EXHIBIT 10
Amendment No. 1 to Loan and Security Agreement
Gentlemen:
Reference is made to the Loan and Security Agreement, dated December 10,
1998 (as now or hereafter amended or supplemented, the "Loan Agreement") among
(a) Congress Financial Corporation and First Union National Bank ( individually
and collectively, "Lender"), (b) Congress Financial Corporation, as
Administrative Agent for Lender (in such capacity "Agent") and (c) Crown Central
Petroleum Corporation ("Crown"), Continental American Corporation, Crown Central
Holding Corporation, Crown Central Pipe Line Company, Crown-Rancho Pipe Line
Corporation, Crown Stations, Inc., FZ Corporation, Fast Fare, Inc., La Xxxxxx
Oil and Gas Company, Locot, Inc., XxXxxxxx Pipe Line Company, Mollie's
Properties, Inc. and Crowncen International N.V. (each of such parties,
including Crown, being referred to herein, individually and collectively, as
"Borrower").
Borrower has requested certain amendments to the Loan Agreement and Agent
is willing to agree to such amendments, subject to the terms and conditions
contained herein. By this Amendment, Agent and Borrower desire and intend to
evidence such amendment.
In connection with this Amendment, Borrower has requested that Agent enter
into a Junior Participation Agreement with Xxxxxxxx Holdings, Inc., in respect
of the Obligations, the Collateral and the Financing Agreements (as each of such
terms is defined in the Loan Agreement).
In consideration of the foregoing and the agreements and covenants
contained herein, Borrower and Agent (for itself and on behalf of Lender) each
agree as follows:
1. Existing Definitions in Loan Agreement
Capitalized terms used herein, which are not otherwise defined herein, shall
have the respective meanings ascribed thereto in the Loan Agreement.
2. Additional Definitions. The Loan Agreement shall be and is hereby
amended to include, in addition and not in limitation, each of the following
definitions in Section 1 thereof:
(a) "Blockage Reserve" shall mean the amount of $10,000,000 which shall be
reserved by Agent and deducted from the calculation of Formula Availability.
(b) "Excess Formula Availability" shall mean the amount, as determined by
Agent, calculated at any time, equal to: (i) the amount of Formula availability
at such time, minus (ii) the aggregate amount of all the outstanding and unpaid
Obligations at such time which are not in excess of Formula Availability.
(c) "Formula Availability" shall mean the amount, as determined by Agent,
at any applicable time, equal to (i) the lesser of (A) the amount of the Loans
and Letter of Credit Accommodations available to Borrower at such time based
upon the formulas, as determined by Agent, set forth in Sections 2.1(a), 2.1 (b)
and 2.2(c) of the Loan Agreement, subject to applicable sublimits and other
limitations in respect thereof and after deduction for all availability Reserves
(including reserves for Letter of Credit Accommodations at such time)
established and maintained by Lender, but exclusive of the Supplemental Credit
Facility, or (B) the Maximum Formula Amount, minus (ii) the Blockage Reserve.
The term "Formula Availability" is used herein to mean the Loans and Letter of
Credit Accommodations so available to Borrower without reduction for the amount
of Loans and Letter of Credit Accommodations then outstanding.
(d) "Funded Junior Participation" shall mean each and every Junior
Participation in the Obligations and the Collateral which has been purchased
from and paid for to Agent by or for the account of Xxxxxxxx pursuant to the
Junior Participation Agreement.
(e) "Junior Participation" shall mean each and every obligation of
Xxxxxxxx to purchase a junior participation in the Obligations and the
Collateral pursuant to the Junior Participation Agreement.
(f) "Junior Participation Agreement" shall mean the Junior Participation
Agreement between Agent and Xxxxxxxx, dated of even date, as the same is from
time to time amended, supplemented, renewed, restated, extended or replaced.
(g) "Maximum Formula Amount" shall mean the amount of $75,000,000, as such
amount may be reduced permanently from time to time pursuant to Section 2.4 the
Loan Agreement as amended herein.
(h) "Xxxxxxxx" shall mean Xxxxxxxx Holdings, Inc., a Maryland Corporation,
and it successors and assigns.
(i) "Xxxxxxxx Charges" shall mean, collectively, the Xxxxxxxx Closing Fee,
the Xxxxxxxx Unused Line Fee and the Xxxxxxxx Usage Fee.
