LOAN AGREEMENT
This Loan Agreement is dated as of September 29, 1997, and is entered into by
and between Grease Monkey International, Inc., a Colorado corporation
("Borrower"), and CITICORP LEASING, INC., a Delaware corporation ("Lender").
Borrower and Lender hereby agree as follows:
ARTICLE I
AMOUNT AND TERM OF THE LOAN
SECTION 1.01. THE LOANS. Lender agrees, upon compliance by Borrower with
all terms and conditions hereinafter set forth and set forth in the other
Loan Documents (as hereafter defined), to make advances of loan proceeds (the
"Advances") to Borrower from time to time, prior to September 28, 2000, in an
aggregate amount not to exceed the principal amount of $5,000,000.00, the
proceeds of which shall be used for the purpose of terminating Borrower's
current lubricant supply arrangement, and for acquiring, constructing and/or
developing properties to expand Borrower's express lube business locations
and to enter into and comply with the terms and conditions of a Master Supply
Contract with Mobil Oil Corporation.
Advances hereunder shall be evidenced by notes depending upon the timing and
nature of the disbursements to be made by Borrower. The first note of which
shall be dated September 29, 1997, (The "Buyout Note") and notes to be dated
as disbursed thereafter shall be designated notes A through J ("Expansion
Notes"), or any substitution, modification or amendment thereto
(collectively, hereinafter referred to as the "Notes"), the terms of which
are incorporated herein by this reference. One advance of up to $2,620,000
is permitted under the Buyout Note and as many additional advances are
permitted as are required by Borrower, subject to the terms and conditions of
the Agreement to Provide Guaranty and Reimbursement Agreement between
Borrower, Mobil Oil Corporation and Mobil Corporation dated September 29,
1997, (the "Agreement to Provide Guaranty"); PROVIDED HOWEVER, that no more
than one Advance under all the Notes collectively shall be made in any one
month. Each request for an Advance shall be accompanied by Borrower's
written Request for Advance, in the form of Exhibit "A" attached hereto.
SECTION 1.02. INTEREST AND REPAYMENT. The outstanding balance of each of
the Notes shall bear interest at the rate provided in such Note. Interest
and principal shall be payable pursuant to the terms of each of the Notes.
SECTION 1.03. INCREASED CAPITAL. If the Lender determines that
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law) affects or would affect the amount of capital required or expected to
be maintained by the Lender or any corporation controlling the Lender, and
that the amount of such capital is increased by or based upon the existence
of the Lender's commitment to lend hereunder and other commitments of this
type, then, upon demand by the Lender, the Borrower shall immediately pay to
the Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender in the light of such circumstances, to
the extent that the Lender reasonably determines such increase in capital to
be allocable to the existence of the Lender's commitment to lend hereunder.
A certificate as to such amounts submitted to the Borrower by the Lender
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
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SECTION 1.04. PAYMENTS. Borrower shall make all payments hereunder not
later than 11 a.m., Colorado time, on the date when due in U.S. dollars
through the Disbursing Account, as provided and defined in Section 4.01(h)
for the account of Lender. All payments, whenever made, shall be applied
equally across all notes and shall be applied first to accrued and unpaid
interest, expenses or fees and the remainder of any payment shall be applied
to principal and other amounts then due. Borrower agrees to pay to Lender
upon Lender's demand any amount required to compensate Lender for any
additional losses, costs, or expenses Lender may incur as a result of any
late payment, including any delay in payments from the Disbursing Account.
AMOUNTS REPAID OR PREPAID HEREUNDER MAY NOT BE REBORROWED.
ARTICLE II
CONDITIONS OF LENDING
SECTION 2.01. CONDITIONS PRECEDENT TO ANY AND ALL ADVANCES. The
obligation of Lender to make the initial Advance, or any subsequent Advance,
is subject to the condition precedent that Lender shall have received, unless
otherwise waived in writing by Lender, on or before the day of the proposed
Advance all of the following, each in form and substance satisfactory to
Lender:
(a) The Notes;
(b) The Guaranty ("Guaranty") of Mobil Corporation (the "Guarantor"); and
(c) Authorization required under Section 4.01(h) authorizing the Investor
Agent to debit the Disbursing Account for the payments of all amounts due
under the Loan Documents (this Loan Agreement, the Notes, and the Guaranty
and any other instruments executed by any of the parties hereto pursuant to
this Loan Agreement, are all collectively referred to herein as the "Loan
Documents" together with the following items (d) through (g):
(d) Evidence of Borrower's good standing and qualification to do business;
(e) Evidence of Borrower's and any Guarantor's approval of the execution,
delivery and performance of each Loan Document to which it is a party;
(f) As applicable, copies of Borrower's and any Guarantor's articles of
incorporation, by-laws or partnership agreement; and
(g) Such additional documents, agreements and certificates as Lender shall
from time to time reasonably require.
