Vertex Energy, Inc. 8-K

PERSONAL AND CONFIDENTIAL

February 17, 2022

Vertex Refining Alabama LLC 

c/o Vertex Energy, Inc. 

1331 Gemini Street 

Suite 250 

Houston, TX 77058

Project Vulcan II
Commitment Letter

Ladies and Gentlemen:

You have advised Whitebox Advisors LLC on behalf of certain funds managed or advised by Whitebox Advisors LLC (collectively, “Whitebox”), Highbridge Capital Management, LLC on behalf of certain funds managed or advised by Highbridge Capital Management, LLC (collectively, “Highbridge”), BlackRock Financial Management, Inc. on behalf of certain funds and accounts managed or advised by BlackRock Financial Management, Inc. or its affiliates (collectively, “BlackRock”), Chambers Energy Capital IV, LP (“Chambers”), CrowdOut Capital LLC (“CrowdOut Capital”), CrowdOut Credit Opportunities Fund LLC (“CrowdOut Credit”, and together with Chambers, CrowdOut Capital and the undersigned affiliates of Whitebox, Highbridge and BlackRock, collectively, the “Commitment Parties,” “we,” or “us”) that Vertex Energy, Inc. (the “Parent”), through its indirect wholly-owned subsidiary, Vertex Refining Alabama LLC, a Delaware limited liability company (“Vertex Alabama” or “you”), intends (by assignment from Vertex Energy Operating, LLC, a Texas limited liability company) to acquire (the “Acquisition”) a refinery and related assets located in Mobile, Alabama (the “Target Assets”) pursuant to that certain Sale and Purchase Agreement, dated as of May 26, 2021 (the “Acquisition Agreement”), among Vertex Energy Operating LLC, as the Buyer, and Equilon Enterprises LLC d/b/a Shell Oil Products US, Shell Chemical LP, and Shell Oil Company (the “Seller”). The Acquisition, together with the financing transactions, including the Facility, contemplated herein, are referred to herein as the “Transactions”. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Summary of Principal Terms and Conditions attached hereto as Exhibit A (the “Term Sheet”). This commitment letter, including Schedule I, the Term Sheet, Summary of Terms And Conditions: Warrants attached hereto as Exhibit B (the “Warrant Term Sheet”) and the Summary of Additional Conditions attached hereto as Exhibit C are referred to herein collectively as the “Commitment Letter”.

1.            Commitment. Based upon the foregoing and subject to the terms and conditions expressly set forth in this letter and in the Term Sheet, each of the Commitment Parties, severally and not jointly, agrees to provide a portion of the Facility on the Funding Effective Date in the aggregate principal amount set forth opposite such Commitment Party’s name on Schedule I hereto (as to each Commitment Party, its “Agreed Commitment Amount”). Each Commitment Party’s commitment is made solely on behalf of its respective managed funds and accounts and does not in any way include a commitment or other arrangement from any other non-affiliated institution.

2.            Appointment of Roles. You hereby agree to appoint a mutually acceptable third party to act as sole administrative agent and collateral agent (in such capacities, the “Administrative Agent”) for the Facility; provided that Cantor Fitzgerald Securities shall be mutually acceptable.

It is understood and agreed that, except for Oppenheimer & Co., Inc., no agents, co-agents, arrangers, co-arrangers, bookrunners, managers, or co-managers will be appointed, no titles will be awarded, and no compensation (other than compensation expressly contemplated by this Commitment Letter, the Term Sheet and the Fee Letter) will be paid in connection with the Facility unless you and we shall so agree.

3.            Fees. As additional consideration for funding the Facility, you agree to pay to us the fees set forth in this Commitment Letter and in the Fee Letter, dated as of the date hereof (the “Fee Letter”), between you and the Commitment Parties. Once paid, such fees shall not be refundable under any circumstances, except as otherwise contemplated by this Commitment Letter or the Fee Letter, as applicable, or as agreed in writing by the parties hereto. The payment of the Alternative Financing Fee (as defined below) and the Ticking Fee (as defined in the Term Sheet) to each Commitment Party shall be made without deduction or withholding for any taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any tax from the payment of the Alternative Financing Fee or the Ticking Fee, as applicable, to a Commitment Party, then the sum payable with respect to such fee shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this paragraph) the applicable Commitment Party receives an amount equal to the sum it would have received had no such deduction or withholding been made.

4.            Conditions. Notwithstanding anything in this Commitment Letter, the Term Sheet, the definitive documentation governing the Facility (the “Facility Documentation”), or any other letter agreement or other undertaking between us and you concerning the financing to the contrary the commitments and undertakings of the Commitment Parties hereunder are subject solely to the satisfaction of the conditions set forth under the heading “Conditions Precedent” in Exhibit A hereto and in Exhibit C.

