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Exhibit 10.16
WLD ASSIGNMENT AND SECURITY AGREEMENT
THIS WLD ASSIGNMENT AND SECURITY AGREEMENT ("WLD Security
Agreement") is made this March 12, 1997, by and among The WLD Trust, an Ohio
Testamentary Trust ("WLD Trust"), Portfield Investments, Inc., a corporation
formed under the laws of the state of Colorado ("Portfield"), Wescourt Group,
Inc., a corporation formed under the laws of the state Delaware ("Wescourt"),
Wescourt Distributing, Inc., a corporation formed under the laws of the state
of Delaware ("Wescourt Distributing"), Wesfrac, Inc., a corporation formed
under the laws of the state of Colorado ("Wesfrac"), Westec Denver, Inc., a
corporation formed under the laws of the state of Colorado ("Westec Denver"),
Xxxxx-Xxxx Corp. Utah, a corporation formed under the laws of the state of
Colorado ("Xxxxx-Xxxx/Utah"), Xxxxx-Xxxx Corp., a corporation formed under the
laws of the state of Colorado ("Xxxxx-Xxxx Corp."), Xxxxx-Xxxx Corp. Montrose,
Inc., a corporation formed under the laws of the state of Colorado
("Montrose"), Westec Fruita, Inc., a corporation formed under the laws of the
state of Delaware ("Westec Fruita"), Montrose Propane, Inc., a corporation
formed under the laws of the state of Colorado ("Montrose Propane"), Grand Mesa
Texaco, Inc., a corporation formed under the laws of the state of Colorado
("Grand Mesa Texaco"), Fruita RP Holding, Inc., a corporation formed under the
laws of the state of Delaware ("Fruita RP Holding"), and Xxxxx-Xxxx Convenience
Stores, Inc., a corporation formed under the laws of the state of Colorado
("Xxxxx-Xxxx/Colorado").
RECITALS
A. Pursuant to that certain Demand Note made by Portfield to Xxxxxx
Guaranty Trust Company of New York ("Xxxxxx") of even date herewith (the
"Xxxxxx Note"), Xxxxxx will loan Portfield up to four million five hundred
thousand dollars ($4,500,000). As a condition precedent to funding the Xxxxxx
Note, Xxxxxx required and WLD Trust agreed to guaranty the full and prompt
payment by Portfield of all amounts due under the Xxxxxx Note pursuant to that
certain guarantee of even date herewith (the "WLD Guaranty").
X. Xxxxxxxxx owns, directly or indirectly, all of the issued and
outstanding shares of stock of each of Wescourt, Wescourt Distributing,
Wesfrac, Westec Denver, Xxxxx-Xxxx/Utah, Xxxxx-Xxxx Corp., Xxxxx-Xxxx Corp.,
Montrose, Westec Fruita, Montrose Propane, Grand Mesa Texaco, Fruita RP
Holding, and Xxxxx-Xxxx/Colorado. For purposes of this WLD Security Agreement,
the parties shall sometimes refer to Portfield's related entities,
collectively, as the "Related Parties" and, individually, as a "Related Party."
