Beacon Energy Corp. SERIES B STOCK SUBSCRIPTION AGREEMENT AND STOCKHOLDER AGREEMENT
Exhibit 10.2
Beacon Energy Corp.
SERIES B STOCK SUBSCRIPTION AGREEMENT
AND STOCKHOLDER AGREEMENT
AND STOCKHOLDER AGREEMENT
This Series B Stock Subscription Agreement and Stockholder Agreement (this
“Agreement”) is entered into as of August 22, 2007 by and among (i) Beacon Energy Corp., a
Delaware corporation (the “Company”), (ii) the purchasers of common stock of the Company
signatory hereto (collectively the “Purchasers” and each individually a
“Purchaser”), and (iii) Metalico, Inc., a Delaware corporation (“Metalico”). The
parties hereto hereby agree as follows:
WHEREAS, the Purchasers have previously entered into that certain Stock Subscription Agreement
by and between such Purchasers and the Company dated on or about September 29, 2006 (the
“Original Agreement”) and that certain Amended and Restated Stock Subscription Agreement
and Stockholder Agreement dated as of November 30, 2006 (the “Amended Agreement”),
providing for the issuance and sale of additional shares of common stock of the Company to the
Purchasers; and
WHEREAS, the Company, the Purchasers and Metalico have agreed that the Company may and shall
raise additional capital through the issuance and sale of additional shares to Metalico and the
Purchasers,
NOW, THEREFORE, in consideration of the premises set forth in and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged :
1. AUTHORIZATION. The Company acknowledges that it has authorized or will authorize the issue
and sale of additional shares of common stock in the Company (the “Series B Securities”) to
be held by the respective Purchasers in the amounts and for the consideration (for each individual
Purchaser such Purchaser’s “Series B Capital Contribution”) set forth below such
Purchaser’s signature hereto.
2. PURCHASE AND SALE OF SECURITIES; CLOSING.
2A. Purchase and Sale of Series B Securities. Subject to the terms and conditions of this
Agreement, the Company shall sell to each Purchaser, and each Purchaser shall purchase from the
Company, Series B Securities in the number specified below such Purchaser’s signature hereto at a
price equal to $31.25 per share for the Series B Capital Contribution set forth below such
Purchaser’s signature hereto, in each case registered in such Purchaser’s name or that of the
Purchaser’s nominee or nominees. Notwithstanding the foregoing, each Purchaser’s obligations under
this Agreement are several and not joint obligations and no Purchaser shall have any obligation or
liability for the performance or non-performance by any other Purchaser of such other Purchaser’s
obligation under this Agreement. Except as set forth immediately below, Purchasers shall be
permitted to purchase up to that number of Series B Securities indicated next to their name in
Schedule 6A in the column entitled “Series B”. In the event that one or more Purchasers declines to
purchase some or all of their allotted Series B Securities indicated on Schedule 6A, such shares
shall be re-allocated among the remaining Purchasers on a pro-rata basis based upon existing
ownership of the Company’s common stock. Such re-allocation shall continue until either (i) the
total number of Series B Securities subscribed to by all Purchasers in the aggregate equals
192,000, or (ii) all remaining Purchasers decline their respective pro-rata re-allocation. The
Company reserves the right to reduce the total number of Series B Securities available for
subscription.
2B. Closing. The purchase and sale of the Series B Securities shall take place at the offices
of Beacon Energy Co., 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx at a closing (the
“Closing”) to be held within ten (10) days after the date of execution of this Agreement
(the “Closing Date”).
3. CONDITIONS OF CLOSING. Each Purchaser’s obligation to purchase and pay for its Series B
Securities at the Closing is subject to the fulfillment to its satisfaction or its written waiver
of the
following conditions, provided that the closing of the purchase shall constitute the waiver by
the Purchasers of any such conditions that shall not have theretofore been satisfied:
3A. Representations and Warranties. The representations and warranties contained in Paragraph
6 hereinbelow shall be true and correct on and as of the Closing Date after giving effect to the
issue and sale of the Series B Securities and application of the proceeds as contemplated by the
Agreement.
3B. Sale of all Series B Securities. The Company shall have made available to each Purchaser
the Series B Securities to be purchased by it at the Closing as provided in Paragraph 2A
hereinabove, provided that the failure of any Purchaser to close or consummate its purchase
of Series B Securities shall not excuse or waive the obligation of any other Purchaser to close or
consummate its respective purchase.
3C. Metalico Approval. The Board of Directors of Metalico shall have approved the execution
and delivery of this Agreement and the undertakings of Metalico contemplated hereunder.
