Instead, the number of subscription rights will be rounded down to the next lowest whole number.
 
For a more complete description of the terms and conditions of the Rights Offering, please refer to the Company’s Supplemental Prospectus dated September 29, 2010 (the “Prospectus”), which is incorporated herein by reference. Copies of the prospectus are available upon request from the Dallas office, by phone at 1-888-891-9466 or 214-221-4610 or by e-mail at dallas@zionoil.com.
 
This subscription certificate (the “Rights Certificate”) must be received by us with payment in full by 5:00 p.m., Eastern Standard time, on November 15, 2010 (unless extended in the sole discretion of the Company) (as it may be extended, the “Expiration Date”). Any Rights not exercised prior to the Expiration Date will be null and void. Any subscription for Units in the Rights Offering made hereby is irrevocable.
 
The Rights represented by this Rights Certificate may be exercised by duly completing Form 1. Rights holders are advised to review the Prospectus before determining whether to exercise their Rights. In addition, if certificates representing the shares of Common Stock included in the Unit and the Warrant instruments are to be issued in a name other than the registered holder or are to be sent to an address other than that shown above, also complete Form 2.

 

 
 
SUBSCRIPTION PRICE: $5.00 PER UNIT
 
The registered owner whose name is inscribed hereon is entitled to subscribe for Units upon the terms and subject to the conditions set forth in the Prospectus and instructions relating to the use hereof.
 
Except in limited circumstances described in the Prospectus, only you may exercise your Rights.
 
Rights holders should be aware that if they choose to exercise only part of their Rights, they may not receive a new Rights Certificate in sufficient time to exercise the remaining Rights evidenced thereby.            

 

 

 FORM 1
 
EXERCISE AND SUBSCRIPTION:  The undersigned hereby irrevocably exercises one or more Rights to subscribe for Units  as indicated below, on the terms and subject to the conditions specified in the Prospectus, receipt of which is hereby acknowledged.
 
Basic Subscription Rights:

 I subscribe for   
   
Units at $5.00 each = $
     
 
(no. of Units subscribed for)
(subscription price)
 
 
Over-Subscription Rights:
 
IF YOU HAVE SUBSCRIBED FOR YOUR BASIC SUBSCRIPTION RIGHT AND WISH TO PURCHASE ADDITIONAL UNITS PURSUANT TO THE OVER-SUBSCRIPTION RIGHT (TO THE EXTENT AVAILABLE):
 
 I wish to subscribe for   
   
Units at $5.00 each = $
     
 
(no. of Units subscribed for)
(subscription price)
 

Total Amount Enclosed = $
   
*
 
I.
METHOD OF PAYMENT (CHECK AND COMPLETE APPROPRIATE BOX (ES)):
 
 
¨
Check, bank draft, or money order payable to “Zion Oil & Gas” or
 
¨ Wire transfer directed to the account maintained by us (contact Zion for wire instructions).
 
If the Rights being executed pursuant to the Basic Subscription Rights do not account for all of the Rights represented by the Rights Certificate (check only one):
 
¨    Deliver to the undersigned a new Rights Certificate evidencing the remaining Rights to which the undersigned is entitled.

¨    Do not deliver any new Rights Certificate to me.

¨    Check here if Rights are being exercised pursuant to the Notice of Guaranteed Delivery delivered to Zion prior to the date hereof and complete the following:

Name(s) of Registered Holder(s)
     
Window Ticket Number (if any)
    
Date of Execution of Notice of Guaranteed Delivery
     
Name of Institution Which Guaranteed Delivery
     

* If the aggregate Subscription Price enclosed or transmitted is insufficient to purchase the total number of Units indicated in the “Total” line above, or if the number of Units being subscribed for is not specified, the Rights holder exercising this Rights Certificate shall be deemed to have subscribed for the maximum amount of Units that could be subscribed for upon payment of such amount. If the aggregate Subscription Price paid by you exceeds the amount necessary to purchase the number of Units  for which you have indicated an intention to subscribe (such excess being the “Subscription Excess”), then you will be deemed to have exercised the Over-Subscription Rights to the full extent of the excess payment tendered, to purchase, to the extent available, that number of whole Units equal to the quotient obtained by dividing the Subscription Excess by the Subscription Price. To the extent any portion of the aggregate Subscription Price enclosed or transmitted remains after the foregoing procedures, such funds shall be mailed to the subscriber without interest or deduction as soon as practicable.

 

 

ACKNOWLEDGMENT—THE SUBSCRIPTION ORDER FORM IS NOT VALID UNLESS YOU SIGN  BELOW
 
I/We acknowledge receipt of the Prospectus and the terms set forth herein and understand that after delivery to the Company we may not modify or revoke this Subscription Certificate. Under penalties of perjury, I/we certify that the information contained herein, including the social security number or taxpayer identification number given above, is correct.
 
