Subject to Completion, Dated January 30, 2002
Puma Energy, Inc.
Up to 3,000,000 Shares of Common Stock
This prospectus covers the offer and sale of an aggregate of a minimum of 500,000 shares and a maximum of 3,000,000 shares of our common stock.
The common stock trades in the Pink Sheets under the symbol "PUMX". On January 21, 2002, the last reported sales price for the common stock was $1.50. The offering price may not be the same as the market price.
Sales of our shares are being made through our officers, directors, and employees who will not receive any commission or remuneration for their sales. We may, however, use NASD broker/dealers and other qualified persons to help us sell some of the shares, in which case we will then incur sales concessions (fees, expenses and commissions) of up to 10 percent on those sales.
YOUR INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. BEFORE MAKING AN INVESTMENT DECISION, YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER "RISK FACTORS" BEGINNING ON PAGE 5.
The Offering Per Share Total
------------ --------- -----
Public offering price $_____ Minimum of $________ and
Maximum of $________
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated _________,2002
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed information regarding us and the financial statements and notes appearing elsewhere in this prospect us. Our fiscal year ends on December 31 of each year.
Puma Energy, Inc. - Our Business
We are an international energy company. We plan on exploring for, developing, acquiring and producing oil and gas primarily in Central Asia and other regions of the World outside of the United States.
On December 20, 2001, we signed an Agreement with a German company to acquire directly or indirectly a 30-42% interest in a joint venture with the State Oil Company of Azerbaijan Republic (SOCAR) to develop the Ramana 7 oil field in Azerbaijan. Such Agreement is subject to due diligence and funding and is expected to close in the second quarter of 2002. Under the Agreement, we will purchase the interest from the German company for its appraised value and will be obligated to contribute $5 million toward the initial phase of the development project.
We have also been engaged in negotiations to acquire a license for the development and production of a larger oil concession in the Azerbaijan Republic. On November 19, 1999, the Inter-regional Public Assistance Fund for Petroleum Sector Stable Development ("IPF"), a Russian corporation, executed a Farmout Agreement with us, where IPF granted us all rights to negotiate a definitive agreement with SOCAR and to conduct feasibility studies and due diligence reviews. Under the Farmout Agreement, we would fund 100% of all development and exploration costs and will receive 80% of IPF's interest granted by SOCAR. It also permitted the company to participate in negotiations with SOCAR for the final terms of the oil project in exchange for our agreement to fund certain work commitments specified in the Farmout Agreement. No agreement with SOCAR has been signed, but the company continues actively to pursue this project.
Gaffney, Cline & Associates, Ltd., technical and management advisors to the international petroleum industry has been advising us on our current negotiations, feasibility and due diligence on the projects in Central Asia since 1999.
Our Strategy
Our goal is to be a leading producer of oil and gas in selected regions of the World outside of the United States and provide an attractive return to our shareholders. Our strategy includes:
o focusing on exclusive licensing rights to develop and produce oil and gas
in the Central Asia region.
o exploration for new oil and gas reserves in the Central Asian region.
o pursuing attractive acquisition projects elsewhere in the world.
o utilization of risk management techniques to reduce exposure to the risks
involved in oil and gas exploration, development and production.
o maintaining a low-cost operating structure by exercising control over the
cost and timing of exploration, drilling and development activities in
order to improve project returns.
o acquisition of select oil and gas properties that will provide significant
exploration and development opportunities.
RISK FACTORS
In addition to the other information contained in this Prospectus, the following risk factors should be carefully considered in evaluating the company and its business before purchasing shares of common stock offered hereby. Each of the following factors may have a material adverse effect on the company's operations, financial results, financial condition, liquidity, market valuation or market liquidity in future periods.
We Have a Limited Operating History with Which to Judge Our Performance.
We were incorporated in January 1991, but the company was inactive until June 22, 1998, when it was reorganized under the name Puma Energy, Inc. Since then, the company has been primarily engaged in negotiations to acquire interest in the development and production of oil properties in the Azerbaijan Republic. Accordingly, we have a limited operating history. Before you decide to purchase our common stock, you should consider the risks and difficulties frequently encountered by early stage companies in new developing global markets. We cannot assure you that our business strategy will be successful or that we will successfully be able to address these risks.
We Have a History of Losses and We Anticipate Future Losses and Negative Cash Flow.
Since inception, we have incurred operating losses, and as of September 30, 2001, we had an accumulated deficit of $2,663,527. We incurred net losses of $454,392 for the fiscal year ended December 31, 2000.
We expect operating losses and negative cash flow to continue through at least the fourth quarter of 2002. However, there can be no assurances that we will be profitable thereafter.
Our future profitability depends on our ability to manage our properties and achieve our business strategy. If we do achieve profitability, we cannot assure you that we will be able to sustain it or improve upon it on a quarterly or annual basis for future periods.
International Markets and Prices for Oil and Gas Pose Added Risks
The availability of a ready market and the prices obtained for our oil and gas in Central Asia will depend on many factors beyond our control, including the proximity and capacity of natural gas pipelines and other transportation facilities, fluctuating demands for oil and gas, the marketing of competitive fuels and the effects of governmental regulation in Azerbaijan of oil and gas production and sales. International markets will depend upon the existence of delivery systems, political factors, pricing uncertainty of reserves, lack of infrastructure, government regulations, environmental matters, competition, and risks of currency fluctuation to name a few.
Our revenues, profitability, future growth and ability to borrow funds or obtain additional capital, as well as the carrying value of our properties, are substantially dependent upon prevailing prices of oil and gas. Historically, the markets for oil and gas have been volatile, and such markets are likely to continue to be volatile in the future. Prices for oil and gas are subject to wide fluctuation in response to relatively minor changes in the supply of and demand for oil and gas, market uncertainty and a variety of additional factors that are beyond our control. These factors include the level of consumer product demand, weather conditions, domestic and foreign governmental regulations, the price and availability of alternative fuels, political conditions in the Middle East, the foreign supply of oil and gas, the price of foreign imports and overall economic conditions.
We Face Uncertainty of Operations Due to Government Laws and Regulations
Oil and gas operations will be subject to various foreign government laws and regulations that may be changed from time to time in response to economic or political conditions. We are operating exclusively in Azerbaijan, a Central Asian Republic of the former Soviet Union. Matters subject to laws and regulation include discharge permits for drilling operations, reports concerning
operations, the spacing of wells, unitization and pooling of properties and government taxation. From time to time, foreign governments in the past have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas. In addition, the development, production, handling, storage, transportation and disposal of oil and gas, by- products thereof and other substances and materials produced or used in connection with oil and gas operations are subject to regulation . We are also subject to change in the government, the effects of which cannot be predicted. We believe that we will be in substantial compliance with applicable regulations, although there can be no assurance that this is or will remain the case. The implementation of new, or the modification of existing, laws or regulations could have a material adverse effect on us. No assurance can be given that existing laws or regulations, as currently interpreted or reinterpreted in the future, or future laws or regulations will not materially adversely affect our financial condition and results of operations.
We Will Require Significant Capital
Due to our proposed development, exploration and acquisition programs, we will experience substantial working capital needs. Additional financing will be required in the future to fund our growth and developmental and exploratory drilling. No assurances can be given as to the availability or terms of any such additional financing that will be required or that financing will be available under existing or new credit facilities. In the event sufficient capital resources are not available to us, our drilling and other activities may be curtailed.
We Will Face Difficulties Managing Growth and Achieving Our Business Strategy
Our ability to grow will depend upon a number of factors, including our ability to identify and acquire new exploratory sites, our ability to develop existing sites, our ability to continue to retain and attract skilled personnel, the results of our drilling program, oil and gas prices, transportation of oil, access to capital and other factors. There can be no assurance that we will be successful in achieving growth or any other aspect of our business strategy.
Replacement and Expansion of Reserves will be Necessary
In general, the volume of production from oil and gas properties declines as reserves are depleted, with the rate of decline depending on reservoir characteristics. Except to the extent we acquire properties containing proved reserves or conduct successful exploration and development activities, or both, any proved reserves we acquire will decline as reserves are produced. Our future oil and gas production is, therefore, highly dependent upon our ability to economically find, develop or acquire additional reserves in commercial quantities. The business of exploring for, developing or acquiring reserves is capital- intensive. To the extent cash flow from operations is reduced and external sources of capital become limited or unavailable, our ability to make the necessary capital investment to maintain or expand our asset base of oil and gas reserves would be impaired. In addition, there can be no assurance that our future exploration, development and acquisition activities will result in proved reserves or that we will be able to drill productive wells at acceptable costs. Furthermore, although our revenues could increase if prevailing prices for oil or gas increase significantly, our finding and development costs could also increase.
There are Many Risks of Drilling Activities
Our success will be materially dependent upon the continued success of our exploration and drilling programs, which will be funded in part with the proceeds of this Offering. Oil and gas drilling involves numerous risks, including the risk that no commercially productive oil or gas reservoirs will be encountered, even if the reserves targeted are classified as proved. The cost of drilling, completing and operating wells is often uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including unexpected drilling conditions, pressure or irregularities in formations, equipment failures or accidents, adverse weather conditions, compliance with governmental requirements and shortages or delays in the
availability of drilling rigs and the delivery of equipment. Our future drilling activities may not be successful and, if drilling activities are unsuccessful, such failure will have an adverse effect on our future results of operations and financial condition. Although we have identified numerous drilling prospects, there can be no assurance that such prospects will be drilled or that oil or gas will be produced from any such identified prospects or any other prospects.
Acquisitions Create Special Risks
The successful acquisition of producing properties requires an assessment of recoverable reserves, future oil and gas prices, operating costs, potential government regulations and other liabilities and other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain.
Operating Hazards and Uninsured Risks May Be Substantial
The oil and gas business involves certain operating hazards such as well blowouts, craterings, explosions, uncontrollable flows of oil, natural gas or well fluids, fires, formations with abnormal pressures, pollution, releases of toxic gas and other environmental hazards and risks, any of which could result in substantial losses to the Company. As is common in the oil and gas industry, we are not fully insured against the occurrence of these events either because insurance is not available or because we have elected not to insure against their occurrence because of prohibitive premium costs. The occurrence of an event not fully covered by insurance could have a material adverse effect on our financial condition and results of operations.
We Depend on Our Key Personnel
We depend to a large extent on the services of certain key management personnel and relationship with our consultants and venture partners, the loss of any of whom could have a material adverse effect on the our operations. None of the Company's employees are parties to employment agreements. The Company does not maintain key employee insurance on any of its employees.
We Will Face Extensive Competition
We will encounter competition from other oil and gas companies in all areas of our operations, including the acquisitions of exploratory prospects and proven properties. Our competitors include major integrated oil and gas companies, individuals and drilling and income programs. Many of our competitors are large, well-established companies with substantially larger operating staffs and greater capital resources than ours and, in many instances, have been engaged in the oil and gas business for a much longer time than we have. Those companies may be able to pay more for exploratory prospects and productive oil and gas properties, and may be able to define, evaluate, bid for and purchase a greater number of properties and prospects, than our financial or human resources permit. Our ability to explore for oil and gas prospects and to acquire additional properties in the future will be dependent upon our ability to conduct our operations, to evaluate and select suitable properties and to consummate transactions in highly competitive environments.
Conflicts of Interests May Be Material
Our officers, directors and affiliates will be subject to substantial conflicts of interest between their interests in and obligations to the Company and their other activities in other oil and gas ventures that will demand their time and economic resources. Our officers, directors and affiliates may also participate in other oil and gas investment entities with respect to which they have managerial and/or fiduciary responsibilities; in certain circumstances, we will be required to compete with such other entities for (i) the managerial time and resources of the officers, and (ii) appropriate investment opportunities.
Trading of Our Stock in The Over-the-Counter Market Creates Certain Risks and the Penny Stock Trading Rules Will Limit the Market for Our Stock
The Common Stock will be traded in the over-the-counter market and may be subject to the "penny stock" trading rules. The over-the-counter market is characterized as volatile in that securities traded in such market are subject to substantial and sudden price increases and decreases and at times price (bid an asked) information for such securities may not be available. In addition, when there is a limited number of market makers (a dealer holding itself out as ready to buy and sell the securities on a regular basis), there is a risk that the dealer or group of dealers may control the market in the security and set prices that are not based on competitive forces and the available offered price may be substantially below the quoted bid price.
Generally, at any time the bid price of the Common Stock in the over-the-counter market is less than $5.00, the Company's equity securities will be subject to the "penny stock" trading rules, unless the Company meets certain other exemptions under the "penny stock" trading rules. The "penny stock" trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in such equity securities of the Company, including determination of the purchasers's investment suitability, delivery of certain information and disclosure to the purchaser, and receipt of a specific purchase agreement from the purchaser prior to effecting the purchase transaction. Compliance with the "penny stock" trading rules affect or will affect the ability to resell the Common Stock by a holder principally because of the additional duties and responsibilities imposed upon the broker-dealers and salespersons recommending and effecting sale and purchase transactions in such securities. In addition, many broker-dealers will not effect transactions in the penny stocks, except on an unsolicited basis, in order to avoid compliance with the "penny stock" trading rules. Consequently, the "penny stock" trading rules may materially limit or restrict the number of potential purchasers of the Common Stock and the ability of a holder to resell the Company's equity securities.
We Do Not Expect to Pay Dividends
We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. The Company intends to retain profits, if any, to fund growth and expansion.
Dilution of Our Stockholders' Interests Will Occur
Our principal shareholders have acquired Common Stock at a cost per share that is significantly less than that at which we intend to sell the Common Stock in this Offering. Therefore, an investment in the Common Stock offered hereby will result in the investors experiencing immediate and substantial dilution in net tangible book value of $1.24 per share of common Stock, or 83% , as a result of the maximum Offering, and $1.47 per share of Common Stock or 98% as a result of the minimum Offering.
We Will Attempt to Reverse the Delisting of Our Common Stock
In early 2000, our "PUMX" Common Stock was delisted from the NASD over-the-counter bulletin board ("OTCBB") because it had not completed its registration as a reporting company under the Securities Exchange Act of 1934. The Common Stock is now traded in the Pink Sheets under the symbol "PUMX". Upon effectiveness of this Form SB-2 Registration Statement, the Company will reapply for trading on the OTCBB. No assurance can be given that we will be current in our reporting obligation to allow us to be listed on OTCBB or that there will be sufficient market making interest in our OTCBB eligible Common Stock.
Anti-Takeover Provisions May Make Our Shares Unattractive
Our Bylaws may make it difficult to effect a change in control of the Company and replace incumbent management.
The Bylaws have certain provisions that could have the effect of preventing a merger, tender offer or other takeover attempt which the Company's Board of Directors opposes. Such provisions could also exert a negative influence on the value of the Common Stock and of a shareholder's ability to receive the highest
value for the Common Stock in a transaction that may be hindered by the
operation of these provisions. The Company's directors may be elected for
three-year terms, with approximately one-third of the Board standing for
election each year, which may make it difficult to effect a change of incumbent
management and control. In addition, directors may be removed only for "good
cause" as defined in the Company's bylaws, and such bylaws require an action by
more than two-thirds of shares outstanding to call a special meeting of
shareholders.
All Shares Outstanding Are Eligible for Future Sale
As of September 30, 2001, the Company had a total of 11,450,000 shares of
Common Stock outstanding. All of these shares are freely tradable without
restriction or limitation under the Securities Act. There are also shares of
Common Stock issuable upon the exercise of stock options. No prediction can be
made as to the effect, if any, that future sales of shares of Common Stock or
the availability of Common Stock for future sale will have on the market price
of the Common Stock prevailing from time to time. Sales of substantial amounts
of Common Stock, or the perception that such sales could occur, could adversely
affect the prevailing market price of the Common Stock.
DILUTION
As of September 30, 2001, the net tangible book value of the Company was
$(283,727) or $(0.02) per share of Common Stock. Net tangible book value per
share of the Company is the amount of its tangible assets less its total
liabilities, divided by the number of shares of common stock outstanding after
giving effect to the sale of the minimum and maximum number of shares of common
stock at the proposed public Offering price per share of $1.50, and the
application of the net proceeds therefrom, the pro forma net tangible book value
per share would increase, representing an immediate increase in net tangible
book value to current holders of Common Stock, and an immediate dilution to new
investors, as illustrated in the following table.
Minimum Maximum
Offering Offering
-------- --------
Assumed Offering price per share $ 1.50 $ 1.50
Net tangible book value per share before this Offering $ (0.02) $ (0.02)
Increase per share attributable to new investors................. $ 0.05 $ 0.28
Adjusted net tangible book value per share after this Offering . $ 0.03 $ 0.26
-------- --------
Dilution per share to new investors.................................... $ 1.47 $ 1.24
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The following table summarizes, as of September 30, 2001, the number of shares of Common Stock purchased from the Company, the total consideration paid, and the average price per share paid by the existing share holders and the number of shares of Common Stock purchased from the company and the total consideration paid by the new investors purchasing shares of Common Stock in this Offering at the minimum and maximum levels, after deduction of the underwriting discounts and commissions and offering expenses payable by the Company:
MINIMUM OFFERING
Shares Purchased Total Consideration
---------------- ------------------- Average
Number Percent Amount Percent Per Share
------ ------- ------ ------- ---------
Existing Shareholders 11,450,000 95.8% $1,844,201 71.1% 0.16
New Shareholders .... 500,000 4.2% 750,000 28.9% 1.50
---------- ---- ---------- ----- ----
Total ......... 11,950,000 100% $2,594,201 100%
MAXIMUM OFFERING
Shares Purchased Total Consideration
---------------- ------------------- Average
Number Percent Amount Percent Per Share
------ ------- ------ ------- ---------
Existing Shareholders. 11,450,000 79.2% $1,844,201 29.1% 0.16
New Shareholders...... 3,000,000 20.8% 4,500,000 70.9% 1.50
---------- ---- ---------- ----- ----
Total........... 14,450,000 100% $6,344,201 100%
USE OF PROCEEDS
The net proceeds to us from the sale of the minimum and maximum number of
shares of Common Stock offered by us at an assumed initial public offering price
of $1.50 per share (after deducting commissions of 10% of the offering price and
estimated offering expenses of approximately $50,000 payable by us), are
estimated to be from $625,000 to $4,000,000.
The net proceeds of the offering will be used for the following purposes:
Intended Use Minimum Maximum
------------ Offering Percent Offering Percent
-------- ------- -------- -------
Working Capital $625,000 100% $ 625,000 16%
Contributions to Grunewald project
(see "Description of the Business -
Grunewald Project") 0 0 2,000,000 50%
Contributions to unspecified
acquisitions and/or Grunewald
Project (see "Description of the
Business - Grunewald Project") 0 0 1,375,000 34%
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are an energy company originally formed under the laws of the State of Florida as Teleauctions of America, Inc. (the "Company'), in January 1991. The Company was inactive until June 22, 1998, when it was reorganized and its name changed to Puma Energy, Inc. Since then, we have refocused the Company on the energy industry primarily in Central Asia. This area is comprised of former Soviet Central Asian States, including the Caspian region.
From inception through the date of this filing, we have been in a development stage and have been dependent upon the sale of our common stock and advances from shareholders and affiliates to provide working capital. Our continued existence is dependent upon our ability to generate sufficient cash flows from operations to support our daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.
Our independent auditor, Hein + Associates LLP, stated in the Company's
audited financial statements for the years ended December 31, 2000 and 1999,
that the continuation of the Company as a going concern is dependent upon its
obtaining additional long-term debt and/or equity financing to meet its
obligations and implement it's business plan. Reference is made to the
independent auditor's report included elsewhere in this Prospectus.