(j) "Xxxxxxxx Closing Fee" shall mean the sum of $50,000.
(k) "Xxxxxxxx Letter of Credit" shall mean, collectively, each and every
Irrevocable Standby Letter of Credit issued by First Union National Bank for the
account of Xxxxxxxx and for the benefit of Agent, in form and substance
satisfactory to Agent, which has been delivered to and is in the possession of
Agent.
(l) "Xxxxxxxx Letter of Credit Amount" shall mean the amount, calculated
at any time, of the aggregate outstanding and undrawn face amount of each and
every Xxxxxxxx Letter of Credit in the possession of Lender at such time.
(m) "Xxxxxxxx Unused Line Fee" shall mean, in any applicable period, an
amount equal to one-quarter of one (.25%) percent per annum of the average daily
amount during such period of (i) $50,000,000 minus (ii) the Xxxxxxxx Letter of
Credit Amount.
(n) "Xxxxxxxx Usage Fee" shall mean , in any applicable period, an amount
equal to three-tenths of one (.3%) percent per annum of the average daily
Xxxxxxxx Letter of Credit Amount during such period.
(o) "Supplemental Credit Facility" shall mean , at any applicable time, an
amount in excess of Formula Availability equal to the lesser of (i) the sum of
(A) the aggregate oustanding and undrawn face amount of each and every Xxxxxxxx
Letter of Credit in the possession of Agent at such time (x) as to which the
original expiration date thereof is not less than one hundred and eighty (180)
days from the date of issuance thereof, (y) Agent has not received a notice from
the issuer thereof that the then current expiration date of such Xxxxxxxx Letter
of Credit will not be extended beyond its then current expiration date and (z)
as to which the then current expiration date thereof at such time is not less
than the longer of sixty (60) days after such time or thirty (30) days after
the last expiration date of any then outstanding and undrawn Supplier Letter of
Credit at such time, unless, prior to such current expiration date of the
applicable Xxxxxxxx Letter of Credit, Agent receives (and is in possession of )
a written amendment thereto from the issuer thereof that the then current
expiration date of such Xxxxxxxx Letter of Credit is extended for not less than
one hundred and eighty (180) days from its then current expiration date, plus
(B) the aggregate amount of each and every Funded Junior Participation at such
time, or (ii) $50,000,000.
(p) "Supplier Letters of Credit" shall mean, collectively, all Letter of
Credit Accommodations in respect of standby letters of credit issued or opened
at the request of any Borrower for the benefit of suppliers of goods to any
Borrower which is in form and substance satisfactory to Agent, taking into
account the reasonable requirements of the beneficiary thereof.
3. Amendment of Definitions.
(a) The definition of "Excess Availability" in the Loan Agreement
shall be and is hereby deleted, and the following is inserted in its stead.
"Excess" Availability" shall mean the amount, as determined by Agent,
calculated at any time, equal to : (a) the sum of (i) the amount of Formula
Availability at such time, and (ii) the amount of the Supplemental Credit
Facility at such time, minus (b) the sum of (i) the amount of all then
outstanding and unpaid Obligations at such time and (ii) the aggregate amount of
all trade payables of Borrower which are more than sixty (60) days past due as
of such time.
(b) The definition of "Maximum Credit" in the Loan Agreement shall be
and is hereby deleted, and the following is inserted in its stead:
"Maximum Credit" shall mean, at any time, the sum of (a) the Maximum
Formula Amount at such time, plus (b) the amount of the Supplemental Credit
Facility at such time.
(c) All references to the term "Letter of Credit Accommodations" in
the Loan Agreement and, as applicable the other Financing Agreements, shall be
deemed and each such reference is hereby amended to include, in addition, and
not in limitation, Supplier Letters of Credit. All references to the term
"Obligations" in the Loan Agreement and, as applicable, the other Financing
Agreements, shall be deemed and each such reference is hereby amended to include
in addition, and not in limitation, the obligations and indebtedness of Borrower
arising or referred to in this Amendment, including, without limitation, all (a)
Xxxxxxxx Charges and (b) reimbursement obligations, fees and charges owed by
Borrower pursuant to the Loan Agreement and this Amendment in respect of
Supplier Letters of Credit.
