Document:

ex10_1.htm

EXHIBIT 10.1

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

           THIS EMPLOYMENT AGREEMENT (“Agreement”), is made and entered into effective as of October 1, 2011 (the “Effective Date”), by and between Circle Star Energy Corp., a Nevada corporation with a principal business address of 919 Milam Street, Suite 2300,  Houston, Texas, 77002 (the “Company”), and S. Jeffrey Johnson, a resident of Texas (the
“Executive”).

The Company will employ the Executive as the Chief Executive Officer of the Company, and the Executive agrees that his employment with the Company is contingent upon the Executive’s agreement to the terms and conditions set forth herein.

           NOW THEREFORE, in consideration of the respective covenants and agreements of the parties herein contained, the receipt of which are hereby acknowledged, the parties, intending legally to be bound, hereby agree as follows:

           1.           Defined Terms. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the following meanings:

 

       1.1           “Board” means the Board of Directors of the Company, excluding the Executive in matters that would be reasonably considered to be a Related Party Transaction.

       1.2           “Compensation Committee” means the Compensation Committee established by the Board, if any.

 

       1.3           “EBITDA” means earnings before interest, taxes, depreciation and amortization.

       1.4           “Related Party Transaction” means a contract or transaction between the Company, or any affiliate of the Company, and the Executive or any affiliate or affiliated entity of the Executive.

       1.5           “Transaction” means a merger, acquisition, share sale, business sale, business combination or other transaction for the acquisition or disposal of any corporate entity, assets, property, group of assets or property interests, or any joint venture or strategic alliance in respect of any assets or group of assets, approved by the Board and, if applicable, the shareholders of the Company, where, in a single transaction,
the consideration for or the value of such transaction, is equal to or greater than $100,000,000 in Transaction Value.

       1.6           “Transaction Value” means the aggregate amount of cash and the fair market value of any securities or other property paid, received or payable directly or indirectly by the Company, in connection with a consummated Transaction.

           2.          Term.  Except as otherwise provided in Section 6 hereof, the term of employment hereunder shall be the two-year period beginning on the Effective Date and ending on the second anniversary of the Effective Date (the “Employment Period”).

 

 

  

  

  

 

           3.          Duties of Executive. The Executive’s principal duties on behalf of the Company are and shall be to fulfill the obligations and duties of Chief Executive Officer, which are all of the duties customarily involved in such position.

           4.          Compensation and General Benefits. The Executive shall be compensated for his services under this Agreement as follows:

	 	
4.1

	
Salary. During the Employment Period and any extensions thereof, the Company shall pay the Executive a salary of not less $200,000 annually.

       4.2           Restricted Shares. The Executive shall be issued shares of common stock of the Company (each, a “Restricted Share”), upon satisfaction of the vesting conditions set forth below:

 

	
  

	
(i)

	
Restricted Share Issuance 1: 1,514,500 Restricted Shares payable and issued on the following schedule: 1/3 on March 1, 2012, 1/3 on June 1, 2012, 1/3 on September 1, 2012.

 

	
  

	
(ii)

	
Restricted Share Issuance 2: 1,514,500 Restricted Shares and payable and issued after satisfaction of the following conditions:

 

	
  

	
(1)

	
Daily trading volume of the Company’s common stock exceeds 300,000 for 20 of the last 30 days prior to issuance; and

 

	
  

	
(2)

	
EBITDA of the Company exceeds $4,000,000 during any four consecutive quarter periods during the term of this Agreement;

 

	
  

	
(iii)

	
Restricted Share Issuance 3: 3,029,000 Restricted Shares payable and issued after satisfaction of the following conditions:

 

	
  

	
(1)

	
Daily trading volume of the Company’s common stock exceeds 450,000  for 20 of the last 30 days prior to issuance; and

 

	
  

	
(2)

	
EBITDA of the Company exceeds $6,000,000 during any four consecutive quarter periods during the term of this Agreement;

 

	
  

	
(iv)

	
Restricted Share Issuance 4: 3,029,000 Restricted Shares payable and issued after the Company enters into a single Transaction which has a Transaction Value equal to or in excess of $100,000,000.

