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Exhibit 10.2

SUBSCRIPTION AGREEMENT

IN

VERTEX ENERGY, INC.

A.             Subscription . This Agreement has been executed by _______________ (the “ Subscriber ”)   in connection with the subscription to purchase (a) _____________ shares of the common stock, $0.001 par value per share (the “ Common Stock ” and the “ Shares ”) of Vertex Energy, Inc., a Nevada corporation (the “ Company ”), and (b) warrants to purchase 109,934 shares of the Common Stock of the Company at an exercise price of $3.01 per share (the “ Exercise Price ”), evidenced by the Common Stock Purchase Warrant attached hereto as Exhibit A (the “ Warrants ” and the “ Warrant Agreement ” and together with the Shares, the “ Securities ”) at an aggregate purchase price of $__________ (the “ Purchase Price ”). This Subscription Agreement is referred to herein as the “ Agreement ” or the “ Subscription ”. The offering of the Securities shall be defined herein as the “ Offering ”. The Offering is made in reliance upon an exemption from registration under the federal securities laws provided by Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933, as amended.

When the context in which words are used in this Agreement indicates that such is the intent, singular words shall include the plural, and vice versa, and masculine words shall include the feminine and neuter genders, and vice versa. Any reference to a person shall include an individual, trust, estate, or any incorporated or unincorporated organization, including general or limited partnerships, limited liability companies, corporations, joint ventures and cooperatives, and all heirs, executors, administrators, legal representatives, successors and assigns of such person where permitted or required by the context. Captions are inserted for convenience only, are not a part of this Agreement, and shall not be used in the interpretation of this Agreement.

This Agreement shall be binding on the Subscriber and the Company, subject to the terms hereof, upon execution by the Subscriber and the Company.

B.             Representations and Warranties of Subscriber . Subscriber hereby represents and warrants to the Company as follows:

i)            Subscriber (or the person making the investment decision hereunder on behalf of the Subscriber, if the Subscriber is an entity) is a sophisticated investor that has such knowledge and experience in financial and business matters that Subscriber is capable of evaluating the merits and risks of an investment in the Company and the suitability of the Securities as an investment for Subscriber;

ii)            Subscriber is an “ Accredited Investor ” as such term is defined in Rule 501 of the Securities Act of 1933, as amended (the “ Securities Act ”, the “ Act ” or the “ 1933 Act ”) , and has completed the Certification of Accredited Investor Status attached hereto as Exhibit B ;

iii)           The Subscriber is acquiring the Securities for its own account for long-term investment and not with a view toward resale, fractionalization or division, or distribution thereof, and he does not presently have any reason to anticipate any change in its circumstances, financial or otherwise, or particular occasion or event which would necessitate or require its sale or distribution of the Securities. No one other than the Subscriber has any beneficial interest in said securities. The Subscriber is purchasing the Securities for its account for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof. Subscriber has had an opportunity to ask questions of and receive satisfactory answers from the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of this investment and the Offering, and all such questions have been answered to the full satisfaction of Subscriber. The Company has not supplied Subscriber any information other than as contained in this Agreement, and Subscriber is relying on its own investigation and evaluation of the Company and the Securities in making an investment hereunder and not on any other information;

 

iv)           Subscriber is able to bear the economic risk of the investment in the Securities and Subscriber has sufficient net worth to sustain a loss of Subscriber’s entire investment in the Company without economic hardship if such a loss should occur;

v)           The Subscriber recognizes that the investment herein is a speculative venture and that the total amount of funds tendered to purchase Securities is placed at the risk of the business and may be completely lost;

vi)           Subscriber acknowledges and is aware of the following:

(1)           There are substantial restrictions on the transferability of the Securities; the Securities will not be, and the Subscriber has no right to require that the Securities be registered under the 1933 Act; there may not be any public market for the Securities; Subscriber may not be able to use the provisions of Rule 144 of the 1933 Act with respect to the resale of the Securities; and accordingly, Subscriber may have to hold the Securities indefinitely and it may not be possible for Subscriber to liquidate Subscriber’s investment in the Company. Subscriber agrees that the Securities shall not be sold, transferred, pledged or hypothecated unless such sale is exempt from registration under the 1933 Act. Subscriber also acknowledges that Subscriber shall be responsible for compliance with all conditions on transfer imposed by any blue sky or securities law administrator and for any expenses incurred by the Company for legal or accounting services in connection with reviewing a proposed transfer; and

(2)           No federal or state agency has made any finding or determination as to the fairness of the Offering of the Securities for investment or any recommendation or endorsement of the Securities; and

(3)           The Securities have not been approved or registered under any Blue Sky law or with any State Securities Division, and as such, there may be restrictions on the sale or transfer of such Securities under State law.

vii)          The Subscriber has carefully considered and has, to the extent it believes such discussion is necessary, discussed with its professional, legal, tax and financial advisors, the suitability of an investment in the Securities for its particular tax and financial situation and that the Subscriber and its advisers, if such advisors were deemed necessary, have determined that the Securities are a suitable investment for it;

viii)         The Subscriber has not become aware of this Offering and has not been offered Securities by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to the Subscriber's knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising;

 

ix)           The Subscriber realizes that the Securities cannot readily be sold and will be restricted securities and therefore the Securities must not be purchased unless the Subscriber has liquid assets sufficient to assure that such purchase will cause no undue financial difficulties and the Subscriber can provide for current needs and possible personal contingencies;

x)            The Subscriber represents that he has (i) adequate means of providing for its current needs and possible personal contingencies, and (ii) has no need for liquidity in this particular investment;

xi)           The Subscriber understands that the Securities are being offered and sold to it in reliance on specific exemptions from or non-application of the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth herein in order to determine the applicability of such exemptions and the suitability of the Subscriber to acquire the Securities. All information which the Subscriber has provided to the Company concerning the undersigned's financial position and knowledge of financial and business matters is correct and complete as of the date hereof, and if there should be any material change in such information prior to acceptance of this Agreement by the Company, the undersigned will immediately provide the Company with such information;

xii)          The Subscriber has the requisite power and authority to enter into and perform the transactions contemplated by this Agreement and the purchase of the Securities. The execution, delivery and performance of this Agreement by the Subscriber and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate, partnership or other entity action, and no further consent or authorization of the Subscriber is required. When executed and delivered by the Subscriber, this Agreement shall constitute a valid and binding obligation of the Subscriber enforceable against the Subscriber in accordance with its terms;

xiii)          The Subscriber has not agreed to act with any of the other investors for the purpose of acquiring, holding, voting or disposing of the Securities purchased hereunder for purposes of Section 13(d) under the Securities Exchange Act of 1934, as amended, and the Subscriber is acting independently with respect to its investment in the Securities;

xiv)         The Subscriber: (i) if a natural person, represents that the Subscriber has reached the age of 21 and has full authority, legal capacity and competence to enter into, execute and deliver this Agreement and all other related agreements or certificates and to take all actions required pursuant hereto and thereto and to carry out the provisions hereof and thereof, or (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities and such entity is duly organized, validly existing and in good standing under the laws of the state of its organization. Any individual executing this Agreement on behalf of an entity has authority to act on behalf of such entity and has been duly and properly authorized to sign this Agreement on behalf of such entity, provided further that such entity has validly authorized and approved such entity’s entry into this Agreement and the transactions contemplated herein;

 

xv)          The Subscriber confirms and certifies that:

(a)

Subscriber is in receipt of and has carefully read and reviewed and understands the Warrant Agreement attached hereto as Exhibit A .

(b)

The Subscription hereunder is irrevocable by Subscriber, and, except as required by law, Subscriber is not entitled to cancel, terminate or revoke this Agreement or any agreements of Subscriber hereunder except as set forth in Section F .

(c)

No federal or state agency has made any findings or determination as to the fairness of the terms of this Offering for investment purposes; or any recommendations or endorsements of the Securities.

(d)

The Offering is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) of the Securities Act and the provisions of Rule 506 of Regulation D thereunder, which is in part dependent upon the truth, completeness and accuracy of the statements made by the Subscriber herein.

(e)

It is understood that in order not to jeopardize the Offering’s exempt status under Section 4(2) of the Securities Act and Regulation D or Regulation S, any transferee may, at a minimum, be required to fulfill the investor suitability requirements thereunder.

 

 

(g)

THIS SUBSCRIPTION DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT PERMITTED UNDER APPLICABLE LAW OR TO ANY FIRM OR INDIVIDUAL THAT DOES NOT POSSESS THE QUALIFICATIONS PRESCRIBED IN THIS SUBSCRIPTION.

C.              Indemnification . Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties in paragraph B hereof, and Subscriber hereby agrees to indemnify and hold harmless the Company and its affiliates, partners, officers, directors, agents, attorneys, and employees from and against any and all loss, damage or liability due to or arising out of a breach of any such representations or warranties and the breach of any representations and warranties whatsoever made herein. Notwithstanding the foregoing, however, no representation, warranty, acknowledgment or agreement made herein by Subscriber shall in any manner be deemed to constitute a waiver of any rights granted to Subscriber under federal or state securities laws. The representations and warranties set forth herein shall survive the date upon which the Subscriber becomes a shareholder of the Company. No representation, warranty or covenant in this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were or are to be made, not misleading.

 

D.             Compliance with Securities Laws . Subscriber understands and agrees that a legend has been or will be placed on any certificate(s) or other document(s) evidencing the Securities in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY SHALL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE CORPORATION, THAT REGISTRATION IS NOT REQUIRED UNDER ANY SUCH ACTS.”

E.              U.S.A. Patriot Act and Anti-Money Laundering Representations . Subscriber represents and warrants that Subscriber is not and is not acting as an agent, representative, intermediary or nominee for, a person identified on the list of blocked persons maintained by the Office of Foreign Assets Control, U.S. Department of Treasury. In addition, Subscriber is in full compliance with all applicable U.S. laws, regulations, directives, and executive orders imposing economic sanctions, embargoes, export controls or anti-money laundering requirements, including but not limited to the following laws: (1) the International Emergency Economic Powers Act, 50 U.S.C. 1701-1706; (2) the National Emergencies Act, 50 U.S.C. 1601-1651; (3) section 5 of the United Nations Participation Act of 1945, 22 U.S.C. 287c; (4) Section 321 of the Antiterrorism Act, 18 U.S.C. 2332d; (5) the Export Administration Act of 1979, as amended, 50 U.S.C. app. 2401-2420; (6) the Trading with the Enemy Act, 50 U.S.C. app. 1 et seq.; (7) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56; and (8) Executive Order 13224 (Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) of September 23, 2001. The Subscriber represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an Office of Foreign Assets Control (“ OFAC ”) list, or a person or entity prohibited under the OFAC Programs.

