Document:

Vertex Energy, Inc. 8-K

 

Exhibit 10.2

 

 

FORM OF CONTINUING
GUARANTY

 

As of February 4, 2022 (the
“Effective Date”), FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and as a material inducement
to Vertex Refining Alabama LLC, a Delaware limited liability company (“Beneficiary”), entering into the Master
Offtake Agreement (“Master Agreement”) effective as of February 4, 2022, with Idemitsu Apollo Renewable Corp.,
a Delaware corporation (“Buyer”), the undersigned Guarantor (the “Guarantor”) hereby
furnishes its guaranty (this “Guaranty”) as follows below. Capitalized terms used in this Guaranty and not otherwise
defined have the meanings given to them in the Master Agreement.

 

1.            Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to Beneficiary the (i) full and
prompt payment when due, whether upon acceleration, demand or otherwise, and at all times thereafter, of the Guaranteed Obligations (as
hereafter defined) and (ii) punctual performance of all of the payment obligations contained in the Master Agreement (and any Exhibits,
Schedules or other attachments thereto) executed by Buyer (together with all instruments, agreements or other documents of any kind or
nature now or hereafter executed in connection with the Master Agreement or related thereto, collectively, the “Transaction
Documents”), in connection with the Guaranteed Obligations; provided, however, that the total liability of Guarantor hereunder,
regardless of any amendment or modification to the Transaction Documents, is limited to the lesser of (i) all amounts owed by Buyer to
Beneficiary under the Transaction Documents, or (ii) USD $100,000,000.00. This Guaranty is an absolute, continuing and unconditional guaranty
of payment and is not merely a guaranty of collection. As used herein, the term “Guaranteed
Obligations” means any and all existing and future indebtedness, obligations, and liabilities of every kind, nature
and character, direct or indirect, absolute or contingent, liquidated or unliquidated, voluntary or involuntary and whether for principal,
interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of the Buyer to Beneficiary, arising under any of the Transaction
Documents, (including all renewals, extensions, amendments and other modifications thereof and all costs, attorneys’ fees and expenses
incurred by Beneficiary in connection with the collection or enforcement thereof). . In addition, Guarantor shall reimburse Beneficiary
for all sums paid to Beneficiary by Buyer with respect to such Guaranteed Obligations which Beneficiary is subsequently required to return
to Buyer or a representative of Buyer’s creditors as a result of Buyer’s bankruptcy, insolvency, reorganization, liquidation,
receivership, or similar proceeding (the foregoing, collectively, “Bankruptcy”) under the Bankruptcy Code (Title
11, United States Code), any successor statute or any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States of America (“United
States” or “U.S.”) or other applicable jurisdictions from time to time in effect and affecting
the rights of creditors generally (collectively, “Debtor Relief Laws”), and will include interest that accrues
after the commencement by or against Buyer of any proceeding under any Debtor Relief Laws.

 

2.            Setoff and Deductions; Taxes; Payments. Except as hereafter set forth, the Guarantor will make all payments
hereunder without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless the Guarantor is compelled by law to make such deduction
or withholding. If any such obligation (other than one arising with respect to taxes based on or measured by the income or profits of
Beneficiary) is imposed upon the Guarantor with respect to any amount payable by it hereunder, the Guarantor will pay to Beneficiary,
on the date on which such amount is due and payable hereunder, such additional amount in U.S. dollars as will be necessary to enable Beneficiary
to receive the same net amount which Beneficiary would have received on such due date had no such obligation been imposed upon the Guarantor.
The Guarantor will deliver promptly to Beneficiary certificates or other valid vouchers for all taxes or other charges deducted from or
paid with respect to payments made by the Guarantor hereunder. The obligations of the Guarantor under this Section 2 will survive the
payment in full of the Guaranteed Obligations and termination of this Guaranty. Except with respect to matters waived by Guarantor hereunder
and subject to the terms hereof, the Guarantor reserves to itself all rights, setoffs, counterclaims, and other defenses to which the
Buyer is or may be entitled arising from or under the Transaction Documents.

 

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3.             Rights of Beneficiary. The Guarantor consents and agrees that Beneficiary may, subject to the terms and provisions
of the Transaction Documents, at any time and from time to time, without notice or demand, and without affecting the enforceability or
continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment
or the terms of the Guaranteed Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell,
or otherwise dispose of any security for the payment of this Guaranty or any Guaranteed Obligations; (c) apply such security and direct
the order or manner of sale thereof as Beneficiary in its sole discretion may determine; and (d) release or substitute one or more of
any endorsers or other guarantors of any of the Guaranteed Obligations.

