Document:

exv10w1

 

Exhibit 10.1

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of February ___, 2007, among
Channel Refining Corporation, a Texas corporation (the “Company”), those persons listed on
Annex I attached hereto (individually, each a “Seller” and collectively the “Sellers”), and
GreenHunter Energy, Inc. (“Buyer”).

     WHEREAS, Sellers collectively own all of the issued and outstanding shares of Common Stock, no
par value of the Company (the “Shares”); and

     WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, the
Shares, including each Seller’s community property interest, if any, in the Shares; and

     WHEREAS, the Company desires to join in the execution of this Agreement for the purpose of
evidencing its consent to the consummation of the foregoing transaction and for the purpose of
making certain representations and warranties to and covenants and agreements with Buyer;

     NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the Company, Sellers, and Buyer hereby agree
as follows:

     Section 1. Agreement to Sell and to Purchase Shares. At the Closing, and on the terms
and subject to the conditions set forth in this Agreement, Sellers shall sell and deliver to Buyer,
and Buyer shall purchase and accept from Sellers, the Shares.

     Section 2. Purchase Price and Payment. In consideration of the sale of the Shares to
Buyer, Buyer shall pay to Sellers at the Closing the aggregate purchase price of $11,300,000 (the
"Purchase Price”) with a withholding amount as required in accordance with U.S. tax laws. The
Purchase Price shall be paid to Sellers as follows:

     (a) Buyer shall deposit in an escrow account with Compass Bank (“Escrow Agent”)]on the date of
this Agreement the amount of One Hundred Thousand Dollars ($100,000) cash (the “Good Faith
Deposit”), subject to return to Buyer in accordance with the provisions of Section 10
hereof. The Good Faith Deposit will be applied to the cash portion of the Purchase Price set forth
in Section 2(b). The Interest thereon is to inure to Buyer.

     (b) Buyer shall pay to Sellers on the Closing Date the amount of Seven Million Fifty Thousand
Dollars ($7,050,000) cash less the Good Faith Deposit allocated among Sellers as set forth under
the column “Allocation of Cash Payment” on Annex I. The Good Faith Deposit less any
adjustment made pursuant to Section 10 will be released to Sellers and allocated among
Sellers as set forth under the column “Allocation of Good Faith Deposit” on Annex I after
the time period for such adjustment has expired.

     (c) Buyer shall deliver to each Seller on the Closing Date that number of newly-issued shares
of Common Stock of Buyer (the “Restricted Shares”) that are subject only to the restrictions on
resale imposed under the Securities Act of 1933, as amended (the “Securities Act”) equal to the
dollar value set forth under the column “Restricted Shares” on Annex I divided

 

 

by the
Restricted Share Price. The Restricted Share Price (“Restricted Share Price”) shall be $5.00.
Buyer will offer “piggyback” registration rights pursuant to the Registration Rights Agreement
attached hereto as Exhibit A for the Restricted Shares for the one year period commencing
on the one year anniversary of the Closing Date and ending on the two year anniversary of the
Closing Date.

     (d) Buyer shall deliver to Robert E. Lorton and C.R. Rittenberry (“Rittenberry”) (the two
Sellers to receive Company Notes) at the Closing subordinated notes of the Company, together with
the Guaranties of such Company Notes executed and delivered by Buyer in the form attached hereto as
Exhibits D-1 and D-2 (“Guaranty”) in the form attached hereto as Exhibit B, dated
as of the Closing Date, payable to the order of Sellers in the aggregate principal amount of Two
Million Dollars ($2,000,000) allocated among Sellers as set forth under the column “Subordinated
Notes” on Annex I (the “Company Notes”). The Company Notes shall have such terms and
conditions as to payment terms, interest, acceleration and subordination as mutually agreed upon by
the Buyer and the Sellers.

     Section 3. Closing. The closing of the transactions contemplated hereby (the
"Closing”) shall take place at the offices of Thompson & Knight LLP, 1700 Pacific Avenue, Suite
3300, Dallas, Texas, at 10:00 am Central time (i) on the later to occur of April 15, 2007 or 15
days following the satisfaction or waiver of all applicable conditions set forth in Section
8 and Section 9 or (ii) at such other time or place or on such other date as the
parties hereto shall agree. The date on which the Closing is required to take place is herein
referred to as the “Closing Date.”

     Section 4. Representations and Warranties Regarding the Company. As of the Closing,
Sellers and the Company jointly and severally represent and warrant to Buyer the following
(provided, however, that the corresponding Schedules referenced in this Section 4
shall be delivered to Buyer no later than 15 days prior to the Closing):

     (a) The Company is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Texas and has all requisite corporate power and corporate authority to
own, lease, and operate its properties and to carry on its business as now being conducted. No
actions or proceedings to dissolve the Company are pending or, to the best knowledge of Sellers or
the Company, threatened.

     (b) The authorized capital stock consists of 1,000,000 shares of Common Stock, no par value,
of which the outstanding shares will be determined prior to Closing. All outstanding shares of
capital stock of the Company have been validly existing and are fully paid and nonassessable, and
no shares of capital stock of the Company are subject to, nor have been issued in violation of,
preemptive or similar rights. The Shares constitute all the outstanding shares of capital stock of
the Company. The Sellers are the only shareholders of record of any equity stock of the Company.

     (c) The Company has full corporate power and corporate authority to execute, deliver, and
perform this Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by the Company of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action of the Company.
This Agreement has been duly executed and

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delivered by the Company and constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in accordance with its
terms.

     (d) The Company has or will have duly filed all federal, state, local and foreign tax returns
required to be filed by or with respect to it with the Internal Revenue Service or other applicable
taxing authority, and all such returns are true and correct. The Company has paid all taxes
pursuant to such returns or pursuant to any assessments received by it. No tax returns of the
Company are currently being audited by any local, state or federal authority, and neither the
Company or Sellers has been notified by any such authority of a forthcoming audit.

     (e) Set forth on Schedule 4(a) is a true, complete and correct list of all real
property owned by the Company (the “Real Estate”). The Company is the owner, in fee, of such
properties, and no liens, covenants, easements, rights-of-way, regulations of record or other
encumbrances impair in any material respect the value or uses of these properties. The Company has
provided to Buyer true and complete copies of the most recent survey, appraisal and title insurance
policy relating to these real properties.

     (f) Environmental Matters.

          “Environmental Law” means any law, common law, ordinance, regulation or policy of any U.S.
federal, state, local or any governmental, regulatory or administrative authority, agency, or
commission or any court, tribunal, or judicial or arbitral body or entity in effect in the
jurisdiction where the Company operates (“Governmental Authority”), as well as any order, decree,
permit, judgment or injunction issued, promulgated, approved, or entered thereunder, relating to
the environment, health and safety, Hazardous Material (including, without limitation, the use,
handling, transportation, production, disposal, discharge or storage thereof), industrial hygiene,
the environmental conditions on, under or about any real property owned, leased or operated at any
time by the Company, including, without limitation, soil, groundwater and indoor and ambient air
conditions or the reporting or remediation of environmental contamination. Environmental Laws
include, without limitation, the Clean Air Act, as amended, the Federal Water Pollution Control
Act, as amended, the Rivers and Harbors Act of 1899, as amended, the Safe Drinking Water Act, as
amended, CERCLA, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Hazardous and Solid Waste Amendments Act of
1984, as amended, the Toxic Substances Control Act, as amended, the Occupational Safety and Health
Act (“OSHA”), as amended, the Hazardous Materials Transportation Act, as amended, and any other
federal, state and local Law in effect in the jurisdiction where the Company operates whose purpose
is to conserve or protect human health, the environment, wildlife or natural resources.