F.             Closing . The sale of the Securities (the “ Closing ”) will take place concurrently with the closing of the transactions contemplated by that certain Asset Purchase Agreement by and among the Company, Vertex Energy Operating, LLC, the wholly-owned subsidiary of the Company, Vertex Refining OH, LLC, an indirect wholly-owned subsidiary of the Company, and Heartland Group Holdings, LLC (“ Heartland ”), dated October 21, 2014 (as amended, modified and supplemented to date, the “ Purchase Agreement ”). Subscriber acknowledges and agrees that this subscription is irrevocable and binding on the part of the Subscriber. Notwithstanding any other term or provision hereof, in the event the Closing does not occur by December 12, 2014, the Subscriber or the Company shall have the right to terminate the Offering and upon such termination all funds provided by the Subscriber to the Company in connection with this Agreement shall be returned to the Subscriber without interest.

G.             Entire Agreement . This Subscription and the Warrant Agreement are the entire and fully integrated agreement of the parties regarding the subject matter hereof, and there are no oral representations, warranties, agreements, or promises pertaining to this Subscription, the Warrant Agreement or the Securities.

H.              Purchase Payment . The purchase price shall be paid to the Company in cash, check or via wire transfer simultaneously with the undersigned’s entry into this Agreement.

I.               Construction of Terms . As used in this Agreement, the terms “ herein, ” “ herewith, ” “ hereof ” and “ hereunder ” are references to this Agreement, taken as a whole; the term “ includes ” or “ including ” shall mean “ including, without limitation; ” the word “ or ” is not exclusive; and references to a “ Section, ” “ subsection, ” “ clause, ” “ Exhibit, ” “ Appendix, ” “ Schedule, ” “ Annex ” or “ Attachment ” shall mean a Section, subsection, clause, Exhibit, Appendix, Schedule, Annex or Attachment of this Agreement, as the case may be, unless in any such case the context requires otherwise. Exhibits, Appendices, Schedules, Annexes or Attachments to any document shall be deemed incorporated by reference in such document. All references to or definitions of any agreement, instrument or other document (a) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (b) except as otherwise expressly provided, shall mean such agreement, instrument or document, or replacement or predecessor thereto, as modified, amended, supplemented and restated through the date as of which such reference is made.

J.              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 (a) faxed to another party or (b) scanned and emailed to another party, shall be deemed to have been executed and delivered by the signing party as though an original. A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

K.             Severability . The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.

 

L.             Further Assurances . The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.

M.            Governing Law . This Agreement shall be interpreted in accordance with the laws of the State of Texas. In the event of a dispute concerning this Agreement, the parties agree that venue lies in a court of competent jurisdiction in any Texas court.

N.             Review of Document; Arm’s Length Transaction . Each party herein expressly represents and warrants to all other parties hereto that (a) before executing this Subscription, said party has fully informed itself of the terms, contents, conditions and effects of this Subscription; (b) said party has relied solely and completely upon its own judgment in executing this Subscription; (c) said party has had the opportunity to seek and has obtained the advice of its own legal, tax and business advisors before executing this Subscription; (d) said party has acted voluntarily and of its own free will in executing this Subscription; and (e) this Subscription is the result of arm’s length negotiations conducted by and among the parties and their respective counsel.

O.             NASDAQ Capital Market Review . The Company’s Common Stock is listed on the NASDAQ Capital Market (“ NASDAQ ”). The Subscriber agrees and acknowledges its understanding of that fact that NASDAQ has not had sufficient time to review this Agreement or the terms of the Offering in order to confirm that such terms and conditions (including, but not limited to the offering price of the Shares and Warrants (the “ Offering Price ”) and the Exercise Price) comply in all respects with NASDAQ’s additional listing rules and regulations (the “ NASDAQ Rules ”).  As such, the Subscriber agrees to adjust the Offering Price, Exercise Price, total number of Shares, total number of Warrants, or such other terms and conditions of the Offering as the Company may reasonably request subsequent to the Closing to confirm compliance with NASDAQ Rules (each a “ NASDAQ Adjustment ”).  The Subscriber agrees to take such other action and to execute, acknowledge and deliver such contracts, deeds, or other documents as may be reasonably requested and necessary or appropriate to carry out any NASDAQ Adjustment, including, if necessary, returning Shares or Warrants to the Company for cancellation or entering into amendments to this Subscription or the Warrant Agreement.

P.             Piggyback Registration Rights .   The Company covenants and agrees that if, at any time prior to the Registration Rights Expiration Date (defined below), it proposes to file a registration statement with respect to any class of equity or equity-related securities (other than in connection with an offering to the Company’s employees (Form S-8) or in connection with an acquisition, merger or similar transaction (Form S-4)) under the Securities Act in a primary registration on behalf of the Company and/or in a secondary registration on behalf of holders of such securities, and the registration form to be used may be used for the issuance or resale of the Shares and the shares of Common Stock issuable upon exercise of the Warrants (the “ Warrant Shares ” and together with the Shares, the “ Registrable Securities ”), the Company will give prompt written notice to Subscriber of its intention to file such registration statement and will offer to include in such registration statement, such number of Registrable Securities with respect to which the Company has received written requests for inclusion therein within three (3) days after the giving of notice by the Company (the “ Piggyback Registration Rights ”).  Subscriber acknowledges and understands that the Company may file a secondary registration on behalf of certain investors that have provided or will provide financing or other resources to the Company or who have received shares in acquisition or combination transactions, that the inclusion of the Registrable Securities in such registration statement(s) is subject to the prior approval of such shareholders, and that such shareholders may not approve the inclusion of the Registrable Securities, in which case, the Piggyback Registration Rights provided in this paragraph will continue pursuant to the terms of this paragraph for any subsequent primary or secondary registration statement.  The Subscriber acknowledges and understands that the Company shall not be required to include Registrable Securities in a registration statement relating solely to an offering by the Company of securities for its own account if the managing underwriter or placement agent shall have advised the Company in writing that the inclusion of such securities will have a material adverse effect upon the ability of the Company to sell securities for its own account, and provided further that the Subscriber is not treated less favorably than others seeking to have their securities included in such registration statement. If the registration statement relating to the Piggyback Registration Rights is for an underwritten offering, such Registrable Securities shall be included in the underwriting on the same terms and conditions as the securities otherwise being sold through the underwriters. Notwithstanding the obligations set forth above, if any Securities and Exchange Commission guidance sets forth a limitation on the number of securities permitted to be registered on a particular registration statement as a secondary offering, the number of Registrable Securities to be registered on such registration statement will be reduced pro rata between the Subscriber and other parties whose securities are included in such registration statement. The “ Registration Rights Expiration Date ” shall be five years from the Closing.

 

Q.             Purchase Price. The Subscriber shall pay the Purchase Price to the Company concurrently with the Subscriber’s entry into this Agreement, which funds shall be held by the Company in trust for the benefit of the Subscriber until the earlier of (a) the Closing, when they shall become the sole property of the Company; or (b) the termination of the Offering (as described in Section F ) at which time such funds shall be returned to the Subscriber without interest.

“ SUBSCRIBER ”

Entity Name (if applicable):____________________

By:______________________________

Its:______________________________

Printed Name:_________________________

Address:________________________________

SS#/EIN#:______________________________

Date: _______________________________

“ COMPANY ”

Vertex Energy, Inc.

______________________________

Chris Carlson

Chief Financial Officer

Date: _______________________________

CERTIFICATION OF ACCREDITED INVESTOR STATUS

 

Except as may be indicated by the undersigned below, the undersigned is an “ accredited investor, ” as that term is defined in Rule 501 1 of Regulation D of the Securities Act of 1933, as amended (the “ Securities Act ”). The undersigned has initialed the line below indicating (a) the basis on which he, she or it is representing his, her or its status as an “ accredited investor ”; or (b) that the undersigned is not an “ accredited investor ”, at the request of Vertex Energy, Inc., a Nevada corporation (the “ Company ”).  The representation and confirmation below as part of this Certification of Accredited Investor Status (the “ Certification ”) shall be effective for all purposes and shall be able to be relied upon by the Company, its legal counsel and assigns for any and all purposes, until such time, if ever, as the undersigned has advised the Company that the representations below are no longer accurate or correct.

By initializing below the undersigned confirms, acknowledges and represents that he, she or it, is an “ accredited investor ” because he, she or it is:

 

a bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “ Securities Exchange Act ”); an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are “ accredited investors ”;

a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

a natural person whose individual net worth, or joint net worth with the undersigned’s spouse, at the time of this purchase exceeds $1,000,000. For purposes of this item, “ net worth ” means the excess of total assets at fair market value (including personal and real property, but excluding the estimated fair market value of a person’s primary home) over total liabilities. Total liabilities excludes any mortgage on the primary home in an amount of up to the home’s estimated fair market value as long as the mortgage was incurred more than 60 days before the Closing Date, but includes (i) any mortgage amount in excess of the home’s fair market value and (ii) any mortgage amount that was borrowed during the 60-day period before the Closing Date;

a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with the undersigned’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. “ Income ” for this purpose is computed by adding the following items to adjusted gross income for federal income tax purposes: (a) the amount of any tax-exempt interest income received; (b) the amount of losses claimed as a limited partner in a limited partnership; (c) any deduction claimed for depletion; (d) deductions for alimony paid; (e) deductible amounts contributed to an IRA or Keogh retirement plan; and (f) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code;

1   http://www.law.cornell.edu/cfr/text/17/230.501

 

an irrevocable trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring any securities of the Company, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment;

an irrevocable trust where the grantor is an “ accredited investor ” and is considered an “ equity owner ” because the trust has the following characteristics:

•

The trust is a grantor trust for federal income tax purposes and the grantor(s) is the sole funding source; AND

•

The grantor would be taxed on all income of the trust and would be taxed on the sale of trust assets; AND

•

The grantor(s) is the trustee with sole investment discretion; AND

•

The entire amount of the grantor’s contribution plus a rate of return would be paid to the grantor prior to any other payments; AND

•

The trust was established by the grantor for estate planning purposes; AND

•

Creditors of the grantor(s) would be able to reach the grantor’s interest in the trust.