 

 

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4.3           Unvested Restricted Share Issuance Rights. Upon termination of employment by the Company, the Executive’s right to any unvested Restricted Shares shall terminate and be null and void twelve (12) months following such termination.  The Executive’s rights to any unvested Restricted Shares, except the Restricted Shares issuable under Section 4.2(i), shall terminate immediately and be null and void upon termination of employment by the Executive.

 

4.4           Transferability. The Restricted Shares may not be sold, assigned, transferred or pledged, other than by will or the laws of descent and distribution, and any such attempted transfer shall be void.  The Restricted Shares and underlying shares of common stock of the Company (the “Common Shares”) have not been registered under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”), or any states securities laws. Any Common Shares that are issued upon vesting of the Restricted Shares are restricted securities as defined in Rule 144(a)(3) of the U.S. Securities Act and will bear a legend in the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”).  THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES
NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE CORPORATION.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.”

 

 

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In the event the Company proposes for any reason to register any of its shares of common stock or other securities under the U.S. Securities Act, the Executive shall have the Restricted Shares included in such registration.

4.5           Gross-Up Payment.  The Company shall provide a tax gross-up payment to the Executive payable in Common Shares upon the issuance of Restricted Shares to cover a portion of the federal and applicable state income taxes applicable to the Common Shares such that the net amount received by the Executive after all federal and state income taxes applicable to the Common Shares is equal to the net amount the Executive would have received after income taxes if the Common Shares were instead subject to federal and applicable state long-term capital gain taxes; provided that the
total number of Common Shares issued as a tax gross-up payment shall not exceed 25% of the number of Restricted Shares issued.

 

4.6           Vacation. During each twelve (12) month period during which the Executive is employed by the Company pursuant to this Agreement, the Executive shall be entitled to four weeks of paid vacation, prorated during the course of the employment. Any unused vacation time shall accrue and be carried over into the next twelve month period.

 

    5.           Termination of Employment.  The employment of the Executive under this Agreement may be terminated with or without cause by either party with 30 days written notice.

    6.           Notice of Termination. Any notice of termination of the Executive’s employment under this Agreement shall be communicated in writing and delivered to the other party as provided in Section 10.

    7.           Severance Conditions Upon Termination of Employment Relationship. Upon termination of employment by the Company, the Executive shall receive 90 days severance at the current salary upon such termination.

 

    8.           Confidentiality. The Executive covenants and agrees that he shall keep and maintain confidential information strictly confidential in accordance with applicable law.

    9.           Indemnification.  The Company shall indemnify the Executive, to the maximum extent permitted by applicable law, against all costs, charges, and expenses incurred or sustained by the Executive in connection with any action, suit, or proceeding to which the Executive may be made a party by reason of being an officer, director, or employee of the Company or of any subsidiary or affiliate of the Company.  The Company shall use commercially reasonable efforts to provide, at its expense, directors’ and officers’ liability insurance for
executives of the Company, including the Executive.

   10.           Notices. All notices hereunder shall be in writing and shall be deemed given if hand-delivered or deposited with a nationally recognized overnight delivery service such as FedEx for next Business Day delivery, or in the mail, postage prepaid, registered or certified with a return receipt requested, and addressed as follows:

 

 

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	 	If to Executive:                                            

S. Jeffrey Johnson

________________________

________________________

	 	 
	 	
If to Company:

Circle Star Energy Corp.

919 Milam Street, Suite 2300

Houston, Texas

77002

                                                   

or to such other addresses as the parties hereto may designate by written notice pursuant to this paragraph.

   11.           Amendment. This Agreement may be amended or modified only by an agreement in writing signed by the Company and the Executive.

   12.           Entire Agreement. This Agreement is complete, and all promises, representations, understandings, warranties, and agreements with reference to the subject matter herein have been fully and finally expressed herein; and this Agreement supersedes any and all prior agreements with respect to the subject matter hereof. 

   13.           Governing Law. This Agreement shall be construed according to and governed by the laws of the State of Texas.

 

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IN WITNESS WHEREOF, the parties hereto or their duly authorized representatives have caused this Agreement to be executed as of the date first above written.

