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MATERIAL BELOW MARKED BY AN “***” HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.  THIS ENTIRE EXHIBIT INCLUDING THE OMITTED CONFIDENTIAL
INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
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EXHIBIT 10.6

 
AMENDED AND RESTATED CREDIT AGREEMENT
 
among
 
VERTEX ENERGY, INC.,

and

VERTEX ENERGY OPERATING, LLC
as Borrowers
 
and
 
 
BANK OF AMERICA, N.A.,
Lender
 
 

As of May 2, 2014
 

 
 

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TABLE OF CONTENTS
 

   
Page
SECTION 1
DEFINITIONS AND TERMS
1
1.1
Definitions
1
1.2
Interpretive Provisions
24
1.3
Accounting Terms
25
1.4
References to Documents
25
1.5
Time
25
     
SECTION 2
LOAN COMMITMENTS
25
2.1
Revolving Credit Facility
25
2.2
Loan Procedure
25
2.3
Prepayments
26
2.4
LC Facility
27
2.5
Increase in Revolving Facility
30
     
SECTION 3
TERMS OF PAYMENT
30
3.1
Notes and Payments
30
3.2
Revolving Credit Facility
30
3.3
Order of Application
31
3.4
Interest
31
3.5
Interest Calculations
31
3.6
Maximum Rate
32
3.7
Set-Off
32
3.8
Debit Account
32
     
SECTION 4
FEES
33
4.1
Treatment of Fees
33
4.2
Commitment Fee
33
4.3
Closing Fee
33
4.4
LC Fees
33
     
SECTION 5
CONDITIONS PRECEDENT
33
5.1
Conditions to Initial Credit Extension
33
5.2
Conditions to all Credit Extensions
34
5.3
Conditions to all LIBOR Loans
34
5.4
No Waiver
34
     
SECTION 6
SECURITY AND GUARANTIES
34
6.1
Collateral
34
6.2
Financing Statements
34
6.3
Guaranties
34
6.4
Reserves
35
     
SECTION 7
REPRESENTATIONS AND WARRANTIES
35
7.1
Existence, Good Standing, and Authority to do Business
35
7.2
Subsidiaries
35

 
 
i

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7.3
Authorization, Compliance, and No Default
35
7.4
Enforceability
35
7.5
Litigation
35
7.6
Taxes
35
7.7
Environmental Matters
35
7.8
Ownership of Assets; Intellectual Property
36
7.9
Liens
36
7.10
Debt
36
7.11
Insurance
36
7.12
Place of Business; Real Property
36
7.13
Purpose of Credit Facilities
36
7.14
Trade Names
36
7.15
Transactions with Affiliates
36
7.16
Financial Information
36
7.17
Material Contracts and Funded Debt
37
7.18
ERISA
37
7.19
Government Sanctions
37
7.20
Solvency
38
     
SECTION 8
AFFIRMATIVE COVENANTS
38
8.1
Items to be Furnished
38
8.2
Books, Records and Inspections
39
8.3
Taxes
39
8.4
Compliance with Laws
40
8.5
Maintenance of Existence, Assets, and Business
40
8.6
Insurance
40
8.7
Environmental Laws
40
8.8
ERISA
40
8.9
Use of Proceeds
40
8.10
Application of Insurance and Eminent Domain Proceeds
40
8.11
New Subsidiaries
41
8.12
Expenses
41
8.13
Primary Depositary Institution
41
8.14
Further Assurances
41
8.15
Keepwell
41
8.16
Equity Raise
42
8.17
Miscellaneous Business Covenants
42
     
SECTION 9
NEGATIVE COVENANTS
42
9.1
Debt
42
9.2
Liens
43
9.3
Compliance
43
9.4
Loans and Investments
43
9.5
Dividends
43
9.6
Acquisition, Mergers, and Dissolutions
43
9.7
Assignment
44
9.8
Fiscal Year and Accounting Methods
44
9.9
Sale of Assets
44
9.10
New Businesses
44
9.11
Transactions with Affiliates
44

 
 
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9.12
Payroll Taxes
44
9.13
Prepayment of Debt
44
9.14
Purchase Agreement
45
     
SECTION 10
FINANCIAL COVENANTS
45
10.1
Fixed Charge Coverage Ratio
45
10.2
Leverage Ratio
45
10.3
Consolidated Adjusted EBITDA
45
10.4
Minimum Consolidated Liquidity
46
10.5
Certain Calculations
46
     
SECTION 11
EVENTS OF DEFAULT
46
11.1
Payment of Obligation
46
11.2
Covenants
46
11.3
Debtor Relief
47
11.4
Judgments
47
11.5
False Information; Misrepresentation
47
11.6
Default Under Other Agreements
47
11.7
Validity and Enforceability of Loan Documents
47
11.8
Hedge Agreement
47
11.9
Change of Management or Control
48
11.10
Material Adverse Effect
48
11.11
LCs
48
11.12
Default under the Subject Leases
48
11.13
Default under GS Term Loan Agreement
48
     
SECTION 12
RIGHTS AND REMEDIES
48
12.1
Remedies Upon Event of Default
48
12.2
Waivers
48
12.3
No Waiver
48
12.4
Performance by Lender
49
12.5
Cash Collateral
49
12.6
Cumulative Rights
49
     
SECTION 13
MISCELLANEOUS
49
13.1
Governing Law
49
13.2
Invalid Provisions
49
13.3
Multiple Counterparts and Electronic Signatures
49
13.4
Notice
49
13.5
Binding Effect; Survival
50
13.6
Amendments; Amendment and Restatement of Original Credit Agreement
50
13.7
Participants
50
13.8
Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances
50
13.9
Arbitration; Waiver of Jury Trial
50
13.10
Indemnity
52
13.11
Indemnity Regarding Hazardous Materials
52
13.12
Joint and Several Liability
53
13.13
Borrower Representative
54
13.14
USA Patriot Act Notice
54

 
 
iii

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13.15
Entirety
54

 
iv

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SCHEDULES AND EXHIBITS
 
 
SCHEDULE 1
 
Parties, Addresses, and Wiring Information
SCHEDULE 2
 
Existing Debt and Liens
SCHEDULE 5
 
Conditions Precedent
SCHEDULE 7.2
 
Subsidiaries
SCHEDULE 7.5
 
Litigation
SCHEDULE 7.7
 
Environmental
SCHEDULE 7.12
 
Place of Business
SCHEDULE 7.14
 
Trade Names
SCHEDULE 7.15
 
Transactions with Affiliates
SCHEDULE 7.17
 
Material Contracts
     
EXHIBIT A
 
Revolving Note
EXHIBIT B
 
Loan Request
EXHIBIT C
 
Borrowing Base Certificate
EXHIBIT D
 
Compliance Certificate
EXHIBIT E
 
Pledge and Security Agreement
EXHIBIT F
 
Guaranty

 
 
 
 
v

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AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of May 2, 2014,
among VERTEX ENERGY, INC., a Nevada corporation (“Holdings”), VERTEX ENERGY
OPERATING, LLC, a Texas limited liability company (“Vertex-Operating” and
together with Holdings, “Borrowers” and each individually a “Borrower”), and
BANK OF AMERICA, N.A. (“Lender”).
 
RECITALS
 
A.          Borrowers have requested that Lender extend credit to Borrowers in
the maximum principal amount of up to $20,000,000 in the form of a revolving
credit facility, subject to increase in accordance with the terms of this
Agreement.
 
B.           Lender is willing to extend the requested credit on the terms and
conditions of this Agreement.
 
C.           Holdings and Lender previously entered into that certain Credit
Agreement dated August 31, 2012, as amended prior to the date hereof (the
“Original Credit Agreement”), and the parties desire to amend and restate the
Original Credit Agreement in its entirety.
 
Accordingly, Borrowers and Lender agree as follow:
 
SECTION 1   DEFINITIONS AND TERMS.
 
1.1           Definitions.  As used in the Loan Documents:
 
Acquisition means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of the Equity Interests of any Person (other
than a Person that is a Subsidiary), or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that
Holdings, Vertex-Operating or a Subsidiary of a Borrower is the surviving
entity.
 
Affiliate means as to any Person, any other Person that directly or indirectly
controls, or is controlled by, or is under common control with, that
Person.  For purposes of this definition (a) “control,” “controlled by,” and
“under common control with” mean possession, directly or indirectly, of power to
direct (or cause the direction of) management or policies of a Person, whether
through ownership of voting interests or other ownership interests, by contract,
or otherwise, and (b) the term “Affiliate” includes each officer and director of
any Company, and each of the following as “Affiliates” of the others:  (i) each
Guarantor; (ii) each Borrower; (iii) each Company; and (iv) E-Source.
 
Agreement means this Amended and Restated Credit Agreement, and all exhibits and
schedules to this Agreement, in each case as amended, supplemented, or restated
from time to time.
 
Applicable Margin means, for any day, the rate per annum set forth below
opposite the applicable Level then in effect (based on the Leverage Ratio), it
being understood that the Applicable Margin for (a) Revolving Loans that are
Base Rate Loans shall be the percentage set forth under the column “Base Rate”,
(b) Revolving Loans that are LIBOR Loans shall be the percentage set forth under
the column “LIBOR”, and (c) the Commitment Fee shall be the percentage set forth
under the column “Commitment Fee”:
 
 
1

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Level
 
Leverage Ratio
LIBOR
Base Rate
 
Commitment
 Fee
1
Greater than 3.00 to 1.0
 
3.00%
2.00%
0.35%
2
Less than or equal to 3.00 to 1.0 and greater than 2.50 to 1.0
2.75%
1.75%
0.25%
3
Less than or equal to 2.50 to 1.0
2.35%
1.35%
0.25%

Any increase or decrease in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to Section
8.1(c); provided, however, that if a Compliance Certificate is not delivered
when due in accordance with such Section, then, Level 1 shall apply, in each
case as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered and in each case shall remain in
effect until the first Business Day following the date on which such Compliance
Certificate is delivered.  In addition, at all times while the Default Rate is
in effect, the highest rate set forth in each column of the Applicable Margin
shall apply.

Notwithstanding anything to the contrary contained in this definition, (a) the
determination of the Applicable Margin for any period shall be subject to the
provisions of Section 3.4(d), and (b) the initial Applicable Margin shall be
established at Level 1 until the first Business Day immediately following the
date a Compliance Certificate is delivered to Lender pursuant to Section 8.1(c)
for the fiscal quarter ending December 31, 2014.  Any adjustment in the
Applicable Margin shall be applicable to all Credit Extensions then existing or
subsequently made or issued.

Auto-Renewal LC is defined in Section 2.4(a)(iv).
 
Bango Acquisition means the acquisition by Vertex-NV of certain assets of Bango
Refining in accordance with the terms set forth in the Purchase Agreement on the
Closing Date.
 
Bango Refining means Bango Refining NV, LLC, a Delaware limited liability
company.
 
Bank of America means Bank of America, N.A., and its successors.
 
Bank Product Provider means Lender or any Affiliate of Lender.
 
Bank Products means any one or more of the following types or services or
facilities provided to Borrowers by a Bank Product Provider:  (a) credit cards
and stored value cards, (b) Cash Management Agreements and similar or related
services, including (i) the automated clearinghouse transfer of funds for the
account of Borrowers pursuant to agreement or overdraft for any accounts of
Borrowers maintained with Lender or any Bank Product Provider and (ii)
controlled disbursement services, and (c) Hedge Agreements if and to the extent
permitted hereunder.  Any of the foregoing shall only be included in the
definition of the term “Bank Products” to the extent that the Bank Product
Provider has been approved by Lender in writing.
 
Base Rate  means, for any day, a fluctuating rate per annum equal to Prime Rate.
 
Base Rate Loan means a Loan bearing interest based on the Base Rate.
 
Borrower has the meaning given such term in the Preamble to this Agreement.
 

 
2

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Borrowing Base means, when determined, an amount equal to the total of (a) 80%
of Eligible Accounts, plus (b) 65% of Eligible Inventory, minus (c) any Reserves
established by Lender and in effect at such time, in each case as shown on the
most recent Borrowing Base Certificate.  Inventory will be valued at the lower
of average cost or market as set out in the Current Financials.
 
Borrowing Base Certificate means a certificate substantially in the form of
Exhibit C which is signed by a Responsible Officer of each Borrower.
 
Borrower Representative means Holdings.
 
Business Day means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where Lender’s Office is located.
 
Capital Lease means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person (i) as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person or (ii) as lessee which is a transaction of a type
commonly known as a “synthetic lease”) (i.e., a transaction that is treated as
an operating lease for accounting purposes but with respect to which payments of
rent are intended to be treated as payments of principal and interest on a loan
for Federal income tax purposes.
 
Cash Collateralize means to pledge and deposit with or deliver to Lender, as
collateral for the LC Exposure, cash or deposit account balances pursuant to
documentation in Proper Form.
 
Cash Management Agreement means one or more treasury management, cash
management, or lockbox agreements (or a combination of such agreements) entered
into by one or more of the Companies and Lender under which amounts paid to
Borrowers are automatically deposited into Borrowers’ accounts with Lender and
such accounts are swept or debited via ACH transactions and amounts are
automatically invested overnight or are repaid under the Revolving Credit
Facility, as such agreements may be amended or replaced from time to time.
 
CFTC means the Commodity Futures Trading Commission
 
Chambers County Leasehold Property means that certain real property leased by
CMT pursuant to the CMT Lease and having an address commonly known as 200
Atlantic Pipeline Road, Baytown, Chambers County, Texas  77520.
 
Change of Control means (a) Benjamin P. Cowart ceases to own and control at
least 20% of the Equity Interests of Holdings, (b) Holdings at any time ceases
to own and control 100% of the Equity Interests of Vertex-Operating, (c) any
Company ceases to own 100% of the Equity Interests of VAS, Vertex-II, VMS,
Vertex-NV and Vertex-LA (d) VAS at any time ceases to own 100% of the Equity
Interests of CMT, Crossroad Carriers, Vertex-Recovery, or H&H, (e) any Company
ceases to be the sole general partner of CMT, Crossroad Carriers,
Vertex-Recovery, or H&H, (f) following the Omega Acquisition, Vertex-NV or any
other Company ceases to own 100% of the Equity Interests of GSLW, or (g) “any
“change of control” or similar event under the GS Term Loan Agreement shall
occur.
 
Change of Management means Benjamin P. Cowart ceases to be actively involved in
the day-to-day management or operation of Borrowers and their respective
Subsidiaries, unless within 60 days an interim or permanent successor reasonably
acceptable Lender is appointed.
 

 
3

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Churchill County Leasehold Property means that certain real property to be
leased by Vertex-NV following the Bango Acquisition and the assignment of the
Vertex-NV Lease and having an address commonly known as 33311 Bango Road,
Fallon, Churchill County, Nevada 89406.
 
Closing Date means May 2, 2014.
 
CMT means Cedar Marine Terminals, L.P., a Texas limited partnership.
 
CMT Lease means that certain Lease Agreement dated as of July 25, 1997, between
CP Terminal, LLC, as landlord, and TRW Trading, Inc., as tenant, to which CMT
has succeeded as tenant, and as renewed, extended, modified, or supplemented
from time to time.
 
Collateral is defined in Section 6.1.
 
Commitment means Lender’s obligation and commitment to make Loans and LC Credit
Extensions under the Revolving Credit Facility up to the Revolving Committed
Amount.
 
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. § 1 et seq.),
as amended, and all related rules, regulations and published interpretations.
 
Company or Companies means, at any time, Vertex-Operating, Holdings and each of
their respective direct and indirect Subsidiaries that is a Guarantor.  For
purposes of clarity, E-Source is not a Company.  On the Closing Date, Vertex-NV
will be a “Company” in accordance with this defined term.  However, at any time
that Vertex-NV is not required to be a Guarantor and has been released from its
guarantee and the Liens granted in its assets to secure the Obligations have
been terminated as provided in Section 6.1 and Section 6.3, Vertex-NV shall not
be a “Company” and, among other things, its assets shall not be used in
determining Eligible Accounts and Eligible Inventory under the Borrowing Base,
and its results of operations shall not be used in calculating and measuring
compliance with the financial covenants in Section 10.
 
Compliance Certificate means a certificate substantially in the form of
Exhibit D signed by a Responsible Officer of each Borrower.
 
Consolidated Adjusted EBITDA means, for any period, an amount determined for
Holdings and its Subsidiaries on a consolidated basis equal to (a)  the sum,
without duplication, of the amounts for such period of (i) Consolidated Net
Income, plus (ii) Consolidated Interest Expense, plus (iii) provisions for taxes
based on income, plus (iv) total depreciation expense, plus (v) total
amortization expense, plus (vi) to the extent deducted in determining
Consolidated Net Income, Transaction Costs, plus (vii) other non-cash items
reducing Consolidated Net Income (excluding any such non-cash item to the extent
that it represents an accrual or reserve for potential cash items in any future
period or amortization of a prepaid cash item that was paid in a prior period),
plus (viii) to the extent deducted in determining Consolidated Net Income,
retention bonuses paid on or prior to December 31, 2014 in an aggregate amount
not to exceed $650,500  minus (b) the sum, without duplication of the amounts
for such period of (i) other non-cash items increasing Consolidated Net Income
for such period (excluding any such non-cash item to the extent it represents
the reversal of an accrual or reserve for potential cash item in any prior
period), plus (ii) interest income, plus (iii) other income.  For the avoidance
of doubt, the provisions of Section 10.5 shall apply for purposes of calculating
Consolidated Adjusted EBITDA with respect to the acquisition of Equity Interests
of E-Source prior to the Closing Date, the Omega Acquisition and any other
Permitted Acquisitions that occur after the Closing Date, measuring the
foregoing components of Consolidated Adjusted EBITDA as if such acquisitions
occurred on the first day of the applicable period.
 

 
4

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Consolidated Capital Expenditures means, for any period, the aggregate of all
expenditures of Holdings and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in
“purchase of property and equipment or which should otherwise be capitalized” or
similar items reflected in the consolidated statement of cash flows of the
Companies.
 
Consolidated Cash Interest Expense means, for any period, Consolidated Interest
Expense for such period based upon GAAP, excluding any paid-in-kind interest,
amortization of deferred financing costs, and any realized or unrealized gains
or losses attributable to Hedge Agreements.
 
Consolidated Fixed Charges means, for any period, the sum, without duplication
of the amounts determined for Holdings and its Subsidiaries on a consolidated
basis equal to (i) Consolidated Cash Interest Expense, (ii) scheduled payments
of principal on Consolidated Total Debt, (iii) Consolidated Capital
Expenditures, and (iv) the current portion of taxes provided for with respect to
such period in accordance with GAAP.
 
Consolidated Interest Expense means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of Holdings and its Subsidiaries on a consolidated
basis with respect to all outstanding Consolidated Total Debt, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and net costs under Hedge Agreements, but excluding, however, any
amounts referred to in Section 4 payable on or before the Closing Date.
 
Consolidated Liquidity means, as of any date, an amount determined for Holdings
and its Subsidiaries on a consolidated basis equal to the sum of (a)
cash-on-hand of Holdings and its Subsidiaries held in one or more Controlled
Accounts as of such date (provided that such cash shall be included without
being held in Controlled Accounts until Controlled Accounts are required to be
in place), but excluding funds in the Vertex Refining Cash Collateral Account
plus (b) the excess of the Revolving Credit Limit over the Revolving Credit
Exposure.
 
Consolidated Net Income means, for any period, (a) the net income (or loss) of
Holdings and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP, minus (b) the sum,
without duplication, of (i) the income (or loss) of any Person (other than a
Company) in which any other Person (other than a Subsidiary of Holdings) has a
joint interest, plus (ii) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of Holdings or is merged into or consolidated
with any Company or that Person’s assets are acquired by any Company, plus
(iii) income of any Subsidiary of Holdings to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, plus (iv) any gains or losses
attributable to Dispositions or returned surplus assets of any Employee Plan,
plus (v) the minority interest of any Person (other than Holdings or any of its
Subsidiaries) in the income (or loss) of any Subsidiary of Holdings in which
such Person has a joint interest, including, without limitation, E-Source,
(vi) (to the extent not included in (i) through (v) above) any net extraordinary
gains or net extraordinary losses.
 
Consolidated Total Debt means, as at any date of determination, the aggregate
amount of all Indebtedness of Holdings and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, including, without limitation, the
Loans, all Capital Leases, all outstanding Indebtedness under the GS Term Loan
Agreement but excluding all “earn-out” obligations and other deferred payment
obligations with respect to any acquisition if and to the extent that such
obligations are either (x) subject to an Earnout Subordination Agreement or (y)
payable by Holdings and its Subsidiaries solely with shares of common stock of
Holdings.
 

 
5

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Controlled Account means a deposit account of a Company which is subject to the
control of the Lender, in accordance with the terms of the Pledge and Security
Agreement and the Intercreditor Agreement.
 
Credit Extension means a Loan or an LC Credit Extension.
 
Crossroad Carriers means Crossroad Carriers, L.P., a Texas limited partnership.
 
Current Financials means, when determined, the consolidated financial statements
of Borrowers and the other Companies most recently delivered to Lender pursuant
to Section 8.1.
 
Debt means, without duplication, for any Person (a) all indebtedness for
borrowed money; (b) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP; (c) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money; (d) any obligation
owed for all or any part of the deferred purchase price of property or services
including, without limitation, any “earn-out” obligation (excluding any such
obligations incurred under ERISA); (e) all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (f) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (g) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another; (h) any obligation of such Person
the primary purpose or intent of which is to provide assurance to an obligee
that the obligation of the obligor thereof will be paid or discharged, or any
agreement relating thereto will be complied with, or the holders thereof will be
protected (in whole or in part) against loss in respect thereof; (i) any
liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (ii) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (i) or (ii) of this
clause (i), the primary purpose or intent thereof is as described in clause (h)
above; and (j) all obligations of such Person in respect of any exchange traded
or over the counter derivative transaction, including, without limitation, any
Hedge Agreement, whether entered into for hedging or speculative purposes.
 
Debtor Relief Laws means Title 11 of the United States Code and all other
applicable liquidation, conservatorship, bankruptcy, fraudulent transfer,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.
 
Deed of Trust means (a) that certain Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing dated as of the date hereof,
executed by VAS, as grantor, to PRLAP, Inc., as trustee, for the benefit of
Lender, with respect to the Harris County Property, (b) that that certain Deed
of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing
dated as of the date hereof, executed by Vertex-Recovery, as grantor, to PRLAP,
Inc., as trustee, for the benefit of Lender, with respect to the Nueces County
Property, (c) that certain Deed of Trust, Assignment of Rents and Leases,
Security Agreement and Fixture Filing dated as of the date hereof, executed
by VAS, as grantor, to PRLAP, Inc., as trustee, for the benefit of Lender, with
respect to the Travis County Property, (d) that certain Leasehold Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing dated as
of the date hereof, executed by CMT, as grantor, to PRLAP, Inc., as trustee, for
the benefit of
 

 
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Lender, with respect to the Chambers County Leasehold Property, (e) that certain
Leasehold Mortgage to Secure Present and Future Indebtedness, Assignment of
Leases and Rents, and Security Agreement dated as of the date hereof, executed
by Vertex-LA, as mortgagor, for the benefit of Lender, as mortgagee, with
respect to the Jefferson Parish Leasehold Property and the  Plaquemines Parish
Leasehold Property, (f) following the consummation of the Bango Acquisition,
that certain Leasehold Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, executed by Vertex-NV, as grantor, to PRLAP, Inc.,
as trustee, for the benefit of Lender, with respect to the Churchill County
Leasehold Property, and (g) each other deed of trust or mortgage in form and
substance reasonably acceptable to Lender, and executed by any Company, as
grantor, for the benefit of Lender, to secure the Obligation.
 
Default means the occurrence of any event or the existence of any circumstance
that would, with the giving of notice or lapse of time or both, become an Event
of Default.
 
Default Rate means, from day to day, an annual rate of interest equal to the
lesser of (a) the Base Rate plus 4%, and (b) the Maximum Rate.
 
Disposition means the sale, lease, transfer, conveyance, assignment, license, or
other disposition (including any sale and leaseback transaction) of any asset by
any Person, including any sale, assignment, transfer, conveyance, or other
disposition, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.
 
Dollar, Dollars or $ mean lawful money of the U.S.
 
Earnout Subordination Agreements means (a) that certain Subordination Agreement,
dated as of the date hereof, by and between, Vertex Holdings, L.P., the
Companies, Term Loan Agent and Lender and (b) any other subordination agreement
with respect to earnout obligations entered into by the Lender and any other
Person after the Closing Date.
 
Eligibility Date shall mean, with respect to each Borrower, each Guarantor, and
each Hedge Agreement, the date on which this Agreement or any other Loan
Document becomes effective with respect to such Hedge Agreement (for the
avoidance of doubt, the Eligibility Date shall be the Effective Date of such
Hedge Agreement if this Agreement or any other Loan Document is then in effect
with respect to Borrower or any Guarantor, and otherwise it shall be the
Effective Date of this Agreement and/or such other Loan Documents to which such
Borrower or Guarantor is a party).  For purposes of this defined term,
“Effective Date” means the date indicated in a document or agreement to be the
date on which such document or agreement becomes effective, or, if there is no
such indication, the date of execution of such document or agreement.
 
Eligible Accounts means an account or account receivable of any Company in which
Lender holds a first-priority perfected security interest and which satisfies
all of the following requirements:
 
(a)          it has not been outstanding more than 90 days after the relevant
invoice date;
 
(b)          it has not been outstanding more than 60 days after the date it
became due and payable;
 
(c)          it arises from the sale or lease of goods or from services
rendered, such goods have been shipped or delivered to the account debtor under
such account or such services have been fully performed and have been accepted
by the account debtor, and such Company’s full right to payment for all sums due
from such account debtor with respect to such account shall have been earned and
then be due and payable;
 

 
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(d)          it is a valid and legally enforceable obligation of the account
debtor thereunder according to its express terms, and is not subject to any
offset, counterclaim, crossclaim, or other defense on the part of such account
debtor denying liability thereunder in whole or in part;
 
(e)          it is not subject to any mortgage, lien, security interest, right
of a surety under a performance bond or otherwise or similar adverse rights or
interests whatsoever other than the security interests granted to Lender under
the Loan Documents;
 
(f)           it is evidenced by an invoice dated the date of shipment (in the
case of goods sold or leased) or the date of performance (in the case of
services rendered) and having payment terms acceptable to Lender, and is not
evidenced by an instrument, note, draft, title retention and lien instrument,
security agreement, acceptance, conditional sales contract, chattel mortgage or
chattel paper and, if requested by Lender, a copy of such invoice shall have
been delivered to and received by Lender;
 
(g)          it is not owed by an account debtor which is an Affiliate of any
Company;
 
(h)          it does not constitute, require or provide for progress billings,
retainages or deferred payments under a contract not fully performed;
 
(i)           it does not constitute, in whole or in part, interest or finance
charges on outstanding balances, any amount received as a down payment or
prepayment or other principal reduction or similar payment, any chargebacks or
contra amounts or accounts;
 
(j)           it is an account with respect to which no return, repossession,
rejection, cancellation, or repudiation shall have occurred or have been
threatened;
 
(k)          it is an account with respect to which such Company continues to be
in full conformity with the representations, warranties and covenants of such
Company made with respect thereto;
 
(l)           it is not subject to any sales terms, trial terms, sales-or-return
terms, consignment terms, guaranteed sales or performance terms, minimum sales
terms, C.O.D. terms, cash terms, or similar terms or conditions;
 
(m)         it is not owed by an account debtor which is a Foreign Person;
 
(n)          it is not an account subject, in whole or in part, to any “bill and
hold” or similar arrangement pursuant to which the invoice is delivered prior to
the actual delivery of the sold or leased goods or the performance of the
services;
 
(o)          it is not an account owed by the United States Government or any
other Governmental Authority unless such account arises from a government
contract that is a United States Government contract in Proper Form and such
Company and Lender have completed and executed all forms and documents necessary
to assign  such Company’s right, title and interest in such contract and all
accounts and other rights arising thereunder to Lender in compliance with the
Federal Assignment of Claims Act of 1940, as amended;
 
(p)          it is not owed by an account debtor with respect to which thirty
percent (30%) or more of such account debtor’s total accounts owing to the
Companies would not be deemed to be Eligible Accounts under clause (a) or (b)
above;
 

 
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(q)          it is not owed by an account debtor whose aggregate account balance
with such Company exceeds twenty-five percent (25%) of the total value of such
Company’s total Accounts, provided that, such accounts shall be excluded from
the definition of Eligible Account only to the extent to which such accounts
exceed twenty-five percent (25%) of the accounts of such Company;
 
(r)           it is not owed by an account debtor which is subject to any Debtor
Relief Law or whose obligations with respect to which Lender, acting in its
discretion, shall have notified the applicable Company in writing are not deemed
to constitute an Eligible Account; and
 
(s)          prior to the occurrence of the Vertex-NV Ring Fence Termination
Date with respect to the accounts of Vertex-NV only, it is an account that
Lender has determined, in its sole discretion, should be excluded.
 
