Document:

exv10w8

Exhibit 10.8

August 4, 2009

NYTEX Energy Holdings Inc.

12222 Merit Drive, Suite 1850

Dallas, Texas 75251 

Attn: Michael Galvis, CEO

Dear Mr. Galvis:

This is to confirm our understanding pursuant to which NYTEX Energy Holdings, Inc. (the “Company”)
has agreed to engage National Securities Corporation, a Washington corporation (“National”), to
act as its exclusive placement agent for the Company during the period commencing on the date
hereof and ending the earlier of the termination date of the Financing described herein or six
months from the date hereof (in the event that no closing of the Financing has occurred by that
date), unless earlier terminated pursuant to Section 12 (the “Engagement Period” or the “Term”).

1. Financing. National shall assist the Company in raising capital in the form of debt, equity or
equity-linked securities of the Company or a combination of the foregoing (the “Financing”). The specific
terms and conditions of the Financing shall ultimately be agreed to by the Company and the parties to the
Financing after good faith negotiations. The Financing will be subject to a satisfactory due
diligence investigation of the Company and general market conditions.

The Financing will be made in accordance with exemptions from the registration and prospectus
requirements of the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Act”) provided by Regulation D under the Act (“Regulation D”) and
the qualification and registration requirements of applicable state and foreign securities or blue
sky laws and regulations.

2. The Placement Fee. In connection with any Financing during the Term of this agreement except for
up to $8 million of the founders round currently underway, National will be paid an aggregate
placement agent fee (the “Placement Fee”) as stated below, unless such fee must be adjusted to meet the
requirements of the party or parties who will ultimately provide the capital (the “Capital
Provider”) and who were introduced to the Company by National. Should the Capital Provider request that
National’s Placement Fee be adjusted, and the Company is desirous of obtaining Financing from such Capital
Provider, National agrees to further negotiate in good faith its Placement Fee with the Company and
the Capital Provider. National shall not be entitled to any Placement Fee with respect to securities
sold to KCG or Lion Share Capital. All such fees shall be immediately paid by the Company to National at the
closing of the Financing; however, if such Financing occurs through multiple closings, then a pro
rata portion of such fees shall be paid upon each closing:

	 	(a)	 	National shall receive an aggregate cash fee equal to seven (7%) of the
aggregate sales price of securities sold in the Financing.
	 
	 	(b)	 	National or its designees shall receive four-year warrants (“Warrants”) to
purchase an aggregate of five percent (5%) of the number of equity Shares sold in the Financing
at an exercise price equal to the purchase price of the securities with said Warrants
having selling restrictions for 18 months. The Warrants shall contain customary terms,

	 	 	 	 	 
	New York Office

	 	Chicago Office
	 	Dallas Office
	120 Broadway, 27th Floor

	 	875 N. Michigan Ave, Suite 1560
	 	5040 Addison Circle, #5751
	New York, NY 10271

	 	Chicago, IL 60611
	 	Addison, TX 75001
	212-417-8000

	 	312-867-3470
	 	214-484-4989

 

 

NYTEX — National Securities Agreement

8-04-09

Page 2

	 	 	 	including, without limitation, provisions for cashless exercise and registration
rights consistent with the registration rights granted to the investors in the
Financing.
	 
	 	(c)	 	National shall be entitled to the Placement Fee set forth in Section 2(a)
with respect to any securities of the Company sold within twelve (12) months of the later of (i)
the conclusion of the Engagement Period or (ii) the final closing of the Financing
(“Tail Period”) to any parties introduced to the Company by National during the Engagement
Period (“National Introduced Parties”). For these purposes, National Introduced
Parties also means and includes any party, which is directly or indirectly connected with
or related to one of the National Introduced Parties including, without limitation,
all affiliates as well as any referrals from any of the National Introduced Parties.
	 
	 	(d)	 	Upon execution of this agreement, the Company shall pay National a
non-refundable due diligence retainer of $7,500 per month for a period of three months (the
“Retainer”). The Retainer shall be credited towards the cash fee described in section 2 (a) above.

3. Indemnification. The Company agrees to indemnify National in accordance with the provisions of
Annex A hereto, which is incorporated by reference and made a part hereof.

4. Expenses. Subject to pre-approval by the Company, the Company shall reimburse National for all
of its actual out-of-pocket expenses, including but not limited to reasonable and documented travel,
legal fees and other expenses, incurred in connection with its services hereunder, whether or not any
corporate finance or acquisition transaction is commenced or completed. National shall submit a budget
proposal to the Company and receive written authorization from the Company prior to incurring expenditures for
which it shall request reimbursement from the Company. National will not bear any of the Company’s
legal, accounting, printing or other expenses in connection with any transaction considered
or consummated hereby. It also is understood that National will not be responsible for any fees or
commissions payable to any finder or to any other financial or other advisor utilized or retained
by the Company.

