DATE: 28 AUGUST 2006

 

 

 

 

 

PETROFINANZ GMBH

IGNIS PETROLEUM GROUP, INC.

 

 

 

 

 

 

 

AMENDED AND RESTATED LOAN AGREEMENT

 

 

 

THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Loan Agreement") is made this
28th day of August 2006.

 

BETWEEN:

 

1. Petrofinanz GMBH a company with administration address at Ajeltake Road,

Ajeltake Island, Majuro, Marshall Islands MH9696010 (the "Lender").

2. Ignis Petroleum Group, Inc. whose administration address is at 100 Crescent
Court, 7th Floor, Dallas, TX, 75201 (the "Borrower").

 

WHEREAS:

 A. The Borrower previously borrowed $100,000.00 from Lender pursuant to the
    Loan Agreement dated December 22, 2005 by and between the Lender and the
    Borrower (the "Original Loan Agreement").
 B. The Borrower has requested an additional loan of $500,000.00 from the Lender
    for working capital purposes.

IT IS HEREBY AGREED as follows:

1. The Original Loan Agreement is hereby amended and restated in its entirety as
set forth in this Loan Agreement. Lender hereby waives any default or Event of
Default under the Original Loan Agreement including without limitation the
Borrower's failure to repay the loan under the Original Loan Agreement on the
Repayment Date set forth in the Original Loan Agreement.

2. The following expressions shall, where the context admits, have the following
meanings;

i. "Events of Default" means the events described in Clause 8;

ii. the "Loan" means the sum of $600,000.00 which is being lent to the Borrower
by the Lender under this Loan Agreement, including $100,000 previously lent
under the Original Loan Agreement and $500,000 being lent on the date hereof;

iii. the "Repayment Date" means 28th February 2008.

3. The Lender will promptly make the remaining $500,000 of the Loan to the
Borrower. The Borrower will:

i. repay the principal amount of the Loan at a rate of $30,000 per month on or
before the 28th day of each month beginning January 28, 2007 and continuing
until the Repayment Date, at which time the entire outstanding principal amount
shall be due and payable. There shall be no penalty for repayment of the Loan
prior to the Repayment Date.

ii. pay interest on the Loan on or before the Repayment Date. Interest shall
accrue on the outstanding principal amount of the Loan as follows: (A) prior to
the date hereof, interest accrued at the fixed rate of 12% per annum; and (B) on
and after the date hereof, interest shall accrue at the fixed rate of 10% per
annum. Interest shall be calculated on the basis of actual days elapsed on a 365
day year.

Notwithstanding the foregoing, if the Borrower obtains new financing from the
issuance of debt or equity securities in excess of $1,000,000 after the date
hereof and prior to the Repayment Date (a "Financing Event"), then the Borrower
shall notify the Lender of the Financing Event and the Lender shall have the
right to accelerate repayment of the Loan in which case the entire outstanding
principal amount of the Loan and all accrued but unpaid interest thereon shall
be immediately due and payable upon such Financing Event.

4. All payments to be made by the Borrower shall be made free and clear without
deduction of any taxes, levies, imposts, duties, charges, fees, deductions or
withholding of any nature unless deduction or withholding of the same is
required by law. In the event such deduction or withholding is required by law,
the Borrower shall pay to the Lender such additional amounts as will result in
the Lender receiving the full amount which would have been received had no such
deduction or withholding been required.

5. The Borrower represents and warrants:

i. that the acceptance of the Loan and the performance of this agreement are
within its corporate powers and that there is no provision in any law, trust
deed or other agreement binding on the Borrower which would conflict with or
prevent the Borrower from entering into and performing this Loan Agreement in
accordance with its terms.

ii. that there are no pending or threatened actions, proceedings or happenings
which might materially affect the Borrower from entering into and performing
this Loan Agreement in accordance with its terms.

6. The Borrower undertakes that whilst any amount remains outstanding under this
facility it will advise the Lender as soon as it becomes aware that an Event of
Default has occurred.

7. If any Event of Default shall occur the Lender may, at its absolute
discretion, give notice that an Event of Default has occurred, and without
prejudice to any other right or remedy the Lender may have, the amount then
outstanding on the Loan will become immediately due and payable together with
any accrued interest or other amount that shall be accrued thereunder. No
failure or delay on the part of the Lender to exercise any power, right or
remedy it may have under the terms of this agreement shall operate as a waiver
thereof, nor shall any exercise or waiver of any such power, right or remedy
preclude its further exercise, or the exercise of any other power, right or
remedy. The powers, rights and remedies hereby provided are cumulative and are
not exclusive of any powers, rights or remedies provided by law.

8. The Events of Default are the occurrence of any of the following events,
provided that the Lender provides written notice of such the occurrence and five
(5) business days to cure:

i. if the Borrower fails to pay any monies due hereunder when the same become
due, or

ii. if a petition is presented (and not promptly dismissed) or an order is made
or an effective resolution is passed for the winding up of the Borrower, or if
circumstances occur which would justify the appointment of a receiver or
administrative receiver (or similar person) of all or any part of the business,
undertaking or assets of the Borrower, or

iii. if the Borrower ceases or threatens to cease to carry on its business or
any material part of the business, or

iv. if the Borrower sells, leases or otherwise disposes of all or substantially
all of its business or assets by one or more transactions whether related or not
other than leases of assets or transfers or other disposal of assets in the
ordinary course of business, or

v. if any encombrancer takes possession or a receiver is appointed of any part
of the Borrower's assets, business or undertaking, or

vi. if any distress execution sequestration or other process levied or enforced
upon or sued out against the Borrower's property in respect of a debt due by the
Borrower and is not discharged within twenty-one days, or

vii. if the Borrower convenes a meeting of, or proposes to enter into any
arrangement for the benefit of or composition with its creditors, or

viii. if any of the representations and warranties contained herein shall prove
to be incorrect in any material respect, or

ix. if the Borrower materially breaches any of the undertakings herein
contained, or

x. if anything analogous to any of the events specified in paragraphs i to ix
occurs under the laws of any applicable jurisdiction.

9. This Loan Agreement shall be governed by and construed in accordance with the
law of the State of Texas.

10. The parties hereby submit to the exclusive jurisdiction of the courts of
Texas, in relation to any disputes that may arise out of or in connection with
this Loan Agreement and the parties hereby waive any objections on the ground of
venue or forum non convenience or any similar grounds.

11. The Lender acknowledges that the Borrower previously borrowed $5,000,000
(the "Cornell Loan") from Cornell Capital Partners, LP ("Cornell"). The Lender
agrees to subordinate the Loan and any payments or obligations of the Borrower
under this Loan Agreement to the rights of Cornell under the Cornell Loan.

[Signature page follows.]

 

IN WITNESS WHEREOF

the parties hereto have executed this Loan Agreement the day and year first
written above.

 

THE COMMON SEAL of

PETROFINANZ GMBH

Was hereunto affixed in the

Presence of:

 

/s/ David Craven

DIRECTOR

 

 

 

____________________________

DIRECTOR/SECRETARY

 

IGNIS PETROLEUM GROUP, INC.

 

 

BY: /s/ Philipp Buschmann

 

NAME: Philipp Buschmann

 

TITLE: Chief Operating Officer

 

 

 

 

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