EXHIBIT 10.1
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AMENDMENT NO. 2 TO SHARE EXCHANGE AGREEMENT
THIS AMENDMENT NO. 2 TO SHARE EXCHANGE AGREEMENT (this "Amendment")
is made and entered into as of October 1, 2004, by and among Accessity Corp., a
New York corporation ("Accessity"); Pacific Ethanol, Inc., a California
corporation ("PEI"); Kinergy Marketing, LLC, an Oregon limited liability company
("Kinergy"); ReEnergy, LLC, a California limited liability company ("ReEnergy,"
and together with PEI and Kinergy, the "Acquired Companies"); each of the
shareholders of PEI (collectively, the "PEI Shareholders"); each of the holders
of options or warrants to acquire shares of common stock of PEI (collectively,
the "PEI Warrantholders"); each of the limited liability company members of
Kinergy identified on the signature pages hereof (collectively, the "Kinergy
Members"); each of the limited liability company members of ReEnergy identified
on the signature pages hereof (collectively, the "ReEnergy Members").
WHEREAS, Accessity, PEI, Kinergy, and ReEnergy have executed a Share
Exchange Agreement dated as of May 14, 2004, as amended by that certain
Amendment No. 1 to Share Exchange Agreement dated as of July 29, 2004 (as so
amended, the "Exchange Agreement"); and
WHEREAS, Accessity, PEI, Kinergy and ReEnergy desire to amend
certain provisions of the Share Exchange Agreement.
NOW THEREFORE, in consideration of the foregoing premises and the
respective promises and agreements of the parties set forth herein, the parties
hereto agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Exchange Agreement.
2. AMENDMENTS.
(a) Section 2.3 of the Exchange Agreement is hereby amended by
replacing the reference to "1,875,000 Accessity Exchange Shares" with "3,875,000
Accessity Exchange Shares."
(b) Section 2.4 of the Exchange Agreement is hereby amended by
replacing the reference to "21,250 Accessity Exchange Shares" with "1,250
Accessity Exchange Shares."
(c) Section 3.2(d) of the Exchange Agreement is hereby amended by
deleting said Section 3.2(d) in its entirety and inserting in its place the
following new Section 3.2(d) which shall read in its entirety as follows:
"(d) the written resignations of each of the current
directors of Accessity other than Xxxxxxx X. Xxxxxxxx (Xxxxx Xxxxxx
and Xxxxx X. Xxxxx), dated as of the Closing Date, in form and
substance reasonably acceptable to each of PEI, Kinergy and ReEnergy
(and Xxxxxxx X. Xxxxxxxx shall thereafter remain as a Class II
director (thereby holding such board seat until the annual meeting
of Accessity shareholders to be held in the fourth calendar quarter
of 2005) and shall confirm said resignations and appoint Xxxx X.
Xxxxxxx and Xxxxxxx Xxxxx as Class I directors of Accessity, Xxxx
Xxxxxxxx as a Class II director of Accessity and Xxxx Xxxxxx and
Xxxxx X. Xxxxxxx as Class III directors of Accessity to fill the
vacant director positions and serve as directors of Accessity upon
and after the Closing);"
(d) Section 4.2 of the Exchange Agreement is hereby amended by
deleting the number "12,252,200" appearing in the fourth line of said section
and inserting in its place the number "13,332,200."
(e) Clause (xi) of Section 11.4(a) of the Exchange Agreement is
hereby amended by adding the following additional language at the end of clause
(xi) as so modified:
",provided, however, that PEI may issue shares of its
common stock in a private placement transaction provided that in
connection with such private placement transaction all but $500,000
of the offering proceeds must be held in an escrow account and not
released until on or after the Closing Date;"
(f) Section 11.5 of the Exchange Agreement is hereby amended by
deleting said Section 11.5 in its entirety and inserting in its place the
following new Section 11.5 which shall read in its entirety as follows:
"11.5 ACCESSITY ANNUAL SHAREHOLDERS' MEETING. Accessity
shall, in accordance with its articles of incorporation and bylaws
and the applicable requirements of New York law, call and hold an
annual meeting of its shareholders as promptly as practicable for
the purpose of permitting them to consider and to vote upon and
approve the Share Exchange and the transactions contemplated by this
Agreement, the reincorporation of Accessity in the State of Delaware
referred to in Section 13.6 below, the Subsidiary Transfer and the
Subsidiary Sale referred to in Section 13.11 below, and the adoption
of a new stock option plan referred to in Section 13.16 below, in
form and substance reasonably acceptable to the Acquired Companies)
(the "Accessity Annual Shareholders' Meeting"). As soon as
permissible under all applicable Legal Requirements, Accessity shall
cause a copy of the Proxy Statement (as defined in Section 11.6
below) to be delivered to each shareholder of Accessity who is
entitled to vote on such matter under its articles of incorporation
and bylaws and the applicable requirements of New York law."
