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Exhibit 10.10
TERM LOAN AND GUARANTY AGREEMENT
THIS TERM LOAN AND GUARANTY AGREEMENT made, entered into and effective as
of the 11th day of April, 1997, by and among WESFRAC, INC., a Colorado
corporation ( Wesfrac ), WESTEC DENVER, INC., a Colorado corporation ( Westec
Denver ) and XXXXXXX OIL COMPANY, INC., a Texas corporation ( Xxxxxxx ), and
XXXXXX FINANCIAL, INC., a Delaware corporation ( Lender ) and the Guarantors
(as such term and other capitalized terms used herein without definition are
defined in Section 1. 1 hereof).
W I T N E S S E T H:
WHEREAS, Borrowers have applied to Lender for a term loan facility in the
aggregate principal amount of up to Seven Million Dollars ($7,000,000.00), the
proceeds of which will be used by Borrowers to finance the Acquisition and
refinance certain indebtedness of the Borrowers owing to NCFC;
WHEREAS, Lender has considered Borrowers' request for such financing and
is willing to extend such financing to Borrowers for such purposes subject to
the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, to induce
Lender to extend the financing provided for herein, and for other good and
valuable consideration, the sufficiency and receipt of all of which are
acknowledged by Borrowers and the Guarantors, Lender, Borrowers and the
Guarantors agree as follows:
1. DEFINITIONS, TERMS AND REFERENCES.
1.1. Certain Definitions. In addition to such other terms as are
elsewhere defined herein, as used in this Agreement and in any Exhibits, the
following terms shall have the following meanings, unless the context requires
otherwise:
Acquisition shall mean the acquisition of Xxxxxxx contemplated by the
Acquisition Agreement.
Acquisition Agreements shall mean that certain Stock Purchase Agreement
dated April 11th, 1997 between Xxxxxxx, XxXxx Xxxxxxx, Xxx Xxxxxxx, Xxxxxx
Xxxxxxx, Xx. and Wesfrac, the Xxxxxxx Noncompete Agreements and all agreements
or documents delivered pursuant thereto or contemplated thereby.
Acquisition Agreement Assignment shall mean that certain Assignment of
Stock Purchase Agreement dated as of the date hereof by and between Wesfrac and
Lender with an acknowledgment thereof by XxXxx Xxxxxxx, Xxx Xxxxxxx and Xxxxxx
Xxxxxxx Xx.
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Affiliate in relation to any particular Person, shall mean any other
Person which, directly or indirectly, controls, or is controlled by, or is
under common control with, such Person. For purposes of this definition,
control shall mean the power, directly or indirectly, to (a) vote ten percent
(10%) or more of the outstanding stock having ordinary voting power for the
election of directors of such Person or (b) direct the management or policies
of such Person, whether by contract or otherwise. The term Affiliate shall
include, without limitation, and in any event, in respect of Borrower, (i) each
shareholder, and each officer and director of Borrower; and (ii) any
subsidiaries of Borrower that are at least 51% owned or controlled (by contract
or otherwise) by Borrower.
Agreement shall mean this Term Loan and Guaranty Agreement, as amended or
supplemented from time to time.
Applicable Rate shall mean (a) three and one-fourth percent (3.25%) plus
the Five Year Treasury Rate or (b) the Default Rate, as made applicable to the
Term Loan, pursuant to Section 2.4 hereof.
Bankruptcy Code shall mean Title 11 of the United. States Code, as amended
from time to time.
Borrowers mean, collectively, Wesfrac, Westec Denver and Xxxxxxx and all
promises, covenants, representations and warranties of the Borrowers made in
the Loan Documents or in any other instruments or documents delivered pursuant
hereto or thereto shall be and constitute the joint and several promises,
covenants, representations and warranties of each and all of Wesfrac, Westec
Denver and Xxxxxxx.
Business Day shall mean any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of Illinois or Colorado
or is a day on which banking institutions located in such States are closed.
Closing Date shall mean the date of this Agreement.
Collateral shall mean, collectively, the Equipment Collateral, the Pledged
Stock, the Mortgaged Premises Headquarters, the Acquisition Agreement
Assignment and all other properties, rights, interests and privileges from time
to time subject to the Liens granted to the Lender pursuant to the Collateral
Documents.
Collateral Documents shall mean the Acquisition Agreement Assignment, the
Security Agreement, the Mortgage, the Stock Pledge Agreement together with all
other security agreements, mortgages, deeds of trust, assignments, financing
statements and other agreements and documents as shall from time to time secure
the Obligations.
Compliance Certificate shall mean a certificate of Borrowers executed by
the chief financial officer of each Borrower, on Borrowers' behalf, stating
that no Event of Default or Default Condition has occurred or exists, or if an
Event of Default or
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Default Condition has occurred or exists, specifying the nature and period of
existence thereof and what action Borrowers have taken or propose to take with
respect thereto.
Default Condition has occurred or exists, or if an Event of Default or
Default Condition has occurred or exists, specifying the nature and period of
existence thereof and what action Borrowers have taken or propose to take with
respect thereto.
"Condemnation Proceeds" shall mean all compensation, awards, damages,
rights of action and proceeds due any Loan Party arising from any taking by any
lawful power or authority by exercise of the rights of condemnation or eminent
domain with respect to any of the Collateral.
"Contaminant" shall mean those substances which are regulated by or form
the basis of liability under federal, state or local environmental, health and
safety statutes or regulations including, without limitation, asbestos,
polychlorinated biphenyls ("PCBs") radioactive substances, petroleum, petroleum
products or any other material or substance which constitutes a material
health, safety or environmental hazard to any Person or Property.
"Convenience Stores" shall mean Super Mart Convenience Stores, Inc., a
Colorado corporation (formerly known as Xxxxx-Xxxx Convenience Stores, Inc.).
"Debt to Worth Ratio" shall mean the ratio of (a) total liabilities
(excluding Subordinated Indebtedness) of the Wescourt Companies (computed on a
consolidated basis in accordance with GAAP) to (b) Net Worth.
"Default Condition" shall mean the occurrence of any event which, after
satisfaction of any requirement for the giving of notice or the lapse of time,
or both, would become an Event of Default.
"Default Rate" shall mean that simple interest rate equal to three percent
(3 %) per annum in excess of the Applicable Rate.
"EBITDA" means, with reference to any period, Net Earnings for such period
plus all amounts deducted in arriving at such Net Earnings amount in respect of
(i) interest expense for such period, plus (ii) federal, state and local income
taxes for such period, plus (iii) all amounts properly charged for depreciation
of fixed assets and amortization of intangible assets during such period on the
books of the Wescourt Companies and their Subsidiaries.
"Environmental Claim" shall mean any notice of violation, claim, suit,
demand, abatement or other order or direction (conditional or otherwise) by any
Governmental Authority or any Person for personal injury (including sickness,
disease or death), tangible or intangible property damage, damage to the
environment, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon (i) the
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existence, or the continuation of the existence, of a Release (including,
without limitation, sudden or non-sudden, accidental or non-accidental
Releases) of, or exposure to, any Contaminant, or other release or emission in,
into or onto the environment (including, without limitation, the air, ground,
surface water, ground water or any surface) in, by, from, or related to any
Property, (ii) the environmental aspects of the transportation, storage,
treatment or disposal of materials, in connection with the operation of any
Property or (iii) the violation, or alleged violation, of any statutes,
ordinances, orders, rules, regulations, Permits, licenses, registrations or
approvals of or from any Governmental Authority relating to environmental
matters connected with any Property.
"Environmental Laws" shall mean all laws relating to the environmental,
safety, health and the regulation of Contaminants, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.), the Superfund Amendments and
Reauthorization Act of 1986, Public Law Xx. 00-000, 000 Xxxx. 000, the
Hazardous Material Transportation Act (49 U.S. C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 1369 et seq.), and the Occupational Safety and Health Act
(29 U.S.C. Section 651 et seq.), as such laws have been and hereafter may be
amended or supplemented, and any analogous future federal, or present or future
state or local laws and all rules and regulations promulgated pursuant thereto.
"Equipment Collateral" shall mean all equipment, vehicles, machinery,
furniture, furnishings, fixtures and related rights and properties owned or
leased by any Loan Party more particularly described in the Security Agreement.
"Event of Default" shall mean any of the events or conditions described in
Article 7 provided that any requirement for the giving of notice or the lapse
of time, or both, has been satisfied.
"First Portfield Loan Documents" shall mean the First Portfield Note and
the other agreements, instruments and documents executed or delivered by
Convenience Stores in connection therewith.
"First Portfield Note" shall mean the promissory note dated March 12, 1997
of Convenience Stores payable to the order of Portfield in the original
principal amount of $2,500,000.
"Five Year Treasury Rate" shall mean the yield to maturity, determined at
the close of business on the third Business Day immediately preceding the
Closing Date, on a currently outstanding, recently issued United States
Treasury Note with the same maturity as the Term Note; provided that if there
is no United States Treasury Note having such maturity, the maturity
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date used for purposes of this definition shall be the next following maturity
date, based upon chronological order.
"Fixed Charges" shall mean, with reference to any period, the sum of (i)
the aggregate amount of payments required to be made by the Wescourt Companies
and their Subsidiaries during the period in respect of principal on all
Indebtedness for borrowed money (whether at maturity, as a result of mandatory
sinking fund redemption, mandatory prepayment, acceleration or otherwise), plus
(ii) interest expense for such period, computed on a consolidated basis in
accordance with GAAP.
"Fractionator" shall mean that certain fractionator of Wesfrac located in
Fruita, Colorado which has been pledged as Collateral for the Obligations
pursuant to the Security Agreement.
"Fruita Holding" shall mean Fruita RP Holding, Inc., a Delaware
corporation.
"GAAP" shall mean generally accepted accounting principles which are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors as in effect from time to time,
(b) such that a certified public accountant would, insofar as the use of
accounting principles is pertinent, be in a position to deliver an unqualified
opinion as to financial statements in which such principles have been properly
applied and (c) applied on a basis consistent with prior periods; provided that
any changes in GAAP after the date hereof that would affect the calculation of
the covenants set forth in Section 6 shall be excluded in making such
calculations.
"Governmental Authority" shall mean any nation or government, federal,
state, city, town, municipality, county, local or political subdivision thereof
or thereto and any department, commission, instrumentality or agency exercising
executive, legislative, judicial, regulatory or administrative functions on
behalf thereof.
"Grand Mesa" shall mean Grand Mesa Texaco, Inc., a Colorado corporation.
"Guarantors" shall mean collectively, Portfield, Wescourt, Wescourt
Distributing, Petromark Utah, Petromark, Petromark Montrose Grand Mesa, Fruita
Holding, Westec Fruita and Montrose Propane and all promises, covenants,
representations and warranties of the Guarantors made in the other Loan
Documents or in any other instruments or documents delivered pursuant thereto
or thereto shall constitute the joint and several promises covenants,
representations and warranties of each and all of Portfield, Wescourt, Wescourt
Distributing, Petromark Utah, Petromark, Petromark Montrose and Montrose
Propane.
"Hazardous Materials" shall include Hazardous Substances, as defined by
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq., any petroleum or petroleum products (excluding a
small quantity of gasoline and oil used in maintenance equipment on the
Property), asbestos or asbestos containing material, or any other
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hazardous substances, hazardous wastes or hazardous materials as defined by
other Environmental Laws.
"Headquarters Mortgage" shall mean that certain Deed of Trust, Assignment
of Rents and Security Agreement and Fixture Filing bearing even date herewith
from Fruita Holding in favor of Lender.
"Indebtedness" shall mean, without duplication, all obligations,
contingent and otherwise, of the Wescourt Companies which in accordance with
GAAP should be classified as liabilities upon a consolidated balance sheet of
the Wescourt Companies, or to which reference should be made by footnotes
thereto, including, without limitation, in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations, whether direct or indirect, in respect of Indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase Indebtedness, or to assure the
owner of Indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the Indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit, except that
Indebtedness shall not include the amount of any Loan Party's obligations under
guaranties for the benefit of financial institutions lending to dealers that
enter into long-term exclusive supply contracts with another Loan Party.
"Independent Accountants" shall mean a firm of independent public
accountants selected by Borrowers and reasonably acceptable to Lender, it being
acknowledged by Lender that Coopers & Xxxxxxx is so acceptable.
"Intercreditor Agreement" shall mean that certain Intercreditor and
Subordination Agreement dated as of March 12, 1997 as amended and restated
pursuant to that certain First Amended and Restated Intercreditor and
Subordination Agreement dated as of the date hereof among Borrowers, Lender,
NCFC, WLD Trust, Portfield and the other parties thereto as amended, modified,
substituted or replaced from time to time.
"Lender" shall have the meaning ascribed thereto in the initial recitals
to this Agreement. The term "Lender" shall also include any Participant to
whom Lender shall assign, in whole or in part, its right, title and interest in
and to the Obligations and hereunder subsequent to the Closing Date.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of
a vendor or lessor under any conditional sale.
