Exhibit 10.6

 

Conformed Copy

 

FOURTH AMENDMENT AGREEMENT

 

Synthetic American Fuel Enterprises II, LLC

 

This Fourth Amendment Agreement (“Fourth Amendment”) is made and entered into as
of April 29, 2005, by and among Synthetic American Fuel Enterprises Holdings,
Inc. (“Holdings”), Marriott Hotel Services, Inc. (“MHSI”) and Serratus LLC
(“Buyer”).

 

W I T N E S S E T H:

 

WHEREAS, Holdings, MHSI and Buyer entered into an Agreement for Purchase of
Membership Interest in Synthetic American Fuel Enterprises II, LLC (the
“Company”) dated as of January 28, 2003, as amended by Amendment Agreement dated
as of June 20, 2003 and Third Amendment Agreement dated as of October 6, 2004
(the “Purchase Agreement”);

 

WHEREAS, Holdings, MHSI and Buyer entered into an Amended and Restated Limited
Liability Company Agreement of the Company dated as of January 28, 2003, as
amended by Amendment Agreement dated as of June 20, 2003, Second Amendment
Agreement dated as of September 3, 2004, and Third Amendment Agreement dated as
of October 6, 2004 (the “LLC Agreement”); and

 

WHEREAS, the parties desire to amend the LLC Agreement and the Purchase
Agreement as provided herein;

 

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

 

ARTICLE I

AMENDMENTS TO LLC AGREEMENT

 

Section 1.1 Amended Definition. The definition of “Sharing Ratio” in Section 1.1
of the LLC Agreement is hereby deleted in its entirety and replaced with the
following:

 

“Sharing Ratio” means (i) for the period from the Closing Date through December
31, 2003, 8.9% for MHSI, 1.1% for Holdings, and 90.0% for Buyer; (ii) for the
period from October 1, 2004 through December 31, 2004, 90.44% for MHSI, 1.1% for
Holdings, and 8.46% for Buyer; (iii) for the period from January 1, 2005 through
May 31, 2005, 97.9% for MHSI, 1.1% for Holdings, and 1.0% for Buyer; and (iv)
for all other periods, 48.8% for MHSI, 1.1% for Holdings and 50.1% for Buyer;
provided, however, that if in any Quarter, the Administrative Member proposes to
produce less than 1,350,000 tons of synthetic fuel, then the Members shall
discuss in good faith an appropriate change in the Sharing Ratio for that
Quarter.

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Section 1.2 Amendments to Section 10.8(a).

 

(a) Section 10.8(a) of the LLC Agreement is deleted in its entirely and replaced
with the following:

 

“(a) (i) Upon the occurrence of a Tax Event (other than a Tax Event described in
the last sentence of the definition of “Tax Event”), (ii) upon the exercise by
Buyer of its right to defer payments for low volume pursuant to Section 2.6 of
the Purchase Agreement for the fourth time (the “Fourth Deferral”), (iii) in the
event there has not been a Successful Resolution by the close of business on
March 31, 2005, or (iv) upon the occurrence of a Tax Event described in the last
sentence of the definition of “Tax Event,” Buyer shall have the option,
exercisable by delivery of written notice thereof to the Company within 60 days
of such Tax Event or Fourth Deferral, in the case of an exercise pursuant to
clauses (i), (ii) or (iv), or on or prior to June 30, 2005, in the case of an
exercise pursuant to clause (iii), to require the Company to redeem its
Membership Interest, in whole but not in part, such redemption to be effective
(A) on the later of (x) the 60th day after the occurrence of such Tax Event or
Fourth Deferral or (y) the tenth day following receipt of the written notice
from Buyer in relation thereto, in the case of an exercise pursuant to clauses
(i) or (ii), (B) as of the first day of the calendar month in which the written
notice from Buyer is received, in the case of an exercise pursuant to clause
(iii), or (C) on the tenth day following receipt of the written notice from
Buyer in the case of an exercise pursuant to clause (iv); provided, however,
that any redemption hereunder shall be subject to the expiration of any waiting
period, if applicable, under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, but once such waiting period expires, shall have effect from
the date specified in clause (A), (B) or (C), as applicable.”