Selected Financial Data
The statement of operations data set forth below for the fiscal years ended
December 31, 1999 and 2000 and the selected balance sheet data as of December
31, 2000 have been derived from our audited consolidated financial statements
appearing elsewhere in this prospectus. The statement of operations data for the
nine months ended September 30, 2000 and 2001 and the selected balance sheet
data as of September 30, 2001 have been derived from unaudited consolidated
financial statements. The unaudited consolidated financial statements include
all adjustments, consisting of normal recurring accruals, which we consider
necessary for a fair presentation of the results of operations for these
periods. The historical results are not necessarily indicative of results to be
expected for any future period.
Year ended December 31, Nine months ended September 30,
---------------------------- ----------------------------
1999 2000 2000 2001
------------ ------------ ------------ ------------
(Unaudited)
Statement of Operations Data:
Revenues: ....................................... -0- -0- -0- -0-
Operating expenses:
General and administrative ............. $ 560,370 $ 454,392 $ 334,043 $ 1,283,850
Total operating expenses ............... 560,370 454,392 334,043 1,283,850
Operating loss .................................. (560,370) (454,392) (334,043) (1,283,850)
Loss before income taxes ........................ (560,370) (454,392) (334,043) (1,283,850)
Income tax benefit....................... ------------ ------------ ------------ ------------
Net Loss....................................... $ (560,370) $ (454,392) $ (334,043) $ (1,283,850)
------------ ------------ ------------ ------------
Weighted-average common shares
outstanding-basic and diluted ................ 11,450,000 11,450,000 11,450,000 11,450,000
Net loss per share-basic and diluted ............ (0.05) (0.04) (0.03) (0.11)
------------ ------------ ------------ ------------
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At December 31, 2000 At September 30, 2001
-------------------- ---------------------
Balance Sheet Data: .......... (Unaudited)
Cash and Cash equivalents .... $ 345 $ 345
Working capital (deficiency) . (97,916) (283,727)
Total assets ................. 345 345
Stockholders' equity (deficit) (97,916) (283,727)
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Results of Operations
Nine months ended September 30, 2001 compared to September 30, 2000.
The Company has generated no operating revenues and has incurred cumulative operating losses of approximately $2,663,527. For the respective nine month periods ended September 30, 2001 and 2000, the Company's expenses during these corresponding periods relate principally to the Company's general, administrative and office overheard expenses.
Total net losses for the respective nine month periods ending September 30, 2001 and 2000 were approximately $1,283,850 and $334,043. Net loss per share was approximately $(0.11) as of September 30, 2001, and $(0.03) as of September 30, 2000.
Year ended December 31, 2000 compared to December 31, 1999.
For the years ended December 31, 2000 and 1999, the Company had no revenues. The company's expenses during the years ended December 31, 2000 and 1999, consisting principally of expenses related to general, administrative and operating expenses related to start-up of operations and negotiations for a Memorandum of Understanding with SOCAR.
Total net losses for the respective years ended December 31, 2000, and 1999 were approximately $454,392 and $560,370. Net loss per share was approximately $(0.04) and $(0.05) for each respective year.
Liquidity and Capital Resources
Liquidity for the period from inception through September 30, 2001, has been provided by either the proceeds from the sale of common stock or contributions from significant shareholders.
In the second quarter of 1998, the Company sold an aggregate 10,000,000 shares of unregistered common stock to various unrelated investors who were the founding investment group at a price of $(0.01) per share for aggregate proceeds of approximately $100,000.
In the third quarter of 1998, the Company sold an aggregate 450,000 shares of unregistered common stock to an investment group and other unrelated parties at a price of $2.00 per share for aggregate proceeds of approximately $900,000.
The Company has identified significant capital requirements for the current annual period (see "Use of Proceeds"). Liquidity requirements mandated by future business plans, if any are specifically identified therein. See "Use of Proceeds" and "Business" sections of this Prospectus.
There is no assurance that the Company will be able to obtain additional funding through the sales of additional securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. It is the intend of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding.
Forward-Looking Information
This Prospectus contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this Prospectus, words such as "anticipate", "believe," "estimate," "expect," "intend," "should," and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions relating to the operations, results of operations, liquidity and growth strategy of the Company, including competitive factors and pricing pressures, changes in legal and regulatory requirements, interest rate fluctuations and general economic conditions, as well as other factors described in this Prospectus. Should one or more of the risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein as anticipated, believed, estimated, expected or intended.
DESCRIPTION OF THE BUSINESS
Overview
We are an international energy company. We plan on exploring for, developing, acquiring and producing oil and gas primarily in Central Asia and other regions of the World outside of the United States.
On December 20, 2001, we signed an Agreement with a German company to acquire directly or indirectly a 30-42% interest in a joint venture with the State Oil Company of Azerbaijan Republic ("SOCAR") to develop the Ramana 7 oil field in Azerbaijan. Such Agreement is subject to due diligence and funding and is expected to close in the second quarter of 2002. Under the Agreement, we will purchase the interest from the Germany company for its appraised value and will be obligated to contribute $5 million toward the initial phase of the development project.
We have also been engaged in negotiations to acquire a license for the development and production of a larger oil concession in the Azerbaijan Republic. On November 19, 1999, the Inter-regional Public Assistance Fund for Petroleum Sector Stable Development ("IPF"), a Russian corporation, executed a Farmout Agreement with us, where IPF granted us all rights to negotiate a definitive agreement with SOCAR and to conduct feasibility studies and due diligence reviews. Under the Farmout Agreement, we would fund 100% of all development and exploration costs and will receive 80% of IPF's interest granted by SOCAR. It also permitted the company to participate in negotiations with SOCAR for the final terms of the oil project in exchange for our agreement to fund certain work commitments specified in the Farmout Agreement. No agreement with SOCAR has been signed, but the company continues actively to pursue this project.
Gaffney, Cline & Associates, Ltd., technical and management advisors to the international petroleum industry has been advising us on our current negotiations, feasibility and due diligence on the project in Central Asia since 1999.
Our Strategy
Our goal is to be a leading producer of oil and gas in selected regions of the World outside of the United States and provide an attractive return to our shareholders. Our strategy includes:
o focusing on exclusive licensing rights to develop and produce oil and gas
in the Central Asia region.
o exploration for new oil and gas reserves in the Central Asian region.
o pursuing attractive acquisition projects elsewhere in the world.
o utilization of risk management techniques to reduce exposure to the risks
involved in oil and gas exploration, development and production.
o maintaining a low-cost operating structure by exercising control over the
cost and timing of exploration, drilling and development activities in
order to improve project returns.
o acquisition of select oil and gas properties that will provide significant
exploration and development opportunities.
Acquisition Goals
The company will seek to find opportunities to acquire oil and gas properties for exploration and production. The company owns no such properties at present, and, given its limited financial resources, the opportunities will need to be accompanied by seller financing or of such a quality that the company will be able to obtain third party financing for any purchase price not financed by the seller. The company will also seek to use its equity securities as part of the consideration for acquisition.
The initial acquisitions sought by the company will emphasize offshore and international areas of interest. Criteria used by the company in accepting an acquisition opportunity will include the following:
o Development drilling in proved producing areas.
o Significant additional production capacity through developmental
drilling, recompletions and workovers.
o Access to contiguous properties with developmental potential.
o The ability to assume operatorship or appointment of a known operator
with relevant experiences in the area.
o Spreading of financial risk across a number of drilling prospects.
The company's future business, including expansion of its present operations, may require additional equity and/or debt financing, which may not be available in a timely manner, on commercially reasonable terms, or at all.
The oil and gas industry is highly competitive. Our objective is to position ourselves to capitalize on the growing importance of oil in the world's energy markets. We hope to provide an attractive return to our shareholders. The following are some key strategic elements we plan to achieve our objectives:
Exploration for New Reserves. We will be placing increasing emphasis on exploration as a source of future growth and will have an active exploration program targeting a wide variety of reserve creation opportunities in our core area of operation and in select new areas in the Caspian region. We intend to pursue a balance portfolio of exploration prospects where we believe multiple additional new reserve opportunities could result if a significant discovery were made.
Utilization of Risk Management Techniques. We intend to use a variety of techniques to reduce our exposure to the risks involved in our oil and gas activities. We intend to conduct operations in distinct geographic areas within the Caspian region, to gain diversification benefits from geologic settings and local operating characteristics. We will seek to reduce risks normally associated with exploration through the use of existing industry technologies in a region that has not had access to them, by spreading projects over various geological settings and geographic areas within the regions, by balancing potential rewards against evaluated risks and by participating in projects with other experienced industry partners at working interest levels appropriate for us. We may seek to reduce our exposure to short-term fluctuations in the price of oil and natural gas and interest rates by entering into various hedging arrangements.
Acquisition of Select Properties. We intend actively to seek to acquire oil and gas properties that are either complementary to existing production operations or that we believe will provide significant exploration opportunities beyond any proved reserves acquired.
Utilize Strengths of Personnel. We intend to utilize qualified and experienced operators, field supervisors, engineers, landmen, accountants and other personnel assigned to specific core areas of operation. All personnel and consultants will have access to and use modern information systems, operating technologies and equipment to help maximize production and reliability of operations while minimizing costs.
Initial Projects
Grunewald Venture. On December 20, 2001, the Company executed an agreement with Grunewald & Co., GmbH, a German corporation, jointly to pursue the development of the Ramana Field No. 7 in the Republic of Azerbaijan. A Grunewald affiliate had previously executed a Joint Venture Agreement known as Azgerneft, Ltd. with the State Oil Company of the Azerbaijan Republic ("SOCAR"), pursuant to which Grunewald acquired a 60% joint venture interest in the project. The agreement between Puma and Grunewald entitles Puma to acquire a minimum of 50% and a maximum of 70% of Grunewald's interest in Azgerneft, which translates to a 30% to 42% interest in Azgerneft. Such amount will be reduced by one-third when Puma and Grunewald have recovered from program revenues all of their invested capitol expenditures plus an equal amount of net profits. The purchase price for the interest will be based upon audited financial statements, including a valuation of the oil and gas reserves by Gaffney Cline & Associates, Ltd. consulting petroleum engineers to Puma.
In addition, Puma, acting through an Azerbaijan subsidiary, will enter into a funding commitment with the joint venture to supply a financial commitment of USD 5 million, to be drawn down through December 31, 2004, to finance development work in the Ramana Field. Grunewald and Puma have agreed to form a company controlled by Puma to serve as the funding vehicle for the commitment and to receive revenues and make distributions. All revenue from the Project will be applied first to repay the parties' financial contributions and loans, plus a 5% return, and then to the parties' interests in the joint venture.
The closing of the agreement with Grunewald and delivery of all financial commitments and payments by Puma is to occur by March 31, 2002. The proceeds of this offering, even at the minimum level, will not be sufficient fully to fund the company's obligations, and it will be necessary to arrange funding from third parties who will receive part of the company's interest in the venture. No agreement exists with any such third party to supply the necessary financing, and the company will be in default with Grunewald if it cannot arrange all necessary financing.
The intent of the Joint Venture Azgerneft is to increase oil production from the Ramana 7 field by utilizing the experienced field 7 personnel and equipment available in Baku, complemented by the expertise of foreign specialists, materials and techniques. New infrastructure will be brought in to enhance current operating procedures and to substitute equipment shortages. Azerbaijani employees of the Joint Venture will be trained to run new equipment
and to improve their overall operating skills. In the process of redeveloping the field, the Joint Venture will make efforts to clean up the current field operations to minimize the oil and water flow through ditches and ponds. Efforts will be made to remove all unnecessary and non-utilized equipment, flowlines, and tanks from the field.
The Balakhany - Sabunchi - Ramana field, which was the first commercial oil field in Azerbaijan, commenced production in the early 1870's. To date, the field has produced 330 million tonnes of oil (2079 million barrels) and 700 million cubic meters of water (4200 million barrels) from approximately 11,000 wells (9000 currently shut-in) covering approximately 15 square kilometers. The crude production is sweet 24 degrees API oil with virtually no solution gas production and water cuts in the 95 percent range. From a beginning in the mid 1930's, Ramana 7 (the eastern portion of the BSR field), has produced approximately 24.5 million tonnes of oil (154 million barrels) or about 14% of the total field production. Wells are in the range of 450-2400 meters in depth. Currently the field consists of 337 wells of which 226 are producing and 111 are inactive.
The work program in the Ramana 7 Oil Field will be carried out using a phased in program with emphasis on increasing the short term oil production. Maximum use will be made of existing facilities and equipment in Baku. Data will be gathered for the design of a long term program for maximizing the recovery of oil in place.
Selected wells will be worked over to give a cross sectional pattern of production and reservoir characteristics of the field. Personnel and equipment will be installed to carry out the work program. General refurbishing of the field facilities will be done.
The Company and Grunewald will invest about 2.1 million dollars in capital equipment in this part of the work program to bring one half of the inactive wells in the field back into service. The work program includes, but is not limited to:
o installation of sales meters to continuously monitor field oil production
o installation and repair of equipment to enhance the capacity of the current
obsolete air-lift compression facilities
o optimization of producing completions currently served by air lift
facilities
o investigate and introduce modern sand-control methods to enhance the
productivity of selected producing oil wells
o workover and recompletion of inactive pumping wells
o reconstruction of separation facilities, with sand disposal capacity
o refurbishing of repair shops and staging areas
o clean up and reperforating workover wells with high shot density, high
performance perforating guns
o clean up and refurbishing of field facilities on an "as needed" basis
The second phase of the work program will bring the remainder of the inactive wells back into service and increase the efficiency of the active wells. The Company and Grunewald will invest about 1.7 million dollars in capital equipment in this phase of the project.
The production levels achieved in this phase of the work program will determine the level of capital available for investment in Phase III of the work program.
Phase II operations include:
o workover and recompletion of the remaining inactive wells
o population of a reservoir and completion data base for field management
o continue installation and repair of equipment to replace or enhance the
capacity of obsolete air-lifting facilities
o implement the findings of the investigation regarding the application of
modern sand-control methods to selected elements of the field producing
well system
o refurbishing and reconstruction of water collection and treatment
facilities
o relocation and reconstruction of separators
o relogging of selected wells to locate overlooked reservoirs
A production pattern will be established to fully develop the recoverable reserves in the field, using reservoir data gathered in Phases I and II. As indicated from the results of Phases I and II, we will implement a program of new well drilling and completions at selected in-field locations.
Long term secondary and tertiary recovery programs will be implemented to maintain production levels consistent with maximum recovery of oil in place.
Production Sharing Agreement for Balakhany, Sabunchi and Ramani Oil Fields. While the company's first goal is to provide the funding and management for the Azgerneft Ltd. joint venture, it will also pursue a larger opportunity in Azerberijan related to the full Balakhany, Sabunchi, Ramani Oil Field (BSR Field) that includes the field that is the subject of the Azgerneft venture.
During 1999-2001, the company was in active negotiations with SOCAR to conclude an Agreement on Basic Principals and Provisions for the Rehabilitation, Exploration, Development and Production Sharing (for the contract area including the Balakhany, Sabunchi, and Ramani (BSR) Oil Fields in the Azerbaijan Republic (the "PSA Agreement"). On November 9, 1999, SOCAR granted to the Interregional Public Assistance Fund for Petroleum Sector Stable Development of Moscow ("IPF") the right to negotiate for a definitive PSA agreement for the development and operation of the BSR Field. Then on November 19, 1999, Puma signed a farmout agreement with IPF under which Puma had the right to conduct a feasibility study and due diligence review of the BSR Fields. For this right, Puma would pay 100% of the study costs and receive 80% of IPF's interest in the project.
Negotiations ensued for the execution of a PSA, and one was signed by Puma and IPF and submitted to SOCAR in June 2001. However, SOCAR has not followed through with obtaining legislative approval for the project, and any further work on the matter will be subject to further involvement by SOCAR. Puma believes that its efforts in the Grunewald project will enhance its ability to obtain a PSA agreement from SOCAR, although there can be no assurances it will occur or upon what terms it might be granted.
While the possibilities of obtaining a concession in the BSR Fields are unknown at this time, the company will continue to pursue it. The eventual development program is projected to involve the investment of approximately $55 million in the first two years of the project and more than $400 million during its life. The company will use its efforts to obtain a leading role in arranging for U.S. participation in this project.
Organization
We were incorporated in Florida, as Teleauctions of America, Inc., in January 1991. We were inactive until June 22, 1998, when we were reorganized and our name changed to Puma Energy, Inc. Since then, we have been engaged in the oil and gas industry, primarily in Central Asia.
Employees
We currently have no employees. Edward W. Blessing, President and CEO, devotes substantially full time to manage our affairs. As our Business Plan develops, it may require the hiring of full- or part-time employees during the next twelve months.
MANAGEMENT
The directors and officers of Puma Energy, Inc., are listed below with
information about their respective backgrounds.
Name Age Position
---- --- --------
Edward W. Blessing 65 President, Treasurer, and Sole Director
Ronald L. Brown 55 Secretary
Edward W. Blessing has served as President, CEO and Director of Puma Energy,
Inc., since 1998. Mr. Blessing received an MBA Degree from Harvard University in
1965 and a Bachelor of Arts Degree from San Diego State University in 1960. Mr.
Blessing has over 25 years experience in the oil and gas industry. Mr. Blessing
has been the Managing Partner since 1989 of Blessing Petroleum Group, LLC, which
arranges financing for both international and domestic oil and gas exploration
and development. Mr. Blessing currently serves on the Board of the Wildcatter's
Fund, the political action committee for the domestic oil and gas industry
sponsored by the Independent Petroleum Association of America (the "IPAA"), has
served as a Regional Governor of the IPAA, and as a Director of the Dallas
Petroleum Club, and is a member of the Dallas Wildcat Committee. Mr. Blessing,
after receiving his MBA from Harvard University, served as a consultant with the
management consulting firm of McKinsey & Company, Inc. Subsequent to his serving
with McKinsey & Company, Inc., Mr. Blessing has served in various executive
capacities in the natural resource industry.
Mr. Blessing also serves as a Director and President of Caspian Energy
International, Inc., an international oil and gas exploration and development
company and is managing director of Blessing Petroleum Group, LLC, an oil and
gas exploration and development company.
Ronald L. Brown has served as Secretary of Puma Energy, Inc., since 2000. Mr.
Brown is a principal of the Dallas law firm of Glast, Phillips & Murray, P.C.,
which serves as general counsel to the Company. He received Bachelor of Arts
Degree from Texas Tech University in 1968 and his law degree from Southern
Methodist University in 1975. He has been in the private practice of law since
1975. In 1983 to 1985, he was an adjunct professor of law at Southern Methodist
University.
All directors hold office until the next annual meeting of the shareholders
of Puma Energy, Inc., to be held in June, 2002 and until their successors have
been elected and qualified. Officers serve at the discretion of the Board of
Directors. Edward W. Blessing will devote such of his time to Puma Energy, Inc.,
as he deems necessary to provide management to the company. There are no
employment agreements with any executive officer.
Executive Compensation
Puma Energy, Inc., pays limited compensation to its officers and directors
and has paid no compensation in any amount or of any kind to its executive
officers or directors for the calendar years ended December 31, 1998.
Summary Compensation Table
Annual Compensation Long-Term Compensation
Name and Principal Position Year Salary(1) Bonus Other Securities Underlying Options/SARs
--------------------------- ---- --------- ----- ----- ----------------------------------
Edward W. Blessing, 2000 $192,000 -0- -0- -0-
President and CEO 1999 144,000 -0- -0- -0-
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(1) Of such salary, $36,000 in 1999 and $12,000 in 2000 has been accrued but not paid.