5. National’s and the Company’s Relationships with Others. The Company acknowledges that
National and its affiliates are in the business of providing investment banking, financial advisory
and consulting services (of all types contemplated by this agreement) to others and agrees that the
provision of such services shall not constitute a breach hereof of any duty owed to the Company by virtue of
this Agreement. Nothing contained herein, other than National’s obligations relating to the Company’s
Confidential Material as provided in Section 7 hereof, shall be construed to limit or restrict
National or its affiliates in conducting such businesses with respect to others or in rendering such services to
others.

6. Selected Dealers. National shall have the right to engage additional broker-dealers
(“Selected Dealers”) who are licensed members of the FINRA and registered as broker dealers with the
Securities and Exchange Commission. Such Selected Dealers may be engaged by National pursuant to selected
dealer agreements and shall receive a portion of the Placement Fee pursuant to such agreements.

7. Confidential Information. In connection with the rendering of services hereunder, National has
been or will be furnished with certain confidential information of the Company including, but not
limited to, financial statements and information, cost and expense data, scientific data, intellectual
property, trade secrets, business strategies, marketing and customer data, and such other information not generally
available from public or published information sources. Such information shall be deemed
“Confidential Material”, shall be used solely in connection with the provision of services contemplated hereby,
and shall not be disclosed by National without the prior written consent of the Company. In the event
National is required by applicable law or legal process to disclose any of the Confidential
Material,

 

 

NYTEX — National Securities Agreement

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Page 3

National will deliver to the Company prompt notice of such requirement (by fax or overnight courier
promptly following National’s knowledge or determination of such requirement) prior to such
disclosure so the Company may seek an appropriate protective order and/or waive compliance of this
provision. If, in the absence of a protective order (because the Company elected to not seek such
an order or it was denied by a court of competent jurisdiction) or receipt of written waiver,
National is nonetheless, in the written opinion of its counsel, compelled to disclose any
Confidential Material, National may do so without liability hereunder.

8. Limitation Upon the Use of Advice and Services

	 	(a)	 	No person or entity, other than the Company (including its directors,
officers and employees), shall be entitled to make use of, or rely upon any advice of National to
be given hereunder, and the Company shall not transmit such advice to, or encourage or
facilitate the use or reliance upon such advice by others without the prior written
consent of National.
	 
	 	(b)	 	The Company hereby acknowledges that National, for services rendered as
contemplated by this Agreement, makes no commitment whatsoever to make a market in any of the
Company’s securities on any stock exchange or in any electronic marketplace. Any
decision by National to make a market in any of the Company’s securities shall be
based solely on the independent judgment of National’s management, employees, and agents
and pursuant to all applicable rules and regulations.
	 
	 	(c)	 	Use of National’s names in annual reports or any other report of the Company
or releases by the Company requires the prior written approval of National unless the Company is
required by law to include National’s name in such annual reports, other report or
release of the Company, in which event the Company shall furnish to National copies of such
annual reports or other reports or releases using National’s names in advance of
publication by the Company.

9. Control Transaction. If the Company executes a letter of intent to conduct a Control Transaction
or consummates a Control Transaction with any party (irrespective of whether National introduced such
person to the Company) prior to the earlier of the closing of the Financing or the termination or
expiration date of this Agreement, then, the Company shall pay National an aggregate cash fee of 2% of the
Control Transaction Consideration received upon the closing of such Control Transaction to be paid upon the
closing of the Control Transaction. In the event such a Control Transaction does not close within a
period of six months following termination or expiration of this Agreement, the Company shall, at
National’s option, pay National the sum of $250,000 promptly following the expiration of such six month
period. For purposes hereof, a “Control Transaction” shall mean any transaction or series or combination of
transactions, whereby, directly or indirectly, control of, or a majority interest in, the Company
or all or substantially all of its businesses, assets or properties, is sold, leased or otherwise
transferred, including, without limitation, a sale or exchange of capital stock or assets, a lease of assets with or
without a purchase option, a merger or consolidation, a leveraged buy-out, a liquidation, the formation of a
joint venture or partnership or any other similar transaction. In the case of a tender or exchange offer
or a multi-step transaction which contemplates the acquisition of more than 50% of the Company’s
outstanding voting stock, a transaction shall be deemed to have been consummated upon the
acquisition of more than 50% of the Company’s outstanding voting power or the ability to elect a majority of
the Company’s Board of Directors. For purposes hereof, Control Transaction Consideration shall mean the
total value of all cash, securities, other property and any other consideration, including, without
limitation, any contingent, earned or other consideration paid or payable, directly or indirectly,
to the Company or holders of its securities in connection with a transaction. Control Transaction
Consideration

 

 

NYTEX — National Securities Agreement

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Page 4

shall also be deemed to include any indebtedness, including, without limitation, pension
liabilities, guarantees and other obligations assumed, directly or indirectly, in connection with,
or which survives the closing of, a transaction.