(If this category is checked, please also check the additional category or categories under which the grantor qualifies as an accredited investor).

a trust that is revocable by its grantor and has a single grantor who is an accredited investor and is the sole source of funds for the trust (If this category is checked, please also check the additional category or categories under which the grantor qualifies as an accredited investor) ;

an entity (other than a trust) in which all of the equity holders are “ accredited investors ” by virtue of their meeting one or more of the above standards; or

a director, executive officer, or general partner of Vertex Energy, Inc., or any director, executive officer, or general partner of a general partner of Vertex Energy, Inc.;

 

OR

by initializing to the left or failing to initial one of the requirements above, the undersigned confirms, acknowledges and represents that he, she or it, is not an “ accredited investor ” because he, she or it does not meet one of the requirements above.

* * * * * * * * * * * * * * *

The undersigned agrees that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the undersigned as set forth herein. All information which the undersigned has provided to the Company is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

IN WITNESS WHEREOF , the undersigned has executed this Certification of Accredited Investor Status on December 4, 2014.

                                                      

Name:______________________________________________   By: _________________________________________________ Signature   Printed Name of Signatory (if entity):_______________________   Title: _________________________________________________ (required for any stockholder that is a corporation, partnership, trust or other entity)

 

 

 

 

 

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FIRST AMENDMENT TO   CREDIT AND GUARANTY AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT (this “ Amendment ”) is entered into as of December 5, 2014, by and among VERTEX ENERGY OPERATING, LLC., a Texas limited liability company (“Company”), VERTEX ENERGY, INC., a Nevada corporation (“Holdings”), the other Credit Parties signatory hereto, the Lenders signatory hereto and GOLDMAN SACHS BANK USA, as Administrative Agent for the Lenders (in such capacity, “ Administrative Agent ”) and as Collateral Agent for the Lenders (in such capacity, “ Collateral Agent ”).

RECITALS

A.           Company, Holdings, the other Credit Parties, Lenders and Administrative Agent are parties to a certain Credit and Guaranty Agreement, dated as of May 2, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement), pursuant to which the Lenders have made certain financial accommodations available to the Companies;

 

B.           Certain Events of Default have occurred and are continuing, including, without limitation, the Events of Default set forth on Schedule A to this Amendment (the “ Designated Defaults ”);

 

C.           Company, Holdings and Vertex Refining OH, LLC (“ Vertex Refining OH ”), an Ohio limited liability company, desire to acquire certain assets of Heartland Group Holdings, LLC (“ Heartland ”), a Delaware limited liability company, (such acquisition, the “ Heartland Acquisition ”) pursuant to that certain Asset Purchase Agreement by and among Company, Holdings, Vertex Refining OH and Heartland dated effective as of October 21, 2014 (as amended, restated, supplemented or otherwise modified from time to time); and

 

D.           Notwithstanding the Designated Defaults, Company has requested that the  Administrative Agent and Lenders consent to the Heartland Acquisition and amend certain provisions of the Credit Agreement and, subject to the terms and conditions hereof, the Administrative Agent and the Lenders executing this Amendment are willing to do so;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and intending to be legally bound, the parties hereto agree as follows:

 

A.    A C KNOWLEDGEMENT OF DEFAULT; RESERVATION OF RIGHTS

 

1.      Each Credit Party acknowledges and agrees that as of the First Amendment Effective Date, the outstanding principal amount of the Term Loan was $39,400,000.00. The foregoing amount does not include interest, fees, expenses and other amounts that are chargeable or otherwise reimbursable under the Credit Agreement and the other Credit Documents.

2.      Each Credit Party acknowledges and agrees that (i) each of the Designated Defaults constitutes an Event of Default that has occurred and is continuing, (ii) none of the Designated Defaults has been cured or waived as of the date hereof, and (iii) except for the Designated Defaults, no other Events of Default have occurred and are continuing as of the date hereof.  Each of the Designated Defaults permits the Administrative Agent, Collateral Agent and Lenders (i) to accelerate the Obligations, (ii) to require payment of accrued default interest in respect of the Obligations (as of any date from and after the date on which the first Designated Default first occurred) and to convert all LIBOR Rate Loans into Base Rate Loans, (iii) to commence any legal or other action to collect any or all of the Obligations from any or all of Company, the other Credit Parties, and any other person liable therefor and/or any Collateral, (iv) to foreclose or otherwise realize on any or all of the Collateral and/or as appropriate, set-off or apply to the payment of any or all of the Obligations, any or all of the Collateral, (v) to take any other enforcement action or otherwise exercise any or all rights and remedies provided for by any or all of the Credit Agreement, other Credit Documents or applicable law, and (vi) to reject any forbearance, financial restructuring or other proposal made by or on behalf of Company, any other Credit Party or any creditor or equity holder.

3.      Each Credit Party further acknowledges and agrees that (i) nothing in this Amendment, including, without limitation, the amendments set forth in Section B and the consent set forth in Section C, constitutes a waiver, consent or agreement to forbear with respect to the Designated Defaults, and (ii) both prior to and after giving effect to this Amendment, the Administrative Agent, Collateral Agent and Lenders retain all rights, powers, privileges and remedies under the Credit Agreement, other Credit Documents and/or applicable law, including without limitation, the rights and remedies referred to in Section A(2).

 

B.     AMENDMENTS

 

1.      Section 1.1 of the Credit Agreement is amended by inserting the following new definition in appropriate alphabetical order:

“ First Amendment Effective Date ” means December 5, 2014.

“ Heartland Acquisition ” means the acquisition by Vertex Refining OH of certain assets of Heartland Group Holdings, LLC, a Delaware limited liability company, pursuant to and in accordance with the terms set forth in the Heartland Purchase Agreement and this Agreement, and the payment by the Company of the transaction costs and expenses associated with such acquisition.

“ Heartland Acquisition Documents ” means the Heartland Purchase Agreement, the Vertex OH Shared Services Agreement, the Escrow Agreement (as defined in the Heartland Purchase Agreement), all leases of Vertex Refining OH with the Seller (as defined in the Heartland Purchase Agreement) and each other document entered into by Holdings or any of its Subsidiaries in connection with the Heartland Acquisition.

“ Heartland Purchase Agreement ” means that certain Asset Purchase Agreement, dated effective as of October 21, 2014, among Holdings, Company, Vertex Refining OH and Heartland Group Holdings, LLC, a Delaware limited liability company, as amended by that certain First Amendment to Asset Purchase Agreement, dated as of November 26, 2014, and that certain Second Amendment to Asset Purchase Agreement, dated as of December 5, 2014.

“ Vertex OH Shared Services Agreement ” means that certain Shared Services Agreement, dated as of December 5, 2014, between Vertex Refining OH and Company, as amended, restated, supplemented or otherwise modified in accordance with the terms of this Agreement.

“ Vertex Refining OH ” means Vertex Refining OH, LLC, an Ohio limited liability company.

2.      Section 1.1 of the Credit Agreement is further amended by making the following modifications to the definitions of “Consolidated Adjusted EBITDA”, “Permitted Acquisition” and “Subsidiary”:

a.

the definition of “Consolidated Adjusted EBITDA” is amended by inserting the following new language at the end thereof:

Notwithstanding the foregoing, Vertex Refining OH shall be excluded from Consolidated Adjusted EBITDA pursuant to the  definition of “Subsidiary”.

b.

the definition of “Permitted Acquisition” is amended by inserting the words “or (except with respect to the Heartland Acquisition) Vertex Refining OH” immediately after the words “Vertex Refining NV” and immediately prior to the parentheses; and

c.

the definition of “Subsidiary” is amended by replacing such definition in its entirety with the following:

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.  Notwithstanding the foregoing, Vertex Refining OH and, to the extent that the Bango Acquisition is consummated and unless and until (x) the Bango Acquisition is consummated pursuant to Section 6.9(g)(i) with the consent of the Administrative Agent and (y) the Vertex NV EBITDA Election Notice has been delivered, Vertex Refining NV shall be deemed not to be Subsidiaries of Holdings solely for purposes of the definitions of Consolidated Adjusted EBITDA, Consolidated Capital Expenditures, Consolidated Cash Interest Expense, Consolidated Current Assets, Consolidated Current Liabilities, Consolidated Excess Cash Flow, Consolidated Fixed Charges, Consolidated Interest Expense, Consolidated Liquidity, Consolidated Net Income, Consolidated Pro Forma Adjusted EBITDA, Consolidated Total Debt, Consolidated Working Capital, Consolidated Working Capital Adjustment, Fixed Charge Coverage Ratio and Leverage Ratio.

3.      Section 2.13 of the Credit Agreement is amended by replacing Section 2.13(c) in its entirety with the following:

(c)    Issuance of Equity Securities .  On the date of receipt by Holdings of any Cash proceeds from a capital contribution to, or the issuance of any Capital Stock of, Holdings or any of its Subsidiaries (other than Capital Stock issued (i) pursuant to any employee stock or stock option compensation plan, or (ii) for purposes approved in writing by Administrative Agent), Company shall prepay the Term Loans in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, in each case, paid to Persons who are not Affiliates of Holdings, including reasonable legal fees and expenses. Notwithstanding the foregoing, no mandatory prepayment of the Term Loans shall be required (i) from the net proceeds of the Post Close Equity Raise or (ii) to the extent that the net proceeds from a capital contribution to, or the issuance of any Capital Stock of, Holdings are used (w) to prepay Capital Leases in an amount not to exceed $10,000,000 in the aggregate after the Closing Date, (x) for working capital purposes in an amount not to exceed $5,000,000, (y) to fund the working capital of Vertex Refining NV prior to the Vertex NV Ring Fence Termination Date and to fund working capital of Vertex Refining OH or (z) in connection with a Permitted Acquisition.

4.      Section 5.1 of the Credit Agreement is amended by replacing Sections 5.1(a) and 5.1(b) in their entirety with the following:

 

 

(b)    Quarterly Financial Statements .  As soon as available, and in any event within 45 days after the end of each Fiscal Quarter of each Fiscal Year (including the fourth Fiscal Quarter), the consolidated balance sheets of Holdings and its Subsidiaries and the consolidating balance sheets of each of Vertex Refining NV and Vertex Refining OH, in each case as at the end of such Fiscal Quarter and the related consolidated statements of income, stockholders’ equity and cash flows of Holdings and its Subsidiaries and consolidating statements of income and cash flows of each of Vertex Refining NV and Vertex Refining OH, in each case for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto;

 

5.      Section 5.14(a) of the Credit Agreement is amended by inserting the following new language at the end thereof:

Holdings will cause the Credit Parties not to commingle their funds or assets with those of Vertex Refining OH, which shall maintain separate books and records, assets and funds for all purposes.

