TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
TENTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS
TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Tenth Amendment"), made
and
entered into as of the 8th day of August, 2007, by and among SMF Energy
Corporation, a Delaware corporation (hereinafter referred to as "SMF"),
successor by merger to Xxxxxxxxx Mobile Fueling, Inc., a Florida corporation,
SMF Services, Inc., a Delaware corporation (hereinafter referred to as "SSI"),
H
& W Petroleum Company, Inc., a Texas corporation (hereinafter referred to as
"H & W" and, collectively with SMF and SSI, as "Borrower") and Wachovia
Bank, National Association, successor by merger to Congress Financial
Corporation (Florida) (hereinafter referred to as "Lender").
R E C
I TA L
S
A. On
September 26, 2002, Xxxxxxxxx Mobile Fueling, Inc. ("STR") and Lender entered
into a Loan and Security Agreement (the "Loan Agreement"), which, among other
things, established a revolving line of credit (the "Revolving Loans") by Lender
in favor of STR.
B. STR
and
Lender executed a Consent and First Amendment to Loan and Security Agreement
dated as of March 31, 2003 (the "First Amendment"), which, among other things,
consented to certain subordinated debt of STR and modified certain defined
terms
in the Loan Agreement.
C. STR
and
Lender executed a Second Amendment to Loan and Security Agreement dated as
of
August 29, 2003 (the "Second Amendment"), which, among other things, (1)
permitted STR to incur certain additional secured Indebtedness, and (2) released
Lender's security interest in the patents (including the related trade names
utilized in such patents) constituting a portion of the Collateral, subject
to
the terms and conditions stated therein.
D. STR
and
Lender executed a Third Amendment to Loan and Security Agreement dated as of
August 30, 2003 (the "Third Amendment"), which, among other things, modified
certain terms of the Loan Agreement in order to reflect that the amount of
the
additional secured Indebtedness contemplated by the Second Amendment exceeded
the actual amount thereof.
E. STR,
SSI
and Lender executed a Fourth Amendment to Loan and Security Agreement dated
as
of February 18, 2005 (the "Fourth Amendment"), which, among other things, added
SSI as an additional borrower under the Revolving Loans, extended the term
of
the Loan Agreement, and modified the applicable Interest Rate, the unused line
fee and certain covenants of the Loan Agreement.
F. STR,
SSI,
H & W and Lender executed a Fifth Amendment to Loan and Security Agreement
dated as of October 1, 2005 (the "Fifth Amendment"), which, among other things,
added H & W as an additional borrower under the Revolving Loans, extended
the term of the Loan Agreement, increased the Maximum Credit amount for the
Revolving Loans, added certain inventory to the Borrowing Base, decreased the
applicable Interest Rate, and modified certain covenants and other terms of
the
Loan Agreement.
G. STR,
SSI,
H & W and Lender executed a Sixth Amendment to Loan and Security Agreement
effective as of March 31, 2006 (the "Sixth Amendment"), which, among other
things, (1) added (a) an Interest Rate option based on the London interbank
offered rate and (b) certain leased Vehicles and Equipment to the Excluded
Assets from the Collateral, and (2) amended the capital expenditures covenant
of
the Loan Agreement.
H. STR,
SSI,
H & W and Lender executed a Seventh Amendment to Loan and Security Agreement
dated as of September 26, 2006 (the "Seventh Amendment"), which, among other
things, amended Sections 1.4 and 9.10 of the Loan Agreement limiting Borrower's
loans and advances to other persons and increasing the amount of the Maximum
Credit for Revolving Loans.
I. On
February 14, 2007, STR merged with and into SMF, and, contemporaneously
therewith, Borrower and Lender executed an Assumption Agreement and Eighth
Amendment to Loan and Security Agreement, dated as of February 14, 2007 (the
"Eighth Amendment"), pursuant to which, among other things, SMF assumed all
of
STR's obligations as a Borrower under the Loan Agreement and the other Financing
Agreements (as defined in the Loan Agreement) to which STR is a
party.
J. Borrower
and Lender executed a Ninth Amendment to Loan and Security Agreement dated
as of
February 15, 2007 (the "Ninth Amendment"), which, among other things, extended
the maturity date of the Loan Agreement from September 25, 2007, to June 30,
2008, and modified certain financial covenants.
K. Borrower
and Lender desire to amend the Loan Agreement to, among other things, (1) permit
SMF to refinance the August 2003 Indebtedness, the January 2005 Indebtedness
and
the September 2005 Indebtedness (as such terms are defined in the Loan
Agreement) (collectively, the "Prior Indebtedness"), and (2) modify certain
financial covenants, and Lender is agreeable to same, subject to the terms
and
conditions hereinafter set forth.
