EXHIBIT 4.2
SUBSCRIPTION AGREEMENT
BLUEFERE ETHANOL FUELS, INC.
Ladies and Gentlemen:
BLUEFIRE ETHANOL FUELS, INC., a Nevada corporation (the "Company" or
"BlueFire"), desires to sell up to Two Hundred and Fifty Thousand (250,000)
shares of the Company's common stock, par value $0.001 per share (the "SHARES"),
at a price of two dollars ($2.00) per Share. The undersigned ("SUBSCRIBER")
desires to purchase the number of Shares set forth on the signature page of this
Agreement (the "AGREEMENT"). Accordingly, the Company and Subscriber agree as
follows:
1. SALE AND PURCHASE. Subject to the terms and conditions set
forth in this Agreement, Subscriber hereby tenders the amount
set forth on the signature page of this Agreement for the
purchase of the number of Shares set forth on said signature
page.
2. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF SUBSCRIBER. In
connection with this subscription, Subscriber hereby makes the
following representations, warranties, and agreements and
confirms the following understandings, each of which are made
or confirmed, as the case may be, with respect to Shares
subscribed for herein:
(a) INVESTMENT PURPOSE Subscriber is acquiring the Shares
for Subscriber's own account and for investment
purposes only.
(b) REVIEW AND EVALUATION OF INFORMATION REGARDING THE
COMPANY
(i) Subscriber is familiar with the Company's
financial condition and proposed operations. Without
limiting the foregoing, the Subscriber acknowledges
that the undersigned has reviewed the corporate
documents regarding the Company and the terms of this
Offering.
(ii) In addition to the foregoing. Subscriber
acknowledges that Subscriber has conducted, or has
been afforded the opportunity to conduct, an
investigation of the. Company and has been offered
the opportunity to ask representatives of the.
Company questions about the Company's financial
condition and proposed business and that Subscriber
has obtained such available information as Subscriber
has requested, to the extent Subscriber has deemed.
necessary, to permit Subscriber to fully evaluate the
merits and risks of an investment in the Company,
Representatives of the Company have answered all
inquiries that Subscriber has put to them concerning
the Company and its activities, and the offering and
sale of the Shares.
(c) RISKS. Subscriber recognizes that the purchase of
Shares involves a high degree of risk and is suitable
only for persons of adequate financial means who have
no
need for liquidity in this investment in that (i)
Subscriber may not be able to liquidate the
investment in the event of an emergency; (ii)
transferability is limited; and (iii) in the event of
a disposition, Subscriber could sustain a complete
loss of the entire investment.
(d) ACCREDITED INVESTOR STATUS Subscriber represents
that. Subscriber is an "accredited investor" as
such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933,
amended (the "Securities Act"). Specifically, the
Subscriber is (check appropriate items):
__________ (i) A bank, savings and loan association or other
similar institution (as defined in Sections 3(a)(2) and 3(a)(5)(A) of the
Securities Act);
__________ (ii) A broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended;
__________ (iii) An insurance company (as defined in Section
2(13) of the Securities Act);
__________ (iv) An investment company registered under the
Investment Company Act of 1940 (the "Investment Company Act");
__________ (v) A Small Business Investment Company licensed by
the U.S. Small Business Administration under Sections 301(c) or (d) of the Small
Business Investment Act of 1958;
__________ (vi) Any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
subdivisions for the benefit to its employees, which plan has total assets in
excess of $55,000,000;
__________ (vii) An employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 ("ERISA"), if the investment
decision is made by a "Plan Fiduciary", as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance company or
registered investment adviser;
__________ (viii) An employee benefit plan within the meaning of
ERISA having total assets in excess of $55,000,000;
__________ (ix) A self-directed employee benefit plan within the
meaning of ERISA, with investment decisions made solely by persons who are
accredited investors as defined in Rule 501(a) of Regulation D;
__________ (x) A business development company (as defined in
Section 2(a)(48) of the Investment Company Act) or a private business
development company (as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940);
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__________ (xi) A corporation, partnership, Massachusetts or
similar business trust, or organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (tax exempt organization), not formed
for the specific purpose of acquiring the Units having total assets in excess of
$5,000,000;
__________ (xii) Any executive officer or director of the
Company;
__________ (xiii) An individual having an individual net worth
or a joint net worth with spouse at the time of purchase in excess of
$1,000,000;
__________ (xiv) An individual whose net income was in excess of
$200,000 in each of the two most recent years, or whose joint income with spouse
was in excess of $300,000 in each of those years, and who reasonably expects his
net income to reach such level in the current year;
__________ (xv) A trust with total assets in excess of
$5,000,000 not formed for the specific purpose of acquiring the Units whose
purchase is directed by a sophisticated person (i.e., person who has such
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of any securities); or
__________ (xvi) Any entity in which all of the entity owners
are "accredited investors."
