Item 1.01. Entry into a Material Definitive Agreement.
First Amendment to Promissory Note
As previously disclosed in the Current Report on Form 8-K filed by Vertex
Energy, Inc. (the "Company", "Vertex", "we", or "us") with the Securities and
Exchange Commission on July 2, 2021 (the "July 2021 Form 8-K"), on July 1, 2021,
HPRM LLC ("Heartland SPV"), a Delaware limited liability company which was
formed as a special purpose vehicle, in connection with certain transactions
between the Company and Tensile Capital Partners Master Fund LP, an investment
fund based in San Francisco, California ("Tensile"), which is owned 35% by
Vertex Energy Operating, LLC ("Vertex Operating"), the Company's wholly-owned
subsidiary and 65% by an affiliate of Tensile, loaned Vertex Operating,
$7,000,000, which was evidenced by a Promissory Note (the "Heartland Note"). The
Heartland Note was originally due on the earlier of (i) September 29, 2021 and
(ii) five (5) calendar days following the closing of the transaction between
Vertex Operating, and/or any of its affiliates, and Safety-Kleen Systems, Inc.
and/or any of its affiliates, as more fully described in the Asset Purchase
Agreement by and among them, dated June 29, 2021 (the "Asset Purchase
Effective on October 11, 2021, Vertex Operating and Heartland SPV entered into a
First Amendment to Promissory Note (the "First Amendment"), which amended the
due date of the Heartland Note to the earlier of (i) February 28, 2022 and (ii)
five (5) calendar days following the closing of the Asset Purchase Agreement.
The Heartland Note accrues interest at the applicable federal rate of interest
from time to time, increasing to 12% upon an event of default. No event of
default was declared in connection with the failure of Vertex Operating to repay
the note by the original stated due date thereof, no triggering event occurred
in connection therewith, and Heartland SPV did not accelerate the amount due in
Other than as discussed above, the Heartland Note has the same terms as
described in the July 2021 Form 8-K, which description is incorporated by
reference into this Item 1.01.
The funds borrowed under the Heartland Note were used to pay paydown a portion
of the $10 million deposit promissory note owed by Vertex Operating to Equilon
Enterprises LLC d/b/a Shell Oil Products US and/or Shell Chemical LP and/or
Shell Oil Company (the "Seller"), in connection with that certain Sale and
Purchase Agreement (the "Purchase Agreement" and the "Deposit Note") entered
into by Vertex Operating, the Company and the Seller on May 26, 2021, as
previously disclosed in the Current Report on Form 8-K filed by the Company
with the Securities and Exchange Commission on May 27, 2021, which Deposit Note
has been paid in full.
The foregoing description of the Heartland Note and First Amendment is qualified
in its entirety by Exhibit 10.1 incorporated by reference in this Current Report
on Form 8-K and Exhibit 10.2 attached hereto, each of which are incorporated by
reference in this Item 1.01 in their entirety.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 above regarding the Heartland Note and the First
Amendment are incorporated into this Item 2.03 in their entirety by reference.
Item 9.01. Financial Statements and Exhibits
Exhibit No. Description
10.1** $7,000,000 Promissory Note provided by Vertex Energy Operating,
LLC to HPRM LLC
10.1* First Amendment to $7,000,000 Promissory Note dated and effective
October 11, 2021 by and between Vertex Energy Operating, LLC and
104 Inline XBRL for the cover page of this Current Report on Form 8-K
* Filed herewith.
** Previously Filed
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