U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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by Rule 14(a)-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
United EcoEnergy Corp.
(Name of Company in Its Charter)
______________________________________
(Name of Person(s) Filing Proxy Statement,
if Other Than the Company)
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the offsetting fee was paid previously. Identify the previous
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Notes:
United EcoEnergy Corp.
409 Brevard Avenue
Cocoa, Florida 32922
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, June __, 2006
Notice is hereby given that the Annual Meeting of shareholders of
United EcoEnergy Corp., a Nevada corporation (Company), will be held on
Friday, June __, 2006, at the Company offices located at 409 Brevard Avenue,
Cocoa, Florida 32922 at 10:00 a.m. (EDT) for the following purposes:
1. To elect the following five (5) nominees as directors of the Company
until the next Annual Meeting of shareholders and until their respective
successors shall be elected and qualified: William K. Mackey, Adam Mayblum,
John Paul DeVito, William L. Sklar and Alec Hoke.
2. To ratify the decision by our Audit Committee to retain Berman Hopkins
Wright & Laham, CPAs, LLP as our independent registered accounting firm for
the fiscal year that commenced on January 1, 2006;
3. To approve the amendment of the Articles of Incorporation of the
Company to increase the authorized shares of common stock from 50 million
shares to 150 million shares;
4. To ratify the decision of the Board of Directors to enter into an
Investment Advisory Agreement with United EcoEnergy Advisors, LLC., as
amended
5. To approve an Amended Certificate of Designation for the Series A
Convertible Preferred Stock of the Company.
6. To consider any other matter that properly may come before the meeting
or any adjournment thereof.
Shareholders of record as the close of business on May 22, 2006 are entitled
to vote at the meeting or any postponement or adjournment thereof.
Please review the voting options on the attached proxy card and submit
your vote promptly. If you attend the Annual Meeting, you may revoke your
Proxy and vote in person if you desire to do so, but attendance at the Annual
Meeting does not itself serve to revoke your Proxy. Copies of our Annual
Report for the fiscal year ended December 31, 2005 and our amended quarterly
report for the quarter ended March 31, 2006 on Form 10-Q/A as filed with the
Securities & Exchange Commission, will be provided on request or you may
obtain copies online from the Securities and Exchange Commission Website at
www.sec.gov. (Search for Company Filings).
By order of the Board of Directors
June 9, 2006
/s/ Robert Hipple
Robert Hipple, Secretary
PROXY STATEMENT
United EcoEnergy Corp.
409 Brevard Avenue
Cocoa, Florida 32922
This Proxy Statement is being furnished to shareholders at
the direction and on behalf of the board of directors of United
EcoEnergy Corp., a Nevada corporation (Company), for the
purpose of soliciting proxies for use at the Annual Meeting of
Shareholders of the Company to be held on Friday, June __, 2006
at 409 Brevard Avenue, Cocoa, Florida 32922 at 10:00 a.m. (PDT).
The shares represented by the proxy will be voted in the manner
specified in the proxy. To the extent that no specification is
made as to the proposals set forth in the notice of meeting
accompanying this Proxy Statement, the proxy will be voted in
favor of such proposals. However, any proxy given pursuant to
this solicitation may be revoked at any time before it is
exercised by giving written notice of such revocation to the
Secretary of the Company, by appearing at the meeting and voting
in person or by submitting a later dated proxy. Neither
attendance at the meeting nor voting at the meeting will revoke
the proxy. A revocation that is not timely received will not be
taken into account, and the original proxy will be counted.
The matters to be submitted to the shareholders for
approval at the Annual Meeting are:
1. Election of the following as directors of the Company
until the next Annual Meeting and until their successors are
duly elected and qualified:
Adam Mayblum
William K. Mackey
Alec Hoke
John Paul DeVito
William Sklar
2. Approval of an amendment to the Articles of
Incorporation to increase the number of authorized shares of the
Company par vale $0.001 common stock from 50 million shares to
150 million shares.
3. Ratification of the decision of the Audit Committee to
appoint Berman Hopkins Wright & Laham, CPAs, LLP as the
independent auditors of the Company for the fiscal year
beginning January 1, 2006.
4. Ratification of the appointment of United EcoEnergy
Advisors, LLC as investment advisors to the Company and approval
of the investment advisory agreement, as amended.
5. Approval of the Amended Statement of Designation for
the Series A Convertible Stock of the Company, to be filed with
the Secretary of State for the State of Nevada.
6. Approval of such other matters as may properly be
brought before the Annual Meeting.
Shareholder proposals must be submitted to the Company not
later than April 30, 2006 in order to be included in those
matters considered at the next Annual Meeting of the Company to
be held in June, 2007. The cost of preparing, assembling and
mailing this Proxy Statement, the Notice of Annual Meeting of
Shareholders and the accompanying Proxy is being borne by the
Company. Brokers, dealers, banks, or voting trustees, and their
nominees, are requested to forward soliciting materials to the
beneficial owners of shares and will be reimbursed for their
reasonable expenses. This Proxy Statement and accompanying
proxy will be mailed to shareholders on or about June 20, 2006.
VOTING SECURITIES
The record date of shareholders entitled to notice of and
to vote at the Annual Meeting of Shareholders is the close of
business on June 15, 2006. On March 31, 2006, the Company had
issued and outstanding 28,468,900 shares of $0.001 par value
common stock and 1,000,000 shares of Series A Convertible
Preferred Stock, which is non-voting except in defined
circumstances. The only matter to be brought before the Annual
Meeting on which the holders of Series A Convertible Preferred
Stock are entitled to vote is for the approval of the Amended
Certificate of Designation for the Series A Convertible
Preferred Stock, and the Company has already received the signed
written consent of all of the holders of the outstanding
preferred stock, consenting to the Amended Certificate of
Designation for the Series A Convertible Preferred Stock. Each
holder of common stock will be entitled to one (1) vote for each
share of common stock held by such shareholder, on any matter
that may properly come before the meeting. There will be no
cumulative voting right on any shares.
The presence at the meeting, in person or by proxy, of the
holders of a majority of the voting power as set forth above
outstanding on the record date will constitute a quorum at the
meeting. Votes withheld and abstentions will be counted in
determining the presence of a quorum but will not be voted.
Broker non-votes will not be counted in determining the presence
of a quorum and will not be voted.
All matters to be voted on require an affirmative vote of a
majority of the votes present at the meeting, except as noted
below. Pursuant to applicable Nevada law, there are no
dissenters rights relating to the matters to be voted on.
STOCK OWNERSHIP
The following table sets forth information regarding the
beneficial ownership of shares of our common stock as of May 22,
2006 (28,468,900 issued and outstanding) by (i) all stockholders
known to us to be beneficial owners of more than 5% of the
outstanding common stock; and (ii) all officers and directors of
the Company, individually and as a group (except as otherwise
noted, each person has sole voting power and sole dispositive
power as to all of the shares shown as beneficially owned by
them):
Name and Address Amount & Nature
of Beneficial of Beneficial Percent
Owner Position Ownership of Series
-----------------------------------------------------------------------------
William K. Mackey Chairman, CEO 0 --
9632 NW 7th Circle Director
#1724
Plantation, FL 33324
Adam Mayblum Director(1) 13,470,150 47.3
50 Andrew Lane
New Rochelle, NY 10804
William L. Sklar Director 0 --
513 Roselawn Avenue
Toronto, Canada M5N 1K2
Alec Hoke Director 0 --
721 Carriage Hill Lane
Boca Raton, FL 33486
John Paul DeVito Director 0 --
1201 Hardscrabble Road
Chappaqua, NY 10514
Robert Hipple CFO 0 --
412 Brevard Avenue Secretary/
Cocoa, Fl 32922 Treasurer
---------------------------------------------------------------------------
*All directors & officers 13,470,150 47.3
as a group (6 persons)
Enterprise Partners, LLC 26,940,300 94.7
50 Andrew Lane
New Rochelle, NY 10804
Enterprise Partners LLC also owns 1,000,000 shares of the Series
A Convertible Preferred Stock of the Company, representing 100
percent of the Series A Convertible Shares issued and
outstanding
(1) Adam Mayblum is a 50 percent owner of Enterprise Partners,
LLC, which owns 26,940,300 shares of common stock and 1,000,000
shares of Series A Convertible Preferred Stock and is therefore
considered the beneficial owner of 13,470,150 common shares and
500,000 preferred shares.
(2) None of these security holders has the right to acquire any
amount of the common or preferred shares within sixty days, from
options, warrants, rights, conversion privileges, or similar
obligations
(2) Applicable percentage ownership of common stock is
based on 28,468,900 shares issued and outstanding on June 15,
2006 divided by the total common stock for each beneficial
owner. Beneficial ownership is determined in accordance with the
rules and regulations of the Securities and Exchange Commission.
In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of common
stock subject to options or convertible or exchangeable into
such shares of common stock held by that person that are
currently exercisable, or exercisable within 60 days, are
included.
(5) The Series A Preferred Stock, issued on February 28, 2006,
is convertible after one year following its issuance. There are
no other plans or arrangements to issue any additional Series A
Preferred Stock at this time.
EXECUTIVE COMPENSATION
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities All
Name and Restricted Underlying ($) Other
Principal ($) ($) ($) Stock Options LTIP Compen-
Position Year Salary Bonus Other Awards($) & SARs(#) Payouts sation($)
--------------- -------------------------------------------------------------------------------
Stephen M. Siedow 2005 $ -0- None None None None None $ -0-
Former Chairman, 2004 $ -0- None None None None None $ -0-
President/CEO/CFO 2003 $ -0- None None None None None $ -0-
None of the other current or former officers or directors of the
Company have received compensation exceeding $100,000 over the
past three fiscal years.
Employment Agreements.
The Company has not entered into any employment agreements
with any officer or director of the Company, or with any other
employees. The Company has entered into a Consulting Agreement
with CF Consulting, LLC pursuant to which Robert Hipple serves
as our CFO and corporate counsel.
Other Compensation.
(a) There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees of the
Company in the event of retirement at normal retirement date as
there was no existing plan as of December 31, 2004 provided for
or contributed to by the company.
(b) With the exception of director compensation, no
remuneration is proposed to be paid in the future directly or
indirectly by the Company to any director. Our Compensation
Committee will determine the compensation to be paid to our
independent directors. No compensation has yet been approved or
paid to any of our directors.
Item 1: ELECTION OF DIRECTORS
Directors and Executive Officers.
The names, ages, and respective positions of the directors
and executive officers of the Company are set forth below. The
directors named below will serve until the next annual meeting
of our stockholders or until their successors are duly elected
and have qualified. Directors are elected for a term until the
next annual stockholders meeting. Officers will hold their
positions at the will of the board of directors, absent any
employment agreement, of which none currently exist or are
contemplated.