2001 Employee Stock Option Plan
The Puma Energy, Inc. 2001 Employee Stock Option Plan (the "2001 Option
Plan") provides for the grant to eligible employees, directors, consultants, and
agents of the Company options for the purchase of Common Stock. The 2001 Option
Plan covers, in the aggregate, a maximum of 2,000,000 shares of Common Stock and
provides for the granting of both incentive stock options (as defined in Section
422 of the Internal Revenue Code of 1986) and non-qualified stock options
(options which do not meet the requirements of Section 422). Under the 2001
Option Plan, the exercise price may not be less than the fair market value of
the Common Stock on the date of the grant of the option. As of September 30,
2001, options for 1,500,000 shares had been granted under the 2001 Option Plan
at an exercise price of between $1.00 to $1.45 per share, including options for
750,000 shares granted to Edward W. Blessing.
The Board of Directors administers and interprets the 2001 Option Plan and
is authorized to grant options thereunder to all eligible employees of the
Company, including officers. The Board of Directors designates the optionees,
the number of shares subject to the options and the terms and conditions of each
option. Each option granted under the 2001 Option Plan must be exercised, if at
all, during a period established in the grant which may not exceed 10 years from
the later of the date of grant or the date first exercisable. An optionee may
not transfer or assign any option granted and may not exercise any options after
a specified period subsequent to the termination of the optionee's employment
with the Company.
The following table provides certain summary information concerning shares
of the Company's stock represented by stock options granted to named executive
officers during fiscal year 2001.
OPTION GRANTS TABLE
(Option Grants in Last Fiscal Year)
Number of Percent of Total
Underlying Options Granted Exercise of
Securities To Employees Base Price Expiration
Name Options Granted in Fiscal Year Per Share Date
---- --------------- ---------------- ----------- ----------
Edward W. Blessing 750,000 100% $1.00 2/7/11
Aggregated Option Exercises in Last Fiscal
Year and FY-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Shares Value Options at 2001 FY-End Options at 12-31-01
Name Acquired Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ---------------------------- --------------------------
Edward W. Blessing -0- - 750,000 -0- -0- -0-
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PRINCIPAL SHAREHOLDERS
The following table sets forth beneficial ownership information, as of the date of this Prospectus, of our common stock for: each person known by Puma Energy, Inc. to own beneficially more than 5% of our common stock; each of our directors; each of our executive officers; and our current executive officers and directors as a group.
Name and Address Shares Owned Percentage ---------------- ------------ ---------- Eric P. Littman 900,000 7.8% 7695 SW 104th Street Miami, Florida 33156 Edward W. Blessing 750,0001 6.1% 5430 LBJ Freeway Suite 1600 Dallas, Texas 75240 Group consisting of 1,400,000 12.2% Fousoun Nevzat Irfan Nevzat Levent Nevzat Bacheliever Talimhane Mevkii Ocengelkoy, Istanbul, Turkey All officers and directors as a group (2 persons) 890,0002 7.2% |
In addition, Cede & Co. holds as nominee a total of 6,186,550 shares (54%).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1998, cash balances of approximately $911,000 were distributed to certain stockholders of the Company. The stockholders subsequently contributed that amount of funds to pay expenses of the Company in 1999 and 2000, as well as an additional $844,201 that has been recorded as capital contributions as of September 30, 2001. The payment received from the stockholders in 1999 and 2000 were paid initially to Caspian Energy International, Inc. ("CEI"), an affiliated company, on behalf of the Company. CEI then made the payments to the Company from its account.
The Company shares office space with CEI, which is an affiliate due to common management by Edward W. Blessing and certain overlapping ownership. The Company pays $2,860 per month as its share of the rent and office overhead and pays the salary allocable to Mr. Blessing under the terms of a Management Agreement among the Company, Caspian Energy International, Inc. and Blessing Petroleum Group, LLC.
2 Consists of stock options exercisable at $1.00 and $1.45 per share.
MARKET AND PRICE FOR COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
Market Information.
Our Common Stock is traded in the over-the-counter market in the Pink Sheets under the symbol "PUMX". The following table shows the price range of the Company's common stock for the past two years:
BID ASK
High Low High Low
First Quarter 2000 $1.87 $ .53 $2.25 $1.03
Second Quarter 2000 1.12 .40 1.50 .55
Third Quarter 2000 1.50 .87 1.75 1.06
Fourth Quarter 2000 1.50 .66 1.99 1.05
First Quarter 2001 1.25 .55 1.45 .90
Second Quarter 2001 2.65 .25 2.80 1.45
Third Quarter 2001 2.72 1.20 2.78 1.45
Fourth Quarter 2001* 1.65 1.20 1.75 1.33
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*Through December 6, 2001
Holders
As of November 21, 2001, there were 506 record holders of the Company's Common Stock.
Dividends
We have never paid any dividends on our Common Stock, and we currently intend to retain any future earnings to fund the development and growth of our business. Any future determination to pay dividends will depend on our results of operations, future earnings, financial condition and capital requirements, applicable restrictions under any credit facilities or other debt arrangements and such other factors deemed relevant by our Board of Directors.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the company consists of 50,000,000 shares of common stock, par value of $.001 per share. As of September 30, 2001, there were issued and outstanding 11,450,000 shares of common stock.
Common Stock
General. The holders of Common Stock have no preemptive, conversion or redemption rights. The outstanding shares of Common Stock are fully paid and nonassessable.
Dividends. The holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors of the Company out of funds legally available therefor. The Company has not paid cash dividends on the Common Stock during the last two fiscal years and the Board of Directors of the Company currently intends to retain earnings for further development of the Company's business and, therefore, does not intend to pay cash dividends on the Common Stock in the foreseeable future.
Voting Rights. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of shareholders and do not possess cumulative voting rights.
Registrar and Transfer Agent. The registrar and transfer agent for the Common Stock is Interwest Transfer Company, Inc., Salt Lake City, Utah.
Possible Anti-takeover Provisions.
Our bylaws provide that special meetings of stockholders may be called by stockholders only if the holders of at least 66-2/3% of the Common Stock join in such action. The bylaws also provide that stockholders desiring to nominate a person for election to the Board of Directors must submit their nominations to the Company at least 60 days in advance of the date on which the last annual stockholders' meeting was held, and provide that the number of directors to be elected (within the minimum - maximum range of 3-9 set forth in the bylaws) shall be determined by the Board of Directors or by the holders of at least 66 2/3% of the Common Stock. While these provisions of the bylaws have been established to provide a more cost-efficient method of calling special meetings of stockholders and a more orderly and complete presentation and consideration of stockholder nominations, they could have the effect of discouraging certain stockholder actions or opposition to candidates selected by the Board of Directors and provide incumbent management a greater opportunity to oppose stockholder nominees or hostile actions by stockholders. The affirmative vote of holders of at least 66-2/3% of the Common Stock is necessary to amend, alter or adopt any provision inconsistent with or repeal any of these provisions.
Indemnification of Directors and Officers.
Our Articles and the Bylaws provide that the we shall indemnify our directors and officers to the fullest extent permitted by the Florida law, and that such officers or directors may be entitled under any agreement, insurance policy, vote of stockholders or disinterested directors or otherwise. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or controlling persons of the Company pursuant to the foregoing provisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in such act and is therefore unenforceable.
Limitation on Liability of Directors.
Our Articles provide that no director shall be personally liable to us or our stockholders. The Florida statutes provide that a director will not be liable, except for liability (i) for knowing a violation of criminal law, (ii) for acts or omissions not in good faith or which involved willful misconduct or conscious disregard for the best interest of the Corporation, (iii) for liability under the Florida Statutes, or (iv) for any transaction from which the director, officer or employee derived an improper personal benefit.
LEGAL PROCEEDINGS
We are a party to an appeal pending before the First District Court of Appeals in Houston, Texas, and in which Petka Corporation ("Petka") is seeking to reverse a decision of the 215th Judicial District Court of Harris County, Texas. Petka is seeking to establish that we breached a contract called "Confidentiality and Non-Circumvention Agreement" (the "Agreement") that purported to provide us with certain "confidential information" consisting of geographical data, maps, personal and business contacts and business strategy in connection with the Siyazan Monocline oil field (the "oil field") located in Azerbaijan. Petka alleges that we agreed to not use the "confidential information" except in connection with our participation with Petka in developing the oil field. Although the Agreement had the alleged confidential
information as an attachment, Petka never provided us with a description of the confidential information. Petka also claimed that we subsequently entered into a Memorandum of Understanding with the State Oil Company of the Azerbaijan Republic ("SOCAR") for the right to negotiate an agreement for the exploration and development of the oil field, but did not include the participation of Petka in direct violation of the Agreement. Petka brought its action alleging breach of contract, conversion and misappropriation of trade secrets. On September 8, 2001, the District Court Judge granted our motion and signed an Order Granting No Evidence Summary Judgment in our favor. Petka then filed their appeal. If the decision of the District Judge is ultimately reversed, we could be denied the right to develop and explore that oil field and/or face what is now unspecified damages. Although we believe and are confident that we will again prevail on the appeal, there can be no assurances that we will be successful. There are no other material pending legal proceedings.
LEGAL MATTERS
The Law Offices of Glast, Phillips & Murray, Dallas, Texas, have passed upon the validity of the common stock covered by this registration statement for Puma Energy, Inc. Attorneys with Glast, Phillips & Murray, P.C., hold options to purchase 200,000 shares of common stock for $1.45 per share.
EXPERTS
The financial statements included in the registration statement on Form SB-2 have been audited by Hein + Associates LLP, independent certified public accountants, to the extent and for the periods set forth in their report, and are included herein in reliance upon the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN GET MORE INFORMATION
At your request, we will provide you, without charge, with a copy of any exhibits to our registration statement incorporated by reference in this prospectus. If you want more information, write or call us at:
Puma Energy, Inc. 5430 LBJ Freeway, Suite 1600 Dallas, Texas 75240 Telephone: (972) 663-9430 Facsimile: (972) 663-9395
Our fiscal year ends on December 31st. We intend to furnish our stockholders with annual reports containing audited financial statements and other appropriate reports. In addition, we intend to become a reporting company and file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional office located at the Northwestern Atrium Center, 500 West Madison street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on the operation and other locations of the public reference rooms. You can also request copies of these documents, upon payment of a duplicating fee, by writing the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Our SEC filings are also available to the public on the SEC Internet website at http: \\www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report F-1 Balance Sheets as of December 31, 2000 and September 30, 2001 (unaudited) F-2 Statement of Operations for the two years ended December 31, 1999 and 2000 and the nine months ended September 30, 2000 and 2001 (unaudited) F-3 Statements of Changes in Stockholders' Equity for the period since inception (July 7, 1991) through September 30, 2001 F-4 Statement of Cash Flows for the years ended December 31, 1999 and 2000 and the nine months ended September 30, 2000 and 2001 (unaudited) F-5 - F-6 Notes to Financial Statements F-7 |
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Puma Energy, Inc.
Dallas, Texas
We have audited the accompanying balance sheet of Puma Energy, Inc., formerly Teleauctions of America, Inc., (a development stage company) as of December 31, 2000, and the related statements of operations, changes in stockholders' deficit and cash flows for the years ended December 31, 2000 and 1999, and for the period (not separately presented) from inception (January 7, 1991) to December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Puma Energy, Inc. as of December 31, 2000, and the results of its operations and cash flows for the years ended December 31, 2000 and 1999, and the period (not separately presented) from inception to December 31, 2000, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company is in the development stage and has had no revenues to date. The Company will also require significant amounts of capital in order to implement its business plan. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
HEIN + ASSOCIATES LLP
Dallas, Texas
June 12, 2001, except for Note 6, which is dated December 20, 2001
PUMA ENERGY, INC.
(a development stage company)
BALANCE SHEET
ASSETS
------
SEPTEMBER 30, DECEMBER 31,
2001 2000
------------- -------------
(Unaudited)
CURRENT ASSET - Cash $ 345 $ 345
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES -
Accounts payable and other liabilities $ 284,072 $ 98,261
CONTINGENCIES AND COMMITMENTS (Notes 1, 5 and 6)
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value; 50,000,000 shares authorized;
11,450,000 shares issued and outstanding 11,450 11,450
Paid-in capital 2,368,350 1,270,311
Accumulated deficit (2,663,527) (1,379,677)
------------- -------------
Total stockholders' deficit (283,727) (97,916)
------------- -------------
Total liabilities and stockholders' deficit . $ 345 $ 345
============= =============
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See accompanying notes to these financial statements.
PUMA ENERGY, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
PERIOD FROM
INCEPTION
NINE MONTHS ENDED (JANUARY 7, 1991)
SEPTEMBER 30, YEARS ENDED DECEMBER 31, TO
---------------------------- ---------------------------- SEPTEMBER 30,
2001 2000 2000 1999 2001
------------ ------------ ------------ ------------ -----------------
(Unaudited) (Unaudited) (Unaudited)
REVENUES $ -- $ -- $ -- $ -- $ --
GENERAL AND ADMINISTRATIVE EXPENSES
1,283,850 334,043 454,392 560,370 2,663,527
------------ ------------ ------------ ------------ -----------------
NET LOSS $ (1,283,850) $ (334,043) $ (454,392) $ (560,370) $ (2,663,527)
============ ============ ============ ============ =================
NET LOSS PER COMMON SHARE $ (.11) $ (.03) $ (.04) $ (.05)
============ ============ ============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
11,450,000 11,450,000 11,450,000 11,450,000
============ ============ ============ ============
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See accompanying notes to these financial statements.
PUMA ENERGY, INC.
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM INCEPTION (JANUARY 7, 1991) THROUGH SEPTEMBER 30, 2001
COMMON STOCK ADDITIONAL CASH BALANCES
------------------------ PAID-IN HELD BY ACCUMULATED
SHARES AMOUNT CAPITAL STOCKHOLDERS DEFICIT
----------- ----------- ----------- ----------- -----------
BALANCES, JANUARY 7, 1991 -- $ -- $ -- $ -- $ --
Issuance of common stock for 125 lode claims and expenses -
December 4, 1992 1,000,000 1,000 4,000 -- --
Net loss -- -- -- -- (5,000)
----------- ----------- ----------- ----------- -----------
BALANCES, DECEMBER 31, 1991 THROUGH 1997 1,000,000 1,000 4,000 -- (5,000)
Issuance of common stock - $0.01 per share in June 1998 10,000,000 10,000 90,000 -- --
Issuance of common stock - $2.00 per share in August 1998 450,000 450 899,550 -- --
Transfer of stock from shareholder for services -- -- 100,000 -- --
Distribution of cash balances to stockholders -- -- -- (911,082) --
Application of cash balances by stockholders -- -- -- 116,386 --
Net loss -- -- -- -- (359,915)
----------- ----------- ----------- ----------- -----------
BALANCES, DECEMBER 31, 1998 11,450,000 11,450 1,093,550 (794,696) (364,915)
Application of cash balances by stockholders -- -- -- 563,007 --
-- -- -- -- (560,370)
----------- ----------- ----------- ----------- -----------
BALANCES, DECEMBER 31, 1999 11,450,000 11,450 1,093,550 (231,689) (925,285)
Application of cash balances by stockholders -- -- -- 231,689 --
Contributions by stockholders -- -- 176,761 -- --
Net loss -- -- -- -- (454,392)
----------- ----------- ----------- ----------- -----------
BALANCES, DECEMBER 31, 2000 11,450,000 $ 11,450 1,270,311 -- (1,379,677)
Contributions by stockholders (unaudited) -- -- 667,440 -- --
Stock options granted (unaudited) -- -- 430,599 -- --
Net loss (unaudited) -- -- -- -- (1,283,850)
----------- ----------- ----------- ----------- -----------
BALANCES, SEPTEMBER 30, 2001 (unaudited) 11,450,000 $ 11,450 $ 2,368,350 $ -- $(2,663,527)
=========== =========== =========== =========== ===========
|
See accompanying notes to these financial statements.
PUMA ENERGY, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
-------------------------- --------------------------
2001 2000 2000 1999
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,283,850) $ (334,043) $ (454,392) $ (560,370)
Adjustments to reconcile net loss to net cash from operations:
Expenses paid by stockholders 109,691 -- (33,845) 276,242
Stock and options granted for services 430,599 -- -- --
Change in accounts payable and accrued liabilities 185,812 90,045 45,701 (3,573)
Other -- -- -- --
----------- ----------- ----------- -----------
Net cash used by operations (557,748) (243,998) (442,536) (287,701)
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution of cash balances to stockholders -- -- -- --
Application of cash balances and contributions by
stockholders 557,748 243,758 442,296 286,765
Sale of common stock -- -- -- --
----------- ----------- ----------- -----------
Net cash provided by financing activities 557,748 243,758 442,296 286,765
----------- ----------- ----------- -----------
NET CHANGE IN CASH -- (240) (240) (936)
CASH, beginning of period 345 585 585 1,521
----------- ----------- ----------- -----------
CASH, end of period $ 345 $ 345 $ 345 $ 585
=========== =========== =========== ===========
|
See accompanying notes to these financial statements.
PUMA ENERGY, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS, CONT.
PERIOD FROM
INCEPTION
(JANUARY 7, 1991)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,663,527)
Adjustments to reconcile net loss to net cash from operations:
Expenses paid by stockholders 352,090
Stock and options granted for services 530,599
Change in accounts payable and accrued liabilities 284,072
Other 5,000
-----------
Net cash used by operations (1,491,766)
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution of cash balances to stockholders (911,082)
Application of cash balances and contributions by
stockholders 1,403,193
Sale of common stock 1,000,000
-----------
Net cash provided by financing activities 1,492,111
-----------
NET CHANGE IN CASH 345
CASH, beginning of period --
-----------
CASH, end of period $ 345
===========
|
See accompanying notes to these financial statements.
PUMA ENERGY, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
(the period subsequent to December 31, 2000 is unaudited)
In November 1999, the Company entered into a farmout agreement with a Russian company that had previously entered into a Memorandum of Understanding ("MOU") with the State Oil Company of the Azerbaijan Republic ("SOCAR") to conduct a feasibility study and due diligence and negotiate a definitive agreement with SOCAR regarding the rehabilitation, exploration, development and production of certain oil fields in the Azerbaijan Republic. Under the farmout agreement, the Company was granted the right to negotiate the definitive agreement with SOCAR and conduct a feasibility study and due diligence review. See Note 6.
Use of Estimates and Certain Significant Estimates The preparation of the Company's financial statements in conformity with generally accepted accounting principles requires the Company's management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
PUMA ENERGY, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
(the period subsequent to December 31, 2000 is unaudited)
September 30, 2001 and $97,916 at December 31, 2000. To date, stockholders have provided funding for the continuing operations of the Company. The continuation of the Company as a going concern is dependent upon its ability to obtain additional long-term debt and/or equity financing and/or to bring in a joint venture partner to meet its obligations and permit implementation of its business plan.
In 1998, the Company recorded cash distributions of approximately $911,000 to certain stockholders. Certain stockholders subsequently contributed that amount of funds to pay expenses of the Company in 1999 and 2000, as well as an additional $844,201 that has been recorded as capital contributions as of September 30, 2001 with the issuance of no additional stock. The payments received from the stockholders in 1999 and 2000 were paid initially to Caspian Energy International, Inc. ("CEI"), an affiliated company, on behalf of the Company. CEI then made the payments to or for the benefit of the Company from its account.