6.      Section 6.1(c) of the Credit Agreement is amended by inserting the following new language at the end thereof:

provided , further , that Vertex Refining OH shall not be permitted to guaranty any Indebtedness under or with respect to the ABL Credit Agreement;

7.      Section 6.1 is further amended by inserting the following new paragraph at the end thereof:

Notwithstanding the foregoing, at no time shall (x) Vertex Refining OH incur any Indebtedness pursuant to subsections (b), (c), (e), (g)(x), (g)(y) or (h) above, (y) the Company nor any other Subsidiary Guarantor lend any Indebtedness to Vertex Refining OH pursuant to subsection (b) above or guarantee any Indebtedness of Vertex Refining OH pursuant to subsection (e) above or (z) the accounts, inventory or other assets of Vertex Refining OH be included in the Borrowing Base (as defined in the ABL Credit Agreement).

8.      Section 6.2(a) of the Credit Agreement is amended by inserting the following new language at the end thereof:

provided , further , that no Liens on assets of Vertex Refining OH shall be permitted to secure Indebtedness permitted under Section 6.1(c) and 6.1(h);

9.      Section 6.7(b) of the Credit Agreement is amended by replacing such Section in its entirety with the following:

(b)   equity Investments owned as of the Closing Date in any Subsidiary and Investments made after the Closing Date in any wholly owned Guarantor Subsidiary of Company; provided, that (x) no Investment may be made in Vertex Refining OH other than from the net cash proceeds from contemporaneous equity issuances by Holdings and (y) prior to the Vertex NV Ring Fence Termination Date, no Investment may be made in Vertex Refining NV other than equity Investments funded from the Vertex Refining Cash Collateral Account in accordance with Section 5.14(b) or from the net cash proceeds from contemporaneous equity issuances by Holdings;

10.      Section 6.7(c) of the Credit Agreement is amended by inserting the following new language at the end thereof:

11.      Section 6.7 of the Credit Agreement is further amended by (i) inserting “; and” at the end of Section 6.7(f), immediately prior to the period and (ii)  inserting the following new clause (g) immediately after Section 6.7(f):

(g)   Investments by Holdings in Vertex Refining OH to the extent funded with a contemporaneous issuance of common Capital Stock by Holdings.

12.      Section 6.8 of the Credit Agreement is amended by inserting the following new Section 6.8(f) at the end thereof:

(f)    Minimum Vertex OH Liquidity .  Holdings shall not permit unrestricted Cash and Cash Equivalents held by Vertex OH to be less than $500,000 at any time from and after the First Amendment Effective Date.

13.      Section 6.9(a) of the Credit Agreement is amended by replacing such Section in its entirety with the following:

(a)   any Subsidiary of Holdings may be merged with or into Company or any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Company or any Guarantor Subsidiary; provided, that (x) in the case of such a merger, Company or such Guarantor Subsidiary, as applicable shall be the continuing or surviving Person and (y) in no event shall Vertex Refining OH or, unless and until the Vertex NV Ring Fence Termination Date has occurred, Vertex Refining NV be merged with or into Holdings or any of its other Subsidiaries, be liquidated, wound up or dissolved, or have all or any part of its business, property or assets conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Holdings or any of its other Subsidiaries;

14.      Section 6.9(i) of the Credit Agreement is amended by inserting the words “or Vertex Refining OH” immediately after the word “ESource”.

15.      Section 6.11 of the Credit Agreement is amended by inserting the following new language at the end thereof, immediately prior to the period:

; provided , further , that Vertex Refining OH shall not sell and lease back any property with Holdings or any of its other Subsidiaries

16.      Section 6.12 of the Credit Agreement is amended by replacing such Section in its entirety with the following:

 

17.      Section 6.14 of the Credit Agreement is amended by inserting the words “or Vertex Refining OH” immediately after the words “Vertex Refining NV” in clause (f) of such Section.

18.      Section 6.15 of the Credit Agreement is amended by inserting the following sentence at the end of such Section:

 

 

C.     CONSENT AND RESERVATION OF RIGHTS

 

Notwithstanding the failure of the Heartland Acquisition to satisfy the requirements of clauses (i), (ii), (iii), (vi), (vii), and (viii)(z) of the definition of “Permitted Acquisition” and the failure of the Credit Parties to satisfy the requirements of Sections 5.10 and 5.11 of the Credit Agreement with respect to Vertex Refining OH and the assets acquired in the Heartland Acquisition, subject to the conditions set forth in Section E below, the Administrative Agent and Lenders hereby (x) consent to the Heartland Acquisition and waive the requirements of clauses (i), (ii), (iii), (vi), (vii) and (viii)(z) of the definition of “Permitted Acquisition solely with respect to the Heartland Acquisition, (y) waive the requirements of Sections 5.10 and 5.11 with respect to Vertex Refining OH and the assets acquired in the Heartland Acquisition and (z) waive the prohibition on any Credit Party or its Subsidiaries becoming directly or indirectly liable to pay any “earn-out” or other deferred purchase price obligations with respect to any acquisition permitted under Section 6.9(h) or (i), solely with respect to any earn-out obligations incurred by Vertex Refining OH under the Heartland Purchase Agreement; provided , that (1) the Heartland Acquisition satisfies clauses (iv), (v), (viii)(y), (ix) and (x) of the definition of “Permitted Acquisition”, (2) the only cash consideration payable by the Credit Parties in connection with the Heartland Acquisition shall be (x) funded with the proceeds of a substantially contemporaneous issuance of common Capital Stock of Holdings and/or (y) following the closing date of the Heartland Acquisition, funded by internally generated cash flow of Vertex Refining OH,  and (3) except as permitted under clause (2), the only consideration payable in connection with the Heartland Acquisition is common Capital Stock of Holdings.

The Credit Parties acknowledge that (x) the consideration paid in connection with the Heartland Acquisition shall be included for purposes of determining whether clause (i) of the definition of “Permitted Acquisitions” is satisfied with respect to any future acquisitions and (y)

pursuant to Section 6.20, no Credit Party may make any “earn-out” payments or other similar payments if a Default or Event of Default exists at the time of such payment or would arise after giving effect to any such payment, unless such payment is made with common Capital Stock of Holdings, and the Company shall provide notice to the Administrative Agent prior to making any such payment, which notice shall demonstrate pro forma compliance with Section 6.8(d) after giving effect to such payment.

The Credit Parties acknowledge that, by consenting to the Heartland Acquisition and granting the foregoing waivers, the Administrative Agent and the Lenders have not waived the Designated Defaults and each of Administrative Agent and the Lenders expressly reserves all of its rights, powers, privileges and remedies under the Credit Agreement, other Credit Documents and/or applicable law.  Each of Administrative Agent and the Lenders may exercise their respective rights, powers, privileges and remedies, including those set forth in the Credit Agreement, other Credit Documents or applicable law, at any time in its sole and absolute discretion without further notice.  No oral representations or course of dealing on the part of any Agent, any Lender or any of their respective officers, employees or agents, and no failure or delay by any Agent or any Lender with respect to the exercise of any right, power, privilege or remedy under any of the Credit Agreement, other Credit Documents or applicable law shall operate as a waiver thereof, and the single or partial exercise of any such right, power, privilege or remedy shall not preclude any later exercise of any other right, power, privilege or remedy.

 

D.     RELEASE

 

1.      In consideration of, among other things, Administrative Agent’s, Collateral Agent’s and the Lenders’ execution and delivery of this Agreement, each of Company and the other Credit Parties, on behalf of itself and its agents, representatives, officers, directors, advisors, employees, subsidiaries, affiliates, successors and assigns (collectively, the “ Releasors ”), hereby forever agrees and covenants not to sue or prosecute against any Releasee (as hereinafter defined) and hereby forever waives, releases and discharges, to the fullest extent permitted by law, each Releasee from any and all claims (including, without limitation, crossclaims, counterclaims, rights of set-off and recoupment), actions, causes of action, suits, debts, accounts, interests, liens, promises, warranties, damages and consequential damages, demands, agreements, bonds, bills, specialties, covenants, controversies, variances, trespasses, judgments, executions, costs, expenses or claims whatsoever, that such Releasor now has or hereafter may have, of whatsoever nature and kind, whether known or unknown, whether now existing or hereafter arising, whether arising at law or in equity (collectively, the “ Claims ”), against Administrative Agent, Collateral Agent and the Lenders party hereto in any capacity and their respective affiliates, subsidiaries, and their respective successors and assigns and each and all of the officers, directors, employees, agents, attorneys, advisors and other representatives of each of the foregoing (collectively, the “ Releasees ”), based in whole or in part on facts, whether or not now known, existing on or before the date hereof, that relate to, arise out of or otherwise are in connection with: (i) any or all of the Credit Documents or transactions contemplated thereby or any actions or omissions in connection therewith or (ii) any aspect of the dealings or relationships between or among Company and the other Credit Parties, on the one hand, and any or all of Administrative Agent, Collateral Agent or the Lenders party hereto, on the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof.  In entering into this Agreement, Company and each other Credit Party consulted with, and has been represented by, legal counsel and expressly disclaims any reliance on any representations, acts or omissions by any of the Releasees and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth above do not depend in any way on any such representations, acts and/or omissions or the accuracy, completeness or validity thereof.  The provisions of this Section shall survive the termination of this Amendment, the Credit Agreement, the other Credit Documents and payment in full of the Obligations.

2.      Company and other Credit Parties each hereby agrees that it shall be, jointly and severally, obligated to indemnify and hold the Releasees harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding by or on behalf of any Person, including, without limitation, the respective officers, directors, agents, trustees, creditors, partners or shareholders of Company, any other Credit Party, or any of their respective Subsidiaries, whether threatened or initiated, in respect of any claim for legal or equitable remedy under any statue, regulation or common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of the Credit Agreement, the other Credit Documents, this Amendment or any other document executed and/or delivered in connection herewith or therewith; provided, that neither Company nor any other Credit Party shall have any obligation to indemnify or hold harmless any Releasee hereunder with respect to liabilities to the extent they result from the gross negligence or willful misconduct of that Releasee as finally determined by a court of competent jurisdiction.  If and to the extent that the foregoing undertaking may be unenforceable for any reason, Company and other Credit Parties each agrees to make the maximum contribution to the payment and satisfaction thereof that is permissible under applicable law.  The foregoing indemnity shall survive the termination of this Amendment, the Credit Agreement, the other Credit Documents and the payment in full of the Obligations.