There are no family relationships between any two or more
of our directors or executive officers. There are no
arrangements or understandings between any two or more of our
directors or executive officers except as noted below. There is
no arrangement or understanding between any of our directors or
executive officers and any other person pursuant to which any
director or officer was or is to be selected as a director or
officer, and there is no arrangement, plan or understanding as
to whether non-management shareholders will exercise their
voting rights to continue to elect the current board of
directors. There are also no arrangements, agreements or
understandings between non-management shareholders that may
directly or indirectly participate in or influence the
management of our affairs. There are no other promoters or
control persons of the Company. There are no legal proceedings
involving the executive officers or directors of the Company.
William K. Mackey - Chief Executive Officer, Chairman and
Director. Mr. Mackey, age 54, joined United EcoEnergy after
thirty years of C level experience in both public and private
companies. He began his career in the chemical process industry
where he spent 21 years in various roles from sales & marketing,
the laboratory from technician to Technical Director, as Plant
Manager and various executive positions including President and
Chairman of the Board. Mr. Mackey also has 10 years of public
company experience acting as a Director, Chairman and CFO,
President and CEO. He has managed multiple locations and
hundreds of employees at a time during his tenure. His
experience has allowed him to access the capital markets for
both debt & equity, communicate his company message to the
investing public and close 22 M & A transactions. Mr. Mackey
also has a one-third interest in United EcoEnergy Advisors, LLC,
the designated investment advisor to the Company.
Adam Mayblum, age 40, co-founded United EcoEnergy Advisors, LLC,
the investment advisor for the Company, in which he holds a one-
third interest, and is a principal and founder of Enterprise
Partners, LLC, the majority common stockholder and the sole
owner of the Series A Convertible Preferred Stock of the
Company. Prior to founding Enterprise Partners, LLC, he had 17
years of experience in the financial markets as a top retail
producer specializing in Public Venture Capital. In 1998 Mr.
Mayblum left his position as Branch Manager of HJ Meyers in NY
to become a Managing Director of The May Davis Group,
specializing in PIPES (Private Investments in Public Equity). In
2002, Mr. Mayblum took a position as the Managing Director of
the Private Equities Group of Joseph Stevens & Company where he
successfully completed numerous financings and advised many
companies on changes in the regulatory environment and the
impact those changes have on their ability to raise capital in
the public and private markets. He graduated from Emory
University in 1987 with a BBA in Management.
Alec Hoke is a senior vice president of Summit Brokerage
Services in Boca Raton, Florida. Prior to that he was a senior
vice president at First Union Securities until it merged with
Wachovia Securities. He has extensive experience in venture
capital as well as specialized industry analysis. Alec expanded
his knowledge into stock market related work with several
venture capital and investment banking firms, specializing in
start-up financing. Mr. Hoke started his investment career with
Massachusetts Mutual Life Insurance Company where he developed
skills in estate planning and needs analysis to manage risk.
He is a native of Princeton, New Jersey. He attended Rutgers
University on a football scholarship, where he was an All-
American linebacker and earned his degree in Management.
William L. Sklar has served as a consultant with Willmar
Management Corp. since 1988. Since September 2004 Mr. Sklar has
been the President and a Director of PaperFree Medical
Solutions, Inc., a company trading on the OTC BB. He has also
served as a Director of Pathogenics, Inc., a public company
since January 2005. Since October 26, 2005 Mr. Sklar has been a
director of Radiate Research a public company. From July 1983 to
October 1988 Mr. Sklar was the owner of Western Bag & Burlap a
textile manufacturer. Mr. Sklar, aged 58, holds a Bachelor of
Commerce from the University of Toronto.
John Paul DeVito is currently Director of Business Development
for Bon-Trade Solutions, Inc., and has worked in the securities
and investment banking industry for thirty years. He has served
as COO of May Davis Group, Inc.; CEO of EastBrokers
International, Inc., a broker Dealer specializing in emerging
markets in Central and Eastern Europe; and Vice President of JB
Oxford & Company, Inc. He has also worked with PaineWebber
Incorporated and Smith Barney Harris Upham & Co. He holds a BA
in Psychology from New York University and a Diploma in
Financial Planning, also from New York University. He currently
holds Series 4, 7, 24, 27, 54, 55, 63 and 65 licenses from the
NASD, Inc.
Robert Hipple will serve as Chief Financial Officer of the
Company on a consulting basis through CF Consulting, LLC. Mr.
Hipple is an attorney, law professor and senior executive with
35 years experience as president and chief executive officer,
chief financial officer and general counsel, as well as a
director, for several public (NYSE, AMEX and NASDAQ) companies.
He also has extensive experience with public mergers,
acquisitions and capital raising, along with personal relations
with investment banks, broker/dealers, and market makers, and
has taught both taxation and federal securities law at
Georgetown University Law School, Emory University Law School,
the University of San Diego School of Law and Florida A&M
University College of Law. Mr. Hipple also has been President
of iTrustFinancial, Inc., a Florida based business consulting
company since June, 2003, was President and CEO of iWorld
Projects & Systems, Inc., a publicly traded business development
company, was President and CEO of International Trust &
Financial Systems, Inc., a publicly traded financial services
company in 2002 and 2003 and was Senior Vice President and
General Counsel of Enesco, Inc., a New York Stock Exchange
listed company based in the Chicago area from August 1999 to
April 2001. Mr. Hipple also serves as contract Chief Financial
Officer for Neptune Industries, Inc., an OTC BB traded (NPDI)
company in the aquaculture business based in Boca Raton,
Florida.
Certain Relationships and Related Transactions.
During the last two fiscal years there have not been any
relationships, transactions, or proposed transactions to which
the Company was or is to be a party, in which any of the
directors, officers, or 5% or greater shareholders (or any
immediate family thereof) had or is to have a direct or indirect
material interest, other than as set forth below.
(a) During 2004 and 2005, the Company used the offices of
its former CEO, Stephen M. Seidow, as its principal offices on a
rent free basis. In addition, Mr. Seidow advanced funds to the
Company on a loan basis to pay for audit expenses and other
operating expenses, which advances were reflected as liabilities
of the Company on its financial statements through December 31,
2005. All of the amounts advanced by Mr. Seidow have been paid
during the First Quarter of 2006.
(b) In February 2006, the Company approved a sub-lease of
office space with CF Consulting LLC, which our CFO, Robert
Hipple, also serves as a managing member. The lease space
serves as the principal offices of the Company and the monthly
sub-lease amount of $450 includes office space, telephone,
facsimile, utilities and Internet access for the Company. The
Company also has entered into a consulting agreement with CF
Consulting LLC to provide CFO and General Counsel services to
the Company.
(c) In February 2006, the Board of Directors authorized
the issuance of 1,000,000 shares of Series A Convertible
Preferred Stock to our majority shareholder, Enterprise
Partners, LLC, In return for an advance of $60,000 to the
Company to pay existing liabilities to our former CEO, Stephen
Seidow, and for operating capital.
The Series A Convertible Preferred Stock issued to Enterprise
Partners, LLC is $0.001 par value stock, which may be converted
into common stock based on a formula under which conversion is
equal to 1 divided by the 30 day trailing average stock price of
the common shares at the time of the conversion election, but
not more than 15 common shares for each preferred share
converted. No conversion may occur until after one year from
the date of issue. The Company may redeem the Series A
Convertible Preferred Stock in whole or in part beginning 181
days after issue at $0.75 per share, and after 365 days from
issue at $0.95 per share. The Series A Convertible Preferred
Stock automatically converts into common stock following the
second anniversary of issue, at the formula price if not
redeemed prior to that date. A copy of the Statement of
Designation for the Series A Convertible Preferred Stock is
attached our Annual Report on Form 10-K for 2005 as Exhibit 9.2.
It is proposed that this Statement of Designation be amended in
several respects, and the amendments will be submitted to the
shareholders for approval at the Annual Meeting. A copy of the
Amended Statement of Designation for the Series A Convertible
Preferred Stock is attached to this Proxy as Attachment A.
Our Director, Adam Mayblum, is a fifty percent member of
Enterprise Partners, LLC and therefore did not participate in
the decision to issue the Series A Convertible Preferred Stock
to Enterprise Partners, LLC or in the decision to amend the
Certificate of Designation for the Series A Convertible
Preferred.
For each of the transactions noted above, the transaction
was negotiated, on the part of the Company, on the basis of what
is in the best interests of the Company and its shareholders. In
addition, in each case, the full board of directors made the
determination that the terms in each case were as favorable as
could have been obtained from non-affiliated parties.
Certain of our directors are engaged in other businesses,
either individually or through corporations in which they have
an interest, hold an office, or serve on a board of directors.
As a result, certain conflicts of interest may arise between the
Company and such directors. The Company will attempt to resolve
such conflicts of interest in our favor.
Compliance with Section 16(a) of the Securities Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934
requires executive officers and directors, and persons who
beneficially own more than 10% of any class of our equity
securities to file initial reports of ownership and reports of
changes in ownership with the SEC. Executive officers,
directors and beneficial owners of more than 10% of any class of
our equity securities are required by SEC regulations to furnish
us with copies of all Section 16(a) forms they file.
Based solely upon a review of Forms 3 and 4 and amendments
thereto furnished to us under Rule 16a-3(d), and certain written
representations from executive officers and directors, the
Company is not aware of any of the required reports that have
not been timely filed, except reports for the prior ownership of
our former CEO, Stephen M. Seidow during 2004 and 2005. Mr.
Seidow is no longer a shareholder of the Company, having sold
his entire interest in the Company in February 2006.
Code of Ethics.
The Company has adopted a code of ethics that applies to
its board of directors, principal executive officer, principal
financial officer, principal accounting officer or controller,
or persons performing similar functions. The code of ethics in
general prohibits any officer, director or advisory person of
the Company from acquiring any interest in any security which
the Company (i) is considering a purchase or sale thereof, (ii)
is being purchased or sold by the Company, or (iii) is being
sold short by the Company. These persons are required to advise
us in writing of his or her acquisition or sale of any such
security.
Committees of the Board of Directors.
(a) Audit Committee.
The Audit Committee of the Company consists of Messrs.
Hoke, Sklar, and DeVito, all being independent directors. The
Audit Committee has adopted a written charter (a copy of which
is attached to this proxy statement). Mr. Sklar has been
designated the financial expert on our Audit Committee in
compliance with Item 401(e) of Regulation S-B. The Company has
had one meeting of this committee since its appointment in
February 2006, at which the Audit Committee appointed Berman
Hopkins Wright & LaHam CPAs, LLP as the independent auditors for
the Company for the fiscal year beginning January 1, 2006..
The primary responsibility of the Audit Committee is to
oversee our financial reporting process on behalf of our board
of directors and report the result of their activities to the
board. Such responsibilities include, but are limited to, the
selection, and if necessary the replacement, of our independent
auditors, review and discuss with such independent auditors (i)
the overall scope and plans for the audit, (ii) the adequacy and
effectiveness of the accounting and financial controls,
including our system to monitor and manage business risks, and
legal and ethical programs, and (iii) the results of the annual
audit, including the financial statements to be included in our
annual report on Form 10-K.
The Company policy is to pre-approve all audit and
permissible non-audit services provided by the independent
auditors. These services may include audit services, audit-
related services, tax services and other services. Pre-approval
is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent
auditors and management are required to periodically report to
the audit committee regarding the extent of services provided by
the independent auditors in accordance with this pre-approval,
and the fees for the services performed to date. The audit
committee may also pre-approve particular services on a case-by-
case basis.