(e) SUBSCRIBER'S FINANCIAL EXPERIENCE Subscriber is
sufficiently experienced in financial and business
matters to be capable of evaluating the merits and
risks of an investment in the Company or, if he or
she has utilized the services of a purchaser
representative, together with such representative,
are sufficiently experienced in financial and
business matter to be capable of evaluating the
merits and risks of an investment in the Company.
(f) SUITABILITY OF INVESTMENT Subscriber has evaluated
the merits and risks of Subscriber's proposed
investment in the Company, including those risks
particular to Subscriber's situation, and has
determined that this investment is suitable for
Subscriber. Subscriber has adequate financial
resources for an investment of this character, and at
this time Subscriber can bear a complete loss of
Subscriber's investment. Further, Subscriber will
continue to have, after making an investment in the
common stock of Pet Ecology Brands Inc, adequate
means of providing for Subscriber's current needs,
the needs of those dependent on Subscriber, and
possible personal contingencies. Subscriber
specifically represents that he or she has a net
worth at least five times greater than the investment
made herein.
(g) EXEMPT OFFERING Subscriber understands that the sale
of Shares is not being registered on the basis that
this issuance is exempt from registration under the
Securities Act, and the applicable state securities
laws, and the rules and regulations promulgated
thereunder, and that reliance on such exemptions is
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predicated, in part, on Subscriber's representations
and warranties contained in this Agreement.
(h) LIMITATIONS ON DISPOSITION Subscriber understands
that there are substantial restrictions on the
transferability of the Units pursuant to the
Securities Act; the Shares will not be, and, except
as provided in Section 4 herein, Subscriber has no
right to require that the Shares be registered under
the Securities Act; and, accordingly, Subscriber may
have to hold the Shares for an indefinite period of
time until the Shares have been registered by the
Company or are subject to an exemption from
registration. Subscriber represents that Subscriber
can afford to hold the Shares for an indefinite
period of time. Subscriber further understands that
an opinion of counsel and other documents may be
required to transfer the Shares. Subscriber
acknowledges that the Shares shall bear the
following, or a substantially similar, legend:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
UNITS NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1)
A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (2) IN ACCOIWANCE WITH THE
PROVISIONS OF REGULATION S, OR (3) PURSUANT TO AN
EXEM-PTION FROM REGISTRATION UNDER THE SECURITIES
ACT."
(i) ABSENCE OF OFFICIAL EVALUATION Subscriber understands
that no federal or state agency has made any finding
or determination as to the fairness of the terms of
an investment in the Company, or any recommendation
for or endorsement of the Shares offered hereby.
(j) ADDITIONAL FINANCING Subscriber further acknowledges
that nothing hereunder shall preclude the Company
from seeking and/or procuring, additional equity
and/or debt financing.
(k) NON-RELIANCE Subscriber is not relying on the Company
or any representation contained herein or in the
documents referred to herein with respect to the tax
and economic effect of Subscriber's investment in the
Shares.
(l) ACCEPTANCE Subscriber acknowledges that. the Company
shall, in its sole discretion, have the right to
accept or reject this subscription, in whole or in
part, for any reason or for no reason. If
Subscriber's subscription is accepted by the Company,
Subscriber shall, and Subscriber hereby elects to,
execute any and all further documents necessary in
the opinion of the Company to complete his
subscription and become a shareholder of the Company.
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(m) AUTHORITY TO ENTER INTO AGREEMENT Subscriber has the
full right, power, and authority to execute and
deliver this Agreement and perform Subscriber's
obligations hereunder.
