NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit
10.2
NINTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS
NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Ninth Amendment"), made
and
entered into as of the 15th day of February, 2007, by and among SMF Energy
Corporation, a Delaware corporation (hereinafter referred to as "SMF"),
successor by merger to Xxxxxxxxx Mobile Fueling, Inc., a Florida corporation,
SMF Services, Inc., a Delaware corporation (hereinafter referred to as "SSI"),
H
& W Petroleum Company, Inc., a Texas corporation (hereinafter referred to as
"H & W" and, collectively with SMF and SSI, as "Borrower") and Wachovia
Bank, National Association, successor by merger to Congress Financial
Corporation (Florida) (hereinafter referred to as "Lender").
RECITALS:
A. On
September 26, 2002, Xxxxxxxxx Mobile Fueling, Inc. ("STR") and Lender entered
into a Loan and Security Agreement (the "Loan Agreement"), which, among other
things, established a revolving line of credit (the "Revolving Loans") by Lender
in favor of STR.
B. STR
and
Lender executed a Consent and First Amendment to Loan and Security Agreement
dated as of March 31, 2003 (the "First Amendment"), which, among other things,
consented to certain subordinated debt of STR and modified certain defined
terms
in the Loan Agreement.
C. STR
and
Lender executed a Second Amendment to Loan and Security Agreement dated as
of
August 29, 2003 (the "Second Amendment"), which, among other things, (1)
permitted STR to incur certain additional secured Indebtedness, and (2) released
Lender's security interest in the patents (including the related trade names
utilized in such patents) constituting a portion of the Collateral, subject
to
the terms and conditions stated therein.
D. STR
and
Lender executed a Third Amendment to Loan and Security Agreement dated as of
August 30, 2003 (the "Third Amendment"), which, among other things, modified
certain terms of the Loan Agreement in order to reflect that the amount of
the
additional secured Indebtedness contemplated by the Second Amendment exceeded
the actual amount thereof.
E. STR,
SSI
and Lender executed a Fourth Amendment to Loan and Security Agreement dated
as
of February 18, 2005 (the "Fourth Amendment"), which, among other things, added
SSI as an additional borrower under the Revolving Loans, extended the term
of
the Loan Agreement, and modified the applicable Interest Rate, the unused line
fee and certain covenants of the Loan Agreement.
F. STR,
SSI,
H & W and Lender executed a Fifth Amendment to Loan and Security Agreement
dated as of October 1, 2005 (the "Fifth Amendment"), which, among other things,
added H & W as an additional borrower under the Revolving Loans, extended
the term of the Loan Agreement, increased the Maximum Credit amount for the
Revolving Loans, added certain inventory to the Borrowing Base, decreased the
applicable Interest Rate, and modified certain covenants and other terms of
the
Loan Agreement.
G. STR,
SSI,
H & W and Lender executed a Sixth Amendment to Loan and Security Agreement
effective as of March 31, 2006 (the "Sixth Amendment"), which, among other
things, (1) added (a) an Interest Rate option based on the London interbank
offered rate and (b) certain leased Vehicles and Equipment to the Excluded
Assets from the Collateral, and (2) amended the capital expenditures covenant
of
the Loan Agreement.
H. STR,
SSI,
H & W and Lender executed a Seventh Amendment to Loan and Security Agreement
dated as of September 26, 2006 (the "Seventh Amendment"), which, among other
things, amended Sections 1.4 and 9.10 of the Loan Agreement limiting Borrower's
loans and advances to other persons and increasing the amount of the Maximum
Credit for Revolving Loans.
I. On
February 14, 2007, STR merged with and into SMF, and, contemporaneously
therewith, Borrower and Lender executed an Assumption Agreement and Eighth
Amendment to Loan and Security Agreement, dated as of February 14, 2007 (the
"Eighth Amendment"), pursuant to which, among other things, SMF assumed all
of
STR's obligations as a Borrower under the Loan Agreement and the other Financing
Agreements (as defined in the Loan Agreement) to which STR is a
party.
J. Borrower
and Lender desire to amend the Loan Agreement to, among other things, extend
the
maturity date of the Loan Agreement from September 25, 2007 to June 30, 2008
and
modify certain financial covenants, and Lender is agreeable to same, subject
to
the terms and conditions hereinafter set forth.
NOW
THEREFORE, in consideration of the mutual covenants of the parties hereto,
and
for other good and valuable consideration, it is agreed as follows:
1. The
statements in the foregoing Recitals are true and correct and are incorporated
herein as if set forth in full.
