Document:

ex4_5a.htm

Exhibit 4.5A

 

//First Amendment

To

Unit Purchase Agreement

This First Amendment to the Unit Purchase Agreement dated as of September 24, 2012 (the “Agreement”) by and among Third Eye Capital Corporation, as Administrative Agent, the Investors Party Thereto, Lima Energy Company, as the “Company”, and USA Synthetic Fuel Corporation, as Parent (collectively the “Parties” and individually a “Party”) is dated as of October 2, 2012 and is entered into by and among each of the Parties (the “Amendment”).

Recitals

WHEREAS, the Parties desire to amend and modify the Agreement in order to clarify certain defined terms in the Agreement and Section 13.1 to clarify the intent of the Parties with respect to the Call Rights (as defined in the Agreement) of the Parent;

Agreement

NOW THEREFORE, in consideration of the premises, mutual promises and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:

	
  

	
1.

	
Defined Terms.  Capitalized terms used in this Amendment shall have the same meaning as set forth in the Agreement except as amended or modified by this Amendment.

	
  

	
2.

	
Amendments.

	
  

	
a.

	
Definition of “Call Right” The definition of the term “Call Right” as set forth in the Agreement shall be amended and restated in its entirety to read as follows:

“Call Right” has the meaning given thereto in Section 13.1.”

	
  

	
b.

	
Definition of “Units”  The definition of the term “Units” as set forth in the Agreement shall be amended and restated in its entirety to read as follows:

“Unit” means one Common Share issuable upon the conversion of a Note into Common Shares at the Conversion Price and one Common Share issuable upon the exercise of a Warrant in accordance with its terms, and “Units” means each and every Unit, collectively, totaling 10,312,500 Units.

	
  

	
c.

	
Definition of Warrant  The definition of the term “Warrant” as set forth in the Agreement shall be amended by adding the following language immediately after the word “Agreement” at the end of the definition:

“, and “Warrants” means any additional Warrants issued by the Parent upon the surrender of the Warrant and the transfer or other assignment of a portion of the Warrant to a third party”

 

  

1

  

 

	
  

	
d.

	
Section 13.1  Section 13.1 of the Agreement shall be amended and restated in its entirety to read as follows:

Section 13.1  Call Right.

“Notwithstanding any provision in Article 8, the Parent shall have the right, at any time prior to (i) a Holder of a Note exercising its right, in whole or in part, to convert the Note to Common Shares or (ii) a Holder of a Warrant exercising its right, in whole or in part, to purchase Common Shares pursuant to the terms of the Warrant (as the case may be), to purchase all Common Shares that would be issued upon a conversion of the Notes and the exercise of the Warrants comprising all of the Units from the Holder(s) for a price equal to $10.00 per Unit, subject to adjustment as set forth in Section 8.4 (the “Call Right”). The Parent shall exercise its Call Right by providing written notice to the Holder(s) not less than ten (10) days prior to the date on which the Parent desires to purchase all of the Units, which notice shall set forth the time and place for the completion of such purchase. The Parent shall pay for such Units by wire transfer of immediately available funds to the account or accounts as directed by the Holder(s). For purposes of clarity, in the event a Holder exercises its right to either (i) convert a Note to Common Shares or (ii) exercise its right to purchase Common Shares pursuant to the Warrant, in whole or in part, the Call Right shall expire.”

	
  

	
3.

	
Remaining Provisions of Agreement.  The Parties agree that all remaining provisions of the Agreement shall remain in full force and effect as if entered into on the date of this Amendment.

	
  

	
4.

	
Governing Law.  This Amendment shall be construed and enforced in accordance with the laws of the State of Ohio, without regard to Ohio law regarding choice of law. Each of the parties hereto irrevocably consents to the exclusive venue and jurisdiction of the state and federal courts located in Hamilton County, Ohio in the event of any lawsuits, claims or other disputes relating to or arising from this Amendment.

	
  

	
5.

	
Counterparts and Facsimile.  This Agreement may be executed in counterparts and by facsimile or other electronic transmission (including by electronic mail) of an authorized signature and each such counterpart shall be deemed to form part of one and the same document.

(Signature page follows herewith)

  

2

  

IN WITNESS WHEREOF, the Parties have executed this Amendment on the date written above.