(n) ENTITY AS A SUBSCRIBER If Subscriber is a
corporation, partnership, trust, or other entity, (i)
Subscriber is authorized and qualified to become a
shareholder of, and is authorized to, make its
investment in the Company; (ii) Subscriber has not
been formed for the purpose of acquiring an interest
in the Company; (iii) Subscriber has not been in
existence for less than 90 days prior to the date
hereof; and (iv) the person signing this Agreement on
behalf of such entity has been duly authorized by
such entity to do so.
(o) PROHIBITIONS ON CANCELLATION, TERMINATION,
REVOCATION, TRANSFERABILITY, AND ASSIGNMENT
Subscriber hereby acknowledges and agrees that,
except as may be specifically provided herein or by
applicable law, Subscriber is not entitled to cancel,
terminate, or revoke, this Agreement, and this
Agreement shall survive Subscriber's death or
disability or any assignment of Shares. Subscriber
further agrees that Subscriber may not transfer or
assign Subscriber's rights under this Agreement, and
Subscriber understands that, if Subscriber's
subscription is accepted, the transferability of
Shares will be restricted.
(p) OBLIGATION This Agreement constitutes a valid and
legally binding obligation of Subscriber and neither
the execution of this Agreement nor the consummation
of the transactions contemplated herein will
constitute a violation of or default under, or
conflict with, any judgment, decree, statutes or
regulation of any governmental authority applicable
to Subscriber, or any contract, commitment, agreement
or restriction of any kind to which Subscriber is a
party or by which Subscriber's assets are bound. The
execution and delivery of this Agreement does not,
and the consummation of the transactions described
herein will not, violate applicable laws, or any
mortgage, lien, agreement, indenture, lease or
understanding (whether oral or written) of any kind
outstanding relative to Subscriber.
(q) REQUIRED APPROVALS. No approval, authorization,
consent, order, or other action of, or filing with,
any person, firm or corporation or any court,
administrative agency or other governmental authority
is required in connection with the execution and
delivery of this Agreement by Subscriber or the
purchase of the Shares.
(r) NO GENERAL SOLICITATION Subscriber is not subscribing
for Shares because of or following(,) any
advertisement, article, notice, or other
communication published in any newspaper, magazine or
similar media or broadcast over television or radio,
or presented at any seminar or meeting, or any
solicitation or a subscription by a person other than
an authorized representative of the Company.
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3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE. COMPANY In
connection with this subscription, the Company makes the
following representations, warranties and agreements and
confirms the following understandings:
(a) COMPANY'S GOOD STANDING The Company is a corporation
organized and Validly existing under the laws of the
State of Nevada, and it has all corporate authority
and power to conduct its business and to own its
properties.
(b) LEGAL AND OTHER PROCEEDINGS Neither the Company, nor
any of its affiliates or its executive officers or
directors (in their capacity as executive officers or
directors), is a party to any pending or, to the best
knowledge of the Company, threatened, or unasserted
but considered by it to be probable of assertion,
claim, action, suit; investigation, arbitration or
proceeding, or is subject to any order. judgment or
decree that is reasonably expected by management of
the Company to have, either individually or in the
aggregate, a material adverse effect on the condition
(financial or otherwise), earnings or results of
operations of lie Company. The Company is not, as of
the date hereof a party to or subject to any
enforcement action instituted by, or any agreement or
memorandum of understanding with any federal or state
regulatory authority restricting its operations or
requiring that actions be taken, and no such
regulatory authority has threatened any such action
memorandum or order against the Company and the
Company has not received any report of examination
from any federal or state regulatory agency which
requires that the Company address any problem or take
any action which has not already been addressed or
taken in a manner satisfactory to the regulatory
agency.
(c) AUTHORIZATION; CONFLICT; VALID AND BINDING OBLIGATION
This Agreement and the transactions contemplated
herein have been duly and validly authorized by all
requisite corporate action of the Company. The
Company has full right, power and capacity to
execute, deliver and perform its obligations under
this Agreement. No governmental license, permit or
authorization and no registration or filings with any
court, governmental authority or regulatory agency is
required in connection with the Company's execution,
delivery and/or performance of this Agreement, other
than any filings required by applicable federal and
state securities laws. The execution, delivery and
performance of this Agreement, the consummation of
the transactions herein contemplated and the
compliance with the terms of this Agreement by the
Company will not violate or conflict with any
provision of the Articles of Incorporation, as
amended or By-laws of the Company, or any agreement,
instrument, law or regulation to which the Company is
a party or by which the Company may be bound. This
Agreement, upon execution and delivery by the
Company, will represent the valid and binding
obligation of the Company enforceable in accordance
with its terms.