10. Cooperation. The Company will cooperate with and will furnish National or entities introduced
by National with all reasonable information and data concerning the Company and will provide National
with reasonable access to the Company’s officers, directors, employees, independent accountants and
legal counsel, provided that National and entities introduced by National are subject to the terms
of Confidentiality described in Section 7 herein with evidence provided in writing by such entities
introduced by National. The Company represents that all information made available to National
for distribution to investors will be complete and correct in all material respects. Notwithstanding
anything set forth above to the contrary, National shall not be responsible for any due diligence
investigation of the Company on behalf of any other party in connection with its services hereunder.

11. Miscellaneous.

	 	(a)	 	Any notice or communication between the parties hereto shall be sufficiently given if
sent by certified or registered mail, postage prepaid, or faxed and confirmed if to the Company,
addressed to it at: NYTEX Energy Holdings Inc., 12222 Merit Drive, Suite 1850, Dallas,
Texas, 75251, or if to National, addressed to them at: National Securities Corporation,
120 Broadway, 27th Floor, New York, NY 10271, Attention: Brian Friedman. Such
notice or other communication shall be deemed to be given on the date of receipt.
	 
	 	(b)	 	This Agreement embodies the entire agreement and understanding between the Company and
National and supersedes any and all negotiations, prior discussions and preliminary and
prior agreements and understandings related to the subject matter hereof, and may be modified
only by a written instrument duly executed by each party. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and personal representatives of
each of the parties hereto.
	 
	 	(c)	 	This Agreement has been duly authorized, executed and delivered by and on behalf of the
Company and National.
	 
	 	(d)	 	This Agreement shall be deemed to have been made and delivered in New York City and
shall be governed as to validity, interpretation, construction, affect and in all other
respects by the laws of the State of New York The parties agree that any dispute, claim or
controversy directly or indirectly relating to or arising out of this Agreement, the termination or
validity hereof, any alleged breach of this Agreement or the engagement contemplated hereby (any
of the foregoing, a “Claim”) shall be submitted to the Judicial Arbitration and Mediation
Services, Inc (JAMS), or its successor, in New York, for final and binding arbitration in
front of a panel of three arbitrators with JAMS in New York, New York under the JAMS
Comprehensive Arbitration Rules and Procedures (with each of National and the Company
choosing one arbitrator, and the chosen arbitrators choosing the third arbitrator). The
arbitrators shall, in their award, allocate all of the costs of the arbitration,
including the fees of the arbitrators and the reasonable attorneys’ fees of the prevailing party, against the
party who did not prevail. The award in the arbitration shall be final and binding. The arbitration
shall be governed by the Federal Arbitration Act, 9 U.S.C. Sec.1-16, and the judgment upon the
award rendered by the arbitrators may be entered by any court having jurisdiction
thereof. The Company and National agree and consent to personal jurisdiction, service of process
and venue in any federal or state court within the State and County of New York in connection
with any action brought to enforce an award in arbitration.

 

 

NYTEX — National Securities Agreement

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Page 5

	 	(e)	 	There is no relationship of partnership, agency, employment, franchise or joint
venture between the parties. No party has the authority to bind the other or incur any
obligation on the other’s behalf with the exception of the courts having jurisdiction over this
Agreement.
	 
	 	(f)	 	The Company hereby acknowledges that National is not a fiduciary of the Company. The
execution of this Agreement does not constitute a commitment by National or the Company
to consummate any transaction contemplated hereunder and does not ensure the successful
placement or underwriting of securities of the Company or the success of National with
respect to securing any financing or acquisition targets on behalf of the Company.
	 
	 	(g)	 	This Agreement and the rights hereunder may not be assigned by either party (except
by operation of law).
	 
	 	(h)	 	Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or enforceability of any
of the terms or provisions of this Agreement in any other jurisdiction. If any provision
of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only as broad as is enforceable.

12. Termination. This Agreement may be terminated at any time prior to the expiration of the Term
by either party upon five (5) days prior written notice to the other party. In the event of any
such termination, this engagement letter shall terminate and shall be of no further force and effect
except for (i) continuing indemnity obligations hereunder, (ii) National shall be entitled to retain compensation
for services it has rendered in accordance with Section 2(a), and receive reimbursement for expenses it
has incurred up to the date of such termination in accordance with Section 4 and (iii) the Company
shall be responsible for fees that may become due in respect of any National Introduced Investors under
Section 2(b).

In the event this Agreement shall be terminated in accordance with the provisions of this Section
12 or upon expiration of this Agreement, the sections headed “Confidential Information,”
“Indemnification,” “Miscellaneous,” “Expenses,” “Limitation of Liability” and the “Tail Period”
provisions set forth under Section 1 will survive for an additional twelve (12) month time period.

