Unassociated Document


    
      

    

     

    Exhibit
      4.8

     

    PLEDGE
      AND ESCROW AGREEMENT

     

    THIS
      PLEDGE AND ESCROW AGREEMENT
      (the
“Agreement”)
      is
      made and entered into as of January 5, 2006 (the “Effective
      Date”)
      by and
      among IGNIS
      PETROLEUM GROUP, INC.,
      a
      corporation organized and existing under the laws of the State of Nevada (the
      “Pledgor”),
      CORNELL
      CAPITAL PARTNERS, LP,
      (the
“Pledgee”),
      and
DAVID
      GONZALEZ,
      ESQ.,
      as
      escrow agent (“Escrow
      Agent”).
      

     

    RECITALS:

     

    WHEREAS,
      in
      order
      to secure the full and prompt payment when due (whether at the stated maturity,
      by acceleration or otherwise) of all of the Company’s obligations (the
“Obligations”)
      to the
      Pledgee or any successor to the Pledgee under this
      Agreement, the Securities Purchase Agreement of even date herewith between
      the
      Pledgor and the Pledgee (the “Securities
      Purchase Agreement”),
      the
      Convertible Debentures (the “Convertible
      Debentures”)
      issued
      or to be issued by the Company to the Pledgee, either now or in the future,
      up
      to a total of Five Million Dollars ($5,000,000) of principal, plus any interest,
      costs, fees, and other amounts owed to the Pledgee thereunder, the Security
      Agreement of even date herewith between the Pledgor and the Pledgee (the
“Security
      Agreement”),
      and
      all other contracts entered into between the parties hereto (collectively,
      the
“Transaction
      Documents”),
      the
      Pledgor has agreed to irrevocably pledge to the Pledgee 18,750,000 shares (the
      “Pledged
      Shares”)
      of the
      Pledgor’s common stock, which shall be delivered to the Escrow Agent upon the
      termination of the Insider Pledge Agreement. 

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants, agreements, warranties, and
      representations herein contained, and for other good and valuable consideration,
      the receipt and sufficiency of which is hereby acknowledged, the parties hereto
      agree as follows:

     

    TERMS
      AND CONDITIONS

     

    1.            
      Pledge
      and Transfer of Pledged Shares.
      

     

    1.1.           The
      Pledgor hereby grants to Pledgee a security interest in all Pledged Shares
      as
      security for Pledgor’s obligations under the Convertible Debentures.
      Simultaneously with the execution of the Transaction Documents, the Pledgor
      shall deliver to the Escrow Agent stock certificates representing the Pledged
      Shares, together with duly executed stock powers or other appropriate transfer
      documents executed in blank by the Pledgor (the “Transfer
      Documents”),
      and
      such stock certificates and Transfer Documents shall be held by the Escrow
      Agent
      until the full payment of all amounts due to the Pledgee under the Convertible
      Debentures and through repayment in accordance with the terms of the Convertible
      Debentures, or the termination or expiration of this Agreement.

     

    2.            Rights
      Relating to Pledged Shares.
      Upon
      the occurrence of an Event of Default (as defined herein), the Pledgee shall
      be
      entitled to vote the Pledged Shares, to receive dividends and other
      distributions thereon, and to enjoy all other rights and privileges incident
      to
      the ownership of the Pledged Shares.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    3.            Release
      of Pledged Shares from Pledge.
      Upon
      the payment of all amounts due to the Pledgee under the Convertible Debentures
      by repayment or conversion in accordance with the terms of the Convertible
      Debentures, the parties hereto shall notify the Escrow Agent to such effect
      in
      writing. Upon receipt of such written notice for payment of the amounts due
      to
      the Pledgee under the Convertible Debentures, the Escrow Agent shall return
      to
      the Pledgor the Transfer Documents and the certificates representing the Pledged
      Shares, (collectively the “Pledged
      Materials”),
      whereupon any and all rights of Pledgee in the Pledged Materials shall be
      terminated. Notwithstanding anything to the contrary contained herein, upon
      full
      payment of all amounts due to the Pledgee under the Convertible Debentures,
      by
      repayment or conversion in accordance with the terms of the Convertible
      Debentures, this Agreement and Pledgee’s security interest and rights in and to
      the Pledged Shares shall terminate.

     

    4.            Event
      of Default.
      An
      “Event
      of Default”
shall
      be deemed to have occurred under this Agreement upon an Event of Default under
      the Transaction Documents.

