AMENDMENT NO. 1 TO PRE-INCORPORATION AGREEMENT AND SUBSCRIPTION
EXHIBIT 10.6
AMENDMENT NO. 1
TO
This constitutes Amendment No. 1 to that certain Pre-Incorporation
Agreement and Subscription (the “Agreement”), dated as of August 16, 2006, by
and between Xxxx Xxxxxxxxx (“Xxxxxxxxx”), and Sun Bear, LLC, a Texas limited
liability company (“Sun Bear”).
For good and adequate consideration, the receipt and adequacy of which
is
hereby acknowledged, the parties hereby agree, as follows:
A. Paragraph 2.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
“2.1 The parties hereto agree to take all
commercially reasonable steps necessary, and consistent with the terms of this
Agreement, to cause the formation of All Energy, in conformity with the table
set forth below.
Initial Ownership of all shares of All Energy:
- 187,500 shares owned by Xxxxxxxxx
- 125,000 shares owned by Sun Bear
- A total of 187,500 shares to be reserved for issuance to advisors, seed
capital, etc.
- 187,500 shares to be reserved for issuance to Xxxxxxxxxx, should he
become a part of All Energy
- 187,500 shares to be reserved for issuance to Xxxxxx, should he become
a
part of All Energy
- 187,500 shares to be reserved for issuance to X. Xxxxx, should he become
a part of All Energy
- 187,500 shares to be reserved for issuance to X. Xxxxx, should he become
a part of All Energy”
B. Paragraph 2.3.3 of the Agreement is hereby deleted in its entirety and
replaced with the following:
“2.3.3 Promptly upon the incorporation of All Energy, Fifty
Thousand Dollars ($50,000) obtained from the initial seed capital investor
will
be deposited into a bank account of All Energy. For consideration of the payment
of such $50,000 to All Energy, the initial seed capital investor will receive
12,500 shares of the stock of All Energy.”
C. Article IV of the Agreement is hereby deleted in its entirety and
replaced with the following:
“IV. SUBSCRIPTION
FOR ALL ENERGY COMMON STOCK
The parties hereto hereby agree for the initial shares of common stock
to
be issued by All Energy, as follows:
|
|
Subscriber
|
|
Number of
Shares Subscribed
|
|
Consideration to be Paid
for Shares Subscribed
|
|
|
Xxxx Xxxxxxxxx
|
|
187,500
|
|
187.50
|
|
|
Sun Bear, LLC
|
|
125,000
|
|
125.00”
|
In all other aspects, the Agreement is ratified and affirmed.
/s/ XXXX XXXXXXXXX
Xxxx Xxxxxxxxx
SUN BEAR, LLC
By: /s/ XXXXX X. XXXX
Xxxxx X. Xxxx
President
-----------------------------------------
This Pre-Incorporation Agreement and Subscription is made and entered into
as of the 20th day of July, 2006, by and among Xxxx Xxxxxxxxx and Sun Bear,
LLC
(each is a “Party” and, collectively, they are the “Parties”).
WHEREAS, the parties desire to form a new Delaware corporation for the
purpose of providing a management team attractive to Wall Street, with a view
towards conducting an IPO or through other forms of institutional financing
in
order to acquire one or more businesses in the ethanol and alternative energy
industries; and
WHEREAS, the parties desire to determine and establish the rights, duties,
powers, disabilities, benefits and liabilities between them and with respect
to
the new corporation;
WITNESSETH, for and in consideration of the mutual promises of the parties,
each being consideration for the promises of the other, for Ten Dollars cash
in
hand, and for other good an valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by each Party, the Parties agree as
follows:
I. DEFINITIONS
The terms listed below shall, for the purposes of this Agreement, have
the
meanings ascribed to them, as follows:
1.1 “Agreement” means this Pre-Incorporation Agreement and
Subscription.
1.2 “All Energy” means All Energy Company, a corporation to be formed under
the laws of the State of Delaware.
1.3 “Xxxxxxxxxx” means Xxxxx X. Xxxxxxxxxx, an individual resident of
the State of Iowa.
1.4 “X. Xxxxx” means X.X. Xxxx Xxxxx, an individual resident of the
State of Virginia.
