FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
EXHIBIT
10.4
FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This
FIRST AMENDMENT TO LOAN AND
SECURITY AGREEMENT (this "Amendment")
is dated as of August 29, 2007 by and between KINERGY MARKETING, LLC, an Oregon limited
liability company ("Borrower")
and COMERICA BANK, a
Michigan banking corporation, with its offices located at 000 X. Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 ("Bank").
RECITALS
A.
Borrower and Bank have previously entered into that certain Loan and Security
Agreement (Accounts and Inventory) dated August 17, 2007 (the "Loan
Agreement").
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as set forth below.
1.
Incorporation by
Reference. The foregoing Recitals and the Loan Documents (as defined in
the Loan Agreement) are incorporated herein by this reference as though set
forth in full herein. Capitalized terms not otherwise defined herein shall have
the meanings given such terms in the Loan Agreement.
2.
Ratification of
Indebtedness. Borrower ratifies and reaffirms the Indebtedness, without
setoff, defense, or counterclaim.
3.
Amendment to the
Loan Agreement. The Loan Agreement is hereby amended as set forth
herein.
3.1. Amendment to
Section 1.10 of the Loan Agreement. Section 1.10 of the Loan Agreement is
hereby amended by deleting it in its entirety and replacing it with the
following:
"1.10
"Borrowing
Base" means an amount equal to the sum of: (a) eighty percent (80%) of
the Net Amount of Eligible Accounts; plus (b) the sum of
(i) seventy percent (70%) of the Value of Eligible In Storage Inventory; provided that the aggregate
amount of Advances made under this Subsection 1.10(b)(i) shall not exceed Ten
Million and 00/100 Dollars ($10,000,000.00); plus (ii) seventy
percent (70%) of the Value of Eligible In Transit Inventory; provided that the aggregate
amount of Advances made under this Subsection 1,10(b)(ii) shall not exceed Four
Million and 00/100 Dollars ($4,000,000.00); further provided that the aggregate
amount of Advances made under Subsection I .10(b) for Inventory consisting of
bio-diesel shall not exceed One Million and 00/100 Dollars
($1,000,000.00)."
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3.2. Amendment to
Section 1.23 of the Loan Agreement. Section 1.23 of the Loan
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following:
"1.23
"Eligible
Inventory" means that portion of Borrower's Inventory
consisting of ethanol, bio-diesel and denaturant which is: (a) owned by
Borrower, free and clear of all Liens or encumbrances, except Permitted Liens;
(b) held for sale by Borrower in the ordinary course of the Borrower's business;
(c) of good and merchantable quality, free from defects for the purposes for
which it is intended; (d) as to which Bank has been able to perfect and maintain
a perfected first priority security interest; and (e) Bank, in its reasonable
judgment and in good faith, has not determined that it is unacceptable or should
be price-adjusted in any material respect."
3.3. Amendment to
Section 2.2.3 of the Loan Agreement. Section 2.2.3 of the Loan
Agreement is hereby amended by deleting the term "Two Million and 00/100 Dollars
($2,000,000.00)" and replacing it with the term "Six Million and 00/100 Dollars
($6,000,000.00)."
4. Legal
Effect.
4.1. Except as
specifically set forth in this Amendment, all of the terms and conditions
of the Loan Documents remain in full force and effect. Except as expressly set
forth herein, the execution, delivery, and performance of this Amendment shall
not operate as a waiver of, or as an amendment of, any right, power, or remedy
of Bank under the Loan Documents, as in effect prior to the date hereof.
Borrower ratifies and reaffirms the continuing effectiveness of all promissory
notes, guaranties, security agreements, mortgages, deeds of trust, environmental
agreements, and all other instruments, documents and agreements entered into in
connection with the Loan Documents.
4.2. Borrower represents
and warrants that each of the representations and warranties
contained in the Loan Documents are true and correct as of the date of this
Amendment, and that no Event of Default has occurred and is
continuing.
4.3. The effectiveness
of this Amendment and each of the documents, instruments
and agreements entered into in connection with this Amendment is conditioned
upon receipt by Bank of this Amendment and any other documents which Bank may
require to carry out the terms hereof.
5. Integration.
This Amendment, any documents executed in connection herewith
and the Loan Documents (as amended hereby and by any documents executed in
connection herewith) contain the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, offers and negotiations, oral or written, with respect
thereto.
