TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT (the "Loan Agreement") is made by and
between XXXXXX-XXXXXXX COMPANY ("EWC") and FRANK'S FUELS, INC. ("FFI"), both
Texas corporations (collectively hereinafter referred to as the "Borrowers"),
UNITED FUEL & ENERGY CORPORATION, ("UFEC"), a Texas corporation (sometimes
referred to as "Corporate Guarantor"), Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxx
X. Xxxxxx, and Xxxxxx X. Xxxxxx, (collectively referenced as the "Individual
Guarantors"), and NEW WEST RESOURCES, INC. ,a Texas corporation with offices
at 000 Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Lender").
RECITALS
WHEREAS, Borrowers have requested that the Lender extend to EWC a
TWELVE MILLION AND NO/DOLLARS ($12,000,000.00) term loan facility; and
WHEREAS, Borrowers have requested that the Lender extend to FFI a
THREE MILLION AND NO/DOLLARS ($3,000,000.00) term loan facility; and
WHEREAS, in conjunction with the loans, UNITED FUEL & ENERGY
CORPORATION, ("UFEC") shall become the parent of Borrowers, and as such has
agreed to guarantee the above referenced term loan facilities; and
WHEREAS, the Individual Guarantors, each being shareholders of UFEC,
have each individually agreed to jointly and severally guarantee the above
referenced term loan facilities in the amounts as set forth in this Loan
Agreement; and
WHEREAS, Borrowers have all requisite corporate power and authority
to execute, deliver and perform pursuant to this Loan Agreement; and
WHEREAS, Corporate Guarantor has all requisite corporate power and
authority to execute, deliver and perform pursuant to this Loan Agreement; and
WHEREAS, each of the Individual Guarantors has the legal capacity to
execute, deliver, and perform pursuant to this Loan Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and for other valuable consideration, the parties hereto agree as
follows:
ARTICLE I.-DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS. As used in this Loan Agreement, the
following terms shall have the meaning set out respectively after each:
"Affiliate" -- Shall mean any Person who, directly or indirectly,
controls, is controlled by, or is under common control with, the first
Person. For the purposes of this definition, "CONTROL" including, with
correlative meanings, the terms "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH", as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting shares
or by contract or otherwise.
"Borrowers" -- Shall mean Xxxxxx-Xxxxxxx Company and Frank's Fuels,
Inc. both corporations organized and existing under the laws of the State of
Texas.
"Business Day" -- Shall mean a day on which business is transacted
by national banks in Midland, Texas.
"Capital Lease" -- Shall mean, as of any date, any lease of
property, real or personal, that would be capitalized on a balance sheet of
the lessee prepared as of that date, in accordance with GAAP.
"Cash Available for Debt Service" -- Shall mean for the Borrowers
based upon their combined Financial Statements determined in accordance with
GAAP, in each case for the four (4) quarter period ending on the date of
testing, the sum of Net Income PLUS interest expenses, deferred tax expenses,
depreciation and amortization LESS non-financed additions to property, plant
and equipment.
"Closing" and "Closing Date" -- Shall mean a date selected by
Borrowers and Lender upon which the Loan Agreement and the Loan Documents are
to be effective, which date shall be no later than July 12, 2000.
"Contract Interest Rate" -- Shall mean the Prime Interest Rate plus
1.25%.
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"Corporate Guarantor" -- Shall mean United Fuel & Energy
Corporation, a corporation organized and existing under the laws of the State
of Texas.
"Debt Service Coverage Ratio" -- Shall have that meaning set forth
in Section 5.1.10 hereof.
"Default Rate" -- Shall mean an interest rate at which all past due
principal of the Notes shall bear interest until paid, to the extent
permitted by applicable law, at the lesser of the following:
(i) 18 per cent per annum, or
(ii) the Maximum Rate.
"Dollars" and "$"-- Shall mean dollars or such coin or currency of
the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts in the United States.
"ERISA" -- Shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.
"Event of Default" -- Shall mean any of the events specified in
Section 8.1 hereof; provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act; and "Default" shall
mean any of such events, whether or not such requirement has been satisfied.
"EWC Term Note" -- Shall mean the promissory note executed and
delivered by EWC to the Lender pursuant to Section 2.1 (b) hereof; in form
and substance substantially as set forth on Exhibit "A" hereto.
"EWC Term Note Deed of Trust" -- Shall mean the Deeds of Trust and
Security Agreements executed and delivered by EWC to the Lender pursuant to
Sections 3.1(a) and (b) hereof; in form and substance substantially as set
forth on Exhibit "C" hereto as pertains to fee simple ownership and Exhibit
"C1" as pertains to leasehold interests.
"FFI Term Note" -- Shall mean the promissory note executed and
delivered by FFI to the Lender pursuant to Section 2.2 (b) hereof; in form
and substance substantially as set forth on Exhibit "B" hereto.
"FFI Term Note Deed of Trust" -- Shall mean the Deeds of Trust and
Security Agreements executed and delivered by FFI to the Lender pursuant to
Section 3.1(c) and (d) hereof, in form and substance substantially as set
forth on Exhibit "E" hereto as pertains to fee simple ownership and Exhibit
"E1" as pertains to leasehold interests.
"Financial Covenants" -- Shall mean those financial covenants set
forth in Section 5.1.10 of this Loan Agreement, consisting of the Debt
Service Coverage Ratio.
"Financial Statements" -- Shall mean, individually and cumulatively,
those certain balance sheets of each of Borrowers, the related statement of
income and changes in cash flow as set forth in Section 5.1.1 of this Loan
Agreement, and that certain balance sheet of Corporate Guarantor and the
related statement of income and changes in cash flow as set forth in Section
5.2.1.
"Equipment and Vehicles Security Agreement of Borrower EWC" -- Shall
mean that certain Security Agreement executed by EWC pursuant to Section
3.2(a) hereof pertaining to equipment and vehicles in form and substance
substantially as set forth in Exhibit "G" hereto.
"Equipment and Vehicles Security Agreement of Borrower FFI" -- Shall
mean that certain Security Agreement executed by FFI pursuant to Section
3.2(b) hereof pertaining to equipment and vehicles in form and substance
substantially as set forth in Exhibit "I" hereto.
"EWC Term Note Maturity Date" -- Shall mean July 12, 2003, unless
modified as provided in Section 8.1 hereof.
"FFI Term Note Maturity Date" -- Shall mean July 12, 2003, unless
modified as provided in Section 8.1 hereof.
"GAAP" -- Shall mean Generally Accepted Accounting Principles.
"Generally Accepted Accounting Principles" -- Shall mean those
generally accepted accounting principles and practices which are recognized
as such by the American Institute of Certified Public Accountants acting
through its Accounting Principles Board or by the Financial Accounting
Standards Board or through other appropriate boards or committees thereof and
which are consistently applied for all periods after the date hereof so as to
properly reflect the financial condition, and the results of operations and
changes in financial position, of any party to the Loan Agreement, except
that any accounting principle or practice required to be changed by the said
Accounting Principles Board or Financial Accounting Standards Board (or other
appropriate board or committee of the said Boards) in order to continue as a
generally accepted accounting principle or practice may so be changed. In the
event of a change in Generally
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Accepted Accounting Principles, Lender and Borrowers will thereafter
negotiate in good faith to revise any covenants of this Loan Agreement
affected thereby in order to make such covenants consistent with Generally
Accepted Accounting Principles then in effect.
"Governmental Authority" -- Shall mean any government (or any
political subdivision or jurisdiction thereof), court, bureau agency or other
governmental authority having jurisdiction over Borrowers or any of its or
their business, operations or properties.
"Guaranty" -- Shall mean any contract, agreement or understanding of
a Borrower pursuant to which the Borrower guarantees, or in effect
guarantees, any Indebtedness of any other Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, including without limitation,
agreements:
(i) to purchase Indebtedness or any property that is
security therefor;
(ii) to advance or supply funds (a) for the purchase or
payment of the Indebtedness, or (b) to maintain
working capital or other balance sheet conditions, or
otherwise to advance or make available funds for the
purchase or payment of the Indebtedness;
(iii) to purchase property, securities or services
primarily for the purpose of assuring the holder of
the Indebtedness of the ability of the Primary
Obligor to make payment of the Indebtedness; or
(iv) otherwise to assure the holder of the Indebtedness of
the Primary Obligor against loss in respect thereof,
except that "GUARANTY" shall not include the endorsement by any
Borrower in the ordinary course of business of negotiable instruments or
documents for deposit or collection.
"Indebtedness"-Shall mean, with respect to any Borrower, all
indebtedness, obligations and liabilities of the Borrower, including without
limitation:
(i) all "LIABILITIES" that would be reflected on a
balance sheet of the Borrower, prepared in accordance
with GAAP;
(ii) all obligations of the Borrower in respect of any
Guaranty; and
(iii) all obligations of the Borrower in respect of any
Capital Lease.
"Indebtedness for Borrowed Money" -- Shall mean, as of any date with
respect to the Borrowers, Corporate Guarantor and Individual Guarantors:
(i) all Indebtedness represented by notes, bonds,
debentures or other evidences of indebtedness, for
the repayment of money borrowed,
(ii) all Indebtedness representing deferred payment of the
purchase price of property,
(iii) all Indebtedness under any Capital Lease,
(iv) all Indebtedness under any Guaranty, and
(v) all Indebtedness secured by a Lien on any property or
asset.
"Individual Guarantor's Collateral Pledge Agreement in UFEC Stock" --
Shall mean those four certain Collateral Pledge and Security Agreements executed
by each of Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx
pursuant to Section 3.5 hereof pertaining to a possessory lien in all of the
issued and outstanding stock of UFEC in form and substance substantially as set
forth in Exhibits "T1-T4" hereto, and that certain Collateral Pledge and
Security Agreement executed by either Xxx Xxxxx or Xxxx Xxxx, if either shall
exercise their option to purchase up to 5% of the shares of UFEC, pursuant to
Section 3.5 hereof pertaining to a possessory lien in all of the issued and
outstanding stock of UFEC in form and substance substantially as set forth in
Exhibit "T5" hereto.
"Interest Payment Date(s) -- Shall mean the last Business Day of each
month, commencing July 31, 2000.
"Interest Period" -- Shall mean, with respect to each Loan, the period
commencing:
(i) on the date of borrowing of a loan made pursuant to
Sections 2.1 and 2.2 of this Loan Agreement; and
(ii) in each instance, the period shall end on the first
Interest Payment Date following the date of borrowing
of a loan or the date of the Note, as applicable, and
further provided that:
(A) any Interest Period that otherwise would end on a
day that is not a Business Day shall be extended to the next succeeding Business
Day UNLESS, the Business Day falls in another month, in which case the Interest
Period shall end on the next preceding Business Day; and
(B) if the Interest Period for any Loan would
otherwise end after the Termination Date, that Interest Period shall end on the
Termination Date.
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"Lender" -- Shall mean New West Resources, Inc., a corporation
organized and existing under the laws of the state of Texas.
"Loan Agreement" -- Shall mean this Term Loan Agreement, as
originally executed and as amended or supplemented from time to time.
"Loan Documents" -- Shall mean the Loan Agreement, the Notes, and
those documents reflected as exhibits to this Loan Agreement, as well as any
amendments or supplements to such documents.
"Loans" -- Shall mean the money advanced by the Lender under the
Notes pursuant to this Loan Agreement, each individually, a "Loan".
"Material Adverse Effect" -- shall mean any (i) material adverse
effect whatsoever upon the validity, performance or enforceability of any
Loan Documents, (ii) material adverse effect upon the financial condition or
business operations of either Borrower or Corporate Guarantor, (iii) material
adverse effect upon the ability of Borrowers to fulfill obligations under the
Loan Documents, or which causes an Event of Default or any event, which with
notice or lapse of time or both, could become an Event of Default.
"Maximum Rate" -- Shall mean that Maximum Rate of interest as set
forth in Section 9.11 of this Loan Agreement.
"Net Income" -- Shall mean with respect to any period, the net
earnings (after income taxes) for such period determined in accordance with
GAAP.
"Net Loss" -- Shall mean with respect to any period, the net loss
(after adjustment for income taxes) for such period determined in accordance
with GAAP.
"Notes" -- Shall mean the EWC Term Note and the FFI Term Note, each
individually a "Note".
"Officer's Certificate" -- Shall mean a certificate signed in the
name of Borrowers by either the Chairman of the Board, the President, one of
the Vice Presidents or the Treasurer.
"PBGC" -- Shall mean the Pension Benefit Guaranty Corporation
created by Section 4002 of ERISA and any successor entity having similar
responsibilities.
"Person" -- Shall mean any individual, partnership, corporation,
joint venture, association, joint stock company, trust, or unincorporated
organization.
"Plan" -- Shall mean an employee pension or other benefit Plan of
Borrowers or any Subsidiary subject to Title IV of ERISA or to which Section
412 of the Internal Revenue Code of 1986, as amended, applies.
"Prime Interest Rate" -- Shall mean, with respect to each Interest
Period, a fluctuating daily interest rate per annum, which rate per annum
shall at all times be equal to the "prime rate" published in the "Money
Rates" table in THE WALL STREET JOURNAL from time to time, and if multiple
prime rates are published, the highest such rate; provided, however, that in
the event THE WALL STREET JOURNAL is no longer published or no longer
publishes the prime rate in its "Money Rates" table, Lender shall choose a
substitute Index Rate that is based upon comparable information. Lender may
lend to others at rates at, greater, or less then such fate. After maturity,
all amounts outstanding hereunder, to the extent permitted by applicable law,
shall, at the option of Lender, bear interest at a per annum rate equal to
the Highest Lawful Rate. Each change in the Prime Interest Rate shall become
effective, without notice to Borrowers (which notice is hereby expressly
waived by Borrowers), on the effective date of such change.
"Principal Payment Date(s)" -- Shall mean the last Business Day of
each month with the first (1st) such Principal Payment Date commencing on
July 31, 2000.
"Reportable Event" -- Shall have the meaning assigned to that term
in Title IV of ERISA.
"Total Required Debt Service" -- Shall mean the sum of (i) current
maturities of long-term indebtedness and lease obligations (which lease
obligations would, in accordance with Generally Accepted Accounting
Principles, be capitalized on the books of Borrower(s)) of Borrower(s) for
the one-year period following the date of determination and (ii) interest
paid or payable by Borrower(s) on all Indebtedness of Borrower(s) for the
one-year period ending on the date of determination, LESS the amount of
principal and interest scheduled to be paid on that certain note from
Borrowers to Xxxx Xxxxxxx in the original principal sum of $445,451.52 for
the one-year period ending on the date of determination.
"UFEC Collateral Pledge Agreement in EWC and FFI Stock" -- Shall
mean that certain Collateral Pledge and Security Agreement executed by UFEC
pursuant to Section 3.4 hereof pertaining to a possessory lien in all of the
issued and outstanding stock of EWC and FFI in form and substance
substantially as set forth in Exhibit "Q" hereto.
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SECTION 1.2 USE OF DEFINED TERMS. Any defined term used in the
plural preceded by the definite article shall be taken to encompass all
members of the relevant class. Any defined term used in the singular preceded
by "any" shall be taken to indicate any number of the members of the relevant
class.
SECTION 1.3 ACCOUNTING TERMS. All accounting terms not specifically
defined in this Loan Agreement shall be construed in accordance with GAAP
consistently applied.
