Document:

ex10_23.htm

    
      
        

      

      Exhibit
        No. 10.23

    

    ADDENDUM
      TO PROMISSORY NOTE CONVERSION AGREEMENT

    

    This
      Addendum to Promissory Note Conversion Agreement (“Addendum”) is entered into as
      of the 18th day
      of June, 2007 by and between Shearson Financial, Inc., a Nevada corporation
      (“Shearson”) for purposes of this Addendum, “Shearson” included any predecessors
      in interest of Shearson Financial, Inc., and La Jolla Cove Investors, Inc.,
      a
      California corporation (“LJCI” ).

    

    WHEREAS,
      LJCI and Shearson are parties to that certain Promissory Note Conversion
      Agreement dated as of January 29, 2007 (“Conversion Agreement”);
      and

    

    WHEREAS,
      the parties desire to amend the Conversion Agreement in certain
      respects.

    

    NOW,
      THEREFORE, in consideration of the mutual promises and covenants contained
      herein, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Shearson and LJCI agree as
      follows:

    

    
      	
               

            	
              1.

            	
              All
                terms used herein and not otherwise defined herein shall have the
                definitions set forth in the Conversion
                Agreement.

            

    

    

    
      	
               

            	
              2.

            	
              The
                first recital of the Conversion Agreement is hereby amended and restated
                in its entirety as follows:

            

    

    

    “WHEREAS,
      LJCI has purchased, and/or will be purchasing, certain Promissory Notes (such
      a
“Promissory Note,” and collectively, the “Promissory Notes”) issued by Shearson
      to various individuals and/or entities, as set forth in more detail on
Exhibit A attached hereto; and”

    

    
      	
               

            	
              3.

            	
              The
                following promissory note shall be added to Exhibit A of the
                Conversion Agreement as of the date hereof and shall be incorporated
                therein and into the Conversion Agreement by this reference, such
                that
                such promissory note referenced below shall constitute a Promissory
                Note,
                as such term is defined in the Conversion
                Agreement:

            

    

    

    
      	
               

            	
              a.

            	
              Promissory
                Note issued by Shearson to BT Venture Fund, I, L.P., a Delaware limited
                partnership, dated on or about September 1, 2004 in the principal
                amount
                of $ 523,750 (the “September 2004 Promissory
                Note”).

            

    

    

    
      	
               

            	
              4.

            	
              Section
                1 of the Conversion Agreement is hereby amended and restated in its
                entirety as follows:

            

    

    

    “1.            Conversion
      Right:  Each of LJCI and Shearson agree that each Promissory Note
      shall be converted or exchanged (each, a “Conversion”), through one or a series
      of such Conversions, up to the full principal balance thereof and any accrued
      and unpaid interest thereon, into shares of the common stock of Shearson (the
      “Shearson Common Stock”) (calculated as to each such conversion to the nearest
      1/100th. Of a
      share) The number of shares of Shearson Common Stock into which the Promissory
      Notes may be converted is equal to the dollar amount of the Promissory Note,
      or
      portion thereof, being converted divided by the Conversion Price.  The
      Conversion Price shall be equal to 82% of the average of the volume weighted
      average price of the shares of the Shearson Common Stock during the five trading
      days prior tot LJCI’s election to convert.  Upon the conversion of the
      full principal blanc and all accrued and unpaid interest of each Promissory
      Note
      into shares of the Shearson Common Stock, as set forth above, no further rights
      shall exist under such Promissory Note with respect to the collection of
      interest or other amounts under the Promissory Note by the holder
      thereof.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    For
      so
      long as Shearson honors the terms of each Conversion Notice delivered by LJCI
      to
      Shearson and affects each such Conversion as submitted by LJCI within the
      applicable time periods set forth in this
      Agreement, LJCI shall not otherwise demand cash payment upon any outstanding
      sums of principal and accrued and unpaid interest under the Promissory
      Notes.  In the event that Shearson refuses or otherwise fails to honor
      any Conversion Notice submitted to Shearson by LJCI and/or Shearson fails to
      effect such Conversion within the applicable time period set forth herein,
      LJCI
      shall have the right, at LJCI’s sole discretion, to declare any or all amounts,
      including outstanding principal and accrued and unpaid interest, under the
      Promissory Notes immediately due and payable by Shearson and Shearson shall
      deliver such payment for all such outstanding sums owed under the Promissory
      Notes to LJCI within five days of LJCI’s demand for payment
      thereof.”

    

    
      	
               

            	
              5.

            	
              The
                following Section 2(e) is hereby added to the Conversion
                Agreement:

            

    

    

    “2.(e)
      LJCI may effect a Conversion of all or any portion of any of the Promissory
      Notes by telecopying or otherwise delivering to Shearson an executed notice
      setting forth the amount and identity of all or any portion of the Promissory
      Notes that is to be so converted or exchanged for Shearson Common Stock (the
      “Conversion Notice”).  No other action on the part of LJCI shall be
      required to so effect such Conversion.”

    

    
      	
               

            	
              6.