13. Limitation of Liability. The Company agrees that National will not be liable to the Company for
any claims, losses, damages, liabilities, costs or expenses related to the engagement hereunder,
except to the extent finally judicially determined to have resulted solely from the gross negligence or
willful misconduct of National, and then only to the extent of any compensation paid to National by the
Company hereunder. In no event will National be liable for consequential, special, indirect,
incidental, punitive or exemplary losses, damages or expenses.

14. Exclusivity. The Company represents, warrants and agrees that it has not, as of the date
hereof, engaged the services of any other broker, agent, advisor or finder in connection with the services
and the transactions contemplated herein.

15. Non Contravention. During the Engagement Period, the Company shall not negotiate, enter into or
attempt to negotiate or enter into any agreement, covenant or understanding, written or oral, with
any other person or entity, directly or indirectly that could in any manner be construed to be
inconsistent with this Agreement or could undermine any of the rights or interests of National, in, under or in
respect of this Agreement and agrees not to interfere with, circumvent, frustrate or otherwise impede in any manner
the

 

 

NYTEX — National Securities Agreement

8-04-09

Page 6

realization by National of any of the objectives it seeks or benefits derived, or to be derived,
from any of the foregoing.

16. Provision for Alternative Outcomes. In the event that other services are requested by the
Company, the parties hereto shall negotiate in good faith to determine a mutually acceptable level
of compensation in such an eventuality.

18. Counterparts. This Agreement may be executed in one or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf” signature page were an
original thereof.

If you are in agreement with the foregoing, please execute and return one copy of this letter to
National.

	 	 	 	 	 
	 	Sincerely, 

NATIONAL SECURITIES CORPORATION

 	 
	 	By:  	/s/ Brian Friedman
 	 
	 	 	Brian Friedman 	 
	 	 	Managing Director, Head of Investment Banking 	 
	 

Agreed to and Accepted

this 5 day of August, 2009

	 	 	 	 	 
	NYTEX HOLDINGS INC.

 	 	 
	By:  	/s/  Michael Galvis
 	 	 
	 	Michael Galvis 	 	 
	 	Chief Executive Officer 	 	 
	 

 

 

ANNEX A

THE COMPANY INDEMNIFICATION

     The Company agrees to indemnify and hold harmless National and its affiliates and their
respective officers, directors, employees, agents (including selected dealers) and controlling
persons (National and each such person being an “Indemnified Party”), from and against any losses,
claims, damages and liabilities, joint or several, to which such Indemnified Party may become
subject under any applicable law, or otherwise, which relate to or arise in any manner out of any
transaction, financing, or any other matter (collectively, the “Matters”) contemplated by the
engagement letter of which this Annex A forms a part and the performance by National of the
services contemplated thereby, and will promptly reimburse each Indemnified Party for all
reasonable expenses (including reasonable fees and expenses of legal counsel) as incurred in
connection with the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a
party and whether or not such claim, action or proceeding is initiated or brought by or on behalf
of the Company. Notwithstanding the foregoing, the Company shall not be liable under the foregoing
to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a
court of competent jurisdiction to have resulted solely from National’s willful misconduct, bad
faith or gross negligence.

     The Company also agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company or its security holders or creditors
related to, arising out of, or in connection with, any Matters, the engagement of National
pursuant to, or the performance by National of the services contemplated by, the engagement
letter, except to the extent any loss, claim, damage, liability if found in a final judgment by a
court of competent jurisdiction to have resulted solely from National’s bad faith or gross
negligence.

     If the indemnification of an Indemnified Party provided for this letter agreement is for any
reason held unenforceable, although otherwise applicable in accordance with its terms, the Company
agrees to contribute to the losses, claims, damages and liabilities for which such indemnification
is held unenforceable (i) in such proportion as is appropriate to reflect the relative benefits to
the Company, on the one hand, and National, on the other hand, of any Matter (whether or not the
Matter is consummated) or (ii) if (but only if) the allocation provided for in clause (i) is for
any reason held unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of the Company, on the one
hand, and National, on the other hand, as well as any other relevant equitable considerations. The
Company agrees that for the purposes of this paragraph the relative benefits to the Company and
National of any contemplated Matter (whether or not such Matter is consummated) shall be deemed to
be in the same proportion that the total value paid or received or to be paid or received by the
Company as a result of or in connection with any Matter, bears to the fees paid or to be paid to
National under the engagement letter; provided, however, that, to the extent permitted by
applicable law, in no event shall the Indemnified Parties be required to contribute an aggregate
amount in excess of the aggregate fees actually paid to National under the engagement letter of
which this Annex A is a part.

