STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT
(the "Agreement"), dated as of February 28, 2012, by and among Infinity Energy Resources, Inc., a Delaware corporation,
with headquarters located at 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx 00000 (the "Company") and Off-Shore
Finance, LLC, a Nevada limited liability company (the "Buyer"), 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx
Company and Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506 of Regulation D ("Regulation
D") thereunder, as promulgated by the United States Securities and Exchange Commission (the "SEC") under the 1933
Company has authorized the issuance of shares of Series B Preferred Stock, $0.0001 par value ("Series B Preferred").
The Certificate of Designation of the Series A Preferred and the Series B Preferred is set forth as Exhibit A to this Agreement.
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Series B
the Company and Buyer hereby agree as follows:
AND SALE OF THE SERIES B PREFERRED.
Upon the terms and conditions set forth herein, the Company hereby agrees to issue and sell to Buyer, and Buyer hereby agrees to
purchase from the Company at the Closing (as defined below), 15,016 shares of the Series B Preferred.
The closing (the "Closing") of the purchase and sale of the Series B Preferred will occur at the offices of the Company
at 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx 00000 on March 6, 2012 at 10:00 a.m., CST, or such other date and time
as the parties shall agree (the "Closing Date"). At the Closing, the parties shall take the actions and make such deliveries
as are provided in Article 5 below.
Price. The purchase price (the "Purchase Price") of the Series B Preferred is $1,501,600, which represents all the
amount due under the Subordinate Secured Promissory Note, dated March 23, 2009, due March 31, 2012 (the "Note"). The
Buyer agrees, on the terms and conditions set forth herein to purchase at the Closing, and the Company agrees to sell and issue
to the Purchaser at the Closing, 15,016 shares of Series B Preferred in conversion, exchange and payment in full of the Note.
REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to the Company that the following representations and
warranties are true and correct in all material respects as of the date hereof and as of the Closing Date:
and Good Standing. Buyer is duly organized, validly existing, and in good standing under the laws of the State of Nevada. The
Buyer has all requisite limited liability company power and authority to own and operate its assets and to carry on its business
as presently conducted.
Enforcement. The Buyer has the requisite power and authority to enter into and perform its obligations under this Agreement
and any related documents to which it is or may be a party. The execution and delivery of this Agreement and any related documents
by the Buyer and the consummation by the Buyer of the transactions contemplated hereby and thereby, including, without limitation,
the conversion and exchange of the Note and payment in full of the debt it represents into the Series B Preferred have been duly
authorized by the Buyer's Managing Member and Members. This Agreement and any related documents to which it is a party have been
duly executed and delivered by the Buyer, and constitute the legal, valid and binding obligations of the Buyer, enforceable against
the Buyer in accordance with their respective terms, except as (i) such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws or (ii) general principles
of equity that restrict the enforcement and availability of applicable creditors' rights and remedies.
Conflicts. The execution, delivery and performance by Buyer of this Agreement and any related Documents to which it is or may
be a party and the consummation by Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which Buyer is a party, or result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to Buyer, except in the case of clauses (i) and (ii)
above, for such conflicts, defaults, rights or violations which would not, have a material adverse effect on the ability of Buyer
to perform its obligations hereunder.
Public Sale or Distribution. Buyer is acquiring the Series B Preferred for its own account and for investment purposes only
and not with a view towards, or for resale in connection with, the public sale or distribution thereof in a manner that would violate
the Securities Act, except pursuant to sales registered or exempted under the Securities Act. Buyer does not presently have any
agreement or understanding, directly or indirectly, with any person to distribute any of the shares of the Series B Preferred.
to Information. Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the Series B Preferred that have been requested by Buyer.
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company and receive answers concerning
the business and affairs of the Company and the terms and conditions of the sale of the Series B Preferred as contemplated by this
Agreement, and to obtain any additional information as may be necessary to verify the accuracy of information furnished to Buyer.
Buyer further acknowledges that it was encouraged by the Company to request all additional information that might be material or
important in order for Buyer to make an informed investment decision with respect to the purchase of the Series B Preferred and
has carefully read this Agreement and the other any related documents and all other information furnished to Buyer by the Company
in connection with this Agreement, including the Stock Purchase Agreement and other documents relating to the Company’s transaction
with Amegy Bank, N.A. (the "Amegy Transaction").
of Risk. Buyer acknowledges and warrants that, in making this investment decision, it has made its own independent assessment
of the merits and risks of an investment in the Series B Preferred based on its examination and evaluation of Company, its business,
operations, financial condition, future prospects and the skills and qualifications of its officers,
directors and employees. Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Series B Preferred and has not relied on Company or its respective agents
or representatives. Buyer understands that its investment in the Series B Preferred involves a high degree of risk and understands
that the Company is currently experiencing substantial liquidity problems. Buyer acknowledges the risks, including, without limitation,
the risks set forth in the "Risk Factors" in the Form 10, as amended, the Company filed with the SEC in July 2011 and
the risk that it is converting its debt into equity, thereby forfeiting its status as a creditor for that of an equity holder.