(g) Section 12.9 of the Exchange Agreement is hereby amended by
deleting said Section 12.9 in its entirety and inserting in its place the
following new Section 12.9 which shall read in its entirety as follows:
"12.9 CONSULTING AND NONCOMPETITION AGREEMENTS. Accessity
shall have entered into a consulting and noncompetition agreement
with Xxxxx Xxxxxx in regard to advisory services to be rendered by
Xx. Xxxxxx, in form and substance mutually acceptable to the
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Acquired Companies, Accessity and Xxxxx Xxxxxx (the "Xxxxxx
Consulting and Noncompetition Agreement"). The Xxxxxx Consulting and
Noncompetition Agreement shall include payment to Xxxxx Xxxxxx on
the Closing Date of compensation (a) in the form of the number of
shares of Common Stock of Accessity equal to the excess, if any, of
400,000 shares of the Common Stock of Accessity over the number of
shares of Xxxxxx Common Stock determined in accordance with Section
13.11 of this Agreement and (b) allocated between compensation for
consulting services and a covenant not to compete, each in such
amounts as shall be mutually acceptable to the Acquired Companies,
Accessity and Xxxxx Xxxxxx. Accessity shall also have entered into a
consulting and noncompetition agreement with Xxxxxx Kart in regard
to advisory services to be rendered by Mr. Kart, in form and
substance mutually acceptable to the Acquired Companies, Accessity
and Xxxxxx Kart (the "Kart Consulting and Noncompetition
Agreement"). The Kart Consulting and Noncompetition Agreement shall
include payment to Xxxxxx Kart on the Closing Date of compensation
(a) in the amount of 200,000 shares of the Common Stock of Accessity
and (b) allocated between compensation for consulting services and a
covenant not to compete, in such amounts as shall be mutually
acceptable to the Acquired Companies, Accessity and Xxxxxx Kart."
(h) Section 12.13 of the Exchange Agreement is hereby amended by
deleting said Section 12.13 in its entirety and inserting in its place the
following new Section 12.13 which shall read in its entirety as follows: :
"12.13 APPROVAL BY ACCESSITY SHAREHOLDERS. The shareholders
of Accessity shall have approved the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby (including, without limitation, the
reincorporation of Accessity in the State of Delaware referred to in
Section 13.6 below, the Subsidiary Transfer and the Subsidiary Sale
referred to in Section 13.11 below, and the adoption of a new stock
option plan referred to in Section 13.16 below, in form and
substance reasonably acceptable to the Acquired Companies)). "
(i) Section 12.14 of the Exchange Agreement is hereby amended by
deleting the number "18,800,000" appearing in the fourth line of said section
and inserting in its place the number "21,700,000."
(j) Section 12.16 of the Exchange Agreement is hereby amended by
deleting said Section 12.16 in its entirety and inserting in its place the
following new Section 12.16 which shall read in its entirety as follows: :
"12.16 FAIRNESS OPINION. Accessity shall have received a
fairness opinion regarding the Subsidiary Transfer referred to in
Section 13.11 below. "
(k) Article XII of the Exchange Agreement is hereby amended by
adding at the end thereof a new Section 12.17 which shall read in its entirety
as follows:
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"12.17 RECEIPT OF ADDITIONAL EQUITY CAPITAL BY PEI. PEI
shall have raised an additional $7.0 million in equity capital
pursuant to the private placement of securities of PEI between
October 1, 2004 and the Closing Date (which securities shall also be
exchanged for securities of Accessity pursuant to the Share
Exchange, subject to the other terms and conditions set forth in
this Agreement)."
