Document:

Vertex Energy 8-K

Exhibit 10.1

 

**************************************************

MATERIAL BELOW MARKED BY AN “***”
HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THIS ENTIRE EXHIBIT INCLUDING THE OMITTED CONFIDENTIAL INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

**************************************************

 

	 	 

  

SWAP
AGREEMENT 

 

 

THIS
SWAP AGREEMENT, (“Agreement”) is made on this 29th, day of January, 2016 (the “Effective Date”),
by and between Vertex Energy Operating, LLC, a Texas limited liability company with its principal place of business located at
1331 Gemini Street, Suite 250, Houston, Texas 77058 and its affiliates and subsidiaries (collectively, “Vertex”)
and Safety-Kleen Systems, Inc., a Wisconsin corporation with its principal place of business located at 2600 North Central Expressway,
Suite 400, Richardson, Texas 75080 and its affiliates and subsidiaries (“Safety-Kleen” and, together with Vertex,
the “Parties”).

 

The
following paragraphs set forth the general terms and conditions under which the Parties agree to swap equivalent volumes of used
oil meeting the specifications set forth in Schedule A (such used oil, meeting such specifications, the “Oil”
or the “Product”):

 

1.                 
TERM:

 

Subject
to the provisions of Section 6 and 13 below, this Agreement shall have a term of five (5) years commencing on the date that Safety-Kleen’s
oil processing facility located at 22211 Bango Road, Fallon, NV 89406 is fully operational as mutually determined in a written
acknowledgement signed by both Parties (the “Initial Term”) and shall automatically renew for additional subsequent
one (1) year terms (each a “Renewal Term”) unless a Party provides the other Party with ninety (90) days prior
written notice to the other Party that it desires not to renew this Agreement (such Initial Term plus the Renewal Terms, if applicable,
the “Term”).

 

2.                 
USED OIL EXCHANGE:

a.     Subject to the terms of this Agreement, during the Term, each Party (the “Delivering Party”) agrees to deliver
to the other Party (the “Receiving Party”) the Quarterly Quantity (as defined in Schedule B).

b.    Within the first ten (10) business days of each fiscal quarter during the Term, each Party shall indicate to the other Party the
quantity of Oil (which quantity must be between the Quarterly Minimum and the Quarterly Maximum) that it proposes to deliver to
the other Party during the upcoming fiscal quarter. If the quantities so proposed by the Parties are different, the Parties shall,
within five (5) business days after receipt of both proposed quantities, use their good faith efforts to mutually agree upon a
single quantity. If the Parties are able to come to such an agreement, the agreed upon quantity shall be the Quarterly Quantity.
If the Parties cannot agree, the Quarterly Quantity shall be the lower of the two proposed quantities.

    	Page 1 of 11

    	 

    

 

c.     Neither
Party shall be obligated to deliver to the other Party, or to accept from the other Party, any amount of Oil exceeding the Monthly
Maximum in any calendar month, the Quarterly Maximum in any fiscal quarter or the Annual Maximum in any calendar year. If the
Delivering Party delivers in excess of any such quantity in any month, fiscal quarter or calendar year, as applicable, the Receiving
Party shall have the option, in its sole discretion, to reject the delivery or to purchase the delivered Oil for a price to be
mutually agreed upon. If a price cannot be agreed upon, such delivery shall be deemed to have been rejected.

d.     If, by the last day of the applicable fiscal quarter, the Delivering Party has not delivered the full Quarterly Quantity to the
Receiving Party, the Receiving Party shall, in its sole discretion, have the option of either: (A) permitting the Delivering Party
to deliver, during the next fiscal quarter (in addition to the amount of the Quarterly Quantity applicable to the next fiscal
quarter), the Shortfall Quantity; or (B) in lieu of delivering the Shortfall Quantity, requiring the Delivering Party to pay the
Receiving Party the Shortfall Payment Amount.

e.     Safety-Kleen agrees to deliver all Oil required to be delivered hereunder to Vertex’s oil processing facilities located
at, in the sole discretion and election of Vertex, either the Cedar Marine Terminal Processing Plant, 200 Atlantic Pipeline Rd.,
Baytown, TX 77520 or the Marrero Re-Refinery, 5000 River Road, Marrero, LA 70072 and Vertex agrees to deliver all Oil required
to be delivered hereunder to Safety-Kleen’s oil processing facility located at 22211 Bango Road, Fallon, NV 89406.

 

3.                 
OBLIGATIONS:

Each
Party represents and warrants that all Oil provided to the other Party pursuant to this Agreement shall be used lubricating oil
suitable for re-refining and shall meet the refinery grade used oil specifications referenced in Schedule A.

 

If,
in the Receiving Party’s opinion, the Oil does not comply with the specifications set forth in Schedule A or is otherwise
not as described in Schedule A (“Non-Refinery Grade Used Oil”) or is otherwise not suitable for re-refining
in the Receiving Party’s reasonable discretion, the Receiving Party reserves the right to reject the oil hereunder and refuse
acceptance of the said delivery.

 

Notwithstanding
the foregoing, the Receiving Party may agree to purchase the Non-Refinery Grade Used Oil at a price mutually agreed upon by the
Parties, upon which the Receiving Party will purchase the Non-Refinery Grade Used Oil and pay the delivering Party the agreed
price in accordance with the terms of payment of this Agreement. Any Non-Refinery Grade Used Oil delivered by a Party shall not
be included in the calculation of that Party’s Quarterly Quantity.