At December 31, 2000, the Company had a deferred tax asset of approximately $450,000, which is subject to a valuation allowance of the same amount. The deferred tax asset results from a net operating loss carryforward for federal income tax purposes of approximately $1,300,000, which will expire if unused in 2020.
In February 2001, the Company adopted a stock option plan and reserved 2,000,000 shares to be issued under the plan. Also in February 2001, the Company issued options under the plan to an officer to purchase 750,000 shares of stock and to a former director to purchase 225,000 shares of stock. The terms of the options were for ten years exercisable at $1.00 per share with no vesting period. In April 2001, the Company granted options under the stock option plan to an officer to purchase 140,000 shares and to a stockholder, consultant and attorneys to purchase a total of 385,000 shares of the Company's stock. The terms of these options were for ten years exercisable at $1.45 per share with no vesting period. The estimated value of the options granted to other than the officers of $430,599 was recorded as an expense in the nine month period ended September 30, 2001.
All options granted during 2001 were still outstanding at September 30, 2001. There were no options exercised, forfeited or expired during the presented periods.
Total options granted in the nine month period ended September 30, 2001 were 1,500,000, with a weighted average exercise price per share of $1.16 and a weighted average fair value per share of $.40. The value of these options was estimated using the Black Scholes option pricing model using the following parameters:
Volatility 100% Risk free interest rate 5.0% Expected term 3 years |
PUMA ENERGY, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
(the period subsequent to December 31, 2000 is unaudited)
The Company, from time to time, may be involved in litigation in the normal course of business. In management's opinion, there is no litigation pending that is likely to have a significant impact on the financial statements.
As of the date of this report, the Company has proposed an agreement with the State Oil Company of Azerbaijan Republic ("SOCAR") for rehabilitation, development and production sharing of certain fields in Azerbaijan. The Company has estimated its obligations under the agreement, if it is concluded, to be approximately $55,000,000 over the first two years of the program and more than $400,000,000 over the life of the project.
In addition, in December 2001, the Company signed a preliminary agreement with a German company to acquire an interest in a joint venture with SOCAR to develop an oil field in Azerbaijan. If the agreement is finalized, the Company will be obligated to pay appraised value for its interest in the joint venture and contribute $5,000,000 toward the initial phase of the development project.
*****************
Introduction
Please read this prospectus carefully. It describes our business, our products and services and our financial condition and results of operations. We have prepared this prospectus so that you will have the information necessary to make an informed investment decision.
You should only rely on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of the prospectus, regardless of the time the prospectus is delivered or the common stock is sold.
Up to 3000,000 Shares
Common Stock
Prospectus Summary...................... Risk Factors............................ --------------- Dilution................................ PROSPECTUS Use of Proceeds......................... Management's Discussion and Analysis of _________, 2001 Financial Condition and Results of Operations........................... --------------- Description of the Business............. Management.............................. Prinipal Shareholders................... Certain Relationships and Related Transactions......................... Market and Price for Common Equity and Other Shareholder matters............ Description of Capital Stock............ Legal Proceedings....................... Legal Matters........................... Experts................................. Where You Can Get More Information...... Index to Consolidated Financial......... Statements |
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. Indemnification of Directors and Officers
Section 607.0850 of the Florida Business Corporation Act permits the Registrant to indemnify directors and officers. Article X of the Articles and Article II, Section 2.19 of Bylaws provide that the Board of Directors shall authorize the corporation to pay or reimburse any present or former Director or Officer of the corporation any costs or expenses actually and necessarily incurred by him in any action, suit, or proceeding to which he is made a party by reason of his holding such position; provided, however, that he shall not receive indemnification if he be finally adjudicated therein. The indemnification herein provided shall also extend to good faith expenditures incurred in anticipation of, or preparation for, threatened or proposed litigation. The Board of Directors may, in proper cases, extend the indemnification to cover the good faith settlement of any action, suit, or proceeding, whether formally instituted or not to the maximum extent permitted by Section 607.0850 of the Florida Business Corporation Act.
ITEM 25. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection with the sale and distribution of the securities being registered, other than underwriting discounts and commissions. All of the amounts shown are estimates, except the SEC, NASD, and Nasdaq fees.
Securities and Exchange Commission registration fee ................. $1,125
NASD filing fee ..................................................... *
Standard & Poor's Listing fee ....................................... 4,975
Printing expenses ................................................... *
Accounting fees and expenses ........................................ *
Legal fees and expenses ............................................. *
Fees and expenses (including legal fees) for qualifications
under state securities laws ...................................... *
Transfer agent and registrar's fees and expenses .................... *
Miscellaneous expenses .............................................. *
------
Total.......................................................$ *
|
* to be completed by amendment
ITEM 26. Recent Sales of Unregistered Securities
Set forth in the table below are the dates, the number of securities sold and the total offering price of such securities sold by the Registrant within the past three years. Unless otherwise indicated, all securities were sold to the purchasers directly by the Registrant, and therefore, no underwriting discounts or commissions were involved.
Total
Number Offering
Title of Securities Sold Date of Purchase of shares Price ($)
------------------------ ---------------- --------- ---------
None -0- -0- -0-
|
ITEM 27. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number Description
------- -----------
3(i)(A) Articles of Incorporation of Registrant - January 7, 1991
3(i)(B) Articles of Amendment of Registrant - May 21, 1998
3(i)(C) Articles of Amendment of Registrant - June 29, 1998
3(ii) Bylaws of the Registrant
4(i) Specimen common stock certificate
5(i) Opinion on legality of Glast, Phillips & Murray, a Professional
Corporation
10(i)(A) Heads of Agreement with Grunewald & Co, GmbH, dated December
20, 2001
10(ii)(A)(1) 2001 Employee Stock Option Plan adopted February 7, 2001
10(ii)(A)(2) Non-Qualified Stock Option Agreement dated February 7, 2001,
granted to Edward W.
Blessing
10(ii)(A)(3) Incentive Stock Option Agreement dated February 7, 2001,
granted to Edward W.
Blessing
10(iii) Management Agreement with The Blessing Petroleum Group, LLC
23(i)(A) Consent of Hein + Associates LLP.
23(i)(B) Consent of Glast, Phillips & Murray, P.C. (contained in Exhibit
5(i))
|
ITEM 28. Undertakings
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus of any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually, or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in this registration statement; and
(iii)to include any additional or changed material information with respect to the plan of distribution;
(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of this offering.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Dallas, State of Texas, on January 22, 2002.
PUMA ENERGY, INC.
By: /s/ Edward W. Blessing ------------------------- Edward W. Blessing Chief Executive Officer |
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
/s/ Edward W. Blessing
-----------------------------------------
Edward W. Blessing
Sole Director and Chief Executive Officer
January 22, 2002
-----------------------------------------
(Date)
|
INDEX TO EXHIBITS
Exhibit
Number Description
------- -----------
3(i)(A) Articles of Incorporation of Registrant - January 7, 1991
3(i)(B) Articles of Amendment of Registrant - May 21, 1998
3(i)(C) Articles of Amendment of Registrant - June 29, 1998
3(ii) Bylaws of the Registrant
4(i) Specimen common stock certificate
5(i) Opinion on legality of Glast, Phillips & Murray, a Professional
Corporation
10(i)(A) Heads of Agreement with Grunewald & Co, GmbH, dated December
20, 2001
10(ii)(A)(1) 2001 Employee Stock Option Plan adopted February 7, 2001
10(ii)(A)(2) Non-Qualified Stock Option Agreement dated February 7, 2001,
granted to Edward W.
Blessing
10(ii)(A)(3) Incentive Stock Option Agreement dated February 7, 2001,
granted to Edward W.
Blessing
10(iii) Management Agreement with The Blessing Petroleum Group, LLC
23(i)(A) Consent of Hein + Associates LLP.
23(i)(B) Consent of Glast, Phillips & Murray, P.C. (contained in Exhibit
5(i))
|
EXHIBIT 3(i)(A)
ARTICLES OF INCORPORATION
OF
TELEAUCTIONS OF AMERICA, INC.
The undersigned subscriber to these Articles of Incorporation, a natural person competent to contract, hereby forms a corporation under the laws of the State of florida.
ARTICLE I
NAME
The name of this corporation is TELEAUCTIONS OF AMERICA, INC.
ARTICLE II
NATURE OF THE BUSINESS
This corporation shall have the power to transact or engage in any business permitted under the laws of the United States and of the State of Florida.
ARTICLE III
AUTHORIZED SHARES
The capital stock of this corporation shall consist of 10,000 shares of common stock having a par value of $.01.
ARTICLE IV
INITIAL CAPITAL
The amount of capital with which this corporation shall commence business shall be not less than One Hundred ($100.00) Dollars.
ARTICLE V
TERM OF EXISTENCE
This corporation shall have perpetual existence.
ARTICLE VI
INITIAL ADDRESS
The initial address of the principal place of business of this corporation in the State of florida shall be 1428 Brickell Avenue, Suite 202,Miami, Florida 33131. The Board of Directors may at any time and from time to time move the principal office of this corporation to any location within or without the State of Florida. ARTICLE VII DIRECTORS The business of this corporation shall be managed by its Board of Directors The number of such directors shall be not be less than one (1) and, subject to such minimum may be increased or decreased from time to time in the manner provided in the By-Laws. The number of persons constituting the Initial Board of Directors shall be 1.
ARTICLE VIII
INITIAL DIRECTORS
The names and addresses of the Initial Board of Directors are as follows:.lsl
Eric P. Littman 1428 Brlckell Avenue
Suite 202
Miami, FL 33131
|
ARTICLE IX
SUBSCRIBER
The name and address of the person signing these Articles of Incorporation as subscriber is:
Eric P. Littman Suite 202 1428 Brickell Avenue Miami, FL 33131
ARTICLE X
VOTING FOR DIRECTORS
The Board of Directors shall be elected by the Stockholders of the corporation at such time and In such manner as provided in the By-laws.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person, firm or corporation shall be effected by the fact that any officer or director of this corporation is such other party or is, or at some time In the future becomes, an officer, director or partner of such other contracting party, or has now or hereafter a direct or indirect interest in such contract.
ARTICLE XII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
This corporation shall have the power, in its By.Laws or in any resolution of its stockholders or directors, to undertake to indemnify the officers and directors of this corporation against any contingency or peril as may be determined to be in the best interests at this corporation, and in conjunction therewith, to procure, at this corporation's expense, policies of insurance.
ARTICLE XIII
RESIDENT AGENT
The name and address of the initial resident agent of this corporation is:
Berlit Corporate Services, Inc.
1428 Brickell Avenue
Suite 202
Miami, FL 33131
(Signatures to follow)
IN WITNESS WHEREOF, I have hereunto subscribed to and executed these Articles of Incorporation this 3rd day of January, 1991.
/s/ Eric P. Littman -------------------------- Eric P. Littman, Subscriber |
Subscribed and Sworn to this
3rd day of January, 1991.
Before me:
/s/ Isabel J. Cantre --------------------------------------- Notary Public |
My Commission Expires:
Notary Public State of Florida at Large
My Commission Expires Feb. 25, 1991
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR SERVICE OF PROCESS WITHIN THIS STATE NAMING THE AGENT UPON WHOM PROCESS MAY BE SERVED
In pursuance of Chapter 48.091 of the Florida Statutes, the following is submitted:
TELEAUCTIONS OF AMERICA, INC. desiring to organize a corporation under the laws of the State of Florida with its principal place of business as stated in its Articles of Incorporation has named Berlit Corporate Services, Inc., located at Suite 202. 1428 Brickell Avenue, Miami, FL 33131 as its agent upon whom process may be served within this state.
Having been named to accept service of process for the above stated corporation, hereby accept to act In this capacity and to comply with the provisions of the Act relative to keeping open said office.
BERLIT CORPORATE SERVICES, INC.
By: /s/ Eric P. Littman
---------------------------
Eric P. Littman. Secretary
|
EXHIBIT 3 (i) (B)
ARTICLES OF AMENDMENT TO
TELEAUCTIONS OF AMERICA, INC.
THE.UNDERSIGNED, being the sole director and president of TELEAUCTIONS OF AMERICA, INC., does hereby amend its Articles of Incorporation of as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be TELEAUCTIONS OF AMERICA, INC.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes authorized under the laws of the state of Florida.
ARTICLE Ill
PERIOD OF EXISTENCE
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
SHARES
The capital stock of this corpofation shall consist of 50,000,000 shares of common stock, $0.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this corporation in the State of Florida shall be 7695 S.W. 104th Street, Suite 210, Miami, FL 33156. The Board of Directors may at any time and from time to time move the principal office of this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by its Board of Directors. The number of such directors shall be not be less than one (1) and, subject to such minimum may be increased or decreased from time to time in the manner provided in the By-Laws.
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have any right to acquire shares or other securities of the Corporation except to the extent such right may be granted by an amendment to these Articles of Incorporation or by a resolution of the board of Directors.
ARTICLE VIII
AMENDMENT OF BYLAWS
Anything in these Articles of Incorporation, the Bylaws, or the Florida Corporation Act notwithstanding, bylaws shall not be adopted, modified, amended or repealed by the shareholders of the Corporation except upon the affirmative vote of a simple majority vote of the holders of all the issued and outstanding shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9. I. Inspection of Books. The board of directors shall make reasonable rules to determine at what times and places and under what conditions the books of the Corporation shall be open to inspection by shareholders ora duly appointed representative of a shareholder.
9.2. Control Share Acquisition. The provisions relating to any control share acquisition as contained in Florida Statutes now, or hereinafter amended, and any successor provision shall not apply to the Corporation.
9.3. Quorum. The holders of shares entitled to one-third of the votes at a meeting of shareholder's shall constitute a quorum.
9.4. Required Vote. Acts of shareholders shall require the approval of holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIAB1LITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of the Corporation shall be personally liable to the Corporation or its shareholders for damages for breach of any duty owed to the Corporation or its shareholders. In addition, the Corporation shall have the power, in its By- Laws or in any resolution of its stockholders or directors, to undertake to indemnify the officers and directors of this corporation against any contingency or peril as may be determined to be in the best interests of this corporation, and in conjunction therewith, to procure, at this corporation's expense, policies of insurance.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person, firm or corporation shall be affected by the fact that any officer or director of this corporation is such other party or is, or at some time in the future becomes, an officer, director or partner of such other contracting party, or has now or hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority vote of the shareholders and directors of the corporation on May 20, 1998 and that the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this Amendment to Articles of Incorporation this on May 20, 1998.
/s/ Eric P. Littman -------------------------------- Eric P. Littman, Sole Director |
The foregoing instrument was acknowledged before me on May 20,1998, by Eric P. Littman, who is personally known to me.
/s/ Isabel J. Cantera ---------------------- Notary Public |
My Commission expires:
Isabel J. Cantera My Commission # CC 428909 Expires: February 25, 1999 Bonded Thru Notary Public Underwriters
EXHIBIT 3(i)(C)
ARTICLES OF AMENDMENT TO
THE UNDERSIGNED, being all of the directors of TELEAUCTIONS OF AMERICA, INC. do hereby amend the Articles of Incorporation of TELEAUCTIONS OF AMERICA, INC. as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be PUMA ENERGY, INC.
I hereby certify that the following was adopted by a majority vote of the shareholders and directors of the corporation on June 22, 1998 and that the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this Amendment to Articles of Incorporation this on June 22, 1998.
/s/ H. Tamer Muftizade ---------------------------- H. TAMER MUFTIZADE, Director |
The foregoing instrument was acknowledged before me on June 22, 1998, by H. TAMER MUFTIZADE, who is personally known to me.
My commission expires: Denise I. Cox
Commission # 1122353
Notary Public - California
San Diego County
My Commission Expires: Jan. 15, 2001
/s/ Denise I. Cox ----------------- Notary Public |
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this Amendment to Articles of Incorporation this on June 22, 1998.
/s/ Edward W. Blessing ---------------------------- EDWARD W. BLESSING, Director |
The foregoing instrument was acknowledged before me on June 23, 1998 by EDWARD W. BLESSING, who is personally known to me.
My Commission Expires:
D. Darlene Bryan
Notary Public, State of Texas
My Commission Expires
Feb. 16, 2001 /s/ D. Darlene Bryan
--------------------
Notary Public
|
EXHIBIT 3(ii)
BY-LAWS
of
PUMA ENERGY, INC.
Section 1. Annual Meeting. The annual meeting of the shareholders of this corporation shall be held on the 30th day of June of each year or at such other time and ace designated by the Board of Directors of the corporation. Business transacted at the annual meeting shall include the election of directors of the corporation. If the designated day shall fall on a Sunday or legal holiday, then the meeting shall be held on the first business day thereafter.
Section 2. Special Meetings. Special meetings of the shareholders shall be held when directed by the President or the Board of Directors, or when requested in writing by the holders of not less than 10% of all the shares entitled to vote at the meeting. A meeting requested by shareholders shall be called for a date not less than 3 nor more than 30 days after the request is made, unless the shareholders requesting the meeting designate a later date. The call for the meeting shall be issued by the Secretary, unless the President, Board of Directors, or shareholders requesting the meeting shall designate another person to do so.
Section 3. Place. Meetings of shareholders shall be held at the principal place of business of the corporation or at such other place as may be designated by the Board of Directors.
Section 4. Notice. Written notice stating the place, day and hour of the meeting and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 3 nor more than 30 days before the meeting, either personally or by first class mail, or by the direction of the President, the Secretary or the officer or persons calling the meeting to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meeting. When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. If, however, after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given as provided in this Article to each shareholder of record on a new record date entitled to vote at such meeting.
Section 6. Shareholder Quorum and Voting. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum is present, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders unless otherwise provided by law.
Section 7. Voting of Shares. Each outstanding share shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders.
Section 8. Proxies. A shareholder may vote either in person or by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact. No proxy shall be valid after the duration of 11 months from the date thereof unless otherwise provided in the proxy.
Section 9. Action by Shareholders Without a Meeting. Any action required by law or authorized by these by-laws or the Articles of Incorporation of this corporation or taken or to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
Section 1. Function. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to fix the compensation of directors.
Section 4. Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest.
Section 5. Number. This corporation shall have a minimum of 1 director but no more than 7.
Section 6. Election and Term. Each person named in the Articles of Incorporation as a member of the initial Board of Directors shall hold office until the first annual meeting of shareholders, and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death. At the first annual meeting of shareholders and at each annual meeting thereafter the shareholders shall elect directors to hold office until the next succeeding annual meeting. Each director shall hold office for a term for which he is elected and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death.
Section 7. Vacancies. Any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of Directors, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall hold office only until the next election of directors by the shareholders.
Section 8. Removal of Directors. At a meeting of shareholders called expressly for that purpose, any director or the entire Board of Directors may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors.
Section 9. Quorum and Voting. A majority of the number of directors fixed by these by-laws shall constitute a quorum for the transaction of business. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 10. Executive and Other Committees. The Board of Directors, by resolution adopted by a majority of the full Board of Directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution shall have and may exercise all the authority of the Board of Directors, except as is provided by law. Section 11. Place of Meeting. Regular and special meetings of the Board of Directors shall be held at the principal place of business of the corporation or as otherwise determined by the Directors.
Section 12. Time. Notice and Call of Meetings. Regular meetings of the Board of Directors shall be held without notice on the first Monday of the calendar month two (2) months following the end of the corporation's fiscal, or if the said first Monday is a legal holiday, then on the next business day. Written notice of the time and place of special meetings of the Board of Directors shall be given to each director by either personal delivery, telegram or cablegram at least three (3) days before the meeting or by notice mailed to the director at least 3 days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose, of any regular or special meeting of the Board of Directors need be specified in the notice of waiver of notice of such meeting. A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who were not present at the time of the adjournment, and unless the time and place of adjourned meeting are announced at the time of the adjournment, to the other directors. Meetings of the Board of Directors may be called by the chairman of the board, by the president of the corporation or by any two directors.