NOW
THEREFORE, in consideration of the mutual covenants of the parties hereto,
and
for other good and valuable consideration, it is agreed as follows:
1. The
statements in the foregoing Recitals are true and correct and are incorporated
herein as if set forth in full.
2. Unless
otherwise defined herein, all terms used herein shall have the definitions
specified in the Loan Agreement, as modified by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment,
the
Sixth Amendment, the Seventh Amendment, the Eighth Amendment and the Ninth
Amendment (collectively, the "Prior Amendments"); all references hereinafter
made to the Loan Agreement shall include the modifications thereto effectuated
pursuant to the Prior Amendments.
3. Borrower
confirms and acknowledges that the principal balance of Revolving Loans
outstanding under the Loan Agreement as of the close of business on July
26,
2007,
was
$14,064,511.46, which amount, together with all accrued interest, fees and
other
charges under the Loan Agreement are due and payable without any defense,
set-off or counterclaim (and to the
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extent
there exists any such defense, offset or counterclaim on the date hereof, the
same is hereby waived by Borrower).
4. The
Loan
Agreement is hereby modified as follows (all references to Sections and
Subsections being the applicable Sections and Subsections of the Loan
Agreement):
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(a)
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Section
1.69 of the Loan Agreement is amended and restated in its entirety
to read
as follows:
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1.69 "Excluded
Assets" shall mean (a) all Vehicles owned by Borrower, including but not limited
to those listed on Schedule
A,
including future additions, parts, accessories, attachments, substitutions,
repairs, related intangibles and improvements and replacements to or of any
Vehicle; (b) all tanks, pumps, pans, totes, hoses, reels, gauges, filling
machines, compressors, dollies, piston mounts, jug molds, flow meters, steam
cleaners, fuel delivery control systems, filtration units, blending units,
hydraulic lifts, hurricane generators, hurricane equipment, and any other
similar Equipment (collectively, "Field Equipment"), owned by SSI, including
future additions, parts, accessories, attachments, substitutions, repairs,
related intangibles and improvements and replacements; (c) all Field Equipment
owned by H & W, including future additions, parts, accessories, attachments,
substitutions, repairs, related intangibles and improvements and replacements;
(d) certain Field Equipment listed on Schedule
A
and
shown on Schedule
A
as owned
by SMF, including any future additions, parts, accessories, attachments,
substitutions, repairs, related intangibles and improvements and replacements
to
such Field Equipment; (e) certain other Equipment (other than Field Equipment)
listed on Schedule
A
and
shown on Schedule
A
as owned
by SMF, including any parts, repairs or improvements thereto, but excluding
any
future additions, accessories, attachments, substitutions, related intangibles
or replacements to such other Equipment; (f) all of SMF's right, title and
interest in and to certain patents listed on Schedule
A
and
shown on Schedule
A
as owned
by SMF; (g) certain Equipment (other than Field Equipment) listed on
Schedule
A
and
shown on Schedule
A
as owned
by SSI or H & W, including future additions, parts, accessories,
attachments, substitutions, repairs, improvements and replacements thereof,
(h)
any proceeds from the sale, assignment, or other transfer of any of the assets
listed in the preceding subclauses (a), (b), (c), (d), (e), (f) or (g)
including, without limitation, proceeds of insurance; and (i) approximately
$1,141,000 in cash proceeds from prior sales of Vehicles and Field Equipment
being held in an interest bearing account as of the date of the Tenth Amendment
to this Agreement, by the trustee for certain holders of subordinated
Indebtedness, in order to be applied to the purchase of replacement Field
Equipment and Vehicles by Borrower, that will also secure the August 2007
Indebtedness. For the avoidance of doubt, the "Excluded Assets" shall not
include any Accounts of any
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Borrower
or any other right to payment arising out of or derived from the sale of
Inventory or the rendition of services by any Borrower.
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(b)
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Section
9.8(g) of the Loan Agreement, reading as follows, is added immediately
after Section 9.9(f):
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and
(g)
liens on the Excluded Assets securing the August 2007 Indebtedness.
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(c)
|
Section
9.9(g) of the Loan Agreement is amended and restated in its entirety
to
read as follows:
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(i)
Indebtedness of SMF evidenced by the 11½% Senior Secured Convertible Promissory
Notes due December 31, 2009, dated as of August 8, 2007, in the aggregate
principal amount of $10,609,225 (the "August 2007 Indebtedness") and secured
by
a security interest in the Excluded Assets, pursuant to documentation on terms
satisfactory to Lender (Lender hereby acknowledging that the terms contained
in
draft documentation delivered to Lender on July 12, 2007 was satisfactory to
Lender) and provided that the August 2007 Indebtedness is subject at all times
to the terms of that certain Subordination Agreement dated as of July 13, 2007,
among 1041 Partners, L.P. (and such other loan holders as may join as a party
to
such subordination agreement as contemplated therein), Borrower and Lender,
a
copy of which subordination agreement is attached as Exhibit
A
to the
Tenth Amendment to this Agreement.