2. Unless
otherwise defined herein, all terms used herein shall have the definitions
specified in the Loan Agreement, as modified by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment,
the
Sixth Amendment, the Seventh Amendment and the Eighth Amendment; all references
hereinafter made to the Loan Agreement shall include the modifications thereto
effectuated pursuant to the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment,
the
Seventh Amendment and the Eighth Amendment.
3. Borrower
confirms and acknowledges that the principal balance of Revolving Loans
outstanding under the Loan Agreement as of the close of business on February
9,
2007 was $10,114,321, which amount, together with all accrued interest, fees
and
other charges under the Loan Agreement are due and payable without any defense,
set-off or counterclaim.
4. The
Loan
Agreement is hereby modified as follows (all references to Sections and
Subsections being the applicable Sections and Subsections of the Loan
Agreement):
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|
(a)
|
In
Section 12.1, the "Renewal Date" in subsection (a) is extended, from
the
date that is five (5) years from the date of the Loan Agreement,
to June
30, 2008.
|
5. In
addition, the Loan Agreement is hereby modified as follows (all references
to
Sections and Subsections being the applicable Sections and Subsections of the
Loan Agreement):
|
(a)
|
The
definition of "Information Certificate" contained in Section 1.34
of the
Loan Agreement is amended and restated in its entirety to read as
follows:
|
1.34 "Information
Certificate" shall mean the Information Certificate of SMF Energy Corporation
(or its predecessor in interest, Xxxxxxxxx Mobile Fueling, Inc.) dated August
30, 2002 (revised September 26, 2002) and delivered to Lender, the Information
Certificate of SMF Services, Inc. dated on or about February 18, 2005 and
delivered to Lender and the Information Certificate of H & W Petroleum
Company, Inc. dated on or about October 5, 2005 and delivered to Lender, in
each
case, containing material information with respect to Borrower, its business
and
assets provided by or on behalf of Borrower to Lender in connection with this
Agreement and the other Financing Agreements and the financing arrangements
provided for herein, and in each case, as each such Information Certificates
has
been updated and delivered to Lender prior to February 15, 2007, and as each
such Information Certificate may be updated after February 15, 2007 from time
to
time and as the same may be approved in writing by Lender.
|
(b)
|
Subclause
(i) in the proviso contained in Section 9.9(f) is amended and restated
in
its entirety to read as follows:
|
|
(i)
Borrower may only make regularly scheduled payments of principal
and
interest in respect of such Indebtedness in accordance with the terms
of
the agreement or instrument evidencing or giving rise to such
Indebtedness, as in effect on the date hereof, and in accordance
with any
subordination agreement (if any) applicable to such
Indebtedness,
|
|
(c)
|
Sections
9.21 and 9.22 are amended and restated in their entireties to read
as
follows:
|
9.21 Fixed
Charge Coverage Ratio.
Borrower shall not, as of any month end in which the Average Excess Availability
is less than the amount set forth below and corresponding to such month, or
as
of the end of any month during which an Event of Default occurs or exists,
on a
cumulative basis for the applicable fiscal year, permit the ratio of (a) EBITDA
to (b) Fixed Charges to be less than 1.0 to 1.0.
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|
Month
|
Average
Excess Availability
|
|||
|
February,
2007
|
|
$1,500,000
|
||
|
March,
2007
|
|
$1,500,000
|
||
|
April,
2007
|
|
$1,500,000
|
||
|
May,
2007
|
|
$1,500,000
|
||
|
June,
2007 and each
|
|
$2,500,000
|
||
|
month
thereafter
|
||||
9.22 Excess
Availability.
Borrower shall maintain Excess Availability as determined by Lender in an amount
not less than: (a) at all times during the period beginning on February 15,
2007
and ending on July 15, 2007, $750,000, and (b) at all times on and after July
16, 2007, $2,000,000.
6. Each
and
every reference to the Loan Agreement in the other Financing Agreements shall
be
deemed to refer to the Loan Agreement, as modified by this Ninth
Amendment.