 

    	Page 2 of 11

    	 

    

 

 

EXCEPT
FOR WARRANTY OF TITLE, NO CONDITIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF SATISFACTORY QUALITY, MERCHANTABILITY, FITNESS OR SUITABILITY
OF THE OIL FOR ANY PARTICULAR PURPOSE OR OTHERWISE, ARE MADE BY A PARTY OTHER THAN THAT THE USED OIL CONFORMS, WITHIN ANY TOLERANCES
STATED, TO THE DESCRIPTION CONTAINED HEREIN.

 

4.                 
DELIVERY/ TITLE AND RISK OF LOSS:

 

The
Parties shall deliver the Oil to the locations specified above, fully paid and in compliance with all laws, rules, regulations
and guidelines applicable to the Oil or the transport of the Oil. If the Receiving Party reasonably determines upon delivery that
the Oil packaging is not in compliance with any applicable laws, rules, regulations or guidelines, the Receiving Party may require
the Delivering Party to remedy the Oil packaging to bring it into compliance with all applicable laws, rules, regulations and
guidelines prior to the Receiving Party handling such Oil.

 

Except
as otherwise specified in this agreement, title and risk of loss shall pass between Parties for all volumes delivered by truck,
as the Product passes the flange connecting the delivering and receiving apparatus of the Parties at the delivery location. With
respect to delivery of Oil by rail, delivery shall be deemed to occur upon receipt at the applicable Party’s rail yard and
each such receiving Party agrees to accept unloading of rail cars in a commercially reasonable and customary timeframe after receipt.

 

5.                 
PAYMENT

Where
any payment is required under this Agreement, the Party requiring payment shall issue an invoice to the other Party and the other
Party will make payment within 30 days of the invoice date.

 

6.                 
TERMINATION

Either
Party may terminate this Agreement for cause upon providing 30 days advance written notice to the other Party where the other
Party:

                                                           
i.      Fails to meet the refinery grade specifications set out in Schedule A on a recurring basis;

                                                          
ii.      Fails to deliver the Quarterly Quantity for at least three consecutive fiscal quarters; or

                                                         
iii.      Breaches a material term of this Agreement.

Where
notice of termination is provided pursuant to Subsection (i) or (iii) above, the defaulting Party shall have the opportunity to
cure the default during the termination notice period. Upon the effective date of a termination notice, the Parties shall undertake
an accounting
of all Oil volumes delivered and received during the quarter or portion thereof immediately preceding the effective date of termination
in accordance with Section 2 and Section 5 (pro-rated for partial quarters, if applicable).

 

    	Page 3 of 11

    	 

    

 

 

7.                 
TAXES

The
Delivering Party is responsible for remitting GST and any other applicable taxes, as applicable.

 

8.                 
METHODS OF TREATMENT AND RECYCLING

The
methods of treatment and recycling shall be for re refining. Each Party represents that its methods are suitable for the materials
and in compliance with all federal, provincial and local laws governing the applicable used oil streams.

 

9.                 
LICENSES, PERMITS AND COMPLIANCE WITH THE LAW

Each
Party represents that it is familiar with, understands, and will comply with all applicable local, provincial and federal laws,
guidelines, regulations, permits, licenses, and approvals concerning the handling, transportation and recycling/disposal of the
used oil streams.

 

10.             
INDEMNIFICATION

Safety-Kleen
agrees to indemnify, defend and save Vertex harmless from and against any and all liability (including reasonable lawyer’s
fees) for which Vertex may be responsible or pay out as a result of bodily injuries (including death), property damage, or any
violation of law to the extent caused by: (i) Safety-Kleen’s breach of this Agreement; or (ii) any negligent act, negligent
omission or willful misconduct of Safety-Kleen, its employees or contractors in the performance of this Agreement.

Vertex
agrees to indemnify, defend and save Safety-Kleen harmless from and against any and all liability (including reasonable lawyer’s
fees) for which Safety-Kleen may be responsible or pay out as a result of bodily injuries (including death), property damage,
or any violation of law to the extent caused by: (i) Vertex’s breach of this Agreement; or (ii) any negligent act, negligent
omission or willful misconduct of Vertex, its employees or contractors in the performance of this Agreement.

Neither
Party shall be liable to the other for indirect, incidental, consequential, or special damages, including but not limited to loss
of use and lost profits.

 

11.             
ASSIGNMENT:

 

Neither
Party shall assign its rights and obligations hereunder directly or indirectly without prior written consent of the other Party.
Notwithstanding the foregoing, either Party may assign its rights and obligations hereunder to an affiliate of such Party provided
that the credit
worthiness of such affiliate is not materially weaker than the credit worthiness of the assignor.

 

 

    	Page 4 of 11

    	 

    

 

 

12.             
AMENDMENT:

 

No
amendment to, or modification, waiver or discharge of, any provision of this Agreement shall be binding on Safety-Kleen
or Vertex unless in writing and signed by authorized representatives of both Parties. 

 

13.             
BANKRUPTCY, NON-PAYMENT:

 

In
addition to the provisions contained in Section 6 above, a Party may terminate this Agreement at its sole option immediately if
(i) the other Party is liquidated, dissolved, has a change of ownership or control; (ii) the other Party fails to pay such Party
when due any amounts hereunder and such failure continues for fifteen (15) days after written notice from such Party; (iii) the
other Party voluntarily files a petition for bankruptcy for reorganization or to effect a plan or other arrangements with creditors
or is adjudicated bankrupt or insolvent; or (iv) the other Party fails or refuses to accept delivery of the Product as agreed
herein or refuses any further deliveries without required notice.

