0001104659-06-079857.txt : 20061206 0001104659-06-079857.hdr.sgml : 20061206 20061206171552 ACCESSION NUMBER: 0001104659-06-079857 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20061206 DATE AS OF CHANGE: 20061206 GROUP MEMBERS: GOLDEN SPREAD ENERGY, INC. GROUP MEMBERS: GSEKFT, INC. GROUP MEMBERS: OLIVER KENDALL KELLEY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: APOLLO RESOURCES INTERNATIONAL INC CENTRAL INDEX KEY: 0001048237 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841431425 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-80124 FILM NUMBER: 061260684 BUSINESS ADDRESS: STREET 1: 3001 KNOX STREET, SUITE 407 CITY: DALLAS STATE: TX ZIP: 75205 BUSINESS PHONE: 214-389-2151 MAIL ADDRESS: STREET 1: 3001 KNOX STREET, SUITE 407 CITY: DALLAS STATE: TX ZIP: 75205 FORMER COMPANY: FORMER CONFORMED NAME: POWERBALL INTERNATIONAL INC DATE OF NAME CHANGE: 20000814 FORMER COMPANY: FORMER CONFORMED NAME: NATEX CORP DATE OF NAME CHANGE: 19991029 FORMER COMPANY: FORMER CONFORMED NAME: NATEX CORP/UT DATE OF NAME CHANGE: 19990409 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Neptune Leasing, Inc. CENTRAL INDEX KEY: 0001382432 IRS NUMBER: 752515149 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 8101 SW 34TH AVENUE CITY: AMARILLO STATE: TX ZIP: 79121 BUSINESS PHONE: 806-355-5679 MAIL ADDRESS: STREET 1: 8101 SW 34TH AVENUE CITY: AMARILLO STATE: TX ZIP: 79121 SC 13D/A 1 a06-24901_2sc13da.htm AMENDMENT

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

Apollo Resources International, Inc.

(Name of Issuer)

Common Stock, $0.001 par value

(Title of Class of Securities)

037622 10 7

(CUSIP Number)

J. Mark Ariail

214 389 9800

3001 Knox Street, Suite 403

Dallas, Texas 75205

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

November 22, 2006

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 037622107

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Neptune Leasing, Inc. FEIN: 75-2515149 Golden Spread Energy, Inc. FEIN: 75-1486280 GSEKFT, Inc. FEIN: 20-4883357 Oliver Kendall Kelley

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			x
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC, OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Texas, USA

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0*

			8.	Shared Voting Power 0*

			9.	Sole Dispositive Power 0*

			10.	Shared Dispositive Power 0*

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 0*

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 0%*

	14.	Type of Reporting Person (See Instructions) CO CO CO IN

* On November 22, 2006, Neptune Leasing, Inc., Golden Spread Energy, Inc., GSEKFT, Inc. and Oliver Kendall Kelley have disposed of 89,642,000 shares of the common stock of the Issuer.

Item 1.	Security and Issuer
	This Statement on Schedule 13D/A (the “Statement”) is being filed as Amendment No. 1 to the Statement on Schedule 13D originally filed with the Securities and Exchange Commission on December 4, 2006 (the “Original Statement”). Capitalized terms used but not defined herein have the meaning set forth in the Original Statement. As a result of transactions described herein, Neptune Leasing, Inc., Golden Spread Energy, Inc., GSEKFT, Inc. and Oliver Kendall Kelley have disposed of all shares of the common stock of the issuer.

Item 2.	Identity and Background


Item 3.	Source and Amount of Funds or Other Consideration


Item 4.	Purpose of Transaction
	Item 4 is hereby supplementally amended as follows: As of November 22, 2006, Neptune Leasing, Inc., Golden Spread Energy, Inc., GSEKFT, Inc. Telluride Investments, Inc. f.k.a. GSEJKM, Inc., GSESKO, Inc., and Oliver Kendall Kelley (the “Shareholders”) entered into a Share Exchange Agreement (the “Agreement”) with issuer pursuant to which the Shareholders agreed to sell to AP Holdings International, Inc. all of the shares of common stock of issuer owned by the Shareholders in consideration of a promissory note secured by the shares of common stock of issuer owned by AP Holdings International, Inc. Upon consummation of the transactions contemplated by the Agreement, the Shareholders will cease to own any interest in issuer and will no longer beneficially own any shares of the common stock of issuer.

Item 5.	Interest in Securities of the Issuer
	(a)	Item 5 is hereby supplementally amended as follows: As of November 22, 2006, Neptune Leasing, Inc. did not own shares of Common Stock of the Issuer. As of November 22, 2006, Golden Spread Energy, Inc.did not own shares of the Common Stock of the Issuer. As of November 22, 2006, GSEKFT, Inc. did not own shares of the Common Stock of the Issuer. As of November 22, 2006, Oliver Kendall Kelley did not own shares of the Common Stock of the Issuer.