C. From the proceeds of the Xxxxxx Note and pursuant to that certain
Secured Promissory Note of even date herewith (the "Xxxxx-Xxxx/Colorado Note"),
Portfield loaned PetroMark/Colorado two million five hundred thousand dollars
($2,500,000) for Xxxxx-Xxxx/Colorado to use to acquire certain properties from
Diamond Shamrock Refining and Marketing Company, a corporation formed under the
laws of the state of Delaware ("Diamond Shamrock"), pursuant to that certain
Purchase and Branding Agreement dated October 29, 1996, as amended. The Note is
subordinate to all of the rights of both Xxxxxx Financial, Inc., a corporation
formed under the laws of Delaware ("Xxxxxx Financial"), pursuant to the "Xxxxxx
Loan Agreement" (as hereinafter defined), and National Canada Finance Corp., a
Delaware
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corporation ("NCFC"), pursuant to the "NCFC Security Agreements" (as
hereinafter defined). To secure its performance of all of its obligations under
the Xxxxx-Xxxx/Colorado Note, Xxxxx-Xxxx/Colorado pledged to Portfield certain
of its assets as more particularly described in that certain
Xxxxx-Xxxx/Colorado Security Agreement (the "PetroMark/Colorado Security
Agreement"), subject to the prior senior liens of Xxxxxx Financial, pursuant to
that certain Security Agreement of even date herewith and certain deeds of
trust recorded against fee simple and leasehold interests in real property of
Xxxxx-Xxxx/Colorado. Further, Portfield requires, and Wescourt agrees, to
guaranty the full and prompt performance of Xxxxx-Xxxx/Colorado under the
Xxxxx-Xxxx/Colorado Note pursuant to that certain Wescourt Guaranty of even
date herewith (the "Xxxxxxxx Xxxxx-Xxxx Guaranty").
D. From the proceeds of the Xxxxxx Note and pursuant to a form of
secured promissory note (the "Xxxxxxx Note") in substantially the same form as
the Xxxxx-Xxxx/Colorado Note, Portfield may loan Wescourt or its assignee up to
two million dollars ($2,000,000) for Wescourt's or its assignee's use in its
acquisition (the "Xxxxxxx Acquisition") of all of the shares (the "Xxxxxxx
Shares") of stock of Xxxxxxx Oil Company, Inc., a corporation formed under the
laws of the state of Texas ("Xxxxxxx"). To secure its performance of all of its
obligations under the Xxxxxxx Note, Wescourt shall cause Xxxxxxx or its
assignee, after the closing of the purchase of the Xxxxxxx Shares, to pledge
all of its assets to Portfield pursuant to a form of security agreement (the
"Xxxxxxx Security Agreement") in substantially the same form as the Xxxxx-Xxxx
Security Agreement.
E. WLD Trust requires, as a condition precedent to Portfield's draw
against the Xxxxxx Note to fund the Xxxxx-Xxxx/Colorado Note and the Xxxxxxx
Note, Portfield to indemnify and hold WLD Trust harmless under the WLD
Guarantee pursuant to that certain Indemnification Agreement (the "Portfield
Indemnification") of even date herewith. To secure Portfield's obligations
under the Portfield Indemnification, WLD Trust requires and Portfield and the
Related Parties (i) hereby grant a security interest to WLD Trust in (A) the
Xxxxx-Xxxx/Colorado Note and all security therefor, and (B) the Xxxxxxx Note
and all security therefor; and, (ii) agree to grant, subject in each case to
any prior liens and security interests as set forth in this WLD Security
Agreement, a security interest in all of Portfield's and the Related Parties'
Equipment, including the "Fractionator" (as hereinafter defined), if and when
Portfield and the Related Parties have fully and irrevocably satisfied to
NCFC's satisfaction all of Portfields' and the Related Parties' obligations
incurred on a term loan basis from NCFC, and NCFC has released its prior
security interest in Portfield's and the Related Parties' Equipment.
F. WLD Trust requires, as a condition precedent to Portfield's draw
against the Xxxxxx Note to fund the Xxxxx-Xxxx/Colorado Note, Wescourt to
indemnify and hold WLD Trust harmless under the WLD Guarantee pursuant to that
certain Indemnification Agreement (the "Wescourt Indemnification") of even date
herewith. To secure Wescourt's obligations under the Wescourt Indemnification,
WLD requires and Portfield, Wescourt and the other Related Parties hereby
grant, subject in each case to any prior liens and security interests as set
forth in this WLD Security Agreement, a security interest to WLD in all of
Portfield's and the Related Parties' Equipment, if and when Portfield and the
Related Parties have fully and irrevocably satisfied to NCFC's satisfaction all
of Portfields' and the Related Parties' obligations incurred on a
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term loan basis from NCFC, and NCFC has released its prior security interest in
Portfield's and the Related Parties' Equipment.