4. COVENANTS OF THE COMPANY.
4A. Financial and Other Reporting by the Company. The Company will deliver to each holder of
a Security:
(i) that certain power point presentation and financial model of the Company dated as of July
2007, as amended through the date hereof;
(ii) audited financial statements of the Company as of December 31, 2006;
(iii) with reasonable promptness after any officer of the Company obtains knowledge or notice,
either written or oral, of any condition or event particular to the Company which could reasonably
be expected to have a material adverse effect on the business, operations, or prospects of the
Company, subject to Paragraph 5D hereinbelow; and
(iv) with reasonable promptness, any such other information and data with respect to the
Company as from time to time may be reasonably requested by any holder or holders of a Security,
subject to Paragraph 5D hereinbelow.
4B. Use of Proceeds. The Company will use the proceeds of the sale of the Series B Securities
to fund investments in developmental-stage and existing plant production projects, the purchase
and/or construction of a biodiesel refinery, the funding of various and ancillary start-up costs,
the payment of general operating expenses including payroll, and other general corporate purposes.
4C. Business of the Company. The business of the Company shall be: to become a vertically
integrated international biofuels production, storage, distribution and marketing company; to own
farmland for the production of biofuels feedstock; and to acquire and operate existing biofuel
production facilities.
4D. Investor Relations Firm. On or before the effective date of the the registration or
acceptance for trading of the Company’s stock by a Trading Platform (as defined in Paragraph 5C),
the Company shall retain an investor relations firm to promote the Company’s stock.
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4E Board of Directors. On or before December 31, 2007 the Company shall appoint two additional
members to its Board of Directors (for a total of four members). Such two appointees will include
a representative chosen from among the Purchasers and one third party independent director.
4F. Anti-Dilution. Until the Platform Date (as defined in Paragraph 5C), the Company shall not
issue any shares of common stock or securities convertible into or exercisable for shares of common
stock at a price per share less than $31.25 (as such may be adjusted to account for any stock
split, reverse stock split, merger or other corporate re-organization), except for options (and the
shares of common stock underlying such options) under a stock option plan or similar arrangement
approved by the Company’s Board of Directors.
5. CONDITIONAL RIGHT TO SELL.
5A. Sale Rights. (i) Unless a Public Trading Event (as defined in Paragraph 5C) has occurred,
each Purchaser shall have the right as of August 1, 2008 or December 1, 2008, as determined by
reference to Paragraph 5C, upon thirty (30) days written notice (a “Sale Notice”) to
Metalico, to require Metalico to purchase all or a portion of the Series B Securities of such
Purchaser acquired pursuant to this Agreement for consideration equal to, at the option of such
Purchaser, either:
(a) cash in an amount equal to twice the portion of such Purchaser’s Series B Capital
Contribution allocable to the Series B Securities subject to such sale, or
(b) common stock of Metalico, at a per-share price equal to the closing price for
Metalico common stock on the American Stock Exchange on the date such Purchaser’s Series B
Capital Contribution was made, for the portion of such Purchaser’s Series B Capital
Contribution allocable to the Series B Securities subject to such sale.
A Purchaser may in its discretion allocate any such sale of all or a portion of its Series B
Securities between the two options described in this Paragraph 5A(i).
(ii) Each Purchaser’s right to deliver a Sale Notice and to compel a sale as provided under
Paragraph 5A(i) shall terminate as of the close of business on September 2,, 2008 or January 2,
2009, as determined by reference to Paragraph 5C and 5A.
(iii) Metalico shall make any cash payment required in connection with a sale pursuant to
Paragraph 5A(i)(a) within thirty (30) days of its receipt of an appropriate Sale Notice and shall
issue and cause to be delivered any stock required in connection with a sale pursuant to Paragraph
5A(i)(b) promptly after its receipt of an appropriate Sale Notice, subject to regulatory and
exchange requirements.
5B. Stock Rights. Nothing in this Agreement shall confer or be deemed to confer any
“tagalong” or other rights in connection with the Series B Securities or any common stock of
Metalico acquired pursuant to Paragraph 5A(i)(b) except as expressly set forth herein. Each
Purchaser expressly acknowledges and agrees that the date of acquisition of any Metalico stock
pursuant to Paragraph 5A(i)(b) shall be the date the stock of the Company used by the Purchaser to
acquire such Metalico stock is delivered to Metalico as payment therefor, such date being the date
of acquisition of the Metalico stock for purposes of Rule 144. Metalico shall use its best efforts
to register any stock issued pursuant to Paragraph 5A(i)(b) within 120 days of issuance so as to
allow for public sale.