The Audit Committee approved the appointment of Berman Hopkins
Wright & LaHam CPAs, LLP as the auditors of the Company for the
fiscal year beginning January 1, 2006.
(b) Governance and Nominating Committee.
The members of our Governance and Nominating Committee are
Messrs. Hoke, Sklar, and DeVito, all independent directors. The
Governance and Nominating Committee has responsibility to
provide guidance and direction regarding the governance and
operation of the Company and assistance to the board of
directors in fulfilling the board of directors responsibilities
relating to good governance and management. The Committee is
also charged with the duty to: (a) actively seek individuals
qualified to become members of the board of directors; (b) from
time to time recommend individuals for appointment as directors
by the board of directors; (c) set the number of directors that
shall constitute the whole board of directors; (d) nominate
directors for approval by stockholders at an annual meeting of
stockholders or special meeting of stockholders; (e) recommend
to the full board of directors the establishment, charter and
membership of the various committees of the board of directors;
(f) annually evaluate the performance and function of this g
Committee; (g) acting with sole authority, retain and terminate
any consulting or search firm to be used to identify director
candidates, including the sole authority to approve the firms
fees and other retention terms; and (h) annually, review and
update its own charter for consideration by the board of
directors. The Company had no meetings of this committee in
2005 as the Committee was first appointed in February 2006.
There are no specific, minimum qualifications that must be
met by a Governance and Nominating Committee recommended nominee
for a position on our board of directors. In addition, there
are no specific qualities or skills that the Nominating
Committee believes are necessary for one or more of our
directors to possess.
The Governance and Nominating Committee does not have any
policy with regard to the consideration of any director
candidates recommended by security holders. Our board of
directors feels that it is appropriate for the Company not to
have such a policy since the Company will consider director
candidates recommended by security holders anyway and will treat
them the same as other recommendations for the board. Security
holders wishing to submit such recommendation must put them in
writing, addressed to our Secretary, Robert Hipple.
The process of the Governance and Nominating Committee for
identifying and evaluating nominees for director, including any
recommended by security holders, involves reviewing
recommendations among the members and interviewing certain
prospective candidates. There are no differences between in the
manner in which the committee evaluates nominees based on
whether it is recommended by security holders or not.
The current nominees for director were recommended by the
Governance and Nominating Committee.
(c) Compensation Committee.
The Compensation Committee consists of Messrs. Hoke,
Sklar, and DeVito, all independent directors. The Compensation
Committee has responsibility with respect to reviewing and
overseeing our compensation to directors and officers of the
Company, including the issuance of any stock to these
individuals, reports the results of its activities to the full
board of directors. The Company had no meetings of this
committee in 2005 as the Committee was not appointed until
February 2006.
(d) Investment Committee.
The members of the Investment Committee are Messrs.
Mayblum, Hoke and DeVito, a majority being independent directors
of the Company. The Investment Committee has responsibility
with respect to reviewing and overseeing our contemplated
investments and portfolio companies and investments on behalf of
the Board and reports the results of its activities to the full
board of directors. Such Investment Committee has the ultimate
authority for and responsibility (i) to evaluate and recommend
investments, and (ii) review and discuss with management (a) the
performance of portfolio companies, (b) the diversity and risk
of our investment portfolio, and, where appropriate, make
recommendations respecting the role or addition of portfolio
investments and (c) all solicited and unsolicited offers to
purchase portfolio companies. The Company had no meetings of
this committee in 2005 as the Committee was not appointed until
February 2006.
Meetings of the Board of Directors.
During the fiscal year ended December 31, 2005, the total
number of meetings of the board of directors held was one, which
was held by unanimous written consent of our then sole director,
Stephen M. Siedow.
The Company does not yet have a policy with regard to board
members attendance at annual meetings, but this issue will be
addressed by the Governance and Nominating Committee during
2006. The Company did not have an annual meeting last year.
Communications to the Board of Directors.
Our board of directors does provide a process for security
holders to send communications to the board of directors.
Security holders can send communications to our Secretary,
Robert Hipple, at the Company address; such communications will
then be forwarded to the rest of the board of directors for
review and discussion.
VOTE REQUIRED:
The affirmative vote of a majority of the total voting
power of the issued and outstanding common stock is required to
elect each of the nominees for the Board of Directors.
Our board of directors recommends that you vote FOR the
election of each of the nominees for the Board of Directors.
Item 2: AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The board of directors has determined that it is
advisable to increase our authorized common stock and has
adopted, subject to stockholder approval, an amendment to our
articles of incorporation to increase our authorized number of
shares of common stock from 50,000,000 shares to 150,000,000
shares par value $0.001 per share. A copy of the proposed
resolution amending our articles of incorporation is contained in
Attachment B to this proxy statement.
Authorizing an additional 100,000,000 shares of common
stock would give our board of directors the express authority,
without further action of the stockholders, to issue common
stock from time to time as the board deems necessary. The board
of directors believes it is necessary to have the ability to
issue such additional shares of common stock for general
corporate purposes. Potential uses of the additional authorized
shares may include equity financings, issuance of options,
acquisition transactions, stock dividends or distributions,
without further action by the stockholders, unless such action
were specifically required by applicable law or rules of any
stock exchange or similar system on which our securities may
then be listed.
The following is a summary of the material matters relating
to our common stock.
Presently, the holders of our common stock are entitled to
one vote for each share held of record on all matters
submitted to a vote of our stockholders, including the
election of directors. Our common stockholders do not have
cumulative voting rights. Subject to preferences that may be
applicable to any then outstanding series of our preferred
stock, holders of our common stock are entitled to receive
ratably such dividends, if any, as may be declared by our board
of directors out of legally available funds. In the event of
the liquidation, dissolution, or winding up of the Company, the
holders of our common stock will be entitled to share ratably in
the net assets legally available for distribution to our
stockholders after the payment of all our debts and other
liabilities, subject to the prior rights of any series of our
preferred stock then outstanding.
The holders of our common stock have no preemptive or
conversion rights or other subscription rights and there are no
redemption or sinking fund provisions applicable to our common
stock. The amendment would not alter or modify any preemptive
right of holders of our common stock to acquire our shares,
which is denied, or effect any change in our common stock, other
than the number of authorized shares.
The issuance of additional shares to certain persons allied
with our management could have the effect of making it more
difficult to remove our current management by diluting the stock
ownership or voting rights of persons seeking to cause such
removal. In addition, an issuance of additional shares by us
could have an effect on the potential realizable value of a
stockholders investment.
In the absence of a proportionate increase in our earnings
and book value, an increase in the aggregate number of our
outstanding shares caused by the issuance of additional shares
will dilute the earnings per share and book value per share of
all outstanding shares of our common stock. If such factors
were reflected in the price per share of common stock, the
potential realizable value of a stockholders investment could be
adversely affected.
The additional common stock to be authorized by adoption of
the amendment would have rights identical to our currently
outstanding common stock. Adoption of the proposed amendment
and issuance of the common stock would not affect the rights of
the holders of our currently outstanding common stock, except
for effects incidental to increasing the number of outstanding
shares of our common stock, such as dilution of the earnings per
share and voting rights of current holders of common stock. If
the amendment is adopted, it will become effective upon filing
of a certificate of amendment of our articles of incorporation
with the Secretary of State of Nevada.
Issuance of additional shares. As of the date of this
proxy statement, our board has no plans to issue or use any of
our newly authorized shares of common stock. The increase in
the number of our authorized common shares is proposed by our
management in order to ensure sufficient reserves of our common
stock for various capital purposes and to eliminate the need for
similar amendments in the near future, which could be costly and
time-consuming.
The proposal with respect to our common stock is not being
made by us in response to any known accumulation of shares or
threatened takeover.
VOTE REQUIRED:
The affirmative vote of a majority of the total voting
power of the issued and outstanding common stock is required to
approve the amendment to our articles of incorporation
increasing the number of our common shares.
Our board of directors recommends that you vote FOR the
amendment of our articles of incorporation to increase the
number of our authorized common shares as described in
Attachment B hereto.
Item 3: APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Comiskey & Company, PC of Denver, Colorado, issued the
report for our audited financial statements for the fiscal years
ended December 31, 2005 and December 31, 2004. Comiskey &
Company, PC declined to stand for re-appointment as our auditors
for the fiscal year ended December 31, 2006 as a result of our
election to be treated as a Business Development Company made in
February 2006, because it did not have experience as auditor for
a BDC. There were no disputes over accounting policy, procedure
or disclosure with Comiskey & Company, PC.
The Audit Committee has appointed Berman Hopkins Wright &
LaHam CPAs, LLP of Winter Park, Florida and Merritt Island,
Florida, as our independent auditors for the year 2006.
Audit Fees.
The aggregate fees billed for each of the last two fiscal
years for professional services rendered by Comiskey & Company,
PC for the audit of our annual financial statements, and review
of financial statements included in our Form 10-QSBs and our
Form 10-K for 2005 were: 2004: $2,050; and 2005: $2,050.
Audit-Related Fees.
The aggregate fees billed in each of the last two fiscal
years for assurance and related services by Comiskey & Company,
PC that are reasonably related to the performance of the audit
or review of our financial statements and are not reported under
Audit Fees above: $0.
Tax Fees.
The aggregate fees billed in each of the last two fiscal years
for professional services rendered by Comiskey & Company, PC for
tax compliance, tax advice, and tax planning: 2005: $0; and 2004:
$0.
All Other Fees.
The aggregate fees billed in each of the last two fiscal
years for products and services provided by Comiskey & Company,
PC, other than the services reported above: $0.
Our Audit Committee has already appointed Berman Hopkins
Wright & LaHam CPAs, LLP as the independent registered
accounting firm for the fiscal year that commenced on January 1,
2006. The board of directors of the Company recommends a vote
FOR a ratification of the decision to retain Berman Hopkins
Wright & LaHam CPAs, LLP for the fiscal year then commenced.
The Company had no prior relationship with Berman Hopkins
Wright & LaHam CPAs, LLP, and no audit-related fees, tax fees or
other fees were billed to the Company by Berman Hopkins Wright &
LaHam CPAs, LLP for any prior period.
Representatives of Comiskey & Company, PC are not expected
to be present at the annual meeting. This firm will have the
opportunity to make a statement if they desire to do so.
Representatives of this firm are not expected to be available to
respond to appropriate questions.
Representatives of Berman Hopkins Wright & LaHam CPAs, LLP,
are not expected to be present at the annual meeting. This firm
will have the opportunity to make a statement if they desire to
do so.
VOTE REQUIRED
The affirmative vote of a majority of the total voting
power of the issued and outstanding common stock is required to
ratify the appointment of Berman Hopkins Wright & LaHam CPAs,
LLP by the independent Audit Committee of the Company as the
independent auditor of the Company for 2006.