5.            Information. You hereby represent and warrant that (and with respect to the Target Assets, to the best of your knowledge that) (a) all written factual information (other than (i) any financial estimates, forecasts, budgets and other projections and forward looking information delivered by you or on behalf of you (“Projections”) and (ii) information of a general economic or industry specific nature, the “Information”) that has been or will be made available to the Commitment Parties by or on behalf of you or at your request by any of your representatives on your behalf in connection with the Transactions is or will be, when furnished, correct in all material respects, and, does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto from time to time), and (b) the Projections that have been made or will be made available to the Commitment Parties by or on behalf of you or at your request by any of your representatives on your behalf in connection with the Transactions have been or will be, as the case may be, prepared based upon good faith estimates and assumptions believed by you to be reasonable at the time the related Projections are so furnished to the Commitment Parties (it being recognized by us that such Projections are not to be viewed as facts and that actual results during the period or periods covered by any such Projections may differ from the projected results). You agree to supplement (or, to the extent relating to Target Assets prior to the Closing Date (subject to any limitation on your rights set forth in the Acquisition Agreement), use your commercially reasonable efforts to cause to be promptly supplemented) the Information and the Projections from time to time until the Closing Date so that the representation and warranties in the preceding sentence each remains correct (to your knowledge with respect to the Target Assets prior to the Closing Date). The Commitment Parties will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof.

6.            Expenses. You agree to pay or reimburse each Commitment Party, regardless of whether the Closing Date occurs, for all of each Commitment Party’s actual and reasonable documented out-of-pocket costs and expenses (including, but not limited to, expenses of each Commitment Party’s due diligence investigation, attorneys’ fees and expenses and consultant’s, and auditors, appraisers, accountants, search and lien filing agencies, and external service providers) incurred in connection with this Commitment Letter, the Fee Letter, and the Facility Documentation and any consents, amendments, waivers, or other modifications thereto, limited in the case of legal expenses to the reasonable and documented or invoiced out-of-pocket legal expenses of counsel the Commitment Parties (including Clifford Chance LLP as special counsel for BlackRock with scope and limitations as agreed by Blackrock and the Borrower, and Sidley Austin LLP for Whitebox, Highbridge and the other Lenders), and, if reasonably necessary, (a) one firm of local counsel in each relevant material jurisdiction (which may include a single special counsel acting in multiple jurisdictions); and (b) in the case of an actual or perceived conflict of interest where any such person affected by such conflict informs Borrower of such conflict, in each case, a single additional firm of counsel in each relevant jurisdiction for all similarly situated affected persons.

7.            Indemnification. You agree to defend (subject to the Indemnified Persons’ selection of counsel), indemnify, and hold harmless each Commitment Party and its affiliates and each Commitment Party’s and its affiliates’ respective shareholders, members, controlling persons, officers, partners, directors, trustees, advisors, counsel, employees, and agents (each Commitment Party and each such other person being an “Indemnified Person”), from and against any and all Indemnified Liabilities (defined below); provided that you shall not have any obligation to any Indemnified Person hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise from (i) the gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final, non-appealable order, of that Indemnified Person, (ii) a material breach of the obligations under this Commitment Letter of such Indemnified Person (as determined by a court of competent jurisdiction in a final, non-appealable order), or (iii) any proceeding solely between or among Indemnified Persons not arising from any act or omission by you or any of your affiliates (other than any claim, actions, suits, inquiries, litigation, investigation or proceeding against any Indemnified Person in its capacity or in fulfilling its role as an Administrative Agent). Notwithstanding anything to the contrary herein, no Indemnified Person or Indemnifying Person or any of their respective officers, directors, employees, advisors, controlling persons, members, agents and other representatives or their respective successors and assigns shall be liable for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings) provided, that nothing contained in this sentence shall limit your indemnification obligations to the extent such special, indirect, consequential or punitive damages are included in any third party claim in connection with which such Indemnified Person is otherwise entitled to indemnification hereunder to the extent that none of the exceptions set forth in clause (i), (ii) or (iii) to the proviso of the preceding paragraph applies to such person at such time. As used herein, “Indemnified Liabilities” means, collectively, any and all liabilities, obligations, settlements, losses, damages (including civil damages related to environmental liabilities), penalties, claims (including environmental liabilities), costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation, or other response action necessary to remove, remediate, clean up, or abate any hazardous materials), expenses, and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for the Indemnified Persons in connection with any investigative, administrative, or judicial proceeding commenced or threatened by any person, whether or not any such Indemnified Person shall be designated as a party or a potential party thereto, and any fees or expenses incurred by the Indemnified Persons in enforcing this indemnity), whether based on any federal, state, or foreign laws, statutes, rules, or regulations (including securities and commercial laws, statutes, rules, or regulations and environmental laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnified Person, in any manner relating to or arising out of this Commitment Letter, the Fee Letter, the Facility Documentation, or the Transactions (including the Initial Lenders’ agreement to make the Facility available to the Borrower on the terms, and subject to the conditions, set forth herein or the use or intended use of the proceeds thereof, or any enforcement of this Commitment Letter, the Fee Letter, or the Facility Documentation (including any sale of, collection from, or other realization upon any of the collateral or the enforcement of any guaranty)) or any related transaction contemplated hereby or any of the use of proceeds of the Facility; provided that the Indemnified Liabilities shall be limited in the case of legal expenses to the reasonable and documented or invoiced out-of-pocket legal expenses of one firm of counsel for BlackRock (which as of the date hereof is Clifford Chance LLP) and one firm of counsel for Whitebox, Highbridge and all other Indemnified Persons, taken as a whole, (which as of the date hereof is Sidley Austin LLP) and, if reasonably necessary, of one firm of local counsel in each relevant material jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all such Indemnified Persons, taken as a whole (and, solely in the case of an actual or potential conflict of interest where the Indemnified Persons affected by such conflict notify you of the existence of such conflict, of one additional firm of counsel for all affected Indemnified Persons, taken as a whole and, if necessary, one firm of local counsel in each relevant material jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for each group of similarly situated affected Indemnified Persons, taken as a whole).