SECTION 2.02. ADDITIONAL CONDITIONS PRECEDENT TO ANY ADVANCE. The
obligation of Lender to make any Advance (including, without limitation, the
initial Advance and any other Advances) shall be subject to the further
conditions precedent that on the date of each proposed Advance all of the
following statements shall be true and requirements satisfied:
(a) The representations, warranties and covenants of this Loan Agreement,
and those contained in the Loan Documents are correct in all material
respects on and as of the date of each proposed Advance as though made on
and as of such date;
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(b) No event has occurred and is continuing, or would result from the
Advance, which constitutes an Event of Default (as hereinafter defined) or
would constitute an Event of Default but for the requirement that notice be
given or time elapse or both;
(c) No material adverse change has occurred and is continuing, in the
business, condition (financial or otherwise), operations, performance or
properties of Borrower or any guarantor on or as of the date of the
Advance; and
(d) Borrower shall submit and be in compliance with the provisions of
Exhibit A.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 3.01. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants as follows:
(a) NO VIOLATION. The execution, delivery and performance by Borrower of
this Loan Agreement and any other loan document to which it is a party do
not violate any provision of any law or regulation, or result in a breach
of or constitute a default under any contract, obligation, indenture or
other instrument to which Borrower is a party or may be bound.
(b) AUTHORIZATION AND VALIDITY. This Loan Agreement, and the other Loan
Documents, and any other contracts or instruments executed by Borrower in
connection with this Loan Agreement, have been duly executed and delivered,
constitute legal, valid and binding agreements of Borrower enforceable in
accordance with their respective terms and are not subject to any dispute,
offset, counterclaim or defense. Except for the prior encumbrances listed
in Schedule A ("Prior Liens"), attached to this Loan Agreement, no approval
or other action of any governmental authority or any third party is
required for the entering into and performance by Borrower of the Loan
Documents.
(c) LITIGATION. Except as set forth in Schedule B, there are no pending
or threatened actions, claims, investigations, suits or proceedings before
or any writs, orders, injunctions or decrees of any governmental authority,
court or administrative agency in excess of $50,000 which may adversely
affect the business, condition (financial or otherwise), operations,
performance, properties or prospects of Borrower, other than those
disclosed by Borrower to Lender in writing.
(d) TAX RETURNS. Borrower has no pending assessments or adjustments of
taxes or similar charges or impositions imposed on Borrower, including,
without limitation, taxes directly imposed on Borrower and taxes that
Borrower is otherwise obligated to collect (including, without limitation,
sales and withholding taxes), except for those which it is contesting in
good faith in a proper proceeding. Borrower has filed all applicable tax
returns required to be filed by it and has paid all taxes which have become
due pursuant to said returns and warrants that such returns properly
reflect the United States and applicable state, municipal and other tax
liability of Borrower for the periods covered.
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(e) NO SUBORDINATION. Except for the Prior Liens, there is no agreement,
indenture, contract or instrument to which Borrower is a party or by which
Borrower may be bound that requires any of Borrower's obligations subject
to this Loan Agreement to be subordinated in right of payment to any other
obligation of Borrower.
(f) OTHER OBLIGATIONS. Borrower is not in default on any obligation or any
other material lease, commitment, contract, instrument or obligation.
(g) TITLE, LIENS AND ENCUMBRANCES. Except for the Prior Liens, Borrower
has, or will have prior to the pledge thereof, good and marketable title to
all real and personal property purporting to secure Borrower's obligations
under this Loan Agreement and the other Loan Documents, and there exists no
lien, security interest claim or encumbrance on such property, except those
created hereby and those expressly consented to by Lender in writing.