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"Loan Documents" shall mean this Agreement, the Term Note, the Collateral
Documents, the Intercreditor Agreement, and each and every other document,
instrument, certificate and agreement executed and/or delivered by any Loan
party in connection herewith, or any one, more, or all of the foregoing, all as
the context shall require.
"Loan Parties" means, collectively, any of the Borrowers and the
Guarantors and the promises, covenants, representations and warranties of the
Loan Parties made herein or in any other Loan Document shall be and constitute
the joint and several promises, covenants, representations and warranties of
each and all of the Loan Parties.
"Loan Year" means each period of twelve (12) consecutive months commencing
on the Closing Date and on each anniversary thereof, due and payable or
otherwise perform its obligations hereunder or under the other Loan Documents;
or (iii) the failure or inability, of such Loan Party to pay its obligations to
its creditors generally.
Material Adverse Effect shall mean an effect that has resulted in, will
result in, or is reasonably likely to result in, a Material Adverse Change.
Material Agreements shall mean all franchise and distribution rights
agreements with any petroleum companies; all real property leases with respect
to any Property; all loan and other debt instruments and agreements; all
management, employment and labor agreements; and any and all other agreements,
not specified hereinabove; provided, that in all cases cited above, the loss,
diminution or impairment of any such other agreement would have, or would
reasonably be expected to have, a Material Adverse Effect.
Xxxxxxx shall mean Xxxxxxx Oil Company, Inc., a Texas corporation.
Xxxxxxx Noncompete Agreements shall mean (a) that certain Covenant to
Refrain from Certain Business Activities between Xxxxx Xxxxxxx and Wesfrac, (b)
that certain Covenant to Refrain from Certain Business Activities between Xxx
Xxxxxxx and Wesfrac and (c) that certain Covenant to Refrain from Certain
Business Activities between Xxxxxx Xxxxxxx and Wesfrac.
Montrose-Propane shall mean Montrose Propane, Inc., a Colorado
corporation.
Xxxxxx Demand Note shall mean the promissory note of Portfield dated April
11, 1997 payable to the order of Xxxxxx Guaranty in the face principal amount
of $4,500,000.
Xxxxxx Financing shall mean all indebtedness from time to time owing by
Portfield to Xxxxxx Guaranty under the Xxxxxx Loan Documents.
Xxxxxx Loan Documents shall mean the Xxxxxx Demand Note, the WLD Guaranty
and the other agreements, instruments and documents executed or delivered in
connection with the Xxxxxx Financing.
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Mortgaged Premises - Headquarters shall mean the real estate, building and
other Properties located thereon at 0000 Xxxxxxx 0 xxx 00, Xxxxxx, Xxxxxxxx
00000 as more particularly described in the Headquarters Mortgage.
Mortgaged Properties shall mean the Mortgaged Premises-Headquarters and
all other Property subject to the Liens and security interests granted pursuant
to the Mortgages.
Mortgages shall mean the Headquarters Mortgage and all other mortgages,
deeds of trust or similar instruments pursuant to which Lender shall obtain a
mortgage lien, security interest or security title on or in any right, tide and
ownership of any Loan Party, as owner, lessee or otherwise, in and to any real
property owned by such Loan Party.
"Mortgages" shall mean the Headquarters Mortgage and all other mortgages,
deeds of trust or similar instruments pursuant to which Lender shall obtain a
mortgage lien, security interest or security title on or in any right, tide and
ownership of any Loan Party, as owner, lessee or otherwise, in and to any real
property owned by such Loan Party.
"NCFC" means National Canada Finance Corp.
"NCFC Collateral" shall have the same meaning herein a such term is
defined in the Intercreditor Agreement.
"NCFC Lien" means NCFC's Liens in any assets pledged to NCFC from time to
time pursuant to the NCFC Loan Documents which are subject to the Intercreditor
Agreement.
"NCFC Loan Documents" means that certain Loan and Security Agreement dated
as of October 6, 1995 among NCFC, Portfield, Wesfrac, Wescourt, Petro-Xxxx
Xxxxxxxx, Wesfrac Fruita and certain other borrowers (as such agreement has
been or will be amended from time to time) and each of the agreements related
thereto, or any replacement or similar credit facility.
"Net Worth" shall mean, at any time, for the Wescourt Companies the total
of shareholders' equity (including capital stock, additional paid-in capital,
and retained earnings) plus Subordinated Indebtedness all as calculated on a
consolidated basis in accordance with GAAP.
"Net Earnings" shall mean, for any period for which the same is being
computed, the gross revenues of the Wescourt Companies for such period less all
expenses and other proper charges (including taxes on income) determined on a
consolidated basis in accordance with GAAP but excluding in any event any gains
resulting from the sale or other disposition of investments or other assets not
in the ordinary course of business, gains resulting from any reappraisal,
revaluation or write-up of assets and other extraordinary gains.
"Obligations" shall mean and include any and all indebtedness, liabilities
and obligations of the Loan Parties, or any of them, to Lender arising
hereunder or as a result hereof or under any
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other Loan Document, whether evidenced by the Term Note, provided for in
Article 9 hereof or otherwise, whether now existing or hereafter arising and
any and all extensions or renewals thereof in whole or in part.
"Participant" shall mean any Person to whom, now or hereafter, Lender
sells a participation interest in, or makes an assignment of, its right, title
or interest hereunder and in the Obligations (whether in whole or in part).
"Permit" shall mean any permit, approval, authorization, license,
variance, or permission required from a Governmental Authority having
jurisdiction under an applicable Environmental Law.
"Permitted Encumbrances" shall mean:
(1) liens for taxes, assessments or other governmental charges not
yet due and payable;
(2) statutory liens incurred by any Loan Party or its subsidiaries
of landlords, carriers, warehousemen, mechanics, materialmen and other similar
liens imposed by law, which are incurred in the ordinary course of business for
sums not more than thirty (30) days delinquent or which are being contested in
good faith; provided that a reserve or other appropriate provision shall have
been made therefor if required by GAAP and the aggregate amount of such liens
is less than $50.000;
(3) liens (other than any lien imposed by the Employee Retirement
Income Security Act of 1974 or any rule or regulation promulgated thereunder)
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety, stay, customs and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(4) liens incurred by any Loan Party or its Subsidiaries for
purchase money obligations in an aggregate amount not to exceed $500,000 at any
time, provided any such lien encumbers only the asset so purchased or leased
and secures only Indebtedness incurred for the purchase of such asset;
(5) any attachment or judgment lien not constituting an Event of
Default under Section 7;
(6) easements, rights of way, restrictions, and other similar
charges or encumbrances not interfering in any material respect with the
ordinary conduct of the business of any Loan Party or any of its subsidiaries;
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(7) the NCFC Lien;
(8) the Portfield Lien and liens in favor of WLD subject to the
Intercreditor Agreement;
(9) involuntary lines incurred in the ordinary course of any Loan
Party's business (other than in connection with Indebtedness in an aggregate
principal amount with respect to such Loan Party not to exceed $50,000 at any
time;
(10) liens in favor of Lender; and
(11) the liens set forth on Schedule 1.1.
"Person" shall mean any individual, partnership, corporation, trust,
unincorporated association, business trust, sole proprietorship, or joint
venture, a government or any department, agency, political subdivision or
instrumentality thereof, or any other entity or organization.
"Petromark" shall mean Xxxxx-Xxxx Corp., a Colorado corporation.
"Petromark Montrose" shall mean Xxxxx-Xxxx Corp., Montrose, Inc., a
Colorado corporation.
"Petromark Utah" shall mean Xxxxx-Xxxx Corp. Utah, a Colorado corporation.
"Pledged Stock" shall mean the shares of the capital stock of Wesfrac,
Westec Denver and Xxxxxxx pledged pursuant to the Stock Pledge Agreement.
"Portfield" shall mean Portfield Investments, Inc., a Colorado
corporation.
"Portfield Lien" shall mean Portfield's Liens in those assets of
Convenience Stores and Xxxxxxx pledged to Portfield to secure the Portfield
Loan (as defined in the Intercreditor Agreement) and the Second Portfield Loan
(as defined in the Intercreditor Agreement), together with the assignment of
such Liens to WLD pursuant to that certain Amended and Restated WLD Assignment
and Security Agreement dated as of the date hereof from, inter alia, Portfield
to WLD, which is subject to the terms of the Intercreditor Agreement.
"Property" shall mean any real or personal property owned, leased or
operated by the Loan Parties.
"Qualified Initial Public Offering" means an initial underwritten public
offering and sale for cash by Portfield or its successors of the common stock
of Portfield or its successors to an underwriter or underwriters pursuant to a
"firm commitment" underwriting agreement and registration statement declared
effective by the Securities and Exchange Commission under the
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Securities Act of 1933, as amended, in which the Company receives net proceeds
of at least $10,000,000.
"Release" shall mean any actual or threatened release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration of Contaminants into the indoor or outdoor environment or into or
out of any Property, through or into the air, soil, subsurface strata, surface
water or ground water.
"Remedial Action" shall mean all actions required to (1) clean up, remove,
treat or m any . other way address Contaminants in the indoor or outdoor
environment; (2) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(3) perform pre-remedial studies and investigations and post-remedial
monitoring and care in respect of actions contemplated in the preceding clauses
(1) and (2), in each instance in compliance with Environmental Laws.
"Second Portfield Loan" shall mean the term loan in the original principal
amount of $2,000,000 from Portfield to Wesfrac made pursuant to the Second
Portfield Loan Documents.
"Second Portfield Loan Documents" shall mean any and all agreements,
instruments and documents, as in effect on the date hereof evidencing or
securing the Second Portfield Loan, including without limitation, the Second
Portfield Note, the related security agreements and financing statements, dated
on or about the date of this Agreement.
"Second Portfield Note" shall mean that certain Promissory Note of Wesfrac
payable to the order of Portfield in the original principal amount of
$2,000,000 dated on or about the date of this Agreement.
"Security Agreement" shall mean that certain Security Agreement re:
Equipment dated as of even date herewith from the Loan Parties in favor of the
Lender.
"Stock Pledge Agreement" shall mean that certain Pledge Agreement dated
the date hereof executed and delivered by Wescourt and Wesfrac in favor of
Lender pledging all of the shares of the Wesfrac, Westec Denver and Xxxxxxx as
security for the Obligations, which Pledge Agreement shall be in form and
substance reasonably satisfactory to Lender.
"Subsidiary" shall mean, with respect to any Person, any corporation or
partnership of which more than 50% of the outstanding equity interests having
the power to vote is at the time directly or indirectly owned by such Person,
by one or more Subsidiaries of such Person, or by such Person and one or more
of its Subsidiaries.
"Subordinated Indebtedness" shall mean, with respect to any Person,
Indebtedness of such Person which has been subordinated in right of payment to
the prior payment of all indebtedness, obligations and liabilities of the Loan
Parties or any of them owing to the Lender.
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"Tangible Net Worth" shall mean Net Worth less intangible assets
(including goodwill) of the Wescourt Companies computed on a consolidated basis
in accordance with GAAP.
"Term-Loan" shall mean the term loan made by Lender to Borrowers pursuant
to Section 2.1 below.
"Term Loan Facility" shall mean the term loan facility in the maximum
amount of Seven Million Dollars ($7,000,000) established by Lender in favor of
Borrowers pursuant to Section 2.1.
"Term Note" shall mean the joint and several Term Note in the form
attached hereto as Exhibit A issued by Borrowers to Lender to evidence the
repayment obligation associated with the Term Loan, as the same may from time
to time be amended together with any notes issued in substitution or
replacement therefor and any extensions or renewals thereof, in whole or in
part.
"UCC" shall mean the Uniform Commercial Code of Illinois, as in effect
from time to time.
"Wescourt" shall mean Wescourt Group, Inc., a Delaware corporation.
"Wescourt Distributing" shall mean Wescourt Distributing, Inc., a Colorado
corporation.
"Wescourt Companies" means Portfield and each of its Subsidiaries.
"Westec Fruita" shall mean Westec Fruita, Inc., a Delaware corporation.
"Wescourt Guaranty" shall mean the guaranty from Wescourt in favor of
Portfield guaranteeing the First Portfield Note.
"Wescourt WLD Guaranty" shall mean the guaranty from Wescourt in favor of
Portfield guaranteeing the WLD Guaranty.
"WLD" shall mean the WLD Trust, an Ohio testamentary trust.
"WLD Guaranty" shall mean the guaranty from WLD in favor of Xxxxxx
Guaranty guaranteeing the Xxxxxx Demand Note.
"WLD Guaranty Documents" shall mean the WLD Guaranty and all agreements,
instruments or documents executed or delivered in connection therewith.
1.2. USE OF DEFINED TERMS. All terms defined in this Agreement and the
Exhibits shall have the same defined meanings when used in any other Loan
Documents, unless the context shall require otherwise.
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1.3. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall have the meanings generally attributed to such terms under GAAP.
1.4. UCC TERMS. The terms "equipment", "proceeds" and "products", as and
when used in the Loan Documents, together with any other or similar terms not
specifically defined herein but which are defined in the UCC shall have the
same meanings as given to such terms therein.
