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Exhibit 10.9
LOAN AND SECURITY AGREEMENT
THIS AGREEMENT made this ____ day of October, 1995 by and between
National Canada Finance Corp., a Delaware corporation ("Lender"), with an
address at 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, and Portfield
Investments, Inc., a Colorado corporation, Wescourt Group, Inc., a Delaware
corporation, Wescourt Distributing, Inc., a Colorado corporation, Wesfrac,
Inc., a Colorado corporation, Westec Denver, Inc., a Colorado corporation,
Xxxxx-Xxxx Corp. Utah, a Colorado corporation, Wescourt Environmental, Inc., a
Colorado corporation, Xxxxx-Xxxx Corp., a Colorado corporation, Xxxxx-Xxxx
Corp., Montrose, Inc., a Colorado corporation, Westec Fruita, Inc., a Delaware
corporation, Montrose Propane, Inc., a Colorado corporation, Grand Mesa Texaco,
Inc., a Colorado corporation, Fruita Investments, Inc., a Colorado corporation,
Fruita Marketing & Management, Inc., a Delaware corporation, and Fruita RP
Holding, Inc, a Delaware corporation, all with an address at 0000 Xxxxxxx 0 xxx
00, Xxxxxx, Xxxxxxxx 00000 (collectively "Borrowers"). Hereinafter, each of
the Borrowers may be referred to singularly as a "Borrower."
WITNESSETH:
WHEREAS, the parties wish to provide for the terms and conditions
upon which Loans may be made, and Letters of Credit may be issued, for the
account of Borrowers;
NOW, THEREFORE, in consideration of any Loans made and/or Letters
of Credit issued for the account of Borrowers, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
Borrowers, the parties agree as follows:
1. DEFINITIONS.
(a) "Account," "Account Debtor," "Chattel Paper," "Documents,"
"Equipment," "General Intangibles," "Goods," "Instruments" and "Inventory"
shall have the respective meanings assigned to such terms, as of the date of
this Agreement, in the Colorado Uniform Commercial Code.
(b) "Affiliate" shall mean any direct or indirect parent,
subsidiary, or sister company of any Person or any other Person directly or
indirectly controlling, controlled by or under common control with another
Person.
(c) "Agreement" shall mean this Loan and Security Agreement,
any exhibits or schedules hereto, any concurrent or subsequent rider hereto and
any extensions, supplements, amendments or modifications hereto.
(d) "Blocked Account" shall have the meaning specified in
SECTION 8 hereof.
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(e) "Collateral" shall mean all of the property of Borrowers
described in SECTION 5 hereof, together with all other real or personal
property of Borrowers now or hereafter pledged to Lender to secure repayment of
any of the Liabilities, including without limitation all Accounts, Inventory,
General Intangibles and Equipment of Borrowers.
(f) "Collateral Report" shall have the meaning specified in
SECTION 9 hereof.
(g) "Debt" shall mean, at any time, the liabilities of
Borrowers except for debt subordinated to the Liabilities (pursuant to a
written agreement in a form acceptable to Lender acting in good faith) as
determined in accordance with generally accepted accounting principles.
(h) "Eligible Accounts" shall mean those Accounts of any
Borrower which are evidenced by invoices requiring payment within thirty (30)
days from invoice date and are unpaid less than sixty days (60) days from
invoice date as well as those Accounts of any Borrower which are evidenced by
invoices requiring payment within ten (10) days from invoice date and are
unpaid less than thirty (30) days from invoice date, and which Lender, in good
faith, determines to be eligible. Without limiting the foregoing, unless
otherwise agreed by Lender, the following Accounts are not Eligible Accounts:
(i) all Accounts owing by a single Account Debtor, including currently
scheduled Accounts, if twenty-five percent (25%) or more of the balance owing
by such Account Debtor to Borrowers or any Borrower is ineligible for any
reason; (ii) Accounts with respect to which the Account Debtor is an officer,
director, employee, Subsidiary or Affiliate of any Borrower; (iii) Accounts
with respect to which the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower creating and
owning such Accounts assigns its rights to payment of such Accounts to Lender
pursuant to, and in full compliance with, the Assignment of Claims Act of 1940,
as amended; (iv) Accounts with respect to which the Account Debtor is not a
resident of the continental United States unless the Account Debtor has
supplied the Borrower owning such Accounts with an irrevocable letter of
credit, in form and substance satisfactory to Lender, issued by a U.S.
financial institution satisfactory to Lender, to cover the full amount of such
Accounts, and such letter of credit is assigned and delivered to Lender; (v)
Accounts in dispute or with respect to which the Account Debtor has asserted or
may assert a counterclaim or has asserted or may assert a right of setoff; (vi)
Accounts with respect to which the prospect of payment or performance by the
Account Debtor is or will be impaired, as determined by Lender in good faith;
(vii) Accounts with respect to which Lender does not have a first and valid
fully perfected security interest; (viii) Accounts with respect to which the
Account Debtor is the subject of bankruptcy or a similar insolvency proceeding
or has made an assignment for the benefit of creditors or whose assets have
been conveyed to a receiver or trustee; (ix) Accounts with respect to which the
Account Debtor's
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obligation to pay the Account is conditional upon the Account Debtor's approval
or is otherwise subject to any repurchase obligation or return right, as with
sales made on a xxxx-and-hold, guaranteed sale, sale-and-return, sale on
approval or consignment basis; (x) Accounts to the extent that the Account
Debtor's indebtedness to Borrowers or any Borrower exceeds a credit limit
determined by Lender in good faith; (xi) Accounts with respect to which the
Account Debtor is located in a state in which any Borrower is required to
obtain a certificate of authority to do business and be in good standing before
it can enforce any obligations owing from the Account Debtor unless such
Borrower, with respect to each such state, has received a certificate of
authority to do business and is in good standing in such state; (xii) Accounts
which arise out of sales not made in the ordinary course of any Borrower's
business; (xiii) Accounts with respect to which the Account Debtor has returned
to any Borrower any portion of the Inventory the sale of which gave rise to
such Accounts; and (xiv) Accounts with respect to which any document or
agreement executed or delivered in connection therewith, or any procedure used
in connection with any such document or agreement, fails in any material
respect to comply with the requirements of applicable law.
(i) "Eligible Acquired Equipment" shall mean Equipment of any
Borrower acquired as part of the acquisition of the assets of another business
after the date of this Agreement which Lender, in good faith, determines to be
eligible. Without limiting the foregoing, unless otherwise agreed by Lender,
the following Equipment of any Borrower is not Eligible Acquired Equipment: (i)
Equipment which is not in good condition; (ii) Equipment which is obsolete;
(iii) New Equipment which Lender determines, in good faith, to be unacceptable
due to age, type, category and/or quantity; (iv) Equipment with respect to
which Lender does not have a first and valid fully perfected security interest;
(v) Equipment which may constitute fixtures under applicable law; or (vi)
Equipment which is stored with or located on the premises of a bailee,
consignee, warehouseman, processor or other third party.
(j) "Eligible Existing Equipment" shall mean Equipment of any
Borrower existing as of the date of this Agreement which Lender, in good faith,
determines to be eligible. Without limiting the foregoing, unless otherwise
agreed by Lender, the following Equipment of any Borrower is not Eligible
Existing Equipment: (i) Equipment which is not in good condition; (ii)
Equipment which is obsolete; (iii) Equipment which Lender determines, in good
faith, to be unacceptable due to age, type, category and/or quantity; (iv)
Equipment with respect to which Lender does not have a first and valid fully
perfected security interest; (v) Equipment which may constitute fixtures under
applicable law; or (vi) Equipment which is stored with or located on the
premises of a bailee, consignee, warehouseman, processor or other third party.
(k) "Eligible Inventory" shall mean Inventory of any Borrower
consisting of gasoline and diesel fuel, oils, greases, antifreeze, natural gas
liquids, gasoline blend stocks, and diesel
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blend stocks which constitute raw materials which possess a ready market or
finished goods and which Lender, in good faith, determines to be eligible.
Without limiting the foregoing, unless otherwise agreed by Lender, the
following Inventory of any Borrower is not Eligible Inventory: (i) Inventory
which is not in good condition, or not currently usable or currently saleable
in the ordinary course of any Borrower's business; (ii) Inventory which is
obsolete; (iii) Inventory which Lender determines, in good faith, to be
unacceptable due to age, type, category and/or quantity; (iv) Inventory with
respect to which Lender does not have a first and valid fully perfected
security interest; (v) Inventory consisting of work-in-progress, packaging
materials or supplies; or (vi) Inventory which is stored with or located on the
premises of a bailee, consignee, warehouseman, processor or other third party
(such premises shall not include such Borrower's leased premises).
(l) "Eligible Purchased Equipment" shall mean Equipment of any
Borrower purchased after the date of this Agreement which Lender, in good
faith, determines to be eligible. Without limiting the foregoing, unless
otherwise agreed by Lender, the following Equipment of any Borrower is not
Eligible Purchased Equipment: (i) Equipment which is not in good condition;
(ii) Equipment which is obsolete; (iii) Equipment which Lender determines, in
good faith, to be unacceptable due to age, type, category and/or quantity; (iv)
Equipment with respect to which Lender does not have a first and valid fully
perfected security interest; (v) Equipment which may constitute fixtures under
applicable law; or (vi) Equipment which is stored with or located on the
premises of a bailee, consignee, warehouseman, processor or other third party.
(m) "Environmental Laws" shall mean all federal, state,
district, local and foreign laws, rules, regulations, ordinances, and consent
decrees relating to health, safety, hazardous substances, pollution and
environmental matters, as now or at any time hereafter in effect, applicable to
any Borrower's business and facilities (whether or not owned by it), including
laws relating to emissions, discharges, releases or threatened releases of
pollutants, contamination, chemicals, or hazardous, toxic or dangerous
substances, materials or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the generation, manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals, or hazardous, toxic or
dangerous substances, materials or wastes.
(n) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
(o) "Event of Default" shall have the meaning specified in
SECTION 13 hereof.
(p) "good faith" shall mean honesty in fact in the conduct or
transaction concerned and the test for the good faith of
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any Person shall be a subjective rather than an objective (or reasonableness)
test of such Person's state of mind.
(q) "Hazardous Materials" shall mean any hazardous, toxic or
dangerous substances, materials and wastes, including, without limitation,
hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation,
radioactive materials, biological substances, polychlorinated biphenyls,
pesticides, herbicides and any other kind and/or type of pollutants or
contaminants (including, without limitation, materials which include hazardous
constituents), sewage, sludge, industrial slag, solvents and/or any other
similar substances, materials, or wastes and including any other substances,
materials or wastes that are or become regulated under any Environmental Law
(including, without limitation any that are or become classified as hazardous
or toxic under any Environmental Law).
(r) "Indemnified Party" shall have the meaning specified in
SECTION 15 hereof.
(s) "Letter of Credit Issuer" shall mean National Bank of
Canada.
(t) "Letters of Credit" shall mean any Letter of Credit which
shall now or hereafter be issued by the Letter of Credit Issuer at the request
and for the account of any Borrower pursuant to the terms of this Agreement.
(u) "Liabilities" shall mean any and all obligations,
liabilities and indebtedness of Borrowers or any of them to Lender or to any
Affiliate of Lender of any and every kind and nature, howsoever created,
arising or evidenced and howsoever owned, held or acquired, whether now or
hereafter existing, whether now due or to become due, whether primary,
secondary, direct, indirect, absolute, contingent or otherwise (including
without limitation obligations of performance), whether several, joint or joint
and several, and whether arising or existing under written or oral agreement or
by operation of law, including without limitation all obligations for payment
of the Loans and for payment of the reimbursement obligations under SECTION
2(B) with respect to the Letters of Credit.
(v) "Loan" or "Loans" shall mean all advances made by Lender
to any Borrower pursuant to SECTION 2(A) hereof.
(w) "Loan Availability" for each Borrower shall mean, at any
time, the difference of the following:
(i) up to eighty-five percent (85%) of the face amount
(less maximum discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith) then outstanding
under such Borrower's existing Eligible Accounts at such time, less such
reserves as Lender in good faith elects to establish; plus
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(ii) up to fifty percent (50%) of the value of such
Borrower's then-existing Eligible Inventory, valued at the lower of cost
(determined on an average cost basis and in accordance with generally
accepted accounting principles) or fair market value, less such reserves
as Lender in good faith elects to establish; plus
(iii) up to eighty percent (80%) of the orderly
liquidation value of such Borrower's then-existing Eligible Existing
Equipment less such reserves as Lender in good faith elects to
establish; plus
(iv) up to eighty percent (80%) of the value of such
Borrower's then-existing Eligible Purchased Equipment, valued at the
lower of the actual hard cost or orderly liquidation value of such
Equipment, less such reserves as Lender in good faith elects to
establish; plus
(v) up to eighty percent (80%) of the orderly
liquidation value of such Borrower's then-existing Eligible Acquired
Equipment less such reserves as Lender in good faith elects to
establish; minus
(vi) the aggregate undrawn face amount of the Letters
of Credit issued for the account of such Borrower.
Notwithstanding anything to the contrary contained herein, all Loans based upon
Eligible Purchased Equipment shall be made in increments of $100,000.00 and the
Loan Availability for Eligible Existing Equipment, Eligible Acquired Equipment,
and Eligible Purchased Equipment constituting the basis for any Loan shall be
decreased by 1.67% per month on the first day of each month following such
Loan. In addition, without limiting the foregoing, Lender shall reserve
against the Loan Availability for each Borrower on a monthly basis fifty
percent (50%) of the amount of any unpaid fuel taxes (net of any fuel tax
refunds) owing by that entity for the prior or any previous month (whether or
not such taxes are due and payable at such time). Such reserve for fuel taxes
shall be applied against the Loan Availability for each Borrower based: (i)
first, upon its Eligible Inventory, (ii) then, upon its Eligible Accounts, and
(iii) then, upon its Eligible Existing Equipment, Eligible Acquired Equipment,
and Eligible Purchased Equipment as determined by Lender in its sole
discretion. Notwithstanding anything to the contrary contained herein and
without waiving any Event of Default under this Agreement, the reserves for
unpaid fuel taxes against the Loan Availability for each Borrower shall be
increased to one hundred percent (100%) of the amount of any unpaid fuel taxes
owing by that entity (whether or not such taxes are due and payable at such
time) in the event that any Borrower fails to pay its fuel taxes when due and
payable.
(x) "Net Worth" of Portfield shall mean, at any time,
the total of shareholders' equity (including capital stock, additional paid-in
capital, and retained earnings) less intangible assets (including goodwill of
Portfield) plus debt subordinated to
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the Liabilities (pursuant to a written agreement in a form acceptable to Lender
- working group in house to file -acting in good faith) calculated in
accordance with generally accepted accounting principles.
(y) "Obligors" shall mean Borrowers and each Person who is or
shall become primarily or secondarily liable for any of the Liabilities.
Hereinafter, each of the Obligors may be referred to singularly as an
"Obligor."
(z) "Other Agreements" shall mean all agreements, instruments
and documents, including without limitation guaranties, mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, security agreements,
intercreditor agreements, support agreements, financing statements and all
other writings heretofore, now or from time to time hereafter executed by or on
behalf of any Borrower or any other Person and delivered to Lender or to any
Affiliate of Lender in connection with the Liabilities or the transactions
contemplated hereby.
(aa) "Permitted Liens" shall mean (i) statutory liens of
landlords, carriers, warehousemen, mechanics, materialmen or suppliers incurred
in the ordinary course of business and securing amounts not yet due or declared
to be due by the claimant thereunder, (ii) liens or security interests in favor
of Lender, (iii) zoning restrictions and easements, licenses, covenants and
other restrictions affecting the use of real property that do not individually
or in the aggregate have a material adverse effect on any Borrower's ability to
use such real property for its intended purpose in connection with any
Borrower's business, and (iv) the liens set forth on EXHIBIT A.
(bb) "Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party or foreign or United States government
(whether federal, state, county, city, municipal or otherwise), including
without limitation any instrumentality, division, agency, body or department
thereof.
(cc) "Plan" shall mean any employee benefit plan defined in
Section 3(3) of ERISA, including any multiemployer plan or any employee welfare
benefit plan which is maintained or has been maintained pursuant to a
collective bargaining agreement to which two or more unrelated employers
contribute and in respect of which any Borrower is an "employer" as defined in
Section 3(5) of ERISA.
(dd) "Reference Rate" shall mean the rate of interest publicly
announced from time to time by National Bank of Canada at its principal office
as its prime lending rate. The Reference Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Any change in the Reference Rate shall be effective as of the effective date
stated in the announcement by National Bank of Canada of such change.
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(ee) "Subsidiary" shall mean any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time stock of any other class of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time, directly or indirectly, owned by any Borrower
or by any partnership or joint venture of which more than fifty percent (50%)
of the outstanding equity interests are at the time, directly or indirectly,
owned by any Borrower.
(ff) "Termination Date" shall mean the earliest to occur of
the following: (i) October ___, 1998 (which date shall be automatically
extended by one (1) year on each anniversary of this Agreement unless Borrowers
or Lender provide each other with written notice of their intent not to extend
the Termination Date for an additional year prior to any anniversary of this
Agreement), (ii) the date Lender makes demand for the payment of the
Liabilities, or (iii) the date the Liabilities are accelerated pursuant to
SECTION 14 hereof.
2. LOANS; LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement and
the Other Agreements, prior to the Termination Date and so long as no Event of
Default has occurred hereunder, Lender shall make Loans to any Borrower as such
Borrower shall from time to time request; provided, however, that: (i) the
total amount of all Loans outstanding to any Borrower shall not exceed such
Borrower's Loan Availability at any time; and (ii) the total unpaid principal
of all Loans outstanding to the Borrowers and all Letters of Credit issued for
the account of the Borrowers in the aggregate ("Maximum Credit") shall not
exceed Six Million Dollars ($6,000,000.00) at any time. Such Maximum Credit
shall be increased to: (i) Nine Million Dollars ($9,000,000.00) if Borrowers
provide Lender with at least ten (10) days' prior written notice of such
increase and pay the first additional Facility Fee described in this Agreement
and so long as no Event of Default has occurred hereunder or will occur
hereunder as a result of such increase in the Maximum Credit; and (ii) Twelve
Million Dollars ($12,000,000.00) if Borrowers provide Lender with at least ten
(10) days' prior written notice of such increase and pay both of the additional
Facility Fee described in this Agreement and so long as no Event of Default has
occurred hereunder or will occur hereunder as a result of such increase in the
Maximum Credit. Borrowers shall be entitled to reduce the Maximum Credit to
any level upon providing Lender with at least thirty (30) days' prior written
notice thereof and paying Lender any amounts necessary to reduce the total
amount of the outstanding Loans and the aggregate undrawn face amount of the
Letters of Credit to an amount equal to or less than the reduced Maximum Credit
and so long as no Event of Default has occurred hereunder.
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The total unpaid principal of all Loans outstanding to the Borrowers
and: (i) based upon Eligible Inventory shall not exceed One Million Dollars
($1,000,000.00) at any time; (ii) and based upon Eligible Existing Equipment
and Eligible Acquired Equipment shall not exceed Two Million Dollars
($2,000,000.00) at any time; provided, however, that such limit shall be
increased to Four Million Dollars ($4,000,000.00) if the Maximum Credit is
increased to and maintained at Nine Million Dollars ($9,000,000.00) or Twelve
Million Dollars ($12,000,000.00) in accordance with the terms and conditions
set forth in this Agreement; and (iii) and based upon Eligible Purchased
Equipment shall not exceed Five Hundred Thousand Dollars ($500,000.00) at any
time; provided, however, that such limit shall be increased to One Million
Dollars ($1,000,000.00) if the Maximum Credit is increased to and maintained at
Nine Million Dollars ($9,000,000.00) or Twelve Million Dollars ($12,000,000.00)
in accordance with the terms and conditions set forth in this Agreement.
Prior to Lender making any Loan, the Loans shall be repaid as provided
elsewhere in this Agreement. If at any time the outstanding balance on any
Borrower's Loans exceeds its Loan Availability or the principal balance of the
outstanding Loans to Borrowers in the aggregate exceeds the Maximum Credit or
any of the other restrictions set forth in this Agreement, such Borrower or
Borrowers shall immediately, and without the necessity of a demand by Lender,
pay to Lender such amount as may be necessary to eliminate such excess.
(b) Subject to the terms and conditions of this Agreement and
the Other Agreements, prior to the Termination Date and so long as no Event of
Default has occurred hereunder, Lender shall at any Borrower's request, cause
one or more Letters of Credit to be issued for the account of such Borrower;
provided, however, that: (i) the total undrawn face amounts of the Letters of
Credit for the accounts of the Borrowers shall not exceed Seven Hundred Fifty
Thousand Dollars ($750,000.00) in the aggregate at any time; and (ii) the total
undrawn face amounts of the proposed Letter(s) of Credit shall not exceed the
difference between the Loan Availability of the requesting Borrower and the
outstanding principal balance of the Loans to such Borrower at such time. If
at any time the Loan Availability for any Borrower is less than zero, such
Borrower shall provide cash collateral to Lender in an amount equal to the
amount by which Loan Availability is less than zero to secure any Letters of
Credit for the account of such Borrower. The Letters of Credit shall be in
form and substance satisfactory to Lender and shall not have an expiration date
later than twelve (12) months from the date of issuance. Borrowers authorize
Lender to reimburse the Letter of Credit Issuer for any payments made in
respect of the Letters of Credit. Each Borrower shall reimburse Lender,
immediately upon demand, in the amount of any payments made by Lender to the
Letter of Credit Issuer or any Person with respect to the Letters of Credit
issued for the account of such Borrower, and until Lender shall have been so
reimbursed by such Borrower such payments by Lender shall be deemed to be
Loans. In connection with the Letters of Credit, each Borrower hereby
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indemnifies Lender for any payments made by Lender with respect to the Letters
of Credit issued for the account of such Borrower and for any taxes, levies,
deductions, charges and costs and expenses incurred by Lender with respect to
the Letters of Credit.
3. FEES AND CHARGES. Borrowers shall pay to Lender the following
fees:
(a) Each Borrower shall pay to Lender interest on the
outstanding principal balance of its Loans monthly in arrears, on the first day
of each month following the execution of this Agreement, at the per annum rate
of one percent (1%) plus the Reference Rate [computed on the basis of a year of
three hundred sixty (360) days for the actual number of days elapsed];
provided, however, that such interest rate shall be reduced to the Reference
Rate plus three-fourths of one percent (0.75%) if Portfield's audited financial
statements indicate at least One Million Dollars ($1,000,000.00) of pre-tax
income before extraordinary or non-operating gains and losses for the fiscal
year ending February 29, 1996 and the ratio of Borrowers' total liabilities
calculated in accordance with generally accepted accounting principles (except
for debt subordinated to the Liabilities pursuant to a written agreement in a
form acceptable to Lender acting in good faith) to total Net Worth do not
exceed 4.00:1.0 for the fiscal year ending February 29, 1996 and, assuming such
requirements are satisfied, such interest rate shall be reduced to the
Reference Rate plus one-half of one percent (0.50%) if Portfield's audited
financial statements indicate at least One Million Dollars ($1,000,000.00) of
pre-tax income before extraordinary or non-operating gains and losses for the
fiscal year ending February 28, 1997 and the ratio of Borrowers' total
liabilities calculated in accordance with generally accepted accounting
principles (except for debt subordinated to the Liabilities pursuant to a
written agreement in a form acceptable to Lender acting in good faith) to total
Net Worth do not exceed 3.50:1.0 for the fiscal year ending February 28, 1997.
Following the occurrence of an Event of Default, each Borrower shall pay to
Lender interest on the outstanding principal balance of its Loans at the per
annum rate of two percent (2%) plus the Reference Rate. Interest shall be
computed on the basis of a year of three hundred sixty (360) days for the
actual number of days elapsed.
(b) Each Borrower shall pay to Lender a letter of credit fee
equal to two percent (2%) per annum [computed on the basis of a year of three
hundred sixty (360) days for the actual number of days elapsed] of the face
amount of the Letters of Credit issued for the account of such Borrower,
payable monthly in arrears, on the first day of each month following the
execution of this Agreement. In addition, each Borrower shall pay to Lender
all expenses incurred by Lender and the Letters of Credit Issuer in connection
with the issuance and negotiation of any Letters of Credit issued for the
account of such Borrower, payable on the date incurred by Lender or the Letter
of Credit Issuer.
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(c) Borrowers shall pay to Lender, for the benefit of Lenders,
a facility fee equal to Fifteen Thousand Dollars ($15,000.00) upon the
execution of this Agreement. Borrowers also shall pay to Lender the following
additional facility fees if the Maximum Credit is increased as set forth below
under the terms and conditions set forth in this Agreement:
Increase in Maximum Credit Additional Facility Fee
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$6,000,000.00 to $9,000,000.00 $15,000.00
$9,000,000.00 to $12,000,000.00 $15,000.00
or, in lieu of the foregoing additional facility fees,
$6,000,000.00 directly to $30,000.00
$12,000,000.00
(d) Borrowers shall pay to Lender an unused facility fee,
equal to the lesser of Five Thousand Dollars ($5,000.00) per annum or one
quarter of one percent (0.25%) per annum [computed on the basis of a year of
three hundred sixty days for the actual number of days elapsed], of the amount
by which Six Million Dollars ($6,000,000.00) exceeds the sum of the average
daily outstanding Loans, payable monthly in arrears, on the first day of each
month following the execution of this Agreement. Such unused facility fee
shall not be subject to the Five Thousand Dollars ($5,000.00) limitation and:
(i) be based upon the amount by which Nine Million Dollars ($9,000,000.00)
exceeds the sum of the average daily outstanding Loans plus the average daily
undrawn face amount of the Letters of Credit retroactive to the first day of
the calendar year in which the Maximum Credit was increased to Nine Million
Dollars ($9,000,000.00) if the Maximum Credit is increased to Nine Million
Dollars ($9,000,000.00) under the terms and conditions set forth in this
Agreement; and (ii) be based upon the amount by which Twelve Million Dollars
($12,000,000.00) exceeds the sum of the average daily outstanding Loans plus
the average daily undrawn face amount of the Letters of Credit retroactive to
the first day of the calendar year in which the Maximum Credit was increased to
Twelve Million Dollars ($12,000,000.00) if the Maximum Credit is increased to
Twelve Million Dollars ($12,000,000.00) under the terms and conditions set
forth in this Agreement.
(e) If this Agreement is terminated prior to the Termination
Date, the Borrowers shall pay to Lender an early termination fee equal to: (i)
$180,000.00 if such termination occurs prior to the first anniversary of this
Agreement; (ii) $120,000.00 if such termination occurs on or after the first
anniversary but prior to the second anniversary of this Agreement; (iii)
$60,000.00 if such termination occurs on or after the second anniversary but
prior to the third anniversary of this Agreement; and (iv) $30,000.00 if such
termination occurs on or after the third anniversary but prior to the fourth
anniversary of this Agreement.
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(f) Borrowers shall pay to Lender an audit fee at a rate of
Five Hundred Dollars ($500) per auditor per day, plus travel and other out-of-
pocket expenses, which shall be payable by Borrowers upon completion of each
audit, for any audits conducted after the occurrence and during the continuance
of an Event of Default, or otherwise.
(g) Borrowers shall reimburse Lender and its Affiliates for
all other fees and expenses, including legal, consulting, appraisal and filing
fees, incurred in connection with the credit facilities provided under this
Agreement.
It is the intent of the parties that the rate of interest and the other fees
and charges to each Borrower under this Agreement shall be lawful; therefore,
if for any reason the interest or other fees and charges payable under this
Agreement are found by a court of competent jurisdiction, in a final
determination, to exceed the limit which Lender may lawfully charge any
Borrower, then the obligation to pay interest and other charges shall
automatically be reduced to such limit and, if any amount in excess of such
limit shall have been paid, then such amount shall be refunded to such
Borrower.
4. CONDITIONS OF ADVANCES AND LETTERS OF CREDIT. Without limiting
Lender's ability to limit or refuse to make advances hereunder, the making of
any advance provided for in this Agreement shall be conditioned upon the
following:
(a) Lender shall have received, (i) with respect to a request
for an advance, by at least eleven o'clock a.m. (11:00 a.m.) Denver time on the
day on which such advance is requested to be made hereunder, a telephonic
request from an officer of the Borrower requesting such advance (or any Person
authorized by such Borrower pursuant to a written list provided to Lender), for
an advance in a specific amount, and (ii) with respect to a request for the
issuance of a Letter of Credit, at least five days prior to the date such
Letter of Credit is requested to be issued, an application for such Letter of
Credit executed by an officer of the Borrower requesting such Letter of Credit.