(h) SOLVENCY. After giving effect to each Advance: (i) the assets of
Borrower, at fair valuation, exceed its liabilities, (ii) the capital of
Borrower is not unreasonably small to conduct its business, and (iii)
Borrower has not incurred debts, and does not intend to incur debts, beyond
its ability to pay such debts as they mature.
(i) INFORMATION. All factual information (including, without limitation,
the application for the Advances) provided by or on behalf of Borrower to
Lender is true and accurate as of the date on which it is dated or
certified and is not incomplete by omitting to state any material fact
necessary to make such information not misleading. Each financial
statement delivered by Borrower to Lender is complete and correct, fairly
presents the financial condition of Borrower, and was prepared in
accordance with generally accepted accounting principles. Since the date
of each such financial statement, there has been no material adverse change
in the business, condition (financial or otherwise), operations,
performance, properties or prospects of Borrower, nor has Borrower
mortgaged, pledged or granted a security interest or encumbered any of its
assets or properties except as permitted by this Loan Agreement.
(j) COMPLIANCE WITH LAW. Borrower and all express lube locations that
Borrower operates in the Denver, Colorado area (the "Company Operated
Locations") are in compliance in all material respects with all applicable
law (including, but not limited to, environmental law, health, safety,
pension and labor laws). Borrower has no material unfunded pension
liability with respect to any pension or employee benefit plan for
employees of Borrower or any affiliate of Borrower. Except as previously
disclosed to Lender in writing, hazardous substances have not been released
or disposed of on any Company Operated Location in any manner or quantity
that could reasonably be expected to result in material liability of
Borrower or cause any Company Operated Location to be subject to any
restrictions on ownership, occupancy, use or transferability under any
environmental laws and no circumstances exist that may reasonably be
expected to form the basis of an environmental claim against Borrower. For
purposes of this Paragraph, "material" means any claim in excess of
$50,000.
(k) COLLATERAL. Except for the Prior Liens, Borrower is, or will be, the
legal and beneficial owner of any collateral pledged under this Loan
Agreement free and clear of any lien, security interest, option or other
charge or encumbrance and the collateral is not covered by any financing
statement, except for: (i) liens for current taxes not delinquent, and (ii)
the security
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interest granted herein.
(1) LEGAL STATUS. Borrower is a corporation organized and in good
standing under the laws of the State of Colorado, and is qualified or
licensed to do business, and is in good standing as a foreign corporation,
if applicable, in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so
licensed could have a material adverse effect on the business, condition
(financial or otherwise), operations, performance, properties or prospects
of Borrower.
(m) CORPORATE MATTERS. The organization documents of Borrower, including,
without limitation, its charter and bylaws and any resolutions of its
shareholders authorizing Borrower to enter into this Loan Agreement, and
the transactions contemplated thereby have not been amended, modified,
repealed, or otherwise rendered ineffective since the date thereof in any
manner that would have a material adverse effect on the business, condition
(financial or otherwise), operations, performance, properties or prospects
of Borrower.
ARTICLE IV
COVENANTS OF BORROWER
SECTION 4.01. AFFIRMATIVE COVENANTS. So long as any obligation hereunder
or under any Note shall remain unpaid, Borrower will, unless Lender shall
otherwise consent in writing:
(a) PUNCTUAL PAYMENTS. Punctually pay the interest and principal as
expressed in the monthly payment of each of the Notes at the times and
place and in the manner set forth therein; any fees or other liabilities
due hereunder at the times and place in the manner specified herein. In
the event of multiple notes, Borrower shall combine all monthly payments
into one monthly payment. Any shortages in monthly payments so combined
shall be applied equally across all notes and will be applied first to
interest, then to any other fees or amounts due under the notes and finally
to principal.
(b) MAINTAIN EXISTENCE AND BUSINESS AND COMPLY WITH LAWS. Borrower will:
(i) maintain its existence and all necessary licenses, permits, franchises
and qualifications necessary to operate its business (including, without
limitation, all of the foregoing as required under all environmental laws),
(ii) comply with its organizational documents and applicable laws, rules,
regulations, orders and requirements for the maintenance of Borrower's
insurance, licenses, permits and governmental approvals, (iii) maintain
adequate books and accounts in accordance with generally accepted
accounting principles, (iv) pay rents, royalties, taxes and other
liabilities when due, (iv) own or lease sufficient equipment for the
operation of its business, and (v) maintain its business facilities in good
condition to permit its continuing operations.