The Board of Directors recommends that you vote FOR the
ratification of Berman Hopkins Wright & LaHam CPAs, LLP as the
independent auditors for the Company
Item 4: RATIFICATION OF INVESTMENT ADVISOR AGREEMENT
On February 19, 2006, the Board of Directors approved the
appointment of United EcoEnergy Advisors, LLC as the investment
advisors for the Company, pursuant to an Investment Advisory and
Management Agreement. The appointment of United EcoEnergy
Advisors, LLC and the approval of the terms of the Investment
Advisory and Management Agreement, as amended (the Agreement)
were adopted by a majority of the Board of Directors, with Adam
Mayblum and William K. Mackey abstaining from the discussion and
vote. Mr. Mayblum and Mr. Mackey are each one-third owners of
United EcoEnergy Advisors, LLC (the Advisor). The Investment
Advisory Agreement will be amended as noted below and the
amended agreement will become effective on its approval by the
shareholders. A copy of the Amended Investment Advisory and
Management Agreement is attached to this Proxy as Appendix C.
Under the terms of the Agreement, the Advisor will provide
investment advice and assistance to the Company with respect to
locating, reviewing and investing in suitable portfolio
investments by the Company recommended by the Investment
Committee and will assist the Investment Committee in
determining the value of its portfolio investments from time to
time as required for reporting purposes.
The Company has agreed to pay, and the Advisor has agreed
to accept, as compensation for the services to be provided by
the Advisor, a base management fee (Base Management Fee) and
an incentive fee (Incentive Fee).
(a) Base Management Fee.
(i) For services rendered during the period from the
effective date of the election under Section 54(a) of the
Investment Company Act (the Effective Date) through the end
of the reported second full fiscal quarter of the Company
thereafter, the Base Management Fee is payable monthly in
advance, and is calculated at an annual rate of 2.00% of the
value of the total assets of the Company, less the cash proceeds
and cash equivalent investments from equity investors that are
not invested in debt or equity securities of portfolio companies
in accordance with the investment objectives of the Company (the
Gross Invested Assets), valued as of the end of each preceding
month during the period.
(ii) For services rendered after the end of the
reported second full fiscal quarter of the Company following the
Effective Date, the Base Management Fee is payable quarterly in
arrears, and is calculated at an annual rate of 2.00% of the
average value of the total assets of the Company, including
investments made with proceeds of borrowings, less any
uninvested cash or cash equivalents resulting from borrowings
(the Gross Assets), valued as of the end of the two most
recently completed calendar quarters, and appropriately adjusted
for any share issuances or repurchases during the current
calendar quarter.
(iii) Base Management Fees payable for any partial
month or quarter will be appropriately prorated.
(iv) Notwithstanding the foregoing, under the
original agreement, the Base Management Fee will not be lower
than $25,000 per month for the first two years of the term of
the Agreement. The Company and the Investment Advisor have
agreed to amend the original agreement to remove this minimum
payment provision and the Amended Agreement does not contain
this minimum monthly payment amount. A copy of the Amended
Investment Advisory and Management Agreement is attached to this
Proxy as Appendix C.
(b) The Incentive Fee consists of two parts, as follows:
(i) One part will be calculated and payable quarterly
in arrears based on the pre-Incentive Fee net investment income
for the immediately preceding calendar quarter. For this
purpose, pre-Incentive Fee net investment income means interest
income, dividend income and any other income (including any
other fees, such as commitment, origination, structuring,
diligence, consulting fees that the Corporation receives from
portfolio companies, but excluding fees for providing managerial
assistance) accrued by the Company during the calendar quarter,
minus the operating expenses of the Company for the quarter
(including the Base Management Fee, and any interest expense and
dividends paid on any issued and outstanding preferred stock,
but excluding the Incentive Fee). Pre-Incentive Fee net
investment income includes, in the case of investments with a
deferred interest feature (such as original issue discount, debt
instruments with payment-in-kind interest and zero coupon
securities), accrued income that the Company has not yet
received in cash and includes the proportionate share of the
portfolio companies net income allocable to equity holdings that
has not been distributed as dividends. Pre-Incentive Fee net
investment income does not include any realized capital gains,
realized capital losses or unrealized capital appreciation or
depreciation. Pre-Incentive Fee net investment income, expressed
as a rate of return on the value of the Corporations net assets
at the end of the immediately preceding calendar quarter, will
be compared to a hurdle rate of 1.75% per quarter (7%
annualized). The Company will pay the Adviser an Incentive Fee
with respect to the pre-Incentive Fee net investment income in
each calendar quarter as follows: (1) no Incentive Fee in any
calendar quarter in which the pre-Incentive Fee net investment
income does not exceed the hurdle rate; (2) 100% of the pre-
Incentive Fee net investment income with respect to that portion
of such pre-Incentive Fee net investment income, if any, that
exceeds the hurdle rate but is less than 2.1875% in any calendar
quarter (8.75% annualized); and (3) 20% of the amount of the
pre-Incentive Fee net investment income, if any, that exceeds
2.1875% in any calendar quarter (8.75% annualized). These
calculations will be appropriately pro rated for any period of
less than three months and adjusted for any share issuances or
repurchases during the current quarter.
(ii) The second part of the Incentive Fee (the
Capital Gains Fee) will be determined and payable in arrears
as of the end of each fiscal year (or upon termination of this
Agreement as set forth below), commencing on March 31, 2009, and
will equal 20.0% of the realized capital gains of the Company
for the 2008 calendar year, if any, computed net of all realized
capital losses and unrealized capital depreciation at the end of
such year; provided that the Capital Gains Fee determined as of
March 31, 2009 will be calculated for a period of shorter than
twelve calendar months to take into account any net realized
capital gains, if any, computed net of all realized capital
losses and unrealized capital depreciation for the period ending
March 31, 2009. The amount of capital gains used to determine
the Capital Gains Fee shall be calculated at the end of each
applicable year by subtracting the sum of the Cumulative
Aggregate Realized Capital Losses and Aggregate Unrealized
Capital Depreciation of the Company from the Cumulative
Aggregate Realized Capital Gains. If this number is positive at
the end of such year, then the Capital Gains Fee for such year
is equal to 20.0% of such amount, less the aggregate amount of
any Capital Gains Fees paid in all prior years. In the event
that the Agreement terminates as of a date that is not a
calendar year end, the termination date is treated as though it
were a calendar year end for purposes of calculating and paying
a Capital Gains Fee.
A copy of the Amended Investment Advisor Agreement with
United EcoEnergy Advisors LLC is attached to this Proxy
Statement as Appendix C
VOTE REQUIRED:
The affirmative vote of a majority of the total voting
power of the issued and outstanding common stock is required to
ratify the appointment of United EcoEnergy Advisors, LLC as the
investment advisor of the Company and to approve the Amended
Investment Advisory and Management Agreement. However, the Board
of Directors has determined that a majority of the common
shareholders other than the shares held by Enterprise Partners,
LLC must be voted in favor of the Amended Investment Advisory
and Management Agreement, because the principal owners of
Enterprise Partners, LLC, our majority common shareholders, are
also the owners of the investment advisor.
The Board of Directors recommends that you vote FOR the
ratification of the appointment of United EcoEnergy Advisors,
LLC as the investment advisor for the Company and the Amended
Investment Advisory and Management Agreement.
Item 5: AMENDEMENT OF CERTIFICATE OF DESIGNATION OF SERIES A
CONVERTIBLE PREFERRED STOCK
The Board of Directors of the Company previously approved
the filing of a Certificate of Designations for the Series A
Convertible Preferred Stock, and this decision was ratified by
unanimous written consent of our common stockholders in February
2006. A copy of the original Certificate of Designation of
Series A Convertible Preferred Stock, as filed with the State of
Nevada on February 27, 2006, was attached as an exhibit to our
Form 10-K for the calendar year 2005. The Board of Directors
has determined that the Certificate of Designation should be
amended in several respects to clarify the qualification of the
Series A Convertible Preferred Stock as a senior security for
purposes of the business development company rules under the
Investment Company Act of 1940. The proposed amendments are:
1. Section 4 of the existing Certificate of Designation has
been modified to provide that the Series A Convertible
Preferred will have a dividend preference equal to $0.001
per share over the common stock and thereafter will
receive the amount of dividend payable as if the
outstanding preferred stock had been converted to common
stock, and that this dividend must be paid before any
dividend is paid on the common stock. This will clarify
the status of the Series A Convertible Preferred as a
senior security under Section 18(g)of the Investment
Company Act of 1940.
2. Section 4 of the existing Certificate of Designation also
has been modified to provide that the Series A
Convertible Preferred will have a protective provision
prohibiting the declaration of a dividend on the common
stock, in the terms provided by Section 18(a)(2)(B) of
the Investment Company Act of 1940 to maintain the
required 200 percent asset coverage for the preferred
stock.
3. Section 5 of the existing Certificate of Designation has
been modified to provide that the Series A Convertible
Preferred Stock will have a liquidation preference over
the common stock equal to $0.01 per share of each
preferred share outstanding, and that, thereafter, the
preferred stock will share in any further liquidation
distribution on a par with the common stock, as if the
outstanding preferred stock has been converted to common
stock. This again will clarify the status of the Series
A Convertible Preferred as a senior security under
Section 18(g) of the Investment Company Act of 1940.
4. A provision has been added to the Certificate of
Designations entitling the holders of the Series A
Preferred Stock to elect two directors, voting as a
class, as provided in Section 18(a)(2)(C) of the
Investment Company Act of 1940.
VOTE REQUIRED
The affirmative vote of a majority of the total voting
power of the issued and outstanding common stock and a majority
of the total voting power of the outstanding Series A
Convertible Preferred Stock, voting as a class, is required to
approve the Amended Certificate of Designations for the Series A
Convertible Preferred Stock. However, since Enterprise Partners,
LLC is the sole holder of the Series A Convertible Preferred
Stock and has already consented in writing to the Amended
Certificate of Designations for the Series A Convertible
Preferred Stock, and Enterprise Partners, LLC also holds a
majority of the common stock of the Company outstanding, the
independent Board of Directors has determined that a majority of
the common shareholders of the Company other than Enterprise
Partners, LLC, must approve the Amended Certificate of
Designations for the Series A Convertible Preferred Stock, to
avoid the appearance of any conflict of interest.
The Board of Directors recommends that you vote FOR the
approval of the Amended Certificate of Designations for the
Series A Convertible Preferred Stock.
By order of the Board of Directors
June 9, 2006
/s/ Robert Hipple
Robert Hipple, Secretary
P R O X Y
United EcoEnergy Corp.
Annual Meeting of Shareholders To Be Held June __, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Robert Hipple as proxy of the
undersigned, with full power of substitution, and hereby
authorizes him to represent and to vote at the Annual Meeting of
Shareholders of iWorld Projects & Systems (Company) to be held
on June __, 2006, as designated below, all of the common stock
of the Company held of record by the undersigned on June 15,
2006, at 409 Brevard Avenue, Cocoa, Florida 32922 at 10:00 a.m.
(EDT), for matters that properly may come before the meeting or
any adjournment thereof.