	(b)	As of November 22, 2006, Neptune Leasing, Inc. had no power to vote shares of Common Stock of the Issuer. As of November 22, 2006, Neptune Leasing, Inc. had no power to dispose of the shares of Common Stock of the Issuer. As of November 22, 2006, Golden Spread Energy, Inc. had no power to vote the shares of Common Stock of the Issuer. As of November 22, 2006, Golden Spread Energy, Inc. had no power to dispose of the shares of Common Stock of the Issuer. As of November 22, 2006, GSEKFT, Inc. had no power to vote the shares of Common Stock of the Issuer. As of November 22, 2006, GSEKFT, Inc. had no power to dispose of the shares of Common Stock of the Issuer. As of November 22, 2006, Mr. Kelley had no power to vote the shares of Common Stock of the Issuer. As of November 22, 2006, Mr. Kelley had no power to dispose of the shares of Common Stock of the Issuer.

	(e)	November 22, 2006.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
	Item 6 is hereby supplementally amended by reference to the disclosures in Item 4 of this Statement

Item 7.	Material to Be Filed as Exhibits
	Exhibit 99.1 - Share Exchange Agreement Exhibit 99.2 – Promissory Note Exhibit 99.3 - Stock Pledge Agreement

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date
	December 2, 2006

Signature
	/s/ Oliver Kendall Kelley

Name/Title	Printed Name: Oliver Kendall Kelley Title: CEO, President, Neptune Leasing, Inc.

Signature
	/s/ Oliver Kendall Kelley

Name/Title	Printed Name: Oliver Kendall Kelley Title: CEO, President, Golden Spread Energy, Inc.

Signature
	/s/ Oliver Kendall Kelley

Name/Title	Printed Name: Oliver Kendall Kelley Title: CEO, President, GSEKFT, Inc.

Signature
	/s/ Oliver Kendall Kelley

Name/Title	Printed Name: Oliver Kendall Kelley Title: Individually

EX-99.1 2 a06-24901_2ex99d1.htm EX-99.1

Exhibit 99.1

SHARE EXCHANGE AGREEMENT

This Share Exchange Agreement (this “Agreement”) is entered into effective as of this 17th day of November, 2006, by and among AP Holdings International, Inc., a Texas corporation (“AP Holdings”) and the undersigned shareholders (the “Shareholders”) of Apollo Resources International, Inc., a Utah corporation (“Apollo”).

RECITALS

WHEREAS, the Shareholders collectively own 106,850,000 shares of Apollo common stock; and

WHEREAS, AP Holdings and the Shareholders desire to effect an exchange of all of the Apollo shares collectively held by the Shareholders for a secured promissory note payable by AP Holdings, as provided for herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows:

1. Exchange of Apollo Shares for Secured Promissory Note.

a. On the terms and subject to the conditions set forth in this Agreement, at the Closing (defined below), AP Holdings shall execute and deliver to the Shareholders a secured promissory note substantially in the form of Exhibit A, plus a stock pledge agreement substantially in the form of Exhibit B, in exchange for an aggregate of 106,850,000 shares of Apollo common stock, par value $0.001 per share (the “Apollo Shares”) currently held by the Shareholders.

b. At the Closing, each Shareholder shall deliver to AP Holdings the certificate(s) representing the Apollo Shares held by such Shareholder, accompanied by an executed stock power in a form reasonably satisfactory to AP Holdings. The number of Apollo Shares to be delivered by each Shareholder is set forth opposite each Shareholder’s name on Schedule 1.

c. At the Closing, AP Holdings shall deliver to the Shareholders fully executed forms of secured promissory note and stock pledge agreement.

d. The exchange contemplated by this Agreement shall take place on the date of this Agreement (the “Closing”).

2. Representations and Warranties of AP Holdings. AP Holdings hereby represents and warrants as follows:

a. AP Holdings is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas. AP Holdings has all requisite authority to enter into, execute and deliver this Agreement, to consummate the transaction contemplated hereby, and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transaction contemplated hereby have been duly and validly authorized by all necessary limited liability company action on the part of AP Holdings. This Agreement has been duly executed and delivered by AP Holdings.

b. Each of this Agreement, the secured promissory note and the stock pledge agreement constitutes a legal, valid and binding obligation of AP Holdings, enforceable against AP Holdings in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy and insolvency laws, the rights of creditors generally, and general principles of equity.

