Vertex Energy Inc.
10/01/2024 | Press release | Distributed by Public on 10/01/2024 15:28
Material Agreement Form 8 K
Item 1.01 Entry into a Material Definitive Agreement.
DIP Loan Agreement
To fund the administration of the Chapter 11 Cases and the implementation of the Restructuring Transactions, on September 25, 2024, Vertex Refining, as the borrower, the Company, as parent and as a guarantor, certain direct and indirect subsidiaries of the Company, as guarantors, certain debtor-in-possession financing lenders ("DIP Lenders") party thereto, and the Agent, entered into a Senior Secured Super-Priority Debtor-in-Possession Loan and Security Agreement (such agreement, the "DIP Loan Agreement", and the financing facility thereunder, the "DIP Facility"), consisting of (a) a new money term loan facility in the aggregate principal amount of up to $80 million and (b) a "roll up" loan facility, whereby $200 million of outstanding principal amount of the claims relating to the Term Loan (the "Term Loan Claims") were or, subject to the entry of the final order of the Bankruptcy Court governing the DIP Facility, will be, converted on a cashless, dollar-for-dollar basis into DIP Facility loans on the terms and conditions set forth in the DIP Loan Agreement, which provides for, among other things, the granting of a security interest in substantially all assets of the Company Parties as collateral, and provides for a guarantee by the Company Parties. The DIP Facility will be used by the Company in accordance with the budget agreed upon between the Company Parties and the Required Lenders (as defined in the DIP Loan Agreement).
The amounts borrowed under the DIP Loan Agreement will bear interest at a rate per annum equal to the sum of (i) the greater of (x) the per annum rate publicly quoted from time to time by The Wall Street Journal as the "Prime Rate" in the United States minus 1.50% as in effect on such day and (y) the Federal Funds rate for such day plus 0.50%, subject in the case of this clause (i), to a floor of 1.0%, plus (ii) a margin of (x) 9.40% for the Interim Roll-Up Loans and the Final Roll-Up Loans (each as defined in the DIP Loan Agreement), (y) 9.50% in the case of the New Money Term Loans (as defined in the DIP Loan Agreement, the "New Money Term Loans"), and (z) 9.60% in the case of the Restricted Roll-Up Loans (as defined in the DIP Loan Agreement). The rate of interest increases by 2% per annum after the notice of an occurrence of an event of default.
Amounts borrowed under the DIP Loan Agreement are due upon the earliest to occur of (a) the date that is four (4) months after September 25, 2024, which may be extended, at Vertex Refining's election, so long as no default or event of default shall have occurred and be continuing, by two (2) one-month extensions, subject to the payment of an extension fee, in connection with each such extension, equal to 2.0% on drawn amounts of the New Money Term Loans as of the date of such extension, (b) the date that is thirty (30) days after September 25, 2024, if a final debtor-in-possession order has not been approved by the Bankruptcy Court on or prior to such date, (c) the date the Plan is effective, and (d) the date the Agent, at the direction of the Required Lenders (as defined in the DIP Loan Agreement), delivers a notice of termination to Vertex Refining, in each case, subject to certain prepayment events described in greater detail in the DIP Loan Agreement.