1.5 “X. Xxxxx” means Xxx Xxxxx, an individual resident of the State
of Virginia.
1.6 “Xxxxxxxxx” means Xxxx Xxxxxxxxx, an individual resident of the
State of Minnesota.
1.7 “Sun Bear” means Sun Bear LLC, a Texas limited liability
company.
1.8 “Xxxxxx” means Xxxxx X. Xxxxxx, an individual resident of the
State of South Dakota.
II. AGREEMENT TO FORM CORPORATION
2.1 The parties hereto agree to take all commercially reasonable
steps necessary, and consistent with the terms of this Agreement, to cause
the
formation of All Energy, in conformity with the table set forth below.
Initial Ownership of all shares of All Energy:
- 1,500 shares owned by Xxxxxxxxx
- 1,000 shares owned by Sun Bear
- A total of 1,500 shares to be reserved for issuance to advisors, seed
capital, etc.
- 1,500 shares to be reserved for issuance to Xxxxxxxxxx, should he become
a part of All Energy
- 1,500 shares to be reserved for issuance to Xxxxxx, should he become
a
part of All Energy
- 1,500 shares to be reserved for issuance to X. Xxxxx, should he become
a
part of All Energy
- 1,500 shares to be reserved for issuance to X. Xxxxx, should he become
a
part of All Energy
2.2 The Parties understand and agree that the foregoing table sets
forth the initial ownership of All Energy Company, only upon the terms and
conditions set forth herein.
2.3 The following is the timetable (the “Timetable”) which the
organization and funding of All Energy will follow, and each numbered item
in
the timetable is an “Event”:
2.3.1 Execution of this Agreement, the date of which is
conclusively evidenced by the date at the beginning of this Agreement.
2.3.2 Within two business days after incorporation of All
Energy, execution of a written consent in lieu of director’s organization
meeting, which consent will (i) adopt the Bylaws (defined below), (ii) adopt
a
budget (the "Initial Budget") for All Energy through the time of the Funding
Event (defined below), (iii) elect officers of All Energy and (iv) authorize
the
issuance of the stock of All Energy (the Parties shall be the initial
shareholders (the "Shareholders") of All Energy).
2.3.3 Promptly upon the incorporation of All Energy, Fifty
Thousand Dollars ($50,000) obtained from the initial seed capital investor
will
be deposited into a bank account of All Energy. For consideration of the payment
of such $50,000 to All Energy, the initial seed capital investor will receive
100 shares of the stock of All Energy.
2.3.4 The Funding Event (defined below) shall occur within
thirty calendar days after the date of formation of All Energy.
2.3.5 The Super-Funding Event (defined below) shall occur
within one year after the date of formation of All Energy.
2.4 The Parties agree that time is of the essence for the events and
the timing described in the Timetable.
2.5 In the event any Event does not occur as and when required by the
Timetable:
2.5.1 this Agreement shall be terminated;
2.5.2 if formed, All Energy shall be wound up and its existence
terminated; and
2.5.3 in the event that the Funding Event has occurred, but the
Super-Funding Event does not timely occur, any money of All Energy remaining
shall be paid first to approved expenses of All Energy, then to the investor
or
investors participating in the Funding Event, and any money remaining thereafter
shall be distributed pro rata to the Shareholders.
2.6 The Parties understand and agree that, subsequent to its
organization, All Energy shall, in a private offering of its equity securities,
raise an amount not less than Two Million Dollars ($2,000,000) (the "Funding
Event") , to be used on terms and conditions established by the board of
directors of All Energy. Thereafter, All Energy will raise funds in an IPO
in an
amount not less than One Hundred And Thirty Million Dollars ($130,000,000)
(the
"Super-Funding Event"). The precise number of shares of All Energy common stock
to be offered and sold in such IPO will be determined by the board of directors
of All Energy by appropriate action.
2.7 The Parties further agree that Xxxx Xxxxxx, Esquire, will be
engaged as attorney for, and will be the incorporator of, All Energy, on behalf
of the Parties. The Certificate of Incorporation of All Energy (the "All Energy
Certificate") shall be in the form of Exhibit "A" attached hereto and
incorporated herein by this reference.