 

		4.	Consent and Waiver.

 

(a)           The Guarantor waives to the fullest extent permitted by law (i) any defense arising by reason of any disability or other
defense of Buyer or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of Beneficiary) of
the liability of Buyer; (ii) any right to require Beneficiary to proceed against Buyer, proceed against or exhaust any security for the
Guaranteed Obligations, or pursue any other remedy in Beneficiary’s power whatsoever and any defense based upon the doctrines of
marshalling of assets or of election of remedies; (iii) any benefit of and any right to participate in any security now or hereafter held
by Beneficiary; and (iv) any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability
of or exonerating guarantors or sureties, including but not limited to the benefits of Chapter 43 of the Texas Civil Practice and Remedies
Code, as amended (except rights under Section 43.04), §17.001 of the Texas Civil Practice and Remedies Code, as amended, and Rule
31 of the Texas Rules of Civil Procedure, as amended, any and all rights under Sections 51.003, 51.004 and 51.005 of the Texas Property
Code, as amended, or any similar statute, other than the defense that the Guaranteed Obligations have been fully performed and indefeasibly
paid in full in cash It shall not be necessary for Beneficiary, in order to enforce payment by Guarantor under this Guaranty, to exhaust
its remedies against Buyer, any other guarantor, or any other person liable for payment or performance of the Guaranteed Obligations.

 

(b) Except as set forth in
this Guaranty, the Guarantor expressly waives all presentments, demands for payment, notices of nonpayment, protests, notices of protest,
notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guaranteed Obligations, and
all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations. The
liability of the Guarantor under this Guaranty shall be absolute, irrevocable and unconditional irrespective of:

 

(i)       Any
defect or deficiency in, or any invalidity or unenforceability of, any Transaction Documents or any other agreement or instrument executed
in connection therewith;

 

(ii)      any
change in the time, manner, terms or place of payment of or in any other term of, all or any of the Guaranteed Obligations, or any other
modification, extension, amendment or waiver of, or any consent to departure from, any Transaction Documents or any other agreement or
instrument executed in connection therewith;

 

     Continuing Guaranty – Page  2 

     

    

 

(iii)     any
sale, exchange, release or non-perfection of any property standing as security for the liabilities hereby guaranteed or any liabilities
incurred directly or indirectly hereunder or any setoff against any of said liabilities, or any release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Guaranteed Obligations;

 

(iv)     failure,
omission, delay, waiver or refusal by Beneficiary to exercise, in whole or in part, any right or remedy held by Beneficiary with respect
to any Transaction Documents or any transaction under any Transaction Documents; or

 

(v)      any
Bankruptcy affecting the Buyer or its assets.

 

(c)           Beneficiary
may at any time, without the consent of Guarantor, without incurring liability to Guarantor and without impairing, releasing, reducing
or affecting the obligations of Guarantor hereunder: (i) change the manner, place or terms of payment of all or any part of the Guaranteed
Obligations, or renew, extend, modify, rearrange or alter all or any part of the Guaranteed Obligations; (ii) sell, exchange, release,
surrender, subordinate, realize upon or otherwise deal with in any manner and in any order any collateral for all or any part of the Guaranteed
Obligations; (iii) neglect, delay, omit, fail or refuse to take or prosecute any action for the collection of all or any part of the Guaranteed
Obligations or this Guaranty or to take or prosecute any action in connection with any of the Transaction Documents; (iv) exercise or
refrain from exercising any rights against Buyer or others, or otherwise act or refrain from acting; (v) settle or compromise all or any
part of the Guaranteed Obligations and subordinate the payment of all or any part of the Guaranteed Obligations to the payment of any
obligations, indebtedness or liabilities which may be due or become due to Beneficiary or others; and (vi) apply any deposit balance,
fund, payment, collections through process of law or otherwise or other collateral of Buyer to the satisfaction and liquidation of the
indebtedness or obligations of Buyer to Beneficiary, if any, not guaranteed under this Guaranty.

 

5.             No Right of Revocation; Obligations Independent. Guarantor understands and agrees that Guarantor may not revoke
its future obligations under this Guaranty at any time as long as any Guaranteed Obligation is outstanding. The obligations of the Guarantor
hereunder are independent of the Guaranteed Obligations and the obligations of any other guarantor, and a separate action may be brought
against the Guarantor to enforce this Guaranty whether or not Buyer or any other person or entity is joined as a party.