To the extent the undertakings set forth in this Section 7 may be unenforceable in whole or in part because they are violative of any law or public policy, the applicable loan party shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnified Persons or any of them. Notwithstanding any other provision of this Commitment Letter, and without limitation of your indemnification obligations set forth herein, no party hereto shall be liable for any damages arising from the use by others of information or other materials obtained through electronic, telecommunications, or other information transmission systems, except to the extent such damages have been determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the willful misconduct or gross negligence of such person.

8.            Confidentiality; Absence of Fiduciary Duty; Etc. You agree that you will not disclose, directly or indirectly, the Fee Letter and the contents thereof or this Commitment Letter and the Term Sheet and the contents hereof and thereof, or the activities of the Commitment Parties pursuant hereto or thereto, to any person without prior written approval of the Commitment Parties, except that you may disclose (a) the Commitment Letter, the Term Sheet, the Fee Letter, and the contents hereof and thereof (i) to your officers, directors, agents, employees, attorneys, accountants, and advisors and (ii) as required by applicable law, regulation, or compulsory legal process (in which case you agree to provide prompt written notice thereof, such notice to be provided in advance to the extent permitted by applicable law), (b) this Commitment Letter, the Term Sheet, and the contents hereof and thereof (but not the Fee Letter unless redacted in a customary manner reasonably acceptable to the Commitment Parties) to the Seller, and its officers, directors, employees, attorneys, accountants, and advisors, in each case in connection with the Transactions and on a confidential and need-to-know basis, (c) the Commitment Letter, the Term Sheet and the contents thereof and hereof (but not the Fee Letter) to any rating agency when required by it; provided, that prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information received by it, (d) the existence and contents of the Term Sheet to potential lenders in connection with the Transactions, (e) this Commitment Letter, the Term Sheet, and the contents hereof and thereof (but not the Fee Letter) to any other financing providers, including the providers of the WC Facility, not in violation of Section 11 below, (f) this Commitment Letter, the Term Sheet, and the contents hereof and thereof (but not the Fee Letter) to any Secured Hedge Provider or any potential Secured Hedge Provider, (g) to the extent any such information becomes publicly available other than by reason of disclosure by you, your affiliates, or your or their respective officers, directors, agents, employees, attorneys, accountants, or advisors in breach of this Commitment Letter and (h) the existence and contents of this Commitment Letter and the Term Sheet in any public filing, prospectus or, subject to the last sentence of this paragraph, press release (it being acknowledged that the fees in the Fee Letter may be included generically in projections and pro forma information and in a generic disclosure of aggregate sources and uses contained in such syndication and other marketing materials). Further, notwithstanding the next succeeding paragraph, we shall be permitted, in consultation with you and with your approval, after the Funding Effective Date, to use Parent’s and Borrower’s tradenames, trademarks, logo, and information related to the Facility in connection with marketing, press releases, or other transactional announcements or updates provided to investor or trade publications. You agree that you will permit the applicable Commitment Party to review and approve (such approval not to be unreasonably delayed, conditioned or withheld) any reference to such Commitment Party or any of its affiliates in connection with the Facility or the Transactions contained in any press release or similar public disclosure prior to public release.

We shall hold all non-public information regarding you, Parent and the Target Assets, and your and their respective subsidiaries and businesses identified as such by you solely for the purpose of providing the services which are the subject of this Commitment Letter and negotiating and consummating the transactions contemplated hereby and shall treat confidentially all such information and shall not publish, disclose or otherwise divulge such information, in each case, in accordance with our customary procedures for handling confidential information of such nature, it being understood and agreed by you that, in any event, we may make (a) disclosures of such information to our respective affiliates and to our and affiliates’ respective members, controlling persons, agents, advisors, counsel, directors, shareholders and other equity-holders (and to other persons authorized by a Commitment Party to organize, present, or disseminate such information in connection with disclosures otherwise made in accordance with this Section 8), in each case, to the extent directly involved in the consideration of this matter on a confidential and need-to-know basis, (b) disclosures of such information reasonably required by any bona fide potential Lender or participant in connection with the contemplated assignment, transfer, or participation by any such Commitment Party of any interest in the Facility or any participations therein provided, that prior to any disclosure, such potential Lender shall undertake in writing to preserve the confidentiality of any confidential information received by it from any of the Commitment Parties, (c) disclosure to any rating agency when required by it; provided, that prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information received by it from any of the Commitment Parties, (d) disclosure to any Commitment Party’s financing sources or valuation providers; provided, that prior to any disclosure, such financing source or valuation provider is informed of the confidential nature of information received by it from any of the Commitment Parties, (e) disclosures of such information to any investors and partners of any Commitment Party, including prospective investors in future funds and accounts, in each case, that may or not be participating in the proposed investment; provided, that prior to any disclosure, such investor or partner is informed of the confidential nature of information received by it from any of the Commitment Parties (and, in each case of the foregoing clauses (b), (c), (d), and (e), such disclosures shall be permitted to such persons’ or entities’ respective affiliates, members, employees, advisors, representatives and agents; provided, that prior to any disclosure, such parties shall be informed of the confidential nature of information received by it), (f) disclosure required or requested pursuant to applicable law, rule or regulation or any legal, judicial, governmental, administrative or regulatory order, authority or process, or in connection with any public filings, whether pursuant to any securities laws or regulations or rules promulgated therefor (including the Investment Company Act of 1940 or otherwise, including, without limitation, in connection with filings, submissions and any other similar documentation required or customary to comply with Securities and Exchange Commission filing requirements) or representative thereof or by the National Association of Insurance Commissioners (and any successor thereto); provided further, that unless specifically prohibited by applicable law or court order, each Commitment Party shall make reasonable efforts to notify Borrower of any request by any governmental authority or representative thereof (other than any such request in connection with any examination of the financial condition or other routine examination of such Commitment Party by such governmental authority, or with respect to any request for information by any legal, judicial, governmental, administrative, or regulatory authority that is not specific to the confidential information provided hereunder) for disclosure of any such non-public information prior to disclosure of such information, (g) to the extent any such information becomes publicly available other than by reason of disclosure by us, our affiliates, or our or their respective officers, directors, agents, employees, attorneys, accountants, or advisors in breach of this Commitment Letter, or to the extent any such information is developed independently by us, and (h) for purposes of establishing a “due diligence” defense or to exercise rights or remedies. Our obligations under this Section 8, shall automatically expire upon the earlier of execution and delivery of the Facility Documentation and the second anniversary of the date hereof.