 

 

	 	
CIRCLE STAR ENERGY CORP.

	 	 
	 	
 

By: _______________________________

Name: _____________________________

Title: ______________________________

 

 

	 	EXECUTIVE
	 	

___________________________________

S. Jeffrey Johnson

 

 

 

 

 

 

 

 

 

6Second Amendment

Second Amendment To Credit Agreement
This Second Amendment to Credit Agreement (herein, the “Amendment”) is entered into as of October 11, 2011, by and among FCStone Financial, Inc., an Iowa corporation (the “Borrower”), INTL FCStone Inc., as a Guarantor, the financial institutions party to this Amendment, as lenders (the “Lenders”), and Bank of Montreal, Chicago Branch, as administrative agent (the “Administrative Agent”).
Preliminary Statements
A.    The Borrower, the Guarantors, the Lenders and the Administrative Agent entered into a certain Credit Agreement dated as of December 2, 2010, as amended (the “Credit Agreement”).  All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.
B.    The Borrower has requested that the Lenders make certain amendments to the Credit Agreement, and the Lenders are willing to do so under the terms and conditions set forth in this Amendment.
Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
		
	Section 2.
	Amendment.

Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement shall be and hereby is amended as follows: 
1.1.    The defined terms “Borrowing Base”, “Borrowing Limit” and “Termination Date” appearing in Section 5.1 of the Credit Agreement shall be amended and restated to read in their entirety as follows:
“Borrowing Base” means, as of any time it is to be determined, the sum of:
(a) the sum of: 
(i) 95% of the sum of (A) the aggregate amount of all obligations of all Sellers under Eligible Repurchase Agreements to repurchase from the Borrower all Qualified Commodities (other than Qualified Commodities consisting of Sorghum) sold by the Sellers to the Borrower under the Eligible Repurchase Agreements, plus (B) an amount equal to 90% of the Hedging Value of all Hedging Agreements maintained in an Eligible Hedging Account with respect to such Qualified Commodities, minus (C) the Concentration Limit; plus 
(ii) the lesser of (A) $15,000,000 when taken together with the amounts set forth in clause (b)(ii) of this definition and (B) 89% of the aggregate amount of all obligations of all Sellers under Eligible Repurchase Agreements to repurchase from the Borrower all Qualified Commodities consisting of Sorghum sold by the Sellers to the Borrower under the Eligible Repurchase Agreements, 

provided that the amount included in the Borrowing Base pursuant to this clause (a) shall not at any time exceed 90% of the sum of (i) the market value at such time of all Eligible Commodities purchased by the Borrower under all Eligible Repurchase Agreements, plus (ii) the Hedging Value of all Hedging Agreements maintained in an Eligible Hedging Account with respect to such Eligible Commodities, minus (iii) the Concentration Limit; plus
(b) the sum of: 
(i) 95% of the sum of (A) the aggregate principal amount of all payment obligations of all Sellers under Eligible Loan Receivables secured by Qualified Commodities (other than Qualified Commodities consisting of Sorghum) owed to the Borrower, plus (B) an amount equal to 90% the Hedging Value of all Hedging Agreements maintained in an Eligible Hedging Account with respect to such Eligible Loan Receivables, minus (c) the Concentration Limit, plus 
(ii) the lesser of (A) $15,000,000 when taken together with the amounts set forth in clause (a)(ii) of this definition and (B) 89% of the aggregate principal amount of all payment obligations of all Sellers under Eligible Loan Receivables secured by Qualified Commodities consisting of Sorghum owed to the Borrower, 
provided that the amount included in the Borrowing Base pursuant to this clause (b) at any time may not exceed 90% of the (i) market value at such time of all Eligible Commodities pledged to the Borrower as collateral security for the Eligible Loan Receivables,  plus (ii) and the Hedging Value of all Hedging Agreements maintained in an Eligible Hedging Account with respect to such Eligible Commodities, minus (iii) the Concentration Limit; 
provided that (i) the Administrative Agent shall have the right upon five (5) Business Days' notice to the Borrower to reduce the foregoing advance rates in its reasonable discretion based on results from any field audit or appraisal of the Collateral and (ii) the Borrowing Base shall be computed only as against and on so much of such Collateral as is included on the Borrowing Notice substantially in the form of Exhibit A attached hereto furnished from time to time by the Borrower pursuant to this Agreement and, if required by the Administrative Agent pursuant to any of the terms hereof or any Collateral Document, as verified by such other evidence reasonably required to be furnished to the Administrative Agent pursuant hereto or pursuant to any such Collateral Document.
“Borrowing Limit” means, at any time the same is determined (including, at the option of the Administrative Agent, daily computations of the value of Eligible Commodities and Hedging Value of all Hedging Agreements), an amount equal to the lesser of: 
(i) the Borrowing Base as then determined and computed, and 
(ii) the sum of:
 (A) 85% of (1) the market value at such time of all Eligible 