 

	COMPANY: 	LIMA ENERGY COMPANY	 
	 	 	 	 
	 	By: 	/s/ H. H. Graves	 
	 	 	Harry H. Graves	 
	 	 	 	 
	PARENT:	USA SYNTHETIC FUEL CORPORATION	 

 

	 	 	 
	 	By:  	/s/ H. H. Graves	 
	 	 	Harry H. Graves	 
	 	 	 	 
	ADMINISTRATIVE AGENT:  	THIRD EYE CAPITAL CORPORATION	 

        

	 	 	 
	 	By:  	
/s/ Arif N. Bhalwani

	 
	 	 	 	 
	 	By:	
Arif  N. Bhalwani

	 
	 	 	Managing Director	 
	 	 	 	 

 

	INVESTOR: 	STRATIVE CAPITAL LTD.	 
	 	 	 	 
	 	By:  	/s/ Claude Church	 
	 	 	 	 
	 	By:	Claude Church	 
	 	 	President & CEO	 

 

Signature Page

First Amendment to Unit Purchase Agreement

 

 

3ex10-11.htm

Exhibit 10.11

 

 

SECOND ADDENDUM TO THE EMPLOYMENT AGREEMENT BETWEEN

VERTEX ENERGY, INC.

and

GREG WALLACE

THIS SECOND ADDENDUM (this “Addendum”) made this 15th day of June, 2012 by and between GREG WALLACE (hereinafter “Wallace”) and VERTEX ENERGY, INC., a Nevada corporation, (hereinafter referred to as the “Company”), to the Employment Agreement originally executed on or about January 1, 2007, amended on or about February 22, 2010, and modified by that certain Addendum to Employment Agreement entered into on July 5, 2011, as amended, modified and added to from time to time, the "Agreement" between the same parties.

W I T N E S S E T H:

WHEREAS, both parties have agreed to make the following Addendum to the Agreement simultaneously with the execution thereof;

NOW THEREFORE, in consideration of the contractual terms and conditions agreed in the Agreement, as amended by this Addendum, and of the mutual terms, conditions and covenants of the parties set forth in the Agreement as amended, and this Addendum thereto, the parties hereto amend the Agreement as follows, which Addendum shall control over any inconsistent terms elsewhere in the Agreement; and

Effective with the execution of this Addendum, the Agreement incorporates into and makes a part of the Agreement the additions and modifications as follows, which additions and modifications are approved, acknowledged and ratified by each Party.

1.           The Following Section shall be considered added to and as a part of the Agreement for all purposes, with the execution of this Addendum, to wit:

“2012 – 2015 Commission Compensation”

The Company hereby sets the bonus compensation for the period from January 1, 2012 to December 31, 2014 as provided below.  Commission compensation will be provided to Wallace if and only if the Company earns Adjusted Gross Margin (as defined below) recorded in the Company’s General Ledger.

Period:  January 1, 2012 to December 31, 2014 (each calendar year, a “Commission Year”)

Commission Compensation -

The Company agrees to pay commissions to Wallace for each Commission Year, calculated at 10% of the Commission Year's "Adjusted Gross Margin" on the Vertex Refining and Marketing book of business managed by Greg Wallace (the “Earned Bonus Commission”).  In addition to Earned Bonus Commission, in the event that year end Adjusted Gross Margin exceeds $2,477,393 (for the 2012 Commission Year) (the “Adjusted Gross Margin Limit”) in any Commission Year, Wallace shall earn (in addition to the Earned Bonus Commission), commission on the amount exceeding such Adjusted Gross Margin Limit (“Exceeded Commission”) at a rate of 5%, which will be paid out according to the detailed schedule provided below similar to the Earned Bonus Commission.  Exceeded Commission levels will be established and documented on a yearly basis.  Commissions shall be calculated and paid based on quarterly and year-end reports.  "Adjusted Gross Margin" is defined as Gross Margin minus general and administrative overhead directly related to the segments of Vertex Refining and Marketing which relates to business conducted in Port Arthur and managed by Wallace and excludes the re-refining of certain oil feedstock referred to as the “Thermal/chemical extraction process” (“TCEP”).  Final year-end commission calculations shall be made after year-end close of accounting records and no later than April 20th of each year following the applicable Commission Year in which the Commission Compensation is to be earned (i.e., 2013 for Commission Compensation earned in the 2012 Commission Year, each a “Payment Year”).

 

 

  

  

  

Payments of Commissions due for each Payment Year shall be paid in three (3) installments according to the following schedule and adjusted annually subject to earnings criteria and cash flows available, to wit (the “Installment Payments”):

	
  

	
·

	
The First Installment shall be payable on May 25th of the applicable Payment Year, in the amount of 25% of the prior Commission Year’s Earned Bonus Commission and Exceeded Commission (the “First Installment Payment”); provided however, that such First Installment Payment will not exceed 50% of the cumulative Adjusted Gross Margin for the first quarter of the applicable Payment Year.