(l) Article XII of the Exchange Agreement is hereby amended by
adding at the end thereof a new Section 12.18 which shall read in its entirety
as follows:
"12.18 NONCOMPETITION AND NONSOLICITATION AGREEMENTS. Each
of Xxxx X. Xxxxxxx, Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxx
Xxxxxxx shall have entered into a Noncompetition and Nonsolicitation
Agreement with Accessity in a form mutually agreeable to the
parties."
(m) Section 13.4 of the Exchange Agreement is hereby amended by
deleting said Section 13.4 in its entirety and inserting in its place the
following new Section 13.4 which shall read in its entirety as follows:
"13.4 APPROVAL BY ACCESSITY SHAREHOLDERS. The shareholders
of Accessity shall have approved the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby (including, without limitation, the
reincorporation of Accessity in the State of Delaware referred to in
Section 13.6 below, the Subsidiary Transfer and the Subsidiary Sale
referred to in Section 13.11 below, and the adoption of a new stock
option plan referred to in Section 13.16 below, in form and
substance reasonably acceptable to the Acquired Companies)). "
(n) Section 13.10 of the Exchange Agreement is hereby amended by
deleting said Section 13.10 in its entirety and inserting in its place the
following new Section 13.10 which shall read in its entirety as follows: :
"13.10 LIMITATION OF OUTSTANDING CAPITAL STOCK. As of the
Closing Date, without giving effect to the transactions contemplated
hereby, Accessity shall have no more than 2,800,000 of capital stock
issued and outstanding on a fully-diluted basis (including shares of
capital stock issuable upon exercise of any and all options, calls,
warrants, claims and any other rights to acquire shares of capital
stock of Accessity, whether accrued or contingent, other than an
aggregate of 600,000 shares of common stock of Accessity to be
issued and beneficially owned by Xxxxx Xxxxxx and Xxxxxx Kart)."
(o) Section 13.11 of the Exchange Agreement is hereby amended by
deleting said Section 13.11 in its entirety and inserting in its place the
following new Section 13.11 which shall read in its entirety as follows:
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"13.11 SUBSIDIARY TRANSFER, SUBSIDIARY SALE AND WAIVER
OF CHANGE OF CONTROL PROVISIONS BY XXXXX XXXXXX AND XXXXXX KART..
Prior to Closing, Accessity shall have (a) transferred its
subsidiary DriverShield CRM Corp., a Delaware corporation, to Xxxxx
Xxxxxx pursuant to a written agreement between Accessity and Xxxxx
Xxxxxx, in form and substance reasonably satisfactory to PEI,
Kinergy and ReEnergy (the "Subsidiary Transfer"), and sold its other
subsidiary, Sentaur Corp., a Florida corporation, to Xxxxx Xxxxxx
pursuant to a written agreement between Accessity and Xxxxx Xxxxxx,
in form and substance reasonably satisfactory to PEI, Kinergy and
ReEnergy (the "Subsidiary Sale"), and (b) issued a certain number of
shares of Common Stock of Accessity (the "Xxxxxx Common Stock"), not
to exceed 400,000 shares, in consideration of the waiver by Xxxxx
Xxxxxx of the change in control provisions set forth in the
employment agreement between Accessity and Xxxxx Xxxxxx that expires
on December 31, 2004, as the same would be applicable to the
consummation of the transactions contemplated by this Agreement
(including, but not limited to, the provisions that require
Accessity to pay to Xxxxx Xxxxxx (i) a xxxxxxxxx payment of 300% of
his average annual salary for the past five years, less $100; (ii)
the cash value of his outstanding but unexercised stock options; and
(iii) for any and all other perquisites in the event that he is
terminated for various reasons specified in such agreement following
a change of control (as defined in such agreement)). The number of
shares of Xxxxxx Common Stock to be issued shall be such number,
which shall not exceed 400,000 shares of Common Stock of Accessity,
as shall be equal to a fraction, the numerator of which is the
excess of the value of the waived severance payment over the fair
market value of DriverShield CRM Corp. determined as of the Closing
Date, and the denominator of which is the closing price per share of
the Common Stock of Accessity on the business day before the Closing
Date. Without in any way limiting the foregoing, as part of the
Subsidiary Sale, until the landlord of the present Accessity
headquarters in Coral Springs, Florida sells the building, Xx.