2.8 Prior to the formation of All Energy, each Party will pay his own
costs and expenses relative to this Agreement. The costs of formation of All
Energy, and the expenses to prepare the corporate documents of All Energy,
shall
be paid or reimbursed by All Energy.
III. CHARACTERISTICS
OF ALL ENERGY
All Energy is to have certain characteristics set forth in the All
Energy Certificate (Exhibit “A”) and in its Bylaws, which shall be in the form
of Exhibit “B” attached hereto and incorporated herein by this reference.
IV. SUBSCRIPTION
FOR ALL ENERGY COMMON STOCK
The parties hereto hereby agree for the initial shares of common
stock to be issued by All Energy, as follows:
|
|
Subscriber
|
|
Number of Shares Subscribed
|
|
Consideration to be Paid for Shares
Subscribed
|
|
|
Xxxx Xxxxxxxxx
|
|
1,500
|
|
150.00
|
|
|
Sun Bear, LLC
|
|
1,000
|
|
150.00
|
V. BUSINESS OF ALL ENERGY
5.1 All Energy shall be organized for the purpose of providing an
attractive management team to Wall Street, with a view towards obtaining Super
Funding by conducting an IPO or through other forms of institutional financing
(other than through a private placement) with which to acquire, through a
merger, capital stock exchange, asset acquisition or other similar business
combination, one or more businesses in the ethanol and alternative energy
industries. The following sets forth the intended course of business of All
Energy, once incorporated:
The Parties believe that the ethanol and alternative energy industries
present attractive opportunities for consolidation and growth and a favorable
area in which to attempt to consummate one or more business combinations.
Collectively, the Parties have extensive experience on Wall Street and
investment banking consulting, and in the ethanol industry, as leading managers,
principals or directors of prominent companies. In addition, the Parties
collectively comprise a formidable pool of expertise covering the key areas
of
ethanol production. It is the intent of the Parties to leverage this industry
experience by focusing on identifying prospective acquisition targets within
the
ethanol industry.
After organization, in order to obtain the Super Funding, All Energy will
pursue an IPO or other forms of institutional financing other than a private
placement, the proceeds from which will be used to acquire one or more
businesses and, if appropriate opportunities arise, to engage in new
construction of an ethanol, or other alternative energy, production facility.
It
is anticipated by the Parties that, until the completion of the IPO or other
forms of such institutional financing, they would continue to control All Energy
and, for some period thereafter, would continue to exert control over which
acquisitions or new construction opportunities All Energy would
pursue.
5.2 The Parties understand and agree that each currently has or, in
the future, may have affiliations with companies in the ethanol and alternative
energy industries. Should All Energy seek to effect a business transaction
with
an entity that is directly or indirectly affiliated with one of the Parties,
it
is likely that conflicts of interest would arise. In such event, persons with
such a conflict of interest shall announce the conflict, and such announcement
shall be spread in the official minutes of the meeting. Directors shall be
held
to the standards of responsibility for directors as required by Delaware law
and
the All Energy Certificate and bylaws of All Energy, as amended from time to
time.
5.3 The Parties further understand and agree that each will not be
obligated to spend his full-time efforts to the affairs of All Energy. However,
subject to the terms of this Agreement, each of the Parties agrees to make
a
commercially reasonable effort to accomplish the business objectives of All
Energy. Also, it is possible that All Energy's then-current officers and
directors will resign upon the consummation of a business combination. In
addition, All Energy shall engage in such other legal activities as the board
of
directors of All Energy shall determine.
VI. AGREEMENT WITH RESPECT TO COMMON STOCK OF ALL ENERGY
6.1 All of the shares of common stock of All Energy to be issued to
Xxxxxxxxx and Sun Bear pursuant to this Agreement shall be subject to the terms
and conditions of this paragraph VI. Shares of common stock of All Energy
acquired by any of the Parties subsequent to the initial capitalization
transaction contemplated by this Agreement shall not be subject to the terms
and
conditions of this paragraph VI.
If is further agreed by the Parties that all of the shares of common
stock of All Energy that may be issued to Xxxxxxxxxx, X. Xxxxx, X. Xxxxx and/or
Xxxxxx shall be issued subject to the terms and conditions of this paragraph
VI,
which shall be acknowledged by such parties in writing.