Commodities (other than Eligible Commodities consisting of Sorghum) purchased by the Borrower under all Eligible Repurchase Agreements, plus (2) the Hedging Value of all Hedging Agreements maintained in an Eligible Hedging Account with respect to all Eligible Commodities (including Sorghum), minus (3) the Concentration Limit; plus 
(B) 85% of (1) the market value at such time of all Eligible Commodities (other than Eligible Commodities consisting of Sorghum) pledged to the Borrower as collateral security for the Eligible Loan Receivables, plus (2) the Hedging Value of all Hedging Agreements maintained in an Eligible Hedging Account with respect to all Eligible Commodities (including Sorghum), minus (3) the Concentration Limit; plus 
(C) the lesser of: 
(1) $15,000,000, and 
(2) the sum of: 
(I) 80% of the market value at such time of all Eligible Commodities consisting of Sorghum purchased by the Borrower under all Eligible Repurchase Agreements; plus 
(II) 80% of the market value at such time of all Eligible Commodities consisting of Sorghum pledged to the Borrower as collateral security for the Eligible Loan Receivables.
“Termination Date” means October 9, 2012, or such earlier date on which the Commitments are terminated in whole pursuant to Section 1.10, 9.2 or 9.3 hereof.
1.2.    Clause (d) of the defined term “Eligible Commodities” appearing in Section 5.1 of the Credit Agreement shall be amended and restated to read in its entirety as follows:
(d)    if such Qualified Commodity is subject to an Agreement to Pledge, then the Borrower shall have delivered an original warehouse receipt with all necessary endorsements no later than one (1) Business Day after the Administrative Agent has advanced a Loan in reliance upon such Agreement to Pledge;
1.3.    Section 5.1 of the Credit Agreement shall be and hereby is amended by inserting a defined in its appropriate alphabetical order, which such defined term shall read as follows:
“Concentration Limit” means the aggregate amount by which (a) the obligations of each Seller (including each such Seller's Subsidiaries and Affiliates) to repurchase Qualified Commodities immediately following the consummation of the applicable Eligible Repurchase Agreement or the amount of the initial loans and advances made to each Seller (including each such Seller's Subsidiaries and Affiliates) in connection with the applicable Eligible Loan Agreement, as the case may be, exceeds $13,500,000, plus (b) the Borrower's loans and advances to each such Seller (including advances set forth in clause (a) above) exceeds $18,000,000.

1.4.    Section 8.9(g) of the Credit Agreement shall be amended and restated to read in its entirety as follows:
(g)    the Borrower's loans and advances to Sellers pursuant to Repurchase Agreements or Loan Agreements; and
1.5.    Exhibit A of the Credit Agreement shall be amended and restated in its entirety in the form of Exhibit A attached hereto.
		
	Section 2.
	Conditions Precedent.

This Amendment shall become effective upon satisfaction of all of the following conditions precedent:
2.1.    The Borrower, the Guarantors, the Lenders and the Administrative Agent shall have executed and delivered this Amendment.
2.2.    The Administrative Agent shall have received copies of the certificates of good standing for the Borrower and the Guarantor (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state of its incorporation or organization.
2.3.    The Administrative Agent shall have received copies of all amendments and supplements to the Borrower's and the Guarantor's articles of incorporation and bylaws (or comparable organizational documents) since December 2, 2010, certified in each instance by its Secretary or Assistant Secretary; 
2.4.    The Administrative Agent shall have received a fully executed copy of the fee letter dated as the date hereof between the Administrative Agent and the Borrower, and all fees pursuant to such fee letter shall have been received by the Administrative Agent.
2.5.    Legal matters incident to the execution and delivery of this Amendment shall be satisfactory to the Administrative Agent and its counsel.
		