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4. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS AND
ACKNOWLEDGMENTS The representations, warranties, agreements,
and acknowledgments of the Company and Subscriber shall
survive the offering and purchase of Shares.
5. INDEMNIFICATION OF THE COMPANY Subscriber agrees to indemnify
and hold harmless the Company against and in respect of any
and all loss, liability, claim, damage, deficiency, and all
actions, suits, proceedings, demands, assessments, judgments,
costs and expenses whatsoever (including, but not limited to,
attorneys fees reasonably incurred in investigating,
preparing, or defending against any litigation commenced or
threatened or any claim whatsoever through all appeals)
arising out of or based upon any false representation or
warranty or breach or failure by Subscriber to comply with any
covenant or agreement made by it herein or in any other
document furnished by it in connection with this subscription.
6. RESET PROVISION During the 12 months following the
Subscriber's purchase of the Shares, if the Company raises
capital at a price per Share (split-protected) of less than
that paid by the Subscriber, then the Subscriber shall be
issued additional Shares such that his cost per Share is equal
to that of the new investors.
7. PIGGYBACK REGISTRATION RIGHTS If during two years from the
date of this Agreement, the Company files a registration
statement for any of its Shares, the Shares issued pursuant to
this Agreement shall be included in such registration
statement. This "piggyback" registration right is subject to
the right of the Company and its underwriters in any public
offering to reduce the number of shares proposed to be
registered in view of market conditions (to avoid adversely
affecting the Company's offering) and any state laws or
regulations which may prevent safe of these shares.
8. COOPERATION IN EFFECTING SALE OF THE SHARES Should the
Subscriber desire to sell the Shares subsequent to the end of
a one-year holding period and pursuant to an exemption from
registration under the Act, then the Company shall at no cost
to the Subscriber cooperate with the Investor in removing any
restrictions on the Shares; such cooperation shall include (a)
providing the transfer agent with written permission to remove
the restrictive legend and (b) furnishing the requisite
tradability opinion letter of counsel. If the Issuer's efforts
have been insufficient to have the restriction on the
Subscriber's shares removed within fifteen (15) days after
receiving a written request for such removal from the
Subscriber, then the Company shall indemnify the Investor
against any loss in the value of its Shares until such time as
the restriction on the Shares is removed. If the Company's
efforts have been insufficient to have the restriction on the
Shares removed within thirty (30) days after receiving a
written request for such removal from the Subscriber, then in
addition to the aforementioned indemnification, the Company
shall pay to the Subscriber a penalty equal to five hundred
dollars ($500) per day. If the Company has performed on a
"Reasonable Efforts basis, including written notification to
the Subscriber of delays that are out of the Company's
control, none of the above Company penalties shall be
enforceable.
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9. MISCELLANEOUS
(a) ENTIRE AGREEMENT This Agreement constitutes the
entire agreement between the parties hereto, and
supersedes all prior negotiations, letters and
understandings relating to the subject matter hereof
(b) AMENDMENTS This Agreement may not be amended,
supplemented, or modified in whole or in part except
by an instrument in writing signed by the party or
parties against whom enforcement of any such
amendment, supplement, or modification is sought.
(c) NOTICES Any notice, demand, or other communication
that any party hereto may be required, or may elect,
to give to anyone interested hereunder shall be
deemed given on the date initially received if
delivered by facsimile transmission followed by
registered or certified mail confirmation; on the
date delivered by an overnight courier service; on
the third business day after it is mailed if mailed
by registered or certified mail (return receipt
requested, with postage and other fees prepaid)
addressed to such addresses as provided herein.
(d) SUCCESSORS AND ASSIGNS Except as otherwise provided
herein, this Agreement shall be binding upon and
inure to Subscriber's benefit and the benefit of
Subscriber's heirs, executors, administrators,
successors legal representatives, and permitted
assigns. If the undersigned is more than one person,
the obligation of the undersigned shall be joint and
several and the agreements, representations,
warranties, and acknowledgements herein contained
shall be deemed to be made by and be binding upon
each such person and his heirs, executors;
successors, administrators, legal representatives,
and permitted assigns.