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(d)
|
Sections
9.9(h) and 9.9(i) of the Loan Agreement are deleted in their entireties
from the Loan Agreement.
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(e)
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Section
9.22 of the Loan Agreement is amended and restated in its entirety
to read
as follows:
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9.22 Excess
Availability.
Borrower shall maintain at all times Excess Availability as determined by Lender
in an amount not less than $750,000.
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(f)
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Schedule
A
to
the Loan Agreement is deleted in its entirety and replaced with
Schedule
A
attached hereto.
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5. Each
and
every reference to the Loan Agreement in the other Financing Agreements shall
be
deemed to refer to the Loan Agreement, as modified by this Tenth
Amendment.
6. The
effectiveness of the amendments contained in Section 4 and Section 5 of this
Tenth Amendment is subject to satisfactory compliance with conditions precedent
requiring that Lender shall have received:
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| (a) |
copies
of the final executed documents evidencing or securing the 11½% Senior
Secured Convertible Notes due December 31, 2009, made by SMF in favor
of
certain noteholders with American National Bank as the indenture
trustee
(the "2007 Offering"), all in form and substance satisfactory to
Lender;
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(b)
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all
requisite corporate action and proceedings in connection with this
Tenth
Amendment and the other Financing Agreements shall be satisfactory
in form
and substance to Lender, and Lender shall have received all information
and copies of all documents, including records of requisite corporate
action and proceedings which Lender or its counsel may have requested
in
connection therewith, such documents, where requested to be certified
by
appropriate corporate officers or governmental authorities;
and
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(c)
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such
additional documents, instruments and agreements as are required
hereunder
as well as those which Lender or its counsel may reasonably
request.
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7. Notwithstanding
any other provision of the Loan Agreement or the Prior Amendments, Lender agrees
that the proceeds of the 2007 Offering shall be used first by Borrower to repay
the Prior Indebtedness, including any unpaid principal, pre-payment penalties
and accrued interest thereon.
8. Lender
hereby waives any right under Article III of the Indenture for the January
2005
Indebtedness and under Article III of the Indenture for the September 2005
Indebtedness to require the full forty five (45) days notice of the redemption
of the January 2005 Indebtedness and the September 2005 Indebtedness,
respectively, with the proceeds of the 2007 Offering.
9. Borrower
represents and warrants to Lender that, except as has been otherwise disclosed
to Lender in writing, the representations and warranties contained in the Loan
Agreement and all related loan documentation are true and correct on and as
of
the date hereof (with the same force and effect as if made on and as of the
date
hereof, other than representations and warranties made as of a specific date
which shall be deemed made as of such date) and with respect to this Tenth
Amendment and the related documentation referenced herein, and that no Default
or Event of Default shall have occurred and be continuing. Specifically, (a)
SMF
represents and warrants that its Certificate of Incorporation and Bylaws,
certified on February 14, 2007, were not amended on or subsequent to their
aforesaid certification date, (b) SSI represents and warrants that its
Certificate of Incorporation and Bylaws, certified on February 18, 2005,
were not amended on or subsequent to their aforesaid certification date, and
(c)
H & W represents and warrants that its Articles of Incorporation and Bylaws,
certified on October 1, 2005, were not amended on nor subsequent to their
aforesaid certification date.
10. Borrower
acknowledges and confirms that all Collateral furnished in connection with
the
Loan Agreement, except the Excluded Assets, continues to secure the Obligations
and indebtedness thereunder, and the security interests and liens granted by
the
Borrower in the Collateral other than the Excluded Assets to Lender to secure
the Obligations are duly perfected, first priority security interests and
liens.
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11. Borrower
shall pay all out-of-pocket expenses incurred by Lender in connection with
the
preparation for and closing of the transaction contemplated under this Tenth
Amendment, including, without limitation, the reasonable fees and expenses
of
special counsel for Lender. In addition, Borrower shall pay any and all taxes
(together with interest and penalties, if any, applicable thereto) and fees,
including, without limitation, documentary stamp taxes, now or hereafter
required in connection with the execution and delivery of the Loan Agreement,
as
hereby amended, and all related documents, instruments and
agreements.
12. Except
as
expressly modified herein, all terms and provisions of the Loan Agreement,
and
all other documents, instruments and agreements executed and/or delivered in
connection with the Loan Agreement, shall remain unchanged and in full force
and
effect; no consent of Lender hereunder shall operate as a waiver or continuing
consent with respect to any instance or event other than those specified herein.