You acknowledge that each Commitment Party and its affiliates and its and its respective affiliates’ managed funds and accounts may be providing debt financing, equity capital, or other services (including, without limitation, financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise. The Commitment Parties will not use confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or any of their other relationships with you in connection with the performance by them and their affiliates of services for other companies, and except as expressly permitted hereby, the Commitment Parties will not furnish any such information to such other companies. By the same token, we will not make available to you confidential information that we have obtained or may obtain from any other customer. You also acknowledge that none of the Commitment Parties nor any of their affiliates have any obligation to use, in connection with the transactions contemplated by this Commitment Letter or to furnish to you or your subsidiaries, confidential information obtained by such Commitment Party and its affiliates from other companies.

In connection with all aspects of each transaction contemplated by this Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’ understanding, that: (a) the Facility and any related services described in this Commitment Letter is an arm’s-length commercial transaction between you and your affiliates, on the one hand, and the Commitment Parties, on the other hand, (b) the Commitment Parties have not provided any investment, legal, accounting, regulatory, or tax advice with respect to any of the Transactions, you have consulted your own investment, legal, accounting, regulatory, and tax advisors to the extent you have deemed appropriate, and neither you, nor any of your affiliates, have received, or have relied upon, the advice of the Commitment Parties or any of their respective affiliates or advisors regarding investment, legal, regulatory, accounting, or tax matters, (c) you are capable of evaluating, and understand and accept, the terms, risks, and conditions of the Transactions, (d) in connection with the financing Transactions and the process leading to such Transactions, each of the Commitment Parties has been, is, and will be acting solely as a principal and has not been, is not, and will not be acting as an advisor, agent, or fiduciary for you or any of your affiliates, stockholders, creditors, or employees or any other party, (e) the Commitment Parties have not assumed and will not assume an advisory, agency, or fiduciary responsibility in your or your affiliates’ favor with respect to any of the financing Transactions or the process leading thereto, and the Commitment Parties have no obligation to you or your affiliates with respect to the financing Transactions except those obligations expressly set forth in this Commitment Letter, and (f) the Commitment Parties and their respective affiliates and their and their respective affiliates’ managed funds and accounts may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and the Commitment Parties have no obligation to disclose any of such interests to you or your affiliates. To the fullest extent permitted by law, you hereby waive and release any claims that you may have against the Commitment Parties with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any financing transaction contemplated by this Commitment Letter.

9.            Termination. Except as set forth in the next paragraph, this Commitment Letter and our commitments and undertakings hereunder shall terminate in their entirety automatically without further notice or action by us on the date (the “Termination Date”) that is the first to occur of (a) April 1, 2022, (b) with respect to our commitments and undertakings hereunder in respect of the Facility, consummation of the Acquisition without use of the Facility or if the Initial Lenders become aware of a breach under Section 11 hereof, (c) the Closing Date and the release of the funds on deposit in the Escrow Account to the Borrower, (d) the termination of the Acquisition Agreement in accordance with its terms prior to the Closing Date, and (e) the date upon which the Borrower breaches its obligations hereunder or otherwise fails to comply with the terms and conditions of this Commitment Letter (unless such breach or failure is cured within two (2) business days following Borrower’s receipt of notice of such breach or failure).

The Fee Letter and the compensation, reimbursement, indemnification, exclusivity, jurisdiction, absence of fiduciary relationship, governing law, waiver of jury trial, and confidentiality provisions contained herein shall remain in full force and effect regardless of whether the Facility Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or any Lender’s commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to confidentiality) shall automatically terminate and be superseded to the extent of any corresponding provisions of the Facility Documentation covering the same subject matter upon the execution and delivery thereof.