3.      Each of Company and other Credit Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by Company or any other Credit Party pursuant to Section D(1) hereof.  If Company, any other Credit Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, Company and other Credit Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.

 

E.     CONDITIONS TO EFFECTIVENESS

 

Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Lenders hereunder, it is understood and agreed that this Amendment shall not become effective, including, without limitation, the amendments contained in Section B and the consent contained in Section C, and the Company shall have no rights hereunder until satisfaction of the following conditions precedent on or prior to December 5, 2014:

1.

The Administrative Agent and Lenders shall have received each of the following documents, each dated as of the date hereof and in form and substance satisfactory to the Administrative Agent and Lenders:

a.

executed counterparts to this Amendment from Company, each of the Guarantors and the Lenders;

b.

a fully executed amendment to the ABL Credit Agreement which consents to the Heartland acquisition;

c.

a fully executed copy of the Vertex OH Shared Services Agreement;

d.

fully executed copies of the Heartland Purchase Agreement (including all schedules and exhibits thereto), all amendments to the Heartland Purchase Agreement, and each other material document entered into in connection with the Heartland Acquisition, including, without limitation, the Escrow Agreement (as defined in the Heartland Purchase Agreement) and all leases with the Seller (as defined in the Heartland Purchase Agreement), each certified as being true, correct and complete by an Authorized Officer of Company;

e.

(i) the results of a recent search, by a Person satisfactory to Collateral Agent, of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of acquired in the Heartland Acquisition, together with copies of all such filings disclosed by such search, and (ii) UCC termination statements (or similar documents) duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search (other than any such financing statements in respect of Permitted Liens);

f.

a title report issued by a title company reasonably satisfactory to the Collateral Agent with respect to each Real Estate Asset to be purchased by Vertex Refining OH in the Heartland Acquisition, dated not more than thirty days prior to the First Amendment Effective Date and copies of all recorded documents listed as exceptions to title or otherwise referred to therein;

g.

reports and other information, in form, scope and substance satisfactory to Administrative Agent, regarding environmental matters relating to the Real Estate Assets to be acquired or leased in the Heartland Acquisition, which reports shall include a Phase I Report for each of the Real Estate Assets specified by Administrative Agent; and

h.

payoff or release letters from the lenders holding Liens on the assets to be acquired in the Heartland Acquisition together with all documents or instruments necessary to release all Liens securing Indebtedness owed to such lenders.

2.

The Administrative Agent shall have received evidence in form and substance reasonably satisfactory to Administrative Agent demonstrating that on the date hereof, immediately after giving effect to this Amendment, the Heartland Acquisition and all other transactions contemplated to occur on the date hereof, Vertex Refining OH shall have unrestricted Cash and Cash Equivalents held in a separate account in the name of Vertex Refining OH in an amount at least equal to $1,500,000;

3.

The Administrative Agent shall have received copies of all required consents, releases and terminations of liens and claims under the Heartland Purchase Agreement, including, without limitation, those set forth on Schedules 6.02(d) and 7.03(b) to the Heartland Purchase Agreement and the Heartland Acquisition shall have been consummated in compliance with (a) all applicable Requirements of Law and (b) the terms and provisions of the Heartland Purchase Agreement; the Heartland Acquisition Documents shall not have been amended, restated, supplemented or otherwise modified and no term thereof shall have been waived without the prior written consent of the Administrative Agent; and

4.

The Administrative Agent shall have received reimbursement or payment of its costs and expenses incurred in connection with this Amendment or the Credit Agreement (including reasonable fees, charges and disbursements of counsel to Administrative Agent).

5.

The Administrative Agent shall have received correspondence in form and substance reasonably satisfactory to Administrative Agent from Reinhart Boerner Van Deuren s.c. ("Reinhart") to the effect that Reinhart has received not less than $1,500,000 in its client trust account from the issuance of Capital Stock by Holdings to the Cowart GRATs, and that upon the closing of the Heartland Acquisition and the execution and delivery of this Amendment by all parties hereto and the execution and delivery of the amendment referred to in Section E.1.b. hereof by all parties thereto, that Reinhart will transfer all such amounts to Vertex Refining OH.

 

F.     REPRESENTATIONS

 

To induce the Lenders, Collateral Agent and Administrative Agent to enter into this Amendment, each Credit Party hereby represents and warrants to the Lenders, Collateral Agent and Administrative Agent that:

1.           Each of Holdings and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (b) has all requisite power and authority to enter into this Amendment and to carry out the transactions contemplated hereby, and (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect.

2.           The execution, delivery and performance of this Amendment have been duly authorized by all necessary action on the part of each Credit Party that is a party thereto.

3.           The execution, delivery and performance by Credit Parties of this Amendment and the consummation of the transactions contemplated hereby do not and will not (a) violate any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries, any of the Organizational Documents of Holdings or any of its Subsidiaries, or any order, judgment or decree of any court or other agency of government binding on Holdings or any of its Subsidiaries; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Holdings or any of its Subsidiaries; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Liens created under any of the Credit Documents in favor of Collateral  Agent, on behalf of Secured Parties); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the date hereof and disclosed in writing to Lenders.

4.            The execution, delivery and performance by Credit Parties of this Amendment and the consummation of the transactions contemplated hereby do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority.

5.            This Amendment has been duly executed and delivered by each Credit Party and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

6.           After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all material respects on and as of such earlier date, and, other than the Designated Defaults, no Default or Event of Default has occurred and is continuing as of the date hereof.

 

G.     OTHER AGREEMENTS

 

1.            Continuing Effectiveness of Loan Documents .  As amended hereby, all terms of the Credit Agreement and the other Credit Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Credit Parties party thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.  To the extent any terms and conditions in any of the other Credit Documents shall contradict or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Credit Agreement as modified and amended hereby. Upon the effectiveness of this Amendment such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Credit Agreement as modified and amended hereby.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.  This Amendment shall constitute a Credit Document for all purposes of the Credit Agreement.

2.            Reaffirmation of Guaranty .  Holdings and each other Guarantor consents to the execution and delivery by the Company of this Amendment and the consummation of the transactions described herein, and ratifies and confirms the terms of the Guaranty to which such Guarantor is a party with respect to the Indebtedness now or hereafter outstanding under the Credit Agreement as amended hereby and all promissory notes issued thereunder. Each Guarantor acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any Indebtedness of Company to the Lenders or any other Obligation of Company, or any actions now or hereafter taken by the Lenders with respect to any Obligation of Company, the Guaranty to which any Guarantor is a party (i) is and shall continue to be a primary obligation of such Guarantor, (ii) is and shall continue to be an absolute, unconditional, continuing and irrevocable guaranty of payment, and (iii) is and shall continue to be in full force and effect in accordance with its terms.  Nothing contained herein to the contrary shall release, discharge, modify, change or affect the original liability of each Guarantor under the Guaranty to which such Guarantor is a party.

3.            Acknowledgment of Perfection of Security Interest . Each Credit Party hereby acknowledges that, as of the date hereof, the security interests and Liens granted to Collateral Agent and the Lenders under the Credit Agreement and the other Credit Documents, including, without limitations, Liens granted under the Mortgages, are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the Credit Agreement and the other Credit Documents.

4.            APPLICABLE LAW .    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) THEREOF.

5.            No Novation .   This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement and the other Credit Documents or an accord and satisfaction in regard thereto.

6.            Costs and Expenses .  The Company agrees to pay on demand all costs and expenses of Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for Administrative Agent with respect thereto.

7.            Counterparts .   This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile transmission or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

8.            Binding Nature .  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.  No third party beneficiaries are intended in connection with this Amendment.

9.            Entire Understanding .  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotia­tions or agreements, whether written or oral, with respect thereto.

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first written above.

	VERTEX ENERGY OPERATING, LLC
	By:    /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX ENERGY, INC.
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX ACQUISITION SUB, LLC
	By:    /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX MERGER SUB, LLC
	By:    /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX REFINING NV, LLC
	By:    /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer

 

	GOLDMAN SACHS BANK USA, a New York State-Chartered Bank, as Administrative Agent, Collateral Agent and Lender
	By:  /s/ Stephen W. Hipp                                Stephen W. Hipp Authorized Signatory

Schedule A

a)

Event of Default under Section 8.1(a) of the Credit Agreement due to the failure of the Company to prepay the Term Loans pursuant to Section 2.13(g) of the Credit Agreement in an amount equal to $6,299,567.00 due to (x) Consolidated Total Debt exceeding (y) Consolidated Pro Forma Adjusted EBITDA for the twelve month period ending on August 31, 2014, multiplied by the maximum Leverage Ratio permitted under Section 6.8(b) of the Credit Agreement with respect to the Fiscal Quarter ending on June 30, 2014.

 

b)

Event of Default under Section 8.1(a) of the Credit Agreement due to the failure of the Company to prepay the Term Loans pursuant to Section 2.13(g) of the Credit Agreement in an amount to be determined due to (x) Consolidated Total Debt exceeding (y) Consolidated Pro Forma Adjusted EBITDA for the twelve month period ending on September 30, 2014, multiplied by the maximum Leverage Ratio permitted under Section 6.8(b) of the Credit Agreement with respect to the Fiscal Quarter ending on September 30, 2014.

 

c)

Events of Default under Section 8.1(b) of the Credit Agreement due to the failure of the Company to satisfy the requirements of Items 2, 3, 4 and 6 of that certain Post-Closing Letter Agreement, dated May 2, 2014, among the Company, Holdings and the ABL Agent in violation of Section 11.2 of the ABL Credit Agreement;

 

d)

Event of Default under Section 8.1(b)(iii) of the Credit Agreement due to the occurrence and continuation of “Defaults” (as defined in the ABL Credit Agreement) under the ABL Credit Agreement as set forth in greater detail in that certain Notice of Event of Default, dated as of November 6, 2014.

 

e)

Event of Default under Section 8.1(c) of the Credit Agreement due to the failure of Holdings to timely deliver to Administrative Agent and Lenders the financial statements set forth in Sections 5.1(a), 5.1(d) and 5.1(v) for the month ending on September 30, 2014.

 

f)

Event of Default under Section 8.1(c) of the Credit Agreement due to the failure of Holdings to comply with Section 5.13 to immediately deposit the net cash proceeds from the Post Close Equity Raise into the Vertex Refining Cash Collateral Account.

