Vertex Energy Inc. 8-K



 Exhibit
10.7


 


Execution Version


 










PLEDGE
AND SECURITY AGREEMENT


 


THIS
PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of April 1, 2022, is made between VERTEX ALABAMA
REFINING LLC, a Delaware limited liability company (the “Company”), and MACQUARIE ENERGY NORTH AMERICA TRADING
INC., a Delaware corporation (“Secured Party”).


 


Reference
is made to that certain Supply and Offtake Agreement dated as of April 1, 2022, between Secured Party and the Company (as amended,
restated, supplemented or otherwise modified from time to time, the “S&O Agreement”), pursuant to which
Secured Party has agreed to sell and deliver Crude Oil to and purchase and receive Products from the Company upon and subject
to the terms of the S&O Agreement and related Transaction Documents. The obligations of Secured Party contemplated by the
S&O Agreement are conditioned upon, among other things, the execution and delivery of this Agreement.


 


In
order to comply with the terms and conditions of the S&O Agreement, for and in consideration of the agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency of all of which being hereby acknowledged, the Company
and Secured Party hereby agree as follows:


 


ARTICLE
I



Definitions


 


SECTION
1.01. (a) Capitalized terms used in this Agreement
and not otherwise defined herein have the meanings specified in the S&O Agreement. All terms defined in the New York UCC (as
defined herein) and not defined in this Agreement or the S&O Agreement have the meanings specified therein.


 


(b)   
  The rules of construction specified in Section 1.2 of the S&O Agreement also apply to this
Agreement.


 


SECTION
1.02. Other Defined Terms. As used in
this Agreement, the following terms have the meanings specified below:


 


“Catalyst
Assets” means any catalyst assets and inventory constituting catalyst, precious metals assets and precious metals inventory
and all additions, accessions and all rights related thereto.


 


“CFP”
means any current or future U.S. federal, state, regional or local renewable or clean transportation fuel program, other than
the RFS, the LCFS, and the OCFP.


 


“CFP
Credits” means credits generated and traded under the relevant CFP.


 


“Collateral”
has the meaning assigned to such term in Section 2.01.


 


“Company”
has the meaning assigned to such term in the preliminary statement of this Agreement.


 



    


     


    




“Conforming
Renewable Product” means a renewable diesel that (i) is produced from one hundred percent (100%) Renewable Biomass
and no portion of which is produced from non-renewable feedstock, including petroleum products; (ii) meets the Product Specifications,
and (iii) is eligible to generate a valid RIN with a D Code of 4 under the RFS.


 


“Environmental
Attributes” means any and all attributes, credits, benefits, emission reductions, offsets, and allowances, howsoever
entitled, attributable to the characteristics, production, use or combustion of renewable diesel or its displacement or reduction
in the use of transportation fuel, but only to the extent that any of the foregoing is generated, produced and verified through
and in compliance with the RFS, the LCFS, the OCFP, and any other applicable CFP. For sake of clarity, Environmental Attributes
(i) to the extent verified, includes RINs, LCFS Credits, OCFP Credits, and CFP Credits, and (ii) excludes any federal or state
tax credits, development credits, or similar incentives.


 


“Excluded
Property” means, (a) Environmental Attributes, Renewable Products and Renewable Feedstocks, RINs and Catalyst Assets
and (b) any “intent to use” trademark application for registration of a Trademark filed pursuant to Section 1(b) of
the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the
Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto.


 


“Intercreditor
Agreement” means the Intercreditor Agreement dated as of April 1, 2022 by and among Cantor Fitzgerald Securities, as
agent for the Term Loan Secured Parties (as defined therein), Macquarie Energy North America Trading Inc., as Intermediation Facility
Secured Party (as defined therein), Vertex Refining Alabama LLC, and each of the other Grantors (as defined therein) party thereto
(as amended, restated, amended and restated, supplemented, modified, extended, renewed, replaced, refinanced or restructured from
time to time).


 


“Inventory”
has the meaning assigned to such term in Section 9-102 of the New York UCC.


 


“LCFS”
or “Low Carbon Fuel Standard” means the California Low Carbon Fuel Standard as set forth in Section 95484 of
Title 17 of the California Code of Regulations, as amended or supplemented.


 


“LCFS
Credits” means a Credit as defined in the LCFS Regulations.


 


“LCFS
Regulations” means the regulations, orders, decrees and standards issued by a Governmental Authority implementing or
otherwise applicable to the LCFS as set forth in 17 CCR § 95480 et seq. and each successor regulation.


 


“Letter-of-Credit
Rights” means any and all of the Company’s letter-of-credit rights, as such term is defined in Section 9-102 of
the New York UCC.