In addition, Lender shall also have received all of the schedules and reports
required to have been delivered by Borrowers pursuant to SECTION 9 hereof;
(b) No Event of Default shall have occurred and be continuing;
(c) All of the representations and warranties contained in
this Agreement and the Other Agreements shall be true and correct as if made on
the date the request for an advance or Letter of Credit is made; and
(d) Lender shall have received, in form and substance
satisfactory to Lender, all certificates, orders, authorities, consents,
affidavits, appraisals, environmental reports, schedules, instruments, security
agreements, financing statements, certificate
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of title documents, mortgages, guaranties, support agreements, assignments of
insurance policies, landlord and mortgagee waivers, and other documents which
are provided for hereunder, or which Lender may at any time request in good
faith.
5. GRANT OF SECURITY INTEREST TO LENDER. As security for the
payment or other satisfaction of its Liabilities, each Borrower hereby assigns
to Lender and grants to Lender a continuing security interest in the following
property of such Borrower, whether now or hereafter owned, existing, acquired
or arising and wherever now or hereafter located: (a) all Accounts and all
Goods whose sale, lease or other disposition by such Borrower has given rise to
Accounts and have been returned to or repossessed or stopped in transit by such
Borrower; (b) all Chattel Paper, Instruments, Documents and General Intangibles
(including without limitation all patents, patent applications, trademarks,
trademark applications, tradenames, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, customer lists, tax refund claims, claims
against carriers and shippers, guarantee claims, contracts rights, security
interests, security deposits and any rights to indemnification); (c) all
Inventory and other Goods, including without limitation Equipment, furniture,
furnishings, machinery, motor vehicles, minerals and the like, and fixtures;
(d) all deposits and cash and any other property of such Borrower now or
hereafter in the possession, custody or control of Lender or any agent or any
Affiliate of Lender or any participant with Lender in the Loans and/or Letters
of Credit for any purpose (whether for safekeeping, deposit, collection,
custody, pledge, transmission or otherwise); and (e) all additions and
accessions to, substitutions for, and replacements, products and proceeds of
the foregoing property, including without limitation proceeds of all insurance
policies insuring the foregoing property, and all of such Borrower's books and
records relating to any of the foregoing and to such Borrower's business.
In addition, Borrowers shall assign to Lender all of their rights, title
and interests in an American Credit Indemnity or other accounts receivable
insurance policy covering all of their Accounts and key man life insurance
policies in the aggregate face amount of $2,000,000.00 on the life of Xxxxx X.
Xxxxxx. The insurance policies and assignments shall be in a form and from
such companies as may be acceptable to Lender acting in good faith.
6. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN. Borrowers shall, at Lender's request, at any time and from time to
time, execute and deliver to Lender such financing statements, documents and
other agreements and instruments (and pay the cost of filing or recording the
same in all public offices deemed necessary or desirable by Lender) and do such
other acts and things as Lender may deem necessary or desirable in order to
establish and maintain a valid, attached and perfected security interest in the
Collateral in favor of Lender (free and clear of all other liens, claims and
rights of third parties whatsoever, whether voluntarily or involuntarily
created, except Permitted Liens) to secure payment of the Liabilities, and
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in order to facilitate the collection of the Collateral. Borrowers irrevocably
hereby make, constitute and appoint Lender (and all Persons designated by
Lender for that purpose) as Borrowers' true and lawful attorney and agent-in-
fact to execute such financing statements, documents and other agreements and
instruments and do such other acts and things as may be necessary to preserve
and perfect Lender's security interest in the Collateral if Borrowers fail to
execute the documents or take the actions described in this Section or an Event
of Default occurs under this Agreement. Borrowers further agree that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement shall be sufficient as a financing statement.
7. CAPITAL ADEQUACY. If Lender shall reasonably determine that the
application or adoption of any law, rule, regulation, directive,
interpretation, treaty or guideline regarding capital adequacy, or any change
therein or in the interpretation or administration thereof, whether or not
having the force of law, increases the amount of capital required or expected
to be maintained by Lender or any Person controlling, directly or indirectly,
Lender, and such increase is based upon the existence of Lender's obligations
hereunder and other commitments of this type, then from time to time, within
ten (10) days after demand from Lender, Borrowers shall pay to Lender such
amount or amounts as will compensate Lender or such controlling Person, as the
case may be, for such increased capital requirement. The determination of any
amount to be paid by Borrowers under this Section shall take into consideration
the policies of Lender or any Person controlling Lender with respect to capital
adequacy and shall be based upon any reasonable averaging, attribution and
allocation methods selected by Lender. A certificate of Lender setting forth
the amount or amounts as shall be necessary to compensate Lender as specified
in this Section shall be delivered to Borrowers and shall be conclusive in the
absence of manifest error.
8. COLLECTIONS.
(a) Each Borrower shall establish an account (the "Blocked
Account") in such Borrower's name with a financial institution acceptable to
Lender, into which such Borrower will immediately deposit all payments received
by such Borrower with respect to its Accounts and other Collateral in the
identical form in which such payments were made, whether by cash or check. If
any Borrower, any Affiliate or Subsidiary of any Borrower, or any shareholder,
officer, director, employee or agent of any Borrower or any Affiliate or
Subsidiary of such Borrower, or any other Person acting for or in concert with
such Borrower shall receive any monies, checks, notes, drafts or other payments
relating to or as proceeds of such Borrower's Accounts or other Collateral,
such Borrower, Affiliate, Subsidiary, and other Person shall receive all such
items in trust for, and as the sole and exclusive property of, Lender and,
immediately upon receipt thereof, shall remit the same (or cause the same to be
remitted) in kind to such Borrower's Blocked Account. The financial
institution with which each Blocked Account is established shall acknowledge
and agree, in a manner
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satisfactory to Lender, that the amounts on deposit in such Blocked Account are
the sole and exclusive property of Lender, that such financial institution has
no right to setoff against the Blocked Account, and that such financial
institution shall wire, or otherwise transfer in immediately available funds in
a manner satisfactory to Lender, funds deposited in the Blocked Account on a
daily basis as such funds are collected, to Lender's account at National Bank
of Canada. Lender shall, two (2) business days after receipt by Lender of
immediately available funds in its account at National Bank of Canada, apply
the whole or any part of such collections or proceeds against the appropriate
Borrower's Liabilities in such order as Lender shall determine in its sole
discretion. Each Borrower agrees that all payments deposited to such Blocked
Account or otherwise received by Lender, whether in respect of the Accounts of
such Borrower or as proceeds of other Collateral or otherwise, will be applied
on account of the Liabilities of such Borrower in accordance with the terms of
this Agreement. All checks, drafts, instruments and other items of payment or
proceeds of Collateral shall be endorsed by Borrowers to Lender, and, if that
endorsement of any such item shall not be made for any reason, Lender is hereby
irrevocably authorized to endorse the same on Borrowers' behalf. For the
purpose of this paragraph, Borrowers irrevocably hereby make, constitute and
appoint Lender (and all Persons designated by Lender for that purpose) as
Borrowers' true and lawful attorney and agent-in-fact: (i) to endorse
Borrowers' names upon said items of payment and/or proceeds of Collateral and
upon any Chattel Paper of Borrowers, document, instrument, invoice or similar
document or agreement relating to any Account of any Borrower or goods
pertaining thereto; (ii) to take control in any manner of any item of payment
or proceeds thereof; and (iii) upon and following the occurrence of an Event of
Default, to have access to any lock box or postal box into which any Borrower's
mail is deposited, and open and process all mail addressed to any Borrower and
deposited therein.
(b) Lender may, at any time and from time to time, following
the occurrence of an Event of Default: (i) enforce collection of any Borrower's
Accounts or contract rights by suit or otherwise; (ii) exercise all of
Borrowers' rights and remedies with respect to proceedings brought to collect
any Borrower's Accounts; (iii) surrender, release or exchange all or any part
of any Borrower's Accounts, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness thereunder;
(iv) sell or assign any Borrower's Accounts upon such terms, for such amount
and at such time or times as Lender deems advisable; (v) prepare, file and sign
Borrowers' names on any proof of claim in bankruptcy or other similar document
against any Account Debtor; and (vi) do all other acts and things which Lender
in good xxxxx xxxxx necessary or desirable to fulfill Borrowers' obligations
under this Agreement and to allow Lender to collect the Borrowers' Accounts.
In addition to any other provision hereof, Lender may at any time, following
the occurrence of an Event of Default, at Borrowers' expense, notify any
parties obligated on any of the Accounts to make payment directly to Lender of
any amounts due or to become due thereunder.
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(c) Lender, in its sole discretion, without waiving or
releasing any obligation, liability or duty of any Borrower under this
Agreement or the Other Agreements or any Event of Default, may at any time or
times hereafter, but shall not be obligated to, pay, acquire or accept an
assignment of any security interest, lien, encumbrance or claim asserted by any
Person in, upon or against the Collateral. All sums paid by Lender in respect
thereof and all costs, fees and expenses, including without limitation
reasonable attorney fees, all court costs and all other charges relating
thereto incurred by Lender shall constitute Loans, payable by such Borrower to
Lender on demand and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder.
(d) Immediately upon any Borrower's receipt of any portion of
the Collateral evidenced by an agreement, Instrument or Document, including
without limitation any Chattel Paper, such Borrower shall deliver the original
thereof to Lender together with an appropriate endorsement or other specific
evidence of assignment thereof to Lender (in form and substance acceptable to
Lender). If an endorsement or assignment of any such items shall not be made
for any reason, Lender is hereby irrevocably authorized, as Borrowers' attorney
and agent-in-fact, to endorse or assign the same on Borrowers' behalf.
9. SCHEDULES AND REPORTS.
(a) Each Borrower shall deliver to Lender, on a weekly basis
[or, if the Loans to any Borrower exceed sixty-five percent (65%) of the Loan
Availability for such Borrower or if the total outstanding balance on the Loans
to the Borrowers and the aggregate undrawn face amount of the Letters of Credit
issued for the account of Borrower exceed sixty-five percent (65%) of the
Maximum Credit, on a daily basis], a collateral report (the "Collateral
Report") describing all Accounts and Eligible Accounts created or acquired by
such Borrower and all amounts collected by such Borrower on Accounts subsequent
to the immediately preceding Collateral Report. In addition, each Borrower
shall deliver to Lender on a weekly basis (or, if Lender has provided any
Borrower with Loans based upon Eligible Inventory, on a daily basis in Lender's
discretion) with a schedule of Inventory owned by such Borrower and in such
Borrower's possession valued on an average cost basis and in accordance with
generally accepted accounting principles, information on all sales of or other
reduction of and all additions to Inventory, all returns of Inventory, all
credits issued by such Borrower and all complaints and claims against such
Borrower in connection with Inventory subsequent to the immediately preceding
Collateral Report. The Collateral Reports shall contain such additional
information as Lender shall require. Each Borrower also shall furnish copies of
any other reports or information concerning the Accounts and Inventory
included, described or referred to in the Collateral Reports, including without
limitation, but only if specifically requested by Lender, copies of all
invoices prepared in connection with the Accounts. Lender, through its
officers, employees or agents, shall have the right, at any time and from
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time to time in Lender's name, in the name of a nominee of Lender or in
Borrower's name, to verify the validity, amount or any other matter relating to
any of the Accounts, by mail, telephone, telegraph or otherwise. Borrowers
shall reimburse Lender, on demand, for all reasonable costs, fees and expenses
incurred by Lender in this regard.
(b) Without limiting the generality of the foregoing, each
Borrower shall deliver to Lender, at least once a month (or more frequently
when requested by Lender), a report describing its Eligible Accounts, non-
Eligible Accounts, accounts payable, Inventory, and Eligible Inventory as well
as containing an aging of its Accounts and accounts payable. Such report also
shall reconcile the information described in SECTION 9(a) for the past month
and describe the fuel taxes payable by such Borrower to any governmental
authority.
(c) All schedules, certificates, reports, and assignments and
other items delivered by Borrowers to Lender hereunder shall be executed by an
authorized representative of Borrowers and shall be in such form and contain
such information as Lender shall specify.
10. TERMINATION. This Agreement shall be in effect until the
Termination Date. The Liabilities as well as the security interests and liens
created under this Agreement and the Other Agreements shall survive such
termination until the Letters of Credit have been terminated and cancelled and
the payment of the other Liabilities has become indefeasible. At such time as
Borrowers have repaid all of the Liabilities and this Agreement has terminated,
Borrowers shall deliver to Lender a release, in form and substance satisfactory
to Lender, of all obligations and liabilities of Lender and its officers,
directors, employees, agents and Affiliates to Borrower and Lender shall
deliver to Borrowers a release of all obligations and liabilities of Borrowers
and their officers, directors, employees, agents and Affiliates to Lender.
Such releases shall be in form and substance reasonably acceptable to Lender.
11. REPRESENTATIONS, WARRANTIES AND COVENANTS. Borrowers hereby
represent, warrant and covenant that:
(a) The financial statements delivered or to be delivered by
each Borrower to Lender at or prior to the date of this Agreement and at all
times subsequent thereto accurately reflect the financial condition of such
Borrower, and there has been no adverse change in the financial condition, the
operations or any other status of such Borrower since the date of the financial
statements delivered to Lender most recently prior to the date of this
Agreement;
(b) The office where each Borrower keeps its books, records
and accounts (or copies thereof) concerning the Collateral, such Borrower's
chief executive offices and places of business and
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all of such Borrower's other places of business, locations of Collateral and
post office boxes are as set forth in EXHIBIT B; Borrowers shall promptly (but
in no event less than ten (10) days prior thereto) advise Lender in writing of
the proposed opening of any new place of business, the closing of any existing
place of business, any change in the location of any Borrower's books, records
and accounts (or copies thereof) or the opening or closing of any post office
box of any Borrower;
(c) The Collateral, including without limitation the Equipment
is and shall be kept, or, in the case of vehicles, based, only at the addresses
set forth on the first page of this Agreement or on EXHIBIT B;
(d) If any of the Collateral consists of Goods of a type
normally used in more than one state, whether or not actually so used,
Borrowers shall immediately give written notice to Lender of any use of any
such Goods in any state other than a state in which Borrowers have previously
advised Lender such Goods shall be used, and such Goods shall not, unless
Lender shall otherwise consent in writing, be used outside of the continental
United States;
(e) Each Account which any Borrower shall, expressly or by
implication, request Lender to classify as an Eligible Account shall, as of the
time when such request is made, conform in all respects to the requirements of
such classification as set forth in the respective definitions of "Eligible
Account" as set forth herein and as otherwise established by Lender from time
to time, and such Borrower shall promptly notify Lender in writing if any such
Eligible Account shall subsequently become ineligible;
(f) Each Borrower is and shall at all times be the lawful
owners of the property now purportedly owned or hereafter purportedly acquired
by such Borrower, free from all liens, claims, security interests and
encumbrances whatsoever, whether voluntarily or involuntarily created and
whether or not perfected, other than the Permitted Liens;
(g) Each Borrower has the right and power and is duly
authorized and empowered to enter into, execute and deliver this Agreement and
the Other Agreements and perform its obligations hereunder and thereunder; each
Borrower's execution, delivery and performance of this Agreement and the Other
Agreements does not and shall not conflict with the provisions of any statute,
regulation, ordinance or rule of law, or any agreement, contract or other
document which may now or hereafter be binding on such Borrower, and each
Borrower's execution, delivery and performance of this Agreement and the Other
Agreements shall not result in the imposition of any lien or other encumbrance
upon any of its property under any existing indenture, mortgage, deed of trust,
loan or credit agreement or other agreement or instrument by which such
Borrower or any of its property may be bound or affected;
(h) There are no actions or proceedings which are pending or
threatened against any Borrower which might result in
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any material adverse change in its financial condition or materially adversely
affect such Borrower's property and Borrowers shall, promptly upon becoming
aware of any such pending or threatened action or proceeding, give written
notice thereof to Lender;
(i) Each Borrower has obtained all licenses, authorizations,
approvals and permits, the lack of which would have a material adverse effect
on the operation of its business, and each Borrower is and shall remain in
compliance in all material respects with all applicable federal, state, local
and foreign statutes, orders, regulations, rules and ordinances, the failure to
comply with which could reasonably be expected to have a material adverse
effect on its business, property, assets, operations or condition, financial or
otherwise;
(j) All written information now, heretofore or hereafter
furnished by each Borrower to Lender is and shall be materially true and
correct as of the date with respect to which such information was or is
furnished;
(k) No Borrower is conducting, permitting or suffering to be
conducted, nor shall it conduct, permit or suffer to be conducted, any
activities or transactions with any Affiliate of any Borrower; provided,
however, that any Borrower may enter into transactions with Affiliates of any
Borrower in the ordinary course of business pursuant to terms that are no less
favorable to such Borrower than the terms upon which such transfers or
transactions would have been made had they been made to or with a Person that
is not an Affiliate of any Borrower and, in connection therewith, may transfer
cash or property to Affiliates of any Borrower for fair value;
(l) Except as set forth on EXHIBIT C, each Borrower's name has
always been as set forth on the first page of this Agreement and Borrowers use
no tradenames or division names in the operation of their businesses.
Borrowers shall notify Lender in writing within ten (10) days of the change of
any Borrower's name or the use of any tradenames or division names not
previously disclosed to Lender in writing;
(m) With respect to each Borrower's Equipment: (i) such
Borrower has good and indefeasible and merchantable title to and ownership of
all of its Equipment, including without limitation the Equipment described or
listed on the schedule of Equipment delivered to Lender concurrently with this
Agreement; (ii) such Borrower shall keep and maintain the Equipment in good
operating condition and repair and shall make all necessary replacements
thereof and renewals thereto so that the value and operating efficiency thereof
shall at all times be preserved and maintained; (iii) such Borrower shall not
permit any such items to become a fixture to real estate or an accession to
other personal property; and (iv) such Borrower, immediately on demand by
Lender, shall deliver to Lender any and all evidence of ownership of, including
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without limitation certificates of title and applications of title to, any of
its Equipment;
(n) This Agreement and the Other Agreements to which any
Borrower are a party are the legal, valid and binding obligations of such
Borrower and are enforceable against such Borrower in accordance with their
respective terms;
(o) Each Borrower is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business, now owns
property having a value both at fair valuation and at present fair saleable
value greater than the amount required to pay its debts, and will not be
rendered insolvent by the execution and delivery of this Agreement or any of
the Other Agreements or by completion of the transactions contemplated
hereunder or thereunder;
(p) Except as noted in SECTION 12(K) of this Agreement, no
Borrower is now obligated, nor shall it create, incur, assume or become
obligated (directly or indirectly), for any loans or other indebtedness for
borrowed money other than the Loans, except that such Borrower may: (i) borrow
money from a Person other than Lender on an unsecured and subordinated basis if
a subordination agreement in favor of Lender and in form and substance
satisfactory to Lender is executed and delivered to Lender relative thereto;
(ii) maintain any present indebtedness to any Person which is set forth on
EXHIBIT D; (iii) incur unsecured indebtedness to trade creditors in the
ordinary course of such Borrower's business; and (iv) acquire the assets of
another company and obtain an unsecured loan or a loan secured solely by the
acquired real property and the cash proceeds thereof from the seller of such
assets so long as no Event of Default has occurred or would be caused by such
action, Lender is provided with at least thirty (30) days' prior written notice
of such acquisition and a valid, enforceable, perfected, and sole lien,
security interest and encumbrance upon the acquired assets (except for the
acquired real property and the cash proceeds thereof), and a subordination or
intercreditor agreement in favor of Lender and in form and substance
satisfactory to Lender is executed and delivered to Lender by the seller of
such assets.
(q) No Borrower owns any margin securities, and none of the
proceeds of the Loans hereunder shall be used for the purpose of purchasing or
carrying any margin securities or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase any margin securities or
for any other purpose not permitted by Regulation G or Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to
time;
(r) EXHIBIT E sets forth the names of all of the shareholders
of each Borrower and, except as set forth on EXHIBIT E, no Borrower has any
Subsidiaries or divisions, nor is any Borrower engaged in any joint venture or
partnership with any other Person;
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(s) Each Borrower is duly organized and in good standing in
its state of organization and each Borrower is duly qualified and in good
standing in all states where the nature and extent of the business transacted
by it or the ownership of its assets makes such qualification necessary;
(t) No Borrower is in default under any material contract,
lease or commitment to which it is a party or by which it is bound, nor do
Borrowers know of any dispute regarding any contract, lease or commitment which
is material to the continued financial success and well-being of any Borrower;
(u) There are no controversies pending or threatened between
any Borrower and any of its employees, other than employee grievances arising
in the ordinary course of business which are not, in the aggregate, material to
the continued financial success and well-being of such Borrower, and each
Borrower is in compliance in all material respects with all federal and state
laws respecting employment and employment terms, conditions and practices;
(v) Each Borrower possesses, and shall continue to possess,
adequate licenses, patents, patent applications, copyrights, service marks,
trademarks, trademark applications, tradestyles and tradenames to continue to
conduct its business as heretofore conducted by it;
(w) Except as set forth on EXHIBIT F attached hereto and
incorporated herein by this reference, Borrowers have not generated, used,
stored, treated, transported, manufactured, handled, produced or disposed of
any Hazardous Materials, on or off its premises (whether or not owned by it) in
any manner which at any time violates any applicable Environmental Law or any
license, permit, certificate, approval or similar authorization thereunder and
the operations of each Borrower complies in all material respects with all
Environmental Laws and all licenses, permits, certificates, approvals and
similar authorizations thereunder;
(x) Except as set forth on EXHIBIT F attached hereto, there
has been no investigation, proceeding, complaint, order, directive, claim,
citation or notice by any governmental authority or any other person nor is any
pending or to the best of any Borrower's knowledge threatened, with respect to
any non-compliance with or violation of the requirements of any Environmental
Law by any Borrower or the release, spill or discharge, threatened or actual,
of any Hazardous Material or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials or any other environmental, health or safety matter, which affects
any Borrower or its business, operations or assets or any properties at which
any Borrower has transported, stored or disposed of any Hazardous Materials;
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(y) Except as set forth on EXHIBIT F attached hereto, no
Borrower has any material liability (contingent or otherwise) in connection
with a release, spill or discharge, threatened or actual, of any Hazardous
Materials or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials; and
(z) Each Borrower has all licenses, permits, certificates,
approvals or similar authorizations required to be obtained or filed in
connection with the operations of such
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Borrower under any Environmental Law and all of such licenses, permits,
certificates, approvals or similar authorizations are valid and in full force
and effect.
Borrowers represent, warrant and covenant to Lender that all representations,
warranties and covenants of Borrowers contained in this Agreement (whether
appearing in SECTIONS 11 or 12 hereof or elsewhere) shall be true at the time
of Borrowers' execution of this Agreement, shall survive the execution,
delivery and acceptance hereof by the parties hereto and the closing of the
transactions described herein or related hereto, shall remain true until the
repayment in full of all of the Liabilities and termination of this Agreement,
and shall be remade by Borrowers at the time each Loan is made or Letters of
Credit issued pursuant to this Agreement.
12. ADDITIONAL COVENANTS OF BORROWER. Until payment or satisfaction
in full of all Liabilities and termination of this Agreement, unless Borrowers
obtain Lender's prior written consent waiving or modifying any of Borrowers'
covenants hereunder in any specific instance, Borrowers agree as follows:
(a) Each Borrower shall at all times keep accurate and
complete books, records and accounts with respect to all of such Borrower's
business activities, in accordance with sound accounting practices and
generally accepted accounting principles consistently applied, and shall keep
such books, records and accounts, and any copies thereof, only at the addresses
indicated for such purpose on EXHIBIT B;
(b) Each Borrower agrees to deliver to Lender the following
financial information, all of which shall be prepared in accordance with
generally accepted accounting principles consistently applied: (i) no later
than twenty-five (25) days after each calendar month, copies of internally
prepared financial statements, including without limitation balance sheets and
statements of income and retained earnings of such Borrower, certified by the
chief financial officer or other officer of such Borrower approved by Lender;
(ii) no later than ninety (90) days after the end of such Borrower's fiscal
years, annual financial statements certified by independent certified public
accountants selected by such Borrower and satisfactory to Lender, which
financial statements shall be accompanied by consolidating business projections
prepared by such Borrower for the following fiscal year; and (iii) such other
financial information as Lender shall reasonably request. Borrowers shall use
their best efforts to obtain a letter from the foregoing accountants which
acknowledges that such accountants are aware that Lender is relying upon the
foregoing financial statements in connection with the exercise of its rights
hereunder;
(c) Each Borrower shall promptly advise Lender in writing of
any material adverse change in the business, assets or condition, financial or
otherwise, of any Borrower, the occurrence
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of any Event of Default hereunder or the occurrence of any event which, if
uncured, will become an Event of Default hereunder after notice or lapse of
time (or both);
(d) Lender, or any Persons designated by it, shall have the
right, upon reasonable notice prior to the occurrence of an Event of Default
and at any time thereafter, to call at Borrowers' places of business at any
reasonable times, and, without hindrance or delay, to inspect the Collateral
and to inspect, audit, check and make extracts from Borrowers' books, records,
journals, orders, receipts and any correspondence and other data relating to
Borrowers' businesses, the Collateral or any transactions between the parties
hereto, and shall have the right to make such verification concerning
Borrowers' businesses as Lender may consider reasonable under the
circumstances. Each Borrower shall furnish to Lender such information relevant
to Lender's rights under this Agreement as Lender shall at any time and from
time to time request. Each Borrower authorizes Lender to discuss the affairs,
finances and business of such Borrower with any officers, employees or
directors of such Borrower or with any Affiliate or the officers, employees or
directors of any Affiliate, and to discuss the financial condition of such
Borrower with such Borrower's independent public accountants. Any such
discussions shall be without liability to Lender or to such Borrower's
independent public accountants. Borrowers shall pay to Lender the fees and
out-of-pocket expenses incurred by Lender and described in SECTION 3(E) of this
Agreement, and all of such fees and expenses shall constitute Loans hereunder,
payable on demand and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder;
(e) Borrowers shall:
(i) keep the Collateral properly housed and shall keep
the Collateral insured for the full insurable value thereof against loss
or damage by fire, theft, explosion, sprinklers, collision (in the case
of motor vehicles) and such other risks as are customarily insured
against by Persons engaged in businesses similar to that of Borrowers
with such companies, in such amounts and under policies in such form as
shall be satisfactory to Lender. At the request of Lender, original (or
certified) copies of such policies of insurance shall be delivered to
Lender, together with evidence of payment of all premiums therefor, and
shall contain an endorsement, in form and substance acceptable to
Lender, showing loss under such insurance policies payable to Lender.
Such endorsement, or an independent instrument furnished to Lender,
shall provide that the insurance company shall give Lender at least
thirty (30) days written notice before any such policy of insurance is
altered or cancelled and that no act, whether willful or negligent, or
default of any Borrower or any other Person shall affect the right of
Lender to recover under such policy of insurance in case of loss or
damage. Borrowers hereby direct all insurers under such
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policies of insurance to pay all proceeds payable thereunder directly to
Lender and all proceeds received by Lender may be applied to the Liabilities in
such order and manner as Lender shall determine. Borrowers irrevocably, make,
constitute and appoint Lender (and all officers, employees or agents designated
by Lender) as Borrowers' true and lawful attorney (and agent-in-fact) for the
purpose of making, settling and adjusting claims under such policies of
insurance (upon and following the occurrence of an Event of Default hereunder),
endorsing the names of Borrowers on any check, draft, instrument or other item
of payment for the proceeds of such policies of insurance, and making all
determinations and decisions with respect to such policies of insurance (upon
and following the occurrence of an Event of Default hereunder); and
(ii) maintain, at its expense, such public liability and
third party property damage insurance as is customary for Persons engaged in
businesses similar to that of Borrowers with such companies and in such
amounts, with such deductibles and under policies in such form as shall be
satisfactory to Lender and, at the request of Lender, original (or certified)
copies of such policies shall be delivered to Lender, together with evidence of
payment of all premiums therefor; each such policy shall contain an endorsement
showing Lender as additional insured thereunder and providing that the
insurance company shall give Lender at least thirty (30) days written notice
before any such policy shall be altered or cancelled.