G. Pursuant to that certain Term Loan and Security Agreement of even
date herewith (the "Xxxxxx Loan Agreement"), Xxxxxx Financial loaned
Xxxxx-Xxxx/Colorado eight million dollars ($8,000,000) for Xxxxx-Xxxx/Colorado
to acquire certain properties from Diamond Shamrock. To secure its performance
under the Term Note it issued to Xxxxxx Financial pursuant to the Xxxxxx Loan
Agreement, Xxxxx-Xxxx/Colorado granted Xxxxxx Financial a first priority
security interest in those parcels of real property which it owns and in all of
Xxxxx-Xxxx/Colorado's equipment and its leasehold interests in those parcels of
real property which it leases.
H. As additional security for Xxxxx-Xxxx/Colorado's performance under
the Xxxxxx Loan Agreement, Xxxxxx Financial required and Wesfrac granted,
pursuant to that certain Security Agreement of even date herewith (the
"Fractionator Security Agreement"), Xxxxxx Financial a second priority security
interest in that certain piece of equipment, known as a "Fractionator" (as more
particularly defined in the Intercreditor Agreement described below), which
security interest is junior only to the prior security interest of NCFC.
Further, as additional security for Portfield's performance under the Portfield
Indemnification, WLD Trust requires and Wesfrac agrees to grant, to WLD Trust a
second priority security interest in the Fractionator pursuant to the terms and
conditions of this WLD Security Agreement and subject to the "Intercreditor
Agreement" (as hereinafter defined) if and when Portfield and the Related
Parties have fully and irrevocably satisfied to NCFC's satisfaction all of
Portfields' and the Related Parties' obligations incurred on a term loan basis
from NCFC, and NCFC has released its prior security interest in the
Fractionator.
I. NCFC has, pursuant to various security and pledge agreements
(collectively, the "NCFC Security Agreements"), a security interest in certain
of the Related Parties' assets, including without limitation, a senior security
interest in the Fractionator.
J. Pursuant to that certain Intercreditor and Subordination Agreement
of even date herewith (the "Intercreditor Agreement"), Xxxxxx Financial, NCFC
and WLD Trust and the other parties named therein have set forth their
respective priorities, rights and obligations with respect to the various
collateral, including the Fractionator, for which Portfield and the Related
Entities granted security interests.
NOW, THEREFORE, in consideration of the foregoing, and the promises
set forth herein, the parties agree as follows:
1. RECITALS AND DEFINITIONS.
The recitals hereto are made a part hereof by this reference.
Capitalized terms that are not defined elsewhere herein shall have the meanings
set forth in the Uniform Commercial Code in force in the state of Colorado at
the date of execution of this Security Agreement (the "Colorado Uniform
Commercial Code").
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2. COLLATERAL.
2.1 Assignments and Grant of Security Interests.
To secure the prompt, full and faithful performance
by Portfield of all of the provisions to be kept, observed or performed by
Portfield under the Portfield Indemnification, by Wescourt under the Wescourt
Indemnification and by Portfield and the Related Parties under this WLD
Security Agreement (collectively, the "Secured Liabilities"), Portfield and the
Related Parties, as appropriate, hereby assign all of their respective rights,
title and interests in, or grants to WLD Trust the following security interests
in, and collateral assignment of, the following assets (collectively, the
"Collateral"):
(a) Xxxxx-Xxxx/Colorado Note and Security
Agreement and Wescourt Guaranty.
(i) Assignment.
