Vertex Energy, Inc. 8-K 


Exhibit
10.4 


 


NEITHER
THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
AND SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES.


 





	Warrant
    No.: T-1	Number
    of Shares: 1,500,000
	Warrant
    Date: July 24, 2019	 










 


VERTEX
ENERGY, INC.

COMMON STOCK PURCHASE WARRANT


 


1.       Issuance.
For value received, the receipt of which is hereby acknowledged by Vertex Energy, Inc., a Nevada corporation (the “Company”),
Tensile Capital Partners Master Fund LP or its registered assigns (the “Holder”), is hereby granted
the right to purchase, at any time until the close of business on July 24, 2029 (the “Expiration Date”),
One Million Five Hundred Thousand (1,500,000), subject to adjustment upon certain events as described in greater detail
below, fully paid and nonassessable shares of the Company’s Common Stock, par value $0.001 per share (the “Common
Stock”), at an exercise price of $2.25 per share (the “Exercise Price”).


 


2.       Procedure
for Exercise. Upon surrender of this Warrant with the annexed Notice of Exercise Form duly executed, together with payment
in cash of the aggregate Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. This Warrant may be exercised in whole or in part, subject to the
Beneficial Ownership Limitation (defined below). On any such partial exercise, provided the Holder has surrendered the original
Warrant, the Company will issue and deliver to the order of the Holder a new Warrant of like tenor, in the name of the Holder,
for the whole number of shares of Common Stock for which such Warrant may still be exercised. 


 


3.       No
Fractional Shares or Scrip. No fractional Shares or scrip representing fractional Warrant Shares shall be issued upon the
exercise of this Warrant, but in lieu of such fractional Warrant Shares the Company shall issue an additional share of Common
Stock to the Holder or pay the Holder the fair market value of such fractional share, as determined in the reasonable discretion
of the Board of Directors of the Company, in the Company’s sole discretion.


 


4.       Reservation
of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance
upon exercise of this Warrant such number of shares of Common Stock as shall be required for issuance upon exercise hereof (the
“Warrant Shares”). Any shares issuable upon exercise of this Warrant will be duly and validly issued,
fully paid, non-assessable and free of all liens and charges and not subject to any preemptive rights and rights of first refusal.


 






     


     


    

 


5.       Mutilation
or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the
case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new warrant of like
tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void.


 


6.       No
Rights as Shareholder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Company,
either at law or in equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable
against the Company except to the extent set forth herein.


 


7.       Beneficial
Ownership Limitation. Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be
acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary
to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned
by such Holder and its affiliates (as defined under Rule 144 of the Securities Act, “Affiliates”) and
any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 4.999%
of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise)(the “Beneficial Ownership Limitation”). For such purposes, beneficial ownership
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order
to determine the amount of securities or other consideration that such Holder may receive in the event of a transaction described
in Section 8.2 hereof, to the extent applicable. By written notice to the Company, the Holder may increase the Beneficial
Ownership Limitation to up to 9.999% of the total number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise), but any such increase will not be effective until the 61st day
after delivery of such notice. In no event shall the Beneficial Ownership Limitation be increased to greater than 9.999% of the
total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise). This restriction may not be waived.


 


8.       Effect
of Certain Transactions


 


  8.1       Adjustments
for Stock Splits, Stock Dividends Etc. If the number of outstanding shares of Common Stock of the Company are increased or
decreased by a stock split, reverse stock split, stock dividend, stock combination, recapitalization or the like, the Exercise
Price and the number of shares purchasable pursuant to this Warrant shall be adjusted proportionately so that the ratio of (i)
the aggregate number of shares purchasable by exercise of this Warrant to (ii) the total number of shares outstanding immediately
following such stock split, reverse stock split, stock dividend, stock combination, recapitalization or the like shall remain
unchanged, and the aggregate purchase price of shares issuable pursuant to this Warrant shall remain unchanged.


 





Vertex
Energy, Inc.


Common
Stock Purchase Warrant [T-1]


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  8.2       Fundamental
Transactions. Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially
all of the Company’s assets or other transaction, which in each case is effected in such a way that the holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or
in exchange for Common Stock is referred to herein as “Organic Change.” Prior to the consummation of
any Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Holders
of Warrants representing a majority of the Common Stock obtainable upon exercise of all Warrants then outstanding under this series
of Warrants) to insure that each of the Holders of Warrants under this Warrant shall thereafter have the right to acquire and
receive, in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable
upon the exercise of such Holder’s Warrant, such shares of stock, securities or assets as would have been issued or payable
in such Organic Change (if the holder had exercised this Warrant immediately prior to such Organic Change) with respect to or
in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon exercise of such Holder’s
Warrant had such Organic Change not taken place, including by making appropriate provision (in form and substance reasonably satisfactory
to the Holders of Warrants representing a majority of the Common Stock obtainable upon exercise of all Warrants then outstanding
under this series of Warrants) with respect to such holders’ rights and interests to insure that the provisions of this
Section 8.2 shall thereafter be applicable to the Warrants. The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger
or the entity purchasing such assets assumes by written instrument (in form and substance reasonably satisfactory to the Holders
of Warrants representing a majority of the Common Stock obtainable upon exercise of all Warrants then outstanding under this series
of Warrants), the obligation to deliver to each such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to acquire.