            	
              Section
                4 of the Conversion agreement is hereby amended and restated in its
                entirety to read as follows:

            

    

    

    “4.
      Certain Conversion Limits:  For the period during which LJCI
      holds any of the Promissory Notes, if and to the extent that, on any date,
      the
      holding by LJCI of the Promissory Notes would result in LJCI being deemed the
      beneficial owner of more than 4.99% of the then Outstanding shares of the common
      stock of Shearson, then LJCI shall not have the right, and Shearson shall not
      have the obligation, to convert or exchange any portion of the Promissory Notes
      as shall cause LJCI to be deemed the beneficial owner of more than 4.99% of
      the
      then Outstanding shares of the common stock of Shearson.  If any court
      of competent jurisdiction shall determine that the foregoing limitation is
      ineffective to prevent LJCI from being deemed the beneficial owner of more
      than
      4.99% of the then Outstanding shares of the common stock of Shearson, then
      Shearson  shall prepay such portion of the Promissory Notes as shall
      cause LJCI not be deemed the beneficial owner of more than 4.99% of the then
      Outstanding shares of the common stock of Shearson.  Upon such
      determination by a court of competent jurisdiction, LJCI shall have no interest
      in or rights under such portion of the Promissory Notes that is so
      prepaid.  Such prepayment shall be for cash at a prepayment price of
      one hundred and then percent (110%) of the principal amount thereof, thgether
      with all accrued and unpaid interest thereon to the date of
      prepayment.  For purposes of this Section, beneficial ownership shall
      be calculated in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934, as amended, and the rules and regulations promulgated there
      under.  “Outstanding” when used with reference to the common stock of
      Shearson means, on any date of determination, all issued and outstanding shares
      of the common stock of Shearson, and includes all such shares of the common
      stock of Shearson issuable in respect of outstanding scrip or any certificates
      representing fractional interests in such shares of the common stock of
      Shearson; provided, however, that any such shares of the common stock of
      Shearson directly or indirectly owned or held by or for the account of Shearson
      or any subsidiary of Shearson shall not be deemed “Outstanding” for purposes
      hereof.”

    

    
      	
               

            	
              7.

            	
              Except
                as specifically amended therein, all other terms and conditions of
                the
                Conversion agreement shall remain in full force and
                effect.

            

    

    

    
      	
               

            	
              8.

            	
              This
                Addendum may be executed in one or more counterparts, each of which
                shall
                for all purposes be deemed to be an original and all of which shall
                constitute the same document.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHREEOF, Shearson Financial, Inc. and La Jolla Cove Investors, Inc.,
      have caused this Addendum to be signed by its duly authorized officers on the
      date first set forth above.

    

    
      	
              Shearson
                Financial, Inc. 

            	
              La
                Jolla Cove Investors., Inc. 

            	 
	 	 	 	 	 	 
	
              By:

            	
              /s/  Michael
                A. Barron

            	
               

            	
              By:

            	
              /s/  Travis
                Huff

            	 
	 	 	 	 	 	 
	
              Name:

            	Michael
              A. Barron	
               

            	
              Name:

            	
              Travis
                Huff

            	 
	 	 	 	 	 	 
	
              Title:

            	
              CEO

            	
               

            	
              Title:

            	
              Portfolio
                Manager[For
      the Southern Iowa BioEnergy LLC Letterhead]

    

    

    RESCISSION
      OFFER ELECTION FORM

    

    ____________,
      2007

    

    

    _______    I
      accept
      this rescission offer. Please refund the purchase price of the membership units
      to me plus interest.

     

    _______    I
      decline
      this rescission offer and will continue my investment. 

     

     

    
      	
              __________________________________

            	
              ___________________

            
	
              (Investor’s
                name and signature)

            	
              (Date)

            

    

    

     

    In
      order
      to register your election, you must return this completed Rescission Offer
      Election Form to us at the following address:

    

    SOUTHERN
      IOWA BIOENERGY LLC

    Attn:
      William T. Higdon

    115
      S.
      Linden Street

    Lamoni,
      Iowa 50140

    

     

    IF
      YOU WISH TO CONFIRM YOUR SUBSCRIPTION, YOU MUST CHECK THE BOX AS INDICATED
      ABOVE
      AND RETURN THIS FORM TO US. YOU MAY CHANGE YOUR ELECTION AT ANYTIME PRIOR TO
      EXPIRATION OF THE RESCISSION OFFER. THE RESCISSION OFFER EXPIRES ON
      ______________, 2007. ONCE YOU RETURN THE COMPLETED FORM AND THE RESCISSION
      OFFER EXPIRES, YOUR ELECTION TO CONFIRM IS IRREVOCABLE, AND YOUR INVESTMENT
      WILL
      NOT BE RETURNED, UNLESS WE REJECT YOUR SUBSCRIPTION. IF THIS FORM IS NOT
      COMPLETED AND RECEIVED BY US WITHIN THIRTY (30) DAYS OF RECEIPT, YOU WILL NOT
      BE
      ABLE TO WITHDRAW YOUR INVESTMENT.

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