1.5. TERMINOLOGY. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural, and the plural shall include
the singular. Titles of Articles and Sections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement, and all references in this Agreement to Articles, Sections,
Subsections, paragraphs, clauses, subclauses or Exhibits shall refer to the
corresponding Article, Section, Subsection, paragraph, clause, subclause of, or
Exhibit attached to, this Agreement, unless specific reference is made to the
articles, sections or other subdivisions divisions of, or Exhibit to, another
document or instrument.
1.6. EXHIBITS. All Exhibits attached hereto are by reference made a part
hereof as fully as if the contents thereof were set forth expressly herein.
2. THE FINANCING.
2.1. TERM LOAN FUND. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
and the other Loan Parties set forth herein and in the Loan Documents, Lender
agrees to lend Borrowers, on the Closing Date, an amount not to exceed Seven
Million Dollars ($7,000,000.00), for the purpose of financing the Acquisition
and refinancing certain term Indebtedness owing to NCFC. The Term Loan shall
be funded in one drawing and no amount of the Term Loan may be reborrowed once
disbursed, notwithstanding its repayment. Borrowers shall make principal and
interest payments on the dates and in the amounts as set forth in Sections 2.3
and 2.4.
2.2. TERM NOTE. The indebtedness represented by the Term Loan shall be
evidenced by the Term Note. The Term Note shall be executed by Borrowers and
delivered to Lender coincident with the disbursement of the Term Loan on the
Closing Date.
2.3. AMORTIZATION. The principal amount of the Term Loan shall be repaid
in sixty (60) consecutive equal monthly installments of principal and interest
based upon an the amortization schedule set forth in Exhibit B hereto, with a
sixty first (61st) and final balloon installments payment being equal to the
then unpaid principal on such Term Loan, plus any accrued and outstanding
interest thereon, to be due and payable on May 1, 2002, the final maturity
thereof.
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2.4. INTEREST. The Term Note shall bear interest (computed on the
basis of a year of 360 days for the actual number of days elapsed) at the rate
per annum determined by adding three and one fourth percent (3-1/4%) to the
Five Year Treasury Rate. Interest on the Term Loan shall be payable monthly in
arrears, commencing on May 1, 1997, to be collected for the preceding calendar
month (or, in the case of the first such payment, from the Closing Date through
the end of such calendar month), and thereafter interest. payments shall be
made on the first Business Day of each succeeding calendar month and upon
payment or prepayment in full (or in part to the extent permitted herein) of
the Term Note. Notwithstanding the foregoing, however, from and after the
occurrence of any Event of Default, and continuing for so long thereafter as
such Event of Default shall be continuing, Lender shall have the right to
increase the interest rate payable on the Term Note to the Default Rate
applicable thereto upon giving Borrowers written notice thereof, and Borrowers
shall be responsible for the payment of the additional interest resulting
therefrom in addition to the regularly scheduled principal amortization of the
Term Note, as described more particularly in Section 2.3, and accrued interest
thereon.
2.5. SECURITY DEPOSIT FEE. The $35,000 security deposit presently
held by Lender will be refunded to Borrowers, less Lender's costs and expenses,
within thirty (30) days from the Closing Date. If the Term Loan is not funded,
other than as a result of a breach by Lender under this Agreement, then Lender
may retain the deposit as liquidated damages and not as a penalty, without in
any way reducing Borrowers' liabilities with respect to Lender's expenses.
2.6. LATE CHARGE. If payment of any principal of, or interest on, the
Term Note or any other sum payable hereunder or under any other Loan Document
is not received within ten (10) calendar days after its due date, Lender shall
have the right to impose a late charge relative to such payment in an amount
equal to up to five percent (5%) of the amount of such past due payment, which
charge, if imposed by Lender, shall be due and payable by Borrowers immediately
upon receipt of notice thereof.
2.7. VOLUNTARY AND MANDATORY PREPAYMENTS
(a) Voluntary. The Term Note may be prepaid in whole, but not in part,
by Borrowers at any time after the first Loan Year, provided, however, that any
such prepayment must be preceded by at least ten (10) calendar days prior
written notice thereof to Lender; and, provided, further, that any such
prepayment made during the second through fourth Loan Years must be accompanied
by the payment of all then accrued, but unpaid, interest on the principal
amount to be prepaid together with a prepayment fee, representing liquidated
damages to Lender for the loss of its bargain and its costs for making funds
available to Borrowers hereunder and not a penalty, equal in amount to the
amount determined by multiplying the following applicable percentage for the
applicable Loan Year follow' the Closing Date by the principal amount of the
outstanding Term Loan: two percent (2%) for the second Loan Year, one percent
(1%) for the third Loan year, one-half percent (.5%) for the fourth Loan Year,
together with amounts payable by the Borrowers pursuant to Section 2.11 hereof.
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(b) Mandatory. The Borrowers and Guarantors agree that any net cash
insurance proceeds or net cash Condemnation Proceeds received by any of them
with respect to the Collateral shall, except to the extent otherwise provided
in the relevant Collateral Document, be immediately paid over to the Lender and
applied as and for a mandatory prepayment on the Term Note. The Borrowers and
the Guarantors further agree that any net proceeds from the sale or other
deposition of any Collateral shall also immediately be paid over to the Lender
and applied as and for a mandatory prepayment on the Term Note. All
prepayments pursuant to this Section 2.7(b) shall be applied to the several
installments of the Term Note in the inverse order of their respective
maturities and no amount prepaid hereunder may be reborrowed.
2.8. NATURE OF CHARGES IMPOSED. Lender and Borrowers hereby agree
that (i) the only charges imposed by Lender upon Borrowers for the use of money
in connection with the Term Loan Facility are and shall be interest at the
rates per annum expressed in Section 2.4 hereinabove and (ii) all other charges
imposed by Lender upon Borrowers in connection with the Term Loan Facility,
including, without limitation, the deposit heretofore made by Borrowers, as
described injection 2.5, the late charge provided for in Section 2.6, and any
breakage fee hereafter paid by Borrowers pursuant to Section 2.7, are and shall
be deemed to be charges made to compensate Lender for underwriting and
administrative services and costs, and other services and costs performed and
incurred, and to be performed and incurred, by Lender in connection with the
creation and administration of the Term Loan Facility, and shall under no
circumstances be deemed to be charges for the use of money for purposes of
Illinois law.
2.9. SAVINGS CLAUSE. Notwithstanding the foregoing or any provision
contained in this Agreement, the Term Note or any other Loan Document to the
contrary, if at any time the amount of interest computed with respect to the
Term Note on the basis of the Applicable Rate would exceed the amount of such
interest computed upon the basis of the maximum rate of interest permitted by
applicable state or federal law in effect from time to time hereafter, after
taking into account, to the extent required by applicable law, any and all
fees, payments, charges and calculations provided for in this Agreement or in
any other agreement between Borrowers and Lender (the "Maximum Legal Rate"),
the interest payable under this Agreement shall be computed upon the basis of
the Maximum Legal Rate, but any subsequent reduction in the Applicable Rate
shall not reduce such interest thereafter payable hereunder below the amount
computed on the basis of the Maximum Legal Rate until the aggregate amount of
such interest accrued and payable under this Agreement equals the total amount
of interest which would have accrued if such interest had been at all times
computed solely on the basis of the Applicable Rate. No agreements,
conditions, provisions or stipulations contained in this Agreement, the Term
Note or any other Loan Document or default of the Borrowers, or the exercise by
the Lender of the right to accelerate the payment of the maturity of principal
and interest, or to exercise any option whatsoever contained in this Agreement
or any other Loan Document, or arising of any contingency whatsoever, shall
entitle Lender to collect, in any event, interest exceeding the. Maximum Legal
Rate and in no event shall the Borrowers be obligated to pay interest exceeding
such Maximum Legal Rate and all agreements, conditions or stipulations, if any,
which may in any event or contingency whatsoever operate to bind, obligate or
compel the Borrowers to pay a rate of interest exceeding the Maximum Legal
Rate, shall be without binding force or effect, at
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law or in equity, to the extent only of the excess of interest over such
Maximum Legal Rate. In the event any interest is charged in excess of the
Maximum Legal Rate ("Excess Inte="), Borrowers acknowledge and stipulate that
any such charge shall be the result of an accidental and bona fide error, and
such Excess Interest shall be, first, applied to reduce the principal then
unpaid hereunder; second, applied to reduce any other Obligations, until paid
in full; and third, returned to the Borrowers, it being the intention of the
parties hereto not to enter at any time into a usurious or otherwise illegal
relationship. The Borrowers recognize that, with fluctuations in the interest
rate and the Maximum Legal Rate, such an unintentional result could
inadvertently occur. By the execution of this Agreement, the Borrowers
covenant that (i) the credit or return of any Excess Interest shall constitute
the acceptance by the Borrowers of such Excess Interest, and (h) the Borrowers
shall not seek or pursue any other remedy, legal or equitable, against Lender,
based in whole or in part upon the charging or receiving of any interest in
excess of the maximum authorized by applicable law. For the purpose of
determining whether or not any Excess Interest has been contracted for, charged
or received by Lender, all interest at any time contracted for, charged or
received by the Lender in connection with this Agreement shall be amortized,
prorated, allocated and spread in equal parts during the entire term of this
Agreement. The provisions of this Section shall be deemed to be incorporated
into each and every Term Note and other Loan Document or communication relating
to the. Obligations which sets forth or prescribes any account, right or claim
or alleged account, right or claim of the Lender with respect to the Borrowers
(or any other obligor in respect of Obligations), whether or not any provision
of this Section is referred to therein. All such documents and communications
and all figures set forth therein shall, for the sole purpose of computing the
extent of the liabilities and obligations of the Borrowers (or other obligor)
asserted by the Lender thereunder, be automatically recomputed by any Borrowers
or obligor, and by any court considering the same, to give effect to the
adjustments or credits required by this Section. If the applicable state or
federal law is amended in the future to allow a greater rate of interest to be
charged under this Agreement or any other Loan Documents than is presently
allowed by applicable state or federal law, then the limitation of interest
under this Section shall be increased to the maximum rate of interest allowed
by applicable state or federal law as amended, which increase shall be
effective hereunder on the effective date of such amendment. and all interest
charges owing to the Lender by reason thereof shall be payable upon demand.
2.10. BORROWERS'S LOAN ACCOUNT. Lender will maintain on its books and
records all loans and payments made to Lender by Borrowers. This loan account
will be maintained in accordance with Lender's customary accounting practices.
Borrowers promise to pay such amounts as may become or declare due pursuant to
the terms of this Agreement. The balance of the loan account recorded on
Lender's books and records shall absent manifest error be presumptive evidence
of the amounts due and owing to Lender by Borrowers, provided that any failure
by Lender to such record or error in recording shall not limit or otherwise
affect Borrowers' obligations to pay Borrowers' Obligations.
2.11. FIXED RATE BREAKAGE FEE. Upon any prepayment of the Term Loan
(regardless of the source of such prepayment and whether voluntary or
otherwise), in addition to any other prepayment fees due from Borrowers,
Borrowers shall pay an amount (the "Fixed Rate Breakage
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Fee") equal to the present value, for each remaining year of the term of such
prepaid Term Loan, of (1) the yield as reported in the Federal Reserve
statistical release H.15(519) under the caption "U.S. Government
Securities/Treasury Constant Maturities" (hereinafter "H.15(519)"(for a
Treasury Note with a term equal to that remaining on such Term Loan (which will
be obtained by interpolating between the yield reported on the H.15(519) for
specific whole years) on the date of the term Loan was funded (2) the yield as
reported on the date of such prepayment in the H.15(519) for a Treasury Note
with a term equal to that remaining on the Term Loan (which will be obtained by
interpolating between the yield reported on the H.15(519) for specific whole
years) on the date of such prepayment, multiplied by (a) the out-standing
principal balance of the Term Loan at the time of prepayment for purposes of
calculating such amount for the month during which such prepayment occurs and
by (b) the principal balance that would have been outstanding at the beginning
of each successive month in the remaining term of the Term Loan had the
amortization schedule set forth for the Term Loan been adhered to; provided,
that the rate determined in (2) above will be used as the discount rate in
computing such present value. The Fixed Rate Breakage Fee represents Lender's
reinvestment loss resulting from making a fixed rate loan.
3. COLLATERAL AND GUARANTY.
3.1. COLLATERAL. The payment and performance of the Obligations shall
at all times be secured by, among other things, all Collateral pursuant to the
Collateral Documents.
3.2. FURTHER ASSURANCES. Each of the Loan Parties further shall duly
execute and/or deliver (or cause to be duly executed and/or delivered) to
Lender any instrument, invoice, registration certificate, certificate of tide,
application, document, document of title, dock warrant, dock receipt, warehouse
receipt, xxxx of lading, order, financing statement, assignment, waiver,
consent or other writing which may be deemed necessary by Lender to reasonably
carry out the terms of this Agreement and any of the other Loan Documents and
to perfect its security interest in and facilitate its realization on the
Collateral. Each Loan Party agrees to perform or cause to be performed such
acts as Lender may reasonably request to establish and maintain for Lender a
valid and perfected first priority security interest in the Collateral, free
and clear of any liens, encumbrances or security interests other than in favor
of Lender and Permitted Encumbrances.
