VERTEX ENERGY, INC. 8-K


 


Exhibit
10.4


 








SECOND
AMENDMENT TO CREDIT AGREEMENT


THIS
SECOND AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is entered into as of December 15, 2017 by and among
VERTEX ENERGY, INC., a Nevada corporation (“Parent”), VERTEX ENERGY OPERATING, LLC, a Texas limited liability
company (the “Lead Borrower”), the other Borrowers signatory hereto, ENCINA BUSINESS CREDIT, LLC, as Agent,
and the Lenders signatory hereto.


W
I T N E S S E T H:


WHEREAS,
Parent, the Lead Borrower, the other Loan Parties, Agent and the Lenders from time to time party thereto are parties to that certain
Credit Agreement dated as of February 1, 2017 (as amended, restated, supplemented or modified from time to time, the “Credit
Agreement”; unless otherwise defined herein, capitalized terms used herein that are not otherwise defined herein shall
have the respective meanings assigned to such terms in the Credit Agreement); and


WHEREAS,
the Loan Parties have requested that the Agent and Lenders amend certain provisions of the Credit Agreement, and subject to the
satisfaction of the conditions set forth herein, the Agent and the Lenders signatory hereto are willing to do so, on the terms
set forth herein.


NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:


1.       


Amendments
to Credit Agreement. Upon satisfaction of the conditions set forth in Section 2 hereof, the Credit Agreement is hereby
amended as follows:


a.       


Section
7.16 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:


“7.16.


Minimum
Availability. Permit Availability at any time to be less than (a) on or prior to December 31, 2017, $1,500,000 and (b) after
December 31, 2017, $2,500,000.”


2.       


Conditions.
Provided that each of the conditions precedent set forth in this Section 2 has been met (or waived by Agent) as of the date hereof,
this Amendment shall be deemed effective as of November 5, 2017:


a.       


the
execution and delivery of this Agreement by each Loan Party, Agent and the Lenders;


b.       


the
truth and accuracy of the representations and warranties contained in Section 3 hereof;




    	  



    	 



    

 


c.       


Agent
shall have received confirmation that the Loan Parties have engaged a third-party consultant reasonably acceptable to Agent to
perform services of a scope reasonably acceptable to Agent;


d.       


Agent
shall have received an amendment to the Term Loan Agreement corresponding in relevant part to this Agreement and otherwise in
form and substance reasonably satisfactory to Agent, executed and delivered by each Loan Party, the Term Loan Agent and the Required
Lenders (as defined in the Term Loan Agreement); and


e.       


Agent
shall have received such other documents, opinions or materials reasonably requested by Agent, in form and substance reasonably
acceptable to Agent.


3.       


Representations
and Warranties. Each Loan Party hereby represents and warrants to Agent and each Lender as follows:


a.       


the
execution, delivery and performance by such Loan Party of this Agreement has been duly authorized by all necessary corporate or
other organizational action, and does not and will not (a) contravene the terms of any of such Person’s Organization Documents;
(b) conflict with or result in any breach, termination, or contravention of, or constitute a default under, or require any
payment to be made under (i) any Material Contract or any Material Indebtedness to which such Person is a party or affecting such
Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject; (c) result in or require the creation of any
Lien upon any asset of such Loan Party (other than Liens in favor of the Agent under the Security Documents); or (d) violate any
Law;


b.       


such
Loan Party has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and the
Credit Agreement, as amended hereby;


c.       


this
Agreement constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at
law;


d.       


after
giving effect to this Agreement and the transactions contemplated hereby, each of the representations and warranties of such Loan
Party contained herein, in Article V of the Credit Agreement or in any other Loan Document are true and correct in all material
respects on and as of the date hereof, except (i) to the extent that such representations and warranties specifically refer to
an earlier date, in which case they shall be true and correct as of such earlier date, (ii) in the case of any representation
and warranty qualified by materiality, they shall be true and correct in all respects and (iii) for purposes of this Section
3(d), the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall
be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the
Credit Agreement; and


e.       


after
giving effect to this Agreement, no Default or Event of Default has occurred and is continuing or would result from the transactions
contemplated hereby.




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4.       


No
Modification. Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance
with any term or condition contained in the Credit Agreement or any of the other Loan Documents or constitute a course of conduct
or dealing among the parties. Except as expressly stated herein, the Agent and Lenders reserve all rights, privileges and remedies
under the Loan Documents. Except as amended or consented to hereby, the Credit Agreement and other Loan Documents remain unmodified
and in full force and effect. All references in the Loan Documents to the Credit Agreement shall be deemed to be references to
the Credit Agreement as modified hereby. This Agreement shall constitute a Loan Document.