          “Hazardous Material” means (a) any “hazardous substance,” as defined by CERCLA (as defined
below); (b) any “hazardous waste” or “solid waste,” in either case as defined by the Resource
Conservation and Recovery Act, as amended; (c) any solid, hazardous, dangerous, radioactive or
toxic chemical, material, waste or substance, within the meaning of and regulated by any
Environmental Law; (d) any asbestos containing materials in any form or
condition; (e) any polychlorinated biphenyls in any form or condition; (f) petroleum,
petroleum hydrocarbons, or any fraction or byproducts thereof; or (g) any air pollutant which is so
designated by the U.S. EPA as authorized by the Clean Air Act.

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          “Person” means any natural person, corporation, partnership, limited liability company, trust,
unincorporated organization, Governmental Authority, or other entity.

          1. Except as set forth on Schedule 4(f), to the knowledge of the Sellers, the Company
has conducted its businesses and operated its assets, and is conducting its businesses and
operating its assets, and the condition of all facilities and properties (including off site
storage or disposal of any Hazardous Materials from such facilities or properties) currently or
formerly owned, leased, operated or in which an interest is held by them (or was held by the
Company) are, in material compliance with all Environmental Laws.

          2. Except as set forth on Schedule 4(f), the Company has not been notified by any
Governmental Authority or other Person that any of the operations or assets of the Company is the
subject of any investigation or inquiry by any Governmental Authority or other Person regarding the
violation of or liability under any Environmental Law or evaluating whether any material remedial
action is needed to respond to a release or threatened release of any Hazardous Material or to the
improper storage or disposal (including storage or disposal at offsite locations) of any Hazardous
Material.

          3. Except as set forth on Schedule 4(f), The Company has not filed, and to the
knowledge of the Sellers no other Person has filed, nor has the Company received any notice under
any federal, state or local law indicating that (i) the Company is responsible for the improper
release into the environment, or the improper storage or disposal, of any Hazardous Material, or
(ii) any Hazardous Material is improperly stored or disposed of upon any property of the Company.

          4. Except as set forth on Schedule 4(f), to the knowledge of the Sellers, the Company
does not have any material contingent liability in connection with (i) the release or threatened
release into the environment at, beneath or on any property now or previously owned, leased,
operated or in which an interest is or was held by the Company, or (ii) the storage or disposal of
any Hazardous Material.

          5. Except as set forth on Schedule 4(f), the Company has not received any claim,
complaint, notice, inquiry or request for information involving any matter which remains unresolved
as of the date hereof with respect to any alleged violation of any Environmental Law or regarding
potential liability under any Environmental Law relating to operations or conditions of any
facilities or property (including off site storage or disposal of any Hazardous Material from such
facilities or property) currently owned, leased or operated by the Company or formerly owned,
leased or operated by the Company.

          6. To the knowledge of the Sellers, no property now or previously owned, leased, operated or
in which an interest is or was held by the Company is listed on the National Priorities List
pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or any successor statutes and any regulations promulgated thereunder (“CERCLA”) or on the
Comprehensive Environmental Response, Compensation and
Liability Information System List (“CERCLIS”) or on any other federal or state list as sites
requiring investigation or cleanup.

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          7. To the knowledge of the Sellers, the Company is not and has not transported, or arranged
for the transportation of, any Hazardous Material to any location which is listed on the National
Priorities List pursuant to CERCLA, on the CERCLIS, or on any similar federal or state list or
which is the subject of federal, state or local enforcement actions or other investigations that
may lead to material claims against the Company for remedial work, damage to property, natural
resources or personal injury, including claims under CERCLA.

          8. Except as set forth on Schedule 4(f), to the knowledge of the Sellers, there are no
physical or environmental conditions existing on any property owned or leased by the Company
resulting from the Company’s or operations or activities, past or present, at any location that
give rise to any on site or off site remedial obligations under any applicable Environmental Laws.

          9. Except as set forth on Schedule 4(f), to the knowledge of the Sellers, there are
no sites, locations or operations at which Company is currently undertaking, or have completed, any
remedial or response actions relating to any disposal or release of Hazardous Materials, as
required by Environmental Laws.

          10. The Company has no underground storage tanks or solid waste disposal facilities and has
never owned any such tanks or facilities.

          11. Except as set forth on Schedule 4(f), the Company has not contractually assumed
any liabilities under any Environmental Law.

          12. Neither this Agreement nor the consummation of the transaction contemplated hereby will
result in any obligations for site investigation or cleanup, or for notification to, or consent of,
Governmental Authorities or third parties, pursuant to any “transaction triggered” or “responsible
party transfer” Environmental Law.

     (g) Set forth on Schedule 4(g) is a list, as of January 31, 2007, of all of the
furniture, equipment, machinery, computer hardware, and other tangible personal property owned,
leased, or used by the Company (“Personal Property”). Except as set forth on Schedule
4(g), with respect to such items or tangible personal property held by the Company under lease,
no consent by the lessor of such leases is required to consummate the transactions contemplated
hereby.

     (h) Reserved.

     (i) There is no litigation pending or, to the best knowledge of Sellers and the Company,
threatened against or involving the Company in connection with the business and affairs of the
Company or any properties or rights of the Company.

     (j) The Company has no liabilities or obligations (whether accrued, absolute, contingent,
unliquidated, or otherwise, whether or not known to the Company, and whether due or to become due),
except liabilities or obligations which have arisen in the ordinary course of
business of the Company or that are otherwise set forth in the financial statements of the
Company or the footnotes thereto.

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     (k) The Company has no (i) multiemployer pension benefit plans, (ii) collective bargaining
agreements or other contracts with unions or (iii) bonus, pension, profit sharing, retirement and
other forms of deferred compensation or equity plans.

     (l) Set forth on Schedule 4(l) is a list of all Permits (as defined below) owned or
held by the Company. Except as set forth on Schedule 4(l), such Permits constitute all
Permits necessary to conduct the business (“Business”) currently conducted as of the date hereof.
Except as set forth on Schedule 4(l), such Permits are in good standing, the Company has
not received any notice that any such Permit is not in good standing, and the Company has been in
compliance with all of the requirements and limitations included in or applicable to such Permits
as of the date hereof. The Company has timely filed applications for the renewal of such Permits
as may be necessary. Other than the transfer of the Shares, there are no facts, circumstances or
conditions that could reasonably be expected to lead to the suspension, cancellation, or revocation
of any existing Permit or the denial of applications for the renewal of any such Permits on terms
less favorable than what are currently in effect. There are no pending challenges to any Permits.
"Permits” means all permits, consents, authorizations, approvals, registrations, licenses,
certificates or variances granted by or obtained from any U.S. federal, state or local
governmental, administrative or regulatory authority, including but not limited to those relating
to environmental matters.