3. Representations and Warranties of Shareholders. Each individual Shareholder (with respect to himself or itself only) hereby represents and warrants as follows:

a. Such Shareholder has the requisite capacity to enter into, execute and deliver this Agreement, to consummate the transactions contemplated hereby, and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate or other action on the part of such Shareholder. This Agreement has been duly executed and delivered by such Shareholder. This Agreement constitutes a legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy and insolvency laws, the rights of creditors generally, and general principles of equity.

b. Such Shareholder owns the Apollo Shares attributed to such Shareholder in Schedule 1, free and clear of all liens, restrictions and claims of any kind. The Apollo Shares attributed to such Shareholder are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting, dividend rights or disposition of such shares. To the extent the Apollo Shares attributed to such Shareholder constitute community property with such Shareholder’s spouse, such spouse has the requisite capacity to execute the spousal consent form incorporated in the signature pages to this Agreement, and such spouse’s execution of such spousal consent form is a legal, valid and binding obligation of such spouse.

c. Such Shareholder acknowledges that it has received all the information requested from AP Holdings that such Shareholder considers necessary or appropriate for deciding whether to consummate the transactions contemplated by this Agreement. Such Shareholder further represents that its representatives have knowledge and experience in financial and business matters and that its representatives are capable of evaluating the merits and risk of this transaction.

d. Such Shareholder hereby acknowledges the accuracy of Schedule 1, as it pertains to such Shareholder.

4. Miscellaneous.

a. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

b. No failure or delay on the part of any party in exercising any right, power or privilege hereunder or under any of the other agreements, instruments or documents delivered in connection with this Agreement shall operate as a waiver of such right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege preclude any other or future exercise thereof or the exercise of any other right, power or privilege.

c. Each of the parties agrees and covenants that it will promptly execute and deliver to the other parties such further instruments and documents and take such further action as the other parties may reasonably require in order to carry out the full intent and purpose of this Agreement.

d. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, mailed by certified mail (return receipt requested) or sent by overnight delivery service to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice:

	(i)	if to AP Holdings:
		Dennis G. McLaughlin
		3001 Knox Street, Suite 403
		Dallas, Texas 75205

		and

	(ii)	if to any individual Shareholder, to such Shareholder at the address set forth below such Shareholder’s name on Schedule 1.

Notice so given shall, in the case of notice so given by mail, be deemed to be given and received on the third calendar day after posting, in the case of notice so given by overnight delivery service, on the date of actual delivery.

e. Regardless of any investigation at any time made by or on behalf of any party hereto or of any information any party may have in respect thereof, all representations and warranties made hereunder shall survive forever, subject, however, to any applicable statute of limitations.

f. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas exclusive of conflicts of law principles.

g. This Agreement may be executed in any number of counterparts. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

AP Holdings International, Inc.,
a Texas limited liability company


By:	/s/ Dennis G McLaughlin
	Dennis G. McLaughlin, Manager


Apollo Resources International, Inc. Shareholders

Golden Spread Energy, Inc.,
a Texas corporation


By:		/s/ Oliver Kendall Kelley
		Name:		Oliver Kendall Kelley
		Title:		Chief Executive Officer


Telluride Investments, Inc. f.k.a. GSEJKM, Inc.,
a Texas corporation


By:			/s/ Judy K. Morgan
			Name:	Judy K. Morgan
			Title:	President


GSEKFT, Inc.,
a Texas corporation


By:		/s/ Oliver Kendall Kelley
		Name:		Oliver Kendall Kelley
		Title:		Chief Executive Officer


GSESKO, Inc.,
a Texas corporation


By:			/s/ Sharon Kelley Oeschger
			Name:	Sharon Kelley Oeschger
			Title:	President

Neptune Leasing, Inc.,
a Texas corporation


By:	/s/ Oliver Kendall Kelley
	Name:	Oliver Kendall Kelley
	Title:	Chief Executive Officer


/s/ Oliver Kendall Kelley
Oliver Kendall Kelly, Individually

SPOUSAL CONSENT

The undersigned spouse of Oliver Kendall Kelly, a party to the foregoing Share Exchange Agreement (the “Agreement”), acknowledges as follows:

I have read the foregoing Agreement and I know its contents. I am aware that by its provisions that my husband, Oliver Kendall Kelly, transfers to AP Holdings International, Inc. all of his right, title and interest in the Apollo Shares (as such term is defined in the Agreement) owned by him as specified in Schedule 1 attached hereto, including my community interest (if any) in the Apollo Shares. I hereby consent to the transfer, approve of the provisions of the Agreement, and agree that the Apollo Shares and my interest in the Apollo Shares (if any) are subject to the provisions of the Agreement and that I will take no action at any time to hinder operation of the Agreement.

Executed this 17th day of November, 2006.

