Document:

ex10-21.htm

Exhibit 10.21

 

 

FIRST ADDENDUM TO

EXECUTIVE EMPLOYMENT AGREEMENT

 

This First Addendum to Amended and Restated Executive Employment Agreement (this “Agreement”) dated to be effective as of August 31, 2012 (the “Effective Date”), is by and between Vertex Energy, Inc., a Nevada corporation (“Vertex”) and Chris Carlson, an individual (“Executive”), each referred to herein as a “Party” and collectively the “Parties”.

 

W I T N E S S E T H:

 

WHEREAS, the Parties previously entered into an Amended and Restated Executive Employment Agreement (the “Executive Employment Agreement”) on March 29, 2011, effective as of April 1, 2010;

 

WHEREAS, pursuant to that certain Unit Purchase Agreement dated as of August 14, 2012 (the “Purchase Agreement”) by and among Vertex, Vertex Holdings, L.P., a Texas limited partnership (“Holdings”), B&S Cowart Family, L.P., a Texas liability partnership (“B&S LP” and together with Holdings, the “Sellers”), and Vertex Acquisition Sub, LLC, a Nevada limited liability company (“Target”), Vertex agreed to purchase from the Sellers all of the issued and outstanding units representing membership interests (the “Units”) of Target;

 

WHEREAS, it is a condition to Vertex’s obligation under the Purchase Agreement to purchase the Units that Vertex and Executive shall have executed and delivered this Agreement;

 

WHEREAS, Executive will derive substantial direct and indirect benefits from the transactions contemplated in the Purchase Agreement, including Executive’s indirect percentage share of the Purchase Price (as defined in the Purchase Agreement);

 

WHEREAS, capitalized terms used herein shall have the meaning ascribed to such terms in the Executive Employment Agreement, unless otherwise stated herein or the context requires otherwise; and

 

WHEREAS, the Parties desire to enter into this Agreement to modify certain provisions, terms and conditions to the Executive Employment Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements, and considerations herein contained, and other consideration, which consideration the Parties hereby acknowledge and confirm the sufficiency thereof, the Parties hereto agree as follows:

 

1. Amendment to Executive Employment Agreement.

 

(a) Section 1.3 of the Executive Employment Agreement is hereby amended by adding the following sentence at the end of such section:

 

“In the event that any covenant contained in this Agreement should ever be adjudicated to exceed the time, geographic, product or service or other limitations permitted by applicable law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service or other limitations permitted by applicable law.”

 

 

 

  

  

  

(b) Section 1.4 of the Executive Employment Agreement is hereby amended and restated in its entirety to read as follows:

 

“1.4.           Other Activities. Subject to the foregoing prohibition and the terms and conditions of that certain Non-Competition and Non-Solicitation Agreement dated as of August 31, 2012 by and among Vertex, Vertex Holdings, L.P., B&S Cowart Family, L.P., Benjamin P. Cowart and Executive, and provided such services or investments do not violate any applicable law, regulation or order, or interfere in any way with the faithful and diligent performance by Executive of the services to the Company otherwise required or contemplated by this Agreement, the Company expressly acknowledges that Executive may:

 

1.4.1           make and manage personal business investments of Executive’s choice without consulting the Board;

 

1.4.2           serve in any capacity with any non-profit civic, educational or charitable organization; and

 

1.4.3           spend up to a total of twenty (20) hours per month in fulfilling his duties as officer, director and/or manager of any of the private companies with whom Executive is currently affiliated, namely Vertex Holdings, L.P., VTX, Inc., Arrow, Vertex Residual Management, B&S Cowart Family, L.P.,  Vertex Green, LP and Vertex Processing, pursuant to Exhibit A.”

 

(c) The Executive Employment Agreement is hereby amended by replacing Exhibit A thereto with Exhibit A to this Agreement.

 

2. Reconfirmation of Executive Employment Agreement.  The Parties hereby reaffirm all terms, conditions, covenants, representations and warranties made in the Executive Employment Agreement, to the extent the same are not amended hereby.

 

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

 

4. Executive Employment Agreement to Continue in Full Force and Effect.  Except as specifically modified herein, the Executive Employment Agreement and the terms and conditions thereof shall remain in full force and effect.