Buyer further represents it: (i) is able to bear the loss of Buyer's entire investment in the Series B Preferred without any material
adverse effect on Buyer's economic condition or stability and (ii) has, alone or together with its advisors, such knowledge and
experience in financial and business matters as to be capable of evaluating the merits and risks of the investment to be made by
Buyer pursuant to this Agreement.
Status. Buyer understands that the Series B Preferred is being offered and sold only to "accredited investors" (as
that term is defined under Rule 501(a) of Regulation D), and Buyer represents that Buyer is an accredited investor by virtue
of the fact that it is an entity in which all of the equity owners are accredited investors. Buyer understands that the Company
is relying on Buyer with respect to the accuracy of this representation. Buyer and each of its equity investors has completed and
returned a copy of the investor questionnaire, and Buyer represents that the statements made therein are complete and accurate.
Solicitation. Buyer is not purchasing the Series B Preferred as a result of any advertisement, article, notice or other communication
regarding the Series B Preferred published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general advertisement.
Information. Buyer represents and warrants that, except as set forth in this Agreement and any related document, no representations
or warranties have been made to Buyer by the Company or any agent, employee, representative or affiliate of the Company and that,
in entering into this transaction for the Series B Preferred, Buyer is not relying on any information other than that contained
in this Agreement, any related document, and other written information obtained from the Company in the course of the independent
investigation by Buyer, and has been based solely on the independent evaluation by the Buyer and its representatives.
on Exemptions. Buyer understands that the Series B Preferred are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings
of Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of Buyer to acquire the
Series B Preferred. Buyer understands that the shares of Series B Preferred have not been registered under the Securities Act or
any state securities laws by reason of their contemplated issuance in transactions exempt from the registration requirements of
the Securities Act and applicable state securities laws, and that the reliance of Company and others upon these exemptions is predicated
in part upon the representations by Buyer in this Agreement.
Regarding Buyer's Purchase of Series B Preferred. The Buyer acknowledges and agrees that Buyer and any person acting as an
affiliate of Buyer is acting solely in the capacity of an arm's length purchaser with respect to the Series B Preferred and the
negotiation of this Agreement and any related document and that Buyer is not an officer or director of the Company or acting as
a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the purchase and sale of the Series
B Preferred and the negotiation of any related document.
Governmental Review. Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Series B Preferred or the fairness or suitability of the
investment in the Series B Preferred nor have such authorities passed upon or endorsed the merits of the offering of the Series
or Resale Legends. Buyer understands that because the shares of Series B Preferred have not been and are not being registered
under the Securities Act or any state securities laws, such securities may not be offered for sale, sold, assigned or transferred,
and the legend set forth below shall not be removed and the Company shall not issue a certificate without such legend to the holder
of the securities upon which it is stamped, unless (i) such securities are registered under the Securities Act, or in connection
with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally acceptable
form, to the effect that such sale, assignment or transfer of the securities may be made without registration under the applicable
requirements of the Securities Act. Buyer understands that the certificates or other instruments representing the shares of Series
B Preferred shall bear a legend as required by the securities laws of any state and a restrictive legend in substantially the following
THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE ACT, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT SUCH REGISTRATION SHALL NO
LONGER BE REQUIRED.
Buyer has not employed, engaged or retained or otherwise incurred any liability to, any person as a broker, finder, agent or other
intermediary in connection with the transactions contemplated herein.
Buyer has its principal place of business in the jurisdiction set forth below Buyer's name in the notice provisions of this Agreement.
AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to the Buyer that the following representations
and warranties are true and correct in all material respects as of the date hereof and as of the Closing Date:
and Good Standing. The Company and its subsidiaries are duly organized, validly existing, and in good standing under the laws
of the jurisdiction in which they are formed. The Company and its subsidiaries have all requisite power and authority to own and
operate their properties and assets and to carry on their business as presently conducted.
Enforcement. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement,
and any related document to which it is or may be a party. The execution and delivery by the Company of this Agreement and any
related document and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation,
the issuance of the Series B Preferred have been duly authorized by the Company's Board of Directors. This Agreement and any related
document to which the Company is a party have been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as (i)
such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws or (ii) general principles of equity that restrict the enforcement and availability of applicable creditors'
rights and remedies.
Conflicts. The execution, delivery and performance by the Company of this Agreement and any related document to which it is
or may be a party and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in
a violation of the organizational documents of the Company, or conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which Company is a party, or (ii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to Company, except in the
case of clauses (i) and (ii) above, for such conflicts, defaults, rights or violations which would not have a material adverse
effect on the Company or its ability to perform its obligations hereunder.