/s/ Sherry Kelley

SCHEDULE 1

Shareholder		Shares of Common Stock of Apollo Resources International, Inc. to be Exchanged
Golden Spread Energy, Inc. 8101 West 34th Avenue Amarillo, Texas 79121-1069		8,606,500
Telluride Investments, Inc. f.k.a. GSEJKM, Inc. 8101 West 34th Avenue Amarillo, Texas 79121-1069		8,604,000
GSEKFT, Inc. 8101 West 34th Avenue Amarillo, Texas 79121-1069		5,093,000
GSESKO, Inc. 8101 West 34th Avenue Amarillo, Texas 79121-1069		8,604,000
Neptune Leasing, Inc. 8101 West 34th Avenue Amarillo, Texas 79121-1069		41,692,500
Oliver Kendall Kelley 8101 West 34th Avenue Amarillo, Texas 79121-1069		34,250,000

Exhibit A

Form of Secured Promissory Note

Exhibit B

Form of Stock Pledge Agreement

EX-99.2 3 a06-24901_2ex99d2.htm EX-99.2

Exhibit 99.2

SECURED PROMISSORY NOTE

$26,712,500.00

Dallas, Texas

November 17, 2006

FOR VALUE RECEIVED, the undersigned, AP Holdings International, Inc., a Texas corporation (“Maker”), whose address is 3001 Knox Street, Dallas, Texas 75205, hereby unconditionally promises to pay to the individuals and entities listed on Attachment A (collectively, “Payee”), at Payee’s offices at 8101 West 34th Avenue, Amarillo, Texas 79121-1069, the principal sum of Twenty-Six Million Seven Hundred Twelve Thousand Five Hundred and No/100 Dollars ($26,712,500.00), in lawful money of the United States of America, together with interest (calculated on the basis of a 360-day year) on the unpaid principal balance from day to day remaining, equal to the lesser of (a) the Maximum Rate (as hereinafter defined) or (b) five percent (5%).

1. Definitions. The following terms shall have the meanings assigned to them in this Section 1.

“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized to be closed under the laws of the State of Texas.

“Maximum Rate,” means the maximum nonusurious interest rate that at any time may be contracted for, taken, reserved, charged, or received on the indebtedness evidenced by this Note.

“Note” shall refer to and mean this Secured Promissory Note.

“Pledge Agreement” means that certain Stock Pledge Agreement dated as of the date hereof, executed by Maker and Payee.

2. Payment of Principal and Interest. The principal and accrued interest on this Note, computed as aforesaid, shall be due and payable as follows:

A. Principal only shall be due and payable as follows: $1,300,000 on December 31, 2006, $1,300,000 on May 30, 2007, $2,400,000 on November 30, 2007; $10,000,000 on May 30, 2008; and the balance on November 30, 2008; and

B. Accrued but unpaid interest only shall be due and payable on December 31, 2006, on May 30, 2007, on November 30, 2007; on May 30, 2008; and on November 30, 2008.

All past due principal of, and, to the extent permitted by applicable law, past due interest on this Note shall bear interest until paid at the Maximum Rate, or if no Maximum Rate is established by applicable law, then at the rate of 18% per annum.

3. Payment Dates. Should the principal of, or any installment of the principal of or interest on this Note become due and payable on any day other than a Business Day, the maturity

thereof shall be extended to the next succeeding Business Day, and interest shall be payable with respect to that extension. All payments made to Payee by Maker hereunder shall be applied first to accrued interest and then to principal. Payments received by Payee after 2:00 o’clock p.m. (Dallas, Texas time) on any Business Day shall be deemed to have been received on the following Business Day.

4. Optional Prepayment. Maker may prepay this Note, in whole or in part, at any time and from time to time, without premium or penalty. Any prepayment made hereunder shall be made together with interest accrued on the principal amount being prepaid (through the date of such prepayment).

5. Security. This Note is secured by the collateral described in the Pledge Agreement.

6. Events of Default; Acceleration; Recourse. An Event of Default (herein so called) shall exist under this Note if any one or more of the following events shall occur and be continuing:

(a) Maker shall fail to pay when due any principal of or interest on this Note and such default in payment is not cured within thirty (30) days after written notice of same is sent to Maker;

(b) Maker fails to perform any of the covenants or agreements of Maker contained herein or in the Pledge Agreement and such failure is not cured within thirty (30) days after written notice of same is sent to Maker;

(c) Maker shall: (i) apply for or consent to the appointment of a receiver, trustee, or intervenor, custodian or liquidator of all or a substantial part of its assets, (ii) be adjudicated as bankrupt or insolvent or file a voluntary petition for bankruptcy or admit in writing that he is unable to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws, or (v) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against him in any bankruptcy, reorganization, or insolvency proceeding, or any action for the purpose of effecting any of the foregoing; or (vi) an order, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition appointing a receiver, trustee, intervenor or liquidator of all of its assets, and such order, judgment or decree shall continue unstayed and in effect for a period of sixty (60) days.