The amount of Eligible Accounts owed by an account debtor to such Company shall
be reduced by the amount of all “contra accounts” and other obligations owed by
any Company to such account debtor.  Accounts which are at any time Eligible
Accounts, but which subsequently fail to meet any of the foregoing requirements
shall, at such time, cease to be Eligible Accounts. Borrowers and Lender
acknowledge and agree that (i) at the time any account becomes subject to a
security interest in favor of Lender, said account shall be a good and valid
account representing an undisputed, bona fide Debt incurred by the account
debtor named therein, for merchandise held subject to delivery instructions or
theretofore shipped or delivered pursuant to a contract of sale, or for services
theretofore performed by such Company with or for said account debtor,
(ii) there shall be no set-offs, counterclaims, or disputes against any such
account except as indicated in some written list, statement or invoice furnished
to Lender with reference thereto, (iii) one or more of the Companies shall be
the lawful owner of all such accounts and shall have good right to subject the
same to a security interest in favor of Lender, and (iv) no such account shall
be sold, assigned, or transferred to any Person other than Lender or in any way
encumbered except to Lender, and such Company shall defend the same against the
lawful claims and demands of all persons other than Lender.  If any account
shall be in violation of (A) the immediately preceding sentence or (B) any of
the requirements to be an Eligible Account, it shall not be deemed an Eligible
Account for purposes of this Agreement.
 
Eligible Contract Participant shall mean an “eligible contract participant” as
defined in the Commodity Exchange Act and regulations thereunder.
 
Eligible Inventory means any Company’s finished-goods inventory in which Lender
holds a first-priority perfected security interest and which satisfies all of
the following requirements:
 
(a)          it is not private label or styled type or otherwise subject to
special marketing conditions or marketability limitations judged by Lender, in
its sole discretion, to be unacceptable;
 
(b)          it is not parts, supplies, raw materials, nor work in process, nor
does it include any shipping or packaging materials;
 
(c)          it is not materials or supplies used or to be used, or consumed or
to be consumed, in the normal course of business of such Company;
 
(d)          it is new and unused;
 
(e)          it is owned by such Company and is not subject to any Lien or
security interest whatsoever other than the Liens or security interests granted
to Lender under the Loan Documents or a
 

 
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Lien or security interest which has been subordinated to Liens or security
interests granted under the Loan Documents, on terms acceptable to Lender;
 
(f)           it is held for sale in the normal and ordinary course of such
Company’s business;
 
(g)          it is located at one of such Company’s places of business as set
forth on Schedule 7.12;
 
(h)          it is not located on any leased premises unless Lender has a signed
landlord waiver or landlord subordination agreement from the relevant landlord
in Proper Form;
 
(i)           it is not of a type of inventory that is subject to any recall,
class action litigation, governmental action, order, inquiry or investigation;
 
(j)           it is not on consignment, has not been shipped on a sale or return
basis, and no warehouse receipt or document of title is or shall have been
issued in respect of such inventory;
 
(k)          it is not inventory that Lender, in its reasonable discretion, has
determined to be unmarketable or unacceptable;
 
(l)           it is not an item, type, or class of inventory which is Slow
Moving; and
 
(m)         prior to the occurrence of the Vertex-NV Ring Fence Termination
Date, it is inventory of Vertex-NV that Lender has determined, in its sole
discretion, should be excluded.
 
The value of all Eligible Inventory shall be determined on the basis of any and
all factors and criteria as Lender (in its sole discretion) shall deem
appropriate, including, without limitation, that unless Lender shall determine
that some other basis is more appropriate, such value shall be determined on the
basis of the lower of cost, book or market value, net of all handling charges,
taxes, assessments, insurance, warranty, interest, finance and other charges.
 
Eminent Domain Event means any Governmental Authority or any Person acting under
a Governmental Authority institutes proceedings to condemn, seize or appropriate
all or part of any asset of a Company.
 
Eminent Domain Proceeds means all amounts received by any Company as a result of
any Eminent Domain Event.
 
Employee Plan means a pension, profit-sharing, or stock bonus plan intended to
qualify under Section 401(a) of the Tax Code, maintained or contributed to by
any Borrower or any ERISA Affiliate, including any multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA.
 
Environmental Law means any Law that relates to the pollution or protection of
the environment, the release of any materials into the environment, including
those related to Hazardous Materials, air emissions and discharges to waste or
public systems, or to health and safety.
 
Equity Interests means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests
 

 
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in such Person (including partnership, member or trust interests therein),
whether voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are outstanding on any date of determination.
 
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and
its related rules, regulations, and published interpretations.
 
ERISA Affiliate means any trade or business (whether or not incorporated) under
common control with any Borrower within the meaning of Section 414(b) or (c) of
the Tax Code (including any multiemployer plan within the meaning of Section
4001(a)(3) of ERISA).
 
E-Source means E-Source Holdings, LLC, a Texas limited liability company.
 
Event of Default is defined in Section 11.
 
Excluded Hedge Liabilities means with respect to Borrowers and any Guarantor,
each of its Hedge Liabilities if, and only to the extent that, all or any
portion of this Agreement or any other Loan Document that relates to such Hedge
Liabilities is or becomes illegal under the Commodity Exchange Act, or any rule,
regulation or order of the CFTC, solely by virtue of such Borrower’s or such
Guarantor’s failure to qualify as an Eligible Contract Participant on the
Eligibility Date for such Hedge Agreement. Notwithstanding anything to the
contrary contained in the foregoing or in any other provision of this Agreement
or any other Loan Document, the foregoing is subject to the following provisos:
(a) if any Hedge Liabilities arise under a master agreement governing more than
one Hedge Agreement, this definition shall apply only to the portion of such
Hedge Liabilities that is attributable to Hedge Agreements for which such
guaranty or security interest is or becomes illegal under the Commodity Exchange
Act, or any rule, regulations or order of the CFTC, solely as a result of the
failure by such Borrower or such Guarantor for any reason to qualify as an
Eligible Contract Participant on the Eligibility Date for such Hedge Agreement;
(b) if a guarantee of any Hedge Liabilities would cause such obligation to be an
Excluded Hedge Liability but the grant of a security interest would not cause
such obligation to be an Excluded Hedge Liability, such Hedge Liabilities shall
constitute an Excluded Hedge Liability for purposes of the guaranty but not for
purposes of the grant of the security interest; and (c) if there is more than
one Borrower or Guarantor executing this Agreement or the other Loan Documents
and any Hedge Liabilities would be Excluded Hedge Liabilities with respect to
one or more of such Persons, but not all of them, the definition of Excluded
Hedge Liability with respect to each such Person shall only be deemed applicable
to (i) the particular Hedge Liabilities that constitute Excluded Hedge
Liabilities with respect to such Person, and (ii) the particular Person with
respect to which such Hedge Liabilities constitute Excluded Hedge Liabilities.
 
Fee Letter means that certain fee letter dated as of the date hereof between
Borrowers and Lender, as amended, restated, or supplemented from time to time.
 
Fixed Charge Coverage Ratio means the ratio as of the last day of (i) for the
fiscal quarter ending June 30, 2014, of (a) Consolidated Adjusted EBITDA for the
six months ended June 30, 2014, to (b) Consolidated Fixed Charges for the six
months ended June 30, 2014, (ii) for the fiscal quarter ending September 30,
2014, of (a) Consolidated Adjusted EBITDA for the nine months ended September
30, 2014, to (b) Consolidated Fixed Charges for the nine months ended September
30, 2014, (iii) for the fiscal quarter ending December 31, 2014, (a)
Consolidated Adjusted EBITDA for the twelve months ended December 31, 2014, to
(b) Consolidated Fixed Charges for the twelve months ended December 31, 2014,
and (iv) any other fiscal quarter of (a) Consolidated Adjusted EBITDA for the
twelve-month period then ended, to (b) Consolidated Fixed Charges for the
twelve-month period then ended.
 

 
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Foreign Person means (a) a natural person who does not reside in the U.S., or
(b) any Person (other than a natural person) that is not organized and validly
existing under the laws of the U.S. or a state within the U.S.
 
Funded Debt means, when determined, (a) all Debt of the Companies for borrowed
money (whether as a direct obligor on a promissory note, a reimbursement obligor
on a letter of credit, a guarantor, or otherwise), and (b) all Capital Lease
obligations of the Companies.
 
GAAP means generally accepted accounting principles in the U.S. set out in the
opinions and pronouncements of the of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board as in effect from time to time.
 
GSLW means Golden State Lubricants Works, LLC, a Delaware limited liability
company.
 
Governmental Authority means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of, or pertaining to, any government or any
court, in each case whether associated with a state of the United States, the
United States, or foreign entity or government.
 
Governmental Authorization means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.
 
GS Term Loan Agreement means that certain Credit and Guaranty Agreement dated
May 2, 2014, by and among Holdings, Vertex-Operating, as borrower, certain other
direct and indirect subsidiaries of Holdings, as guarantors, the lenders party
thereto, and Goldman Sachs Bank USA, as administrative agent, as amended,
supplemented, or restated from time to time.
 
Guarantor means each of, and Guarantors means all of CMT, Crossroad Carriers,
H&H Oil, VAS, Vertex-II, Vertex-LA, Vertex-NV, Vertex-Recovery, VMS, GSLW
(following the closing of the Purchase Agreement), each other Subsidiary of each
Borrower (excluding E-Source), and each other Person executing a Guaranty.
 
Guaranty means a guaranty substantially in the form of Exhibit F.
 
H&H Oil means H & H Oil, L. P., a Texas limited partnership.
 
Harris County Property means that certain real property owned by VAS and having
an address commonly known as 7311 Decker Drive, Baytown, Harris County,
Texas  77520.
 
Hazardous Materials means (a) any explosive or radioactive substance or waste,
all hazardous or toxic substances, waste, or other pollutants, and any other
substance the presence of which requires removal, remediation or investigation
under any applicable Environmental Law, (b) any substance that is defined or
classified as a hazardous waste, hazardous material, pollutant, contaminant, or
toxic or hazardous substance under any applicable Environmental Law, or
(c) petroleum, petroleum distillates, petroleum products, oil, polychlorinated
biphenyls, radon gas, infectious medical wastes, and asbestos or
asbestos-containing materials.
 
Hedge Agreement means a Hedge Transaction which is provided by Lender or an
Affiliate of Lender and is (a) documented on a form of master agreement
published by the International Hedge Agreements and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or
 

 
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other reasonable and customary manner, (b) provides for the method of
calculating the reimbursable amount of the provider’s credit exposure in a
reasonable and customary manner, and (c) is entered into for hedging (rather
than speculative purposes).
 
Hedge Liabilities means, with respect to any Hedge Agreement (a) the Hedge
Termination Value for such Hedge Agreement, (b) any other liabilities owed by
Borrowers, any Guarantor, or one of their respective Subsidiaries, to the
provider under any Hedge Agreement, or (c) any obligation to pay or perform
under any Hedge Agreement that constitutes a “swap” within the meaning of
Section 1a(47) of the Commodity Exchange Act.  The Hedge Liabilities shall, for
purposes of this Agreement and all other Loan Documents be “Obligations” of such
Person and of each Borrower and Guarantor, be guaranteed obligations under any
Guaranty and secured obligations under any Security Document executed by any
Guarantor, as applicable, and otherwise treated as Obligations for purposes of
the other Loan Documents, except to the extent constituting Excluded Hedge
Liabilities of such Person.
 
Hedge Termination Value means, in respect of any one or more Hedge Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Hedge Agreements, (a) for any date on or after the
date such Hedge Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Hedge Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Hedge Agreements (which may include Lender or any
Affiliate of Lender).
 
Hedge Transaction means any (and all) rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing).
 
Honor Date is defined in Section 2.4(b).
 
Insurance Proceeds means all cash and non-cash proceeds in respect of any
insurance policy maintained by any Company under the terms of this Agreement,
excluding (a) any key man life insurance, and (b) provided no Default or Event
of Default then exists or would result therefrom, any business interruption
insurance proceeds.
 
Intercreditor Agreement means that certain Intercreditor Agreement dated May 2,
2014, by and among Lender, Term Loan Agent, and each of the Companies party
thereto, as amended, supplemented, or restated from time to time.
 
Jefferson Parish Leasehold Property means that certain real property leased by
Vertex-LA pursuant to the Vertex-LA Jefferson Parish Lease and having an address
commonly known as 5000 River Road, Marrero, Jefferson Parish, Louisiana  70072.
 
Laws means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, requests,
 

 
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licenses, authorizations and permits of, and agreements with, any Governmental
Authority (whether or not such orders, requests, licenses, authorizations,
permits or agreements have the force of law).
 
LC means each documentary, standby, or direct pay letter of credit issued by
Lender for the account of any Company on or after the Closing Date under the
terms of this Agreement and the applicable LC Application.
 
LC Application means an application and agreement for the issuance or amendment
of an LC in the form from time to time in use by Lender.
 
LC Borrowing means an LC Credit Extension resulting from a drawing under any LC
which has not been reimbursed or refinanced as a Loan under the Revolving Credit
Facility.
 
LC Credit Extension means, with respect to any LC, the issuance, extension of
the expiry date, amendment, renewal, or increase of the amount of such LC.
 
LC Credit Extension Date means the date on which an LC Credit Extension occurs.
 
LC Exposure means, when determined and without duplication, the sum of (a) the
aggregate undrawn maximum face amount of each LC at such time, plus (b) the
aggregate unpaid obligations of the Companies to reimburse Lender for amounts
paid by Lender under LCs (including all LC Borrowings and excluding any Loans to
fund such reimbursement obligations under Section 2.4).
 
LC Facility means a subfacility for the issuance of LCs, as described in Section
2.4.
 
LC Sublimit means $1,000,000.
 
LC Termination Date means the date that is 180 days beyond the Revolving Credit
Termination Date.
 
Lender’s Office means Lender’s address, and, as appropriate, account as set out
on Schedule 1, or such other address or account of which Lender may from time to
time notify Borrowers in writing.
 
Leverage Ratio means, as of any date of determination, the ratio of (i)
Consolidated Total Debt as of such date, to (ii) Consolidated Adjusted EBITDA
for the period of twelve consecutive months ending on such date.
 
LIBOR means a daily fluctuating rate of interest which can change on each
banking day.  The rate will be adjusted on each banking day to equal the London
Interbank Offered Rate (or a comparable or successor rate which is approved by
the Lender) for U.S. Dollar deposits for delivery on the date in question for a
one month term beginning on that date.  Lender will use the London Interbank
Offered Rate as published by Bloomberg (or other commercially available source
providing quotations of such rate as selected by the Lender from time to time)
as determined at approximately 11:00 a.m. London time two (2) London Banking
Days prior to the date in question, as adjusted from time to time in the
Lender’s sole discretion for reserve requirements, deposit insurance assessment
rates and other regulatory costs.  If such rate is not available at such time
for any reason, then the rate will be determined by such alternate method as
reasonably selected by Lender.  A “London Banking Day” is a day on which banks
in London are open for business and dealing in offshore dollars.
 
LIBOR Loan means a Loan that bears interest at a rate based on LIBOR.
 

 
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Lien means any lien (statutory or other), mortgage, security interest, financing
statement, collateral assignment, pledge, assignment, charge, hypothecation,
deposit arrangement, or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing), or
encumbrance of any kind, and any other right of or arrangement with any creditor
(whether based on common law, constitutional provision, statute or contract) to
have its claim satisfied out of any property or assets, or their proceeds,
before the claims of the general creditors of the owner of the property or
assets.
 
Litigation means any action by or before any Governmental Authority, arbitrator,
or arbitration panel.
 
Loan means any amount disbursed by Lender to, or on behalf of, any Company under
the Loan Documents, whether such amount constitutes an original disbursement of
funds or the financing of an LC reimbursement obligation, or a disbursement in
in accordance with, and to satisfy the obligations of any Company under, any
Loan Document.
 
Loan Documents means (a) this Agreement, certificates and requests delivered
under this Agreement, and exhibits and schedules to this Agreement, (b) the
Note, (c) all Guaranties, (d) the Security Documents, (e) all agreements,
documents and instruments related to Bank Products (including all Hedge
Agreements and all Cash Management Agreements), (f) all LCs and LC Applications,
(g) any Subordination Agreement, (h) all other agreements, documents, and
instruments in favor of Lender ever delivered in connection with or under this
Agreement, and (i) all renewals, extensions, amendments, modifications,
supplements, restatements, and replacements of, or substitutions for, any of the
foregoing.
 
Loan Request means a request substantially in the form of Exhibit B or in such
other form as may be acceptable to Lender.
 
Material Adverse Effect means any circumstance or event that, individually or
collectively with other circumstances or events, could reasonably be expected to
result in (a) impairment of the ability of any Company to perform any of its
payment or other material obligations under any Loan Document when due or as
required therein, (b) impairment of the ability of Lender to enforce any
Company’s material obligations, or Lender’ rights, under any Loan Document, (c)
a material adverse effect upon the legality, validity, binding effect or
enforceability against any Company of any Loan Document to which it is a party,
or (d) a material and adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise), or prospects of the Companies taken as a whole.
 
Material Contract means, for any Person, any agreement to which that Person is a
party (other than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to have a Material
Adverse Effect, together with the Related Agreements and those contracts and
arrangements listed on Schedule 7.17.
 
Maximum Amount and Maximum Rate respectively mean the maximum non-usurious
amount and the maximum non-usurious rate of interest that, under applicable Law,
Lender is permitted to contract for, charge, take, reserve or receive on the
Obligation.
 
Moody’s means Moody’s Investors Service, Inc. and any successor thereto.
 
Net Proceeds means, with respect to (a) any Disposition of any asset by any
Person, the aggregate amount of cash and non-cash proceeds from such Disposition
received by, or paid to or for the account of,
 

 
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such Person, net of customary and reasonable out-of-pocket costs, fees, and
expenses, (b) the issuance of Funded Debt (including Subordinated Debt), Equity
Interests, or similar instruments, the cash and non-cash proceeds received from
such issuance or incurrence, net of attorneys’ fees, investment banking fees,
accountants fees, underwriting discounts and commissions, legal fees, and other
customary fees and expenses actually incurred in connection with such issuance,
(c) insurance proceeds, the aggregate amount of such cash proceeds received by,
or paid to or for the account of, such Person, net of customary and reasonable
legal fees, out-of-pocket costs, fees, and expenses, and (d) eminent domain or
condemnation proceeds, the aggregate amount of such cash proceeds received by,
or paid to or for the account of, such Person, net of customary and reasonable
legal fees, out-of-pocket costs, fees, and expenses.  Non-cash proceeds include
any proceeds received by way of deferred payment of principal pursuant to a
note, installment receivable, purchase price adjustment receivable, or
otherwise, but only as and when received.
 
Non-Qualifying Party means any Borrower or any Guarantor that on the Eligibility
Date fails for any reason to qualify as an Eligible Contract Participant.
 
Non-renewal Notice Date is defined in Section 2.4(a)(iv).
 
Note means the Revolving Note.
 
Nueces County Property means that certain real property owned by Vertex-Recovery
and having an address commonly known as 7941 Recycle Road, Corpus Christi,
Nueces County, Texas 78409.
 
Obligation means all present and future Debt, liabilities and obligations
(including the Loans, the LC Exposure, the obligations under any Bank Products,
the Hedge Liabilities (other than Excluded Hedge Liabilities) and indemnity
obligations), whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, and all renewals,
increases and extensions thereof, or any part thereof, now or in the future owed
to Lender by any Company under any Loan Document, together with all interest
accruing thereon, reasonable fees, costs and expenses payable under the Loan
Documents or in connection with the enforcement of rights under the Loan
Documents, including (a) fees and expenses under Section 8.12, and (b) interest
and fees that accrue after the commencement by or against any Company or any
Affiliate thereof of any proceeding under any Debtor Relief Law naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
 
Omega Acquisition means the acquisition by Vertex-Operating and Vertex-LA of
certain assets under the Purchase Agreement.
 
Omega/Bango Financing Documents means the notes, loan agreements, security
agreements, mortgages and related documents evidencing loans and advances by
Vertex-NV to Omega Refining and Bango Refining.
 
Omega Holdings means Omega Holdings Company, LLC, a Delaware limited liability
company.
 
Omega Refining means Omega Refining, LLC, a Delaware limited liability company.
 
Organizational Documents means (a) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (b) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (c) with respect to any general partnership, its partnership
agreement, as amended, and (d) with respect to any limited liability company,
its articles of organization or certificate of formation, as amended, and its
 
 
16

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operating agreement or limited liability company agreement, as amended.  In the
event any term or condition of this Agreement or any other Loan Document
requires any Organizational Document to be certified by a secretary of state or
similar governmental official, the reference to any such “Organizational
Document” shall only be to a document of a type customarily certified by such
governmental official.
 
PBGC means Pension Benefit Guaranty Corporation, or any successor thereof,
established under ERISA.
 
Permitted Acquisition means any Acquisition occurring after the Closing Date by
any Company with respect to which all of the following conditions shall have
been satisfied:
 
(a)          the total consideration for all Acquisitions occurring after the
Closing Date (including, but not limited to consideration paid for the Bango
Acquisition) does not exceed $10,000,000 in aggregate;
 
(b)          if a new Subsidiary is formed or acquired as a result of or in
connection with the Acquisition, the Companies shall have complied with the
requirements of Section 8.11 hereof in connection therewith;
 
(c)          immediately prior to and after giving effect to the Acquisition, no
Default or Event of Default shall exist, including with respect to the financial
covenants contained in Section 10 hereof on a pro forma basis as of the last day
of the fiscal quarter most recently ended,
 
(d)          all transactions in connection therewith shall be consummated, in
all material respects, in accordance with all applicable laws and in conformity
with all applicable Governmental Authorizations;
 
(e)          in the case of the acquisition of Equity Interests, all of the
Equity Interests (except for any such securities in the nature of directors’
qualifying shares required pursuant to applicable law) acquired or otherwise
issued by such Person or any newly formed Subsidiary in connection with such
acquisition shall be owned 100% by Holdings or a Guarantor;
 
(f)           Borrower Representative shall have delivered to Lender (i) at
least 30 Business Days  prior to such proposed acquisition (except such notice
may be delivered not less than 10 Business Days prior to the Bango Acquisition),
a Compliance Certificate evidencing compliance with Section 10 as required under
clause (c) above, together with all relevant financial and business information
with respect to such acquired assets, including, without limitation, the
aggregate consideration for such acquisition and any other information required
to demonstrate compliance with Section 10;
 
(g)          any Person or assets or division as acquired in accordance herewith
(y) shall be in the same business or lines of business in which Holdings and its
Subsidiaries are engaged as of the Closing Date and (z) for the four quarter
period most recently ended prior to the date of such acquisition, shall have
generated earnings before income taxes, depreciation, and amortization during
such period that shall exceed the amount of capital expenditures related to such
Person or assets or division during such period (calculated in substantially the
same manner as Consolidated Adjusted EBITDA and Consolidated Capital
Expenditures are calculated); provided, however, clause (z) shall not apply to
the consummation of the Bango Acquisition; and
 
(h)          the Acquisition shall have been approved by the board of directors
or other governing body or controlling Person of the Person acquired or the
Person from whom such assets or division is acquired.
 

 
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Permitted Bango/Omega Transaction means loans made by Vertex-NV to Omega
Refining and Bango Refining, and guaranteed by Omega Holdings in an aggregate
amount not to exceed $6,000,000 to the extent:
 
(a)          such loans are evidenced by that certain Secured Promissory Note,
dated as of the Closing Date, issued by Omega Refining and Bango Refining in
favor of Vertex-NV;
 
(b)          such loans are made on the terms set forth in the Purchase
Agreement and such Secured Promissory Note;
 
(c)          such loans are secured by a first priority Lien on all assets of
Omega Refining and Bango Refining, except that (i) the Liens in the Equity
Interests of Holdings issued to the Sellers on the date that the Omega
Acquisition is consummated may be subordinated to Liens in up to 116,145 shares
of capital stock of Holdings securing loans advanced by FCC Environmental, LLC,
(ii)  the Liens in the Equity Interests of Holdings issued to the Sellers on the
date that the Omega Acquisition is consummated may be subordinated to Liens in
up to 183,855 shares of capital stock of Holdings securing loans advanced by
Thermo Fluids, Inc., and (iii) the Liens in the collateral insurance proceeds
with respect to the facility located on the Churchill County Leasehold Property
may be to Liens securing up to $1,500,000 of loans advanced by BBB Funding, LLC
after the Closing Date to Bango Refining (the “BBB Post Close Loans”); provided
that (i) Vertex-NV has a second priority Lien in such casualty insurance
proceeds and (ii) BBB Funding, LLC is obligated to fund the full $1,500,000 of
BBB Post Close Loans before any draw loans are made pursuant to the Omega/Bango
Financing Documents;
 
(d)          the loans owed to BBB Funding, LLC in an aggregate principal amount
not to exceed $6,500,000 may be secured by a second priority Lien in the assets
of Bango Refining prior to the Bango Acquisition and by a first priority Lien on
the Equity Interests of Holdings issued to the Sellers on the date that the
Omega Acquisition is consummated;
 
(e)          the Omega/Bango Financing Documents have all been pledged to Lender
pursuant to the Pledge and Security Agreement and all related collateral has
been collaterally assigned to Lender, including delivery of such UCC amendments
and collateral assignments of mortgages or deeds of trust as Lender shall
request subject to the Intercreditor Agreement;
 
(f)           Vertex-NV shall have required Omega Refining and Bango Refining to
institute cash management provisions and control accounts with respect to
account collateral in a manner reasonably satisfactory to Lender;
 
(g)          all loans, notes and advances by BBB Funding, LLC, Thermo Fluids,
Inc., and FCC Environmental, LLC shall be unsecured and subordinated to all
loans, advances and other liabilities owned by Omega Holdings or its
Subsidiaries to any other creditors (excluding for this purpose the accrual of
any salaries to officers and employees in the ordinary course of business),
including without limitation, the loans made by Vertex-NV to Omega Refining and
Bango Refining in a manner satisfactory to Lender, except to the extent set
forth in clause (c);
 
(h)          BBB Funding, LLC, Thermo Fluids, Inc., and FCC Environmental, LLC
shall have executed and delivered to Borrowers releases of Holdings, its
Subsidiaries and their creditors from all existing and future claims that it may
have related to any of its loans, advanced or other investments in the Sellers
or in Holdings or any of its Subsidiaries, as well as the transactions
contemplated hereby or by the Related Agreements, in form and substance
satisfactory to Lender; and
 

 
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(i)           subject to compliance with the preceding clauses (a) – (h), all
purchase price and used motor oil loans may be made on the Closing Date and
following the Closing Date no additional loans shall be funded to Omega Refining
or Bango Refining unless and until the Post Close Equity Raise shall have
occurred.
 