 

(b) Section 10.8(c) of the LLC Agreement is hereby amended by deleting the
proviso at the end of clause (viii) thereof in its entirety and replacing it
with the following:

 

“; provided, however, that if Buyer exercises the option in paragraph (a) above
pursuant to clause (iii) thereof, Buyer shall pay Holdings an amount equal to
the sum of (A) the Annual Adjustment Amount for the Fiscal Year ended November
30, 2004, (B) the Applicable Percentage of the excess of (x) the Estimated Tax
Credits with respect to the Quarter ended February 28, 2005, recomputed using
the revised inflation adjustment factor applicable to the immediately preceding
Fiscal Year published by the IRS pursuant to Section 29(d)(2) of the Code, over
(y) the Estimated Tax Credits actually used in calculating the Variable Deferred
Payment paid by Buyer with respect to Quarter ended February 28, 2005, and (C)
the excess, if any, of (x) the Applicable Percentage of the Estimated Tax
Credits with respect to the period from March 1, 2005 through the last day of
the calendar month preceding the month in which Buyer exercises such option (the
“Final Period”), over (y) the sum of (I) the payments of

 

2

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Purchase Price under the Purchase Agreement, if any, made by Buyer in respect of
such Final Period and (II) the capital contributions, if any, made by Buyer, or
by Buyer Parent on its behalf, to the Company in respect of such Final Period
pursuant to Section 4.1, in lieu of any accrued obligations and liabilities to
make any capital contributions to the Company and any further payments of the
Purchase Price under the Purchase Agreement for such Final Period”

 

Section 1.3 Effect on Capital Accounts. The parties understand and agree that
their Capital Accounts as of the date hereof shall not be adjusted as a result
of the preceding amendments to the LLC Agreement, since these amendments merely
alter the allocation of income and losses among the Members after the date
hereof.

 

ARTICLE II

AMENDMENTS TO PURCHASE AGREEMENT

 

Section 2.1 Amended Definition. The following definition in Annex I to the
Purchase Agreement is hereby deleted in its entirety and replaced with the
following:

 

“Amended LLC Agreement” means the Amended and Restated Limited Liability Company
Agreement of the Operating Company, dated as of January 28, 2003, by and among
Seller, MHSI and Buyer in the form attached as Exhibit I, as amended by the
Amendment Agreement, the Second Amendment Agreement dated as of September 3,
2004 by and among Seller, MHSI and Buyer, the Third Amendment Agreement dated as
of October 6, 2004, by and among Seller, MHSI and Buyer, and the Fourth
Amendment Agreement dated as of April 29, 2005, by and among Seller, MHSI and
Buyer.

 

Section 2.2 Amended Schedule 2.4. Schedule 2.4 (Fixed Deferred Payment Schedule)
to the Purchase Agreement is hereby deleted in its entirety and replaced with
Schedule 2.4 attached hereto.

 

ARTICLE III

MISCELLANEOUS

 

This Fourth Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. This Fourth
Amendment shall be governed by and construed under the laws of the State of New
York applicable to contracts executed and performed therein. The Purchase
Agreement and the LLC Agreement (including the Exhibits and Schedules thereto),
as amended by this Fourth Amendment, constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and thereof. This
Fourth Amendment may not be changed or modified orally but only by an instrument
in writing signed by all the parties, which states that it is an amendment to
this Fourth Amendment. This Fourth Amendment may be executed in any number of
counterparts (including by facsimile), each of which shall for all purposes be
and be deemed to be an original, and all of which shall constitute one and the
same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

3

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IN WITNESS WHEREOF, each party hereto has caused this Fourth Amendment to be
signed on its behalf as of the date first above written.

 

SYNTHETIC AMERICAN FUEL

ENTERPRISES HOLDINGS, INC.

By:  

/s/ Kathleen K. Oberg

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Name:   Kathleen K. Oberg Title:   President MARRIOTT HOTEL SERVICES, INC. By:  

/s/ Kathleen K. Oberg

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Name:   Kathleen K. Oberg Title:   Vice President SERRATUS LLC By:  

/s/

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Name:  

 

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Title:  

 

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4

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Schedule 2.4

 

Fixed Deferred Payment Schedule (SYN II)

 

Period

        Beginning        

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Period

        Ending        

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Payment

        Date        

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               Payment        

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6/1/2003

   8/31/2003    9/20/2003    $ 10,654,000

9/1/2003

   11/30/2003    12/20/2003      14,782,000

12/1/2003

   2/29/2004    3/20/2004      8,447,000

3/1/2004

   5/31/2004    6/20/2004      7,157,000

6/1/2004

   8/31/2004    9/20/2004      7,838,000

9/1/2004

   11/30/2004    12/20/2004      2,870,000

12/1/2004

   2/28/2005    3/20/2005      0

3/1/2005

   5/31/2005    6/20/2005      0

6/1/2005

   8/31/2005    9/20/2005      9,552,000

9/1/2005

   11/30/2005    12/20/2005      9,552,000

12/1/2005

   2/28/2006    3/20/2006      8,186,000

3/1/2006

   5/31/2006    6/20/2006      8,936,000

6/1/2006

   8/31/2006    9/20/2006      9,653,000

9/1/2006

   11/30/2006    12/20/2006      9,653,000

12/1/2006

   2/28/2007    3/20/2007      8,241,000

3/1/2007

   5/31/2007    6/20/2007      8,972,000

6/1/2007

   8/31/2007    9/20/2007      9,691,000

9/1/2007

   11/30/2007    12/20/2007      9,691,000

12/1/2007

   12/31/2007    1/20/2008      4,108,000