     

    5.            Remedies.
      Upon
      and anytime after the occurrence of an Event of Default, the Pledgee shall
      have
      the right to provide written notice of such Event of Default (the “Default
      Notice”)
      to the
      Escrow Agent, with a copy to the Pledgor. As soon as practicable after receipt
      of the Default Notice, the Escrow Agent shall deliver to Pledgee the Pledged
      Materials held by the Escrow Agent hereunder. Upon receipt of the Pledged
      Materials, the Pledgee shall have the right to (i) sell the Pledged Shares
      and
      to apply the proceeds of such sales, net of any selling commissions, to the
      Obligations owed to the Pledgee by the Pledgor under the Transaction Documents,
      including, without limitation, outstanding principal, interest, legal fees,
      and
      any other amounts owed to the Pledgee, and exercise all other rights and (ii)
      any and all remedies of a secured party with respect to such property as may
      be
      available under the Uniform Commercial Code as in effect in the State of New
      Jersey. To the extent that the net proceeds received by the Pledgee are
      insufficient to satisfy the Obligations in full, the Pledgee shall be entitled
      to a deficiency judgment against the Pledgor for such amount. The Pledgee shall
      have the absolute right to sell or dispose of the Pledged Shares in any manner
      it sees fit and shall have no liability to the Pledgor or any other party for
      selling or disposing of such Pledged Shares even if other methods of sales
      or
      dispositions would or allegedly would result in greater proceeds than the method
      actually used. The Escrow Agent shall have the absolute right to disburse the
      Pledged Shares to the Pledgee in batches not to exceed 9.9% of the outstanding
      capital of the Pledgor (which limit may be waived by the Pledgee providing
      not
      less than 65 days’ prior written notice to the Escrow Agent). The Pledgee shall
      return any Pledged Shares released to it and remaining after the Pledgee has
      applied the net proceeds to all amounts owed to the Pledgee. 

     

    5.1.           Each
      right, power and remedy of the Pledgee provided for in this Agreement or any
      other Transaction Document shall be cumulative and concurrent and shall be
      in
      addition to every other such right, power or remedy. The
      exercise or beginning of the exercise by the Pledgee of any one or more of
      the
      rights, powers or remedies provided for in this Agreement or any
      other
      Transaction Document or
      now or
      hereafter existing at law or in equity or by statute or otherwise shall not
      preclude the simultaneous or later exercise by the
      Pledgee of all such other rights, powers or remedies, and no failure or delay
      on
      the part of the Pledgee to exercise any such right, power or remedy shall
      operate as a waiver thereof. No notice to or demand on the Pledgor in any case
      shall entitle it to any other or further notice or demand in similar or other
      circumstances or constitute a waiver of any of the rights of the Pledgee to
      any
      other further action in any circumstances without demand or notice. The Pledgee
      shall have the full power to enforce or to assign or contract is rights under
      this Agreement to a third party.

     

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    5.2.           Demand
      Registration Rights. In
      addition to all other remedies available to the Pledgee, upon an Event of
      Default, the Pledgor shall promptly, but in no event more than thirty (30)
      days
      after the date of receipt of the Default Notice, file a registration statement
      to register with the Securities and Exchange Commission the Pledged Shares
      for
      the resale by the Pledgee. The Pledgor shall cause the registration statement
      to
      remain in effect until all of the Pledged Shares have been sold by the Pledgee.
      

     

    6.            
      Concerning
      the Escrow Agent.

     

    6.1.           The
      Escrow Agent undertakes to perform only such duties as are expressly set forth
      herein and no implied duties or obligations shall be read into this Agreement
      against the Escrow Agent.

     

    6.2.           The
      Escrow Agent may act in reliance upon any writing or instrument or signature
      which it, in good faith, believes to be genuine, may assume the validity and
      accuracy of any statement or assertion contained in such a writing or
      instrument, and may assume that any person purporting to give any writing,
      notice, advice or instructions in connection with the provisions hereof has
      been
      duly authorized to do so. The Escrow Agent shall not be liable in any manner
      for
      the sufficiency or correctness as to form, manner, and execution, or validity
      of
      any instrument deposited in this escrow, nor as to the identity, authority,
      or
      right of any person executing the same; and its duties hereunder shall be
      limited to the safekeeping of such certificates, monies, instruments, or other
      document received by it as such escrow holder, and for the disposition of the
      same in accordance with the written instruments accepted by it in the
      escrow.