     (m) No representation or warranty made by Sellers in this Agreement, and no statement of
Sellers contained in any Schedules or certificate furnished or to be furnished by Sellers pursuant
hereto, knowingly contains or will knowingly contain, at the time of delivery, any untrue statement
of a material fact or omits or will omit, at the time of delivery, to state any material fact
necessary in order to make the statements contained therein, in light of the circumstances under
which they are made, not misleading. Sellers shall be deemed to have disclosed to Buyer matters of
common knowledge regarding the Company’s industry in general and publicly available information
regarding the marketplace in which the Company conducts its business.

     (n) The Company has no subsidiaries.

     (o) Set forth on Schedule 4(o) is a true and complete copy of the settlement agreement
and all amendments thereto with DiVinci Chemical, L.P. (“DiVinci”) covering a portion of the Real
Estate. Except for the lease with DiVinci, there is no lease of any of the real property owned by
the Company to any third party.

     (p) Set forth on Schedule 4(p) in a true and complete copy of the use agreement with
Parker Brothers regarding the use of the access road to the Real Estate.

     (q) Set forth on Schedule 4(r) are true and complete copies of all federal income tax
returns and Texas state franchise tax returns for the Company for the past five (5) fiscal years.
The Company has properly reported all income and will have paid all taxes due for such years prior
to the Closing Date.

     (r) Set forth on Schedule 4(s) are true and complete copies of all contracts which
have involved or will involve payments of $5,000 more in calendar year 2007 entered into by the
Company concerning its operations on the Real Estate.

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     (s) The Company and the Sellers make no representations or warranties as to the condition of
the Real Estate and Personal Property (the “Assets”), as such Assets are being conveyed “as is,
where is and with all faults”. There are no express or implied warranties regarding the Assets.
Notwithstanding the foregoing, Buyer shall have the right of inspection and determination as to
whether the Assets have material defects as a condition to Closing as provided in Section
9(k) other than material defects which can reasonably be cured by the Company within 30 days
after written notice thereof is provided to Company by Buyer. Further, Seller represents that
Seller has received no written notice (i) that the Assets and their uses fail to conform to all
Applicable Laws and all restrictive covenants applicable thereto, (ii) that a pending or
threatened governmental or private proceeding would impair, curtail or adversely impact full
unencumbered, insurable and free access or utility service to and from the Real Property and public
highways, streets or roads or (iii) that any part of the Real Property is subject to a condemnation
proceeding.

     (t) To the knowledge of the Sellers, the Company has complied with all Applicable Law in the
operation of the Business. “Applicable Law” shall mean any statute, law, rule, or regulation or
any judgment, order, writ, injunction, or decree of any Governmental Authority to which a specified
person or property is subject.

     (u) Attached hereto as Schedule 4(v) are true and complete copies of the Rail
Documents (as defined in item (i) of the Special Warranty Deed dated October 29, 1996 from Parker
Brothers & Co., Inc., as grantor, to Channel Refining Corporation, as grantee) including but not
limited to (1) that certain Application to the Commissioners’ Court of Harris County Texas made by
Parker on July 22, 1941 and approved on July 23, 1941; (2) that certain Industrial Tract Agreement
dated April 7, 1942, by and among Harris County Houston Ship Channel Navigation District, Port
Terminal Railroad Association and Parker; and (3) that certain Agreement dated September 1, 1951,
by and among Harris County Houston Ship Channel Navigation District, Port Terminal Railroad
Association, Parker and Tenn-Tex.

     Section 5. Representations and Warranties Regarding the Sellers. Each of the Sellers
hereby severally warrants as to itself only to Buyer as follows:

     (a) Such Seller has full legal right, power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by such Seller and constitutes a legally binding obligation of such Seller
enforceable against each Seller in accordance with its terms.

     (b) The execution, delivery and performance by such Seller and the consummation by such Seller
of the transactions contemplated hereby will not (i) conflict with or result in a violation of any
provision of, or constitute a default under, or give rise to any right of termination,
cancellation, or acceleration under or require any consent, approval, authorization, or waiver of,
or notice to, any party to any agreement, document or instrument to which such Seller is a party or
is otherwise obligated or by which any of its assets are burdened, (ii) conflict
with the provisions of the Company’s corporate charter or bylaws, or (iii) result in the
creation or imposition of any lien, claim or encumbrance upon such Seller’s Shares.

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     (c) Such Seller is the record and beneficial owner of such Seller’s Shares, and upon
consummation of the transactions contemplated hereby Buyer will acquire title to such Seller’s
Shares, free and clear of all liens, claims and encumbrances.

     (d) Such Seller is acquiring the Restricted Shares and the Company Notes for its own account
for investment and not with a view to, or for sale or other disposition in connection with, any
distribution of all or any part thereof, except (X) in an offering covered by a registration
statement filed with the Securities and Exchange Commission under the Securities Act, covering the
Restricted Shares or the Company Notes, as the case may be, or (Y) pursuant to an applicable
exemption under the Securities Act. Such Seller is an “accredited investor” as that term is
defined in Rule 501 of Regulation D under the Securities Act (“Accredited Investor”).

     Section 6. Representations and Warranties of Buyer. Buyer represents and warrants to
Sellers and the Company that:

     (a) Buyer is a corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all requisite corporate power and corporate authority to own,
lease, and operate its properties and to carry on its business as now being conducted. No actions
or proceedings to dissolve Buyer are pending or, to the best knowledge of Buyer, threatened.

     (b) As of the date hereof, the authorized capital stock of Buyer consists of (i) 90,000,000
shares of Common Stock, of which as of the date hereof, 15,000,000 are issued and outstanding (the
"Buyer Issued Stock”) and (ii) 10,000,000 shares of preferred stock, of which as of the date
hereof, no shares are issued and outstanding. All outstanding shares of capital stock of Buyer
have been validly existing and are fully paid and nonassessable, and no shares of capital stock of
Buyer are subject to, nor have been issued in violation of, preemptive or similar rights. The
Buyer Issued Stock constitutes all the outstanding shares of capital stock of the Buyer.

     (c) Buyer has full corporate power and corporate authority to execute, deliver, and perform
this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes a valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.

     (d) The Buyer has duly filed all federal, state, local and foreign tax returns required to be
filed by or with respect to it with the Internal Revenue Service or other applicable taxing
authority, and all such returns are true and correct. The Buyer has paid all taxes pursuant to
such returns or pursuant to any assessments received by it. No tax returns of the Buyer are
currently being audited by any local, state or federal authority, and the Buyer has not been notified by
any such authority of a forthcoming audit.

     (e) Environmental Matters.

          1. Buyer has conducted its businesses and operated its assets, and is conducting its
businesses and operating its assets, and the condition of all facilities and properties (including
off site storage or disposal of any Hazardous Materials from such facilities

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or properties)
currently or formerly owned, leased, operated or in which an interest is held by them (or was held
by the Company) are, in material compliance with all Environmental Laws.