Permitted Debt means:
 
(a) the Obligation;
 
(b) Debt incurred by Borrowers or any of their Subsidiaries under the GS Term
Loan Agreement not to exceed the sum of (i) $40,000,000 minus (ii) the amount of
principal payments applied to reduce the outstanding principal amount of the
term loans under the GS Term Loan Agreement, plus (iii) any payments in kind
made by capitalizing such amount to the then outstanding principal amount of the
term loans under the GS Term Loan Agreement, or issuing new promissory notes in
relation thereto, plus (iv) $10,000,000;
 
(c) Debt arising from endorsing negotiable instruments for collection in the
ordinary course of business;
 
(d) purchase money Debt, Capital Lease obligations or other Debt incurred in the
ordinary course of business which, in the aggregate, does not exceed
$2,000,000 in the aggregate principal outstanding at any time for all Companies;
 
(e) Debt among the Companies and guaranties by any Company of Permitted Debt;
 
(f) Debt existing on the Closing Date and described on Schedule 2;
 
(g) indemnities arising under agreements entered into by any Company in the
ordinary course of business; and
 
(h) trade payables, Tax liabilities and other current liabilities incurred in
the ordinary course of business.
 
Permitted Investments means (a) marketable obligations (i) issued or directly
and unconditionally guaranteed as to interest and principal by the U.S., (ii)
backed by the full faith and credit of the U.S. (and investments in mutual funds
investing primarily in those obligations) and (iii) marketable obligations
issued by any state of the U.S. or any political subdivision thereof 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-2" from S&P or at least "P-2" from Moody's,
(b) certificates of deposit or banker’s acceptances that are fully insured by
the Federal Deposit Insurance Corporation or are issued by commercial banks
having combined capital, surplus, and undivided profits of not less than
$100,000,000 (as shown on its most recently published statement of condition),
(c) cash or cash equivalents, (d) eurodollar time deposits or investments
managed by Lender, (e) commercial paper and similar obligations rated “P-2” or
better by Moody’s or “A-2” or better by S&P, (f) investments in securities
purchased by any Company under repurchase obligations pursuant to which
arrangements are made with selling financial institutions (being a financial
institution having unimpaired capital and surplus of not less than $500,000,000
and with a rating of “A-1” by S&P or “P-1” by Moody’s) for such financial
institutions to repurchase such securities within 30 days from the date of
purchase by such Company, and other similar short term investments made in
connection with the Company’s cash management practices, (g) non-cash proceeds
from dispositions permitted under Section 9.9, (h) investments by any Borrower
in its wholly-owned Subsidiaries which are Guarantors, (i) the Permitted
 

 
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Bango/Omega Transaction, (j) investments made solely from the proceeds of the
Vertex Refining Cash Collateral Account, in accordance with terms of the GS Term
Loan Agreement as in effect on the Closing Date, (k) investments by Holdings in
Vertex-NV so long as such investments are made solely from the Net Proceeds of
the issuance of Equity Interests by Holdings, and (l) investments made by any
Company after the Closing Date in an aggregate amount not to exceed at any time
$100,000; provided that this subsection (l) shall not be available for Permitted
Acquisitions or any investment in E-Source or, prior to the Vertex-NV Ring Fence
Termination Date, Vertex-NV.  Notwithstanding the foregoing, at no time
following the closing of the Bango Acquisition and prior to the Vertex-NV Ring
Fence Termination Date shall any Company encumber any of its properties to
secure Debt of Vertex-NV.
 
Permitted Liens means (a) Liens securing the Obligation, (b) Liens on Collateral
securing Debt under the GS Term Loan Agreement, but only to the extent such
Liens are subject to the terms of the Intercreditor Agreement, (c) Liens
existing on the Closing Date and described on Schedule 2, (d) Liens which secure
purchase money Debt and Capital Lease obligations permitted under clause (d) of
the definition of Permitted Debt, (e) easements, rights-of-way, encumbrances and
other restrictions on the use of real property which do not materially impair
the use thereof, (f) Liens for Taxes; provided that, (i) no amounts are due and
payable and no Lien has been filed or agreed to, or (ii)  the validity or amount
thereof is being contested in good faith by lawful proceedings diligently
conducted, and reserve or other provision required by GAAP has been made, (g)
judgments and attachments permitted by Section 11.4, (h) pledges or deposits
made to secure payment of workers’ compensation, unemployment insurance or other
forms of governmental insurance or benefits or to participate in any fund in
connection with workers’ compensation, unemployment insurance, pensions or other
social security programs, (i) good-faith pledges or deposits made in the
ordinary course of business to secure (j) performance of bids, tenders, trade
contracts (other than for the repayment of borrowed money) or leases,
(ii) statutory obligations, or (iii) surety or appeal bonds, or indemnity,
performance or other similar bonds, which, in the aggregate under this clause
(j), do not exceed $100,000 at any time, (k) rights of offset or statutory
banker’s Lien arising in the ordinary course of business in favor of commercial
banks; provided that, any such Lien shall only extend to deposits and property
in possession of such commercial bank and its Affiliates, and (l) Liens (other
than for Taxes) imposed by operation of law (including Liens of mechanics,
materialmen, warehousemen, carriers and landlords and similar Liens); provided
that, (i) the validity or amount thereof is being contested in good faith by
lawful proceedings diligently conducted, (ii) reserve or other provision
required by GAAP has been made, and (iii) within 60 days after the entry
thereof, levy and execution thereon have been (and continue to be) stayed or
payment thereof is covered in full by insurance (subject to the customary
deductible).
 
Person means any individual, partnership, limited partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, syndicate, Governmental Authority or
other entity or organization of whatever nature.
 
Plaquemines Parish Leasehold Property means that certain real property leased by
Vertex-LA pursuant to the Vertex-LA Plaquemines Parish Lease and having an
address commonly known as 278 E. Ravenna Road, Belle Chasse, Plaquemines Parish,
Louisiana 70037.
 
Pledge and Security Agreement means the Pledge and Security Agreement in
substantially the form of Exhibit E, and executed by each Company, as debtor,
and by Lender, as secured party, granting Lender a Lien on, and security
interest in, among other things, such Company’s accounts receivable, equity
interests, inventory, equipment, goods, general intangibles, intellectual
property, chattel paper, instruments, and documents.
 
Post Close Equity Raise has the meaning set forth in Section 8.16.
 

 
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Prime Rate means the rate of interest publicly announced from time to time by
Lender as its Prime Rate.  The Prime Rate is set by Lender based on various
factors, including Lender’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans.  Lender may price loans to its customers at, above, or below the Prime
Rate.  Any change in the Prime Rate shall take effect at the opening of business
on the day specified in the public announcement of a change in Lender’s Prime
Rate.  The Prime Rate is not necessarily the lowest rate charged by Lender on
its loans and is set by Lender in its sole discretion.
 
Proper Form means in form and substance satisfactory to Lender and its legal
counsel.
 
Purchase Agreement means that certain Asset Purchase Agreement dated March 17,
2014, as amended by that certain First Amendment to Asset Purchase Agreement
dated as of April 14, 2014 and that certain Second Amendment to Asset Purchase
Agreement dated as of the Closing Date, among Holdings, Vertex-LA, and
Vertex-NV, as buyers; Omega Refining and Bango Refining, as sellers; and Omega
Holdings, as equity owner.
 
Qualified ECP Loan Party means any Borrower or any Guarantor that on the
Eligibility Date is (a) a corporation, partnership, proprietorship,
organization, trust, or other entity other than a “commodity pool” as defined in
Section 1a(10) of the Commodity Exchange Act and CFTC regulations thereunder
that has total assets exceeding $10,000,000, or (b) an Eligible Contract
Participant that can cause another person to qualify as an Eligible Contract
Participant on the Eligibility Date under Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act by entering into or otherwise providing a “letter of
credit or keepwell, support, or other agreement” for purposes of Section
1a(18)(A)(v)(II) of the Commodity Exchange Act.
 
Related Agreements means, collectively, the Purchase Agreement, the GS Term Loan
Agreement, the Omega/Bango Financing Documents, the Tolling Agreement and all
other material agreements executed in connection with the foregoing.
 
Representatives means representatives, officers, directors, employees,
consultants, contractors, attorneys of Lender.
 
Reserves means reserves established from time to time by Lender in its
reasonable credit judgment against Eligible Inventory, Eligible Accounts, or the
Borrowing Base.  Without limiting the generality of the foregoing, Reserves
established to ensure the payment of accrued interest expense, Taxes, Debt rent
for locations without landlord waivers or warehouseman’s agreements shall be
deemed to be an exercise of Lender’s reasonable credit judgment as will any Slow
Moving Reserve in respect of inventory.
 
Responsible Officer means, with respect to each Company, the president, chief
executive officer, chief financial officer, treasurer, controller, chief
accounting officer, or chief operating officer of such Company.
 
Restricted NV Intercompany Transactions means upon satisfaction of each of the
following conditions (a) the Bango Acquisition has been consummated and the
Vertex-NV Ring Fence Termination Date has not yet occurred, (b) Borrowers have
delivered the financial statements to the Lender for at least three full fiscal
months ending after the Bango Acquisition, (c) the EBITDA of Vertex-NV for each
of the three most recently ended fiscal months for which financial statements
have been delivered pursuant to the preceding clause is positive, (d) no Default
or Event of Default has occurred and is continuing or would result therefrom,
and (e) Vertex-NV is a Guarantor and its guarantee and security agreement is in
full force and effect, any of the following permissible actions:
 

 
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(i) Vertex-NV may guarantee the Debt under the GS Term Loan Agreement in
accordance with the terms of the GS Term Loan Agreement as in effect on the
Closing Date, and (ii) Holdings and its Subsidiaries may make intercompany loans
to Vertex-NV and Vertex-NV may borrow such intercompany loans, provided that the
aggregate amount of does not exceed $2,000,000 at any time;
 
provided that, the foregoing permissible actions shall only be permissible if
and to the extent such actions are also permitted under the last paragraph of
Section 6.1 of the GS Term Loan Agreement as in effect on the Closing Date.
 
Revolving Committed Amount means $20,000,000.
 
Revolving Credit Exposure means, when determined the sum of (a) the Revolving
Principal Amount, plus (b) the LC Exposure.
 
Revolving Credit Facility is defined in Section 2.1.
 
Revolving Credit Limit means the lesser of (a) the Revolving Committed Amount
and (b) the Borrowing Base.
 
Revolving Credit Termination Date means the earlier of (a) May 2, 2017, or (b)
the effective date that Lender’s Commitment to make Credit Extensions under the
Revolving Credit Facility under this Agreement is otherwise canceled or
terminated in accordance with Section 12 of this Agreement or otherwise.
 
Revolving Note means a promissory note substantially in the form of Exhibit A,
executed by Borrowers and made payable to Lender and all renewals, extensions,
modifications, amendments, supplements, restatements, and replacements of, or
substitutions for, that promissory note.
 
Revolving Principal Amount means, when determined, the outstanding principal
balance of the Revolving Note.
 
S&P means Standard & Poor’s Ratings Group (a division of The McGraw-Hill
Companies, Inc.).
 
Security Documents means the Pledge and Security Agreement, Deeds of Trusts, and
all documents executed in connection therewith to create or perfect a Lien on
the Collateral.
 
Sellers means Omega Refining and Bango Refining.
 
Slow Moving means inventory that turns less than once each 365 days.
 
Solvent means, with respect to any Company, that as of the date of
determination, both (a) (i) the sum of such Company’s debt (including contingent
liabilities) does not exceed the present fair saleable value of such Company’s
present assets; (ii) such Company’s capital is not unreasonably small in
relation to its business as contemplated on the Closing Date and reflected in
any projections or with respect to any transaction contemplated or undertaken
after the Closing Date; and (iii) such Person has not incurred and does not
intend to incur, or believe (nor should it reasonably believe) that it will
incur, debts beyond its ability to pay such debts as they become due (whether at
maturity or otherwise); and (b) such Person is “solvent” within the meaning
given that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances.  For purposes of this definition, 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
 

 
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matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No.5).
 
Subject Leases means the CMT Lease, the Vertex-LA Jefferson Parish Lease, the
Vertex-LA Plaquemines Parish Lease, and following assignment of the Vertex-NV
Lease to Vertex-NV, the Vertex-NV Lease.
 
Subordinated Debt means Debt which is contractually subordinated in right of
payment, collection, enforcement and lien rights to the prior payment in full of
the Obligation on terms satisfactory to Lender.
 
Subordination Agreement means the Earnout Subordination Agreements and each
other subordination agreement in Proper Form (but excluding the Intercreditor
Agreement).
 
Subsidiary of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the Voting
Interests are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.  Unless otherwise specified, all
references in this Agreement or the Loan Documents to a “Subsidiary” or to
“Subsidiaries” shall refer to a Subsidiary or to Subsidiaries of Borrower.
 
Tax Code means the Internal Revenue Code of 1986, as amended, and related rules,
regulations and published interpretations.
 
Taxes means, for any Person, taxes, assessments or other governmental charges or
levies imposed upon that Person, its income, or any of its properties,
franchises or assets.
 
Term Loan Agent means Goldman Sachs Bank USA, in its capacity as administrative
agent under the GS Term Loan Agreement.
 
Tolling Agreement means that certain Tolling Agreement dated May 2, 2014, by and
between Vertex-Operating and Bango Refining, with respect to used motor oil.
 
Transaction Costs means the fees, costs and expenses payable by any Company on
or before the Closing Date in connection with the transactions contemplated by
the Loan Documents, the Related Agreements and any Permitted Acquisitions, to
the extent approved in writing by Lender and which shall include, without
limitation, all costs and expenses incurred in connection with the transactions
contemplated by the Related Agreements which have been approved by Lender on the
Closing Date.
 
Travis County Property means that certain real property owned by VAS and having
an address commonly known as 20909 FM 685, Pflugerville, Travis County, Texas
77660.
 
UCC means the Uniform Commercial Code, as adopted in Texas and as amended from
time to time.
 
Unreimbursed Amount is defined in Section 2.4(b)(i).
 
U.S. means United States of America.
 
VAS means Vertex Acquisition Sub, LLC, a Nevada limited liability company.
 

 
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Vertex-II means Vertex II GP, LLC, a Nevada limited liability company.
 
Vertex-LA means Vertex Refining LA, LLC, a Louisiana limited liability company.
 
Vertex-LA Jefferson Parish Lease means that certain Land Lease Agreement dated
as of April 30, 2008, between Marrero Terminal, LLC, a Delaware limited
liability company, as landlord, and Omega Refining, as tenant, to which
Vertex-LA has succeeded as tenant, and as renewed, extended, modified, or
supplemented from time to time.
 
Vertex-LA Plaquemines Parish Lease means that certain Commercial Lease Agreement
dated as of May 25, 2012, between Plaquemines Holdings, LLC, a Louisiana limited
liability company, as landlord, and Omega Refining, LLC, a Delaware limited
liability company, as tenant, to which Vertex-LA has succeeded as tenant, and as
renewed, extended, modified, or supplemented from time to time.
 
Vertex-NV means Vertex Refining NV, LLC, a Nevada limited liability company.
 
Vertex-NV Lease means that certain Lease with Option for Membership Interest
Purchase dated as of August 4, 2010, between Bango Oil, LLC, a Nevada limited
liability company, as landlord, and Bango Refining NV, LLC, a Delaware limited
liability company, as tenant, to which Vertex-NV will succeed as tenant, and as
renewed, extended, modified, or supplemented from time to time.
 
Vertex-NV Ring Fence Termination Date means “Vertex NV Ring Fence Termination
Date” as defined in the GS Term Loan Agreement as in effect on the Closing Date.
 
Vertex-Recovery means Vertex Recovery, L.P., a Texas limited partnership.
 
Vertex Refining Cash Collateral Account has the meaning set forth in Section
8.16.
 
VMS means Vertex Merger Sub, LLC, a California limited liability company.
 
Voting Interests of any Person means the Equity Interests of such Person having
ordinary voting power for the election of directors (or other governing body).
 
1.2           Interpretive Provisions.
 
(a)           Terms used but not defined in this Agreement, but which are
defined in the UCC, have the meaning given them in the UCC.
 
(b)           The meanings of words and defined terms are equally applicable to
the singular and plural forms of the defined terms and words.  Defined terms in
respect of one gender include each other gender where appropriate.  Derivatives
of defined terms have corresponding meanings.
 
(c)           Any conflict or ambiguity between this Agreement and any other
Loan Document is controlled by the terms and provisions of this Agreement.
 
(d)           The headings and captions used in this Agreement and the other
Loan Documents are for convenience only and will not be deemed to limit, amplify
or modify the terms of this Agreement or the Loan Documents.
 
(e)           Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears, unless otherwise indicated.
 
 
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(f)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”
 
(g)           The words “herein,” “hereto,” “hereof” and “hereunder” and words
of similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision of such Loan Document.
 
(h)           The term “including” is by way of example and not limitation.
 
1.3           Accounting Terms.  All accounting terms not specifically or
completely defined in this Agreement shall be construed in conformity with, and
all financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP, with all accounting principles being consistently applied
from period to period and on a basis consistent with the most recent audited
consolidated financial statements of Borrowers and its Subsidiaries.  While any
Borrower has any Subsidiaries, all accounting and financial terms and financial
calculations (including the calculation of all financial covenants, ratios, and
related definitions) in respect of Borrowers or any Company are on a
consolidated and consolidating basis for all Companies, unless otherwise
indicated.
 
(a)           If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set out in any Loan Document, and either the
Borrowers or Lender shall so request, Lender and the Borrowers shall negotiate
in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of Lender);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP as in effect prior to such change and (ii)
the Borrowers shall provide to Lender financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.
 
1.4           References to Documents.  Unless otherwise expressly provided in
this Agreement, (a) references to corporate formation or governance documents,
contractual agreements (including this Agreement and the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document, and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
 
1.5           Time.  Unless otherwise indicated, all time references (e.g.,
11:00 a.m.) are to Central time (daylight or standard, as applicable).
 
SECTION 2    LOAN COMMITMENTS.
 
2.1           Revolving Credit Facility.  Subject to the terms and conditions of
this Agreement, Lender agrees to make a loan to Borrowers in an amount not to
exceed the Revolving Committed Amount in one or more Loans from time to time,
which Borrowers may borrow, repay, and reborrow under this Agreement
(collectively, the “Revolving Credit Facility”).
 
2.2           Loan Procedure.
 
(a)           Subject to compliance with Section 5, Borrower Representative may
request a
 

 
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Loan under the Revolving Credit Facility by submitting a Loan Request to
Lender.  A Loan Request is irrevocable and binding on Borrowers.  Each Loan
Request must be received by Lender no later than 11:00 a.m. on the proposed Loan
Date.  Each Loan Date must be a Business Day, and each Loan Date under the
Revolving Credit Facility must occur before the Revolving Credit Termination
Date.  Each Loan under the Revolving Credit Facility is subject to the following
conditions:
 
(i)           each Loan (unless the remaining amount under clause (ii) below is
less) must be in an amount not less than $50,000 or a greater integral multiple
of $10,000;
 
(ii)           no Loan may exceed an amount equal to the excess of the Revolving
Credit Limit over the Revolving Credit Exposure; and
 
(iii)           after giving effect to any Loan, the Revolving Credit Exposure
may not exceed the Revolving Credit Limit.
 
(b)           Each Loan under the Revolving Credit Facility will be deposited by
Lender into Borrowers’ account with Lender set out on Schedule 1.
 
(c)           From time to time, Lender may provide certain treasury or cash
management services to Borrowers under which Borrowers incur Loans under the
Revolving Credit Facility.  While a Cash Management Agreement is in effect,
Borrowers may repay the Revolving Principal Amount under the terms of the Cash
Management Agreement without notice.  Each Borrower hereby authorizes Lender to
honor all checks or other drafts received against the accounts subject to the
Cash Management Agreement.  Loans borrowed under the terms of any Cash
Management Agreement between Borrowers and Lender shall be borrowed as LIBOR
Loans.
 
2.3           Prepayments.
 
(a)           Borrowers may voluntarily prepay all or any part of the Revolving
Principal Amount at any time, without premium or penalty, subject to the
following conditions:
 
(i)           Lender must receive Borrower Representative’s written or
telephonic prepayment notice by 2:00 p.m. at least one Business Day preceding
the proposed prepayment date;
 
(ii)           Borrower Representative’s prepayment notice shall (A) specify the
prepayment date, (B) specify the amount of the Loan to be prepaid, and (C)
constitute an irrevocable and binding obligation of Borrowers to make a
prepayment in such amount on the designated prepayment date; and
 
(iii)           except as otherwise provided in clause (iv) below, each partial
prepayment must be in a minimum amount of not less than (A) $50,000 or in a
greater integral multiple of $10,000, or (B) if less than the requested minimum
amount, the outstanding balance of the Revolving Principal Amount.
 
(b)           If the Revolving Credit Exposure at any time exceeds the Revolving
Credit Limit, then Borrowers shall promptly prepay the Revolving Principal
Amount (or if no Revolving Principal Amount is outstanding, Cash Collateralize
the LC Exposure), in at least the amount of that excess, together with all
accrued and unpaid interest on the principal amount so prepaid.
 

 
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(c)           On the date such amounts are received by, or for the account of,
any Borrower (or the applicable Company), the following amounts shall be paid to
Lender in the form received with any endorsement or assignment and shall be
applied to the Revolving Principal Amount in accordance with this Section 2.3:
(i) 100% of the Net Proceeds from the Disposition of inventory and delinquent
accounts receivable, (ii) 100% of Eminent Domain Proceeds or Insurance Proceeds
required to be paid to Lender under Section 8.10, and (iii) 100% of the Net
Proceeds from the issuance of Equity Interests by any Borrower; provided that no
mandatory prepayment of the Revolving Principal Amount shall be required after
the Closing Date (a) if such Net Proceeds are required to be deposited into the
Vertex Refining Cash Collateral Account and are used by Borrowers as permitted
under Section 5.14(b) of the GS Term Loan Agreement as in effect on the Closing
Date, (b) if such Net Proceeds are used in accordance with terms of Section
2.13(c) of the GS Term Loan Agreement as in effect on the Closing Date, or (c)
pursuant to any employee stock or stock option compensation plan that is adopted
by the Board of Directors of Holdings. The non-cash portion of all Net Proceeds
Lender is entitled to receive under this Section 2.3 shall be pledged to Lender
concurrently with the applicable Disposition.
 
(d)           Unless otherwise specified in this Agreement, prepayments under
this Section 2.3 shall be applied first, to Cash Collateralize all LC Exposure,
and second, to repay the Loans under the Revolving Credit Facility (with the
proceeds being applied in accordance with Section 3.3), without a corresponding
reduction in the Revolving Committed Amount.
 
(e)           After proper application of all proceeds under this Section 2.3,
the excess proceeds, if any, shall be payable to Borrowers.
 
2.4           LC Facility.
 
(a)           The LC Commitment.
 
(i)           Subject to the terms and conditions set out in this Agreement,
Lender agrees, from time to time on any Business Day during the period from the
Closing Date until the Revolving Credit Termination Date, to issue LCs for the
account of any Borrower or any Company or make any other LC Credit Extension,
provided that, Lender shall not be obligated to make any LC Credit Extension if,
as of the LC Credit Extension Date, (A) the Revolving Credit Exposure would
exceed the Revolving Credit Limit (after giving effect to such LC Credit
Extension), (B) the LC Exposure would exceed the LC Sublimit (after giving
effect to such LC Credit Extension), (C) the expiry date of such requested LC
would occur after the LC Termination Date, unless Lender has approved such
expiry date, (D) the LC is to be denominated in a currency other than Dollars,
(E) any Litigation shall by its terms purport to enjoin or restrain Lender from
making such LC Credit Extension, (F) the beneficiary of such LC does not accept
the LC or any proposed amendment to, or renewal of, such LC, or (G) a Default or
Event of Default exists.
 
(ii)           Each LC Credit Extension shall be made upon the request of
Borrower Representative delivered to Lender in the form of an LC Application,
appropriately completed and signed by a Responsible Officer of Borrower
Representative.  Such LC Application must be received by Lender not later than
11:00 a.m. at least four (4) Business Days prior to the proposed LC Credit
Extension Date.
 
(A)           In the case of a request for an initial issuance of an LC, such
LC Application shall specify in form and detail satisfactory to Lender (1) the
 

 
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proposed issuance date of the requested LC (which shall be a Business Day),
(2) the amount of the requested LC, (3) the expiry date of the requested LC,
(4) the name and address of the beneficiary of the requested LC, (5) the
documents to be presented by such beneficiary in case of any drawing under the
requested LC, (6) the full text of any certificate to be presented by such
beneficiary in case of any drawing under the requested LC, and (7) such other
matters as Lender may reasonably require.
 
(B)           In the case of a request for an amendment of any outstanding LC,
such LC Application shall specify in form and detail satisfactory to Lender (1)
the LC to be amended, (2) the proposed date of the amendment (which shall be a
Business Day), (3) the nature of the proposed amendment, and (4) such other
matters as Lender may reasonably require.
 
(iii)           Promptly after receipt of any LC Application, Lender will
confirm that the requested LC Credit Extension is permitted in accordance with
the terms of this Agreement, then, subject to the terms and conditions hereof,
Lender shall, on the requested date, issue an LC for the account of such
requesting Borrower or enter into the applicable amendment, as the case may be,
in each case in accordance with Lender’s usual and customary business practices.
 
(iv)           If Borrower Representative so requests in any applicable LC
Application, Lender may, in its sole and absolute discretion, agree to issue an
LC that has automatic renewal provisions (each, an “Auto-Renewal LC”); provided
that, any such Auto-Renewal LC must permit Lender to prevent any such renewal at
least once in each twelve-month period (commencing with the date of issuance of
such LC) by giving prior notice to the beneficiary thereof not later than a day
(the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed
upon at the time such LC is issued.  Unless otherwise directed by Lender,
Borrower Representative shall not be required to make a specific request to
Lender for any such renewal.  Lender may elect not to renew any auto-renewal LC
for any reason, including, (A) Lender has reasonably determined that it would
have no obligation at such time to issue such LC in its renewed form under the
terms hereof (by reason of the provisions of Section 2.4(a)(i) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is two (2) Business Days before the Nonrenewal Notice Date
(1) that beneficiary has elected not to permit such renewal or (2) that one or
more of the applicable conditions specified in Section 5 is not then satisfied.
 
(b)           Drawings and Reimbursements.
 
(i)           Upon receipt from the beneficiary of any LC of any notice of a
drawing under such LC, Lender shall notify Borrower Representative thereof.  Not
later than 11:00 a.m. on the date of any payment by Lender under an LC (each
such date, an “Honor Date”), Borrowers shall reimburse Lender in an amount equal
to the amount of such drawing.  If Borrowers fail to so reimburse Lender by such
time, Borrowers shall be deemed to have requested a Loan under the Revolving
Credit Facility to be disbursed on the Honor Date in an amount equal to the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), without regard
to the minimum and multiples specified in Section 2.2 for the principal amount
of Loans, but subject to the conditions set out in Section 5 (other than the
delivery of a Loan Request).  Any notice given by Lender pursuant to this
Section 2.4(b)(i) may be given by telephone if immediately confirmed in
 

 
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writing; provided that, the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
 
(ii)           With respect to any Unreimbursed Amount that is not fully
refinanced by a Loan because the conditions set out in Section 5 cannot be
satisfied, there are not sufficient available funds under the Revolving Credit
Facility, or for any other reason, Borrowers shall be deemed to have incurred
from Lender an LC Borrowing in the amount of the Unreimbursed Amount that is not
so refinanced, which LC Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate.
 