Neither this Tenth Amendment nor
any
earlier waiver or amendment of the Loan Agreement will constitute a novation
or
have the effect of discharging any liability or obligation evidenced by the
Loan
Agreement or any other Financing Agreements. This Tenth Amendment shall not
be
deemed to prejudice any rights or remedies which Lender may now have or may
have
in the future under or in connection with the Loan Agreement or the Financing
Agreements or any of the instruments or agreements referred to therein, as
the
same may be amended, restated or otherwise modified. This Tenth Amendment is
part of the Loan Agreement and constitutes a Financing Agreement
thereunder.
13. All
covenants, agreements, representations and warranties contained herein shall
be
binding upon and inure to the benefit of the parties hereto, their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent
of
Lender.
14. This
Tenth Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which, when so executed, shall
be deemed to be an original and shall be binding upon all parties, their
successors and assigns, and all of which taken together shall constitute one
and
the same agreement. Any manually-executed signature page to this Tenth Amendment
delivered by a party by facsimile or other electronic transmission shall be
deemed to be an original signature hereto.
15. Borrower
agrees to take such further actions as Lender shall reasonably request from
time
to time in connection herewith to evidence or give effect to the amendments
set
forth herein or any of the transactions contemplated hereby.
16. This
Tenth Amendment shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Florida, without giving effect to
its
conflict of law principles.
17. BORROWER
HEREBY RELEASES AND FOREVER DISCHARGES LENDER AND EACH AND EVERY ONE OF ITS
DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, LEGAL COUNSEL, AGENTS, PARENTS,
SUBSIDIARIES AND AFFILIATES, AND PERSONS EMPLOYED OR ENGAGED BY THEM, WHETHER
PAST OR PRESENT (HEREINAFTER COLLECTIVELY REFERRED TO AS THE "LENDER
RELEASEES"), OF AND FROM ALL ACTIONS, AGREEMENTS, DAMAGES,
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JUDGMENTS,
CLAIMS, COUNTERCLAIMS, AND DEMANDS WHATSOEVER, LIQUIDATED OR UNLIQUIDATED,
CONTINGENT OR FIXED, DETERMINED OR UNDETERMINED, AT LAW OR IN EQUITY, WHICH
BORROWER, HAD, NOW HAS, OR MAY HAVE AGAINST THE LENDER RELEASEES, OR ANY OF
THEM, FOR, UPON OR BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER TO THE
DATE OF THIS TENTH AMENDMENT, WHETHER ARISING OUT OF, RELATED TO OR PERTAINING
TO THE OBLIGATIONS, THE FINANCING AGREEMENTS, OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, THE NEGOTIATION, CLOSING, ADMINISTRATION, AND FUNDING OF THE
OBLIGATIONS OR THE FINANCING AGREEMENTS. BORROWER ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS TENTH AMENDMENT
AND THIS PROVISION SHALL SURVIVE PAYMENT IN FULL OF ALL OBLIGATIONS AND
TERMINATION OF ALL FINANCING AGREEMENTS.
18. LENDER
AND BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS TENTH AMENDMENT
OR
THE LOAN AGREEMENT AND ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS
A
MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS TENTH AMENDMENT.
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begin on following page.]
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IN
WITNESS WHEREOF, the parties hereto have executed this Tenth Amendment the
day
and year first above written.
SMF
ENERGY CORPORATION, a Delaware
corporation,
successor by merger to XXXXXXXXX
MOBILE
FUELING, INC., a Florida corporation
By:
/s/ Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
President and Chief Executive Officer
SMF
SERVICES, INC., a Delaware corporation
By:
/s/ Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
President and Chief Executive Officer
H
&
W
PETROLEUM COMPANY, INC., a Texas corporation
By:
/s/ Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
Chief Executive Officer
LENDER:
WACHOVIA
BANK, NATIONAL
ASSOCIATION,
successor by merger to
CONGRESS
FINANCIAL CORPORATION
(FLORIDA)
By:
/s/ Xxx Xxxxxxxxx
Name:
Xxx
Xxxxxxxxx
Title:
Director
JOINDER
The
undersigned: (1) acknowledges and confirms that Lender's loans, advances and
credit to Borrower have been, are and will continue to be of direct economic
benefit to the undersigned, (2) acknowledges that it has previously waived
any
right to consent to the foregoing or any future amendment to the Agreement
but,
nevertheless, consents to all terms and provisions of the foregoing Tenth
Amendment which are applicable to it, and agrees to be bound by and comply
with
such terms and provisions, and (3) acknowledges and confirms that its guarantee
in favor of Lender executed in connection with the Agreement is valid and
binding and remains in full force and effect in accordance with its terms
(without defense, setoff or counterclaim against enforcement thereof), which
include, without limitation, its guarantee in connection with the Agreement,
as
modified by the Tenth Amendment.
GUARANTOR:
XXXXXXXXX
REALTY, INC., a Florida corporation
By:
/s/ Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
President and Chief Executive Officer