If Maker fails or refuses to pay any part of the principal of or interest upon this Note as the same becomes due, or upon the occurrence of an Event of Default hereunder, then in any such event the holder hereof may, at its option (i) declare the entire unpaid balance of principal and accrued interest on this Note to be immediately due and payable without notice, (ii) reduce any claim to judgment, (iii) foreclose any liens or security interest securing all or any part hereof, and/or (iv) demand, pursue and enforce any of Payee’s rights and remedies, pursuant to any

applicable law or agreement. Each right and remedy available to Payee shall be cumulative of and in addition to each other such right and remedy. No delay on the part of Payee in the exercise of any right or remedy available to Payee shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude other or further exercise thereof or exercise of any other such right or remedy.

7. Notice. Whenever this Note requires or permits any notice, approval, request or demand from one party to another, the notice, approval, request or demand must be in writing and shall be deemed to have been given when personally served or when deposited in the United States mail, registered or certified, return receipt requested, addressed to the party to be notified at the following address (or at such other address as may have been designated by written notice):

	Maker:	AP Holdings International, Inc.
		3001 Knox Street, Suite 401
		Dallas, Texas 75205

	Payee:	8101 West 34th Avenue
		Amarillo, Texas 79121-1069
		Attn: Oliver Kendall Kelley

In the event that the holder hereof shall fail to give notice of default to Maker as provided herein, the sole and exclusive remedy of Maker for such failure shall be to seek appropriate equitable relief to enforce this agreement to give such notice and to have any acceleration of the maturity hereof postponed or revoked and foreclosure proceedings in connection therewith delayed or terminated pending or upon the curing of such default in the manner and during the period of time hereinbefore set out, and Maker shall have no right to damages or any other type of relief not herein specifically set out against the holder hereof, all of which damages or other relief are expressly waived by Maker. The foregoing is not intended and shall not be deemed under any circumstances to require the holder hereof to give notice of any type or nature to Maker not expressly required by other provisions of this Note.

8. Miscellaneous.

(a) Governing Law; etc. This Note is being executed and delivered, and is intended to be performed, in the State of Texas. Except to the extent that the laws of the United States may apply to the terms hereof, the substantive laws of the State of Texas shall govern the validity, construction, enforcement and interpretation of this Note. In the event of a dispute involving this Note or any other instruments executed in connection herewith, the parties irrevocably agree that exclusive venue for such dispute shall lie in any court of competent jurisdiction in Dallas County, Texas, and the parties waive any claim that such forum is inappropriate or inconvenient.

(b) Limitations on Interest. Regardless of any provisions contained in this Note, Payee shall never be deemed to have contracted for or be entitled to receive, collect or apply as interest on this Note, any amount in excess of the Maximum Rate, and, in the

event Payee ever receives, collects or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, any remaining excess shall forthwith be paid to Maker. In determining whether or not the interest paid or payable under any specific contingency exceeds the Maximum Rate, Maker and Payee shall, to the maximum extent permitted under applicable law, (i) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense or fee, rather than as interest, (ii) exclude voluntary prepayments and the effect thereof, and (iii) spread the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term.

(c) Waivers. Maker and each surety, endorser, guarantor and other party ever liable for payment of any sums of money payable on this Note, jointly and severally waive presentment and demand for payment, protest, notice of protest, notice of intent to accelerate, notice of acceleration, and notice of default, and agree that their liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or by any increases or indulgences, or by any release or change in any security for the payment of this Note, and hereby consent to any and all renewals, extensions, increases, indulgences, releases or changes, regardless of the number of such renewals, extensions, increases, indulgences, releases or changes.

(d) Costs of Collection. If this Note is not paid when due or if an Event of Default occurs, Maker promises to pay all costs of enforcement and collection, including reasonable attorney’s fees, whether or not any action or proceeding is brought to enforce the provision hereof.

(e) Partial Invalidity. The unenforceability or invalidity of any provision of this Note shall not affect the enforceability or validity of any other provision of this Note.

(f) Amendment. This Note may be amended or modified only by written instrument duly executed by both Maker and Payee.

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN MAKER AND PAYEE CONCERNING THE MATTERS HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

	MAKER:

	AP Holdings International, Inc.,
	a Texas limited liability company


	By:	/s/ Dennis G McLaughlin
		Dennis G. McLaughlin, Manager

Attachment A

Payee

Golden Spread Energy, Inc.
8101 West 34th Avenue
Amarillo, Texas 79121-1069

Telluride Investments, Inc. f.k.a. GSEJKM, Inc.
8101 West 34th Avenue
Amarillo, Texas 79121-1069

GSEKFT, Inc.
8101 West 34th Avenue
Amarillo, Texas 79121-1069

GSESKO, Inc.
8101 West 34th Avenue
Amarillo, Texas 79121-1069

Neptune Leasing, Inc.
8101 West 34th Avenue
Amarillo, Texas 79121-1069

Oliver Kendall Kelley

8101 West 34th Avenue

Amarillo, Texas 79121-1069

EX-99.3 4 a06-24901_2ex99d3.htm EX-99.3

Exhibit 99.3

STOCK PLEDGE AGREEMENT

This STOCK PLEDGE AGREEMENT (this “Agreement”) is entered into and made effective as of November 17, 2006, by and between AP Holdings International, Inc., a Texas corporation whose address is 3001 Knox Street, Suite 401, Dallas, Texas 75205 (“Pledgor”) and the individuals and entities listed on Attachment A (collectively, “Secured Party”), whose offices are located at 8101 West 34th Avenue, Amarillo, Texas 79121-1069.