(c)           Obligations Absolute.  The obligation of Borrowers to reimburse
Lender for each drawing under each LC and to repay each LC Borrowing shall be
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances.  Borrower
Representative shall promptly examine a copy of each LC and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with Borrower Representative’s instructions or other irregularity, Borrower
Representative will immediately notify Lender.  Borrowers shall be conclusively
deemed to have waived any such claim against Lender and its correspondents
unless such notice is given as aforesaid.
 
(d)           Cash Collateral.  Upon the request of Lender, (i) if Lender has
honored any full or partial drawing request under any LC and such drawing has
resulted in an LC Borrowing, or (ii) if, as of the Revolving Credit Termination
Date, any LC for any reason remains outstanding and partially or wholly undrawn,
Borrowers shall immediately Cash Collateralize the then outstanding LC Exposure
in an amount equal to 105% of such LC Exposure determined as of the date of such
LC Borrowing or the Revolving Credit Termination Date, as the case may be).  If
LCs are to be outstanding after the Revolving Credit Termination Date, not later
than ten (10) Business Days prior to the Revolving Credit Termination Date,
Borrowers shall Cash Collateralize the LC Exposure for each such LC as provided
in this Section 2.4(d).  Borrowers hereby grant to Lender a security interest in
and Lien upon all such cash, deposit accounts and all balances therein and all
proceeds of the foregoing.  All such Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Lender.
 
(e)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed
by Lender and Borrowers when an LC Credit Extension is made, (i) the rules of
the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby LC, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the “ICC”) at the
time of issuance (including the ICC decision published by the Commission on
Banking Technique and Practice on April 6, 1998, regarding the European single
currency (euro)) shall apply to each documentary LC.
 
(f)           Provisions Regarding Electronic Issuance of Letters of
Credit.  Lender may adopt procedures pursuant to which Borrower Representative
may request the issuance of LCs by electronic means and Lender may issue LCs
based on such electronic requests.  Such procedures may include the entering by
Borrowers into the LC Applications electronically.  All the procedures, actions
and documents referred to in the two preceding sentences are referred to as
“Electronic Applications”.  Borrowers hold Lender harmless with respect to
actions taken by Lender based upon Electronic Applications.  Borrowers further
agree to be bound by all the terms and provisions contained in the LC
Applications, including, without limitation, the terms and
 

 
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provisions of the LC Applications contained on the reverse side of the paper
copies thereof, including the release and indemnification provisions contained
therein.
 
2.5           Increase in Revolving Facility.
 
(a)           Request for Increase.  Provided there exists no Default or Event
of Default, upon notice to the Lender, Borrowers may from time to time, request
an increase in the Revolving Credit Facility by an amount (for all such
requests) not exceeding $10,000,000; provided that (i) any such request for an
increase shall be in a minimum amount of $3,000,000, and (ii) Borrowers may make
a maximum of three (3) such requests.  At the time of sending such notice,
Borrower Representative shall specify the time period within which Lender is
requested to respond (which shall in no event be less than ten (10) Business
Days from the date of delivery of such notice to the Lender).

(b)           Lender Election to Increase.  Lender shall notify the Borrower
Representative within such time period whether or not it agrees to increase the
Revolving Committed Amount.  If Lender does not respond within such time period,
Lender shall be deemed to have declined to increase the Revolving Committed
Amount.

(c)           Effective Date and Allocations.  If the Revolving Credit Facility
is increased in accordance with this Section 2.5, Lender and Borrowers shall
determine the effective date (the “Revolving Increase Effective Date”).

(d)           Conditions to Effectiveness of Increase.  As a condition precedent
to such increase, Borrowers shall deliver to the Lender a certificate of each
Company dated as of the Revolving Increase Effective Date signed by a
Responsible Officer of each Company (i) certifying and attaching the resolutions
adopted by such Company approving or consenting to such increase, and (ii) in
the case of the Borrowers, certifying that, before and after giving effect to
such increase, (A) the representations and warranties contained in Section 7 and
the other Loan Documents are true and correct, on and as of the Revolving
Increase Effective Date, and (B) no Default or Event of Default exists.
 
SECTION 3    TERMS OF PAYMENT.
 
3.1           Notes and Payments.
 
(a)           The Loans under the Revolving Credit Facility shall be evidenced
by the Revolving Note.
 
(b)           Borrowers must make each payment on the Obligation, without
offset, counterclaim or deduction to Lender’s Office, in funds that will be
available for immediate use by Lender by 12:00 noon on the day due.  Payments
received after such time (and payments received on a day which is not a Business
Day) will be deemed received on the next Business Day but interest shall
continue to accrue during such period.
 
3.2           Revolving Credit Facility.
 
(a)           Accrued interest on the Revolving Principal Amount is due and
payable monthly in arrears on the last day of each month and on the Revolving
Credit Termination Date.
 

 
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(b)           The Revolving Principal Amount, all accrued and unpaid interest
thereon, and all of the Obligation in respect of the Revolving Credit Facility
are due and payable on the Revolving Credit Termination Date.
 
3.3           Order of Application.
 
(a)           All payments and prepayments shall be applied as specified in this
Agreement and, if not specified, shall be applied in the following order: (i) to
all fees, expenses, late charges, collection costs, and other charges, costs and
expenses for which Lender has not been paid or reimbursed under the Loan
Documents; (ii) to accrued and unpaid interest on the Revolving Principal
Amount; and (iii)  to the remaining Obligation in the order and manner Lender
deems appropriate in its sole discretion.
 
(b)           All proceeds from the exercise of any rights shall be applied at
Lender’s discretion among principal, interest, fees, expenses, late charges,
collection costs, and other charges, costs and expenses, for which Lender has
not been paid or reimbursed under the Loan Documents.
 
3.4           Interest.
 
(a)           Except as otherwise provided in this Agreement, Loans under the
Revolving Credit Facility shall accrue interest at an annual rate equal to the
lesser of (i) at Borrowers’ option (A) for a Base Rate Loan, the sum of the Base
Rate plus the Applicable Margin for Base Rate Loans, or (B) for a LIBOR Loan,
the sum of LIBOR plus the Applicable Margin for LIBOR Loans, and (ii) the
Maximum Rate.
 
(b)           Each change in LIBOR Rate, the Base Rate or the Maximum Rate is
effective as of the effective date of such change without notice to any Borrower
or any other Person.
 
(c)           To the extent permitted by Law, while an Event of Default exists,
the Obligation shall accrue interest at the lesser of (i) the Default Rate and
(ii) the Maximum Rate until such Event of Default is waived or cured.  Subject
to Section 3.6, if an Event of Default exists, Lender may, in its sole
discretion, to the extent permitted by Law, add accrued and unpaid interest to
the Revolving Principal Amount and such amount will accrue interest until paid
at the applicable interest rate.
 
(d)           If, as a result of any restatement of or other adjustment to the
financial statements of Holdings and its Subsidiaries or for any other reason,
the Borrowers, or the Lender determines that (i) the Leverage Ratio as
calculated by the Borrowers as of any applicable date was inaccurate and (ii) a
proper calculation of the Leverage Ratio would have resulted in higher pricing
for such period, the Borrowers shall immediately and retroactively be obligated
to pay to Lender, promptly on demand by Lender, an amount equal to the excess of
the amount of interest and fees that should have been paid for such period over
the amount of interest and fees actually paid for such period.  This paragraph
shall not limit the rights of Lender under any provision of this Agreement to
payment of the Obligation at the Default Rate or under Section 11.  The
Borrowers’ obligations under this paragraph shall survive the termination of the
Commitment and the repayment of the Obligation hereunder.
 
3.5           Interest Calculations.  Interest on Loans will be calculated on
the basis of actual number of days elapsed (including the first day but
excluding the last day), but computed as if each calendar year consisted of 360
days (unless computation would result in an interest rate in excess of the
Maximum
 

 
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**************************************************
MATERIAL BELOW MARKED BY AN “***” HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THIS ENTIRE EXHIBIT INCLUDING THE OMITTED CONFIDENTIAL
INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
**************************************************
 
Rate, in which event the computation is made on the basis of a year of 365 or
366 days, as the case may be).  All interest rate determinations and
calculations by Lender are conclusive and binding, absent manifest error.
 
3.6           Maximum Rate.  It is the intention of the parties to comply with
applicable usury laws.  The parties agree that the total amount of interest
contracted for, charged, collected or received by Lender under this Agreement
shall not exceed the Maximum Rate.  To the extent, if any, that Chapter 303 of
the Texas Finance Code (the “Finance Code”) is relevant to Lender for purposes
of determining the Maximum Rate, the parties elect to determine the Maximum Rate
under the Finance Code pursuant to the “weekly ceiling” from time to time in
effect, as referred to and defined in § 303.001-303.016 of the Finance Code;
subject, however, to any right Lender subsequently may have under applicable law
to change the method of determining the Maximum Rate.  Notwithstanding any
contrary provisions contained herein, (a) the Maximum Rate shall be calculated
on the basis of the actual number of days elapsed over a year of 365 or 366
days, as the case may be; (b) in determining whether the interest hereunder
exceeds interest at the Maximum Rate, the total amount of interest shall be
spread throughout the entire term of this Agreement until its payment in full;
(c) if at any time the interest rate chargeable under this Agreement would
exceed the Maximum Rate, thereby causing the interest payable under this
Agreement to be limited to the Maximum Rate, then any subsequent reductions in
the interest rate(s) shall not reduce the rate of interest charged under this
Agreement below the Maximum Rate until the total amount of interest accrued from
and after the date of this Agreement equals the amount of interest which would
have accrued if the interest rate(s) had at all times been in effect; (d) if
Lender ever charges or receives anything of value which is deemed to be interest
under applicable Texas law, and if the occurrence of any event, including
acceleration of maturity of obligations owing to Lender, should cause such
interest to exceed the maximum lawful amount, any amount which exceeds interest
at the Maximum Rate shall be applied to the reduction of the unpaid principal
balance under this Agreement or any other indebtedness owed to Lender by
Borrowers, and if this Agreement and such other indebtedness are paid in full,
any remaining excess shall be paid to Borrowers; and (e) Chapter 346 of the
Finance Code shall not be applicable to this Agreement or the indebtedness
outstanding hereunder.
 
3.7           Set-Off.  Upon the occurrence and during the continuance of an
Event of Default under this Agreement, (a) each Borrower hereby authorizes
Lender, at any time and from time to time, without notice, which is hereby
expressly waived by each Borrower, and whether or not Lender shall have declared
any credit subject hereto to be due and payable in accordance with the terms
hereof, to set off against, and to appropriate and apply to the payment of, the
Obligation (whether matured or unmatured, fixed or contingent, liquidated or
unliquidated), any and all amounts owing by Lender to such Borrower (whether
payable in U.S. dollars or any other currency, whether matured or unmatured, and
in the case of deposits, whether general or special (except trust and escrow
accounts), time or demand and however evidenced), and (b) pending any such
action, to the extent necessary, to hold such amounts as collateral to secure
such Obligation and to return as unpaid for insufficient funds any and all
checks and other items drawn against any deposits so held as Lender, in its sole
discretion, may elect.  Each Borrower hereby grants to Lender a security
interest in all deposits and accounts maintained with Lender to secure the
payment of all Obligation of the Borrower to Lender under this Agreement and all
agreements, instruments and documents related to this Agreement.
 
3.8             Debit Account.  Each Borrower agrees that interest and principal
payments and any fees will be deducted automatically on the due date from
Holdings’ account number *** or such other accounts of either Borrower with
Lender as designated in writing by such Borrower.  This authorization shall not
affect the obligation of Borrowers to pay such sums when due, without notice, if
there are insufficient funds in such account to make such payment in full on the
due date thereof, or if Lender fails to debit such account.
 

 
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SECTION 4     FEES.
 
4.1           Treatment of Fees.  To the extent permitted by Law, the fees
described in this Section 4 (a) do not constitute compensation for the use,
detention, or forbearance of money, (b) are in addition to, and not in lieu of,
interest and expenses otherwise described in this Agreement or in any other Loan
Document, (c) are payable in accordance with Section 3.1, (d) are
non-refundable, (e) accrue interest, if not paid when due, at the Default Rate,
and (f) are calculated on the basis of actual number of days elapsed (including
the first day but excluding the last day), but computed as if each calendar year
consisted of 360 days (unless computation would result in an interest rate in
excess of the Maximum Rate, in which event the computation is made on the basis
of a year of 365 or 366 days, as the case may be).  The fees described in this
Section 4 are in all events subject to the provisions of Section 3.6.
 
4.2           Commitment Fee.  Borrowers shall pay to Lender a fee (the
“Commitment Fee”) equal to the Applicable Margin multiplied by the actual daily
amount by which the Revolving Committed Amount exceeds the Revolving Credit
Exposure.  The Commitment Fee shall be due and payable quarterly in arrears on
the last day of each March, June, September, and December, beginning June 30,
2014, and continuing until the Revolving Credit Termination Date.
 
4.3           Closing Fee.  On the Closing Date, Borrowers shall pay to Lender
all fees due and payable in accordance with the Fee Letter.  Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.
 
4.4           LC Fees.
 
(a)           Borrowers shall pay to Lender (i) an LC fee for each documentary
LC equal to the greater of (A) 2.00% per annum multiplied by the daily maximum
amount available to be drawn under such LC (whether or not such maximum amount
is then in effect under such LC), and (B) $500, and (ii) an LC fee for each
standby LC equal to the greater of (A) 2.00% multiplied by the daily maximum
amount available to be drawn under such LC (whether or not such maximum amount
is then in effect under such LC), and (B) $500.
 
(b)           Such LC fees shall be computed on the date of issuance, shall be
due and payable in advance on the date of issuance (and, for each Auto-Renewal
LC, on the date of each such renewal), and are nonrefundable.
 
(c)           In addition, Borrowers shall pay directly to Lender all other
customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of Lender relating to letters of credit as from time
to time in effect.  Such customary fees and standard costs and charges are due
and payable on demand and are nonrefundable.
 
SECTION 5    CONDITIONS PRECEDENT.
 
5.1           Conditions to Initial Credit Extension.  This Agreement will
become effective once all parties have executed and delivered this Agreement.
Lender will not be obligated to make the initial Credit Extension on the Closing
Date until (a) Lender has received all of the items described on Schedule 5,
each in Proper Form, including, but not limited to, payment of all fees due and
payable under Section 4.3, (b) Borrowers have established (and thereafter
maintains) with Lender a Cash Management Agreement acceptable to Borrowers and
Lender, (c) all conditions to closing the Omega Acquisition under the Purchase
Agreement have been satisfied, (d) all conditions to closing the Permitted
Bango/Omega Transaction (except those related solely to closing the Bango
Acquisition) have been satisfied, and (e) all conditions to closing the GS Term
Loan Agreement have been satisfied.
 

 
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5.2           Conditions to all Credit Extensions.  Lender will not be obligated
to make any Credit Extension unless:  (a) Lender has timely received a Loan
Request; (b) all of the representations and warranties of the Companies in the
Loan Documents are true and correct in all material respects (except to the
extent that the representations and warranties speak to a specific date);
(c) Lender has received and continues to maintain evidence of insurance as set
out in Section 8.6 (including certificates and endorsements); (d) no Material
Adverse Effect exists; and (e) no Default or Event of Default exists or will
result from such Credit Extension (whether a funding, issuance, amendment or
renewal).  Each Loan Request delivered to Lender constitutes the representation
and warranty by the Companies that the statements in clauses (b), (c), (d), and
(e) above are true and correct in all material respects.
 
5.3           Conditions to all LIBOR Loans.  Lender will have no obligation to
make or continue a LIBOR Loan if any of the following described events has
occurred and is continuing:  (a) Dollar deposits are not available in the London
inter-bank market; or (b) LIBOR does not accurately reflect Lender’s cost with
respect to any LIBOR Loan.  If either of the foregoing conditions exists, then
the applicable rate of interest on the Loans will be determined by such
alternate method as reasonably selected by Lender.
 
5.4           No Waiver.  Each condition precedent in this Agreement (including
matters listed on Schedule 5) is material to the transactions contemplated by
this Agreement, and time is of the essence with respect to each condition
precedent.  Lender may make any Credit Extension without all conditions being
satisfied, but such Credit Extension shall not be deemed a waiver of any
condition precedent for any subsequent Credit Extension.
 
SECTION 6    SECURITY AND GUARANTIES.
 
6.1           Collateral.  The complete payment and performance of the
Obligation shall be secured by all of the items and types of property
(collectively, the “Collateral”) described as “Collateral” in each Pledge and
Security Agreement and Deed of Trust.  Vertex-Operating, Holdings and each of
their respective direct and indirect wholly-owned Subsidiaries (for the
avoidance of doubt, other than E-Source and other than Vertex-NV upon its
release from its guarantee as provided in the last sentence of Section 6.3)
shall execute all applicable Security Documents necessary to pledge all of the
Collateral it owns, within ten (10) Business Days after such Subsidiary is
created or acquired.
 
6.2           Financing Statements.  Each Company hereby authorizes Lender to
file, and agrees to execute, in Proper Form, if requested, financing statements,
continuation statements, or termination statements, or take other action
reasonably requested by Lender relating to the Collateral, including any Lien
search required by Lender.
 
6.3           Guaranties.  Each direct and indirect subsidiary of
Vertex-Operating or Holdings (other than E-Source other than Vertex-NV upon its
release from its guarantee as provided in the last sentence of this Section 6.3)
shall guaranty the complete payment and performance of the Obligation (including
the Revolving Credit Facility, LCs, and any Bank Products) by executing and
delivering a Guaranty to Lender on the Closing Date or, with respect to such
Subsidiary, within 10 Business Days after such Subsidiary is created or
acquired.  Concurrent with the consummation of the Bango Acquisition in
accordance with the Purchase Agreement and the GS Term Loan Agreement as in
effect on the Closing Date, and so long as (a) Vertex-NV is simultaneously
released from its guarantee under the GS Term Loan Agreement, and (b) the liens
on the property of Vertex-NV are terminated as provided in Section 7.12 of the
GS Term Loan Agreement as in effect on the Closing Date, then upon the request
of Borrowers, Vertex-NV shall be released from the Guaranty and the Liens
granted by Vertex-NV to secure the Obligations shall be discharged and released
by Lender.  In no event shall any Subsidiary of Vertex-Operating or Holdings
guarantee the GS Term Loan Agreement without simultaneously becoming a
Guarantor.
 

 
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6.4           Reserves.  Upon 7 days prior notice to Borrower Representative,
Lender shall have the right to establish, modify, increase, decrease or
eliminate Reserves against Eligible Accounts, Eligible Inventory, and the
Borrowing Base from time to time in its reasonable credit judgment.  In addition
upon 7 days prior notice to Borrower Representative, Lender reserves the right,
at any time and from time to time after the Closing Date, to adjust any of the
criteria set out in the definitions of “Eligible Accounts” or “Eligible
Inventory” or to establish new criteria in its reasonable credit judgment.
 
SECTION 7    REPRESENTATIONS AND WARRANTIES.
 
Each Borrower represents and warrants to Lender as follows:
 
7.1           Existence, Good Standing, and Authority to do Business.  Holdings
is a corporation duly organized, validly existing, and in good standing under
the Laws of the jurisdiction in which it is organized.  Vertex-Operating is a
limited liability company duly organized, validly existing, and in good standing
under the Laws of the jurisdiction in which it is organized.  Each other Company
is duly organized, validly existing, and in good standing under the laws of the
jurisdiction in which it is organized.  In each state in which each Company does
business, it is properly licensed, in good standing, and, where required, in
compliance with fictitious name statutes.
 
7.2           Subsidiaries.  Except as disclosed on Schedule 7.2, no Borrower
has any Subsidiaries.
 
7.3           Authorization, Compliance, and No Default.  The execution and
delivery by each Company of the Loan Documents to which it is a party and each
Company’s performance of its obligations under the Loan Documents are within
such Company’s powers, have been duly authorized, do not conflict with any of
its Organizational Documents, and do not conflict with any Law, agreement, or
obligation by which such Company is bound.
 
7.4           Enforceability.  Each Loan Document has been executed and
delivered by each Company which is a party to it, and the Loan Documents are
enforceable against each Company in accordance with their respective terms,
except as enforceability may be limited by applicable Debtor Relief Laws and
general principles of equity.
 
7.5           Litigation.  Except as disclosed on Schedule 7.5, no Company is
subject to, or aware of the threat of, any Litigation involving any Company
which, (a) purports to affect or pertain to this Agreement, any other Loan
Document, or any of the transactions contemplated by the Loan Documents, or (b)
if determined adversely to any Company could reasonably be expected to result in
a Material Adverse Effect.
 
7.6           Taxes.  All Tax returns of each Company required to be filed have
been timely filed (or extensions have been granted) and all Taxes imposed upon
any Company that are due and payable have been paid before delinquency, other
than Taxes which are being contested in good faith by lawful proceedings
diligently conducted, against which reserve or other provision required by GAAP
has been made.
 
7.7           Environmental Matters.  Except as disclosed in Schedule 7.7, no
facility of any Company is used for, or to the knowledge of any Company has been
used for, storage, treatment, or disposal of any Hazardous Materials in
violation of any applicable Environmental Law, other than violations that
individually or collectively would not constitute a Material Adverse Effect.  No
Company knows of any environmental condition or circumstance adversely affecting
its assets, properties, or operations that could reasonably be expected to
result in a Material Adverse Effect.
 

 
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7.8           Ownership of Assets; Intellectual Property.  Each Company has
(a) indefeasible title to its real property, (b) a vested leasehold interest in
all of its leased property, and (c) good and marketable title to its personal
property, all as reflected on the Current Financials (except for property that
has been disposed of as permitted by Section 9.9).  Each Company is conducting
its business without infringement or claim of infringement of any license,
patent, copyright, service mark, trademark, trade name, trade secret or other
intellectual property right of others, other than any infringements or claims
that, if successfully asserted against or determined adversely to any Company,
could not, individually or collectively, reasonably be expected to result in a
Material Adverse Effect.
 
7.9           Liens.  No Lien exists on any asset of any Company, other than
Permitted Liens.
 
7.10         Debt.  No Company is an obligor on any Debt, other than Permitted
Debt.
 
7.11         Insurance.  The Companies maintain the insurance required under
Section 8.6.
 
7.12         Place of Business; Real Property.  The location of each Company’s
place of business or chief executive office is set out on Schedule 7.12.  The
books and records of each Company are located at its place of business or chief
executive office.  All of each Company’s inventory (other than inventory on
consignment, in transit, or in the possession of a Person under the terms of a
contract with a Company) is at one or more of the locations set out on
Schedule 7.12.  Except as described on Schedule 7.12, no Company has any
ownership, leasehold, or other interest in real estate.
 
7.13         Purpose of Credit Facilities.  Borrowers will use the proceeds of
the Revolving Credit Facility (a) to consummate the Omega Acquisition, (b) to
pay Transaction Costs related to the consummation of this Agreement and the
Related Agreements, and (c) for working capital and other general corporate
purposes. No part of the proceeds of the Revolving Credit Facility will be used,
directly or indirectly, for a purpose under Regulation U of the Board of
Governors of the Federal Reserve, or for a purpose that violates any Law.
 
7.14         Trade Names.  Except as disclosed on Schedule 7.14, no Company has
used or transacted business under any other corporate or trade name in the
five-year period preceding the Closing Date (including names of all Persons with
which any Company has merged or consolidated, or from which any Company has
acquired all or substantially all of such Person’s assets).
 
7.15         Transactions with Affiliates.  Except as disclosed on
Schedule 7.15, no Company is a party to an agreement or transaction with any of
its Affiliates (excluding other Companies, 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 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), other than (a)
transactions in the ordinary course of business and upon fair and reasonable
terms not materially less favorable than it could obtain or could become
entitled to in an arm’s-length transaction with a Person that was not its
Affiliate, and (b) permissible transactions which constitute Restricted NV
Intercompany Transactions.
 
7.16         Financial Information.  Each material fact or condition relating to
the Loan Documents or the Companies’ financial condition, business, property, or
prospects has been disclosed to Lender in writing.  All financial and other
information supplied to Lender is sufficiently complete to give Lender accurate
knowledge of each Company’s financial condition, including all material
contingent liabilities.  Since the date of the most recent financial statement
provided to Lender, there has been no occurrence which has caused a Material
Adverse Effect.
 

 
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7.17         Material Contracts and Funded Debt.  No Company is a party to any
Material Contract, other than the Loan Documents, the Related Agreements and the
Material Contracts described on attached Schedule 7.17.  No Company has breached
or is in default under any Material Contract or Funded Debt obligation.
 
7.18         ERISA.
 
(a)           Each Employee Plan (i) (other than a multiemployer plan) is in
compliance in all material respects with the applicable provisions of ERISA, the
Tax Code and other federal or state law, (ii) has received a favorable
determination letter from the IRS and to the best knowledge of Borrowers,
nothing has occurred which would cause the loss of such qualification.
 
(b)           Each Borrower has fulfilled its obligations, if any, under the
minimum funding standards of ERISA and the Tax Code with respect to each
Employee Plan, and has not incurred any liability with respect to any Employee
Plan under Title IV of ERISA.
 
(c)           There are no claims, actions, or Litigation (including by any
Governmental Authority), and there has been no prohibited transaction or
violation of the fiduciary responsibility rules, with respect to any Employee
Plan which is or could reasonably be expected to be a Material Adverse Effect.
 
(d)           With respect to any Employee Plan subject to Title IV of ERISA:
(i) no reportable event has occurred under Section 4043(c) of ERISA for which
the PBGC requires 30 day notice; (ii) no action by any Borrower or any ERISA
Affiliate to terminate or withdraw from any Employee Plan has been taken and no
notice of intent to terminate any Employee Plan has been filed under Section
4041 of ERISA; and (iii) no termination proceeding has been commenced with
respect to an Employee Plan under Section 4042 of ERISA, and no event has
occurred or condition exists which might constitute grounds for the commencement
of such a proceeding.
 
7.19         Government Sanctions.
 
(a)           Each Borrower represents that no Company, nor any of its
affiliated entities, including in the case of any Company that is not a natural
person, subsidiaries nor, to the knowledge of each Borrower, any owner, trustee,
director, officer, employee, agent, affiliate or representative of any Company
is an individual or entity currently the subject of any sanctions administered
or enforced by the United States Government, including, without limitation, the
U.S. Department of Treasury’s Office of Foreign Assets Control, the United
Nations Security Council, the European Union, Her Majesty’s Treasury, or other
relevant sanctions authority (collectively, “Sanctions”), nor any Borrower or
any Company located, organized or resident in a country or territory that is the
subject of Sanctions.
 
(b)           Each Borrower represents and covenants that it will not, directly
or indirectly, use the proceeds of the credit provided under this Agreement, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, to fund any activities of or business
with any Person, or in any country or territory, that, at the time of such
funding, is the subject of Sanctions, or in any other manner that will result in
a violation by any Person (including any Person participating in the
transaction, whether as underwriter, advisor, investor or otherwise) of
Sanctions.
 

 
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7.20         Solvency.  Each Company is and, upon the incurrence of any Credit
Extension by such Company on any date on which this representation and warranty
is made, will be, Solvent.
 
SECTION 8    AFFIRMATIVE COVENANTS.  So long as Lender is committed to make any
Credit Extension under this Agreement, and thereafter until the Obligation is
paid in full, each Borrower agrees as follows, and agrees to cause each Company
to comply with the following:
 
8.1           Items to be Furnished.  Borrowers shall cause the following to be
furnished to Lender:
 
(a)           Promptly after preparation, and no later than 120 days after the
last day of each fiscal year of Holdings, audited financial statements
(including statements of income, statements of retained earnings and cash flows
and a balance sheet) showing the consolidated financial condition and results of
operations of the Companies as of, and for the year ended on, that last day,
setting out, in each case, in comparative form the figures for the previous
fiscal year and accompanied by:
 
(i)           the unqualified opinion of LLB & Associates Ltd., LLP, or a firm
of nationally or regionally recognized independent certified public accountants
satisfactory to Lender, based on an audit using generally accepted auditing
standards, that the financial statements were prepared in accordance with GAAP
and present fairly, in all material respects, the consolidated financial
condition and results of operations of Companies, and
 
(ii)           a Compliance Certificate executed by a Responsible Officer of
each Borrower with respect to such financial statements to be delivered under
this clause (a), calculating and certifying as to the Companies’ compliance with
the financial covenants set forth in Section 10 of this Agreement.
 