If Borrowers at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required above or to pay any premium
in whole or in part relating thereto, then Lender, without waiving or releasing
any obligation or default by Borrowers hereunder, may (but shall be under no
obligation to) obtain and maintain such policies of insurance and pay such
premiums and take such other actions with respect thereto as Lender deems
advisable. All sums disbursed by Lender in connection with any such actions,
including without limitation court costs, expenses, other charges relating
thereto and reasonable attorneys' fees, shall constitute Loans hereunder and
shall be payable on demand by Borrowers to Lender and, until paid, shall bear
interest at the highest rate then applicable to Loans hereunder;
(f) No Borrower shall use its property, or any part thereof,
in any unlawful business or for any unlawful purpose or use or maintain any of
its property in any manner that does or could result in material damage to the
environment or a violation of any applicable environmental laws, rules or
regulations; shall keep its property in good condition, repair and order;
(g) Each Borrower shall permit Lender to examine any of its or
any other Borrower's property at any time [subject to the restrictions set
forth in subsection (d) above]; shall not permit its property, or any part
thereof, to be levied upon under execution, attachment, distraint or other
legal process; shall not
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grant a security interest in or suffer to exist a lien on any of its property
except for the Permitted Liens; shall not sell, lease, transfer or otherwise
dispose of any of its property except for the sale of Inventory in the ordinary
course of its business; and shall not secrete or abandon any of its or any
other Borrower's property, or remove or permit removal of any of its property
from any of the locations listed on EXHIBIT B or in any written notice to
Lender pursuant to SECTION 10(B) hereof, except for the removal of Inventory
sold in the ordinary course of such Borrower's business;
(h) All monies and other property obtained by any Borrower
from Lender pursuant to this Agreement will be used solely for the business
purposes of such Borrower;
(i) Each Borrower shall, at the request of Lender, indicate on
its records concerning the Collateral a notation, in form satisfactory to
Lender, of the security interest of Lender hereunder, and such Borrower shall
not maintain duplicates or copies of such records at any address other than
such Borrower's principal place of business set forth on the first page of this
Agreement;
(j) Each Borrower shall file all required tax returns and pay
all of its taxes when due, including without limitation taxes imposed by
federal, state or municipal agencies, and shall cause any liens for taxes to be
promptly released; provided, that such Borrower shall have the right to contest
the payment of such taxes in good faith by appropriate proceedings so long as:
(i) the amount so contested is shown on such Borrower's financial statements,
(ii) the contesting of any such payment does not give rise to a lien for taxes,
(iii) such Borrower keeps on deposit with Lender (such deposit to be held
without interest) an amount of money which, in the sole judgment of Lender, is
sufficient to pay such taxes and any interest or penalties that may accrue
thereon, and (iv) if such Borrower fails to prosecute such contest with
reasonable diligence, Lender may apply the money so deposited in payment of
such taxes. If such Borrower fails to pay any such taxes and in the absence of
any such contest by such Borrower, Lender may (but shall be under no obligation
to) advance and pay any sums required to pay any such taxes and/or to secure
the release of any lien therefor, and any sums so advanced by Lender shall
constitute Loans hereunder, shall be payable by such Borrower to Lender on
demand, and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder;
(k) No Borrower shall assume, guarantee or endorse, or
otherwise become liable in connection with, the obligations of any Person,
except: (i) by endorsement of instruments for deposit or collection or similar
transactions in the ordinary course of business, and (ii) for guarantees of
Affiliate obligations consented to by Lender which consent shall be granted or
denied by Lender acting in good faith;
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(l) Except for The Coastal Corporation's acquisition of up to
fifty percent (50%) of Westec Denver, Inc. stock and the acquisition of assets
permitted in SECTION 11(p) of this Agreement, no Borrower shall permit any
change in its ownership or control or engage in any merger or acquisition
without obtaining the prior written consent of Lender which consent may be
withheld by Lender acting in good faith;
(m) Borrowers shall not declare or pay any dividend or other
distribution (whether in cash or in kind) on any class of their stock unless no
Event of Default has occurred or would be caused by such dividend or
distribution and Borrowers' dividends and distributions for any fiscal year do
not exceed fifty percent (50%) of Portfield's net income as reported on the
audited financial statement for such fiscal year;
(n) Each Borrower shall: (i) keep in full force and effect any
and all Plans which may, from time to time, come into existence under ERISA,
unless such Plans can be terminated without liability to such Borrower; (ii)
make contributions to all of the Plans in a timely manner and in a sufficient
amount to comply with the requirements of ERISA; (iii) comply with all material
requirements of ERISA which relate to Plans (including without limitation the
minimum funding standards of Section 302 of ERISA); and (iv) notify Lender
immediately upon receipt by such Borrower of any notice of the institution of
any proceeding or other action which may result in the termination of any
Plans;
(o) No Borrower shall amend its organizational documents or
change its fiscal year (which shall end on February 28th or 29th of each year);
(p) Each Borrower shall, at all times, comply in all material
respects with all laws, rules, regulations, licenses, permits, approvals and
orders applicable to it and duly observe all requirements of any Federal, State
or local governmental authority, including, without limitation, the Employee
Retirement Security Act of 1974, as amended, the Occupational Safety and Hazard
Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended, and
all statutes, rules, regulations, orders, permits and stipulations relating to
environmental pollution and employee health and safety, including, without
limitation, all of the Environmental Laws;
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(q) Each Borrower shall establish and maintain, at its
expense, a system to assure and monitor its continued material compliance with
all Environmental Laws in all of its operations, which system shall include
annual reviews of such compliance by employees or agents of such Borrower who
are familiar with the `requirements of the Environmental Laws. Copies of all
environmental surveys, audits, assessments, feasibility studies and results of
remedial investigations shall be promptly furnished, or caused to be furnished,
by Borrowers to Lender. Each Borrower shall take prompt and appropriate action
to respond to any non-compliance with any of the Environmental Laws and shall
regularly report to Lender on such response.
(r) Each Borrower shall give both oral and written notice to
Lender immediately upon such Borrower's receipt of any notice of, or such
Borrower's otherwise obtaining knowledge of any of the following events
involving a liability or exposure equal to or exceeding $200,000.00 in the
aggregate: (i) the occurrence of any event involving the release, spill or
discharge, threatened or actual, of any Hazardous Material; (ii) any
investigation, proceeding, complaint, order, directive, claims, citation or
notice with respect to: (A) any non-compliance with or violation of any
Environmental Law by any Borrower or (B) the release, spill or discharge,
threatened or actual, of any Hazardous Material or (C) the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or (D) any other environmental, health or
safety matter, which affects any Borrower or its business, operations or assets
or any properties at which any Borrower transported, stored or disposed of any
Hazardous Materials;
(s) Without limiting the generality of the foregoing, whenever
Lender reasonably determines that there is material non-compliance, or any
condition which requires any action by or on behalf of any Borrower in order to
avoid any material non-compliance, with any Environmental Law, such Borrower
shall, at Lender's request and such Borrower's expense: (i) cause an
independent environmental engineer acceptable to Lender to conduct such tests
of the site where any Borrower's non-compliance or alleged non-compliance with
such Environmental Laws has occurred as to such non-compliance and prepare and
deliver to Lender a report as to such non-compliance setting forth the results
of such tests, a proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof and (ii) provide to
Lender a supplemental report of such engineer whenever the scope of such non-
compliance, or such Borrower's response thereto or the estimated costs thereof,
shall change in any material respect;
(t) Borrowers shall indemnify and hold harmless Lender, its
directors, officers, employees, agents, invitees, representatives, successors
and assigns, from and against any and all losses, claims, damages, liabilities,
costs, and expenses (including attorneys' fees and legal expenses) directly or
indirectly arising out of or attributable to the use, generation, manufacture,
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reproduction, storage, release, threatened release, spill, discharge, disposal
or presence of a Hazardous Material, including, without limitation, the costs
of any required or necessary repair, cleanup or other remedial work with
respect to any property of any Borrower and the preparation and implementation
of any closure, remedial or other required plans. All representations,
warranties, covenants and indemnifications in this Section shall survive the
payment of the Obligations and the termination or non-renewal of this
Agreement;
(u) Borrowers shall reimburse Lender for all reasonable costs
and expenses, including without limitation legal expenses and reasonable
attorneys' fees, incurred by Lender in connection with documentation and
consummation of this transaction and any other transactions between Borrowers
and Lender, including without limitation Uniform Commercial Code and other
public record searches, lien filings, Federal Express or similar express or
messenger delivery, appraisal costs, surveys, title insurance, engineering
reports and inspections, and environmental audit or review costs, and in
seeking to administer, collect, protect or enforce any rights in or to the
Collateral or incurred by Lender in seeking to collect any Liabilities and to
administer, participate, assign and/or enforce any of Lender's rights under
this Agreement and the Other Agreements. All such costs, expenses and charges
shall constitute Loans hereunder, shall be payable by Borrowers to Lender on
demand, and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder;
(v) Borrowers shall not incur more than $3,500,000.00 in
capital expenditures (excluding expenditures incurred as a result of Borrowers'
acquisition of the assets of another business) during the first fiscal year of
this Agreement, more than $5,500,000.00 in capital expenditures (excluding
expenditures incurred as a result of Borrowers' acquisition of the assets of
another business) during the first two years of this Agreement, more than
$7,500,000.00 in capital expenditures (excluding expenditures incurred as a
result of Borrowers' acquisition of the assets of another business) during the
first three years of this Agreement, or more than an amount deemed acceptable
to Lender acting in good faith during any extended term (if any) of this
Agreement. Borrowers shall provide Lender with a written report of their
capital expenditures on a monthly basis during the term of this Agreement.
Such report shall be in a form acceptable to Lender acting in good faith;
(w) Borrowers shall not permit the ratio of their total
liabilities calculated in accordance with generally accepted accounting
principles (except for debt subordinated to the Liabilities pursuant to a
written agreement in a form acceptable to Lender acting in good faith) to total
Net Worth to exceed the following amounts at any time during the term of this
Agreement:
First Fiscal Year: 4.75:1.0
Second Fiscal Year: 4.75:1.0
Third Fiscal Year: 4.75:1.0
Subsequent Fiscal
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Years (if any): To be determined by Borrowers and Lender
acting in good faith, provided,
however, that if Borrowers and
Lender are unable to reach an
agreement, the ratio for the
subsequent fiscal year shall be the
ratio used for the immediately
preceding fiscal year
Borrowers shall provide Lender with a written report of their ratio of total
liabilities to total Net Worth on a monthly basis during the term of this
Agreement. Such report shall be in a form acceptable to Lender acting in good
faith; and
(x) Borrowers shall not permit their ratio of cumulative
earnings (exclusive of any extraordinary income, non-operating gains, loss
carryforwards, or gains due to changes in accounting) before taxes,
depreciation and amortization for the four (4) most recent fiscal quarters less
any cash income taxes paid during the applicable period to the sum of (i)
Borrowers' consolidated interest expense (including, without limitation,
imputed interest expense on capitalized leases) and (ii) the current maturities
of Borrowers' long-term indebtedness for the applicable period (all of the
foregoing determined in accordance with generally accepted accounting
principles) to be less than the following amounts at the end of each fiscal
quarter during the term of this Agreement:
Quarters ending between August
31, 1995 and February 29, 1996: 1.10:1.0
Quarters ending between May
31, 1996 and August 31, 1998: 1.25:1.0
Subsequent quarters (if any): To be determined by
Borrowers and Lender
acting in good faith,
provided, however, that
if Borrowers and Lender
are unable to reach an
agreement, the ratio
for the subsequent
quarter year shall be
the ratio used for the
immediately preceding
quarter year
Borrowers shall provide Lender with a written report of their ratio of
cumulative earnings for the four (4) most recent fiscal quarters (exclusive of
any extraordinary income, non-operating gains, loss carryforwards, or gains due
to changes in accounting) before taxes, depreciation and accruals less any cash
income taxes paid during the applicable period to the sum of (i) Borrowers'
consolidated interest expense (including, without limitation, imputed interest
expense on capitalized leases) and (ii) the current maturities of Borrower's
long-term indebtedness for the applicable period (all of the foregoing
determined in accordance with generally accepted accounting principles) on a
quarterly basis during the term of this
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Agreement. Such report shall be in a form acceptable to Lender acting in good
faith.
13. DEFAULT. The occurrence of any one or more of the following
events shall constitute an "Event of Default" by Borrowers hereunder:
(a) the failure of any Obligor to pay when due any of the
Liabilities;
(b) the failure of any Obligor to perform, keep or observe any
of the covenants, conditions, promises, agreements or obligations of such
Obligor under this Agreement or any of the Other Agreements provided, however,
that an Event of Default shall not be deemed to have occurred under SECTION
12(w) of this Agreement unless Borrowers have failed to maintain the ratios set
forth therein for at least five (5) days from the date on which the Borrowers
provided or should have provided to Lender the written report described in
SECTION 12(w);
(c) the failure of any Obligor to perform, keep or observe any
of the covenants, conditions, promises, agreements or obligations of such
Obligor under any other agreement with any Person if such failure may have a
material adverse effect on such Obligor's business property, assets, operations
or condition, financial or otherwise;
(d) the making or furnishing by any Obligor to Lender of any
representation, warranty, certificate, schedule, report or other communication
within or in connection with this Agreement or the Other Agreements or in
connection with any other agreement between such Obligor and Lender, which is
untrue or misleading in any respect;
(e) the making or any attempt to make any levy, seizure or
attachment of any Borrower's property or any part thereof possessing a fair
market value of $25,000.00 or more in the aggregate;
(f) the commencement of any proceedings in bankruptcy by or
against any Obligor or for the liquidation or reorganization of any Obligor, or
alleging that such Obligor is insolvent or unable to pay its debts as they
mature, or for the readjustment or arrangement of any Obligor's debts, whether
under the United States Bankruptcy Code or under any other law, whether state
or federal, now or hereafter existing for the relief of debtors, or the
commencement of any analogous statutory or non-statutory proceedings involving
any Obligor; provided, however, that if such commencement of proceedings
against such Obligor is involuntary and such Obligor is contesting such
proceedings in good faith, such action shall not constitute an Event of Default
unless such proceedings are not dismissed within thirty (30) days after the
commencement of such proceedings;
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(g) the appointment of a receiver or trustee for any Obligor,
for any of the Collateral or for any substantial part of any Obligor's assets
or the institution of any proceedings for the dissolution, or the full or
partial liquidation, of any Obligor which is a corporation or a partnership;
provided, however, that if such appointment or commencement of proceedings
against such Obligor is involuntary and such Obligor is contesting such
proceedings in good faith, such action shall not constitute an Event of Default
unless such appointment is not revoked or such proceedings are not dismissed
within thirty (30) days after the commencement of such proceedings;
(h) the entry of any judgments or orders against any Obligor
which equal or exceed $150,000.00 in the aggregate and which remain unsatisfied
or undischarged and in effect for thirty (30) days after such entry without a
stay of enforcement or execution;
(i) the death of any Obligor who is a natural Person or the
dissolution of any Obligor which is a partnership or corporation;
(j) the occurrence of a change of control, direct or indirect,
of any Borrower except as set forth in SECTION 12(l) of this Agreement;
(k) the occurrence of an event of default under, or the
revocation or termination of, any agreement, instrument or document executed
and delivered by any Person to Lender pursuant to which such Person has
guaranteed to Lender the payment of all or any of the Liabilities or has
granted Lender a security interest in or lien upon some or all of such Person's
real and/or personal property to secure the payment of all or any of the
Liabilities;
(l) the institution in any court of a criminal proceeding
against any Obligor, or the indictment of any Obligor for any crime; or
(m) Lender shall feel insecure in good faith for any reason
whatsoever, including without limitation fear of removal or waste of the
Collateral, or any part thereof.
14. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Without limiting Lender's right to demand payment of the
Liabilities at any time, upon the Termination Date or the occurrence of an
Event of Default described in SECTION 13(f) hereof, all of the Liabilities
shall immediately and automatically become due and payable, without notice of
any kind and upon the occurrence of any other Event of Default, all Liabilities
may, at the option of Lender, and without demand, notice or legal process of
any kind, be declared, and immediately shall become, due and payable.
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(b) Upon the Termination Date or the occurrence of an Event of
Default, Lender may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code and any other applicable law
in addition to, and not in lieu of, any rights and remedies expressly granted
in this Agreement or in any of the Other Agreements and all of Lender's rights
and remedies shall be cumulative and non-exclusive to the extent permitted by
law. In particular, but not by way of limitation of the foregoing, Lender may,
without notice, demand or legal process of any kind, take possession of any or
all of the Collateral (in addition to Collateral of which it already has
possession), wherever it may be found, and for that purpose may pursue the same
wherever it may be found, and may enter into any Borrower's premises where any
of the Collateral may be, and search for, take possession of, remove, keep and
store any of the Collateral until the same shall be sold or otherwise disposed
of, and Lender shall have the right to store the same at any Borrower's
premises without cost to Lender. At Lender's request, Borrowers shall, at
Borrowers' expense, assemble the Collateral and make it available to Lender at
one or more places to be designated by Lender and reasonably convenient to
Lender and Borrowers. Borrowers recognizes that if Borrowers fail to perform,
observe or discharge any of their Liabilities under this Agreement or the Other
Agreements, no remedy at law will provide adequate relief to Lender, and agree
that Lender shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages. Any
notification of intended disposition of any of the Collateral required by law
will be deemed reasonably and properly given if given at least ten (10)
calendar days before such disposition. Any proceeds of any disposition by
Lender of any of the Collateral may be applied by Lender to the payment of
expenses in connection with the Collateral, including without limitation legal
expenses and reasonable attorneys' fees, and any balance of such proceeds may
be applied by Lender toward the payment of such of the Liabilities, and in such
order of application, as Lender may from time to time elect, including without
limitation to provide cash collateral to secure the Letters of Credit.
15. INDEMNIFICATION. Borrowers agree to defend (with counsel
satisfactory to Lender), protect, indemnify and hold harmless Lender, each
Affiliate of Lender, and each of their respective officers, directors,
employees, attorneys and agents (each an "Indemnified Party") from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature (including without limitation the disbursements and the reasonable fees
of counsel for each Indemnified Party in connection with any investigative,
administrative or judicial proceeding, whether or not the Indemnified Party
shall be designated a party thereto), which may be imposed on, incurred by, or
asserted against, any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal, state or local laws or
regulations, including without limitation securities, environmental and
commercial laws and regulations, under common law or in equity, or based on
contract or otherwise) in any manner relating to or
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34
arising out of this Agreement or any Other Agreement, or any act, event or
transaction related or attendant thereto, the making and the management of the
Loans or any Letters of Credit, or the use or intended use of the proceeds of
the Loans or any Letters of Credit; provided, however, that Borrowers shall not
have any obligation hereunder to any Indemnified Party with respect to matters
caused by or resulting from the willful misconduct or gross negligence of such
Indemnified Party. To the extent that the undertaking to indemnify set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, Borrowers shall satisfy such undertaking to the maximum
extent permitted by applicable law. Any liability, obligation, loss, damage,
penalty, cost or expense covered by this indemnity shall be paid to each
Indemnified Party on demand, and, failing prompt payment, shall, together with
interest thereon at the highest rate then applicable to Loans hereunder from
the date incurred by each Indemnified Party until paid by Borrowers, be added
to the Liabilities of Borrowers and be secured by the Collateral. The
provisions of this Section shall survive the satisfaction and payment of the
other Liabilities and the termination of this Agreement.
16. NOTICE. All written notices and other written communications
with respect to this Agreement shall be sent by ordinary, certified or
overnight mail, by telecopy or delivered in person, and in the case of Lender
shall be sent to it at 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxxxx, and in the case of Borrower shall be sent to
it at its principal place of business set forth on the first page of this
Agreement, Attention: Xxxxx X. Xxxxxx.
17. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION. This
Agreement and the Other Agreements are submitted by Borrowers to Lender for
Lender's acceptance or rejection at Lender's principal place of business as an
offer by Borrowers to borrow monies from Lender now and from time to time
hereafter, and shall not be binding upon Lender or become effective until
accepted by Lender, in writing, at said place of business. If so accepted by
Lender, this Agreement and the Other Agreements shall be deemed to have been
made at said place of business. THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL
BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF COLORADO AS TO
INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER
RESPECTS, INCLUDING WITHOUT LIMITATION THE LEGALITY OF THE INTEREST RATE AND
OTHER CHARGES, BUT EXCLUDING PERFECTION OF THE SECURITY INTERESTS IN THE
COLLATERAL, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT
JURISDICTION. If any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or remaining provisions of this
Agreement.
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To induce Lender to accept this Agreement, Borrowers irrevocably
agree that, subject to Lender's sole and absolute election, ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO
THIS AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN
COURTS HAVING SITUS WITHIN XXX XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO.
BORROWERS HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURTS LOCATED WITHIN SAID CITY AND STATE. BORROWERS HEREBY WAIVE ANY
RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT
AGAINST BORROWERS BY LENDER IN ACCORDANCE WITH THIS SECTION.
18. PARTICIPATION; ASSIGNMENT. Lender shall have the right to assign
all or any of its rights under this Agreement and the Other Agreements, and/or
to offer participation interests therein, to any Affiliate or Subsidiary of
Lender, without the consent of Borrowers and, if an Event of Default has
occurred under this Agreement, to any non-Affiliate or non-Subsidiary of
Lender, without the consent of Borrowers. In addition, if the Maximum Credit
exceeds $12,000,000.00, Lender shall have the right to assign all or any of its
rights under this Agreement and the Other Agreements, and/or to offer
participation interests therein, to any non-Affiliate or non-Subsidiary of
Lender, without the consent of Borrowers; provided, however, that upon the
consummation of such assignment or participation, Borrowers shall be entitled
to terminate this Agreement without the payment of any fees described in
SECTION 3(e) so long as no Event of Default has occurred under this Agreement
and such termination, the full satisfaction of the Liabilities, and the
provision of the release described in SECTION 10 are completed within one
hundred and eighty days (180) from the earlier of the consummation or the
giving of notice to Borrowers of such assignment or participation. In the
event of any assignment or participation, Borrowers shall execute such
agreements, instruments and documents as Lender shall request in connection
therewith, including without limitation agreements, instruments and documents
in favor of each assignee and participant.
19. MODIFICATION AND BENEFIT OF AGREEMENT. This Agreement and the
Other Agreements may not be modified, altered or amended except by an agreement
in writing signed by Borrowers and Lender. Borrowers may not sell, assign or
transfer this Agreement, or the Other Agreements or any portion thereof,
including without limitation Borrowers' rights, titles, interest, remedies,
powers or duties thereunder.
20. HEADINGS OF SUBDIVISIONS. The headings of subdivisions in this
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this Agreement.
21. POWER OF ATTORNEY. Borrowers acknowledge and agree that their
appointment of Lender as their attorney and agent-in-fact for
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36
the purposes specified in this Agreement is an appointment coupled with an
interest and shall be irrevocable until all of the Liabilities are paid in full
and this Agreement is terminated.
22. WAIVER OF JURY TRIAL; OTHER WAIVERS; MISCELLANEOUS.
(a BORROWERS HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT,
ANY OF THE OTHER AGREEMENTS, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED
TORTIOUS CONDUCT BY BORROWERS OR LENDER OR WHICH, IN ANY WAY, DIRECTLY OR
INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN BORROWERS AND
LENDER. IN NO EVENT SHALL LENDER BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL
OR CONSEQUENTIAL DAMAGES.
(b Borrowers hereby waive demand, presentment, protest and
notice of nonpayment, and further waive the benefit of all valuation, appraisal
and exemption laws.
(c BORROWERS HEREBY WAIVE ALL RIGHTS TO NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO REPOSSESS THE
COLLATERAL OF BORROWERS WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY
UPON SUCH COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.
(d Lender's failure, at any time or times hereafter, to
require strict performance by any Borrower of any provision of this Agreement
or any of the Other Agreements shall not waive, affect or diminish any right of
Lender thereafter to demand strict compliance and performance by such Borrower
therewith or to demand strict compliance and performance by any other Borrower
therewith at any time. Any suspension or waiver by Lender of an Event of
Default under this Agreement or any default under any of the Other Agreements
shall not suspend, waive or affect any other Event of Default under this
Agreement or any other default under any of the Other Agreements, whether the
same is prior or subsequent thereto and whether of the same or of a different
kind or character. No delay on the part of Lender in the exercise of any right
or remedy under this Agreement or any Other Agreement shall preclude other or
further exercise thereof or the exercise of any right or remedy. None of the
undertakings, agreements, warranties, covenants and representations of
Borrowers contained in this Agreement or any of the Other Agreements and no
Event of Default under this Agreement or default under any of the Other
Agreements shall be deemed to have been suspended or waived by Lender unless
such suspension or waiver is in writing, signed by a duly authorized officer of
Lender and directed to Borrowers specifying such suspension or waiver.
(e Whenever this Agreement refers to "Borrowers'"
representations, warranties, covenants, indebtedness, liabilities, obligations,
and assets as opposed to those of any "Borrower", such representations,
warranties, covenants, indebtedness, liabilities
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and obligations shall be joint and several in nature and such assets shall
include Borrowers' jointly and severally-owned assets.
BORROWER: LENDER:
PORTFIELD INVESTMENTS, INC. NATIONAL CANADA FINANCE CORP.
By: By:
----------------------------- ------------------------------
Title: Title: Vice President
--------------------------
WESCOURT GROUP, INC. By:
-------------------------------
Title:
----------------------------
By:
-----------------------------
Title:
--------------------------
WESCOURT DISTRIBUTING, INC.
By:
-----------------------------
Title:
--------------------------
WESFRAC, INC.
By:
-----------------------------
Title:
--------------------------
WESTEC DENVER, INC.
By:
-----------------------------
Title:
--------------------------
XXXXX-XXXX CORP. UTAH
By:
-----------------------------
Title:
--------------------------
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38
WESCOURT ENVIRONMENTAL, INC.
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP.
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP., MONTROSE, INC.
By:
---------------------------
Title:
------------------------
WESTEC FRUITA, INC.
By:
---------------------------
Title:
------------------------
MONTROSE PROPANE, INC.
By:
---------------------------
Title:
------------------------
GRAND MESA TEXACO, INC.
By:
---------------------------
Title:
------------------------
FRUITA INVESTMENTS, INC.
By:
---------------------------
Title:
------------------------
-38-
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FRUITA MARKETING & MANAGEMENT, INC.
By:
--------------------------------
Title:
-----------------------------
FRUITA RP HOLDING, INC.
By:
--------------------------------
Title:
-----------------------------
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EXHIBIT A
Permitted Liens
1. CASTROL NORTH AMERICA AUTOMOTIVE, INC.
Xxxxx Xxxx Corp. Utah, Inc. ("PMCU") and Castrol, Inc. ("Castrol") have
entered into a Distributor Loaned Equipment Program Agreement dated July
20, 1995 for participation by the PMCU in Castrol's Distributor LEAD
Program.
Pursuant to the Distributor Loaned Equipment Program Agreement, Castrol
shall finance certain lube bay equipment for PMCU and shall be granted a
security interest in such lube bay equipment to secure the amounts owing
by PMCU to Castrol in connection with the purchase of those goods.
Copies of the relevant documents shall be provided to Lender in prompt
manner.
2. TAL FINANCIAL CORPORATION, INC.
During October 1995, Wesfrac, Inc. ("Wesfrac") and Xxxxx-Xxxx Corp.
("PMC") intend to enter into a five year operating lease agreement with
TAL Financial Corporation, Inc. for the following equipment:
Two (2) Bobtail vehicles (PMC)
One (1) Merichem light oil sweetening unit located at 0000
Xxxxxxx 0 & 00, Xxxxxx, XX - (Wesfrac)
One (1) Butane splitter (currently under construction at 1629 21
Road, Grand Junction, CO) - (Wesfrac)
Copies of the relevant documents shall be provided to Lender in a prompt
manner.
-40-
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EXHIBIT B
Chief Executive Office, Other Offices, Places of Business and Post
Office Boxes
Chief Executive Offices
and Chief Place of
Business: 0000 Xxxxxxx 0 xxx 00 Xxxxxx,
Xxxxxxxx 00000
Other Offices and Places
of Business: 0000 Xxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
0000 Xxxx 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
0000 00 Xxxx
Xxxxx Xxxxxxxx, Xxxxxxxx 00000
000 Xxxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
000 Xxxxx Xxxxx Xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
000 Xxxx X Xxxxxx
Xxxxxx, Xxxxxxxx 00000
000 Xxxx Xxx
Xxxxxxxx, Xxxxxxxx 00000
000 X. 0xx Xxxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
0000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Owner: Post Office Box
----- ---------------
Xxxxx Xxxx Corp. X.X. Xxx 0000
Xxxxxx, XX 00000
Westec Denver, Inc. X.X. Xxx 000
Xxxxxx, XX 00000
Xxxxx Xxxx Corp., Utah X.X. Xxx 00000
Xxxx Xxxx Xxxx, XX 00000
Xxxxx Xxxx Corp. X.X. Xxx 000
Xxxxxxxx, XX 00000
-41-
42
Xxxxx Xxxx Corp. X.X. Xxx 000
Xxxxx Xxxx, XX 00000
-42-
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EXHIBIT C
Former Corporate Names
----------------------
Former Name: Present Company:
----------- ---------------
Westec Salt Lake City, Inc. Xxxxx Xxxx Corp., Utah
Westec Operating Company, Inc. Xxxxx Xxxx Corp.
Burnet Oil Co., Inc. Xxxxx Xxxx Corp., Montrose, Inc.
Charterhall Trading, Inc. Wescourt Distributing, Inc.
Charterhall Refining and Wescourt Group, Inc.
Marketing, Inc.
Wescourt Group, Inc. also possesses a subsidiary, Wescourt Petroleum,
Inc., at the present time. However, such subsidiary possesses no assets, is
the process of being dissolved, and shall be dissolved in a prompt manner. The
Borrowers shall provide Lender with written evidence of the dissolution of
Wescourt Petroleum, Inc. in a prompt manner.