 

6.             Representations and Warranties. Guarantor hereby represents and warrants the following to Beneficiary:

 

(a)           This Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor, and (i) if Guarantor is a corporation
or limited liability company, the board of directors or other governing body of Guarantor has determined that this Guaranty may reasonably
be expected to benefit, directly or indirectly, Guarantor, or (ii) if Guarantor is a partnership, the requisite number of its partners
have determined that this Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor, and (iii) the value of the
consideration received and to be received by Guarantor is reasonably worth at least as much as the liability and obligation of Guarantor
hereunder, and such liability and obligation may reasonably be expected to benefit Guarantor directly or indirectly; and

 

(b)           The Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from
Buyer and any other guarantor such information concerning the financial condition, business and operations of Buyer and any such other
guarantor as the Guarantor requires, and that the Beneficiary has no duty, and the Guarantor is not relying on the Beneficiary at any
time, to disclose to the Guarantor any information relating to the business, operations or financial condition of the Buyer or any other
guarantor (the guarantor waiving any duty on the part of the Beneficiary to disclose such information and any defense relating to the
failure to provide the same); and

 

     Continuing Guaranty – Page  3 

     

    

 

(c)           Guarantor has the power and authority to execute, deliver and perform this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith, and the execution, delivery and performance of this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith do not and will not violate (i) any agreement or instrument to which Guarantor is a party, (ii) any
law, rule, regulation or order of any governmental authority to which Guarantor is subject, or (iii) its organizational documents; and
that this Guaranty constitutes a valid and binding obligation of the Guarantor enforceable against it in accordance with its terms and
term; and

 

(d)           Neither Beneficiary nor any other party has made any representation or warranty to Guarantor in order to induce Guarantor
to execute this Guaranty; and

 

(e)           The financial statements and other financial information regarding Guarantor heretofore and hereafter delivered to Beneficiary
are and will be true and correct in all material respects and fairly present the financial position of Guarantor as of the dates thereof,
and no material adverse change has occurred in the financial condition of Guarantor reflected in the financial statements and other financial
information regarding Guarantor heretofore delivered to Beneficiary since the date of the last statement thereof; and

 

(f)            As of the date hereof, and after giving effect to this Guaranty and the obligations evidenced hereby, (i) Guarantor is and
will be solvent, (ii) the fair saleable value of Guarantor’s assets exceeds and will continue to exceed its liabilities (both fixed
and contingent), (iii) Guarantor is and will continue to be able to pay its debts as they mature, and (iv) if Guarantor is not an individual,
Guarantor has and will continue to have sufficient capital to carry on its business and all businesses in which it is about to engage;
and

 

(g)           There are no actions, proceedings or claims pending or, to the Guarantor’s knowledge, threatened against it, the adverse
determination of which are likely to have a material adverse effect on the Guarantor’s ability to perform its obligations under,
or affect the validity or enforceability against the Guarantor, of this Guaranty.

 

		7.	Covenants. Guarantor hereby covenants and agrees with Beneficiary as follows:

 

(a)           Guarantor will not, so long as its obligations under this Guaranty continue, transfer or pledge any material portion of
its assets for less than full and adequate consideration; and

 

(b)           Guarantor will promptly furnish to Beneficiary from time to time such financial statements and other financial information
of Guarantor as Beneficiary may reasonably require, in form and substance satisfactory to Beneficiary; provided, however, if Guarantor
is obligated to provide financial statements to Beneficiary at specific times and in a specific format, those provisions will control
over this Section 7(b); and

 

(c)           Guarantor will promptly furnish to Beneficiary such additional information concerning Guarantor as Beneficiary may reasonably
request; and

 

(d)           If and to the extent any payment is not made when due hereunder, Beneficiary may setoff and charge from time to time any
amount so due against any or all of the Guarantor’s accounts or deposits with the Beneficiary; and

 

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(e)           Guarantor will promptly inform Beneficiary of (i) any litigation or governmental investigation against Guarantor or affecting
any security for all or any part of the Guaranteed Obligations or this Guaranty which, if determined adversely, might reasonably be expected
to have a material adverse effect upon the financial condition of Guarantor or upon such security or might reasonably be excepted to cause
a default under this Guaranty, (ii) any claim or controversy which might reasonably be expected to become the subject of such litigation
or governmental investigation, and (iii) any material adverse change in the financial condition of Guarantor.

