STOCK SUBSCRIPTION AGREEMENT
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EXHIBIT 10.7
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This Agreement is made as of the 5th day of September, 2006, by and among
All Energy Company, a Delaware corporation (“All Energy”), Xxxx Xxxxxxxxx, the
president of All Energy acting in his individual capacity (“Xxxxxxxxx”), X.X.
Xxxx Xxxxx, an individual resident of the State of Virginia (“X. Xxxxx”), Xxx
Xxxxx, an individual resident of the State of Virginia (“X. Xxxxx”), Xxxxx X.
Xxxxxxxxxx, an individual resident of the State of Iowa (“Xxxxxxxxxx”), Xxxxx X.
Xxxxxx, an individual resident of the State of South Dakota (“Xxxxxx”), Xxxx X.
Xxxxxxx, Xx., an individual resident of the State of Virginia (“Xxxxxxx”), and
Midwest Biofuels, Inc., an Iowa corporation (“MBI”) (collectively, X. Xxxxx, X.
Xxxxx, Xxxxxxxxxx, Xxxxxx and Xxxxxxx are referred to herein as the
“Participants”; each signatory of this Agreement is a “Party” and, collectively,
they are the “Parties”).
WHEREAS, All Energy is pursuing the development of its proposed ethanol
production business; and
WHEREAS, All Energy desires to associate with the Participants and the
Participants desire to be associated with All Energy;
WITNESSETH, for and in consideration of the mutual promises of the
parties, each being consideration for the promises of the other, 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. FUTURE AGREEMENTS
X. X. Xxxxx, as the owner of Delta-T Corporation (“Delta-T”), and All
Energy agree that they shall negotiate, in good faith, a development agreement
(the “Delta-T Agreement”) relating to the construction of five (5) ethanol
production facilities, which agreement shall be on terms and conditions
substantially the same as the terms and conditions contained in extant
ethanol-related development agreements between Delta-T and unaffiliated
third-parties. X. Xxxxx further agrees to take such actions as may be necessary
to cause Delta-T to enter into the Delta-T Agreement.
B. R. Xxxxx and X. Xxxxx, as the majority owners of Pacesetter
Management Group, LLC (“Pacesetter”), and All Energy agree that they shall
negotiate, in good faith, a management agreement (the “Pacesetter Agreement”)
relating to the management of the first five (5) ethanol production facilities
of All Energy, which agreement shall be on terms and conditions substantially
the same as the terms and conditions contained in extant ethanol-related
management agreements between Pacesetter and unaffiliated third-parties. X.
Xxxxx and X. Xxxxx further agree to take such actions as may be necessary to
cause Pacesetter to enter into the Pacesetter Agreement.
II. AGREEMENT TO CANCEL SHARES OF ALL ENERGY COMMON STOCK
As an inducement for the Participants to execute this Agreement, upon
the execution of this Agreement by all of the Parties, Xxxxxxxxx shall tender
to
All Energy for cancellation 19,643 of the 187,500 shares of All Energy common
stock currently owned by him, leaving Xxxxxxxxx with a total of 167,857 shares
of All Energy common stock.
III. AGREEMENT TO ASSIGN OPTION
As an inducement for All Energy and the Parties to execute this
Agreement, MBI, as the owner of an option (the “Option”) to acquire
approximately 150 acres of land located in Manchester, Iowa, which is to be
the
location of All Energy’s first ethanol production facility, shall assign all of
its right, title and interest in and to such option to All Energy, the
additional consideration for such assignment being the $10,000 previously
delivered by All Energy to Xxxxxxxxxx, the president of MBI.
IV. SUBSCRIPTION FOR ALL ENERGY COMMON STOCK
Upon the execution of each of the Delta-T Agreement and the
Pacesetter Agreement, the Participants, and each of them, shall have the right,
but not the obligation, to subscribed for shares of the $.0001 par value common
stock of All Energy, in the amounts and for the consideration set forth
below:
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Subscriber
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Number of
Shares Subscribed
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Consideration to be Paid
for Shares Subscribed
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X.X. Xxxx Xxxxx
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142,857 *
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143.00
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Xxx Xxxxx
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142,857 *
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143.00
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Xxxxx Xxxxxxxxxx
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142,857 *
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143.00
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Xxxxx X. Xxxxxx
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142,857 *
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143.00
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Xxxx X. Xxxxxxx, Xx.
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142,857 *
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143.00
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*
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This amount of shares of common stock of All Energy represents
11.42857% of the shares of common stock allocated by the board of
directors of All Energy to the founders of All
Energy.
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With respect to the sales of common stock of All Energy contemplated
by this Article IV, the Parties are relying on the exemption from registration
under the Iowa securities laws provided by Section 502.202(14) of the Iowa
Code.
Further, with respect to the sales of common stock of All Energy contemplated
by
this Article IV, the Parties are relying on the exemption from registration
under the Virginia securities laws provided by Section 13.1-514(B)(7)(a) of
the
Code of Virginia. Also, with respect to the sales of common stock of All Energy
contemplated by this Article IV, the Parties are relying on the exemption from
registration under the South Dakota securities laws provided by Section
47-31B-202(14) of the South Dakota Codified Laws.
V. REPRESENTATIONS OF ALL ENERGY
A. Organization and Qualification; Subsidiaries. All Energy is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Delaware and has the requisite corporate power and authority
and
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders to own, operate or
lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of
its
activities makes such qualification necessary.