Trade Names
_____________________ possesses the registered trademark "Green
Gasoline."
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44
EXHIBIT D
Permitted Indebtedness
1. Xxxxx-Xxxx Corp., Utah fka Westec Salt Lake City, Inc. executed and
delivered to Triton Fuel Group, Inc. a promissory note in the original
principal amount of $1,075,000.00 on or about October 1, 1994. The
principal balance on the promissory note accrues simple interest at the
rate of 7% per annum. The promissory note is payable in 33 monthly
installments of $17,102.00 each followed by 42 monthly installments of
$11,455.00 each with the unpaid balance due and payable on February 1,
2001.
The promissory note is unsecured and subordinated to the payment of the
debt of Xxxxx Xxxx Corp, Utah to any third parties. The promissory note
permits prepayments without penalties of any kind.
2. Wescourt Group, Inc. executed and delivered to Triton Fuel Group, Inc. a
promissory note in the original principal amount of $135,000 on or about
October 1, 1994. The principal balance on the promissory note accrues
simple interest at the rate of 7% per annum. The promissory note is
payable in 32 monthly installments of $4,500.00 each followed by a final
payment of $4,832.55 due and payable on July 1, 1997.
The promissory note is unsecured and subordinated to the payment of the
debt of Wescourt Group, Inc. to any third parties. The promissory note
permits prepayments without penalties of any kind.
3. Xxxxx-Xxxx Corp. executed and delivered to Xxxxxxx Oil Company and Star
Oil Company a promissory note in the original principal amount of
$115,703.29 on or about October 1, 1994. The principal balance on the
promissory note accrues simple interest at the rate of 8% per annum.
The promissory note is payable in quarterly installments of $10,700.00
each with the unpaid balance due and payable on October 1, 1999.
The promissory note is unsecured.
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45
EXHIBIT E
Shareholders and Subsidiaries
Portfield Investments, Inc. is owned by Petroleum Holding, Ltd. (60%)
and Xxxxx X. Xxxxxx (40%).
Portfield Investments, Inc. is the sole shareholder of Wescourt Group,
Inc. and Wescourt Distributing, Inc.
Wescourt Group, Inc. is the sole shareholder of Wesfrac, Inc., Westec
Denver, Inc., Xxxxx-Xxxx Corp., Utah, Wescourt Environmental, Inc., Xxxxx-Xxxx
Corp., Xxxxx Xxxx Corp., Montrose, Inc. and Westec Fruita, Inc. Wescourt
Group, Inc. also possesses a subsidiary, Wescourt Petroleum, Inc., at the
present time. However, such subsidiary possesses no assets, is the process of
being dissolved, and shall be dissolved in a prompt manner. The Borrowers
shall provide Lender with written evidence of the dissolution of Wescourt
Petroleum, Inc. in a prompt manner.
Xxxxx Xxxx Corp., Montrose, Inc. is the sole shareholder of Montrose
Propane, Inc. and Grand Mesa Texaco, Inc..
Montrose Propane, Inc. is the sole shareholder of Fruita Investments,
Inc. and Fruita Marketing & Management, Inc.
Grand Mesa Texaco, Inc. is the sole shareholder of Fruita RP Holding,
Inc.
NOTE: Westec Denver, Inc., Coastal Mart, Inc. and Coastal Refining,
Inc. (collectively "Coastal") entered into an operating agreement on April 5,
1995. The operating agreement provides for Coastal to purchase 50% (fifty
percent) of Westec Denver, Inc.'s common stock on or after April 5, 2000.
-45-
46
EXHIBIT F
Environmental Problems
1. Borrowers have not generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials,
on or off its premises (whether or not owned by it) in any manner which
at any time violates any applicable Environmental Law or any license,
permit, certificate, approval or similar authorization thereunder (and
would render Borrowers or any of them liable for damages and penalties
in the amount of $200,000.00 or more in the aggregate) and the
operations of each Borrower complies in all material respects with all
Environmental Laws and all licenses, permits, certificates, approvals
and similar authorizations thereunder.
2. There has been no investigation, proceeding, complaint, order,
directive, claim, citation or notice by any governmental authority or
any other person nor is any pending or to the best of any Borrower's
knowledge threatened, with respect to any non-compliance with or
violation of the requirements of any Environmental Law by any Borrower
or the release, spill or discharge, threatened or actual, of any
Hazardous Material or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any
Hazardous Materials or any other environmental, health or safety matter,
which affects any Borrower or its business, operations or assets or any
properties at which any Borrower has transported, stored or disposed of
any Hazardous Materials and which could render Borrowers or any of them
liable for damages and penalties in the amount of $500,000.00 or more in
the aggregate.
3. No Borrower has any liability (contingent or otherwise) in connection
with a release, spill or discharge, threatened or actual, of any
Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any
Hazardous Materials which could render Borrowers or any of them liable
for damages and penalties in the amount of $500,000.00 or more in the
aggregate.
4. NOTE: Westec Petroleum, Inc. ("WPI"), which is being dissolved,
formerly operated its business at 0000 X. 00xx Xxxxxx, Xxxxxx, Xxxxxxxx.
Such located was leased from Tamko Asphalt Products, Inc. ("Tamko") from
December 8, 1988 to March 31, 1994. The site had previously been used
by a number of non-related third parties for the unloading and trans-
shipping of hydrocarbon fuels including jet fuel.
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47
In May 1994, Portfield Investments, Inc. received notice from Tamko
alleging contamination of the leased premises. Both WPI and Tamko were
placed under a Service of Compliance Order and Invitation to Informal
Conference by the Colorado Department-Public Health and Environment.
The estimated remediation costs for the leased premises could total as
much as $50,000 per year for five years.
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48
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT AND RELATED
DOCUMENTS
This First Amendment to Loan and Security Agreement and Related
Documents ("First Amendment") is executed by Portfield Investments, Inc., a
Colorado corporation, Wescourt Group, Inc., a Delaware corporation, Wescourt
Distributing, Inc., a Colorado corporation, Wesfrac, Inc., a Colorado
corporation, Westec Denver, Inc., a Colorado corporation, Xxxxx-Xxxx Corp.
Utah, a Colorado corporation, Wescourt Environmental, Inc., a Colorado
corporation, Xxxxx-Xxxx Corp., a Colorado corporation, Xxxxx-Xxxx Corp.,
Montrose, Inc., a Colorado corporation, Westec Fruita, Inc., a Delaware
corporation, Montrose Propane, Inc., a Colorado corporation, Grand Mesa Texaco,
Inc., a Colorado corporation, Fruita Investments, Inc., a Colorado corporation,
Fruita Marketing & Management, Inc., a Delaware corporation, and Fruita RP
Holding, Inc, a Delaware corporation, all with an address at 0000 Xxxxxxx 0 xxx
00, Xxxxxx, Xxxxxxxx 00000 (collectively "Borrowers") and National Canada
Finance Corp., a Delaware corporation ("Lender"), with an address at 0000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 for valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, on this day of
October, 1995. Hereinafter, each of the Borrowers may be referred to singularly
as a "Borrower."
RECITALS
A. Borrowers executed and delivered to Lender a Loan and
Security Agreement and various related documents (collectively
"Loan Documents") on or about October 5, 1995.
B. Borrowers and Lender wish to add certain additional
terms and conditions to the Loan Documents as set forth in this
First Amendment.
AGREEMENTS
1. The Borrowers, jointly and severally, represent and warrant to and
covenant with Lender that: (a) Borrowers are not and have no relationship to
the various debtors described in the financing statements, notices of tax
liens, and other materials attached hereto as EXHIBIT A and incorporated herein
by this reference; (b) The Borrowers contemplated, but did not form, a company
to be called "Westec Grand Junction, Inc." and such entity has never existed or
been used as a trade name for the Borrowers or any of them; (c) Borrowers have
vacated their former business premises located at 0000 Xxxx 0000 Xxxxx, Xxxxx
Xxxxx, Xxxx; (d) Borrowers lease certain real property in Garfield and Teller
Counties, Colorado; (e) none of Borrowers' business operations are conducted
and none of Borrowers' assets are located at 1710 West 2600 South, Xxxxx Cross,
Utah or in Garfield and Teller Counties,
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49
Colorado, as of the date of this First Amendment; (f) Westec Petroleum, Inc.
does not and shall not possess any assets or parties possessing a lien or
security interest in its former assets (if any) and shall be dissolved within
thirty (30) days from the date of this First Amendment; and (g) none of
Borrowers' business operations shall be conducted and none of Borrowers' assets
shall be located on the properties described in Section 1(c) without Lender
being provided with: (i) at least ten (10) days' prior written notice thereof,
and (ii) such documents (such as financing statements, landlord waivers, and
mortgagee waivers) as Lender may request to provide Lender with a first
priority security interest in the assets located on such property.
2. Notwithstanding anything to the contrary contained in the Loan
Documents, Lender shall not be obligated to provide Borrowers with any advances
or other financial accommodations of any kind unless no event of default exists
under the Loan Documents and Borrowers provide Lender with the following
information and materials:
a. AN ENVIRONMENTAL REPORT ON THE BORROWERS' REAL
PROPERTY;
b. THE PAYOFF LETTER FROM BANK ONE TEXAS, N.A.;
c. THE TERMINATION STATEMENTS FOR THE FINANCING
STATEMENTS THAT WERE FILED AGAINST LANDMARK PETROLEUM,
INC. AND LANDMARK RESOURCES, INC. PRIOR TO THE
BORROWERS' ACQUISITION OF CERTAIN ASSETS BELONGING TO
THOSE COMPANIES;
d. the confirmation letters and termination statements
from Mercantile Bank of Forth Worth AND THE CIT
GROUP/CREDIT FINANCE, INC.;
e. the correct street address and legal description and
a copy of the lease for the Borrowers' premises in
Canon City, Colorado, as well as any NECESSARY LANDLORD
WAIVERS AND MORTGAGEE WAIVERS FOR THAT PROPERTY;
f. any financing statements and termination statements
necessary to provide Lender with a first priority
security interest in the Borrowers' personal property
and fixtures located in Fremont County, Colorado;
g. THE REMAINING CERTIFICATES OF TITLE PERTAINING TO
THE MOTOR VEHICLES BELONGING TO THE BORROWERS;
h. the landlord waivers for the Borrowers' premises in
DUPONT, MONTROSE and PUEBLO, Colorado, and SALT LAKE CITY,
Utah (provided, however, that Borrowers shall be
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50
entitled to provide Lender with the landlord waivers for the
Salt Lake City property within 30 days from the date of this
First Amendment);
UNION PACIFIC, SOUTHERN PACIFIC, DAUPHIN
i. the mortgagee waivers pertaining to all of the
Borrowers' premises;
CHASE AND SALT LAKE CITY
j. THE REVISED ENDORSEMENT TO THE AMERICAN CREDIT INDEMNITY
INSURANCE POLICY AS WELL AS THE DATE-STAMPED LOSS PAYEE FORM
AND CONFIRMATION LETTER FROM THAT INSURANCE COMPANY (as well
as a copy of any replacement accounts receivable insurance
policy and similar loss payee forms and confirmation letters
pertaining to such replacement policy);
k. THE CERTIFICATES OF INSURANCE AND LOSS PAYABLE ENDORSEMENTS
PERTAINING TO THE BORROWERS' CASUALTY AND LIABILITY INSURANCE
POLICIES;
l. the original life insurance policy and the date-stamped
Assignment of Life Insurance Policy as Collateral form and
confirmation letter from Principal Mutual Life Insurance
Company;
m. the Collateral Account Agreements and Lockbox Agreements
from the appropriate financial institutions;
n. the revised opinion letter from the Borrowers' counsel;
and
o. any other materials which Lender may reasonably require in
connection with Borrowers' loans.
All of the foregoing appraisals, reports, waivers, and other materials shall be
in such form and executed by such parties as may be acceptable to Lender in
good faith.
3. Lender shall be entitled to rely upon faxed or scanned
signatures in making advances or for any other purposes in
connection with the Borrowers' loans.
4. Notwithstanding anything to the contrary contained in the Loan
Documents, Borrowers shall be entitled to terminate the Loan Documents in the
event that Lender has not made an initial advance under the Loan Documents
within thirty (30) days from the date of this Agreement. Lender shall provide
Borrowers with any termination statements and other documents necessary to
release its liens and security interests against Borrowers' assets within sixty
(60) days from such termination date.
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51
5. This First Amendment shall be governed by the laws of
the State of Colorado.
6. The Loan Documents shall remain in full force and
effect except as amended by this Agreement.
7. This First Amendment and the various documents described
herein represent the complete and integrated understanding between the parties
pertaining to the subject matter hereof. All prior and contemporaneous
understandings and agreements, written or oral,express or implied, shall be of
no further force and effect to the extent inconsistent herewith.
BORROWER: LENDER:
PORTFIELD INVESTMENTS, INC. NATIONAL CANADA FINANCE CORP.
By:
--------------------------- By:
--------------------------
Title: Title: Vice President
------------------------
By:
--------------------------
Title: Vice President
WESCOURT GROUP, INC.
By:
---------------------------
Title:
------------------------
WESCOURT DISTRIBUTING, INC.
By:
---------------------------
Title:
------------------------
WESFRAC, INC.
By:
---------------------------
Title:
------------------------
WESTEC DENVER, INC.
By:
---------------------------
Title:
------------------------
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52
XXXXX-XXXX CORP. UTAH
By:
---------------------------
Title:
------------------------
WESCOURT ENVIRONMENTAL, INC.
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP.
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP., MONTROSE, INC.
By:
---------------------------
Title:
------------------------
WESTEC FRUITA, INC.
By:
---------------------------
Title:
------------------------
MONTROSE PROPANE, INC.
By:
---------------------------
Title:
------------------------
GRAND MESA TEXACO, INC.
By:
---------------------------
Title:
------------------------
FRUITA INVESTMENTS, INC.
By:
---------------------------
Title:
------------------------
FRUITA MARKETING & MANAGEMENT, INC.
By:
---------------------------
Title:
------------------------
FRUITA RP HOLDING, INC.
By:
---------------------------
Title:
------------------------
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53
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND RELATED
DOCUMENTS
This Second Amendment to Loan and Security Agreement and Related
Documents ("Agreement") is executed by Portfield Investments, Inc., a Colorado
corporation, Wescourt Group, Inc., a Delaware corporation, Wescourt
Distributing, Inc., a Colorado corporation, Wesfrac, Inc., a Colorado
corporation, Westec Denver, Inc., a Colorado corporation, Xxxxx-Xxxx Corp.
Utah, a Colorado corporation, Xxxxx-Xxxx Corp., a Colorado corporation,
Xxxxx-Xxxx Corp., Montrose, Inc., a Colorado corporation, Westec Fruita, Inc.,
a Delaware corporation, Montrose Propane, Inc., a Colorado corporation, Grand
Mesa Texaco, Inc., a Colorado corporation, and Fruita RP Holding, Inc, a
Delaware corporation, all with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx,
Xxxxxxxx 00000 (collectively "Borrowers"), Mesa Environmental, Inc. fka
Wescourt Environmental, Inc., a Colorado corporation ("MEI"), Fruita
Investments, Inc., a Colorado corporation ("FII"), and Fruita Marketing &
Management, Inc., a Delaware corporation ("FMMI"), all with an address at 0000
Xxxxxxx 0 xxx 00, Xxxxxx, Xxxxxxxx 00000, and National Canada Finance Corp., a
Delaware corporation ("Lender"), with an address at 0000 00xx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx 00000 for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, on this day of August, 1996.
Hereinafter, each of the Borrowers may be referred to singularly as a
"Borrower."
RECITALS
A. Borrowers and MEI, FII and FMMI executed and delivered to Lender a
Loan and Security Agreement ("Loan and Security Agreement") and various related
documents and a First Amendment to Loan and Security Agreement and Related
Documents on or about October 6, 1995. Hereinafter, the foregoing documents,
any related loan documents, and any amendments, modifications, replacements or
substitutions to any of the foregoing shall be referred to collectively as the
"Loan Documents."
B. The outstanding principal balance on Borrowers', MEI's, FII's and
FMMI's obligations to Lender under the Loan Documents amounted to approximately
$6,720,191.71 as of August 23, 1996 and interest and expenses are accruing
thereon as set forth in the Loan Documents. None of the principal balance on
Borrowers', MEI's, FII's and FMMI's obligations to Lender under the Loan
Documents consists of advances to MEI, FII or FMMI based on the accounts or
inventory belonging to those parties.
X. XXX'x, FII's and FMMI's assets and liabilities are described in
EXHIBIT A attached hereto and incorporated herein by this reference in an
accurate and complete manner.
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54
D. Borrowers and Lender wish to amend the Loan Documents to, among
other things, release MEI, FII and FMMI from their obligations as Borrowers
under the Loan Documents and to release all of Lender's liens and security
interests against MEI's, FII's and FMMI's assets under the Loan Documents.
AGREEMENTS
1. Borrowers, MEI, FII and FMMI hereby acknowledge and reaffirm the
truth and accuracy of all of the foregoing Recitals and the representations and
other statements contained in the Loan Documents as of the date of this
Agreement.
2. The second paragraph of Section 2 of the Loan and Security
Agreement shall be amended to read:
The total unpaid principal of all Loans outstanding to the Borrowers
and: (i) based upon Eligible Inventory shall not exceed Two Million
Dollars ($2,000,000.00) at any time; (ii) and based upon Eligible
Existing Equipment and Eligible Acquired Equipment shall not exceed
Two Million Dollars ($2,000,000.00) at any time; provided, however,
that such limit shall be increased to Four Million Dollars
($4,000,000.00) if the Maximum Credit is increased to and maintained
at Nine Million Dollars ($9,000,000.00) or Twelve Million Dollars
($12,000,000.00) in accordance with the terms and conditions set forth
in this Agreement; and (iii) and based upon Eligible Purchased
Equipment shall not exceed Five Hundred Thousand Dollars ($500,000.00)
at any time; provided, however, that such limit shall be increased to
One Million Dollars ($1,000,000.00) if the Maximum Credit is increased
to and maintained at Nine Million Dollars ($9,000,000.00) or Twelve
Million Dollars ($12,000,000.00) in accordance with the terms and
conditions set forth in this Agreement.
3. Borrowers, MEI, FII and FMMI, jointly and severally, represent and
warrant to Lender that they have not defaulted upon any of their respective
obligations under the Loan Documents.
4. Based upon the truth and accuracy of the foregoing reaffirmations,
representations and warranties and in consideration for the releases and other
terms and conditions set forth in this Agreement, Lender hereby releases MEI,
FII and FMMI from their respective obligations under the Loan Documents and
releases its liens and security interests against MEI's, FII's and FMMI's
assets described in EXHIBIT A attached hereto.
5. BORROWERS, MEI, FII AND FMMI HEREBY WAIVE AND FOREVER DISCHARGE
LENDER AND ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM
ALL KNOWN AND UNKNOWN, ABSOLUTE AND CONTINGENT, CLAIMS, DEFENSES, SETOFFS,
COUNTERCLAIMS, CAUSES OF
- 2 -
55
ACTION, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS OF ANY KIND EXISTING OR
ACCRUED AS OF THE DATE OF THIS AGREEMENT.
6. Notwithstanding the execution of this Agreement, Borrowers shall be
jointly and severally liable for the payment and performance of their present
and future obligations under the Loan Documents and all of their present and
future obligations to Lender under the Loan Documents and otherwise shall
continue to be secured by all of Borrowers' present and future personal and
real property and other rights and assets of any kind (collectively "Lender
Collateral") including, but not limited to, all of Borrowers' present and
future accounts, chattel paper, contract rights, documents, equipment,
fixtures, general intangibles, goods, instruments, inventory, minerals and the
like, and the proceeds and products thereof.
7. Borrowers, jointly and severally, hereby represent, warrant to and
covenant with that Lender's liens, security interests, encumbrances and claims
against the Lender Collateral shall continue to be prior and superior to any
other liens, security interests, encumbrances or claims of any kind except for
those specifically provided otherwise in the Loan Documents.
8. Borrowers, jointly and severally, shall pay Lender a fee of
$5,000.00 upon the execution of this Agreement. In addition, Borrowers, jointly
and severally, shall pay all of Lender' attorneys' fees and other expenses
incurred in connection with the negotiation, drafting or execution of this
Agreement. The amounts described in this paragraph shall be in addition to, and
not in lieu of, the interest, fees and other charges owing under the Loan
Documents.
9. The Loan Documents shall remain in full force and effect except as
amended by this Agreement.
10. This Agreement and the various documents described herein represent
the complete and integrated understanding between the parties pertaining to the
subject matter hereof. All prior and contemporaneous understandings and
agreements, written or oral, express or implied, shall be of no further force
and effect to the extent inconsistent herewith.
BORROWER: LENDER:
PORTFIELD INVESTMENTS, INC. NATIONAL CANADA FINANCE CORP.
By: By:
---------------------------- ------------------------------
Title: Vice President
Title:
-------------------------
By:
------------------------------
Title: Vice President
- 3 -
56
WESCOURT GROUP, INC.
By:
---------------------------
Title:
------------------------
WESCOURT DISTRIBUTING, INC.
By:
---------------------------
Title:
------------------------
WESFRAC, INC.
By:
---------------------------
Title:
------------------------
WESTEC DENVER, INC.
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP. UTAH
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP.
By:
---------------------------
Title:
------------------------
XXXXX-XXXX CORP., MONTROSE, INC.
By:
---------------------------
Title:
------------------------
- 4 -
57
WESTEC FRUITA, INC.
By:
---------------------------
Title:
------------------------
MONTROSE PROPANE, INC.
By:
---------------------------
Title:
------------------------
GRAND MESA TEXACO, INC.
By:
---------------------------
Title:
------------------------
FRUITA RP HOLDING, INC.
By:
---------------------------
Title:
------------------------
MESA ENVIRONMENTAL, INC.
fka WESCOURT ENVIRONMENTAL, INC.
By:
---------------------------
Title:
------------------------
FRUITA INVESTMENTS, INC.
By:
---------------------------
Title:
------------------------
- 5 -
58
EXHIBIT A
- 6 -
59
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT AND RELATED
DOCUMENTS
This Third Amendment to Loan and Security Agreement and Related
Documents ("Agreement") is executed by Portfield Investments, Inc., a Colorado
corporation, Wescourt Group, Inc., a Delaware corporation, Wescourt
Distributing, Inc., a Colorado corporation, Wesfrac, Inc., a Colorado
corporation, Westec Denver, Inc., a Colorado corporation, Xxxxx-Xxxx Corp.
Utah, a Colorado corporation, Xxxxx-Xxxx Corp., a Colorado corporation,
Xxxxx-Xxxx Corp., Montrose, Inc., a Colorado corporation, Westec Fruita, Inc.,
a Delaware corporation, Montrose Propane, Inc., a Colorado corporation, Grand
Mesa Texaco, Inc., a Colorado corporation, and Fruita RP Holding, Inc, a
Delaware corporation, all with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx,
Xxxxxxxx 00000 (collectively "Borrowers") and National Canada Finance Corp., a
Delaware corporation ("Lender") with an address at 0000 00xx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx 00000 for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, on this day of November, 1996.
Hereinafter, each of the Borrowers may be referred to singularly as a
"Borrower."
RECITALS
A. Borrowers, Mesa Environmental, Inc. fka Wescourt Environmental,
Inc., a Colorado corporation ("MEI"), Fruita Investments, Inc., a Colorado
corporation ("FII"), and Fruita Marketing & Management, Inc., a Delaware
corporation (FMMI"), executed and delivered to Lender a Loan and Security
Agreement ("Loan and Security Agreement") and various related documents and a
First Amendment to Loan and Security Agreement and Related Documents on or
about October 6, 1995 and a Second Amendment to Loan and Security Agreement and
Related Documents on or about August 23, 1996. Hereinafter, the foregoing
documents, any related loan documents, and any amendments, modifications,
replacements or substitutions to any of the foregoing shall be referred to
collectively as the "Loan Documents."
B. Subject to the terms and conditions set forth in the Loan Documents,
MEI, FII, and FMMI have been released from their obligations to Lender
thereunder.
C. Borrowers have defaulted upon their obligations to Lender under
Section 12(x) of the Loan and Security Agreement by failing to maintain the
ratio set forth therein prior to the quarter ending on May 31, 1996.
D. The outstanding principal balance on Borrowers' obligations to
Lender under the Loan Documents amounted to approximately $7,040,463.93 of
November 18, 1996 and interest and expenses are accruing thereon as set forth
in the Loan Documents.
- 1 -
60
E. Borrowers and Lender wish to amend the Loan Documents, waive the
default described in Recital D, and resolve various other issues as set forth
in this Agreement.
AGREEMENTS
1. Borrowers hereby acknowledge and reaffirm the truth and accuracy
of all of the foregoing Recitals and the representations and other statements
contained in the Loan Documents as of the date of this Agreement.
2. Lender shall waive the default described in Recital D of this
Agreement.
3. Section 12(x) of the Loan and Security Agreement shall be amended to
read:
(x) Borrowers shall not permit their ratio of cumulative net income
(exclusive of any extraordinary income, non-operating gains,
loss carryforwards, or gains due to changes in accounting) plus
depreciation and amortization for the four (4) most recent
fiscal quarters to the sum of the current maturities of
Borrowers' long-term indebtedness (including, but not limited
to, the current portion of any terms loan owing to Lender) for
the applicable period (all of the foregoing determined in
accordance with generally accepted accounting principles) to be
less than 1.25:1.0 at the end of each fiscal quarter ending on
and after May 31, 1996 during the term of this Agreement.
Borrowers shall provide Lender with a written report of the
ratio described in this subsection (x) on a quarterly basis
during the term of this Agreement. Such report shall be in a
form acceptable to Lender acting in good faith.
4. Borrowers, jointly and severally, represent and warrant to Lender
that they have not defaulted upon any of their respective obligations under the
Loan Documents (except for the default described in Recital C which has been
waived by Lender).
5. BORROWERS HEREBY WAIVE AND FOREVER DISCHARGE LENDER AND ITS
SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM ALL KNOWN AND
UNKNOWN, ABSOLUTE AND CONTINGENT, CLAIMS, DEFENSES, SETOFFS, COUNTERCLAIMS,
CAUSES OF ACTION, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS OF ANY KIND
EXISTING OR ACCRUED AS OF THE DATE OF THIS AGREEMENT.
6. Notwithstanding the execution of this Agreement, Borrowers shall be
jointly and severally liable for the payment and performance of their present
and future obligations under the Loan Documents and all of their present and
future obligations to Lender
- 2 -
61
under the Loan Documents and otherwise shall continue to be secured by all of
Borrowers' present and future personal and real property and other rights and
assets of any kind (collectively "Lender Collateral") including, but not
limited to, all of Borrowers' present and future accounts, chattel paper,
contract rights, documents, equipment, fixtures, general intangibles, goods,
instruments, inventory, minerals and the like, and the proceeds and products
thereof.
7. Borrowers, jointly and severally, hereby represent, warrant to and
covenant with that Lender's liens, security interests, encumbrances and claims
against the Lender Collateral shall continue to be prior and superior to any
other liens, security interests, encumbrances or claims of any kind except for
those specifically provided otherwise in the Loan Documents.
8. Borrowers, jointly and severally, shall pay all of Lender'
attorneys' fees and other expenses incurred in connection with the negotiation,
drafting or execution of this Agreement. The amounts described in this
paragraph shall be in addition to, and not in lieu of, the interest, fees and
other charges owing under the Loan Documents.
9. The Loan Documents shall remain in full force and effect except as
amended by this Agreement.
10. This Agreement and the various documents described herein
represent the complete and integrated understanding between the parties
pertaining to the subject matter hereof. All prior and contemporaneous
understandings and agreements, written or oral, express or implied, shall be of
no further force and effect to the extent inconsistent herewith.
BORROWER: LENDER:
PORTFIELD INVESTMENTS, INC. NATIONAL CANADA FINANCE CORP.
By: By:
---------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Title: Vice President
-------------------------
By:
------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President
WESCOURT GROUP, INC.
By:
----------------------------
Title:
-------------------------
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62
WESCOURT DISTRIBUTING, INC.
By:
----------------------------
Title:
-------------------------
WESFRAC, INC.
By:
----------------------------
Title:
-------------------------
WESTEC DENVER, INC.
By:
----------------------------
Title:
-------------------------
XXXXX-XXXX CORP. UTAH
By:
----------------------------
Title:
-------------------------
XXXXX-XXXX CORP.
By:
----------------------------
Title:
-------------------------
XXXXX-XXXX CORP., MONTROSE, INC.
By:
----------------------------
Title:
-------------------------
WESTEC FRUITA, INC.
By:
----------------------------
Title:
-------------------------
MONTROSE PROPANE, INC.
By:
----------------------------
Title:
-------------------------
GRAND MESA TEXACO, INC.
By:
----------------------------
Title:
-------------------------
FRUITA RP HOLDING, INC.