 


“New
York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York, as amended from
time to time.


 



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“Non-Conforming
Renewable Product” means a renewable diesel that (i) is produced from one hundred percent (100%) Renewable Biomass
and no portion of which is produced from non-renewable feedstock, including petroleum products; and (ii) does not meet the
Product Specifications.


 


“Obligations”
has the meaning assigned to such term in Section 2.01(a).


 


“OCFP
Credits” means a credit as defined in the OCFP Regulations.


 


“OCFP
Regulations” means the regulations, orders, decrees and standards issued by a Governmental Authority implementing or
otherwise applicable to the Oregon Clean Fuels Program as set forth in the Oregon Administrative Rules chapter 340, division 253
as defined in OAR 340-253-0060(4) and each successor regulation.


 


“person”
shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership,
Governmental Authority or other entity.


 


“Proceeds”
has the meaning specified in Section 9-102 of the New York UCC.


 


“Renewable
Biomass” has the meaning set forth in 42 U.S.C. § 7545(o)(I).


 


“Renewable
Feedstock” means all renewable feedstocks, including Renewable Biomass.


 


“Renewable
Fuel Standard” or “RFS” means the renewable fuel program and policies established section 211(o)
of the Clean Air Act (42 U.S.C. § 7545(o)) as implemented by the U.S. Environmental Protection Agency under Subpart M
of Part 80 of Title 40 of the Code of Federal Regulations.


 


“Renewable
Product” means all renewable products, including all Conforming Renewable Product or Non-Conforming Renewable Product.


 


“Renewable
Product Specifications” means (i) the requirements and specifications for fuels and fuel additives established
by the U.S. Environmental Protection Agency in Part 79 of Title 40 of the Code of Federal Regulations; (ii) the requirements
and specifications established by the California Air Resources Board in Sections 2281, 2282, and 2284 of Title 13 of the California
Code of Regulations; (iii) the requirements and specifications of American Society of Testing and Materials specification
D 975; and (vi) all requirements under Applicable Law governing the production and composition of renewable diesel sold and
used as vehicle fuel, including those imposed by any Governmental Authority and under any CFP.


 


“RIN”
or “Renewable Identification Number” means mean a thirty-eight (38) character numeric code that is generated
by the producer or importer of renewable fuel representing gallons of renewable fuel produced/imported and assigned to batches
of renewable fuel that are transferred to others such that a change of ownership is effected, or any similar successor instrument
thereof.


 



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“S&O
Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement.


 


“Secured
Party” has the meaning assigned to such term in the preliminary statement of this Agreement.


 


“Security
Interest” has the meaning assigned to such term in Section 2.01.


 


“Supporting
Obligations” means all supporting obligations, as such term is defined in Section 9-102 of the New York UCC.


 


“Term
Loan Agent” has the meaning specified in the S&O Agreement.


 


ARTICLE
II



Security Interests in Collateral


 


SECTION
2.01. Security Interest. (a) As security
for the payment and performance, as the case may be, in full of its obligations and liabilities, including, without limitation,
the Transaction Obligations as defined in the S&O Agreement, under the S&O Agreement and the other Transaction Documents
(collectively, the “Obligations”), the Company hereby grants to Secured Party, and its permitted successors
and assigns, a continuing security interest (the “Security Interest”) in and to, and a right of set off against,
all right, title and interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired
by the Company or in which the Company now has or at any time in the future may acquire any right, title or interest (collectively,
the “Collateral”):


 


(i)          all Inventory, including, but not limited to Crude Oil and Products (and all Hydrocarbon Credit Support); and


 


(ii)         all Proceeds of (including proceeds of business interruption and other insurance), and Supporting Obligations (including Letter-of-Credit
Rights) with respect to, any of the foregoing.


 


Notwithstanding
anything in this Section 2.01(a) to the contrary, (1) in no event shall the Collateral include, or the security interest or Lien
granted under this Section 2.01(a) attach to, any Excluded Property, and (2) for so long as the applicable property continues
to be Excluded Property, the Company shall not be required to take any action intended to cause any Excluded Property to constitute
Collateral, and none of the covenants or representations and warranties herein shall be deemed to apply to any property constituting
Excluded Property; provided, however, that the security interest granted under this Section 2.01(a) shall immediately attach to,
and the Collateral shall immediately include, any such asset (or portion thereof) that would otherwise constitute Collateral,
were it not Excluded Property, upon such asset (or portion thereof) ceasing to be Excluded Property and (3) any and all assets
or property sold, conveyed, transferred, assigned or otherwise disposed of by the Company to the extent not prohibited by the
terms of the Transaction Documents shall be free of the security interests granted and created herein upon, from and after such
sale, conveyance, transfer, assignment or other disposition, and all rights therein shall revert to the Company; provided, further,
however, that security interests granted and created herein shall continue in any Proceeds of such sale, conveyance, transfer,
assignment or other disposition. Upon any such release or such sale, transfer, conveyance, assignment or other disposition of
Collateral or any part thereof, the Secured Party shall, upon the request and at the sole cost and expense of the Company, execute
and deliver to the Company such documents and instruments reasonably requested by the Company as shall be necessary to evidence
such termination.






