SUBSCRIPTION AGREEMENT IGNIS PETROLEUM GROUP, INC. April 19, 2006
Exhibit
10.32
April
19,
2006
000
Xxxxxxxx Xxxxx, 0xx
Xxxxx
Xxxxxx,
Xxxxx 00000
The
undersigned, Petrofinanz
GmbH
(the
“Subscriber”)
understands that Ignis Petroleum Group, Inc., a Nevada Corporation (the
“Company”),
is
offering for sale to the undersigned shares of the Company’s common stock, par
value $0.001 per share (the “Common
Stock”),
at a
purchase price of $1.10 per share, which is equal to the bid price per share
of
the Common Stock as quoted by Bloomberg, LP at the close of business on the
date
hereof (the “Bid
Price”).
The
Subscriber agrees to purchase the Common Stock upon the terms and conditions
set
forth herein. The Subscriber acknowledges and understands that the offering
of
the Common Stock (the “Offering”)
is
being made without registration of the Common Stock under the Securities Act
of
1933, as amended (the “Act”),
or
any securities “blue sky” or other similar laws of any state (“State
Securities Laws”).
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1.
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Subscription.
Subject to the terms and conditions hereof and effective as of the
close
of business on the date hereof, the Subscriber hereby subscribes
for and
agrees to purchase $200,000 (the “Purchase
Price”)
worth of Common Stock at the Bid Price per share, upon acceptance
of this
Subscription Agreement by the
Company.
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2.
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Payment
for the Common Stock.
The undersigned shall deliver the Purchase Price to the Company via
cash,
check or wire transfer on or before April 19, 2006. Upon receipt
of the
Purchase Price and acceptance of this Subscription Agreement, the
Company
shall deliver to the Subscriber a certificate representing 181,818
shares
of Common Stock. If this subscription is not accepted by the Company
for
any reason, all documents will be returned to the
Subscriber.
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3.
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Representations
and Warranties of the Subscriber.
The Subscriber hereby represents and warrants to and covenants with
the
Company, as well as each officer, director and agent of the Company
as
follows:
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(a) General.
(i) The
Subscriber has all requisite authority to enter into this Subscription Agreement
and to perform all the obligations required to be performed by the Subscriber
hereunder.
(ii)
The
Subscriber is the sole party in interest and is not acquiring the Common Stock
as an agent or otherwise for any other person. The Subscriber resides at the
location set forth opposite its name on the signature page hereto and it has
its
principal office at such location.
(iii)
The
Subscriber recognizes that the total amount of funds tendered to purchase the
Common Stock is placed at the risk of the business and may be completely lost.
The purchase of the Common Stock of the Company as an investment involves
extreme risk.
(iv)
The
Subscriber realizes that the Common Stock cannot readily be sold as the shares
of Common Stock are restricted securities, that it may not be possible to sell
or dispose of the Common Stock and therefore the Common Stock must not be
purchased unless the Subscriber has liquid assets sufficient to assure that
such
purchase will cause no undue financial difficulties and the Subscriber can
provide for current needs and personal contingencies.
(v)
The
Subscriber confirms and represents that it is able (a) to bear the economic
risk
of this investment, (b) to hold the Common Stock for an indefinite period of
time, and (c) to afford a complete loss of this investment. The Subscriber
also
represents that it has (x) adequate means of providing for its current needs
and
personal contingencies, and (y) has no need for liquidity in this particular
investment.
(vi)
The
Subscriber has not become aware of the Offering by any form of general
solicitation or advertising, including, but not limited to advertisements,
articles, notices or other communications published in any newspaper, magazine
or other similar media or broadcast over television or radio or any seminar
or
meeting where those individuals that have attended have been invited by any
such
or similar means of general solicitation or advertising.
(vii)
Subscriber
is purchasing the Common Stock for its own account, for investment purposes
only
and not with view to any public resale or other distribution thereof. Subscriber
acknowledges that it is an Accredited Investor as that term is defined in Rule
501(a) of Regulation D of the Act. Subscriber and its representatives have
received, or have had access to, and have had sufficient opportunity to review,
all books, records, financial information and other information which Subscriber
considers necessary or advisable to enable it to make a decision concerning
its
purchase of the Common Stock, and that it possesses such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment hereunder.