By:
----------------------------
Title:
-------------------------
- 4 -
63
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND RELATED DOCUMENTS
This Fourth Amendment to Loan and Security Agreement and Related
Documents ("Fourth Amendment") is executed by Portfield Investments, Inc., a
Colorado corporation ("Portfield"), Wescourt Group, Inc., a Delaware
corporation ("Wescourt"), Wescourt Distributing, Inc., a Colorado corporation,
Wesfrac, Inc., a Colorado corporation ("Wesfrac"), Westec Denver, Inc., a
Colorado corporation, Xxxxx-Xxxx Corp. Utah, a Colorado corporation, Xxxxx-Xxxx
Corp., a Colorado corporation, Xxxxx-Xxxx Corp., Montrose, Inc., a Colorado
corporation ("Petro-Xxxx Xxxxxxxx"), Westec Fruita, Inc., a Delaware
corporation ("Westec Fruita"), Montrose Propane, Inc. a Colorado corporation,
Grand Mesa Texaco, Inc., a Colorado corporation, and Fruita RP Holding, Inc., a
Delaware corporation, all with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx,
Xxxxxxxx 00000 (collectively "Borrowers"), Xxxxx-Xxxx Convenience Stores, Inc.,
a Colorado corporation, with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx,
Xxxxxxxx 00000 ("PMCS"), and National Canada Finance Corp. with an address at
0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 ("NCFC"), for valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, on
this 12th day of March, 1997. Hereinafter, each of Borrowers may be referred
to singularly as a "Borrower."
RECITALS
A. Borrowers, Mesa Environmental, Inc. fka Wescourt
Environmental, Inc., a Colorado corporation ("MEI"), Fruita Investments, Inc.,
a Colorado corporation ("FII") and Fruita Marketing & Management, Inc., a
Delaware corporation ("FMMI") executed and delivered to NCFC a Loan and
Security Agreement and various other loan documents on or about October 6,
1995. Such documents have been amended by that First Amendment to Loan and
Security Agreement and Related Documents dated October 6, 1995, Second
Amendment to Loan and Security Agreement dated August 23, 1996, Third Amendment
to Loan and Security Agreement dated November 18, 1996 and various related
documents. Hereinafter, the Loan and Security Agreement and any amendments,
modifications, replacements and substitutions thereto may be referred to
collectively as the "NCFC Loan Agreement" and all of the documents described in
this paragraph, any related documents, instruments and agreements, and any
amendments, modifications, replacements and substitutions to any of the
foregoing may be referred to collectively as the "NCFC Loan Documents".
B. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to such terms in the NCFC Loan Agreement.
C. Subject to the terms and conditions set forth in the NCFC Loan
Documents, MEI, FII, and FMMI have been released from their obligations to NCFC
thereunder.
64
D. Borrowers and PMCS wish the following actions to be taken by
the parties described below:
(i) PMCS shall become a "Borrower" (as such term is defined
in the NCFC Loan Agreement) under the NCFC Loan Agreement and be
entitled to the rights and subject to the obligations of a "Borrower"
that are contained in the NCFC Loan Documents. Without limiting the
foregoing: (a) NCFC may make Loans and provide Letters of Credit to
or for the benefit of PMCS based upon the terms and conditions set
forth in the NCFC Loan Documents, (b) the other Borrowers, jointly
and severally, shall absolutely and unconditionally guaranty and
secure all of PMCS' Liabilities to NCFC and any Affiliate of NCFC with
all of their Collateral (except for the Petro-Xxxx Xxxxxxxx and Westec
Fruita assets and Wesfrac Stock constituting a portion of the Xxxxxx
Collateral as defined below); and (c) PMCS shall absolutely and
unconditionally guaranty and secure all of the other Borrower's
Liabilities to NCFC and any Affiliate of NCFC with all of its
Collateral (except for the Xxxxxx Collateral);
(ii) In consideration for the Petro-Xxxx Xxxxxxxx and Westec
Fruita Notes, Petro-Xxxx Xxxxxxxx and Westec Fruita shall sell PMCS
the Petro-Xxxx Xxxxxxxx and Westec Fruita Stores (as defined below) in
accordance with the Petro-Xxxx Xxxxxxxx and Westec Fruita Purchase
Agreements (as defined below);
(iii) In consideration for the payment of $10,000,000.00,
Diamond Shamrock (as defined below) shall sell PMCS the Diamond
Shamrock Stores (as defined below) in accordance with the Diamond
Shamrock Purchase Agreement (as defined below);
(iv) Xxxxxx shall provide PMCS with the Xxxxxx Loan (as
defined below). Subject to the terms and conditions set forth in the
Intercreditor Agreement (as defined below), Portfield, Wescourt and
Wesfrac shall guarantee the payment and performance of PMCS'
obligations under the Xxxxxx Loan and PMCS, Wescourt and Wesfrac shall
provide Xxxxxx with a first priority security interest in: (a) certain
PMCS personal property assets described on EXHIBIT A attached hereto
and incorporated herein by this reference; (b) certain PMCS real
property and real property interests pertaining to the real property
located at the addresses set forth on EXHIBIT B attached hereto and
incorporated herein by this reference; (c) the Wesfrac Stock
constituting a portion of the Xxxxxx Collateral (as defined below);
and (d) a second priority security interest in the Fractionator (as
defined below);
(v) Xxxxxx (as defined below) shall provide Portfield
2
65
with the Xxxxxx Loan (as defined below). WLD (as defined below) shall
guarantee the payment and performance of Portfield's obligations to
Xxxxxx under the Xxxxxx Loan. Portfield and Wescourt shall indemnify
WLD for any damages suffered by WLD with respect to the Xxxxxx Loan
and Portfield shall secure its indemnity with a pledge of the
Portfield Note (as defined below) and an assignment of Portfield's
second priority security interest in the PMCS assets constituting a
portion of Xxxxxx'x Collateral. Such indemnification agreements and
related pledges and assignments shall not be assigned, conveyed, sold,
transferred or encumbered by or to Xxxxxx without NCFC's prior written
consent.
(vi) Portfield shall provide PMCS with the Portfield Loan
(as defined below) for the purchase of the Diamond Shamrock Stores.
Wescourt shall guarantee the payment and performance of PMCS'
obligations under the Portfield Loan and PMCS shall provide Portfield
with a second priority security interest in the PMCS assets
constituting a portion of the Xxxxxx Collateral.
E. The outstanding principal balance on Borrowers' and PMCS'
obligations to NCFC under the NCFC Loan Documents amounted to approximately
$6,520,568.91 of March 7, 1997 and interest and expenses are accruing thereon
as set forth in the NCFC Loan Documents.
F. Borrowers, PMCS and NCFC wish to amend certain terms and
conditions set forth in the NCFC Loan Documents to amend certain provisions
contained in the NCFC Loan Documents as set forth in this Fourth Amendment.
AGREEMENTS
1. The NCFC Loan Agreement and the other NCFC Loan Documents are
hereby amended as follows:
(a) PMCS is hereby added as an additional Borrower under
the NCFC Loan Agreement and all references to "Borrower" or
"Borrowers" shall mean Borrowers and PMCS, jointly and severally, in
all respects;
(b) All references to "Borrower" or "Borrowers" in the
Guaranties executed by the Borrowers and constituting a portion of the
NCFC Loan Documents shall mean Borrowers and PMCS, jointly and
severally, in all respects;
(c) All references to "Borrower" or "Borrowers" in the
Third Party Security Agreements executed by the Borrowers and
3
66
constituting a portion of the NCFC Loan Documents shall mean Borrowers
and PMCS, jointly and severally, in all respects;
(d) All notices to Borrower, PMCS or NCFC under the Loan
Agreement and other Loan Documents shall be sent to the following
addresses and telecopy numbers for such parties:
If to any Borrower or PMCS:
0000 Xxxxxxx 0 xxx 00
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
If to NCFC:
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
(e) PMCS shall absolutely and unconditionally guarantee
the payment and performance of each Borrower's joint and several
obligations to NCFC under the NCFC Loan Documents upon the execution
of this Agreement. Such guaranty shall be in form and substance
acceptable to NCFC in its sole discretion;
(f) PMCS shall grant NCFC a first priority security
interest in its Collateral (except for the Xxxxxx Collateral excluding
the Fractionator) to secure the payment and performance of the
Borrower's and PMCS' joint and several obligations to NCFC under the
NCFC Loan Documents upon the execution of this Agreement. The
security agreements, financing statements, and other loan documents
executed by PMCS shall be in form and substance acceptable to NCFC in
its sole discretion;
(g) NCFC hereby releases all of its liens and security
interests in (i) the Xxxxxx Collateral excluding the Fractionator,
(ii) the Portfield Note and (iii) the Petro-Xxxx Xxxxxxxx and Westec
Fruita Notes;
(h) PMCS and Borrowers shall provide and cause NCFC to be
provided with an Intercreditor and Subordination Agreement
("Intercreditor Agreement") upon the execution of this Fourth
Amendment. Such Intercreditor Agreement shall be in form and
substance and from such parties as are acceptable to NCFC in its sole
discretion;
(i) PMCS and Borrowers shall cause NCFC to be provided
with the Xxxxxx Estoppel Letter (as defined below) prior to or
4
67
upon the execution of this Fourth Amendment. (A faxed copy of such
letter has been provided to NCFC prior to the date hereof);
(j) PMCS and Borrowers shall provide NCFC with landlord
waivers for all of PMCS' leased premises [or permit NCFC to reserve
six (6) months' rent for each location that is not covered by a
landlord waiver] within twenty (20) days from the date of this Fourth
Amendment. Such landlord waivers shall be in form and substance
acceptable to NCFC in its sole discretion; and
(k) PMCS and Borrowers acknowledge and agree to comply
with and be bound by all of the terms and conditions of the NCFC Loan
Documents (including, but not limited to, the Intercreditor Agreement,
this Fourth Amendment, and any related documents) upon the execution
of this Fourth Amendment.
2. SECTION 1 of the NCFC Loan Agreement is hereby amended by
adding the following definitions:
"Convenience Stores" shall mean collectively the Diamond
Shamrock Stores and the Petro-Xxxx Xxxxxxxx and Westec Fruita Stores
located at the addresses described in EXHIBIT B to the Fourth
Amendment.
"Diamond Shamrock" shall mean Diamond Shamrock Refining and
Marketing Company.
"Diamond Shamrock Purchase Agreement" shall mean the Asset
Purchase and Branding Agreement between Diamond Shamrock and Wescourt
dated October 29, 1996 as amended by the First Amendment to Asset
Purchase and Branding Agreement dated December 17, 1996, Second
Amendment to Asset Purchase and Branding Agreement dated as of January
27, 1997 and the Third Amendment to Asset Purchase and Branding
Agreement dated as of March 5, 1997, the letter agreement between
Diamond Shamrock, Wescourt and PMCS dated February 20, 1997, and the
Assumption and Amendment Agreement between Diamond Shamrock, Wescourt
and PMCS dated March 4, 1997.
"Diamond Shamrock Stores" shall mean the convenience stores
and related assets sold by Diamond Shamrock to PMCS and located at the
addresses described in EXHIBIT B to the Fourth Amendment.
"Fourth Amendment" shall mean the Fourth Amendment to Loan and
Security Agreement and Related Documents dated March 12, 1997 by and
among Borrowers and Lender.
"Fractionator" shall mean the equipment described in
5
68
EXHIBIT C to the Fourth Amendment, all modifications, replacements and
substitutions thereto, and all identifiable cash proceeds of any of
the foregoing.
"Xxxxxx" shall mean Xxxxxx Financial, Inc.
"Xxxxxx Loan" shall mean the term loan in the original
principal amount of $8,000,000.00 from Xxxxxx to PMCS and evidenced by
the Xxxxxx Loan Documents.
"Xxxxxx Loan Documents" shall mean the Term Loan and Security
Agreement, Guaranties from Portfield, Wescourt and Wesfrac, Security
Agreements from Wescourt and Wesfrac, financing statements from PMCS,
Wescourt and Wesfrac, Deeds of Trust and Leasehold Deeds of Trust from
PMCS, and related documents dated on or about the date hereof.
"Xxxxxx Collateral" shall mean the Wesfrac Stock, the
Fractionator, and all of PMCS' personal property described on EXHIBIT
A to the Fourth Amendment and PMCS' real property and real property
interests pertaining to the real property located at the addresses
described on EXHIBIT B to the Fourth Amendment.
"Xxxxxx" shall mean Xxxxxx Guaranty Trust Company of New York.
"Xxxxxx Estoppel Letter" shall mean the estoppel letter from
Xxxxxx to Lender dated on or about March 5, 1997.
"Xxxxxx Loan" shall mean the demand loan in the original
principal amount of up to $4,500,000.00 from Xxxxxx to Portfield and
evidenced by the Xxxxxx Loan Documents.
"Xxxxxx Loan Documents" shall mean the Xxxxxx Demand Note,
Guaranties from WLD, Xxxxxx Estoppel Letter, the indemnifications of
Wescourt and Portfield to WLD for any damages suffered by WLD with
respect to the Xxxxxx Loan, and related documents dated on or about
the date hereof.
"Petro-Xxxx Xxxxxxxx" shall mean Xxxxx-Xxxx Corp., Montrose,
Inc., a Colorado corporation.
"Petro-Xxxx Xxxxxxxx and Westec Fruita Stores" shall mean the
convenience stores and related assets sold by Petro-Xxxx Xxxxxxxx and
Westec Fruita to PMCS and located at the addresses described in
EXHIBIT B attached hereto.
"Petro-Xxxx Xxxxxxxx and Westec Fruita Notes" shall mean the
subordinated unsecured promissory notes issued by PMCS in favor of
Petro-Xxxx Xxxxxxxx and Westec Fruita in the original
6
69
principal amounts of $716,438.78 and $485,925.82, respectively, for
the purchase of the Petro-Xxxx Xxxxxxxx and Westec Fruita Stores.
"Petro-Xxxx Xxxxxxxx and Westec Fruita Purchase Agreements"
shall mean the Asset Sale and Purchase Agreements between PMCS and
Petro-Xxxx Xxxxxxxx and Westec Fruita, respectively, dated January 31,
1997;
"PMCS" shall mean Xxxxx-Xxxx Convenience Stores, Inc., a
Colorado corporation.
"Portfield Loan" shall mean the term loan in the original
principal amount of $2,500,000.00 from Portfield to PMCS and evidenced
by the Portfield Loan Documents.
"Portfield Loan Documents" shall mean the Portfield Note,
security agreement, financing statements, and deeds of trust from
PMCS, guaranty from Wescourt, and related documents dated on or about
the date hereof.
"Portfield Note" shall mean the promissory note issued by PMCS
in favor of Portfield in the original principal amount of
$2,500,000.00 and dated on or about the date hereof.
"Wescourt" shall mean Wescourt Group, Inc., a Delaware
corporation.
"Wesfrac Stock" shall mean all of Wesfrac's issued and
outstanding stock at any time and all distributions thereon. (Nothing
contained herein shall constitute Lender's authorization for Wesfrac
to declare and/or issue any distributions on the Wesfrac stock that
are not permitted under the terms and conditions set forth in this
Agreement.
"Westec Fruita" shall mean Westec Fruita, Inc., a Delaware
corporation.
"WLD" shall mean the WLD Trust, an Ohio testamentary trust.
3. The following definitions set forth in SECTION 1 of the NCFC Loan
Agreement are hereby amended to read as follows:
"Collateral" shall mean all of the property of Borrowers
described in SECTION 5 hereof, together with all other real or
personal property of Borrowers now or hereafter pledged to Lender to
secure repayment of any of the Liabilities, including without
limitation all Accounts, Inventory, General Intangibles and Equipment
of Borrowers. Notwithstanding the foregoing, the term Collateral
shall not include the Xxxxxx Collateral.
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70
"Eligible Acquired Equipment" shall mean Equipment of any
Borrower acquired as part of the acquisition of the assets of another
business after the date of this Agreement which Lender, in good faith,
determines to be eligible. Without limiting the foregoing, unless
otherwise agreed by Lender, the following Equipment of any Borrower is
not Eligible Acquired Equipment: (i) Equipment which is not in good
condition; (ii) Equipment which is obsolete; (iii) New Equipment which
Lender determines, in good faith, to be unacceptable due to age, type,
category and/or quantity; (iv) Equipment with respect to which Lender
does not have a first and valid fully perfected security interest; (v)
Equipment which may constitute fixtures under applicable law; (vi)
Equipment which is stored with or located on the premises of a bailee,
consignee, warehouseman, processor or other third party; or (vii) any
Equipment constituting any portion of the Xxxxxx Collateral.
"Eligible Existing Equipment" shall mean Equipment of any
Borrower existing as of the date of this Agreement which Lender, in
good faith, determines to be eligible. Without limiting the
foregoing, unless otherwise agreed by Lender, the following Equipment
of any Borrower is not Eligible Existing Equipment: (i) Equipment
which is not in good condition; (ii) Equipment which is obsolete;
(iii) Equipment which Lender determines, in good faith, to be
unacceptable due to age, type, category and/or quantity; (iv)
Equipment with respect to which Lender does not have a first and valid
fully perfected security interest; (v) Equipment which may constitute
fixtures under applicable law; (vi) Equipment which is stored with or
located on the premises of a bailee, consignee, warehouseman,
processor or other third party; or (vii) any Equipment constituting
any portion of the Xxxxxx Collateral.
"Eligible Purchased Equipment" shall mean Equipment of any
Borrower purchased after the date of this Agreement which Lender, in
good faith, determines to be eligible. Without limiting the
foregoing, unless otherwise agreed by Lender, the following Equipment
of any Borrower is not Eligible Purchased Equipment: (i) Equipment
which is not in good condition; (ii) Equipment which is obsolete;
(iii) Equipment which Lender determines, in good faith, to be
unacceptable due to age, type, category and/or quantity; (iv)
Equipment with respect to which Lender does not have a first and valid
fully perfected security interest; (v) Equipment which may constitute
fixtures under applicable law; (vi) Equipment which is stored with or
located on the premises of a bailee, consignee, warehouseman,
processor or other third party; or (vii) any Equipment constituting
any portion of the Xxxxxx Collateral.
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4. SECTION 11(f) of the NCFC Loan Agreement is hereby amended to
read as follows:
(f) Each Borrower is and shall at all times be the lawful
owners of the property now purportedly owned or hereafter purportedly
acquired by such Borrower, free from all liens, claims, security
interests and encumbrances whatsoever, whether voluntarily or
involuntarily created and whether or not perfected, other than the
Permitted Liens. Notwithstanding the foregoing, Petro-Xxxx Xxxxxxxx
and Westec Fruita shall be entitled to sell to PMCS the Petro-Xxxx
Xxxxxxxx and Westec Fruita Stores under the terms and conditions set
forth in the Petro-Xxxx Xxxxxxxx and Westec Fruita Purchase
Agreements.
5. SECTION 11(k) of the NCFC Loan Agreement is hereby amended to
read as follows:
(k) No Borrower is conducting, permitting or suffering to be
conducted, nor shall it conduct, permit or suffer to be conducted, any
activities or transactions with any Affiliate of any Borrower;
provided, however, that any Borrower may enter into transactions with
Affiliates of any Borrower in the ordinary course of business pursuant
to terms that are no less favorable to such Borrower than the terms
upon which such transfers or transactions would have been made had
they been made to or with a Person that is not an Affiliate of any
Borrower and, in connection therewith, may transfer cash or property
to Affiliates of any Borrower for fair value. Notwithstanding the
foregoing: (i) Petro-Xxxx Xxxxxxxx and Westec Fruita may sell PMCS the
Petro- Xxxx Xxxxxxxx and Westec Fruita Stores under the terms and
conditions set forth in the Petro-Xxxx Xxxxxxxx and Westec Fruita
Purchase Agreements; (ii) PMCS may execute and deliver to Petro-Xxxx
Xxxxxxxx and Westec Fruita the Petro-Xxxx Xxxxxxxx and Westec Fruita
Notes in connection with PMCS' purchase of the Petro-Xxxx Xxxxxxxx and
Westec Fruita Stores; (iii) Portfield may provide PMCS with the
Portfield Loan; (iv) PMCS and Wescourt may execute and deliver to
Portfield the Portfield Loan Documents; (v) PMCS may issue the
Portfield Note to Portfield; (vi) Portfield may provide an
indemnification to WLD for any damages suffered by WLD with respect to
the Xxxxxx Loan and secure such indemnification with a pledge of the
Portfield Loan Documents (Lender recognizes that WLD may possess a
power of attorney for certain rights belonging to Portfield in its
collateral and, upon the foreclosure of Portfield's pledge to WLD of
the Portfield Loan Documents, WLD shall be the owner of such Loan
Documents and related rights in the PMCS assets constituting a portion
of the Xxxxxx Collateral); and (vii) Wescourt may provide an
indemnification to WLD for any damages suffered by WLD with respect to
the Xxxxxx Loan.
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6. SECTION 11(p) of the NCFC Loan Agreement is hereby amended to
read as follows:
(p) Except as noted in SECTION 12(K) of this Agreement,
no Borrower is now obligated, nor shall it create, incur, assume or
become obligated (directly or indirectly), for any loans or other
indebtedness for borrowed money other than the Loans, except that such
Borrower may: (i) borrow money from a Person other than Lender on an
unsecured and subordinated basis if a subordination agreement in favor
of Lender and in form and substance satisfactory to Lender is executed
and delivered to Lender relative thereto; (ii) maintain any present
indebtedness to any Person and incur the other indebtedness which is
set forth on EXHIBIT D; (iii) incur unsecured indebtedness to trade
creditors in the ordinary course of such Borrower's business; and (iv)
acquire the assets of another company and obtain an unsecured loan or
a loan secured solely by the acquired real property and the cash
proceeds thereof from the seller of such assets so long as no Event of
Default has occurred or would be caused by such action, Lender is
provided with at least thirty (30) days' prior written notice of such
acquisition and a valid, enforceable, perfected, and sole lien,
security interest and encumbrance upon the acquired assets (except for
the acquired real property and the cash proceeds thereof), and a
subordination or intercreditor agreement in favor of Lender and in
form and substance satisfactory to Lender is executed and delivered to
Lender by the seller of such assets.
7. SECTION 12(k) of the NCFC Loan Agreement is hereby amended to
read as follows:
(k) No Borrower shall assume, guarantee or endorse, or
otherwise become liable in connection with, the obligations of any
Person, except: (i) by endorsement of instruments for deposit or
collection or similar transactions in the ordinary course of business,
and (ii) for guarantees of Affiliate obligations consented to by
Lender which consent shall be granted or denied by Lender acting in
good faith. Notwithstanding the foregoing, Lender consents to (A)
Portfield's, Wescourt's and Wesfrac's execution and delivery of the
guaranties constituting a portion of the Xxxxxx Loan Documents; (B)
Wescourt's execution and delivery of the guaranty constituting a
portion of the Portfield Loan Documents; (C) Portfield's guaranty of
PMCS's obligations under the Diamond Shamrock Purchase Agreement; (D)
the guaranties for the benefit of Lender pursuant to this Agreement
and the other Loan Documents; (E) Portfield's and Wescourt's
indemnifications to WLD for any damages suffered by WLD with respect
to the Xxxxxx Loan; (F) Wescourt's and PMCS'
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indemnifications to Diamond Shamrock contained in the Diamond Shamrock
Purchase Agreement; and (G) the liens and security interests described
in Section 13 of this Agreement.
8. SECTION 12(l) of the NCFC Loan Agreement is hereby amended to
read as follows:
(l) Except for The Coastal Corporation's acquisition of up to
fifty percent (50%) of Westec Denver, Inc. stock and the acquisition
of assets permitted in SECTION 11(P) of this Agreement, no Borrower
shall permit any change in its ownership or control or engage in any
merger or acquisition without obtaining the prior written consent of
Lender which consent may be withheld by Lender acting in good faith.
Notwithstanding the foregoing, Lender hereby consents to: (i)
Petro-Xxxx Xxxxxxxx'x and Westec Fruita's sale to PMCS of the Petro-
Xxxx Xxxxxxxx and Westec Fruita Stores; and (ii) PMCS's acquisition of
the Convenience Stores.
9. NCFC waives SECTION 12(o) of the NCFC Loan Agreement to the
extent necessary to permit the amendment of Portfield's articles of
incorporation of Portfield as set forth in EXHIBIT D attached hereto and
incorporated herein by this reference.
10. SECTION 13(l) of the NCFC Loan Agreement is hereby amended by
deleting the word "or" at the end of that subsection.
11. SECTION 13(m) of the NCFC Loan Agreement is hereby amended by
deleting the period at the end of that subsection and substituting a semicolon
in lieu of such period.
12. SECTION 13 of the NCFC Loan Agreement is hereby amended by
adding new SECTIONS 13(n), (o), (p) and (q) which shall read as follows:
(n) Borrowers fail to provide Lender with access to
accurate and complete copies of all of the existing Diamond Shamrock
Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx and
Westec Fruita Purchase Agreement and related documents, Petro-Xxxx
Xxxxxxxx and Westec Fruita Notes, Portfield Loan Documents (and
related WLD loan documents), Xxxxxx Loan Documents and Xxxxxx Loan
Documents on or before any modification of this Agreement on or about
March 12, 1997;
(o) Borrowers fail to provide Lender with accurate and
complete copies of all of the existing Diamond Shamrock Purchase
Agreement and related documents, Petro-Xxxx Xxxxxxxx and Westec Fruita
Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx and
Westec Fruita Notes, Portfield Loan Documents (and related WLD loan
documents), Xxxxxx Loan
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Documents and Xxxxxx Loan Documents within twenty (20) days from any
modification of this Agreement on or about March 12, 1997;
(p) Without limiting any of the other terms and
conditions set forth in this Agreement or the other Loan Documents,
any of the following occurs without the prior written consent of
Lender which may be withheld in Lender's sole discretion: (i) any
Borrower obtains any additional loans or other financial
accommodations from or provides any additional guaranties or
collateral to WLD, Xxxxxx or Xxxxxx; or (ii) the Diamond Shamrock
Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx and
Westec Fruita Purchase Agreement and related documents, Petro-Xxxx
Xxxxxxxx and Westec Fruita Notes, Portfield Loan Documents (and
related WLD documents), Xxxxxx Loan Documents or Xxxxxx Loan Documents
shall be prepaid in whole or in part (except for prepayments required
under the Xxxxxx Loan Documents for sales, loss or damage, or
condemnation of or to the Xxxxxx Collateral) or shall be amended,
modified, replaced, substituted or supplemented in any way which (A)
increases the amount of any loans or other obligations described
therein, (B) accelerates or increases any payments due thereunder, (C)
increases any interest rate described therein, (D) shortens the
maturity date thereof, or (E) increases, replaces or substitutes any
co-borrowers, accommodation parties, guaranties or collateral
therefor; or
(q) Without limiting any other Event of Default hereunder, a
material event of default shall occur under the Diamond Shamrock
Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx and
Westec Fruita Purchase Agreement and related documents, Petro-Xxxx
Xxxxxxxx and Westec Fruita Notes, Portfield Loan Documents (and
related WLD documents), Xxxxxx Loan Documents or Xxxxxx Loan Documents
and not be cured or waived within the time periods permitted under
such documents or any lender or seller under such documents seeks to
accelerate its obligations from and/or exercise any post-default or
post-maturity remedies against the other parties under such
documents.
13. EXHIBIT A to the NCFC Loan Agreement (Permitted Liens) is
amended by adding the following provision:
3. the liens and security interests contained in the
Xxxxxx Loan Documents and Portfield Loan Documents as permitted or
restricted by this Agreement and any intercreditor agreement executed
by Lender.
14. EXHIBIT B to the NCFC Loan Agreement (Chief Executive Offices,
Other Offices, Places of Business and Post Office Boxes) is
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amended by adding the Other Offices contained at the following addresses:
0000 X. Xxxx
Xxxxxxx, XX 00000
000 Xxxxx Xxxx @ Xxxxx Xxxxxx
Xxxxx, XX 00000
0000 Xxxxxxxx @ Xxxxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
0000 X Xxxx @ 00 Xxxx
Xxxxx Xxxxxxxx, XX 00000
0000 Xxxxx Xxxxxx @ 00 Xxxx
Xxxxx Xxxxxxxx, XX 00000
000 Xxxxx Xxxxxx & Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
000 Xxxxx Xxxxxxxx Xxxxxx & Xxxxx
Xxxxxxxx, XX 00000
0000 Xxxx Xxxxxx
Xxxxxxxx Xxxxxxx, XX 00000
0000 Xxxxxxxx
Xxxxx Xxxxxxxx, XX 00000
0000 Xxxxxxx 0 & 00
Xxxxx Xxxxxxxx, XX 00000
000 Xxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
0000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
000 X. Xxxx
Xxxxxxxx, XX 00000
15. EXHIBIT C to the NCFC Loan Agreement (Former Corporate
Names/Tradenames) is amended by adding the following tradename for PMCS:
Super Mart
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16. EXHIBIT D to the NCFC Loan Agreement (Permitted Indebtedness)
is amended by adding the following thereto:
4. All of the Indebtedness described in the Diamond
Shamrock Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx
and Westec Fruita Purchase Agreement and related documents, Xxxxxx
Loan Documents, Xxxxxx Loan Documents, Petro-Xxxx Xxxxxxxx and Westec
Fruita Notes, and Portfield Loan Documents as permitted or restricted
by this Agreement or any intercreditor agreement executed by Lender.
