VERTEX ENERGY INC. : Entering into a material definitive agreement, creating a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, unregistered sale of equity securities, FD settlement disclosure, financial statements and parts (Form 8-K)

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Section 1.01 Entering into a Material Definitive Agreement.

As previously noted in the current report on Form 8-K filed by Vertex Energy, Inc. (“Vertex”, “we”, “our” or the “Company”) with the Security and Exchange Commission (the “SEC”) on May 27, 2021to May 26, 2021, Vertex Energy Operating LLC (“Vertex Operating”), a wholly-owned subsidiary of the Company, has entered into a definitive sale and purchase agreement (the “Sale and Purchase Agreement”) with Equilon Enterprises LLC d/b/a Shell Petroleum Products United States and or
Shell Chemical LP and or Shell oil company (“Seller”), to purchase the
Mobile Refinery, Alabamacertain associated real estate and related assets, including certain refinery-related inventory at closing and certain equipment, rolling stock and other personal property associated with the mobile refinery. The initial base purchase price for the
mobile refinery East $75 million. Vertex Operating will also purchase certain hydrocarbon stocks located at mobile refineryas valued at closing, and the purchase price is subject to customary purchase price adjustments and the reimbursement of certain capital expenditures in the amount of approximately
$440,000. Upon closing of the Acquisition, the Company (through one or more of its subsidiaries and affiliates) expects to enter into a $85 million capital project to modify mobile refinery hydrocracking unit to produce renewable diesel fuel on a stand-alone basis and, in anticipation of the shutdown, the Company has already spent approximately $13 million for engineering services and for upfront purchase order payments for long-lead equipment associated with the capital project.

At February 17, 2022the Company and the Company’s wholly-owned subsidiary,
Vertex Refining Alabama LLCa Delaware limited liability company has entered into a letter of commitment (attached as Exhibit 10.1, the “Letter of Commitment”) with a syndicate of lenders for a term of three years, $125 million senior secured term loan facility (the “Term Loan”). The closing date and financing of the Term Loan is subject to the closing of Vertex’s planned acquisition of the mobile refinery during the first quarter of 2022, in addition to various conditions precedent, as specified in the Letter of Engagement.

The Vertex Term Loan Syndicate is led by, among others, certain funds and accounts managed by BlackRock Financial Management, Inc., Whitebox Advisors LLC
and Highbridge Capital Management, LLC. The proceeds of the term loan are expected to be used by Vertex and its wholly owned subsidiaries to fund a portion of the purchase price of the mobile refinerypart of a planned renewable diesel conversion project at the mobile refinery, liquidity requirements and certain fees and expenses associated with closing the term loan. The term loan is expected to be secured by substantially all of the present and future assets of the Company and its subsidiaries and to be guaranteed by the Company and certain of its subsidiaries.

The covenants and covenants of the Lenders under the Letter of Commitment will automatically terminate on the first occurrence of (a) April 1, 2022(b) completion of the acquisition of mobile refinery without use of the facility or if the lenders become aware of a breach of the exclusivity provisions of the Letter of Commitment, (c) the closing date of the term loan and payment of the term loan proceeds to Vertex, (d) the termination of the Sale and Purchase Agreement in accordance with its terms prior to the Closing Date and (e) the date on which Vertex defaults on its obligations under the Letter of Engagement or fails to comply with the terms and conditions of the Engagement Letter (unless such breach or default is cured within two (2) business days of Vertex’s receipt of notice of such breach or default).

As further described in the Commitment Letter, the Term Loan will bear interest at an annual rate equal to the sum of (i) the greater of (x) the annual rate publicly quoted from time to time by Wall Street Newspaper as “prime rate” in United States minus 1.50% in effect on that day and (y) the Fed Funds rate for that day plus 0.50% (subject to a floor of 1.0%), plus (ii) 8.75% . The facility will also be issued at an initial issue discount of 1.5%. Commencing on the first anniversary of the closing date of the facility, the loan will be amortized in equal quarterly installments in aggregate annual amounts equal to 5.0% of the original principal amount of the facility. The facility will be subject to certain mandatory prepayment obligations, as described in the Letter of Commitment, and to be further documented in the definitive loan agreements.