3.3. GUARANTY. The payment and performance of the Obligations shall
at all times be guaranteed by the Guarantors pursuant to Section 9 hereof.
4. GENERAL REPRESENTATIONS AND WARRANTEES. In order to induce
Lender to enter into this Agreement and to make the Term Loan, each Loan Party
hereby, represents and warrants to Lender that the following statements are
and, after giving effect to the Acquisition, will be true, correct and
complete.
4.1. EXISTENCE. Each Loan Party is a corporation duly organized,
validly existing and in good standing under the laws of the State of its
incorporation operating in accordance with its articles of incorporation and
by-laws. Each Loan Party is duly qualified to transact business in
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the jurisdiction wherein the nature of the activities conducted by it or assets
owned by it requires such licensing or qualification.
4.2. AUTHORITY. Each Loan Party has full power to make, deliver and
perform under this Agreement, the Term Note and the other Loan Documents to
which it is a party and have taken all necessary and appropriate action to
authorize the execution, delivery and performance of the Loan Documents. This
Agreement constitutes, and the Term Note and the remainder of the Loan
Documents to which each Loan Party is a party, when executed and delivered for
value received, will constitute, the valid obligations of Loan Parties, legally
binding upon them and enforceable against them in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar creditors rights generally and equitable remedies
may be limited by equitable principles of law. The respective officers of the
Loan Parties whose names are inscribed below are duly authorized and empowered
to execute, attest and deliver this Agreement, the Term Note and the remainder
of the Loan Documents to which they are a party for and on their behalf, and to
bind Loan Parties accordingly thereby.
4.3. NO MATERIAL LITIGATION. There are no proceedings pending or, so
far as any Loan Party knows, threatened, before any court, arbitration panel or
administrative agency, no material disputes with any contract party and no
pending or threatened labor action which, in each case, if decided adversely to
such Loan Party, would have a Material Adverse Effect.
4.4. PAYMENT OF TAXES. Each Loan Party has filed or caused to be
filed any federal income tax returns required to be filed by it, and, to the
best of its knowledge following diligent inquiry, all other tax returns
required to be filed by it, and has paid all taxes not yet delinquent and any
assessments made against it. No Loan Party has participated in any "prohibited
transaction" (as defined in Section 4975 of the Internal Revenue Code of 1986)
that could subject such Loan Party to any tax or penalty.
4.5. NO VIOLATIONS, GENERALLY. The execution, delivery and
performance by each Loan Party of this Agreement, the Term Note and the other
Loan Documents to which it is a party do not and will not require any consent
or approval of any Person, except to the extent obtained by such Loan Party on
or prior to the Closing Date; or violate any material provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to any Loan Party; or result in
a breach of or constitute a default under any Material Agreement; and, to the
best of knowledge of each Loan Party following diligent inquiry, such Loan
Party is not in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any Material Agreement;
provided that such default or violation, in any such case, would result in a
Material Adverse Effect.
4.6. FINANCIAL STATEMENTS; LIABILITIES. The audited consolidated
financial statements of the Wescourt Companies (other than Xxxxxxx) for its
fiscal year ending February 28, 1996 and the unaudited consolidated financial
statements of the Wescourt Companies (other than Xxxxxxx) for its interim
period ending on December 31, 1996 accurately and fairly represent the
financial condition of the Wescourt Companies (other than Xxxxxxx) and the
transactions in its equity
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accounts as of the dates referred to therein, and have been prepared in
accordance with GAAP. There are no material liabilities, direct or indirect,
fixed or contingent, of the Wescourt Companies as of the date hereof which are
not reflected in such financial statements or in the notes thereto. There has
been no Material Adverse Change since December 31, 1996 in the business,
operations, prospects, properties, condition (financial or otherwise) of the
Wescourt Companies.
4.7. POLLUTION AND ENVIRONMENTAL CONTROL. Except as disclosed on
Schedule 4.7, (i) the business operations of each Loan Party comply in all
material respects with all applicable Environmental Laws; (ii) each Loan Party
has obtained all environmental, health and safety Permits necessary for the
operation of such Loan Party's business; and all such Permits are valid, and in
good standing and Borrowers is in compliance in all respects with all terms and
conditions of such Permits; (iii) Borrowers is not subject to any outstanding
written order or agreement with any Governmental Authority or with any private
Person respecting (a) any Environmental Laws, (b) any Remedial Actions, or (c)
any Environmental Claims arising from the Release of a Contaminant into the
environment; (iv) none of the operations of Borrowers is subject to any
judicial or administrative proceeding alleging a violation of any Environmental
Law; (v) none of the operations of any Loan Party is the subject of any federal
or state investigation evaluating whether any Remedial Action is needed to
respond to a Release of any Contaminant into the environment under any
applicable law; (vi) except as disclosed on environmental reports delivered to
any Loan Party, Lender, no Loan Party or to the best of any Loan Party's
knowledge, no predecessor of any Loan Party has filed any notice under any
federal or state law indicating past or present treatment, storage, or disposal
of a hazardous waste or reporting a spill or Release of a Contaminant into the
environment under any applicable law; (vii) no Loan Party Borrowers has any
known contingent liability in connection with any Release of any Contaminant
into the environment; (viii) the Loan Parties' operations do not involve the
generation, transportation, treatment or disposal of any hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent (other than any
done in compliance with all Environmental Laws); (ix) no Loan Party has
disposed of any Contaminant by placing it in or on the ground, ground water or
surface water, and, to the best of the Loan Parties' knowledge, neither has any
lessee, prior owner, or other Person; and (x) no Lien in favor of any
Governmental Authority for (A) any liability under Environmental Laws or
regulations, or (B) damages arising from or costs incurred by such Governmental
Authority in response to a Release of a Contaminant into the environment, has
been filed or attached.
4.8. DISCLOSURE. No representation or warranty of any Loan Party, any
of its Subsidiaries contained in this Agreement, the financial statements
referred to in section 4.6 hereof, the financial statements of Xxxxxxx, any
information or any other document, certificate or written statement furnished
to Lender by or on behalf of any such Person for use in connection with the
Loan Documents or with respect to the transactions contemplated by the
Acquisition Agreement contains any untrue statement of a material fact or
omitted, omits or will omit to state a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which the same were made.
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4.9. INTELLECTUAL PROPERTY. Each Loan Party and each of their
respective Subsidiaries owns, is licensed to use or otherwise has the right to
use, all patents, trademarks, trade names, copyrights, technology, know-how and
processes used in or necessary for the conduct of its business as currently
conducted that are material to the condition (financial or other), business or
operations of such Loan Party or its Subsidiaries (collectively called
INTELLECTUAL PROPERTY) and all such Intellectual Property is identified on
Schedule 4.9 and fully protected and/or duly and properly registered, filed or
issued in the appropriate office and jurisdictions for such registrations,
filing or issuances. Except as disclosed in Schedule 4.9, the use of such
Intellectual Property by any Loan Party or its Subsidiaries does not and has
not been alleged by any Person to infringe on the rights of any Person.
4.10. EMPLOYEE MATTERS. Except as set forth on Schedule 4.10, (a)
none of the Loan Parties nor any of their respective employees is subject to
any collective bargaining agreement, (b) no petition for certification or union
election is pending with respect to the employees of any Loan Party and no
union or collective bargaining unit has sought such certification or
recognition with respect to the employees of any Loan Party and (c) there are
no strikes, slowdowns, work, stoppages or controversies pending or, to the best
knowledge of the Loan Parties after due inquiry, threatened between any Loan
Party and its respective employees, other than employee grievances arising in
the ordinary course of business which could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. Except as
set forth on Schedule 4.10, no Loan Party nor any of its Subsidiaries is
subject to an employment contract.
4.11. SOLVENCY. As of and from and after the date of this Agreement
and after giving effect to the consummation of the Acquisition, each Loan
Party: (a) owns and will own assets the fair saleable value of which are (i)
greater than the total amount of liabilities (including contingent liabilities)
of such Loan Party and (ii) greater than the amount that will be required to
pay the probable liabilities of such Loan Party's then existing debts as they
become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Loan Party; (b) has capital
that is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (c) does not
intend to incur and does not believe that it will incur debts beyond its
ability to pay such debts as they become due.
4.12. ACQUISITION. The Loan Parties have furnished the Lender with
true and correct copies of all Acquisition Agreements. Wesfrac had and has
full right, power and authority to enter into and consummate the Acquisition
and to perform and observe all of the matters and dealings provided for in the
Acquisition Agreements. The execution and delivery of the Acquisition
Agreements does not, nor will the performance or observe of any of the matters
or things therein provided for, contravene any provision of law or any articles
of incorporation, charter or by-laws of any Loan Party or of any covenant,
indenture or agreement of or affecting any Loan Party or any of its assets and
properties. No registrations, filings or consents were, are or will be
required in connection with the Acquisition other than those which have been
made or obtained. The Acquisition Agreements have been duly authorized,
unexecuted and delivered by the proper officers of all parties thereto and
constitute the valid and binding agreements of such parties
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enforceable against them in accordance with their terms. The Acquisition has
been consummated in accordance with the terms of the Acquisition Documents.
5. AFFIRMATIVE COVENANTS. Each Loan Party agrees that, so long as
any Obligations are outstanding, it will comply with the following covenants:
5.1. BOOKS AND RECORDS. Each Loan Party shall maintain, at all times,
true and complete books, records and accounts in which true and correct entries
are made of its transactions in accordance with GAAP.
5.2. PERIODIC FINANCIAL STATEMENTS. The Loan Parties shall, as soon as
practicable, and I in any event within sixty (60) days after the end of each
fiscal quarter, furnish to Lender and each Participant unaudited financial
statements of the Wescourt Companies including, in each instance,, balance
sheets and income statements, on a consolidated and consolidating basis, as
appropriate, and individual profit and loss statements as of and for the
quarterly period then ended and for its fiscal year to date, prepared in
accordance with GAAP, certified by the chief financial officer of the Wescourt
Companies in a certificate substantially in the form of Exhibit C attached
hereto, and accompanied by a report of performance or condition of the Wescourt
Companies as of or for the corresponding date or period in the preceding fiscal
year, displayed on a comparative basis.
5.3. ANNUAL FINANCIAL STATEMENTS. The Loan Parties shall, as soon as
practicable, and in any event within one hundred twenty (120) days after the
end of each fiscal year of the Wescourt Companies, furnish to Lender and each
Participant, individual profit and loss statements and annual audited financial
statements of the Wescourt Companies, including balance sheets, income
statements and cash flow statements for the fiscal year then ended, on a
consolidated and consolidating basis, as appropriate, which have been prepared
by the Independent Accountants. Such audited financial statements will be
required to be accompanied by the Independent Accountant's opinion, which
opinion shall be in form generally recognized as "unqualified".
5.4. COMPLIANCE CERTIFICATES. Together with each of the financial
statements described in Sections 5.2 and 5.3 above, and more frequently, if
requested by Lender, the Loan Parties shall deliver a Compliance Certificate to
Lender (together with calculation worksheets, including covenant calculations
contained in Sections 6.15 and 6.16 hereof) signed by the chief financial
officer of the Wescourt Companies, provided however that as long as no Event of
Default has occurred and is continuing, the Loan Parties shall not be required
to deliver a Compliance Certificate more often than once per fiscal quarter.
5.5. PAYMENT OF TAXES. The Loan Parties shall pay and discharge all
taxes, assessments and governmental charges upon them, their income and their
properties prior to the date on which penalties attach thereto, unless and to
the extent only that (x) such taxes, assessments and governmental charges are
being contested in good faith and by appropriate proceedings by the Loan
Parties and (y) the Loan Parties maintain reasonable reserves on their books
therefor.
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5.6. MAINTENANCE OF INSURANCE. Each Loan Party shall insure the
Collateral against fire, theft and such other risks as Under shall require from
time to time at the full replacement cost thereof, with Lender named as loss
payee and mortgagee thereof, with St. Xxxx Insurance or other responsible
insurance companies rated "A-' or better by A.M. Best Company. As to other
Property and risks, including, without limitation, liability coverage, each
Loan Party shall maintain such insurance, with such insurers (having the
minimum qualifications described above) on such Property, in such amounts and
against such risks as is customarily maintained by similar businesses operating
in the same vicinity; provided that such insurance shall not be less, in terms
of insurers, amounts, coverages or limitations, then the insurance being
maintained by such Loan Party on the Closing Date; and provided, further, that
such insurance shall include, in any event, at all times, automobile and
comprehensive general liability (inclusive of products liability coverage) of
at least Five Million Dollars ($5,000,000), in aggregate combined single limit
coverage; that Lender shall be shown by endorsement as "additional insured"
thereon and with breach of warranty endorsement favoring Lender. All such
insurance in existence on the Closing Date shall not be cancelable or
modifiable by any Loan Party, thereafter, unless with the prior written consent
of Lender, or by such Loan Party's insurer, unless with at least thirty (30)
days advance written notice to Lender thereof (except as may be necessary to
bring such insurance into compliance herewith from time to time). The Loan
Party shall file with Lender on the Closing Date and at least annually
thereafter or, at Lender's request at any time from and after the occurrence
of, and during the continuance of, any Event of Default, upon its request a
detailed list of such insurance then in effect stating the names of the
insurance companies, the amounts and rates of insurance, the dates of
expiration thereof, the properties and risks covered thereby and the insured
with respect thereto, together with copies of all such policies and the
insurer's certificate in regard thereto.