17. EXHIBIT E to the NCFC Loan Agreement is amended by adding PMCS
as a subsidiary of Wescourt and Wescourt as PMCS' sole shareholder.
18. All of the NCFC Loan Documents are amended to incorporate the
same types of changes affecting the NCFC Loan Agreement that are described in
this Fourth Amendment.
19. Borrowers and PMCS hereby acknowledge and reaffirm the truth
and accuracy of all of the Recitals contained in this Fourth Amendment and the
representations and other statements contained in the NCFC Loan Documents
(including the Fourth Amendment) as of the date hereof.
20. Borrowers and PMCS, jointly and severally, hereby represent,
warrant and covenant to NCFC that NCFC's liens, security interests,
encumbrances and claims against the Collateral shall continue to be prior and
superior to any other liens, security interests, encumbrances or claims of any
kind except as otherwise specifically provided for in this Fourth Amendment,
the Intercreditor Agreement and the other NCFC Loan Documents.
21. Borrowers and PMCS, jointly and severally, represent and
warrant to NCFC that they have not defaulted upon any of their respective
obligations under the NCFC Loan Documents. Notwithstanding anything to the
contrary contained herein, NCFC hereby reserves all of its rights and remedies
against Borrowers, PMCS, any third party, or any of their assets for any Event
of
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Default under the NCFC Loan Documents that may have occurred prior to the date
hereof or may occur on or after the date hereof.
22. BORROWERS AND PMCS HEREBY WAIVE AND FOREVER DISCHARGE NCFC AND
ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM ALL KNOWN AND
UNKNOWN, ABSOLUTE AND CONTINGENT, CLAIMS, DEFENSES, SETOFFS, COUNTERCLAIMS,
CAUSES OF ACTION, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS OF ANY KIND
EXISTING OR ACCRUED AS OF THE DATE HEREOF.
23. Borrowers and PMCS shall be jointly and severally liable for
the payment and performance of Borrowers' and PMCS' present and future
indebtedness and obligations under the NCFC Loan Documents and all of
Borrowers' and PMCS' present and future indebtedness and obligations to NCFC
under the NCFC Loan Documents and otherwise shall be secured by all of
Borrowers' and PMCS' present and future personal and real property and other
rights and assets of any kind (other than the Xxxxxx Collateral excluding the
Fractionator) including, but not limited to, all of Borrowers' and PMCS'
present and future accounts, chattel paper, contract rights, documents,
equipment, fixtures, general intangibles, goods, instruments, inventory,
minerals and the like, and the proceeds and products thereof (other than the
Xxxxxx Collateral excluding the Fractionator, the Portfield Loan Documents and
the Petro-Xxxx Xxxxxxxx and Westec Fruita Notes).
24. Borrowers and PMCS, jointly and severally, shall pay all of
NCFC's attorneys' fees and other expenses incurred in connection with the
review, negotiation, drafting and execution of this Fourth Amendment and any
related documents. The amounts described in this paragraph shall be in
addition to, and not in lieu of, the interest, fees and other charges owing
under the NCFC Loan Documents.
25. The NCFC Loan Documents shall remain in full force and effect
except as amended by this Fourth Amendment.
26. This Fourth Amendment, the various documents described herein
(including the Intercreditor Agreement), and any additional documents executed
or obtained by NCFC in connection the foregoing represent the complete and
integrated understanding between the parties pertaining to the subject matter
hereof. All prior and contemporaneous understandings and agreements, written
or oral,
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express or implied, shall be of no further force and effect to the extent
inconsistent herewith.
27. This Fourth Amendment shall be governed by the laws of the
State of Colorado.
28. This Fourth Amendment may be executed in counterparts and
shall be effective when at least one counterpart hereof shall be executed by
all of the parties hereto.
29. BORROWERS, PMCS AND NCFC HEREBY WAIVE ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS
FOURTH AMENDMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE LIABILITIES, THE
COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWERS OR NCFC OR WHICH, IN ANY
WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP
BETWEEN BORROWERS AND NCFC. IN NO EVENT SHALL NCFC BE LIABLE FOR LOST PROFITS
OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
PORTFIELD INVESTMENTS, INC.
By:
-------------------------------------
Title:
----------------------------------
WESCOURT GROUP, INC.
By:
-------------------------------------
Title:
----------------------------------
WESCOURT DISTRIBUTING, INC.
By:
-------------------------------------
Title:
----------------------------------
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WESFRAC, INC.
By:
-------------------------------------
Title:
----------------------------------
WESTEC DENVER, INC.
By:
-------------------------------------
Title:
----------------------------------
XXXXX-XXXX CORP. UTAH
By:
-------------------------------------
Title:
----------------------------------
XXXXX-XXXX CORP.
By:
-------------------------------------
Title:
----------------------------------
XXXXX-XXXX CORP., MONTROSE, INC.
By:
-------------------------------------
Title:
----------------------------------
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WESTEC FRUITA, INC.
By:
-------------------------------------
Title:
----------------------------------
MONTROSE PROPANE, INC.
By:
-------------------------------------
Title:
----------------------------------
GRAND MESA TEXACO, INC.
By:
-------------------------------------
Title:
----------------------------------
FRUITA RP HOLDING, INC.
By:
-------------------------------------
Title:
----------------------------------
XXXXX-XXXX CONVENIENCE STORES, INC.
By:
-------------------------------------
Title:
----------------------------------
NATIONAL CANADA FINANCE CORP.
By:
-------------------------------------
Title:
----------------------------------
By:
-------------------------------------
Title:
----------------------------------
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EXHIBIT A
PERSONAL PROPERTY
1) That certain Asset Purchase and Branding Agreement dated
October 29, 1996 between Diamond Shamrock and Wescourt, as amended from time to
time in accordance with the terms thereof, which agreement has been assigned to
PMCS, subject to the terms of that certain Assignment of Representations,
Warranties, Covenants, Indemnities and Rights (the "Acquisition Assignment
Agreement") between PMCS and Xxxxxx; provided, that notwithstanding anything
herein to the contrary, the foregoing shall not include the terms and
conditions of such agreement which pertain to PMCS's inventory or accounts or
proceeds therefrom;
2) All equipment, machinery, furniture, furnishings and fixtures
owned or leased by PMCS located on, or used in the operation of a convenience
store business at the addresses on Exhibit "B", including, without limitation,
the convenience store, together with all furniture, fixtures, equipment in the
convenience store, any and all lighting (including without limitation any and
all lighting fixtures, lighting pedestals, and flood lights), removable signage
of all varieties (to the extent owned and not leased, except as provided in the
Acquisition Assignment Agreement), sprinkler controls, sprinkler solenoids,
sprinkler heads, exterior menu boards and exterior intercom ordering systems,
exterior music speakers and pedestals, and any and all personal property of any
kind or nature contained in, on, or around and/or associated, in any manner,
with the operation of the convenience store, and all building and construction
materials, supplies and equipment incorporated in the convenience store and all
machinery, appliances, pipes, conduits, generators, engines, pumps, motors,
compressors, boilers, condensing units, disposals, sprinklers, wiring and
furnishings of every kind and description which may be used in connection with
the operation of and located inside the convenience store; and any and all
gasoline or petroleum equipment for use with gasoline or petroleum products,
utensils, parts and spare parts therefor; all outside removable items and any
and all ice machines, ice cream machines, warmers, refrigerators, freezers,
ovens, and toasters; all security, fire, smoke and other alarm systems; all
cash registers and point-of-sale terminals; all computers (hardware and
software); all in-store communication devices; together with any and all
extensions, additions,
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improvements, betterments, after-acquired property that constitutes equipment,
machinery, furnishings, and fixtures of the nature described herein, renewals,
replacements and substitutions or proceeds from a voluntary or involuntary
sale, liquidation or conversion of any of the foregoing; and all attachments,
additions and accessions thereto, all whether nor or hereafter existing or
acquired;
3) All of PMCS's existing and after-acquired liquor licenses and
lottery licenses used by PMCS in connection with a convenience store business
at the addresses on Exhibit "B";
4) All agreements affecting the use, enjoyment or occupancy of a
convenience store business at the addresses on Exhibit "B", now or hereafter
entered into (the "LEASES") and the immediate and continuing right to collect
all rents, income, receipts, royalties, profits, issues, service
reimbursements, fees, revenues and prepayments of any of the same from or
related to the convenience store from time to time accruing under the Leases
(the "RENTS");
5) All claims, demands, rights of action, judgments, insurance
proceeds, compensation, awards of damages and settlements due PMCS hereafter
made resulting from the taking of a convenience store business at the addresses
on Exhibit "B", or any part thereof, by any lawful power or authority by
exercise of the rights of condemnation or under the power of eminent domain, or
for any damage (whether caused by such taking, by casualty or otherwise) to the
convenience store or any part thereof;
6) To the extent assignable, all now or hereafter existing
management contracts and all permits, certificates, licenses, approvals,
entitlements and authorizations, however characterized, issued or in any way
furnished for the acquisition, construction, operation and use of a convenience
store business at the addresses on Exhibit "B" and/or leases, including
building permits, environmental certificates, licenses, certificates of
operation, warranties and guaranties;
7) All of PMCS's rights in and to all trademarks, tradenames,
assumed names, and other rights and interests in and to the names and marks
used by PMCS in connection with a convenience store business at the addresses
on Exhibit "B"; and
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8) Any monies on deposit with or for the benefit of Xxxxxx
including deposits for the payment of real estate taxes.
Notwithstanding anything to the contrary herein, the foregoing collateral shall
not include (i) any of PMCS's accounts, inventory, cash (except (A) all
insurance, condemnation and other proceeds of (1) through (7) above and (B)
monies referenced in (8) above to the extent related to real estate owned or
leased by PMCS)) or the proceeds from such accounts, inventory or cash, or (ii)
any assets transferred by Portfield or any of its directly or indirectly owned
subsidiaries to PMCS after March 12, 1997.
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EXHIBIT B
CONVENIENCE STORES
Diamond Shamrock Stores (identified by location)
0000 X. Xxxx
Xxxxxxx, XX 00000
000 Xxxxx Xxxx @ Xxxxx Xxxxxx
Xxxxx, XX 00000
0000 Xxxxxxxx @ Xxxxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
0000 X Xxxx @ 00 Xxxx
Xxxxx Xxxxxxxx, XX 00000
0000 Xxxxx Xxxxxx @ 00 Xxxx
Xxxxx Xxxxxxxx, XX 00000
000 Xxxxx Xxxxxx & Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
000 Xxxxx Xxxxxxxx Xxxxxx & Xxxxx
Xxxxxxxx, XX 00000
0000 Xxxx Xxxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Petro-Xxxx Xxxxxxxx and Westec Fruita Stores
(identified by location)
0000 Xxxxxxxx
Xxxxx Xxxxxxxx, XX 00000
0000 Xxxxxxx 0 & 00
Xxxxx Xxxxxxxx, XX 00000
000 Xxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
0000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
000 X. Xxxx
Xxxxxxxx, XX 00000
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85
EXHIBIT C
FRACTIONATOR
One (1) Deethanizer Tower, Xxxxxx, Mfg., Serial No. 63.9, approx. 30" x
41-1/2', 596 PSI at 300 degrees, Insulated, 11,800 lb.
One (1) Depropanizer Tower, Xxxxxx Mfg., Serial No. 63.10, approx. 30" x 65',
291 PSI at 300 degrees, Insulated, 18,900 lb.
One (1) Debutanizer Tower, Pipeline Services, Serial No. 684, approx. 24" x
60', 330 PSI at 400 degrees, 3-Section Flanged, Estimated 10,000-12,000 lb.
One (1) Debutanizing Tower, Transmix, Mfg. Xxxxxx, Serial No. 63.11 approx. 18"
x 66', 210 PSI at 300 degrees, 11,500 lb.
One (1) Vacuum Tower, BTX, as shown on list, approx. 30" x 45', currently not
in service, estimated weight 10,000
One (1) Deethanizer Heat Exchanger/Reboiler, KEMCO, Mfg. 1963, Serial No.
63-222, 560 PSI at 300 degrees, approx. 175 sq. ft. capacity
One (1) Depropanizer Heat Exchanger/Reboiler, list shows KEMCO, approx. 100 sq.
ft.
One (1) Debutanizer Heat Exchanger/Reboiler, list shows KEMCO, approx. 825 sq.
ft.
One (1) Debutanizer Heat Exchanger/Reboiler, list shows KEMCO, approx. 65 sq.
ft.
Three (3) Absorber Tanks, plate shows SEMCO, Serial Nos. A2638, A2639, A2640,
Vertical Carbon Steel Seam Welded, approx. 72" x 22', 403 PSI at 750 degrees,
Mfg. 1963, storage only
Two (2) Deabsorber Tanks, Regeneration Exchanger, currently not in service,
plate shows SEMCO, approx. 72" x 20', Serial Nos. A2642 and A2641, 430 PSI at
650 degrees
One (1) Cooling Tower, list shows XXXXXX, 12,800 sq. ft., 10 H.P., Debutanizer
Condenser
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One (1) Cooling Tower, list shows 37,400 sq. ft. capacity, two (2) top mounted
30 H.P. electric motors, high degree difficulty of removal,
Deethanizer/Depropanizer Condenser
One (1) Cooling Tower, list shows 11,800 sq. ft., 20 H.P. motor, Debutanizer
Condenser
One (1) Furnace, Xxxxxxxxx Xxxxx Hot Oil Heater, 10M BTU per hour, vertical,
gas fired, 400 PSI at 650 degrees, Serial No. 63-5-7810, with Xxxxxx and Xxxxxx
Chart Records, Honeywell Temperature Indicator, related equipment
One (1) Furnace, Xxxxxxxxx Xxxxx Hot Oil Heater, 5M BTU per hour, vertical, gas
fired, 200 PSI at 650 degrees, Serial No. 63-5-7811, currently not in service
[C-]
Lot Transmix System, includes Xxxxxxxxx-Xxxx 2X1X10 Pump, 3 H.P. motor, Xxxxxx
Dust Scrubber with Serial No. 63-22, 495 PSI and 150 degrees, approx. 28.7 5" x
6' Tank, Xxxxxx Cooling Tower with 7-1/2 H.P. motor, 3 H.P. feed pump, etc.
Lot Hot Oil System, includes 25 H.P. Skidded Pump, Young Aftercooler, three (3)
valves, 4' x 8' Expansion Tank, related equipment
One (1) Pre-Heater, five (5) oval tubes, located behind #2 Debutanizer
One (1) Gas Compressor, Worthington, piston type, 130 H.P., list shows 10-1/2"
x 11" - 8 cylinder, located near large cooling tower
Lot Gas Compressor, Sundyne, includes two (2) 125 H.P. vertical turbine pumps,
one (1) currently disassembled, both not in service, [C-]
One (1) Triplex Pump, Xxxxxxx, 30 H.P. motor
One (1) Quintiplex Pump, Xxxxxxxx, Model 5P-200A, 20 H.P.
Lot Surge/Scrubber Skid, includes SEMCO approx. 5' x 16' horizontal fuel gas
surge tank, SEMCO approx. 24" x 10' horizontal fuel gas scrubber tank, related
valves, piping, located near Xxxxxxxx
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Triplex and Quintiplex pumps, currently not in service
Lot Reflux Accumulator Skid, includes Xxxxxx approx. 30" x 4-1/2' Tank, related
valves, piping, two (2) Pacific pumps with 10 H.P. motors, 5 H.P. pump, etc.
One (1) Air Compressor, Xxxxxx, 2-Stage, 20 H.P. motor, horizontal tank
25
88
EXHIBIT D
Amendment to Portfield, Inc. Articles of Incorporation
26
89
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND RELATED DOCUMENTS
This Fifth Amendment to Loan and Security Agreement and Related
Documents ("Fifth Amendment") is executed by Portfield Investments, Inc., a
Colorado corporation ("Portfield"), Wescourt Group, Inc., a Delaware
corporation ("Wescourt"), Wescourt Distributing, Inc., a Colorado corporation,
Wesfrac, Inc., a Colorado corporation ("Wesfrac"), Westec Denver, Inc., a
Colorado corporation ("Westec Denver"), Xxxxx-Xxxx Corp. Utah, a Colorado
corporation, Xxxxx-Xxxx Corp., a Colorado corporation, Xxxxx-Xxxx Corp.,
Montrose, Inc., a Colorado corporation ("Petro-Xxxx Xxxxxxxx"), Westec Fruita,
Inc., a Delaware corporation ("Westec Fruita"), Montrose Propane, Inc., a
Colorado corporation, Grand Mesa Texaco, Inc., a Colorado corporation, Fruita
RP Holding, Inc., a Delaware corporation ("Fruita RP Holding"), and Super Mart
Convenience Stores, Inc. fka Xxxxx-Xxxx Convenience Stores, Inc., a Colorado
corporation ("SMCS"), all with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx,
Xxxxxxxx 00000 (collectively "Borrowers"), Xxxxxxx Oil Company, Inc., a Texas
corporation, with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx, Xxxxxxxx 00000
("Xxxxxxx"), and National Canada Finance Corp. with an address at 0000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 ("NCFC"), for valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, on
this 11th day of April, 1997. Hereinafter, each of Borrowers may be referred
to singularly as a "Borrower."
RECITALS
A. Borrowers (besides SMCS), Mesa Environmental, Inc. fka
Wescourt Environmental, Inc., a Colorado corporation ("MEI"), Fruita
Investments, Inc., a Colorado corporation ("FII") and Fruita Marketing &
Management, Inc., a Delaware corporation ("FMMI") executed and delivered to
NCFC a Loan and Security Agreement and various other loan documents on or about
October 6, 1995. Such documents have been amended by that certain First
Amendment to Loan and Security Agreement and Related Documents dated October 6,
1995, that certain Second Amendment to Loan and Security Agreement and Related
Documents dated August 23, 1996, that certain Third Amendment to Loan and
Security Agreement and Related Documents dated November 18, 1996, that certain
Fourth Amendment to Loan and Security Agreement and Related Documents dated
March 12, 1997 ("Fourth Amendment"), and the various related documents.
Hereinafter, the Loan and Security Agreement and any amendments, modifications,
replacements and substitutions thereto may be referred to collectively as the
"NCFC Loan Agreement" and all of the documents described in this paragraph, any
related documents, instruments and agreements, and any amendments,
modifications, replacements and substitutions to any of the foregoing may be
referred to collectively as the "NCFC Loan Documents".
90
B. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to such terms in the NCFC Loan Agreement.
C. Subject to the terms and conditions set forth in the NCFC Loan
Documents, MEI, FII, and FMMI have been released from their obligations to NCFC
thereunder.
X. Xxxxx-Xxxx Convenience Stores, Inc. has changed its name to
Super Mart Convenience Stores, Inc.
E. Borrowers and Xxxxxxx wish the following actions to be taken
by the parties described below:
(i) Xxxxxxx shall become a "Borrower" (as such term is
defined in the NCFC Loan Agreement) under the NCFC Loan Agreement and
be entitled to the rights and subject to the obligations of a
"Borrower" that are contained in the NCFC Loan Documents. Without
limiting the foregoing: (a) NCFC may make Loans and provide Letters
of Credit to or for the benefit of Xxxxxxx based upon the terms and
conditions set forth in the NCFC Loan Documents, (b) Borrowers,
jointly and severally, shall absolutely and unconditionally guaranty
and secure all of Xxxxxxx'x Liabilities to NCFC and any Affiliate of
NCFC with all of their Collateral; and (c) Xxxxxxx shall absolutely
and unconditionally guaranty and secure all of Borrower's Liabilities
to NCFC and any Affiliate of NCFC with all of its Collateral;
(ii) In consideration for payments of $7,038,293.00 and
$25,000.00 to XxXxx Xxxxxxx ("XxXxx") and $1,706,926.00 to each of Xxx
Xxxxxxx and Xxxxxx Xxxxxxx, Xx., XxXxx shall assign, convey, sell and
transfer to Wesfrac all of Xxxxxxx'x issued and outstanding capital
stock ("Xxxxxxx Stock") in accordance with the Xxxxxxx Purchase
Agreement (as defined below);
(iii) Subject to the terms and conditions set forth in the
Intercreditor Agreement (as defined below), (a) Xxxxxx shall provide
Wesfrac, Westec Denver and Xxxxxxx with the Second Xxxxxx Loan (as
defined below), (b) Borrowers (besides Wesfrac, Westec Denver and
SMCS) shall guaranty the payment and performance of Wesfrac's, Westec
Denver's and Xxxxxxx'x obligations to Xxxxxx under the Second Xxxxxx
Loan, and (c) Borrowers (besides SMCS) and Xxxxxxx shall provide
Xxxxxx with a first priority security interest in the Second Xxxxxx
Collateral (as defined below) as security for the payment and
performance of Borrowers' (besides SMCS') and Xxxxxxx'x obligations
with respect to the Second Xxxxxx Loan;
(iv) Portfield shall borrow the remaining $2,000,000.00
available under the Xxxxxx Loan and relend such monies to
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Wesfrac under the Second Portfield Loan (as defined below) for the
purchase of the Xxxxxxx Stock. Xxxxxxx shall xxxxx Xxxxxxxxx a second
priority security interest in all of its present and future equipment,
fixtures, the cash proceeds thereof and any other proceeds thereof
that do not constitute a portion of the Collateral to secure the
payment and performance of Wesfrac's obligations under the Second
Portfield Loan.
(v) In addition to the collateral described in the Fourth
Amendment that secures Portfield's indemnification to WLD for damages
suffered by WLD with respect to the Xxxxxx Loan, to the extent that
the following assets constitute a portion of the Second Xxxxxx
Collateral, Borrowers (besides SMCS) shall provide WLD with a second
priority security interest in their present and future equipment,
fixtures, and the cash proceeds thereof and any other proceeds thereof
that do not constitute a portion of the Collateral and Portfield shall
provide WLD with a first priority assignment for security purposes of
the Second Portfield Loan Documents (and its rights in Xxxxxxx'x
present and future equipment, fixtures, the cash proceeds thereof and
any other proceeds thereof that do not constitute a portion of the
Collateral to secure Portfield's indemnification to WLD for damages
suffered by WLD with respect to the Xxxxxx Loan.
F. The outstanding principal balance on Borrowers' and SMCS'
obligations to NCFC under the NCFC Loan Documents amounted to approximately
$6,583,802.02 as of April 9, 1997 and interest, fees and expenses are accruing
thereon as set forth in the NCFC Loan Documents.
G. Borrowers, Xxxxxxx and NCFC wish to amend certain terms and
conditions set forth in the NCFC Loan Documents as set forth in this Fifth
Amendment.
AGREEMENTS
1. The NCFC Loan Agreement and the other NCFC Loan Documents are
hereby amended as follows:
(a) Xxxxxxx is hereby added as an additional Borrower
under the NCFC Loan Agreement and all references to "Borrower" or
"Borrowers" shall mean Borrowers and Xxxxxxx, jointly and severally,
in all respects;
(b) All references to "Borrower" or "Borrowers" in the
Guaranties executed by Borrowers and constituting a portion of the
NCFC Loan Documents shall mean Borrowers and Xxxxxxx, jointly and
severally, in all respects;
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(c) All references to "Borrower" or "Borrowers" in the
Third Party Security Agreements executed by the Borrowers and
constituting a portion of the NCFC Loan Documents shall mean Borrowers
and Xxxxxxx, jointly and severally, in all respects;
(d) All notices to Borrower, Xxxxxxx or NCFC under the
Loan Agreement and other Loan Documents shall be sent to the following
addresses and telecopy numbers for such parties:
If to any Borrower or Xxxxxxx:
c/o Portfield Investments, Inc.
0000 Xxxxxxx 0 xxx 00
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
If to NCFC:
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
(e) Xxxxxxx shall absolutely and unconditionally guaranty
the payment and performance of each Borrower's present and future,
joint and several, obligations to NCFC upon the execution of this
Fifth Amendment. Such guaranty shall be in form and substance
acceptable to NCFC in its sole discretion;
(f) Xxxxx X. Xxxxxx ("Holder") shall absolutely and
unconditionally guaranty the payment and performance of up to
$300,000.00 of the Borrowers' present and future, joint and several,
obligations to NCFC upon the execution of this Fifth Amendment.
Holder also shall be responsible for the payment of any attorneys'
fees, expenses and costs incurred in the enforcement of NCFC's rights
or Holder's obligations under such guaranty. The guaranty shall
expire on April 11, 1998 if no event of default has occurred and is
continuing under the NCFC Loan Documents on that date. The guaranty
shall be in form and substance acceptable to NCFC in its sole
discretion;
(g) Xxxxxxx shall xxxxx NCFC a first priority security
interest in its Collateral to secure the payment and performance of
Borrowers' and Xxxxxxx'x present and future, joint and several,
obligations to NCFC under the NCFC Loan Documents upon the execution
of this Fifth Amendment. The security agreements, financing
statements, and other loan documents executed by Xxxxxxx shall be in
form and substance acceptable to NCFC in its sole discretion;
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(h) All references to "PMCS" or "Xxxxx-Xxxx Convenience
Stores, Inc." in the NCFC Loan Documents shall mean "SMCS" or "Super
Mart Convenience Stores, Inc." respectively;
(i) NCFC hereby releases all of its liens and security
interests in (i) the Second Xxxxxx Collateral and (ii) the Second
Portfield Note and the Second Portfield Loan Documents.
(j) Borrowers and Xxxxxxx shall provide and cause NCFC to
be provided with a First Amended and Restated Intercreditor and
Subordination Agreement ("Intercreditor Agreement") upon the execution
of this Fifth Amendment. Such Intercreditor Agreement shall be in
form and substance and from such parties as are acceptable to NCFC in
its sole discretion and shall replace and supersede the terms and
conditions set forth in the Intercreditor and Subordination between
Borrowers, Xxxxxx, WLD and NCFC dated as of March 12, 1997 in its
entirety;
(k) Borrowers and Xxxxxxx shall provide NCFC with a
landlord waiver for each of Xxxxxxx'x leased premises within twenty
(20) days from the later of the date of this Fifth Amendment or the
execution of the lease for such premises. Until NCFC is provided with
a landlord waiver for any of Xxxxxxx'x leased premises, NCFC shall be
entitled to reserve six (6) months' rent for such premises against the
monies that otherwise would be capable of being borrowed by Xxxxxxx
under the NCFC Loan Documents. NCFC shall be entitled to establish
similar reserves against the Borrowers for their leased premises. All
of the landlord waivers for the Borrowers' and Xxxxxxx'x leased
premises shall be in form and substance acceptable to NCFC in its sole
discretion; and
(l) Borrowers and Xxxxxxx acknowledge and agree to comply
with and be bound by all of the terms and conditions of the NCFC Loan
Documents (including, but not limited to, the Intercreditor Agreement,
this Fifth Amendment, and any related documents) upon the execution of
this Fifth Amendment.
2. SECTION 1(a) of the NCFC Loan Agreement is hereby amended to
read as follows:
(a) "Account," "Account Debtor," "Chattel Paper,"
"Documents," "Equipment," "General Intangibles," "Goods,"
"Instruments," "Inventory" and "Investment Property" shall have the
respective meanings assigned to such terms in the Colorado Uniform
Commercial Code as amended from time to time.
3. SECTION 1 of the NCFC Loan Agreement is hereby amended by
adding the following definitions:
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"Debt to Net Worth Ratio" shall mean the ratio of Borrowers'
total liabilities calculated in accordance with generally accepted
accounting principles (except for debt subordinated to the Liabilities
pursuant to a written agreement in a form acceptable to Lender acting
in good faith) to Borrowers' total Net Worth.
"Fifth Amendment" shall mean the Fifth Amendment to Loan and
Security Agreement and Related Documents dated on or about April 11,
1997 by and among Borrowers and Lender.
"Xxxxxxx" shall mean Xxxxxxx Oil Company, Inc., a Texas
corporation.
"Xxxxxxx Purchase Agreement" shall mean the Stock Purchase
Agreement between Xxxxxxx, XxXxx Xxxxxxx, Xxx Xxxxxxx, Xxxxxx Xxxxxxx,
Xx. and Wesfrac dated on or about April 11, 1997.
"Second Xxxxxx Collateral" shall mean all of Borrowers'
(besides SMCS') real and personal property described on EXHIBIT A to
the Fifth Amendment.
"Second Xxxxxx Loan" shall mean the term loan in the original
aggregate principal amount of up to $7,000,000.00 from Xxxxxx to
Wesfrac, Westec Denver and Xxxxxxx in connection with the Second
Xxxxxx Loan Documents.