B. Authority Relative to this Agreement. All Energy has all necessary
corporate power and authority to enter into this Agreement and to carry out
its
obligations hereunder. The execution and delivery of this Agreement by All
Energy and the consummation by All Energy of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of All Energy. This Agreement has been duly executed and delivered by All Energy
and constitutes a legal, valid and binding obligation of All Energy.
C. Status of All Energy. All Energy is a development-stage company
and lacks adequate capital with which to pursue its plan of business. Unless
and
until All Energy obtains at least $1,300,000 pursuant to its ongoing private
offering of common stock or otherwise, it will be unable to pursue its plan
of
business. All Energy hereby represents and warrants that the information
contained in its private placement memorandum (the “Memorandum”) dated as of
August 21, 2006, a copy of which has, heretofore, been delivered to each of
the
Participants, is true and correct as of the date of this Agreement.
VI. REPRESENTATIONS OF XXXXXXXXX
Xxxxxxxxx represents and warrants that he is under no disability with
respect to entering into this Agreement.
VII. REPRESENTATIONS OF MBI
A. Organization and Qualification; Subsidiaries. MBI is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Iowa and has the requisite corporate power and authority and is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders to own, operate or
lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of
its
activities makes such qualification necessary.
B. Authority Relative to this Agreement. MBI has all necessary
corporate power and authority to enter into this Agreement and to carry out
its
obligations hereunder. The execution and delivery of this Agreement by MBI
and
the consummation by MBI of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of MBI. This Agreement
has been duly executed and delivered by MBI and constitutes a legal, valid
and
binding obligation of MBI.
C. Ownership of the Option. MBI represents and warrants to All Energy
and the Parties that it owns the Option free and clear of any claim of any
other
person or entity, including MBI’s affiliates. MBI further represents and
warrants to All Energy and the Parties that the Option is assignable in the
manner contemplated by this Agreement.
VIII. REPRESENTATIONS OF PARTICIPANTS
A. No Legal Disability.
1. X. Xxxxx represents and warrants that he is under no
disability with respect to entering into this Agreement.
2. X. Xxxxx represents and warrants that he is under no
disability with respect to entering into this Agreement.
3. Xxxxxxxxxx represents and warrants that he is under no
disability with respect to entering into this Agreement.
4. Xxxxxx represents and warrants that he is under no
disability with respect to entering into this Agreement.
5. Xxxxxxx represents and warrants that he is under no
disability with respect to entering into this Agreement.
B. Receipt of Disclosure. X. Xxxxx, X. Xxxxx, Xxxxxxxxxx, Xxxxxx and
Xxxxxxx, and each of them, hereby represent and warrant that they have received
and reviewed the Memorandum. With respect to such information, Messrs. X. Xxxxx,
X. Xxxxx, Xxxxxxxxxx, Xxxxxx and Xxxxxxx further represent and warrant that
they
have had an opportunity to ask questions of, and to receive answers from, Xx.
Xxxx Xxxxxxxxx, President of All Energy.
C. Representations Relating to All Energy’s Common Stock. X. Xxxxx,
X. Xxxxx, Xxxxxxxxxx, Xxxxxx and Xxxxxxx, and each of them, hereby represent
and
warrant to All Energy that the shares of All Energy’s common stock being
acquired pursuant to this Agreement are being acquired for their own accounts
and for investment and not with a view to the public resale or distribution
of
such securities and further acknowledge that the securities being issued have
not been registered under the Securities Act of 1933, as amended, or any state
securities law and are “restricted securities”, as that term is defined in Rule
144 promulgated by the SEC, and must be held indefinitely, unless they are
subsequently registered or an exemption from such registration is
available.
D. Agreement to be Bound. X. Xxxxx, X. Xxxxx, Xxxxxxxxxx, Xxxxxx and
Xxxxxxx, and each of them, hereby agree that they shall be bound by the terms
and conditions of articles VI, VII and IX of that certain Pre-Incorporation
Agreement and Subscription, dated as of August 16, 2006, a copy of which has,
heretofore, been delivered to each of the Participants, relating to the
formation of All Energy.
E. Consent to Legends. X. Xxxxx, X. Xxxxx, Xxxxxxxxxx, Xxxxxx and
Xxxxxxx, and each of them, hereby consent to the placement of the following
legends restricting future transfer on the certificates representing the shares
of All Energy common sock being acquired pursuant to this Agreement:
1. the following legend conspicuously printed or typewritten on its
face:
“SEE TRANSFER RESTRICTIONS ON REVERSE SIDE.”
2. the reverse side of each such certificate shall bear the
following, or substantially similar, legends conspicuously printed or
typewritten thereon:
“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.”
“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.”
IX. MISCELLANEOUS
A. 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.
B. 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.
C. 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.
D. 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.
E. 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.
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ALL ENERGY: ALL ENERGY COMPANY By: /s/ XXXX XXXXXXXXX
Xxxx Xxxxxxxxx
President /s/ XXXX XXXXXXXXX
Xxxx Xxxxxxxxx, individually MBI: MIDWEST BIOFUELS, INC. By: /s/ XXXXX XXXXXXXXXX
Xxxxx Xxxxxxxxxx
President
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PARTICIPANTS: /s/ X.X. XXXX XXXXX
X.X. Xxxx Xxxxx /s/ XXX XXXXX
Xxx Xxxxx /s/ XXXXX XXXXXXXXXX
Xxxxx Xxxxxxxxxx, individually /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx /s/ XXXX X. XXXXXXX, XX.
Xxxx X. Xxxxxxx, Xx.
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