 

14.             
CONFIDENTIALITY:

 

Safety-Kleen
and Vertex, and their respective affiliates, officers, directors, employees and agents (“Representatives”),
shall treat and maintain as confidential property, and not use for its own benefit or disclose to others during the term of this
Agreement and for a period of ten (10) years thereafter, except as is necessary to provide the Products and related services hereunder,
any information (including any technical information, experience or data) regarding products, pricing, plans, programs, plants,
processes, costs, equipment, operations, or such Party’s vendors, suppliers and customers, or the chemical composition,
quantity or analysis of the Product, the terms of this Agreement or the existence of this Agreement (collectively, “Confidential
Information”), which may be disclosed by a Party (the “Disclosing Party”) to, or come within the
knowledge of, the other Party (the “Receiving Party”) or its respective Representatives in the performance
of this Agreement, without the Disclosing Party’s prior written consent.

 

The
provisions of this section shall not apply to any Confidential Information which: (a) has been published and has become part of
the public domain other than by wrongful acts or omissions of Receiving Party, its employees and agents; (b) has been furnished
or made known to the Receiving Party, its employees or agents, by third parties (other than those acting directly or indirectly
for or on behalf of Receiving Party) as a matter of legal right and without restriction on disclosure; (c) was in Receiving Party’s
possession prior to disclosure by the Disclosing Party and was not acquired by Receiving Party, its employees and agents directly
or indirectly from the Disclosing Party; or (d) is required by law or by any governmental regulatory authority to be disclosed;
provided the Receiving Party gives the Disclosing Party sufficient notice of such anticipated disclosure so that the Disclosing
Party might,
at Disclosing Party’s expense, seek a protective order or other remedy it deems appropriate to prevent disclosure of the
Confidential Information.

 

    	Page 5 of 11

    	 

    

 

 

The
Parties agree to exercise the same degree of care and discretion to avoid unauthorized disclosure, publication or dissemination
of all of the other Party’s Confidential Information as the Party exercises to protect its own confidential information,
being no less than a reasonable degree of care.

 

The
obligations of this Section 14 shall survive for a period of five (5) years after termination of this Agreement. Notwithstanding
anything herein to the contrary, breach of the obligations set forth in this Section 14 shall give rise to immediate termination.

 

15.             
NOTICES:

 

All
notices and communications required or permitted to be given hereunder shall be considered to be given and received in all respects
when personally delivered or sent by facsimile or sent by reputable overnight courier service or three (3) days after being deposited
in the United States mail, certified, postage prepaid and return receipt requested to the following addresses:

 

Vertex:

Vertex
Energy Operating, LLC

1331
Gemini Street, Suite 250

Houston, TX 77058

Attn:
Benjamin P. Cowart, President and CEO

 

Safety-Kleen:

Safety-Kleen
Systems Inc. 

2600
N. Central Expressway

Suite
400

Richardson,
TX 75080

 

With
a copy to:

Clean
Harbors Environmental Services Inc.

42
Longwater Drive

P.O.
Box 9149

Norwell,
MA 02061-9149

Attn:
General Counsel (Urgent Contract Matter)

781-792-5000

 

16. 
 GOVERNING LAW:

 

This
contract shall be governed by and construed in accordance with Texas law without regard to conflicts of law rules. The Parties
consent to the exclusive jurisdiction of the state and federal courts located in the state of Texas with regard to all disputes
hereunder.

 

 

    	Page 6 of 11

    	 

    

 

17. 
 WAIVER: 

 

Any
waiver by either Party of any provision or condition of this Agreement shall not be construed or deemed to be a waiver of any
other provisions or conditions. 

 

18. 
 SEVERABILITY:

 

If
any section of this Agreement shall be found to be unenforceable, such finding shall not affect the enforceability of any other
section or the Agreement as a whole. 

 

19. 
 ENTIRE AGREEMENT: 

 

This
Agreement and the attachments hereto, constitute the entire agreement between Vertex and Safety-Kleen related to the purchase
of the Product and shall be deemed effective on the date signed by the Party executing this Agreement last. Should any discrepancy
exist between this Agreement and any supporting documents, such as a Party’s request for Product and Product receipts, the
terms and conditions of this Agreement shall control. The Parties agree that preprinted terms and conditions on a purchase or
work order shall be of no force and effect, even if signed by both Parties. No modification of this Agreement, except to Schedule
A, shall be binding on Safety-Kleen or Vertex unless in writing and signed by both Parties.

 

20. 
 COUNTERPARTS

 

This
Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and
the same document. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

21. 
FORCE MAJEURE

 

a.   
Each Party hereto shall be excused from liability for delay or cancellation of any purchase or delivery of the Product hereunder
due to any cause beyond the reasonable control of such Party (each a “Force Majeure Event”), including, but not limited
to, fire, labor dispute, embargo, material shortage, acts of God, or acts of any government, whether national, state, municipal
or otherwise, and in such event, either Party, at its option by prompt written notice to the other Party, shall have the right
to reduce the quantity of any purchase or delivery (or portions thereof) of Product so affected. The affected Party shall make
every commercially reasonable effort to eliminate and/or correct the effect of such Force Majeure Event as completely and rapidly
as is reasonably possible. In such case, the time of delivery or performance shall be deferred until the cause of the Force Majeure
Event has been eliminated or corrected sufficiently to permit performance.