 

		8.	Obligations Not Impaired.

 

(a)           Guarantor agrees that its obligations under this Guaranty will not be released, diminished, impaired, reduced or affected
by the occurrence of any one or more of the following events: (i) the lack of corporate power of Buyer, Guarantor or any other guarantor
of all or any part of the Guaranteed Obligations, (ii) any receivership, insolvency bankruptcy, or other proceedings affecting Buyer,
Guarantor or any other guarantor of all or any part of the Guaranteed Obligations, or any of their respective property; (iii) the partial
or total release or discharge of Buyer or any other guarantor of all or any part of the Guaranteed Obligations, or any other person or
entity from the performance of any obligation contained in any instrument or agreement evidencing, governing or securing all or any part
of the Guaranteed Obligations, whether occurring by reason of law or otherwise; (iv) the taking or accepting of any collateral for all
or any part of the Guaranteed Obligations or this Guaranty; (v) the taking or accepting of any other guaranty for all or any part of the
Guaranteed Obligations; (vi) any failure by Beneficiary to acquire, perfect or continue any lien or security interest on collateral securing
all or any part of the Guaranteed Obligations or this Guaranty; (vii) the impairment of any collateral securing all or any part of the
Guaranteed Obligations or this Guaranty; (viii) any failure by Beneficiary to sell any collateral securing all or any part of the Guaranteed
Obligations or this Guaranty in a commercially reasonable manner or as otherwise required by law; or (ix) any other circumstance which
might otherwise constitute a defense available to, or discharge of, Buyer, Guarantor or any other guarantor of all or any part of the
Guaranteed Obligations.

 

(b)           This Guaranty will continue to be effective or be reinstated, as the case may be, if at any time any payment of all or any
part of the Guaranteed Obligations is rescinded or must otherwise be returned by Beneficiary upon the insolvency, bankruptcy or reorganization
of Buyer, Guarantor, any other guarantor of all or any part of the Guaranteed Obligations, or otherwise, all as though such payment had
not been made.

 

(c)           Guarantor hereby acknowledges that withdrawal from, or termination of, any ownership interest in Buyer now or hereafter
owned or held by Guarantor will not alter, affect or in any way limit the obligations of Guarantor hereunder.

 

(d)           In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed, in connection with
any case commenced by or against the Guarantor or the Buyer under any Debtor Relief Law or otherwise, all such amounts will nonetheless
be payable by the Guarantor immediately upon demand by the Beneficiary.

 

9.             Insolvency. Should Guarantor become insolvent, or fail to pay Guarantor’s debts generally as they become
due, or voluntarily seek, consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law, or become a party to (or be made
the subject of) any proceeding provided for by any Debtor Relief Law (other than as a creditor or claimant) that could reasonably be expected
to suspend or otherwise adversely affect the rights and remedies of Beneficiary granted hereunder, then, in any such event, the Guaranteed
Obligations will be, as between Guarantor and Beneficiary, a fully matured, due, and payable obligation of Guarantor to Beneficiary (without
regard to whether Buyer is then in default under any of the Transaction Documents or whether the Guaranteed Obligations, or any part thereof
is then due and owing by Buyer to Beneficiary), payable in full by Guarantor to Beneficiary upon demand, which will be the estimated amount
owing in respect of the contingent claim created hereunder.

 

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10.           Subrogation. Guarantor is subrogated to all rights of the Beneficiary against Buyer in respect of any amounts
indefeasibly paid by Guarantor pursuant to this Guaranty; provided, however, Guarantor waives any rights in may acquire by way of subrogation
under this Guaranty, by any payment made hereunder or otherwise, until all Guaranteed Obligations are paid in full. If Guarantor so performs
and all Guaranteed Obligations are indefeasibly paid in full, Beneficiary will, at Guarantor’s request, execute and deliver to Guarantor
appropriate documents on a form or forms reasonably acceptable to Beneficiary to evidence the transfer by subrogation to Guarantor or
any interest in the Guaranteed Obligations resulting from such payment by Guarantor.