 

g)

Event of Default under Section 8.1(c) of the Credit Agreement due to the failure of Holdings to comply with the requirements set forth in Section 6.8(a) by permitting the Fixed Charge Coverage Ratio as of the last day of the Fiscal Quarter ending September 30, 2014 to be less than 1.10:1.00;

 

h)

Event of Default under Section 8.1(c) of the Credit Agreement due to the failure of Holdings to comply with the requirements set forth in Section 6.8(b) by permitting the Leverage Ratio as the last day of Fiscal Quarter ending September 30, 2014 to exceed 4.00:1.00;

 

 

i)

Event of Default under Section 8.1(c) of the Credit Agreement due to the failure of Holdings to comply with the requirements set forth in Section 6.8(c) by permitting the Consolidated Adjusted EBITDA as of the end of the Fiscal Quarter ending September 30, 2014 to be less than $7,750,000;

 

j)

Event of Default under Section 8.1(c) of the Credit Agreement due to the failure of Holdings to comply with the requirements set forth in Section 6.8(d) by permitting the Consolidated Liquidity to be less than $3,000,000 at any time from and after the Closing Date;

 

k)

Event of Default under Section 8.1(c) of the Credit Agreement due to the formation of Vertex Refining OH in violation of Section 6.13 of the Credit Agreement;

 

l)

Events of Default under Section 8.1(c) of the Credit Agreement due to the entry by Holdings into non-binding Letters of Intent with certain third parties in violation of Section 6.14 of the Credit Agreement;

 

m)

Event of Default under Section 8.1(c) of the Credit Agreement due to the entry by Company into that certain Consulting Agreement with Heartland Group Holdings, LLC dated July 18, 2014.

 

n)

Event of Default under Section 8.1(c) of the Credit Agreement due to the entry by Holdings into that certain Asset Purchase Agreement, dated as of October 21, 2014 with certain third parties in violation of Section 6.14 of the Credit Agreement; and

 

o)

Events of Default under Section 8.1(e) of the Credit Agreement due to the failure of the Company to satisfy the requirements of (i) Items 6 and 8 of Schedule 5.15 within thirty days following the dates set forth on such Schedule 5.15 and (ii) Items 2, 3, 4 and 9 of Schedule 5.15 within ninety days following the dates set forth on such Schedule 5.15 in violation of Section 5.15 of the Credit Agreement.

 

 

 

 

 

 

2  

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Exhibit 10.4

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “ Amendment ”) is entered into as of December 5, 2014 (the “ First Amendment Effective Date ”), by and among VERTEX ENERGY OPERATING, LLC, a Texas limited liability company (“ Vertex-Operating ”), VERTEX ENERGY, INC., a Nevada corporation (“ Holdings ” and together with Vertex-Operating, “ Borrowers ” and each individually, a “ Borrower ”), and BANK OF AMERICA, N.A. (“ Lender ”), and acknowledged and agreed to by the Guarantors party hereto.

 

RECITALS

A.           Vertex-Operating, Holdings, and Lender are parties to that certain Amended and Restated Credit Agreement, dated as of May 2, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement);

 

B.           Certain Events of Default have occurred and are continuing, including, without limitation, the Events of Default set forth on Schedule A to this Amendment (the “ Designated Defaults ”);

 

C.           Holdings formed a new subsidiary, Vertex Refining OH, LLC (“ Vertex Refining OH ”), an Ohio limited liability company, on August 28, 2014.

 

D.           Vertex-Operating, Holdings and Vertex Refining OH desire to acquire certain assets of Heartland Group Holdings, LLC (“ Heartland ”), a Delaware limited liability company, (such acquisition, the “ Heartland Acquisition ”) pursuant to that certain Asset Purchase Agreement by and among Vertex-Operating, Holdings, Vertex Refining OH and Heartland dated effective as of October 21, 2014 (as amended, restated, supplemented or otherwise modified from time to time); and

 

E.           Notwithstanding the Designated Defaults, Borrowers have requested that Lender consent to the Heartland Acquisition and amend certain provisions of the Credit Agreement and, subject to the terms and conditions hereof, Lender is willing to do so;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and intending to be legally bound, the parties hereto agree as follows:

 

A.            ACKNOWLEDGEMENT OF DEFAULT; RESERVATION OF RIGHTS

 

1.           Lender is not obligated to make or continue any Credit Extensions to Borrowers while any of the Designated Defaults exist and are continuing or any other Event of Defaults exists.  Any Credit Extension to Borrowers after the First Amendment Effective Date shall be in Lender’s sole discretion and subject to obtaining internal credit approval. Each request by Borrowers to Lender for a Credit Extension must be accompanied by updated financial projections, including a forecast balance sheet, income statement and rolling 13-week cash forecast, and if an Event of Default exists at the time such Credit Extension is made, a written release by each Company of all claims against Lender, in form acceptable to Lender.   If Lender elects in its sole discretion to make a Loan or other Credit Extension to Borrowers under the Credit Agreement, Lender shall not be obligated to make any additional or subsequent Loan or other Credit Extension to Borrowers. 

 

2.           Each Company acknowledges and agrees that (i) each of the Designated Defaults constitutes an Event of Default that has occurred and is continuing, (ii) none of the Designated Defaults has been cured or waived as of the date hereof, and (iii) except for the Designated Defaults, no other Events of Default have occurred and are continuing as of the date hereof.  Each of the Designated Defaults permits Lender (i) to accelerate the Obligation, (ii) to require payment of accrued default interest in respect of the Obligation (as of any date from and after the date on which the first Designated Default first occurred) and to convert any or all LIBOR Loans into Base Rate Loans, (iii) to commence any legal or other action to collect any or all of the Obligation from any Company or all of Companies, and any other person liable therefor and/or any Collateral, (iv) to foreclose or otherwise realize on any or all of the Collateral and/or as appropriate, set-off or apply to the payment of any or all of the Obligation, any or all of the Collateral, (v) to take any other enforcement action or otherwise exercise any or all rights and remedies provided for by any or all of the Credit Agreement, the other Loan Documents or applicable law, and (vi) to reject any forbearance, financial restructuring or other proposal made by or on behalf of any Company or any creditor or equity holder.

 

3.           Each Company further acknowledges and agrees that (i) nothing in this Amendment, including, without limitation, the amendments set forth in Section B and the consent set forth in Section C , constitutes a waiver, consent or agreement to forbear with respect to the Designated Defaults, and (ii) both prior to and after giving effect to this Amendment, Lender retains all rights, powers, privileges and remedies under the Credit Agreement, the other Loan Documents and/or applicable law, including without limitation, the rights and remedies referred to in Section A(2) .

 

B.            AMENDMENTS

 

1.            Section 1.1 of the Credit Agreement is amended by inserting the following new definitions in their appropriate alphabetical order:

 

“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

 

“ Cash ” means money, currency or a credit balance in any demand or deposit account; provided, however, that notwithstanding anything to the contrary contained herein, for purposes of calculating compliance with the requirements of Section 10 hereof “Cash” shall exclude any amounts that would not be considered “cash” under GAAP or “cash” as recorded on the books of the Borrowers and the Guarantors.

 

“ Cash Equivalents ” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government, or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator), and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii)  above, (b) has net assets of not less than $500,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s.

 

“ Contractual Obligation ” means, as applied to any Person, any provision of any security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by it or any of its properties is bound or to which it or any of its properties is subject.

 

“ First Amendment Effective Date ” means December 5, 2014.

 

“ Heartland Acquisition ” means the acquisition by Vertex Refining OH of certain assets of Heartland Group Holdings, LLC, a Delaware limited liability company, pursuant to and in accordance with the terms set forth in the Heartland Purchase Agreement and this Amendment, and the payment by Vertex-Operating of transaction costs and expenses incurred in order to consummate the closing of such acquisition.

 

“ Heartland Acquisition Documents ” means the Heartland Purchase Agreement, the Vertex OH Shared Services Agreement, the Escrow Agreement (as defined in the Heartland Purchase Agreement), all leases of Vertex Refining OH with the Seller (as defined in the Heartland Purchase Agreement) and each other document entered into by Holdings or any of its Subsidiaries in connection with the Heartland Acquisition,

 

“ Heartland Purchase Agreement ” means that certain Asset Purchase Agreement, dated effective as of October 21, 2014, among Holdings, Vertex-Operating, Vertex Refining OH and Heartland Group Holdings, LLC, a Delaware limited liability company, as amended by that certain First Amendment to Asset Purchase Agreement dated as of November 26, 2014 and that certain Second Amendment to Asset Purchase Agreement dated as of December 5, 2014.

 

“ Real Estate Asset ” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any company in any real property.

 

“ Vertex OH Shared Services Agreement ” means that certain Shared Services Agreement, dated as of December 5, 2014, between Vertex Refining OH and Vertex-Operating, as amended, restated, supplemented or otherwise modified in accordance with the terms of this Agreement.

 

“ Vertex Refining OH ” means Vertex Refining OH, LLC, an Ohio limited liability company.

 

2.           The defined term “Company” contained in Section 1.1 of the Credit Agreement is amended by adding the following sentence at the end thereof:

 

“In addition, Vertex Refining OH shall be deemed not to be a “Company” for purposes of determining the financial covenants set forth in this Agreement, whether used in determining the Applicable Margin, measuring the financial covenants set forth in Section 10 hereof (other than Section 10.6 ), determining the Borrowing Base or otherwise, including, without limitation, determining the Leverage Ratio and Consolidated Total Debt.”

 

 

3.            Clause (b) of the definition of “Permitted Debt” in Section 1.1 of the Credit Agreement is amended by inserting the following new language at the end of such clause (b) : “ provided, further , that Vertex Refining OH shall not be permitted to guaranty any Debt under or with respect to the GS Term Loan Agreement;”

5.            Section 8.1(b) of the Credit Agreement is amended by replacing the parenthetical “(and the consolidating financial statements of Vertex-NV)” where it appears with the following parenthetical:

 

“(and the consolidating financial statements of Vertex-NV and of Vertex Refining OH)”

 

6.            Section 8.1(d) of the Credit Agreement is amended by replacing Section 8.1(d) in its entirety with the following:

 

“(d)  Promptly after preparation, and in any event within 30 days after the end of each month, the consolidated balance sheet of Holdings and its Subsidiaries and consolidating balance sheet of Vertex-NV and of Vertex Refining OH, in each case as at the end of such month and the related consolidated statements of income, consolidated statements of stockholders’ equity and consolidated statements of cash flows of Holdings and its Subsidiaries and consolidating statements of income and cash flows of Vertex-NV and of Vertex Refining OH, in each case for such month and for the period from the beginning of the then current fiscal year to the end of such month, which are identical in form and substance to the monthly financial reports required to be delivered to the Term Loan Agent under the GS Term Loan Agreement;”

 

7.            Section 8.17 of the Credit Agreement is amended by inserting the following new clause (d) at the end thereof:

 

 “(d)  No Commingling .  Borrowers will not commingle, and Borrowers will cause each Subsidiary not to commingle, their funds or assets with those of Vertex Refining OH, which shall maintain separate books and records, assets and funds for all purposes.”