(c) INSURANCE. Borrower will maintain insurance of the types and in
amounts customarily carried by businesses similar to Borrower's and keep
the collateral insured against such risks, with such limits as are
customary, but in no event less than the balance outstanding under this
Loan Agreement.
(d) DISPOSITION OF COLLATERAL. Borrower will defend the collateral
against all claims and demands at any time claiming the same or any
interest therein. Borrower will immediately
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notify Lender in writing of any change of address from that shown in this
Loan Agreement. Upon demand, Borrower will furnish to Lender such further
information and will execute and deliver to Lender such financing
statements, mortgages and other papers and will do all such acts and things
as Lender may at any time or from time to time reasonably request and/or as
may be necessary or appropriate to comply with or accomplish the covenants
and agreements contained in the Loan Documents, including, without
limitation, establishing and maintaining a valid perfected first priority
security interest in the collateral. Borrower will not permanently remove
any collateral from the locations specified herein without prior written
notice to Lender of the location or locations to which Borrower desires to
remove the collateral. Borrower will keep the collateral in good order and
repair, will not waste or destroy the collateral or any part thereof, and
will not use or permit anyone else to use the collateral in violation of any
applicable law or policy of insurance thereon. Borrower will permit Lender,
upon written approval in advance from Borrower, to examine and inspect the
collateral and Borrower's books and records wherever located at any
reasonable time or times.
(e) INFORMATION. Borrower will furnish Lender with such financial, tax,
accounting and other information with respect to Borrower as Lender may
from time to time reasonably request.
(f) NOTICE TO LENDER. Promptly (but in no event more than five (5) days
after the occurrence of each such event or matter) give notice in writing
to Lender of: (a) the occurrence of any Event of Default, or any condition,
event or act which with the giving of notice or the passage of time or both
would constitute such an Event of Default; (b) any change in the name (or
the organizational structure) of Borrower; (c) any termination or
cancellation of any insurance policy which Borrower is required to
maintain; or (d) any uninsured or partially uninsured loss through
liability or property damage, or through fire, theft or any other cause
affecting Borrower's property in excess of an aggregate of $10,000.00.
(g) FURTHER ASSURANCES. At its own expense upon written direction from
Lender, to do all further acts and execute, acknowledge and deliver all
instruments and assurances reasonably necessary or proper to comply with or
accomplish the covenants and agreements contained in this Agreement.
(h) DISBURSING ACCOUNT. Borrower will maintain: (i) an account
("Disbursing Account") with a commercial bank that shall be a member of the
automated clearing house system (the "ACH System"), and (ii) such
authorizations as may be necessary to enable Lender or its designated
collecting agent to obtain payments due under this Loan Agreement from the
Disbursing Account through the ACH System. Borrower shall not terminate
the Disbursing Account or such authorizations at any time during the term
of this Loan Agreement without having provided 60 days' prior written
notice thereof to Lender, which notice shall specify the institution at
which a substitute Disbursing Account has been established and the account
number of such substitute Disbursing Account, and certifying that all
authorizations necessary to enable Lender or its collection agent to obtain
payments due under this Loan Agreement from such substitute Disbursing
Account through the ACH System have been given and are then in effect. By
not later than the opening of business on each day that any payment shall
be due under this Loan Agreement, Borrower shall cause an amount, in
immediately available funds, equal to such payment to be available for
withdrawal from the Disbursing Account by
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the Lender or its collection agent.
(i) COMPLIANCE CERTIFICATE. Borrower will provide a copy of Exhibit B and
any necessary supporting documents to Lender and Guarantor prior to each
Advance under any note.
SECTION 4.02. NEGATIVE COVENANTS. So long as any obligation hereunder or
under any of the Notes shall remain unpaid, Borrower will not, without the
written consent of Lender:
(a) NO LIENS, ETC.. Borrower will not create nor permit to exist any lien
or security interest in the collateral, except for liens for current taxes
not delinquent, until such time as this Loan Agreement is terminated and
all amounts due under any of the Notes are paid in full.
(b) RESTRICTIONS ON DISPOSITION OF ASSETS. Except as specifically
permitted under the Agreement to Provide Guaranty, Borrower will not: (i)
sell, transfer, lease or otherwise dispose of all or (except in the
ordinary course of business) any material part of its assets related to the
Company Operated Locations or to the express lube locations financed by an
Advance (the "New Locations"), or (ii) enter into any sale, lease back or
bulk transfer transaction involving its properties or assets related to the
Company Operated Locations or New Locations.