"Second Xxxxxx Loan Documents" shall mean any and all
agreements, instruments and documents, together with any amendments,
modifications, restatements and replacements thereof, now or hereafter
evidencing or securing the Second Xxxxxx Loan or any part thereof,
including, without limitation, the Term Loan and Guaranty Agreement,
Security Agreement Re: Equipment, Assignment of Stock Purchase
Agreement from Wesfrac, Pledge Agreement from Wesfrac and Wescourt,
Deed of Trust from Fruita RP Holding, and financing statements from
Borrowers (besides SMCS) dated on or about the date of the Fifth
Amendment.
"Second Portfield Loan" shall mean the term loan in the
original principal amount of $2,000,000.00 from Portfield to Wesfrac
in connection with the Second Portfield Loan Documents.
"Second Portfield Loan Documents" shall mean any and all
agreements, instruments and documents, together with any amendments,
modifications, restatements and replacements thereof, now or hereafter
evidencing or securing the Second Portfield Loan or any part thereof,
including, without limitation, the Second Portfield Note, security
agreements and
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financing statements from Xxxxxxx, and related documents dated on or
about the date of the Fifth Amendment.
"Second Portfield Note" shall mean the promissory note issued
by Wesfrac in favor of Portfield in the original principal amount of
$2,000,000.00 and dated on or about the date of the Fifth Amendment.
"Tangible Net Worth" shall mean, at any time, the total of
shareholders' equity (including capital stock, additional paid-in
capital, and retained earnings) less intangible assets (including
goodwill) plus debt subordinated to the Liabilities (pursuant to a
written agreement in a form acceptable to Lender acting in good faith)
calculated in accordance with generally accepted accounting
principles.
4. The following definitions set forth in SECTION 1 of the NCFC Loan
Agreement are hereby amended to read as follows:
"Collateral" shall mean all of the property of Borrowers
described in SECTION 5 hereof, together with all other real or
personal property of Borrowers now or hereafter pledged to Lender to
secure repayment of any of the Liabilities, including without
limitation all Accounts, Inventory, Investment Property and General
Intangibles of Borrowers. Notwithstanding the foregoing, the term
Collateral shall not include the Xxxxxx Collateral or the Second
Xxxxxx Collateral.
"Loan Availability" for each Borrower shall mean, at any time,
the difference of the following:
(i) up to eighty-five percent (85%) of the face
amount (less maximum discounts, credits and allowances which
may be taken by or granted to Account Debtors in connection
therewith) then outstanding under such Borrower's existing
Eligible Accounts at such time, less such reserves as Lender
in good faith elects to establish; plus
(ii) up to fifty percent (50%) of the value of such
Borrower's then-existing Eligible Inventory, valued at the
lower of cost (determined on an average cost basis and in
accordance with generally accepted accounting principles) or
fair market value, less such reserves as Lender in good faith
elects to establish; plus
(iii) with respect to Wesfrac only, One Million Five
Hundred Thousand Dollars ($1,500,000.00) minus the One Hundred
Twenty Five Thousand Dollars ($125,000.00) monthly payments of
principal described in SECTION 2(c)
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of this Agreement; but only if such amounts are advanced to Wesfrac
on April 11, 1997; minus
(iv) the aggregate undrawn face amount of the Letters of Credit
issued for the account of such Borrower.
Notwithstanding anything to the contrary contained herein, Lender
shall reserve against the Loan Availability for each Borrower on a
monthly basis fifty percent (50%) of the amount of any unpaid fuel
taxes (net of any fuel tax refunds) owing by that entity for the prior
or any previous month (whether or not such taxes are due and payable
at such time). Such reserve for fuel taxes shall be applied against
the Loan Availability for each Borrower based: (i) first, upon its
Eligible Inventory, and (ii) then, upon its Eligible Accounts as
determined by Lender in its sole discretion.
Notwithstanding anything to the contrary contained herein and without
waiving any Event of Default under this Agreement, the reserves for
unpaid fuel taxes against the Loan Availability for each Borrower
shall be increased to one hundred percent (100%) of the amount of any
unpaid fuel taxes owing by that entity (whether or not such taxes are
due and payable at such time) in the event that any Borrower fails to
pay its fuel taxes when due and payable.
"Net Worth" shall mean, at any time, the total of
shareholders' equity (including capital stock, additional paid-in
capital, and retained earnings) plus debt subordinated to the
Liabilities (pursuant to a written agreement in a form acceptable to
Lender acting in good faith) calculated in accordance with generally
accepted accounting principles.
"Termination Date" shall mean the earliest to occur of the
following: (i) October 8, 1998; (ii) the date Lender makes demand for
the payment of the Liabilities; or (iii) the date the Liabilities are
accelerated pursuant to SECTION 14 hereof.
5. The definitions of "Eligible Acquired Equipment", "Eligible
Existing Equipment", and "Eligible Purchased Equipment" are hereby deleted in
their entirety.
6. Subparagraph (v) in the definition of Eligible Accounts is
hereby amended to read as follows:
(v) Accounts in dispute or with respect to which the Account
Debtor has asserted or may assert a counterclaim or has asserted or
may assert a right of setoff against any Borrower (provided, however,
that the
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"ineligible" portion of the account shall be limited to the amount of
the actual or potential setoff or counterclaim);
7. SECTION 2(a) of the NCFC Loan Agreement is hereby amended to
read as follows:
(a) Subject to the terms and conditions of this Agreement
and the Other Agreements, prior to the Termination Date and so long as
no Event of Default has occurred hereunder, Lender shall make Loans to
any Borrower as such Borrower shall from time to time request;
provided, however, that: (i) the total amount of all Loans outstanding
to any Borrower shall not exceed such Borrower's Loan Availability at
any time; and (ii) the total unpaid principal of all Loans outstanding
to the Borrowers and all Letters of Credit issued for the account of
the Borrowers in the aggregate ("Maximum Credit") shall not exceed
Nine Million Dollars ($9,000,000.00) at any time. Such Maximum Credit
shall be increased to:
(i) Twelve Million Dollars ($12,000,000.00) if
Borrowers provide Lender with at least ten (10) days' prior
written notice of such increase and pay the first additional
Facility Fee described in this Agreement and so long as no
Event of Default has occurred hereunder or will occur
hereunder as a result of such increase in the Maximum Credit;
and
(ii) Fourteen Million Dollars ($14,000,000.00) if
Borrowers provide Lender with at least ten (10) days' prior
written notice of such increase and pay or have paid all of
the additional Facility Fees described in this Agreement and
so long as no Event of Default has occurred hereunder or will
occur hereunder as a result of such increase in the Maximum
Credit.
The total unpaid principal of all Loans outstanding to
Borrowers based upon Eligible Inventory shall not exceed Three Million
Dollars ($3,000,000.00) at any time.
Prior to Lender making any Loan, the Loans shall be repaid as
provided elsewhere in this Agreement. If at any time the outstanding
balance on any Borrower's Loans exceeds its Loan Availability or the
principal balance of the outstanding Loans to Borrowers in the
aggregate exceeds the Maximum Credit or any of the other restrictions
set forth in this Agreement, such Borrower or Borrowers shall
immediately, and without the necessity of a demand by Lender, pay to
Lender such amount as may be necessary to eliminate such excess.
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8. The reference to "Seven Hundred Fifty Thousand Dollars
($750,000.00)" contained in SECTION 2(B) of the NCFC Loan Agreement is hereby
amended by to read "One Million Dollars ($1,000,000.00)".
9. SECTION 2 of the NCFC Loan Agreement is hereby amended by
adding SECTION 2(c) thereto which shall read as follows:
All Liabilities of Borrowers to Lender shall be due and payable on the
Termination Date. Unless due and payable on an earlier date in
accordance with the terms of this Agreement, the advance made by
Lender to Wesfrac based upon SUBSECTION (III) in the definition of
"Loan Availability" shall be repaid by Wesfrac in twelve monthly
installments of $125,000.00 plus all accrued but unpaid interest
thereon beginning on May 15, 1997 and continuing on the fifteenth day
of each calendar month thereafter until paid in full.
10. SECTION 3(a) of the NCFC Loan Agreement is hereby amended to
read as follows:
(a) Each Borrower shall pay to Lender interest on the
outstanding principal balance of its Loans monthly in arrears, on the
first day of each month following the execution of this Agreement, at
the per annum rate of one percent (1%) plus the Reference Rate;
provided, however, that such interest rate shall be:
(i) On the day following the closing of the Fifth
Amendment, reduced to the Reference Rate plus one-half of one
percent (.5%) per annum;
(ii) the reduction in the interest rate described in
the preceding subsection shall be eliminated retroactively to
the date of such reduction if (A) Portfield's audited
financial statements for the fiscal year ending February 28,
1997 do not indicate at least Seven Hundred Fifty Thousand
Dollars ($750,000.00) of pre-tax income before extraordinary
or non-operating gains or (B) Borrowers' have not complied
with all of the financial covenants contained in SECTIONS
12(w), (x), (y), (z) AND (aa) of this Agreement;
(iii) reduced to the Reference Rate if (A)
Portfield's audited financial statements for the fiscal year
ending February 28, 1998 indicate at least One Million Dollars
($1,000,000.00) of pre-tax income before extraordinary or
non-operating gains; (B) Borrowers' have complied with all of
the financial covenants contained in SECTIONS 12(w), (x), (y),
(z) AND (aa) of this Agreement; and (C) the reduction set
forth in subsection (i) above
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has not been eliminated pursuant to subsection (ii) above; and
(iv) reduced to the Reference Rate plus one-half of
one percent (.5%) per annum if (A) Portfield's audited financial
statements for the fiscal year ending February 28, 1998 indicate
at least One Million Dollars ($1,000,000.00) of pre-tax income
before extraordinary or non-operating gains; (B) Borrowers' have
complied with all of the financial covenants contained in
SECTIONS 12(w), (x), (y), (z) AND (aa) of this Agreement; and (C)
the reduction set forth in subsection (i) above has been
eliminated pursuant to subsection (ii) above.
In the event that any decrease in the interest rate is eliminated
retroactively as set forth above, Borrowers' shall pay Lender, upon
demand, all of the accrued but unpaid interest arising therefrom.
Notwithstanding anything to the contrary contained herein, following
the occurrence of an Event of Default, each Borrower shall pay to
Lender interest on the outstanding principal balance of its Loans at
the per annum rate of two percent (2%) plus the Reference Rate.
Interest shall be computed on the basis of a year of three hundred
sixty (360) days for the actual number of days elapsed.
11. SECTION 3 (c) of the NCFC Loan Agreement is hereby amended to
read as follows:
(c) All facility fees paid by Borrowers to Lender in
accordance with this Agreement (prior to amendment by the Fifth
Amendment) have been fully earned by Lender and are non-refundable.
Borrower shall pay to Lender on the closing of the Fifth Amendment,
(i) a fully-earned and non-refundable facility fee of $37,500.00 for
the activation of the additional financial accommodations contemplated
in SUBSECTION (iii) of the definition of "Loan Availability" and (ii)
a fully-earned and non-refundable transaction fee of $20,000.00 for
executing the Fifth Amendment and permitting the transactions
described therein. In addition to the foregoing facility fee,
transaction fee and all other facility fees previously paid by
Borrowers to Lender, Borrowers shall pay to Lender the following
fully-earned and non-refundable facility fees if the Maximum Credit is
increased as set forth below under the terms and conditions set forth
in this Agreement:
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Increase in Maximum Credit Additional Facility Fee
-------------------------- -----------------------
$ 9,000,000.00 to $12,000,000.00 $15,000.00
$12,000,000.00 to $14,000,000.00 $10,000.00
or, in lieu of the foregoing additional facility fees,
$ 9,000,000.00 directly to $25,000.00
$14,000,000.00
12. SECTION 3(d) of the NCFC Loan Agreement is hereby amended to
read as follows:
(d) Borrowers shall pay to Lender an unused facility fee,
equal to one quarter of one percent (0.25%) per annum [computed on the
basis of a year of three hundred sixty days for the actual number of
days elapsed] of the amount by which Nine Million Dollars
($9,000,000.00) exceeds the sum of the average daily outstanding Loans
plus the average daily undrawn face amount of the Letters of Credit,
payable monthly in arrears, on the first day of each month following
the execution of this Agreement. Such unused facility fee shall:
(i) be based upon the amount by which Twelve Million
Dollars ($12,000,000.00) exceeds the sum of the average daily
outstanding Loans plus the average daily undrawn face amount
of the Letters of Credit retroactive to the first day of the
calendar year in which the Maximum Credit was increased to
Twelve Million Dollars ($12,000,000.00) if the Maximum Credit
is increased to Twelve Million Dollars ($12,000,000.00) under
the terms and conditions set forth in this Agreement; and
(ii) be based upon the amount by which Fourteen
Million Dollars ($14,000,000.00) exceeds the sum of the
average daily outstanding Loans plus the average daily undrawn
face amount of the Letters of Credit retroactive to the first
day of the calendar year in which the Maximum Credit was
increased to Fourteen Million Dollars ($14,000,000.00) if the
Maximum Credit is increased to Fourteen Million Dollars
($14,000,000.00) under the terms and conditions set forth in
this Agreement.
13. SECTION 5 of the NCFC Loan Agreement is hereby amended to read
as follows:
5. GRANT OF SECURITY INTEREST TO LENDER. As security
for the payment or other satisfaction of its Liabilities, each
Borrower hereby assigns to Lender and grants to Lender a continuing
security interest in the following property of such
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Borrower, whether now or hereafter owned, existing, acquired or arising
and wherever now or hereafter located:
(a) all Accounts and all Inventory whose sale, lease
or other disposition by such Borrower has given rise to
Accounts and have been returned to or repossessed or stopped
in transit by such Borrower;
(b) all Chattel Paper, Instruments (except for any
Wesfrac, Westec Denver or Xxxxxxx stock), Documents,
Investment Property and General Intangibles (including without
limitation all patents, patent applications, trademarks,
trademark applications, tradenames, trade secrets, goodwill,
copyrights, registrations, licenses, franchises, customer
lists, tax refund claims, claims against carriers and
shippers, guaranty claims, contracts rights, security
interests, security deposits and any rights to
indemnification);
(c) all Inventory and minerals or the like;
(d) all deposits and cash and any other property of
such Borrower now or hereafter in the possession, custody or
control of Lender or any agent or any Affiliate of Lender or
any participant with Lender in the Loans and/or Letters of
Credit for any purpose (whether for safekeeping, deposit,
collection, custody, pledge, transmission or otherwise); and
(e) all additions and accessions to, substitutions
for, and replacements, products and proceeds of the foregoing
property, including without limitation proceeds of all
insurance policies insuring the foregoing property, and all of
such Borrower's books and records relating to any of the
foregoing and to such Borrower's business.
Notwithstanding anything to the contrary contained above, the
Collateral shall not include the Xxxxxx Collateral or the Second
Xxxxxx Collateral (to the extent that the Xxxxxx Collateral or the
Second Xxxxxx Collateral does not consist of any of the specific
Collateral or types of Collateral described above).
In addition, Borrowers shall assign to Lender all of their
rights, title and interests in an American Credit Indemnity or other
accounts receivable insurance policy covering all of their Accounts
and key man life insurance policies in the aggregate face amount of
$2,000,000.00 on the life of Xxxxx X. Xxxxxx. The insurance policies
and assignments shall be in a form and from such companies as may be
acceptable to Lender acting in good faith.
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14. SECTION 8(a) of the NCFC Loan Agreement is hereby amended to
read as follows:
(a) Each Borrower shall establish an account (the
"Blocked Account") in such Borrower's name with a financial
institution acceptable to Lender, into which such Borrower will
immediately deposit all payments received by such Borrower with
respect to its Accounts and other Collateral in the identical form in
which such payments were made, whether by cash or check. If any
Borrower, any Affiliate or Subsidiary of any Borrower, or any
shareholder, officer, director, employee or agent of any Borrower or
any Affiliate or Subsidiary of such Borrower, or any other Person
acting for or in concert with such Borrower shall receive any monies,
checks, notes, drafts or other payments relating to or as proceeds of
such Borrower's Accounts or other Collateral, such Borrower,
Affiliate, Subsidiary, and other Person shall receive all such items
in trust for, and as the sole and exclusive property of, Lender and,
immediately upon receipt thereof, shall remit the same (or cause the
same to be remitted) in kind to such Borrower's Blocked Account. The
financial institution with which each Blocked Account is established
shall acknowledge and agree, in a manner satisfactory to Lender, that
the amounts on deposit in such Blocked Account are the sole and
exclusive property of Lender, that such financial institution has no
right to setoff against the Blocked Account, and that such financial
institution shall wire, or otherwise transfer in immediately available
funds in a manner satisfactory to Lender, funds deposited in the
Blocked Account on a daily basis as such funds are collected, to
Lender's account at National Bank of Canada. Lender shall,
immediately after receipt by Lender of immediately available funds in
its account at National Bank of Canada, apply the whole or any part of
such collections or proceeds against the appropriate Borrower's
Liabilities in such order as Lender shall determine in its sole
discretion. Each Borrower agrees that all payments deposited to such
Blocked Account or otherwise received by Lender, whether in respect of
the Accounts of such Borrower or as proceeds of other Collateral or
otherwise, will be applied on account of the Liabilities of such
Borrower in accordance with the terms of this Agreement. All checks,
drafts, instruments and other items of payment or proceeds of
Collateral shall be endorsed by Borrowers to Lender, and, if that
endorsement of any such item shall not be made for any reason, Lender
is hereby irrevocably authorized to endorse the same on Borrowers'
behalf. For the purpose of this paragraph, Borrowers irrevocably
hereby make, constitute and appoint Lender (and all Persons designated
by Lender for that purpose) as Borrowers' true and lawful attorney and
agent-in-fact: (i) to endorse Borrowers' names upon said items
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of payment and/or proceeds of Collateral and upon any Chattel Paper of
Borrowers, document, instrument, invoice or similar document or
agreement relating to any Account of any Borrower or goods pertaining
thereto; (ii) to take control in any manner of any item of payment or
proceeds thereof; and (iii) upon and following the occurrence of an
Event of Default, to have access to any lock box or postal box into
which any Borrower's mail is deposited, and open and process all mail
addressed to any Borrower and deposited therein.
15. SECTION 11(k) of the NCFC Loan Agreement is hereby amended to
read as follows:
(k) No Borrower is conducting, permitting or suffering to be
conducted, nor shall it conduct, permit or suffer to be conducted, any
activities or transactions with any Affiliate of any Borrower;
provided, however, that any Borrower may enter into transactions with
Affiliates of any Borrower in the ordinary course of business pursuant
to terms that are no less favorable to such Borrower than the terms
upon which such transfers or transactions would have been made had
they been made to or with a Person that is not an Affiliate of any
Borrower and, in connection therewith, may transfer cash or property
to Affiliates of any Borrower for fair value. Notwithstanding the
foregoing:
(i) Petro-Xxxx Xxxxxxxx and Westec Fruita may sell
SMCS the Petro-Xxxx Xxxxxxxx and Westec Fruita Stores under
the terms and conditions set forth in the Petro-Xxxx Xxxxxxxx
and Westec Fruita Purchase Agreements;
(ii) SMCS may execute and deliver to Petro-Xxxx
Xxxxxxxx and Westec Fruita the Petro-Xxxx Xxxxxxxx and Westec
Fruita Notes in connection with SMCS' purchase of the
Petro-Xxxx Xxxxxxxx and Westec Fruita Stores;
(iii) Portfield may provide SMCS with the Portfield
Loan;
(iv) SMCS and Wescourt may execute and deliver to
Portfield the Portfield Loan Documents;
(v) SMCS may issue the Portfield Note to Portfield;
(vi) Portfield may provide an indemnification to WLD
for any damages suffered by WLD with respect to the Xxxxxx
Loan and secure such indemnification with a pledge of the
Portfield Loan Documents and the Second Portfield Loan
Documents (Lender recognizes that WLD may possess a power of
attorney for certain rights belonging to Portfield in its
collateral and, upon the foreclosure of
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Portfield's pledge to WLD of the Portfield Loan Documents and
the Second Portfield Loan Documents, WLD shall be the owner of
such Loan Documents and related rights in SMCS' assets
constituting a portion of the Xxxxxx Collateral and Xxxxxxx'x
assets constituting a portion of the Second Xxxxxx Collateral)
and a security interest in the Borrowers' (other than SMCS' and
Xxxxxxx'x) present and future equipment, fixtures, the cash
proceeds thereof and any other proceeds thereof that do not
constitute a portion of the Collateral;
(vii) Wescourt may provide an indemnification to WLD
for any damages suffered by WLD with respect to the Xxxxxx
Loan;
(viii) Portfield may provide Wesfrac with the Second
Portfield Loan;
(ix) Wesfrac and Wescourt may execute and deliver to
Portfield the Second Portfield Loan Documents;
(x) Wesfrac may issue the Second Portfield Note to
Portfield;
(xi) Xxxxxxx may xxxxx Xxxxxxxxx a security interest
in its present and future equipment, fixtures, the cash
proceeds thereof and any other proceeds thereof that do not
constitute a portion of the Collateral as security for the
Second Portfield Loan; and
(xii) Borrowers (besides SMCS and Xxxxxxx) may grant
WLD a security interest in their present and future equipment,
fixtures, the cash proceeds thereto and any other proceeds
thereof that do not constitute a portion of the Collateral as
security for Portfield's indemnifications to WLD in connection
with the Xxxxxx Loan.
16. SECTION 12(k) of the NCFC Loan Agreement is hereby amended to
read as follows:
(k) No Borrower shall assume, guaranty or endorse, or
otherwise become liable in connection with, the obligations of any
Person, except: (i) by endorsement of instruments for deposit or
collection or similar transactions in the ordinary course of business,
and (ii) for guarantees of Affiliate obligations consented to by
Lender which consent shall be granted or denied by Lender acting in
good faith. Notwithstanding the foregoing, Lender consents to:
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(A) Portfield's, Wescourt's and Wesfrac's execution
and delivery of the guaranties constituting a portion of the
Xxxxxx Loan Documents;
(B) Wescourt's execution and delivery of the guaranty
constituting a portion of the Portfield Loan Documents;
(C) Portfield's guaranty of SMCS's obligations under
the Diamond Shamrock Purchase Agreement;
(D) the guaranties for the benefit of Lender pursuant
to this Agreement and the other Loan Documents;
(E) Portfield's and Wescourt's indemnifications to
WLD for any damages suffered by WLD with respect to the Xxxxxx
Loan;
(F) Wescourt's and SMCS' indemnifications to Diamond
Shamrock contained in the Diamond Shamrock Purchase Agreement;
(G) the liens and security interests described in
SECTION 13 of this Agreement;
(H) Portfield's guaranty of Xxxxxxx'x obligations to
XxXxx Xxxxxxx under the Lease Agreement dated on or about
April 11, 1997;
(I) Portfield's guaranty of JoAnn's guaranty
obligations as set forth in the Xxxxxxx Purchase Agreement;
(J) Borrowers' (besides Wesfrac's, Westec Denver's,
SMCS' and Xxxxxxx'x) guaranty of Wesfrac's, Westec Denver's
and Xxxxxxx'x obligations to Xxxxxx under the Second Xxxxxx
Loan Documents; and
(K) Petro-Xxxx Xxxxxxxx'x guaranty of $400,000 or
less of the obligations of North Avenue Shell, LLC to Bank of
Colorado-Western Slope upon terms and conditions consented to
by Lender (which consent shall not be unreasonably withheld).
17. SECTION 11(m) of the NCFC Loan Agreement is hereby amended to
read as follows:
(m) With respect to each Borrower's Equipment: (i) such
Borrower has good and indefeasible and merchantable title to and
ownership of all of its Equipment, including without limitation the
Equipment described or listed on the schedule
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of Equipment delivered to Lender concurrently with this Agreement; and
(ii) such Borrower shall keep and maintain the Equipment in good
operating condition and repair and shall make all necessary
replacements thereof and renewals thereto so that the value and
operating efficiency thereof shall at all times be preserved and
maintained;
18. SECTION 12(l) of the NCFC Loan Agreement is hereby amended to
read as follows:
(l) Except for The Coastal Corporation's acquisition of up to
fifty percent (50%) of Westec Denver, Inc. stock and the acquisition
of assets permitted in SECTION 11(P) of this Agreement, no Borrower
shall permit any change in its ownership or control or engage in any
merger or acquisition without obtaining the prior written consent of
Lender which consent may be withheld by Lender acting in good faith.
Notwithstanding the foregoing, Lender hereby consents to:
(i) Petro-Xxxx Xxxxxxxx'x and Westec Fruita's sale to
SMCS of the Petro-Xxxx Xxxxxxxx and Westec Fruita Stores;
(ii) SMCS's acquisition of the Convenience Stores; and
(iii) Wesfrac's acquisition of all of Xxxxxxx'x
issued and outstanding capital stock pursuant to the terms and
conditions of the Xxxxxxx Purchase Agreement.
19. SECTION 12(v) of the NCFC Loan Agreement is hereby amended to
read as follows:
(v) Borrowers shall not incur more than $2,000,000.00 in
capital expenditures (excluding expenditures incurred as a result of
Borrowers' acquisition of the assets of another business) during any
fiscal year of this Agreement. Borrowers shall provide Lender with a
written report of their capital expenditures on a monthly basis during
the term of this Agreement. Such report shall be in a form acceptable
to Lender acting in good faith;
20. SECTION 12(w) of the NCFC Loan Agreement is hereby amended to
read as follows:
(w) Borrowers shall not permit the Debt to Net Worth
Ratio to exceed 5.00 to 1.00 at any time through the Termination Date.
The Debt to Net Worth Ratio which Borrowers shall be required to
maintain thereafter (if any) shall be determined by Borrowers and
Lender acting in good faith, provided, however, that if Borrowers and
Lender are unable to
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reach an agreement, the ratio for the subsequent fiscal year shall be
the ratio used for the immediately preceding fiscal year.
Borrowers shall provide Lender with a written report of their Debt to
Net Worth Ratio on a monthly basis during the term of this Agreement.
Such report shall be in a form acceptable to Lender acting in good
faith; and
21. SECTION 12 of the NCFC Loan Agreement is hereby amended by
adding SECTION 12(y) thereto which shall read as follows:
(y) Borrowers shall maintain a Tangible Net Worth equal
to or greater than (i) $3,000,000.00 from the date hereof through
February 27, 1998; (ii) $3,500,000.00 from February 28, 1998 through
February 27, 1999; and (iii) $4,000,000.00 from February 28, 1999
through February 27, 2000. The minimum Tangible Net Worth that
Borrowers are required to maintain under this subsection shall be
increased from the existing minimum requirement by $500,000.00 on
February 28, 2000 and further increased by increments of $500,000.00
each on a like date each year thereafter. Borrowers shall provide
Lender with a written report of their Tangible Net Worth on a monthly
basis during the term of this Agreement. Such report shall be in a
form acceptable to Lender acting in good faith.
22. SECTION 12 of the NCFC Loan Agreement is hereby amended by
adding SECTION 12(z) thereto which shall read as follows:
(z) Borrowers' net income determined after taxes but
before giving effect to extraordinary gains shall equal or exceed
$500,000.00 on February 28th of each year during the term of this
Agreement (beginning February 28, 1998).
23. SECTION 12 of the NCFC Loan Agreement is hereby amended by
adding SECTION 12(aa) thereto which shall read as follows:
(aa) Xxxxxxx'x minimum net profit as reflected on
Portfield's internally prepared financial statements with specific
reference to Portfield's monthly schedule entitled "Xxxxxxx
Marine-Cashflow Summary" shall not be less than zero dollars in any
rolling three month period during the period April 1, 1997 through
February 28, 1998. Such calculations shall be made in accordance with
GAAP and shall specifically include the fees paid to Xxx Xxxxxxx in
accordance with any consulting agreement between any of the Borrowers
and that person.