 

8.            Section 9.11 of the Credit Agreement is amended by replacing such Section in its entirety with the following:

 

“9.11.    Transactions with Shareholders and Affiliates .  No Borrower shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of 5% or more of any class of Capital Stock of Holdings or any of its Subsidiaries (or any Affiliate of such holder) or with any Affiliate of Holdings or of any such holder; provided, however, that the each Company may enter into or permit to exist any such transaction if both (i) Lender in its sole discretion has consented thereto in writing prior to the consummation thereof and (ii) the terms of such transaction are not less favorable to Borrowers or such Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not such a holder or Affiliate; further, provided, that the foregoing restrictions shall not apply to (a) any transaction between Borrowers and any Guarantor permitted under the terms of this Agreement (except that unless and until the Vertex-NV Ring Fence Termination Date has occurred, Vertex-NV shall not enter into any transaction with Holdings or its other Subsidiaries unless such transaction is subject to and in accordance with a master shared services agreement approved in writing by Lender or otherwise approved in writing by Lender); (b) reasonable and customary fees paid to members of the board of directors (or similar governing body) of Holdings and its Subsidiaries; (c) compensation arrangements for officers and other employees of Holdings and its Subsidiaries entered into in the ordinary course of business; (d) transactions under and in accordance with the Vertex OH Shared Services Agreement; (e) the purchase by Benjamin Paul Cowart, trustee of the Benjamin Paul Cowart 2012 GRAT U/A dated April 17, 2012 and by Shelley T. Cowart, trustee of the Shelley T. Cowart 2012 GRAT U/A dated April 17, 2012 (collectively, the “ Cowart GRATs ”) of $1,500,000 of Capital Stock on or about the First Amendment Effective Date and the issuance by Holdings of warrants to the Cowart GRATs in connection therewith, the proceeds of which shall be contributed by Holdings to Vertex Refining OH, and (f) transactions described in Schedule 7.15 .  Borrowers shall disclose in writing each transaction with any holder of 5% or more of any class of Capital Stock of Holdings or any of its Subsidiaries or with any Affiliate of Holdings or of any such holder to Lender.”

 

 

9.            Section 9 of the Credit Agreement is amended by inserting the following new Section 9.15 at the end of thereof:

 

“9.15    Vertex Refining OH .

 

(a)       Notwithstanding anything to the contrary in Section 9.1 , Vertex Refining OH may obtain loans from financial institutions other than Lender or lenders party to the GS Term Loan Agreement, provided that at no time shall (i) Vertex Refining OH accept any loans or investments from Borrowers or any Guarantor, (ii) any Company guarantee, secure, provide credit support or in any way become obligated on any debt, obligations or liabilities (whether contingent, matured, or unmatured) of Vertex Refining OH, and (iii) any accounts, inventory or other assets of Vertex Refining OH be included in the Borrowing Base.

 

(b)       Notwithstanding anything to the contrary in Section 9.2 , Vertex Refining OH may grant liens to secure its debt provided that such debt is permitted to be incurred under preceding clause (a).

 

(c)       Notwithstanding anything to the contrary in Section 9.4 , no investments shall be made by any Company in Vertex Refining OH, except for investments made by Holdings in Vertex Refining OH from the proceeds of an issuance of common stock by Holdings.

 

(d)       No Company may make any intercompany loans or other extensions of credit to Vertex Refining OH, and neither Vertex Refining OH nor any Company may make any “earn-out” payment or similar payments under the Heartland Acquisition if a Default or Event of Default exists at the time of such payment or would arise after giving effect to any such payment, unless such payment is made solely with proceeds of an issuance of common stock of Holdings, or from cash on hand generated by Vertex Refining OH in its business, and Borrowers shall provide notice to Lender prior to such payment being made and shall further demonstrate that such payment is permitted to be made under the GS Term Loan Agreement.

 

(e)       Notwithstanding any to the contrary in Section 9.6 , in no event shall Vertex Refining OH be merged with or into Holdings or any of its other Subsidiaries.  Furthermore, in no event shall Vertex Refining OH voluntarily liquidate, merge, dissolve with or into Holdings or any of its other Subsidiaries, or have any part of its business, property or assets conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Holdings or any of its other Subsidiaries.

 

(f)       No Company shall agree to, nor shall it permit any of its Subsidiaries to agree to, any amendment, restatement, supplement or other modification to, or waiver of, any of its rights under any Heartland Acquisition Document without in each case obtaining the prior written consent of Lender to such amendment, restatement, supplement or other modification or waiver.

 

 

(g)       Following the closing of the Heartland Acquisition, Vertex Refining OH is permitted to pay, directly from cash on hand generated by Vertex Refining OH in its business, or from the proceeds of a common stock issuance by Holdings, (i) for out of pocket costs of Vertex Refining OH for certain cleanup costs related to the Norwalk facility, but not to exceed $200,000 in the aggregate, and (ii) for certain capital expenditure upgrades to the Heartland facilities not to exceed $1,300,000 in the aggregate.

 

(h)       Vertex Refining OH shall be not be included as a “Subsidiary” for purposes of determining the financial covenants set forth in this Agreement, whether used in determining the Applicable Margin, measuring the financial covenants set forth in Section 10 hereof (other than Section 10.6 ), determining the Borrowing Base or otherwise, including, without limitation, determining the Leverage Ratio and Consolidated Total Debt.”

 

10.            Section 10 of the Credit Agreement is amended by inserting the following new Section 10.6 at the end thereof:

 

“10.6    Minimum Vertex OH Liquidity .  Borrowers shall not permit unrestricted Cash and Cash Equivalents held by Vertex Refining OH to be less than $500,000 at any time from and after the First Amendment Effective Date.”

 

C.            CONSENT AND RESERVATION OF RIGHTS

 

1.           Notwithstanding the failure of the Heartland Acquisition to satisfy the requirements of the definition of “Permitted Acquisition” and the failure of the Companies to satisfy the requirements of Sections 6.1 and 6.3 of the Credit Agreement with respect to Vertex Refining OH and the assets acquired in the Heartland Acquisition, subject to the conditions set forth in Section E below, Lender hereby consents to the Heartland Acquisition in accordance with the terms of the Heartland Purchase Agreement and the other Heartland Acquisition Documents and waives the requirements of the definition of “Permitted Acquisition” and the failure of the Borrowers to satisfy the requirements of Sections 6.1 and 6.3 of the Credit Agreement with respect to Vertex Refining OH; provided, that (x) the Heartland Acquisition must satisfy clauses (d) , (e) , (g)(y) , and (h) , of the definition of “Permitted Acquisition” and (y) the only consideration payable by Borrowers and their Subsidiaries in connection with the Heartland Acquisition shall be common stock of Holdings and other cash amounts expressly permitted to be paid under Section 9.15 of the Credit Agreement.

 

2.           By consenting to the Heartland Acquisition and waiving the requirements set forth in paragraph C.1 above, Borrowers and each Guarantor acknowledge that Lender has not waived the Designated Defaults and Lender expressly reserves all of its rights, powers, privileges and remedies under the Credit Agreement, other Loan Documents and/or applicable law.  Lender may exercise all of its powers, privileges and remedies, including those set forth in the Credit Agreement, the other Loan Documents or applicable law, at any time in its sole and absolute discretion without further notice.  No oral representations or course of dealing on the part of Lender or any of its officers, employees or agents, and no failure or delay by Lender with respect to the exercise of any right, power, privilege or remedy under any of the Credit Agreement, the other Loan Documents or applicable law shall operate as a waiver thereof, and the single or partial exercise of any such right, power, privilege or remedy shall not preclude any later exercise of any other right, power, privilege or remedy.

 

 

D.            RELEASE

 

1.           In consideration of, among other things, Lender’s execution and delivery of this Agreement, each Borrower and the other Companies, on behalf of itself and its agents, representatives, officers, directors, advisors, employees, subsidiaries, affiliates, successors and assigns (collectively, the “ Releasors ”), hereby forever agrees and covenants not to sue or prosecute against any Releasee (as hereinafter defined) and hereby forever waives, releases and discharges, to the fullest extent permitted by law, each Releasee from any and all claims (including, without limitation, crossclaims, counterclaims, rights of set-off and recoupment), actions, causes of action, suits, debts, accounts, interests, liens, promises, warranties, damages and consequential damages, demands, agreements, bonds, bills, specialties, covenants, controversies, variances, trespasses, judgments, executions, costs, expenses or claims whatsoever, that such Releasor now has or hereafter may have, of whatsoever nature and kind, whether known or unknown, whether now existing or hereafter arising, whether arising at law or in equity (collectively, the “ Claims ”), against Lender in any capacity and its affiliates, subsidiaries, and its successors and assigns and each and all of the officers, directors, employees, agents, attorneys, advisors and other representatives of each of the foregoing (collectively, the “ Releasees ”), based in whole or in part on facts, whether or not now known, existing on or before the date hereof, that relate to, arise out of or otherwise are in connection with: (i) any or all of the Loan Documents or transactions contemplated thereby or any actions or omissions in connection therewith or (ii) any aspect of the dealings or relationships between or among the Borrowers and the other Companies, on the one hand, and Lender, on the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof.  In entering into this Agreement, each Borrower and each other Company consulted with, and has been represented by, legal counsel and expressly disclaims any reliance on any representations, acts or omissions by any of the Releasees and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth above do not depend in any way on any such representations, acts and/or omissions or the accuracy, completeness or validity thereof.  The provisions of this Section shall survive the termination of this Amendment, the Credit Agreement, the other Loan Documents and payment in full of the Obligation.