10.          Assignment; etc. This Commitment Letter and the commitments and undertakings hereunder shall not be assignable by any party hereto without the prior written consent of each other party hereto, and any attempted assignment shall be void and of no effect; provided, however, that nothing contained in this paragraph shall prohibit us (in our sole discretion), subject to the terms of this Commitment Letter, from granting participations in, or selling assignments of, all or a portion of the commitments or the advances under the Facility; provided that notwithstanding such assignment or participation, with respect to amounts to be funded into escrow on the Funding Effective Date or amounts to be funded to the Borrower on the Closing Date, the commitment of the Initial Lenders to fund the Facility on the terms and conditions set forth in this Commitment Letter and the Fee Letter will be reduced solely to the extent such other Lenders fund their commitments into escrow on the Funding Effective Date or amounts to be funded to the Borrower on the Closing Date. This Commitment Letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the Indemnified Persons, except that the Commitment Parties may perform the duties and activities described hereunder through any of their respective affiliates or branches and the provisions of the final paragraph of Section 8 shall apply with equal force and effect to any of such affiliates or branches so performing any such duties or activities. Notwithstanding the foregoing, the Initial Lenders will be permitted to assign the Term Loans after the Closing Date, with the consent of the Borrower (not to be unreasonably withheld or delayed); provided, in each case, that no consent of the Borrower shall be required (i) if such assignment is made to another Lender or an affiliate or approved fund thereof or (ii) after the occurrence and during the continuance of an event of default; provided, further, no assignments shall be made to any natural persons, the Borrower or any Guarantor. If the consent of the Borrower is required for an assignment, its consent will be deemed given if the Borrower has not responded within ten (10) business days of a request for such consent.

11.          Exclusivity. From the date hereof until the earlier of (i) nine months from the date hereof, (ii) the date upon which the Lenders have failed to fund all or any portion of the Term Loans within two (2) Business Days of the date such Term Loans were required to be funded hereunder (unless such Lender notifies the Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more Conditions Precedent to funding in the Borrower’s control has not been satisfied) and (iii) the Lenders otherwise elect not to pursue the transactions contemplated hereby (such period, the “Exclusivity Period”), (A) you (i) shall not, and shall cause your affiliates, agents, representatives, counsel, consultants and advisors and any other person acting on your or their behalf not to, other than pursuant to this Commitment Letter, directly or indirectly solicit, participate in any negotiations or discussions with or provide or afford access to information to any third party with respect to, or otherwise facilitate, encourage or accept any offers for or otherwise enter into any other capital financing arrangements (whether in the form of an equity contribution, debt issuance, credit facility or otherwise) that would have the effect of replacing all or any portion of the borrowings under the Facility (other than the Permitted Financing (defined below)) (any such transaction, an “Alternate Financing Transaction”) and (ii) shall terminate or have terminated prior to the date hereof, and shall cause your affiliates, agents, representatives, counsel, consultants and advisors and any other person acting on your or their behalf to terminate, any agreement or arrangement related to the foregoing to which you or your affiliates are parties, as well as any activities and discussions related to the foregoing as may be continuing on the date hereof with any party other than us and our representatives, in each case, other than the Permitted Financing, and (B) the Commitment Parties shall have the exclusive right to provide any senior secured financing for you and each of your affiliates, including, without limitation, the Facility or any other financing in lieu thereof, in each case, in connection with the Acquisition (it being understood and agreed that the Permitted Financing is not in connection with the Acquisition). If during the Exclusivity Period, you, the Borrower or any of your or its affiliates enter into a commitment, agreement for, or consummate an Alternate Financing Transaction, in each case, for which the Commitment Parties (as a group) do not provide such debt financing, Borrower will pay (or cause to be paid) to each Commitment Party, an amount equal to the interest that would otherwise have accrued and been due for a one (1) year period (calculated based on the per annum Interest Rate from the Term Sheet applicable to the Facility) on the aggregate principal amount of such Commitment Party’s Agreed Commitment Amount (the “Alternative Financing Fee”). For purposes of this paragraph, the WC Facility or any other inventory related financing shall constitute a “Permitted Financing” and shall not, for any reason, constitute an “Alternate Financing Transaction”.

12.          Escrow Funding; Escrow Termination. If the Escrow Funding Condition (as defined below) is satisfied, the Commitment Parties agree to fund an amount equal to the total net proceeds of the Loans (net of the Upfront Fee on the Funding Effective Date) into the Escrow Account on a date (the date on which such funding occurs, the “Funding Effective Date”), which shall be a date designated by you, but shall not occur prior to February 21, 2022. If the Conditions Precedent have been satisfied prior to the Termination Date, the net proceeds of the Loans (which will have been funded net of the Upfront Fees on the Funding Effective Date) in the Escrow Account shall be distributed to the Borrower on the Closing Date. If the Conditions Precedent have not been satisfied prior to the Termination Date, the net proceeds of the Loans (which will have been funded net of the Upfront Fees on the Funding Effective Date) plus the deemed refund of the Upfront Fees under the Fee Letter shall be distributed to the Initial Lenders on the Termination Date (other than pursuant to clause (c) thereof) in full satisfaction of the Loans (such date, the “Escrow Termination Date”). For purposes hereof, the “Escrow Funding Condition” shall mean the occurrence of each of the following: (1) the appointment of an Escrow Agent reasonably satisfactory to the Initial Lenders and the Borrower and (2) the execution and delivery by the Borrower and the Guarantors of a customary escrow agreement (the “Escrow Agreement”) in form and substance reasonably satisfactory to the Escrow Agent, the Administrative Agent, the Initial Lenders and the Borrower which provides for: (a) the creation of an escrow account to hold the net proceeds funded by the Lenders hereunder on the Funding Effective Date (the “Escrow Account”) and (b) the release of the funds on deposit in the Escrow Account to (x) the Borrower to finance the Transactions upon receipt by the Escrow Agent of notice delivered by both the Initial Lenders and the Borrower that the Conditions Precedent have been satisfied or (y) the Initial Lenders on the Escrow Termination Date upon a joint instruction of the Initial Lenders.