WHEREAS, Pledgor is the maker of a promissory note of even date herewith in the original principal amount of $26,712,500.00, payable to the order of Secured Party (the “Note”), and the Note is being given in consideration for the transfer to Pledgor of 106,850,000 shares of Common Stock, par value $0.001 per share, of Apollo Resources International, Inc., a Utah corporation; and

WHEREAS, Pledgor has agreed to pledge such Common Stock (the “Pledged Shares”) to the Secured Party as security for the repayment of the Note (the “Secured Indebtedness”).

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants and promises contained herein, Secured Party and Pledgor hereby agree as follows:

1. Pledge. As collateral security for the payment and performance of the Secured Indebtedness, Pledgor hereby pledges, hypothecates, assigns, transfers, sets over, and delivers unto Secured Party, and hereby grants Secured Party a lien and security interest in, the following:

(a) the Pledged Shares and the certificates representing the Pledged Shares, and all cash, securities, dividends, increases, distributions, and profits received therefrom or in connection therewith, including distributions or payments in partial or complete liquidation or redemption, or as a result of reclassifications, readjustments, reorganizations, stock splits or other changes in time to time received, receivable, or otherwise distributed or delivered to Secured Party, and all rights and privileges pertaining thereto;

(b) all additional shares of stock of Secured Party from time to time acquired by Pledgor in any manner, and all dividends, cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of such additional shares;

(c) all securities hereafter delivered to Secured Party in substitution for, or in addition to, any of the foregoing, all certificates representing or evidencing such securities, and all cash, securities, instruments, documents, dividends, increases, distributions, and profits received therefrom, and any other property at any time and from time to time received by, receivable by, or otherwise distributed or delivered to Secured Party in respect of or in exchange for any or all of the property described;

(d) all subscriptions, warrants, options, and any other rights issued now or hereafter by Secured Party or any other person whatsoever upon or in connection with the Pledged Shares and any part of the Pledged Collateral (as defined below); and

(e) all products and proceeds of the foregoing and all general intangibles and contract rights related thereto, including without limitation, all revenues, distributions, dividends, property, registration rights, contract rights, and other rights and interests that Pledgor is, or may hereafter become, entitled to receive on account of any collateral described in subsections 2(a) through (e);

(all such Pledged Shares, certificates, securities, instruments, documents, dividends, increases, distributions, profits, intangibles, contract rights, and other property being herein collectively called the “Pledged Collateral”).

2. Term. This Agreement shall remain in effect until the Secured Indebtedness is paid in full.

3. Delivery of Pledged Collateral. Concurrently with Pledgor’s execution of this Agreement, Pledgor shall deliver to Secured Party all certificates or instruments representing the Pledged Collateral, together with properly executed irrevocable certificates of assignment thereof, endorsed in blank, as security for the repayment and performance of the Secured Indebtedness.

4. Covenants. So long as the Secured Indebtedness remains outstanding, Pledgor covenants and agrees not to sell, mortgage, hypothecate, assign, or otherwise transfer, nor permit any lien or security interest to be created against, any portion of the Pledged Collateral, in whole or in part, without the prior written consent of Secured Party.

5. Release of Pledged Collateral. This Agreement shall terminate, and Pledgor shall be entitled to a release of the Pledged Collateral from the lien and security interest on the Pledged Collateral created under this Agreement, upon the payment in full of the Secured Indebtedness.

6. Rights and Remedies of Secured Party Upon and After Default.

(a) Remedies. Upon the occurrence of an Event of Default (as defined in the Note), in addition to any and all other rights and remedies which Secured Party may then have hereunder, under other contracts or agreements between Pledgor and Secured Party, under applicable law, or under the Uniform Commercial Code as in effect in the State of Texas (the “Code”), or otherwise, Secured Party may, at its option: (i) declare the entire unpaid balance of principal and all accrued interest on the Secured Indebtedness immediately due and payable, without written notice of demand, notice of intent to accelerate, notice of acceleration, or presentment, all of which are hereby waived; (ii) reduce its claim to judgment, foreclose, or otherwise enforce its security

interest in all or any part of the Pledged Collateral by any available judicial procedure; (iii) after notification, if any, expressly provided for herein, sell or otherwise dispose of, at the office of Secured Party or elsewhere, as chosen by Secured Party, all or any part of the Pledged Collateral, and any such sale or other disposition may be as a unit or in parcels, by public or private proceedings, and by way of one or more contracts, and at any such sale it shall not be necessary to exhibit the Pledged Collateral; (iv) at its discretion, retain the Pledged Collateral in satisfaction of the Secured Indebtedness whenever the circumstances are such that Secured Party is entitled to do so under the Code; (v) purchase the Pledged Collateral at any public sale in accordance with the Code; (vi) purchase the Pledged Collateral at any private sale in accordance with the Code; and (vii) exercise the rights set forth in this Section 6 in accordance with the Code.