24. SECTION 13(p) of the NCFC Loan Agreement is hereby amended to
read as follows:
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(p) Without limiting any of the other terms and
conditions set forth in this Agreement or the other Loan Documents,
any of the following occurs without the prior written consent of
Lender which may be withheld in Lender's sole discretion:
(i) any Borrower obtains any additional loans or
other financial accommodations from or provides any additional
guaranties or collateral to WLD, Xxxxxx or Xxxxxx; or
(ii) the Diamond Shamrock Purchase Agreement and
related documents, Petro-Xxxx Xxxxxxxx and Westec Fruita
Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx
and Westec Fruita Notes, Portfield Loan Documents (and related
WLD documents), Xxxxxx Loan Documents, Xxxxxx Loan Documents,
Xxxxxxx Purchase Agreement and related documents, Second
Portfield Loan Documents (and related WLD documents), and
Second Xxxxxx Loan Documents shall be prepaid in whole or in
part (except for prepayments required under the Xxxxxx Loan
Documents or Second Xxxxxx Loan Documents for sales, loss or
damage, or condemnation of or to the Xxxxxx Collateral or
Second Xxxxxx Collateral) or shall be amended, modified,
replaced, substituted or supplemented in any way which (A)
increases the amount of any loans or other obligations
described therein, (B) accelerates or increases any payments
due thereunder, (C) increases any interest rate described
therein, (D) shortens the maturity date thereof, or (E)
increases, replaces or substitutes any co-borrowers,
accommodation parties, guaranties or collateral therefor;
25. SECTION 13(q) of the NCFC Loan Agreement is hereby amended to
read as follows:
(q) Without limiting any other Event of Default hereunder, a
material event of default shall occur under the Diamond Shamrock
Purchase Agreement and related documents, Petro-Xxxx Xxxxxxxx and
Westec Fruita Purchase Agreement and related documents, Petro-Xxxx
Xxxxxxxx and Westec Fruita Notes, Portfield Loan Documents (and
related WLD documents), Xxxxxx Loan Documents, Xxxxxx Loan Documents,
Xxxxxxx Purchase Agreement and related documents, Second Portfield
Loan Documents (and related WLD documents), and Second Xxxxxx Loan
Documents and not be cured or waived within the time periods permitted
under such documents or any lender or seller under such documents
seeks to accelerate its obligations from and/or exercise any
post-default or post-maturity remedies against the other parties
under such documents;
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26. SECTION 13 of the NCFC Loan Agreement is hereby amended by
adding new SECTIONS 13(r) AND (s) which shall read as follows:
(r) Borrowers fail to provide Lender with access to accurate
and complete copies of all of the existing Xxxxxxx Purchase Agreement
and related documents, Second Portfield Loan Documents (and related
WLD loan documents), Second Xxxxxx Loan Documents and Xxxxxx Loan
Documents on or before any modification of this Agreement on or about
April 11, 1997; or
(s) Borrowers fail to provide Lender with accurate and
complete copies of all of the existing Xxxxxxx Purchase Agreement and
related documents, Second Portfield Loan Documents (and related WLD
loan documents), Second Xxxxxx Loan Documents and Xxxxxx Loan
Documents within twenty (20) days from any modification of this
Agreement on or about April 11, 1997.
27. EXHIBIT A to the NCFC Loan Agreement (Permitted Liens) is
amended by adding the following provision:
4. the liens and security interests contained in the
Second Xxxxxx Loan Documents and Second Portfield Loan Documents as
permitted or restricted by this Agreement and any intercreditor
agreement executed by Lender.
5. the purchase money liens and security interests and
leasehold rights in existence on the date of the Fifth Amendment
securing the Permitted Indebtedness owing to Financial Federal Credit,
Inc., AT&T Credit Corporation, The Manifest Group, a division of Lyon
Financial Services, Inc., Concord Commercial, division of Marine
Midland Business Loans, Inc., Bankers Leasing Association of Houston,
Comerica Leasing Corporation, Textron Financial Corporation and Ford
Motor Credit Company (provided, however, that such liens, security
interests, and leasehold rights shall not constitute a lien, security
interest or other encumbrance on the Collateral).
28. EXHIBIT B to the NCFC Loan Agreement (Chief Executive Offices,
Other Offices, Places of Business and Post Office Boxes) is amended by adding
an additional office located at 13002 Xxxxx Road, Cypress, Texas.
29. EXHIBIT D to the NCFC Loan Agreement (Permitted Indebtedness)
is amended by adding the following thereto:
5. All of the Indebtedness described in the Xxxxxxx
Purchase Agreement and related documents, Second Xxxxxx Loan
Documents, and Second Portfield Loan Documents as permitted or
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restricted by this Agreement or any intercreditor agreement executed
by Lender.
6. Indebtedness to Financial Federal Credit, Inc. in the
amount of $_____________ or less.
7. Indebtedness to AT&T Credit Corporation in the amount
of $_____________ or less.
8. Indebtedness to The Manifest Group, a division of
Lyon Financial Services, Inc. in the amount of $_____________ or less.
9. Indebtedness to Concord Commercial, division of
Marine Midland Business Loans, Inc. in the amount of $________________
or less.
10. Indebtedness to Bankers Leasing Association of
Houston in the amounts of $________________ or less.
11. Indebtedness to Comerica Leasing Corporation in the
amount of $________________ or less.
12. Indebtedness to Textron Financial Corporation in the
amount of $____________ or less.
30. EXHIBIT E to the NCFC Loan Agreement is amended by adding
Xxxxxxx as a subsidiary of Wesfrac and Wesfrac as Xxxxxxx'x sole shareholder.
31. SECTION 1.1 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
1.1 "Account," "Account Debtor," "Chattel Paper,"
"Documents," "Equipment," "General Intangibles," "Goods,"
"Instruments," "Inventory" and "Investment Property" shall have the
respective meanings assigned to such terms in the Colorado Uniform
Commercial Code as amended from time to time.
32. SECTION 2.1 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
2.1 all Accounts and all Inventory whose sale, lease or
other disposition by Guarantor has given rise to Accounts and have
been returned to or repossessed or stopped in transit by such
Borrower;
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33. SECTION 2.2 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
2.2 all Chattel Paper, Instruments, Documents, Investment
Property and General Intangibles (including without limitation all
patents, patent applications, trademarks, trademark applications,
tradenames, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, tax refund claims, claims
against carriers and shippers, guaranty claims, contracts rights,
security interests, security deposits and any rights to
indemnification);
34. SECTION 2.3 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
2.3 all Inventory and minerals or the like;
35. SECTION 3.3 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
3.3 [Intentionally Omitted].
36. SECTION 4.4 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
4.4 Priority of Liens; Title to Properties. The security
interests and liens granted to Lender under this Agreement and the
other Financing Agreements constitute valid and perfected first
priority liens and security interests in and upon the Collateral
subject only to the liens permitted under Section 5.8 hereof.
Guarantor has good and marketable title to all of its properties and
assets subject to no liens, mortgages, pledges, security interests,
encumbrances or charges of any kind, except those granted to Lender
and such others as are permitted under Section 5.8 hereof.
37. SECTION 5.7 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
5.7 Sale of Assets, Consolidation, Merger, Dissolution,
Etc. Guarantor shall not, directly or indirectly, (a) merge into or
with or consolidate with any other Person or permit any other Person
to merge into or with or consolidate with it, (bi sell, assign, lease,
transfer, abandon or otherwise dispose of any stock or indebtedness to
any other Person or
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any of its assets to any other Person (except for sales of Inventory
in the ordinary course of business), (c) form or acquire any
subsidiaries, (d) wind up, liquidate or dissolve or (e) agree to do
any of the foregoing unless otherwise permitted under the Loan
Agreement in accordance with the terms and conditions set forth in the
Loan Agreement.
38. SECTION 5.8 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
5.8 Encumbrances. Guarantor shall not create, incur, assume
or suffer to exist any security interest, mortgage, pledge, lien,
charge or other encumbrance of any nature whatsoever on any of its
assets or properties, including, without limitation, the Collateral,
except those permitted under the Loan Agreement in accordance with the
terms and conditions set forth in the Loan Agreement.
39. SECTION 5.9 of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended to read
as follows:
5.9 Indebtedness. Guarantor shall not incur, create, assume,
become or be liable in any manner with respect to, or permit to exist,
any obligations or indebtedness, except those permitted under the Loan
Agreement in accordance with the terms and conditions set forth in the
Loan Agreement.
40. SECTION 5.10 of the Third Party Security Agreements executed
by Borrowers in connection with the NCFC Loan Agreement is hereby amended to
read as follows:
5.10 Loans, Investments, Guarantees, Etc. Guarantor shall
not, directly or indirectly, make any loans or advance money or
property to any person, or invest in (by capital contribution,
dividend or otherwise) or purchase or repurchase the stock or
indebtedness or all or a substantial part of the assets or property of
any person, or guaranty, assume, endorse, or otherwise become
responsible for (directly or indirectly) the indebtedness,
performance, obligations or dividends of any Person or agree to do any
of the foregoing, except those permitted under the Loan Agreement in
accordance with the terms and conditions set forth in the Loan
Agreement.
41. SECTION 5.12 of each of the Third Party Security Agreements
executed by Borrowers in connection with the NCFC Loan Agreement is hereby
amended to read as follows:
5.12 Transactions with Affiliates. Guarantor shall not enter
into any transaction for the purchase, sale or exchange
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of property or the rendering of any service to or by any affiliate,
except in the ordinary course of and pursuant to the reasonable
requirements of Guarantor's business and upon fair and reasonable
terms no less favorable to the Guarantor than Guarantor would obtain
in a comparable arm's length transaction with an unaffiliated person
except those permitted under the Loan Agreement in accordance with the
terms and conditions set forth in the Loan Agreement.
42. Each of the Third Party Security Agreements executed by
Borrowers in connection with the NCFC Loan Agreement is hereby amended by
adding a new SECTION 8.6 thereto which shall read as follows:
8.6 Waivers and Consents. Notice of acceptance of this
Agreement, the making of loans, advances and extensions of credit or
other financial accommodations to, and the incurring of any expenses
by or in respect of, Borrowers or any of them, and presentment,
demand, protest, notice of protest, notice of nonpayment or default
and all other notices to which Borrowers or any of them or Guarantor
are or may be entitled are hereby waived. Guarantor waives notice of,
and hereby consents to, (a) any amendment, modification, supplement,
renewal, restatement or extensions of time of payment of or increase
or decrease in the amount of any of the Obligations or to the
Financing Agreements or in any collateral, and the liens and security
interests granted herein shall apply to the Obligations as so amended,
modified, supplemented, renewed, restated or extended, increased or
decreased, (b) the taking, exchange, surrender and releasing of
collateral or guarantees now or at any time held by or available to
Lender for the obligations of Borrowers or any of them or any other
party at any time liable for or in respect of the Obligations
("Obligor"), (c) the exercise of, or refraining from the exercise of
any rights against Borrowers or any of them, Guarantor or any other
Obligor or any collateral, and (d) the settlement, compromise or
release of, or the waiver of any default with respect to, any
Obligations. Guarantor agrees that the amount of the Obligations, and
the liens and security interests created hereunder, shall not be
diminished and the liability of Guarantor hereunder shall not be
otherwise impaired or affected by any of the foregoing.
43. Immediately following the initial advances to the Borrowers
following the execution of this Fifth Amendment, the remaining Loan
Availability shall not be less than $1,500,000.00 and all of Borrowers'
accounts payable shall have been paid in a current fashion.
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44. All of the NCFC Loan Documents are amended to incorporate the
same types of changes affecting the NCFC Loan Agreement that are described in
this Fifth Amendment.
45. Borrowers and Xxxxxxx hereby acknowledge and reaffirm the
truth and accuracy of all of the Recitals contained in this Fifth Amendment and
the representations and other statements contained in the NCFC Loan Documents
(including the Fifth Amendment) as of the date hereof.
46. Borrowers and Xxxxxxx, jointly and severally, hereby
represent, warrant and covenant to NCFC that NCFC's liens, security interests,
encumbrances and claims against the Collateral shall continue to be prior and
superior to any other liens, security interests, encumbrances or claims of any
kind except as otherwise specifically provided for in this Fifth Amendment, the
Intercreditor Agreement and the other NCFC Loan Documents.
47. Borrowers and Xxxxxxx, jointly and severally, represent and
warrant to NCFC that they have not defaulted upon any of their respective
obligations under the NCFC Loan Documents. Notwithstanding anything to the
contrary contained herein, NCFC hereby reserves all of its rights and remedies
against Borrowers, Xxxxxxx, any third party, or any of their assets for any
Event of Default under the NCFC Loan Documents that may have occurred prior to
the date hereof or may occur on or after the date hereof.
48. BORROWERS AND XXXXXXX HEREBY WAIVE AND FOREVER DISCHARGE NCFC
AND ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM ALL KNOWN
AND UNKNOWN, ABSOLUTE AND CONTINGENT, CLAIMS, DEFENSES, SETOFFS, COUNTERCLAIMS,
CAUSES OF ACTION, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS OF ANY KIND
EXISTING OR ACCRUED AS OF THE DATE HEREOF.
49. Borrowers and Xxxxxxx shall be jointly and severally liable
for the payment and performance of Borrowers' and Xxxxxxx'x present and future
indebtedness and obligations under the NCFC Loan Documents and all of
Borrowers' and Xxxxxxx' present and future indebtedness and obligations to NCFC
under the NCFC Loan Documents and otherwise shall be secured by all of
Borrowers' and Xxxxxxx'x rights and assets described as a portion of NCFC's
collateral in the NCFC Loan Documents.
50. Borrowers and Xxxxxxx, jointly and severally, shall pay all of
NCFC's attorneys' fees and other expenses incurred in connection with the
review, negotiation, drafting and execution of this Fifth Amendment and any
related documents. The amounts described in this paragraph shall be in
addition to, and not in lieu of, the interest, fees and other charges owing
under the NCFC Loan Documents.
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51. The NCFC Loan Documents shall remain in full force and effect
except as amended by this Fifth Amendment.
52. This Fifth Amendment, the various documents described herein
(including the Intercreditor Agreement), and any additional documents executed
or obtained by NCFC in connection the foregoing represent the complete and
integrated understanding between the parties pertaining to the subject matter
hereof. All prior and contemporaneous understandings and agreements, written
or oral, express or implied, shall be of no further force and effect to the
extent inconsistent herewith.
53. This Fifth Amendment shall be governed by the laws of the
State of Colorado.
54. This Fifth Amendment may be executed in counterparts and shall
be effective when at least one counterpart hereof shall be executed by all of
the parties hereto.
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55. BORROWERS, XXXXXXX AND NCFC HEREBY WAIVE ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO
THIS FIFTH AMENDMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE LIABILITIES, THE
COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWERS OR NCFC OR WHICH, IN ANY
WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP
BETWEEN BORROWERS AND NCFC. IN NO EVENT SHALL NCFC BE LIABLE FOR LOST PROFITS
OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
PORTFIELD INVESTMENTS, INC.
By:
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
WESCOURT GROUP, INC.
By:
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
WESCOURT DISTRIBUTING, INC.
By:
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
WESFRAC, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer and Secretary
WESTEC DENVER, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer and Secretary
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XXXXX-XXXX CORP. UTAH
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
XXXXX-XXXX CORP.
By:
--------------------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer and Secretary
XXXXX-XXXX CORP., MONTROSE, INC.
By:
--------------------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer and Secretary
WESTEC FRUITA, INC.
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
MONTROSE PROPANE, INC.
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
GRAND MESA TEXACO, INC.
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
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118
FRUITA RP HOLDING, INC.
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
SUPER MART CONVENIENCE STORES, INC.
By:
--------------------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer and Secretary
XXXXXXX OIL COMPANY, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
NATIONAL CANADA FINANCE CORP.
By:
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
By:
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President
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119
EXHIBIT A
PERSONAL PROPERTY
1. All of the following pertaining to Borrowers' equipment:
(a) All Equipment, whether now owned or existing or
hereafter created, acquired or arising, or in which such Borrower now
has or hereafter acquires any rights (the term "Equipment" means and
includes all equipment and any other machinery, tools, fixtures, trade
fixtures, furniture, furnishings, office equipment and vehicles
(including vehicles subject to a certificate of title law), now or
hereafter used or usable in connection with such Borrower's business,
together with all parts, accessories and attachments relating to any
of the foregoing), including, without limitation, the Fractionator (as
defined in the Fourth Amendment);
(b) All supporting evidence and documents relating to any
of the above-described property, whether now owned or existing or
hereafter created, acquired or arising, including, without limitation,
delivery and installation certificates, invoice copies, delivery
receipts, insurance certificates and the like, together with all books
of account, ledgers and cabinets in which the same are reflected or
maintained;
(c) All accessions and additions to, and substitutions
and replacements of, any and all of the foregoing, whether now owned
or hereafter existing or hereafter created, acquired or arising; and
(d) All cash proceeds of the foregoing and any other
proceeds of the foregoing not constituting NCFC Collateral and all
insurance of the foregoing and cash proceeds thereof, whether now
owned or existing or hereafter created, acquired or arising.
2. All of the following pertaining to the shares of Wesfrac,
Westec Denver, and Xxxxxxx:
Any and all right, title and interest of Wescourt Group, Inc.
and Wesfrac, Inc., whether now owned or existing or hereafter created,
acquired or arising, in and to the following:
(i) all shares of the capital stock of Wesfrac,
Inc., Westec Denver, Inc. and Xxxxxxx Oil Company, Inc. owned
or held by Wescourt Group, Inc. and Wesfrac, Inc., whether now
existing or hereafter formed or acquired
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120
(those shares delivered to and deposited with Xxxxxx
Financial, Inc., and all substitutions and additions to such
shares (herein, the "Pledged Securities");
(ii) all dividends, distributions and sums
distributable or payable from, upon or in respect of the
Pledged Securities;
(iii) all other rights and privileges incident to
the Pledged Securities; and
(iv) all cash proceeds of the foregoing and any
other proceeds of the foregoing not constituting NCFC
Collateral.
3. The collateral described in the Assignment of Stock Purchase
Agreement between XxXxx Xxxxxxx, Xxx Xxxxxxx, Xxx Xxxxxxx and Wesfrac dated on
or about April 11, 1997.
REAL PROPERTY
The following described property of Fruita RP Holding and all cash
proceeds and other proceeds thereof not constituting a portion of NCFC's
Collateral (which property is hereinafter sometimes collectively referred to as
the "Property"):
(a. The real estate located at 0000 Xxxxxxx 0 & 00,
Xxxxxx, Xxxxxxxx 00000 (the "Land");
(b. All improvements of every nature whatsoever now or
hereafter situated on the Land and owned by Fruita RP Holding (the
"Improvements"), and all machinery, equipment and mechanical systems
and other equipment now or hereafter owned by Fruita RP Holding and
used in connection with the operation of the Improvements;
(c. All easements and appurtenances now or hereafter in
any way relating to the Land or Improvements or any part thereof;
(d. All agreements affecting the use, enjoyment or
occupancy of the Land and/or Improvements now or hereafter entered
into (the "Leases") and the immediate and continuing right to collect
all rents, income, receipts, royalties, profits, issues, service
reimbursements, fees, revenues and prepayments of any of the same from
or related to the Land and/or Improvements from time to time accruing
under the Leases and/or the operation of the Land and/or Improvements
(the "Rents"), reserving to Fruita RP Holding, however, so
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121
long as no "Event of Default" has occurred under the Deed of Trust
from Fruita RP Holding to Xxxxxx, a revocable license to receive and
apply the Rents in accordance with the terms and conditions of
Paragraph 9 of such Deed of Trust;
(e. All claims, demands, judgments, insurance proceeds,
awards of damages and settlements hereafter made resulting from the
taking of the Land and/or the Improvements or any part thereof under
the power of eminent domain, or for any damage (whether caused by such
taking, by casualty or otherwise) to the Land or the Improvements or
any part thereof;
(f. To the extent assignable, all now or hereafter
existing management contracts and all permits, certificates, licenses,
approvals, entitlements and authorizations, however characterized,
issued or in any way furnished for the acquisition, construction,
operation and use of the Land, Improvements and/or Leases, including
building permits, environmental certificates, licenses, certificates
of operation, warranties and guaranties;
(g. Any monies on deposit with or for the benefit of
Xxxxxx for the payment of real estate taxes, insurance and other
matters pertaining to the Property.
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122
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND RELATED DOCUMENTS
This Sixth Amendment to Loan and Security Agreement and Related
Documents ("Sixth Amendment") is executed by Portfield Investments, Inc., a
Colorado corporation ("Portfield"), Wescourt Group, Inc., a Delaware
corporation ("Wescourt"), Wescourt Distributing, Inc., a Colorado corporation
("Wescourt Distributing"), Wesfrac, Inc., a Colorado corporation ("Wesfrac"),
Westec Denver, Inc., a Colorado corporation ("Westec Denver"), Xxxxx-Xxxx Corp.
Utah, a Colorado corporation ("Xxxxx-Xxxx Utah"), Xxxxx-Xxxx Corp., a Colorado
corporation ("Xxxxx-Xxxx"), Xxxxx-Xxxx Corp., Montrose, Inc., a Colorado
corporation ("Petro-Xxxx Xxxxxxxx"), Westec Fruita, Inc., a Delaware
corporation ("Westec Fruita"), Montrose Propane, Inc., a Colorado corporation
("Montrose Propane"), Grand Mesa Texaco, Inc., a Colorado corporation ("Grand
Mesa"), Fruita RP Holding, Inc., a Delaware corporation ("Fruita RP Holding"),
Super Mart Convenience Stores, Inc. fka Xxxxx-Xxxx Convenience Stores, Inc., a
Colorado corporation ("SMCS"), and Xxxxxxx Oil Company, Inc., a Texas
corporation ("Xxxxxxx"), all with an address at 0000 Xxxxxxx 0 xxx 00, Xxxxxx,
Xxxxxxxx 00000 and National Canada Finance Corp. with an address at 0000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 ("NCFC"), for valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, on
this 12th day of August, 1997. Hereinafter, Portfield, Wescourt, Wescourt
Distributing, Wesfrac, Westec Denver, Xxxxx-Xxxx Utah, Xxxxx-Xxxx, Xxxxx-Xxxx
Xxxxxxxx, Westec Fruita, Montrose Propane, Grand Mesa, Fruita RP Holding, SMCS
and Xxxxxxx may be referred to collectively as "Borrowers" and individually as
"Borrower."
RECITALS
A Borrowers (besides SMCS and Xxxxxxx), Mesa Environmental, Inc.
fka Wescourt Environmental, Inc., a Colorado corporation ("MEI"), Fruita
Investments, Inc., a Colorado corporation ("FII") and Fruita Marketing &
Management, Inc., a Delaware corporation ("FMMI") executed and delivered to
NCFC a Loan and Security Agreement and various other loan documents on or about
October 6, 1995. Such documents have been amended by that certain First
Amendment to Loan and Security Agreement and Related Documents dated October 6,
1995, that certain Second Amendment to Loan and Security Agreement and Related
Documents dated August 23, 1996, that certain Third Amendment to Loan and
Security Agreement and Related Documents dated November 18, 1996, that certain
Fourth Amendment to Loan and Security Agreement and Related Documents dated
March 12, 1997 ("Fourth Amendment"), that Fifth Amendment to Loan and Security
Agreement and Related Documents dated April 11, 1997 ("Fifth Amendment") and
various related documents. Hereinafter, the Loan and Security Agreement and
any amendments,
123
modifications, replacements and substitutions thereto may be referred to
collectively as the "NCFC Loan Agreement" and all of the documents described in
this paragraph, any related documents, instruments and agreements, and any
amendments, modifications, replacements and substitutions to any of the
foregoing may be referred to collectively as the "NCFC Loan Documents".
B All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the NCFC Loan Agreement.
C Subject to the terms and conditions set forth in the NCFC Loan
Documents, MEI, FII, and FMMI have been released from their obligations to NCFC
thereunder.
D Xxxxx-Xxxx Convenience Stores, Inc. has changed its name to
Super Mart Convenience Stores, Inc.
E Borrowers and NCFC wish to amend certain terms and conditions
set forth in the NCFC Loan Documents as set forth in this Sixth Amendment.
AGREEMENTS
1 Borrowers hereby acknowledge and reaffirm the truth and
accuracy of all of the foregoing Recitals and the representations and other
statements contained in the NCFC Loan Documents as of the date of this Sixth
Amendment.
2 The outstanding principal balance of the Liabilities of
Borrowers to Lender under the Loan Documents amounted to $13,557,357.71 as of
August 11, 1997 and interest, fees, and expenses are accruing thereon as set
forth in the Loan Documents.
3 SECTION 2(A) of the NCFC Loan Agreement is hereby amended to
read as follows:
(a) Subject to the terms and conditions of this Agreement
and the Other Agreements, prior to the Termination Date and so long as
no Event of Default has occurred hereunder, Lender shall make Loans to
any Borrower as such Borrower shall from time to time request;
provided, however, that: (i) the total amount of all Loans outstanding
to any Borrower shall not exceed such Borrower's Loan Availability at
any time; and (ii) the total unpaid principal of all Loans outstanding
to the Borrowers and all Letters of Credit issued for the account of
the Borrowers in the aggregate ("Maximum Credit") shall not exceed
Eighteen Million Dollars ($18,000,000.00) at any time.
2
124
The total unpaid principal of all Loans outstanding to
Borrowers based upon Eligible Inventory shall not exceed Three Million
Dollars ($3,000,000.00) at any time.
Prior to Lender making any Loan, the Loans shall be repaid as
provided elsewhere in this Agreement. If at any time the outstanding
balance on any Borrower's Loans exceeds its Loan Availability or the
principal balance of the outstanding Loans to Borrowers in the
aggregate exceeds the Maximum Credit or any of the other restrictions
set forth in this Agreement, such Borrower or Borrowers shall
immediately, and without the necessity of a demand by Lender, pay to
Lender such amount as may be necessary to eliminate such excess.
4 SECTION 3(d) of the NCFC Loan Agreement is hereby amended to
read as follows:
(d) Borrowers shall pay to Lender an unused facility fee,
equal to one quarter of one percent (0.25%) per annum [computed on the
basis of a year of three hundred sixty days for the actual number of
days elapsed] of the amount by which Eighteen Million Dollars
($18,000,000.00) exceeds the sum of the average daily outstanding
Loans plus the average daily undrawn face amount of the Letters of
Credit, payable monthly in arrears, on the first day of each month
following the execution of this Agreement.
5 Borrowers and Xxxxxxx, jointly and severally, hereby
represent, warrant and covenant to NCFC that NCFC's liens, security interests,
encumbrances and claims against the Collateral shall continue to be prior and
superior to any other liens, security interests, encumbrances or claims of any
kind except as otherwise specifically provided for in the NCFC Loan Documents.
6 Borrowers and Xxxxxxx, jointly and severally, represent and
warrant to NCFC that they have not defaulted upon any of their respective
obligations under the NCFC Loan Documents. Notwithstanding anything to the
contrary contained herein, NCFC hereby reserves all of its rights and remedies
against Borrowers, any third party, or any of their assets for any Event of
Default under the NCFC Loan Documents that may have occurred prior to the date
hereof or may occur on or after the date hereof.
7 BORROWERS HEREBY WAIVE AND FOREVER DISCHARGE NCFC AND ITS
SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM ALL KNOWN AND
UNKNOWN, ABSOLUTE AND CONTINGENT, CLAIMS, DEFENSES, SETOFFS, COUNTERCLAIMS,
CAUSES OF ACTION, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS OF ANY KIND
EXISTING OR ACCRUED AS OF THE DATE HEREOF.
3
125
8 Borrowers shall be jointly and severally liable for the
payment and performance of Borrowers' present and future indebtedness and
obligations under the NCFC Loan Documents and all of Borrowers' present and
future indebtedness and obligations to NCFC under the NCFC Loan Documents and
otherwise shall be secured by all of Borrowers' rights and assets described as
a portion of NCFC's collateral in the NCFC Loan Documents.
9 Borrowers,jointly and severally, shall pay NCFC a fully-earned
and non-refundable loan modification fee in the amount of $20,000.00 upon the
execution of this Sixth Amendment. In addition, upon NCFC's demand, Borrowers,
jointly and severally, shall pay all of NCFC's attorneys' fees and other
expenses incurred in connection with the review, negotiation, drafting and
execution of this Sixth Amendment and any related documents. The amounts
described in this paragraph shall be in addition to, and not in lieu of, the
interest, fees and other charges owing under the NCFC Loan Documents.
10 The NCFC Loan Documents shall remain in full force and effect
and as amended by this Sixth Amendment.
11 This Sixth Amendment, the other NCFC Loan Documents, and any
additional documents executed or obtained by NCFC in connection the
foregoing represent the complete and integrated understanding between the
parties pertaining to the subject matter hereof. All prior and contemporaneous
understandings and agreements, written or oral, express or implied, shall be of
no further force and effect to the extent inconsistent therewith.
12 This Sixth Amendment shall be governed by the laws of the
State of Colorado.
13 This Sixth Amendment may be executed in counterparts and shall
be effective when at least one counterpart hereof shall be executed by all of
the parties hereto.
14 BORROWERS AND NCFC HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS SIXTH
AMENDMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE LIABILITIES, THE COLLATERAL, ANY
ALLEGED TORTIOUS CONDUCT BY BORROWERS OR NCFC OR WHICH, IN ANY WAY, DIRECTLY OR
INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN BORROWERS AND
NCFC. IN NO EVENT SHALL NCFC BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR
CONSEQUENTIAL DAMAGES.
4
126
PORTFIELD INVESTMENTS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WESCOURT GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WESCOURT DISTRIBUTING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WESFRAC, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WESTEC DENVER, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX-XXXX CORP. UTAH
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
5
127
XXXXX-XXXX CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX-XXXX CORP., MONTROSE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WESTEC FRUITA, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MONTROSE PROPANE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GRAND MESA TEXACO, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FRUITA RP HOLDING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
6
128
SUPER MART CONVENIENCE STORES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX OIL COMPANY, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
NATIONAL CANADA FINANCE CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
7