4. Revolving Loans. Section 2.1(a) of the Loan Agreement shall be and is
hereby amended to delete the words "Maximum Credit" and to insert "Maximum
Formula Amount" in their stead.
5. Cash Borrowings. Section 2.1(a) of the Loan Agreement shall be and is
hereby amended to provide that, notwithstanding anything to the contrary set
forth in the Loan Agreement and subject to the other limitations upon Loans
under the Loan Agreement, the aggregate outstanding amount of all cash
borrowings in respect of Loans thereunder shall not exceed the amount of
$50,000,000 at any time except (a) in Agent's sole discretion, or (b) if Agent
receives a Certificate executed by the chief financial officer of Crown that the
amount of cash borrowings from Lender is not limited by the terms of the
Indenture, and which specifies the applicable provision and calculation of the
applicable formula in respect thereof under the Indenture which removes any
restriction on such cash borrowings under the Indenture, which is reasonably
acceptable to Agent.
6. Limitations on Loans and Letter of Credit Accommodations. Section
2.1(c) of the Loan Agreement shall be and is hereby amended (a) to add the
phrase ", including, without limitation, the Supplier Letters of Credit,"
immediately after the word "Accommodations" in the first sentence thereof, (b)
to add the words "and limitations on the Loans or components thereof set forth
in Section 2.2(a) or otherwise herein" immediately after the words "lending
formulas" in the second sentence thereof, and (c) to add the words "or Formula
Availability" after the words "Maximum Credit" in the second sentence thereof.
7. Reduction of Eligible Inventory Loans. Section 2.1(d) of the Loan
Agreement shall be and is hereby amended to provide that it shall not be
applicable to Supplier Letters of Credit, to the extent that these are standby
and not documentary letters of credit.
8. Letter of Credit Reserves. Section 2.2(c) of the Loan agreement shall
be and is hereby amended (a) to delete the words "Maximum Credit" and insert
"Maximum Formula Amount" in their stead and to provide that, for purposes of
Section 2.2(c) only, the availability of Revolving Loans shall be determined
without regard to the limitation on cash borrowings imposed by Section 5 of this
Amendment (but the availability of such Revolving Loans for purposes of such
Section 2.2(c) shall be subject to the other limitations in respect thereof as
provided in the Loan Agreement), and (b) to provide that Supplier Letters of
Credit, which are standby and not documentary letters of credit, shall be
included in the "Letter of Credit Accommodations" referenced in Section
2.2(c)(ii) of the Loan Agreement and the last sentence thereof, provided,
however, if Excess Formula Availability does not exist at any time, Section
2.2(c) of the Loan Agreement shall not be applicable to such amount of the
outstanding and undrawn amount of the Supplier Letters of Credit at such time
(x) which is in excess of the outstanding and unpaid amount of all other
Obligations of up to the Formula Availability at such time and (y) which does
not exceed the Supplemental Credit Facility at such time. For example if the
Formula Availability is $60 million at a particular time and the Obligations are
$70 million at such time (including $20 million of Supplier Letters of Credit,
$40 million of Loans and $10 million of other Letter of Credit Accommodations at
such time), then $10 million of Supplier Letters of Credit will not be subject
to Section 2.2(c) of the Loan Agreement. Supplier Letters of Credit which are
issued or opened when Excess Formula Availability does not exist or which would
result in the amount of all then outstanding and unpaid Obligations to be in
excess of Formula Availability at such time shall not have expiration dates in
respect thereof later than thirty (30) days prior to the earliest expiration
date of a then outstanding and undrawn Xxxxxxxx Letter of Credit.
9. Requests by Borrower for Xxxxxxxx Letters of Credit. If Crown or any
other Borrower delivers a written request to Xxxxxxxx that Xxxxxxxx arrange for
the delivery of a Letter of Credit (as such term is defined in the he Junior
Participation Agreement) or more than one such Letter of Credit to Agent (a
"Xxxxxxxx Request"), a copy of such Xxxxxxxx Request shall be delivered by Crown
concurrently therewith to Agent.
10. Maximum Formula Amount Reduction. Section 2.4 of the Loan Agreement
shall be and is hereby deleted, and replaced by the following:
"2.4" Maximum Formula Amount Reduction. So long
as no Event of Default has occurred and is continuing, Borrowers may elect
to reduce (which reduction shall be irrevocable) the Maximum Formula Amount to
not less than $50,000,000, by prior written notice delivered to and received by
Agent, in increments of $10,000,000 each at any time on or after December 9,
1999."