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(b)          The Company hereby irrevocably authorizes Secured Party at any time and from time to time to file in any relevant jurisdiction
any initial financing statements and amendments thereto that contain the information required by Article 9 of the Uniform Commercial
Code of each applicable jurisdiction for the filing of any financing statement or amendment that is necessary or advisable with
respect to perfecting the Secured Party’s security interest in the Collateral, including whether the Company is an organization,
the type of organization and any organizational identification number issued to the Company identifying the Collateral as collateral
thereon. The Company agrees to provide such information to Secured Party promptly upon request. The Company also ratifies its
authorization for Secured Party to file in any relevant jurisdiction any such initial financing statements or amendments thereto
if filed prior to the date hereof.


 


(c)          The Security Interest is granted as security only and shall not subject Secured Party to, or in any way alter or modify, any obligation
or liability of the Company with respect to or arising out of the Collateral.


 


(d)          The Company and Secured Party agree and acknowledge that to the extent one or more schedules to the S&O Agreement are modified,
supplemented or changed in anyway, such modification, supplement or change will, as applicable, be deemed to, and will, automatically,
be reflected and incorporated in this Agreement.


 


(e)          Anything herein to the contrary notwithstanding, (i) the Company shall remain liable under any contracts, agreements and other
documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (ii) the exercise by Secured Party of any of the rights granted
to Secured Party hereunder or under any other Transaction Document shall not release the Company from any of its duties or obligations
under any such contracts, agreements and other documents included in the Collateral, and (iii) Secured Party shall not have any
obligation or liability under any such contracts, agreements and other documents by reason of this Agreement, nor shall Secured
Party be obligated to perform any of the obligations or duties of the Company thereunder or to take any action to collect or enforce
any such contract, agreement or other document included in the Collateral hereunder.


 


(f)            The Company agrees that this Agreement shall create a continuing security interest in the Collateral which shall remain in effect
until terminated in accordance with Section 4.18.


 


(g)           The Company acknowledges and agrees that Secured Party, the Term Loan Agent, and the Company are parties to the Intercreditor
Agreement and that nothing in this Agreement limits Secured Party’s rights under the Intercreditor Agreement.


 



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SECTION
2.02. Representations and Warranties.
The Company represents and warrants to Secured Party that:


 


(a)           Except for the Security Interest of Secured Party granted pursuant to this Agreement and other Permitted Liens, the Company has
good and valid rights in, title to and interests in the Collateral, with respect to which it has purported to grant a Security
Interest hereunder, free and clear of any other Liens (other than Permitted Liens) adverse claims or options, and has full power
and authority to grant to Secured Party the Security Interest in such Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained.


 


(b)           No other Lien, adverse claim or option has been created by the Company or is known by the Company to exist with respect to any
Collateral other than Permitted Liens; and no financing statement or other security instrument is on file in any jurisdiction
covering such Collateral, other than those in favor of Secured Party (and other than with respect to Permitted Liens).


 


(c)           At the time the Security Interest in favor of Secured Party attaches, good and defensible title to all after-acquired property
included within the Collateral, free and clear of any other Liens or adverse claims other than the Secured Interest of Secured
Party granted pursuant to this Agreement (other than Permitted Liens), will be vested in the Company.


 


(d)           (i) Attached hereto as Schedule 1 is (a) the exact legal name of the Company as such name appears in its document of formation,
(b) the jurisdiction of formation and the form of organization of the Company, (c) the organizational identification
number, if any, assigned by such jurisdiction and (d) the address (including the county) of the chief executive office of
the Company, and (ii) attached hereto as Schedule 2 is the name and address of any person that has, as of the date of this Agreement,
possession from time to time of any Collateral with an aggregate market value greater than $250,000. Except as set forth on Schedule
2, no Inventory is stored with any bailee, warehouseman or similar person or on any premises leased to the Company, nor has any
Inventory been consigned to the Company or consigned by the Company to any person or is held by the Company for any person under
any “bill and hold” or other arrangement.