 

    	Page 7 of 11

    	 

    

 

b.    Notwithstanding
the above paragraph, should a Force Majeure Event adversely impact, or reasonably be likely to impact adversely, a Party’s
available timely supply or receipt of Product from the other Party for a period of one hundred eighty (180) days or more, then
such Party shall have the right to terminate this Agreement without liability upon written notice thereof to the other Party.

 

SIGNATURE
PAGE FOLLOWS

 

 

    	Page 8 of 11

    	 

    

IN
WITNESS WHEREOF, the Parties have caused this Swap Agreement to be executed by their duly authorized representatives as of the
day and year first above written.

 

	

SAFETY-KLEEN SYSTEMS, INC.

	VERTEX ENERGY OPERATING, LLC:
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	/s/ James M. Rutledge	 	By:	/s/ Benjamin P. Cowart	 
	 	 	 	 	 	 
	Its:	Executive Vice President	 	Its:	President and Chief Executive Officer	 
	 	 	 	 	 	 
	Date:	January 29, 2016	 	Date:	January 29, 2016	 

 

 

 

    	Page 9 of 11

    	 

    

Schedule
A

 

Used
Oil Specifications

 

	Test	Procedure	Units	UMO
	 	 	 	 
	API
    Gravity at 60° F	ASTM
    D1298 mod.	-	26
    – 32
	Specific
    Gravity	ASTM
    D1298 mod.	-	Report
	Water
    Content, %	ASTM
    E203 mod	%	<5
	Total
    Halogens (XRF)	ASTM
    D6052 mod.	ppm	<800
	Flash
    Point, Closed Cup  or Seta 	ASTM
    D 93 / D3828	F	>140
	Arsenic
    (ICAP)	ASTM
    D5185 mod.	ppm	<5
	Cadmium
    (ICAP)	ASTM
    D5185 mod.	ppm	<2
	Calcium
    (ICAP)	ASTM
    D5185 mod.	ppm	<3500
	Chromium
    (ICAP)	ASTM
    D5185 mod.	ppm	<10
	Iron
    (ICAP)	ASTM
    D5185 mod.	ppm	<150
	Lead
    (ICAP)	ASTM
    D5185 mod.	ppm	<100
	Phosphorous
    (ICAP)	ASTM
    D5185 mod.	ppm	<1100
	Silicon
    (ICAP)	ASTM
    D5185 mod.	ppm	<150
	Sodium
    (ICAP)	ASTM
    D5185 mod.	ppm	<250
	Vanadium
    (ICAP)	ASTM
    D5185 mod.	ppm	<10
	Zinc
    (ICAP	ASTM
    D5185 mod.	ppm	<1500
	Styrene,
    PPM	GC/HS	ppm	<100
	Polychlorinated
    Biphenyls	SW
    846/USEPA 8082 	ug/g	<2
	Sulfur
    by ICAP or X-Ray	ASTM
    D5185 mod. / D6052	wt%	<0.5
	Glycol	GC/HS	%	<1
	Sediment
    by Spin, %	ASTM
    D1796	%	<1.5
	Viscosity
    at 40° C, After Caustic	ASTM
    D445 mod.	cSt	<250
	Viscosity
    at 40° C	ASTM
    D445 mod.	cSt	40
    - 100
	Distillation
    Curve	ASTM
    D2887	%	<15%@700oF
	Distillation
    Curve	ASTM
    D2887	%	>50%>800oF
	Distillation
    Curve	ASTM
    D2887	%	>95%>1050oF
	 	 	 	 

 

 

    	Page 10 of 11

    	 

    

 

 

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MATERIAL
BELOW MARKED BY AN “***” HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THIS ENTIRE EXHIBIT INCLUDING
THE OMITTED CONFIDENTIAL INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

**************************************************

 

Schedule
B

 

Quarterly
Quantities

 

As
used in Section 2, the following terms shall have the following meanings:

	i.	 	“Monthly Maximum” means *** gallons of Oil or such
    other number of gallons as is mutually agreed upon by the Parties.
	 	 	 
	ii.	 	“Quarterly Minimum” means *** gallons of Oil or such other number of
    gallons as is mutually agreed upon by the Parties.
	 	 	 
	iii.	 	“Quarterly Maximum” means *** gallons of Oil or such other number of
    gallons as is mutually agreed upon by the Parties.
	 	 	 
	iv.	 	“Annual Maximum” means *** gallons of Oil or such other number of gallons
    as is mutually agreed upon by the Parties.
	 	 	 
	v.	 	“Quarterly Quantity” means the quantity of Oil determined pursuant to
    subsection (c) below.
	 	 	 
	vi.	 	“Shortfall Quantity” means the difference between the Quarterly Quantity
    and the amount of Oil actually delivered by the Delivering Party during the applicable fiscal quarter (beginning on January
    1, April 1, July 1 and October 1).
	 	 	 
	vii.	 	“Shortfall Payment Amount” means an amount equal to: (A) the number of
    gallons in the Shortfall Quantity times *** of the applicable per-gallon price specified in the Index (assuming 42 gallons
    per barrel, and using the most current figure available as of the applicable date of determination), plus (B) *** of the amount
    specified in clause (A).
	 	 	 
	viii.	 	“Index” means the US Platts mid-range per gallon rate for Gulf Coast
    No. 6, 3%.
	 	 	 