     (f) There is no litigation pending or, to the best knowledge of Buyer, threatened against or
involving Buyer in connection with the business and affairs of Buyer or any properties or rights of
Buyer.

     (g) Buyer has no liabilities or obligations (whether accrued, absolute, contingent,
unliquidated, or otherwise, whether or not known to Buyer, and whether due or to become due),
except liabilities or obligations which have arisen in the ordinary course of business of Buyer or
that are otherwise set forth in the financial statements of Buyer or the footnotes thereto.

     (h) No representation or warranty made by Buyer in this Agreement, and no statement of Buyer
contained in any certificate furnished or to be furnished by Buyer pursuant hereto, knowingly
contains or will knowingly contain, at the time of delivery, any untrue statement of a material
fact or omits or will omit, at the time of delivery, to state any material fact necessary in order
to make the statements contained therein, in light of the circumstances under which they are made,
not misleading. Buyer shall be deemed to have disclosed to Sellers matters of common knowledge
regarding Buyer’s industry in general and publicly available information regarding the marketplace
in which Buyer conducts its business.

     (i) Reserved.

     (j) The execution, delivery and performance by Buyer of this Agreement and the consummation by
it of the transactions contemplated hereby will not (i) conflict with or result in a violation of
any provision of, or constitute a default under, or give rise to any right of termination,
cancellation, or acceleration under or require any consent, approval, authorization, or waiver of,
or notice to, any party to any agreement, document or instrument to which Buyer is a party or is
otherwise obligated or by which any of its assets are burdened, (ii) conflict with the provisions
of the Buyer’s corporate charter or bylaws, (iii) result in the violation of any preemptive rights
or cause the issuance of or the right to acquire any additional shares of Common Stock or
Convertible Securities as the result of any anti-dilution rights or otherwise, or (iv) result in
the creation or imposition of any lien, claim or encumbrance upon the properties of Buyer.

     (k) The Company Notes to be issued by Buyer at the Closing, when issued and delivered by Buyer
in accordance with the provisions of this Agreement, will constitute valid and legally binding
obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except
that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors’ rights generally and
(ii) equitable principles which may limit the availability of certain equitable remedies (such
as specific performance) in certain instances.

     (l) The Restricted Shares have been duly authorized and validly issued and are fully paid and
non-assessable.

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     (m) Buyer is an Accredited Investor and Buyer is acquiring the Shares for its account for
investment and not with a view to, or for sale or other disposition in connection with, any
distribution of all or any part thereof, except (i) in an offering covered by a registration
statement filed with the Securities and Exchange Commission under the Securities Act, covering the
Shares or (ii) pursuant to an applicable exemption under the Securities Act.

     Section 7. Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such fee or expenses whether or not the Closing shall have
occurred. The Company will pay the fees and expenses of counsel for the Sellers whether or not the
Closing shall have occurred. Notwithstanding the foregoing, Buyer shall pay for fees and expenses
related to the audited financial statements to be prepared pursuant to Section 9(n).

     Section 8. Conditions to Obligations of the Company and Sellers. The obligations of
the Company and Sellers to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of each of the following conditions:

     (a) All the material representations and material warranties of Buyer contained in this
Agreement shall be materially true and correct on and as of the Closing Date as if made on and as
of such date.

     (b) Buyer shall have performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing Date.

     (c) No legal proceeding filed by a Governmental Authority shall, on the Closing Date, be
pending seeking to restrain, prohibit, or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.

     (d) Buyer has deposited the Good Faith Deposit with the escrow agent pursuant to Section
2 hereof and delivered the remainder of the Purchase Price to Sellers.

     (e) Buyer shall have executed and delivered the Registration Rights Agreement substantially in
the form attached hereto as Exhibit A.

     (f) Buyer shall have delivered audited financial statements (e.g., balance sheet, income
statement and statement of cash flows) of the Buyer for the fiscal year ended December 31, 2006 to
Sellers.

     (g) Buyer shall have executed and delivered the Guaranty(s) to Sellers.

     (h) After the date of this Agreement, Sellers or their representatives shall not have become
aware of any material adverse facts relating to the business, assets, results of operations,
condition (financial or otherwise) of the Buyer other than material defects which can be reasonably
cured by Buyer within 30 days after written notice thereof is provided to the Buyer by Rittenberry.

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     Section 9. Conditions to Obligations of Buyer. The obligations of Buyer to consummate
the transactions contemplated by this Agreement shall be subject to the fulfillment on or prior to
the Closing Date of each of the following conditions:

     (a) All the material representations and material warranties of Sellers and the Company
contained in this Agreement shall be materially true and correct on and as of the Closing Date as
if made on and as of such date.

     (b) Buyer shall have received, at Buyer’s sole cost and expense and in form and substance
acceptable to Buyer, (i) an owner’s policy of title insurance from a title company that is
reasonably acceptable to Buyer covering the Real Estate, insuring that Buyer has a good and
indefeasible title to the Real Estate, subject only to the Permitted Encumbrances and (ii) a survey
of the Real Estate acceptable to Buyer showing no encroachments, protrusions, easements or other
matters not acceptable to Buyer, in Buyer’s reasonable discretion. “Permitted Encumbrances” shall
mean taxes on the Real Estate for 2007 and subsequent years, easements for utilities serving the
Real Estate and other encumbrances acceptable to Buyer. There shall not exist, as of the Closing
Date, any material changes in the title and survey matters disclosed in the title commitment and
survey obtained by Buyer in connection with its due diligence inspections of the Real Estate.

     (c) No legal proceeding filed by a Governmental Authority shall, on the Closing Date, be
pending seeking to restrain, prohibit, or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.

     (d) Subject to the provisions of Section 13(h) of this Agreement, Buyer shall have
received (i) the stock certificate or certificates representing the Shares duly endorsed in blank,
or accompanied by stock powers duly executed in blank, (ii) the minute books, corporate records,
stock records, and corporate seal of the Company, (iii) the Company’s books and records, including
without limitation bank account records, accounting records, computer records, and all contracts
for third parties, provided that Sellers shall be entitled to retain copies of any such books and
records that are necessary for its tax, accounting or legal purposes, and (iv) the written
resignation of Sellers as officers and members of the Board of Directors of the Company, such
resignations to become effective concurrently with Closing.

     (e) Buyer shall have received Phase I and Phase II environmental and engineering reports from
[Entact] satisfactory to Buyer in Buyer’s sole discretion.

     (f) After the date of this Agreement, Buyer or its representatives shall not have become aware
of any material adverse facts relating to the business, assets, results of operations, condition
(financial or otherwise), of the Company other than material defects which can reasonably be cured
by the Company within 30 days after written notice thereof is provided to the Company by Buyer.

     (g) Buyer shall have received a Certificate of Non-Foreign Status executed by each of Robert
E. Lorton and C.R. Rittenberry.

11

 

     (h) Buyer shall have received Pledge Agreements, substantially in the form attached hereto as
Exhibit C from, and executed by, each Seller.