 


(e)           The Security Interest constitutes (i) a legal and valid first priority security interest (subject to Permitted Liens and the Intercreditor
Agreement) in and to all the Collateral securing the payment and performance of the Obligations and (ii) when properly perfected
by filing with the Delaware Secretary of State, shall constitute a perfected security interest to the extent that a security interest
in such Collateral can be perfected by filing under the Uniform Commercial Code. No further or subsequent filing, recording, registration
or other public notice of such Security Interest is necessary in any office or jurisdiction in order to perfect such Security
Interest in all Collateral or to continue, preserve or protect such Security Interest except for continuation statements or for
filings upon the occurrence of any of the events stated in Section 2.03(a) of this Agreement.


 



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(f)            The Company is not a party to any license or other agreement which would materially limit Secured Party’s (or any of Secured
Party’s transferees) right to sell, lease or otherwise use any Collateral upon Secured Party’s proper exercise of
its rights or remedies hereunder or under the other Transaction Documents (including, without limitation, the rights of the Secured
Party pursuant to Section 20.4 of the S&O Agreement).


 


(g)           Within the 12-month period preceding the date hereof, the Company has not purchased any of the Collateral consisting of goods
in a bulk transfer or in a transaction which was outside the ordinary course of business of the Company other than pursuant to
the Refinery SPA and the Step-In Inventory Sales Agreement.


 


SECTION
2.03. Covenants. (a) The Company shall
not change (i) its corporate name, (ii) its form of organization, (iii) its Federal Taxpayer Identification Number or organizational
identification number or (iv) its jurisdiction of organization, in each case, without providing written notice to Secured Party
at least thirty (30) days prior to any such change. Within five (5) Business Days after Secured Party’s request therefor,
the Company shall execute and deliver all such additional documents and perform all additional acts as are necessary, including
to perfect the Security Interest in the Collateral, or that Secured Party may reasonably request in order to continue or maintain
the existence and priority of the Liens granted hereunder in the Collateral. The Company agrees to promptly notify Secured Party
if any material portion of the Collateral owned or held by the Company is destroyed.


 


(b)           The Company agrees (i) to maintain, at its own cost and expense, such records with respect to the Collateral as are consistent
with its current practices and in accordance with such prudent and standard practices used in industries that are the same as
or similar to those in which the Company is engaged, and in any event, complete and accurate in all material respects, and, (ii)
at such time or times as Secured Party may reasonably request, promptly to prepare and deliver to Secured Party a duly certified
schedule or schedules in form and detail reasonably satisfactory to Secured Party showing the identity, amount and location of
any and all Collateral.


 


(c)           The Company agrees, at its own expense, to execute, acknowledge, sign and deliver, alone or with Secured Party, any financing
statements, security agreements or other document reasonably requested by the Secured Party, procure any instruments or documents
as may be reasonably requested by Secured Party, and cause to be duly filed all such further instruments and documents, and take
all such actions as Secured Party may from time to time reasonably request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection
with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements
or other documents in connection herewith or therewith. The Company agrees to take steps reasonably requested by the Secured Party
to protect the title to the Collateral.


 



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(d)           At its option, Secured Party may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances
at any time levied or placed on the Collateral (other than Permitted S&O Liens) that are not being contested in accordance
with Section 5.9 or 16.2 of the S&O Agreement or being contested in accordance with the applicable agreement
or Applicable Law under which they are levied or placed, and may pay for the maintenance and preservation of the Collateral to
the extent the Company fails to do so as required by this Agreement or the S&O Agreement, and the Company agrees to reimburse
Secured Party upon written request for any payment made or any expense incurred by Secured Party pursuant to the foregoing authorization
other than to the extent relating to Permitted Article 10 Liens; provided, however, that nothing in this paragraph
shall be interpreted as excusing the Company from the performance of, or imposing any obligation on Secured Party to cure or perform,
any covenants or other promises of the Company with respect to taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein or in the Transaction Documents,


 







(e)           The Company’s entry into this Agreement shall not relieve the Company of any obligation to be observed or performed by it
under any contract, agreement or instrument relating to the Collateral, all in accordance with the terms and conditions thereof.


 


(f)            The Company, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Collateral
in accordance with the requirements set forth in Article 17 of the S&O Agreement. The Company irrevocably makes, constitutes
and appoints Secured Party (and all officers, employees or agents designated by Secured Party) as the Company’s true and
lawful agent (and attorney-in-fact) for the purpose, during the occurrence and continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of the Company on any check,
draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that the Company at any time or times shall fail to obtain or maintain any of the
policies of insurance required by the S&O Agreement or to pay any premium in whole or part relating thereto, Secured Party
may, without waiving or releasing any obligation or liability of the Company hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as Secured
Party deems advisable. Without duplication of any obligations under the SOA, all sums disbursed by Secured Party in connection
with this paragraph, including reasonable out of pocket attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Company to Secured Party and shall be additional Obligations secured hereby.