 

11.           Subordinated Debt. All principal of and interest, if any, on all indebtedness, liabilities, and obligations
of Buyer to Guarantor (the “Subordinated Debt”) whether now or hereafter existing, due or to become due to Guarantor,
or held or to be held by Guarantor, whether created directly or acquired by assignment or otherwise, including but not limited to any
obligation of the Buyer to the Guarantor as subrogee of the Beneficiary or resulting from the Guarantor’s performance under this
Guaranty, and whether evidenced by written instrument or not, will be expressly subordinated to the indefeasible payment in full in cash
of all Guaranteed Obligations. In the event Guarantor receives any payment on the Subordinated Debt in violation of the foregoing, Guarantor
will hold any such payment in trust for Beneficiary and forthwith turn it over to Beneficiary in the form received, to be applied to the
Guaranteed Obligations, but without reducing or affecting in any manner the liability of the Guarantor under this Guaranty.

 

12.           Termination; Reinstatement. This Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligations
now or hereafter existing and will remain in full force and effect until all Guaranteed Obligations and any other amounts payable under
this Guaranty are indefeasibly paid in full in cash. Notwithstanding the foregoing, this Guaranty will continue in full force and effect
or be revived, as the case may be, if any payment by or on behalf of the Buyer or the Guarantor is made, or the Beneficiary exercises
its right of setoff, in respect of the Guaranteed Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the
Beneficiary in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor
Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Beneficiary
is in possession of or has released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations
of the Guarantor under this Section will survive termination of this Guaranty.

 

13.           [Intentionally Omitted]

 

14.           No Fraudulent Transfer. It is the intention of Guarantor and Beneficiary that the amount of the Guaranteed
Obligations guaranteed by Guarantor by this Guaranty will be in, but not in excess of, the maximum amount permitted by fraudulent conveyance,
fraudulent transfer, or similar laws applicable to Guarantor. Accordingly, notwithstanding anything to the contrary contained in this
Guaranty or any other agreement or instrument executed in connection with the payment of any of the Guaranteed Obligations, the amount
of the Guaranteed Obligations guaranteed by Guarantor by this Guaranty will be limited to that amount which after giving effect thereto
would not (a) render Guarantor insolvent, (b) result in the fair saleable value of the assets of Guarantor being less than the amount
required to pay its debts and other liabilities (including contingent liabilities) as they mature, or (c) leave Guarantor with unreasonably
small capital to carry out its business as now conducted and as proposed to be conducted, including its capital needs, as such concepts
described in clauses (a), (b) and (c) of this Section 14, are determined under applicable law, if the obligations of Guarantor
hereunder would otherwise be set aside, terminated, annulled or avoided for such reason by a court of competent jurisdiction in a proceeding
actually pending before such court. For purposes of this Guaranty, the term “applicable law” means as to Guarantor each statute,
law, ordinance, regulation, order, judgment, injunction or decree of the United States or any state or commonwealth, any municipality,
any foreign country, or any territory, possession or tribunal applicable to Guarantor.

 

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15.           Actions Against Guarantor. In the event of a default in the payment or performance of all or any part of the
Guaranteed Obligations, when all or any portion of the Guaranteed Obligations becomes due, whether by its terms, by acceleration or otherwise,
Guarantor will, upon written demand signed by a duly authorized officer of Beneficiary, promptly pay the amount due thereon to Beneficiary,
in lawful money of the United States, to Beneficiary at such office as Beneficiary may designate for such purpose from time to time in
a written notice to Guarantor. One or more successive or concurrent actions may be brought against Guarantor, either in the same action
in which Buyer is sued or in separate actions, as often as Beneficiary deems advisable. The exercise by Beneficiary of any right or remedy
under this Guaranty or under any other agreement or instrument, at law, in equity or otherwise, will not preclude concurrent or subsequent
exercise of any other right or remedy.

 

16.           Notice of Sale. Except as otherwise required by law, in the event that Guarantor is entitled to receive any
notice under the Uniform Commercial Code, as it exists in the state governing any such notice, of the sale or other disposition of any
collateral securing all or any part of the Guaranteed Obligations or this Guaranty, reasonable notice will be deemed given when such notice
is deposited in the United States mail, postage prepaid, at the address for Guarantor set forth above, ten (10) days prior to the date
any public sale, or after which any private sale, of any such collateral is to be held; provided, however, that notice given in any other
reasonable manner or at any other reasonable time will be sufficient.