The signature below must correspond with the name of the registered holder exactly as it appears on the books of the Company’s transfer agent without any alteration or change whatsoever.

 Signature(s) of Registered Holder:
     
Date:
   
 
If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a corporation or another acting in a fiduciary or representative capacity, please provide the following information (please print).

 Name:
   
 Capacity:
   
Soc. Sec. #/Tax ID #:
   
Address:
     
Phone:
   
 
The Rights are not transferable in any way, except to affiliates of the recipient and except by operation of law.

Evidence satisfactory to the Company that any such permitted transfer is proper must be delivered to Zion Oil & Gas prior to the Expiration Date by mail, by hand or by overnight courier to 6510 Abrams Rd., Suite 300, Dallas, TX 75231.

 

 

FORM 2
 
SPECIAL ISSUANCE OR DELIVERY INSTRUCTIONS

(a)   To be completed ONLY if the certificate representing the Common Stock included in the Unit and/or the instrument representing the Warrant(s) included in the Unit is/are to be issued in a name other than that of the registered holder. DO NOT FORGET TO COMPLETE THE MEDALLION GUARANTEE OF SIGNATURE(S) SECTION BELOW.

Issue Shares to:
     
Soc. Sec. #/Tax ID #:
   
Address:
   
 
(b)   To be completed ONLY if the certificate representing the Common Stock included in the Unit and/or the instrument representing the Warrant(s) included in the Unit is/are to be sent to an address other than that shown above. See the Instructions. DO NOT FORGET TO COMPLETE THE MEDALLION GUARANTEE OF SIGNATURE(S) SECTION BELOW.

Name:
   
Address:
   

MEDALLION GUARANTEE OF SIGNATURES
 
All Rights Holders who specify special issuance or delivery instructions must have their signatures guaranteed by an Eligible Institution, as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

     
 
    
 Name of Firm
 
Authorized Signature
     
 
     
Address
 
Name
     
 
     
City, State, Zip Code
 
Title
     
   
Area Code and Telephone Number
   
 
YOU MUST HAVE YOUR SIGNATURE MEDALLION GUARANTEED IF YOU WISH TO HAVE YOUR SHARES DELIVERED TO AN ADDRESS OTHER THAN YOUR OWN OR TO A SHAREHOLDER OTHER THAN YOURSELF.

EX-4.3 4 v198213_ex4-3.htm
EXHIBIT 4.3
 
WARRANT AGREEMENT
 
This Warrant Agreement (this "Agreement") is made as of September 28, 2010, by and between Zion Oil & Gas, Inc., a Delaware corporation having its principal place of business at 6510 Abrams Road, Suite 300, Dallas, Texas 75231 (the "Company"), and Registrar and Transfer Company, a New Jersey corporation with offices at 10 Commerce Drive, Cranford, New Jersey 07016 (the "Warrant Agent"). 

WHEREAS, the Company is conducting a rights offering to holders of its common stock, par value $0.01 per share (the Common Stock”), as of close of business on September 28, 2010 (the “Rights Offering”) pursuant to which the Company is distributing, at no cost, non-transferable subscription rights to purchase units (each a “Unit” and collectively the “Units”) of its securities to persons who owned shares of its Common Stock on September 28, 2010, with each Unit consisting of (i) one (1) share of  the Company’s Common Stock, and (ii) one (1) warrant to purchase an additional share of the Company’s Common Stock at an exercise price of $4.00 per share (each a “Warrant” and collectively the “Warrants”);  Each Unit may be purchased at a per Unit subscription price of $5.00; and

WHEREAS, The Warrant is exercisable for a two (2) year period beginning on the closing date after the expiration of the rights offering; and

WHEREAS, on January 28, 2010, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission with respect to a shelf offering (the “Registration Statement”), which was subsequently amended on March 26, 2010 and declared effective on April 16, 2010; and

WHEREAS, the Company intends to utilize the Registration Statement to facilitate the trading of the shares of Common Stock included in the Units and the shares of Common Stock underlying the Warrants that are included in the Units as well as the Warrants; and

WHEREAS, following the closing of the offering, the shares of Common Stock included in the Units and the shares of Common Stock underlying the Warrants, will be listed on the NASDAQ Global Market under the symbol ZN; the Company has filed an application to list the Warrants on the NASDAQ Global Market and, if the application is accepted, the symbol “ZN WAZ” has been reserved to designate the Warrants; the Units will not be listed for trading nor will they otherwise be tradable; and

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and
 
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
 
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
 
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
 
1.   Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
   
 
 
2.   Warrants.
 
2.1   Form of Warrant. Each Warrant shall be issued in registered form only. The Warrants shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chief Executive Officer or President and Chief Financial Officer of the Company and shall bear a facsimile of the Company's seal. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
 
2.2   Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
 
2.3   Registration.
 
2.3.1   Warrant Register. The Warrant Agent shall maintain books ("Warrant Register") for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.
 