 

 

Page 11 of 11Vertex Energy 8-K

Exhibit 10.2

 

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MATERIAL BELOW MARKED BY AN “***”
HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THIS ENTIRE EXHIBIT INCLUDING THE OMITTED CONFIDENTIAL INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

**************************************************

 

	 	 

  

 

BASE
OIL SALES AGREEMENT 

 

 

THIS
BASE OIL SALES AGREEMENT, (this “Agreement”) is made on this 29th, day of January, 2016 (the “Effective
Date”), by and between Vertex Energy Operating, LLC, a Texas limited liability company with its principal place of business
located at 1331 Gemini Street, Suite 250, Houston, Texas 77058 and its affiliates and subsidiaries (collectively, “Purchaser”)
and Safety-Kleen Systems, Inc., a Wisconsin corporation with its principal place of business located at 2600 North Central Expressway,
Suite 400, Richardson, Texas 75080 and its affiliates and subsidiaries (collectively, “Safety- Kleen” and,
together with Vertex, the “Parties”).

 

The
following paragraphs set forth the general terms and conditions under which Purchaser will purchase from Safety-Kleen and Safety-Kleen
will supply to Purchaser base oils and other finished lubricants of the type specified in Exhibit A (the “Product”).

 

1.                 
TERM:

 

Subject
to the provisions hereof, this Agreement shall have a term of five (5) years from the date hereof (the “Initial Term”)
and shall automatically renew for additional subsequent one (1) year terms (each a “Renewal Term”) unless a
Party provides the other Party with ninety (90) days prior written notice to the other Party that it desires not to renew this
Agreement (such Initial Term plus the Renewal Terms, if applicable, the “Term”).

 

2.                 
PRODUCT AND QUANTITY/ VOLUME COMMITMENT:

 

During
the Term, Safety-Kleen agrees to sell to Purchaser, and Purchaser agrees to purchase from Safety-Kleen, the Product up to the
maximum quantities set forth in Exhibit B (the “Volume Commitment”) and at the locations specified herein
or otherwise mutually agreed by the Parties in accordance with the terms of this Agreement.

 

Safety-Kleen
shall have no obligation to sell or deliver more than 95% of the Volume Commitment of any Product.

 

In
the event Purchaser seeks to purchase Product in excess of the Maximum Annual Volume Commitment (as specified in Exhibit B)
in any given year, written notice of request by Purchaser to purchase such additional Product must be given ninety (90) days prior
to desired purchase date. Safety-Kleen has the right to accept or not accept request, upon timely notice.

 

3.                 
FORECAST: 

 

During
the Term, Purchaser will provide Safety-Kleen with a Product forecast each month that details its requirements for the next two
(2) months (the “Forecast”). The Forecast will be by Product type, including by contracted grade and volume,
and will define planned shipments
for each month in the Forecast. If Purchaser fails to provide the Forecast in any month during the Term, then the Forecast for
such month shall be equivalent to the last monthly Forecast provided by Purchaser; provided, however, if Purchaser shall have
failed to deliver a Forecast for six consecutive months, then Safety-Kleen, at its sole discretion, may elect to terminate this
Agreement.

    	Page 1 of 12

    	 

    

 

 

4.                 
SPECIFICATIONS:

 

The
Product shall meet Safety-Kleen’s current specifications for the Product as disclosed in advance to Purchaser or the specifications
provided upon request by Purchaser (the “Specifications”). If any Product does not meet the Specifications,
Purchaser shall have the right to reject or revoke its acceptance of such Product.

 

5.                 
PRICING:

 

The
price at which Safety-Kleen shall invoice Purchaser for Product sold and delivered hereunder for shipping shall be as specified
in Exhibit C.

 

6.                 
PAYMENT: 

 

Payment
is due within thirty (30) days from the date of the bill of lading.  Safety-Kleen and
Purchaser agree that, in the event Purchaser fails to make payment when due, an amount equal to 1.5% per month (18% per annum)
or the maximum amount allowed by law, whichever is greater, will be added to all amounts outstanding beyond the due date. 
In order to assure timely payment, Purchaser agrees to notify Safety-Kleen within
a reasonable time after receipt of the invoice of any questions concerning an invoice charge.  All payments from Purchaser
shall be made through an Electric Funds Transfer (EFT) account. Safety-Kleen, in its sole discretion, reserves the right
to change credit amounts extended to Purchaser to the extent it is reasonable to do so under the circumstances.  If amounts
owed to Safety-Kleen by Purchaser exceed allowed credit amounts, Safety-Kleen further reserves the right to require certain shipments
be paid on a C.O.D. basis until Purchaser’s outstanding balances are reduced within established credit terms.

 

7.                 
ORDERING:

 

Orders
must be placed in full rail car or truck load quantities. The minimum order for one rail car is 22,000 gallons. The minimum order
lead time (the interval between the day an order is received and the day such order is delivered to the applicable carrier for
shipping) is seven (7) business days. Orders must be placed by Purchaser with Safety-Kleen’s Customer Service department
at (800) 421-6841.