 

5. Effect of Facsimile and Photocopied Signatures.  This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement 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 Agreement shall be effective as an original for all purposes.

 

 

 

[Signature Page Follows.]

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be effective as of the Effective Date.

 

 

 

	 	 	
VERTEX:

 

VERTEX ENERGY, INC., a Nevada corporation

	 	 	 	 
	 	
By:

Name:       

 

 

 

 

 

	
/s/ David L. Phillips                              

 
David L. Phillips

Director and Chairman,

Related Party Transaction Committee

 

 
EXECUTIVE:

 

/s/ Chris Carlson

Chris Carlson

 

 

	 	 	 

 

 

 

  

  

  

EXHIBIT A

 

It is acknowledged and agreed that the following actions, business transactions, agreements and undertakings may be undertaken by Executive:

 

	
  

	
·

	
Executive can serve as an officer, director or manager of any of the private companies with whom he is currently affiliated, including Vertex Holdings, L.P., VTX, Inc., Arrow, Vertex Residual Management, B&S Cowart Family, L.P., Vertex Green, LP or Vertex Processing (collectively, the “Affiliated Companies”);

 

	
  

	
·

	
Executive may own an interest in or shares or membership units in any of the Affiliated Companies. Executive may earn a fee for providing services to the Affiliated Companies;

 

	
  

	
·

	
Any Affiliated Party may sell products, equipment or materials to the Company on terms mutually agreeable between the Company and such Affiliated Party;

 

	
  

	
·

	
Vertex Residual Management may contract with the Company or with Vertex LP on behalf of the Company to provide the Company environmental compliance, regulation and oversight services on terms mutually agreeable between the parties;

 

	
  

	
·

	
Vertex Green may focus on the development of renewable energy such as biodiesel, which entity shall be outside of the Company; and

 

	
  

	
·

	
Any other actions, business transactions, agreements and undertakings which the Executive has received approval of a majority of the independent members of the Board of Directors to enter into and/or undertake.FURTHER AMENDMENT

to POLICY PURCHASE AGREEMENT
entered March 15, 2012 (As amended April

27, 2012)

 

In reference to the Policy Purchase Agreement by and
between Universal Settlements International Inc. and Crown Alliance Capital Limited as noted above, section 18 of said agreement
headed “Termination Date" is hereby further amended to extend termination date to November 23, 2012.

 

	USI:	By: /s/ J. Panos
		J. Panos, President
		Universal Settlements International Inc.
		5500 North Service Road, Suite 703
		Burlington
		
        Ontario, L7L 6W6

         

	Purchaser:	By: /s/ L. Fusco
		L. Fusco, President
		Crown Alliance Capital Limited
		3601 Highway 7 East. Suite 203
		Markham
		Ontario L3R 8X6EXCLUSIVE
LICENSE/ROYALTY AGREEMENT

 

THIS LICENSE
AGREEMENT (the "Agreement")
is made and 
is effective as
of the last
date  of signature hereto (the "Effective
Date") by and between Paul Aston, and SP Innovations, Inc. (collectively "Licensor") a
California Corporation with its principal place of business at 9386 Pike Road,
Santee, CA 92071 and  IDS Solar Technologies,
Inc., ("Licensee"), a Nevada corporation with its principal place of
business at 533 Birch Street, Lake Elsinore,
CA 92530 (collectively "Parties") WHEREAS, Paul Aston is the principal of
SP Innovations, Inc. and  warrants that
he is authorized to enter into  this agreement
on behalf  of SP Innovations, Inc.

 

WHEREAS, Licensor
represents and  covenants that he is
the sole owner of the entire right, title and interest in
the entire line of products owned by
SP Innovations, Inc. ("Product").
As of the date  of this
Agreement, the Product specifically includes those 
products described on Schedule A hereto. Licensee shall also
have  the right of first refusal
on any subsequent product created by Paul
Aston  and/ or SP Innovations, Inc.;

 

WHEREAS, Licensee desires to retain an exclusive license
right to make, sell and  use products
derived within the scope of

Product;

 

WHEREAS, In consideration of
the mutual promises and understandings hereinafter set
forth,  the parties intending to be legally bound
do hereby agree as follows:

 

1) Licensor grants to
Licensee an exclusive
license, which is subject  to the
Provisions of Article (5) and  Article (6) (iv) of this Agreement, the exclusive
rights to manufacture, import, use and sell Product
in the United States.