Portfield irrevocably and
unconditionally grants, transfers and assigns to WLD Trust all of Portfield's
present and future right, title and interest in and to the PetroMark/Colorado
Note, the Xxxxx-Xxxx/Colorado Security Agreement, including any and all deeds
of trust made by Xxxxx-Xxxx/Colorado in favor of Portfield to secure the
Xxxxx-Xxxx/Colorado Note, and the Xxxxxxxx Xxxxx-Xxxx Guaranty (collectively,
the "Xxxxx-Xxxx Loan Documents"), together with all advance payments and other
amounts paid or payable to or deposited with Portfield thereunder, and
guaranties for either of the Xxxxx-Xxxx Loan Documents, and all other rights
and interests of Portfield under or in respect of the Xxxxx-Xxxx Loan
Documents.
(ii) Collection of Payments Due.
Notwithstanding the assignment set
forth in Section 2.1(a)(i), so long as no "Event of Default" (as hereinafter
defined) has occurred and is continuing, Portfield shall have the right (a) to
collect, receive, hold and dispose of amounts payable under the Xxxxx-Xxxx Loan
Documents and to apply the same to the payment of amounts due from time to time
from Portfield under the Xxxxxx Note subject to any restrictions imposed on
such application pursuant to the terms and provisions of the Intercreditor
Agreement, and (b) subject to the requirements of Section 2.1(a)(iii) below, to
enforce, supplement, modify, amend, renew, extend, terminate and otherwise
administer the Xxxxx-Xxxx Loan Documents and deal with Xxxxx-Xxxx Loan
Documents. During the continuance of any Event of Default, only WLD Trust shall
have the right to take the actions described in the preceding sentence, subject
to any restriction imposed on such action pursuant to the terms and conditions
of the Intercreditor Agreement, and WLD Trust may notify Xxxxx-Xxxx/Colorado to
make all such payments directly to WLD Trust or as WLD Trust may direct. All
payments under the PetroMark/Colorado Loan Documents received by Portfield
during the existence of any Event of Default shall be held by Portfield in
trust for WLD Trust and not commingled with any other funds of Portfield, and
Portfield shall apply such funds only as directed by WLD Trust.
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(iii) Maintenance and Enforcement of
Xxxxx-Xxxx Loan Documents.
Unless WLD Trust otherwise consents
in writing, Portfield shall: (a) take all action reasonably necessary or
appropriate to maintain and enforce its rights and interests under the
Xxxxx-Xxxx Loan Documents; (b) comply in all material respects with its
obligations under the Xxxxx-Xxxx Loan Documents; (c) not transfer, encumber or
further assign any of Portfield's Interest in the Xxxxx-Xxxx Loan Documents;
(d) not commit or permit any material breach or default on the part of
Portfield under the Xxxxx-Xxxx Loan Documents; (e) not otherwise permit or
agree to any supplement, modification, amendment, renewal, extension,
termination or surrender of, or consent or agree to any waiver of or departure
from the terms of, or otherwise release any interest in or rights under or in
connection with, the Xxxxx-Xxxx Loan Documents.
(iv) Actions.
At the direction of WLD Trust and at
Portfield's sole expense, Portfield shall appear in and defend any claim or any
action or other proceeding purporting to affect the Xxxxx-Xxxx Loan Documents
or the rights, powers or interests of WLD Trust under this assignment, and give
WLD Trust prompt written notice of any such claim, action or proceeding. If any
Event of Default has occurred and is continuing, WLD Trust shall have the right
to appear in and defend any such claim or proceeding on its own behalf, and
Portfield shall reimburse WLD Trust all costs and expenses incurred by WLD
Trust in connection therewith, including attorney's fees, which reimbursable
expenses shall be additional Secured Liabilities secured by the Collateral.
(b) Xxxxxxx Note and Security Agreement.
(i) Assignment.
Portfield irrevocably and
unconditionally agrees, upon the closing the acquisition of the Xxxxxxx Shares,
to grant, transfer and assign to WLD Trust all of Portfield's present and
future right, title and interest in and to the Xxxxxxx Note and the Xxxxxxx
Security Agreement, together with all advance payments and other amounts paid
or payable to or deposited with Portfield thereunder, all other security and
guaranties for either of the Xxxxxxx Note and the Xxxxxxx Security Agreement,
and all other rights and interests of Portfield under or in respect of the
Xxxxxxx Note and the Xxxxxxx Security Agreement.