Notwithstanding the foregoing, if, for any reason, the Commitment Parties do not fund the Facility into escrow, or if the Escrow Agreement is not executed and delivered by the parties, then the Commitment Parties hereby agree that their commitments and obligations under paragraph 1 of this Commitment Letter, and any other obligations of the Commitment Parties hereunder, shall remain in full force and effect and the funding of the Facility shall occur subject to the Conditions Precedent including the conditions set forth in Exhibit C.

13.          Governing Law; Waiver of Jury Trial; etc. This Commitment Letter, the Term Sheet, and the Fee Letter and the rights and obligations of the parties hereunder and thereunder shall be governed by, and construed in accordance with, the laws of the State of New York, together constitute the entire agreement between the parties relating to the subject matter hereof and thereof, and supersede any previous agreement, written or oral, between the parties with respect to the subject matter hereof and thereof; provided, however, that: (A) the interpretation of the definition of “Material Adverse Effect” (and whether or not a “Material Adverse Effect” has occurred) and (B) the determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement shall, in each case, be governed by, and construed and interpreted in accordance with, the internal laws of the State of Texas without giving effect to any choice or conflict of laws provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the applicable of laws of any jurisdiction other than the State of Texas. Each of the parties hereto hereby agrees to waive its respective rights to a jury trial of any claim or cause of action based upon or arising hereunder or under the Fee Letter or any dealings between them relating to the subject matter of this Commitment Letter or the Fee Letter or the borrower/lender relationship that is being established. The scope of this waiver is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of the Transactions, including contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Commitment Letter and the Fee Letter, and that each will continue to rely on this waiver in its related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 12 and executed by each of the parties hereto), and this waiver shall apply to any subsequent amendments, renewals, supplements, or modifications hereto or to the Fee Letter. In addition, with respect to any action or proceeding arising out of or relating to this Commitment Letter, the Term Sheet, the Fee Letter, the Transactions, or the performance of any of the parties hereunder, the parties hereto hereby irrevocably: (a) submit to the exclusive jurisdiction of any New York State or Federal court sitting in the Borough of Manhattan, New York, New York; (b) agree that all claims with respect to such action or proceeding shall be heard and determined in such New York State or Federal court; (c) waive the defense of any inconvenient forum to such New York State or Federal court; (d) agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in another jurisdiction by suit on the judgment or in any other manner provided by law; and (e) consent to service of process by mailing or delivering a copy of such process to such party at its address set forth on the first page of this Commitment Letter and agree that such service shall be effective when sent or delivered. Nothing in this Commitment Letter shall affect any right that any Commitment Party or any of its affiliates may otherwise have to bring any action or proceeding relating to this Commitment Letter and the Transactions against you or your properties in the courts of any jurisdiction.

14.          Amendments; Counterparts; etc. No amendment or waiver of any provision hereof or the Term Sheet, shall be effective unless in writing and signed by the parties hereto, and no amendment or waiver of any provision of the Fee Letter shall be effective unless in writing and signed by the applicable parties thereto, and, in each case, then only in the specific instance and for the specific purpose for which given. This Commitment Letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission (or in “pdf” or similar format by electronic mail) shall be effective as delivery of a manually executed counterpart of this Commitment Letter. Any signature to this Commitment Letter may be delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law.

15.          PATRIOT Act Notification. We hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (as the same may be amended and in effect from time to time, the “PATRIOT Act”), each Commitment Party is required to obtain, verify, and record information that identifies the Borrower and the Guarantors, which information includes the name, address, tax identification number, and other information regarding the Borrower and the Guarantors that will allow the Commitment Parties to identify the Borrower and the Guarantors in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective as to each Commitment Party and each Lender. You hereby acknowledge and agree that the Commitment Parties shall be permitted to share any or all such information with the Lenders.

16.          Expiration Date. If the foregoing proposal is acceptable to you, please so confirm by signing and returning to us executed counterparts of this Commitment Letter and the Fee Letter. Unless we receive your executed counterparts hereof and thereof by 5:00 p.m., New York City time, on February 18, 2022 (the “Expiration Date”) our offer hereunder will automatically expire at such time without further action or notice.

[Signature Pages Follow]

We are pleased to have this opportunity and we look forward to working with you on this transaction. 

[Signature Page to Vertex Refining Alabama LLC Commitment Letter]

[Signature Page to Vertex Refining Alabama LLC Commitment Letter]

[Signature Page to Vertex Refining Alabama LLC Commitment Letter]

[Signature Page to Vertex Refining Alabama LLC Commitment Letter]

[Signature Page to Vertex Refining Alabama LLC Commitment Letter]

Accepted and agreed to as of
the date first written above:

[Signature Page to Vertex Refining Alabama LLC Commitment Letter]

¹ Such rate is accessible at https://www.wsj.com/market-data/bonds/moneyrates?mod=md_bond_view_money_rates_full 

Project Vulcan II

Summary of Additional Conditions Precedent

Capitalized terms used but not defined in this Exhibit C shall have the meanings set forth in the Commitment Letter to which this Exhibit C is attached and the other Exhibits to the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit C shall be determined by reference to the context in which it is used.