ARTICLE II.--AMOUNT AND TERMS OF THE LOANS
SECTION 2.1 EWC TERM LOAN AND NOTE.
(a) The Lender hereby agrees, on the terms and conditions
hereinafter set forth, to loan to EWC on the Closing Date the EWC Term Loan
in the amount of TWELVE MILLION AND NO/100 DOLLARS ($12,000,000.00).
(b) The EWC Term Loan shall be evidenced by a secured
promissory note (the "EWC Term Note") executed and delivered by EWC, payable
to the order of the Lender in the principal amount of TWELVE MILLION AND
NO/100 DOLLARS ($12,000,000.00), in substantially the form of Exhibit "A"
hereto and dated the Closing Date. The EWC Term Note is payable as
hereinafter set forth until July 12, 2003 (the "EWC Term Note Maturity Date")
or such earlier date the Holder accelerates the EWC Term Note Maturity Date
hereof pursuant to the Loan Agreement.
(c) The EWC Term Note shall bear interest from the Closing Date
on the unpaid principal amount thereof from time to time outstanding until
the final Principal Payment Date at a per annum rate equal to the Contract
Interest Rate.
(d) The principal amount of the EWC Term Note shall be repaid
in thirty (36) monthly installments, and the first monthly installment of
principal shall be due and payable on the first (1st) Principal Payment Date
following the Closing Date, and a regular monthly installment of principal
shall thereafter be due and payable for thirty-five (35) months on each of
the next successive Principal Payment Dates. The first thirty-five (35)
payments shall each be in the amount of Sixty-six Thousand Six Hundred
Sixty-six and 67/100 Dollars ($66,666.67), with the thirty-sixth (36th) and
final and last monthly installment of the EWC Term Note being due on the
thirty-sixth (36th) Principal Payment Date, which is the EWC Term Note Maturity
Date, when the remaining unpaid principal shall be paid in full, unless
modified as provided in Section 8.1 hereof.
(e) Accrued interest shall be due and payable in arrears on the
last day of each Interest Period, commencing on the first (1st) Interest
Payment Date subsequent to the Closing Date, and continuing thereafter on
each Interest Payment Date. All remaining accrued and unpaid interest is due
and payable on the EWC Term Note Maturity Date unless modified as provided in
Section 8.1 hereof ("Termination Date of EWC Term Note").
SECTION 2.2 FFI TERM LOAN AND NOTE.
(a) The Lender hereby agrees, on the terms and conditions
hereinafter set forth, to loan to FFI on the Closing Date the FFI Term Loan
in the amount of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00).
(b) The FFI Term Loan shall be evidenced by a secured
promissory note (the "FFI Term Note") executed and delivered by FFI, payable
to the order of the Lender in the principal amount of THREE MILLION AND
NO/100 DOLLARS ($3,000,000.00), in substantially the form of Exhibit "B"
hereto and dated the Closing Date. The FFI Term Note is payable as
hereinafter set forth until July 12, 2003 (the "FFI Term Note Maturity Date")
or such earlier date the Holder accelerates the FFI Term Note Maturity Date
hereof pursuant to the Loan Agreement.
(c) The FFI Term Note shall bear interest from the Closing Date
on the unpaid principal amount thereof from time to time outstanding until
the final Principal Payment Date at a per annum rate equal to annum rate
equal to the Contract Interest Rate.
(d) The principal amount of the FFI Term Note shall be repaid
in thirty-six (36) monthly installments, and the first monthly installment of
principal shall be due and payable on the first (1st) Principal Payment Date
following the Closing Date, and a regular monthly installment of principal
shall thereafter be due and payable for thirty-five (35) months on each the
next successive Principal Payment Dates. The first thirty-five (35) payments
shall each be in the amount of Sixteen Thousand Six Hundred Sixty-six and
67/100 Dollars ($16,666.67), with the thirty-sixth (36th) and final and last
monthly installment of the FFI Term Note being due on the thirty-sixth (36th)
Principal Payment Date, which is the FFI Term Note Maturity Date, when the
remaining unpaid principal shall be paid in full, unless modified as provided
in Section 8.1 hereof.
(e) Accrued interest shall be due and payable in arrears on the
last day of each Interest Period, commencing on the first (1st) Interest
Payment Date subsequent to the Closing Date, and continuing thereafter on
each Interest Payment Date. All remaining
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accrued and unpaid interest is due and payable on the FFI Term Note Maturity
Date unless modified as provided in Section 8.1 hereof ("Termination Date of
FFI Term Note").
SECTION 2.3 PREPAYMENTS. Borrowers may prepay the EWC Term Loan and
or the FFI Term Loan at any time without penalty or premium.
SECTION 2.4 PAYMENTS AND COMPUTATION OF INTEREST. All payments made
under this Loan Agreement on account of principal and interest upon the Notes
shall be made to the Lender, not later than 11:00 a.m. (Midland time) on the
date of payment, in immediately available funds, at the 000 Xxxx Xxxx office
of the Lender in Midland, Texas, or such other place as Lender may direct
Borrowers in writing. All interest on a Term Loan shall be computed on the
basis of a year of 365 days. At such time as this Loan Agreement shall have
been terminated and the Notes shall have been paid in full (together with
accrued interest thereon), the Lender shall cancel and return the Notes to
Borrowers and execute appropriate releases for any and all such security
interests and liens in favor of Lender which secure repayment of the Loans.
At the time of any payment, Borrowers shall designate whether such payment
applies to the EWC Term Note or the FFI Term Note with an identification of
such specific note. In absence of any direction from Borrowers, the Lender
shall apply such payments first against accrued interest with respect to the
EWC Term Note, then against accrued interest with respect to the FFI Term
Note, then against the next installment of principal maturing under the EWC
Term Note, then against the next installment of principal maturing under the
FFI Term Note, then against the principal amount then outstanding under the
EWC Term Note, and then against the principal amount then outstanding under
the FFI Term Note, commencing with the first of such notes and continuing to
the last thereof.
SECTION 2.5 USE OF PROCEEDS. The entire proceeds of any Loan under
this Loan Agreement to EWC and to FFI shall be used for the corporate
purposes of EWC and FFI. The Loan to EWC shall be used for the redemptive
purchase of shares of stock in EWC and the refinancing of existing debt. The
Loan to FFI shall be used for the refinancing of existing debt.
SECTION 2.6 COMMITMENT FEE. The Borrowers shall pay to Lender a
commitment fee of $45,000.00 upon funding of the Loans.
ARTICLE III.--COLLATERAL
SECTION 3.1 LIEN ON REAL PROPERTY. To further secure the repayment
of the Notes, Loans and the repayment and satisfaction of all other
obligations of Borrowers under this Loan Agreement, and any and all
extensions, modifications, increases, and renewals made from time to time:
(a) At Closing EWC shall execute and deliver to the Lender an EWC
Term Note Deed Of Trust, pertaining to each of the realty referenced in the
attached Exhibit "K" and owned in fee simple by EWC, substantially in the
form of Exhibit "C" hereto, granting to the Lender a first priority lien on
real property and improvements of EWC, and a first priority security interest
in the fixtures located therein or thereon, and two (2) properly executed
Financing Statements, one to be filed with the Secretary of State of the
State of Texas and the other to be filed with the County Clerk in the county
where the real estate is located, substantially in the form of Exhibit "D"
hereto.
(b) At Closing EWC shall execute and deliver to the Lender a EWC
Term Note Deed Of Trust, pertaining to each of the realty referenced in the
attached Exhibit "L" in which EWC has a leasehold interest, substantially in
the form of Exhibit "C1" hereto, granting to the Lender a first priority lien
in the leasehold interest and leasehold improvements of EWC, and a first
priority security interest in the fixtures located therein or thereon, and
two (2) properly executed Financing Statements, one to be filed with the
Secretary of State of the State of Texas and the other to be filed with the
County Clerk in the county where the real estate is located, substantially in
the form of Exhibit "D1" hereto.
(c) At Closing FFI shall execute and deliver to the Lender a FFI
Term Note Deed Of Trust, pertaining to each of the realty referenced in the
attached Exhibit "M" and owned in fee simple by FFI, substantially in the
form of Exhibit "E" hereto, granting to the Lender a first priority lien on
real property and improvements of FFI, and a first priority security interest
in the fixtures located therein or thereon, and two (2) properly executed
Financing Statements, one to be filed with the Secretary of State of the
State of Texas and the other to be filed with the County Clerk in the county
where the real estate is located, substantially in the form of Exhibit "F"
hereto.
(d) At Closing FFI shall execute and deliver to the Lender a FFI
Term Note Deed Of Trust, pertaining to each of the realty referenced in the
attached Exhibit "N" in which FFI has a leasehold interest, substantially in
the form of Exhibit "E1" hereto, granting to the Lender a first priority lien
in the leasehold interest and leasehold improvements of FFI and a first
priority security interest in the fixtures located therein or thereon, and
two (2) properly executed Financing Statements, one to be filed with the
Secretary of State of the State of Texas and the other to be filed with the
County Clerk in the county where the real estate is located, substantially in
the form of Exhibit "F1" hereto.
SECTION 3.2 SECURITY INTEREST IN EQUIPMENT AND VEHICLES. To further
secure the repayment of the Notes, Loans and the repayment and satisfaction
of all other obligations of Borrowers under this Loan Agreement, and any and
all extensions, modifications, increases, and renewals made from time to time:
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(a) At Closing, EWC shall execute and deliver to the Lender a
Security Agreement substantially in the form of Exhibit "G" hereto (the "EWC
Security Agreement"), granting a first and prior security interest in the
equipment and vehicles of EWC, and one (1) properly executed Financing
Statement, in substantially the form of Exhibit "H" hereto.
(b) At Closing, FFI shall execute and deliver to the Lender a
Security Agreement substantially in the form of Exhibit "I" hereto (the "FFI
Security Agreement"), granting a first and prior security interest in the
equipment and vehicles of FFI, and one (1) properly executed Financing
Statement, in substantially the form of Exhibit "J" hereto.
(c) Borrowers expressly agree to reflect Lender as the first and
prior lienholder on Certificates of Title of motor vehicles or other titled
vehicles pursuant to Article 6687-1, Vernon's Annotated Revised Civil
Statutes (the "Certificate of Title Act") no later than sixty (60) days
subsequent to the Closing. Borrowers also agree that any motor vehicles or
other titled vehicles acquired subsequent to the date of execution of this
Loan Agreement shall be held in trust for the benefit of Lender, and are
likewise subject to and governed by the Loan Documents executed of even date
with this Loan Agreement. Borrowers agree, therefore, during the term of this
Loan Agreement and any renewals, extensions, and modifications thereof, to
reflect Lender as the first and prior lienholder on all Certificates of
Title, whether acquired prior to or subsequent to the date of this Loan
Agreement, and further to provide Lender quarterly (commencing on the first
calendar quarter end subsequent to execution of this Loan Agreement) with a
listing of the Certificates of Title to all motor vehicles or other titled
vehicles owned by the Borrowers, such listing to contain such information
reasonably necessary to identify the motor vehicles or other titled vehicles,
including specifically the vehicle identification number. Lender may, at any
time, request Borrowers to provide Lender with possession of the Certificates
of Title to all motor vehicles or other titled vehicles owned by the
Borrowers not previously delivered to Lender. Borrowers shall provide Lender
with physical possession of the Certificates of Title so requested within
five (5) business days subsequent to the written notice from Lender to
Borrowers. Absent such request by Lender, Borrowers shall retain in
Borrowers' possession all original Certificates of Title.
SECTION 3.3 GUARANTY AGREEMENTS.
(a) To further secure the repayment of the Notes, Loans and the
repayment and satisfaction of all other obligations of Borrowers under this
Loan Agreement, and any and all extensions, modifications, increases, and
renewals made from time to time, UFEC shall execute and deliver a Guaranty
Agreement substantially in the form of Exhibit "01" hereto, wherein UFEC
guarantees the repayment of the Notes, Loans and the repayment and
satisfaction of all other obligations of Borrowers under this Loan Agreement,
and any and all extensions, modifications, increases, and renewals made from
time to time.
(b) To further secure the repayment of the Notes, Loans and the
repayment and satisfaction of all other obligations of Borrowers under this
Loan Agreement, and any and all extensions, modifications, increases, and
renewals made from time to time, each of Xxxxxx Xxxxx and Xxxxxxx Xxxxxxxx
shall execute and deliver an Individual Guaranty Agreement substantially in
the form of Exhibits "P1-P2" hereto, wherein each of Xxxxxx Xxxxx and Xxxxxxx
Xxxxxxxx guarantees the repayment of the Notes, Loans and the repayment and
satisfaction of all other obligations of Borrowers under this Loan Agreement,
and any and all extensions, modifications, increases, and renewals made from
time to time, in an individual amount not to exceed $1,000,000.00, provided,
however, that in the event that the fair market value of the either Xxxxxx
Xxxxx'x or Xxxxxxx Xxxxxxxx'x stock in United Fuel & Energy Corporation which
is pledged as security pursuant to the Individual Guarantor's Pledge
Collateral Pledge Agreement should exceed the $1,000,000, then amount of the
Guarantee shall be increased, ipso facto, to such fair market value, but such
increase shall apply only to the pledged stock in United Fuel & Energy
Corporation, it being the intent of the parties that the pledge of the stock
not be limited by the maximum amount of the personal guarantees.
(c) To further secure the repayment of the Notes, Loans and the
repayment and satisfaction of all other obligations of Borrowers under this
Loan Agreement, and any and all extensions, modifications, increases, and
renewals made from time to time, each of Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx
shall execute and deliver an Individual Guaranty Agreement substantially in
the form of Exhibits "P3-P4" hereto, wherein each of Xxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxx guarantees the repayment of the Notes, Loans and the
repayment and satisfaction of all other obligations of Borrowers under this
Loan Agreement, and any and all extensions, modifications, increases, and
renewals made from time to time, in an individual amount not to exceed
$500,000.00, provided, however, that in the event that the fair market value
of the either Xxxxx X. Xxxxxx, or Xxxxxx X. Xxxxxx' stock in United Fuel &
Energy Corporation which is pledged as security pursuant to the Individual
Guarantor's Pledge Collateral Pledge Agreement should exceed the $1,000,000,
then amount of the Guarantee shall be increased, ipso facto, to such fair
market value, but such increase shall apply only to the pledged stock in
United Fuel & Energy Corporation, it being the intent of the parties that the
pledge of the stock not be limited by the maximum amount of the personal
guarantees.
(d) To further secure the repayment of the FFI Note, FFI Loan and
the repayment and satisfaction of all other obligations of Borrower FFI under
this Loan Agreement, and any and all extensions, modifications, increases,
and renewals made from time to time, Borrower EWC shall execute and deliver a
Guaranty Agreement substantially in the form of Exhibit "O2" hereto, wherein
EWC guarantees the repayment of the FFI Note, FFI Loan and the repayment and
satisfaction of all other obligations of Borrower FFI under this Loan
Agreement, and any and all extensions, modifications, increases, and renewals
made from time to time.
(e) To further secure the repayment of the EWC Note, EWC Loan and
the repayment and satisfaction of all other obligations of Borrower EWC under
this Loan Agreement, and any and all extensions, modifications, increases,
and renewals made from time to time, Borrower FFI shall execute and deliver a
Guaranty Agreement substantially in the form of Exhibit "O3" hereto, wherein
FFI guarantees
7
the repayment of the EWC Note, EWC Loan and the repayment and satisfaction of
all other obligations of Borrower EWC under this Loan Agreement, and any and
all extensions, modifications, increases, and renewals made from time to time.