 


9.       Transfer
to Comply with the Securities Act. This Warrant and the Warrant Shares have not been registered under the Securities Act of
1933, as amended, (the “Securities Act”) and has been issued to the Holder for investment and not with
a view to the distribution of either this Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or
any other security issued or upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of
an effective registration statement under the Securities Act relating to such security or an opinion of counsel satisfactory to
the Company that registration is not required under the Securities Act. Each certificate for this Warrant, the Warrant Shares
and any other security issued or issuable upon exercise of this Warrant shall contain a legend in form and substance satisfactory
to counsel for the Company, setting forth the restrictions on transfer contained in this Section.


 


10.     Notices.
Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally or sent
by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally,
or if mailed, two days after the date of deposit in the United States mails, as follows:


 

Vertex
Energy, Inc.


Common
Stock Purchase Warrant [T-1]


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If
to the Company, to:


 


Vertex
Energy, Inc.


Attn:
Chris Carlson, CFO

1331 Gemini St., Suite 250


Houston,
Texas 77058


Email:
chrisc@vertexenergy.com


  


With
a copy to:


 


The
Loev Law Firm, PC


Attn:
David M. Loev


6300
West Loop South, Suite 280


Bellaire,
Texas 77401


Email:
dloev@loevlaw.com


 


If
to the Holder, to its address appearing on the Company’ records.


 


Any
party may designate another address or person for receipt of notices hereunder by written notice given at least five (5) business
days prior to the date such change will be effective, given to the other parties in accordance with this Section.


 


11.         Supplements
and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the
Company and the Holder hereof. This Warrant contains the full understanding of the parties hereto with respect to the subject
matter hereof, and there are no representations, warranties, agreements or understandings other than expressly contained herein.


 


12.         Governing
Law. This Warrant shall be deemed to be a contract made under the laws of the State of Texas and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely
within such State. Any action brought by either party against the other concerning the transactions contemplated by this Warrant
shall be brought only in the state courts of Texas or in the federal courts located in Harris County, Texas. The parties to this
Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Warrant
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law.


 


13.         Counterparts.
This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the same instrument.


 

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Energy, Inc.


Common
Stock Purchase Warrant [T-1]


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14.       Descriptive
Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.


 


15.       Assignability.
This Warrant or any part hereof may only be hereafter assigned by the Holder to an affiliate thereof executing documents reasonably
required by the Company, subject to applicable law. Any such assignment shall be binding on the Company and shall inure to the
benefit of any such assignee.


 


16.       Restrictions.
By acceptance hereof, the Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant have restrictions
upon their resale imposed by state and federal securities laws. 


 


[Remainder
of the page intentionally left blank; signature page follows.]


 

Vertex
Energy, Inc.


Common
Stock Purchase Warrant [T-1]


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IN
WITNESS WHEREOF, the parties hereto have executed this Warrant as of the Warrant Date set forth above.


 






	 	COMPANY:
	 	 
	 	VERTEX ENERGY, INC.
	 	 
	 	By:	/s/
    Benjamin P. Cowart 
	 	Name:	Benjamin P. Cowart 
	 	Title:	CEO 
	 	 	 
	 	HOLDER:
	 	 
	 	TENSILE CAPITAL PARTNERS
	 	MASTER FUND LP
	 	 
	 	By: 	Tensile Capital GP LLC
	 	Its:	General Partner


  


	 	By:	 	/s/
    Douglas J. Dossey
	 	Name: 	Douglas J. Dossey
	 	Title: 	Manager



 

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Energy, Inc.


Common
Stock Purchase Warrant [T-1]


Page
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NOTICE
OF EXERCISE OF WARRANT 


 


Attention:
Corporate Secretary


 


The
undersigned hereby elects to purchase, pursuant to the provisions of the Common Stock Purchase Warrant T-1 issued by Vertex
Energy, Inc., a Nevada corporation (the “Company”) and held by the undersigned, _________ shares of
Common Stock of the Company. Payment of the Exercise Price per Warrant Share required under the Warrant accompanies this
Notice.


 


The
issuance of the shares of Common Stock upon in connection with this Notice of Exercise of Warrant will not cause the undersigned
to exceed the Beneficial Ownership Limitation of the Warrant.


 


The
undersigned hereby represents and warrants that the undersigned is acquiring such Shares for his own account for investment purposes
only, and not for resale or with a view to distribution of such Warrant Shares or any part thereof.


 


Date:
________, 20__ 





	 	WARRANTHOLDER:
	 	 
	 	Signature:	 	 
	 	Print Name:	 	 
	 	Title:	 	 
	 	Address:	 	 



 





	 	Name in which Shares should
    be registered:______________________________________