	
  

	
·

	
The Second Installment shall be payable on August 25th of the applicable Payment Year, in the amount of 25% of the prior Commission Year’s Earned Bonus Commission and Exceeded Commission, plus any accumulated and unpaid carried forward bonus not paid in the First Installment (the “Second Installment Payment”); provided however, that such Second Installment Payment will not exceed 50% of the cumulative Adjusted Gross Margin for the second quarter of the applicable Payment Year.

	
  

	
·

	
The Third Installment shall be payable on November 25th of the applicable Payment Year, in the amount of 50% of the prior Commission Year’s Earned Bonus Commission and Exceeded Commission, plus any accumulated and unpaid carried forward bonus not paid in the First and Second Installments (the “Third Installment Payment”); provided however, such Third Installment Payment will not exceed 50% of the cumulative Adjusted Gross Margin for the third quarter of the applicable Payment Year. Any excess commission due and payable after the payment of the Third Installment, shall accumulate and carry forward for payment calculations applicable to the First Installment due for the following Payment Year.”

Period:  January 1, 2015 to December 31, 2015 (“2015 Commission Year”)

 

 

 

 

 

 

 

 

  

  

  

Commission Compensation –

The Company agrees to pay commissions to Wallace for the 2015 Commission Year, calculated at 15% of the Commission Year's "Adjusted Gross Margin" on the Vertex Refining and Marketing book of business managed by Greg Wallace (the “Earned Bonus Commission”).  All payment schedules and installments to be the same as prior years.

 

2.           Installment Payments shall continue to be due pursuant to the schedule above for each Payment Year applicable to a Commission Year, ending on the earlier of (a) the termination date of Wallace’s employment with the Company, provided that Wallace shall earn commission compensation for the then Commission Year due to Wallace through the date of such termination only; and (b) November 25, 2015 (the “Final Regular Payment Date”).  In the event that any accrued and unpaid Earned Bonus Commission or Exceeded Commission remains outstanding on the Final Regular Payment Date, such remaining Earned Bonus Commission and Exceeded Commission (the “Remaining Bonus”) shall continue to accrue to Wallace and be paid based on the Installment Payments above with the “prior Commission Year’s Earned Bonus Commission and Exceeded Commission” being substituted with the Remaining Bonus for any and all purposes and the “Payment Year” being the applicable calendar year, with any unpaid amount of the Remaining Bonus continuing to accrue year after year until paid pursuant to the Installment Payments described above, if ever; provided further that the Company’s obligation to pay any Remaining Bonus or accrued and unpaid bonus to Wallace shall cease on the second anniversary of the termination date of Wallace’s employment with the Company (“Bonus Payment Termination Date”), and any Remaining Bonus or accrued and unpaid bonus not paid by such Bonus Payment Termination Date shall be automatically forgiven and waived, and Wallace shall be deemed to have automatically released the Company’s obligation to make such payment (“Forgiveness” which shall refer to Wallace’s release of the Company’s obligation to make any such payment and confirmation that no such payment is due).

3.           All unpaid and accrued installment payments will accrue interest at the rate of LIBOR + 3% per annum until paid or subject to Forgiveness (LIBOR to be determined as of May 25th  of each Commission Year).  Any unpaid interest will accrue to the next payment, subject to the limitations described above or Forgiveness.

4.           Each of the parties agrees and confirms by signing below that they have received valid consideration in connection with this Addendum and the transactions contemplated herein.

5.           The parties hereby reaffirm all terms, conditions, covenants, representations and warranties made in the Agreement, to the extent the same are not amended, modified or added to hereby.

 

6.           Upon the effectiveness of this Addendum, each reference in the Agreement to “Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to such Agreement as modified hereby.

 

7.           Except as specifically modified or added to herein, the Agreement and the terms and conditions thereof shall remain in full force and effect.

 

8.           This Addendum may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Addendum or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Addendum signed by one party and faxed to another party shall be deemed to have been executed and delivered by the signing party as though an original.  A photocopy of this Addendum shall be effective as an original for all purposes.

 

 

  

  

  

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

COMPANY:

 

Vertex Energy, Inc.

 

By: /s/ Benjamin P. Cowart               

Name:    Benjamin P. Cowart

 

Title:      President

 

WALLACE:

 

Greg Wallace

 

/s/ Greg Wallace

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