 


(g)           After the occurrence and during the continuance of an Event of Default, any person (other than Secured Party) or the Company at
any time and from time to time holding all or any portion of the Collateral shall be deemed to, and shall, hold the Collateral
as the agent of, and as pledge holder for, Secured Party. After the occurrence and during the continuance of an Event of Default,
at any time and from time to time, Secured Party may give notice to any such person holding all or any portion of the Collateral
that such person is holding the Collateral as the agent and bailee of, and as pledge holder for, Secured Party, and obtain such
person’s written acknowledgment thereof, and the Company shall, upon request, join with Secured Party in any such notice.


 



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(h)           Subject to the terms and conditions of the Intercreditor Agreement, the Company will use commercially reasonable efforts to obtain
from each person from whom the Company leases any premises at which any Collateral with a value in excess of $250,000 is located,
and from each other person at whose premises Collateral with a value in excess of $250,000 is located (including any bailee, warehouseman
or similar person), (1) on or before the Commencement Date or (2) if later, within 30 days of the date the Company enters into
a lease of or a contract to hold Collateral at any premises, any such collateral access, subordination, landlord waiver, bailment,
consent and estoppel agreements, as Secured Party may reasonably request, in form and substance satisfactory to Secured Party
and the other parties thereto. In the event that any such person becomes an Affiliate of the Company after the Commencement Date
and from whom the Company leases any premises at which any Collateral is located, the Company will cause such person to deliver
such bailee’s letter no later than 30 days after the date such person becomes an Affiliate of the Company.


 


(i)            Secured Party may from to time (but it shall not be obligated to), inspect the Company’s records concerning the Collateral
in accordance with Article 24 of the S&O Agreement.


 


(j)            Under
all circumstances, access to the Facilities (as such term is defined in the Storage Facilities Agreement) shall be subject to
the terms of the Storage Facilities Agreement.


 


ARTICLE
III



Remedies


 


SECTION
3.01. Remedies Upon Default. Upon the
occurrence and during the continuance of an Event of Default, it is agreed that Secured Party shall have the right to, from time
to time, apply, set-off, collect, sell in one or more sales, lease, or otherwise dispose of, any or all of the Collateral, in
its then current condition or following any commercially reasonable preparation or processing, in such order as Secured Party
may elect, and may take any of or all of the following actions set forth herein below, at the same or different times, with or
without legal process and with or without prior notice or demand for performance, without resistance or interference by the Company,
to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral, and may so remove the Collateral from such premises, and,
generally, in addition to the rights and remedies provided herein, in the other Transaction Documents and in any other documents
relating to the Obligations, to exercise any and all rights afforded to a secured party under the New York UCC or other Applicable
Law. Without limiting the generality of the foregoing, the Company agrees that Secured Party shall have the right, subject to
the mandatory requirements of Applicable Law, to sell or otherwise dispose of all or any part of the Collateral on any such premises
at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future
delivery as Secured Party shall deem appropriate. Each such purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of the Company, and the Company hereby waives (to the extent permitted by Applicable
Law) all rights of redemption, stay and appraisal which the Company now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.


 



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Secured
Party shall give the Company ten (10) Business Days’ written notice (which the Company agrees is reasonable notice within
the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of Secured Party’s
intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale
and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such
sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as Secured
Party may fix and state in the notice (if any) of such sale. At any such sale, the Collateral or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as Secured Party may (in its sole and absolute discretion) determine,
for cash, upon credit or otherwise, at such prices and upon such terms as Secured Party deems advisable, in its sole discretion
(subject to any and all mandatory legal requirements). Secured Party shall not be obligated to make any sale of any Collateral
if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. Secured
Party may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery,
the Collateral so sold may be retained by Secured Party until the sale price is paid by the purchaser or purchasers thereof, but
Secured Party shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by Applicable Law, private) sale made pursuant to this Section, Secured Party may bid for or purchase, free (to the
extent permitted by Applicable Law) from any right of redemption, stay, valuation or appraisal on the part of the Company (all
said rights being also hereby waived and released to the extent permitted by Applicable Law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then due and payable to Secured Party from the Company
as a credit against the purchase price, and Secured Party may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to the Company therefor. The Company acknowledges that any such private sale may
be at prices and on terms less favorable to the seller than the prices and other terms which might have been obtained at a public
sale and, notwithstanding the foregoing, agrees that such private sale shall not solely by reason thereof be deemed not to have
been made in a commercially reasonable manner. Neither Secured Party’s compliance with Applicable Law nor its disclaimer
of warranties relating to the Collateral shall be considered to adversely affect the commercial reasonableness of any sale. For
purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; Secured
Party shall be free to carry out such sale pursuant to such agreement and the Company shall not be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that after Secured Party shall have entered into such
an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, Secured Party may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section
3.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions. For avoidance of doubt, Secured Party shall be entitled to any and all cash
proceeds received upon the collection, sale or other disposition of any Collateral pursuant to the exercise of its remedies as
set forth herein, including under law or in equity.