 

17.           Miscellaneous. If any provision of this Guaranty is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such provision will be fully severable, will not impair or invalidate the remainder
of this Guaranty and the effect thereof will be confined to the provision held to be illegal, invalid or unenforceable. No modification
or amendment of any provision of this Guaranty, nor consent to any departure by Guarantor therefrom, will be effective unless the same
will be in writing and signed by an officer of Beneficiary, and then will be effective only in the specific instance and for the purpose
for which given. Nothing contained herein will be construed as an obligation on the part of Beneficiary to extend credit to Buyer. All
rights and remedies of Beneficiary hereunder are cumulative of each other and of every other right or remedy which Beneficiary may otherwise
have at law or in equity or under any instrument or agreement, and the exercise of one or more of such rights or remedies will not prejudice
or impair the concurrent or subsequent exercise of any other rights or remedies. The headings in this Guaranty are for convenience only
and will not define or limit the provisions hereof. Within this Guaranty, words of any gender will be held and construed to include the
other gender.

 

18.           Assignment. This Guaranty is for the benefit of, and is enforceable by, Beneficiary, its successors and assigns.
This Guaranty is binding upon Guarantor and Guarantor’s successors and permitted transferees and assigns, including, without limitation,
any person or entity obligated by operation of law upon the reorganization, merger, consolidation or other change in the organizational
structure of Guarantor. Guarantor may not assign in whole or in part this Guaranty or any of its obligations hereunder without the prior
written consent of Beneficiary, which consent may be withheld in Beneficiary’s sole discretion, and any purported assignment without
Beneficiary’s written consent is null and void ab initio.

 

19.           Setoff Rights. Beneficiary has the right to set off and apply against the Guaranteed Obligations, any and
all amounts owing from Beneficiary to Guarantor if Guarantor’s obligation to remit all or any portion of the Guaranteed Obligations
has matured under this Guaranty irrespective of whether or not Beneficiary will have made any demand under this Guaranty. The rights and
remedies of Beneficiary hereunder are in addition to other rights and remedies (including, without limitation, other rights of setoff)
which Beneficiary may have.

 

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20.           Costs and Expenses. Guarantor will pay on demand by Beneficiary all costs and expenses, including, without
limitation, all reasonable attorneys’ fees and arbitral fees incurred by Beneficiary in connection with the successful enforcement,
protection and/or collection of this Guaranty or in respect of the Guaranteed Obligations, including any incurred during any “workout”
or restructuring in respect of the Guaranteed Obligations and any incurred in the preservation, protection or enforcement of any rights
of the Beneficiary in any proceeding under any Debtor Relief Laws. This covenant survives the payment of the Guaranteed Obligations and
termination of this Guaranty

 

21.           Compliance with Applicable Usury Laws. Notwithstanding any other provision of this Guaranty or of any instrument
or agreement evidencing, governing or securing all or any part of the Guaranteed Obligations, Guarantor and Beneficiary by its acceptance
hereof agree that Guarantor will never be required or obligated to pay interest in excess of the maximum non-usurious interest rate as
may be authorized by applicable law for the written contracts which constitute the Guaranteed Obligations. It is the intention of Guarantor
and Beneficiary to conform strictly to the applicable laws which limit interest rates, and any of the aforesaid contracts for interest,
if and to the extent payable by Guarantor, will be held to be subject to reduction to the maximum non-usurious interest rate allowed under
said law.

 

22.           GOVERNING LAW AND VENUE. THIS GUARANTY IS BEING EXECUTED AND DELIVERED, AND IS INTENDED TO BE PERFORMED, IN HARRIS
COUNTY, TEXAS AND THE LAWS (EXCLUDING CHOICE OF LAW PROVISIONS) OF SUCH STATE WILL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THIS GUARANTY, EXCEPT TO THE EXTENT FEDERAL LAWS OTHERWISE GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION
OF ALL OR ANY PART OF THIS GUARANTY. ALL LEGAL ACTIONS RELATED TO THIS GUARANTY MUST BE BROUGHT IN THE FEDERAL OR STATE COURTS LOCATED
IN IN HARRIS COUNTY, TEXAS, TO THE EXCLUSION OF ALL OTHER VENUES.

 

23.           WAIVER OF RIGHT TO JURY. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF THE TRANSACTION DOCUMENTS OR THE ACTS OR FAILURE TO ACT
OF OR BY BUYER IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS GUARANTY OR THE TRANSACTION DOCUMENTS.

 

24.           NO
ORAL AGREEMENTS. THIS GUARANTY AND THE TRANSACTION DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. 

 

[Signature Page Follows]

 

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EXECUTED as of the Effective
Date.