Members of the Board of Directors may participate in a meeting of such board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.
Section 13. Action Without a Meeting. Any action, required to be taken at a meeting of the Board of Directors, or any action which may be taken at a meeting of the Board of Directors or a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so to be taken, is signed by such number of the directors, or such number of the members of the committee, as the case may be, as would constitute the requisite majority thereof for the taking of such actions, is filed in the minutes of the proceedings of the board or of the committee. Such actions shall then be deemed taken with the same force and effect as though taken at a meeting of such board or committee whereat all members were present and voting throughout and those who signed such action shall have voted in the affirmative and all others shall have voted in the negative. For informational purposes, a copy of such signed actions shall be mailed to all members of the board or committee who did not sign said action, provided however, that the failure to mail said notices shall in no way prejudice the actions of the board or committee.
Section 1. Officers. The officers of this corporation shall consist of a president, a secretary and a treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the Board of Directors from time to time. Any two or more offices may be held by the same person.
Section 2. Duties. The officers of this corporation shall have the following duties:
The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate records except the financial records; shall record the minutes of all meetings of the shareholders and Board of directors, send all notices of all meetings and perform such other duties as may be prescribed by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and financial records, shall keep full and accurate accounts of receipts and disbursements and render accounts thereof at the annual meetings of shareholders and whenever else required by the Board of Directors or the President, and shall perform such other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. An officer or agent elected or appointed by the Board of Directors may be removed by the board whenever in its judgment the best interests of the corporation will be served thereby. Any vacancy in any office may be filed by the Board of Directors.
Section 1. Issuance. Every holder of shares in this corporation shall be entitled to have a certificate representing all shares to which he is entitled. No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this corporation shall be signed by the President or Vice President and the Secretary or an Assistant Secretary and may be sealed with the seal of this corporation or a facsimile thereof.
Section 3. Transfer of Stock. The corporation shall register a stock certificate presented to it for transfer if the certificate is properly endorsed by the holder of record or by his duly authorized attorney.
Section 4. Lost. Stolen or Destroyed Certificates. If the shareholder shall claim to have lost or destroyed a certificate of shares issued by the corporation, a new certificate shall be issued upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, and, at the discretion of the Board of Directors, upon the deposit of a bond or other indemnity in such amount and with such sureties, if any, as the board may reasonably require.
Section 1. Books and Records. This corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders, Board of Directors and committee of directors.
This corporation shall keep at its registered office, or principal place of business a record of its shareholders, giving the names and addresses of all shareholders and the number of the shares held by each.
Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have been a holder of record of shares of voting trust certificates therefor at least six months immediately preceding his demand or shall be the holder of record of, or the holder of record of voting trust certificates for, at least five percent of the outstanding shares of the corporation, upon written demand stating the purpose thereof, shall have the right to examine, in person or by agent or attorney, at any reasonable time or times, for any proper purpose its relevant books and records of accounts, minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the close of each fiscal year, this corporation shall prepare a balance sheet showing in reasonable detail the financial condition of the corporation as of the close of its fiscal year, and a profit and loss statement showing the results of the operations of the corporation during the fiscal year.
Upon the written request of any shareholder or holder of voting trust certificates for shares of the corporation, the corporation shall mail to each shareholder or holder of voting trust certificates a copy of the most recent such balance sheet and profit and loss statement. The balance sheets and profit and loss statements shall be filed in the registered office of the corporation in this state, shall be kept for at least five years, and shall be subject to inspection during business hours by any shareholder or holder of voting trust certificates, in person or by agent.
The Board of Directors of this corporation may, from time to time, declare and the corporation may pay dividends on its shares in cash, property or its own shares, except when the corporation is insolvent or when the payment thereof would render the corporation insolvent subject to the provisions of the Florida Statutes.
The Board of Directors shall provide a corporate seal which shall be in circular form.
These by-laws may be altered, amended or repealed, and new by-laws may be adopted by the a majority vote of the directors of the corporation.
EXHIBIT 4(i)
(Form of Stock Certificate)
Not Valid Unless Countersigned by Transfer Agent Incorporated under the Laws of the State of Florida
Puma Energy, Inc. Authorized Common Stock: 50,000,000 Shares Par Value $0.001
This certifies that
is the record holder of
_____________ Shares of PUMA ENERGY, INC. Common Stock transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
PUMA ENERGY, INC. Corporate Seal of Florida
/s/ Darla D. Smotherman /s/ Edward W. Blessing
------------------------------ ----------------------
Darla D. Smotherman, Secretary Edward W. Blessing,
President & CEO
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EXHIBIT 5(i)
Glast, Phillips & Murray
A Professional Corporation
Attorneys and Counselors 2200 One Galleria Tower ______ 13355 Noel Road, L.B. 48 Houston Dallas, Texas 75240-6657 (713) 237-3111 (972) 419-8300 Telecopier (972) 419-8329
January 23, 2002
Puma Energy, Inc.
1600 Three Lincoln Centre
5430 LBJ Freeway
Dallas, Texas 75240
RE: Form SB-2 Registration Statement relating to the registration of up to 3,000,000 shares of common stock, $.001 par value of Puma Energy, Inc.
Gentlemen:
We are acting as counsel for Puma Energy, Inc., a Florida corporation (the "Company"), in connection with the filing under the Securities Act of 1933, as amended, of a Registration Statement for the Company on Form SB-2 filed with the Securities and Exchange Commission ("SEC") (the "Registration Statement"), covering an aggregate of up to 3,000,000 shares (the "Shares") of common stock, par value $.001 per share (the "Common Stock"), which may be issued and sold.
In that connection, we have examined the Form SB-2 Registration Statement in the form to be filed with the SEC. We have also examined and are familiar with the originals or authenticated copies of all corporate or other documents, records and instruments that we have deemed necessary or appropriate to enable us to render the opinion expressed below.
We have assumed that all signatures on all documents presented to us are genuine, that all documents submitted to us as originals are accurate and complete, that all documents submitted to us as copies are true and correct copies of the original thereof, that all information submitted to us was accurate and complete and that all persons executing the delivering originals or copies of documents examined by us were competent to execute and deliver such documents.
Based on the foregoing and having due regard for the legal considerations we deem relevant, we are of the opinion that the Shares, or any portion thereof, when sold as described in the Registration Statement, will have been validly issued and fully paid, and are nonassessable.
This opinion may be filed as an exhibit to the Registration Statement.
GLAST, PHILLIPS & MURRAY, P.C.
/s/ GLAST, PHILLIPS & MURRAY, P.C. |
EXHIBIT 1O (i)(A)
HEADS OF AGREEMENT
THIS AGREEMENT, dated December 20, 2001, is entered into between the following persons (together the "Parties"):
(1) PUMA ENERGY INC., a company incorporated under the laws of Florida, USA ("PUMA"); and
(2) H. GRUNEWALD & CO., GmbH, a company incorporated under the laws of Germany ("Grunewald").
INTRODUCTION
(A) Grunewald or its affiliate holds a 60% interest in Azergerneft, a limited liability company formed under the legislation of the Azerbaijan Republic (the "Company"), the remainder of the interests in which are held by the State Oil Company of the Azerbaijan Republic ("SOCAR").
(B) The Company was incorporated pursuant to an agreement between SOCAR and Grunewald (the "JV Contract") to carry out the rehabilitation of existing facilities in the Ramana Field Number 7 and all ancillary activities (the "Project") in accordance with its terms.
(C) The Company is seeking funds to carry out such rehabilitation and on August 14, 2001 Grunewald and PUMA signed a Letter of- Intent under which PUMA agreed to investigate the possibility of investing in the Company.
(D) The Parties now wish to record the circumstances under which PUMA will agree to make available funds to the Offshore Company which will in turn make available up to US$5 million to the Project.
IT IS NOW AGREED as follows:
ARTICLE I- DEFINITIONS
Article 1.01. Definitions
Unless the context otherwise requires, terms used in this Agreement shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
that directly, or indirectly through one or more
intermediaries, has Control, is under the Control of
or is under common Control with that Person.
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"Agreement" means this heads of agreement including its
Introduction and Annex.
"Company" is defined in Introduction (A).
"Control" means in respect of any entity, the ownership of more
than fifty percent of the participatory interests
(50%) authorised to vote at a general meeting, or the
ability to pass or procure the passing of a decision
(whether by the casting of votes of otherwise) at a
general meeting, or at any meeting of the executive
or management body of such entity.
"Governmental" means relating to the central government of a state,
including any and all instrumentalities, branches and
administrative and other subdivisions of or in such
government, and any and all executive and regulatory
bodies, agencies, departments, ministries,
authorities and officials of or in such government
that have the authority to govern, regulate, levy or
collect Taxes, duties or other charges, grant
licenses or permits or approve or otherwise affect
(whether financially or otherwise), directly or
indirectly, activities of the Project or any Party's
rights or obligations in respect of the Project,
notwithstanding any change at any time or from time
to time in structure, form or otherwise.
"JV Contract" is defined in Introduction (B).
"JY Documents" means the JV Contract and any charter other similar
foundation document of the Company together with all
other documents required by the jurisdiction of
formation in order to create the Company.
"Information" means the terms and conditions of this Agreement and
any confidential or proprietary information
(including any plans, drawings, reports, records,
scientific and technical data, notes and other
similar information) in written, oral or electronic
form which a Party obtains pursuant to this Agreement
or by virtue of its interest in the Project.
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"Offshore Company" means a limited liability company to be formed under
the laws of Nevis or other acceptable jurisdiction to
act as the funding vehicle as described in Section
4.01. Such company shall be joint venture owned
equally by Gruenewalcl and Puma, except that Puma
shall have the controlling vote in the event of tie
vote on any matter.
"Parties" means the parties to this Agreement together with
their successors and permitted assignees.
"Person" means any physical person or any entity, including
any successor or permitted assignee of such person or
entity.
"Project" is defined in Introduction (B).
"Project Agreements" means the IV Documents, the Rehabilitation Activities
Plan and the IV Contract.
"Rehabilitation
Activities Plan" means a plan for carrying out of the Project.
"Taxes" duties, customs, imposts, contributions (such as
social fund and compulsory medical insurance
contributions), fees, assessments or other similar
charges payable to or imposed by any government or
Governmental authority (whether at central, regional
or local level), together with interest, penalties
and fines (including financial sanctions and
administrative penalties) with respect thereto,
imposed by or in Azerbaijan on the Project and its
income (whether such taxes are paid by the Company or
its owners). and "Tax" shall mean any of the
foregoing.
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Article 1.02. Interpretation
In this Agreement except where the context otherwise requires:
(a) words denoting the singular include the plural and vice versa;
(b) references to a specific Article or Introduction shall be construed as a reference to that specified Article or Introduction of this Agreement;
(c) the headings and the Table of Contents are inserted for convenience of reference only and shall not effect the interpretation of this Agreement;
(d) the word "including" shall be read as including without limitation;
(e) references to writing shall include any method of reproducing words in a legible and non transitory form;
(f) references to any statute or statutory provision shall include references to such statute or statutory provision as amended, modified, re-enacted or replaced from time to time; and
(g) references to any document or agreement shall include references to such document or agreement as amended, modified, reenacted, or replaced from time to time.
ARTICLE II- REPRESENTATIONS AND WARRANTIES
Article 2.01. Representations and Warranties of the Parties
Each of the Parties represents and warrants to each other Party that:
(a) it is duly organized under the laws of the jurisdiction of its formation and it has the corporate and legislative power and authority to enter into and perform its obligations under this Agreement and that all necessary Governmental, corporate, shareholder and other action has been taken to authorize the execution, delivery and performance of this Agreement;
(b) the execution and delivery of, the performance of its obligations under, and the discharge of its liabilities in compliance with the provisions of, this Agreement will not:
(i) contravene any existing applicable law, statute, rule, regulation, judgement, decree or permit to which it is subject;
(ii) conflict with, or result in the breach of any of the terms of, or constitute a default under, any agreement or other instrument to which it is a party or is subject or by which it or any of its property is bound;
(iii)contravene or conflict with any provision of its foundation documents; or
(iv) result in the imposition of a lien or encumbrance on any of its assets or property;
(c) this Agreement has been duly authorised and executed by it and constitutes legal, valid and binding obligations of such Party enforceable against such Party in accordance with its terms;
(d) no authorization, approval or other action by, and no notice to or filing with, any Governmental authority or regulatory body is required for the execution, delivery or performance of this Agreement;
(e) no approval or authorization is required for any of the activities contemplated by this Agreement by virtue of its entering into and performing this Agreement;
(f) neither it not its property enjoy any rights of immunity from suit, set-off or attachment or execution of judgement in respect of its obligations and liabilities under this Agreement; and
(g) there exist no litigation or claim which would prohibit or impair it from entering into or performing this Agreement.
Article 2.02. Further Representations and Warranties of the Parties.
Each Party hereby represents and warrants to the other that all Information which has been made available in connection with this Agreement or the activities to be undertaken pursuant to this Agreement:
(a) is complete and accurate and all assumptions on which such Information is based and opinions expressed in such Information are reasonable;
(b) does not contain any untrue or misleading statement or omit any material fact; and
(c) has been prepared in good faith and in a prudent and competent manner.
Article 2.03. Inducement
Each Party acknowledges that it has made the representations and warranties contained in this Article II with the intention of inducing each other Party to enter into this Agreement and that each such other Party has entered into this Agreement on the basis of, and in full reliance on, each of such representations and warranties.
ARTICLE III- DUE DILIGENCE
Article 3.01. Co-operation
(a) Grunewald shall procure that the Company shall permit PUMA to complete its legal, operational, financial and Tax due diligence on the Company and its activities including the audit described in Exhibit 4.02(a) and render PUMA every assistance in obtaining Information in respect of such due diligence.
(b) Such due diligence shall be completed on or before March 31, 2002.
ARTICLE IV- FUNDING METHODS
Article 4.01. The Offshore Company
(a) Upon execution of this Agreement, PUMA shall cause to be formed a subsidiary in Azer baijan ("PUMA AZ") to acquire the Company interest, and the Offshore Company. The PUMA subsidiary shall be owned 100% by PUMA. The Offshore Company shall be owned 50% by PUMA AZ, and 50% by Grunewald.
(b) Each of PUMA AZ and Grunewald shall appoint one member to the Offshore Company governing board. In the event of a deadlock between such member, PUMA AZ may appoint a third member to the Board.
(c) Upon satisfaction of all conditions to this Agreement, there shall be held a closing (the "Closing") at which PUMA will provide a funding commitment to the Offshore Company equal to USD 5 million through December 31, 2004. Drawdowns of committed funds shall be timed to coincide with budgeted expenditures on the Project.
(d) All funding for the benefit of the Company shall be made by and through the Offshore Company, and the shares of the Parties' revenues in the Company shall be paid to the Offshore Company for further distribution to the Parties. PUMA AZ shall receive a return on the funds it invests in or loans to the Offshore Company, and Grunewald shall receive a return on all amounts it documents as owed to (Grunewald by the Company or as further invested in or loaned to the Offshore Company. Such payments shall be applied one-third to Grunewald and two-thirds to Puma until all amounts have been repaid. Such returns shall bear interest at the rate of three month LIBOR, reset monthly, plus 5%. After all returns have been made, revenue shall be distributed to the Parties in proportion to their percentage interest in the Company.
(e) The Offshore -Company will handle all contracting and supervise all work to be performed on the Project for the Parties.
Article 4.02 Acquisition of Company Interest
(a) As a condition to Closing, a fair market valuation of the oil and gas reserves of the Proj - ect shall have been conducted as of December 31, 2001 by Gaffney Cline & Associates on the premise of the relationships described herein and the conditions precedent hereto, and such re serve values shall be carried forward in a financial audit of the Company as of such date to be performed by an international accounting firm chosen by the Parties. Fair market value is defined as the price that would be paid by a willing buyer to a willing seller. The valuation of the Com pany, including the reserves, shall determine the fair market value of the Company. If Gaffney Cline's estimates are unacceptable to either Grunewald or Puma, an arbitration process will be established wherein a third party will resolve the differences.
(b) Based upon the value of the Company so determined, including all indebtedness payable to any party, PUMA shall have the right to purchase from Grunewald an interest in the Company equal to a minimum of a 30% Joint Venture Interest and a maximum of a 42% Joint Venture Interest. In the event Grunewald cannot directly convey a Joint Venture Interest, PUMA shall have the right as an alternative to acquire ownership of Grunewald equal to a minimum of 50% and a maximum of 70% of Grunewald). The determination whether Grunewald can convey a direct Joint Venture interest shall be made if possible before March 31, 2002.
(c) The purchase price for Grunewald's interest in the Joint Venture (or for Grunewald) shall be payable in full in cash at the Closing. Alternatively, if the Parties so agree, all or part of the purchase price may be paid in the common stock of PUMA.
(d) The Parties shall control a majority of the governing board of the Joint Venture and shall comply in all respects with the Joint Venture Agreement.
ARTICLE V - OTHER CONDITIONS PRECEDENT
Article 5.01 Other Conditions Precedent
(a) Legal Documentation: each of the Project Agreements shall be in effect and valid, legal and binding and enforceable in accordance with its terms.
(b) Unpaid Royalties and Taxes: the Company shall have delivered to PUMA evidence, in form and substance satisfactory to PUMA, that any outstanding Tax liability (including any fine or penalty) with~ any national ~or local Tax authority will be included in the audited financial statements.
(c) Oil Sales: Grunewald shall have delivered to PUMA evidence, in form and substance satisfactory to PUMA, that the status of all executed petroleum sales with the Azerbaijan Repub lic, including reaching an appropriate agreement for 'making up' approximately 40,000 tonnes of 'World Market Share' petroleum previously classified as 'Local Market Share' petroleum, shall be resolved in the valuation.
(d) Accounting and Administrative Procedures: the Company shall have introduced and be implementing through the Offshore Company the accounting and administrative procedures specified in the JV Contract to the satisfaction of PUMA and PUMA shall be satisfied with the level of commitment to such procedures demonstrated by the Company and its owners.
(e) Rehabilitation Activities Plan: the Offshore Company shall have prepared and decided to introduce the Rehabilitation Activities Plan in form and substance satisfactory to PUMA.
(f) No Adverse Change: until the date of initial funding of PUMA's commitment, nothing shall have occurred which:
(i) is likely to have a material adverse effect on the rights or remedies of PUMA or on the ability of the Company, Grunewald or SOCAR to perform their respective obli gations under any of the Project Agreements; and
(ii) in the opinion of PUMA, may have an adverse material effect on the business, condition (financial or other), results of operations, operations, property, assets, liabilities or prospects of the Company or the Guarantors.
ARTICLE VI- EXPENSES
Article 6.01 Responsibility
Each of the Parties shall be responsible for all expenses incurred by it in connection with entry into and performance of this Agreement including, legal, travel and other out-of-pocket expenses. The Parties shall equally divide the costs of the audit and will negotiate in good faith regarding the sharing of the costs of the valuation, giving credit to work previously commis sioned by Grunewald and delivered to Gaffney, Cline & Associates, all as described in Article 4.02(a).
ARTICLE VII- MISCELLANEOUS
Article 7.01 Assignment
No Party shall assign or otherwise transfer all or any part of its rights or obligations under this Agreement without the prior written consent of the other Parties except that Puma and its permitted assignees shall have the right to assign or otherwise transfer to an Affiliate without consent.
