VERTEX ENERGY, INC. 8-K


 


Exhibit 10.5


 








FIRST AMENDMENT TO ABL CREDIT AGREEMENT


THIS FIRST AMENDMENT
TO ABL 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 ABL
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 in cash, for the benefit of each Lender (ratably in accordance with the aggregate outstanding Commitments of each Lender),
a non-refundable amendment fee in an amount equal to $35,000, which shall be earned in full on the date hereof;


e.       


Agent shall have
received an amendment to the ABL Credit 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 ABL Agent and the Required Lenders (as defined
in the ABL Credit Agreement); and


f.       


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




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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.


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 First Amendment to ABL 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 First Amendment to ABL Credit Agreement]	 



     


    

 

AGENT:


ENCINA
BUSINESS CREDIT, LLC, as Agent


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







 



    	 	[Signature Page First Amendment to ABL Credit Agreement]	 



     


    

 


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







 



    	 	[Signature Page First Amendment to ABL Credit Agreement]