     (i) Buyer shall have approved the terms of the purchase agreement with DiVinci concerning
tankage.

     (j) Buyer shall have approved the terms of the use agreement with Parker Brothers.

     (k) Buyer shall have performed a physical inspection of the Real Estate and Personal Property
and Buyer shall have determined that such property has no material defects other than material
defects which can reasonably be cured by the Company within 30 days after written notice thereof is
provided to the Company by Buyer.

     (l) Buyer shall have determined that railroad spur track service is available to the Real
Estate.

     (m) Buyer shall have approved the terms of all contracts of a material nature concerning the
Company’s operations on the Real Estate.

     (n) Buyer shall have received audited financial statements (e.g., balance sheet, income
statement and statement of cash flows) of the Company for the fiscal year ended October 31, 2006
from a third party accounting firm selected by Buyer.

     Section 10. Working Capital Adjustment.

     (a) On or before thirty (30) days after the Closing Date, the Company shall provide Sellers
with a statement showing its calculation of Working Capital (the “Working Capital Statement”),
together with its supporting documentation. The Company and Sellers shall have an additional
fifteen (15) day period (the “Review Period”) following the delivery of the Working Capital
Statement to agree upon the amount of Working Capital in accordance with the provisions of
Section 10(c) below. If Working Capital as agreed pursuant to this Section 10 is
less than zero, then Sellers shall be obligated to pay Buyer an amount not to exceed the Purchase
Price in cash equal to that amount that would bring the Working Capital to zero. The payment
required to be made pursuant to this Section 10 shall first be satisfied by the receipt by
Buyer of the Good Faith Deposit. If the Good Faith Deposit is insufficient to satisfy the payment
required by this Section 10, such additional amount shall be paid by the Sellers, (i) by
delivery of the Restricted Shares (valued at the Restricted Share Price), then (ii) the Company
Notes (valued at face value plus accrued interest) and then (iii) if a deficiency still remains by
delivery of cash, promptly upon the agreement as to the amount of Working Capital in immediately
available funds in accordance with the instructions provided by Buyer. “Working Capital” means an
amount equal to the Company’s current assets minus current liabilities (each expressed as a
positive number) as of the Closing Date as determined in accordance with GAAP, except that for
purposes of this calculation, current assets shall exclude prepaid insurance unamortized at the
acquisition date and current liabilities shall exclude the remainder of the premium liability due
related to the current year prepaid insurance at the acquisition date and current liabilities shall
also exclude the twelve months of lease/purchase obligations for tanks due to DiVinci of $21,000
($1,750 per month for twelve months) at the acquisition date.

12

 

     (b) Sellers hereby appoint Rittenberry as their representative and expressly authorize him to
review and determine the amount of Working Capital on their behalf. Each of the other Sellers
hereby indemnifies and holds Rittenberry harmless from any action or omission he may take or fail
to take with respect to such review and determination except for his gross negligence or willful
misconduct.

     (c) If Rittenberry has not given Buyer written notice of his disagreement with the Working
Capital Statement by the end of the Review Period, then the statement of Working Capital Statement
will be final and binding on all parties. If Rittenberry gives notice of disagreement with the
Working Capital Statement before the end of the Review Period, then the parties hereto agree to
attempt to resolve, in good faith, any discrepancies during the ten (10) day period following
receipt by Buyer of the notice of disagreement. If the parties hereto are unable to resolve the
objection, then the issues in dispute will be submitted to a mutually acceptable national or
regional firm of certified public accountants (the “Accountants”) for resolution. If issues in
dispute are submitted to the Accountants for resolution, then each party will furnish to the
Accountants such work papers and other documents and information relating to the disputed issues as
the Accountants may request and are available to that party (or its independent public
accountants), and will be afforded the opportunity to present to the Accountants any material
relating to the determination and to discuss the determination with the Accountants. The
determination by the Accountants, as set forth in a notice delivered to Company, Buyer and the
Sellers simultaneously by the Accountants, will be binding and conclusive on the parties and final.
If the Accountant’s reconciliation of the Working Capital results a determination that the Working
Capital is equal to or in excess of $0, then Buyer will bear all of the Accountant’s fees and
expenses, and if the Accountant’s reconciliation of the Working Capital results in a Working
Capital amount of less than $0, then the Sellers will bear all of the Accountant’s fees and
expenses based upon their Pro Rata Share as defined in Section 12(c).

     Section 11. Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing in the following manner:

     (a) By mutual written consent of each Seller, the Company and Buyer; or

     (b) By Sellers and the Company, if, on April ___, 2007, any of the conditions set forth in
Section 8 shall not have been satisfied and shall not have been waived by Sellers and the
Company; or

     (c) By Buyer, if, on April ___, 2007 any of the conditions set forth in Section 9 shall
not have been satisfied and shall not have been waived by Buyer.

In the event of the termination of this Agreement pursuant to this Section 11 by Sellers
and the Company, on the one hand, or Buyer, on the other, written notice thereof shall forthwith be
given to the other party specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall become void and have no effect, except that the agreements contained
in this Section and Section 12 shall survive the termination thereof. If Buyer terminates
this Agreement under Section 9(f) or if the Company or Sellers terminate this Agreement as
a result of the conditions set forth in Section 8(a), Section 8(b), 8(d), 8(e), 8(f), 8(g) or
8(h) having not been met or satisfied, the Good Faith Deposit shall be released to Sellers from
the escrow account. If Buyer terminates this Agreement under any other provision of Section
9 hereof, the Good Faith Deposit shall be released to Buyer from the escrow account.

13

 

     Section 12. Survival of Representations; Indemnification. 

     (a) The representations and warranties of the parties hereto contained in this Agreement or in
any certificate, instrument, or document delivered pursuant hereto shall survive the Closing for a
period of one year after the Closing Date and shall thereafter terminate and be of no further force
or effect, except that (i) the representations and warranties of Sellers and the Company relating
to taxes and tax returns in Section 4(d) and environmental liabilities in Section
4(f) shall survive the Closing for the period of the applicable statutes of limitation plus any
extensions or waivers thereof, and (ii) any representation or warranty as to which a claim
(including without limitation a contingent claim) shall have been asserted during the survival
period shall continue in effect with respect to such claim until such claim shall have been finally
resolved or settled. Notwithstanding any investigation or audit conducted before or after the
Closing Date or the decision of any party to complete the Closing, each party shall be entitled to
rely upon the representations and warranties of the other party or parties set forth herein.