5.7. PRESERVATION OF EXISTENCE. Each Loan Party shall preserve and
maintain its corporate existence, rights, franchises and privileges in the
State of its incorporation and in the other jurisdiction where the nature of
the business conducted therein or the location of any Property therein requires
that such rights, franchises and privileges be preserved and maintained; and
obtain and maintain for itself all Permits, licenses, certificates of
convenience and necessity, operating rights, authorizations and consents as
shall be necessary or advisable to permit it to continue to operate its
business in the manner contemplated to be conducted by it on the Closing Date.
5.8. COMPLIANCE WITH LAWS. Each Loan Party shall comply with the
requirements of all applicable laws, rules, regulations, permits, hearings,
approvals and clearances and orders of any Governmental Authority, including
particularly, but without limitation, in respect of Environmental Laws and
laws, rules regulations and orders relating to taxes, employer and employee
contributions, securities, employee retirement and welfare benefits, and
employee health and safety.
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5.9. ENVIRONMENTAL LAW COMPLIANCE.
(a) On or before the Closing Date, the Loan Parties will provide Lender
with copies of any environmental assessments or similar reports made by or on
behalf of any Loan Party with respect to any Mortgaged Premises within the
preceding five (5) years and, subsequent to the Closing Date, the Loan Parties
will provide Lender with copies of any such assessments or reports thereafter
made by or on behalf of a Loan Party with respect to any Mortgaged Premises,
promptly as and when made or received by such Loan Party, but not later than
thirty (30) days thereafter. The foregoing shall be cumulative with, and in
addition to, any similar requirements made applicable to any Mortgaged Premises
in Section 11.1.
(b) Each Loan Party will notify Lender in writing of any Environmental
Claim or an accusation or allegation which may give rise to an Environmental
Claim hereafter made against it or received by it which would or would
reasonably be expected to have a Material Adverse Effect if determined
adversely to such Loan Party within ten (10) days after it first obtains
knowledge or notice thereof. Each such notice to Lender shall include a copy
of any claim, citation, order, notice or other communication (to the extent in
writing) received by such Loan Party from the Person making such Environmental
Claim, allegation or accusation, a description of the nature of such
Environmental Claim, allegation or accusation, the name of the Person making
such Environmental Claim, allegation or accusation, such Loan Party's
anticipated defense to such Environmental Claim, allegation or accusation or
the action such Loan Party proposes to take in respect of such Environmental
Claim, allegation or accusation and the anticipated costs to be incurred by
such Loan Party in connection with such Environmental Claim, allegation or
accusation ( ' including, without limitation, the amount of any anticipated
damages, the costs of defending such Environmental Claim and the costs of any
cleanup or corrective action).
(c) Each Loan Party covenants and agrees that it (i) shall not use,
generate, store, or allow to be generated, stored or used, any Hazardous
Materials, except in the ordinary course of such Loan Party's business and in
accordance with all Environmental Laws, and (ii) shall at all times maintain
its Property in full compliance with all applicable Environmental Laws,
including timely remediation if and when required.
(d) Each Loan Party shall, with due care, in a safe manner, detain the
spread of, ameliorate and remove from the any real property owned or leased by
such Loan Party (and from any other Property as required by any Environmental
Law) any Hazardous Materials contamination located on, under or about any such
Property and monitor or cause to be monitored the levels of Hazardous Materials
on, under or about any such Property or in the ground water in accordance with
the terms and procedures required by any federal, state or local governmental
agency having jurisdiction including, without limitation, any Regional Water
Quality Control Board and the Environmental Protection Agency.
(e) Lender may require any Loan Party from time to time to perform or
cause to be performed, such studies or assessments of the Property owned or
leased by such Loan Party, as
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Lender may reasonably deem necessary, appropriate or desirable, to determine
the status of environmental conditions on, under and about such Property, which
studies and assessments shall be for the benefit of Lender and shall be
prepared in accordance with the reasonable specifications established by
Lender.
(f) In addition, each Loan Party will promptly notify Lender of any
Release or material change in the nature or extent of any Contaminants used,
transported or stored by such Loan Party or any Subsidiary on any Mortgaged
Premises, and allow no material change in the use thereof or such Loan Party's
operations that would increase in any material amount the risk of violation of
the Environmental Laws without the express prior written approval of Lender.
(g) Each Loan Party further agrees to indemnify and hold Lender, each
Participant and the officers, directors, agents, employees, Affiliates and
representatives of Lender and each Participant (individually an "Indemnified
Party" and collectively the "Indemnified Parties") harmless from and against
any and all damages, penalties, fines, claims, liens, suits, liabilities, costs
(including necessary and actual clean-up and response costs), judgments, and
expenses (including reasonable attorneys' fees and any consultants' or. other
experts' fees and expenses) of every kind and nature suffered by or asserted
against any Indemnified Party (i) under or on account of the Environmental
Laws, including, without limitation, as a result of the past, present or future
institution of any suits, claims, actions, or proceedings by any Person against
such Loan Party or Lender in respect of any alleged violation of the
Environmental Laws by such Loan Party or such Loan Party's use, storage or
disposition of Contaminants, (ii) with respect to any past, present or future
Release or Contaminant affecting any Property, whether or not the same
originates or emanates from any Property or any contiguous real estate, (iii)
with respect to any other past, present or future matters affecting any
Property within the jurisdiction of any Governmental Authority administering
the Environmental Laws or (iv) with respect to any past, present or future
requirement under the Environmental Laws which requires the elimination or
removal of any Contaminants or other substances regulated pursuant to any
Environmental Laws, rules, or regulations of any Governmental Authority having
jurisdiction over any Loan Party, whether attributable to events occurring
before or after the Closing Date; provided, however, that the Loan Parties
shall not be liable for any of the foregoing arising directly from Lender's
gross negligence or willful misconduct. Any payments required to be made
hereunder shall be due and payable on demand.
(h) The agreements contained in the preceding clause (g) of this Section
5.9 shall survive the termination of this Agreement and shall continue in full
force and effect for so long as the prospect of any loss or liability covered
by the indemnity contained in such clause (d) exists.
5.10. LITIGATION: EVENTS OF DEFAULT, ETC. Promptly, after receipt of
notice or knowledge thereof, but not later than ten (10) days thereafter, the
Loan Parties will report to Lender: (1) any lawsuit or administrative
proceeding or arbitration proceeding in which any Loan Party is a defendant
wherein the amount of damages claimed against such Loan Party exceeds Two
Hundred Thousand Dollars ($200,000) of uninsured potential liability (in
Lender's reasonable opinion), or in which the validity of the Acquisition or
this Agreement or any Loan Document or
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any action taken or to be taken pursuant hereto or thereto is questioned; (ii)
any strike, walkout, lockout or other related legal action, whether pending or
threatened pertaining to any Loan Party; or (iii) the existence and nature of
any Default Condition or Event of Default.
6. NEGATIVE COVENANTS. Each Loan Party covenants and agrees that
until payment in full of all Obligations, unless Lender shall otherwise give
its prior written consent, such Loan Party shall comply with and shall cause
its Subsidiaries to comply with all covenants in this Section 6 applicable to
such Person.
6.1. INDEBTEDNESS. Without the prior consent of the Lender, the Loan
Parties will not and will not permit any of their Subsidiaries directly or
indirectly to create, incur, assume, guaranty, or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness except:
(A) the Obligations;
(B) intercompany Indebtedness among such Loan Party and its
Subsidiaries; provided that the obligations of each obligor of such
Indebtedness shall: (1) be subordinated in right of payment to the Obligations
from and after such time as any portion of the Obligations shall become due and
payable (whether at stated maturity, by acceleration or otherwise) and (2) have
such other terms and provisions as Lender may reasonably require;
(C) Indebtedness subject to the terms of the Intercreditor Agreement;
(D) Indebtedness owing to trade creditors in the ordinary course of
business not more than 60 days past due; Indebtedness subject to the terms of
the Intercreditor Agreement;
(E) Indebtedness secured by liens described in clause (4) of the
definition of Permitted Encumbrances in Section 1. 1 hereof; and
(F) Indebtedness in addition to that otherwise permitted hereunder
not exceeding $100,000 at any one time outstanding.
6.2. LIENS AND RELATED MATTERS.
(A) No Liens. The Loan Parties will not and will not permit any of
their Subsidiaries directly or indirectly to create, incur, assume or permit to
exist any Lien on or with respect to any property or asset (including any
document or instrument with respect to goods or accounts receivable) of any
Loan Party or any of its Subsidiaries, whether now owned or hereafter acquired,
or any income or profits therefrom, except Permitted Encumbrances.
(B) No Negative Pledges. The Loan Parties will not and will not
permit any of its Subsidiaries directly or indirectly to enter into or assume
any agreement (other than the Loan
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Documents and as contemplated by the Intercreditor Agreement) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired.
(C) No Restrictions on Subsidiary Distributions to such Loan Euty.
Except as provided herein, the Loan Parties will not and will not permit any of
their Subsidiaries directly or indirectly create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary's capital stock owned by any Loan
Party or any other Subsidiary; (2) subject to subordination provisions, pay any
Indebtedness owed to any Loan Party or any other Subsidiary; (3) make loans or
advances to any Loan Party or any other Subsidiary; or (4) transfer any of its
property or assets to any Loan Party or any other Subsidiary.
6.3. INVESTMENTS; JOINT VENTURES. The Loan Parties agree that they will
not and will not permit any of their Subsidiaries directly or indirectly to
make or own any Investment in any Person except:
(A) Cash Equivalents; provided that such Cash Equivalents are not
subject to set off rights in favor of the issuing bank arising from any banking
relationship of any Loan Party or its Subsidiaries;
(B) intercompany loans and investments to the extent permitted under
Section 6.1;
(C) loans and advances to employees for moving, entertainment, travel
and other similar expenses in the ordinary course of business not to exceed,
without the prior written consent of the Lender, $100,000 in the aggregate at
any time outstanding; and
(D) loans, advances and investments in addition to those otherwise
permitted hereunder not exceeding $100,000 in the aggregate.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by any Loan Party or any of its Subsidiaries of any beneficial
interest in, including stock, partnership interest or other equity securities
of, any other Person (other than a Person that prior to the relevant purchase
or acquisition was a Subsidiary of such. Loan Party) or (ii) any direct or
indirect loan, advance or capital contribution by such Loan Party or any of its
Subsidiaries to any other Person (other than a Subsidiary of such Loan Party),
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the
original cost of such Investment pill the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"CASH EQUIVALENTS" means: (i) marketable direct obligations issued or
unconditionally guarantied by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year from the date
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of acquisition thereof, (ii) commercial paper maturing no more than one (1)
year from the date issued and, at the time of acquisition, having a rating of
at least A-1 from Standard & Poor's Corporation or at least P-1 from Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit or bankers' acceptances
maturing within one (1) year from the date of issuance thereof issued by, or
overnight reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$500,000,000; (iv) time deposits maturing no more than thirty (30) days from
the date of creation thereof with commercial banks having membership in the
Federal Deposit Insurance Corporation in amounts not exceeding the lesser of
$100,000 or the maximum amount of insurance applicable to the aggregate amount
of such Loan Party's deposits at such institution; and (v) deposits or
investments in mutual or similar funds offered or sponsored by brokerage or
other companies having membership in the Securities Investor Protection
Corporation in amounts not exceeding the lesser of $100,000 or the maximum
amount of insurance applicable to the aggregate amount of the relevant Loan
Party's de posits at such institution.
6.4. CONTINGENT OBLIGATION. The Loan Parties agree that they will not and
will not permit any of their Subsidiaries directly or indirectly to create or
become or be liable with respect to any Contingent Obligation except those:
(A) resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(B) arising under the Loan Documents and permitted under the
Intercreditor Agreement;
(C) existing on the Closing Date and described in Schedule 6.4
annexed hereto;
(D) arising under indemnity agreements to title insurers to cause
such title insurers to issue to Lender mortgagee title insurance policies;
(E) arising with respect to customary indemnification and purchase
price adjustment obligations incurred in connection with permitted sales of its
Properties;
(F) incurred with respect to Indebtedness permitted by Section 6.1;
and
(G) not permitted by clauses (A) through (F) above, so long as any
such Contingent Obligations, in the aggregate at any time outstanding, do not
exceed $500,000.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (i) with respect
to any indebtedness, lease, dividend or other obligation of another Person if
the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any
agreements relating thereto
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will be complied with, or that the holders of such liability will be protected
(in whole or in part) against loss with respect thereto; (ii) with respect to
any letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; or (iii) under any
foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co- making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or
to maintain the solvency, financial condition or any balance sheet item or
level of income of another., Contingent Obligations shall not include any Loan
Party's obligations under guaranties for the benefit of financial institutions
lending to dealers that enter into long term exclusive supply contracts with
another Loan Party. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported or, if not a
fixed and determined amount, the maximum amount so guaranteed.