2.3.2   Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register ("registered holder"), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
 
3.   Terms and Exercise of Warrants.
 
3.1   Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $4.00, subject to the adjustments provided in this Section 3.1 and Section 4 hereof. The term "Warrant Price" as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date for a period of not less than ten business days, provided that any such reduction shall be identical among all of the Warrants.
 
3.2   Duration of Warrants. A Warrant may be exercised only during the period commencing on the closing date of the Rights Offering and terminating at 5:00 p.m., Eastern Standard time on the second anniversary thereof. Notwithstanding the foregoing, no Warrant shall be exercisable unless, at the time of exercise, a registration statement relating to the Common Stock issuable upon the exercise of such Warrant is effective and current and a prospectus is available for use by the holders thereof and the Common Stock has been qualified or deemed to be exempt under the securities laws of the state of residence of the holder of such Warrants. The period during which a Warrant may be exercised shall be deemed the "Exercise Period" and the termination of such Exercise Period shall be deemed the "Expiration Date." Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, the Company will provide notice to registered holders of the Warrants of such extension of not less than 20 days and, further provided that any such extension shall be identical in duration among all of the Warrants.
 
 
 
3.3   Exercise of Warrants.
 
 
3.3.2   Issuance of Certificates. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant unless (i) a registration statement under the Act with respect to the Common Stock issuable upon such exercise is effective, or (ii) in the opinion of counsel to the Company, the exercise of the Warrants is exempt from the registration requirements of the Act and such securities are qualified for sale or exempt from qualification under applicable securities laws of the states or other jurisdictions in which the registered holders reside. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise or issuance would be unlawful. In no event will the Company be required to provide the registered holder of a warrant with a net-cash settlement or other consideration in lieu of physical settlement in shares of Common Stock, regardless of whether the Common Stock underlying the Warrants is registered pursuant to an effective registration statement.
 
3.3.3   Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.
 
3.3.4   Date of Issuance. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.
 
4.   Adjustments ..
 
4.1   Stock Dividends Split Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock.
 
4.2   Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3   Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
 
 
 
4.4   Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
 
4.5   Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable on exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to the Warrant holder, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
 
4.6   No Fractional Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.
 
4.7   Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
5.   Transfer and Exchange of Warrants.
 
5.1   Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
 
 
 
5.2   Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, in the event a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
 
5.3   Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.
 
5.4   Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
 
5.5   Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
 
6.   Other Provisions Relating to Rights of Holders of Warrants.
 
6.1   No Rights as Stockholder. A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
 
6.2   Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
 
6.3   Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.
7.   Concerning the Warrant Agent and Other Matters.
 
7.1   Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
 
7.2   Resignation, Consolidation, or Merger of Warrant Agent.
 
7.2.1   Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days' notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to a court of competent jurisdiction for the appointment of a successor Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be authorized to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
 
 
 
7.2.2   Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
 
7.2.3   Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Warrant Agreement without any further act.
 
7.3   Fees and Expenses of Warrant Agent.
 
7.3.1   Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder as set forth on Exhibit B hereto, and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
 
7.3.2   Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Warrant Agreement.
 
7.4   Liability of Warrant Agent.
 
7.4.1   Reliance on Company Statement. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Executive Vice President, Secretary or Assistant Secretary of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Warrant Agreement.
  
7.4.2   Indemnity. The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Warrant Agreement except as a result of the Warrant Agent's negligence, willful misconduct, or bad faith.
 
7.4.3   Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Warrant Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable.
 
 
 
7.5   Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company's Common Stock through the exercise of Warrants.
 
7.6   Waiver. The Warrant Agent hereby waives any and all right, title, interest or claim of any kind ("Claim") in or to any distribution of any account in which funds related to the purchase or exercise of the Warrants are held, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against any such account for any reason whatsoever.
 
8.   Miscellaneous Provisions.
 
8.1   Successors. All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
 
8.2   Notices. Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or by private national courier service, or be mailed, certified or registered mail, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if sent by private national courier service, on the next business day after delivery to the courier, or, if mailed, two business days after the date of mailing, as follows:
 
Zion Oil & Gas, Inc.
6510 Abrams Road, Suite 300
Dallas, Texas 75231
Attn:  Chief Executive Officer
 
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Attn: Account Executive
 
8.3   Applicable Law. The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by the laws of the State of New Jersey, without giving effect to conflict of laws. Each party hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Warrant Agreement shall be brought and enforced in the appropriate state or federal courts in the State of New Jersey, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each party hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
 
8.4   Persons Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants. 
 
 

 
8.5   Examination of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant Agent for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.
 