(b) Sale of Pledged Collateral. Secured Party is authorized at any sale of the Pledged Collateral, if it deems it advisable, to restrict the prospective bidders or purchasers to those persons who will represent and agree that they are purchasing for their own account, for investment, and not with a view to distribution or sale of any of the Pledged Collateral. Upon any such sale, Secured Party shall have the right to deliver, assign, and transfer to the purchaser thereof the Pledged Collateral so sold. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right of whatsoever kind, including any equity or right of redemption of Pledgor. Pledgor specifically waives, to the fullest extent permitted by applicable law, all rights of redemption, stay, or appraisal that it has or may have under any rule of law or statute now existing or hereafter adopted, and such waiver shall be deemed to have been made after default. Secured Party shall give Pledgor ten (10) days’ written notice of its intention to make any such public or private sale. Secured Party shall have no obligation to disclose or provide any information concerning the Secured Party or the Pledged Collateral to prospective purchasers of the Pledged Collateral other than information in its possession at such time, and Pledgor agrees and acknowledges that it shall be commercially reasonable for any notices of any such sale, published or otherwise, to specifically so state. At any such sale the Pledged Collateral may be sold in one lot as an entirety or in separate parcels, as Secured Party may elect, and any such election shall be presumed to be commercially reasonable. Secured Party shall not be obligated to make any such sale pursuant to any such notice. Secured Party may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Pledged Collateral on credit or for future delivery, the Pledged Collateral so sold may be retained by Secured Party until the selling price is paid by the purchaser thereof, but Secured Party shall not incur any liability in case of the failure of such purchaser to take and pay for the Pledged Collateral so sold, and, in case of any such failure, such Pledged Collateral may again be sold upon like notice. Secured Party may also, at its discretion, proceed by a suit or suits at law or in equity to foreclose the pledge and sell the Pledged Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.

(c) Possible Restrictions on Sale of Pledged Collateral. Because of the Securities Act, or any other applicable laws or regulations, there may be legal restrictions or limitations affecting Secured Party in any attempts to dispose of certain portions of the Pledged Collateral in the enforcement of its rights and remedies hereunder. For these reasons Secured Party is hereby authorized by Pledgor, but not obligated, in the event of any Event of Default hereunder giving rise to Secured Party’s rights, to sell or otherwise dispose of the Pledged Collateral, and after the giving of any notices required herein, to sell all or any part of the Pledged Collateral at a private sale, subject to an investment letter or in any other manner that will not require the Pledged Collateral, or any part thereof, to be registered in accordance with the Securities Act or other applicable rules and regulations promulgated thereunder, or any other law or regulation, at the best price reasonably obtainable by Secured Party at any such private sale or other disposition in the manner mentioned above, and Pledgor specifically acknowledges that any such disposition shall be commercially reasonable under the Code. Secured Party is also hereby authorized by Pledgor, but not obligated, to take such actions, give such notices, obtain such consents, and do such other things as Secured Party may deem required or appropriate in the event of a sale or disposition of any of the Pledged Collateral. Pledgor clearly understands that Secured Party may at its discretion approach a restricted number of potential purchasers and that a sale under such circumstances may yield a lower price for the Pledged Collateral, or any part or parts thereof, than would otherwise be obtainable if same were registered and sold in the open market. Pledgor agrees that such private sale shall constitute a commercially reasonable method of disposing of the Collateral in view of the time, expense, and potential liability to the parties of such transactions of registration of the Collateral in accordance with applicable securities laws.

(d) Notification. Reasonable notification of the time and place of any public sale of the Pledged Collateral, or reasonable notification of the time after which any private sale or other intended disposition of the Pledged Collateral is to be made, shall be sent to Pledgor and to any other person entitled under the Code to notice; provided, that if the Pledged Collateral threatens to decline quickly in value or is of a type customarily sold on a recognized market, Secured Party may sell or otherwise dispose of the Pledged Collateral without notification, advertisement, or other notice of any kind. It is agreed that notice sent or given not less than ten (10) calendar days prior to the taking of the action to which the notice relates is reasonable notification and notice for the purpose of this Agreement.

(e) Application of Proceeds. Upon the maturity of any instrument evidencing the Secured Indebtedness or any part thereof, whether such maturity be by such terms of such instruments or through the exercise of any power of acceleration, Secured Party is authorized and empowered to apply any and all funds realized from the sale of the Pledged Collateral not previously credited against the Secured Indebtedness first, toward the payment of the costs, charges, and expenses, if any, incurred in the collection of such funds hereunder, and then, toward the payment (in such order as Secured Party shall elect) of the Secured Indebtedness, and shall pay any balance remaining to Pledgor or as prescribed by the Code.