Additionally,
the Subscriber understands that any sale by the Subscriber of any of the shares
of Common Stock purchased under this Agreement will, under current law, require
either: (a) the registration of the Common Stock under the Act and applicable
state securities acts; (b) compliance with Rule 144 of the Act; or (c) the
availability of an exemption from the registration requirements of the Act.
The
Subscriber understands that the Company has not undertaken and does not
presently intend to file a Registration Statement to register the Common Stock
purchased hereunder. The Subscriber hereby agrees to execute, deliver, furnish
or otherwise provide to the Company an opinion of counsel reasonably acceptable
to the Company prior to any subsequent transfer of the Common Stock, that such
transfer will not violate the registration requirements of the federal or state
securities acts. The Subscriber further agrees to execute, deliver, furnish
or
otherwise provide to the Company any documents or instruments as may be
reasonably necessary or desirable in order to evidence and record the Common
Stock acquired hereby.
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To
assist
in implementing the above provisions, the Subscriber hereby consents to the
placement of the legend, or a substantially similar legend, set forth below,
on
all certificates representing ownership of the Common Stock acquired hereby
until the Common Stock has been sold, transferred, or otherwise disposed of,
pursuant to the requirements hereof. The legend shall read substantially as
follows:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, NOR THE LAWS
OF
ANY OTHER JURISDICTION. THEY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THOSE SECURITIES LAWS OR AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY, THAT THE SALE OR TRANSFER IS PURSUANT TO AN
EXEMPTION TO THE REGISTRATION REQURIEMENTS OF THOSE SECURITIES LAWS, INCLUDING
COMPLIANCE WITH REGULATION S OF THE SECURITIES ACT OF 1933, AS
AMENDED.”
(viii) Subscriber
Information.
Subscriber further confirms and represents hereby that:
a. Subscriber
understands that the shares of Common Stock have not been approved or
disapproved by the United States Securities and Exchange Commission (the
“SEC”)
or any
foreign securities agencies and no registration statement has been filed with
any regulatory agency;
b. Subscriber
is not an underwriter and would be acquiring the Common Stock solely for
investment for its own account and not with a view to, or for, resale in
connection with any distribution with in the meaning of the federal securities
act, the state securities acts or any other applicable state securities
acts;
c. The
undersigned Subscriber is not a person in the United States of America and
at
the time the buy order was originated, the Subscriber was outside the United
States of America. The undersigned Subscriber is not a citizen of the United
States (a “U.S.
Person”)
as
that term is defined in Regulation S of the Act, was not formed by a U. S.
Person principally for the purpose of investing in securities not registered
under the Act, and is not acquiring the Common Stock for the account or benefit
of any U. S. Person;
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d. The
undersigned Subscriber understands the speculative nature and risks of
investments associated with the Company, and confirms that the Common Stock
would be suitable and consistent with its investment program and that its
financial position enable it to bear the risks of this investment;
e. To
the
extent that any federal, and/or state securities laws shall require, the
Subscriber hereby agrees that any securities acquired pursuant to this Agreement
shall be without preference as to assets;
f. The
certificate for the shares of Common Stock will contain a legend that transfer
is prohibited except in accordance with the provisions of Regulation
S;
g. The
Subscriber has had the opportunity to ask questions of the Company and has
received all information from the Company to the extent that the Company
possessed such information, necessary to evaluate the merits and risks of any
investment in the Company;
h. The
Subscriber has satisfied the suitability standards and securities laws imposed
by government of its organization;
i. The
Subscriber has adequate means of providing for its current needs and
contingencies and has no need to sell the Common Stock in the foreseeable future
(that is at the time of the investment, Subscriber can afford to hold the
investment for an indefinite period of time);
j. The
Subscriber has sufficient knowledge and experience in financial matters to
evaluate the merits and risks of this investment and further, the Subscriber
is
capable of reading and interpreting financial statements. Further, Subscriber
is
an “Accredited Investor” as that term is defined in applicable court cases and
the rules, regulations and decisions of the SEC.
k.