8.6   Counterparts. This Warrant Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
 
8.7   Effect of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
 
8.8   Amendments. This Warrant Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Warrant Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent of a majority of the then outstanding Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period in accordance with Sections 3.1 and 3.2, respectively, without such consent.
 
8.9   Severability. This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
 

 
 
IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.

ZION OIL & GAS, INC.
 
By:
/s/ Richard Rinberg
 
 
Name: Richard Rinberg
Title:  Chief Executive Officer
 
REGISTRAR AND TRANSFER COMPANY
 
By:
/s/ Nicola Giancaspro
 
 
Name: Nicola Giancaspro
Title:  Vice President
 



 


EX-5.1 5 v198213_ex5-1.htm

EXHIBIT 5.1
 
[Opinion of Aboudi & Brounstein]


Zion Oil & Gas, Inc.
6510 Abrams Road, Suite 300
Dallas, Texas 75231
                                    October 4, 2010
 
Ladies and Gentlemen
 
We are special counsel to Zion Oil & Gas, Inc. (the “Company”). We are rendering this opinion in connection with the proposed issuance by the Company of (i) 3,820,391 subscription rights (the “Rights”) to purchase up to 3,820,391 Units (as defined below) of the Company’s securities pursuant to a rights offering to holders of the Company’s common stock, par value $0.01 per share (the “Common Stock”) as of September 28, 2010. Each Unit consists of (i) one (1) share of Common Stock (the “Shares”) and (ii) one (1) warrant to purchase an additional share of the Company’s Common Stock at an exercise price of $4.00 per share (each a “Warrant” and collectively the “Warrants”; together with the Shares, the “Securities”) The Rights and Securities are being issued and/or offered and sold, as applicable, under a registration statement on Form S-3 under the Securities Act originally filed with the Securities and Exchange Commission (the “Commission”) on January 28, 2010 (Registration Nos. 333-164563) (as amended by pre-effective Amendment No.1, the “Registration Statement”), including a base prospectus dated April 16, 2010 (the “Base Prospectus”) and a prospectus supplement dated September 29, 2010 (the “Prospectus Supplement” and together with the Base Prospectus the “Prospectus”).
 
In connection therewith, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion, including: (i) the organizational documents of the Company, including the Amended and Restated Certificate of Incorporation and the Restated By-laws of the Company, (ii) minutes and records of the corporate proceedings of the Company with respect to the Registration Statement and the issuance, (iii) the Registration Statement and the exhibits thereto and the Prospectus and (iv) the form of subscription rights certificate in respect of the Rights.
 

For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto other than the Company and the due authorization, execution and delivery of all documents by the parties thereto other than the Company. We have not independently established or verified any facts relevant to the opinions expressed herein, but have relied upon statements and representations of officers and other representatives of the Company. We have also assumed that the stock certificates evidencing the Shares will conform to the specimen common stock certificate examined by us and will be duly executed and delivered.

Based upon and subject to the qualifications, assumptions and limitations set forth herein, we are of the opinion that:
 
1) The Rights were duly authorized and, when issued, were the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).
 
2) When the Securities are issued and delivered against payment therefor upon due exercise of Rights as contemplated in the Prospectus, the Securities will be duly authorized, validly issued, fully paid and nonassessable.
 
3) When and if the Warrants are exercised as contemplated in the Prospectus against payment therefore, the shares of Common Stock issuable thereon will be duly authorized, validly issued, fully paid and nonassessable.
 
Our opinion expressed above is subject to the qualification that we express no opinion as to the applicability of, compliance with, or effect of any laws except the General Corporation Law of the State of Delaware (including the statutory provisions, all applicable provisions of the Delaware constitution and reported judicial decisions interpreting the foregoing).
 
 
 
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Company’s Current Report on Form 8-K and to its incorporation by reference into the Registration Statement. We also consent to the reference to our firm under the heading “Legal Matters” in the Prospectus constituting part of the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.
 
We do not find it necessary for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or “Blue Sky” laws of the various states to the Issuance.
 
This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. This opinion speaks only as of the date hereof and we assume no obligation to revise or supplement this opinion after the date hereof should the General Corporation Law of the State of Delaware be changed by legislative action, judicial decision or otherwise after the date hereof.
 

 
Very truly yours,
 
 
/s/ Aboudi & Brounstein
 
 
Aboudi & Brounstein
   
 




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