Further, subject to the terms of the Letter of Engagement, if a Fiduciary Agent has been appointed by the parties and the parties have entered into a Receivership Agreement prior to the termination of the Letter of Engagement, but in no event before the February 21, 2022, the lenders have agreed to fund the full amount of the term loan (less certain amounts) into the escrow account. If the conditions required for the funding of the term loan have been satisfied before the date on which the commitment letter terminates, the amount of funds in the escrow account must be distributed to the company, net of certain fees and expenses, otherwise these funds must be returned to the lenders upon termination of the Commitment Letter. The Company is also required to pay a “contribution” equal to 10.5% per annum on the total gross amount of the proceeds of the escrow account, from the earlier of (x) the date on which the funds are paid in the escrow account or (y) the date which is 14 days after the date of . . .

Section 2.03. Creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant.

The disclosure included in item 1.01 above regarding the Letter of Engagement is incorporated into this item 2.03 in its entirety by reference.

Section 3.02. Unrecorded sales of Equity securities.

The disclosure included in Section 1.01 above is incorporated into this Section 3.02 by reference. The issuance of the Lender’s Warrants to purchase 2,750,000 Common Shares from the Lenders, as set forth in 1.01 above, upon entry into the Facility, will be exempt from securities law registration requirements Securities Act 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) and/or Regulation D, Rule 506 thereunder, as transactions made by an issuer not involving a public offering. The Company will rely on this registration exemption based in part on the representations of the lenders. In the event that warrants to purchase 2,750,000 common shares are granted , the maximum number of ordinary shares issuable on exercise will be 2,750,000 ordinary shares (subject to the agreed anti-dilution protection).

The Lender’s Warrants and the Common Stock issuable upon the exercise thereof have not been registered under securities law and may not be offered or sold under United States the absence of registration or an applicable exemption from registration requirements. This current report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy securities, nor will there be any sale of the securities in any state or jurisdiction in which a such offer, solicitation or sale be unlawful.

Section 7.01 Disclosure of FD Rules.

At February 22, 2022, the Company issued a press release disclosing the entry in the engagement letter. A copy of the press release is attached hereto as Exhibit 99.1.

Information in response to Section 7.01 of this Form 8-K and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the responsibilities of this Section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as expressly set forth by specific reference in such filing.

This Current Report on Form 8-K, including the press release provided as Exhibit 99.1 to this Current Report on Form 8-K, contains forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act 1995, and as such may involve known and unknown risks, uncertainties and assumptions. You can identify these forward-looking statements by words such as “may”, “should”, “expect”, “anticipate”, “believe”, “estimate”, “intend”, “plan” and other similar expressions. These forward-looking statements relate to the Company’s current expectations and are subject to the qualifications and qualifications set forth in the press release as well as in the other documents filed by the Company with the Security and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements. These statements also involve known and unknown risks, which may cause the results of the Company, its divisions and concepts to be materially different from those expressed or implied by these statements, including, but not limited to , the planned closing of the mobile refinery
the acquisition, the Company’s ability to borrow funds under the credit facility, the terms of such facility and others, including those mentioned in the press release. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements may include comments about the Company’s beliefs and expectations regarding future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are beyond the Company’s control. Further information on potential factors that could affect the Company’s financial results is included from time to time in the “Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” of the Company’s periodic report. and current deposits with the SECONDincluding Forms 10-Q and 10-K, filed with the SECOND and available at www.sec.gov and on the “Investor Relations,” “SEC Filings” page of our website at www.vertexenergy.com. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise occurring after such date, except as required by law.

Item 9.01 Financial statements and supporting documents.



Exhibit No.   Description

   10.1*      Commitment Letter, dated as of February 17, 2022, by and among certain
              funds and accounts managed or advised by each of BlackRock Financial
              Management, Inc., Whitebox Advisors LLC and Highbridge Capital
              Management, LLC, Chambers Energy Capital IV, LP, CrowdOut Credit
              Opportunities Fund LLC , CrowdOut Capital LLC, Vertex Energy, Inc. and
              Vertex Refining Alabama LLC
  99.1**      Press Release of Vertex Energy, Inc., dated February 22, 2022
    104       Inline XBRL for the cover page of this Current Report on Form 8-K




* Filed herewith.

** Furnished attached.

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