(ii) Collection of Payments Due.
Notwithstanding the assignment set
forth in Section 2.1(b)(i), so long as no Event of Default has occurred and is
continuing, Portfield shall have the right (a) to collect, receive, hold and
dispose of amounts payable under the Xxxxxxx Note and the Xxxxxxx Security
Agreement and to apply the same to the payment of amounts due from time to time
from Portfield under the Xxxxxx Note subject any restrictions imposed on such
application pursuant to the terms and provisions of the Intercreditor
Agreement, and (b) subject to the
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requirements of Section 2.1(b)(iii) below, to enforce, supplement, modify,
amend, renew, extend, terminate and otherwise administer the Xxxxxxx Note and
the Xxxxxxx Security Agreement and deal with Xxxxxxx in relation to the Xxxxxxx
Note and the Xxxxxxx Security Agreement. During the continuance of any Event of
Default, only WLD Trust shall have the right to take the actions described in
the preceding sentence, and WLD Trust may notify Wescourt to make all such
payments directly to WLD Trust or as WLD Trust may direct. All payments under
the Xxxxxxx Loan Documents received by Portfield during the existence of any
Event of Default shall be held by Portfield in trust for WLD Trust and not
commingled with any other funds of Portfield, and Portfield shall apply such
funds only as directed by WLD Trust.
(iii) Maintenance and Enforcement of Note
and Security Agreement.
Unless WLD Trust otherwise consents
in writing, Portfield shall: (a) take all action reasonably necessary or
appropriate to maintain and enforce its rights and interests under the Xxxxxxx
Note and the Xxxxxxx Security Agreement; (b) comply in all material respects
with its obligations under the Xxxxxxx Note and the Xxxxxxx Security Agreement;
(c) not transfer, encumber or further assign any of Portfield's interest in the
Xxxxxxx Note and the Xxxxxxx Security Agreement; (d) not commit or permit any
material breach or default on the part of Portfield under the Xxxxxxx Note and
the Xxxxxxx Security Agreement; (e) not otherwise permit or agree to any
supplement, modification, amendment, renewal, extension, termination or
surrender of, or consent or agree to any waiver of or departure from the terms
of, or otherwise release any interest in or rights under or in connection with,
the Xxxxxxx Note and the Xxxxxxx Security Agreement.
(iv) Actions.
At the direction of WLD Trust and at
Portfield's sole expense, Portfield shall appear in and defend any claim or any
action or other proceeding purporting to affect the Xxxxxxx Note and the
Xxxxxxx Security Agreement or the rights, powers or interests of WLD Trust
under this assignment, and give WLD Trust prompt written notice of any such
claim, action or proceeding. If any Event of Default has occurred and is
continuing, WLD Trust shall have the right to appear in and defend any such
claim or proceeding on its own behalf, and Portfield shall reimburse WLD Trust
all costs and expenses incurred by WLD Trust in connection therewith, including
attorney's fees, which reimbursable expenses shall be additional Secured
Liabilities secured by the Collateral.
(c) Fractionator.
Wesfrac agrees to irrevocably and
unconditionally grant a security interest in and to the Fractionator to WLD
Trust, subject only to the prior security interest of Xxxxxx Financial, if and
when Portfield and the Related Parties have fully and irrevocably satisfied to
NCFC's satisfaction all of Portfields' and the Related Parties' obligations
incurred on a term loan basis from NCFC, and NCFC has released its prior
security interest in the Fractionator.
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(d) Portfield's and the Related Parties'
Equipment.