The
offer
and sale of the Common Stock referred to herein is being made outside the United
States within the meaning of and in full compliance with Regulation S;
and
m. The
Subscriber agrees to resell the Common Stock only in accordance with the
provisions of Regulation S, pursuant to registration under the Act or pursuant
to an available exemption from registration.
(b) Information
Concerning the Company.
(i)
The
Subscriber acknowledges that it has received all current information about
the
Company including the Company’s Form 10-KSB for the fiscal year ended June 30,
2005 and the Company’s Forms 10-QSB for the fiscal quarters ended September 30,
2005 and December 31, 2005 (collectively, the “Filed
Documents”).
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(ii) The
Subscriber or its representative is familiar with the business and financial
condition, properties, operations and prospects of the Company, and, at a
reasonable time prior to the execution of this Subscription Agreement, the
Subscriber and its representatives have been afforded the opportunity to ask
questions of and receive satisfactory answers from the Company’s officers and
directors, or other persons acting on the Company’s behalf, concerning the
business and financial condition, properties, operations and prospects of the
Company and concerning the terms and conditions of the offering of the Common
Stock and has asked such questions as it or its representative desires to ask
and all such questions have been answered to the full satisfaction of the
Subscriber.
(iii) The
Subscriber has been furnished, has carefully read, and has relied solely (except
for information obtained pursuant to (iv) below, on the information contained
in
the Filed Documents, and Subscriber has not received any other offering
literature or prospectus, and no verbal or written representations or warranties
have been made to Subscriber by the Company, or its employees or agents, other
than the representations of the Company set forth herein and in the Filed
Documents.
(iv) The
Subscriber has had an unrestricted opportunity to: (A) obtain additional
information concerning the offering of Common Stock, the Company and any other
matters relating directly or indirectly to Subscriber’s purchase of the Common
Stock; and (B) ask questions of, and receive answers from the Company concerning
the terms and conditions of the Offering and to obtain such additional
information as may have been necessary to verify the accuracy of the information
contained in the Filed Documents.
(v)
The
Subscriber understands that, unless the Subscriber notifies the Company in
writing to the contrary, all the representations and warranties contained in
this Subscription Agreement will be deemed to have been reaffirmed and
confirmed, taking into account all information received by the
Subscriber.
(vi)
The
Subscriber understands that the purchase of the Common Stock involves various
risks, including, but not limited to, those outlined in this Subscription
Agreement.
(vii)
The
Subscriber acknowledges that no representations or warranties have been made
to
the Subscriber by the Company as to the tax consequences of this investment,
or
as to profits, losses or cash flow which may be received or sustained as a
result of this investment.
(viii)
All
documents, records and books pertaining to a proposed investment in the Common
Stock which the Subscriber or its representative have requested have been made
available to the Subscriber.
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(ix)
The
Subscriber or its representative has been provided access to all information
requested in evaluating its purchase of the Common Stock.
(c) Status
of the Subscriber.
The
Subscriber represents that the Subscriber is an “Accredited Investor” (check
each category of “Accredited Investor” below which is applicable to the
Subscriber):
(
) (A) a
natural
person whose individual net worth, or joint net worth with that person’s spouse,
at the time of his purchase exceeds $1,000,000;
(
) (B) a
natural
person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching
the
same income level in the current year.