 

2) Licensee  shall
 keep  true and 
accurate books of account showing: the (i) quantity of licensed Product that
is manufactured and  the quantity
sold, including, if applicable, the quantity manufactured
and quantity sold by sublicenses during the term 
of this Agreement; (ii) the
selling price per item thereof for the quantities sold and 
a total dollar amount per item; and other 
data  necessary for an accurate determination of the payments called for herein.

 

3) Licensee shall produce
and provide to the Licensor  a Royalty Report 
providing (i) Sales information including item numbers, dates, invoice 
numbers, quantity, selling  price
 per item  and 
total dollar amount of sales per item and due 
date for payment to Licensee; and  (ii)
The Royalty Report shall be
furnished to the Licensor on a monthly basis throughout the
term  of this Agreement and any extensions
thereto, or until  the Licensee  no
longer sells any Product pursuant to this
Agreement, whichever period is longer.

 

4) On or before the 30th
of each month throughout
the term of this Agreement and  any
extensions thereto, or until the Licensee  is no
longer sells any Product pursuant to this Agreement, whichever period is longer,
the Licensee  shall  pay to
the Licensor  a royalty of five percent (5%) of Licensee's wholesale price for
all products the Licensee has sold and  been  paid
for that were  derived from Product in the
preceding month. Wholesale price as used  in this Agreement
means Licensee's wholesale invoice price for Product, less any allowances for
defective or returned Product and, if applicable,
shipping costs for
return of defective or returned
Product and deductions, such as volume rebates, cash disbursements for sales promotions, etc. The
Parties agree that the first royalty payment shall not be before January
1, 2013

 

5) This exclusive license is in effect for two 
(2) years from  the effective  date.
A minimum fee of $35,000 will be paid on the following schedule to maintain the exclusive license:

 

a) $5,000 within 30 days 
of execution of this agreement;

b)  $15,000
within 60 days  of execution of this agreement; and

c) $15,000 within 90
days of execution of this agreement.

    	1

    	 

    

 

6) Licensee shall 
at its sole discretion renew this
agreement an additional 5 times each
for a term  of two (2) years  ("Option
Period"). During this Option Period,
Licensee and  Licensor shall be bound
by the terms of this agreement as may be from 
time to time amended.

 

7) Upon the
expiration of the Term as described in paragraph 5
and 6 supra, Licensee  shall have 
the right of first refusal to enter  into
a subsequent licensing agreement with  Licensor.

 

8) Licensors' specific right to warrants: upon
the anniversary of this agreement, Licensor shall be entitled to warrants to
purchase common stock in the Licensee  at an exercise 
price of $1.75 per share, exercisable for a period of 3 years. The number of
available warrants shall be 25,000
warrants per $1,000,000 in gross revenues of Licensors' products
by Licensee. i.e. if Licensee's gross
revenue from the sale of Licensor's products is $2,000,000,
licensee shall be entitled to purchase 50,000 warrants. Licensor shall not be entitled to a pro-rata number of warrants.

 

9) Issuance of Common Stock to Licensor: Within ten (10)
business days of the execution of this Agreement, Licensor  shall 
be issued, as additional consideration hereunder, ten thousand
(10,000) shares of common stock in the Licensee.

 

10) With respect to the shares of
common stock and warrants to purchase shares of
common stock to be issued to Licensor  as consideration
hereunder, and with  respect to  the shares
of common stock which may 
be purchased by  Licensor  upon
exercise of such warrants (collectively, the "Securities"), Licensor  represents
and warrants to Licensee the following:

 

a) Licensor acknowledges that an
investment in the Securities involves a high degree
of risk in  that Licensee does not
currently generate revenue and may require substantial funds to pursue its business plan;

 

b) Licensor recognizes
that an investment in the shares is highly speculative
and only investors who can afford the loss
of their entire investment should consider investing in Licensee
and  the Securities;

 

c) Licensor and its 
officers and directors have such  knowledge 
and experience in finance,  securities, investments,
including investment in unregistered
securities, and other business matters so as to be able 
to protect its interests in connection
with this transaction;

 

d) Licensor is an "Accredited Investor" 
as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended;