     (b) Subject to the limitations set forth below, Sellers jointly and severally agree to
indemnify, defend and hold harmless Buyer and the heirs, legal representatives, successors and
assigns of Buyer (collectively, the “Buyer Indemnified Parties” and individually, a “Buyer
Indemnified Party”), from and against, and to reimburse the Buyer Indemnified Parties with respect
to, any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses
(including, without limitation, attorneys’ fees and court costs) asserted against or incurred by
any Buyer Indemnified Party by reason of or arising out of, or resulting from any breach by Sellers
of any of the representations, warranties, covenants or agreements contained in Section 4
of this Agreement. Each of the Sellers’ liability under this Section 12(b) shall be
limited to the Restricted Share Price of the Restricted Shares received by such Seller hereunder.
In order to satisfy any liability under this Section 12(b), each Seller has the option to
deliver Restricted Shares (having a deemed value equal to the Restricted Share Price), the Company
Notes or cash or any combination thereof to the Buyer in satisfaction of such Seller’s obligations
under Section 12(b) or (c), and upon any such cash payment, Buyer will release such
Restricted Shares which have been pledged to it. The total amount paid by a Seller under this
Section 12(b) when combined with amounts paid under Section 12(c) shall not exceed
such Seller’s Pro Rata
Share (as defined below). The Company Notes shall be deemed to have their face value plus
accrued interest for purposes of satisfying any indemnity obligations of Sellers under Section
12(b) or (c) and each Seller shall have the option of cancelling all or any portion of such
Company Notes to satisfy all or any portion of its indemnification obligations under Section
12(b) or (c). In order to secure Sellers’ obligations under this Section 12(b),
Sellers shall pledge their respective Restricted Shares to the Company for one year pursuant to a
Pledge Agreement substantially in the form attached hereto as Exhibit C.

     (c) Sellers severally (but only in proportion to their respective Pro Rata Share) and not
jointly agree to indemnify, defend and hold harmless the Buyer Indemnified Parties from and
against, and to reimburse the Buyer Indemnified Parties with respect to, any and all claims,
demands, causes of action, losses, damages, liabilities, costs and expenses (including, without
limitation, attorneys’ fees and court costs) asserted against or incurred by any Buyer Indemnified
Party by reason of or arising out of, or resulting from any breach by such Seller of any of the
covenants or agreements of such Seller contained in this Agreement or any representations or
warranties of such Seller contained in Section 5(a), (b) and (c) of this Agreement. “Pro
Rata Share” means with respect to any Seller a fraction, set forth as a percentage, the numerator
of

14

 

which is the total consideration received by a Seller pursuant to this Agreement for all of such
Seller’s Shares as set forth on Annex I, and the denominator of which is the total consideration
received by all Sellers pursuant to this Agreement as set forth on Annex I. Each of the Sellers’
liability under this Section 12(c) shall be limited to its respective portion of the
Purchase Price received by such Seller and any amounts paid under Section 12(b) shall
reduce the Pro Rata Share available for recovery from such Seller under this Section 12(c).

     (d) Buyer agrees to indemnify, defend and hold harmless Sellers and the heirs, legal
representatives, successors and assigns of Sellers (collectively, the “Seller Indemnified Parties”
and individually, a “Seller Indemnified Party”), from and against, and to reimburse the Seller
Indemnified Parties with respect to, any and all claims, demands, causes of action, losses,
damages, liabilities, costs and expenses (including, without limitation, attorneys’ fees and court
costs) asserted against or incurred by any Seller Indemnified Party by reason or arising out of, or
resulting from (i) any breach by Buyer of any other representations, warranties, covenants or
agreements contained in this Agreement, (ii) any tax liabilities (including, but not limited to,
income, property, sales, occupation, franchise and transfer tax liabilities) attributable to the
operations or activities of Buyer occurring on or after the Closing Date, (iii) the ownership of
the Shares from and after the Closing Date and (iv) any acts or omissions of Buyer or any events or
occurrences involving the Shares or the ownership or operation of the Company after the Closing
Date.

     Section 13. Miscellaneous.

     (a) If the Closing under this Agreement occurs, the indemnification provided by Section
12 shall be the sole remedy available to any party under this Agreement or arising out of this
transaction whether in contract, tort or otherwise, provided, however, that if a
party from whom indemnification is being sought has committed fraud, the indemnification provided
by Section 12 shall be in addition to any other rights and remedies available for such
fraud whether under this Agreement or otherwise. This section shall not limit the obligations of
the Sellers to indemnify Rittenberry as provided in Section 10(c).

     (b) All notices and other communications required or permitted to be given hereunder by any
party hereto shall be in writing and shall be deemed to have been duly given or made if (i)
delivered personally, (ii) transmitted by first class registered or certified mail, postage
prepaid, return receipt requested, (iii) sent by prepaid overnight courier service, or (iv) sent by
copy of facsimile transmission, to the parties at the addresses set forth on the signature page of
this Agreement.

     (c) This Agreement, together with the Exhibits and Schedules to be attached hereto, constitute
the entire agreement between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof. The parties hereby agree that the Schedules are subject to
being mutually agreed upon and attached at Closing.

     (d) This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors, and permitted assigns. Except as
otherwise expressly provided in this Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties.

15

 

     (e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS THEREOF.

     (f) From time to time following the Closing, at the request of any party hereto and without
further consideration, the other party or parties hereto shall execute and deliver such requesting
parties such instruments and documents and take such other action as such requesting party may
reasonably request in order to consummate more fully and effectively the transactions contemplated
hereby.

     (g) Rittenberry shall cooperate with Buyer and provide assistance to Buyer as is reasonably
necessary in connection with the preparation of unaudited financial statements of the Company for
the quarterly period ended January 31, 2007 as otherwise reasonably requested by Buyer.

     (h) From time to time following the Closing, the Buyer will make reasonably available to the
Sellers any records or documents transferred to Buyer in accordance with Section 9(d) of
this Agreement for the filing of any tax returns and compliance with applicable tax laws, in
defending any third-party litigation arising in respect of this Agreement or any other similar or
related matter.

16

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above-written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	CHANNEL REFINING CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	Address for Notices:

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	13101 Preston Road, Suite 413

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dallas, Texas 75240

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Facsimile:                     
	 	 	 	 	 	 	 	 
	Attention:                     	 	 	 	SELLERS:	 	 
	 
	 	 	 	 	 	 	 	 
	Address for Notices:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	[Address]	 	 	 	Robert E. Lorton	 	 
	[Address]
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address for Notices:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	[Address]	 	 	 	C. R. Rittenberry	 	 
	[Address]
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	WINSTON OVERSEAS INVESTMENT	 	 
	 
	 	 	 	 	 	 	 	 
	Address for Notices:

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	[Address]

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	[Address]

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	GREENHUNTER ENERGY, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	Address for Notices:

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	[Address]

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	[Address]

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	With a copy to:
	 	 	 	 	 	 	 	 
	Thompson & Knight LLP
	 	 	 	 	 	 	 	 
	1700 Pacific Avenue, Suite 3300
	 	 	 	 	 	 	 	 
	Dallas, Texas 75201
	 	 	 	 	 	 	 	 
	Facsimile: 214-969-1751
	 	 	 	 	 	 	 	 
	Attention: Ann Marie Cowdrey
	 	 	 	 	 	 	 	 

17

 

SCHEDULES AND EXHIBITS:

	 	 	 	 	 
	Schedule 4(a)

	 	-
	 	Real Estate (**)
	Schedule 4 (f)

	 	-
	 	Environmental Matters (**)
	Schedule 4(g)

	 	-
	 	Personal Property (**)
	Schedule 4(l)

	 	-
	 	Permits (**)
	Schedule 4(o)

	 	-
	 	DiVinci Settlement Agreement (**)
	Schedule 4(p)