(
) (C) a
bank as
defined in Section 3(a)(2) of the Act or a savings and loan association or
other
institution as defined in Section 3(a)(5)(A) of the Act, whether acting in
its
individual or fiduciary capacity; broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended; an insurance
partnership as defined in Section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 (the “1940
Act”)
or
business development company as defined in Section 2(a)(48) of the 1940 Act;
a
Small Business Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the benefit of
its
employees if such plan has total assets in excess of $5,000,000; or 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 fiduciary is either a bank, savings and loan association,
insurance company or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan,
with
investment decisions made solely by persons that are Accredited Investors (as
listed in categories (A) - (G));
(
) (D) a
private
business development company as defined in Section 202(a) (22) of the Investment
Advisors Act of 1970;
(
) (E) an
organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, Massachusetts or similar business trust, or a partnership, with
total assets in excess of $5,000,000, and which was not formed for the specific
purpose of acquiring the Common Stock;
(
) (F) a
trust,
with total assets in excess of $5,000,000 not formed for the specific purposes
of acquiring the Common Stock whose purchase is directed by a person who has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment in the Common Stock;
and
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(
) (G) an
entity
in which all of the equity owners are Accredited Investors (as listed in
categories (A) - (F)) or is an Accredited Investor defined by Regulation
D.
The
Subscriber agrees to furnish any additional information requested to assure
compliance with applicable Federal and State Securities Laws in connection
with
the purchase and sale of the Common Stock.
(d) Restrictions
on Transfer or Sale of the Common Stock.
(i)
The
Subscriber is acquiring the Common Stock subscribed solely for the Subscriber’s
own beneficial account, for investment purposes, and not with view to, or for
resale in connection with, any distribution of the Common Stock. The Subscriber
understands that the offer and the sale of the Common Stock has not been
registered under the Act or any State Securities Laws by reason of specific
exemptions under the provisions thereof which depend in part upon the investment
intent of the Subscriber and of the other representations made by the Subscriber
in this Subscription Agreement. The Subscriber understands that the Company
is
relying upon the representations, covenants and agreements contained in this
Subscription Agreement (and any supplemental information) for the purposes
of
determining whether this transaction meets the requirements for such
exemptions.
(ii)
The
Subscriber understands that the Common Stock are “restricted securities” under
applicable federal securities laws and that the Act and the rules of the SEC
provide in substance that the Subscriber may dispose of the Common Stock only
pursuant to an effective registration statement under the Act or an exemption
therefrom. The certificates evidencing the shares of Common Stock issued
pursuant to the Offering will bear a legend which clearly sets forth this
restriction. The Subscriber understands that the Subscriber may not at any
time
demand the purchase by the Company of the Subscriber’s Common
Stock.
(iii)
The
Subscriber agrees: (A) that the Subscriber will not sell, assign, pledge, give,
transfer or otherwise dispose of the Common Stock or any interest therein,
or
make any offer or attempt to do any of the foregoing, except pursuant to a
registration of the Common Stock under the Act and all applicable State
Securities Laws or in a transaction which is exempt from the registration
provisions of the Act and all applicable State Securities Laws; (B) that the
Company and any transfer agent shall not be required to give effect to any
purported transfer of any of the Common Stock except upon compliance with the
foregoing restrictions; and (C) that a restrictive legend will be placed on
the
certificate(s) representing any portion of the Common Stock.
(iv)
The
Subscriber has not offered or sold any portion of the subscribed for Common
Stock and has no present intention of dividing such Common Stock with others
or
of reselling or otherwise disposing of any portion of such Common Stock either
currently or after the passage of a fixed or determinable period of time or
upon
the occurrence or nonoccurrence of any predetermined event or
circumstance.
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4.
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Survival
and Indemnification.
All representations, warranties and covenants contained in this Agreement
and the indemnification contained in this Paragraph 4 shall survive
(i)
the acceptance of the Subscription Agreement by the Company and (ii)
the
death or disability of the Subscriber. The Subscriber acknowledges
the
meaning and legal consequences of the representations, warranties
and
covenants in Paragraph 3 hereof and that the Company has relied upon
such
representations, warranties and covenants in determining the Subscriber’s
qualification and suitability to purchase the Common Stock. The Subscriber
hereby agrees to indemnify, defend and hold harmless the Company,
and its
officers, directors, employees, agents and controlling persons, from
and
against any and all losses, claims, damages, liabilities, expenses
(including attorneys’ fees and disbursements), judgment or amounts paid in
settlement of actions arising out of or resulting from the untruth
of any
representation herein or the breach of any warranty or covenant herein.