SECTION 3.4 SECURITY INTEREST IN CORPORATE STOCK OF BORROWERS. To
further secure the repayment of the Notes, Loans and the repayment and
satisfaction of all other obligations of Borrowers under this Loan Agreement,
and any and all extensions, modifications, increases, and renewals made from
time to time, and to secure the performance of UFEC's Guaranty Agreement,
UFEC shall execute and deliver a Collateral Pledge Agreement, substantially
in the form of Exhibit "Q" hereto, granting to the Lender a first and prior
security interest (pledge) in all of the issued and outstanding shares of the
capital stock of each of EWC and FFI, and to take such other reasonable
action necessary to maintain a perfected first priority interest in and to
all of such shares, ALONG WITH an executed Blank Stock Power for EWC stock,
in substantially the form as the attached Exhibit "R" and with an executed
Blank Stock Power for FFI stock, in substantially the form as the attached
Exhibit "S".
SECTION 3.5 SECURITY INTEREST IN CORPORATE STOCK OF GUARANTOR UFEC.
To further secure the repayment of the Notes, Loans and the repayment and
satisfaction of all other obligations of Borrowers under this Loan Agreement,
and any and all extensions, modifications, increases, and renewals made from
time to time, and to secure the performance of the Individual Guaranty
Agreements, each of Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and
Xxxxxx X. Xxxxxx shall execute and deliver an Individual Guarantor's
Collateral Pledge Agreement in UFEC Stock, substantially in the form of
Exhibits "T1-T4" hereto, granting to the Lender a first and prior security
interest (pledge) in all of the issued and outstanding shares of the capital
stock of UFEC, ALONG WITH an executed Blank Stock Power for each of Xxxxxx
Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, in
substantially the form as the attached Exhibits "U1-U4", and to take such
other reasonable action necessary to maintain a perfected first priority
interest in and to all of such shares. To further secure the repayment of the
Notes, Loans and the repayment and satisfaction of all other obligations of
Borrowers under this Loan Agreement, and any and all extensions,
modifications, increases, and renewals made from time to time, either Xxx
Xxxxx, or Xxxx Xxxx, if either should exercise his rights to purchase up to
5% of the issued and outstanding shares of UFEC, shall execute and deliver a
Collateral Pledge Agreement in UFEC Stock, substantially in the form of
Exhibit "T5" hereto, granting to the Lender a first and prior security
interest (pledge) in all of the issued and outstanding shares of the said Xxx
Xxxxx or Xxxx Xxxx in the capital stock of UFEC, ALONG WITH an executed Blank
Stock Power for such Xxx Xxxxx or Xxxx Xxxx, in substantially the form as the
attached Exhibit "U5", and to take such other reasonable action necessary to
maintain a perfected first priority interest in and to all of such shares.
SECTION 3.6 STOCK WARRANT AGREEMENT. At Closing, UFEC shall execute
the Stock Warrant Agreement in substantially the form of the attached Exhibit
"V" wherein UFEC shall issue warrants to Lender providing for Lender to
purchase common stock of UFEC in an amount not to exceed 20% of the issued
and outstanding shares of UFEC, at a price of $1,250.00 per share, which UFEC
and each Individual Guarantor agree is the fair market value of the UFEC
stock.
SECTION 3.7 INTERCREDITOR AGREEMENT. An intercreditor agreement
between Lender and Bank One will be executed in conjunction with the Loans
with regard to certain rights and obligations of Lender and Bank One as
pertains to liens, secured properties, and enforcement rights, in
substantially the form as the attached Exhibit "AC". Pursuant to the
InterCreditor Agreement, certain limitations exist with regard to the
Lender's rights in proceeding against the collateral set forth in the Article
III.
SECTION 3.8 ASSIGNMENT OF LIFE INSURANCE ON INDIVIDUAL GUARANTORS.
As soon as practical, each Individual Guarantor shall obtain and maintain
life insurance in form reasonably acceptable to Lender on the following
individuals in the amount indicated below and cause such insurance coverage
to be pledged, made payable to, or assigned to Lender on forms acceptable to
Lender. Lender, at its discretion, may apply the proceeds of any insurance
policy to the unpaid balances of any Indebtedness:
NAME OF INSURED AMOUNT
--------------- ------
Xxxxxx Xxxxx $1,000,000.00
Xxxxxxx Xxxxxxxx $1,000,000.00
Xxxxx X. Xxxxxx $ 500,000.00
Xxxxxx X. Xxxxxx $ 500,000.00
SECTION 3.9 EXPENSES. Borrowers shall perform any and all acts
reasonably requested by the Lender to maintain and perfect the liens and
security interests described in Sections 3.1, 3.2, 3.3, 3.4, and 3.5 above,
and to effectuate the assignments in 3.6 and 3.7 above, and shall pay all
expenses of the Lender reasonably incurred in the granting, perfecting and
maintaining of such liens and security interests, including but not limited
to any and all recording fees, taxes (including, without limitation,
intangibles taxes), attorneys' fees or other charges which are required to be
paid as a condition to the filing, recording or validation of such liens or
security interests or the preparation or assignment of such interests.
8
ARTICLE IV.--REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF BORROWERS. Borrowers
(Borrower being each corporation which is collectively a part of Borrowers
and each and every representation and warranty contained in this Article IV
is made individually) represent and warrant to the Lender as of the date of
this Loan Agreement and shall be deemed to have represented and warranted to
the Lender as of the Closing Date the following:
4.1.1 ORGANIZATION STANDING AND QUALIFICATION OF
BORROWERS. That Borrowers are corporations duly organized, validly existing
and in good standing under the laws of the State of Texas and are qualified
to do business, except as otherwise disclosed to the Lender in writing, and
are in good standing in each jurisdiction where Borrowers do business and
wherein failure to be so qualified would have a Material Adverse Effect on
Borrowers' ability to enter into valid contracts, or to xxx or be sued.
4.1.2 CORPORATE POWERS AND AUTHORIZATION. Borrowers have
all requisite corporate power and authority to conduct their business
substantially as they are presently conducted and to own their properties.
Borrowers have all requisite corporate power and authority to execute,
deliver and perform the Loan Documents. The execution, delivery and
performance by Borrowers of each of the Loan Documents have been duly
authorized by all necessary corporate action and does not and will not (i)
require any consent, approval, license or authorization of, or declaration to
be filed with any court or Governmental Authority or regulatory body,
domestic or foreign, on the part of Borrowers, except as has been obtained or
filed by Borrower; (ii) contravene any law, rule, regulation, judgment,
decree, or order presently in effect and having applicability to Borrowers,
or any provision of their charter or by-laws; (iii) result in a breach of or
constitute a default under any agreement for borrowed money or under any
other material agreement, lease or instrument to which Borrowers are a party
or by which they or their properties may be bound or affected; or (iv) result
in, or require, the creation or imposition of any deed of trust, mortgage,
pledge, lien, security interest or other charge or encumbrance of any nature
upon or with respect to any properties now owned or hereafter acquired by
Borrowers, other than the liens and security interests created pursuant to
this Loan Agreement in favor of the Lender.
4.1.3 BINDING EFFECT. This Loan Agreement is, and the
Notes and each of the other Loan Documents, when duly executed and delivered
for value by Borrowers, will be legal, valid and binding obligations of
Borrower, enforceable against it in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless
of whether considered in a proceeding in equity or in law).
4.1.4 LITIGATION. Except for litigation disclosed in the
most recent Financial Statements which have been delivered to Lender and
litigation arising in the ordinary course of business and for which adequate
insurance exists and coverage has been accepted, without reservation of
rights of any kind or nature, by Borrower's insurer, which shall be a
responsible and reputable insurance company or association, there are no
pending, or to the knowledge of Borrowers threatened, actions or proceedings
before any court or governmental department, commission, board, bureau,
agency, arbitrator or instrumentality, domestic or foreign, which may have a
Material Adverse Effect on Borrowers or which, to the knowledge of the
officers of Borrowers, seek to question or set aside any of the transactions
herein contemplated. Borrowers are not in default with respect to any
judgment, suit, injunction, decree, rule or regulation which would have a
Material Adverse Effect on the financial condition or operations of Borrowers.
4.1.5 TITLE TO PROPERTIES. Borrowers have good title to
their properties and assets except for defects in title which do not have a
Material Adverse Effect upon Borrowers or those properties or assets for
which Lender has expressly waived this requirement in writing prior to the
Closing Date.
4.1.6 TAX RETURNS. Borrowers have filed all federal,
state and local tax returns which are required to be filed, and have paid all
taxes as shown on said returns and on all assessments received by them to the
extent that such taxes have become due.
4.1.7 LIABILITIES. Borrowers do not have any
liabilities, contingent or otherwise, which are to be disclosed pursuant to
GAAP, which are not reflected in the most recent Financial Statements of the
Borrowers (including the notes thereto) as delivered to Lender.
4.1.8 ERISA. Borrowers have met their minimum funding
requirements under ERISA with respect to each of their Plans and have not
incurred any material liability to the PBGC in connection with any such Plan.
No Reportable Event which constitutes grounds for the termination of any Plan
or for the appointment by the appropriate United States District Court of a
trustee to administer any Plan has occurred.
4.1.9 MARGIN SECURITIES. Borrowers are not engaged
principally in, nor have as one of their important activities, the business
of extending credit for the purpose of purchasing or carrying any margin
stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System of the United States), and no part of the proceeds of
the Loan will be used to purchase or carry any margin stock or extend credit
to others for the purpose of purchasing or carrying any margin stock. If
requested by the Lender, Borrowers will furnish to the Lender in connection
with the Loan a statement in conformity with the requirements of Federal
Reserve Form U-1 referred to in said Regulation.
9
4.1.10 SUBSIDIARIES. Borrowers do not have any
subsidiaries.
4.1.11 PRINCIPAL PLACE OF BUSINESS. Borrower EWC's
principal place of business is located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000, at which its general ledger and other accounting books and
records and true and complete copies thereof relating to the accounts and
contracts of Borrower EWC is and will be maintained. Borrower FFI's principal
place of business is located at 0000 Xxxx Xxxx 000, Xxxxxx, Xxxxx 00000, at
which its general ledger and other accounting books and records and true and
complete copies thereof relating to the accounts and contracts of Borrower
FFI is and will be maintained.
4.1.12 INSURANCE. Borrowers carry insurance covering
their properties and business in the form and in amounts consistent with past
practices and industry standards, and in compliance with the provisions
pertaining to insurance as set forth in Paragraph 5.4 of the Term Note Deeds
of Trust.
4.1.13 HAZARDOUS WASTE, ETC. To the best knowledge of the
officers of Borrowers, no Hazardous Waste (as hereinafter defined) has been
generated, stored or treated on the premises of Borrower's principal office
or any real property owned or leased by Borrowers (collectively, the
"Premises") and, to the best knowledge of the officers of Borrowers, no
Hazardous Waste has ever been, is being, nor do Borrowers intend for such to
be, or is threatened by Borrowers to be spilled, released, discharged,
disposed, placed or otherwise caused to be found in the soil or water in,
under or upon the Premises during Borrower's ownership or lease of the
Premises. Borrowers are not aware of the existence of any of the events or
circumstances which would place Borrowers in a position of noncompliance as
pertains to the regulation of underground storage tanks, whether occurring or
existing prior to Borrower's ownership or lease of the premises, and
therefore, represents, to the best knowledge of the officers of Borrowers,
that no such event of noncompliance or circumstance has occurred or existed.
Also, Borrowers are not aware of the existence of any of the events or
circumstances described above occurring or existing prior to Borrower's
ownership or lease of the Premises and therefore, represents to the best
knowledge of the officers of Borrowers, that no such event or circumstance
has occurred or existed. For the purpose of this Loan Agreement, definitions
in this 4.1.13 are as reflected in the Resource Conservation and Recovery
Act, as amended by the Hazardous and Solid Waste Amendments, including
without limitation Subtitle I, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, the Hazardous Material Transportation Act, the Federal
Water Pollution Control Act, the Toxic Substances Control Act, the Clean Air
Act, the Solid Waste Disposal Act, the National Environmental Policy Act, and
corresponding state and local statutes, ordinances and regulations, including
the Texas Solid Waste Disposal Act, as such statutes, ordinances and
regulations may be amended, or as defined in any federal or state regulation
adopted pursuant to such acts. The term "Hazardous Waste" means "hazardous
waste", "hazardous material", "hazardous substance", and "oil" as presently
defined therein. However, the term Hazardous Waste expressly does not include
those petrochemical products of Borrowers which are held in the ordinary and
regular course of business in compliance with applicable environmental laws,
statutes, or regulations. Furthermore, the term "underground storage tanks"
means those underground storage facilities as it is presently defined therein.
4.1.14 TRANSACTIONS WITH AFFILIATES. There are no loans,
leases, consulting agreements, royalty agreements or other continuing
transactions between Borrowers and any Affiliate, officer or director of
Borrowers which are upon terms less favorable to Borrowers than would be
obtainable at the time in comparable, arms-length transactions with Persons
other than Affiliates.
4.1.15 FULL DISCLOSURE. None of the representations or
warranties made by Borrowers in this Loan Agreement or in any of the other
Loan Documents or in any financial statement, exhibit or document furnished
in connection herewith or therewith, as of the respective dates of such
representations and warranties, contains any untrue statement of a material
fact or omits any material fact necessary to make the statements made not
misleading.
4.1.16 PRIOR CONSENTS. No consent, approval or
authorization of, or filing, registration or qualification with any
Governmental Authority on the part of Borrowers is required as a condition to
the execution and delivery of this Loan Agreement, the Notes or any other
instruments referred to herein.
4.1.17 NO DEFAULTS. Except as may have been previously
disclosed to Lender, Borrowers are not in default in the payment of principal
or interest on any Indebtedness for Borrowed Money, are not in default under
any instrument or agreement under or subject to which any Indebtedness for
Borrowed Money has been issued, and no event has occurred under the
provisions of any such instrument which, with or without the lapse of time or
the giving of notice, or both, constitutes or will constitute an event of
default thereunder.
4.1.18 ADDITIONAL NOTES AND DOCUMENTS. When called upon
to do so by the Lender, Borrowers shall make, sign and execute any and all
new or amended notes or other security documents or instruments which are
reasonably required to satisfy any of the requirements of this Loan
Agreement, including any amendments, modifications or replacements for the
documents required hereby, provided that same do not materially alter, amend,
modify, or change any of the significant terms of such documents, including,
for example and without limitation, interest rates or maturity dates.
4.1.19 REPAYMENT OF LOANS. Borrowers shall repay the
Loans, together with all accrued interest and other sums due and owing
thereon, on or before their maturity dates or immediately upon acceleration
to maturity pursuant to the terms hereof or of
10
any of the other Loan Documents, as well as any other indebtedness to Lender.
Interest shall additionally be paid as it accrues pursuant to the terms of
the Notes.