 

e) Licensor  acknowledges
that only a limited market for the Securities presently  exists and accordingly Licensor
may not be able to liquidate its investment;

 

f) Licensor acknowledges that the
 Securities are subject to significant restrictions
on  transfer as imposed by state and federal securities
laws, including but not limited to a minimum holding period of at
least six  (6) months;

 

g) 
Licensor hereby acknowledges (i) that  this
offering of Securities has not been  reviewed by the United States Securities and Exchange
Commission ("SEC") or by the securities regulator of any 
state; (ii) that  the Securities are being issued by Licensee pursuant to
an exemption from registration provided by Section 4(2) of the
Securities Act of 1933; and 
(iii) that  the certificate
evidencing the Securities received by
Licensor will bear a legend in substantially the following form:

 

    	2

    	 

    

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND  EXCHANGE COMMISSION UNDER 
THE SECURITIES ACT OF
1933, AS AMENDED, OR
UNDER ANY APPLICABLE STATE SECURITIES LAWS. WI1HOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD OR 01HERWISE TRANSFERRED AT ANY  TIME WHATSOEVER UNLESS 
IN  THE OPINION OF COUNSEL SATISFACTORY TO 
THE  COMPANY REGISTRATION IS NOT  REQUIRED
FOR  SUCH TRANSFER AND 1HAT SUCH  TRANSFER
 WILL NOT  BE 
IN VIOLATION OF 1HE APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR  ANY RULE
OR REGULATION PROMULGATED THEREUNDER.

 

h) Licensor is acquiring
the Securities as principal for Licensor's own 
benefit;

 

i) Licensor is not
 aware of any advertisement of the Securities or any general solicitation in connection
with any offering of the Securities;

 

j) 
Licensor  acknowledges receipt and  review
of  the Certificate  of 
Incorporation and bylaws of Licensee, together  with 
the opportunity  and Licensee's encouragement to seek 
the advice  and consultation  of
independent investment, legal and tax counsel.

 

k) Licensor acknowledges and 
agrees  that the Licensee has previously made
available to Licensor the opportunity to ask questions of and to receive answers
from representatives of Licensee  concerning
Licensee and the Securities, as well as to conduct whatever due diligence Licensor, in its discretion, deems advisable.

 

11) Licensor  specifically
agrees to also act as a consultant, including but not limited
to specifically advising Licensee on the set up of production, and recommendations on purchasing products for assembly.

 

a) Licensor and Licensee agree 
that either party shall notify the other 
within ten business days  upon
discovery of a potentially infringing product
that is being  manufactured, sold, or otherwise
disclosed by a third party.

 

b) Licensor and 
Licensee  agree  to litigate on an
equal basis so that both the Licensor and Licensee are responsible to pay for one-half of the legal
costs and  litigation expenses and  receive
one-half of any recovery.

 

c) Licensor and Licensee have the
right to refuse to participate in the litigation referenced in Article (7) (ii),
provided this refusal is tendered in writing
to the participating party. It shall not be deemed a breach of this Agreement or any
statutory or common-law duty to refuse to participate in said litigation.
The non participating party agrees  to provide
all cooperation necessary to permit the other party to enforce rights, including
but not limited to signing any necessary documents, providing
any information necessary to ascertain certain damage and 
making any appearance personally or by their legal representation if so ordered
by a court of competent jurisdiction or as reasonably necessary to aid in the prosecution
of the case or to protect the interests of the non-participating
party, provided the participating party pays all reasonable costs and 
expenses incurred by the non-participating party, including, but not limited
to, reasonable attorney's fees incurred in such actions the nonparticipating
party waives any claim to a recovery
awarded to the participating party in such infringement proceedings.

 

d) Licensor and Licensee further acknowledge that if
Licensee desires non-participation in any
infringement action,  Licensor has the right to settle an infringement action 
by granting to the infringing party a
Non Exclusive Licensee  carved-out of the Exclusive 
License.

 

12) Licensee  shall
 have the right to terminate this Agreement
by giving 90 days written notice by way
of registered or certified mailing
to Licensor. This Agreement shall also be subject 
to termination if the Licensee files for bankruptcy, pursuant to and 
in accordance with the terms of the United States Bankruptcy Code.