 



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SECTION
3.02. Access. In addition to the rights
and remedies hereunder, upon the occurrence and during the continuance of an Event of Default, (i) Secured Party shall have the
right to enter and remain upon the various premises of the Company without cost or charge to Secured Party, and use the same,
together with materials, supplies, books and records of the Company for the purpose of collecting and liquidating the Collateral,
or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise, (ii) Secured
Party may remove Collateral, or any part thereof, from such premises and/or any records with respect thereto, in order to effectively
collect or liquidate such Collateral and (iii) if Secured Party exercises its right to take possession of the Collateral, the
Company shall also at its expense take any and all other actions reasonably requested by Secured Party to preserve and protect
the security interest hereby granted in the Collateral, such as placing and maintaining signs indicating the security interest
of Secured Party, appointing overseers for the Collateral and maintaining inventory records.


 


SECTION
3.03. Secured Party’s Duties. The
powers conferred upon Secured Party by this Agreement are solely to protect its interest in the Collateral and shall not impose
any duty upon Secured Party to exercise any such powers. Secured Party shall be under no duty whatsoever to make or give any presentment,
demand for performance, notice of nonperformance, protest, notice of protest, notice of dishonor or other notice or demand in
connection with any Collateral or the Obligations, or to take any steps necessary to preserve any rights against prior parties.
Secured Party shall not be liable for failure to collect or realize upon any or all of the Obligations or Collateral, or for any
delay in so doing, nor shall Secured Party be under any duty to take any action whatsoever with regard thereto. Secured Party
shall use reasonable care in the custody and preservation of any Collateral in its possession. Secured Party shall have no duty
to comply with any recording, filing or other legal requirements necessary to establish or maintain the validity, priority or
enforceability of, or Secured Party’s rights in or to, any of the Collateral.


 


SECTION
3.04. Right of Set-Off. Upon the occurrence
and during the continuance of an Event of Default, Secured Party may exercise any rights of set-off as provided for in Article
20.4 of the S&O Agreement, or otherwise as available under law or in equity.


 


SECTION
3.05. Application of Proceeds. Secured
Party shall apply all proceeds that it shall receive from any collection, sale or other disposition of Collateral, as well as
any Collateral consisting of cash, as follows:


 


FIRST,
to the payment of all costs and expenses incurred by Secured Party in connection with such collection, sale or other disposition
or otherwise in connection with this Agreement, the S&O Agreement or any of the Obligations, including all court costs and
the fees and expenses of its agents and internal and outside legal counsel, the repayment of all advances made by Secured Party
hereunder or under the S&O Agreement or the other Transaction Documents on behalf of the Company and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder or under the S&O Agreement or the other Transaction
Documents;


 



    11


     


    




SECOND,
to the payment in full of the Obligations; and


 


THIRD,
to the Company or such other person as directed by a court of competent jurisdiction.


 


Upon
any collection, sale or other disposition of Collateral by Secured Party (including pursuant to a power of sale granted by statute
or under a judicial proceeding), the receipt of Secured Party or of the officer making the sale shall be a sufficient discharge
to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to Secured Party or such officer or be answerable in any way for the misapplication
thereof.


 


SECTION
3.06.  Access to Collateral. Notwithstanding
anything in this Agreement to the contrary, so long as no Event of Default shall have occurred and be continuing, the Company
may, subject to the provisions of the S&O Agreement, use, convey, sell, lease, assign, transfer or otherwise dispose of, commingle
or blend all or any part of any of the Collateral.


 


ARTICLE
IV



Miscellaneous


 


SECTION 4.01.  Notices. All communications and
notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Article 28 of
the S&O Agreement.


 


SECTION 4.02. Security Interest Absolute. All
rights of Secured Party hereunder, the Security Interest, the grant of a security interest in the Collateral and all obligations
of the Company hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the
S&O Agreement, any other Transaction Document, any agreement with respect to any of the Obligations or any other agreement
or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the S&O Agreement,
any other Transaction Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on
other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing
all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge
of, the Company (other than a defense relating to payment or performance under the S&O Agreement or Transaction Documents)
in respect of the Obligations or this Agreement.