     

    6.3.           Pledgee
      and the Pledgor hereby agree, to defend and indemnify the Escrow Agent and
      hold
      it harmless from any and all claims, liabilities, losses, actions, suits, or
      proceedings at law or in equity, or any other expenses, fees, or charges of
      any
      character or nature which it may incur or with which it may be threatened by
      reason of its acting as Escrow Agent under this Agreement; and in connection
      therewith, to indemnify the Escrow Agent against any and all expenses, including
      attorneys’ fees and costs of defending any action, suit, or proceeding or
      resisting any claim (and any costs incurred by the Escrow Agent pursuant to
      Sections 6.4 or 6.5 hereof). The Escrow Agent shall be vested with a lien on
      all
      property deposited hereunder, for indemnification of attorneys’ fees and court
      costs regarding any suit, proceeding or otherwise, or any other expenses, fees,
      or charges of any character or nature, which may be incurred by the Escrow
      Agent
      by reason of disputes arising between the makers of this escrow as to the
      correct interpretation of this Agreement and instructions given to the Escrow
      Agent hereunder, or otherwise, with the right of the Escrow Agent, regardless
      of
      the instructions aforesaid, to hold said property until and unless said
      additional expenses, fees, and charges shall be fully paid. Any fees and costs
      charged by the Escrow Agent for serving hereunder shall be paid by the
      Pledgor.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    6.4.           If
      any of
      the parties shall be in disagreement about the interpretation of this Agreement,
      or about the rights and obligations, or the propriety of any action contemplated
      by the Escrow Agent hereunder, the Escrow Agent may, at its sole discretion
      deposit the Pledged Materials with the Clerk of the United States District
      Court
      of New Jersey, sitting in Newark, New Jersey, and, upon notifying all parties
      concerned of such action, all liability on the part of the Escrow Agent shall
      fully cease and terminate. The Escrow Agent shall be indemnified by the Pledgor,
      the Company and Pledgee for all costs, including reasonable attorneys’ fees in
      connection with the aforesaid proceeding, and shall be fully protected in
      suspending all or a part of its activities under this Agreement until a final
      decision or other settlement in the proceeding is received.

     

    6.5.           The
      Escrow Agent may consult with counsel of its own choice (and the costs of such
      counsel shall be paid equally by the Pledgor and Pledgee) and shall have full
      and complete authorization and protection for any action taken or suffered
      by it
      hereunder in good faith and in accordance with the opinion of such counsel.
      The
      Escrow Agent shall not be liable for any mistakes of fact or error of judgment,
      or for any actions or omissions of any kind, unless caused by its willful
      misconduct or gross negligence.

     

    6.6.           The
      Escrow Agent may resign upon ten (10) days’ written notice to the parties in
      this Agreement. If a successor Escrow Agent is not appointed within this ten
      (10) day period, the Escrow Agent may petition a court of competent jurisdiction
      to name a successor.

     

    6.7           Conflict
      Waiver.
      The
      Pledgor hereby acknowledges that the Escrow Agent is general counsel to the
      Pledgee, a partner in the general partner of the Pledgee, and counsel to the
      Pledgee in connection with the transactions contemplated and referred herein.
      The Pledgor agrees that in the event of any dispute arising in connection with
      this Agreement or otherwise in connection with any transaction or agreement
      contemplated and referred herein, the Escrow Agent shall be permitted to
      continue to represent the Pledgee and the Pledgor will not seek to disqualify
      such counsel and waives any objection Pledgor might have with respect to the
      Escrow Agent acting as the Escrow Agent pursuant to this Agreement.


     

    6.8           Notices.
      Unless
      otherwise provided herein, all demands, notices, consents, service of process,
      requests and other communications hereunder shall be in writing and shall be
      delivered in person or by overnight courier service, or mailed by certified
      mail, return receipt requested, addressed:

     

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    
      	
              If
                to the Pledgor, to:

            	
              Ignis
                Petroleum Group, Inc.

            
	 	
              100
                Crescent Court - 7th
                Floor

            
	 	
              Dallas,
                TX 75201

            
	 	
              Attention:

            	
              Michael
                Piazza

            
	 	
              Telephone:

            	
              (214)
                459-8188

            
	 	
              Facsimile:

            	
              (214)
                459-3101

            
	 	 	 
	
              With
                a copy to:

            	
              Sichenzia
                Ross Friedman Ference LLP

            
	 	
              1065
                Avenue of the Americas - 21st
                Floor

            
	 	
              New
                York, NY 10018

            
	 	
              Attention:

            	
              Gregory
                Sichenzia, Esq.

            
	 	
              Telephone:

            	
              (212)
                930-9700

            
	 	
              Facsimile:

            	
              (212)
                930-9725

            
	 	 	 
	 	 	
              and

            
	 	 	 
	 	
              Cantey
                & Hanger, LLP

            
	 	
              801
                Cherry Street, Suite 2100

            
	 	
              Fort
                Worth, Texas 76102

            
	 	
              Attention:

            	
              Douglas
                W. Clayton, Esq.