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6. Successors and
Assigns. This Amendment shall bind and inure to the benefit of the
respective successors and permitted assigns of each of the parties; provided,
however, that neither this Amendment nor any rights hereunder may be
assigned by Borrower. Bank shall have the right without the consent of or notice
to Borrower to sell, transfer, negotiate, or grant participation in all or any
part of, or any interest in, Bank's obligations, rights and benefits
hereunder.
7. Indemnification.
Borrower shall defend, indemnify and hold harmless Bankand its officers,
employees, and agents against: (a) all obligations, demands, claims, and
liabilities claimed or asserted by any other party in connection with the
transactions contemplated by this Amendment; and (b) all losses or Bank expenses
in any way suffered, incurred, or paid by Bank as a result of or in any way
arising out of, following, or consequential to transactions between Bank and
Borrower whether under this Amendment, or otherwise (including without
limitation reasonable attorneys' fees and expenses), except for losses caused by
Bank's gross negligence or willful misconduct.
8. Severability of
Provisions. In the event any one or more of the provisions contained
in this Amendment is held to be invalid, illegal or unenforceable in any
respect, then such provision shall be ineffective only to the extent of such
prohibition or invalidity, and the validity, legality, and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
9. Amendments.
Neither this Amendment nor any provisions hereof may be changed,
waived, discharged or terminated, nor may any consent to the departure from the
terms hereof be given, orally (even if supported by new consideration), but only
by an instrument in writing signed by all parties to this Amendment. Any waiver
or consent so given shall be effective only in the specific instance and for the
specific purpose for which given.
10. Waiver. No
failure to exercise and no delay in exercising any right, power, or remedy
hereunder shall impair any right, power, or remedy which Bank may have, nor
shall any such delay be construed to be a waiver of any of such rights, powers,
or remedies, or any acquiescence in any breach or default hereunder; nor shall
any waiver by Bank of any breach or default by Borrower hereunder be deemed a
waiver of any default or breach subsequently occurring. All rights and remedies
granted to Bank hereunder shall remain in full force and effect notwithstanding
any single or partial exercise of, or any discontinuance of action begun to
enforce, any such right or remedy. The rights and remedies specified herein are
cumulative and not exclusive of each other or of any rights or remedies which
Bank would otherwise have. Any waiver, permit, consent or approval by Bank of
any breach or default hereunder must be in writing and shall be effective only
to the extent set forth in such writing and only as to that specific
instance.
11.
Interpretation.
This Amendment and all agreements relating to the subject matter
hereof are the product of negotiation and preparation by and among each party
and its respective attorneys, and shall be construed accordingly. The parties
waive the provisions of California Civil Code § 1654.
12. Counterparts.
This Amendment may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if all signatures were upon
the same instrument. Delivery of an executed counterpart of the signature page
to this Amendment by telefacsimile shall be effective as delivery of a manually
executed counterpart of this
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Amendment,
and any party delivering such an executed counterpart of the signature page to
this Amendment by telefacsimile to any other party shall thereafter also
promptly deliver a manually executed counterpart of this Amendment to such other
party; provided; however, that the failure to deliver such manually executed
counterpart shall not affect the validity, enforceability, or binding effect of
this Amendment.
13. Attorneys' Fees
and Costs of Enforcement. In the event that any action is required
to be taken by Bank to enforce or interpret its rights under this Amendment and
any documents executed in connection therewith or the Loan Documents, whether or
not suit is brought, or in the event of any dispute arising from this Amendment
and any document executed in connection therewith or the Loan Documents Borrower
shall pay to Bank the attorneys' fees and costs incurred by Bank in connection
therewith, including, without limitation, any attorneys' fees and costs incurred
in connection with any bankruptcy proceeding of Borrower, including, without
limitation, any motion for relief from stay or dispute over or negotiation
concerning cash collateral or nondischargeability, and any expert witness
fees.
IN
WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
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KINERGY
MARKETING, LLC
/s/ Xxxx
Xxxxxxx
By:
Xxxx Xxxxxxx
Its:
President and Chief Executive Officer
COMERICA
BANK
/s/ Xxxxxx
Xxxxxx
By:
Xxxxxx Xxxxxx
Its:
Vice President — Western
Market
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