 


SECTION
4.03.  Survival of Agreement. All covenants,
agreements, representations and warranties made by the Company herein and in the certificates or other instruments required to
be prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by Secured
Party and shall survive the execution and delivery of the Transaction Documents, regardless of any investigation made by any such
other party or on its behalf, and shall continue in full force and effect as long as the parties’ obligations under the
S&O Agreement, any other Transaction Document or any other agreement relating thereto remain in effect and such agreements
have not expired or terminated.


 



    12


     


    




SECTION
4.04. Binding Effect; Several Agreement.
This Agreement shall become effective when a counterpart hereof executed on behalf of the Company shall have been delivered to
Secured Party and a counterpart hereof shall have been executed on behalf of Secured Party, and thereafter shall be binding upon
the Company and Secured Party and their respective permitted successors and assigns, and shall inure to the benefit of the Company
and Secured Party and their respective successors and assigns, except that neither the Company nor Secured Party shall have the
right to assign or transfer its rights or obligations hereunder or any interest herein (and any such assignment or transfer shall
be void) except (i) as expressly contemplated in this Agreement pursuant to the exercise by Secured Party of rights as a secured
creditor after default, or (ii) to any assignee pursuant to Article 27 of the S&O Agreement.


 


SECTION
4.05. Successors and Assigns. Whenever
in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors
and assigns of such party; and all covenants, promises and agreements by or on behalf of the Company or Secured Party that are
contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.


 


SECTION
4.06. Any amounts payable by the Company, including
such amounts paid by Secured Party on behalf of the Company, as provided hereunder shall be additional Obligations secured hereby
and by any other Lien Documents. The provisions of this Section 4.06 shall survive the termination of this Agreement or any
other Transaction Document.


 


SECTION
4.07. Secured Party Appointed Attorney-in-Fact.
The Company hereby appoints Secured Party the attorney-in-fact of the Company for the purpose, to act upon the occurrence and
continuation of an Event of Default, of carrying out the provisions of this Agreement and taking any action and executing any
instrument that Secured Party may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing, Secured Party shall have the right, upon the occurrence
and during the continuance of an Event of Default, with full power of substitution either in Secured Party’s name or in
the name of the Company (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders
or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of the Company on any invoice
or bill of lading relating to any of the Collateral; (d) to commence and prosecute any and all suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to
enforce any rights in respect of any Collateral; (e) to settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; and (f) to use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though Secured Party were the absolute owner of the Collateral for all purposes; provided
that nothing herein contained shall be construed as requiring or obligating Secured Party to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by Secured Party, or to assume or take on any obligation of the
Company under any contract or agreement to which the Company is a party, or to present or file any claim or notice, or to take
any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property
covered thereby.


 



    13


     


    




SECTION
4.08. Liability for Deficiency. Neither
the acceptance of this Agreement by Secured Party nor any action taken pursuant hereto shall be construed as relieving any party
liable for the Obligations from any liability or deficiency thereon. The execution and delivery of this Agreement shall not in
any manner affect any other security for the Obligations, nor shall any security taken hereafter as security for the Obligations
impair or affect this Agreement.


 


SECTION
4.09. Governing Law. THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER STATE.


 


SECTION
4.10. Waivers; Amendment. (a) No failure
or delay of Secured Party in exercising any right or power hereunder or under any other Transaction Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of Secured Party hereunder and under the other Transaction Documents are cumulative and are not exclusive
of any rights or remedies that it would otherwise have, including under law or in equity. No waiver of any provision of any Transaction
Document or consent to any departure by the Company therefrom shall in any event be effective unless the same shall be agreed
in writing by the parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the
purpose for which given, and no such waiver or consent shall be construed to establish any cause of dealing between the parties
hereto. No notice or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar
or other circumstances. To the extent permitted by Applicable Law, neither the Secured Party nor any party acting as attorney
for Secured Party shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other
than their gross negligence or willful misconduct hereunder.


 


SECTION
4.11. WAIVER OF JURY TRIAL. EACH PARTY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS
RELATING TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 



    14


     


    




SECTION
4.12. Severability. In the event any one
or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.


 


SECTION
4.13. Counterparts. This Agreement may
be executed in counterparts (and by different parties hereto or different counterparts), each of which shall constitute an original
but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 4.04.
Delivery of an executed signature page to this Agreement by facsimile or other form of electronic transmission, including a PDF
of a signature page, shall be as effective as delivery of a manually signed counterpart of this Agreement.