4.1.20 REDEMPTION OF STOCK. Commensurate with the funding
of the Loans contemplated by this Loan Agreement, Borrower EWC will
simultaneously issue stock to UFEC and redeem all of the other issued and
outstanding stock of EWC in a redemptive purchase. Borrower EWC warrants and
represents that it has all requisite corporate power and authority to
execute, deliver and perform the redemption and its related documents. The
execution, delivery and performance by Borrower EWC of the redemptive
purchase will have been duly authorized by all necessary corporate action and
does not and will not (i) require any consent, approval, license or
authorization of, or declaration to be filed with any court or Governmental
Authority or regulatory body, domestic or foreign, on the part of Borrowers,
except as has been obtained or filed by Borrower; (ii) contravene any law,
rule, regulation, judgment, decree, or order presently in effect and having
applicability to Borrowers, or any provision of their charter or by-laws;
(iii) result in a breach of or constitute a default under any agreement for
borrowed money or under any other material agreement, lease or instrument to
which Borrowers is a party or by which they or their properties may be bound
or affected; or (iv) result in, or require, the creation or imposition of any
deed of trust, mortgage, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any properties now owned or
hereafter acquired by Borrowers. The execution, delivery and performance by
Borrower EWC of the redemptive purchase will not violate any state or federal
laws, and will not create any adverse income tax consequences to EWC.
Further, Borrower EWC shall cause the shareholders in Borrower EWC whose
shares are being redeemed to execute any and all documents reasonably
necessary to effectuate the redemptive purchase.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF CORPORATE GUARANTOR.
Corporate Guarantor represents and warrants to the Lender as of the date of
this Loan Agreement and shall be deemed to have represented and warranted to
the Lender as of the Closing Date the following:
4.2.1 ORGANIZATION STANDING AND QUALIFICATION OF
BORROWERS. That Corporate Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and is
qualified to do business, except as otherwise disclosed to the Lender in
writing, and is in good standing in each jurisdiction where Corporate
Guarantor does business and wherein failure to be so qualified would have a
Material Adverse Effect on Corporate Guarantor's ability to enter into valid
contracts, or to xxx or be sued.
4.2.2 CORPORATE POWERS AND AUTHORIZATION. Corporate
Guarantor has all requisite corporate power and authority to conduct its
business substantially as it is presently conducted and to own its
properties. Corporate Guarantor has all requisite corporate power and
authority to execute, deliver and perform the Loan Documents. The execution,
delivery and performance by Corporate Guarantor of each of the Loan Documents
has been duly authorized by all necessary corporate action and does not and
will not (i) require any consent, approval, license or authorization of, or
declaration to be filed with any court or Governmental Authority or
regulatory body, domestic or foreign, on the part of Corporate Guarantor,
except as has been obtained or filed by Corporate Guarantor; (ii) contravene
any law, rule, regulation, judgment, decree, or order presently in effect and
having applicability to Corporate Guarantor, or any provision of its charter
or by-laws; (iii) result in a breach of or constitute a default under any
agreement for borrowed money or under any other material agreement, lease or
instrument to which Corporate Guarantor is a party or by which its properties
may be bound or affected; or (iv) result in, or require, the creation or
imposition of any deed of trust, mortgage, pledge, lien, security interest or
other charge or encumbrance of any nature upon or with respect to any
properties now owned or hereafter acquired by Corporate Guarantor, other than
the liens and security interests created pursuant to this Loan Agreement in
favor of the Lender.
4.2.3 BINDING EFFECT. This Loan Agreement is, and the
Guaranty Agreement and each of the other Loan Documents when duly executed
and delivered for value by Corporate Guarantor, will be legal, valid and
binding obligations of Corporate Guarantor, enforceable against it in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether considered in a proceeding in
equity or in law).
4.2.4 LITIGATION. Except for litigation disclosed in the
most recent Financial Statements which have been delivered to Lender and
litigation arising in the ordinary course of business and for which adequate
insurance exists and coverage has been accepted, without reservation of
rights of any kind or nature, by Corporate Guarantor's insurer, which shall
be a responsible and reputable insurance company or association, there are no
pending, or to the knowledge of Corporate Guarantor threatened, actions or
proceedings before any court or governmental department, commission, board,
bureau, agency, arbitrator or instrumentality, domestic or foreign, which may
have a Material Adverse Effect on Borrowers or which, to the knowledge of the
officers of Corporate Guarantor, seek to question or set aside any of the
transactions herein contemplated. Corporate Guarantor is not in default with
respect to any judgment, suit, injunction, decree, rule or regulation which
would have a Material Adverse Effect on the financial condition or operations
of Corporate Guarantor.
4.2.5 TITLE TO PROPERTIES. Corporate Guarantor has good
title to its properties and assets except for defects in title which do not
have a Material Adverse Effect upon Corporate Guarantor.
11
4.2.6 TAX RETURNS. Corporate Guarantor has filed all
federal, state and local tax returns which are required to be filed, and have
paid all taxes as shown on said returns and on all assessments received by it
to the extent that such taxes have become due.
4.2.7 LIABILITIES. Corporate Guarantor does not have any
liabilities, contingent or otherwise, which are to be disclosed pursuant to
GAAP, which are not reflected in the most recent Financial Statements of the
Corporate Guarantor (including the notes thereto) as delivered to Lender.
4.2.8 ERISA. Corporate Guarantor has met its minimum
funding requirements under ERISA with respect to each of its Plans and has
not incurred any material liability to the PBGC in connection with any such
Plan. No Reportable Event which constitutes grounds for the termination of
any Plan or for the appointment by the appropriate United States District
Court of a trustee to administer any Plan has occurred.
4.2.9 MARGIN SECURITIES. Corporate Guarantor is not
engaged principally in, nor have as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States), and no part of the proceeds
of the Loan will be used to purchase or carry any margin stock or extend
credit to others for the purpose of purchasing or carrying any margin stock.
If requested by the Lender, Corporate Guarantor will furnish to the Lender in
connection with the Loan a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in said Regulation.
4.2.10 SUBSIDIARIES. Corporate Guarantor's only
subsidiaries, subsequent to the Closing Date, will be EWC and FFI.
4.2.11 PRINCIPAL PLACE OF BUSINESS. Corporate Guarantor's
principal place of business is located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000, at which its general ledger and other accounting books and
records and true and complete copies thereof relating to the accounts and
contracts of Corporate Guarantor is and will be maintained.
4.2.12 INSURANCE. Corporate Guarantor carries insurance
covering its properties and business in the form and in amounts consistent
with past practices and industry standards.
4.2.13 HAZARDOUS WASTE, ETC. To the best knowledge of the
officers of Corporate Guarantor, no Hazardous Waste (as hereinafter defined)
has been generated, stored or treated on the premises of Corporate
Guarantor's principal office or any real property owned or leased by
Corporate Guarantor (collectively, the "Premises") and, to the best knowledge
of the officers of Corporate Guarantor, no Hazardous Waste has ever been, is
being, nor does Corporate Guarantor intend for such to be, or is threatened
by Corporate Guarantor to be spilled, released, discharged, disposed, placed
or otherwise caused to be found in the soil or water in, under or upon the
Premises during Corporate Guarantor's ownership or lease of the Premises.
Corporate Guarantor is not aware of the existence of any of the events or
circumstances which would place Corporate Guarantor in a position of
noncompliance as pertains to the regulation of underground storage tanks,
whether occurring or existing prior to Corporate Guarantor's ownership or
lease of the premises, and therefore, represents, to the best knowledge of
the officers of Corporate Guarantor, that no such event of noncompliance or
circumstance has occurred or existed. Also, Corporate Guarantor is not aware
of the existence of any of the events or circumstances described above
occurring or existing prior to Corporate Guarantor's ownership or lease of
the Premises and therefore, represents to the best knowledge of the officers
of Corporate Guarantor, that no such event or circumstance has occurred or
existed. For the purpose of this Loan Agreement, definitions in this 4.2.13
are as reflected in the Resource Conservation and Recovery Act, as amended by
the Hazardous and Solid Waste Amendments, including without limitation
Subtitle I, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization
Act, the Hazardous Material Transportation Act, the Federal Water Pollution
Control Act, the Toxic Substances Control Act, the Clean Air Act, the Solid
Waste Disposal Act, the National Environmental Policy Act, and corresponding
state and local statutes, ordinances and regulations, including the Texas
Solid Waste Disposal Act, as such statutes, ordinances and regulations may be
amended, or as defined in any federal or state regulation adopted pursuant to
such acts. The term "Hazardous Waste" means "hazardous waste", "hazardous
material", "hazardous substance", and "oil" as presently defined therein.
However, the term Hazardous Waste expressly does not include those
petrochemical products of Corporate Guarantor which are held in the ordinary
and regular course of business in compliance with applicable environmental
laws, statutes, or regulations. Furthermore, the term "underground storage
tanks" means those underground storage facilities as it is presently defined
therein.
4.2.14 TRANSACTIONS WITH AFFILIATES. There are no loans,
leases, consulting agreements, royalty agreements or other continuing
transactions between Corporate Guarantor and any Affiliate, officer or
director of Corporate Guarantor, which are upon terms less favorable to
Corporate Guarantor than would be obtainable at the time in comparable,
arms-length transactions with Persons other than Affiliates.
4.2.15 FULL DISCLOSURE. None of the representations or
warranties made by Corporate Guarantor in this Loan Agreement or in any of
the other Loan Documents or in any financial statement, exhibit or document
furnished in connection herewith or
12
therewith, as of the respective dates of such representations and warranties,
contains any untrue statement of a material fact or omits any material fact
necessary to make the statements made not misleading.
4.2.16 PRIOR CONSENTS. No consent, approval or
authorization of, or filing, registration or qualification with any
Governmental Authority on the part of Corporate Guarantor is required as a
condition to the execution and delivery of this Loan Agreement, the Corporate
Guaranty, or any other instruments referred to herein.
4.2.17 NO DEFAULTS. Except as may have been previously
disclosed to Lender, Corporate Guarantor is not in default in the payment of
principal or interest on any Indebtedness for Borrowed Money, is not in
default under any instrument or agreement under or subject to which any
Indebtedness for Borrowed Money has been issued, and no event has occurred
under the provisions of any such instrument which, with or without the lapse
of time or the giving of notice, or both, constitutes or will constitute an
event of default thereunder.
4.2.18 ADDITIONAL NOTES AND DOCUMENTS. When called upon
to do so by the Lender, Corporate Guarantor shall make, sign and execute any
and all new or amended security documents or instruments which are reasonably
required to satisfy any of the requirements of this Loan Agreement, including
any amendments, modifications or replacements for the documents required
hereby, provided that same do not materially alter, amend, modify, or change
any of the significant terms of such documents, including, for example and
without limitation, interest rates or maturity dates.
4.2.19 REDEMPTION OF STOCK. Commensurate with the funding
of the Loans contemplated by this Loan Agreement, Borrower EWC will
simultaneously issue stock to UFEC and redeem all of the other issued and
outstanding stock of EWC in a redemptive purchase. Corporate Guarantor
warrants and represents that it has all requisite corporate power and
authority to purchase the shares of stock of Borrower EWC and to execute,
deliver and perform the related documents. The execution, delivery and
performance by Corporate Guarantor of the purchase of the shares of Borrower
EWC will have been duly authorized by all necessary corporate action and does
not and will not (i) require any consent, approval, license or authorization
of, or declaration to be filed with any court or Governmental Authority or
regulatory body, domestic or foreign, on the part of Corporate Guarantor,
except as has been obtained or filed by Corporate Guarantor; (ii) contravene
any law, rule, regulation, judgment, decree, or order presently in effect and
having applicability to Corporate Guarantor, or any provision of its charter
or by-laws; (iii) result in a breach of or constitute a default under any
agreement for borrowed money or under any other material agreement, lease or
instrument to which Corporate Guarantor is a party or by which Corporate
Guarantor.
SECTION 4.3 REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL GUARANTORS.
Each Individual Guarantor (each and every representation and warranty
contained in this Article W is made individually) represents and warrants to
the Lender as of the date of this Loan Agreement and shall be deemed to have
represented and warranted to the Lender as of the Closing Date the following:
4.3.1 POWER AND AUTHORIZATION. Each Individual Guarantor
has all requisite legal capacity to execute, deliver and perform the
Individual Guarantee and the applicable Loan Documents. The execution,
delivery and performance by Individual Guarantor of any of the Loan Documents
does not and will not (i) contravene any law, rule, regulation, judgment,
decree, or order presently in effect and having applicability to Individual
Guarantor, or (ii) result in a breach of or constitute a default under any
agreement for borrowed money or under any other material agreement, lease or
instrument to which Individual Guarantor is a party.
4.3.2 BINDING EFFECT. This Loan Agreement is, and the
Individual Guaranty Agreement and each of the other Loan Documents when duly
executed and delivered for value by Individual Guarantor, will be legal,
valid and binding obligations of Individual Guarantor, enforceable against
each of them in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether
considered in a proceeding in equity or in law).
4.3.3 TITLE TO PROPERTIES. Each Individual Guarantor has
good title to his properties and assets which are pledged pursuant to this
Loan Agreement.
4.3.4 TAX RETURNS. Each Individual Guarantor has filed
all federal, state and local tax returns which are required to be filed, and
have paid all taxes as shown on said returns and on all assessments received
by him to the extent that such taxes have become due.
4.3.5 LIABILITIES. Individual Guarantor does not have
any liabilities, contingent or otherwise, which are to be disclosed pursuant
to GAAP, which are not reflected in the most recent Financial Statements of
the Individual Guarantor (including the notes thereto) as delivered to Lender.
4.3.6 FULL DISCLOSURE. None of the representations or
warranties made by Individual Guarantor in this Loan Agreement or in any of
the other Loan Documents or in any financial statement, exhibit or document
furnished in connection herewith or therewith, as of the respective dates of
such representations and warranties, contains any untrue statement of a
material fact or omits any material fact necessary to make the statements
made not misleading.
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4.3.7 PRIOR CONSENTS. No consent, approval or
authorization of, or filing, registration or qualification with any
Governmental Authority on the part of Individual Guarantor is required as a
condition to the execution and delivery of this Loan Agreement, the
Individual Guarantees or any other instruments referred to herein.
4.3.8 NO DEFAULTS. Except as may have been previously
disclosed to Lender, Individual Guarantor is not in default in the payment of
principal or interest on any Indebtedness for Borrowed Money, is not in
default under any instrument or agreement under or subject to which any
Indebtedness for Borrowed Money has been issued, and no event has occurred
under the provisions of any such instrument which, with or without the lapse
of time or the giving of notice, or both, constitutes or will constitute an
event of default thereunder.
4.3.9 ADDITIONAL NOTES AND DOCUMENTS. When called upon
to do so by the Lender, Individual Guarantor shall make, sign and execute any
and all new or amended security documents or instruments which are reasonably
required to satisfy any of the requirements of this Loan Agreement, including
any amendments, modifications or replacements for the documents required
hereby, provided that same do not materially alter, amend, modify, or change
any of the significant terms of such documents, including, for example and
without limitation, interest rates or maturity dates.