5C. Public Trading Event. For purposes of this Paragraph 5, “Public Trading Event”
means the occurrence of one of the following
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| (i) | as of April 30, 2008 the Company shall have completed the filing of an appropriate application and required supporting materials with any of the following national securities exchangesor listing services providing a platform for public trading in the Company’s common stock: the American Stock Exchange, the New York Stock Exchange, the NASDAQ market, or the OTC Bulletin Board (each a “Traditional Trading Platform”) or | ||
| (ii) | as of July 31, 2008 completed an alternative listing arrangement through a reverse merger with a public shell, a listing on the Pink Sheets trading system, acquisition by a Special Purpose Acquisition Company (“SPAC”)or any other similar mechanism deemed appropriate by the Company’s Board of Directors (each a “Non-Traditional Trading Platform” and, collectively together with the Traditional Trading Platform each a “Trading Platform” ). |
“Platform Date” shall mean the earlier to occur of (a) the date as of which a filing
contemplated under clause (i) above of this Xxxxxxxxx 0X is declared “effective” by the Securities
Exchange Commission and (b) the date as of which an arrangement contemplated under clause (ii)
above of this Xxxxxxxxx 0X is completed.
If the Company elects to cause a Public Trading Event to occur by making the filing
contemplated in clause (i) above, the Company shall use its reasonable efforts to have its filed
application, as such may be amended, declared “effective” by the Securities Exchange Commission no
later than September 30, 2008. If the Company fails to have such filed application declared
effective by September 30, 2008, it shall have until December 1, 2008 to complete a listing through
a Non-Traditional Trading Platform. If the Company fails to cause a Public Trading Event as
contemplated above and within either of the time frames contemplated above, the Purchasers’ sole
remedy shall be the rights set forth in Paragraph 5A.
By its execution of this Agreement, the Company agrees to use its best efforts to cause a
Public Trading Event to occur. By its execution of this Agreement, Metalico agrees to use its best
efforts to seek the authorization of its Board of Directors, to the extent necessary, to cause or
permit any actions by the Company necessary or appropriate to achieve a Public Trading Event and
the effectiveness of any resulting registration or listing, provided that nothing in this
Xxxxxxxxx 0X xxxxx xx deemed to obligate Metalico to perform any act in violation of applicable law
or regulation.
5D. Insider Information. Upon the registration or acceptance for trading of the Company’s
stock by a Trading Platform, the Company’s obligations to individual Purchasers under Paragraphs
4A(ii) and (iii) shall automatically terminate unless, with respect to any individual Purchaser,
such Purchaser delivers written notice to the Company to the effect that such Purchaser wishes to
continue receiving the information contemplated thereunder. Each Purchaser acknowledges that
receipt of such information may subject it to xxxxxxx xxxxxxx restrictions under federal securities
law.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants:
6A. Organization, Etc. (i) It is duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite power and authority to carry on its
business as now being conducted and which it proposes to conduct. It has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement. Schedule
6A correctly identifies the correct legal name of the Company, its jurisdiction of
organization, the jurisdictions in which it is qualified to do business and its officers and
directors.
(ii) This Agreement has been duly authorized by all necessary action on its part and has been
or will have been as of the Closing Date duly executed and delivered by its duly authorized
officers and constitutes (or will constitute upon execution thereof by such officers) its legal,
valid and binding obligations, enforceable against it in accordance with its terms.
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6B. Company Ownership. Its outstanding shares are as described on Schedule 6A. All
of the outstanding shares are or will be, by the Closing Date, validly issued, fully paid and
non-assessable and, to the knowledge and expectation of the Company, are now owned or will be owned
immediately after the Closing, of record and, to the knowledge of the Company, beneficially, in the
amounts and by the persons as set forth in Schedule 6A as it may be supplemented prior to
the Closing Date, free and clear of any lien of any kind, provided that the Company makes
no warranty or guaranty that the Purchasers designated on Schedule 6A have consummated or
will consummate their respective purchases of Series B Securities and therefore makes no
representation or warranty that the ownership of outstanding shares set forth in Schedule
6A with respect to Purchasers will be accurate. The designation, powers, preferences, rights,
qualifications, limitations and restriction in respect of the Series B Securities are as set forth
in the Company’s certificate of incorporation as it has been or may be amended from time to time
and are valid, binding and enforceable in accordance with all applicable laws. The Series B
Securities, when issued, will be validly issued, fully paid and non-assessable and with no personal
liability attaching to the ownership thereof and will be free and clear of all liens, charges and
restrictions.
7. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents (with respect to itself only)
that:
7A. Purchase for Own Account. It is purchasing its Series B Securities for its own account
and not with a view to the distribution thereof or with any present intention of distributing or
selling any of the Series B Securities, provided that the disposition of the Purchaser’s property
shall at all times be within its control subject to applicable law and regulation.
7B. Accredited Investor Status. It has such knowledge and experience in financial affairs
that it is capable of evaluating the merits and risks of purchasing the Series B Securities
purchased by it, and it has not relied in connection with this investment upon any representations,
warranties or agreements other than those set forth in this Agreement. Its financial situation is
such that it can afford to bear the economic risk of holding the Series B Securities for an
indefinite period of time, and can afford to suffer the complete loss of its investment in the
Series B Securities. It is an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended.