Xxxxxx or an entity owned or controlled by Xx. Xxxxxx (which may
include Sentaur) with the consent of the lessor under the existing
lease agreement for such facilities, on terms and conditions
reasonably satisfactory to the Acquired Companies, will contribute
the sum of $3,500 toward the monthly rent obligation; provided,
however, that once the Acquired Companies have made lease payments
of $50,000 under the lease, Xx. Xxxxxx shall make all lease payment
until the building is sold. The parties acknowledge and agree that
the personal property at the facilities of Accessity located in
Coral Springs, Florida shall also be transferred to Xxxxx Xxxxxx or
an entity owned or controlled by Xxxxx Xxxxxx (which may be Sentaur
Corp.) and Accessity shall pay Xxxxx Xxxxxx or Sentaur Corp. $20,000
for moving expenses. Prior to Closing, Accessity shall also have
obtained from Xxxxxx Kart, in consideration for the execution and
delivery by Accessity of the Kart Consulting and Non-Competition
Agreement described in Section 12.9 of this Agreement, the waiver by
Xxxxxx Kart of the change in control provisions set forth in the
employment agreement between Accessity and Xxxxxx Kart that expires
on December 31, 2004, as the same would be applicable to the
consummation of the transactions contemplated by this Agreement
(including, but not limited to, the provisions that require
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Accessity to pay to Xxxxxx Kart (i) a severance payment of 100% of
his annual salary on a date specified in such agreement; (ii) the
cash value of his outstanding but unexercised stock options; and
(iii) for any and all other perquisites in the event that he is
terminated for various reasons specified in such agreement following
a change of control (as defined in such agreement)). Immediately
prior to the Closing, Accessity shall file with the SEC a Form S-8
covering the Xxxxxx Common Stock and the 200,000 shares of the
Common Stock of Accessity issuable to Xxxxxx Kart pursuant to
Section 12.9."
(p) Section 13.17 of the Exchange Agreement is hereby amended by
deleting said Section 13.17 in its entirety and inserting in its place the
following: "[Intentionally omitted]."
(q) Section 14.6 of the Exchange Agreement is hereby amended by
deleting said Section 14.6 in its entirety and inserting in its place the
following: "[Intentionally omitted]."
(r) Subsection (b) of Section 14.7 of the Exchange Agreement is
hereby amended by deleting said subsection (b) in its entirety and inserting in
its place the following: "(b) [Intentionally omitted]."
(s) Subsections (c) and (d) of Section 16.1 of the Exchange
Agreement are hereby amended by deleting said subsections in their entirety and
inserting in their place the following new subsections (c) and (d), which shall
read in their entirety as follows:
"(c) by either Accessity or the Acquired Companies if
the Closing has not occurred on or before January 7, 2005 (the
"Final Date");
(d) by Accessity, upon written notice, if the
shareholders of Accessity shall not have approved the Agreement and
the consummation of the transactions contemplated hereby (including,
without limitation, with respect to the approval by the shareholders
of Accessity, the appointment of the individuals identified in
subsection (d) of Section 3.2 above to the Board of Directors of
Accessity, the reincorporation of Accessity in the State of Delaware
referred to in Section 13.6 above, the Subsidiary Transfer and the
Subsidiary Sale referred to in Section 13.11 above, the adoption of
a new stock option plan as referred to in Section 13.16 above, in
form and substance reasonably acceptable to the Acquired Companies)
prior to the Closing Date;"
(t) The Exchange Agreement is hereby amended to replace all
references to "Reenergy" with "ReEnergy."
(u) Exhibit A to the Exchange Agreement is hereby amended by
deleting each reference to "18,750" and "21,250" and replacing each with
"38,750" and "1,250," respectively.