6.2 Restrictions on Transfer of Common Stock. Neither of the parties
may assign, transfer, give, encumber, pledge, hypothecate or otherwise dispose
of any shares of common stock of All Energy acquired by them hereunder, other
than as permitted under this paragraph VI. Subject to the terms of this
paragraph VI, each of the parties may exercise all other rights of ownership
with respect to their shares of common stock of All Energy.
6.3 Endorsement of Common Stock Certificates. Each certificate
representing shares of common stock of All Energy to be issued pursuant to
this
Agreement to Xxxxxxxxx and Sun Bear shall bear the following legend
conspicuously printed or typewritten on its face:
“SEE TRANSFER RESTRICTIONS ON REVERSE SIDE.”
The reverse side of each such certificate shall bear the following,
or substantially similar, legends conspicuously printed or typewritten
thereon:
6.3.1 “THE OWNERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF A PRE-INCORPORATION AGREEMENT AND SUBSCRIPTION, DATED
AS
OF AUGUST 16, 2006, BY AND BETWEEN XXXX XXXXXXXXX AND SUN BEAR, LLC.”
6.3.2 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO
THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”
VII. VOTING
AGREEMENT
7.1 Elections of Directors. For so long as the Parties to this
Agreement collectively own More than 50% of the voting stock of All Energy,
each
Party shall vote for Xxxxxxxxx in any election of directors of All
Energy.
7.2 Specific Performance. It is agreed that, in view of the inability
to assess monetary damages arising hereunder as a result of a breach of the
provisions of this paragraph VI, the non-breaching party or parties may seek
specific performance by the breaching party or parties, and the breaching party
or parties shall pay attorney’s fees incurred by the non-breaching party or
parties in enforcing the provisions of this paragraph VI.
VIII. REPRESENTATIONS AND WARRANTIES
8.1 Xxxxxxxxx represents and warrants that he is under no disability
with respect to entering into this Agreement.
8.2 Sun Bear represents and warrants that it is a limited liability
company duly organized, validly existing and in good standing under the laws
of
the State of Texas with full power and authority to make and perform this
Agreement.
IX. TERMINATION
This Agreement shall remain in effect until the earlier of (A) such
time as the Parties shall enter into a written agreement to terminate this
Agreement or (B) the date upon which All Energy closes on the Super-Funding
or
(C) the failure of the Super-Funding to occur at the time required by the
Timetable.
X. LEGAL
REPRESENTATION
The parties agree that it is possible that conflicts may arise
between them at some future time. Because the law firm of Xxxxxx & Xxxxxx
has drafted this Pre-incorporation Agreement and Subscription and is to provide
legal services on behalf of All Energy, once formed, should there arise a legal
conflict between and among the parties, the parties agree that Xxxxxx &
Xxxxxx would be unable to represent any of the parties hereto. That is, each
party would need to seek other legal counsel. Each of the parties shall indicate
his acknowledgment and acceptance of this legal representation by initialing
below in the appropriate space:
|
|
|
/s/ DS
Xxxx Xxxxxxxxx
|
|
SUN BEAR, LLC By: /s/ SBG
Xxxxx X. Xxxx
President
|
|
XI. MISCELLANEOUS
11.1 Governing Law. This Agreement shall be deemed to be a contract
made under, governed by and construed in accordance with the substantive laws
of
the State of Delaware, without regard to choice of law considerations.
11.2 Arbitration. The parties agree that any dispute arising out of
this Agreement shall be submitted to arbitration with the American Arbitration
Association at its Chicago, Illinois, office. Such arbitration shall be governed
by the Rules of Commercial Arbitration of the American Arbitration Association
then in effect. Any award by the arbitrator or arbitrators shall be enforceable
by any court of competent jurisdiction.
11.3 Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which when so executed and delivered shall be taken to
be
an original; but such counterparts shall together constitute but one and the
same documents. Facsimile signatures shall be deemed original
signatures.
11.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
11.5 Entire Agreement. This Agreement, the other agreements and the
other documents delivered pursuant hereto and thereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
/s/ XXXX XXXXXXXXX
Xxxx Xxxxxxxxx
SUN BEAR, LLC
By: /s/ XXXXX X. XXXX
Xxxxx X. Xxxx
President