(c) RESTRICTIONS ON OPERATING AND FINANCIAL CONDITIONS. Permit, allow,
approve, endorse or otherwise suffer to exist a material adverse change in
the business, condition (financial or otherwise), operations, performance
or properties of the Borrower.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "Event of Default" under this Loan Agreement:
(a) FAILURE TO PAY. Borrower shall fail to pay any monthly principal and
interest payment in full on any Note within ten (10) days of when due, or
shall fail to pay any other sum owing under any of the other Loan Documents
within ten (10) days of notice from Lender;
(b) FAULTY REPRESENTATIONS. Any representation or warranty made by
Borrower or any of its officers under or in connection with any Loan
Document shall prove to have been incorrect, false or misleading in any
material respect when made;
(c) BUSINESS CHANGE. Borrower shall at any time suffer a material adverse
change in its business, condition (financial or otherwise), operations,
performance or properties;
(d) FAILURE TO PERFORM. Borrower shall fail to perform or observe any of
the covenants or agreements contained in any Loan Document on its part to
be performed or observed and any such failure shall remain unremedied for
twenty (20) days after written notice thereof shall have been given to
Borrower by Lender provided that if more than twenty (20) days are required
for remedy, Borrower shall not be in default if it commences remedy within
the twenty (20) day period and diligently pursues its completion;
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(e) FAILURE TO MEET OTHER OBLIGATIONS. Borrower shall fail to pay debts
as they become due and payable or any interest or premium thereon, when due
or any other default under any agreement or instrument relating to any such
debt or any other event, shall occur if the effect of such default or event
is to accelerate, or to permit the acceleration of, the maturity of such
debt the effect of which would have an adverse material effect on Borrower;
(f) INSOLVENCY. Borrower or any Guarantor shall generally not pay its or
their debts, as such debts become due, or shall admit in writing its
inability to pay its debts, generally winding up or composing or
readjusting such debt, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against Borrower
or any of its subsidiaries or any affiliates seeking to adjudicate it as
bankrupt or insolvent, which proceedings are not dismissed within 60 days,
or seeking liquidation, dissolution, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
shall apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of Borrower or
any Guarantor or any one of them or of all or any substantial part of the
property of any one of them, or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or
Borrower or any of its subsidiaries shall take any action to authorize any
of the actions set forth above in this subsection.
(g) MONEY JUDGMENTS. Any judgment or final order for the payment of
money, the payment or non-payment of which would have a material adverse
effect on Borrower, shall be rendered against Borrower and (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order and (ii) there shall be a period of ten (10) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal, continuance of such case or proceeding or otherwise, shall
not be in effect, unless the validity thereof shall be continually
contested in good faith, by appropriate proceedings diligently pursued.
Borrower shall have set aside on its books adequate and properly designated
reserves satisfactory to Lender with respect thereto;
(h) MATERIAL CHANGE IN LOAN DOCUMENT. Any material provision of any Loan
Document shall for any reason cease to be valid and binding on any party
thereto and such invalidity cannot be remedied within ten (10) days;
(i) DEFAULT IN BUSINESS OPERATIONS. Borrower shall default in the
performance of any material obligation or payment owing under any of
Borrower's franchise licenses or franchise agreements which default would
have a material adverse effect on Borrower; or
(j) GUARANTY REVOKED. Any Guarantor shall purport to revoke, terminate or
otherwise not be bound by the Guaranty as to any future Advances or
indebtedness.