ARTICLE V.--AFFIRMATIVE COVENANTS
SECTION 5.1 COVENANTS OF BORROWERS. From the date of this Loan
Agreement until the Loan is paid in full and Borrowers have satisfied in full
all other obligations hereunder, Borrowers will:
5.1.1 FINANCIAL STATEMENTS. Furnish to the Lender:
(a) As soon as available and in any event within thirty
(30) days after the end of each fiscal quarter, including the last quarter of
each fiscal year, internally prepared:
(i) interim financial statements for EWC,
consisting of a balance sheet and related statements of income for the fiscal
quarter, and changes in cash flows, in a form consistent with that utilized
in the corresponding period of the preceding fiscal year, and all in
reasonable detail and duly certified by its Chief Financial Officer as having
been prepared in accordance with GAAP consistently applied;
(ii) interim financial statements for FFI,
consisting of a balance sheet and related statements of income for the fiscal
quarter, and changes in cash flows, in a form consistent with that utilized
in the corresponding period of the preceding fiscal year, and all in
reasonable detail and duly certified by its Chief Financial Officer as having
been prepared in accordance with GAAP consistently applied;
(iii) At the time such financial statements
referenced in this paragraph are furnished, an Officer's Certificate as to
compliance in the form of Exhibit "W" hereto will be provided; and
(iv) A listing of all motor vehicles or other
titled vehicles owned by the Borrowers containing such information reasonably
necessary to identify the motor vehicles or other titled vehicles, including
specifically the vehicle identification number.
(b) Unqualified audited financial statements for each
Borrower as soon as available and in any event within ninety (90) days after
the end of each fiscal year, consisting of a balance sheet and related
statements of income and retained earnings and changes in cash flows for the
fiscal year, setting forth in comparative form corresponding figures from the
preceding annual financial report, all in reasonable detail with an
unqualified opinion to be rendered by an independent certified public
accountant of recognized standing, satisfactory to the Lender and selected by
Borrowers, as having been prepared in accordance with GAAP applied on a
consistent basis with prior years (except for any changes in consistency with
which Borrower's independent certified public accountants concur); and the
examination of the accounts in connection with such financial statements has
been made in accordance with generally accepted auditing standards and,
accordingly, includes such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances;
(c) Annual financial statements for each of Xxxxxx Xxxxx,
Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, in form and content
acceptable to Lender as soon as available and in any event within ninety (90)
days after the end of each calendar year, consisting of a balance sheet and
related statement of income;
(d) Immediately after the occurrence of a change creating a
Material Adverse Effect in the business, properties, conditions or
operations, financial or otherwise, of Borrowers, a statement of Borrower's
Chief Executive or Chief Financial Officer setting forth details of such
change which creates a Material Adverse Effect and the action which Borrowers
proposes to take with respect thereto;
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(e) As soon as possible and in any event within thirty (30)
days after Borrowers know or have reason to know that any Reportable Event
with respect to any Plan has occurred, the statement of Borrower's Chief
Financial Officer or Treasurer setting forth the details of such Reportable
Event and the action which Borrowers proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event to the PBGC;
(f) Upon any of the officers of Borrowers obtaining
knowledge of any Event of Default, Borrowers will forthwith deliver to the
Lender an Officer's Certificate specifying the nature thereof, the period of
existence thereof, and what action Borrowers proposes to take with respect
thereto;
(g) With reasonable promptness, such other financial data
as the Lender may reasonably request.
5.1.2 INSPECTION OF PROPERTY AND RECORDS. Upon three (3)
business days prior notice, permit any person designated in writing by the
Lender, at the expense of the Lender, to visit and inspect any of the
properties of Borrowers and to inspect financial records of Borrowers, and to
discuss the affairs, finances and accounts with the principal officers of
Borrowers, as often as the Lender may reasonably request, provided that any
information obtained by the Lender from Borrowers whether as a result of
inspections under this Section 5.1.2 or otherwise will be held in strict
confidence by the Lender and will not be disclosed to any other person, firm
or corporation; and further provided that the Lender may make such disclosure
as may be reasonably required by any governmental examining authority or
other governmental agency having jurisdiction over the Lender. Borrowers
agree to permit Lender, its agents, contractors and employees to enter and
inspect any of Borrowers' places of business at any reasonable times upon
three (3) business days prior notice for the purposes of conducting an
environmental investigation and audit (including taking physical samples) to
insure that Borrowers are complying with this Loan Agreement. Borrowers shall
provide Lender, its agents, contractors, employees and representatives with
access to and copies of any and all data and documents relating to or dealing
with any Hazardous Materials used, generated, manufactured, stored or
disposed of by Borrower's business operations within three (3) business days
of the request therefore. Hazardous materials include all materials defined
as hazardous wastes or substances under any local, state or federal
environmental laws, rules or regulations, and petroleum, petroleum products,
oil and asbestos.
5.1.3 MAINTENANCE OF INSURANCE. Maintain insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is presently carried by Borrowers and pursuant to
Section 5.4 of the Term Note Deeds of Trust, and Borrowers shall reflect
Lender as a loss payee thereof, subject, however, to the rights of Bank One
in and to inventory.
5.1.4 CORPORATE EXISTENCE AND STATUS. Preserve and
maintain Borrowers' corporate existence in good standing, and preserve and
maintain all rights, franchises, permits, licenses, and privileges in the
jurisdiction of their incorporation which are material to the conduct of
their operations or financial condition, and qualify and remain qualified as
a foreign corporation in good standing in each jurisdiction in which
Borrowers operate and in which the failure to qualify or remain qualified
would have a Material Adverse Effect upon Borrowers.
5.1.5 PAYMENT OF TAXES, ETC. Pay and discharge all
material taxes, assessments and governmental charges or levies imposed upon
Borrowers or upon their income or profits, or upon any properties belonging
to them, prior to the date on which substantial penalties attach thereto, and
all material and lawful claims which, if unpaid, might become a lien or
charge upon any properties of Borrowers, except to the extent such material
taxes, assessments, governmental charges or levies or claims are being
contested in good faith, and Borrowers have established appropriate reserves
therefor, in accordance with GAAP.
5.1.6 PAYMENT OF FEES AND EXPENSES. Borrowers will, upon
request by the Lender, promptly reimburse the Lender for all amounts
expended, advanced or incurred by the Lender to satisfy any obligation of
Borrowers under this Loan Agreement or the Loan Documents, or to collect the
Notes, or to enforce the rights of the Lender under this Loan Agreement or
any other instrument referred to or mentioned herein or executed or to be
executed in connection herewith, including any subsequent amendments hereof
or waivers hereunder which amounts will include all court costs, attorneys'
fees, fees of auditors and accountants, investigation expenses, or any other
out-of-pocket expenses reasonably incurred by the Lender in connection with
any such matters.
5.1.7 COMPLIANCE WITH LAWS. Borrowers will comply in all
respects with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority except where the failure to so comply,
together with all other such failures, would not result in a Material Adverse
Effect upon Borrowers, including specifically those environmental statutes as
set forth in Section 4.1.13 hereof
5.1.8 NOTICE OF LITIGATION OR OTHER CONTINGENT
LIABILITIES. Notify the Lender promptly of any actual or potential contingent
liabilities or any actions, suits or proceedings instituted by any Person
against Borrowers in which the uninsured portion of any claim exceeds ONE
HUNDRED THOUSAND AND NO/100 DOLLARS, ($100,000.00) and of any actual or
potential contingent liabilities or any actions, suits or proceedings which
could seek non-monetary relief which, if granted, would have a Material
Adverse Effect on Borrowers, said notice to specify the nature and amount of
potential liability or other relief which may be sought, the Person in whose
favor the claim, action, suit or proceeding may be made, and any other
significant features of the claim. In addition,
15
Borrowers shall immediately advise Lender in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other governmental or regulatory
actions instituted, completed or threatened pursuant to any applicable
federal, state, or local laws, ordinances or regulations, relating to any
Hazardous Materials affecting Borrower's business operations; and (ii) all
claims made or threatened by any third party against Borrowers relating to
damages, contribution, cost recovery compensation, loss or injury resulting
from any Hazardous Materials. Borrowers shall immediately notify Lender of
the remedial action taken by Borrowers with respect to Borrower's business
operations.
5.1.9 ERISA. Fund each of Borrower's Plans in accordance
with the minimum funding requirements under ERISA.
5.1.10 FINANCIAL COVENANTS: Each Borrower shall maintain
the following financial covenant, based upon the separate Financial
Statements of Borrowers:
a. DEBT SERVICE COVERAGE RATIO. Maintain at each
fiscal quarter end a ratio of Cash Available for Debt Service to Total
Required Debt Service of not less than 1.25:1.
SECTION 5.2 COVENANTS OF CORPORATE GUARANTOR. From the date of this
Loan Agreement until the Loan is paid in full and Borrowers have satisfied in
full all other obligations hereunder, Corporate Guarantor will:
5.2.1 FINANCIAL STATEMENTS. Furnish to the Lender:
(a) As soon as available and in any event within thirty
(30) days after the end of each fiscal quarter, including the last quarter of
each fiscal year, internally prepared:
(i) interim financial statements for Corporate
Guarantor consisting of a balance sheet and related statements of income for
the fiscal quarter, and changes in cash flows, in a form consistent with that
utilized in the corresponding period of the preceding fiscal year, and all in
reasonable detail and duly certified by its Chief Financial Officer as having
been prepared in accordance with GAAP consistently applied; and
(ii) At the time such financial statements
referenced in this paragraph are furnished, an Officer's Certificate as to
compliance in the form of Exhibit "W" hereto will be provided.
(b) Unqualified audited financial statements for Corporate
Guarantor as soon as available and in any event within one hundred twenty
(120) days after the end of each fiscal year, consisting of a balance sheet
and related statements of income and retained earnings and changes in cash
flows for the fiscal year, setting forth in comparative form corresponding
figures from the preceding annual financial report, all in reasonable detail
with an unqualified opinion to be rendered by an independent certified public
accountant of recognized standing, satisfactory to the Lender and selected by
Corporate Guarantor, as having been prepared in accordance with GAAP applied
on a consistent basis with prior years (except for any changes in consistency
with which Corporate Guarantor's independent certified public accountants
concur); and the examination of the accounts in connection with such
financial statements has been made in accordance with generally accepted
auditing standards and, accordingly, includes such tests of the accounting
records and such other auditing procedures as were considered necessary in
the circumstances;
(c) Immediately after the occurrence of a change creating a
Material Adverse Effect in the business, properties, conditions or
operations, financial or otherwise, of Corporate Guarantor, a statement of
Corporate Guarantor's Chief Executive or Chief Financial Officer setting
forth details of such change which creates a Material Adverse Effect and the
action which Corporate Guarantor proposes to take with respect thereto;
(d) As soon as possible and in any event within thirty (30)
days after Corporate Guarantor knows or has reason to know that any
Reportable Event with respect to any Plan has occurred, the statement of
Corporate Guarantor's Chief Financial Officer or Treasurer setting forth the
details of such Reportable Event and the action which Corporate Guarantor
proposes to take with respect thereto, together with a copy of the notice of
such Reportable Event to the PBGC;
(e) Upon any of the officers of Corporate Guarantor
obtaining knowledge of any Event of Default, Corporate Guarantor will
forthwith deliver to the Lender an Officer's Certificate specifying the
nature thereof; the period of existence thereof, and what action Corporate
Guarantor proposes to take with respect thereto;
(f) With reasonable promptness, such other financial data
as the Lender may reasonably-request.
5.2.2 INSPECTION OF PROPERTY AND RECORDS. Upon three (3)
business days prior notice, permit any person designated in writing by the
Lender, at the expense of the Lender, to visit and inspect any of the
properties of Corporate Guarantor and to inspect financial records of
Corporate Guarantor, and to discuss the affairs, finances and accounts with
the principal officers of Corporate Guarantor, as often as the Lender may
reasonably request, provided that any information obtained by the Lender from
Corporate Guarantor whether as a result of inspections under this Section
5.2.2 or otherwise will be held in strict confidence by the Lender and will
16
not be disclosed to any other person, firm or corporation; and further
provided that the Lender may make such disclosure as may be reasonably
required by any governmental examining authority or other governmental agency
having jurisdiction over the Lender. Corporate Guarantor agrees to permit
Lender, its agents, contractors and employees to enter and inspect any of
Corporate Guarantor's places of business at any reasonable times upon three
(3) business days prior notice for the purposes of conducting an
environmental investigation and audit (including taking physical samples) to
insure that Corporate Guarantor is complying with this Loan Agreement.
Corporate Guarantor shall provide Lender, its agents, contractors, employees
and representatives with access to and copies of any and all data and
documents relating to or dealing with any Hazardous Materials used,
generated, manufactured, stored or disposed of by Corporate Guarantor's
business operations within three (3) business days of the request therefore.
Hazardous materials include all materials defined as hazardous wastes or
substances under any local, state or federal environmental laws, rules or
regulations, and petroleum, petroleum products, oil and asbestos.
5.2.3 MAINTENANCE OF INSURANCE. Maintain insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is presently carried by Corporate Guarantor and
Corporate Guarantor shall reflect Lender as a loss payee thereof.
5.2.4 CORPORATE EXISTENCE AND STATUS. Preserve and
maintain Corporate Guarantor's corporate existence in good standing, and
preserve and maintain all rights, franchises, permits, licenses, and
privileges in the jurisdiction of its incorporation which are material to the
conduct of its operations or financial condition, and qualify and remain
qualified as a foreign corporation in good standing in each jurisdiction in
which Corporate Guarantor operates and in which the failure to qualify or
remain qualified would have a Material Adverse Effect upon Corporate
Guarantor.
5.2.5 PAYMENT OF TAXES, ETC. Pay and discharge all
material taxes, assessments and governmental charges or levies imposed upon
Corporate Guarantor or upon its income or profits, or upon any properties
belonging to it, prior to the date on which substantial penalties attach
thereto, and all material and lawful claims which, if unpaid, might become a
lien or charge upon any properties of Corporate Guarantor, except to the
extent such material taxes, assessments, governmental charges or levies or
claims are being contested in good faith, and Corporate Guarantor has
established appropriate reserves therefor, in accordance with GAAP.
5.2.6 PAYMENT OF FEES AND EXPENSES. Corporate Guarantor
will, upon request by the Lender, promptly reimburse the Lender for all
amounts expended, advanced or incurred by the Lender to satisfy any
obligation of Corporate Guarantor under this Loan Agreement or the Loan
Documents, or to collect the Notes, or to enforce the rights of the Lender
under this Loan Agreement or any other instrument referred to or mentioned
herein or executed or to be executed in connection herewith, including any
subsequent amendments hereof or waivers hereunder which amounts will include
all court costs, attorneys' fees, fees of auditors and accountants,
investigation expenses, or any other out-of-pocket expenses reasonably
incurred by the Lender in connection with any such matters.
5.2.7 COMPLIANCE WITH LAWS. Corporate Guarantor will
comply in all respects with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority except where the failure
to so comply, together with all other such failures, would not result in a
Material Adverse Effect upon Corporate Guarantor, including specifically
those environmental statutes as set forth in Section 4.2.13 hereof
5.2.8 NOTICE OF LITIGATION OR OTHER CONTINGENT
LIABILITIES. Notify the Lender promptly of any actual or potential contingent
liabilities or any actions, suits or proceedings instituted by any Person
against Corporate Guarantor in which the uninsured portion of any claim
exceeds ONE HUNDRED THOUSAND AND NO/100 DOLLARS, ($100,000.00) and of any
actual or potential contingent liabilities or any actions, suits or
proceedings which could seek non-monetary relief which, if granted, would
have a Material Adverse Effect on Corporate Guarantor, said notice to specify
the nature and amount of potential liability or other relief which may be
sought, the Person in whose favor the claim, action, suit or proceeding may
be made, and any other significant features of the claim. In addition,
Corporate Guarantor shall immediately advise Lender in writing of (i) any and
all enforcement, cleanup, remedial, removal, or other governmental or
regulatory actions instituted, completed or threatened pursuant to any
applicable federal, state, or local laws, ordinances or regulations relating
to any Hazardous Materials affecting Corporate Guarantor's business
operations; and (ii) all claims made or threatened by any third party against
Corporate Guarantor relating to damages, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials.