5.       


Counterparts.
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section
2, this Agreement shall become effective when it shall have been executed by the Agent and when the Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy, pdf or other electronic transmission shall be as effective as delivery
of a manually executed counterpart of this Agreement.


6.       


Successors
and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights
or obligations hereunder or under any other Loan Document without the prior written consent of the Agent and each Lender.


7.       


Governing
Law. This Agreement and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Agreement and the transactions contemplated hereby shall be governed by, and construed
in accordance with, the law of the State of Illinois.


8.       


Severability.
If any provision of this Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor 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.


9.       


Section
Headings. Section headings herein are included for convenience of reference only and shall not affect the interpretation of
this Agreement.




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10.       


Reaffirmation.
Each of the Loan Parties as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such
Loan Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case
may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each
of the Loan Documents to which it is a party (after giving effect hereto) and (ii) to the extent such Loan Party granted liens
on or security interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed the
Borrower’s Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and grant of security
interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as
amended hereby. Each of the Loan Parties hereby consents to this Agreement and acknowledges that each of the Loan Documents remains
in full force and effect and is hereby ratified and reaffirmed. The execution of this Agreement shall not operate as a waiver
of any right, power or remedy of the Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve
to effect a novation of the Obligations.


11.       


Release
of Claims. In consideration of the Lenders’ and the Agent’s agreements contained in this Agreement, each Loan
Party hereby irrevocably releases and forever discharge the Lenders and the Agent and their affiliates, subsidiaries, successors,
assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and
from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Loan
Party ever had or now has against Agent, any Lender or any other Released Person which relates, directly or indirectly, to any
acts or omissions of Agent, any Lender or any other Released Person relating to the Credit Agreement or any other Loan Document
on or prior to the date hereof.


12.       


Postclosing
Covenant. The Loan Parties shall retain the consultant engaged pursuant to Section 2(c) to perform the services described
therein through and including January 31, 2018 (or such earlier date as Agent may determine in its sole discretion).


[Signature
pages follow.]




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IN
WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the date set forth above.


Lead
Borrower:


VERTEX
ENERGY OPERATING, LLC


	By:	/s/
    Benjamin
    P. Cowart
	 	Name:	Benjamin
    P. Cowart  
	 	Its:	CEO


 


Additional
Borrowers:

BANGO
OIL LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
REFINING NV, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
REFINING OH, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
MERGER SUB, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO





VERTEX
RECOVERY MANAGEMENT LA, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
REFINING LA, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
II GP, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
ACQUISITION SUB, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO







 




    	[Signature Page to Second Amendment to Credit Agreement]



    	 



    

 

CEDAR
MARINE TERMINALS, LP


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart
	 	Its:	CEO 


 


VERTEX
RECOVERY, L.P.


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO





CROSSROAD
CARRIERS, L.P.


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


H&H
OIL, L.P.


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart 
	 	Its:	CEO


 


VERTEX
RECOVERY MANAGEMENT, LLC


	By:	/s/ Benjamin P. Cowart
	 	Name:	Benjamin
    P. Cowart
	 	Its:	CEO 


 


VERTEX
ENERGY, INC., as Parent and as a Guarantor


	By:	/s/ Benjamin P. Cowart
	Name:	Benjamin
    P. Cowart	 
	Title:	CEO	 







 


    	[Signature Page to Second Amendment to Credit Agreement]



    	 



    

 

AGENT:


ENCINA
BUSINESS CREDIT, LLC, as Agent


	By:	/s/
    Daniel
    Ross  
	Name:	Daniel
    Ross 	 
	Title:	Its
    Duly Authorized Signatory







 


    	[Signature Page to Second Amendment to Credit Agreement]



    	 



    

 


	ENCINA
BUSINESS CREDIT SPV, LLC, as a Lender 
	
	 	 
	By:	/s/ Daniel
    Ross 
	Name:	Daniel
    Ross 	 
	Title:	Authorized
Signatory







 



    	[Signature Page to Second Amendment to Credit Agreement]



    	 



    

 

CrowdOut
Capital LLC, as a Lender





	By:	/s/
    Alexander
    Schoenbaum  
	Name:	Alexander
    Schoenbaum 	 
	Title:	CEO







 




    	[Signature Page to Second Amendment to Credit Agreement]