     Promptly upon receipt by an Indemnified Party of notice of any complaint or the assertion or
institution of any Claim with respect to which indemnification is being sought hereunder, such
Indemnified Party shall notify the Company in writing of such complaint or of such assertion or
institution but failure to so notify the Company shall not relieve the Company from any obligation
it may

	 	 	 	 	 
	New York Office

	 	Chicago Office
	 	Dallas Office
	120
Broadway, 27th Floor

	 	875 N. Michigan Ave, Suite 1560
	 	5040 Addison Circle, #5751
	New York, NY 10271

	 	Chicago, IL 60611
	 	Addison, TX 75001
	212-417-8000

	 	312-867-3470
	 	214-484-4989

 

 

NYTEX — National Securities Agreement

8-04-09

Page 8

have hereunder, unless and only to the extent such failure results in the forfeiture by the Company
of substantial rights and defenses. If the Company so elects or is requested by such Indemnified
Party, the Company will assume the defense of such Claim, including the employment of counsel
reasonably satisfactory to such Indemnified Party and the payment of the fees and expenses of such
counsel; provided, however, that the Indemnified Parties shall have the right to
retain separate counsel, but the

 

 

fees and expenses of such counsel shall be at the expense of the Indemnified Parties, unless (i)
the employment of such counsel has been specifically authorized in writing by the Company, (ii)
the Company has failed to assume the defense and employ reasonably acceptable counsel as required
above, or (iii) the named parties to any such action (including any impleaded parties) include
both (a) the Indemnified Parties and (b) the Company, and the Indemnified Parties shall have
reasonably determined that the defenses available to them are not available to the Company and/or
may not be consistent with the best interests of the Company or the Indemnified Parties (in which
case the Company shall not have the right to assume the defense of such action on behalf of the
Indemnified Parties); it being understood, however, that the Company shall not, in connection with
any one such action or separate, substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys for the Indemnified Parties, which firm
shall be designated in writing by National.

     The Company agrees that it will not, without the prior written consent of National, settle,
compromise or consent to the entry of any judgment in any pending or threatened claim, action or
proceeding in respect of which indemnification may be sought hereunder (whether or not National
or any other Indemnified Party is an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent includes an unconditional release of
National and each other Indemnified Party hereunder from all liability arising out of such claim,
action or proceeding.

     If National or any other Indemnified Party is requested or required to appear as a witness
in any action brought by or on behalf of or against the Company in which such party is not named
as a defendant, the Company will reimburse National for all reasonable expenses incurred in
connection with such party’s appearing and preparing to appear as such a witness, including,
without limitation, the fees and disbursements of its legal counsel.

     The provisions of this Annex A shall continue to apply and shall remain in full force and
effect regardless of any modification or termination of the engagement or engagement letter of
which this Annex A is a part or the completion of National’s services thereunder.

	 	 	 	 	 
	New York Office

	 	Chicago Office
	 	Dallas Office
	120
Broadway, 27th Floor

	 	875 N. Michigan Ave, Suite 1560
	 	5040 Addison Circle, #5751
	New York, NY 10271

	 	Chicago, IL 60611
	 	Addison, TX 75001
	212-417-8000

	 	312-867-3470
	 	214-484-4989

 

 

			
	 	 	 
	
	 	 
	 	 	 
	Member FINRA/SIPC	 	 

Investment Banking Group

Mergers & Acquisitions Division

330 Madison Avenue, 18th floor

New York, NY 10022

ph: (212) 380.2886

cell (1): (585) 233.2428

cell (2): (917) 692.9817

fax: (646) 304.6817

Kenneth K. Conte

Managing Director

October 19, 2009

Mr. Michael Galvis

Chief Executive Officer

NYTEX Energy Holdings, Inc

12222 Merit Drive, Suite 1850

Dallas, TX 75251

PERSONAL & CONFIDENTIAL

Dear Michael:

This letter amends the existing engagement agreement dated August 4, 2009 between NYTEX Energy
Holdings, Inc (the “Company”) and National Securities Corporation (“National”) with the following:

During the term of its engagement, National will provide such financial advice and assistance in
connection with the potential acquisition of Francis Drilling Fluids, Ltd including the acquisition
of the holding company; Francis Oaks, LLC (the “Target Company(s)”) for the (“Transaction”) as the
Company may reasonably request, which may include searching for control private equity groups,
advising and assisting the Company in evaluating the various structures and forms of the purchase,
assisting in the evaluation of the offer and assisting the Company in negotiating the financial
aspects of a Transaction.

As consideration for National’s services in this Transaction, the Company shall pay to National
the sum of the following compensation at Closing of the Transaction which shall be defined as the
(“Transaction Fee”):

New York • Boca Raton • Chicago • Dallas • Rochester

 

 