11. Due Date of Interest Payments. Section 3.1(d) of the Loan Agreement
shall be amended as follows:
(a) In subsection (i) thereof, the word "quarterly" shall be changed
to "monthly" and the words "calendar quarter" shall be changed to "calendar
month".
(b) In subsection (ii) thereof, the words, "on the last day of each
applicable LIBOR Interest Period" and "on each three-month anniversary of the
first day of such LIBOR Interest Period" shall each be changed to "on each
monthly anniversary of the first day of the applicable LIBOR Interest Period."
12. Xxxxxxxx Charges.
In consideration of the increase in the Maximum Credit hereunder based
upon the Junior Participation Agreement and the Xxxxxxxx Letter of Credit:
(a) Xxxxxxxx Closing Fee. Borrower shall pay to Agent, for the
account of Xxxxxxxx, on the date hereof, the Xxxxxxxx Closing Fee. Agent is
authorized by borrower to charge the Xxxxxxxx Closing Fee to the Loan account of
Borrower maintained by Agent and to remit the amount thereof to Xxxxxxxx.
(b) Xxxxxxxx Unused Line Fee. Borrower shall pay to Agent for the
account of Xxxxxxxx, on the first Business Day of each month, the Xxxxxxxx
Unused Line Fee, as calculated by Agent, for the immediately preceding month.
Agent is authorized by Borrower to charge the Xxxxxxxx Unused Line Fee to the
Loan account of Borrower maintained by Agent and to remit the amount thereof to
Xxxxxxxx.
(c) Xxxxxxxx Usage Fee. Borrower shall pay to Agent for the account
of Xxxxxxxx, on the first Business Day of each month, the Xxxxxxxx Usage Fee, as
calculated by Agent, for the immediately preceding month. Agent is authorized
by Borrower to charge the Xxxxxxxx Usage Fee to the Loan account of Borrower
maintained by Agent and to remit the amount thereof to Xxxxxxxx.
13. Blocked Account. The first sentence of Section 6.6 of the Loan
Agreement shall be and is hereby amended to delete the words "If Excess
Availability shall be less than $15,000,000: and to insert in their stead "If
the Blockage Reserve shall be less than $10,000,000."
14. Minimum Net Adjusted Working Capital. Section 9.12 of the Loan
Agreement shall be and is hereby deleted in its entirety as of March 30, 1999
and the following shall be inserted in its stead on such date:
"9.12 Minimum Net Adjusted Working Capital. Borrower shall cause
Adjusted Current Assets to exceed consolidated current liabilities by (a)
$10,000,000 at the end of each fiscal quarter, commencing with the fiscal
quarter ending March 31, 1999, and at the end of each fiscal quarter thereafter
through and including March 31, 2000, and (b) $35,000,000 at the end of each
fiscal quarter thereafter."
15. Minimum FIFO Tangible Net Worth. Section 9.13 of the Loan Agreement
shall be and is hereby deleted in its entirety as of March 30, 1999 and the
following shall be inserted in its stead on such date:
"9.13 Minimum FIFO Tangible Net Worth. Borrowers shall cause FIFO
Tangible Net Worth to be at least (a) $150,000,000 at the end of each fiscal
quarter, commencing with the fiscal quarter ending March 31, 1999, and at the
end of each fiscal quarter thereafter through and including March 31, 2000, and
(b) $180,000,000 at the end of each fiscal quarter thereafter."
16. Additional Event of Default. In addition to the Events of Default set
forth in the Loan Agreement and the other Financing Agreements, it shall
constitute an additional Event of Default if Xxxxxxxx breaches any covenant,
warranty or term of the Junior Participating Agreement in respect of the
validity or enforceability of any Xxxxxxxx Letter of Credit or in respect of
maintaining the existence of any Xxxxxxxx Letter of Credit.
17. Amendment Fee. In consideration of this Amendment, Borrower shall pay
to Agent (for the account of Lender) an amendment fee in the amount of $30,000,
which shall be fully earned and due and payable on the date hereof.