 

8.                 
TRANSPORTATION AND DELIVERY:

 

The
pricing specified in Section 5 does not include transportation fees. All transportation to Purchaser’s location shall be
billed as a separate line item on the invoice. Freight charges will be based on mode of transportation, which is at the election
of Purchaser. Safety-Kleen shall
sell, and Purchaser shall buy, the Product F.O.B. Origin, freight prepaid as specified in Exhibit B.

    	Page 2 of 12

    	 

    

 

 

Safety-Kleen
shall arrange for shipping by rail or truck carrier to Purchaser’s agreed upon facilities. Purchaser shall pay demurrage
at a rate of seventy five dollars ($75) per day beginning on day eight (8) after the rail carrier notifies Purchaser of the rail
car’s arrival for delivery at the receiving facility and at one hundred fifty dollars ($150) per day beginning on day thirty
(30) until the empty railcar is released.

 

Any
claims for shortage in quantity or deficiency in quality shall be waived unless Purchaser gives Safety-Kleen notice of the claim
in writing within ten (10) business days of delivery. Such notice shall set forth in reasonable detail the facts on which Purchaser’s
claim is based, and Safety-Kleen (and/or its representatives) shall be given full opportunity to inspect, measure and test the
Product and alleged deficiencies. Safety-Kleen tank gauge, rail strapping chart and/or scale ticket readings, which Safety-Kleen
represents will be accurate in all material respects, will be used to determine delivered quantity which shall be conclusive and
binding on both Parties. To support deficiency of quality claims, Purchaser must submit to Safety-Kleen in a timely manner, appropriate
retained samples (4 ounce minimum).  

 

Notwithstanding
a delivery date stated on a purchaser order, Safety-Kleen makes no guaranty as to the date of delivery of any order and, subject
to the last sentence of this paragraph, Purchaser shall have no recourse against Safety-Kleen based on a failure to meet a stated
delivery date. Safety-Kleen, however, agrees to make all reasonable efforts to deliver the Product to Purchaser in a timely manner.
Notwithstanding the foregoing, in the event Safety-Kleen fails to deliver any order for Product from Purchaser within 3 days of
the delivery date stated on a purchaser order, then (a) Purchaser shall be entitled to obtain equivalent Product from a third
party source and such volume of Product shall reduce Purchaser’s Volume Commitment obligation hereunder in an amount equivalent
to such third party procured product, (b) Safety-Kleen shall be responsible for any incremental increase in costs incurred by
Vertex related thereto and (c) Safety-Kleen shall accept return of such late Product at no cost to Purchaser.

 

 

9.                 
INSPECTIONS: 

 

Each
delivery of Product shall be inspected by Purchaser for damage or defects and to verify that they meet the Specifications in accordance
with the provisions of Section 8 above. Purchaser will notify Safety-Kleen as provided in Section 8 above if any Product is damaged
or does not meet Specifications. Purchaser’s only remedy in the event of non-conformity will be to return the Product to
Safety-Kleen (at Safety-Kleen’s expense) and receive a refund of the purchase price paid, and, additionally, Purchaser shall
be entitled to procure alternative quantities of the Product from third party sources in accordance with the terms set forth in
the last paragraph of Section 8 above.

 

10.             
TITLE AND RISK:

 

Upon
loading, title to the Product and its risk of loss shall pass to Purchaser, subject to any interest of Safety-Kleen reserved to
secure Purchaser’s payment or performance.

 

 

    	Page 3 of 12

    	 

    

 

 

11.             
WARRANTIES:

 

Safety-Kleen
expressly warrants that at the time of transfer of title, Safety-Kleen shall (A) hold full and unencumbered legal and equitable
title to the Product, and (B) have full right, authority and power to transfer and convey such title to Purchaser and to effect
delivery of the Product to Purchaser. Additionally, Safety-Kleen expressly warrants that at the time of transfer of title the
Product shall conform to the Specifications. OTHER THAN THE FOREGOING, THERE ARE NO GUARANTEES OR WARRANTIES, EXPRESSED OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS OR SUITABILITY OF THE PRODUCT FOR
ANY PARTICULAR PURPOSE. THERE ARE NO OTHER ORAL OR WRITTEN GUARANTEES OR WARRANTIES EXCEPT AS PROVIDED HEREIN. PURCHASER’S
SOLE AND EXCLUSIVE REMEDIES AGAINST SAFETY-KLEEN FOR ANY LIABILITY WITH RESPECT TO THE PRODUCT, WHETHER ANY CLAIM FOR RECOVERY
IS BASED UPON OR ARISES OUT OF THEORIES OF CONTRACT, TORT OR OTHERWISE SHALL BE REFUND OF THE PURCHASE PRICE. IN NO EVENT SHALL
SAFETY-KLEEN BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES, WHETHER BASED IN CONTRACT, WARRANTY, INDEMNITY OR TORT, NEGLIGENCE OR STRICT LIABILITY.

 

Purchaser
expressly warrants THAT PRODUCT Purchased from Safety-Kleen will not be resold to Safety-Kleen’s existing BASE OIL
Customers. 

 

Neither
Party shall be liable to the other for indirect, incidental, consequential, or special damages, including but not limited to loss
of use and lost profits.