SECTION 5.02. REMEDIES. Upon the occurrence of an Event of Default,
referred to in Section 5.01(f), all amounts payable under the Notes shall
become forthwith due and payable and the Lender's obligation to make advances
shall terminate. Lender shall have all the remedies hereinafter provided and
upon the occurrence of any other Event of Default, Lender may, without notice
or demand, exercise any one or more of the following remedies: (i) terminate
this Agreement; (ii) declare
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the Notes and all amounts payable thereunder and under this Agreement to be
forthwith due and payable, whereupon the Notes, and all such amounts shall
become and be forthwith due and payable, without presentment, demand, notice,
protest or further notice of any kind, all of which are hereby expressly
waived by Borrower; (iii) assert payment pursuant to the Guaranty; and (iv)
exercise any other right or remedy which may be available to Lender under any
applicable law or proceed by appropriate court action to enforce the terms
hereunder or recover damages for the breach hereof. The foregoing remedies
are cumulative and in addition to, and not exclusive of, any other remedies
and rights of Lender under applicable law, the Loan Documents or otherwise.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. AMENDMENTS, ETC.. No amendment or waiver of any provision
of the Loan Documents nor consent to any departure by Borrower therefrom,
shall in any event be effective unless the same shall be in writing and
signed by Lender and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 6.02. NOTICES. ETC.. All notices and communications required or
permitted under this Agreement shall be in writing and shall be delivered by
hand, by facsimile transmission, by registered or certified mail, postage
prepaid, or by overnight courier, addressed as follows:
If to Borrower:
Grease Monkey International, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Financial and Legal Departments
If to Lender:
Citicorp Leasing, Inc.
0000 Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn:
------------------------------
All notices and communications shall be effective upon the earlier of actual
receipt or, if delivered by mail, five days after being deposited in the
mail, postage prepaid and addressed as required by this Section 6.02. Either
party may, by written notice so delivered to the other, change the address to
which delivery shall thereafter be made.
SECTION 6.03. NO WAIVER; REMEDIES. No failure on the part of the Lender
to exercise, and no delay in exercising, any right under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right under any Loan Document preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided in the
Loan Documents are cumulative and not exclusive of any remedies provided by
law.
SECTION 6.04. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistently applied, except as otherwise stated herein.
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SECTION 6.05. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on
demand all reasonable fees, costs and expenses with respect to negotiations
with Borrower or other creditors of Borrower arising out of any Event of
Default or circumstances which may give rise to an Event of Default and with
respect to presenting claims or otherwise participation or monitoring any
bankruptcy, insolvency or similar proceeding involving creditors rights
generally and any proceeding ancillary thereto, enforcement of the Loan
Documents upon default or otherwise and the other documents to be delivered
under the Loan Documents. Borrower also agrees that Lender may apply any such
fees, costs and expenses incurred or reasonably anticipated to be incurred
against any Advance hereunder to the extent that the funds in any security
deposit provided by Borrower to Lender are not sufficient to pay such fees,
costs and expenses. In addition, Borrower shall pay any and all stamps,
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of the Loan Documents and the other
documents to be delivered under the Loan Documents, and agrees to save Lender
harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
SECTION 6.06. BINDING EFFECT: SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of Borrower and Lender and
their respective successors and assigns, except that Borrower shall not have
the right to assign its rights or obligations hereunder or any interest
herein without the prior written consent of Lender.
SECTION 6.07. SURVIVAL OF REPRESENTATIONS. All covenants, agreements,
representations and warranties made herein and in the other Loan Documents
shall survive the making of the Advances by Lender to Borrower herein
contemplated and the execution and delivery by the Borrower of the Notes and
shall continue in full force and effect so long as any portion of any Note
remains outstanding and unpaid.
SECTION 6.08. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which when taken together shall constitute one and the same Agreement.
SECTION 6.09. INDEPENDENT PARTIES. Lender and Borrower are not and shall
not be considered as joint venturers, partners or agents of the other for
purposes of fulfilling the obligations of this Agreement and neither shall
have the power to bind or obligate the other. Lender shall not be liable for
any of the debts or other liabilities contracted by or due from Borrower and
Borrower shall hold Lender free and harmless therefrom.
SECTION 6.10. EFFECT OF WAIVERS. The waiver by Lender of any breach by
Borrower of any term, covenant or condition of this Agreement shall not be
deemed a waiver of any subsequent or continuing breach of the same or any
other term, covenant or condition.
SECTION 6.11. CONSTRUCTION. All reference herein in the singular shall
be construed to include the plural where applicable, and the masculine to
include the feminine or neuter gender where applicable, and all covenants,
agreements and obligations herein assumed by the parties shall be deemed to
be joint and several covenants, agreements and obligations. The captions
used in this Agreement are for identification only and are not part of this
Agreement.
SECTION 6.12. SEVERABILITY. In case any one or more of the provisions
contained in this
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Agreement, the Notes or other Loan Documents should be invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.