Corporate Guarantor shall immediately notify Lender of the remedial action
taken by Corporate Guarantor with respect to Corporate Guarantor's business
operations.
5.2.9 ERISA. Fund each of Corporate Guarantor's Plans in
accordance with the minimum funding requirements under ERISA.
ARTICLE VI.--NEGATIVE COVENANTS
SECTION 6.1 NEGATIVE COVENANTS OF BORROWERS. Borrowers covenant and
agree that, until the Loans hereby granted shall have been paid in full, and
until Borrowers have satisfied all other obligations hereunder, Borrowers
shall not, without the prior written consent of the Lender (if Lender does
not provide prior written consent, Lender shall not unreasonably delay its
notification to Borrowers of its determination):
17
6.1.1 LIMITATION ON INDEBTEDNESS. Borrowers shall not
incur, create, contract, waive, assume, have outstanding, guarantee or
otherwise be or become, directly or indirectly, liable in respect of any
Indebtedness, EXCEPT (i) Indebtedness arising out of this Loan Agreement
(ii) current liabilities for taxes and assessments incurred in the ordinary
course of business, (iii) current amounts payable or accrued or other claims
(other than for borrowed funds or purchase money obligations) incurred in the
ordinary course of business, provided that all such liabilities, accounts and
claims shall be promptly paid and discharged when due or in conformity with
customary trade terms, (iv) Indebtedness of the Borrowers as reflected in the
unaudited combined financial statement of the Borrowers as of the Closing
Date (v) Indebtedness owing by any Borrower to another Borrower, and (vi)
operating leases which are not in contravention of the terms of this Loan
Agreement, (vii) Indebtedness arising out of Borrowers' short term credit
facility, currently with Bank One, and (viii) Indebtedness for new capital
expenditures not to exceed $1,000,000.00 in the aggregate in any one year.
6.1.2 CONTINGENT LIABILITIES. Become liable, directly or
indirectly, as a surety, guarantor, accommodation endorser or otherwise for
the payment or performance of any obligation of any other Person; provided,
however, that this Section 6.1.2 shall not be deemed to prohibit the
endorsement of negotiable instruments received in the usual course of its
business, nor shall this Section 6.1.2 prohibit the guaranty of any
obligations to Bank One.
6.1.3 ENCUMBRANCES. Create, incur, assume or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest or other
charge or encumbrance (including the lien of an attachment, judgment or
execution), securing a charge or obligation, on or of any of its property,
real or personal, tangible or intangible, whether now owned or hereafter
acquired, except for:
(a) amounts owed to Bank One by EWC for a
revolving line of credit, and secured by accounts receivables, inventory and
general intangibles;
(b) amounts owed to Bank One by FFI for a
revolving line of credit, and secured by accounts receivables, inventory and
general intangibles;
(c) liens or charges for current taxes,
assessments or other governmental charges which are not delinquent or remain
payable without any penalty, or the validity of which is contested in good faith
by appropriate proceedings upon stay of execution of the enforcement thereof and
for which appropriate reserves have been established in accordance with GAAP;
(d) deposits or pledges to secure:
(i) statutory obligations;
(ii) surety or appeal bonds; or
(iii) bonds for release of attachment,
stay of execution or injunction;
(e) statutory liens arising in the ordinary
course of business which, in the aggregate, do not materially impair the use of
such property in its business or materially detract from the value of such
property;
(f) liens created pursuant to this Loan
Agreement; and
(g) easements on realty which do not have a
Material Adverse Effect upon Borrowers.
6.1.4 DISPOSITION OF ASSETS. Sell, assign, lease as lessor
or otherwise dispose of any of its assets except in the ordinary course of
business as previously conducted, without the prior written consent of Lender
which consent shall be at the sole discretion of Lender.
6.1.5 DISCONTINUANCE OF BUSINESS. Allow a significant
portion of the business of Borrower(s) to be discontinued.
6.1.6 MERGERS AND ACQUISITIONS. Dissolve into or merge or
consolidate with any Person, or acquire all or any portion of the capital stock
of, or all or substantially all of the assets of, any Person, except where the
Borrowers are the surviving entity and the Borrowers have obtained the prior
written consent of Lender which consent shall be at the sole discretion of
Lender.
6.1.7 CHANCE IN MANAGEMENT OR CONTROL. Agree to any merger
or consolidation or sale, lease or other transfer of all or substantially all of
the property, assets or capital stock of Borrower(s) which results in either a
material change in the executive management of Borrowers or in a material change
in the ownership of a controlling interest of Borrowers.
6.1.8 INVESTMENTS. Purchase or hold beneficially any stock
or other securities or evidences of indebtedness of, or make or, permit to exist
any interest whatsoever in, or make or permit to exist any loans or advances to,
any other Person, except that it may make the following investments:
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(a) direct obligations of the United States of
America or any agency thereof, or obligations fully guaranteed by the United
States of America or any agency thereof, provided that the obligations mature
within ninety (90) days of the date of acquisition thereof;
(b) commercial paper rated "A-I" (or higher)
according to Standard & Poor's Corporation or any successor rating agency, or
"P-I" (or higher) according to Moody's Investor's Service, Inc., or any
successor rating agency, and maturing not more than one hundred eighty (180)
days from the date of creation thereof;
(c) readily marketable tax-free municipal bonds of a
domestic issuer maturing in three (3) years or less from the date of acquisition
thereof; which are rated "AAA" (or better) by Moody's Investor's Services, Inc.
or "Aaa" (or better) by Standard & Poor's Corporation; and
(d) time deposits with, and certificates of deposit
and banker's acceptances issued by, any United States bank (A) having capital
surplus and undivided profits aggregating at least $1,000,000,000 and whose debt
has a rating at the time as of which any Investment therein is made, of "A2" (or
higher) according to Standard & Poor's Corporation or any successor rating
agency, or "A" (or higher) according to Moody's Investor's Service, Inc. or any
successor rating agency, and (B) so long as all such deposits are federally
insured.
6.1.9 INTERCOMPANY DEALINGS. Make any loans, advances, or
transfers to any Affiliate without the prior written consent of the Lender,
which consent shall be at the sole discretion of Lender.
6.1.10 LIMITATION ON DIVIDENDS. Pay or declare any dividend
on any class of their stock or make any other distribution on account of any
class of their stock, or redeem, purchase or otherwise acquire, directly or
indirectly, any shares of their stock of any class.
6.1.11 CHANGE OF BUSINESS. Change the general character of
Borrowers' business as conducted at the date hereof; or engage in any type of
business not reasonably related to its business as presently and normally
conducted.
6.1.12 CHANGE IN THE SELECTION OF THE AUDITORS. Make any
change in the selection of the independent certified public accountant rendering
the opinion as to the financial condition of Borrowers.
SECTION 6.2 NEGATIVE COVENANTS OF CORPORATE GUARANTOR. Corporate
Guarantor covenants and agrees that, until the Loans hereby granted shall have
been paid in full, and until Borrowers have satisfied all other obligations
hereunder, Corporate Guarantor shall not, without the prior written consent of
the Lender (if Lender does not provide prior written consent, Lender shall not
unreasonably delay its notification to Corporate Guarantor of its
determination):
6.2.1 LIMITATION ON INDEBTEDNESS. Corporate Guarantor shall
not incur, create, contract, waive, assume, have outstanding, guarantee or
otherwise be or become, directly or indirectly, liable in respect of any
Indebtedness, EXCEPT (i) Indebtedness arising out of this Loan Agreement (ii)
current liabilities for taxes and assessments incurred in the ordinary course of
business, (iii) current amounts payable or accrued or other claims (other than
for borrowed funds or purchase money obligations) incurred in the ordinary
course of business, provided that all such liabilities, accounts and claims
shall be promptly paid and discharged when due or in conformity with customary
trade terms, (iv) Indebtedness of the Corporate guarantor as reflected in the
unaudited combined financial statement of the Corporate Guarantor as of the
Closing Date (v) Indebtedness owing by Corporate Guarantor to a Borrower, and
(viii) operating leases which are not in contravention of the terms of this Loan
Agreement.
6.2.2 CONTINGENT LIABILITIES. Become liable, directly or
indirectly, as a surety, guarantor, accommodation endorser or otherwise for the
payment or performance of any obligation of any other Person; provided, however,
that this Section 6.2.2 shall not be deemed to prohibit the endorsement of
negotiable instruments received in the usual course of its business, nor shall
this Section 6.2.2 prohibit the guaranty of any obligations to Bank One.
6.2.3 ENCUMBRANCES. Create, incur, assume or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest or other
charge or encumbrance (including the lien of an attachment, judgment or
execution), securing a charge or obligation, on or of any of its property, real
or personal, tangible or intangible, whether now owned or hereafter acquired,
except for:
(a) liens or charges for current taxes,
assessments or other governmental charges which are not delinquent or r&main
payable without any penalty, or the validity of which is contested in good faith
by appropriate proceedings upon stay of execution of the enforcement thereof and
for which appropriate reserves have been established in accordance with GAAP;
(b) deposits or pledges to secure:
(i) statutory obligations;
(ii) surety or appeal bonds; or
(iii) bonds for release of attachment, stay of
execution or injunction;
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(c) statutory liens arising in the ordinary
course of business which, in the aggregate, do not materially impair the use
of such property in its business or materially detract from the value of such
property;
(d) liens created pursuant to this Loan
Agreement; and
(e) easements on realty which do not have a
Material Adverse Effect upon Corporate Guarantor.
6.2.4 DISPOSITION OF ASSETS. Sell, assign, lease as
lessor or otherwise dispose of any of its assets except in the ordinary
course of business as previously conducted, without the prior written consent
of Lender which consent shall be at the sole discretion of Lender.
6.2.5 DISCONTINUANCE OF BUSINESS. Allow a significant
portion of the business of Corporate Guarantor to be discontinued.
6.2.6 MERGERS AND ACQUISITIONS. Dissolve into or merge
or consolidate with any Person, or acquire all or any portion of the capital
stock of; or all or substantially all of the assets of; any Person, except
where the Corporate Guarantor is the surviving entity and the Corporate
Guarantor has obtained the prior written consent of Lender which consent
shall be at the sole discretion of Lender.
6.2.7 CHANCE IN MANAGEMENT OR CONTROL. Agree to any
merger or consolidation or sale, lease or other transfer of all or
substantially all of the property, assets or capital stock of Corporate
Guarantor which results in either a material change in the executive
management of Corporate Guarantor or in a material change in the ownership of
a controlling interest of Corporate Guarantor.
6.2.8 INVESTMENTS. Purchase or hold beneficially any
stock or other securities or evidences of indebtedness of; or make or permit
to exist any interest whatsoever in, or make or permit to exist any loans or
advances to, any other Person, except that it may make the following
investments:
(a) direct obligations of the United States of
America or any agency thereof; or obligations fully guaranteed by the United
States of America or any agency thereof; provided that the obligations mature
within ninety (90) days of the date of acquisition thereof;
(b) commercial paper rated "A-I" (or higher)
according to Standard & Poor's Corporation or any successor rating agency, or
"P-I" (or higher) according to Moody's Investor's Service, Inc., or any
successor rating agency, and maturing not more than one hundred eighty (180)
days from the date of creation thereof;
(c) readily marketable tax-free municipal bonds of
a domestic issuer maturing in three (3) years or less from the date of
acquisition thereof; which are rated "AAA" (or better) by Moody's Investor's
Services, Inc. or "Aaa" (or better) by Standard & Poor's Corporation; and
(d) time deposits with, and certificates of
deposit and banker's acceptances issued by, any United States bank (A) having
capital surplus and undivided profits aggregating at least $1,000,000,000 and
whose debt has a rating at the time as of which any Investment therein is
made, of "A2" (or higher) according to Standard & Poor's Corporation dr any
successor rating agency, or "A" (or higher) according to Moody's Investor's
Service, Inc. or any successor rating agency, and (B) so long as all such
deposits are federally insured.
6.2.9 INTERCOMPANY DEALINGS. Make any loans, advances,
or transfers to any Affiliate without the prior written consent of the
Lender, which consent shall be at the sole discretion of Lender.
6.2.10 LIMITATION ON DIVIDENDS. Pay or declare any
dividend on any class of their stock or make any other distribution on
account of any class of their stock, or redeem, purchase or otherwise
acquire, directly or indirectly, any shares of their stock of any class,
other than those transactions as specifically set forth in the option between
Corporate Guarantor, its shareholders, and Xxx Xxxxx (the "Xxxxx Option", a
copy of which is attached hereto and marked Exhibit "AD"), and which
transaction is strictly in conformity with the Xxxxx Option, or the Xxxx Xxxx
Option, which will be in lieu of and upon substantially identical terms and
conditions as the Xxxxx Option, and in any event which options will not
exceed five percent (5%) of the currently authorized shares of Corporate
Guarantor.
6.2.11 CHANGE OF BUSINESS. Change the general character
of Corporate Guarantor's business as conducted at the date hereof; or engage
in any type of business not reasonably related to its business as presently
and normally conducted.
6.2.12 CHANGE IN THE SELECTION OF THE AUDITORS. Make any
change in the selection of the independent certified public accountant
rendering the opinion as to the financial condition of Corporate Guarantor.
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ARTICLE VII.--CONDITIONS OF LENDING
SECTION 7.1 CONDITIONS PRECEDENT TO THE CLOSING. This Loan Agreement
and the obligation of the Lender to make the Loan hereunder are subject to
the conditions precedent that the Lender shall have received on or before the
Closing Date all of the following, each dated the Closing Date, in form and
substance satisfactory to the Lender and Xxxxx X. Xxxxxx, legal counsel for
the Lender:
(a) The EWC Term Note, payable to the order of the Lender, as
described in Section 2.1 hereof and identified as Exhibit "A", duly executed
and delivered by Borrower EWC;
(b) The FFI Term Note, payable to the order of the Lender, as
described in Section 2.2 hereof and identified as Exhibit "B", duly executed
and delivered by Borrower FFI;
(c) The EWC Term Note Deeds Of Trust and the two (2) Financing
Statements pertaining to each of the realty referenced in Exhibit K, as
described in Section 3.1(a) hereof, duly executed and delivered by EWC.
(d) The EWC Term Note Deeds Of Trust and the two (2) Financing
Statements pertaining to each of the realty referenced in Exhibit L, as
described in Section 3.1(b) hereof, duly executed and delivered by EWC.
(e) The FFI Term Note Deeds Of Trust and the two (2) Financing
Statements pertaining to each of the realty referenced in Exhibit M, as
described in Section 3.1(c) hereof, duly executed and delivered by FFI.
(f) The FFI Term Note Deeds of Trust and the two (2) Financing
Statements pertaining to each of the realty referenced in Exhibit N, as
described in Section 3.1(d) hereof, duly executed and delivered by FFI.
(g) The EWC Security Agreement pertaining to the equipment and
vehicles of EWC, as described in Section 3.2(a) hereof, duly executed and
delivered by EWC, as represented by the Security Agreement identified as
Exhibit "G", and the Financing Statements as described in Section 3.2(a)
hereof, duly executed and delivered by EWC, as represented by the Financing
Statements identified as Exhibit "H".