Article 7.02 Notices
Any notice or other communication to be given or made under this Agreement shall be in writing. Such notice or other communication shall be deemed to have been duly given or made when it is delivered by hand, airmail, or fax to the Party to which it is required or permitted to be given or made at such Party's address specified below:
For: Puma Energy, Inc.
Attention: Mr. Edward Blessing
1600 Three Lincoln Centre
5430 LBJ Freeway
Dallas, Texas
USA 75240-2605
Tel: +1 972 663-9400
Fax: +1 972 663-9395
For: Grunewald
Attention: Heinrich Grunewald
Grosse Elbstrasse 131
D-2276 Hamburg, Germany
Tel: +49 40 3068000
Fax: +49 40 388745
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Article 7.03 Illegality
Each of the provisions contained in this Agreement shall be severable and distinct from one another and if at any time any one or more such provisions is or becomes invalid, illegal or unenforceable, the validity, legality and enforceability of each of the remaining provisions of this Agreement shall not in any way be affected prejudiced or impaired thereby.
Article 7.04 Amendments
No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Party from the provisions of the Agreement, shall in any event be effective unless the same shall be in writing and signed by the Parties, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it is given.
Article 7.05 English language
All documents to be furnished or communications to be given or made under this Agreement shall be in the English language or, if in another language, shall be accompanied by a translation into English certified by a representative of the relevant Party.
Article 7.06 Arbitration and Jurisdiction
(a) All Disputes which cannot be amicably settled, shall be exclusively and finally settled by arbitration. In the event that an amicable settlement is not achieved within thirty (30) days after receipt of written notice of Dispute by any Party from any other Party, then any disputant may submit the Dispute to arbitration by notice to the other Parties to the Dispute.
(b) Except as otherwise provided in this Article 7.06, the arbitration proceedings shall be conducted by three (3) arbitrators in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (IJ7NCITRAL), as in existence on the effective date of this Agreement. Notwithstanding the foregoing provisions of this Article 7.06, only one (1) arbitrator shall be used if all disputants unanimously agree to use only one (1) arbitrator.
(c) Unless otherwise expressly agreed by the disputants, the arbitrators shall be appointed in accordance with the procedure set forth in the Arbitration Rules specified in Article 8.06(b); provided, however, that the appointing authority under the said Rules is hereby agreed to be the then President of the Stockholm Chamber of Commerce.
(d) Unless otherwise expressly agreed in writing by all disputants:
(i) the arbitration proceedings shall be held in Stockholm, Sweden, and shall be conducted in the English language;
(ii) the arbitrator(s) shall be fluent in the English language and shall remain at all times wholly independent, impartial, and financially disinterested;
(iii)only the English language text of this Agreement shall be used by the arbitrators;
(iv) the costs of the arbitration proceedings (including the disputants' legal fees and costs) shall be borne in the manner determined by the arbitrator(s);
(v) the decision of the sole arbitrator or all or a majority of the arbitrators, as the case may be, shall be reduced to writing; shall be final and binding without the right of application or appeal on any question of law or otherwise, or the necessity of being confirmed by any court; shall be the sole and exclusive remedy regarding any Dispute presented to the arbitrators; shall be made and promptly paid in US Dollars, free of any deductions or offsets; and any costs and fees incidental to enforcing the award shall, to the maximum extent permitted, be charged to the Party or Parties (as the case may be) resisting such enforcement;
(vi) judgement upon the award may be entered in any court having jurisdiction over the person or assets of any Party (as the case may be) owing the judgement, or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be;
(vii)each Party for the Purposes of allowing such arbitration and the enforcement and execution of any arbitration decision, award, issuance of any attachment, provisional remedy or other pre-award remedy, hereby waives any and all claims to or defenses of immunity, including claims or defenses of sovereign immunity;
(viii) the arbitrators shall not have the power to award any consequential loss or damage, punitive damages or exemplary damages;
(ix) the award shall include interest from the date of any breach or violation of this Agreement, as determined by the arbitral award, and from the date of the award until paid in full, at the interest rate determined by the arbitrator(s) or at the maximum rate permitted by law, whichever is lesser;
(x) whenever the disputants are of more than one citizenship, the single arbitrator or the presiding arbitrator, as the case may be, shall not be of the same citizenship as any of the disputants;
(xi) the arbitration shall proceed in the absence of any disputant who, after due notice, fails to answer or appear. An award shall not be made solely by reason of a disputant's absence or failure to participate in the arbitration, but the arbitrator(s) shall require the disputant(s) who is present to submit such evidence as the arbitrator(s) may reasonably require to make an award;
(xii)if an arbitrator should die, withdraw, or otherwise become incapable of serving, or refuse to serve, a successor arbitrator shall be selected and appointed in the same manner as the original arbitrator; and
(xiii) each Party waives any and all requirements of any applicable laws relating to notice of demand for interest or damage for the loss of use of funds.
Article 7.07. Governing Law
This Agreement shall be governed by and construed in accordance with the substantive laws of England and Wales, without reference to choice of law principles.
Article 7.08. Confidentiality
(e) No Party shall, until (5) years after this Agreement has expired or terminated, without prior written consent of each of the other Parties, disclose any Information to any Person.
(f) For the purposes of the provisions of this Article 7.08, the consent specified by Article 7.08(a) shall not be required for disclosure of Information to:
(i) the directors, officers and employees or the shareholder, owner or Affiliate of the Party concerned;
(ii) the Persons professionally engaged by the Party concerned; and
(iii)the relevant Governmental, legislative, administrative or judicial authorities of the Parties or their Affiliates concerned or any relevant stock exchange authority to the extent the Information is required or requested to be disclosed; and
(iv) relevant financing institutions, investors or potential assignees, provided that:
(A) any disclosure of Information by the relevant Party must be justified by a reasonable need-to-know on the part of any such Person to whom the disclosure is made;
(B) in the case of Article 7.08(b)(i) the relevant Party shall use
(C) Persons referred to in Article 7.08(b)(ii) and (iv) shall be required by such Party to first agree in writing with such Party to be bound by confidentiality provisions that are no less stringent than those contained in this Article 8.08 and provided further that such Party shall use reasonable efforts to secure compliance with such undertaking.
(g) No Party shall be required to obtain the prior consent of any other Party in respect of the disclosure to another Person of Information which:
(i) becomes generally available to the public other than by reason of a breach of this Agreement;
(ii) is already known by the relevant Party at the time of its receipt or acquisition pursuant to this Agreement or is subsequently independently developed by the relevant Party; or
(iii)subsequently lawfully acquired by the relevant Party without any obligation to maintain the confidential nature of the Information to a Person who is not a Party to this Agreement.
(h) No Party shall issue or make any public announcement or statement regarding this Agreement or the Project unless prior to such announcement or statement such Party furnishes to each of the other Parties a copy of such announcement or statement and obtains the prior approval of each other Party as provided in Article 7.08(a).
(i) With respect to matters that have been previously disclosed by any other Party, each Party may make disclosures in securities analysts meetings, in annual reports, employee and stockholder newsletters, magazines and the like of summarizations of a general nature relating to the Project which are customarily or routinely described or reported in such analysts meeting or publications.
(j) Nothing in this Agreement shall be deemed to grant to any Party a license or other rights under any existing or future intellectual property rights owned or controlled by any other Party or the right to use any patents, copyrights, and other intellectual property of any other Party in any operations, including joint venture operations in which such Party or any Affiliate has an interest.
Article 7.09. Obligations Several
The rights, duties, obligations and liabilities of the Parties are several and not joint or collective. It is not the intention of the Parties to create, nor shall this Agreement create, any partnership, trust, or association, or to authorize any Party to act as an agent, servant, or employee for any other Party for any purpose whatsoever except as may be expressly set out in this Agreement. In their relations with each other under this Agreement, the Parties are not, and are not to be considered, fiduciaries.
Article 7.10. Entirety of the Agreement
This Agreement supersedes all prior agreements, written or oral, among the Parties with respect to the subject matter of this Agreement.
Article 7.11. No Third Party Rights
This Agreement is not intended to, and does not, create any right of any person and is not enforceable by any person who is not a party to this Agreement. This Article is intended to exclude, without limitation, all such rights as may otherwise arise pursuant to the Contracts (Rights of Third Parties) Act of 1999.
ARTICLE VIII -TERMINATION
Article 8.01 Date
(a) This Agreement shall terminate on June 30, 2002, if all conditions set forth herein have not been satisfied, and shall be superceded by the provisions of the IV Documents and the Off shore Company governing documents, provided that the provisions of Articles V, VI, 7.06 7.07 and 7.08 shall survive termination.
* * * SIGNATURES FOLLOW* * *
THE PARTIES, acting through duly authorised representatives, have caused this Agreement to be signed in their respective names on the date first above written.
H. Grunewald & Co. GmbH
By: /s/ H. Grunewald ------------------ Heinrich Grunewald |
PUMA ENERGY, INC.
By: /s/ Edward W. Blessing ------------------------ Edward W. Blessing, President |
EXHIBIT 10 (ii) (A) (1)
PUMA ENERGY, INC.
2001 EMPLOYEE STOCK OPTION PLAN
2,000,000 Shares
ARTICLE I - GENERAL
The purpose of the Puma Energy, Inc. 2001 Employee Stock Option Plan (the "Plan") is to assist Puma Energy, Inc., a Florida corporation (the "Company"), in securing and retaining Key Participants of outstanding ability by making it possible to offer them an increased incentive to join or continue in the service of the Company and to increase their efforts for its welfare through participation or increased participation in the ownership and growth of the Company.
(a) "Acceleration Event" means any event which in the opinion of the Board of Directors of the Company is likely to lead to changes in control of share ownership of the Company, whether or not such change in control actually occurs.
(b) "Award" means an Option granted to a Key Participant under the Plan.
(c) "Board of Directors" or "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee referred to in Section 1.3.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Fair Market Value" means the closing price of the shares on the principal trading market on which the Common Stock is primarily traded on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by NASDAQ. If at any time shares of Common Stock are not traded on an exchange or in the over-the-counter market, Fair Market Value shall be the value determined by the Board of Directors or Committee administering the Plan, taking into consideration those factors affecting or reflecting value which they deem appropriate.
(h) "Grantee" means a Key Participant to whom an Award is granted under the Plan.
(i) "Incentive Share" means a share of Common Stock awarded to a Key Participant under Article VI hereof on such terms as are determined by the Committee.
(j) "Incentive Share Agreement" means a written agreement in such form as the Board or Committee, as applicable, shall approve that evidences the terms and conditions of an award of Incentive Shares hereunder.
(k) "Incentive Stock Option" means an option to purchase shares of Common Stock which is intended to qualify as an incentive stock option as defined in Section 422 of the Code.
(l) "Key Participant" means any person, including officers, directors, employees, agents and consultants of the Company or any Subsidiary who are designated a Key Participant by the Board or Committee, as applicable, and is or is expected to be primarily responsible for the management, growth, or supervision of some part or all of the business of the Company. The power to determine who is and who is not a Key Participant is reserved solely for the Committee.
(m) "Nonqualified Stock Option" means an option to purchase shares of Common Stock which is not intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
(n) "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
(o) "Optionee" means a Key Participant to whom an Option is granted under the Plan.
(p) "Parent" means any corporation which qualifies as a parent of a
corporation under the definition of "parent corporation" contained in
Section 425(e) of the Code.
(q) "Subsidiary" means any corporation which qualifies as a subsidiary of
a corporation under the definition of "subsidiary corporation" contained in
Section 425(f) of the Code.
(r) "Term" means the period during which a particular option may be exercised as determined by the Committee and as provided in the option agreement.
The Plan shall be administered by a committee (the "Committee") appointed by the Board of Directors consisting solely of two or more Non-Employee Directors, as defined in Rule 16b-3 (see Section 1.10, below), or in the absence of an appointment of such a Committee, the full Board shall serve as the Committee. Subject to the control of the Board, and without limiting the control over decisions described in Section 1.7, the Committee shall have the power to interpret and apply the Plan and to make regulations for
carrying out its purpose. More particularly, the Committee shall determine which Key Participants shall be granted Options and the terms of such grants. When granting Options, the Committee shall designate the Option as either an Incentive Stock Option or a Nonqualified Stock Option. Determinations by the Committee under the Plan (including, without limitation, determinations of the person to receive Awards, the form, amount and timing of such Awards, and the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. In serving on the Committee, members thereof shall be considered to be acting in their capacity as members of the Board of Directors and shall be entitled to all rights of indemnification provided by the Bylaws of the Company or otherwise to members of the Board of Directors.
The total number of shares that may be purchased pursuant to Options under the Plan shall not exceed 2,000,000 shares of Common Stock. Shares subject to the Options which terminate or expire prior to exercise shall be available for future Awards under the Plan without again being charged against the limitation of 2,000,000 shares set forth above. Shares issued pursuant to the Plan may be either unissued shares of Common Stock or reacquired shares of Common Stock held in treasury.
All Options shall be evidenced by agreements in such form as the Committee shall approve from time to time subject to the provisions of Article II and Article III, as appropriate, and the following provisions:
(a) Exercise. The Committee shall determine whether the Option shall be exercisable in full at any time during the Term or in cumulative or noncumulative installments during the Term.
(b) Termination of Employment or Contractor Relationship. An Optionee's Options shall expire on the expiration of the Term specified in Section 2.1 or 3.1 as the case may be, or upon the occurrence of such events as are specified in the agreement. In the event of exercise of the Option after termination of employment or contractor relationship, the Optionee may exercise the Option only with respect to the shares which could have been purchased by the Optionee at the date of such termination, and then only for a period of 90 days thereafter. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised within the time limitation described in this subsection. An Optionee's employment or contractor relationship shall be deemed to terminate on the last date for
which he receives a regular wage, salary or contract payment. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A termination of employment or contractor relationship shall not occur where the Optionee transfers from the Company to one of its Subsidiaries or transfers from a Subsidiary to the Company.
(c) Death or Disability. Upon termination of an Optionee's employment or
contractor relationship by reason of death or disability (as determined by
the Committee consistent with the definition of Section 422(c)(7) of the
Code), the Option shall expire on the earlier of the expiration of (i) the
date specified in the Option which in no event shall be later than 12
months after the date of such termination, or (ii) the Term specified in
Section 2.1 or 3.1 as the case may be. The Optionee or his successor in
interest, as the case may be, may exercise the Option only as to the shares
that could have been purchased by the Optionee at the date of his
termination of employment. However, the Committee may, but is not required
to, waive any requirements made pursuant to Section 1.5(b) so that some or
all of the shares subject to the Option may be exercised within the time
limitation described in this subsection.
(d) Payment. Payment for shares as to which an Option is exercised shall be made in such manner and at such time or times as shall be provided in the option agreement, including cash, Common Stock of the Company which was previously acquired by the Optionee, or any combination thereof. The Fair Market Value of the surrendered Common Stock as of the date of exercise shall be determined in valuing Common Stock used in payment for Options.
(e) Nontransferability. No Option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee.
(f) Additional Provisions. Each option agreement may contain such other terms and conditions not inconsistent with the provisions of the Plan, including the award of cash amounts, as the Committee may deem appropriate from time to time.
(a) Generally. Notwithstanding Section 1.4, in the event the outstanding shares are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of any other corporation by reason of any merger, sale of stock, consolidation, liquidation, recapitalization, reclassification, stock split up, combination of shares, stock dividend, or transaction having similar effect, the total number of shares set forth in Section 1.4 shall be proportionately and appropriately adjusted by the Committee.
(b) Options. Following a transaction described in subsection (a) above, if the Company continues in existence, the number and kind of shares that are subject to any Option and the option price per share shall be proportionately and appropriately adjusted without any change in the aggregate price to be paid therefor upon exercise of the Option. If the
Company will not remain in existence or substantially all of its voting Common Stock and Common Stock will be purchased by a single purchaser or group of purchasers acting together, then the Committee may (i) declare that all Options shall terminate 30 days after the Committee gives written notice to all Optionee's of their immediate right to exercise all Options then outstanding (without regard to limitations on exercise otherwise contained in the Options), or (ii) notify all Optionee's that all Options granted under the Plan shall apply with appropriate adjustments as determined by the Committee to the securities of the successor corporation to which holders of the numbers of shares subject to such Options would have been entitled, or (iii) take action that is some combination of aspects of (i) and (ii). The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding. Any fractional shares resulting from any of the foregoing adjustments under this section shall be disregarded and eliminated.
If an Acceleration Event occurs in the opinion of the Board of Directors, based on circumstances known to it, the Board of Directors may, but is not obligated to, direct the Committee to declare that any or all Options granted under the Plan shall become exercisable immediately notwithstanding the provisions of the respective agreements granting any such Awards.
Options shall be exercised by written notice directed to the Secretary of
the Company at the principal executive offices of the Company. Such written
notice shall be accompanied by any payment required pursuant to Section
1.5(d). Exercise by an Optionee's heir or the representative of his estate
shall be accompanied by evidence of his authority to so act in form
reasonably satisfactory to the Company.
Subject to the terms and conditions and within the limitations of the Plan, the Committee may modify, extend or renew outstanding Awards or accept the surrender of outstanding Awards (to the extent not theretofore exercised) granted under the Plan or under any other plan of the Company or a Subsidiary, and authorize the granting of new Awards pursuant to the Plan in substitution therefor, and the substituted Awards may bear such different or additional terms and conditions as the Committee shall deem appropriate within the limitations of the Plan. Notwithstanding the foregoing, however, no modification of an Award shall, without the consent of the Grantee holding the Award, adversely affect the rights or obligations of such Grantee.
It is intended that the provisions of the Plan and any Award shall comply in all respects with the terms and conditions of Rule 16b-3 under the Securities Exchange Act of 1934, as in effect on January 1, 2001 and as amended, or any successor provisions, as it relates to persons subject to the reporting requirements of Section 16(a) of such Act. Any agreement granting an Award shall contain such provisions as are necessary or appropriate to assure such compliance. To the extent that any provision hereof is found not to be in compliance with such rule as it relates to such Act, such provision shall be deemed to be modified so as to be in compliance with such rule, or if such modification is not possible, shall be deemed to be null and void, as it relates to such Grantee.
ARTICLE II - INCENTIVE STOCK OPTIONS
Each Incentive Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee; provided, however, that the Term shall end no later than 10 years after the date the Incentive Stock Option is granted.
The aggregate Fair Market Value of Common Stock (determined at the time the Incentive Stock Option is granted) subject to Incentive Stock Options granted to a Key Participant under all plans of the Key Participant's employer corporation and its Parent or Subsidiary corporations and that become exercisable for the first time by such Key Participant during any calendar year may not exceed $100,000.
If at the time an Incentive Stock Option is granted, a participant owns
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of his employer corporation or of its Parent
or any of its Subsidiaries, as determined using the attribution rules of
Section 424(d) of the Code, then the terms of the Incentive Stock Option
shall specify that the option price shall be at least 110% of the Fair
Market Value of the stock subject to the Incentive Stock Option and such
Incentive Stock Option shall not be exercisable after the expiration of
five years from the date such Incentive Stock Option is granted.
In interpreting this Article II of the Plan and the provisions of individual option agreements, the Committee and the Board shall be governed by the principles and requirements of Sections 421, 422 and 425 of the Code, and applicable Treasury Regulations.
ARTICLE III - NONQUALIFIED STOCK OPTIONS
In addition to the requirements of Section 1.5, each Nonqualified Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee.