6.5. RESTRICTED JUNIOR PAYMENTS. The Loan Parties will not and will
not permit any of their Subsidiaries directly or indirectly to declare, order,
pay, make or set apart any sum for any Restricted Junior Payment except that
Subsidiaries of Portfield may make Restricted Junior Payments and Portfield may
make Restricted Junior Payments, if any, described on Schedule 6.5 hereto.
"RESTRICTED JUNIOR PAYMENT" means: W any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock or other equity security of such Loan Party or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in shares of
that class of stock to the holders of that class; (ii) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock or other equity security of such Loan Party or any of its Subsidiaries
now or hereafter outstanding; (iii) any payment or prepayment of principal of,
premium, if any, interest, redemption, conversion, exchange, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any
Subordinated Indebtedness; and (iv) any payment made to retire, or to obtain
the surrender of, 'any outstanding warrants, options or other rights to acquire
shares of any class of stock or other equity security of such Loan Party or any
of its Subsidiaries now or hereafter outstanding.
6.6. RESTRICTION ON FUNDAMENTAL CHANGES. The Loan Parties will not
and will not permit any of their Subsidiaries directly or indirectly to: (a)
amend, modify or waive any term or provision of its articles of incorporation
or by-laws unless required by law; (b) enter into any transaction of merger or
consolidation except any Subsidiary of any Loan Party may be merged with or
into such Loan Party (=gyi&d that such Loan Party is the surviving entity) or
any other
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Subsidiary of such Loan Party; (c) liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution); or (d) acquire by purchase or otherwise
all or any substantial part of the business or assets of any other Person.
6.7. DISPOSAL OF ASSETS OR SUBSIDIARY STOCK. The Loan Parties will
not and will not permit any of their Subsidiaries directly or indirectly to:
convey, sell, lease, sublease, transfer or otherwise dispose of, or grant any
Person an option to acquire, in one transaction or a series of transactions any
of its property, business or assets, or the capital stock of or other equity
interests in any of its Subsidiaries, whether now owned or hereafter acquired
except for (a) bona fide sales of Inventory to customers for fair value in the
ordinary course of business and dispositions of obsolete equipment not used or
useful in the business and (b) Asset Dispositions if all of the following
conditions are met: (i) the market value of assets sold or otherwise disposed
of in any single transaction or series of related transactions does not exceed
$250,000 and the aggregate market value of assets sold or otherwise disposed of
in any fiscal year of such Loan Party does not exceed $250,000; (h) the
consideration received is at least equal to the fair market value of such
assets; (iii) the sole consideration received is cash; (iv) subject to the
terms of the Intercreditor Agreement, the Net Proceeds of such Asset
Disposition are applied as required by Section 2.7(b); (v) after giving effect
to the sale or other disposition of the assets included within the Asset
Disposition and the repayment of Indebtedness with the proceeds thereof, such
Loan Party is in compliance on a pro forma basis with the covenants set forth
in Section 6 recomputed for the most recently ended month for which information
is available and is in compliance with all other terms and conditions contained
in this Agreement; and (vi) no Default Condition or Event of Default shall
result from such sale or other disposition.
6.8. TRANSACTIONS WITH AFFILIATES. The Loan Parties will not and will
not permit any of their Subsidiaries directly or indirectly to enter into or
permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate or
with any director, officer or employee of any Loan Party, except (a) as set
forth on Schedule 6.8 or (b) transactions in the ordinary course of and
pursuant to the reasonable requirements of the business of such Loan Party or
any of its Subsidiaries and upon fair and reasonable terms which are fully
disclosed to Lender and are no less favorable to such Loan Party or such
Subsidiary than would be obtained in a comparable arm's length transaction with
a Person that is not an Affiliate. Notwithstanding the foregoing, no payments
may be made with respect to any items set forth on Schedule 6.8 upon the
occurrence and during the continuation of a Default or Event of Default, the
Loan Parties hereby representing to Lender that any agreements with respect to
such items are expressly subject to such condition.
6.9. MANAGEMENT AND SIMILAR FEES. The Loan Parties will not and will
not permit any of their Subsidiaries directly or indirectly to pay any
management, consulting or similar fees to any Affiliate or to any director,
officer or employee of any Loan Party except as set forth on Schedule 6.9.
Notwithstanding the foregoing, no payments may be made with respect to any
items set forth on Schedule 6.9 upon the occurrence and during the continuation
of a Default or Event of Default and each Loan Party represents that any
contracts or other agreements relating to such items are expressly subject to
such condition.
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6.10. CONDUCT OF BUSINESS. The Loan Parties will not and will not
permit any of their Subsidiaries directly or indirectly to engage in any
business other than businesses of the type in which they are engaged as of the
Closing Date.
6.11. CHANGES RELATING TO SUBORDINATED INDEBTEDAM. Without the prior
written consent of the Lender (such consent not to be unreasonably withheld),
the Loan Parties will not and will not permit any of their Subsidiaries
directly or indirectly to change or amend the terms of any Subordinated
Indebtedness if the effect of such amendment is to: (a) increase the interest
rate on such Indebtedness; (b) change the dates upon which payments of
principal or interest are due on such Indebtedness; (c) change any event of
default or add any covenant with respect to such Indebtedness; (d) change the
prepayment provisions of such Indebtedness; (e) change the subordination
provisions thereof (or the subordination terms of any guaranty thereof); or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
the holder of such Indebtedness in a manner adverse to such Loan Party, any of
its Subsidiaries or Lender.
6.12. FISCAL YEAR. No Loan Party nor any Subsidiary of such Loan Party
shall change its fiscal year.
6.13. PRESS RELEASE: PUBLIC OFFERING MATERIALs. Except as required. by
law, the Loan Parties will not and will not permit any of their Subsidiaries to
disclose the name of Lender in, any press release or in any prospectus, proxy
statement or other materials filed with any governmental entity relating to a
public offering of the capital stock of any Loan Party without Lender's prior
written consent which shall not be unreasonably withheld.
6.14. SUBSIDIARIES. The Loan Parties will not and will not permit any of
their Subsidiaries directly or indirectly to establish. create or acquire any
new Subsidiary.
6.15. DEBT TO WORTH RATIO. The Loan Parties will at all times have a Debt
to Net Worth Ratio of not more than 5.0 to 1.0.
6.16. FIXED CHARGE COVERAGE RATIO. The Loan Parties shall not, at any
fiscal quarter and each of the period specified below, permit the ratio of
EBITDA for the four fiscal quarters then ended to Fixed Charges for the same
period (the "Fixed Charge Coverage Ratio") to be less than 1.25 to 1.00.
6.17. NO AMENDMENTS TO NCFC - PORTFIELD - WLD INDEBTEDNESS. Without
the prior written consent of the Lender (such consent not to be unreasonably
withheld), the Loan Parties will not change or amend any of the First Portfield
Loan Documents, Xxxxxx Loan Documents, NCFC Loan Documents or Second Portfield
Loan Documents in any way which (a) increases the amount of any loans or other
obligations described therein, (b) accelerates or increases any payments due
thereunder,(c) increases any interest rate described therein, (d) shortens the
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maturity date thereof or (e) increases, replaces or substitutes any
co-borrowers accommodation parties, guaranties or collateral therefor.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events or conditions shall constitute an Event of Default hereunder,
provided that any requirement for the giving of notice or the lapse of time, or
both, has been satisfied:
7.1. TERM NOTE. The Borrowers shall fail to make any payments of
principal of, or interest on the Term Note, after the same shall become due and
payable and such failure continues for a period five Business Days.
7.2. OTHER OBLIGATIONS. Any Loan Party shall fail to pay any
Obligations (other than as evidenced by the Term Note) to Lender, within
fifteen (15) calendar days after the same shall become due and payable (unless
a longer or xxxxxxx xxxxx period is provided therefor in any document,
instrument or agreement evidencing, pertaining to or securing the repayment of
such other Obligations, in which event such other grace period shall apply).
7.3. MISREPRESENTATIONS. Any Loan Party shall make any representation
or warranty in this Agreement or such Loan Party or any other party thereto
shall make any representation or warranty in any of the other Loan Documents or
in any certificate or statement furnished at any time hereunder or in
connection with this Agreement or any of the Loan Documents which proves to
have been untrue or misleading in any material respect when made or furnished.
7.4. COVENANTS. Any Loan Party shall default in the observance or
performance of any covenant or agreement contained in either Section 5 or 6; or
any Loan Party shall default in the observance or performance of any other
covenant or agreement contained in this Agreement or any of the other Loan
Documents, to the extent it is a party thereto, except for any default of the
types described in Sections 7.1, 7.2 or 7.3 above, and such default shall
continue for a period of thirty (30) calendar days from the date of receipt by
such Loan Party of written notice from Lender specifying such default (unless a
longer or shorter cure period is provided therefor in any such Loan Document,
in which case such other grace period shall apply), without such default being
waived or cured provided, however, in the case of such defaults which cannot be
cured within said thirty (30) day (or longer or shorter) period, that same
shall not be deemed an Event of Default so long as such Loan Party is
diligently pursuing cure of same and same are cured within ninety (90) days of
the expiration of the applicable period.
7.5. VOLUNTARY BANKRUPTCY. Any Loan Party shall file a voluntary
petition in bankruptcy or a voluntary petition or answer seeking liquidation,
reorganization, arrangement, readjustment of its debts, or for any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether state, Federal, or foreign, now or
hereafter existing; any Loan Party shall enter into any agreement indicating
its consent to, approval of, or acquiescence in, any such petition or
proceeding; any Loan Party shall apply for or permit the appointment by consent
or acquiescence of a receiver, custodian or trustee for all or a substantial
part of its Property; any Loan Party shall make an assignment for the benefit
of
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creditors; any Loan Party shall be unable or shall fail to pay its debts
generally as such debts become due; or any Loan Party shall admit, in writing,
its inability or failure to pay its debts generally as such debts become due.
7.6. INVOLUNTARY BANKRUPTCY. There shall have been filed against any
Loan Party an involuntary petition in bankruptcy or seeking liquidation,
reorganization, arrangement, readjustment of its debts or for any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign, now or
hereafter existing; any Loan Party shall suffer or permit the involuntary
appointment of a receiver, custodian or trustee or for all or a substantial
part of its Property; or any Loan Party shall suffer or permit the issuance of
a warrant of attachment, execution or similar process against all or any
substantial part of its Property; unless, in each other case, such petition,
appointment or process is fully bonded against, vacated or dismissed within
sixty (60) days from its effective date, but not later than sixty (60) days
prior to any proposed disposition of any assets pursuant to any such
proceeding.
7.7. JUDGMENTS. If one or more final, nonappealable judgments or
decrees shall be entered against any Loan Party involving in the aggregate a
personal liability of Two Hundred Thousand Dollars ($200,000) or more (or in
the event such party fails to pursue the appeal of such judgment or any rights
to appeal any such judgment have been revoked or have expired) and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within sixty (60) days from the date such judgment becomes
nonappealable.
7.8. CHANGE OF CONTROL. If: (i) Portfield shall cease to own and
control, directly or indirectly, one hundred percent (100%) of the issued and
outstanding capital stock of Borrowers; or (ii) prior to a Qualified Initial
Public Offering, Xxxxx Xxxxxx shall cease to be President and Chief Executive
Officer of Portfield (other than by reason of death or disability), or (iii)
any Loan Party shall merge with, or consolidate into, any other corporation
(unless such Loan Party shall be the surviving corporation in such merger); or
(iv) any Loan Party shall sell all, or substantially all, of its assets other
than to any other Loan Party.
7.9. LOSS OF COLLATERAL. If all or any material portion of the
Collateral: (i) suffers any loss, damage, theft or other casualty, in a single
occurrence or series of related occurrences; or (ii) becomes subject to any
lien, claim or encumbrance other than a Permitted Encumbrance; or (iii) is made
the subject of any proceeding in which the existence, scope, coverage, or
priority of the security interest of Lender therein is disputed.
7.10. DEFAULT UNDER OTHER LOAN DOCUMENTS. A default has occurred
under any other Loan Document (following any required notice or passage of time
or both).
7.11. CLOSING CONDITIONS. In the event Lender in its sole discretion
shall have waived any of the conditions precedent specified in Section 11.1,
the Borrowers shall have failed to satisfy the same within 30 days from the
Closing Date
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7.12. Cross Default to NCFC Loan Documents. In the event any default
(following passage of any applicable time period or giving of any required
notice or both) by any borrower under any NCFC Loan Document shall occur.