(h) The FFI Security Agreement pertaining to the equipment and
vehicles of FFI as described in Section 3.2(b) hereof, duly executed and
delivered by FFI, as represented by the Security Agreement identified as
Exhibit "I", and the Financing Statements as described in Section 3.2(b)
hereof, duly executed and delivered by FFI, as represented by the Financing
Statements identified as Exhibit "J".
(i) The Corporate Guaranty Agreement of UFEC as described in
Section 3.3(a) hereof, duly executed and delivered by UFEC, as represented by
the Guaranty Agreement identified as Exhibit "O1";
(j) The Corporate Guaranty Agreement of EWC as described in
Section 3.3(d) hereof, duly executed and delivered by EWC, as represented by
the Guaranty Agreement identified as Exhibit "O2";
(k) The Corporate Guaranty Agreement of FFI as described in
Section 3.3(e) hereof, duly executed and delivered by FFI, as represented by
the Guaranty Agreement identified as Exhibit "O3";
(l) The Individual Guaranty Agreements of each of Xxxxxx Xxxxx,
Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, as described in
Section 3.3(b) hereof, duly executed and delivered by each of Xxxxxx Xxxxx,
Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, as represented by
the Individual Guaranty Agreements identified as Exhibits "PI-P4";
(m) The Collateral Pledge Agreement of UFEC as described in
Section 3.4 hereof, duly executed and delivered by UFEC, as represented by
the Collateral Pledge Agreement identified as Exhibit "Q", ALONG WITH all of
the issued and outstanding stock of EWC and FFI, with an executed Blank Stock
Power for EWC, in substantially the form as the attached Exhibit "R" and with
an executed Blank Stock Power for FFI, in substantially the form as the
attached Exhibit "S";
(n) The Individual Guarantor's Collateral Pledge Agreement as
described in Section 3.5 hereof, duly executed and delivered by each of
Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, as
represented by the Individual Guarantor's Collateral Pledge Agreements
identified as Exhibits"T1-T4", ALONG WITH all of the issued and outstanding
stock of UFEC, with an executed Blank Stock Power for each of XxxXxx Xxxxx,
Xxxxxxx Xxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, in substantially the
form as the attached Exhibits "U1-U4";
(o) The Stock Warrant Agreement as described in Section 3.6
hereof, duly executed and delivered by UFEC, as represented by the attached
Exhibit "V";
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(p) The Assignment of Life Insurance on Individual Guarantors
as described in Section 3.7 hereof; duly executed and delivered by UFEC or
each such Individual Guarantor, or the reasonable assurance thereof as
accepted by Lender in its sole discretion;
(q) Certified copies of the resolutions of the Board of
Directors of each of Borrowers, authorizing the execution, delivery and
performance of this Loan Agreement, the EWC Term Note, the FFI Term Note, and
any other Loan Documents to be delivered by Borrowers hereunder, and
certified copies of all documents evidencing other necessary corporate action
with respect to the Loan Documents, which shall certify the names of the
officers of Borrowers authorized to sign this Loan Agreement, the EWC Term
Note, the FFI Term Note and any other Loan Documents, together with the true
signatures of such officers. The Lender may rely conclusively on such
certificate until the Lender shall receive a further certificate of the
Secretary or the Assistant Secretary of Borrowers canceling or amending any
prior certificate and submitting the signatures of the officers named in the
further certificate;
(r) Certificates of Insurance evidencing the insurance policies
and coverage maintained as required in Sections 5.1.3 and 5.2.3 hereof and
reflecting the Lender as loss-payee thereunder, or the reasonable assurance
thereof as accepted by Lender in its sole discretion;
(s) Certified copies of the resolutions of the Board of
Directors of UFEC, authorizing the execution, delivery and performance of the
Loan Agreement, the Corporate Guaranty Agreement, the Assignment of UFEC
Stock to Lender, the Guarantor's Collateral Pledge Agreement, and the Blank
Stock Power of UFEC, and certified copies of all documents evidencing other
necessary corporate action which shall certify the names of the officers of
Corporate Guarantor authorized to sign the above referenced agreements,
together with the true signatures of such officers. The Lender may rely
conclusively on such certificate until the Lender shall receive a further
certificate of the Secretary or the Assistant Secretary of Corporate
Guarantor canceling or amending any prior certificate and submitting the
signatures of the officers named in the further certificate;
(t) A copy of the Articles of Incorporation of each of EWC, FFI
and UFEC and all amendments thereto, certified by the Secretary of State of
Texas, and dated within thirty (30) days of the date of the Closing Date and
a copy of the Bylaws of each of EWC, FFI and UFEC, and all amendments
thereto, certified by the Secretary or Assistant Secretary of each of EWC,
FFI, and UFEC, respectively, as being true, correct and complete as of the
date of such certification.
(u) Certificates of existence from the Secretary of State of
the State of Texas and Certificates of good standing from the Comptroller of
Public Accounts of the State of Texas for each of EWC, FFI and UFEC, dated
within thirty (30) days of the Closing Date.
(v) Certificates of Good Standing and Compliance from the New
Mexico Public Regulation Commission for each of EWC and FFI and Certificates
of Comparison from the New Mexico Public Regulation Commission for each of
EWC, FFI, and UFEC, all dated within thirty (30) days of the Closing Date.
(w) Federal tax identification numbers for each of EWC, FFI,
and UFEC;
(x) A favorable opinion of XxXxxxx, Tidwell, Hansen, Xxxxxx &
Xxxxxxx, P.C., special counsel for Borrowers, Corporate Guarantor, and the
Individual Guarantors, as to the matters covered in Exhibit "AA", which
opinion relies upon and incorporates that opinion of Xxxxx, Xxxxxxxx & Xxxxx,
Midland, Texas, special counsel for EWC and the individual shareholders of
EWC, as to the matters covered in Exhibit "AB";
(y) An intercreditor agreement between Lender and Bank One, in
form mutually agreeable to Lender and Bank One, with regard to certain rights
and obligations of Lender and Bank One as pertains to liens, secured
properties, and enforcement rights, in substantially the form as the attached
Exhibit "AC";
(z) A certificate signed by a duly authorized officer of each
Borrower and of Corporate Guarantor, stating that (to the best knowledge and
belief of the officer, after reasonable and due investigation and review of
matters pertinent to the subject matter of the certificate): (i) all of the
representations and warranties contained in Article IV, and in the other Loan
Papers, are true and correct as of the date of Closing; and (ii) no Potential
Default or Event of Default has occurred and is continuing or would result.
(aa) For each parcel of real property for which a Deed of Trust
is provided, pursuant to Sections 3.1(a) and (b)hereof:
(i) a copy of the Owner's Commitment of Title Insurance,
reflecting either EWC or FFI as applicable, as the owner thereof; subject
only to the standard printed exceptions, provided however that the exception
as to restrictive covenants shall be endorsed "None of Record" except for
permitted exceptions and the exception as to area and boundaries shall be
deleted, except for "any shortages in area"; and
(ii) a Mortgagee's policy of title insurance issued by
Ector County Abstract & Title Co., Inc., 000 Xxxx Xxxxx Xxxxxx, Xxxxxx, Xxxxx
00000 ("TITLE COMPANY"), insuring the liens of the Deeds of Trust on the
property set forth in Exhibits K, L, M, & N, as
22
first and prior, with no exceptions other than as reasonably satisfactory to
Lender ("TITLE POLICY"), a binding commitment may satisfy this requirement if
delivered at closing to Lender and if the Title Policy is delivered to Lender
within 10 business days after closing.
(iii) a Phase I Environmental Site Assessment with regard
to each such property prepared by a firm acceptable to Lender and selected by
Borrowers, indicating that the land is free from hazardous contamination and
which Phase I Environmental Site Assessment is approved by Lender, it being
expressly agreed that Lender shall not be required to close the loan should
any of the Phase I Environmental Site Assessments indicate that the land is
not from hazardous contamination.
(ab) For each leasehold interest for which a Deed of Trust is
provided, pursuant to Sections 3.1(c) and (c) hereof, if requested by the
Lender, an Estoppel Certificate executed by the Landlord thereof
substantially in the form of Exhibit "AE" attached hereto.
(ac) Such supplemental opinions and documents as the Lender may
reasonably request, including, but not limited to amending UCC-3's and blank
stock powers.
SECTION 7.2 CONDITIONS SUBSEQUENT TO THE CLOSING. This Loan
Agreement is subject to the conditions subsequent that the Lender shall have
received on or before sixty (60) days after the Closing Date all of the
following, in form and substance satisfactory to the Lender and Xxxxx X.
Xxxxxx, legal counsel for the Lender:
(a) The Collateral Pledge Agreement as described in Section 3.5
hereof duly executed and delivered by either Xxx Xxxxx or Xxxx Xxxx, should
either exercise their option to purchase up to 5% of the issued and
outstanding shares in UFEC from each of Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxx
X. Xxxxxx, and Xxxxxx X. Xxxxxx, as represented by the Collateral Pledge
Agreement identified as Exhibit "T5", ALONG WITH all of Xxx Xxxxx'x or Xxxx
Xxxx'x issued and outstanding stock of UFEC, should either exercise their
option, with an executed Blank Stock Power for each of either Xxx Xxxxx or
Xxxx Xxxx, in substantially the form as the attached Exhibit "US";
(b) To the extent not provided at closing pursuant to Section
7.1(p) above, the Assignment of Life Insurance on Individual Guarantors as
described in Section 3.7 hereof, duly executed and delivered by UFEC or each
such Individual Guarantor;
(c) To the extent not provided at closing pursuant to Section
7.1(r) above, Certificates of Insurance evidencing the insurance policies and
coverage maintained as required in Sections 5.1.3 and 5.2.3 hereof and
reflecting the Lender as loss-payee thereunder;
(d) To the extent not provided at closing, all original
Certificates of Title of motor vehicles of Borrowers which reflect Lender as
the first and prior lienholder thereon;
(e) To the extent not provided at closing, such remedial real
estate filings as are reasonably necessary in the opinion of Lender's counsel
to provide Lender with a first priority lien on real property and
improvements of EWC and FFI, and a first priority security interest in the
fixtures located therein or thereon, and a first priority lien in the
leasehold interest and leasehold improvements of EWC and FFI, and a first
priority security interest in the fixtures located therein or thereon, with
regard to that property set forth on Exhibits K, L, M, & N hereof, as
specified in Section 3.1 of this Agreement, and if appropriate, endorsements
to the Title Policy pursuant to the terms specified in Section 7.1 (aa) (ii)
above.
ARTICLE VIII.--EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT.
(a) The following shall constitute Events of Default:
(i) Failure by any Borrower to: (1) make any regularly
scheduled payment of principal or interest of the Notes within ten (10) business
days after such payment is due; or (2) pay any amount other than regularly
scheduled payments of principal or interest of the Notes due and Payable under
the Loan Agreement within ten (10) business days after notice that such payment
is due;
(ii) Any Borrower, Corporate Guarantor, or Individual
Guarantor makes any material misrepresentation in connection with the execution
and delivery of this Loan Agreement, any of the other Loan Documents, or in any
certificate furnished pursuant hereto or thereto;
(iii) Failure by any Borrower, Corporate Guarantor, or
Individual Guarantor to perform any term, covenant (except financial covenants
which are addressed in Section 8.1(a) (iv) hereafter, or agreement contained in
this Loan Agreement;
23
(iv) Failure by any Borrower to perform that financial
covenant contained in Section 5.1.10 of this Loan Agreement, and the
continuance of such failure to perform for thirty (30) days after notice
thereof shall have been given to Borrowers by the Lender;
(v) Any event of default (as defined therein) occurs
in any of the other Loan Documents;
(vi) The existence of any event which, with the giving
of notice or lapse of time, or both, would constitute an event of default
under the terms of any agreement or instrument to which any Borrower,
Corporate Guarantor, or Individual Guarantor is a party evidencing or
securing any obligation of such Borrower, Corporate Guarantor, or Individual
Guarantor for borrowed money or the deferred purchase price or the lease of
property, if the acceleration of the maturity of the obligation of such
Borrower, Corporate Guarantor, or Individual Guarantor would have a Material
Adverse Effect upon any Borrower, Corporate Guarantor, or Individual
Guarantor;
(vii) Any Borrower, Corporate Guarantor, or Individual
Guarantor shall (a) apply for or consent to the appointment of; or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (b) admit in writing its
inability, or be generally unable, to pay its debts as such debts become due,
(c) make a general assignment for the benefit of its creditors, (d) commence
a voluntary case under the United States Bankruptcy Code (as now or hereafter
in effect), (e) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, (f) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it
in an involuntary case under such Bankruptcy Code;
(viii) A proceeding or case shall be commenced, without
the application or consent of any Borrower, Corporate Guarantor, or
Individual Guarantor, in any court of competent jurisdiction, seeking (a) the
liquidation, reorganization, dissolution, winding-up or composition or
readjustment of debts, of any Borrower, Corporate Guarantor, or Individual
Guarantor, (b) the appointment of a trustee, receiver, custodian, liquidator
or the like of any Borrower, Corporate Guarantor, or Individual Guarantor or
of all or any substantial part of its or his assets, or (c) similar relief
in respect of Borrowers, Corporate Guarantor, or Individual Guarantor, as the
case may be, under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and any
such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of sixty (60) days from
commencement of such proceeding or case or the date of such order, judgment
or decree, or an order for relief against Borrowers, Corporate Guarantor, or
Individual Guarantor shall be entered in an involuntary case under such
Bankruptcy Code;
(ix) Final judgment for the payment of money in excess
of ONE HUNDRED THOUSAND NO/100 DOLLARS ($100,000.00) shall be rendered
against any Borrower, Corporate Guarantor, or Individual Guarantor and the
same shall remain undischarged or unstayed for a period of forty-five (45)
days thereafter; and
(x) Any Reportable Event which the Lender determines
in good faith constitutes reasonable grounds for the termination of any Plan
or for the appointment by the appropriate United States District Court of a
trustee to administer any Plan shall have occurred and the cause thereof
shall remain unremedied thirty (30) days after written notice to such effect
shall have been given to Borrowers or Corporate Guarantor by the Lender, or
any Plan shall be terminated, or a trustee shall be appointed by an
appropriate United States District Court to administer any Plan or the PBGC
shall institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan.
(b) If an Event of Default shall occur and be continuing, the
Lender may declare the Notes, with accrued interest thereon, and all other
obligations of Borrowers, Corporate Guarantor, or Individual Guarantors to
the Lender under this Loan Agreement or any of the other Loan Documents, to
be immediately due and payable. If the Lender declares the Notes due and
payable, the Lender shall forthwith deliver to Borrowers such declaration
whereupon the Notes with accrued interest thereon shall become and be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by Borrowers.
The Lender shall have the right to take any action at law or in equity to
collect the amounts due and payable under the Notes and this Loan Agreement.
ARTICLE IX--MISCELLANEOUS
SECTION 9.1 MODIFICATIONS CONSENTS AND WAIVERS, CUMULATIVE REMEDIES.