			
	October 19, 2009
	 	Page 2

Transaction Fee Grid — Francis Drilling Fluids, Ltd Acquisition

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2010E	 	Transaction	 	Transaction	 	Transaction Fee Earned	 	Transaction
	EBITDA	 	Multiple	 	Value	 	with Francis Drilling Fluids, Ltd	 	Fee
	 	 	 	 	 	 	 	 	 	 	2.75%	 	2.50%	 	2.25%	 	2.00%	 	1.75%	 	1.50%	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$	10,000,000	 	 	2.50x
	 	$	25,000,000	 	 	$	1,100,000	 	 	$	95,000	 	 	$	90,000	 	 	$	85,000	 	 	$	80,000	 	 	$	75,000	 	 	$	1,525,000	 
	 	10,000,000	 	 	2.55x
	 	 	25,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.60x
	 	 	26,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.65x
	 	 	26,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.70x
	 	 	27,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.75x
	 	 	27,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.80x
	 	 	28,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.85x
	 	 	28,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.90x
	 	 	29,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	2.95x
	 	 	29,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	3.00x
	 	 	30,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	75,000	 	 	 	1,525,000	 
	 	10,000,000	 	 	3.05x
	 	 	30,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	 	 	 	 	1,450,000	 
	 	10,000,000	 	 	3.10x
	 	 	31,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	 	 	 	 	1,450,000	 
	 	10,000,000	 	 	3.15x
	 	 	31,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	 	 	 	 	1,450,000	 
	 	10,000,000	 	 	3.20x
	 	 	32,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	80,000	 	 	 	 	 	 	 	1,450,000	 
	 	10,000,000	 	 	3.25x
	 	 	32,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	 	 	 	 	 	 	 	 	1,370,000	 
	 	10,000,000	 	 	3.30x
	 	 	33,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	 	 	 	 	 	 	 	 	1,370,000	 
	 	10,000,000	 	 	3.35x
	 	 	33,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	—	 	 	 	—	 	 	 	1,370,000	 
	 	10,000,000	 	 	3.40x
	 	 	34,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	85,000	 	 	 	 	 	 	 	 	 	 	 	1,370,000	 
	 	10,000,000	 	 	3.45x
	 	 	34,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,285,000	 
	 	10,000,000	 	 	3.50x
	 	 	35,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,285,000	 
	 	10,000,000	 	 	3.55x
	 	 	35,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,285,000	 
	 	10,000,000	 	 	3,60x
	 	 	36,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	90,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,285,000	 
	 	10,000,000	 	 	3.65x
	 	 	36,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,195,000	 
	 	10,000,000	 	 	3.70x
	 	 	37,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,195,000	 
	 	10,000,000	 	 	3.75x
	 	 	37,500,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,195,000	 
	 	10,000,000	 	 	3.80x
	 	 	38,000,000	 	 	 	1,100,000	 	 	 	95,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,195,000	 
	 	10,000,000	 	 	3.85x
	 	 	38,500,000	 	 	 	1,100,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,100,000	 
	 	10,000,000	 	 	3.90x
	 	 	39,000,000	 	 	 	1,100,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,100,000	 
	 	10,000,000	 	 	3.95x
	 	 	39,500,000	 	 	 	1,100,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,100,000	 
	 	10,000,000	 	 	4.00x
	 	 	40,000,000	 	 	 	1,100,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,100,000	 

New York • Boca Raton • Chicago • Dallas • Rochester

 

 

			
	October 19, 2009
	 	Page 3

     For purposes of this Agreement, the term “Transaction Value” means collectively: (i) the total
amount of cash paid, directly or indirectly, for the assets, business or capital stock of the
Target Company(s); (ii) the fair market value of any assets, securities or other property or rights
transferred, directly or indirectly, in payment for the assets, business or stock of the Target
Company(s) (including, without limitation, payments made under non-competition or similar
arrangements and any deferred or contingent payments) Contingent payments shall be used only if
there is sufficient evidence that these payments will be made, and (iii) the principal amount of
any indebtedness for borrowed money appearing on the most recent balance sheet of the Target
Company(s) prior to the consummation of the Transaction that remains outstanding following
consummation of the Transaction. If, in lieu of receiving all or any portion of the type of
consideration payable to the other shareholders of the Target Company(s) in connection with a
Transaction, any shareholder directly or indirectly retains an ownership interest in the Target
Company(s) or directly or indirectly acquires an ownership interest in the corporation or other
entity surviving or resulting from the Transaction, the Transaction Value shall be calculated by
assuming that such shareholder had sold its entire ownership interest in the Target Company(s) and
received in exchange therefore an amount equal to that received by the Target Company(s) or the
other shareholders of the Target Company(s), as the case may be, in the Transaction.

For purposes of calculating the Transaction Fee, the fair market value of securities for which
there is an established trading market will be the closing sale price of the securities on the
trading day preceding the date of the closing of the Transaction. The fair market value of any
assets, securities, property or rights (other than as provided above) will be mutually agreed by
National and the Company. If the parties cannot agree upon the fair market value of such assets,
securities, property or rights, they will choose a qualified appraiser of national standing to
conclusively determine such fair market value. The Company and National shall share equally in the
cost of such appraisal. Upon reasonable request, the Company will make available to National any
materially relevant information available to it for purposes of calculating the amount of any
component of the Transaction Value.