18. Servicing Agent. Borrower acknowledges, consents and agrees that
Agent is authorized to appoint, and has appointed, Congress Financial
Corporation (Southern) ("Servicing Agent") as servicing agent in respect of all
powers, rights and remedies as Agent may have under the Loan Agreement and
Servicing Agent may exercise same as through it were the Agent.
19. Additional Representations, Warranties and Covenants. Borrower
represents, warrants and covenants with and to Lender as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, and the truth and accuracy of, or compliance with
each, together with the representations, warranties and covenants in the other
Financing Agreements, being a continuing condition of the making of Loans by
Lender to Borrower:
(a) No Event of Default or act, condition or event which with notice
or passage of time or both would constitute an Event of Default exists or has
occurred as of the date of this Amendment (after giving effect to the amendments
to the Loan Agreement made by this Amendment).
(b) This Amendment has been duly executed and delivered by Borrower
and is in full force and effect as of the date hereof and the agreements and
obligations of Borrower contained herein constitute legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
respective terms.
20. Conditions Precedent for Amendment. The effectiveness of the
amendments contained herein shall be subject to the satisfaction of each of the
following conditions, in a manner satisfactory to Agent and its counsel:
(a) Agent shall have received this Amendment No. 1 to the Loan
Agreement duly authorized, executed and delivered by the parties hereto;
(b) Agent shall have received, in form and substance satisfactory to
Lender, the Junior Participation Agreement duly authorized, executed and
delivered by Xxxxxxxx;
(c) Agent shall have received the consents to this Amendment from
each Lender and from Xxxxxxxx; and
(d) no Event of Default, or event, act or condition which with notice
or passage of time or both would constitute an Event of Default, shall exist or
have occurred.
21. Junior Participation Agreement. Borrower (a) consents to the terms
and conditions of the Junior Participation Agreement, and (b) acknowledges that
Borrower is not a party thereto and has no rights thereunder.
22. Effect of this Amendment. Except as modified pursuant hereto, no
other changes or modifications to the Financing Agreements are intended or
implied, and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment shall
control. The Loan Agreement and this Amendment shall be read and construed as
one agreement.
23. Further Assurances. The parties hereto shall execute and deliver such
additional documents and take such additional action as may be reasonably
necessary or desirable to effectuate the provisions and purposes of this
Amendment.
24. Governing Law. The validity, interpretation and enforcement of this
Amendment and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of laws).
25. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
26. Headings. The headings listed herein are for convenience only and do
not constitute maters to be construed in interpreting this Amendment.
27. Counterparts. This Amendment may be executed in any number of
Counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto.
Please sign the enclosed counterpart of this Amendment in the space
provided below, whereupon this Amendment, as so accepted by Lender, shall become
a binding agreement between Borrower and Lender.
Very truly yours,
CROWN CENTRAL PETROLEUM
CORPORATION
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Executive Vice President and CFO
CONTINENTAL AMERICAN
CORPORATION
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:President
CROWN CENTRAL HOLDING
CORPORATION
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:President
CROWN CENTRAL PIPE LINE
COMPANY
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title: Vice President
CROWN-RANCHO PIPELINE
CORPORATION
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Vice President
CROWN STATIONS, INC.
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Vice President
FZ CORPORATION
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Vice President
FAST FARE, INC.
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Vice President
LA XXXXXX OIL AND GAS COMPANY
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Vice President
LOCOT, INC.
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:President
XXXXXXXX PIPE LINE COMPANY
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:President
MOLLIE'S PROPERTIES, INC.
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Vice President
CROWNCEN INTERNATIONAL N.V.
By:/s/--Xxxx X. Xxxxxxx, Xx.
Title:Supervisory Director
AGREED AND ACCEPTED:
CONGRESS FINNACIAL CORPORATION,
as Agent
By:/s/--Xxxxxxx X. Xxxxx
Title:Executive Vice President
CONSENTED TO:
XXXXXXXX HOLDINGS, INC.
By:/s/--Xxxxxxx X. Xxxxx
Title:Executive Vice President
CONGRESS FINANCIAL CORPORATION
as Lender
By:/s/--Xxxxxxx X. Xxxxx
Title:Executive Vice President
FIRST UNION NATIONAL BANK
By:/s/--Will J. Fee
Title:Senior Vice President