1. ELECTION OF DIRECTORS (check one):
FOR AGAINST WITHOLD AUTHORITY
William K. Mackey _______ _______ _______
Adam Mayblum _______ _______ _______
Alec Hoke _______ _______ _______
John Paul DeVito _______ _______ _______
William Sklar _______ _______ _______
2. TO APPROVE A RATIFICATION OF THE DECISION BY OUR AUDIT
COMMITTEE TO RETAIN BERMAN HOPKINS WRIGHT & LAHAM CPAs, LLP, AS
THE INDEPENDENT REGISTERED ACCOUNTING FIRM FOR THE COMPANY FOR
THE FISCAL YEAR THAT COMMENCED ON JANUARY 1, 2006 (circle one):
FOR AGAINST
ABSTAIN
3. TO APPROVE THE AMENDMEENT OF OUR ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHROIZED COMMON SHARES FROM
50,000,000 TO 150,000,000 (Circle One):
FOR AGAINST ABSTAIN
4. TO RATIFY THE DECISION OF OUR BOARD OF DIRECTORS TO RETAIN
UNITED ECOENERGY ADVISORS, LLP AS OUR INVESTMENT ADVISOR AND TO
APPROVE THE AMENDED INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
(Circle One):
FOR AGAINST ABSTAIN
5. TO APPROVE THE AMENDED CERTIFICATE OF DESIGNATION FOR THE
SERIES A CONVERTIBLE PREFERRED STOCK.
FOR AGAINST ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS
GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH
ABOVE. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Shareholders of the Company to be
held on June __, 2006 and the Proxy Statement of such meeting.
Dated: ______________, 2006
__________________________________________________
(Signature of Shareholder)
Print Shareholder Name: __________________________
Note: Please sign exactly as name appears on stock certificate.
All joint owners should sign. When signing as personal
representative, executor, administrator, attorney, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporation name by president or other
authorized person. If a partnership, please sign in partnership
name by a partner.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY BY MAIL
USING THE ENCLOSED ENVELOPE OR FORWARD A SIGNED COPY BY
FACSIMILE TO THE COMPANY AT 321-433-1082, Attention, Robert
Hipple, Secretary.
ATTACHMENT A
AMENDED
CERTIFICATE OF DESIGNATION
of
SERIES A CONVERTIBLE PREFERRED STOCK
of
UNITED ECOENERGY CORP
Pursuant to Section 78.195 of the
Revised Statutes of the State of Nevada
UNITED ECOENERGY CORP., a corporation organized and existing under the
laws of the State of Nevada (the Corporation), does hereby certify that,
pursuant to the authority conferred on its board of directors (the Board of
Directors) by its articles of incorporation (the Articles of Incorporation),
as amended, and in accordance with Section 78.195 of the Revised Statutes of
the State of Nevada (NRS), the Board of Directors adopted the following
resolution amending the Certificate of Designations establishing a series of
1,000,000 shares of Preferred Stock of the Corporation designated as Series A
Convertible Preferred Stock and that a majority of the holders of the
outstanding Class A Convertible Preferred Stock and a majority of the
outstanding shares of common stock of the Corporation voted in favor of the
adoption of this Amended Certificate of Designation of Series A Convertible
Preferred Stock
RESOLVED, that pursuant to the authority conferred on the Board of
Directors of this Corporation (the Corporation) by the Articles of
Incorporation, and pursuant to the affirmative vote of a majority of the
holders of the Series A Convertible Preferred Stock and a majority of the
holders of the outstanding common stock of the Corporation, the Statement of
Preferences of the Series A Convertible Preferred Stock, $.001 par value, of
the Corporation be and hereby is amended, and that the designation and number
of shares thereof and the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series and the
qualifications, limitations and restrictions thereof are as follows:
ITEM 1. Series A Convertible Preferred Stock
1. Designation and Amount. There shall be a series of Preferred Stock
designated as Series A Convertible Preferred Stock, and the number of shares
constituting such series shall be 1,000,000. Such series is referred to
herein as the Convertible Preferred Stock.
2. Par Value. The par value of each share of Convertible Preferred
Stock shall be $.001.
3. Rank. The shares of Convertible Preferred Stock shall rank prior to
all of the Corporations Common Stock, par value $.001 per share (the Common
Stock), now or hereafter issued, both as to payment of dividends and as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary as provided herein.
Notwithstanding anything to the contrary in this Certificate, the Corporation
shall not declare a dividend (other than a dividend payable in common stock of
the Corporation) or a distribution of any other kind on the common stock of
the Corporation, and shall not purchase any of its common stock, unless the
Convertible Preferred Stock has, at the time of such a declaration of a
dividend or distribution, or at the time of any such purchase, an asset
coverage of at least 200 percent, as defined in Section 18 of the Investment
Company Act of 1940, as hereafter emended from time to time.
4. Dividends. If any dividend or other distribution payable in cash,
securities or other property, including a dividend payable in shares of Common
Stock, is declared on the Common Stock, each holder of shares of Convertible
Preferred Stock on the record date for such dividend or distribution shall
first be entitled to receive on the date of payment or distribution of such
dividend or other distribution an amount equal to $0.001 per share and
thereafter shall be entitled to receive the same cash, securities or other
property which such holder would have received on such record date if such
holder was the holder of record of the number (including any fraction) of
shares of Common Stock into which the shares of Convertible Preferred Stock
then held by such holder are then convertible. No dividend or other
distribution shall be declared or paid on the Common Stock unless the
preferred dividend or other distribution that satisfies this Section 4 is
first declared or paid on the Convertible Preferred Stock.
5. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution, or winding-up of the Corporation, after
distribution in full of the preferential amounts, if any, to be distributed
to the holders of shares of any series of preferred stock having a priority
on liquidation superior to that of the Convertible Preferred Stock, the
holders of shares of Convertible Preferred Stock shall first be entitled to
receive an amount equal to $0.01 per share and thereafter shall be entitled to
participate with the Common Stock in all of the remaining assets of the
Corporation available for distribution to its stockholders, ratably with the
holders of Common Stock in proportion to the number of shares of Common Stock
held by them, assuming for each holder of Convertible
Preferred Stock on the record date for such distribution that each holder was
the holder of record of the number (including any fraction) of shares of Common
Stock into which the shares of Convertible Preferred Stock then held by such
holder are then convertible. A liquidation, dissolution, or winding-up of the
Corporation, as such terms are used in this Section 5, shall not be deemed to
be occasioned by or to include any merger of the Corporation with or into one
or more corporations or other entities, any acquisition or exchange of the
outstanding shares of one or more classes or series of the Corporation, or any
sale, lease, exchange, or other disposition of all or a part of the assets of
the Corporation..
6. Voting Rights. Except as otherwise required by law, the shares of
Convertible Preferred Stock shall not entitle a holder thereof to vote on any
matter submitted to a vote of the stockholders of the Corporation except for
matters as to which the holders of the Convertible Preferred Stock shall vote
as a class, as provided in Paragraph 9(c) hereof, and except that the holders
of the Convertible Preferred Stock shall at all times vote as a class to elect
two (2) of the members of the Board of Directors of the Company at any annual
meeting of the shareholders of the Company or at any other meeting of the
shareholders at which the Board of Directors shall be elected by the
shareholders, and shall vote as a class to elect a majority of the Board of
Directors if at any time dividends on the Convertible Preferred Stock shall be
unpaid in an amount equal to two full years of dividends, and thereafter until
all dividends in arrears have been paid or otherwise provided for.
7. Redemption.
(a) The shares of Convertible Preferred Stock may be redeemed by the
Corporation at its election by notice to the holders of the Convertible
Preferred Stock at any time beginning 181 days after the issue of the
Convertible Preferred Stock.
(b) During the period beginning 181 days after the issue of the
Convertible Preferred Stock, the Convertible Preferred Stock may be redeemed
in whole or in part at a price equal to $0.75 per share of Convertible
Preferred Stock.
(c) During the period beginning 366 days after the issue of the
Convertible Preferred Stock, the Convertible Preferred Stock may be redeemed
in whole or in part at a price equal to $0.95 per share of Convertible
Preferred Stock.
(d) In the event that the Corporation elects to redeem all or part of
the Convertible Preferred Stock as provided herein, it shall give written
notice to the holders of the Convertible Preferred Stock it has elected to
redeem, at the addresses shown on the transfer records of the Corporation for
such holders, advising the holders of the election and requesting that the
stock certificates representing the Convertible Preferred Stock to be
redeemed be delivered to the transfer agent for the Corporation, within 30
days of the sending of the Notice of Redemption. The Corporation shall
deposit the funds necessary to cause the redemption, in an amount equal to
the redemption price times the number of shares to be redeemed, with the
transfer agent for the Corporation at the end of the said 30 day period for
delivery to the holders of the Convertible Preferred Stock to be redeemed by
the transfer agent immediately on receipt by the transfer agent of the
certificates for the shares of Convertible Preferred Stock being redeemed.
Deposit of the funds necessary to pay the redemption price in full shall be
deemed to result in the redemption and cancellation of the Convertible
Preferred Stock to be redeemed on the books of the Corporation, regardless of
when the redemption funds are transmitted to the holders by the transfer
agent, who shall be acting as the agent of the holders for purposes of
payment of the funds, and the holders of the Convertible Preferred Stock deemed
so to be redeemed shall have no further rights or claims as shareholders of the
Corporation, including the right to dividends, vote, participation or
conversion otherwise provided for herein.
8. Conversion Provisions.
(a) Conversion at Option of Holders. Provided that, and only to the
extent that, the Corporation has a sufficient number of shares of authorized,
but unissued and unreserved, Common Stock available to issue upon conversion,
each share of Convertible Preferred Stock not previously redeemed, shall be
convertible beginning after one year from the date of the initial issue of
the Convertible Preferred Stock and at any time thereafter, at the option of
the holder thereof, , into fully paid and nonassessable shares of Common
Stock and such other securities and property as hereinafter provided, at the
rate of the number of shares of Common Stock determined by the formula 1/P,
where P is the trailing 30-day volume weighted average trading price of the
Common Stock on such exchange or other trading medium on which the Common
Stock is then traded, for each full share of Convertible Preferred Stock.
For example, if the weighted average trading price of the Common Stock (P)
is $0.20 per share, then the ratio determined by the formula 1/P, would be
five (5) common shares for each full share of Convertible Preferred Stock.
For the purpose of this Certificate of Designation, the term Common
Stock shall initially mean the class designated as Common Stock, par value
$.001 per share, of the Corporation as of February 27, 2006, subject to
adjustment as hereinafter provided.
(b) Maximum Conversion Ratio. Notwithstanding the conversion ratio
determined by the formula contained in Paragraph 8(a), no share of Convertible
Preferred Stock may be converted into more than 15 shares of Common Stock; and
no share of Convertible Preferred Stock may be converted into common stock if
the result of the conversion would be to cause the issue of common shares at a
value less than the then net asset value per share of the common stock or
violates the asset coverage rules as determined under Section 18 of the
Investment Company Act of 1940.
(c) Mechanics of Conversion.