The Company recognizes that certain persons who receive Nonqualified Stock Options may be subject to restrictions regarding their right to trade Common Stock under applicable securities laws. Such may cause Optionee's exercising such Options not to be taxable under the provisions of Section 83(c) of the Code. Accordingly, Optionee's exercising such Nonqualified Stock Options may consider making an election to be taxed upon exercise of the Option under Section 83(b) of the Code and to effect such election will file such election with the Internal Revenue Service within thirty (30) days of exercise of the Option and otherwise in accordance with applicable Treasury Regulations.
ARTICLE IV - ADDITIONAL PROVISIONS
The Plan shall be submitted for the approval of the stockholders of the Company at the first annual meeting of stockholders held subsequent to the adoption of the Plan and in all events within three years of its approval by the Board of Directors. If at said meeting the stockholders of the Company do not approve the Plan, the Plan shall terminate.
The Plan, the grant and exercise of Options hereunder, and the obligation of the Company to sell and deliver shares under such Options, shall be subject to all applicable Federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (a) the listing of such shares on any stock exchange on which the Common Stock may then be listed and (b) the completion of any registration or qualification or exemption of such shares under any Federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable.
The Board of Directors may discontinue the Plan at any time, and may amend it from time to time, but no amendment, without approval by stockholders, may increase the total number of shares which may be issued under the Plan. Other than as expressly permitted under the Plan, no outstanding Award may be revoked or altered in a manner unfavorable to the Grantee without the consent of the Grantee.
No Grantee shall have any rights as a shareholder with respect to any share subject to his or her Option prior to the date of issuance to him or her of a certificate or certificates for such shares.
Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the Grantee to remit to the Company an amount sufficient to satisfy any Federal, state or local withholding tax liability in such form as the Company may determine or accept in its sole discretion, including payment by surrender or retention of shares of Common Stock prior to the delivery of any certificate or certificates for such shares.
This Plan and any document describing this Plan and the grant of any Award hereunder shall not give any Optionee or other Participant a right to continued employment or directorship by the Company or its Subsidiaries or affect the right of the Company or its Subsidiaries to terminate the employment or directorship of any such person with or without cause.
The Plan shall become effective on February 7, 2001, when the Board of Directors adopted the Plan, and shall expire ten years thereafter. No Awards may be granted under the Plan after the expiration date, but Awards granted on or before that date may be exercised according to the terms of the related agreements and shall continue to be governed by and interpreted consistent with the terms hereof.
EXHIBIT 10 (ii) (A) (2)
PUMA ENERGY, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Optionee: Edward W. Blessing
Number of Shares: 590,000
Option Exercise Price: $1.00
Effective Date of Grant: February 7, 2001
1. Grant of Options. Puma Energy, Inc. ("Company") hereby grants to the above- named optionee ("Optionee"), Non-Qualified Stock Options (collectively, "Options") to purchase at the Option Exercise Price (set forth above) per share and on the terms and conditions set forth in this agreement ("Agreement") that number of shares, as adjusted as herein provided (as so adjusted, "Option Shares"), of its common stock ("Common Stock") as is set forth above. The exercise price exceeds the fair market value per share of the Common Stock as reflected by the closing price of the Common Stock on the date hereof, pursuant to a grant that was approved by the Board of Directors.
2. Term of Options and Limitations on Right to Exercise. The Options
shall become exercisable in full on the date hereof and shall expire at 5:00
p.m., Dallas, Texas time, on February 6, 2011, unless sooner terminated pursuant
hereto.
3. Exercise of Options. Other terms, times and conditions of exercise of the Options are as follows:
a. Prior to the Expiration Date, the Options shall be fully exercisable in whole or in part for a number of shares up to the aggregate number of all of the Option Shares.
b. Upon the death or Disability of the Optionee, the Optionee or the personal representative of the Optionee, as applicable, may exercise the Options to the extent not previously exercised (and, in the case of death, to the extent the Options could have been exercised by the Optionee on the date of death) subject to the terms set forth in this Agreement, until their termination as provided by Section 2 hereof.
c. The Options shall be exercised by written notice directed to the Secretary of the Company. Such written notice shall be accompanied by full payment in cash for the number of Option Shares specified in such written notice.
d. If the Optionee is subject to restrictions regarding the Optionee's right to sell shares of Common Stock under applicable securities laws and as a consequence exercise of the Options would not be taxable under the provisions of Section 83(c) of the Code, the Optionee, upon exercise of the Options, shall be authorized to make an election to be taxed upon exercise of the Options under Section 83(b) of the Code. To effect such election, the Optionee may file an appropriate election with the Internal Revenue Service within thirty (30) days after exercise of the Options and otherwise in accordance with applicable Treasury Regulations.
e. The Optionee recognizes that the Committee may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of any taxes that the Company or any subsidiary of the Company is required by any law or regulation or any governmental authority, whether federal, state or local, domestic or foreign, to make in connection with the Optionee's exercise of the Options.
f. Subject to the terms of this Agreement, the Options may be exercised at any time and without regard to any other option to purchase stock of the Company held by the Optionee.
g. In the event the outstanding shares of Common Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of any other corporation by reason of any merger, sale of stock, consolidation, liquidation, recapitalization, reclassification, stock split up, combination of shares, stock dividend, or transaction having similar effect, the total number of shares subject to this Option shall be proportionately and appropriately adjusted. Following a transaction described above, if the Company continues in existence, the number and kind of shares that are subject to any Option and the option price per share shall be proportionately and appropriately adjusted without any change in the aggregate price to be paid therefor upon exercise of the Option. If the Company will not remain in existence or substantially all of its voting Common Stock and Common Stock will be purchased by a single purchaser or group of purchasers acting together, then the Company may (i) declare that all Options shall terminate 30 days after the Committee gives written notice to all Optionee's of their immediate right to exercise all Options then outstanding (without regard to limitations on exercise otherwise contained in the Options), or (ii) notify
the Optionee that the Options shall apply with appropriate adjustments as determined by the Company to the securities of the successor corporation to the Optionee would have been entitled, or (iii) take action that is some combination of aspects of (i) and (ii). The determination by the Company as to the terms of any of the foregoing adjustments shall be conclusive and binding. Any fractional shares resulting from any of the foregoing adjustments under this section shall be disregarded and eliminated.
4. Nontransferability. The Options are not transferable except by will or by the laws of descent and distribution and are subject to the provisions of Section 7 hereof. The Options may be exercised during the lifetime of the Optionee only by the Optionee.
5. Limitation of Rights. The Optionee shall have no rights as a stockholder with respect to the Option Shares until the Optionee shall become the holder of record of such Option Shares. Neither the Plan, the granting of the Options nor this Agreement shall impose any obligation on the Company or any subsidiary of the Company to continue the employment of the Optionee.
6. Optionee's Best Efforts Covenant. The Optionee hereby agrees to use the Optionee's best efforts to provide services to the Company in a workmanlike manner and to promote the Company's interests.
7. Restrictions on Transfer and Pledge. Except as otherwise provided herein, the Options and all rights and privileges granted hereunder shall not be transferred, assigned, pledged or hypothecated in any way, whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process.
8. Restrictions on Issuance of Option Shares. If at any time the
Board of Directors or the Committee determines, in its discretion, that
listing, registration or qualification of the Option Shares covered by the
Options upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary
or desirable as a condition to the exercise of the Options, the Options may
not be exercised in whole or in part unless and until such listing,
registration, qualification, consent or approval has been effected or
obtained free of any conditions not acceptable to the Board of Directors or
the Committee. The Board or Committee, as the case may be, shall make such
a determination, and notify the Optionee of its determination, within two
(2) days after receiving the Optionee's written notice of exercise of his
Options. In the event of any such determination by the Board or the
Committee, the Company shall use its best efforts to effect or obtain such
listing, registration, qualification, consent or approval.
9. Successors. This Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Agreement and the Plan.
10. Stock Reserve. The Company shall at all times during the term of this Agreement reserve and keep available such number of shares of Common Stock as shall be sufficient to satisfy the requirements of this Agreement. The Company shall pay all original issue taxes (if any) on the exercise of the Options, and all other fees and expenses necessarily incurred by the Company in connection therewith.
11. Investment Intent. The Optionee hereby represents and warrants as follows:
a. The Shares will be acquired for the Optionee's own account without the participation of any other person, with the intent of holding the Shares for investment and without the intent of participating, directly or indirectly, in a distribution of the Shares and not with a view to, or for resale in connection with, any distribution of the Shares or any portion thereof.
b. The Optionee, through the Optionee's position with the Company, has access to all material information with regard to the Company.
c. The Optionee will not acquire the Shares based upon any representation, oral or written, by any person with respect to the future value of or income from the Shares but rather upon an independent examination and judgment as to the prospects of the Company.
d. The Shares were not offered to the Optionee by means of publicly disseminated advertisements or sales literature, nor is the Optionee aware of any offers made to other persons by such means.
e. The Optionee acknowledges that the Optionee must continue to bear the economic risk of the investment in the Shares for an indefinite period and recognizes that the Shares will be: (i) transferred without registration under any state or federal law relating to the registration of securities for sale; and (ii) issued and transferred in reliance on the exemption from registration provided by Section 4(2) of the United States Securities Act of 1933, as amended (the "1933 Act").
IN WITNESS WHEREOF, the Company, acting by and through its duly authorized officers, has caused this Agreement to be executed, and the Optionee has executed this Agreement, effective this 7th day of February, 2001.
PUMA ENERGY, INC.
By: /s/ Edward W. Blessing Name: Edward W. Blessing Title: President /s/ Edward W. Blessing ------------------------------- OPTIONEE - Edward W. Blessing |
EXHIBIT 10 (ii) (A) (3)
PUMA ENERGY, INC.
2000 EMPLOYEE STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Optionee: Edward W. Blessing
Number of Shares: 160,000
Option Price: $1.00
Date of Grant: February 7, 2001
1. Grant of Option. Puma Energy, Inc. ("Company") hereby grants to the above- named optionee ("Optionee"), under its 2000 Employee Stock Option Plan ("Plan"), an Incentive Stock Option ("Option") to purchase at the Option Price per share and on the terms and conditions set forth in this agreement ("Option Agreement") shares ("Shares") of its Common Stock ("Common Stock") as stated above. The Plan is incorporated herein by reference and made a part of this Option Agreement. Capitalized terms not defined herein shall have the respective meanings set forth in the Plan.
2. Period of Option and Limitations on Right to Exercise. The Option shall expire at 5:00 p.m., Dallas Time, on February 6, 2011 ("Expiration Date"), unless sooner terminated after the date of the Optionee's termination of employment with the Company by reason of Disability or death as set forth herein.
3. Exercise and Vesting.
3.1 Such options shall be fully vested and exercisable in full upon the grant hereof.
3.2 The exercise price for the options granted hereby shall be the amount set forth above, which exceeds the fair market value of the shares of the Company as of the date hereof.
3.3 Options are non-transferable by Optionee, but may be exercised by the estate of the Optionee at any time within 12 months following his death or Disability, but only to the extent the options are exercisable on the date of death.
3.4 The amounts of options and shares subject to issuance upon exercise of options shall be adjusted for any stock split, stock dividend or recapitalization of the Company's common stock.
3.5 Upon the termination of employment of the Optionee other than as a result of his death or Disability, the Optionee may exercise the Option, subject to its terms as set forth in this Option Agreement only within a period of three (3) months after the date of termination of employment.
3.6 The Option shall be exercised by written notice directed to the Secretary of the Company. Such written notice shall be accompanied by full payment in cash, Common Stock (to the extent permitted by the Compensation Committee in its sole discretion) which was previously acquired by the Optionee, or any combination thereof acceptable to the Compensation Committee (in its sole discretion) for the number of Shares specified in such written notice. The value of the surrendered Common Stock used in payment of the exercise price under the Option shall be equal to the Fair Market Value thereof on the date of exercise, and the Optionee shall deliver to the Company a certificate or certificates representing such shares duly endorsed to the Company or accompanied by a duly-executed separate instrument of transfer satisfactory to the Committee.
3.7 The Optionee recognizes that the Committee may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of any taxes that the Company or any Subsidiary is required by any law or regulation or any governmental authority, whether Federal, state or local, domestic or foreign, to make in connection with the Optionee's exercise of the Option. If the Optionee is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with the exercise of the Option, the Optionee may satisfy such obligation in whole or in part by making an election to have the Company (i) withhold from the distribution of shares of Common Stock issuable upon exercise of the Option shares having a Fair Market Value equal to the amount so required to be withheld, or (ii) accept shares of Common Stock previously acquired by Optionee having a Fair Market Value equal to the amount so required to be withheld.
3.8 Subject to the terms of this Option Agreement, the Option may be exercised at any time and without regard to any other option to purchase stock of the Company held by the Optionee.
4. Nontransferability. The Option is not transferable except by will or
by the laws of descent and distribution and is subject to the provisions of
Section 8 hereof. The Option may be exercised during the lifetime of the
Optionee only by the Optionee.
5. Limitation of Rights. The Optionee shall have no rights as a stockholder with respect to the Shares covered by the Option until the Optionee shall become the holder of record of such Shares. Neither the Plan, the granting of the Option nor this Option Agreement shall impose any obligation on the Company or any Subsidiary to continue the employment of the Optionee.
6. Stock Reserve. The Company shall at all times during the term of this Option Agreement reserve and keep available such number of shares of Common Stock as shall be sufficient to satisfy the requirements of this Option Agreement. The Company shall pay all original issue taxes (if any) on the exercise of the Option, and all other fees and expenses necessarily incurred by the Company in connection therewith.
7. Optionee's Covenant. The Optionee hereby agrees to use his or her best efforts to provide services to the Company in a workmanlike manner and to promote the Company's interests.
8. Restriction on Transfer. Except as otherwise provided in this Option Agreement, the Option and all rights and privileges granted hereunder shall not be transferred, assigned, pledged or hypothecated in any way, whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process.
9. Restrictions on Issuance of Shares. If at any time the Board of Directors or the Committee shall determine, in its discretion, that listing, registration or qualification of the Shares covered by the Option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the exercise of the Option, the shares acquired upon exercise of this Option may not be sold in whole or in part unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors or the Committee.
10. Plan Controls. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Option Agreement, the provisions of the Plan shall be controlling, and determinative.
11. Successors. This Option Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Option Agreement and the Plan.
12. Interpretation. It is the intent of the parties hereto that the Option qualify for incentive stock option treatment pursuant to, and to the extent permitted by, Section 422 of the Code. All provisions hereof are intended to have, and shall be construed to have, such meanings as are set forth in applicable provisions of the Code and Treasury Regulations to allow the Option to so qualify.
13. Defined Terms. The following capitalized terms shall have the following definitions.
(i) Disability means a permanent disability as determined by the Committee consistent with the definition under Section 422(c)(7) of the Code.
(ii) Fair market Value means the closing price of the shares on the stock exchange or market on which the Common Stock is primarily traded on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by the National Quotation Bureau, Inc. or other national quotation service.
14. Copy of Plan. Optionee acknowledges receipt of a description of the Plan, and in consideration of the foregoing grant, accepts the provisions of the Plan and agrees to the above terms and conditions. Copies of the Plan will be made available, and in the event of any conflict between the terms of the Plan and this Agreement or the description, the Plan shall control.
15. Investment Intent. The Optionee hereby represents and warrants as follows:
a. The Shares will be acquired for the Optionee's own account without the participation of any other person, with the intent of holding the Shares for investment and without the intent of participating, directly or indirectly, in a distribution of the Shares and not with a view to, or for resale in connection with, any distribution of the Shares or any portion thereof.
b. The Optionee, through the Optionee's position with the Company, has access to all material information with regard to the Company.
c. The Optionee will not acquire the Shares based upon any representation, oral or written, by any person with respect to the future value of or income from the Shares but rather upon an independent examination and judgment as to the prospects of the Company.
d. The Shares were not offered to the Optionee by means of publicly disseminated advertisements or sales literature, nor is the Optionee aware of any offers made to other persons by such means.
e. The Optionee acknowledges that the Optionee must continue to bear the economic risk of the investment in the Shares for an indefinite period and recognizes that the Shares will be: (i) transferred without registration under any state or federal law relating to the registration of securities for sale; and (ii) issued and transferred in reliance on the exemption from registration provided by Section 4(2) of the United States Securities Act of 1933, as amended (the "1933 Act").
IN WITNESS WHEREOF, the Company, acting by and through its duly authorized officers, has caused this Option Agreement to be executed, and the Optionee has executed this Option Agreement, all as of the day and year first above written.
PUMA ENERGY, INC.
By: /s/ Edward W. Blessing
-------------------------------
Edward W. Blessing, President
/s/ Edward W. Blessing
-------------------------------
Edward W. Blessing
|
EXHIBIT 10.2
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is entered into effective as
of the 1st day of July, 2001, by and between BLESSING PETROLEUM GROUP, LLC,
Q'Manager"), PUMA ENERGY, INC. and CASPIAN ENERGY INTERNATIONAL, INC. (the
"Companies"),
WITNESSETH:
WHEREAS, Manager is primarily engaged in the business of providing management and advisory services relating to oil and gas assets; and
WHEREAS, the Companies are primarily engaged in the oil and gas business, including the acquisition, development and exploration and production of oil and gas properties and in the acquisition and ownership of gas processing plants and gathering facilities; and
WHEREAS, in order to reduce overhead and operating expenses and in an effort to manage their affairs in a more cost effective and efficient manner, the Companies desire to retain the Manager to provide certain management, administrative and support services to the Companies, and the Manager desires to render such services to the Companies, all upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Section 1.1 Appointment. The Companies hereby appoint the Manager to conduct the activities described herein by and on behalf of, and for the account of, the Companies, pursuant to and as set forth in this Agreement. The Companies shall at all times have and retain ultimate control over their business and operations.
Section 1.2 Acceptance. The Manager hereby accepts the appointment and agrees to perform the duties and obligations herein imposed in a prudent manner, consistent with generally accepted standards for the Companies.
Section 1.3 Legal Ownership Retained in the Companies. The Manager shall not take title to any properties owned of record or beneficially by the Companies during the Term of Agreement, all of which will be segregated on the books and records of the Manager as provided in Section 8.2. Any addition to the assets of the Companies purchased, leased, or otherwise acquired with the Companies funds or securities shall be acquired in the name of the Companies.
Section 1.4 Duties Retained by the Companies. The Companies shall remain responsible for (i) making all decisions required of the Companies under this Agreement, (ii) such other duties as shall be specifically identified in writing by the Companies to the Manager and (iii) authorizing (in its discretion) and executing all agreements, contracts, and other documents in connection with their business.
The Manager shall render services hereunder as the Companies agent to the extent specifically provided herein or as further delegated from time to time by the Companies and accepted in writing by the Manager. The relationship created by this Agreement is one of principal and agent, and nothing to the contrary shall be inferred from this Agreement.
Section 3.1 General. As agent for the Companies, the Manager shall have the authority and the responsibility for the supervision and management of the day-to-day operations of the Companies' activities covered hereby. As agent for the Companies, the Manager agrees, to the extent that adequate funds are made available to the Manager, to manage the Companies' activities covered hereby in a prudent manner, consistent with generally accepted standards for businesses similar to the Companies' activities covered hereby. The Manager shall have no obligation to advance funds for the account of the Companies or to pay any sums of its own in connection with the performance of the actions which it is authorized to take hereunder. The Manager's management and activities under this Agreement shall be specifically subject to the terms hereof and the general control, direction and supervision of the Companies.
Section 3.2 Compliance with Laws. The Manager shall use reasonable efforts to insure for full compliance with federal, state and municipal laws, ordinances, regulations and orders relative to the use, operation, development and maintenance of the Companies' activities covered hereby. The Manager shall use reasonable efforts to remedy any violation of any such law, ordinance, rule, regulation or order which comes to its attention.
