March 14, 2007
March
14,
2007
Xxxx
Xxxxxxxxx
2721
Via
Elevado
Palos
Verdes Estates, CA 90274
Dear
Xxxx:
The
purpose of this letter is to document the Allegro Biodiesel Corporation (the
“Company”) Board of Director’s (the “Board’s”) agreement with you regarding your
continued Board service following the engagement of PV Asset Management, LLC
(“PVAM”), of which you are a principal, pursuant to the services agreement by
and between PVAM and Allegro Biodiesel Corporation (the “Company”), dated as of
February 5, 2007 (the “Services Agreement”).
During
the time PVAM is engaged by the Company under the Services Agreement, you will
continue to serve as a director of the Company and continue to vest in the
stock
options previously awarded to you as an independent director. You, however,
will
not receive any cash fees for services as an independent director (as provided
for in the Company’s 2006 Incentive Compensation Plan, as amended) for the
second or third calendar quarters of 2007 if the Services Agreement continues
in
force during such quarters. Notwithstanding the preceding sentence, the Company
shall have the right to remove you from any position in the event that, by
order
of a court of competent jurisdiction, you are found directly liable for gross
negligence or willful misconduct in connection with the provision of services
under the Services Agreement.
If
a
Change of Control (as defined below) occurs after the date hereof with respect
to the Company within six years of the later of (i) the termination of the
term
of the Services Agreement, as may be extended, or (ii) the date that you
otherwise cease to serve as an officer or director of the Company (such later
date, the “Termination Date”), then the Company shall purchase a “tail”
directors and officers liability coverage policy that shall name you as
additional named insured. The maximum coverage amount of such policy shall
be
appropriate for a Company of the type and size of the Company or the date the
policy is purchased, but in any event, not less than $10 million. The term
of
the policy shall be not less than six years less the period of time lapsed
since
the Termination Date. “Change
in Control” shall mean the first to occur of any of the following
events:
(i) A
transaction or series of transactions (other than an offering of equity
securities by the Company) whereby any “person” or related “group” of “persons”
(as such terms are used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the Company,
any of its subsidiaries, an employee benefit plan maintained by the Company
or
any of its subsidiaries or a “person” that, prior to such transaction, directly
or indirectly controls, is controlled by, or is under common control with,
the
Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
possessing more than 50% of the total combined voting power of the Company’s
securities outstanding immediately after such acquisition;
(ii) During
any twelve-month period, individuals who, at the beginning of such period,
constitute the Board together with any new director(s) (other than a director
designated by a person who shall
have
entered into an agreement with the Company to effect a transaction
described
in the
immediately preceding or subsequent paragraph) whose election by the Board
or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the twelve-month period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or
(iii) The
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x)
a
merger, consolidation, reorganization, or business combination or (y) a sale
or
other disposition of all or substantially all of the Company’s assets in any
single transaction or series of related transactions or (z) the acquisition
of
assets or stock of another entity, in each case other than a
transaction
that
results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by
being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction.
If
the
terms of this letter agreement are acceptable to you, please return a signed
copy to me at the Company’s headquarters at your earliest convenience.
Sincerely,
/s/
X.
Xxxxx Xxxxx
III
X.
Xxxxx
Xxxxx, III
Chief
Executive Officer
Acknowledged
and Agreed.
/s/
Xxxx
Xxxxxxxxx Date:
March 14, 2007
Xxxx
Xxxxxxxxx
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