The Transaction Fee will become payable by the Company upon consummation of (a) the Acquisition,
directly or indirectly, by another person or entity, in a single transaction or series of related
transactions, of (i) all or a substantial portion of the assets or business of the Acquisition or
(ii) securities representing debt and/or equity of the Company or the Acquisition. The Transaction
Fee(s) will be included in the schedule of disbursements for the Closing and will be wired to the
National on the day of the Closing.

If this amendment letter accurately sets forth the understanding between us, please sign the
enclosed copy of this letter below and return it to National and this letter will become a
mutually binding obligation when signed by both parties. All other terms and conditions of the
engagement letter dated August 4, 2009 remain the same and in full force and effect.

New York • Boca Raton • Chicago • Dallas • Rochester

 

 

			
	October 19, 2009
	 	Page 4

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	By:  	/s/ Kenneth K. Conte
 	 
	 	 	Kenneth K. Conte 	 
	 	 	Managing Director and Head of

Mergers & Acquisitions Division 	 
	 
	 	 	 
	 	By:  	/s/ Jonathan C. Rich
 	 
	 	 	Jonathan C. Rich 	 
	 	 	Executive Vice President and

Head of Investment Banking 	 
	 

Confirmed and Agreed to this

19th day of October, 2009:

	 	 	 	 	 
	NYTEX ENERGY HOLDINGS, INC

 	 	 
	By:  	/s/   Michael Galvis
 	 	 
	 	Michael Galvis 	 	 
	 	Chief Executive Officer 	 	 
	 

	cc)	 	Bill Brehmer, NYTEX Energy Holdings, Inc

Michael Bezdek, National Securities Corporation

Malcolm Plett, National Securities Corporation

Trey Marinello, National Securities Corporation

New York • Boca Raton • Chicago • Dallas • Rochesterexv10w12

Exhibit 10.12

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY
OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL
PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR
YOUR DRIVER’S LICENSE NUMBER.

PARTIAL ASSIGNMENT AND BILL OF SALE EFFECTIVE

AUGUST 1, 2009

	 	 	 	 	 
	THE STATE OF TEXAS

	 	§	 	 
	 

	 	§
	 	KNOW ALL MEN BY THESE PRESENTS.
	COUNTES OF MOORE, 

HUTCHINSON AND CARSON

	 	§	 	 

     THAT,
the undersigned, KEVIN AUDRAIN AND LORI AUDRAIN, husband and wife, doing business as DRAIN
OIL COMPANY, whose address is #3 Texoma Blvd, Fritch, Texas 79036 (hereinafter called “Assignor”),
for and in consideration of Ten Dollars ($10.00) and other valuable consideration to it in hand
paid by NYTEX PETROLEUM, INC., a Delaware Corporation, with offices at 12222 Merit Drive, Suite
1850, Dallas, Texas 775251 (hereinafter called “Assignee”), does hereby TRANSFER, ASSIGN and
CONVEY unto Assignee, subject to the terms and conditions contained herein, the following:

     (a) seventy-five percent (75%) of 8/8ths right, title and interest in and to the
leasehold estates described in Exhibit “A”, attached hereto and made a part hereof, such leases
being hereinafter called “said leases”;

     (b) seventy-five percent (75%) of 8/8ths right, title and interest in and to all permits,
franchises, licenses, servitudes, easements, surface leases and rights-of-way of every
character relating to said leases;

     (c) seventy-five percent (75%) of 8/8ths right, title and interest in and to any
contracts or agreements including, but not limited to, rights and interest in or derived from unit
agreements, gas processing agreements, joint operating agreements, gas contracts, gas gathering
agreements, gas balancing agreements, boundary or well line agreements, assignments of operating rights,
working interest and subleases affecting said leases.

     For the same consideration, Assignor does hereby BARGAIN, SELL and DELIVER unto
Assignee Seventy-Five Percent (75%) of 8/8ths right, title and interest in and to the wells
located on said leases described in Exhibit “A”; and Assignor does hereby further BARGAIN,
SELL and DELIVER unto Assignee Seventy-Five Percent (75%) of 8/8ths right, title and
interest in and to all personal property and well equipment located in, on and used in
connection with said leases, such well, personal property and the well equipment being
hereinafter collectively called “said wells”.

     The interests in said leases as herein conveyed to Assignee shall be subject to all
enforceable contracts affecting the said leases and wells, including agreements for the sale
or purchase of oil, gas, and other hydrocarbons; processing agreements; division orders;
unit agreements; operating agreements; and other contracts and agreements arising out of,
connected with, or attributable to production from the said leases and wells.

     This Partial Assignment and Bill of Sale is subject to the terms and provisions of that
certain unrecorded letter agreement dated June 5, 2009, between Drain Oil Company and NYTEX
Petroleum, Inc., as heretofore amended and supplemented. Except as expressly provided in
said unrecorded letter agreement, operations on the leases covered hereby, and the extent
and duration thereof, shall be within the judgment and discretion of Assignee, its
successors and assigns. It is further agreed that the Assignor and Assignee will execute
such further assurances as may be requisite for the full and complete enjoyment of the
rights herein granted.