7. Reference
is made to that certain Subordination Agreement dated January 21, 2003, by
and
among Active Investors III and C. Xxxxxx X'Xxxxxx, Lender, as successor by
merger to Congress Financial Corporation (Florida), and SMF, as successor by
merger to Xxxxxxxxx Mobile Fueling, Inc. (the "Subordination Agreement") and
to
each of the other agreements, instruments or documents executed in connection
therewith or which incorporate the terms thereof by reference thereto
(collectively, the "Other Agreements"). Lender acknowledges that,
notwithstanding provisions in the Subordination Agreement and the Other
Agreements prohibiting principal payments on the Subordinated Debt (as defined
in the Subordination Agreement), Lender has consented to each principal payment
made by Borrower and disclosed to Lender prior to the date hereof in respect
of
the Subordinated Debt. Lender agrees that, notwithstanding anything to the
contrary contained in the Subordination Agreement or the Other Agreements,
Lender consents to one or more principal payments to be made by Borrower on
or
prior to February 28, 2007 in respect of such Subordinated Debt, in the amounts
and at the times specified in the Subordinated Debt documents as in effect
on
the date hereof, so long as no Default or Event of Default exists under the
Loan
Agreement on the date of any such payment or would exist as a result of any
such
payment, and Borrower agrees that, based upon such consent, Borrower is
authorized to make such principal payments notwithstanding prohibitions on
such
payments contained in the Subordination Agreement and the Other
Agreements.
8. The
effectiveness of the amendments contained in Section 4 and Section 5 of this
Ninth Amendment is subject to satisfactory compliance with conditions precedent
requiring that Lender shall have received:
| (a) |
all
requisite corporate action and proceedings in connection with this
Ninth
Amendment and the other Financing Agreements shall be satisfactory
in form
and substance to Lender, and Lender shall have received all information
and copies of all documents, including records of requisite corporate
action and proceedings which Lender or its counsel may have requested
in
connection therewith, such documents, where requested to be certified
by
appropriate corporate officers or governmental
authorities;
|
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| (b) |
copies
of such current certified good standing, organizational and authorizing
documents for SMF as Lender may reasonably request in connection
with this
Ninth Amendment; and
|
| (c) |
such
additional documents, instruments and agreements as are required
hereunder
as well as those which Lender or its counsel may reasonably
request.
|
9. As
partial consideration for Lender's agreement to amend the Loan Agreement as
provided above, Lender has fully earned a nonrefundable facility fee in the
amount of forty-five thousand dollars ($45,000), which shall be paid to Lender
simultaneously with the execution of this Ninth Amendment and upon the
effectiveness thereof, irrespective of any actual further funding under the
Revolving Loans.
10. Borrower
represents and warrants to Lender that, except as has been otherwise disclosed
to Lender in writing, the representations and warranties contained in the Loan
Agreement and all related loan documentation are true and correct on and as
of
the date hereof (with the same force and effect as if made on and as of the
date
hereof, other than representations and warranties made as of a specific date
which shall be deemed made as of such date) and with respect to this Ninth
Amendment and the related documentation referenced herein, and that no Default
or Event of Default shall have occurred and be continuing. Specifically, (a)
SMF
represents and warrants that its Certificate of Incorporation and Bylaws,
certified on February 14, 2007, were not amended on or subsequent to their
aforesaid certification date, (b) SSI represents and warrants that its
Certificate of Incorporation and Bylaws, certified on February 18, 2005,
were not amended on or subsequent to their aforesaid certification date, and
(c)
H & W represents and warrants that its Articles of Incorporation and Bylaws,
certified on October 1, 2005, were not amended on nor subsequent to their
aforesaid certification date.
11. Borrower
acknowledges and confirms that all Collateral furnished in connection with
the
Loan Agreement, except patents, continue to secure the Obligations and
indebtedness thereunder, as hereby modified.
12. Borrower
hereby releases and forever discharges Lender and each and every one of its
directors, officers, employees, representatives, legal counsel, agents, parents,
subsidiaries and affiliates, and persons employed or engaged by them, whether
past or present (hereinafter collectively referred to as the "Lender
Releasees"), of and from all actions, agreements, damages, judgments, claims,
counterclaims, and demands whatsoever, liquidated or unliquidated, contingent
or
fixed, determined or undetermined, at law or in equity, which Borrower, had,
now
has, or may have against the Lender Releasees, or any of them, for, upon or
by
reason of any matter, cause or thing whatsoever to the date of this Ninth
Amendment, whether arising out of, related to or pertaining to the Obligations,
the Financing Agreements, or otherwise, including, without limitation, the
negotiation, closing, administration, and funding of the Obligations or the
Financing Agreements. Borrower acknowledges that this provision is a material
inducement for Lender entering into this Ninth Amendment and this provision
shall survive payment in full of all Obligations and termination of all
Financing Agreements.