(i) Optional Conversion. Any holder of shares of Convertible
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates for such shares of Convertible
Preferred Stock at the office of the transfer agent for the Convertible
Preferred Stock, which certificate or certificates, if the Corporation shall
so require, shall be duly endorsed to the Corporation or in blank, or
accompanied by proper instruments of transfer to the Corporation or in blank,
accompanied by irrevocable written notice to the Corporation that the holder
elects so to convert such shares of Convertible Preferred Stock and
specifying the name or names (with address) in which a certificate or
certificates for Common Stock are to be issued.
No adjustments in respect of any dividend on the Common Stock issued
upon conversion shall be made upon the conversion of any shares of
Convertible Preferred Stock.
Any unpaid dividends on shares surrendered for conversion shall be
paid upon the conversion of any shares of Convertible Preferred Stock by
issuing additional shares of Common Stock with an aggregate value (as defined
below) equal to all accrued and unpaid dividends on the shares of Convertible
Preferred Stock converted.
The Corporation will, as soon as practicable after such deposit of
certificates for Convertible Preferred Stock accompanied by the written notice
and compliance with any other conditions herein contained, deliver at the
office of the transfer agent to the person for whose account such shares of
Convertible Preferred Stock were so surrendered, or to his nominee or
nominees, certificates for the number of full shares of Common Stock to which
he shall be entitled as aforesaid, together with a cash adjustment of any
fraction of a share as hereinafter provided. Subject to the following
provisions of this paragraph, such conversion shall be deemed to have been
made as of the date of such surrender of the shares of Convertible Preferred
Stock to be converted, and the person or person entitled to receive the Common
Stock deliverable upon conversion of such Convertible Preferred Stock shall be
treated for all purposes as the record holder or holders of such Common Stock
on such date; provided, however, that the Corporation shall not be required to
convert any shares of Convertible Preferred Stock while the stock transfer
books of the Corporation are closed for any purpose, but the surrender of
Convertible Preferred Stock for conversion during any period while such books
are so closed shall become effective for conversion immediately upon the
reopening of such books as if the surrender had been made on the date of such
reopening, and the conversion shall be at the conversion rate in effect on
such date.
(ii) Mandatory Conversion. Any Convertible Preferred Stock not
previously redeemed or converted as provided herein, shall convert to Common
Stock automatically after two years and one day from the date of issue of the
Convertible Preferred Stock, in accordance with the conversion formula
contained in Paragraph 8(a), as limited by Paragraph 8(b), and the Corporation
shall give direction to the transfer agent for the corporation to cancel the
remaining certificates on the books of the Corporation and to issue the
appropriate number of shares of Common Stock to the holders of the converted
Convertible Preferred Stock, in the names and at the addresses of the
holders of the redeemed Convertible Preferred Stock on the transfer records
of the Corporation.
(c) Changes in Conversion Rate. The Corporation from time to time may
increase the conversion rate by any amount for any period of time if the
period is at least 20 days and if the increase is irrevocable during the
period. Whenever the conversion rate is so increased, the Corporation shall
mail to holders of record of the Convertible Preferred Stock a notice of the
increase at least 15 days before the date the increased conversion rate
takes effect, and such notice shall state the increased conversion rate and
the period it will be in effect.
The Corporation may make such increases in the conversion rate, in
addition to those required or allowed by this Section 8, as shall be determined
by it, as evidenced by a resolution of the Board of Directors, to be advisable
in order to avoid or diminish any income tax to holders of Common Stock
resulting from any dividend or distribution of stock or issuance of rights or
warrants to purchase or subscribe for stock or from any event treated as
such for income tax purposes.
9. Protective Provisions.
(a) Reservation of Shares; Transfer Taxes; Etc. The Corporation shall
at all times serve and keep available, out of its authorized and unissued stock,
solely for the purpose of effecting the conversion of the Convertible Preferred
Stock, such number of shares of its Common Stock free of preemptive rights as
shall from time to time be sufficient to effect the conversion of all shares of
Convertible Preferred Stock from time to time outstanding. The Corporation
shall from time to time, in accordance with the laws of the State of Nevada,
increase the authorized number of shares of Common Stock if at any time the
number of shares of Common Stock not outstanding shall not be sufficient to
permit the conversion of all the then outstanding shares of Convertible
Preferred Stock.
If any shares of Common Stock required to be reserved for
purposes of conversion of the Convertible Preferred Stock hereunder require
registration with or approval of any governmental authority under any Federal
or State law before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible endeavor to
cause such shares to be duly registered or approved, as the case may be.
The Corporation will pay any and all issue or other taxes that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the Convertible Preferred Stock. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Stock (or other
securities or assets) in a name other than that which the shares of
Convertible Preferred Stock so converted were registered, and no such issue
or delivery shall be made unless and until the person requesting such issue
has paid to the Corporation the amount of such tax or has established, to
the satisfaction of the Corporation, that such tax has been paid.
(b) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in shares
of Common Stock or (B) a dividend payable in cash out of its retained
earnings other than any special or nonrecurring or other extraordinary dividend
or (2) declare or authorize a redemption or repurchase of in excess of 10% of
the than-outstanding shores of Common Stock; or
(ii) the Corporation shall authorize the granting to the holders
of Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights or warrants; or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value),
or of any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation shall be required, or
of the sale or transfer of all or substantially all of the assets of the
Corporation or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Convertible Preferred Stock, and shall cause to be mailed to the holders of
record of the Convertible Preferred Stock, at their last address as they shall
appear upon the stock transfer books of the Corporation, at least 15 days
prior to the applicable record date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption or granting of rights or warrants or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, redemption,
rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, share exchange, dissolution, liquidation or winding up (but
no failure to mail such notice or any defect therein or in the mailing thereof
shall affect the validity of the corporate action required to be specified in
such notice).
(b) Class Voting Rights. So long as the Convertible Preferred Stock is
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least a majority of all outstanding Convertible Preferred
Stock voting separately as a class, (i) Amend, alter or repeal (by merger
or otherwise) any provision of the Articles of Incorporation or the By-Laws of
the Corporation, as amended, so as adversely to affect the relative rights,
preferences, qualifications, limitations or restrictions of the Convertible
Preferred Stock, (ii) authorize or issue, or increase the authorized amount of,
any additional class or series of stock, or any security convertible into stock
of such class or series, ranking prior to the Convertible Preferred Stock in
respect of the payment of dividends or upon liquidation, dissolution or winding
up of the Corporation or (iii) effect any reclassification of the Convertible
Preferred Stock. A class vote on the part of the Convertible Preferred Stock
shall, without limitation, specifically not be deemed to be required (except
as otherwise required by law or resolution of the Corporations Board of
Directors) in connection with: (a) the authorization, issuance or increase in
the authorized amount of any shares of any other class or series of stock which
ranks junior to, or on a parity with, the Convertible Preferred Stock in
respect of the payment of dividends and distributions upon liquidation,
dissolution or winding up of the Corporation; or (b) the authorization,
issuance or increase in the amount of any bonds, mortgages, debentures or
other obligations of the Corporation.
The affirmative vote or consent of the holders of a majority of the
outstanding Convertible Preferred Stock, voting or consenting separately as
a class, shall be required to (a) authorize any sale, lease or conveyance of
all or substantially all of the assets of the Corporation, or (b) approve any
merger, consolidation or compulsory share exchange of the Corporation with or
into any other person unless (i) the terms of such merger, consolidation or
compulsory share exchange do not provide for a change in the terms of the
Convertible Preferred Stock and (ii) the Convertible Preferred Stock is,
after such merger, consolidation or compulsory share exchange on a parity
with or prior to any other class or series of capital stock authorized
by the surviving corporation as to dividends and upon liquidation,
dissolution or winding up other than any class or series of stock of the
Corporation prior to the Convertible Preferred Stock as may have been
created with the affirmative vote or consent of the holders of at least
66-2/3% of the Convertible Preferred Stock (or other than a class or series
into which such prior stock is converted as a result of such merger,
consolidation or share exchange).
10. Outstanding Shares. For purposes of this Certificate of
Designation, all shares of Convertible Preferred Stock shall be deemed
outstanding except (i) from the date of surrender of certificates
representing shares of Convertible Preferred Stock, all shares of
Convertible Preferred Stock converted into Common Stock;, and (ii) from
the date of registration of transfer, all shares of Convertible Preferred
Stock held of record by the Corporation or any subsidiary of the
Corporation.
11. Securities Not Registered Under the Securities Act of 1933.
Neither the shares of Convertible Preferred Stock nor the Common Stock
issuable upon conversion thereof has been registered under the Securities
Act of 1933 or the laws of any state of the United States and may not be
transferred without such registration or an exemption from registration.
(a) Restrictive Legends. Each share of Convertible Preferred Stock
and certificate for Common Stock issued upon the conversion of any shares of
Convertible Preferred Stock, and each preferred stock certificate issued upon
the transfer of any such shares of Convertible Preferred Stock or Common Stock
(except as otherwise permitted by this Section 11), shall be stamped or
otherwise imprinted with a legend in substantially the following form:
The securities represented hereby have not been registered under the
Securities Act of 1933. Such securities may not be sold or transferred in
the absence of such registration or an exemption therefrom under said Act.
(b) Notice of Proposed Transfer; Opinions of Counsel. Except as
provided in paragraph (c) of this Section 11, prior to any transfer of any
such shares of Convertible Preferred Stock, or Common Stock, the holder
thereof will give written notice to the Corporation of such holders
intention to effect such transfer and to comply in all other respects with
this Section 11. Each such notice (A) shall describe the manner and
circumstances of the proposed transfer in sufficient detail to enable
counsel to render the opinions referred to below, and (B) shall designate
counsel for the holder giving such notice (who may be house counsel for such
holder). The holder giving such notice will submit a copy thereof to the
counsel designated in such notice and the Corporation will promptly submit a
copy thereof to its counsel, and the following provisions shall apply:
(i) If in the opinion of each such counsel the proposed transfer of
such shares of Convertible Preferred Stock or Common Stock may be effected
without registration under the Act, the Corporation will promptly notify the
holder thereof and such holder shall thereupon be entitled to transfer such
shares of Convertible Preferred Stock or Common Stock in accordance with the
terms of the notice delivered by such holder to the Corporation. Each share
of Convertible Preferred Stock or certificate, if any, issued upon or in
connection with such transfer shall bear the appropriate restrictive legend
set forth in paragraph (a) of this Section 11, unless in the opinion of
each such counsel such legend is no longer required to insure compliance with
the Act. If for any reason counsel for the Corporation (after having been
furnished with the information required to be furnished by this paragraph (b))
shall fail to deliver an opinion of the Corporation, or the Corporation shall
fail to notify such holder thereof as aforesaid, within 20 days after counsel
for such holder shall have delivered its opinion to such holder (with a copy
to the Corporation), then for all purposes of this Certificate of Designation
the opinion of counsel for the Corporation shall be deemed to be the same as
the opinion of counsel for such holder.