(b)           Promptly after preparation, and no later than 45 days after each
fiscal quarter of Borrowers, unaudited financial statements (including
statements of income, statements of retained earnings and cash flows and a
balance sheet) showing the consolidated financial condition and results of
operations of the Companies (and the consolidating financial statements of
Vertex-NV) for the prior quarter and for the period from the beginning of the
current fiscal year to the last day of such quarter.
 
(c)           Within 45 days after the end of each fiscal quarter of Borrowers,
a Compliance Certificate executed by a Responsible Officer of each Borrower with
respect to the financial covenants set forth in Section 10 hereof, together with
calculations of such financial covenants.
 
(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, 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, 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;
 
(e)           Promptly after preparation, and no later than 20 days after the
last day of each month (or more often as Lender shall request), (i) a Borrowing
Base Certificate as of the last day
 

 
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of such month certifying as to the Companies’ Borrowing Base, and (ii) all
supporting information for the calculation of the Borrowing Base, including
supporting schedules, inventory listings, accounts payable, accounts receivable
agings and such other information as Lender may reasonably request.
 
(f)           The Companies will permit Lender to conduct and complete, by a
third party satisfactory to Lender, a field examination regarding all accounts
receivable and inventory of the Companies, in form and substance satisfactory to
Lender and, so long as no Event of Default exists, up to two times per calendar
year at the sole cost and expense of the Borrowers; provided that, at any time
an Event of Default exists, Lender may order or require any additional field
examinations to be conducted at its discretion and at the Borrowers’ sole cost
and expense (and any such field examination ordered by Lender when an Event of
Default exists shall not count toward the two times per calendar year
limitation).
 
(g)           Notice, within 5 days after any Company receives notice of, or
otherwise becomes aware of, (i) the institution of any Litigation involving any
Company for which the monetary amount at issue is greater than
$100,000, individually, or $250,000 in the aggregate, (ii) any liability or
alleged liability under any Environmental Law arising out of, or directly
affecting, the properties or operations of such Company, (iii) any substantial
dispute with any Governmental Authority, (iv) the incurrence of any material
contingent Debt, and (v) a Default or Event of Default, specifying the nature
thereof and what action each Company has taken, is taking, or proposes to take.
 
(h)           Concurrently with the occurrence of (i) such change, notify Lender
of any change in the name, legal structure, place of business, or chief
executive office of any Company, or (ii) any acquisition or creation of a
Subsidiary by any Company, notify Lender that any Person has become a Subsidiary
of such Company.
 
(h)           Promptly upon reasonable request by Lender, information and
documents not otherwise required to be furnished under the Loan Documents
respecting the business affairs, assets and liabilities of the Companies.
 
(i)           Promptly deliver a copy of each item delivered by any Company
pursuant to Section 5.1 of the GS Term Loan Agreement.
 
8.2           Books, Records and Inspections.  Each Company shall maintain
books, records, and accounts necessary to prepare the financial statements
required by Section 8.1.  Upon reasonable notice to Borrower Representative,
each Company shall allow Lender (or its Representatives) during business hours
or at other reasonable times to inspect each Company’s properties and examine,
audit, and make copies of books and records.  If any of the Companies’
properties, books or records are in the possession of a third party, the
applicable Company shall authorize that third party to permit Lender or its
Representatives to have access to perform inspections or audits and to respond
to Lender’s requests for information concerning such properties, books and
records.  Lender may discuss, from time to time, any of the Companies’ affairs,
conditions and finances with its directors, officers, and certified public
accountants.
 
8.3           Taxes.  Each Company will promptly pay when due any and all Taxes,
other than Taxes which are being contested in good faith by lawful proceedings
diligently conducted, against which reserve or other provision required by GAAP
has been made, and in respect of which levy and execution of any Lien are
stayed.
 

 
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8.4           Compliance with Laws.  Each Company shall comply in all material
respects of the requirements of all Laws (including fictitious or trade name
statutes) and all orders, writs, injunctions and decrees applicable to it or its
business or property, except in such instances in which (a) such requirement is
deemed contested in good faith by lawful proceedings diligently conducted,
against which reserve or other provision required by GAAP has been made, and (b)
the failure to comply would not result in a Material Adverse Effect.
 
8.5           Maintenance of Existence, Assets, and Business.  Except as
otherwise permitted by Section 9.6, each Company will (a) maintain its existence
and good standing in its state of organization and its authority to transact
business and good standing in all other jurisdictions where the nature and
extent of its business and properties require due qualification and good
standing, (b) maintain all licenses, permits and franchises necessary for its
business where failure to do so is a Material Adverse Effect, and (c) keep all
of its assets that are useful in and necessary to its business in good working
order and condition (ordinary wear and tear excepted) and make all necessary
repairs and replacements.
 
8.6           Insurance.  Each Company shall maintain (a) insurance satisfactory
to Lender as to amount, nature and carrier covering property damage (including
loss of use and occupancy) to any of the Companies’ properties, business
interruption insurance, public liability insurance including coverage for
contractual liability, product liability and workers’ compensation, and any
other insurance which is usual for the Companies’ business.  Each policy shall
provide for at least thirty (30) days’ prior notice to Lender of any
cancellation thereof, and (b) insurance policies covering the tangible property
comprising the Collateral.  Each insurance policy must be for the full
replacement cost of the Collateral and include a replacement cost endorsement in
an amount acceptable to Lender.  The insurance must be issued by an insurance
company acceptable to Lender and must include a lender’s loss payable
endorsement in favor of Lender in a form acceptable to Lender.  Upon Lender’s
request, Borrowers shall deliver to Lender a copy of each insurance policy, or,
if permitted by Lender, a certificate of insurance listing all insurance in
force.
 
8.7           Environmental Laws.  Each Company shall conduct its business so as
to comply with all applicable Environmental Laws, shall promptly take corrective
action to remedy any violation of any Environmental Law, and shall immediately
notify Lender of any claims or demands by any Governmental Authority or Person
with respect to any Environmental Law or Hazardous Materials.
 
8.8           ERISA.  Promptly during each year (a) pay contributions adequate
to meet at least the minimum funding standards under ERISA with respect to each
and every Employee Plan, (b) file each annual report required to be filed
pursuant to ERISA in connection with each Employee Plan for each year, and (c)
notify Lender within ten (10) days of the occurrence of any reportable event
under Section 4043(c) of ERISA that might constitute grounds for termination of
any capital Employee Plan by the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States District Court of a trustee to
administer any Employee Plan.
 
8.9           Use of Proceeds.  Borrowers shall use the proceeds of the
Revolving Credit Facility only for the purposes represented and warranted in
this Agreement.
 
8.10         Application of Insurance and Eminent Domain Proceeds.
 
(a)           Lender and each Company agree (i) to cause all Insurance Proceeds
received as a result of a loss or casualty of Revolving Credit Priority
Collateral (such term is used herein as defined in the Intercreditor Agreement)
to be paid by the insurers directly to Lender (as loss payee), and (ii) to cause
all Eminent Domain Proceeds arising from and received as a result of an
 

 
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Eminent Domain Event in respect of Revolving Credit Priority Collateral, to be
paid by the condemning Governmental Authority directly to Lender.
 
(b)           If any Insurance Proceeds or Eminent Domain Proceeds described in
Section 8.10(a) are paid to any Company, such Insurance Proceeds or Eminent
Domain Proceeds shall be received only in trust for Lender, shall be segregated
from other funds of the Companies and shall promptly be paid over to Lender in
the same form as received (with any necessary endorsement).
 
(c)           Notwithstanding anything to the contrary in this Section 8.10,
reimbursement under any liability insurance maintained by any Company may be
paid directly to the Person who incurred the liability, cost, or expense covered
by such insurance.
 
(d)           Any Eminent Domain Proceeds or Insurance Proceeds shall be applied
to the repayment of the Revolving Principal Amount and to Cash Collateralize the
LC Exposure in accordance with Section 2.3, with the excess, if any, payable to
Borrowers.
 
8.11         New Subsidiaries.  Each Company shall promptly cause each newly
created or acquired Subsidiary to comply with Section 6.
 
8.12         Expenses.  Borrowers shall promptly pay upon demand (a) all
reasonable costs, fees and expenses paid or incurred by Lender (including those
incurred under Section 6) in connection with the negotiation, preparation,
delivery and execution of any Loan Document, and any related or subsequent
amendment, waiver, or consent (including in each case, the reasonable fees and
expenses of Lender’s counsel), (b) all due diligence, closing, and post-closing
costs including filing fees, recording costs, lien searches, corporate due
diligence, third-party expenses, appraisals (if required), title insurance (if
required), environmental surveys, annual field audits, and other related due
diligence, closing and post-closing costs and expenses, and (c) all costs, fees
and expenses of Lender incurred in connection with the enforcement of the Loan
Documents or the exercise of any rights arising under the Loan Documents or the
negotiation, workout, or restructure and any action taken in connection with any
Debtor Relief Laws (including in each case, the reasonable fees and expenses of
Lender’s counsel), all of which shall be a part of the Obligation and shall
accrue interest, if not paid upon demand, at the Default Rate until repaid.
 
8.13         Primary Depositary Institution.  Borrowers shall establish and
maintain with Lender all of Borrowers’ primary depositary and treasury
management accounts.
 
8.14         Further Assurances.  Each Company shall take such action as Lender
may reasonably request to carry out the intent of this Agreement and the terms
of the Loan Documents (including to perfect and protect its security interests
and Liens), including executing, acknowledging, authorizing, delivering or
recording or filing additional instruments or documents.  Because each Company
agrees that Lender’s remedies at Law for failure of any Company to comply with
the provisions of this Section 8.14 would be inadequate and that failure would
not be adequately compensable in damages, each Company agrees that the covenants
of this Section 8.14 may be specifically enforced.
 
8.15         Keepwell. If it is a Qualified ECP Loan Party, then jointly and
severally, together with each other Qualified ECP Loan Party, hereby absolutely
unconditionally and irrevocably (a) guarantees the prompt payment and
performance of all Hedge Liabilities owing by each Non-Qualifying Party (it
being understood and agreed that this guarantee is a guaranty of payment and not
of collection), and (b) undertakes to provide such funds or other support as may
be needed from time to time by any Non-Qualifying Party to honor all of such
Non-Qualifying Party’s obligations under this Agreement or any other Loan
Document in respect of Hedge Liabilities (provided that, each Qualified ECP Loan
Party shall
 

 
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only be liable under this Section 8.15 for the maximum amount of such liability
that can be hereby incurred without rendering its obligations under this Section
8.15, or otherwise under this Agreement or any other Loan Document, voidable
under applicable Law, including fraudulent conveyance or fraudulent transfer
Laws, and not for any greater amount).  The obligations of each Qualified ECP
Loan Party under this Section 8.15 shall remain in full force and effect until
payment in full of the Obligation and termination of this Agreement and the
other Loan Documents.  Each Qualified ECP Loan Party intends that this Section
8.15 constitute, and this Section 8.15 shall be deemed to constitute, a
guarantee of the obligations of, and a “keepwell, support, or other agreement”
for the benefit of Borrowers and Guarantors for all purposes of Section
1a(18(A)(v)(II) of the Commodity Exchange Act.
 
8.16         Equity Raise.  Holdings shall issue shares of its common stock
after the Closing Date and no later than the earlier of (x) June 30, 2014 and
(y) the date that any Company makes any investment in Bango Refining after the
Closing Date, the net proceeds of which to Holdings are at least $10,000,000
(the “Post Close Equity Raise”).  Holdings shall immediately deposit the net
cash proceeds from the Post Close Equity Raise into a deposit account in the
name of Vertex-Operating in which Lender has a second priority Lien (and in
which the lenders under the GS Term Loan Agreement may have a first priority
Lien) (the “Vertex Refining Cash Collateral Account”).  Vertex-Operating will
not withdraw funds from the Vertex Refining Cash Collateral Account, except in
accordance with terms of the GS Term Loan Agreement as in effect on the Closing
Date.
 
8.17         Miscellaneous Business Covenants.  Unless otherwise consented to by
Lender:
 
(a)           Non-Consolidation.  Holdings will and will cause each of its
Subsidiaries to:  (i)  maintain entity records and books of account separate
from those of any other entity which is an Affiliate of such entity; (ii) not
commingle its funds or assets with those of any other entity which is an
Affiliate of such entity; and (iii) provide that its board of directors or other
analogous governing body will hold all appropriate meetings to authorize and
approve such entity’s actions, which meetings will be separate from those of
other entities.  Holdings will cause each Company not to commingle their funds
or assets with those of Vertex-NV, which shall maintain separate books and
records, assets and funds for all purposes, unless and until the Vertex-NV Ring
Fence Termination Date occurs.
 
(b)           Communication with Accountants. Each Company authorizes Lender to
communicate directly with such Company’s independent certified public
accountants and authorizes and shall instruct those accountants to communicate
(including the delivery of audit drafts and letters to management) with Lender
information relating to any Company with respect to the business, results of
operations and financial condition of any Company; provided however, that
Lender, as the case may be, shall provide such Company with notice at least two
(2) Business Days prior to first initiating any such communication.
 
(c)           Activities of Management.  Each member of the senior management
team of each Company shall devote all or substantially all of his or her
professional working time, attention, and energies to the management of the
businesses of the Company.
 
SECTION 9    NEGATIVE COVENANTS.
 
So long as Lender is committed to make any Credit Extension under this
Agreement, and thereafter until the Obligation is paid in full, each Borrower
agrees as follows, and agrees to cause each Company to comply with the
following:
 
9.1           Debt.  No Company may create, incur, or permit to exist, any Debt
except Permitted
 

 
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Debt.  Furthermore, (a) following the closing of the Bango Acquisition and prior
to the Vertex-NV Ring Fence Termination Date, no Company shall extend credit or
intercompany loans to Vertex-NV or guarantee any Debt of Vertex-NV, other than
in accordance with the restrictions set forth in the Restricted NV Intercompany
Transactions, (b) from and after the Closing Date, no Company shall, nor shall
it permit any of its Subsidiaries to, directly or indirectly, incur, assume or
guaranty, or otherwise become directly or indirectly liable to pay any cash
“earn-out” or other deferred cash purchase price obligations with respect to any
Permitted Acquisitions or any investments described in clause (j) of the
definition of Permitted Investments, and (c) no Company shall incur any “Swap
Obligations” as defined in the GS Term Loan Agreement or Hedge Liabilities
without the prior written consent of the Lender.
 
9.2           Liens.  No Company shall create, incur, or permit any Lien upon
any of its assets, except Permitted Liens.  No Company shall enter into any
agreement (other than the Loan Documents and the GS Term Loan Agreement)
prohibiting the creation or assumption of any Lien upon its assets or revenues
or prohibiting or restricting the ability of the Borrowers or any Company to
amend or otherwise modify this Agreement or any other Loan Document.
 
9.3           Compliance.  No Company may violate the provisions of any Laws
applicable to it, any agreement to which it is a party, or the provisions of its
organizational documents, if such violations individually or collectively would
constitute a Material Adverse Effect.  No Company will modify, repeal, replace
or amend any provision of its organizational or governing documents in any
manner which would be adverse to the interests of Lender.
 
9.4           Loans and Investments.
 
(a)           No Company may extend credit to any other Person, other than (i)
extensions of credit among the Companies which have recourse liability for the
Obligation, subject to the conditions set forth for Restricted NV Intercompany
Transactions, (ii) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business to Persons which are not Affiliates, (iii) demand
deposit accounts maintained in the ordinary course of business, (iv) expense
accounts for employees in the ordinary course of business which do not, in the
aggregate, at any time exceed $25,000, (v) extensions of credit that do not
exceed an aggregate amount of $25,000 outstanding at any one time, and (vi) the
purchase price loan made to Omega Refining on the Closing Date pursuant to the
Purchase Agreement and Omega/Bango Financing Documents in effect on the Closing
Date, and (vii) the Permitted Bango/Omega Transaction.
 
(b)           No Company may make any investment in, or purchase or commit to
purchase any Equity Interests in, any other Person, other than Permitted
Investments and Acquisitions permitted under Section 9.6(b) and (c).
 
9.5           Dividends.  No Company may (a) declare or make any dividend or
other distribution (other than (i) dividends or distributions declared or made
by such Company wholly in the form of its capital stock, or (ii) dividends or
distributions by a Company to another Company), (b) retire, redeem, purchase,
withdraw, or otherwise acquire any Equity Interests in such Company (including
the purchase of warrants or other options to acquire such interests), or (c)
declare or make any distribution of assets to the holders of its Equity
Interests (in that capacity), whether in cash, assets, or in its
obligations.  No Company may enter into or permit to exist any arrangement or
agreement (other than this Agreement and the GS Term Loan Agreement) that
prohibits it from paying dividends or making other distributions.
 
9.6           Acquisition, Mergers, and Dissolutions.
 

 
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(a)           Except as provided in this Section 9.6, no Company may (whether in
one transaction or a series of transactions) (i) acquire all or any substantial
portion of the stock issued by, equity interest in, Voting Interest in, or
assets of, any other Person, (ii) merge or consolidate with any other Person
without Lender’s consent, (iii) liquidate, wind up or dissolve (or suffer any
liquidation or dissolution), (iv) suspend operations, or (v) create or acquire
any Subsidiaries.
 
(b)           Any Company may merge or consolidate with, or acquire stock issued
by, Equity Interests in, or assets of, another Company (and, in the case of such
merger or consolidation or, in the case of the conveyance or distribution of all
of such assets, the non-surviving or selling entity, as the case may be, may be
liquidated, wound up or dissolved); provided that, if the surviving entity is a
Guarantor it shall comply with Section 6 and if any Borrower is a party to such
merger or consolidation, such Borrower must be the surviving entity, and
provided further that, in no event shall any Company merge or consolidate with
Vertex-NV.
 
(c)           The Companies may consummate the following Acquisitions: (i) the
Omega Acquisition and (ii) Permitted Acquisitions.
 
9.7           Assignment.  No Company may assign or transfer any of its rights,
duties or obligations under any of the Loan Documents.
 
9.8           Fiscal Year and Accounting Methods.  No Company may change its
fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP).
 
9.9           Sale of Assets.  No Company may make any Disposition or enter into
any agreement to make any Disposition, except (a) Dispositions of obsolete or
worn out assets in the ordinary course of business, (b) Dispositions of
inventory in the ordinary course of business, (c) the Disposition of delinquent
accounts receivable in the ordinary course of business for purposes of
collection, (d) Dispositions of property by any Company to another Company or to
a wholly-owned Subsidiary; provided that, if the transferor of such property is
a Borrower or a Guarantor, the transferee thereof must either be a Borrower or a
Guarantor and must comply with Section 6, and (e) to the extent permitted by
Section 9.6.
 
9.10         New Businesses.  No Company may engage in any business except the
business in which it is engaged as of the Closing Date.
 
9.11         Transactions with Affiliates.  Except as disclosed on
Schedule 7.15, no Company may enter into any Material Contract or any material
transaction with any of its Affiliates other than transactions in the ordinary
course of business which are upon fair and reasonable terms not materially less
favorable to such Company than such Company could obtain in an arms’ length
transaction with a Person that was not an Affiliate; provided that, no Company
shall make loans or advances to any of its Affiliates (other than extensions of
credit among the Companies which have recourse liability for the Obligation and
loans permitted pursuant to Section 9.4 hereof) at any time.
 
9.12         Payroll Taxes.  No Company may use any portion of the proceeds of
any Loan to pay the wages of employees, unless a timely payment to or deposit
with the appropriate Governmental Authority of all Taxes required to be deducted
and withheld with respect to such wages is also made.
 
9.13         Prepayment of Debt.  No Company may voluntarily prepay principal
of, or interest on, any Debt, other than the Obligation and the “Obligations” as
defined in the GS Term Loan Agreement, if a Default or Event of Default exists
or would result after giving effect to such payment.  No Company
 

 
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may prepay, repay, repurchase, redeem or defease Subordinated Debt prior to the
irrevocable payment and performance in full of the Obligation without the prior
written consent of Lender.
 
9.14         Purchase Agreement.  The Purchase Agreement shall not be amended,
modified or supplemented after the Omega Acquisition, without the prior written
consent of Lender.  No Company may make any Earnout Payment as defined in the
Earnout Subordination Agreements, if an Event of Default exists at the time of
such payment or would arise after giving effect to any such payment, or if such
payment would violate the terms of the Earnout Subordination
Agreements.  Borrowers shall provide notice to Lender prior to making any
Earnout Payment as defined in the Earnout Subordination Agreements.
 
SECTION 10    FINANCIAL COVENANTS.  So long as Lender is committed to make any
Credit Extension under this Agreement, and thereafter until the Obligation is
paid in full, each Company agrees as follows:
 
10.1         Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio as of
the last day of any fiscal quarter, beginning with the fiscal quarter ending
June 30, 2014, shall not be less than 1.25 to 1.00.
 
10.2         Leverage Ratio.  The Leverage Ratio as of the last day of any
fiscal quarter, beginning with the fiscal quarter ending December 31, 2014,
shall not exceed the correlative ratio indicated:
 
 
Fiscal Quarter
Leverage
Ratio
For the fiscal quarter ending December 31, 2014
3.50 to 1.00
For each fiscal quarter ending March 31, 2015, and June 30, 2015
3.00 to 1.00
For each fiscal quarter ending September 31, 2015, December 31, 2015, March 31,
2016 and June 30, 2016
2.50 to 1.00
For the fiscal quarter ending September 30, 2016 and for each fiscal quarter
thereafter
2.00 to 1.00

10.3         Consolidated Adjusted EBITDA.  The Consolidated Adjusted EBITDA as
at the end of any fiscal quarter, beginning with the fiscal quarter ending June
30, 2014, for the periods indicated below, shall not be less than the
correlative amount indicated:
 
Fiscal Quarter
Consolidated
Adjusted EBITDA
For the six months ending June 30, 2014
$4,500,000

 
 
 
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Fiscal Quarter
Consolidated
Adjusted EBITDA
For the nine months ending September 30, 2014
$8,000,000
For the twelve months ending December 31, 2014
$12,500,000
For the twelve months ending March 31, 2015
$13,500,000
For each twelve months ending June 30, 2015 and September 30, 2015
$14,000,000
For each twelve months ending December 31, 2015 and March 31, 2016
$14,500,000
For each twelve months ending June 30, 2016 and September 30, 2016
$15,000,000
For each twelve months ending December 31, 2016 and March 30, 2017
$15,500,000

10.4         Minimum Consolidated Liquidity.  The Consolidated Liquidity shall
not be less than $3,000,000 at any time from and after the Closing Date.
 
10.5         Certain Calculations.  With respect to any period during which the
acquisition of Equity Interest of the Omega Acquisition, a Permitted Acquisition
or a Disposition permitted under this Agreement has occurred (each, a “Subject
Transaction”), for purposes of determining compliance with the financial
covenants set forth in this Section 10 (but not for purposes of determining the
Applicable Margin), Consolidated Adjusted EBITDA and the components of
Consolidated Fixed Charges shall be calculated with respect to such period on a
pro forma basis (including pro forma adjustments approved by Lender in its sole
discretion) using the historical audited financial statements of any business so
acquired or to be acquired or sold or to be sold and the consolidated financial
statements of Holdings and its Subsidiaries which shall be reformulated as if
such Subject Transaction, and any indebtedness incurred or repaid in connection
therewith, had been consum­mated or incurred or repaid at the beginning of such
period (and assuming that such indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period).
 
SECTION 11    EVENTS OF DEFAULT.  The term “Event of Default” means the
occurrence of any one or more of the following events:
 
11.1         Payment of Obligation.  The failure of any Company to pay any part
of the Obligation when and as required to be paid under the Loan Documents.
 
11.2         Covenants.  The failure of any Company to punctually and properly
perform, observe and comply with:
 

 
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(a)           Any covenant, agreement, or condition contained in
(i) Sections 6.1, 6.3, 8.2, 8.6, 8.8, 8.9, or 8.10, and such failure continues
for 10 days or (ii) Sections 9 and 10, or,
 
(b)           Any other covenant, agreement, or condition contained in any Loan
Document, (other than the covenants to pay the Obligation as set out in Section
11.1 above, the covenants in clause (a) preceding and as set out below in this
Section 11), and such failure continues for 30 days.
 
11.3         Debtor Relief.  Any Company or any Guarantor (a) voluntarily seeks,
consents to, or acquiesces in the benefit of any Debtor Relief Law, other than a
voluntary liquidation or dissolution permitted by Section 9.6, (b) becomes a
party to or is made the subject of any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant), and (i) the petition is not
controverted within 10 days and is not dismissed within 60 days, or (ii) an
order for relief is entered under Title 11 of the United States Code, (c) makes
an assignment for the benefit of creditors, or (d) fails (or admits in writing
its inability) to pay its debts generally as they become due.
 
11.4         Judgments.  There is entered against any Company or any Guarantor
(a) a final non-appealable judgment or arbitration award for the payment of
money in the amount exceeding $250,000 (individually or in the aggregate and net
of applicable insurance if the insurer has accepted coverage) or (b) one or more
non-monetary final non-appealable judgments that could be, or could reasonably
be expected to be, individually or in the aggregate, a Material Adverse Effect,
and, in either case enforcement of such judgment or award is not stayed.
 
11.5         False Information; Misrepresentation.  Any information given to
Lender by any Company is false or any representation or warranty made to Lender
by any Company or contained in any Loan Document at any time proves to have been
incorrect in any material respect when made.
 
11.6         Default Under Other Agreements.
 
(a)           Any Company fails to pay when due (after any applicable grace
period) any Debt which (individually or in the aggregate) exceeds $250,000, or
any default exists under any agreement which permits any Person to cause any
Debt which (individually or in the aggregate) exceeds $250,000 to become due and
payable by any Company before its stated maturity.
 
(b)           Any Company breaches or defaults under any term, condition,
provision, representation or warranty contained in any Material Contract,
including any agreement with Lender (other than the Loan Documents), or in any
Related Agreement (other than the GS Term Loan Agreement) and such Company fails
for 5 Business Days to commence and thereafter diligently pursue a cure, if the
effect of such breach or default is to cause or to permit the other parties to
such Related Agreement or Material Contract, as the case may be, to terminate
such Related Agreement or Material Contract.
 
11.7         Validity and Enforceability of Loan Documents.  Any Lien granted
under any Security Document ceases to be a first priority Lien on the Companies’
assets.  Any Loan Document at any time after its execution and delivery (a)
ceases to be in effect in any material respect or is declared by a Governmental
Authority to be null and void, or (b) its validity or enforceability is
contested by a Company or a Company denies that it has any further liability or
obligations under any Loan Document.
 
11.8         Hedge Agreement.  Notwithstanding Section 11.2(b) above, (a) any
Company breaches any provision of any Hedge Agreement and the breach is not
cured or waived within any applicable grace period, or (b) any Hedge Agreement
is terminated.
 

 
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11.9         Change of Management or Control.  (a) A Change of Management
occurs, or (b) a Change of Control occurs.
 
11.10       Material Adverse Effect.  A Material Adverse Effect exists.
 
11.11       LCs.  Lender is served with, or becomes subject to, a court order,
injunction, or other process or decree restraining or seeking to restrain it
from paying any amount under any LC and either (a) a drawing has occurred under
the LC and the applicable Company has refused to reimburse Lender for payment or
(b) the expiration date of the LC has occurred but the right of any beneficiary
thereunder to draw under the LC has been extended past the expiration date in
connection with the pendency of the related court action or proceeding and
Borrowers have failed to Cash Collateralize the then existing LC Exposure.
 