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13) In the event
Licensee is in material default with
respect to compliance with any of the conditions
or obligations of this Agreement, Licensor shall have 
the right, after ninety (90)
days written notice of such default to Licensee
 pursuant to this Agreement, to
terminate this Agreement forthwith, unless
prior thereto, Licensee  shall have remedied
such  default in a commercially reasonable
manner and provided written confirmation of the cure
to Licensor.

 

14) Upon termination
of this Agreement by either  party the Licensee
shall have the right to complete any Products already in
the process of being  manufactured
and  to sell those Products in its normal
course of business, provided that all others
terms of this Agreement, including, but not limited to, the payment of royalties and production of Royalty Reports,
shall be followed.

 

15) Licensee at its sole discretion may improve upon
any PRODUCT without violating the terms of this agreement. Furthermore, any improvement upon any PRODUCT shall be property of Licensee,

 

16) This Agreement shall be interpreted in accordance
with the laws of the State of California.

 

17) All product derivatives of PRODUCT shall be included
in the terms of this Agreement.

 

18) All notices under this Agreement shall be sent via
certified mail as follows:

 

	IDS Solar Technologies, Inc.	SP Innovations, Inc.
	533 Birch Street	9386 Pike Road
	Lake Elsinore, CA92930	Santee, CA 92071

 

19) Licensor shall not contact or solicit in any way
the customers, buyers, representatives or other agents of Licensee during the term of this Agreement or for a period of two
years after expiration of the Agreement except as expressly authorized by the Licensee and only in the specific context of
that express authorization. Any breach of this provision shall entitle the Licensee to seek injunctive relief in any court of equity
in the State of California.

 

20) In the event of any controversy, claim or dispute
between the parties arising out of or relating to this

Agreement or the breach of this Agreement, the "prevailing
party", as that term is construed by California law, shall be entitled, in addition to such other relief as may be granted,
to a reasonable sum as and for attorney's fees and related costs, which shall be determined by the court in that litigation or
in a separate action brought for that purpose. The Parties specifically agree that any dispute whether at law or equity shall be
arbitrated pursuant to the rules of American Arbitration Association with JAMS.

 

21) This Agreement shall be binding on and more to the
benefit of the parties and their heirs, personal representatives, successors and or assigns, except as otherwise provided, This
Agreement contains the entire agreement between the parties. Any prior agreements, promises, negotiations or representations not
expressly set forth in this Agreement are of no force or effect. Any amendment to this Agreement shall be ineffective unless it
is in writing and signed by both parties. If any term, provision, covenant or condition if the agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the rest of the agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.

 

22) This Agreement may be signed by the parties in one
or more counterparts which when taken together shall constitute one single agreement binding on all the parties and their heirs,
executors and or assigns.

 

    	4

    	 

    

 

23) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and facsimile signatures shall constitute and be deemed original signatures for
the purposes of this Agreement.

 

	IDS Solar Technologies, Inc.	SP Innovations, Inc.
	Signed: /s/ Bruce R. Knoblich	Signed: /s/ Paul Aston
	By: Bruce R. Knoblich	By: Paul Aston
	CEO/President	CEO/ President/Owner

 

    	5

    	 

    

 

Schedule A

 

 

IDS Solar Technology Product Description

 

SOTO50-1

 

	Case:	Styleworks Tough Tote 10.5 gallon (original)
	Battery:	50Ah - Universal Power Group - UB12500
	Inverter:	Whistler Pro -1600W
	Charge Controller:	Morningstar Sunguard 4.5A
	Panel:	ET Solar 45W ET-M53645
	Total Weight:	45 lbs.

 

SOTO50-2

 

	Case:	Styleworks Tough Tote 10.5 gallon w /telescoping handle & transport wheels
	Battery:	50Ah - Universal Power Group - UB12500
	Inverter:	Whistler Pro - 1600W
	Charge Controller:	Morningstar Sunguard 4.5A
	Panel:	ET Solar 45W ET-M53645
	Total Weight:	45 lbs.

 

SOST75-1

 

	Case:	Pelican Storm iM2620 w /telescoping handle & transport wheels
	Battery:	75Ah- AGM- 900W
	Inverter:	Whistler Pro -1600W
	Charge Controller:	Morningstar l0A SunSaver with LVD
	Panel:	Power Film 30W foldable panel
	Total Weight:	75 lbs.

 

 

 

    	6

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