(e) CHOICE OF LAW; VENUE This Agreement will be
interpreted, construed, and enforced in accordance
with the laws of the State of California without
giving effect to the application of the principles
pertaining to conflicts of laws. Any proceeding
arising between the parties in any manner pertaining
or relating to this Agreement shall, to the extent
permitted by law, be held in Orange County,
California.
(f) EFFECT OF WAIVER The failure of any party at any time
or times to require performance of any provision of
this Agreement will in no manner affect the right to
enforce the same. The waiver by any party of any
breach of any provision of this Agreement will not be
construed to be a waiver by any such party of any
succeeding breach of that provision or a waiver by
such party of any breach of any other provision.
(g) SEVERABILITY The invalidity, illegality, or
unenforceability of any provision or provisions of
this Agreement will not affect any other provision of
this
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Agreement, which will remain in full force and
effect, nor will the invalidity, illegality, or
unenforceability of a portion of any provision of
this Agreement affect the balance of such provision.
In the event that any one or more of the provisions
contained in this Agreement or any portion thereof
shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, this Agreement shall
be reformed, construed, and enforced as if such
invalid, illegal, or unenforceable provision had
never been contained herein.
(h) ENFORCEMENT Should it become necessary party to
institute legal action to enforce this Agreement, the
successful party will be awarded reasonable
attorneys' fees at all trial and appellate levels,
expenses, and costs.
(i) COUNTERPARTS This Agreement may be executed in one or
more counterparts, each of which will be deemed an
original and all of which together will constitute
one and the same instrument.
(j) FURTHER ASSURANCES The parties hereto will execute
and deliver such further instruments and do such
further acts and things as may be reasonably required
to carry out the intent and purposes of this
Agreement.
[SIGNATURES ON THE FOLLOWING PAGE]
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---------------------------------
SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the _____ day of January, 2007.
Total Number of Shares Subscribed for: _________
Total Purchase Price per Share: $2.00
______________ (Print Name of Spouse or Joint
Tenant, if Any)
______________
(Signature of Subscriber, Custodial) (Signature of Spouse or Joint
Tenant, If Any)
______________
______________ (Address)
____________ (Telephone Number)
______________
(Social Security or Tax ID Number)
January _, 2006
(Date) (Date)
NOTE: If two purchasers are signing, please check the manner in which the
ownership is to be legally held (the indicated manner shall be construed as if
written out in fall accordance with applicable laws or regulations):
______ JT TEN: As joint tenants with right of survivorship
and not as tenants in common.
______ TEN COM: As tenants in common.
______ TENENT: As tenants by the entireties.
THIS IS AN XXX ACCOUNT PURCHASE. PLEASE
REGISTER THE ASSET IN XXX NAME AS LISTED.
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The undersigned hereby tenders to BLUEFIRE ETHANOL FUELS, INC. the amount above
indicating the :number of Units subscribed for. Checks should be made payable to
BLUEFIRE ETHANOL FUELS, INC. Wire transfer information is available upon
request.
-----------------------------
APPROVED AND ACCEPTED in accordance with the terms of this Subscription
Agreement on this _____ day of January, 2007.
BLUEFIRE ETHANOL FUELS INC.
By:
----------------------------
Print Name: Xxxxxx X. Xxxxx
----------------------------
Title: President
----------------------------
SUBSCRIPTION PROCEDURES
Certain documents for investors are enclosed for use in subscribing for the
securities. As a condition to the Company accepting subscriptions, a prospective
investor must complete, execute and deliver us the following:
1. The Subscription Agreement with the signature page appropriately
completed; and
2. The payment required on the Subscription Agreement.
3. Payment for the subscription shall be made by wire transfer follows
PAYMENT BY WIRE TO:
Bank of the West
Green. Valley Office
Acct Name: BlueFire Ethanol Fuels, Inc.
Acct #: 266-033307
Routing #: 000000000
Upon receipt of good funds, the Company will immediately order the Shares
subscribed for in the Subscription Document in the name of the subscriber,
instructions to the transfer agent to send the Shares directly to the
Subscriber.
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