The funding of the initial borrowings under the Facility shall be subject to the satisfaction of the following conditions precedent prior to the Termination Date:

1.                   

(a)          The execution and delivery by the Borrower and the Guarantors of the Facility Documentation consistent with the Term Sheet and the Commitment Letter (including, without limitation the security agreements), in form and substance reasonably satisfactory to the Commitment Parties.

(b)          The execution and delivery by the Borrower of a customary certificate attesting to the solvency of the Borrower and its subsidiaries on the Closing Date on a consolidated basis in the form attached as Annex I hereto.

2.            The execution and delivery by the Borrowers and the Guarantors of (i) a definitive inventory intermediation agreement, or similar agreement with respect to the feedstocks, refined products, and other hydrocarbons produced or utilized by the refinery (the “WCF Agreement”) and (ii) a definitive guarantee and security agreement (the “WCF GSA”), together with other collateral documents required under the terms of the WCF GSA, and the consummation of all Closing Date transactions contemplated thereby.

3.            The execution and delivery by the agent and/or lenders under the WCF Agreement and any other material permitted secured indebtedness of the Loan Parties of a definitive intercreditor agreement (the “Intercreditor Agreement”) in form and substance reasonably satisfactory to the Commitment Parties.

4.            The issuance of the Warrants in form and substance satisfactory to the Commitment Parties.

5.            The Acquisition shall have been consummated substantially simultaneously with the initial borrowings under the Facility in accordance with the Acquisition Agreement (and no provision of the Acquisition Agreement shall have been waived, amended, supplemented, or otherwise modified (including any consents thereunder) in a manner materially adverse to the Lenders without the consent of the Commitment Parties (such consent not to be unreasonably withheld, delayed, or conditioned)) (it being understood that (i) any increase in the consideration for the Acquisition shall not be deemed to be materially adverse to the interests of the Lenders so long as such increase in consideration (x) is pursuant to any purchase price or similar adjustment provisions set forth in the Acquisition Agreement as of the date hereof and (y) is not funded with additional indebtedness, (ii) any reduction in the purchase price consideration of 25% or less shall be deemed not to be materially adverse to the Lenders so long as such reduction (x) is pursuant to any purchase price or similar adjustment provisions set forth in the Acquisition Agreement as of the date hereof and (y) is allocated to the Facility and the WC Facility, subject to the priorities set forth in the Intercreditor Agreement, as applicable, (iii) any consent, waiver, amendment, supplement, or other modification in respect of the third party beneficiary rights applicable to the Administrative Agent, the Commitment Parties or the Lenders or in the governing law without the prior written consent of the Commitment Parties shall be deemed to be materially adverse to the interests of the Lenders, and (iv) any consent, waiver, amendment, supplement, or other modification to the definition of “Material Adverse Effect” without the prior written consent of the Commitment Parties shall be deemed to be materially adverse to the interests of the Lenders.

6.            The Administrative Agent shall have received, subject to the Intercreditor Agreement, all documents and instruments required to create and perfect the Administrative Agent’s security interest in the Collateral; provided however that it is understood and agreed that the Loan Parties shall use commercially reasonable efforts to deliver any required mortgages, control agreements and certificate of title collateral and other Collateral not perfected by filing UCC-1 financing statements, or stock certificates by the Closing Date and any such mortgages, control agreement and certificate of title collateral and other Collateral not perfected by filing UCC-1 financing statements or stock certificates, not so delivered shall be permitted to be delivered no later than 30 days after the Closing Date (or such longer period as the Administrative Agent and the Required Lenders may agree in their sole discretion); provided further that any leasehold mortgages or mortgages on other immaterial real property, mortgages with respect thereto shall be permitted to be delivered on or before a mutually agreeable date after the Closing Date and shall not be subject to such 30 day requirement. For the avoidance of doubt, the Loan Parties shall have provided all UCC-1 financing statements and intellectual property filings in form for filing and shall have delivered all certificated pledged equity and documented pledged debt (if any) with appropriate transfer powers and/or allonges by the Closing Date.

7.            The Administrative Agent shall have received customary legal opinions, organizational documents, customary evidence of authorization, customary officers’ certificates, and customary insurance certificates and endorsements; provided however that it is understood and agreed that the Loan Parties shall use commercially reasonable efforts to deliver customary insurance endorsements by the Closing Date and any customary insurance endorsements not so delivered shall be delivered no later than five (5) Business Days after the Closing Date (or such longer period as the Administrative Agent and the Required Lenders may agree in their sole discretion).

8.            The Borrower and each of the Guarantors shall have provided no less than three (3) business days prior to the Funding Effective Date the documentation and other information to the Lenders that are reasonably requested by the Lenders to the extent requested no later than ten (10) business days prior to the Funding Effective Date under the applicable “know-your-customer” rules and regulations, including, without limitation, the PATRIOT Act.

9.                   

(a)          All accrued costs and expenses (including, without limitation, reasonable and documented legal fees and out-of-pocket expenses) and other compensation due and payable to the Administrative Agent, and the Initial Lenders and required by the Commitment Letter or the Fee Letter to be paid on the Funding Effective Date shall have been paid.