(f) Notices. In the event that any notice is required to be given to Pledgor with respect to any sale or liquidation of the Pledged Collateral, any notice addressed to Pledgor at the address set forth in Section 10 below, postage prepaid, deposited in the United States mail ten (10) days prior to the date of any such intended action, shall be deemed to be a sufficient and commercially reasonable notice. Nothing contained herein shall prevent Secured Party from giving notice in any other manner that is considered reasonable.

7. Attorney-in-Fact. For the purposes hereunder set forth, Pledgor does hereby irrevocably make, constitute, designate and appoint Secured Party (and any agents designated by Secured Party) as Pledgor’s true and lawful attorney-in-fact and agent. Upon an Event of Default hereunder by Pledgor, such agent shall have full power and authority for and in the name of Pledgor to arrange for any or all of the Collateral held by it to be transferred into the name of Secured Party or the name or names of Secured Party’s nominee or nominees (in each case as pledgee hereunder). Pledgor does hereby ratify and confirm all that said agent may do or cause to be done in connection with any of the powers or authorities herein conferred.

8. Severability. If any provision of this Agreement or the application thereof to any party or circumstance is held invalid or unenforceable, the remainder of this Agreement and the application of such provisions to other parties or circumstances will not be affected thereby, the provisions of this Agreement being severable in any such instance.

9. No Waiver. No waiver by Secured Party of any right hereunder or of any Event of Default shall be binding upon Pledgor unless in writing executed by Secured Party. Failure or delay by Secured Party to exercise any right hereunder or waiver by Secured Party of any default shall not operate as a waiver of any other right, the further exercise of such right, or any further default.

10. Notice. Any notice or demand required to be given hereunder to Pledgor shall be in writing and shall be deemed to have been duly given and received, if given by hand, when a writing containing such notice is received by the person to whom addressed or, if given by mail, when a certified or registered letter containing such notice, with postage prepaid, is deposited in the United States mail, addressed to:

AP Holdings International, Inc.
3001 Knox Street, Suite 401
Dallas, Texas 75205

11. Successors. This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors, and permitted assigns of the parties. Secured Party may assign this Agreement and its rights hereunder without notice to or the consent of Pledgor, but no such assignment shall relieve Secured Party of its obligations hereunder.

12. Entire Agreement. This Agreement expresses the entire understanding and agreement of the parties with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

13. Binding Effect; Laws. This Agreement shall be governed as to validity, interpretation, effect and in all other respects by the laws of the State of Texas.

14. Financing Statement. Secured Party shall have the right at any time to execute and file this Agreement as a financing statement, but the failure of Secured Party to do so shall not impair the validity or enforceability of this Agreement.

15. Payment of Expenses. At Secured Party’s option, Secured Party may (but shall not be obligated to) discharge taxes, liens, and interest, perform or cause to be performed, for and on behalf of Pledgor, any actions and conditions, obligations, or covenants which Pledgor has failed or refused to perform, and may pay for the repair, maintenance, or preservation of any of the Pledged Collateral, and all sums so expended, including, but not limited to, reasonable attorneys’ fees, court costs, agents’ fees or commissions, or any other costs or expenses, shall become part of the Secured Indebtedness, shall bear interest from the date of payment at the interest rate set forth in the Note, shall be payable at the place designated for payment of the Secured Indebtedness, and shall be secured by this Pledge Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year set forth above.

PLEDGOR:

AP Holdings International, Inc.,
a Texas limited liability company


/s/ Dennis G McLaughlin
Dennis G. McLaughlin, Manager


SECURED PARTY:

Golden Spread Energy, Inc.,
a Texas corporation


By:		/s/ Oliver Kendall Kelley
		Name:		Oliver Kendall Kelley
		Title:		Chief Executive Officer


Telluride Investments, Inc. f.k.a. GSEJKM, Inc.,
a Texas corporation


By:	/s/ Judy K. Morgan
	Name:		Judy K. Morgan
	Title:		President


GSEKFT, Inc.,
a Texas corporation


By:		/s/ Oliver Kendall Kelley
		Name:	Oliver Kendall Kelley
		Title:	Chief Executive Officer

GSESKO, Inc.,
a Texas corporation


By:	/s/ Sharon Kelley Oeschger
	Name:		Sharon Kelley Oeschger
	Title:		President


Neptune Leasing, Inc.,
a Texas corporation


By:		/s/ Oliver Kendall Kelley
		Name:	Oliver Kendall Kelley
		Title:	Chief Executive Officer


/s/ Oliver Kendall Kelley
Oliver Kendall Kelly, Individually