            
	 	
              Telephone:

            	
              (817)
                877-2890

            
	 	
              Facsimile:

            	
              (817)
                877-2807

            
	 	 	 
	
              If
                to the Pledgee:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention:
                

            	
              Mark
                A. Angelo

            
	 	
              Telephone:

            	
              (201)
                985-8300

            
	 	
              Facsimile:
                

            	
              (201)
                985-8744

            
	 	 	 
	
              With
                copy to:

            	
              David
                Gonzalez, Esq.

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone:

            	
              (201)
                985-8300

            
	 	
              Facsimile:

            	
              (201)
                985-1964

            
	 	 	 


    

    


    Any
      such
      notice shall be effective (a) when delivered, if delivered by hand delivery
      or overnight courier service, or (b) five (5) days after deposit in the
      United States mail, as applicable.

     

    7.            
      Binding
      Effect.
      All of
      the covenants and obligations contained herein shall be binding upon and shall
      inure to the benefit of the respective parties, their successors and
      assigns.

     

    
      
        
          
          

        

        
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    8.            
      Governing
      Law; Venue; Service of Process.
      The
      validity, interpretation and performance of this Agreement shall be determined
      in accordance with the laws of the State of New Jersey applicable to contracts
      made and to be performed wholly within that state except to the extent that
      Federal law applies. The parties hereto agree that any disputes, claims,
      disagreements, lawsuits, actions or controversies of any type or nature
      whatsoever that, directly or indirectly, arise from or relate to this Agreement,
      including, without limitation, claims relating to the inducement, construction,
      performance or termination of this Agreement, shall be brought in the state
      superior courts located in Hudson County, New Jersey or Federal district courts
      located in Newark, New Jersey, and the parties hereto agree not to challenge
      the
      selection of that venue in any such proceeding for any reason, including,
      without limitation, on the grounds that such venue is an inconvenient forum.
      The
      parties hereto specifically agree that service of process may be made, and
      such
      service of process shall be effective if made, pursuant to Section 8
      hereto.

     

    9.            
      Enforcement
      Costs.
      If any
      legal action or other pro-ceeding is brought for the enforcement of this
      Agreement, or because of an alleged dispute, breach, default or
      misrepresenta-tion in connection with any provisions of this Agreement, the
      successful or prevailing party or parties shall be entitled to recover
      reasonable attorneys’ fees, court costs and all expenses even if not taxable as
      court costs (including, without limita-tion, all such fees, costs and expenses
      incident to appeals), incurred in that action or proceeding, in addition to
      any
      other relief to which such party or parties may be entitled.

     

    10.           Remedies
      Cumulative.
      No
      remedy herein conferred upon any party is intended to be exclusive of any other
      remedy, and each and every such remedy shall be cumulative and shall be in
      addition to every other remedy given hereunder or now or here-after existing
      at
      law, in equity, by statute, or otherwise. No single or partial exercise by
      any
      party of any right, power or remedy hereunder shall preclude any other or
      further exercise thereof. 

     

    11.           Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute the same
      instrument.

     

    12.           No
      Penalties.
      No
      provision of this Agreement is to be interpreted as a penalty upon any party
      to
      this Agreement.

     

    13.           JURY
      TRIAL.
      EACH OF
      THE PLEDGEE AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
      WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM, DEMAND,
      ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING OUT OF, UNDER OR IN ANY
      WAY
      CONNECTED WITH THE DEALINGS BETWEEN PLEDGEE AND PLEDGOR, THIS PLEDGE AND ESCROW
      AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
      CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
      OF
      ANY PARTY HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
      ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have duly executed this Pledge and Escrow Agreement as of the
      date first above written. 

     

    


    
      	 	
              Cornell
                Capital Partners, LP

            
	 	 	 
	 	
              By:
                

            	
              Yorkville
                Advisors, LLC

            
	 	
              Its:

            	
              General
                Partner

            
	 	 	 
	 	 	 
	 	
              By:
                /s/
                MARK ANGELO

            
	 	
              Name:

            	
              Mark
                Angelo

            
	 	
              Title:

            	
              Portfolio
                Manager

            
	 	 	 
	 	 	 
	 	
              Ignis
                Petroleum Group, Inc.

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:
                /s/
                MICHAEL PIAZZA

            
	 	
              Name:

            	
              Michael
                Piazza

            
	 	
              Title:

            	
              President
                & CEO

            
	 	 	 
	 	 	 
	 	
              Escrow
                Agent

            
	 	 	 
	 	
              By:
                /s/
                DAVID GONZALEZ

            
	 	
              Name:

            	
              David
                Gonzalez, Esq. 

            


    

     

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