 


SECTION
4.14. Headings. Article and Section headings
and the Table of Contents used herein are for convenience of reference only, and shall not be construed to have any effect or
meaning with respect to the other content of such articles, sections, subsections or other divisions, such other content being
controlling as to the agreement between the parties, and are not to affect the construction of, or to be taken into consideration
in interpreting, this Agreement.


 


SECTION
4.15. Jurisdiction. (a) The Company hereby
irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America, sitting in New York City and County, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any other Transaction Document or for recognition
or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by Applicable
Law, in such Federal court. Nothing in this Agreement or any other Transaction Document shall affect any right that Secured Party
may otherwise have to bring any action or proceeding relating to this Agreement or any other Transaction Document against the
Company or its properties in the courts of any jurisdiction.


 


SECTION
4.16. Venue; Forum. The Company hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or
any other Transaction Document in any court referred to in Section 4.15. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.


 


SECTION
4.17. Consent to Service of Process. Each
party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 4.01. Nothing
in this Agreement or any other Transaction Document will affect the right of any party to this Agreement to serve process in any
other manner permitted by Applicable Law.


 



    15


     


    




SECTION
4.18. Termination. Upon the termination
of the S&O Agreement, in accordance with its terms, and the performance and payment of the obligations thereunder (other than
the indemnity and other obligations hereunder and under the other Transaction Documents that by their terms survive), the security
interests created by this Agreement shall terminate and Secured Party shall promptly execute and deliver to the Company, at the
cost and expense of the Company, such documents and instruments reasonably requested by the Company as shall be necessary to evidence
termination of all security interests given by the Company to Secured Party hereunder.


 


SECTION
4.19. Entire Agreement. THIS AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS REFLECT THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE MATTERS SET OUT HEREIN AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE UNDERSIGNED. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


SECTION
4.20. Intercreditor Agreement. Reference
is made to the Intercreditor Agreement. Notwithstanding anything herein to the contrary, the lien and security interest granted
to the Secured Party pursuant to this Agreement and the exercise of any right or remedy by the Secured Party are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict or inconsistency between the provisions of the Intercreditor
Agreement and this Agreement, the provisions of the Intercreditor Agreement shall control.


 


[Remainder
of page intentionally left blank.]


 




    16


     


    

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


 


	 	COMPANY:
	 	 	 
	 	VERTEX
    ALABAMA REFINING LLC
	 	 	 
	 	By:	/s/ Benjamin P. Cowart          
	 	Name:	Benjamin P. Cowart
	 	Title:	President & Chief Executive Officer
	 	 	 
	 	SECURED
    PARTY:
	 	 	 
	 	MACQUARIE
    ENERGY NORTH AMERICA TRADING INC.
	 	 	 
	 	By:	/s/ Travis McCullough   
	 	Name:	Travis McCullough
	 	Title:	Division Director 
	 	 	 
	 	By:	/s/ Daniel Vizel         
	 	Name:	Daniel Vizel
	 	Title:	Senior Managing Director



 





[Signature Page to Pledge and Security
Agreement]


 







 



    


     


    

Schedule
1


 


Name,
Jurisdiction of Formation, Organizational Identification Number

and Chief Executive Office Address


 


	Company’s
                                         Exact Legal Name

        
	Jurisdiction
    of Formation	Form
                                         of Organization

        
	Organizational
    

    Identification Number

    (if any)	Chief
Executive Office Address 

        (including
county) 

	Vertex
    Refining Alabama, LLC	Delaware
    	Limited
    Liability Company	4818589	1331
    Gemini Street, Suite 250, Houston, TX 77058




    


     


    

Schedule
2


 


Addresses
of Collateral Locations


 


The
name and address, as applicable, of any person that has possession of any Collateral with an aggregate market value greater than
$250,000: 


 


	Property
    Name and Address	Entity
    that Owns/Leases/Occupies Property	Owned
    or Leased?	If
    Leased, Name of Landlord
	Refinery


400 Industrial Parkway 

Saraland, AL 36571

        
	Vertex
    Refining Alabama LLC	Owned	N/A
	Terminals


400 Industrial Parkway 

Saraland, AL 36571

        
	Vertex
    Refining Alabama LLC	Owned	N/A
	Plains
Terminal 

1871 Hess Rd. 

Mobile, AL 36610

        
	Vertex
    Refining Alabama LLC	Leased	Plains
    Marketing, L.P.
	Blakely
Island Terminal 

1105 Cochran Causeway

 Mobile, AL 36602

        
	Vertex
    Refining Alabama LLC	Owned	N/A