11.12       Default under the Subject Leases.  A default under any of the
Subject Leases occurs if the effect of such default is to cause, or to permit
the other parties to such Subject Lease, to terminate such Subject Lease.
 
11.13       Default under GS Term Loan Agreement.  An event of default under or
as defined in the GS Term Loan Agreement occurs.
 
SECTION 12    RIGHTS AND REMEDIES.
 
12.1         Remedies Upon Event of Default.
 
(a)           If an Event of Default exists under Section 11.3, the Commitment
to extend credit under this Agreement automatically terminates and the unpaid
balance of the Obligation automatically becomes due and payable without any
action of any kind.
 
(b)           If an Event of Default exists, Lender may do any one or more of
the following:  (i) if the maturity of the Obligation has not already been
accelerated under Section 12.1(a), declare the unpaid balance of the Obligation
immediately due and payable and to the extent permitted by applicable Law, the
Obligation shall accrue interest at the Default Rate; (ii) terminate the
commitment to extend credit under this Agreement; (iii) reduce any claim to
judgment; (iv) exercise the rights of set-off or banker’s Lien under Section 3.7
to the extent of the full amount of the Obligation; and (v) exercise any and all
other legal or equitable rights afforded by the Loan Documents, the Laws of the
State of Texas, or any other applicable jurisdiction.
 
12.2         Waivers.  To the extent permitted by Law, each Company waives
presentment and demand for payment, protest, notice of intention to accelerate,
notice of acceleration and notice of protest and nonpayment, and agrees that its
liability with respect to all or any part of the Obligation is not affected by
any renewal or extension in the time of payment of all or any part of the
Obligation, by any indulgence, or by any release or change in any security for
the payment of all or any part of the Obligation.
 
12.3         No Waiver.  No waiver of any Event of Default shall be deemed to be
a waiver of any other then-existing or subsequent Event of Default.  No delay or
omission by Lender in exercising any right under the Loan Documents will impair
that right or be construed as a waiver thereof or any acquiescence therein, nor
will any single or partial exercise of any right preclude other or further
exercise thereof or the exercise of any other right.  The acceptance by Lender
of any partial payment shall not be deemed to be a waiver of any Event of
Default then existing.
 

 
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12.4         Performance by Lender.  If any covenant, duty or agreement of any
Company is not performed in accordance with the terms of the Loan Documents,
Lender may, but is not obligated to, perform or attempt to perform that
covenant, duty or agreement on behalf of that Company (and any amount expended
by Lender in its performance or attempted performance is payable on demand,
becomes part of the Obligation, and bears interest at the Default Rate from the
date of Lender’s expenditure until paid).
 
12.5         Cash Collateral.  If any Event of Default exists, Borrowers shall,
if requested by Lender, immediately deposit with and pledge to Lender, cash or
cash equivalent investments in an amount equal to the LC Exposure as security
for the Obligation for so long as such Event of Default continues or until such
Event of Default is waived by Lender.
 
12.6         Cumulative Rights.  All rights available to Lender under the Loan
Documents are cumulative of, and in addition to, all other rights granted at law
or in equity, whether or not the Obligation is due and payable and whether or
not Lender has instituted any suit for collection, foreclosure, or other action
in connection with the Loan Documents.
 
SECTION 13    MISCELLANEOUS.
 
13.1         Governing Law.  Each Loan Document must be construed, and its
performance enforced, under Texas law (except if otherwise provided in such Loan
Document).
 
13.2         Invalid Provisions.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall engage in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
 
13.3         Multiple Counterparts and Electronic Signatures.  Each Loan
Document may be executed in any number of counterparts with the same effect as
if all signatories had signed the same document.  All counterparts must be
construed together to constitute one and the same instrument.  Loan Documents
may be transmitted and signed by facsimile or other electronic means and shall
have the same effect as manually-signed originals and shall be binding on all
Companies and Lender.
 
13.4         Notice.  Unless otherwise provided in this Agreement, all notices
or consents required under this Agreement shall be personally delivered or sent
by first class mail, postage prepaid, or by overnight courier, or sent by
facsimile.  Notices and other communications shall be effective (a) if mailed,
upon the earlier of receipt or five (5) days after deposit in the U.S. mail,
first class, postage prepaid, (b) if faxed, when transmitted, or (c) if
hand-delivered, by courier or otherwise (including telegram, lettergram or
mailgram), when delivered.  Until changed by notice pursuant to this Agreement,
the addresses and facsimile numbers for each party is set out on
Schedule 1.  Lender shall be entitled to rely and act upon any notices
(including telephonic Loan Requests permitted by Lender) purportedly given by or
on behalf of Borrower Representative even if (i) such notices were not made in a
manner specified in this Section 13.4, were incomplete or were not preceded or
followed by any other form of notice specified in this Section 13.4, or (ii) the
terms of the notice, as understood by the recipient, varied from any
confirmation of the notice.  Borrowers shall indemnify Lender and its Affiliates
and representatives from all losses, costs, expenses and liabilities resulting
from the reliance by such Person on each notice purportedly given by or on
behalf of Borrowers.  All telephonic notices to and other communications with
 

 
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Lender may be recorded by Lender, and each of the parties to this Agreement
hereby consents to such recording.
 
13.5         Binding Effect; Survival.  This Agreement is binding upon, and
inures to the benefit of, the parties hereto and their respective successors and
permitted assigns.  Unless otherwise provided, all covenants, agreements,
indemnities, representations and warranties made in any of the Loan Documents
survive and continue in effect as long as the Commitment is in effect or the
Obligation is outstanding.
 
13.6         Amendments; Amendment and Restatement of Original Credit
Agreement.  The Loan Documents may be amended, modified, supplemented or be the
subject of a waiver only by a writing executed by Lender and each Company party
thereto.  This Agreement amends and restates, but does not extinguish and is not
a novation or an accord and satisfaction of the indebtedness outstanding under
the Original Credit Agreement, which indebtedness shall be deemed to be
outstanding under this Agreement. Nothing in this Agreement shall be deemed to
release or otherwise adversely affect any Lien, mortgage or security interest
securing any indebtedness outstanding under the Original Credit Agreement or any
rights of Lender under the Original Credit Agreement.  Borrowers hereby
acknowledge and agree that all Liens securing the “Obligation” under, and as
defined in, the Original Credit Agreement are hereby ratified, renewed, and
extended to secure the Obligation.
 
13.7         Participants.  Lender may, at any time, sell to one or more Persons
(each a “Participant”) participating interests in the Obligation; provided that,
(i) Lender remains the holder of the Revolving Principal Amount, (ii) Lender’s
obligations under this Agreement remain unchanged and Lender remains solely
responsible for the performance of those obligations, and (iii) each Company
continues to deal solely and directly with Lender regarding the Loan
Documents.  Lender may furnish any information concerning the Companies in its
possession from time to time to assignees and Participants (including
prospective assignees and Participants).
 
13.8         Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances.  Each Company’s obligations under the Loan Documents remain in
full force and effect until the Commitment is terminated and the Obligation is
paid in full (except for provisions under the Loan Documents which by their
terms expressly survive payment of the Obligation and termination of the Loan
Documents).  If at any time any payment of the principal of or interest on the
Note or any other amount payable by any Company or any other obligor on the
Obligation under any Loan Document is rescinded or must be restored or returned
upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise,
the obligations of each Company under the Loan Documents with respect to that
payment shall be reinstated as though the payment had been due but not made at
that time.
 
13.9         Arbitration; Waiver of Jury Trial.  This paragraph, including the
subparagraphs below, is referred to as the “Dispute Resolution Provision.”  This
Dispute Resolution Provision is a material inducement for the parties entering
into this Agreement.
 
(a)           This Dispute Resolution Provision concerns the resolution of any
controversies or claims between the parties, whether arising in contract, tort
or by statute, including but not limited to controversies or claims that arise
out of or relate to: (i) this Agreement (including any renewals, extensions or
modifications); or (ii) any document related to this Agreement (collectively a
“Claim”).  For the purposes of this Dispute Resolution Provision only, the term
“parties” shall include any parent corporation, subsidiary or affiliate of
Lender involved in the servicing, management or administration of any obligation
described or evidenced by this Agreement.
 

 
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(b)           At the request of any party to this agreement, any Claim shall be
resolved by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U.S. Code) (the “Act”).  The Act will apply even though this agreement
provides that it is governed by the law of a specified state.
 
(c)           Arbitration proceedings will be determined in accordance with the
Act, the then-current rules and procedures for the arbitration of financial
services disputes of the American Arbitration Association or any successor
thereof (“AAA”), and the terms of this Dispute Resolution Provision.  In the
event of any inconsistency, the terms of this Dispute Resolution Provision shall
control.  If AAA is unwilling or unable to (i) serve as the provider of
arbitration or (ii) enforce any provision of this arbitration clause, Lender may
designate another arbitration organization with similar procedures to serve as
the provider of arbitration.
 
(d)           The arbitration shall be administered by AAA and conducted, unless
otherwise required by law, in any U.S. state where real or tangible personal
property collateral for this credit is located or if there is no such
collateral, in the state specified in the governing law section of this
agreement.  All Claims shall be determined by one arbitrator; however, if Claims
exceed Five Million Dollars ($5,000,000), upon the request of any party, the
Claims shall be decided by three arbitrators.  All arbitration hearings shall
commence within ninety (90) days of the demand for arbitration and close within
ninety (90) days of commencement and the award of the arbitrator(s) shall be
issued within thirty (30) days of the close of the hearing.  However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of the
hearing for up to an additional sixty (60) days.  The arbitrator(s) shall
provide a concise written statement of reasons for the award.  The arbitration
award may be submitted to any court having jurisdiction to be confirmed and have
judgment entered and enforced.
 
(e)           The arbitrator(s) will give effect to statutes of limitation in
determining any Claim and shall dismiss the arbitration if the Claim is barred
under the applicable statutes of limitation.  For purposes of the application of
any statutes of limitation, the service on AAA under applicable AAA rules of a
notice of Claim is the equivalent of the filing of a lawsuit.  Any dispute
concerning this arbitration provision or whether a Claim is arbitrable shall be
determined by the arbitrator(s), except as set forth at subparagraph (h) of this
Dispute Resolution Provision.  The arbitrator(s) shall have the power to award
legal fees pursuant to the terms of this agreement.
 
(f)           This paragraph does not limit the right of any party to: (i)
exercise self-help remedies, such as but not limited to, setoff; (ii) initiate
judicial or non-judicial foreclosure against any real or personal property
collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in
a court of law to obtain an interim remedy, such as but not limited to,
injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.
 
(g)           The filing of a court action is not intended to constitute a
waiver of the right of any party, including the suing party, thereafter to
require submittal of the Claim to arbitration.
 
(h)           Any arbitration or court trial (whether before a judge or jury) of
any Claim will take place on an individual basis without resort to any form of
class or representative action (the “Class Action Waiver”).  The Class Action
Waiver precludes any party from participating in or being represented in any
class or representative action regarding a Claim.  Regardless of anything else
in this Dispute Resolution Provision, the validity and effect of the Class
Action Waiver may be determined only by a court and not by an arbitrator.  The
parties to this agreement acknowledge that the Class Action Waiver is material
and essential to the arbitration of any disputes between the parties and is
nonseverable from the agreement to arbitrate Claims. If the
 

 
51

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Class Action Waiver is limited, voided or found unenforceable, then the parties’
agreement to arbitrate shall be null and void with respect to such proceeding,
subject to the right to appeal the limitation or invalidation of the Class
Action Waiver.  THE PARTIES ACKNOWLEDGE AND AGREE THAT UNDER NO CIRCUMSTANCES
WILL A CLASS ACTION BE ARBITRATED.
 
(i)           By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any
Claim.  Furthermore, without intending in any way to limit this agreement to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim.  This waiver of jury trial shall remain in effect even if the Class
Action Waiver is limited, voided or found unenforceable.  WHETHER THE CLAIM IS
DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND
THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL
BY JURY TO THE EXTENT PERMITTED BY LAW.
 
13.10       Indemnity.  Whether or not the transactions contemplated by this
Agreement are consummated, each Company shall indemnify and hold harmless Lender
and its Affiliates and representatives (collectively the “Indemnitees”) from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including fees and expenses of counsel) of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with
(a) the execution, delivery, enforcement, performance or administration of any
Loan Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Commitment, any Loan, or the use or
proposed use of the proceeds therefrom, or (c) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by any Borrower, any Subsidiary or any other Company, or any
liability in respect of any Environmental Law related in any way to any
Borrower, any Subsidiary or any other Company, or (d) any actual or prospective
Litigation, claim, or investigation relating to any of the foregoing, whether
based on contract, tort or any other theory (including any investigation of,
preparation for, or defense of any pending or threatened claim, investigation,
litigation or proceeding) and regardless of whether any Indemnitee is a party
thereto (all the foregoing, collectively, the “Indemnified Liabilities”), in all
cases, whether or not caused by or arising, in whole or in part, out of the
negligence of the Indemnitee; provided that, such indemnity shall not, as to any
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee.  All amounts due under this Section 13.10
shall be payable within ten (10) Business Days after demand.  The agreements in
this Section 13.10 shall survive the resignation of Lender, the replacement of
Lender, the termination of the Commitments hereunder and the repayment,
satisfaction or discharge of the Obligation.
 
13.11       Indemnity Regarding Hazardous Materials.
 
In addition to Section 13.10, and not by way of limitation, each Borrower agrees
to indemnify and hold Lender harmless from and against all liabilities, claims,
actions, foreseeable and unforeseeable consequential damages, costs and expenses
(including sums paid in settlement of claims and all consultant, expert and
legal fees and expenses of the Lender’s counsel) or loss directly or indirectly
arising out of or resulting from any of the following:
 

 
52

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(a)
Any Hazardous Materials being present at any time, whether before, during or
after any construction, in or around any part of the real property collateral
securing this Agreement (the "Real Property"), or in the soil, groundwater or
soil vapor on or under the Real Property, including those incurred in connection
with any investigation of site conditions or any clean-up, remedial, removal or
restoration work, or any resulting damages or injuries to the person or property
of any third parties or to any natural resources.

 

 
(b)
Any use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal or presence of a Hazardous Materials.  This
indemnity will apply whether the Hazardous Materials is on, under or about any
Company’s property or operations or property leased to any Company, whether or
not the property has been taken by Lender as collateral.

Upon demand by Lender, each Borrower will defend any investigation, action or
proceeding alleging the presence of any Hazardous Materials in any such
location, which affects the Real Property or which is brought or commenced
against Lender, whether alone or together with the Borrowers or any other
person, all at the Borrowers’ own cost and by counsel to be approved by Lender
in the exercise of its reasonable judgment.  In the alternative, Lender may
elect to conduct its own defense at the expense of the Borrowers.  Borrowers’
obligations to Lender under this Section, except the obligation to give notices
to Lender, shall survive termination of this Agreement, repayment of the
Obligation under this Agreement, and foreclosure of the deed of trust or
mortgage encumbering the Real Property or similar proceedings.
 
13.12       Joint and Several Liability.
 
(a)           Each Borrower agrees that it is jointly and severally liable to
Lender for the payment of all obligations arising under this Agreement, and that
such liability is independent of the obligations of the other Borrower(s).  Each
obligation, promise, covenant, representation and warranty in this Agreement
shall be deemed to have been made by, and be binding upon, each Borrower, unless
this Agreement expressly provides otherwise.  Lender may bring an action against
any Borrower, whether an action is brought against the other Borrower(s).
 
(b)           Each Borrower agrees that any release which may be given by Lender
to the other Borrower(s) or any guarantor will not release such Borrower from
its obligations under this Agreement.
 
(c)           Each Borrower waives any right to assert against Lender any
defense, setoff, counterclaim, or claims which such Borrower may have against
the other Borrower(s) or any other party liable to Lender for the obligations of
the Borrowers under this Agreement.
 
(d)           Each Borrower waives any defense by reason of any other Borrower’s
or any other person's defense, disability, or release from liability.  Lender
can exercise its rights against each Borrower even if any other Borrower or any
other person no longer is liable because of a statute of limitations or for
other reasons.
 
(e)           Each Borrower agrees that it is solely responsible for keeping
itself informed as to the financial condition of the other Borrower(s) and of
all circumstances which bear upon the risk of nonpayment.  Each Borrower waives
any right it may have to require Lender to disclose to such Borrower any
information which Lender may now or hereafter acquire concerning the financial
condition of the other Borrower(s).
 

 
53

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(f)           Each Borrower waives all rights to notices of default or
nonperformance by any other Borrower under this Agreement.  Each Borrower
further waives all rights to notices of the existence or the creation of new
indebtedness by any other Borrower and all rights to any other notices to any
party liable on any of the credit extended under this Agreement.
 
(g)           The Borrowers represent and warrant to Lender that each will
derive benefit, directly and indirectly, from the collective administration and
availability of credit under this Agreement.  The Borrowers agree that Lender
will not be required to inquire as to the disposition by any Borrower of funds
disbursed in accordance with the terms of this Agreement.
 
(h)           Until all obligations of the Borrowers to Lender under this
Agreement have been paid in full and any commitments of Lender or facilities
provided by Lender under this Agreement have been terminated, each Borrower
waives any right of subrogation, reimbursement, indemnification and contribution
(contractual, statutory or otherwise), which such Borrower may now or hereafter
have against any other Borrower with respect to the indebtedness incurred under
this Agreement.
 
(i)           Each Borrower waives any right to require Lender to proceed
against any other Borrower or any other person; proceed against or exhaust any
security; or pursue any other remedy.  Further, each Borrower consents to the
taking of, or failure to take, any action which might in any manner or to any
extent vary the risks of the Borrowers under this Agreement or which, but for
this provision, might operate as a discharge of the Borrowers.
 
13.13       Borrower Representative.  Each Borrower hereby designates Borrower
Representative as its representative and agent on its behalf for the purposes of
issuing Loan Requests and LC Applications, delivering Borrowing Base
Certificates, giving instructions with respect to the disbursement of the
proceeds of the Loans and the issuance of LCs, giving and receiving all other
notices and consents hereunder or under any of the other Loan Documents, and
taking all other actions (including in respect of compliance with covenants) on
behalf of any Borrower or Borrowers under the Loan Documents.  Borrower
Representative hereby accepts such appointment.  Lender may regard any notice or
other communication pursuant to any Loan Document from Borrower Representative
as a notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or Borrowers
hereunder to Borrower Representative on behalf of such Borrower or
Borrowers.  Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
 
13.14       USA Patriot Act Notice.  Lender hereby notifies Borrowers that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Patriot Act”), Lender is required to
obtain, verify and record information that identifies Borrowers, which
information includes the name and address of Borrowers and other information
that will allow Lender to identify Borrowers in accordance with the Patriot Act.
 
13.15       Entirety.  The Loan Documents Represent the Final Agreement Between
The parties and May Not Be Contradicted by Evidence of Prior, Contemporaneous,
or Subsequent Oral Agreements by the Parties.  There Are No Unwritten Oral
Agreements among the Parties.
 
[Signatures are on the following pages.]
 

 
54

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EXECUTED as of the day and year set out in the Preamble.

BORROWERS:
 
VERTEX ENERGY, INC.,
a Nevada corporation
   
By: /s/ Benjamin P. Cowart
        Benjamin P. Cowart
        Chief Executive Officer
   
VERTEX ENERGY OPERATING, LLC,
a Texas limited liability
   
By: /s/ Benjamin P. Cowart
       Benjamin P. Cowart
       Chief Executive Officer

Federal law requires Bank of America, N.A. to provide the following notice. The
notice is not part of the foregoing agreement and may not be altered.  Please
read the notice carefully.

USA PATRIOT ACT NOTICE

Federal law requires all financial institutions to obtain, verify and record
information that identifies each person who opens an account or obtains a
loan.  Lender will ask for each Borrower’s legal name, address, tax ID number or
social security number and other identifying information.  Lender may also ask
for additional information or documentation or take other actions reasonably
necessary to verify the identity of each Borrower, guarantors or other related
persons.

 
 

--------------------------------------------------------------------------------

 

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

 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE 1

Parties, Addresses, and Wiring Information
 
Borrowers and other Companies
 
Borrowers’ Wire Instructions
Vertex Energy, Inc.
     
Vertex Energy Operating, LLC
 
Location of Account:
Bank of America
1331 Gemini, Suite 250
 
ABA No.:
111000025
Houston, Texas  77058
 
Account No.:
Please contact
Attn:  Benjamin P. Cowart
   
Rebecca L. Hetzer
Phone:
(713) 208-8736
 
(713) 247-6004
Fax:
(281) 486-0217
 
for account information.
   
For credit to:  Vertex Energy, Inc.

copy to:

Reinhart Boerner Van Deuren s.c.
100 North Water Street, Suite 1700
Milwaukee, Wisconsin 53202
Telephone No.: (414) 298-8227
Facsimile No.: (414) 298-8097
Attention:  Timothy Reardon

Lender’s Office
Bank of America, N.A.
700 Louisiana, 8th Floor
Houston, Texas 77002
Attn:      Rebecca L. Hetzer
Phone:   (713) 247-6004
Fax:         (804) 264-0127

copy to:

Porter Hedges LLP
1000 Main St., 36th Floor
Houston, Texas  77002
Attn:     Joyce K. Soliman
Phone:  (713) 226-6685
Fax:        (713) 226-6285

Schedule 1
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 2
 
Existing Debt and Liens
 
Master Lease Agreement No. MEF0659 dated March 3, 2009 between Pacific Western
Equipment Finance and Vertex-LA (as successor in interest to Omega Refining,
LLC) and the following schedules thereto: (a) Schedule No. 001 dated November
11, 2010, as amended by Amendment No. 1 dated December 20, 2010 (principal
balance outstanding as of the Closing Date is $194,272.48), and (b) Schedule No.
004 dated May 15, 2012, as amended by Amendment No. 1 dated September 28, 2012
(principal balance outstanding as of the Closing Date is $685,844.80).
 
Guaranty dated May 2, 2014 by Holdings in favor of Omega Holdings Company LLC,
Omega Refining, LLC and Bango Refining NV, LLC, guarantying obligations under
contracts assumed in connection with the Omega Acquisition.
 
Guaranty dated May 2, 2014 by Holdings and Vertex-Operating in favor of Magellan
Terminals Holdings, L.P. (“Magellan”) to guarantee Vertex-LA’s obligations under
the Marrero Agreements (as defined in Schedule 7.17)
 
Guaranty dated May 2, 2014 by Vertex-Operating in favor of Plaquemines Holdings,
LLC to guarantee Vertex-LA’s obligations under the Vertex-LA Plaquemines Parish
Lease.
 
Pursuant to the Unit Purchase Agreement dated August 14, 2012 among Holdings,
VAS, Vertex Holdings, L.P. ("VH") and B & S Cowart Family L.P., Holdings may be
obligated to make specified earn-out payments to VH based on Holdings'
achievement of specified EBITDA targets.
 
Pursuant to the Limited Liability Membership Purchase Agreement dated effective
October 1, 2013 among Kevin Ellis, Holdings and E-Source, Holdings may be
obligated to make specified earn-out payments to Mr. Ellis based on E-Source's
achievement of specified net income targets.
 
Holdings:
 
Jurisdiction
Secured Party
Filing No. and Date
Collateral
Nevada Secretary of State
Bank of America Leasing & Capital, LLC
2013005448-2 - 3/1/13
2013005619-5 - Amend - 3/4/13
2013010495-8 - Amend - 4/24/13
Petroleum Process Production Equipment listed in Attached Master Lease Agreement

 
Pursuant to Article XXIV of that certain Tolling Agreement dated July 1, 2012
between Holdings and KMTEX LLC, as amended by First Amendment dated November 1,
2013, KMTEX LLC has an expressed contract lien upon all materials and products
stored and handled under the terms of the agreement, or under any other
agreements between Holdings and KMTEX LLC.

 
Schedule 2 - Page 1

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H & H Oil:
Jurisdiction
Secured Party
Filing No. and Date
Collateral
Texas Secretary of State ("TX SOS")
Toyota Motor Credit Corporation
11-0011849378 - 4/20/11
Toyota forklift
TX SOS
Wells Fargo Equipment Finance, Inc.
14-0001563373 - 1/8/14
Leased equipment

 
 
Vertex-LA:
 
Any precautionary Liens arising with respect to that certain Master Lease
Agreement No. MEF0659 dated March 3, 2009 between Pacific Western Equipment
Finance and Vertex Refining LA, LLC (as successor in interest to Omega Refining,
LLC) and the following schedules thereto: (a) Schedule No. 001 dated November
11, 2010, as amended by Amendment No. 1 dated December 20, (b) Schedule No. 003
dated January 20, 2012, as amended by Amendment No. 1 dated April 10, 2012,
Amendment No. 2 dated June 20, 2012 and Amendment No. 3 dated March 27, 2013 and
(c) Schedule No. 004 dated May 15, 2012, as amended by Amendment No. 1 dated
September 28, 2012.