(ii) If in the opinion of either or both of such counsel the proposed
transfer of such shares of Convertible Preferred Stock or Common Stock may not
be effected without registration under the Act, the Corporation will promptly
so notify the holder thereof and thereafter such holder shall not be entitled
to transfer such share of Convertible Preferred Stock or Common Stock until
receipt of a further notice from the Corporation under subparagraph (i) above
or, in the case of Common Stock, until registration of such Common stock under
the Act has become effective.
12. Preemptive Rights. The Convertible Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any
securities of the Corporation.
13. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or
otherwise adversely affecting the remaining provisions hereof. If a
court of competent jurisdiction should determine that a provision hereof
would be valid or enforceable if a period of time were extended or
shortened or a particular percentage were increased or decreased, then
such court may make such change as shall be necessary to render the provision
in question effective and valid under applicable law.
IN WITNESS WHEREOF, United EcoEnergy Corp.. has caused this
certificate to be signed by its President, and its corporate seal to be
hereunto affixed and attested by its Secretary, as of the ___ day of
June, 2006.
United EcoEnergy Corp.
By:
William K. Mackey, President
Attest:
By:
Robert Hipple, Secretary
ACKNOWLEDGMENT
State of Florida
County of _________
This instrument was acknowledged before me on June ___, 2006 by William
Mackey as President of United EcoEnergy Corp.
____________________________
Signature of notarial officer
My commission expires ______________(Seal)
ATTACHMENT B
RESOLUTIONS TO BE ADOPTED BY THE
STOCKHOLDERS OF
UNITED ECOENERGY CORP.
(the "Company")
RESOLVED, that an amendment to the Articles of
Incorporation increasing the number of authorized shares of
common stock to 150,000,000 shares is hereby adopted and
approved in all respects; and
RESOLVED FURTHER, that the officers of the Company be,
and each of them hereby is, authorized, empowered and directed,
for and on behalf of the Company, to take any and all actions,
to perform all such acts and things, to execute, file, deliver
or record in the name and on behalf of the Company, all such
instruments, agreements, or other documents, and to make all
such payments as they, in their judgment, or in the judgment of
any one or more of them, may deem necessary, advisable or
appropriate in order to carry out the transactions
contemplated by the foregoing resolution.
ATTACHMENT C
AMENDED
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
BETWEEN
UNITED ECOENERGY CORPORATION
AND
UNITED ECOENERGY ADVISORS, LLC
AGREEMENT made this ____ day of June, 2006, by and between
UNITED ECOENERGY CORPORATION, a Delaware corporation (the
Corporation), and UNITED ECOENERGY ADVISORS, LLC a Delaware limited
liability company (the Adviser).
WHEREAS, the Corporation is a newly organized closed-end
management investment company that has elected to be treated as
a business development company under the Investment Company Act
of 1940 (the Investment Company Act);
WHEREAS, the Adviser is an investment adviser that has
registered under the Investment Advisers Act of 1940 (the
Advisers Act); and
WHEREAS, the Corporation desires to retain the Adviser to
furnish investment advisory services to the Corporation on the
terms and conditions hereinafter set forth, and the Adviser
wishes to be retained to provide such services.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the parties hereby agree as
follows:
1. DUTIES OF THE ADVISER.
(a) The Corporation hereby employs the Adviser to act as
the investment adviser to the Corporation and to manage the
investment and reinvestment of the assets of the Corporation,
subject to the supervision of the Board of Directors of the
Corporation, for the period and upon the terms herein set forth,
(i) in accordance with the investment objective, policies and
restrictions established by the Board of the Corporation and its
Investment Committee, as the same shall be amended from time to
time (as amended, the Investment Policies), (ii) in accordance
with the Investment Company Act and (iii) during the term of
this Agreement in accordance with all other applicable federal
and state laws, rules and regulations, and the Corporations
charter and by-laws. Without limiting the generality of the
foregoing, the Adviser shall, during the term and subject to the
provisions of this Agreement, (i) determine the composition of
the portfolio of the Corporation, the nature and timing of the
changes therein and the manner of implementing such changes;
(ii) identify, evaluate and negotiate the structure of the
investments made by the Corporation; (iii) close and monitor the
Corporations investments; (iv) determine the securities and
other assets that the Corporation will purchase, retain, or
sell; (v) perform due diligence on prospective portfolio
companies; and (vi) provide the Corporation with such other
investment advisory, research and related services as the
Corporation may, from time to time, reasonably require for the
investment of its funds. The Adviser shall have the discretion,
power and authority on behalf of the Corporation to effectuate
its investment decisions for the Corporation, including the
execution and delivery of all documents relating to the
Corporations investments and the placing of orders for other
purchase or sale transactions on behalf of the Corporation. In
the event that the Corporation determines to acquire debt
financing, the Adviser will arrange for such financing on the
Corporations behalf, subject to the oversight and approval of
the Corporations Board of Directors. If it is necessary for the
Adviser to make investments on behalf of the Corporation through
a special purpose vehicle, the Adviser shall have authority to
create or arrange for the creation of such special purpose
vehicle and to make such investments through such special
purpose vehicle in accordance with the Investment Company Act.
(b) The Adviser hereby accepts such employment and agrees
during the term hereof to render the services described herein
for the compensation provided herein.
(c) Subject to the requirements of the Investment Company
Act, the Adviser is hereby authorized to enter into one or more
sub-advisory agreements with other investment advisers (each, a
Sub-Adviser) pursuant to which the Adviser may obtain the
services of the Sub-Adviser(s) to assist the Adviser in
fulfilling its responsibilities hereunder. Specifically, the
Adviser may retain a Sub-Adviser to recommend specific
securities or other investments based upon the Corporations
investment objective and policies, and work, along with the
Adviser, in structuring, negotiating, arranging or effecting the
acquisition or disposition of such investments and monitoring
investments on behalf of the Corporation, subject to the
oversight of the Adviser and the Corporation. The Adviser, and
not the Corporation, shall be responsible for any compensation
payable to any Sub-Adviser. Any sub-advisory agreement entered
into by the Adviser shall be in accordance with the requirements
of the Investment Company Act and other applicable federal and
state law and shall contain a provision requiring the Sub-
Adviser to comply with sections 1(e) and 1(f) below as if it
were the Adviser.
(d) The Adviser shall for all purposes herein provided be
deemed to be an independent contractor and, except as expressly
provided or authorized herein, shall have no authority to act
for or represent the Corporation in any way or otherwise be
deemed an agent of the Corporation.
(e) The Adviser shall keep and preserve for the period
required by the Investment Company Act any books and records
relevant to the provision of its investment advisory services to
the Corporation and shall specifically maintain all books and
records with respect to the Corporations portfolio transactions
and shall render to the Corporations Board of Directors such
periodic and special reports as the Board may reasonably
request. The Adviser agrees that all records that it maintains
for the Corporation are the property of the Corporation and will
surrender promptly to the Corporation any such records upon the
Corporations request, provided that the Adviser may retain a
copy of such records.
(f) The Adviser has adopted and implemented written
policies and procedures reasonably designed to prevent violation
of the Federal Securities laws by the Adviser. The Adviser has
provided the Corporation, and shall provide the Corporation at
such times in the future as the Corporation shall reasonably
request, with a copy of such policies and procedures and a
report of such policies and procedures. Such report shall be of
sufficient scope and in sufficient detail, as may reasonably be
required to comply with Rule 38a-1 under the Investment Company
Act and to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if
there are no such inadequacies, the report shall so state.
2. CORPORATIONS RESPONSIBILITIES AND EXPENSES PAYABLE BY THE CORPORATION.
All investment professionals of the Adviser and their
respective staffs, when and to the extent engaged in providing
investment advisory and management services hereunder, and the
compensation and routine overhead expenses of such personnel
allocable to such services, will be provided and paid for by the
Adviser and not by the Corporation. The Corporation will bear
all other costs and expenses of its operations and transactions,
including (without limitation) those relating to: organization
and offering; calculating the Corporations net asset value
(including the cost and expenses of any independent valuation
firm); expenses incurred by the Adviser payable to third
parties, including agents, consultants or other advisors (such
as independent valuation firms, accountants and legal counsel),
in monitoring financial and legal affairs for the Corporation
and in monitoring the Corporations investments and performing
due diligence on its prospective portfolio companies; interest
payable on debt, if any, incurred to finance the Corporations
investments; offerings of the Corporations common stock and
other securities; investment advisory and management fees;
administration fees, if any, fees payable to third parties,
including agents, consultants or other advisors, relating to, or
associated with, evaluating and making investments; transfer
agent and custodial fees; federal and state registration fees;
all costs of registration and listing the Corporations shares on
any securities exchange; federal, state and local taxes;
independent Directors fees and expenses; costs of preparing and
filing reports or other documents required by the Securities and
Exchange Commission; costs of any reports, proxy statements or
other notices to stockholders, including printing costs; the
Corporations allocable portion of the fidelity bond, directors
and officers/errors and omissions liability insurance, and any
other insurance premiums; direct costs and expenses of
administration, including printing, mailing, long distance
telephone, copying, secretarial and other staff, independent
auditors and outside legal costs; and all other expenses
incurred by the Corporation in connection with administering the
Corporations business, including rent and the allocable portion
of the cost of the Corporations chief compliance officer and
chief financial officer and their respective staffs.
3. COMPENSATION OF THE ADVISER.
The Corporation agrees to pay, and the Adviser agrees to
accept, as compensation for the services provided by the Adviser
hereunder, a base management fee (Base Management Fee) and an
incentive fee (Incentive Fee) as hereinafter set forth. The
Corporation shall make any payments due hereunder to the Adviser
or to the Advisers designee as the Adviser may otherwise direct.
(a) Base Management Fee.
(i) For services rendered during the period from the
effective date of the Corporations election under Section 54(a)
of the Investment Company Act (the Effective Date) through
the end of the reported second full fiscal quarter of the
Corporation thereafter, the Base Management Fee shall be payable
monthly in advance, and shall be calculated at an annual rate of
2.00% of the value of the Corporations total assets, less the
cash proceeds and cash equivalent investments from equity
investors that are not invested in debt or equity securities of
portfolio companies in accordance with the Corporations
investment objectives described in the Registration Statement
(the Gross Invested Assets), valued as of the end of each
preceding month during the period.
(ii) For services rendered after the end of the
reported second full fiscal quarter of the Corporation following
the Effective Date, the Base Management Fee shall be payable
quarterly in arrears, and shall be calculated at an annual rate
of 2.00% of the average value of the Corporations total assets,
including investments made with proceeds of borrowings, less any
uninvested cash or cash equivalents resulting from borrowings
(the Gross Assets), valued as of the end of the two most
recently completed calendar quarters, and appropriately adjusted
for any share issuances or repurchases during the current
calendar quarter.
(iii) Base Management Fees payable for any partial
month or quarter will be appropriately prorated.