	Section 3.
	Representations.

3.1.    In order to induce the Administrative Agent and the Lenders to execute and deliver this Amendment, the Borrower hereby represents to the Administrative Agent and the Lenders that as of the date hereof (a) the representations and warranties set forth in Section 6 of the Credit Agreement are and shall be and remain true and correct in all material respects (except to the extent that such representations and warranties relate to an earlier date) and (b) it is in compliance with the terms and conditions of the Credit Agreement and no Default or Event of Default has occurred and is continuing under the Credit Agreement or shall result after giving effect to this Amendment.
3.2.    Since December 2, 2010, there has been no amendments, modifications, supplements or restatements to the Borrower's or Guarantor's articles of incorporation and bylaws (or comparable organizational documents), except for such amendments or supplements delivered to the Administrative Agent in accordance with Section 2 of this Amendment, and such articles of incorporation and bylaws (or comparable organizational documents) are in full force and effect on the date hereof.
3.3.    There has been amendment, modifications, supplements or restatements to the Borrower's and Guarantor's resolutions delivered to the Administrative Agent in connection with the Credit Agreement 

and such resolutions have not been revoked and are in full force and effect as of the date hereof.
		
	Section 4.
	Miscellaneous.

4.1.    The Borrower heretofore executed and delivered to the Administrative Agent the Security Agreement and certain other Collateral Documents. The Borrower hereby acknowledges and agrees that the Liens created and provided for by the Collateral Documents continue to secure, among other things, the Obligations arising under the Credit Agreement as amended hereby; and the Collateral Documents and the rights and remedies of the Administrative Agent thereunder, the obligations of the Borrower thereunder, and the Liens created and provided for thereunder remain in full force and effect and shall not be affected, impaired or discharged hereby.  Nothing herein contained shall in any manner affect or impair the priority of the liens and security interests created and provided for by the Collateral Documents as to the indebtedness which would be secured thereby prior to giving effect to this Amendment.
4.2.    Except as specifically amended herein, the Credit Agreement, including without limitation the Guarantees set forth in Section 12 thereof, shall continue in full force and effect in accordance with its original terms.  Reference to this specific Amendment need not be made in the Credit Agreement, the Notes, or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.
4.3.    The Borrower agrees to pay on demand all out of pocket costs and expenses of or incurred by the Administrative Agent in connection with the negotiation, preparation, execution and delivery of this Amendment, including the fees and expenses of counsel for the Administrative Agent; provided, that such fees and expenses of counsel in connection with this Amendment shall not exceed $5,000.
4.4.    This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement.  Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original.  Delivery of executed counterparts of this Amendment by telecopy or by e‐mail transmission of an Adobe portable document format file (also known as a “PDF” file) shall be effective as an original.  This Amendment shall be governed by the internal laws of the State of Illinois.
[Remainder Left Intentionally Blank]

This Second Amendment to Credit Agreement is entered into as of the date and year first above written.
“Borrower”
FCStone Financial, Inc.
		
	By
	   /s/  Michael J. Knobbe

Name   Michael J. Knobbe   
Title   President  

By   /s/  Bruce Fields  
Name   Bruce Fields
Title   Chief Operating Officer

“Guarantor”

INTL FCStone Inc.
		
	By
	   /s/ Sean O'Connor

Name   Sean O'Connor
Title   Chief Executive Officer
By   /s/ Scott J. Branch
Name   Scott J. Branch
Title   Chief Operating Officer

Accepted and agreed to.
Bank of Montreal, Chicago Branch, as Administrative Agent and a Lender
		
	By
	   /s/  Scott M. Ferris

Name   Scott M. Ferris
Title   Managing Director

CoBank, ACB, as a Lender
By   /s/  Bert D. Johnson
Name   Bert D. Johnson
Title   Vice President

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