SECTION 6.13. ENTIRE AGREEMENT. This Agreement supersedes any and all
other oral or written agreements between the parties hereto with respect to
the subject matter hereof and, together with the other Loan Documents
executed concurrently herewith or subsequent hereto, contains all of the
covenants and agreements between the said parties with respect to said
matter. The parties acknowledge that no one nor any one on behalf of them,
has made any representations, inducements, promises or agreements, orally or
otherwise respecting the subject matter of this Agreement or respecting any
other subject matter, which are not embodied herein.
SECTION 6.14. CONFLICTING PROVISIONS. The provisions of this Agreement
are not intended to supersede the provisions of the other Loan Documents but
shall be construed as supplemental thereto. However, in the event of any
conflict or inconsistency between the provisions hereof and any provisions of
the other Loan Documents which cannot be reconciled using an interpretation
most favorable to Lender, it is intended that the provisions of this
Agreement shall control, except with respect to provisions in any Loan
Document required by applicable state law.
SECTION 6.15. WAIVER OF DEFENSES. Borrower agrees that in the event
that any of them is held or found to be a guarantor, surety or the equivalent
that each of them waives any and all right to assert against Lender any claim
or defense based upon an election of remedies by Lender which in any manner
impairs, effects, reduces, releases, destroys and/or extinguishes their
subrogation rights and/or their right to proceed against any Borrower or any
party for reimbursement and/or any other rights they may have against any
other person or security. Borrower waives any right to require Lender to (a)
proceed against any Borrower or other party; (b) proceed against or exhaust
any security held from any Borrower, or; (c) pursue any other remedy in
Lender's power whatsoever. Borrower waives any defense arising by reason of
any disability or other defense of any Borrower or by reason of the cessation
from any cause whatsoever of the liability of any Borrower. Borrower agrees
that nothing shall discharge or satisfy the liability of Borrowers hereunder
except the full payment and performance of all of Borrower's debts and
obligations to Lender with interest. Any and all present and future debts
and obligations of Borrower to each other are hereby waived and postponed in
favor of and subordinated to the full payment and performance of all
indebtedness of Borrower to Lender. All monies or other property of Borrower
at any time in Lender's possession may be held by Lender as security for any
and all obligations of Borrower to Lender no matter how or when arising,
whether absolute or contingent, whether due or to become due, and whether
under this Agreement or otherwise. Borrower waives all presentments, demands
for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor, notices of default, notices of acceptance of this
Agreement and of the existence, creation or incurring of new or additional
indebtedness, notice of any and all favorable and unfavorable information,
whether financial or otherwise, about Borrower, heretofore, now, or hereafter
learned or acquired by Lender and all other notices to which Borrower might
otherwise be entitled, and the right to the marshaling of any assets prior to
any remedy being exercised by Lender hereunder.
SECTION 6.16. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Virginia
without regard to the conflict of laws provisions thereof.
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SECTION 6.17. PARTICIPATIONS. Lender shall have the right at any time
without the consent of Borrower to sell, assign, transfer, negotiate or grant
participations in all or part of the obligations of Borrower outstanding
under this Agreement or the Notes evidencing such obligations to Lender.
Lender may assign, as collateral or otherwise, to one or more banks
(including Federal Reserve Banks) or other entities all or a portion of its
rights (including, without limitation, right to payments of principal and/or
interest on the Notes) and/or obligations under this Agreement without notice
to or consent of Borrower. Borrower hereby acknowledges and agrees that any
such disposition will give rise to a direct obligation of Borrower to the
participant or assignee and the participant or assignee shall for all
purposes (except as herein provided), where relevant, hereof be considered to
be Lender.
SECTION 6.18. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
SECTION 6.19. CONSENT TO DISCLOSURE. Borrower agrees that any
information provided by Borrower pursuant to or in connection with the Loan
Documents and information regarding payments or defaults may be disclosed to
Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized and empowered officers as of the
date first above written.
GREASE MONKEY INTERNATIONAL, INC., ("BORROWER")
a Colorado Corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
Its: President and CEO
Address: 000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
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CITICORP LEASING, INC., ("LENDER")
a Delaware corporation
By:
---------------------------
Its: Vice President
Address: 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
READ, ACKNOWLEDGED AND AGREED TO BY THE GUARANTORS
------------------------ --------------------------
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