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13. Borrower
shall pay all out-of-pocket expenses incurred by Lender in connection with
the
preparation for and closing of the transaction contemplated under this Ninth
Amendment, including, without limitation, the reasonable fees and expenses
of
special counsel for Lender. In addition, Borrower shall pay any and all taxes
(together with interest and penalties, if any, applicable thereto) and fees,
including, without limitation, documentary stamp taxes, now or hereafter
required in connection with the execution and delivery of the Loan Agreement,
as
hereby amended, and all related documents, instruments and
agreements.
14. Except
as
expressly modified herein, all terms and provisions of the Loan Agreement,
and
all other documents, instruments and agreements executed and/or delivered in
connection with the Loan Agreement, shall remain unchanged and in full force
and
effect; provided,
however,
in the
event of any inconsistency, incongruity or conflict between the terms of the
Loan Agreement and the terms of this Ninth Amendment, the terms of this Ninth
Amendment shall govern and control. No consent of Lender hereunder shall operate
as a waiver or continuing consent with respect to any instance or event other
than those specified herein. Neither this Ninth Amendment nor
any
earlier waiver or amendment of the Loan Agreement will constitute a novation
or
have the effect of discharging any liability or obligation evidenced by the
Agreement or any related document. This Ninth Amendment shall not be deemed
to
prejudice any rights or remedies which Lender may now have or may have in the
future under or in connection with the Loan Agreement or the Financing
Agreements or any of the instruments or agreements referred to therein, as
the
same may be amended, restated or otherwise modified. This Ninth Amendment is
part of the Loan Agreement and constitutes a Financing Agreement
thereunder.
15. All
covenants, agreements, representations and warranties contained herein shall
be
binding upon and inure to the benefit of the parties hereto, their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent
of
Lender.
16. This
Ninth Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which, when so executed, shall
be deemed to be an original and shall be binding upon all parties, their
successors and assigns, and all of which taken together shall constitute one
and
the same agreement.
17. This
Ninth Amendment shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Florida, without giving effect to
its
conflict of law principles.
18. LENDER
AND BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NINTH AMENDMENT
OR
THE LOAN AGREEMENT AND ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS
A
MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS NINTH AMENDMENT.
[Remainder
of page intentionally left blank;
signatures
begin on following page.]
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IN
WITNESS WHEREOF, the parties hereto have executed this Ninth Amendment the
day
and year first above written.
| BORROWER: | ||
| SMF ENERGY CORPORATION, a Delaware corporation, successor by merger to XXXXXXXXX MOBILE FUELING, INC., a Florida corporation | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
| Name: | Xxxxxxx X. Xxxxxxxxx | |
| Title: | President and Chief Executive Officer | |
| SMF SERVICES, INC., a Delaware corporation | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
| Name: | Xxxxxxx X. Xxxxxxxxx | |
| Title: | President and Chief Executive Officer | |
| H & W PETROLEUM COMPANY, INC., a Texas corporation | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
| Name: | Xxxxxxx X. Xxxxxxxxx | |
| Title: | Chief Executive Officer | |
| LENDER: | ||
| WACHOVIA BANK, NATIONAL ASSOCIATION, successor by merger to CONGRESS FINANCIAL CORPORATION (FLORIDA) | ||
| |
|
|
| By: | /s/ Xxx Xxxxxxxxx | |
| Name: | Xxx Xxxxxxxxx | |
| Title: | Director | |
JOINDER
The
undersigned: (1) acknowledges and confirms that Lender's loans, advances
and
credit to Borrower have been, are and will continue to be of direct economic
benefit to the undersigned, (2) acknowledges that it has previously waived
any
right to consent to the foregoing or any future amendment to the Agreement
but,
nevertheless, consents to all terms and provisions of the foregoing Ninth
Amendment which are applicable to it, and agrees to be bound by and comply
with
such terms and provisions, and (3) acknowledges and confirms that its guarantee
in favor of Lender executed in connection with the Agreement is valid and
binding and remains in full force and effect in accordance with its terms
(without defense, setoff or counterclaim against enforcement thereof), which
include, without limitation, its guarantee in connection with the Agreement,
as
modified by the Ninth Amendment.
| GUARANTOR: | ||
| XXXXXXXXX REALTY, INC., a Florida corporation | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
| Name: | Xxxxxxx X. Xxxxxxxxx | |
| Title: | President and Chief Executive Officer | |