 

12.             
DISCLAIMER TO SUPPLY AND DELIVERY: 

Failure
(in whole or in part) or delay on the part of either Party in the performance of any of the obligations imposed upon such
Party hereunder, except for the payment for Product previously received, shall be excused and such Party shall not be liable
for damages or otherwise on account thereof, when such failure or delay is the direct or indirect result of any cause beyond
the reasonable control of such Party, whether or not existing at the date hereof, and whether or not reasonably within the
contemplation of the Parties at the date hereof (each a “Force Majeure Event”), including, without
limitation, fire, labor dispute, embargo, material shortage, acts of God, or acts of any government, whether national, state,
municipal or otherwise.  If, for any reason, Safety-Kleen is unable to make deliveries to all of its customers, its
failure in whole or in part to make deliveries to Purchaser, while delivering to others, shall not be a breach of this
Agreement.  In such event, Safety-Kleen will prorate its available supply of product on an equitable basis to
Purchaser.  The applicable Party shall make every commercially reasonable effort
to eliminate and/or correct the effect of such Force Majeure Event as completely
and rapidly as is reasonably possible. Upon cessation of such cause
or causes for any such failure or delay, performance under this Agreement shall be resumed, but such failure or delay shall not
extend the Term of this Agreement, nor obligate either Party to make up deliveries or receipts, as the case may be.  Nothing
herein contained shall excuse Purchaser from paying Safety-Kleen, when due, any amounts payable for any conforming Product sold
and delivered to Purchaser hereunder.
 

    	Page 4 of 12

    	 

    

 

13.             
EXPORT CONTROL:  

Purchaser
represents, covenants and warrants to Safety-Kleen
that neither it nor any of its officers or employees will engage in or facilitate the export or re-export of any Product, any
other Safety-Kleen products or any other product incorporating any Safety-Kleen products purchased from Safety-Kleen or from a
third Party:

	 	a)	to Cuba, Iran, North Korea, Syria or to any other country subject to a U.S. trade embargo;
	 	 	 
	 	b)	
to any person or entity found on lists of restricted or denied parties maintained by the U.S. government, including the Denied
Persons List, the Specially Designated Nationals List, the Unverified List, the Entity List and the Debarred List; or
	 	 	 
	 	c)	subject to any other U.S. export control restriction (except with necessary licenses and approvals).

     

Purchaser
shall take all reasonable steps necessary to require its consultants, agents and employees to comply with the above representations,
covenants and warranties. Purchaser agrees that it will notify Safety-Kleen in writing immediately of the occurrence of any event
which contravenes any of the foregoing representations, covenants and warranties.

 

14.             
ASSIGNMENT:

 

Neither
Party shall assign its rights and obligations hereunder directly or indirectly without prior written consent of the other Party.
Notwithstanding the foregoing, either Party may assign its rights and obligations hereunder to an affiliate of such Party provided
that the credit worthiness of such affiliate is not materially weaker than the credit worthiness of the assignor.

 

15.             
AMENDMENT:

 

No
amendment to, or modification, waiver or discharge of, any provision of this Agreement shall be binding on either
Party unless in writing and signed by authorized representatives of both Parties. 

 

16.             
TERMINATION:

 

Either
Party may terminate this Agreement if the other Party fails to perform in accordance with this Agreement and the defaulting Party
fails to correct such default within thirty (30) days of written notice of default by the non-defaulting Party; provided, however,
(i) either Party may terminate this Agreement at its sole option immediately if the other Party is liquidated, dissolved, or has
a change of ownership or control; (ii) Safety-Kleen may terminate this Agreement at its sole option if Purchaser fails to pay
Safety-Kleen when due any amounts hereunder and such failure continues for fifteen (15) days after written notice from Safety-Kleen;
(iii) either Party may terminate this Agreement at its sole option immediately if the other Party voluntarily files a petition
for bankruptcy for reorganization or to effect a plan or other arrangements with creditors or is adjudicated bankrupt or insolvent;
(iv) and Safety-Kleen may terminate this Agreement at its sole option if Purchaser fails or refuses to accept delivery of the
conforming Product as agreed herein or refuses any further deliveries without required notice.

 

    	Page 5 of 12

    	 

    

 

 

17.             
CONFIDENTIALITY:

 

Safety-Kleen
and Purchaser, and their respective affiliates, officers, directors, employee and agents (“Representatives”),
shall treat and maintain as confidential property, and not use for its own benefit or disclose to others during the term of this
Agreement and for a period of ten (10) years thereafter, except as is necessary to provide the Products and any related services
hereunder, any information (including any technical information, experience or data) regarding products, pricing, plans, programs,
plants, processes, costs, equipment, operations, or such Party’s vendors, suppliers and customers, or the chemical composition,
quantity or analysis of the Product, the terms of this Agreement or the existence of this Agreement (collectively, “Confidential
Information”), which may be disclosed by a Party (the “Disclosing Party”) to, or come within the
knowledge of, the other Party (the “Receiving Party”), its respective Representatives in the performance of
this Agreement, without the Disclosing Party’s prior written consent.

 

The
provisions of this section shall not apply to any Confidential Information which: (a) has been published and has become part of
the public domain other than by wrongful acts or omissions of Receiving Party, its employees and agents; (b) has been furnished
or made known to the Receiving Party, its employees or agents, by third parties (other than those acting directly or indirectly
for or on behalf of Receiving Party) as a matter of legal right and without restriction on disclosure; (c) was in Receiving Party’s
possession prior to disclosure by the Disclosing Party and was not acquired by Receiving Party, its employees and agents directly
or indirectly from the Disclosing Party; or (d) is required by law or by any governmental regulatory authority to be disclosed;
provided the Receiving Party gives the Disclosing Party sufficient notice of such anticipated disclosure so that the Disclosing
Party might, at Disclosing Party’s expense, seek a protective order or other remedy it deems appropriate to prevent disclosure
of the Confidential Information.