8. REMEDIES. Upon the occurrence or existence of any Event of
Default, or at any time thereafter, without prejudice to the rights of Lender
to enforce its claims against any Loan Party for damages for failure by any
Loan Party to fulfill any of its obligations hereunder, subject only to prior
receipt by Lender of payment in full of all Obligations then outstanding in a
form acceptable to Lender, Lender shall have all of the rights and remedies
described in Sections 8.1 and 8.2, inclusive, and it may exercise any one,
more, or all of such remedies, in its sole discretion, without thereby waiving
any of the others.
8.1. NON-BANKRUPTCY DEFAULT: When any Event of Default described in
Section 7.1 through 7.4, both inclusive or Sections 7.7 through 7.12 both
inclusive, has occurred and is continuing, the Lender may, by notice to the
Borrowers, take one or more of the following actions:
(a) terminate the obligation of the Lender to extend any further credit
hereunder on the date (which may be the date thereof) stated in such notice;
(b) declare the principal of and the accrued interest on the Term
Note to be forthwith due and payable and thereupon the Term Note, including
both principal and interest and all fees, charges and other Obligations payable
hereunder and under the other Loan Documents, shall be and become immediately
due and payable without further demand, presentment, protest or notice of any
kind; and
(c) enforce any and all rights and remedies available to it under the
Loan Documents or applicable law.
8.2. BANKRUPTCY DEFAULTS. When any Event of Default described in
Section 7.5 or 7.6 has occurred and is continuing, then the Term Note,
including both principal and interest, and all fees, charges and other
Obligations payable hereunder and under the other Loan Documents, shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligation of the Lender to extend further credit
pursuant to any of the terms hereof shall immediately terminate. In addition,
the Lender may exercise any and all remedies available to it under the Loan
Documents or applicable law.-
9. THE GUARANTEES.
SECTION 9.1 THE GUARANTEES. To induce the Lender to provide the credit
described herein and in consideration of benefits expected to accrue to each
Guarantor by reason of and for other good and valuable consideration, receipt
of which is hereby acknowledged, each Guarantor hereby unconditionally and
irrevocably guarantees jointly and severally to the Lender and each other
holder of any of the Obligations, the due and punctual payment of all present
and future
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Obligations of any Loan Party evidenced by or arising out of the Loan
Documents, including, but not limited to, the due and punctual payment of
principal of and interest on the Term Note and the due and punctual payment of
all other Obligations now or hereafter owed by any Loan Party under the Loan
Documents as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, according to the terms hereof and
thereof. In case of failure by any Loan Party punctually to pay any
indebtedness guaranteed hereby, each Guarantor hereby unconditionally agrees
jointly and severally to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, according to the terms hereof and
thereof. In case of failure by any Loan Party punctually to pay any
indebtedness guaranteed hereby, each Guarantor hereby unconditionally agrees
jointly and severally to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, and as if such payment were made by
such Loan Party.
SECTION 9.2. GUARANTEE UNCONDITIONAL. The obligations of each
Guarantor as a guarantor under this Section 9 shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any Obligation of any Loan Party whether under this
Agreement or any other Loan Document or by operation of law or otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any other Loan Document;
(c) any change in the corporate existence, structure or ownership of,
or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting, any Loan Party, any other Guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of any Loan
Party or of any other Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Lender or any other Person, whether
or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or demand
or any exercise of, or failure to exercise, any rights or remedies against any
Loan Party, any other Guarantor or any Collateral;
(f) any application of any sums by whomsoever paid or howsoever
realized to any obligation of any Loan Party, regardless of what obligations of
any Loan Party remain unpaid;
(g) any release of any Loan Party, any other Guarantor, or any
Collateral;
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(h) any invalidity or unenforceability relating to or against any
Loan Party or any other Guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation purporting
to prohibit the payment by any Borrower of the principal of or interest on the
Terms or any other amount payable by any Loan Party under the Loan Documents;
or
(i) any other act or omission to act or delay of any kind by the
Lender or any other Person or any other circumstance whatsoever that might, but
for the provisions of this paragraph, constitute a legal or equitable discharge
of the obligations of any Guarantor under this Section 9.
SECTION 9.3. DISCHARGE ONLY UPON PAYMENT IN FULL: REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. Each Guarantor's obligations under this Section 9 shall remain
in full force and effect until the principal of any interest on the Term Note
and all other amounts payable by and Loan Party under this Agreement and all
other Loan Documents shall have been paid in full. If at any time any payment
of the principal of or interest on the Term Note or any other amount payable by
any Loan Party under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of any
Loan Party or of a Guarantor, or otherwise, each Guarantor's obligations under
this Section 9 with respect to such payment shall be reinstated at such time as
through such payment had become due but had not been made at such time.
SECTION 9.4. SUBROGATION: LIMITATION ON RIGHT OF RECOVERY. No Guarantor
will exercise any rights which it may acquire by way of subrogation by any
payment made hereunder, or otherwise, until the Term Note and all other
Obligations shall have been paid in full. If any amount shall be paid to a
Guarantor on account of such subrogation rights at any time prior to the
payment in full of the Term Note and all other Obligations and amounts payable
by such Guarantor hereunder, such amount shall be held in trust for the benefit
of the Lender and shall forthwith be paid to the Lender or be credited and
applied upon the obligations of the Loan Parties under the Loan Documents,
whether matured or unmatured, in accordance with the terms of this Agreement.
Notwithstanding any other provision hereof, the right to recovery against each
Guarantor under this Section 9 shall not exceed $1.00 less than the amount
which would render such Guarantor's obligations under this Section 9 void or
voidable under applicable law, including without limitation fraudulent
conveyance law.
SECTION 9.5. WAIVERS. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any tune any action be taken by the Lender or
any other Person against the Borrowers, or any of them, another Guarantor or
any other Person.
SECTION 9.6. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by any Loan party under this Agreement or any
other Loan Document is stayed upon the insolvency, bankruptcy or reorganization
of such Loan party, all such amounts otherwise subject to acceleration under
the terms of this Agreement or the other Loan Documents shall nonetheless be
payable jointly and severally by the Guarantors hereunder forthwith on demand
by the Lender.
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10. MISCELLANEOUS.
10.1. WAIVER. Each and every right granted to Lender under this
Agreement, or any of the other Loan Documents, or any other document delivered
hereunder or in connection herewith or allowed it by law or in equity, shall be
cumulative and may be exercised from time to time. No failure on the part of
Lender to exercise, and no delay in exercising, any right shall operate as a
waiver thereof, nor shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. No waiver by Lender of any Default Condition or Event of Default shall
constitute a waiver of any subsequent Default Condition or Event of Default.
10.2. GOVERNING LAW. THIS AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE TERM NOTES AND THE OTHER LOAN DOCUMENTS, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
10.3. SURVIVAL. All representations, warranties and covenants made
herein and in the other Loan Documents shall survive the execution and delivery
of this Agreement and such other Loan Documents. On the Closing Date,
Borrowers and the other Loan Parties shall be deemed to have restated, renewed
and reaffirmed all of such representations, warranties and covenants. The
terms and provisions of this Agreement shall continue in full force and effect,
notwithstanding the payment of the Term Note, until all of the Obligations have
been paid in full and Lender has terminated this Agreement in writing.
10.4. NO ASSIGNMENT BY LOAN PARTIES; LENDER MAY ASSIGN. No assignment
hereof shall be made by any Loan Party without the prior written consent of
Lender. Lender may assign, or sell participations in, its right, title and
interest herein and in the Loan Documents at any time hereafter without notice
to or consent of any Loan Party to any Participant. Upon any assignment by
Lender, the assignee shall be entitled to all the rights, powers, privileges
and remedies of Lender to the extent assigned, and the obligations of the Loan
Parties shall not be subject, as against any such assignee, to any defense,
set-off or counterclaim available to the Loan Parties against Lender and any
such defense, set-off or counterclaim may be asserted only against Lender.
Notwithstanding the foregoing, Lender may not assign any of its interest in the
Loan Documents to any Person which does not have total assets of at least
$1,000,000,000. Lender agrees to provide Borrowers with written notice of
assignment following an assignment of any interest herein or in the Loan
Documents.
10.5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when fully executed shall be an original, and all
of said counterparts taken together shall be deemed to constitute one and the
same agreement.
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10.6. REIMBURSEMENT. In connection with the documentation and funding for
the Term Loan, Borrowers agree to pay or reimburse Lender for all reasonable
costs, fees, and expenses incurred by Lender, including, but not limited to,
the fees and expenses of counsel for the Lender, all costs of recording and
filing of liens and/or mortgages, record searches, title registration,
appraisals, surveys, engineering, and any other fees incidental to
documentation or inspection.
10.7. AFTER DEFAULT. After an Event of Default, Borrowers agrees to
reimburse Lender for its out-of-pocket expenses incurred by Lender, including,
but not limited to, all costs for expenses, including reasonable attorneys'
fees and any other incidental fees or charges related to the Term Loan, and
should all or any portion of the Obligations be collected by or through an
attorney-at-law, Lender shall be entitled to collect from Borrowers reasonable
attorneys' fees and all costs of collection. If any taxes, fees or other costs
shall be payable on account of the execution, issuance, delivery or recording
of any of the Loan Documents, by reason of any existing or hereafter enacted
federal or state statute, Borrowers agree to pay all such taxes, reasonable
fees or other costs, including any applicable interest and penalty, and to
indemnify and hold Lender harmless from and against liability in connection
therewith.
10.8. SUCCESSORS AND ASSIGNS. This Agreement and every Loan Document
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto and thereto. The foregoing shall expressly
include, without limitation, in the case of Lender, any Participant.
10.9. SEVERABILITY. If any provision of this Agreement or of the Loan
Documents or the application thereof to any party thereto or circumstances
shall be invalid or unenforceable to any extent, the remainder of such Loan
Documents and the application of such provisions to any other party thereto or
circumstance shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
NOTICES. All notices, requests and demands to or upon the respective
parties hereto shall be deemed to have been given or made (i) when personally
delivered, (ii) three Business Days following deposit in the mail, registered
or certified mail, postage prepaid, or (iii) one Business Day following
delivery of said notice, request or demand to an overnight courier, addressed
as follows or to such other address as may be designated hereafter in writing
by the respective parties hereto (which, in the case of Lender, may include the
name and address of each Participant) except in cases where it is expressly
provided herein or by applicable law that such notice, demand to request is not
effective until received by the party to whom it is addressed:
Borrowers and Other Loan Parties:
c/o Portfield Investments, Inc.
0000 Xxxxxxxx 0 & 00
Xxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxx, CFO
Facsimile number: 000-000-0000
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Lender:
XXXXXX FINANCIAL, INC.
Commercial Equipment Finance Division
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Regional Credit Manager
Facsimile number: 000-000-0000
with copy to:
XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Legal Department
Facsimile number: 000-000-0000
10.11. ENTIRE AGREEMENT - AMENDMENT. This Agreement, together with the
Term Note and the other Loan Documents, constitute - the entire agreement
between the parties hereto with respect to the subject matter hereof and
thereof and supersedes any agreement or understanding, oral or written,
heretofore made in regard thereto, including any commitment letters or term
sheets issued by Lender to any of the Loan Parties. Neither this Agreement,
the Term Note nor any other Loan Document may be changed, waived, discharged,
modified or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement is sought.
10.12 TIME OF ESSENCE. Time is of the essence in this Agreement, the
Term Note and the other Loan Documents.
10.13. INTERPRETATION. No provision of this Agreement or any Loan
Document shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or dictated such
provision.
10.14. LENDER NOT A JOINT VENTUREr. Neither this Agreement nor any
agreements, instruments, documents or transactions contemplated hereby
(including the Loan Documents) shall in any respect be interpreted, deemed or
construed as making Lender a partner or joint venturer with any Loan Party or
as creating any similar relationship or entity, and each Loan Party agrees that
it will not make any contrary assertion, contention, claim or counterclaim in
any action, suit or other legal proceeding involving Lender and any Loan Party.
10.15. JURISDICTION. EACH LOAN PARTY AGREES THAT ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE TERM
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NOTE OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
ILLINOIS, COUNTY OF XXXX OR THE UNITED STATES OF AMERICA FOR THE NORTHERN
DISTRICT OF ILLINOIS, CHICAGO DIVISION, ALL AS LENDER MAY ELECT. BY EXECUTION
OF THIS AGREEMENT, EACH LOAN PARTY HEREBY SUBMITS TO EACH SUCH JURISDICTION,
HEREBY EXPRESSLY WAIVING WHATEVER RIGHTS MAY CORRESPOND TO IT BY REASON OF ITS
PRESENT OR FUTURE DOMICILE AND CONSENTS TO SERVICE OF PROCESS BY WRITTEN NOTICE
GIVEN IN THE MANNER SPECIFIED FOR THE GIVING OF NOTICES IN SECTION 10.10 ABOVE;
PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST SUCH LOAN PARTY IN ANY
OTHER JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED OR REQUIRED BY
LAW.