The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement or any related document, in each case in accordance with the terms hereof or thereof, other
than the filing with the SEC of Form D and filings with state securities authorities as required thereby.
with Law; Permits. The Company and its subsidiaries are in compliance with all applicable statutes and regulations of the United
States and of all states and applicable agencies and foreign jurisdictions or bodies in respect of the conduct of their business
and operations, except as would not have a material adverse effect. The Company and its subsidiaries have all permits, licenses,
and similar authority necessary for the conduct of their business as now being conducted by them, except as would not have a material
Documents; Financial Statements. Since July 2011, the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (the "SEC Documents"). As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading,
other than as may have been subsequently restated or amended in an amended or subsequent report. As of their respective dates,
the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. The financial statements of the
Company were prepared in accordance with generally accepted accounting principles in the United States and fairly and accurately
present in all material respects the financial position, results of operations and cash flows of the Company as of the dates, and
for the periods, indicated therein.
Additional Agreements. The Company does not have any agreement or understanding with Buyer with respect to the transactions
contemplated by this Agreement or any related document.
D and Blue Sky. The Company agrees to file a Form D with respect to the Series B Preferred as required under Regulation D.
The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order
to obtain an exemption for or to quality the Series B Preferred, for sale to the Buyer at the Closing pursuant to this Agreement
under applicable securities laws of the states of the United States (or to obtain an exemption from such qualification). The Company
shall make all filings and reports relating to the offer and sale of the Series B Preferred required under applicable securities
or "Blue Sky" laws of the states of the United States following the Closing Date.
of the Amegy Transaction. The Company hereby agrees immediately after the Closing contemplated by this Agreement, it will close
the Amegy Transaction under the Stock Purchase Agreement and related documents it has entered into with Amegy Bank that include
issuing shares of Series A Preferred to Amegy Bank in conversion of obligations that the Company owes to Amegy Bank.
of Business. The business of the Company and its subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate,
in a material adverse effect.
of Buyer by the Company. The Company hereby agrees to indemnify and hold harmless each of Buyer, its affiliates, their investment
advisors and each of their respective officers, managers, members and employees (collectively, the "Buyer Indemnitees"),
from and against any and all losses, claims, damages, judgments, penalties, liabilities and deficiencies (including the reasonable
fees and expenses (including the reasonable fees and expenses of legal counsel) (collectively, "Losses"), to the extent
arising out of or in connection with: (i) any material misrepresentation, omission of fact or breach of any of the Company's representations
or warranties contained in this Agreement or any related document to which it is a party; or (ii) any failure by the Company to
perform any of its covenants, agreements, undertakings or obligations set forth in this Agreement or any related document to which
it is a party.
of the Company by Buyer. Buyer hereby agrees to indemnify and hold harmless the Company and its officers, directors and employees
(collectively, the "Company Indemnitees"), from and against any and all Losses to the extent arising out of or in connection
with any material misrepresentation, omission of fact or breach of any of Buyer's representations, warranties or covenants contained
in this Agreement or the other any elated document to which it is a party and any failure by Buyer to perform any of its covenants,
agreements, undertakings or obligations set forth in this Agreement or any related document to which it is a party.
of Series B Preferred. Buyer agrees that the Series B Preferred may not be sold, transferred or assigned for a period of one
hundred eighty (180) days after the Closing Date.
The parties will take the following actions at Closing:
and Delivery of Shares and Documents. Each of Buyer and the Company shall execute such documents as are required to cancel
the Security Agreements and the Commercial Guaranties, executed by Infinity Texas and Infinity Wyoming and the Subordination Agreement,
executed by Amegy Bank. The Buyer shall surrender the Note for cancellation and the Company will issue the Buyer shares of Series
B Preferred. Each party shall execute and deliver such other documents relating to the transactions
contemplated by this Agreement as the other party or its counsel may reasonably request.
Law: Jurisdiction: Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of Kansas without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Kansas or any other jurisdictions) that would cause the application of the laws
of any jurisdictions other than the State of Kansas. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in Kansas City, Kansas, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Agreement; Amendments. This Agreement and any related documents supersede all other prior oral or written agreements between
the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this
Agreement, any related documents and the instruments referenced herein and therein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be amended other than by an instrument in writing signed by the Company and the Buyer, and any amendment to this Agreement
made in conformity with the provisions of this Section 6(e) shall be binding on Buyer. No provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement is sought.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
or (ii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive
the same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxx
With a copy (for informational purposes only) to:
Xxxxxxx & Xxxxx LLP
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxx, XXX
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer:
Off-Shore Finance, LLC
00000 Xxxxxxx Xxxxxxxxx., Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Xxxxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or above, respectively.
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Series B Preferred. The Buyer shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Company.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
The representations and warranties of the Company and the Buyer contained in Sections 2 and 3 and the agreements, and covenants
set forth in Section 4 shall survive the Closing.
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.
[Signature Page Follows]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Stock Purchase Agreement to be duly executed as
of the date first written above.
||/s/ Xxxxxx X. Xxxxx|
||Xxxxxx X. Xxxxx|
||Managing Member |
[Note: the Certificate of Designation
(Exhibit A hereto) is filed in its final form as Exhibit 99.4 to the Form 8-K dated April 19, 2012.]