     All ad valorem taxes levied against said leases and wells shall be prorated and paid by
the parties hereto as of the Effective Date of this assignment. Assignee will be liable for
and agrees to

 

 

pay all sales taxes or recording fees due as a result of this Partial Assignment and Bill of Sale.

     All covenants and agreements in this Partial Assignment and Bill of Sale shall be binding
and inure to the benefit of the heirs, successors, and assigns of Assignor and Assignee; are
covenants running with the land; and are effective as stated, whether or not the covenants and
agreements are memorialized in assignments and other conveyances executed and delivered by the
parties and their respective heirs, successors, and assigns from time to time.

     This assignment is executed and delivered to Assignee WITHOUT WARRANTY OF TITLE EITHER
EXPRESS OR IMPLIED, EXCEPT BY, THROUGH AND UNDER ASSIGNOR, BUT NOT OTHERWISE.

     This Partial Assignment and Bill of Sale shall be effective, for all purposes as of 7:00
o’clock a.m., August 1, 2009.

     EXECUTED by Assignor and accepted by Assignee on the dates shown below in their respective
acknowledgments, but to be effective as stated above. To facilitate the recording of this
instrument in the appropriate counties, this instrument may be executed in one or more multiple
counterparts, each of which shall be deemed an original document, and all of which when taken
together shall constitute a single instrument.

	 	 	 	 	 
	 	ASSIGNOR:

 	 
	 	/s/ Kevin Audrain
 	 
	 	Kevin Audrain d/b/a Drain Oil Company 	 
	 
	 	 	 
	 	                                                     /s/ Lori Audrain
 	 
	 	Lori Audrain d/b/a Drain Oil Company 	 
	 	 	 
	 
	 	ASSIGNEE:

NYTEX PETROLEUM, INC.

 	 
	 	By:  	/s/ Jason Lacewell
 	 
	 	 	Jason Lacewell 	 
	 	 	Vice President 	 
	 

ACKNOWLEDGMENTS

	 	 	 
	THE STATE OF TEXAS

	 	§
	COUNTY OF DALLAS

	 	§

     This instrument was acknowledged before me on 31 day of July 2009, by
KEVIN AUDRAIN and LORI AUDRAIN.

MY COMMISSION EXPIRES:

	 	 	 	 	 
	 	 	 
	 	 /s/ Georgianna Hanes
 	 
	 	Notary Public in and for the State of Texas 	 
	 	 	 
	 

2

 

	 	 	 
	THE STATE OF TEXAS

	 	§
	COUNTY OF DALLAS

	 	§

     This
instrument was acknowledged before me on this 31 day of July 2009, by JASON
LACEWELL, as Vice President of NYTEX PETROLEUM, INC., a Delaware Corporation.

MY COMMISSION EXPIRES:

	 	 	 	 	 
	 	 	 
	 	 /s/ Georgianna Hanes
 	 
	 	Notary Public in and for the State of Texas 	 
		 	 
	 

3

 

EXHIBIT “A”

     Attached to and made a part of Partial Assignment and Bill of Sale effective August 1, 2009, from DRAIN OIL COMPANY, Assignor, to NYTEX
PETROLEUM, INC., Assignee

     Oil, Gas and Mineral Lease dated June 2, 1936, from John C. Burns and E. B. Morgan Executors
and Trustees of the Estate of S. B. Burnett, Deceased, and Chas. H. Harris, W. H. Slay, and Mrs.
Ollie Lake Burnett, Trustees of the Mary Couts Burnett Trust, as Lessors, to J. M. Huber
Corporation, as Lessee, recorded in Volume 62, Page 560, of the Deed Records of Carson County,
Texas and Volume 72, Page 520, Deed Records of Hutchinson County, Texas, as amended by instrument
dated August 1, 1974, recorded in Volume 161, Page 686, of the Deed Records of Carson County,
Texas and Volume 403, Page 545, of the Deed Records of Hutchinson County, Texas, INSOFAR AND ONLY
INSOFAR as said lease covers the W/2 E/2 of Section 127, Block 5, I&GN RR Co. Survey, Carson and
Hutchinson Counties, Texas

     Oil, Gas and Mineral Lease dated July 23, 1971, from Gladys Smith et al, as Lessors, to
Richome Oil and Gas Company, as Lessee, recorded in Volume 232, Page 297, of the Deed Records of
Moore County, Texas and covering the Southwest quarter of Section No. 32, Block PMC, EL&RR Co.
Survey, Moore County, Texas

     Oil, Gas and Mineral Lease dated July 23, 1971, from A. E. Herrmann Corporation, as Lessor, to
Richome Oil and Gas Company, as Lessee, recorded in Volume 232, Page 294, of the Deed Records of
Moore County, Texas and covering the Southwest quarter of Section No. 32, Block PMC, EL&RR Co.
Survey, Moore County, Texas

4

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