Vertex Energy, Inc 8-K


 


Exhibit 10.5


 

 


SEVENTH AMENDMENT TO ABL CREDIT AGREEMENT


 


THIS SEVENTH AMENDMENT TO
ABL CREDIT AGREEMENT (this “Agreement”) is entered into as of May 26, 2021 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 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 prior to the date hereof and as it may be further 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 7.03 of the Credit
Agreement is hereby amended by adding a new sentence to the end thereof to read as follows:


 


“Notwithstanding
anything in this Agreement to the contrary, the Loan Parties may enter into that certain (x) Sale and Purchase Agreement dated as of May
26, 2021 between Equilon Enterprises LLC and Vertex Energy Operating LLC and (y) promissory note dated May 26, 2021 in the amount of $10,000,000
payable to Shell Chemical LP and in the form of Exhibit A to such Sale and Purchase Agreement; provided, that so long as the Obligations
remain outstanding, no payments shall be made under any of such documents described in such clauses (x) and (y) above to the extent proceeds
of such payment consist of Loans advanced this Agreement or proceeds of assets of the Loan Parties.”


 


2.             


Conditions. The effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent:


 


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


 






     


     


    

 


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


 


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. 


 


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.


 






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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 3,
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.


  


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.


 






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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.


 


[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 Cowart	 	 	 	 
	 	Name:	Benjamin Cowart	 	 	 	 
	 	Its:	President/CEO	 	 	 	 
	 	 	 	 	 	 	 
	Additional Borrowers:	 	VERTEX RECOVERY MANAGEMENT LA, LLC
	 	 	 	 	 
	BANGO OIL LLC	 	 	 	 
	 	 	 	 	 	 	 
	By:	/s/ Benjamin Cowart	 	By:	/s/ Benjamin Cowart
	 	Name:	Benjamin Cowart	 	 	Name:	Benjamin Cowart
	 	Its:	President	 	 	Its:	President
	 	 	 	 	 	 	 
	VERTEX REFINING NV, LLC	 	VERTEX REFINING LA, LLC
	 	 	 	 	 	 	 
	By:	/s/ Benjamin Cowart	 	By:	/s/ Benjamin Cowart
	 	Name:	Benjamin Cowart	 	 	Name:	Benjamin Cowart
	 	Its:	President	 	 	Its:	President
	 	 	 	 	 	 	 
	 	 	 	 	VERTEX II GP, LLC
	 	 	 	 	 	 	 
	 	 	 	 	By:	/s/ Benjamin Cowart
	 	 	 	 	 	Name:	Benjamin Cowart
	 	 	 	 	 	Its:	President


 


	VERTEX MERGER SUB, LLC	 	VERTEX ACQUISITION SUB, LLC
	 	 	 	 	 	 	 
	By:	/s/ Benjamin Cowart	 	By:	/s/ Benjamin Cowart
	 	Name:	Benjamin Cowart	 	 	Name:	Benjamin Cowart
	 	Its:	President	 	 	Its:	President



 


[Signature Page to Seventh Amendment to ABL Credit Agreement]


 






     


     


    

 


	 	 	 	 	 	 	 
	CEDAR MARINE TERMINALS, LP	 	CROSSROAD CARRIERS, L.P.
	 	 	 	 	 	 	 
	By:	/s/ Benjamin Cowart	 	By:	/s/ Benjamin Cowart
	 	Name:	Benjamin Cowart	 	 	Name:	Benjamin Cowart
	 	Its:	President	 	 	Its:	President
	 	 	 	 	 	 	 
	VERTEX RECOVERY, L.P.	 	H&H OIL, L.P.
	 	 	 	 	 	 	 
	By:	/s/ Benjamin Cowart	 	By:	/s/ Benjamin Cowart
	 	Name:	Benjamin Cowart	 	 	Name:	Benjamin Cowart
	 	Its:	President	 	 	Its:	President
	 	 	 	 	 	 	 
	 	 	 	 	VERTEX RECOVERY MANAGEMENT, LLC
	 	 	 	 	 	 	 
	 	 	 	 	By:	/s/ Benjamin Cowart
	 	 	 	 	 	Name:	Benjamin Cowart
	 	 	 	 	 	Its:	President
	 	 	 	 	 	 	 
	 	 	 	 	VERTEX ENERGY, INC., as Parent and as a Guarantor
	 	 	 	 	 	 	 
	 	 	 	 	 	By:	/s/ Benjamin Cowart
	 	 	 	 	 	Name:	Benjamin Cowart
	 	 	 	 	 	Title:	President/CEO



 


[Signature Page to Seventh 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 to Seventh Amendment to ABL Credit Agreement]


 




     


     


    

 





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


 



[Signature Page to Seventh Amendment to ABL Credit Agreement]