 

The
Parties agree to exercise the same degree of care and discretion to avoid unauthorized disclosure, publication or dissemination
of all of the other Party’s Confidential Information as the Party exercises to protect its own confidential information,
being no less than a reasonable degree of care.

 

The
obligations of this Section 17 shall survive for a period of five (5) years after termination of this Agreement. Notwithstanding
anything herein to the contrary, breach of the obligations set forth in this Section 17 shall give rise to immediate termination.

 

    	Page 6 of 12

    	 

    

 

 

18.             
NOTICES:

 

All
notices and communications required or permitted to be given hereunder shall be considered to be given and received in all respects
when personally delivered or sent by facsimile or sent by reputable overnight courier service or three (3) days after being deposited
in the United States mail, certified, postage prepaid and return receipt requested to the following addresses:

 

Purchaser:

Vertex
Energy Operating, LLC

1331
Gemini Street, Suite 250

Houston, TX 77058

Attn:
Benjamin P. Cowart, President and CEO

 

Safety-Kleen:

Safety-Kleen
Systems Inc 

2600
N. Central Expressway

Suite
400

Richardson,
TX 75080

 

With
a copy to:

Clean
Harbors Inc.

42
Longwater Drive

P.O.
Box 9149

Norwell,
MA 02061-9149

Attn:
General Counsel (Urgent Contract Matter)

 

19. 
 GOVERNING LAW:

 

This
contract shall be governed by and construed in accordance with Texas law without regard to conflicts of law rules. The Parties
consent to the exclusive jurisdiction of the state and federal courts located in the state of Texas with regard to all disputes
hereunder.

 

20. 
 WAIVER: 

 

Any
waiver by either Party of any provision or condition of this Agreement shall not be construed or deemed to be a waiver of any
other provisions or conditions. 

 

21. 
 SEVERABILITY:

 

If
any section of this Agreement shall be found to be unenforceable, such finding shall not affect the enforceability of any other
section or the Agreement as a whole. 

 

22. 
 ENTIRE AGREEMENT: 

    	Page 7 of 12

    	 

    

 

This
Agreement and the attachments hereto, constitute the entire agreement between Purchaser and Safety-Kleen related to the purchase
of the Product and shall be deemed effective on the date signed by the Party executing this Agreement last. Should any discrepancy
exist between this Agreement and any supporting documents, such as Purchaser’s request for Product and Product receipts,
the terms and conditions of this Agreement shall control. The Parties agree that preprinted terms and conditions on a purchase
or work order shall be of no force and effect, even if signed by both Parties. No modification of this Agreement shall be binding
on Safety-Kleen or Purchaser unless in writing and signed by both Parties.

 

23. 
 COUNTERPARTS:

 

This
Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and
the same document. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

SIGNATURE
PAGE FOLLOWS

 

    	Page 8 of 12

    	 

    

IN
WITNESS WHEREOF, the Parties have caused this Base Oil Sales Agreement to be executed by their duly authorized representatives
as of the day and year first above written.

 

 

	

SAFETY-KLEEN SYSTEMS, INC.

	VERTEX ENERGY OPERATING, LLC:
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	/s/ James M. Rutledge	 	By:	/s/ Benjamin P. Cowart	 
	 	 	 	 	 	 
	Its:	Executive Vice President	 	Its:	President and Chief Executive Officer	 
	 	 	 	 	 	 
	Date:	January 29, 2016	 	Date:	January 29, 2016	 

 

 

 

 

    	Page 9 of 12

    	 

    

 

Exhibit
A

 

Description
of Product (Base Oils and Finished Lubricants)

 

Finished
Lubricants:

15
W 40

5
W 20

5
W 30

10
W 30

10
W 30 HD

AW
32

AW
46

AW
68

UTF

ATF
Dexron/Mercon

 

Base
Oils:

 

[see
attachment beginning on next page]

 

 

    	Page 10 of 12

    	 

    

 

 

 

 

 

    	Page 11 of 12

    	 

    

 

 

 

**************************************************

MATERIAL
BELOW MARKED BY AN “***” HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THIS ENTIRE EXHIBIT INCLUDING
THE OMITTED CONFIDENTIAL INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

**************************************************

 

Exhibit
B

 

 

VOLUME
COMMITMENT: 

 

Maximum
Annual Volume Commitment: *** U.S. gallons

 

Maximum
Quarterly Volume Commitment: *** U.S. gallons

 

 

PICKUP:

 

At
the option of Purchaser, to the extent the applicable Product is produced and available from such location, either:

 

–          FOB
East Chicago;

–          FOB
Breslau; or

–          FOB
Newark/Bango.

 

 

Exhibit
C – Pricing

 

The
price at which Safety-Kleen shall invoice Purchaser for Product sold and delivered hereunder for shipping shall be a price equal
to ***. Purchaser shall be responsible for all taxes, if any, applicable to the sale of the Product contemplated herein, which
taxes are not included in the pricing specified herein. Safety-Kleen shall invoice Purchaser at the time the Product is delivered
to the destination point for such Product.

 

 

 

 

 Page
12 of 12

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