10.16. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder or under the Term Note shall be stated to be due on a Saturday,
Sunday or a public holiday under the laws of the State of Illinois, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest
hereunder or under the Term Notes.
10.17. WAIVER OF RIGHTS. AFTER THE OCCURRENCE OF A DEFAULT CONDITION OR
EVENT OF DEFAULT, EACH LOAN PARTY HEREBY WAIVES ANY AND ALL RIGHTS, IF ANY,
WHICH SUCH LOAN PARTY OTHERWISE HAS OR MAY HAVE UNDER AND BY VIRTUE OF ANY
LAW,, WITH RESPECT TO THE RIGHT OF SUCH LOAN PARTY TO NOTICE AND TO A JUDICIAL
OR ADMINISTRATIVE HEARING PRIOR TO SEIZURE OF ANY COLLATERAL BY LENDER. EACH
OF LENDER AND EACH LOAN PARTY WAIVES ANY OBJECTION TO IMPROPER VENUE, FORUM NON
CONVENEENS OR RIGHT TO A TRIAL BY JURY IN ANY CLAIM, CAUSE OF ACTION OR
PROCEEDING, BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE LOAN DOCUMENTS.
THESE WAIVERS ARE KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND FREELY MADE BY SUCH
LOAN PARTY AND LENDER, AND EACH LOAN PARTY ACKNOWLEDGES THAT NEITHER LENDER NOR
ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO
INDUCE THESE WAIVERS OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR
NULLIFY THEIR EFFECT. EACH LOAN PARTY AND LENDER ACKNOWLEDGE THAT THESE
WAIVERS ARE A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH LOAN PARTY AND LENDER HAVE ALREADY RELIED ON THESE WAIVERS IN ENTERING
INTO THIS AGREEMENT AND THE LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE
TO RELY ON THESE WAIVERS IN THEIR RELATED FUTURE DEALINGS. EACH LOAN PARTY AND
LENDER FURTHER WARRANT AND REPRESENT THAT THEY HAVE BEEN REPRESENTED (OR HAVE
HAD THE OPPORTUNITY TO BE REPRESENTED) BY INDEPENDENT LEGAL COUNSEL IN
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THE SIGNING OF THIS AGREEMENT AND THE LOAN DOCUMENTS AND IN THE MAKING OF THESE
WAIVERS AND THAT THEY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.
10.18. CURE OF DEFAULTS BY LENDER. If, hereafter, any Loan Party defaults
in the performance of any duty or obligation to Lender hereunder, Lender may,
at its option, but without obligation, cure such default and any costs, fees
and expenses incurred by Lender in connection therewith including, without
limitation, for the purchase of insurance, the payment of taxes and the removal
or settlement of liens and claims, shall constitute Obligations, be payable on
demand and bear interest until paid at the Default Rate applicable to the Term
Note.
10.19. RECITALS. All recitals contained herein are hereby incorporated
by reference into this Agreement and made part thereof.
10.20. ATTORNEY-IN-FACT. Each Loan Party hereby designates, appoints and
empowers Lender irrevocably, upon the occurrence of an Event of Default and for
so long as such Event of Default is continuing, to act as its attorney-in-
fact, at such Loan Party's cost and expense, to do in the name of such Loan
Party any and all actions which Lender may deem necessary or advisable to carry
out the terms hereof, upon the failure, refusal or inability of such Loan Party
to do so, and the Loan Parties hereby agree to indemnify and hold Lender
harmless from any costs, damages, expenses or liabilities arising against or
incurred by Lender in connection therewith.
10.21. SOLE BENEFIT. The rights and benefits set forth in this Agreement
and in all the other Loan Documents are for the sole and exclusive benefit of
Lender, its Participants (if any) and the Loan Parties and may be relied upon
only by them.
10.22. REMEDIES. AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT, UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY, LENDER MAY ENFORCE ITS RIGHTS UNDER THIS
AGREEMENT AND ALL OTHER LOAN DOCUMENTS WITHOUT RESORT TO PRIOR JUDICIAL PROCESS
OR JUDICIAL HEARING, AND EACH LOAN PARTY EXPRESSLY WAIVES, RENOUNCES AND
KNOWINGLY RELINQUISHES ANY LEGAL RIGHT WHICH MIGHT OTHERWISE REQUIRE LENDER TO
ENFORCE ITS RIGHTS BY JUDICIAL PROCESS. IN SO PROVIDING FOR A NON-JUDICIAL
REMEDY, EACH LOAN PARTY RECOGNIZES AND CONCEDES THAT SUCH A REMEDY IS
CONSISTENT WITH THE USAGE OF THE TRADE, IS RESPONSIVE TO COMMERCIAL NECESSITY
AND IS THE RESULT OF BARGAINING AT ARM'S LENGTH. NOTHING IN THIS AGREEMENT IS
INTENDED TO PREVENT A LOAN PARTY OR LENDER FROM RESORTING TO JUDICIAL PROCESS
AT EITHER PARTY'S OPTION. EACH OF LENDER AND SUCH LOAN PARTY FURTHER AGREES
THAT NEITHER SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL OR SPECIAL DAMAGES
ARISING FROM BREACH OF CONTRACT, TORT OR OTHER WRONG OR CLAIM RELATING TO THE
ESTABLISHMENT, ADMINISTRATION OR COLLECTION OF ANY
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OBLIGATIONS HEREUNDER OR UNDER ANY LOAN DOCUMENT OR ANY ACTION (OR INACTION) BY
ANY PARTY HEREUNDER OR THEREUNDER.
10.23. INDEMNITY. Without limiting any provisions of Sections 5.9 or
10.6, the Loan Parties agree to save, indemnify and hold harmless Lender from
and against any and all debts, liabilities, obligations, damages, costs,
expenses or other claims incurred by Lender as a result of its entry into, and
performance under, this Agreement or any other Loan Documents except for any of
same arising directly from Lender's gross negligence or willful misconduct.
10.24. ACCEPTANCE. THIS AGREEMENT, TOGETHER WITH THE TERM NOTES AND ALL
OTHER LOAN DOCUMENTS, SHALL NOT BECOME EFFECTIVE UNLESS AND UNTIL (1) DULY
EXECUTED BY THE APPLICABLE LOAN PARTIES, (11) DELIVERED TO LENDER FOR
ACCEPTANCE IN CHICAGO, ILLINOIS, (III) ACCEPTED BY LENDER IN CHICAGO, ILLINOIS
AND (IV) DULY EXECUTED AND DELIVERED BY LENDER, AS APPROPRIATE, IN CHICAGO,
ILLINOIS. THE DISBURSEMENT OF THE PROCEEDS OF THE TERM LOAN BY LENDER FROM
CHICAGO, ILLINOIS SHALL BE EVIDENCE THAT THE FOREGOING CONDITIONS HAVE BEEN
FULFILLED.
11. CONDITIONS PRECEDENT.
11.1. CONDITIONS PRECEDENT TO LENDER'S ENTRY INTO THIS AGREEMENT. Unless
waived in writing by Lender at or prior to the execution and delivery of this
Agreement, the conditions set forth below shall constitute express conditions
precedent to any obligation of Lender hereunder:
(a) NO INJUNCTION; ETC. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain,
or prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement, or the consummation of the
transactions contemplated hereby, or which Lender determines would make it
inadvisable to consummate the transactions contemplated hereby.
(b) NO DEFAULT. No Default Condition or Event of Default shall have
occurred and be continuing.
(c) COMPLIANCE WITH LAWS GENERALLY, ENVIRONMENTAL LAW COMPLIANCE.
Lender shall be satisfied in all respects that each Loan Party is in material
compliance with all applicable federal, state and local laws and regulations,
including particularly, but without limitation, all Environmental Laws.
(d) MATERIAL AGREEMENTS. Lender shall have reviewed all Material
Agreements of the Loan Parties, and all of the foregoing shall be satisfactory
to Lender.
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(e) LITIGATION. Lender shall have reviewed all existing litigation,
injunctions and proceedings, if any, pending or threatened against the Loan
Parties and the results of such review shall be satisfactory to Lender.
(f) DOCUMENTATION. Lender shall have received the following
documents of general application to the Term Loan Facility, each to be in form
and substance satisfactory to Lender and its counsel, and duly executed and
delivered by the party or parties thereto:
(1) LOAN DOCUMENTS. This Agreement and all other Loan Documents to be
executed and delivered by the Loan Parties or their Affiliates hereunder and
under the Loan Documents on the Closing Date, to the extent not otherwise
specified below;
(2) INSURANCE CERTIFICATES. Receipt by Lender of a certificate from
the Loan Parties' insurer (or an authorized agent thereof) respecting all
insurance required hereunder or under the other Loan Documents, together with
copies of all insurance policies evidencing such insurance in each case in form
and substance acceptable to Lender;
(3) OPINION OF SUCH LOAN PARTY'S COUNSEL. Receipt by Lender of a
satisfactory opinion of counsel from legal counsel to the Loan Parties;
(4) SECRETARY AND OFFICER'S CERTIFICATES. Receipt by Lender of a
secretary's certificate and an officer's certificate from each Loan Party;
(5) TERM NOTE. A Term Note in a principal amount equal to such
requested Term Loan;
(6) FINANCING STATEMENTS/CERTIFICATES OF TITLe. Copies of all filing
receipts or acknowledgments or certificate of title issued by any Governmental
Authority to evidence any filing or recordation necessary to perfect the
security interests of Lender in all Collateral relating to the Term Loan and
evidence in a form acceptable to Lender that such security interests constitute
value and perfected first priority security interests in Lender's favor;
(7) SURVEY/SITE. A survey acceptable to Lender prepared in
accordance with the standards established by the American Land Title
Association ("ALTA") for the Mortgaged Premises-Headquarters, together with a
surveyor's certificate prepared at the expense of the Loan Parties from a
registered land surveyor and, if requested by Lender, a physical site
inspection report;
(8) MORTGAGES. The Headquarters Mortgage covering the Mortgaged
Premises - Headquarters;
(9) MORTGAGEE'S TITLE INSURANCE POLICY. An ALTA mortgagee's title
insurance policy, issued at the expense of the Loan Parties, by a title insurer
selected by the Loan Parties, but acceptable to Lender insuring Lender's
security interest in the Mortgaged Promises
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Headquarters in such amount containing only such conditions, limitations and
exceptions as shall be acceptable to Lender;
(10) INTERCREDITOR AGREEMENT. Negotiation, execution and delivery of
the Intercreditor Agreement, such Intercreditor Agreement to be in FORM and
substance satisfactory to Lender.
(11) LIST OF EQUIPMENT. Each Loan Party shall have delivered to
Lender a complete list of all Equipment Collateral.
(12) STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, together
with original certificates evidencing the Pledged Shares and blank undated
stock powers for each of such certificates together with such other related
documents and instruments reasonably requested by Lender.
(13) SECURITY AGREEMENT. The Security Agreement, together with such
UCC financing statements, certificates of title for vehicles and other related
documents and instruments reasonably requested by Lender.
(14) OTHER. Documents and Instrumentals. Such other documents
and instruments as Lender may reasonably request.
(g) ACQUISITION. he Acquisition shall have been consummated pursuant
to the Acquisition Agreements in a manner and pursuant to documentation
satisfactory to Lender.
(h) CLOSING FEE. The Loan Parties shall have paid to Lender a
non-refundable closing fee of $35,000 in immediately available funds.
(i) MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
occurred.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and such Loan Party has caused its seal to be affixed hereto, all as
of the day and year first above written.
WESFRAC, INC.
By:
--------------------------------------
Xxxx X. Xxxx
Chief Financial Officer and Secretary
WESTEC DENVER, INC.
By:
--------------------------------------
Xxxx X. Xxxx
Chief Financial Officer and Secretary
XXXXXXX OIL COMPANY, INC.
By:
--------------------------------------
Xxxx X. Xxxx
Chief Financial Officer and Secretary
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GUARANTORS:
-----------
PORTFIELD INVESTMENTS, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx President
WESCOURT GROUP, INC.
By:
--------------------------------------
Xxxx X. Xxxx
Chief Financial Officer and Secretary
WESCOURT DISTRIBUTING, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
XXXXX-XXXX CORP. UTAH, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
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XXXXX-XXXX CORP.
By:
--------------------------------------
Xxxx X. Xxxx
Chief Financial Officer and Secretary
XXXXX-XXXX CORP., MONTROSE, INC.
By:
--------------------------------------
Xxxx X. Xxxx
Chief Financial Officer and Secretary
GRAND MESA TEXACO, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
MONTROSE PROPANE, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
FRUITA RP HOLDING, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
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WESTEC FRUITA, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
LENDER,
------
XXXXXX FINANCIAL, INC.
By:
--------------------------------------
Its:
-------------------------------------
GRAND MESA TEXACO, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
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MONTROSE PROPANE, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
FRUITA RP HOLDINGS INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
WESTEC FRUITA, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxx
President
XXXXXX FINANCIAL, INC.
By:
--------------------------------------
Its:
-------------------------------------
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