Notwithstanding the foregoing, however, no representation, warranty,
covenant or acknowledgment made herein by the Subscriber shall in
any
manner be deemed to constitute a waiver of any rights granted to
it under
the Act or State Securities Laws.
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5.
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Notices.
All notices and other communications provided for herein shall be
in
writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt
requested, postage prepaid, or overnight air courier guaranteeing
next day
delivery:
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(a) if
to the
Company, to it at the following address:
000
Xxxxxxxx Xxxxx, 0xx
Xxxxx
Xxxxxx,
Xxxxx 00000
Attn:
President
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(b)
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if
to the Subscriber, at the address set forth on the last page hereof
or
directly to the Subscriber at the address set forth on the signature
page
hereto, or at such other address as either party shall have specified
by
notice in writing to the other.
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All
notice and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; two days after being deposited
in
the mail, postage prepaid, if mailed; and the next day after timely delivery
to
the courier, if sent by overnight air courier guaranteeing next day
delivery.
If
a
notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives
it.
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6.
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Assignability.
This Subscription Agreement is not assignable by the Subscriber,
and may
not be modified, waived or terminated except by an instrument in
writing
signed by each of the parties
hereto.
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7.
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Binding
Effect.
Except as otherwise provided herein, this Subscription Agreement
shall be
binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and
assigns,
and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by and be binding upon
such
heirs, executors, administrators, successors, legal representatives
and
assigns. If the Subscriber is more than one person, the obligation
of the
Subscriber shall be joint and several and the agreements, representations,
warranties and acknowledgments contained herein shall be deemed to
be made
by and be binding upon each such person and its heirs, executors,
administrators and successors.
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8.
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Entire
Agreement.
This Subscription Agreement constitutes the entire agreement of the
Subscriber and the Company relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or
written.
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9.
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Governing
Law.
This Subscription Agreement shall be governed and controlled as to
the
validity, enforcement, interpretations, construction and effect and
in all
other aspects by the substantive laws of the State of Nevada. In
any
action between or among any of the parties, whether arising out of
this
Agreement or otherwise, each of the parties irrevocably consents
to the
exclusive jurisdiction and venue of the federal and state courts
located
in Dallas County, Texas.
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10.
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Severability.
If any provision of this Subscription Agreement or the application
thereof
to any Subscriber or circumstance shall be held invalid or unenforceable
to any extent, the remainder of this Subscription Agreement and the
application of such provision to other subscriptions or circumstances
shall not be affected thereby and shall be enforced to the greatest
extent
permitted by law.
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11.
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Headings.
The headings in this Subscription Agreement are inserted for convenience
and identification only and are not intended to describe, interpret,
define, or limit the scope, extent or intent of this Subscription
Agreement or any provision hereof.
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12.
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Counterparts
and Facsimiles.
This Subscription Agreement may be executed in multiple counterparts
and
in any number of counterparts, each of which shall be deemed an original
but all of which taken together shall constitute and be deemed to
be one
and the same instrument and each of which shall be considered and
deemed
an original for all purposes. This Agreement shall be effective with
the
facsimile signature of any of the parties set forth below and the
facsimile signature shall be deemed as an original signature for
all
purposes and the Agreement shall be deemed as an original for all
purposes.
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[Signature
page follows.]
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IN
WITNESS WHEREOF,
the
undersigned Subscriber has executed this Subscription Agreement as of the date
first written above.
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PETROFINANZ
GMBH
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By:
/s/
XXXXX XXXXXX
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Name:
Xxxxx
Xxxxxx
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Title:
Director
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Address:
Trust Company Complex
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Ajeltake
Road
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Ajeltake
Island
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Majuro,
Xxxxxxxx Xxxxxxx XX 00000
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ACCEPTED
by the
Company as of the date first written above.
By:
/s/
XXXXXXX X. XXXXXX
Name:
Xxxxxxx
X. Xxxxxx
Title:
President,
Chief Executive Officer
and
Treasurer
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