Section 3.3 Compliance with Obligations. The Manager, to the extent such matters are reasonably within its control, shall use reasonable efforts to cause compliance with all terms and conditions contained in any contract, agreement, judicial, administrative or governmental order, lease, mortgage, deed of trust or other contractual or security instrument affecting the Companies' activities covered hereby; provided, however, that, except as otherwise set forth herein, the Manager shall not be required to make any payment or incur any liability on account thereof The Manager shall promptly notify the Companies of any violation of any covenant in such instruments or agreements.
Section 4.1 Provision of Administrative Services. The Manager shall provide Administrative Services to the Companies, subject to the general approval and direction of the Companies. Administrative Services shall mean the following:
(a) providing the Companies with such office space, equipment, facilities and supplies, and the services of such secretarial, clerical and other personnel as may be required for the reasonable conduct of the business of the Companies;
(b) making such arrangements with and employing, at the expense and for the benefit of the Companies, such accountants, attorneys, banks, transfer agents, custodians, underwriters, engineers, technical consultants, insurance companies and other persons as may from time to time be requested by the Companies or may reasonably be necessary to manage the business of the Companies;
(c) maintaining in good order the books and accounts, ledgers and records of the Companies and performing all day-today accounting functions of the Companies, including, without limitation, matters related to paying and receiving from the bank accounts of the Companies, billing, reserve estimates, contract coordination and administration and tax return preparation. Without limiting the generality of the foregoing, the Manager shall prepare, or assist in the preparation of, all requisite accounting reports and interim financial statements of the Companies, including balance sheets, statements of operations, changes in stockholders' equities and cash flow and shall assist the Companies, if requested, in selecting an independent public accounting firm for the purpose of conducting annual financial audit reviews of the Companies and shall aid in coordinating such audits;
(d) assisting in determining the Companies long and short-term capital requirements, in determining the best method of fulfilling the Companies capital requirements, in locating sources of equity and long and short-term debt financing, in preparing formal presentations to potential investors and lenders, in negotiating the terms and conditions of such financing and in consummating such financing;
(e) timely preparing and filing on behalf of the Companies, all reports, forms, documents, certificates and other instruments required by the Securities and Exchange commission, any national securities exchange on which the Companies securities are traded, state securities commissions, federal, state and local tax authorities, regulatory agencies, including federal and state energy regulatory agencies, and other governmental bodies in order to lawfully conduct the business of the Companies;
(f) analyzing reports, economic data and other information relating to the business of the Companies and periodically reporting to the Board of Directors of the Companies all such information obtained and analyzed, including making recommendations with respect thereto;
(g) maintenance activities, including overseeing and managing the interests of the Companies in the various partnerships, joint ventures, companies and other entities which the Companies have an interest in, and reporting to the Companies any significant fact or matter which relates to such interests;
(h) providing the Companies, at their request, with relevant information for assessing the value of, or making decisions with respect to the acquisition, funding, management or disposition of, existing or future assets or investments of the Companies;
(i) advising the Companies of any potential investments coming to its attention which the Manager believes the Companies may be interested in and which are within the scope of the business of the Companies; and
(j) taking such other actions and performing such other services as are deemed necessary, customary or appropriate in the opinion of the Manager to conduct the business of the Companies.
Section 4.2 Administrative Costs. The Companies shall pay their share of all costs and expenses incurred on their behalf hereunder. All common administrative expenses that are not directly allocable to the Company shall be divided between the Companies based upon the allocation formula in effect for the current year. For the years 2001 and 2002, the allocation formula shall be 80% to Puma Energy, Inc. and 20% to Caspian Energy International, Inc.
Section 5.1 Other Services. The Manager may, at its discretion, perform all other activities related or incidental to the business of the Companies for the account of the Companies, at the request of the Companies, including investment activities or financing activities. Such activities shall be performed under the control and supervision of the Companies.
Section 5.2 Payment of Out-of -Pocket Expenses. The Manager shall pay all out-of-pocket expenses of the Manager and its employees, agents and consultants including the following, travel, food, lodging, entertainment and similar expenses ("Out-of-Pocket Expenses"), pursuant to the policies and procedures established by the Manager for the payment or reimbursement of such costs with respect to activities conducted by the Companies under this Article V. The Companies shall reimburse the Manager, within thirty days after the end of each month during the Term of Agreement, for all such Out-of-Pocket Expenses paid by the Manager on behalf of each Companies or in connection with the business of the Companies during such month.
Section 5.3 Required Companies Approval. The Companies must specifically approve the following matters before they are undertaken by the Manager for the account of the Companies, and, notwithstanding any other provisions hereof, none of the following shall be undertaken without the Companies prior approval:
(a) the issuance of any capital stock or security convertible into or exchangeable for such capital stock;
(b) the entering into of capital leases or making of capital expenditures in excess of $10,000;
(c) the execution of any agreements for borrowing of funds (other than trade accounts payable incurred in the ordinary course of business of the Companies) on a long- term basis;
(d) the pledge, hypothecation or other encumbrance of any material asset of the Companies;
(e) the acquisition or disposition of any material asset of the Companies,
other than in the ordinary course of business or as contemplated herein;
(f) the initiation or compromise of any single litigation matter (or settling of any single claim) with a cost to the Companies of $10,000 or more; and
(g) the execution of any contract whose term extends beyond one year from its effective date.
Notwithstanding any provision of this Agreement to the contrary, the Manager shall have no authority to take any action that will contravene the Companies Articles of Incorporation or Bylaws.
Section 6.1 General. The Manager shall have in its employ or available to it at all times during the term of this Agreement a sufficient number of personnel to enable it to properly and adequately manage, operate, maintain, and account for the business of the Companies as herein provided. All matters pertaining to the employment, supervision compensation, promotion and discharge of any employees or personnel of the Manager are the responsibility of the Manager, which are in all respects the employer of any such employees. All such employment arrangements are solely the Manager's concern and, other than as set forth in Article VI hereof, the Companies shall have no liability with respect thereto.
Section 6.2 Employees. The Manager shall determine the number and qualifications of employees needed in the operation of the Business and shall implement the policies of the Companies with regard to employer/employee matters.
Section 6.3 Consultants and Others. Except as otherwise provided herein, the Manager shall have the power and authority to retain and pay as independent contractors, on behalf of and for the account of the Companies, lawyers, accountants, engineers, contractors, technical consultants, architects, and others in connection with the conduct of the business of the Companies.
Section 7.1 Indemnification by the Manager. The Manager shall protect, indemnify, defend and hold harmless the Companies and their officers, directors, shareholders and Affiliates from any and all threatened or actual claims, demands, causes of action, suits, proceedings (formal or informal) , losses, damages, fines, penalties, liabilities, costs and expenses of any nature, including attorneys' fees and court costs, sustained or incurred by or asserted
governmental authority, partnership or other entity by reason of or arising out
of: (i) any breach of this Agreement by the Manager, its affiliates, agents, or
employees; or (ii) any act of fraud, willful misconduct or gross negligence of
the Manager and its affiliates or any of its respective employees, or acts or
omission outside the scope of the Manager authorized duties and responsibilities
contained herein. In case any action or proceeding shall be brought against the
Companies or its Affiliates in respect of which the indemnification contemplated
by this Section 10.1 may be sought against the Manager, the Manager, upon the
receipt of notice from the Companies, shall defend such action or proceeding by
counsel reasonably satisfactory to the Companies and the Manager, and the
Manager shall pay for all expenses therefor unless such action or proceeding is
resisted and defended by counsel for any carrier of public liability insurance
that benefits the Companies or the Manager. The Companies shall promptly give
written notice to the Manager when a claim is made against the Companies for
which indemnity is owed to the Companies by the Manager pursuant to this Section
7.1. The Manager shall participate at its own expense in defense of such claims,
but the Companies shall have the right to employ its own separate counsel. The
Companies shall assist the Manager in the defense of any claim for which the
Manager owes indemnification hereunder and is undertaking to provide a defense,
by making available to the Manager such records and personnel as may be
reasonably requested in the defense of such claim.
Section 7.2 Indemnification by the Companies. The Companies hereby agree to
indemnify, defend, and hold harmless the Manager and its officers, directors,
shareholders, employees, agents and affiliates from any and all threatened or
actual claims, demands, causes of action, suits, proceedings (formal or
informal), losses, damages, fines, penalties, liabilities, costs and expenses of
any nature, including attorneys' fees and court costs, sustained or incurred by
or asserted against the Manager or its affiliates, officers, directors,
employees and agents by any person, firm, corporation, governmental authority,
partnership or other entity by reason of or arising out of: (i) the conduct of
the Companies, other than conduct by or at the direction of the Manager, or (ii)
the conduct of the business of the Companies or the provision of services by the
Manager pursuant to this Agreement, except to the extent specifically limited by
the foregoing Section 7.1. In case any action or proceeding shall be brought
against the Manager in respect to which the indemnity contemplated by this
Section 7.2 may be sought against the Companies, the Manager shall give notice
of such action to the Companies, and the Companies shall defend such action or
proceeding by counsel reasonably satisfactory to the Companies and the Manager,
and the Companies shall pay for all expenses therefor unless such action or
proceeding is resisted and defended by counsel for any carrier of public
liability insurance that benefits the Companies or the Manager. The Manager
shall promptly give written notice to the Companies when a claim is made against
the Manager for which indemnity is owed to the Manager by the Companies pursuant
to this Section 7.2. The Companies shall participate in defense of such claims,
but the Manager shall have the right to employ its own separate counsel, and the
Manager shall assist the Companies in the defense of any claim for which the
Companies owes indemnification hereunder and is undertaking to provide a
defense, by making available to the Companies such records and personnel of the
Manager as may be reasonably requested.
Section 7.3 Non-Assumption of Liabilities. The Manager shall not, by entering into this Agreement, assume or become liable for any of the obligations, debts or other liabilities of the Companies in existence or arising on or after the date hereof
Section 7.4 Standard of Conduct of Manager. The Manager shall not be liable for damages to the Companies or any stockholder of the Companies under this Agreement or for any actions in connection with the management of the Companies, except for gross negligence or willful misconduct.
Section 8.1 Access to Books and Records. The Manager and its duly authorized representatives shall have complete access to the Companies offices, facilities and records wherever located, in order to discharge the Manager's responsibilities hereunder. All records and materials furnished to the Manager by the Companies in performance of this Agreement shall at all times during the Term of Agreement remain the property of the Companies.
Section 8.2 Confidentiality. For at least two years after the Term of Agreement, the Manager agrees to keep confidential all non-public information concerning the Companies acquired by the Manager or its Affiliates during the Term of Agreement. For the purpose of this Section 8.2, confidential information shall not include any information available to or otherwise disclosed by the Companies to third parties generally. Nothing in this Section 8.2 shall prohibit any announcement or disclosure by a Party that such Party determines is required to be disclosed by applicable law or court order.
Section 8.3 Power of Attorney. By execution of this Agreement, the Companies do hereby irrevocably make, constitute and appoint the Manager, and its successors, with full power of substitution, as its true and lawful attorney and agent with full power and authority in its name, place and stead to execute, swear to, acknowledge, deliver, file, record in the appropriate public offices and publish any and all contracts, agreements, instruments, conveyances, mortgages, deeds, notes and other documents of any kind or nature related to, arising out of or in connection with the business of the Companies or the Manager's performance of this Agreement.
During the Term of Agreement, the power of attorney granted herein shall be irrevocable and a power coupled with an interest, shall survive the death, incompetency, bankruptcy, dissolution or other termination of the Companies, shall extend and be binding upon the Companies successors and assigns and shall continue in full force and effect regardless of the occurrence of any of the foregoing. The Companies hereby agree to be bound by any such contracts, agreements, instruments, conveyances, mortgages, deeds, notes and other documents executed or otherwise entered into by the attorney and agent acting in good faith pursuant to such power of attorney, and hereby waives any and all defenses which may be available to contest, negate, or disaffirm any action of the attorney and agent taken under such power of attorney except in cases of bad faith, gross negligence or willful misconduct.
Section 9.1 Other Activities. The Companies acknowledge that the Manager and its affiliates own, manage and/or operate assets that compete directly with the business of the Companies and may own, manage and/or operate additional business and assets in the future that may compete with the business of the Companies, and the Companies agree that the Manager shall have no liability or accountability to the Companies for any such competing activities or interests or any profits or value generated therefrom.
Section 10.1 Initial Term. The initial term of this Agreement shall be for a five year period beginning on the date hereof Thereafter, this Agreement shall automatically renew for successive one-year periods until terminated by either party in accordance with the provisions of this Article X.
Section 10.2 Termination. This Agreement may be terminated on the first to occur of the following:
(a) In the event the parties shall mutually agree in writing, this Agreement may be terminated on the terms and dates stipulated therein.
(b) Following the initial five year term hereof, either party may, with or without cause, terminate this Agreement on any anniversary date hereof by giving to the other party at least 60 days' advance written notice of its intent to terminate, whereupon his Agreement shall terminate on the future date specified in such notice.
(c) Subject to events of force majeure (as provided in Section 11.9 hereof), in the event either party shall fail to discharge any of its material obligations hereunder, or shall commit a material breach of this Agreement and such default or breach shall continue for a period of 30 days after the other party has served notice of such default, this Agreement may then be terminated at the option of the non-breaching party by notice thereof to the breaching party.
(d) Dissolution or termination for the corporate existence of the Manager or cessation on the Manager's part to continue to do business, or bankruptcy, insolvency, foreclosure or conveyance in lieu of foreclosure, or assignment for the benefit of the creditors of the Manager shall cause an immediate termination of this Agreement at the election of the Companies.
(e) Either Company may terminate this Agreement, with or without cause, upon 12 months prior notice to the Manager, by action of the Compensation Committee of its Board of Directors.
Section 10.3 Effects of Termination. The termination of this Agreement in accordance with the provisions of this Article X shall have the following effects:
(a) Except for the mutual indemnities, covenants or other provisions herein that by their terms expressly extend beyond the Term of Agreement, the Parties' obligations hereunder are limited to the term of this Agreement.
(b) In the event this Agreement is terminated for any reason, the Manager shall immediately deliver possession to the Companies of all assets, books and records of the terminating Company in its possession.
(c) Upon a termination of this Agreement (for whatever cause), the Companies shall pay to the Manager the amount of any and all payroll, general and administrative and other costs and expenses accrued to the date of such termination which are payable by the Companies to the manager in accordance with the provisions hereof
(d) Upon termination of this Agreement by the terminating Company, the Companies shall reimburse the Manager for all amounts incurred by the Manager in connection with its activities under this Agreement. Without limiting the foregoing, the Companies shall (i) hire or pay the costs of terminating all of Manager's employees used to conduct the Companies business, (ii) lease or reimburse the Manager for all or a portion of the rental of any facilities or equipment used by the Manager under the Agreement which use was discontinued or reduced by termination of this Agreement, and (iii) succeed to or indemnify the Manager for any contracts or agreements entered into by the Manager relating to such business.
Section 11.1 Relationship of Parties. This Agreement does not create a partnership, joint venture or association; nor does this Agreement, or the operations hereunder, create the relationship of lessor and lessee or bailor and bailee. Nothing contained in this Agreement or in any agreement made pursuant hereto shall ever by construed to create a partnership, joint venture or association, or the relationship of lessor and lessee or bailor and bailee, or to impose any duty, obligation or liability that would arise therefrom with respect to wither or both of the Parties except as otherwise expressly provided in this Agreement or any agreement made pursuant hereto. Specifically, but not by way of limitation, except as otherwise expressly provided for herein, nothing contained herein shall be construed as imposing any responsibility on the Manager for the debts or obligation of the Companies or any of their affiliates. It is expressly understood that the Manger is hereby engaged by the Companies to manage the activities set forth herein only as an agent of the Companies. Subject to the terms of this Agreement, the Manager and its affiliates shall have the right to render similar services for other business entities and persons, including its own, whether or not engaged in the same business as the Companies.
Section 11.2 No Third Party Beneficiaries. Except to the extend a third party is expressly given rights herein, any agreement to pay an amount and any assumption of liability herein contained, expressed or implied, shall be only for the benefit of the parties and their respective legal representatives, successors and assigns, and such agreement or assumption shall not injure to the benefit of the obligers of any indebtedness of any party whomsoever, it being the intention of the parties hereto that no person or entity shall be deemed a third party beneficiary of this Agreement except to the extent a third party is expressly given rights herein.
Section 11.3 Governing Law. THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN AND SHALL BE INTERPRETED, CONSTRUED AND ENFORCED PURSUANT TO AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 11.4 Assignment. No assignment of this Agreement or any of the rights or obligations set forth herein by either party shall be valid without the specific written consent of the other party.
Section 11.5 Waiver of Breach. The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach of the same or any other provision hereof
Section 11.6 Enforcement. In the event either party shall resort to legal action to enforce the terms and provisions of this Agreement, the prevailing party may recover from the other party the costs of such action including, without limitation, reasonable attorneys' fees.
Section 11.7 Additional Assurances. The provisions of this Agreement shall be self operative and shall not require further accord between the parties except as may herein specifically be provided to the contrary; provided, however, that upon the request of either party, the other party shall execute such additional instruments and take such additional actions as shall be necessary to effectuate this Agreement.
Section 11.8 Force Maieure. Neither party shall be liable nor deemed to be in default for any delay or failure of performance under this Agreement or other interruption of service or employment resulting directly or indirectly from acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquakes, floods, failure of transportation, strikes or other war, interruptions by either party's employees or agent or any similar or dissimilar cause beyond the reasonable control of either party.
Section 11.9 Severability. In the event any provisions of this Agreement is held to be unenforceable for any reason, such provision shall be severable from this Agreement if it is capable of being identified with and apportioned to reciprocal consideration or to the extent that it is a provision that is not essential and the absence of which would not have prevented the parties from entering into this Agreement. The unenforceability of a provision that has been performed shall not be grounds for invalidation of this Agreement under circumstances in which the true controversy between the parties does not involve such provision.
Section 11.10 Article and Section Headings. The articles and section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement.
Section 11.11 Discretionary Terms. Determination of "necessary", "appropriate" and other discretionary terms as used herein shall be according to the judgment and discretion of the respective parties in accordance with generally accepted standards of the oil and gas industry.
Section 11.12 Amendments and Contract Execution. This Agreement supersedes all previous contracts between the parties and constitutes the entire Agreement between the parties with respect to the subject matter of this Agreement. No oral statement or prior written material not specifically incorporated herein shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized unless incorporated herein by amendment, such amendment to become effective on the date stipulated therein.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written.
BLESSING PETROLEUM GROUP, LLC
By: /s/Edward W. Blessing ------------------------------- Edward W. Blessing, President |
PUMA ENERGY, INC.
By: /s/ Edward W. Blessing ------------------------------- Edward W. Blessing, President |
CASPIAN ENERGY INTERNATIONAL, INC.
By: /s/ Edward W. Blessing ------------------------------- Edward W. Blessing, President |
EXHIBIT 23 (i) (A)
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
Puma Energy, Inc.
Dallas, Texas
We consent to the use in the Form SB-2 Registration Statement and Prospectus of Puma Energy, Inc. of our report dated June 12, 2001, accompanying the financial statements of Puma Energy, Inc. contained in such Registration Statement, and to the use of our name and the statements with respect to us, as appearing under the heading "Experts" in the Prospectus.
/s/ Hein + Associates LLP ------------------------- HEIN + ASSOCIATES LLP Dallas, Texas January 17, 2002 |