(v) Exhibit B to the Exchange Agreement is hereby amended by
deleting the row of the table entitled "PEI Shareholders and Accessity Exchange
Shares to be Received" on Exhibit B that reads:
"Xxxxx Diversified, Inc. 1,000,000 1,000,000" and
inserting in its place the following new information:
"Xxxxx Diversified, Inc. 1,160,000 1,160,000"
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(w) Exhibit B to the Exchange Agreement is hereby amended by
deleting the last row of the table entitled "PEI Shareholders and Accessity
Exchange Shares to be Received" on Exhibit B that reads: "TOTAL 12,252,200
12,252,200" and inserting in its place the following new information:
"Liviakis Financial Communications, Inc. 920,000 920,000
TOTAL 13,332,200 13,332,200"
========== ==========
(x) Exhibit B to the Exchange Agreement is hereby further amended by
deleting the table entitled name "PEI Warrantholders and Warrants to Acquire
Accessity Common Stock" in its entirety and replacing said table with the
following new table which shall read in its entirety as follows:
PEI Warrantholders and Warrants to Acquire Accessity Common Stock
-----------------------------------------------------------------
No. of Shares Subject to
Accessity Replacement Exercise Price
Name of PE Warrantholder Warrants per Share
------------------------ -------- ---------
Xxxxx-XxXxxx Capital Partners 14,167 $1.50
Prima Capital Group, Inc. 28,320 $1.50
Xxxxx Xxxxxxx 1,000 $1.50
Xxxxx-XxXxxx Capital Partners 50,000 $2.00
Xxxxxxx Xxxxxxxxxx 25,000 $0.01
------- -----
TOTAL 118,487 $0.01 - $2.00
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(y) Exhibit B to the Exchange Agreement is hereby further amended by
deleting the table entitled name "Convertible Debt" in its entirety and
replacing said table with the following new table which shall read in its
entirety as follows:
"Convertible Debt
-----------------
Xxxxx Diversified, Inc.* 840,000* 840,000*
-------- --------
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* Xxxxx Diversified, Inc. ("LDI") may receive up to 840,000 shares
of PEI Stock pursuant to the conversion of a portion of the
currently outstanding debt owed by PEI to LDI, which conversion is
at the option of LDI. Accordingly, the number of Accessity Exchange
Shares to be received by LDI shall be equal to the product of (i)
the number of shares of PEI Stock received upon conversion (at a
conversion rate of $1.50 per share) of such portion of such debt,
multiplied by (ii) the PEI Exchange Ratio. The parties acknowledge
and agree that Accessity Exchange Shares will be directly issued to
LDI (without any preceding issuance of shares of PEI Stock) if such
conversion occurs after the Closing Date."
(z) Exhibit C to the Exchange Agreement is hereby amended by
deleting the reference to "1,875,000" and replacing it with "3,875,000."
(aa) Exhibit D to the Exchange Agreement is hereby amended by
deleting the references to "499,375" and "626,875" and replacing each with
"29,375" and "36,875," respectively.
3. MISCELLANEOUS. Except as modified and amended pursuant to this
Amendment, the Exchange Agreement shall remain in full force and effect. This
Amendment may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument. This Amendment will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all the parties reflected hereon as signatories.
[SIGNATURES CONTAINED ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.
"ACCESSITY": ACCESSITY CORP.
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By:
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Xxxxx Xxxxxx, Chairman and CEO
"ACQUIRED COMPANIES": PACIFIC ETHANOL, INC.
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By:
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Xxxx Xxxxxx, Director and COO
KINERGY MARKETING, LLC
By:
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Xxxx X. Xxxxxxx, President
REENERGY, LLC
By:
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Xxxxx X. Xxxxxxxxx, Member/Owner
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PEI SHAREHOLDER AND PEI WARRANTHOLDER
SIGNATURE PAGE
TO
AMENDMENT NO. 2 TO
SHARE EXCHANGE AGREEMENT
Pursuant to the authority granted to the undersigned in Section 17.2
of the Exchange Agreement, by execution of this Amendment below by the
undersigned, the PEI Shareholders and PEI Warrantholders have executed this
Amendment as of the day and year first above written.
By: _________________________
Xxxx Xxxxxx,
Attorney-in-Fact
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KINERGY MEMBER
SIGNATURE PAGE
TO
AMENDMENT NO. 2 TO
SHARE EXCHANGE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.
Xxxx X. Xxxxxxx
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REENERGY MEMBER
SIGNATURE PAGE
TO
AMENDMENT NO. 2 TO
SHARE EXCHANGE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.
KINERGY RESOURCES, LLC
By:
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Xxxx X. Xxxxxxx, Member
FLIN-MAC, INC.
By:
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Xxxxx X. Xxxxxxxxx, President
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Xxxx Xxxxxxxx
-----------------------------------
Xxx Xxxxxxx
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