 
Schedule 2 - Page 2

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SCHEDULE 5
 
Conditions Precedent

1.
Amended and Restated Credit Agreement
Schedule 1Parties, Addresses, and Wiring Information
Schedule 2    Existing Debt and Liens
Schedule 5            Conditions Precedent
Schedule 7.2         Subsidiaries
Schedule 7.5         Litigation
Schedule 7.7         Environmental Matters
Schedule 7.12       Place of Business
Schedule 7.14       Trade Names
Schedule 7.15       Transactions with Affiliates
Schedule 7.17       Material Agreements
Exhibit A               Revolving Note
Exhibit B                Loan Request
Exhibit C                Borrowing Base Certificate
Exhibit D                Compliance Certificate
Exhibit E                 Security Agreement
Exhibit F                 Corporate Guaranty
2.
Revolving Note ($20,000,000.00)
3.
Amended and Restated Guaranty
4.
Pledge and Security Agreement
5.
Intercreditor Agreement
6.
Earnout Subordination Agreement (Vertex Holdings, L.P.)
7.
Copy of Executed Unit Membership Purchase Agreement
8.
Assignment of Representations, Warranties, Covenants and Indemnities

 
 
Schedule 5 - Page 1

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9.
Secretary’s Certificate of Holdings
-  Certified Articles of Incorporation
-  Bylaws
-  Resolutions
-  Incumbency
10.
Secretary’s Certificate of Vertex-Operating
-  Certified Certificate of Formation
-  Operating Agreement
-  Resolutions
-  Incumbency
11.
Secretary’s Certificate of VAS
-  Certified Articles of Organization
-  Operating Agreement
-  Resolutions
-  Incumbency
12.
Secretary’s Certificate of VMS
-  Certified Articles of Organization
-  Operating Agreement
-  Resolutions
-  Incumbency
13.
Partner’s Certificate of CMT
 
-  Certified Certificate of Formation
 
-  Limited Partnership Agreement
 
-  Resolutions
 
-  Incumbency
14.
Partner’s Certificate of Crossroad Carriers
 
-  Certified Certificate of Formation
 
-  Limited Partnership Agreement
 
-  Resolutions
 
-  Incumbency
15.
Partner’s Certificate of Vertex-Recovery
 
-  Certified Certificate of Formation

 
 
Schedule 5 - Page 2

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-  Limited Partnership Agreement
 
-  Resolutions
 
-  Incumbency
16.
Partner’s Certificate of H&H Oil
 
-  Certified Certificate of Formation
 
-  Limited Partnership Agreement
 
-  Resolutions
 
-  Incumbency
17.
Secretary’s Certificate of Vertex-II
 
-  Certified Articles of Organization of Vertex-II
 
-  Limited Liability Company Agreement of Vertex-II
 
-  Resolutions
 
-  Incumbency
18.
Secretary’s Certificate of Vertex-LA
-  Certified Articles of Organization
-  Operating Agreement
-  Resolutions
-  Incumbency
19.
Secretary’s Certificate of Vertex-NV
-  Certified Articles of Organization
-  Operating Agreement
-  Resolutions
-  Incumbency
20.
Secretary’s Certificate of GSLW
-  Certified Articles of Organization
-  Operating Agreement
-  Resolutions
-  Incumbency
21.
Officer’s Closing Certificate (Initial Closing)
22.
Solvency Certificate
23.
Perfection Certificate

 
 
Schedule 5 - Page 3

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24.
Legal Opinion of Counsel to Borrowers and Corporate Guarantors
-  Reinhart Boerner Van Deuren
-  Stone Pigman Walther Wittman L.L.C.
-  Dean Allcorn, Esq.
25.
Flow of Funds Memorandum
26.
Field Exam – Inventory
27.
Certificates of Existence/Good Standing/Authority
-  Holdings (Nevada)
-  Vertex-Operating (TX)
-  CMT (TX)
-  Crossroad Carriers (TX)
-  GSLW (Delaware)
-  H&H Oil
-  VAS (Nevada)
-  VMS (California)
-  Vertex-Recovery (TX)
-  Vertex-LA (Louisiana)
-  Vertex-NV (Nevada)
-  Vertex-II (Nevada)
28.
UCC Lien Searches
-  Holdings (Nevada)
-  Vertex-Operating (TX)
-  CMT (TX)
-  Crossroad Carriers (TX)
-  GSLW (Delaware)
-  H&H Oil
-  VAS (Nevada)
-  VMS (California)
-  Vertex-Recovery (TX)
-  Vertex-LA (Louisiana)
-  Vertex-NV (Nevada)
-  Vertex-II (Nevada)

 
 
Schedule 5 - Page 4

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29.
UCC-1 Financing Statements
-  Holdings (Nevada)
-  Vertex-Operating (TX)
-  CMT (TX)
-  Crossroad Carriers (TX)
-  GSLW (Delaware)
-  H&H Oil
-  VAS (Nevada)
-  VMS (California)
-  Vertex-Recovery (TX)
-  Vertex-LA (Louisiana)
-  Vertex-NV (Nevada)
30.
Payoff Letters
-  Omega Capital Lease (Tetra Financial Corp.)
-  Bank of America – Term Loan
-  Big 4 Investments, LLC
-  Wells Fargo – Revolver
-  Guggenheim Corporate Funding, LLC – Term Loan
31.
UCC-3 Terminations
32.
Post-Closing Letter Agreement
33.
Fee Letter
34.
Loan Request
35.
Payment of Lender’s fees and expenses
36.
Due Diligence Review by Lender
37.
Insurance Certificates
a.  Liability
b.  Casualty
c.  Flood, Nueces County
38.
Endorsements to Insurance Policies
a.  Additional Insured Endorsement
b.  Loss Payable Endorsement
39.
Release of Liens – Lender
a.  Harris County
b.  Nueces County
c.  Travis County
d.  Chambers County

 
 
Schedule 5 - Page 5

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40.
Deed of Trust (Harris County)
-  Harris County Property
41.
Deed of Trust (Nueces County)
-  Nueces County Property
42.
Deed of Trust (Travis County)
-  Travis County Property
43.
Leasehold Deed of Trust (Chambers County)
-  Chambers County Leasehold Property
44.
Copy of Ground Lease –  Chambers County Leasehold Property
45.
Consent to Chambers County Leasehold Deed of Trust
46.
Multiple Indebtedness Leasehold Mortgage to Secure Present and Future
Indebtedness, Assignment of Leases and Rents and Security Agreement
-  Jefferson Parish Leasehold Property
-  Plaquemines Parish Leasehold Property
47.
Copies of Leases –
-  Jefferson Parish Leasehold Property
-  Plaquemines Parish Leasehold Property
48.
Consents to Multiple Indebtedness Leasehold Mortgages to Secure Present and
Future Indebtedness, Assignment of Leases and Rents and Security Agreements
-  Jefferson Parish Leasehold Property
-  Plaquemines Parish Leasehold Property
49.
Surveys
a.  Harris County Property
b.  Nueces County Property
c.  Travis County Property
d.  Chambers County Leasehold Property
e.  Jefferson Parish Leasehold Property
f.  Plaquemines Parish Leasehold Property
50.
Environmental Reports
a.  Harris County Property
b.  Nueces County Property
c.  Travis County Property
d.  Chambers County Leasehold Property
e.  Jefferson Parish Leasehold Property
f.  Plaquemines Parish Leasehold Property

 
 
Schedule 5 - Page 6

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51.
Flood Determinations
a.  Harris County Property
b.  Nueces County Property
c.  Travis County Property
d.  Chambers County Leasehold Property
e.  Jefferson Parish Leasehold Property
f.  Plaquemines Parish Leasehold Property
52.
Notice to Borrower in Special Flood Hazard Area (if applicable)
a.  Nueces County Property
53.
Title Commitment
a.  Harris County Property
b.  Nueces County Property
c.  Travis County Property
d.  Chambers County Leasehold Property
e.  Jefferson Parish Leasehold Property
f.  Plaquemines Parish Leasehold Property
54.
Instruction Letter to Title Companies
55.
Title Company Affidavits
56.
Invoices from Title Companies
57.
Intellectual Property Searches
58.
Patent Security Agreement

 
 

 
Schedule 5 - Page 7

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SCHEDULE 7.2

Subsidiaries

Parent
Subsidiary
I/O Shares/Units
% Ownership
Entity Type
Jurisdiction of Incorporation
Vertex-Operating
VMS
1
100%
Limited Liability Company
California
Vertex-Operating
VAS
100,000
100%
Limited Liability Company
Nevada
Vertex-Operating
Vertex-II
N/A
100%
Limited Liability Company
Nevada
Vertex-Operating
Vertex-LA
N/A
100%
Limited Liability Company
Louisiana
Vertex-Operating
Vertex-NV
N/A
100%
Limited Liability Company
Nevada
Vertex-Operating
E-Source
N/A
70%
Limited Liability Company
Texas
Vertex-NV
Golden State Lubricants Works, LLC
N/A
100%
Limited Liability Company
Delaware
VAS
CMT
N/A
100%
Limited Partnership
Texas
VAS
Crossroad Carriers
N/A
100%
Limited Partnership
Texas
Vertex-Recovery
H&H Oil
N/A
100%
Limited Partnership
Texas
VAS
Vertex-Recovery
N/A
100%
Limited Partnership
Texas
Holdings
Vertex-Operating
N/A
100%
Limited Liability Company
Texas

Schedule 7.2
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 7.5
 
Litigation
 
Wunderlich Securities, Inc. (“Wunderlich”) has alleged that Holdings owes
Wunderlich a fee related to Wunderlich's services in locating financing sources
for the Omega Acquisition.  The parties have reached a settlement agreement in
principle pursuant to which Holdings will pay Wunderlich $350,000 in exchange
for Wunderlich's release of all claims related to this matter.   This settlement
should be finalized in writing by not later than June 15, 2014.
 
 

Schedule 7.5
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 7.7
 
Environmental Matters
 
 
1.
Marrero Facility.  As indicated below, Omega Refining has demonstrated a prior
pattern of non-compliance with respect to its discharge of wastewater from the
Marrero, LA facility.  Any liabilities arising out of such instances are
"Excluded Liabilities," as such term is defined in the Purchase
Agreement.  Vertex-LA expects to operate the facility on a post-closing basis in
compliance with applicable Environmental Law and does not anticipate continuing
Omega Refining's pattern of non-compliance.  

 
 
a.
July 31, 2013 - Jefferson Parish Dept. of Environmental Affairs Notice of
non-compliance letter regarding Discharge Permit No. JP-SC-0094-011402-M-11-2,
exceedence of wastewater discharge limits for oil and grease at parking lot
manhole.

 
 
b.
July 16, 2013 - Jefferson Parish Dept. of Environmental Affairs Notice of
non-compliance regarding Discharge Permit No. JP-SC-0094-011402-M-11-2,
exceedence of wastewater discharge limits for oil and grease on March 5-7, 2013,
and exceedence of bis (2-ethylhexyl) phthalate on March 5-7, 2013.

 
 
c.
April 18, 2013 - Jefferson Parish Dept. of Environmental Affairs Compliance
Order, Enforcement Tracking No. 2013-0001 regarding Discharge Permit No.
JP-SC-0094-011402-M-11-2, samples taken on May 9, 2012 from manhole with diesel
and oil contamination in two Parish lift stations, alleged violations: (i) lack
of protection from accidental discharges; (ii) unauthorized discharge; (iii)
improper discharges to sanitary sewer; (iv) general prohibition on discharge of
pollutants to sewers; (v) prohibition on discharge of oils and grease; (vi)
prohibition on discharge of noxious material; (vii) prohibition on discharge of
solid or viscous wastes; (viii) prohibition on discharge of toxic substances;
(ix) inaccurate discharge permit/application and (x) improper reporting.

 
 
d.
June 9, 2008 - The Marrero Facility lacks coverage under the Louisiana Pollutant
Discharge Elimination System (LPDES) Multi-Sector General Permit for Storm Water
Discharges Associated with Industrial Activities and has not drafted a Storm
Water Pollution Prevention Plan to manage storm water discharges at the Marrero
Facility to ensure compliance with applicable permit requirements.

 
 
 

Schedule 7.7
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 7.12
 
Place of Business
 
 
Companies:
 
Place of Business and Chief Executive Office of Companies:
 
1331 Gemini, Suite 250, Houston, TX 77058
 
Location of Books and Records of Companies:
 
1331 Gemini, Suite 250, Houston, TX 77058
 
Location of Assets for Companies (other than CMT, H&H Oil, and Vertex-LA)
(including inventory, equipment and collateral that is or may be fixtures):
 
1331 Gemini, Suite 250, Houston, TX 77058
 
Location of Assets for CMT (including inventory, equipment and collateral that
is or may be fixtures):
 
200 Atlantic Pipeline Road, Baytown, TX 77520
 
Location of Assets for H&H Oil (including inventory, equipment and collateral
that is or may be fixtures):
 
H&H Oil Collection Yard: 20909 FM 685, Pflugerville, TX 78660
 
H&H Oil Collection Yard: 7311 Decker Drive, Baytown, TX 77523
 
H&H Oil Collection Yard: 7941 Recycle Drive, Corpus Christi, TX 78409
 
H&H Oil Storage Yard: 11626 Old Corpus Christi Hwy, San Antonio, TX 78223
 
Location of Assets for Vertex-LA (including inventory, equipment and collateral
that is or may be fixtures):
 
Vertex-LA Used Oil Re-refinery: 5000 River Road, Marrero, LA 70072
 
Vertex-LA Used Oil Re-refinery: 278 E. Ravenna Road, Myrtle Grove, LA 70037
 
Real Property Owned by Companies (other than VAS and Vertex-Recovery):
 
None.
 
Real Property Owned by VAS:
 
7311 Decker Drive, Baytown, TX 78660
 
20909 FM 685, Pflugerville, TX 78660
 

 
Schedule 7.12-1

--------------------------------------------------------------------------------

 

Real Property Owned by Vertex-Recovery:
 
7941 Recycle Drive, Corpus Christi, TX 78409
 
Real Property/Office Space Leased by Companies (other than Vertex-Operating,
CMT, Vertex-LA, H&H Oil):
 
None.
 
Real Property/Office Space Leased by Vertex-Operating:
 
1331 Gemini, Suite 250, Houston, Texas 77058
 
Real Property/Office Space Leased by CMT:
 
200 Atlantic Pipeline Road, Baytown, TX 77520
 
Real Property/Office Space Leased by Vertex-LA:
 
5000 River Road, Marrero, LA 70072
 
278 E. Ravenna Road, Myrtle Grove, LA 70037
 
Real Property/Office Space Leased by GSLW:
 
1134 Manor Street, Oildale, CA 93308
 
Real Property/Office Space Leased by H&H Oil:
 
11626 Old Corpus Christi Hwy, San Antonio, TX 78223
 

 
Schedule 7.12-2

--------------------------------------------------------------------------------

 

SCHEDULE 7.14
 
Trade Names
 
Vertex Recovery
H & H Oil
CMT
Crossroad Carriers
 
 
 

Schedule 7.14
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 7.15
 
Transactions with Affiliates
 
None.
 
 
 

Schedule 7.15
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 7.17
 
Material Contracts
 
1.           Related Agreements
 
2.
Third Amended Company Agreement for E-Source Holdings, LLC dated effective as of
January 1, 2014 between Vertex Energy Operating, LLC (as successor in interest
to Vertex Energy, Inc.) and BBP Landtex Group, LLC

 
3.
Tolling Agreement dated July 1, 2012 between Holdings and KMTEX LLC, as amended
by First Amendment dated November 1, 2013

 
4.
Master Lease Agreement No. 253640900000 dated February 27, 2013 between Holdings
and Banc of America Leasing & Capital, LLC and Schedule No. 001 dated April 22,
2013

 
5.
Lease Agreement dated May 9, 2009 between Cole Gemini, Ltd. and VAS (successor
in interest to Vertex Holdings L.P.), as amended by First Amendment to Office
Lease Agreement dated June 8, 2012

 
6.           CMT Lease
 
7.           Vertex-LA Jefferson Parish Lease
 
8.           Vertex-LA Plaquemines Parish Lease
 
9.
Schedule No. 004 dated May 15, 2012, as amended by Amendment No. 1 dated
September 28, 2012, to Master Lease Agreement No. MEF0659 dated March 3, 2009
between Pacific Western Equipment Finance and Vertex-LA (as successor in
interest to Omega Refining, LLC)

 
10.
Unit Purchase Agreement dated August 14, 2012 among Holdings, VAS, Vertex
Holdings, L.P. and B & S Cowart Family L.P.

 
11.
Limited Liability Membership Purchase Agreement dated effective October 1, 2013
among Kevin Ellis, Holdings, and E-Source Holdings, LLC

 
12.
Terminaling Services Agreement dated May 1, 2008 between Magellan Terminals
Holdings, L.P. (f/k/a Marrero Terminal LLC) (“Magellan”) and Vertex-LA (as
successor in interest to Omega Refining, LLC (the “Marrero TSA”)

 
13.
Operation and Maintenance Agreement dated November 3, 2010 between Magellan and
Vertex-LA (as successor in interest to Omega Refining, LLC (the “Marrero
Operation Agreement,” and collectively with the Vertex-LA Jefferson Parish
Lease, the “Marrero Agreements”)

 
14.
Joint Marketing Agreement dated April 10, 2011 between Rio Energy International,
Inc. and Holdings

 

Schedule 7.17
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
REVOLVING NOTE
 
$20,000,000
Houston, Texas
As of ______________

FOR VALUE RECEIVED, VERTEX ENERGY, INC., a Nevada corporation, and VERTEX ENERGY
OPERATING, LLC, a Texas limited liability company (each, a “Borrower”, and
collectively, the “Borrowers”), hereby promise to pay to the order of Bank of
America, N.A. (“Lender”) on or before the Revolving Credit Termination Date, the
principal amount of $20,000,000 or so much thereof as may then be outstanding
under this note, together with interest, as described below.
 
This note has been executed and delivered under, and is subject to the terms of,
the Amended and Restated Credit Agreement dated as of May 2, 2014 (as amended,
supplemented or restated from time to time, the “Credit Agreement”), between
Borrowers and Lender and is the “Revolving Note” referred to in the Credit
Agreement.  Unless defined in this note, or the context requires otherwise,
capitalized terms used in this note have the meanings given them in the Credit
Agreement.  Reference is made to the Credit Agreement for provisions affecting
this note regarding applicable interest rates, principal and interest payment
dates, final maturity, voluntary and mandatory prepayments, acceleration of
maturity, exercise of rights, payment of attorneys’ fees, court costs and other
costs of collection, certain waivers by Borrowers and others now or hereafter
obligated for payment of any sums due under this note, and security for the
payment of this note.  This note is a Loan Document and, therefore, is subject
to the applicable provisions of Section 13 of the Credit Agreement, all of which
applicable provisions are incorporated into this note by reference as if set
forth in this note verbatim.
 
Specific reference is made to Section 3.6 of the Credit Agreement for usury
savings provisions.
 
The rights and obligations of Borrowers and Lender shall be determined solely
from written agreements, documents, and instruments, and any prior oral
agreements between Borrowers and Lender are superseded by and merged into such
writings.  this note, the Credit Agreement and the other written loan documents
executed by Borrowers and Lender (or by Borrowers for the benefit of Lender)
represent the final agreement between Borrowers and Lender and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements by the parties.  there are no unwritten oral agreements between the
parties.
 
This note must be construed — and its performance enforced — under Texas law.
 
This Revolving Note is issued in replacement (but is not a novation of) that
certain Revolving Note dated August 31, 2012 and payable to the order of Bank of
America, N.A., a national banking association in the principal amount of
$10,000,000.
 
[Signatures are on the following page.]
 

 

Exhibit A
 
 

--------------------------------------------------------------------------------

 

EXECUTED as of the date first written above.
 
BORROWERS:
 
VERTEX ENERGY, INC.,
a Nevada corporation
   
By: ____________________________
Name: __________________________
Title: ___________________________
 
VERTEX ENERGY OPERATING, LLC,
a Texas limited liability company
   
By: _____________________________
Name: ___________________________
Title: ____________________________
 

 

 
 
 
 

Signature Page to Revolving Note
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT B
 
LOAN REQUEST
 
_____________, 20____
 
Bank of America, N.A.
700 Louisiana, 8th Floor
Houston, Texas  77002
Attn:  Rebecca L. Hetzer

Reference is made to the Amended and Restated Credit Agreement dated as of May
2, 2014 (as amended, supplemented or restated from time to time, the “Credit
Agreement”), between the undersigned and Bank of America, N.A.
(“Lender”).  Capitalized terms used but not defined in this Loan Request shall
have the meanings given them in the Credit Agreement.  The undersigned hereby
gives you notice pursuant to Section 2.3 of the Credit Agreement that it
requests a Loan under the Credit Agreement on the following terms:
 
(A)           Loan Date (a Business Day) ♦                  
                                                           
(B)           Principal Amount of Loan♦♦                    
                                                            
(C)           Type of Loan♦♦♦                    
                                                              

Borrowers hereby certify that the following statements are true and correct on
the date of this Loan Request, and will be true and correct on the Loan Date
specified above after giving effect to such Loan:  (a) all of the
representations and warranties in the Loan Documents are true and correct in all
material respects (except to the extent that they speak to a specific date);
(b) no Material Adverse Effect exists; and (c) no Default or Event of Default
exists.
 
[Signature is on the following page.]
 

 

_________________________
 
¨ Must be received by Lender no later than 11:00 a.m. on the proposed Loan Date.
¨¨ Each Loan under the Revolving Credit Facility must be an amount not less than
$50,000 or a greater integral multiple of $10,000.
¨¨¨ Base Rate Loan or LIBOR Loan.
 
Exhibit B
 
 

--------------------------------------------------------------------------------

 

 
Very truly yours,
 
BORROWERS:
 
VERTEX ENERGY, INC.,
a Nevada corporation
   
By: ____________________________
Name: __________________________
Title: ___________________________
 
VERTEX ENERGY OPERATING, LLC,
a Texas limited liability company
   
By: _____________________________
Name: ___________________________
Title: ____________________________
 

 
 

Signature Page to Loan Request
 
 

--------------------------------------------------------------------------------

 

EXHIBIT C
 
BORROWING BASE CERTIFICATE
 
____________, 20___

Bank of America, N.A.
700 Louisiana, 8th Floor
Houston, Texas  77002
Attn: Rebecca L. Hetzer

 
This Borrowing Base Certificate is being delivered to Bank of America, N.A.
(“Lender”) under the terms of that certain Amended and Restated Credit Agreement
dated as of May 2, 2014 (as amended, restated, or supplemented from time to
time, the “Credit Agreement”), between the undersigned and Lender.  Capitalized
terms used but not defined in this Borrowing Base Certificate shall have the
meanings given such terms in the Credit Agreement.
 
I certify that (a) I am a Responsible Officer of each Borrower on the date
hereof; (b) no Default or Event of Default exists; (c) a review of the
activities of the Companies during the [month] ended _____________ (the “Subject
Period”) has been made under my supervision with a view to determine the amount
of the current Borrowing Base; (d) the accounts receivable of each Company
included in the Eligible Accounts, and the inventory of each Company included in
the Eligible Inventory, meet all conditions to qualify as “Eligible Accounts,”
“Eligible Inventory”, respectively, set out in the Credit Agreement and all the
representations and warranties set out in the Credit Agreement with respect
thereto are true and correct; (e) the information and calculation of the
Borrowing Base on Schedule 1 attached hereto is true and correct as of the last
day of the Subject Period; and (f) attached as Schedule 2 to this Borrowing Base
Certificate is a schedule of the Companies’ accounts receivable aging report.
 

[Signatures are on the following page.]

Exhibit C
 
 

--------------------------------------------------------------------------------

 

Executed as of the date first written above.
 
 
BORROWERS:
 
VERTEX ENERGY, INC.,
a Nevada corporation
   
By: ____________________________
Name: __________________________
Title: ___________________________
 
VERTEX ENERGY OPERATING, LLC,
a Texas limited liability company
   
By: _____________________________
Name: ___________________________
Title: ____________________________
 

                    

Attachments:

Schedule 1 – Borrowing Base Calculation
Schedule 2 – Accounts Receivable Aging Report

Signature Page to Borrowing Base Certificate
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 1
TO
BORROWING BASE CERTIFICATE

Borrowing Base Calculation

[See attached]

 

Schedule 1 to Borrowing Base Certificate
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 2
TO
BORROWING BASE CERTIFICATE

Accounts Receivable Aging Report
 
 
[See attached]

 
 

Schedule 2 to Borrowing Base Certificate
 
 

--------------------------------------------------------------------------------

 

EXHIBIT D
 
COMPLIANCE CERTIFICATE
 
FOR _________ ENDED ____________, 20___
 
Bank of America, N.A.
700 Louisiana, 8th Floor
Houston, Texas  77002
Attn: Rebecca L. Hetzer

Reference is made to the Amended and Restated Credit Agreement dated as of May
2, 2014 (as amended, supplemented or restated from time to time, the “Credit
Agreement”), between Vertex Energy, Inc., a Nevada corporation, and Vertex
Energy Operating, LLC, a Texas limited liability company (each, a “Borrower”,
and collectively, the “Borrowers”), and Bank of America, N.A.
(“Lender”).  Capitalized terms used but not defined in this Compliance
Certificate shall have the meanings given such terms in the Credit Agreement.
 
This certificate is delivered pursuant to Section 8.1 of the Credit Agreement.
 
I certify to Lender that I am the __________________1 of each Borrower, on the
date hereof and that:
 
1.           The financial statements attached to this Compliance Certificate
were prepared in accordance with GAAP and present fairly, in all material
respects, the financial position of the Companies as at the dates indicated and
the statements of operations of the Companies for the periods indicated (the
“Subject Period”).
 
2.           During the Subject Period, no Default has occurred which has not
been cured or waived (except for any Defaults described on the attached
Schedule 2).
 
3.           Evidence of compliance by the Companies with the financial
covenants of Section 10 of the Credit Agreement as of the last day of the
Subject Period is set out on the attached calculation work sheet attached as
Schedule 1.
 
[Signatures are on the following page.]
 
 
 
 
 
________________________
 
1. Must be a Responsible Officer.
 

 
Exhibit D
 
 

--------------------------------------------------------------------------------

 
 
 
Very truly yours,
 
BORROWERS:
 
VERTEX ENERGY, INC.,
a Nevada corporation
   
By: ____________________________
Name: __________________________
Title: ___________________________
 
VERTEX ENERGY OPERATING, LLC,
a Texas limited liability company
   
By: _____________________________
Name: ___________________________
Title: ____________________________
 

 
Attachments:
Schedule 1 – Financial Covenant Calculation Worksheet
Schedule 2 – Default Disclosures

 

Signature Page to Compliance Certificate
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 1
 
Financial Covenant Calculation Worksheet
 

 
[To Be Attached.]
 

Exhibit D – Schedule 1
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 2
 
Default Disclosures
 

 

Exhibit D – Schedule 2
 
 

--------------------------------------------------------------------------------

 

EXHIBIT E
 
PLEDGE AND SECURITY AGREEMENT
 

 
[Attached.]
 

Exhibit E
 
 

--------------------------------------------------------------------------------

 

EXHIBIT F
 
[AMENDED AND RESTATED] GUARANTY
 
This [Amended and Restated] Guaranty (as amended, supplemented, or restated,
this “Guaranty”) is executed as of May 2, 2014, by CEDAR MARINE TERMINALS, LP, a
Texas limited partnership (“CMT”), CROSSROAD CARRIERS, L.P., a Texas limited
partnership (“Crossroad Carriers”), GOLDEN STATE LUBRICANTS WORKS, LLC, a
Delaware limited liability company (“GSLW”), H & H OIL, L. P., a Texas limited
partnership (“H&H Oil”), VERTEX ACQUISITION SUB, LLC, a Nevada limited liability
company (“VAS”), VERTEX MERGER SUB, LLC, a California limited liability company
(“VMS”), VERTEX RECOVERY, L.P., a Texas limited partnership (“Vertex-Recovery”),
VERTEX REFINING LA, LLC, a Louisiana limited liability company (“Vertex-LA”),
VERTEX REFINING NV, LLC, a Nevada limited liability company (“Vertex-NV”), and
VERTEX II GP, LLC, a Nevada limited liability company (“Vertex-II” and together
with CMT, Crossroads Carriers, GSLW, H&H Oil, VAS, VMS, Vertex-Recovery,
Vertex-LA, and Vertex-NV, each a “Guarantor”, and collectively, the
“Guarantors”) for the benefit of BANK OF AMERICA, N.A., as lender (“Lender”).
 
RECITALS
 
A.           Vertex Energy, Inc., a Nevada corporation, and Vertex Energy
Operating, LLC, a Texas limited liability company (each, a “Borrower”, and
collectively, the “Borrowers”), as borrowers, and Lender, as lender, have
entered into that certain Amended and Restated Credit Agreement dated of even
date herewith (as amended, supplemented or restated, the “Credit Agreement”),
together with certain other Loan Documents.
 
B.           Each Guarantor is a direct or indirect subsidiary or an affiliate
of Borrowers and expects to benefit, directly and indirectly, from Lender’s
extending credit to Borrowers under the Credit Agreement.
 
C.           In each Guarantor’s judgment, the value of the consideration
received and to be received by such Guarantor under the Loan Documents is
reasonably worth at least as much as its liability and obligation under this
Guaranty, and such liability and obligation may reasonably be expected to
benefit such Guarantor directly or indirectly.
 
D.           It is expressly understood among Borrowers, Guarantors, and Lender
that the execution and delivery of this Guaranty is a condition precedent to
Lender’s obligations to extend credit under the Credit Agreement.
 
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which
are hereby acknowledged, each Guarantor guarantees to Lender the prompt payment
at maturity (by acceleration or otherwise), and at all times thereafter, of the
Guaranteed Obligation, as follows:
 
1.           Definitions.  Each capitalized term used but not defined in this
Guaranty shall have the meaning given that term in the Credit Agreement.  The
following terms shall have the following meanings as used in this Guaranty:
 
Borrowers has the meaning given in Recital A and includes, without limitation,
each Borrower’s successors and assigns, each Borrower as a debtor-in-possession,
and any receiver, trustee, liquidator, conservator, custodian, or similar party
hereafter appointed for any Borrower or for all or any portion of any Borrower’s
assets pursuant to any liquidation, conservatorship,
 

 
Exhibit F - Page 1

--------------------------------------------------------------------------------

 

bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar Debtor Relief Law from time to time in effect.
 