7C. Unregistered Securities. It is aware that the Series B Securities have not been
registered under the federal Securities Act of 1933, as amended, or any state securities laws,
pursuant to exemptions from registration. It understands that the reliance by the Company on such
exemptions is predicated in part upon the truth and accuracy of the statements by such Purchaser in
this Agreement.
8. REPRESENTATIONS OF METALICO. Metalico represents and warrants:
(i) It is duly organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to execute, deliver and perform its obligations
under this Agreement.
(ii) This Agreement has been duly authorized by all necessary action on its part and has been
or will have been as of the Closing Date duly executed and delivered by its duly authorized
officers and constitutes (or will constitute upon execution thereof by such officers) its legal,
valid and binding obligations, enforceable against it in accordance with its terms.
9. RATABLE LIQUIDATION. If the Company shall be voluntarily or involuntarily liquidated,
dissolved, or wound up (including, without limitation, any liquidation or dissolution following a
sale or transfer of all or substantially all of the assets of the Company and including a merger or
other combination in which the Company is not the surviving corporation) (collectively, a
“Liquidation”), then, as among the Purchasers and Metalico and solely with respect to the
common stock of the Company issued and outstanding upon the consummation of the purchases
contemplated under this Agreement, each such party shall be entitled to a distribution from the
property of the Corporation available for distribution to stockholders upon such Liquidation in an
amount ratably proportional to such party’s investment in the
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Company upon the effectiveness of this Agreement and not, to the extent it may differ, in
proportion to the respective numbers of shares of the Company’s stock held by each such party.
10. MISCELLANEOUS.
10A. Consent to Amendments. Except for Section 5 and this Paragraph 10A, this Agreement may
not be amended without the prior written consent of the Company, Metalico, and that number of
Purchasers holding eighty-percent (80%) of the Series B Securities owned by the Purchasers in the
aggregate and their respective permitted successors and assigns. With respect to Section 5 and
this Paragraph 10A, they may not be amended without the prior written consent of the Company,
Metalico and all the Purchasers and their respective permitted successors and assigns.
1B. Survival of Representations and Warranties; Entire Agreement. All representations and
warranties contained in this Agreement shall survive the execution of this Agreement. This
Agreement embodies the entire agreement and understanding among the Purchasers, the Company, and
Metalico and supersedes all prior agreements and understandings relating to the subject matter
hereof and thereof..
11C. Successors and Assigns. All covenants and other agreements in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including, without limitation, any transferee)
whether so expressed or not, provided neither the Company nor Metalico may delegate the performance
of any of its respective obligations hereunder or assign any of its rights hereunder.
11D. Additional Stock. Nothing in this Agreement shall limit or be deemed to limit the right
of Metalico or any Purchaser to acquire additional shares of the common stock of the Company
through subsequent subscriptions, additional stock issuances, private or public purchases from the
Company or other holders, or otherwise, subject to Xxxxxxxxx 0X. By its execution of this
Agreement, each party acknowledges and agrees that the rights granted under this Agreement are
granted solely with respect to the Series B Securities purchased hereunder and do not and shall not
attach to any other common stock issued by the Company to any holder thereof.
11E. Governing Law. THIS AGREEMENT IS TO BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO ANY LAWS OR RULES RELATING TO CONFLICTS OF LAWS THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK).
11F. Counterparts. This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.
11G. Severability. If any provision of this Agreement shall be held or deemed to be, or shall
in fact be, invalid, inoperative, illegal or unenforceable as applied to any particular case in any
jurisdiction because of the conflicting of any provision with any constitution or statute or rule
of public policy or for any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative, illegal or unenforceable in any other
jurisdiction or in any other case or circumstance or of rendering any other provision or provisions
herein contained invalid, inoperative, illegal or unenforceable to the extent that such other
provisions are not themselves actually in conflict with such constitution, statute or rule of
public policy, but this Agreement shall be reformed and construed in any such jurisdiction or case
as if such invalid, inoperative, illegal or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable to the maximum
extent permitted in such jurisdiction or in such case.
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If you are in agreement with the foregoing, please sign the form of acceptance set forth below
and return the same to the Company.
| BEACON ENERGY CORP. |
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| By: | ||||
| Xxxxxx X. Xxxxxx Chairman |
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| The foregoing Agreement is hereby accepted as of the date first above written. | ||||||||||
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By: |
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| Signature |
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| Name: | ||||||||||
| Please Print |
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| Series B Capital Contribution: | $ | |||||||||
| Number of Shares: | ||||||||||
| * | Corporate/business entities: Please insert appropriate Purchaser’s name and signature block. |
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