No failure or delay on the part of the Lender in exercising any power or
right under this Loan Agreement shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right or power preclude the
exercise of any other right or power under this Loan Agreement. The remedies
herein and in such other Loan Documents provided are cumulative and not
exclusive of any remedies provided by law. No amendment, modification, or
waiver of any provision of this Loan Agreement, nor consent to any departure
by Borrowers, Corporate Guarantor, or Individual Guarantors therefrom, shall
in any event be effective unless the same shall be in writing and signed by
the Lender. No notice to or demand on Borrowers, Corporate Guarantor, or
Individual Guarantors in any case shall, of itself; entitle Borrowers,
Corporate Guarantor, or Individual Guarantors to any other or further notice
or demand in similar or other circumstances. No provision of this Section 9.1
may be waived, modified or amended without the prior written consent of the
Lender.
24
SECTION 9.2 ADDRESSES FOR NOTICES. All communications and notices
provided for under this Loan Agreement shall be given in writing and shall be
mailed via the United States Mail, Certified Mail, Return Receipt Requested,
postage prepaid, addressed to the parties at the addresses set forth
following their signatures hereto, or, as to each party, at such other
address as shall be designated by such party in a written notice to each
other party. It is further agreed that written notice given in any method
other than that set forth above shall be effective only when actually
delivered to and received by the party to whom it is directed, but the use of
other methods of giving notice (including hand delivered and telegraphic
notices) are hereby expressly authorized.
SECTION 9.3 BINDING EFFECT AND ASSIGNMENT. This Loan Agreement shall
be binding upon and inure to the benefit of Borrowers, Corporate Guarantor,
Individual Guarantors, the Lender, and their respective successors and
assigns, except that Borrowers, Corporate Guarantor, or Individual Guarantors
may not assign or transfer their rights hereunder without the prior written
consent of the Lender. Borrowers, Corporate Guarantor, and Individual
Guarantor acknowledge and agree that the Lender may, from time to time, sell
or offer to sell interests in the loans evidenced by this Loan Agreement to
one or more participants. Borrowers, Corporate Guarantor, and Individual
Guarantor authorize any assignee or holder of this Loan Agreement to
disseminate any information it has pertaining to the loans evidenced by this
Loan Agreement, including, without limitation, complete and current credit
information on Borrowers, any of its Affiliates and any Guarantor of this
Loan Agreement, only to any such participant or prospective participant,
their legal counsel, accountants, and other professional advisors, regulatory
officials, and as required by law or legal process or in connection with any
legal proceeding.
SECTION 9.4 GOVERNING LAW. THIS LOAN AGREEMENT, THE NOTES AND EACH
OF THE OTHER LOAN DOCUMENTS SHALL BE DEEMED TO BE CONTRACTS UNDER THE LAWS OF
THE STATE OF TEXAS AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF SAID STATE, EXCEPT TO THE EXTENT THAT FEDERAL LAW MAY APPLY, ANY
SUIT, ACTION OR PROCEEDING AGAINST BORROWERS WITH RESPECT TO THIS LOAN
AGREEMENT, THE NOTES, ANY LOAN DOCUMENTS OR ANY JUDGEMENT ENTERED BY ANY
COURT IN RESPECT THEREOF, MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS,
COUNTY OF MIDLAND, OR IN THE UNITED STATES COURTS LOCATED IN THE STATE OF
TEXAS AS LENDER IN ITS SOLE DISCRETION MAY ELECT AND BORROWERS HEREBY SUBMIT
TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH
SUIT, ACTION, OR PROCEEDING.
SECTION 9.5 HEADINGS. Article and Section headings used in this Loan
Agreement are for convenience only and shall not affect the construction of
this Loan Agreement.
SECTION 9.6 EXECUTION IN COUNTERPARTS. This Loan Agreement may be
executed by the parties to this Loan Agreement individually or in any
combinations of the parties to this Loan Agreement in several separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 9.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Loan Agreement or made in
writing by Borrowers, Corporate Guarantor, or Individual Guarantors in
connection with this Loan Agreement shall survive the execution and delivery
of this Loan Agreement, the Notes and the other Loan Documents.
SECTION 9.8 COSTS EXPENSES AND TAXES. Except as may be expressly set
forth in this Loan Agreement, all statements, reports, certificates, opinions
and other documents or information furnished by Borrowers, Corporate
Guarantor, or Individual Guarantors to the Lender under this Loan Agreement
shall be supplied without cost to the Lender. In addition, Borrowers hereby
agrees to pay on demand, whether or not the Loan is made hereunder, (i) all
costs and expenses, including the reasonable fees and expenses of counsel,
incurred by the Lender in connection with the making of the Loans and the
preparation of this Loan Agreement, the other Loan Documents, and any other
documents or agreements prepared in connection herewith or therewith,
including due diligence and closing of the Loan, including the fees and
expenses of counsel (in-house or outside) to Lender in connection with the
negotiation and preparation of the Loan documentation, the fees and expenses
of Lender in securing Lender's funds in the amount of $15,000,000 from
BankUnited, in conjunction with the Loans, the costs of any environmental
investigation and audit, appraisal, title insurance premiums, survey and
inspection fees, whether or not the Loan actually closes; and (ii) all
reasonable costs and expenses of collection (including reasonable attorneys'
fees if such obligations are collected by or through an attorney at law)
incident to the enforcement, protection or preservation of any right of the
Lender under this Loan Agreement or the Notes. Further, Borrowers shall pay
any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution and delivery of this Loan Agreement,
the Notes and any other Loan Document and agrees to save the Lender harmless
from and against any liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes or fees; provided, however, that none
of Borrowers, Corporate Guarantor, or Individual Guarantors shall have
liability for any income taxes (federal or state) owing by the Lender as a
result of its receipt of interest or other income under any of the Loan
Documents.
SECTION 9.9 TERMINATION OF AGREEMENT This Loan Agreement and the
parties' obligations hereunder shall terminate at such time as there are no
amounts due under the Notes, and all other obligations of Borrowers under
this Loan Agreement or any other Loan Document have been satisfied in full.
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SECTION 9.10 STRICT COMPLIANCE. If any action or failure to act by
any Borrower, Corporate Guarantor, or Individual Guarantor violates any
covenant or obligation of such Borrower, Corporate Guarantor, or
Individual Guarantor as contained in this Agreement, then such violation
shall not be excused by the fact that such action or failure to act would
otherwise be required or permitted by any covenant (or exception to any
covenant) other than the covenant violated.
SECTION 9.11 SAVINGS CLAUSE. It is the intention of the parties to
comply strictly with applicable usury laws. Accordingly, notwithstanding any
provision to the contrary in the Loan Documents, in no event shall any Loan
Documents require the payment or permit the payment, taking, reserving,
receiving, collection or charging of any sums constituting interest under
applicable laws that exceed the maximum amount permitted by such laws, as the
same may be amended or modified from time to time (the "Maximum Rate"). If
any such excess interest is called for, contracted for, charged, taken,
reserved or received in connection with any Loan Documents, or in any
communication by or any other person to Borrower or any other person, or in
the event that all or part of the principal or interest hereof or thereof
shall be prepaid or accelerated, so that under any of such circumstances or
under any other circumstance whatsoever the amount of interest contracted
for, charged, taken, reserved or received on the amount of principal actually
outstanding from time to time under the Loan Documents shall exceed the
Maximum Rate, then in such event it is agreed that: (i) the provisions of
this paragraph shall govern and control; (ii) neither Borrower nor any other
person or entity now or hereafter liable for the payment of any Loan
Documents shall be obligated to pay the amount of such interest to the extent
it is in excess of the Maximum Rate; (iii) any such excess interest which is
or has been received by Lender, notwithstanding this paragraph, shall be
credited against the then unpaid principal balance hereof or thereof, or if
any of the Loan Documents has been or would be paid in full by such credit,
refunded to Borrower; and (iv) the provisions of each of the Loan Documents,
and any other communication to Borrower, shall immediately be deemed reformed
and such excess interest reduced, without the necessity of executing any
other document, to the Maximum Rate. The right to accelerate the maturity of
the loan Documents does not include the right to accelerate, collect or
charge unearned interest, but only such interest that has otherwise accrued
as of the date of acceleration. Without limiting the foregoing, all
calculations of the rate of interest contracted for, charged, taken, reserved
or received in connection with any of the Loan Documents which are made for
the purpose of determining whether such rate exceeds the Maximum Rate shall
be made to the extent permitted by applicable laws by amortizing, prorating,
allocating and spreading during the period of the full term of such Loan
Documents, including all prior and subsequent renewals and extensions hereof
or thereof, all interest at any time contracted for, charged, taken, reserved
or received by Lender. The terms of this paragraph shall be deemed to be
incorporated into each of the other Loan Documents. To the extent that either
Chapter 303 or 306, or both, of the Texas Finance Code apply in determining
the Maximum Rate, Lender hereby elects to determine the applicable rate
ceiling by using the weekly ceiling from time to time in effect, subject to
Lender's right subsequently to change such method in accordance with
applicable law, as the same may be amended or modified from time to time.
SECTION 9.12 NONLIABILITY OF LENDER. The relationship between
Borrowers and Lender is, and shall at all times remain, solely that of
borrowers and lenders, and Lender does not undertake nor assume any
responsibility or duty to Borrowers to review, inspect, supervise, pass
judgment upon, or inform Borrowers of any matter in connection with any phase
of Borrower's business, operations, or condition, financial or otherwise.
Borrowers, Corporate Guarantor, or Individual Guarantors shall rely entirely
upon their own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment, or information supplied to
Borrowers, Corporate Guarantor, or Individual Guarantor by Lender in
connection with any such matter is for the protection of Lender, and neither
Borrowers, Corporate Guarantor, any Individual Guarantor nor any third party
is entitled to rely thereon.
SECTION 9.13 OFFSET. Each of Borrowers, Corporate Guarantor, or
Individual Guarantor hereby grants to Lender the right of offset, to secure
repayment of the Notes, upon any and all moneys, securities or other property
of Borrowers and the proceeds therefrom, now or hereafter held or received by
or in transit to Lender or of Borrowers, Corporate Guarantor, or Individual
Guarantor whether for safe keeping, custody, pledge, transmission, collection
or otherwise, and also upon any and all deposits (general or special) and
credits of Borrowers, Corporate Guarantor, or Individual Guarantor and any
and all claims of Borrowers, Corporate Guarantor, or Individual Guarantor
against Lender at any time existing.
SECTION 9.14 NO THIRD PARTY BENEFICIARY. The parties do not intend
the benefits of this Loan Agreement to inure to any third party, nor shall
this Loan Agreement be construed to make or render Lender liable to any
materialman, supplier, contractor, subcontractor, purchaser or lessee of any
property owned by Borrowers, Corporate Guarantor, or Individual Guarantor or
for debts or claims accruing to any such person against Borrowers, Corporate
Guarantor, or Individual Guarantor. Notwithstanding anything contained herein
or in the Notes, or in any other Loan Document, no conduct or course of
conduct by any or all of the parties hereto, before or after signing this
Loan Agreement nor any other Loan Document shall be construed as creating any
right, claim or cause of action against Lender, or any of its officers,
directors, agents or employees, in favor of any materialman, supplier,
contractor, subcontractor, purchaser or lessee of any property owned by
Borrowers, Corporate Guarantor, or Individual Guarantor nor to any other
person or entity other than Borrowers, Corporate Guarantor, or Individual
Guarantor.
SECTION 9.15. INDEMNITY. Each of Borrower, Corporate Guarantor, and
Individual Guarantor shall indemnify, defend (with counsel chosen by Lender),
and hold harmless Lender and its directors, officers, affiliates, agents,
attorneys, and employees (individually, an "INDEMNITEE" and collectively, the
"INDEMNITEES", from and against any and all loss, liability, obligation,
damage, penalty, judgment, claim, deficiency, and expense (including
interest, penalties, attorney's fees and amounts paid in settlement) to which
the Indenmitees may become subject arising out of this Agreement and the
other Loan Documents other than those that arise by reason of gross
negligence or willful misconduct of Indemnitees and excluding pre-default
normal and customary internal loan administration
26
expenses, BUT INCLUDING THOSE ARISING FROM THE NEGLIGENCE OF ANY INDEMNITEE.
Borrower and Corporate Guarantor shall also indemnify, defend (with counsel
chosen by the Indemnitee), and hold each Indemnitee harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, proceedings, costs, expenses (including without
limitation all reasonable attorneys' fees and legal expenses whether or not
suit is brought), and disbursements of any kind or nature whatsoever which
may at any time be imposed on, incurred by, or asserted against such
Indemnitee, with respect to or as a direct or indirect result of the
violation by Borrower or of its Affiliates of any Environmental Law; or with
respect to or as a direct or indirect result of Borrower or its Affiliates'
use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence of a Hazardous Material on, under,
from, or about real property. Each of the Borrower, Corporate Guarantor and
Individual Guarantor agrees not to assert any claim against Lender, any of
its affiliates, or any of its directors, officers, employees, attorneys,
agents, and advisers, on any theory of liability, for special, indirect,
consequential, or punitive damages arising out of or otherwise relating to
the Loan Documents, any of the transactions contemplated herein or the actual
or proposed use of the proceeds of the Loans. The provisions of and
undertakings and indemnifications set forth in this Section 9.15 shall
survive (a) the satisfaction and payment of the Notes upon termination of
this Agreement and (b) the release of any liens held by Lender on real
property or the extinguishment of such liens by foreclosure or action in lieu
thereof.
SECTION 9.16 EXTENSION OF TERMS. ff Lender should decide, in its
sole discretion, to extend the Loans beyond their stated term, and/or advance
funds to Borrowers subsequent to the expiration of the original term of this
Loan Agreement, or if Borrowers shall be indebted to Lender for any reason
prior to the execution of' or upon the expiration of, the original term of
this Loan Agreement, then the terms hereof shall be and remain in full force
and effect as to all such indebtedness and it shall apply to said
indebtedness without the execution of any new documents. THIS SECTION SHALL
NOT IMPLY ANY OBLIGATION ON THE PART OF LENDER TO EXTEND THE MATURITY DATES
OF THE LOAN OR TO RENEW ANY INDEBTEDNESS OF BORROWERS.
THIS TERM LOAN AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties to this Loan Agreement have caused this Loan
Agreement to be executed by their respective officers thereunto duly
authorized and the individuals set forth below to be effective of July 12,
2000.
BORROWERS:
XXXXXX-XXXXXXX COMPANY
By: /s/ Xxx Xxxxx
------------------------
Name: Xxx Xxxxx
----------------------
Title: President
ADDRESS: 0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
FRANK'S FUELS, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
----------------------
Title: President
ADDRESS: 0000 Xxxx Xxxx 000
Xxxxxx, Xxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
CORPORATE GUARANTOR:
UNITED FUEL & ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------
Title: President
ADDRESS: 0000 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
9.5
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INDIVIDUAL GUARANTORS:
/s/ Xxxxxx Xxxxx
-------------------------------
XXXXXX XXXXX
ADDRESS: 0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
/s/ Xxxxxxx Xxxxxxxx
------------------------------
XXXXXXX XXXXXXXX
ADDRESS: 0000 Xxxxxx Xxx
Xxxxxx, Xxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
/s/ Xxxxx X. Xxxxxx
------------------------------
XXXXX X. XXXXXX
ADDRESS: 0000 Xxxxx Xxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
/s/ Xxxxxx X. Xxxxxx
------------------------------
XXXXXX X. XXXXXX
ADDRESS: 0000 XXX 000
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
LENDER:
NEW WEST RESOURCES, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title:
ADDRESS: 000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
Fax (000) 000-0000
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