 

2.           Each Company hereby agrees that it shall be, jointly and severally, obligated to indemnify and hold the Releasees harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding by or on behalf of any Person, including, without limitation, the respective officers, directors, agents, trustees, creditors, partners or shareholders of each Company, or any of their respective Subsidiaries, whether threatened or initiated, in respect of any claim for legal or equitable remedy under any statue, regulation or common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of the Credit Agreement, the other Loan Documents, this Amendment or any other document executed and/or delivered in connection herewith or therewith; provided, that no Company shall have any obligation to indemnify or hold harmless any Releasee hereunder with respect to liabilities to the extent they result from the gross negligence or willful misconduct of that Releasee as finally determined by a court of competent jurisdiction.  If and to the extent that the foregoing undertaking may be unenforceable for any reason, each Company agrees to make the maximum contribution to the payment and satisfaction thereof that is permissible under applicable law.  The foregoing indemnity shall survive the termination of this Amendment, the Credit Agreement, the other Loan Documents and the payment in full of the Obligation.

 

3.           Each of Company on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by any Company pursuant to Section D(1)  hereof.  If any Company or any of its successors, assigns or other legal representatives violates the foregoing covenant, each Company, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.

 

 

E.                                 CONDITIONS TO EFFECTIVENESS

 

Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of Lender hereunder, it is understood and agreed that this Amendment shall not become effective, including, without limitation, the amendments contained in Section B and the consent contained in Section C , and no Company shall have any rights hereunder until satisfaction of the following conditions precedent on or prior to December 5, 2014:

 

1.           Lender shall have received each of the following documents, each dated as of the date hereof and in form and substance satisfactory to Lender:

 

a.

executed counterparts to this Amendment from Borrowers, each of the Guarantors and the Lender and to the Fee Letter executed by Borrowers and Lender in connection with this Amendment;

 

b.

a fully executed amendment to the GS Term Loan Agreement which consents to the Heartland Acquisition;

 

c.

a fully executed copy of the Vertex OH Shared Services Agreement;

 

d.

fully executed copies of the Heartland Purchase Agreement (including all schedules and exhibits thereto), all amendments to the Heartland Purchase Agreement, and each other material document entered into in connection with the Heartland Acquisition, including, without limitation, the Escrow Agreement (as defined in the Heartland Purchase Agreement) and all leases with the Seller (as defined in the Heartland Purchase Agreement), each certified as being true, correct and complete by an Authorized Officer of Company;

 

e.

(i) the results of a recent search, by a Person satisfactory to Lender, of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property acquired in the Heartland Acquisition, together with copies of all such filings disclosed by such search, and (ii) UCC termination statements (or similar documents) duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search (other than any such financing statements in respect of Permitted Liens);

 

f.

a title report issued by a title company reasonably satisfactory to Lender with respect to each Real Estate Asset to be purchased by Vertex Refining OH in the Heartland Acquisition, dated not more than thirty days prior to the First Amendment Effective Date and copies of all recorded documents listed as exceptions to title or otherwise referred to therein;

 

g.

reports and other information, in form, scope and substance satisfactory to Lender, regarding environmental matters relating to the Real Estate Assets to be acquired or leased in the Heartland Acquisition, which reports shall include a Phase I Report for each of the Real Estate Assets specified by Lender; and

 

h.

payoff or release letters from the lenders holding Liens on the assets to be acquired in the Heartland Acquisition together with all documents or instruments necessary to release all Liens securing Indebtedness owed to such lenders.

 

2.           Lender shall have received evidence in form and substance reasonably satisfactory to Lender demonstrating that on the date hereof, immediately after giving effect to this Amendment, the Heartland Acquisition and all other transactions contemplated to occur on the date hereof, Vertex Refining OH shall have unrestricted Cash and Cash Equivalents held in a separate account in the name of Vertex Refining OH in an amount at least equal to $1,500,000.

 

3.           Lender shall have received copies of all required consents, releases and terminations of liens and claims under the Heartland Purchase Agreement, including, without limitation, those set forth on Schedules 6.02(d)   and 7.03(b) to the Heartland Purchase Agreement and the Heartland Acquisition shall have been consummated in compliance with (a) all applicable laws and (b) the terms and provisions of the Heartland Purchase Agreement; the Heartland Acquisition Documents shall not have been amended, restated, supplemented or otherwise modified and no term thereof shall have been waived without the prior written consent of Lender.

 

4.           Lender shall have received reimbursement or payment of its costs and expenses incurred in connection with this Amendment or the Credit Agreement (including reasonable fees, charges and disbursements of counsel to Lender).

 

5.           Lender shall have received correspondence in form and substance reasonably satisfactory to Lender from Reinhart Boerner Van Deuren s.c. (“ Reinhart ”) to the effect that Reinhart has received not less than $1,500,000 in its client trust account from the issuance of Capital Stock by Holdings to the Cowart GRATs, and that upon the closing of the Heartland Acquisition and the execution and delivery of this Amendment by all parties hereto and the execution and delivery of the amendment to the GS Term Loan Agreement referred to in Section E.1.b. hereof by all parties thereto, that Reinhart will transfer all such amounts to Vertex Refining OH.

 

6.           Lender shall have received payment of the amendment fee which is due and payable under the terms of that certain Fee Letter dated of even date herewith among Borrowers and Lender.

 

F.            REPRESENTATIONS AND WARRANTIES

 

To induce Lender to enter into this Amendment, each Company hereby represents and warrants to Lender that:

 

1.           Each of Holdings and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (b) has all requisite power and authority to enter into this Amendment and to carry out the transactions contemplated hereby, and (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect.

 

2.           The execution, delivery and performance of this Amendment have been duly authorized by all necessary action on the part of each Company that is a party thereto.

 

3.           The execution, delivery and performance by each Company of this Amendment and the consummation of the transactions contemplated hereby do not and will not (a) violate any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries, any of the Organizational Documents of Holdings or any of its Subsidiaries, or any order, judgment or decree of any court or other agency of government binding on Holdings or any of its Subsidiaries; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Holdings or any of its Subsidiaries; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Liens created under any of the Loan Documents in favor of Lender); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the date hereof and disclosed in writing to Lender.

 

 

4.           The execution, delivery and performance by each Company of this Amendment and the consummation of the transactions contemplated hereby do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority.

 

5.           This Amendment has been duly executed and delivered by each Company and is the legally valid and binding obligation of such Company, enforceable against such Company in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

6.           After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all material respects on and as of such earlier date, and, other than the Designated Defaults, no Default or Event of Default has occurred and is continuing as of the date hereof.

 

G.            OTHER AGREEMENTS

 

1.            Continuing Effectiveness of Loan Documents .  As amended hereby, all terms of the Credit Agreement and the other Loan Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of each Company party thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.  To the extent any terms and conditions in any of the other Loan Documents shall contradict or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Credit Agreement as modified and amended hereby. Upon the effectiveness of this Amendment such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Credit Agreement as modified and amended hereby.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Lender under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.  This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement.

 

2.            Reaffirmation of Guaranty .  Borrowers and each Guarantor consents to the execution and delivery by Borrowers and each Guarantor of this Amendment and the consummation of the transactions described herein, and ratifies and confirms the terms of the Guaranty to which such Guarantor is a party with respect to the Obligation. Each Guarantor acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing the Obligation or any other obligation or debt of Borrowers to Lender, or any actions now or hereafter taken by Lender with respect to the Obligation, the Guaranty to which any Guarantor is a party (i) is and shall continue to be a primary obligation of such Guarantor, (ii) is and shall continue to be an absolute, unconditional, continuing and irrevocable guaranty of payment, and (iii) is and shall continue to be in full force and effect in accordance with its terms.  Nothing contained herein to the contrary shall release, discharge, modify, change or affect the original liability of each Guarantor under the Guaranty to which such Guarantor is a party.

 

3.            Acknowledgment of Perfection of Security Interest . Each Company hereby acknowledges that, as of the date hereof, the security interests and Liens granted to Lender under the Credit Agreement and the other Loan Documents, including, without limitations, Liens granted under the Deeds of Trust, are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the Credit Agreement and the other Loan Documents.

 

4.            APPLICABLE LAW .   THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

5.            No Novation .  This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement and the other Loan Documents or an accord and satisfaction in regard thereto.

 

6.            Costs and Expenses .  Borrowers agree to pay on demand all costs and expenses of Lender in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for Lender with respect thereto.

 

7.            Counterparts .  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile transmission or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

8.            Binding Nature .  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.  No third party beneficiaries are intended in connection with this Amendment.

 

9.            Entire Understanding .  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotia­tions or agreements, whether written or oral, with respect thereto.

 

[ Signatures are on the following pages .]

	BORROWERS:   VERTEX ENERGY OPERATING, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX ENERGY, INC.
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	GUARANTORS:
	VERTEX ACQUISITION SUB, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX MERGER SUB, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX REFINING NV, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer

	VERTEX REFINING LA, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	CEDAR MARINE TERMINALS, LP CROSSROAD CARRIERS, L.P. VERTEX RECOVERY, L.P. H & H OIL, LP.
	By:            Vertex II GP, LLC,     as sole general partner of each of the foregoing
	By:    /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	VERTEX II GP, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer
	GOLDEN STATE LUBRICANTS WORKS, LLC
	By:   /s/ Benjamin P. Cowart                         Benjamin P. Cowart President & Chief Executive Officer

 

 

	LENDER :
	BANK OF AMERICA, N.A.
	By:  /s/ Rebecca L. Hetzer                         Rebecca L. Hetzer Senior Vice President

Schedule A

I.              Events of Defaults

 

a)

an Event of Default has occurred under Section 11.2 of the Credit Agreement as a result of Borrowers’ failure to comply with the Fixed Charge Coverage Ratio set forth in Section 10.1 of the Credit Agreement for the period ending September 30, 2014;

 

b)

an Event of Default has occurred under Section 11.2 of the Credit Agreement as a result of Borrowers’ failure to comply with the minimum Consolidated Adjusted EBITDA set forth in Section 10.3 of the Credit Agreement for the nine month period ending September 30, 2014;

 

c)

an Event of Default has occurred under Section 11.2 of the Credit Agreement as a result of Borrowers’ failure to satisfy the requirements of Items 2, 3, 4, and 6 of the Post-Closing Letter Agreement, dated May 2, 2014, among Borrowers and Lender; and

 

d)

multiple Events of Default have occurred under Section 11.13 of the Credit Agreement as a result of the occurrence of multiple events of default under the GS Term Loan Agreement, including, but not limited to, those certain events of default listed on Schedule A attached to that certain First Amendment to Credit and Guaranty Agreement dated December 5, 2014 by and among Vertex-Operating, Holdings, the guarantors party thereto, Term Loan Agent, and the lenders party thereto.

 

 

 

 

 

 

 

Schedule A to First Amendment to Amended and Restated Credit Agreement