	 	-
	 	DiVinci Settlement Agreement (**)
	Schedule 4(q)

	 	-
	 	Parker Brothers Use Agreement (**)
	Schedule 4(r)

	 	-
	 	Company Tax Returns (**)
	Schedule 4(s)

	 	-
	 	Company Contracts (**)
	Schedule 4(v)

	 	-
	 	Rail Documents (**)
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Registration Rights Agreement (**)
	Exhibit B

	 	-
	 	Form of Company Notes (*)
	Exhibit C

	 	-
	 	Pledge Agreement (**)
	Exhibit D-1 and D-2

	 	-
	 	Buyer’s Guaranty (**)

 

			
	(*)	 	Attached
	 
	(**)	 	To be attached prior to Closing

18

 

ANNEX I

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Allocation of	 	 	 	 	 	 
	 	 	Allocation of	 	Good Faith	 	Subordinated	 	Restricted	 	Total
	Seller	 	Cash Payment	 	Deposit	 	Notes	 	Shares	 	Consideration
	Robert E. Lorton
	 	$	5,920,353	 	 	$	79,647	 	 	$	1,500,000	 	 	$	1,500,000	 	 	$	9,000,000	 
	C.R. Rittenberry
	 	$	635,399	 	 	$	14,601	 	 	$	500,000	 	 	$	500,000	 	 	$	1,650,000	 
	Winston Overseas Investment
	 	$	394,248	 	 	$	5,752	 	 	$	0	 	 	$	250,000	 	 	$	650,000	 
	Total
	 	 	$	11,300,000exv10w2

 

Exhibit 10.2

AMENDMENT NO. 1

TO

STOCK PURCHASE AGREEMENT

     THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (this “Amendment”) is made and entered into
this 13th day of April, 2007, by and among Channel Refining Corporation, a Texas corporation (the
“Company”), those persons listed on Annex I attached hereto (individually, each a “Seller” and
collectively the “Sellers”), and GreenHunter Energy, Inc. (“Buyer”).

W I T N E S S E T H

:

     WHEREAS, the Company, Sellers and Buyer are the parties to that certain Stock Purchase
Agreement dated as of February ___, 2007 (the “Stock Purchase Agreement”); and

     WHEREAS, the parties hereto desire to enter into this Amendment to amend certain provisions of
the Stock Purchase Agreement and to add certain additional terms to the Stock Purchase Agreement.

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

     Section 1. Certain Definitions. Terms used in this Amendment and not otherwise
defined shall have the meanings set forth in the Stock Purchase Agreement.

     Section 2. Escrow Agent. Section 2(a) of the Agreement is hereby amended and restated
in its entirety, as follows:

     “(a) Buyer shall deposit in an escrow account with Frost Bank (“Escrow Agent”) on the date of
this Agreement the amount of One Hundred Thousand Dollars ($100,000) cash (the “Good Faith
Deposit”), subject to return to Buyer in accordance with the provisions of Section 10
hereof. The Good Faith Deposit will be applied to the cash portion of the Purchase Price set forth
in Section 2(b). The Interest thereon is to inure to Buyer.”

     Section 3. Purchase Price and Payment. Section 2(b) of the Agreement is hereby
amended and restated in its entirety, as follows:

     “(b) Buyer shall pay to Sellers on Closing Date the amount of Seven Million Fifty Thousand
Dollars ($7,050,000) cash less the Good Faith Deposit and less the amounts reflected on the
Preliminary Working Capital Adjustment Schedule (as defined below), allocated among Sellers as set
forth under the column “Net Allocation of Cash Payment” on Annex I. The Good Faith Deposit
less any adjustment made pursuant to Section 10 will be released to Sellers and allocated
among Sellers as set forth under the column “Allocation of Good Faith Deposit” on Annex I
after the time period for such adjustment has expired.”

     Section 4. Representations and Warranties Regarding the Company. Section 4(u) of the
Agreement is hereby amended and restated in its entirety, as follows:

 

 

     “(u) Attached hereto as Schedule 4(v) are true and complete copies of the Rail Documents (as
defined in item (i) of the Special Warranty Deed dated October 29, 1996 from Parker Brothers & Co.,
Inc., as grantor, to Channel Refining Corporation, as grantee).”

     Section 5. Representations and Warranties of Buyer. Section 6(i) of the Agreement is
hereby amended and restated in its entirety, as follows:

     “(i) Buyer has completed, as of April 5, 2007, a private placement of an aggregate amount of
$15,000,000, with a commitment of an additional $5,000,000 consisting of that number of shares of
Series A 8% Convertible Preferred Stock at a conversion price of $5.00 per share, having a total
value of $12,500,000 and that number of shares of Common Stock at a price of $5.00 per share,
having a total value of $7,500,000.”

     Section 6. Working Capital Adjustment. Section 10(a) of the Agreement is hereby
amended and restated it in its entirety, as follows:

     “(a) Attached hereto as Annex II is a list of outstanding liabilities known to the
Company and Buyer as of the date of this Amendment, which will cause the post-closing calculation
of Working Capital to be less than zero (the “Preliminary Working Capital Adjustment Schedule”).
The Purchase Price has been reduced by an amount equal to the amount of these liabilities as shown
on the Preliminary Working Capital Adjustment Schedule, or $337,652.08. On or before sixty (60)
days after the Closing Date, the Company shall provide Sellers with a statement showing its
calculation of Working Capital (the “Working Capital Statement”), together with its supporting
documentation. The Company and Sellers shall have an additional fifteen (15) day period (the
“Review Period”) following the delivery of the Working Capital Statement to agree upon the amount
of Working Capital in accordance with the provisions of Section 10(c) below. If Working
Capital as agreed pursuant to this Section 10 is less than zero, then Sellers shall be
obligated to pay Buyer an amount not to exceed the Purchase Price in cash equal to that amount that
would bring the Working Capital to zero. The payment required to be made pursuant to this
Section 10 shall first be satisfied by the receipt by Buyer of the Good Faith Deposit. If
the Good Faith Deposit is insufficient to satisfy the payment required by this Section 10,
such additional amount shall be paid by the Sellers, (i) by delivery of the Restricted Shares
(valued at the Restricted Share Price), then (ii) the Company Notes (valued at face value plus
accrued interest) and then (iii) if a deficiency still remains by delivery of cash promptly upon
the agreement as to the amount of Working Capital in immediately available funds in accordance with
the instructions provided by Buyer. “Working Capital” means an amount equal to the Company’s
current assets minus current liabilities (each expressed as a positive number) as of the Closing
Date as determined in accordance with GAAP, except that for purposes of this calculation, current
assets shall exclude prepaid insurance unamortized at the acquisition date and current liabilities
shall exclude the remainder of the premium liability due related to the current year prepaid
insurance at the acquisition date and current liabilities shall also exclude the twelve months of
lease/purchase obligations for tanks due to DiVinci of $21,000 ($1,750 per month for twelve months)
at the acquisition date, and provided further, that current liabilities shall exclude amounts
included on the Preliminary Working Capital Adjustment Schedule.”