 

	 	GUARANTOR:
	 	 
	 	IDEMITSU KOSAN CO., LTD.
	 	 	 
	 	By:	  
	 	Name: 	  
	 	Title:	  

 

    Continuing
                                            Guaranty – Signature Pageglto-ex43_558.htm

Exhibit 4.3

 

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 300,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock, par value $0.00001 per share, all of which shares of preferred stock are undesignated.

Common Stock

Holders of our common stock are entitled to one vote for each share of common stock held of record for the election of directors and on all matters submitted to a vote of stockholders. Except as described under “Anti-takeover Effects of Delaware Law and Provisions of our Amended and Restated Certificate of Incorporation and Bylaws” below, a majority vote of the holders of common stock is generally required to take action under our amended and restated certificate of incorporation and bylaws. Holders of our common stock are entitled to receive dividends ratably, if any, as may be declared by our board of directors out of legally available funds, subject to any preferential dividend rights of any preferred stock then outstanding. Upon our dissolution, liquidation or winding up, holders of our common stock are entitled to share ratably in our net assets legally available after the payment of all our debts and other liabilities, subject to the preferential rights of any preferred stock then outstanding. Holders of our common stock have no preemptive, subscription, redemption or conversion rights and no sinking fund provisions are applicable to our common stock. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

As of December 31, 2021, 25,261,832 shares of our common stock were outstanding and held by 34 common shareholders of record.

Preferred Stock

Our board of directors has the authority, without action by the stockholders, to designate and issue up to an aggregate of 10,000,000 shares of preferred stock in one or more series. Our board of directors can designate the rights, preferences and privileges of the shares of each series and any of its qualifications, limitations or restrictions. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible future financings and acquisitions and other corporate purposes could, under certain circumstances, have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, or delaying, deferring or preventing a change in control of us, which might harm the market price of our common stock. See also “—Anti-Takeover Effects of Delaware Law and Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws—Provisions of our amended and restated certificate of incorporation and bylaws—Undesignated preferred stock” below.

Our board of directors will make any determination to issue such shares based on its judgment as to our best interests and the best interests of our stockholders. 

As of December 31, 2021, we had no shares of preferred stock outstanding.

Registration Rights

The holders of 7,628,196 shares of our common stock, or their permitted transferees, which we refer to as our registrable securities, are entitled to rights with respect to the registration of these securities under the Securities Act. These rights are provided under the terms of the Investors’ Rights Agreement. The Investors’ Rights Agreement includes demand registration rights, short-form registration rights and piggyback registration rights. All fees, costs and expenses incurred in connection with registrations under the Investors’ Rights Agreement, will be borne by us, and all selling expenses, including underwriting discounts and selling commissions, will be borne by the holders of the shares being registered.

 

 

Demand registration rights

The holders of our registrable securities are entitled to demand registration rights. Under the terms of the Investors’ Rights Agreement, we will be required, upon the request of holders of at least a majority of our outstanding registrable securities, to file a registration statement and effect the registration with respect to at least forty percent (40%) of the registrable securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of expenses related to the offering, would exceed $10 million) having an anticipated aggregate offering price, net of expenses related to the offering, of at least $5 million for public resale, unless our board of directors decides in good faith that such registration would be materially detrimental to us and our stockholders under the circumstances. We are required to effect up to two registrations pursuant to this provision of the Investors’ Rights Agreement.

Short form registration rights

The holders of our registrable securities are also entitled to short form registration rights. Pursuant to the Investors’ Rights Agreement, if we are eligible to file a registration statement on Form S-3, upon the request of holders of at least 25% of our outstanding registrable securities to sell registrable securities with an anticipated aggregate offering amount of at least $3.0 million net of certain expenses related to the offering, we will be required to effect a registration of such shares, unless our board of directors decides in good faith that such registration would be materially detrimental to us and our stockholders under the circumstances. We are required to effect up to two registrations in any twelve-month period pursuant to this provision of the Investors’ Rights Agreement.

 

Piggyback registration rights

The holders of our registrable securities are entitled to piggyback registration rights. If we register any of our securities either for our own account or for the account of other security holders, the holders of our outstanding registrable securities are entitled to include their shares in the registration. Subject to certain exceptions contained in the Investors’ Rights Agreement, we and the underwriters may limit the number of shares included in the underwritten offering if the underwriters determine that marketing factors require a limitation of the number of shares to be underwritten.