(b) The Incentive Fee shall consist of two parts, as
follows:
(i) One part will be calculated and payable quarterly
in arrears based on the pre-Incentive Fee net investment income
for the immediately preceding calendar quarter. For this
purpose, pre-Incentive Fee net investment income means interest
income, dividend income and any other income (including any
other fees, such as commitment, origination, structuring,
diligence, consulting fees that the Corporation receives from
portfolio companies, but excluding fees for providing managerial
assistance) accrued by the Corporation during the calendar
quarter, minus the Corporations operating expenses for the
quarter (including the Base Management Fee, and any interest
expense and dividends paid on any issued and outstanding
preferred stock, but excluding the Incentive Fee). Pre-Incentive
Fee net investment income includes, in the case of investments
with a deferred interest feature (such as original issue
discount, debt instruments with payment-in-kind interest and
zero coupon securities), accrued income that the Corporation has
not yet received in cash and includes the proportionate share of
the portfolio companies net income allocable to equity holdings
that has not been distributed as dividends. Pre-Incentive Fee
net investment income does not include any realized capital
gains, realized capital losses or unrealized capital
appreciation or depreciation. Pre-Incentive Fee net investment
income, expressed as a rate of return on the value of the
Corporations net assets at the end of the immediately preceding
calendar quarter, will be compared to a hurdle rate of 1.75%
per quarter (7% annualized). The Corporation will pay the
Adviser an Incentive Fee with respect to the Corporations pre-
Incentive Fee net investment income in each calendar quarter as
follows: (1) no Incentive Fee in any calendar quarter in which
the Corporations pre-Incentive Fee net investment income does
not exceed the hurdle rate; (2) 100% of the Corporations pre-
Incentive Fee net investment income with respect to that portion
of such pre-Incentive Fee net investment income, if any, that
exceeds the hurdle rate but is less than 2.1875% in any calendar
quarter (8.75% annualized); and (3) 20% of the amount of the
Corporations pre-Incentive Fee net investment income, if any,
that exceeds 2.1875% in any calendar quarter (8.75% annualized).
These calculations will be appropriately pro rated for any
period of less than three months and adjusted for any share
issuances or repurchases during the current quarter.
(ii) The second part of the Incentive Fee (the
Capital Gains Fee) will be determined and payable in arrears
as of the end of each fiscal year (or upon termination of this
Agreement as set forth below), commencing on March 31, 2009, and
will equal 20.0% of the Corporations realized capital gains for
the 2008 calendar year, if any, computed net of all realized
capital losses and unrealized capital depreciation at the end of
such year; provided that the Capital Gains Fee determined as of
March 31, 2009 will be calculated for a period of shorter than
twelve calendar months to take into account any net realized
capital gains, if any, computed net of all realized capital
losses and unrealized capital depreciation for the period ending
March 31, 2009. The amount of capital gains used to determine
the Capital Gains Fee shall be calculated at the end of each
applicable year by subtracting the sum of the Corporations
Cumulative Aggregate Realized Capital Losses and Aggregate
Unrealized Capital Depreciation from the Corporations Cumulative
Aggregate Realized Capital Gains (each as defined in Section
below. If this number is positive at the end of such year, then
the Capital Gains Fee for such year will be equal to 20.0% of
such amount, less the aggregate amount of any Capital Gains Fees
paid in all prior years. In the event that this Agreement shall
terminate as of a date that is not a calendar year end, the
termination date shall be treated as though it were a calendar
year end for purposes of calculating and paying a Capital Gains
Fee.
(iii) For purposes of this Section 3:
(1) Cumulative Aggregate Realized Capital
Gains shall mean the sum of the differences between the net
sales price of each investment in the Corporations portfolio
when sold, and the original cost of such investment since
inception.
(2) Cumulative Aggregate Realized Capital
Losses shall mean the sum of the amounts by which the net sales
price of each investment in the Corporations portfolio when sold
is less than the original cost of such investment since
inception.
(3) Aggregate Unrealized Capital Depreciation
shall mean the sum of the difference, if negative, between the
valuation of each investment in the Corporations portfolio as of
the applicable Capital Gains Fee calculation date and the
original cost of such investment.
4. COVENANTS OF THE ADVISER.
The Adviser covenants that it is or will be prior to the
Effective Date, a registered as an investment adviser under the
Advisers Act, if applicable or if not applicable under the laws
of the jurisdiction in which its principal executive office is
located. The Adviser agrees that its activities will at all
times be in compliance in all material respects with all
applicable federal and state laws governing its operations and
investments.
5. EXCESS BROKERAGE COMMISSIONS.
The Adviser is hereby authorized, to the fullest extent now
or hereafter permitted by law, to cause the Corporation to pay a
member of a national securities exchange, broker or dealer an
amount of commission for effecting a securities transaction in
excess of the amount of commission another member of such
exchange, broker or dealer would have charged for effecting that
transaction, if the Adviser determines in good faith, taking
into account such factors as price (including the applicable
brokerage commission or dealer spread), size of order,
difficulty of execution, and operational facilities of the firm
and the firms risk and skill in positioning blocks of
securities, that such amount of commission is reasonable in
relation to the value of the brokerage and/or research services
provided by such member, broker or dealer, viewed in terms of
either that particular transaction or its overall
responsibilities with respect to the Corporations portfolio, and
constitutes the best net results for the Corporation.
6. LIMITATIONS ON THE EMPLOYMENT OF THE ADVISER.
The services of the Adviser to the Corporation are not
exclusive, and the Adviser may engage in any other business or
render similar or different services to others including,
without limitation, the direct or indirect sponsorship or
management of other investment based accounts or commingled
pools of capital, however structured, having investment
objectives similar to those of the Corporation, so long as its
services to the Corporation hereunder are not impaired thereby,
and nothing in this Agreement shall limit or restrict the right
of any manager, partner, officer or employee of the Adviser to
engage in any other business or to devote his or her time and
attention in part to any other business, whether of a similar or
dissimilar nature, or to receive any fees or compensation in
connection therewith (including fees for serving as a director
of, or providing consulting services to, one or more of the
Corporations portfolio companies, subject to applicable law). So
long as this Agreement or any extension, renewal or amendment
remains in effect, the Adviser shall be the only investment
adviser for the Corporation, subject to the Advisers right to
enter into sub-advisory agreements. The Adviser assumes no
responsibility under this Agreement other than to render the
services called for hereunder. It is understood that directors,
officers, employees and stockholders of the Corporation are or
may become interested in the Adviser and its affiliates, as
directors, officers, employees, partners, stockholders, members,
managers or otherwise, and that the Adviser and directors,
officers, employees, partners, stockholders, members and
managers of the Adviser and its affiliates are or may become
similarly interested in the Corporation as stockholders or
otherwise.
7. RESPONSIBILITY OF DUAL DIRECTORS, OFFICERS AND/OR EMPLOYEES.
If any person who is a manager, partner, officer or
employee of the Adviser is or becomes a director, officer and/or
employee of the Corporation and acts as such in any business of
the Corporation, then such manager, partner, officer and/or
employee of the Adviser shall be deemed to be acting in such
capacity solely for the Corporation, and not as a manager,
partner, officer or employee of the Adviser or under the control
or direction of the Adviser, even if paid by the Adviser.
8. LIMITATION OF LIABILITY OF THE ADVISER: INDEMNIFICATION.
The Adviser (and its officers, managers, partners, agents,
employees, controlling persons, members and any other person or
entity affiliated with the Adviser) shall not be liable to the
Corporation for any action taken or omitted to be taken by the
Adviser in connection with the performance of any of its duties
or obligations under this Agreement or otherwise as an
investment adviser of the Corporation, except to the extent
specified in Section 36(b) of the Investment Company Act
concerning loss resulting from a breach of fiduciary duty (as
the same is finally determined by judicial proceedings) with
respect to the receipt of compensation for services, and the
Corporation shall indemnify, defend and protect the Adviser (and
its officers, managers, partners, agents, employees, controlling
persons, members and any other person or entity affiliated with
the Adviser, including without limitation its general partner,
each of whom shall be deemed a third party beneficiary hereof)
(collectively, the Indemnified Parties) and hold them harmless
from and against all damages, liabilities, costs and expenses
(including reasonable attorneys fees and amounts reasonably paid
in settlement) incurred by the Indemnified Parties in or by
reason of any pending, threatened or completed action, suit,
investigation or other proceeding (including an action or suit
by or in the right of the Corporation or its security holders)
arising out of or otherwise based upon the performance of any of
the Advisers duties or obligations under this Agreement or
otherwise as an investment adviser of the Corporation.
Notwithstanding the preceding sentence of this Paragraph 8 to
the contrary, nothing contained herein shall protect or be
deemed to protect the Indemnified Parties against or entitle or
be deemed to entitle the Indemnified Parties to indemnification
in respect of, any liability to the Corporation or its security
holders to which the Indemnified Parties would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Advisers duties or by
reason of the reckless disregard of the Advisers duties and
obligations under this Agreement (as the same shall be
determined in accordance with the Investment Company Act and any
interpretations or guidance by the Securities and Exchange
Commission or its staff thereunder).
9. EFFECTIVENESS, DURATION AND TERMINATION OF AGREEMENT.
This Agreement shall become effective as of the date of its
approval by a majority of the common shareholders of the
Corporation. This Agreement shall remain in effect for two
years, and thereafter shall continue automatically for
successive annual periods, provided that such continuance is
specifically approved at least annually by (a) the vote of the
Corporations Board of Directors, or by the vote of a majority of
the outstanding voting securities of the Corporation and (b) the
vote of a majority of the Corporations Directors who are not
parties to this Agreement or interested persons (as such term
is defined in Section 2(a)(19) of the Investment Company Act) of
any such party, in accordance with the requirements of the
Investment Company Act. This Agreement may be terminated at any
time, without the payment of any penalty, upon 60 days written
notice, by the vote of a majority of the outstanding voting
securities of the Corporation, or by the vote of the
Corporations Directors or by the Adviser. This Agreement will
automatically terminate in the event of its assignment (as
such term is defined for purposes of Section 15(a)(4) of the
Investment Company Act). The provisions of Paragraph 8 of this
Agreement shall remain in full force and effect, and the Adviser
and its representatives shall remain entitled to the benefits
thereof, notwithstanding any termination or expiration of this
Agreement. Further, notwithstanding the termination or
expiration of this Agreement as aforesaid, the Adviser shall be
entitled to any amounts owed under Section 3 through the date of
termination or expiration.
10. NOTICES.
Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at its principal office.
11. AMENDMENTS.
This Agreement may be amended by mutual consent, but the
consent of the Corporation must be obtained in conformity with
the requirements of the Investment Company Act.
12. ENTIRE AGREEMENT: GOVERNING LAW.
This Agreement contains the entire agreement of the parties
and supersedes all prior agreements, understandings and
arrangements with respect to the subject matter hereof. This
Agreement shall be construed in accordance with the laws of the
State of Delaware and the applicable provisions of the
Investment Company Act. To the extent the applicable laws of the
State of Delaware, or any of the provisions herein, conflict
with the provisions of the Investment Company Act, the latter
shall control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date above written.
UNITED ECOENERGY CORPORATION
By:
____/s/____________________
William Mackey
Chief Executive Officer
UNITED ECOENERGY ADVISORS, LLC
By:
___/s/__________________
Patrick Donelan
Chief Executive Officer
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