     Section 7. Survival of Representations; Indemnification. Section 12(b) of the
Agreement is hereby amended and restated in its entirety, as follows:

2

 

     “(b) Subject to the limitations set forth below, Sellers jointly and severally (but only in
proportion to the aggregate Restricted Share Price received by such Seller hereunder) agree to
indemnify, defend and hold harmless Buyer and the heirs, legal representatives, successors and
assigns of Buyer (collectively, the “Buyer Indemnified Parties” and individually, a “Buyer
Indemnified Party”), from and against, and to reimburse the Buyer Indemnified Parties with respect
to, any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses
(including, without limitation, attorneys’ fees and court costs) asserted against or incurred by
any Buyer Indemnified Party by reason of or arising out of, or resulting from (i) any breach by
Sellers of any of the representations, warranties, covenants or agreements contained in Section
4 of this Agreement; (ii) any expenses, fines, penalties or other liabilities related to or
arising out of the Cutter stock spill dated October 16, 2006; and (iii) any breach of
representations, warranties, covenants or agreements made in Section 4(l) or Section
14 of this Agreement, including but not limited to the Company’s lack of an air permit. Each
of the Sellers’ liability under this Section 12(b) shall be limited to the Restricted Share
Price of the Restricted Shares received by such Seller hereunder. In order to satisfy any
liability under this Section 12(b), each Seller has the option to deliver Restricted Shares
(having a deemed value equal to the Restricted Share Price), the Company Notes or cash or any
combination thereof to the Buyer in satisfaction of such Seller’s obligations under Section
12(b) or (c), and upon any such cash payment, Buyer will release such Restricted Shares which
have been pledged to it. In no event will the total amount paid by a Seller under this Section
12(b) when combined with amounts paid under Section 12(c) exceed such Seller’s Pro Rata
Share (as defined below). The Company Notes shall be deemed to have their face value plus accrued
interest for purposes of satisfying any indemnity obligations of Sellers under Section 12(b) or
(c) and each Seller shall have the option of canceling all or any portion of such Company Notes
to satisfy all or any portion of its indemnification obligations under Section 12(b) or
(c). In order to secure Sellers’ obligations under this Section 12(b), Sellers shall
pledge their respective Restricted Shares to the Company for one year pursuant to a Pledge
Agreement substantially in the form attached hereto as Exhibit C.”

     Section 8. Sellers’ Clean-Up Duties. A new Section 14 is hereby added to the
agreement, to read as follows:

     “Section 14. Seller’s Covenant to Perform Certain Clean-Up Duties. Within thirty (30)
days of the Closing Date, Sellers shall (i) remove all out of operation transformers on the Real
Estate, (ii) clean any PCB (polychlorinated biphenyl) contamination on the Real Estate and (iii)
remove residue from all storage tanks on the Real Estate. Sellers shall maintain oversight of the
foregoing, shall provide evidence reasonably acceptable to Buyer that the foregoing items were
accomplished, and shall be responsible for all expenses related to the foregoing and shall pay any
service providers engaged or fees or expenses incurred in connection therewith.”

     Section 9. Amendment to Annex I. Annex I is hereby amended by deleting such
annex and replacing it in its entirety with Annex I attached hereto.

     Section 10. Ratification of Stock Purchase Agreement. The Stock Purchase Agreement,
as amended by this Amendment, is hereby ratified and confirmed in all respects.

     Section 11. Counterparts. This Amendment may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.

3

 

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

	 	 	 	 	 	 	 
	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	CHANNEL REFINING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SELLERS:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Robert E. Lorton	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	C. R. Rittenberry	 	 
	 
	 	 	 	 	 	 
	 	 	WINSTON OVERSEAS INVESTMENT	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 
	 	 	GREENHUNTER ENERGY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

4

 

ANNEX I

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Allocation of	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Preliminary	 	 	 	 	 	 	 	 
	 	 	Allocation of	 	Allocation of	 	Working Capital	 	 	 	 	 	 	 	 
	 	 	Total Cash	 	Good Faith	 	Adjustment	 	Net Allocation of	 	Subordinated	 	Restricted	 	Total
	Seller	 	Payment	 	Deposit	 	amount	 	Cash Payment	 	Notes	 	Shares	 	Consideration
	Robert E. Lorton
	 	$	6,000,000	 	 	$	81,247.79	 	 	$	274,334.84	 	 	$	5,644,417.37	 	 	$	1,500,000	 	 	$	1,681,000	 	 	$	9,181,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	C.R. Rittenberry
	 	$	650,000	 	 	$	13,000.00	 	 	$	43,894.77	 	 	$	593,105.23	 	 	$	500,000	 	 	$	319,000	 	 	$	1,469,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Winston Overseas
Investment
	 	$	400,000	 	 	$	5,752.21	 	 	$	19,422.47	 	 	$	374,825.32	 	 	$	0	 	 	$	250,000	 	 	$	650,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals
	 	$	7,050,000	 	 	$	100,000.00	 	 	$	337,652.08	 	 	$	6,612,347.92	 	 	$	2,000,000	 	 	$	2,250,000	 	 	$	11,300,000	 

 

 

ANNEX II

Preliminary Working Capital Adjustment Schedule

Channel Refining Corporation

Schedule of Estimated Working Capital

Deficit

As Of April 13, 2007

	 	 	 	 	 
	Current Assets:
	 	 	 	 
	Cash-Amegy Operating Account
	 	$	83,000.00	 
	A/R Intergulf
	 	$	30,000.00	 
	A/R Processing
	 	$	10,000.00	 
	Inventory-Light Ends (2200 bbls)
	 	$	120,000.00	 
	Inventory MDO (300 bbls)
	 	$	15,000.00	 
	 
	 	 	 
	Total Current Assets
	 	$	258,000.00	 
	 
	 	 	 
	 
	 	 	 	 
	Current Liabilities:
	 	 	 	 
	Goodyear Company
	 	$	150,000.00	 
	Munsch, Hardt, Kopf & Hardt-old
	 	$	2,899.78	 
	Munsch, Hardt, Kopf & Hardt-new
	 	$	30,000.00	 
	Carrigan, McClosky & Roberson
	 	$	6,800.00	 
	Phoenix Pollution Control
	 	$	65,755.22	 
	R. Langholz Jr
	 	$	12,000.00	 
	Robert Langholz Sr
	 	$	20,000.00	 
	Milann Siegfried
	 	$	20,000.00	 
	John F Lawhon
	 	$	20,000.00	 
	Jack Kelley
	 	$	20,000.00	 
	Divinci Chemical
	 	$	125,000.00	 
	Channel Ventures
	 	$	35,459.46	 
	Robert E Lorton
	 	$	42,537.62	 
	Centerpoint
	 	$	11,000.00	 
	Reliant
	 	$	11,000.00	 
	Sartomer
	 	$	15,000.00	 
	Green Energy
	 	$	8,200.00	 
	 
	 	 	 
	Total Current Liabilities
	 	$	595,652.08	 
	 
	 	 	 
	 
	 	 	 	 
	Net Working Capital Deficit
	 	$	(337,652.08	)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]