Indemnification

The Investors’ Rights Agreement contains customary cross-indemnification provisions, under which we are obligated to indemnify holders of registrable securities in the event of material misstatements or omissions in the registration statement attributable to us, and they are obligated to indemnify us for material misstatements or omissions attributable to them.

Expenses of registration

We will pay the registration expenses, subject to certain limited exceptions contained in the Investors’ Rights Agreement, of the holders of the shares registered pursuant to the demand, short form and piggyback registration rights described above, including the expenses of one counsel for the selling holders.

Expiration of registration rights

The registration rights granted under the Investors’ Rights Agreement will terminate upon the earlier of (i) a deemed liquidation event, as defined in our amended and restated certificate of incorporation or certain other events constituting our sale, (ii) on a holder-by-holder basis, at such time after our initial public offering when a holder’s registrable securities could be sold under Rule 144 of the Securities Act or a similar exemption without limitation during a three-month period without registration or (iii) the third anniversary of our initial public offering.

 

 

 

Anti-Takeover Effects of Delaware Law and Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws

Certain provisions of the Delaware General Corporation Law, or DGCL, and of our amended and restated certificate of incorporation and could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and, as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions are also designed in part to encourage anyone seeking to acquire control of us to first negotiate with our board of directors. These provisions might also have the effect of preventing changes in our board of directors or management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. However, we believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our common stock, because, among other reasons, the negotiation of such proposals could improve their terms.

Delaware takeover statute

Upon completion of this offering, we will be subject to the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

 

	
 
	
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before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

 

	
 
	
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upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or

 

	
 
	
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at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

Section 203 defines a business combination to include:

 

	
 
	
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any merger or consolidation involving the corporation and the interested stockholder;

 

	
 
	
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any sale, transfer, lease, pledge, exchange, mortgage or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

 

	
 
	
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subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

 

	
 
	
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subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

 

 

 

 

	
 
	
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the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

Provisions of our amended and restated certificate of incorporation and bylaws

Our amended and restated certificate of incorporation and bylaws to be in effect immediately prior to completion of this offering will include a number of provisions that may have the effect of delaying, deferring or discouraging another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.

Board composition and filling vacancies. In accordance with our amended and restated certificate of incorporation, our board is divided into three classes serving staggered three-year terms, with one class being elected each year. Our amended and restated certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative vote of the holders of not less than two thirds or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office even if less than a quorum.

No written consent of stockholders. Our amended and restated certificate of incorporation provides that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting. This limit may lengthen the amount of time required to take stockholder actions and would prevent the amendment of our bylaws or removal of directors by our stockholder without holding a meeting of stockholders.

Meetings of stockholders. Our amended and restated bylaws provide that only a majority of the members of our board of directors then in office may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders. Our amended and restated bylaws limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.

Advance notice requirements. Our amended and restated bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in our amended and restated bylaws.

Amendment to certificate of incorporation and bylaws. As required by the DGCL, any amendment of our amended and restated certificate of incorporation must first be approved by a majority of our board of directors, and if required by law or our amended and restated certificate of incorporation, must thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder action, directors, limitation of liability and the amendment of our amended and restated certificate of incorporation must be approved by not less than two thirds of the outstanding shares entitled to vote on the amendment, and not less than two-thirds of the outstanding shares of each class entitled to vote thereon as a class. Our bylaws may be amended by the affirmative vote of a majority vote of the directors then in office, subject to any limitations set forth in the bylaws; and may also be amended by the affirmative vote of at least two thirds of the outstanding shares entitled to vote on the amendment, voting together as a single class.

 

 

Undesignated preferred stock. Our amended and restated certificate of incorporation provides for 10,000,000 authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our amended and restated certificate of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control of us.

 

Exclusive forum. Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any state law claims for: (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, (iv) any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or bylaws, or (v) any action asserting a claim against us governed by the internal affairs doctrine. This exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Unless we consent in writing to the selection of an alternate forum, the United States District Court for the District of Delaware shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, as we are a Delaware corporation. Although our amended and restated bylaws contain the choice of forum provision described above, it is possible that a court could rule that such provisions are inapplicable for a particular claim or action or that such provisions are unenforceable.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A. The transfer agent and registrar’s address is 250 Royall Street, Canton, MA 02021, and its telephone number is (800) 962-4284.

Listing

Our common stock is listed on the Nasdaq Global Select Market under the symbol “GLTO.”

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