(b)          All accrued costs, fees, and expenses (including, without limitation, reasonable and documented legal fees and out-of-pocket expenses) and other compensation due and payable to the Administrative Agent, and the Initial Lenders and required by the Commitment Letter or the Fee Letter to be paid on the Closing Date shall have been paid (provided that the foregoing amounts may, at the Borrower’s option, be offset against the proceeds of the Facility funded on the Closing Date).

10.          The representations and warranties of the Borrowers and Guarantors contained in the Facility Documentation shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on the Funding Effective Date.

11.          Since the date of the Acquisition Agreement, there shall not have occurred a Material Adverse Effect (as defined in the Acquisition Agreement).

12.          The Administrative Agent shall have received (i) unaudited consolidated balance sheets and related statements of operations, comprehensive income (loss), equity and cash flows of the Borrower and its subsidiaries, for the quarter ending December 31, 2021 and each subsequent fiscal quarter ended at least 45 days before the Funding Effective Date (subject in the case of this clause (i), to normal and recurring year-end adjustments and the absence of notes) and (ii) the unaudited pro forma consolidated balance sheet and a related unaudited pro forma consolidated statements of operations and comprehensive income (loss) of the Borrower and its subsidiaries as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period (or, if the end of the most recently completed four-fiscal quarter period of the Borrower is the end of a fiscal year of the Borrower, ended at least 90 days before the Funding Effective Date), for which financial statements are available pursuant to clause (i) above prepared after giving effect to the Acquisition as if the Acquisition had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statement of operations and comprehensive income (loss)), in each case, which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).

13.          The execution and delivery by the Borrower of a customary notice of borrowing.

14.          The delivery by the Borrower of funds flow, including sources and uses of the proceeds of the Facility, which shall be in form and substance reasonably satisfactory to the Commitment Parties.

15.          There shall be no order, injunction or decree of any governmental authority restraining or prohibiting the funding under the Facility and upon the Closing Date, challenging or enjoining the Acquisition. All consents and approvals necessary in connection with the execution, delivery and performance of the Facility Documentation being executed upon such date have been obtained and are in full force and effect.

16.          No Default or Event of Default has occurred and is continuing.

17.          The Initial Lenders shall have completed confirmatory diligence of the Borrower, the Guarantors, and the Target Assets, limited to corporate organization and capitalization, review of lien searches, review of material contracts and material pending litigation and no changes or developments shall have occurred, and no new or additional information, shall have been received or discovered by the Administrative Agent regarding the Borrower or the Guarantors or the transactions contemplated hereby after the date of the Commitment Letter that either individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Borrower, the Guarantors or the Facility or any other aspect of the transactions contemplated hereby.

18.          Concurrently with the consummation of the Acquisition, the Loan Parties (and/or the working capital provider) shall execute and deliver or confirm effectiveness of the material supply and offtake agreements with Shell, Idemitsu and Bunker One on substantially similar terms as the agreements provided to counsel to the Lenders on February 16, 2022, subject to (x) any amendments, modifications or adjustments to the terms thereof (other than economic terms) required by the working capital provider, the Loan Parties or the applicable counterparty to the intermediation arrangements to the extent not materially adverse to the Lenders and (y) any amendments, modifications or adjustments to the economic terms thereof required by the working capital provider, the Loan Parties or the applicable counterparty to the intermediation arrangements to the extent not adverse to the Lenders.

The “Closing Date” shall mean the date, which date must occur before the Termination Date, upon which the conditions set forth in this Exhibit C have been satisfied or waived (the forgoing conditions, the “Conditions Precedent”).

FORM OF

SOLVENCY CERTIFICATE

[            ], 2022

This Solvency Certificate is delivered pursuant to Section [           ] of the Loan and Security Agreement dated as of [           ], 2022, among [           ] (the “Loan Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.

The undersigned hereby certifies, solely in his capacity as an officer of Parent and not in his individual capacity, as follows:

1.          I am the [Chief Financial Officer] of Parent. I am familiar with the Transactions, and have reviewed the Loan Agreement, financial statements referred to in Section [    ] of the Loan Agreement and such documents and made such investigation as I have deemed relevant for the purposes of this Solvency Certificate.

2.          As of the date hereof, immediately after giving effect to the consummation of the Transactions (including the making of Loans under the Loan Agreement and other amounts incurred on the date hereof and the use of proceeds thereof), on and as of such date (a) (i) the sum of the debt (including contingent liabilities existing as of the date hereof) of Parent and its Subsidiaries (on a consolidated basis) does not exceed the present fair saleable value of the present assets of Parent and its Subsidiaries (on a consolidated basis), (ii) the capital of Parent and its Subsidiaries (on a consolidated basis) is not unreasonably small in relation to its business as contemplated on the Closing Date, and (iii) Parent and its Subsidiaries have not incurred and do not intend to incur, or believe (nor should they reasonably believe) that they will incur, debts beyond their ability to pay such debts as they mature or, in the case of contingent liabilities, otherwise become payable and (b) Parent and its Subsidiaries (on a consolidated basis) are “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of the foregoing, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

3.          This Solvency Certificate is being delivered by the undersigned officer only in his capacity as [Chief Financial Officer] of Parent and not individually and the undersigned shall have no personal liability to the Administrative Agent or the Lenders with respect thereto.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate on the date first written above.