Company Debt means all obligations of each Borrower to any Guarantor, whether
direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several, now existing or arising after the date of this Guaranty,
due or to become due to any Guarantor, or held or to be held by any Guarantor,
whether created directly or acquired by assignment or otherwise, and whether or
not evidenced by written instrument including the obligation of each  Borrower
to any Guarantor as a subrogee of the Lender or resulting from any Guarantor’s
performance under this Guaranty.
 
Guaranteed Obligation means any and all existing and future indebtedness and
liabilities of every kind, nature, and character, direct or indirect, absolute
or contingent, liquidated or unliquidated, voluntary or involuntary, of
Borrowers to the Lender arising under the Credit Agreement and the other Loan
Documents, including, the Obligation (as defined in the Credit Agreement) and
any premium and all interest (including, without limitation, interest accruing
before and after maturity, before and after an Event of Default, and during the
pendency of any bankruptcy, receivership, insolvency or other similar proceeding
under any applicable Debtor Relief Law (regardless whether such interest is
allowed in such proceeding)), and any and all costs, attorney and paralegal fees
and expenses reasonably incurred by Lender (a) in connection with any waiver,
amendment, consent or default under the Loan Documents, or (b) to enforce any
Borrower’s, any Guarantor’s, or any other obligor’s payment of any portion of
the Guaranteed Obligation.
 
Paid in Full or Payment in Full means that the Guaranteed Obligation is
completely paid (including principal, interest, fees and expenses), and all
commitments to lend or issue letters of credit under the Credit Agreement have
terminated.
 
2.           Guaranty.  Each Guarantor hereby guarantees the prompt payment and
performance of the Guaranteed Obligation when due (at the stated maturity, upon
acceleration, or otherwise) and at all times thereafter.  This is an absolute,
unconditional, irrevocable and continuing guaranty of payment (and not of
collection) of the Guaranteed Obligation which will remain in effect until the
Guaranteed Obligation is Paid in Full.  The circumstance that at any time or
from time to time all or any portion of the Guaranteed Obligation may be paid in
full shall not affect the Guarantors’ obligation with respect to the Guaranteed
Obligation thereafter incurred.  No Guarantor may rescind or revoke its
obligations to Lender under this Guaranty with respect to the Guaranteed
Obligation.  At the Lender’s option, all payments under this Guaranty shall be
made to the office of Lender and in U.S. Dollars.
 
3.           Default by any Borrower.  If an Event of Default exists, Guarantors
shall pay the amount of the Guaranteed Obligation then due and payable to Lender
on demand and without (a) further notice of dishonor to any Guarantor, (b) any
prior notice to any Guarantor of the acceptance by Lender of this Guaranty,
(c) any notice having been given to any Guarantor prior to such demand of the
creating or incurring of such Debt, or (d) notice of intent to accelerate or
notice of acceleration to any Guarantor or any Borrower.  To enforce such
payment by Guarantors it shall not be necessary for Lender to first or
contemporaneously institute suit or exhaust remedies against Borrowers or others
liable on such Debt, or to enforce rights against any security or collateral
ever given to secure such Debt.
 
4.           Amount of Guaranty and Consideration.  The Lender’s books and
records showing the amount of the Guaranteed Obligation shall be admissible in
evidence in any action or proceeding, and shall be binding upon the Guarantors
and conclusive for the purpose of establishing the amount of the Guaranteed
Obligation.  In consummating the transactions contemplated by the Credit
Agreement,
 

 
Exhibit F - Page 2

--------------------------------------------------------------------------------

 

Guarantors do not intend to disturb, delay, hinder, or defraud either any of
their present or future creditors.  Each Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
each Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Obligation.  Based upon such
examination, and taking into account the fairly discounted value of each
Guarantor’s contingent obligations under this Guaranty and the value of the
subrogation and contribution claims any Guarantor could make in connection with
this Guaranty, and assuming each of the transactions contemplated by the Credit
Agreement is consummated and Borrowers make full use of the credit facilities
thereunder, the present realizable fair market value of the assets of each
Guarantor exceeds the total obligations of each such Guarantor, and each
Guarantor is able to realize upon its assets and pay its obligations as such
obligations mature in the normal course of business.  Each Guarantor represents
and warrants to Lender that the value of consideration received and to be
received by it is reasonably worth at least as much as its liability under this
Guaranty, and such liability may reasonably be expected to benefit each
Guarantor, directly or indirectly.
 
5.           Avoidance Limitation.  The obligations of Guarantors under this
Guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations under this Guaranty subject to avoidance
under Section 548 of the U.S. Bankruptcy Code or any comparable provisions of
any applicable state law.
 
6.           Liability for Other Debt of any Borrower.  If any Guarantor becomes
liable for any Debt owing by any Borrower to Lender, by endorsement or
otherwise, other than under this Guaranty, such liability shall not be impaired
or affected by this Guaranty and the rights of Lender under this Guaranty shall
be cumulative of any and all other rights that Lender may ever have against
Guarantors.
 
7.           Subordination.  Each Guarantor hereby expressly subordinates all
Company Debt to the Payment in Full of the Guaranteed Obligation.  Each
Guarantor agrees not to receive or accept any payment from any Borrower with
respect to the Company Debt at any time an Event of Default exists and, in the
event any Guarantor receives any payment on the Company Debt in violation of the
foregoing, such Guarantor shall hold any such payment for the benefit of Lender
and promptly turn it over to Lender, in the form received (with any necessary
endorsements), to be applied to the Guaranteed Obligation.  If Lender so
requests, any such Company Debt shall be enforced and all amounts received by
any Guarantor shall be received in trust for the Lender and the proceeds thereof
shall be paid over to the Lender on account of the Guaranteed Obligation, but
without reducing or affecting in any manner the liability of Guarantors under
this Guaranty.
 
8.           Subrogation and Contribution.
 
(a)           Until the Guaranteed Obligation is Paid In Full, each Guarantor
agrees that it will not assert, enforce, or otherwise exercise (i) any right of
subrogation to any of the rights or liens of Lender or any other beneficiary
against any Borrower or any other obligor on the Guaranteed Obligation or any
Collateral or other security, or (ii) any right of recourse, reimbursement,
subrogation, contribution, indemnification, or similar right against any
Borrower or any other obligor or other guarantor on all or any part of the
Guaranteed Obligation (whether such rights in clause (i) or clause (ii), or
under clause (b) below, arise in equity, under contract, by statute, under
common law, or otherwise).
 
(b)           To the extent that any Guarantor makes a payment (a “Guarantor
Payment”) of all or any portion of the Guaranteed Obligation, then such
Guarantor shall be entitled to contribution and indemnification from, and be
reimbursed by, each of the other Guarantors in an amount, for each such
Guarantor, equal to a fraction of such Guarantor Payment, the numerator of
 

 
Exhibit F - Page 3

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which is such Guarantor’s Allocable Amount and the denominator of which is the
sum of the Allocable Amounts of all Guarantors.
 
(c)           As of any date of determination, the “Allocable Amount” of each
Guarantor shall be equal to the maximum amount of liability which could be
asserted against such Guarantor under this Guaranty with respect to the
applicable Guarantor Payment without (i) rendering such Guarantor “insolvent”,
(ii) leaving such Guarantor with unreasonably small capital, or (iii) leaving
such Guarantor unable to pay its debts as they become due, in each case, under
or within the meaning of any Debtor Relief Law.
 
9.           Enforceability of Guaranty; No Release.
 
(a)           This Guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed Obligation or any instrument or
agreement evidencing any part of the Guaranteed Obligation, or by the existence,
validity, enforceability, perfection, or extent of any Collateral securing the
Guaranteed Obligation, or by any fact or circumstance relating to the Guaranteed
Obligation which might otherwise constitute a defense to the obligations of the
Guarantors under this Guaranty.
 
(b)           Each Guarantor agrees that the Lender may, at any time and from
time to time, and without notice to any Guarantor, make any agreement with the
Borrowers or with any other Person or entity liable on any of the Guaranteed
Obligation or providing collateral as security for the Guaranteed Obligation,
for the extension, renewal, payment, compromise, discharge or release of the
Guaranteed Obligation or any Collateral (in whole or in part), or for any
modification or amendment of the terms thereof or of any instrument or agreement
evidencing the Guaranteed Obligation or the provision of Collateral, all without
in any way impairing, releasing, discharging or otherwise affecting the
obligations of the Guarantors under this Guaranty.
 
(c)           Each Guarantor hereby agrees its obligations under the terms of
this Guaranty shall not be released, discharged, diminished, impaired, reduced
or otherwise adversely affected by any of the following: (a) Lender’s taking or
accepting of any other security or guaranty for any or all of the Guaranteed
Obligation; (b) any release, surrender, exchange, subordination or loss of any
security at any time existing in connection with any or all of the Guaranteed
Obligation; (c) any full or partial release of the liability of any other
obligor on the Obligation; (d) the insolvency, becoming subject to any Debtor
Relief Law, or lack of corporate power of any Borrower or any party at any time
liable for the payment of any or all of the Guaranteed Obligation; (e) any
renewal, extension or rearrangement of the payment of any or all of the
Guaranteed Obligation, either with or without notice to or consent of any
Guarantor, or any adjustment, indulgence, forbearance, or compromise that may be
granted or given by Lender to any Borrower, any Guarantor, or any other obligor
on the Obligation; (f) any neglect, delay, omission, failure or refusal of
Lender to take or prosecute any action for the collection of all or any part of
the Guaranteed Obligation or to foreclose or take or prosecute any action in
connection with any instrument or agreement evidencing or securing any or all of
the Guaranteed Obligation; (g) any failure of Lender to give any Guarantor
notice of any of the foregoing it being understood that Lender shall not be
required to give any Guarantor any notice of any kind under any circumstances
with respect to or in connection with the Guaranteed Obligation, other than any
notice expressly required to be given to Guarantors under this Guaranty; (h) the
unenforceability of all or any part of the Guaranteed Obligation against any
Borrower by reason of the fact that the Guaranteed Obligation (or the interest
on the Guaranteed Obligation) exceeds the amount permitted by Law, the act of
creating the Guaranteed Obligation, or any part thereof, is ultra vires, or the
officers creating same exceeded their authority or violated their fiduciary
 

 
Exhibit F - Page 4

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duties in connection therewith; (i) any payment of the Obligation to Lender is
held to constitute a preference under any Debtor Relief Law or if for any other
reason Lender is required to refund such payment or make payment to someone else
(and in each such instance this Guaranty shall be reinstated in an amount equal
to such payment); or (j) any discharge, release, or other forgiveness of any
Borrower’s personal liability for the payment of the Guaranteed Obligation.
 
10.           Exercise of Rights and Waiver.
 
(a)           No failure by Lender to exercise, and no delay in exercising, any
right or remedy under this Guaranty shall operate as a waiver thereof.  The
exercise by Lender of any right or remedy under this Guaranty under the Loan
Documents, or other instrument, or at Law or in equity, shall not preclude the
concurrent or subsequent exercise of any other right or remedy.  The remedies
provided in this Guaranty are cumulative and not exclusive of any remedies
provided by law or in equity.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein.
 
(b)           The obligations of each Guarantor under this Guaranty are those of
primary obligor, and not merely as surety, and are independent of the Guaranteed
Obligation. Each Guarantor waives diligence by Lender and action on delinquency
in respect of the Guaranteed Obligation or any part thereof, including any
provisions of laws requiring Lender to exhaust any right or remedy or to take
any action against Borrowers, any other Guarantor, or any other Person before
enforcing this Guaranty against any Guarantor.  Each Guarantor hereby waives all
rights by which it might be entitled to require suit on an accrued right of
action in respect of any of the Guaranteed Obligation or require suit against
any Borrower or others, whether arising pursuant to Section 43.002 of the Texas
Civil Practice and Remedies Code (regarding Guarantors’ right to require Lender
to sue any Borrower on accrued right of action following Guarantors’ written
notice to Lender), Section 17.001 of the Texas Civil Practice and Remedies Code,
as amended (allowing suit against Guarantor without suit against Borrowers, but
precluding entry of judgment against Guarantors prior to entry of judgment
against Borrowers), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Lender to join Borrowers in any suit against Guarantors unless
judgment has been previously entered against Borrowers), or otherwise.
 
(c)           Each Guarantor waives notice of acceptance of this Guaranty,
notice of any loan to which it may apply, and waives presentment, demand for
payment, protest, notice of dishonor or nonpayment of any loan, notice of intent
to accelerate, notice of acceleration, and notice of any suit or notice of the
taking of other action by Lender against any Borrower, any Guarantor, or any
other person and any notice to any party liable thereon (including any
Guarantor), without reducing or affecting in any manner the liability of the
Guarantors under this Guaranty.
 
11.           Information.  Each Guarantor agrees to furnish promptly to the
Lender any and all financial or other information regarding such Guarantor or
its property as the Lender may reasonably request in writing.
 
12.           Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligation is stayed, upon the insolvency,
bankruptcy or reorganization of any Borrower or any other Person, or otherwise,
all such amounts shall nonetheless be payable by Guarantors immediately upon
demand by Lender.
 
13.           Expenses.  Each Guarantor shall pay on demand all out-of-pocket
expenses (including reasonable attorneys’ fees and expenses) in any way relating
to the enforcement or protection of the Lender’s rights under this Guaranty,
including any incurred in the preservation, protection or enforcement
 

 
Exhibit F - Page 5

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of any rights of the Lender in any case commenced by or against any Guarantor
under Title 11, United States Code or any similar or successor statute.  The
obligations of the Guarantors under the preceding sentence shall survive
termination of this Guaranty.
 
14.           Amendments.  No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by Lender and
Guarantors.
 
15.           Reliance and Duty to Remain Informed.  Each Guarantor confirms
that it has executed and delivered this Guaranty after reviewing the terms and
conditions of the Credit Agreement and the other Loan Documents and such other
information as it has deemed appropriate in order to make its own credit
analysis and decision to execute and deliver this Guaranty.  Each Guarantor
confirms that it has made its own independent investigation with respect to each
Borrower’s creditworthiness and is not executing and delivering this Guaranty in
reliance on any representation or warranty by Lender as to such
creditworthiness.  Each Guarantor expressly assumes all responsibilities to
remain informed of the financial condition of each Borrower and any
circumstances affecting (a) any Borrower’s ability to perform under the Loan
Documents to which any Borrower is a party or (b) any collateral securing all or
any part of the Guaranteed Obligation.
 
16.           Change in any Guarantor’s Status.  Should any Guarantor become
insolvent, or fail to pay its debts generally as they become due, or voluntarily
seek, consent to, or acquiesce in the benefit or benefits of any Debtor Relief
Law or become a party to (or be made the subject of) any proceeding provided for
by any Debtor Relief Law (other than as a creditor or claimant) that could
suspend or otherwise adversely affect the rights of Lender granted under this
Guaranty, then, in any such event, the Guaranteed Obligation shall be, as
between Guarantors and Lender, a fully matured, due, and payable obligation of
Guarantors to Lender (without regard to whether an Event of Default exists or
whether the Guaranteed Obligation, or any part thereof is then due and owing by
any Borrowers to Lender), payable in full by Guarantors to Lender upon demand,
which shall be the estimated amount owing in respect of the contingent claim
created under this Guaranty.
 
17.           Representations and Warranties.  Each Guarantor acknowledges that
certain representations and warranties set out in the Credit Agreement are in
respect of it, and each Guarantor reaffirms that each such representation and
warranty is true and correct.
 
18.           Covenants.  Each Guarantor acknowledges that certain covenants set
forth in the Credit Agreement are in respect of it or shall be imposed upon it,
and each Guarantor covenants and agrees to promptly and properly perform,
observe, and comply with each such covenant.
 
19.           INDEMNITY.  Each Guarantor shall indemnify, protect, and hold
Lender and its parent, subsidiaries, directors, officers, employees,
representatives, agents, successors, permitted assigns, and attorneys
(collectively, the “indemnified parties”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, and proceedings and all costs, expenses (including, without limitation,
all reasonable attorneys’ fees and legal expenses whether or not suit is
brought), and reasonable disbursements of any kind or nature (the “indemnified
liabilities”) that may at any time be imposed on, incurred by, or asserted
against the indemnified parties, in any way relating to or arising out of
(a) the direct or indirect result of the violation by any Borrower of any
Environmental Law, (b) any Borrower’s generation, manufacture, production,
storage, release, threatened release, discharge, disposal, or presence in
connection with its properties of a Hazardous materials (including, without
limitation, (i) all damages from any use, generation, manufacture, production,
storage, release,
 

 
Exhibit F - Page 6

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threatened release, discharge, disposal, or presence, or (ii) the costs of any
environmental investigation, monitoring, repair, cleanup, or detoxification and
the preparation and implementation of any closure, remedial, or other plans), or
(c) the Loan Documents or any of the transactions contemplated
therein.  However, although each indemnified party shall be indemnified under
the Loan Documents for its own ordinary negligence, no indemnified party has the
right to be indemnified under the Loan Documents for its own fraud, gross
negligence, or willful misconduct.  The provisions of and undertakings and
indemnification set forth in this Section 19 shall survive the Payment in Full
of the Guaranteed Obligation and termination of this Guaranty.
 
20.           Offset Claims.  The Guaranteed Obligation shall not be reduced,
discharged or released because or by reason of any existing or future offset,
claim or defense (except for the defense of Payment in Full of the Guaranteed
Obligation) of any Borrower or any other party against Lender or against payment
of the Guaranteed Obligation, whether such offset, claim, or defense arises in
connection with the Guaranteed Obligation or otherwise.  Such claims and
defenses include, without limitation, failure of consideration, breach of
warranty, fraud, statute of frauds, bankruptcy, infancy, statute of limitations,
lender liability, accord and satisfaction, and usury.
 
21.           Setoff.  If and to the extent any payment is not made when due
under this Guaranty, Lender may setoff and charge from time to time any amounts
so due against any or all of any Guarantor’s accounts or deposits with Lender.
 
22.           Binding Agreement.  This Guaranty is for the benefit of Lender and
its successors and assigns.  Each Guarantor acknowledges that in the event of an
assignment of the Guaranteed Obligation or any part thereof in accordance with
the Credit Agreement, the rights and benefits under this Guaranty, to the extent
applicable to the Debt so assigned, may be transferred with such Debt.  This
Guaranty is binding on each Guarantor and its successors and permitted assigns,
provided that no Guarantor may assign its rights or obligations under this
Guaranty without the prior written consent of Lender (and any attempted
assignment without such consent shall be void).
 
23.           Notices.  All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
 
If to Lender:

Bank of America, N.A.
700 Louisiana, 8th Floor
Houston, Texas  77002
Telephone No.: 713-247-6004
Facsimile No.: 804-264-0127
Attention:  Rebecca L. Hetzer

with a copy to:

Porter Hedges LLP
1000 Main Street, 36th Floor
Houston, Texas 77002
Telephone No.: 713-226-6685
Facsimile No.: 713-226-6285

 
Exhibit F - Page 7

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Attention:  Joyce K. Soliman

If to Borrowers:

Vertex Energy, Inc.
Vertex Energy Operating, LLC
1331 Gemini, Suite 250
Houston, Texas  77058
Telephone No.: (281) 486-4182
Facsimile No.: (281) 486-0217
Attention:  Chris Carlson

with a copy to:

Reinhart Boerner Van Deuren s.c.
1000 North Water Street, Suite 1700
Milwaukee, Wisconsin 53202
Telephone No.: (414) 298-8227
Facsimile No.: (414) 298-8097
Attention:  Timothy Reardon

If to Guarantors:

c/o Vertex Energy, Inc.
1331 Gemini, Suite 250
Houston, Texas  77058
Telephone No.: (281) 486-4182
Facsimile No.: (281) 486-0217
Attention:  Chris Carlson

with a copy to:

Reinhart Boerner Van Deuren s.c.
1000 North Water Street, Suite 1700
Milwaukee, Wisconsin 53202
Telephone No.: (414) 298-8227
Facsimile No.: (414) 298-8097
Attention:  Timothy Reardon

Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change its addresses or fax numbers
and each shall have the right to specify a different address or fax number
within the United States of America.  Nothing in this Section 23 shall be
construed to require any notice to any Guarantor not otherwise expressly
required in this Guaranty.
 
24.           Termination.  Subject to Section 25 regarding reinstatement, this
Guaranty shall terminate and be released upon the earlier occurrence of the date
the Guaranteed Obligation is Paid In Full.
 

 
Exhibit F - Page 8

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25.           Reinstatement.  Notwithstanding anything in this Guaranty to the
contrary, this Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any portion of the Guaranteed
Obligation is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or any other Person or otherwise, as if such payment had not been made
and whether or not the Lender is in possession of or has released this Guaranty
and regardless of any prior revocation, rescission, termination or reduction.
 
26.           Governing Law.  THIS GUARANTY IS TO BE CONSTRUED — AND ITS
PERFORMANCE ENFORCED — UNDER TEXAS LAW.
 
27.           Arbitration; Waiver of Jury Trial.  This paragraph, including the
subparagraphs below, is referred to as the “Dispute Resolution Provision.”  This
Dispute Resolution Provision is a material inducement for the parties entering
into this Guaranty.
 
(a)           This Dispute Resolution Provision concerns the resolution of any
controversies or claims between the parties, whether arising in contract, tort
or by statute, including but not limited to controversies or claims that arise
out of or relate to: (i) this Guaranty (including any renewals, extensions or
modifications); or (ii) any document related to this Guaranty (collectively a
“Claim”).  For the purposes of this Dispute Resolution Provision only, the term
“parties” shall include any parent corporation, subsidiary or affiliate of
Lender involved in the servicing, management or administration of any obligation
described or evidenced by this Guaranty.
 
(b)           At the request of any party to this agreement, any Claim shall be
resolved by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U.S. Code) (the “Act”).  The Act will apply even though this agreement
provides that it is governed by the law of a specified state.
 
(c)           Arbitration proceedings will be determined in accordance with the
Act, the then-current rules and procedures for the arbitration of financial
services disputes of the American Arbitration Association or any successor
thereof (“AAA”), and the terms of this Dispute Resolution Provision.  In the
event of any inconsistency, the terms of this Dispute Resolution Provision shall
control.  If AAA is unwilling or unable to (i) serve as the provider of
arbitration or (ii) enforce any provision of this arbitration clause, Lender may
designate another arbitration organization with similar procedures to serve as
the provider of arbitration.
 
(d)           The arbitration shall be administered by AAA and conducted, unless
otherwise required by law, in any U.S. state where real or tangible personal
property collateral for this credit is located or if there is no such
collateral, in the state specified in the governing law section of this
agreement.  All Claims shall be determined by one arbitrator; however, if Claims
exceed Five Million Dollars ($5,000,000), upon the request of any party, the
Claims shall be decided by three arbitrators.  All arbitration hearings shall
commence within ninety (90) days of the demand for arbitration and close within
ninety (90) days of commencement and the award of the arbitrator(s) shall be
issued within thirty (30) days of the close of the hearing.  However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of the
hearing for up to an additional sixty (60) days.  The arbitrator(s) shall
provide a concise written statement of reasons for the award.  The arbitration
award may be submitted to any court having jurisdiction to be confirmed and have
judgment entered and enforced.
 
(e)           The arbitrator(s) will give effect to statutes of limitation in
determining any Claim and shall dismiss the arbitration if the Claim is barred
under the applicable statutes of
 

 
Exhibit F - Page 9

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limitation. For purposes of the application of any statutes of limitation, the
service on AAA under applicable AAA rules of a notice of Claim is the equivalent
of the filing of a lawsuit.  Any dispute concerning this arbitration provision
or whether a Claim is arbitrable shall be determined by the arbitrator(s),
except as set forth at subparagraph (h) of this Dispute Resolution
Provision.  The arbitrator(s) shall have the power to award legal fees pursuant
to the terms of this agreement.
 
(f)           This paragraph does not limit the right of any party to:
(i) exercise self-help remedies, such as but not limited to, setoff;
(ii) initiate judicial or non-judicial foreclosure against any real or personal
property collateral; (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as but not limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.
 
(g)           The filing of a court action is not intended to constitute a
waiver of the right of any party, including the suing party, thereafter to
require submittal of the Claim to arbitration.
 
(h)           Any arbitration or court trial (whether before a judge or jury) of
any Claim will take place on an individual basis without resort to any form of
class or representative action (the “Class Action Waiver”).  The Class Action
Waiver precludes any party from participating in or being represented in any
class or representative action regarding a Claim.  Regardless of anything else
in this Dispute Resolution Provision, the validity and effect of the Class
Action Waiver may be determined only by a court and not by an arbitrator.  The
parties to this agreement acknowledge that the Class Action Waiver is material
and essential to the arbitration of any disputes between the parties and is
nonseverable from the agreement to arbitrate Claims. If the Class Action Waiver
is limited, voided or found unenforceable, then the parties’ agreement to
arbitrate shall be null and void with respect to such proceeding, subject to the
right to appeal the limitation or invalidation of the Class Action Waiver.  THE
PARTIES ACKNOWLEDGE AND AGREE THAT UNDER NO CIRCUMSTANCES WILL A CLASS ACTION BE
ARBITRATED.
 
(i)           By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any
Claim.  Furthermore, without intending in any way to limit this agreement to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim.  This waiver of jury trial shall remain in effect even if the Class
Action Waiver is limited, voided or found unenforceable.  WHETHER THE CLAIM IS
DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND
THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL
BY JURY TO THE EXTENT PERMITTED BY LAW.
 
28.           No Oral Agreements.  The Rights And Obligations Of The Parties
Hereto Shall Be Determined Solely From Written Agreements, Documents, And
Instruments, And Any Prior Oral Agreements Among The Parties Are Superseded By
And Merged Into Such Writings.  This Guaranty (As Amended In Writing From Time
To Time) The Credit Agreement, And The Other Written Loan Documents Executed By
Borrowers, Lender, or Guarantors (Or By Borrowers Or Guarantors For The Benefit
Of Lender) Represent The Final Agreement Among Borrowers, Guarantors, And Lender
And May Not Be Contradicted By Evidence Of Prior, Contemporaneous, Or Subsequent
Oral Agreements By The Parties.  There Are No Unwritten Oral Agreements Between
The Parties.
 

 
Exhibit F - Page 10

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29.           [Amendment and Restatement.  This Amended and Restated Corporate
Guaranty amends and restates in its entirety that certain Corporate Guaranty
dated as of August 31, 2012, executed by VAS, CMT, Crossroad Carriers,
Vertex-Recovery, H&H Oil, and Vertex II in favor of Lender.]
 
[Signatures are on the following page.]
 

 

 
Exhibit F - Page 11

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EXECUTED as of the date first written above.
 
GUARANTORS:
 
GOLDEN STATE LUBRICANTS WORKS, LLC,
a Nevada limited liability company
   
By: _______________________
Name: _____________________
Title: ______________________
   
VERTEX ACQUISITION SUB, LLC,
a Nevada limited liability company
   
By: _______________________
Name: _____________________
Title: ______________________
   
VERTEX MERGER SUB, LLC,
a California limited liability company
   
By: _______________________
Name: _____________________
Title: ______________________
   
VERTEX REFINING LA, LLC,
a Louisiana limited liability company
   
By: _______________________
Name: _____________________
Title: ______________________
   
VERTEX REFINING NV, LLC,
a Nevada limited liability company
   
By: _______________________
Name: _____________________
Title: ______________________

 

 
Signature Page to [Amended and Restated] Guaranty
 
 

--------------------------------------------------------------------------------

 

VERTEX II GP, LLC,
a Nevada limited liability company
   
By: _______________________
Name: _______________________
Title: _______________________
   
CEDAR MARINE TERMINALS, LP
CROSSROAD CARRIERS, L.P.
H & H OIL, L.P.
VERTEX RECOVERY, L.P.,
each a Texas limited partnership
 
By:  Vertex II GP,
LLC,                                                                          
         a Nevada limited liability company,
         sole general partner of each of the above
   
By: _______________________
Name: _____________________                    
Title: ______________________                       

Signature Page to [Amended and Restated] Guaranty
 
 

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