Each of Portfield and the Related Parties
irrevocably and unconditionally agree to grant to WLD Trust, subject to the
prior security interests described in this WLD Security Agreement and except to
the extent the appropriate Related Party is prohibited from granting a junior
security interest under any prior perfected security interest, in and to all of
the Equipment which Portfield and the Related Parties now own or may hereafter
acquire if and when Portfield and the Related Parties have fully and
irrevocably satisfied to NCFC's satisfaction all of Portfields' and the Related
Parties' obligations incurred on a term loan basis from NCFC, and NCFC has
released its prior security interest in Portfield's and the Related Parties'
Equipment.
2.2 Entries on Portfield's and the Related Parties' Books.
Portfield and each of Related Parties shall make
appropriate entries upon their respective financial statements and books and
records disclosing WLD Trust security interest in and collateral assignment of
the Collateral.
2.3 Supplemental Documentation.
Portfield and the Related Parties shall execute and
deliver to WLD Trust, at the request of WLD Trust, all agreements, instruments
and documents that WLD Trust may reasonably request, in form and substance
acceptable to WLD Trust, to perfect and maintain perfected WLD Trust's security
interest in the Collateral and to consummate the transactions contemplated in
or by this WLD Security Agreement, and Portfield and the Related Parties agree
that a carbon, photographic or photostatic copy, or other reproduction, of this
Agreement or of any financing statement, shall be sufficient as a financing
statement.
2.4 Right to Inspect Collateral.
WLD Trust shall have the right, at any time during
Portfield's and the Related Parties' usual business hours, to inspect the
Collateral, all related records and the premises upon which the Collateral is
located, and to verify the amount and condition of or any other matter relating
to the Collateral.
2.5 Third-Party Claims Against Collateral.
WLD Trust, in its sole and absolute discretion, may
at any time or times hereafter, but shall be under no obligation, to pay,
acquire or accept an assignment of any security interest, lien, encumbrance or
claim asserted by any person or entity against the Collateral.
2.6 Disposition of Collateral.
In no event shall Portfield or any Related Party make
any sale, transfer or other disposition of any of the Equipment included in the
Collateral, except in the ordinary course of Portfield's or the appropriate
Related Parties' business, for transfers or assignments to
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entities in which Portfield owns, directly or indirectly, a majority interest,
or as authorized in a writing executed by WLD Trust and delivered to Portfield
or the appropriate Related Party. No such authorization given by WLD Trust to
sell any specified portion of Collateral or any items thereof, and no waiver by
WLD Trust in connection therewith shall establish a custom or constitute a
waiver of the prohibition contained in this WLD Security Agreement against such
sales, with respect to any portion of the Collateral or any items thereof not
covered by said authorization.
2.7 Set-off Against Secured Liabilities.
WLD Trust may, in its sole discretion and regardless
of the adequacy of the Collateral, upon the occurrence of an Event of Default,
reduce to cash any deposits or other sums at any time credited by or payable or
due from Portfield or any Related Party to WLD Trust, or any monies, cash, cash
equivalents, securities, instruments, documents or other assets of Portfield or
any of the Related Parties in the possession or control of Portfield, the
Related Parties or their bailees for any purpose, apply same to or setoff
against the Secured Liabilities.
3. PRIORITY OF INTERCREDITOR AGREEMENT.
The terms of this Agreement are subject to the terms, express
or implied, and provisions of the Intercreditor Agreement, and to the extent
any conflict arises between this Agreement and the Intercreditor Agreement,
then the terms of the Intercreditor Agreement shall control in all respects and
this Agreement shall be interpreted as if those terms of the Intercreditor
Agreement are explicitly set forth herein.
4. PORTFIELD'S AND RELATED PARTIES' WARRANTIES, REPRESENTATIONS
AND COVENANTS
Portfield and the Related Parties make the following
representations, covenants and warranties to WLD Trust:
4.1 Priority of Lien and Location of Collateral.
Except for the prior and senior liens of Xxxxxx
Financial pursuant to the Xxxxxx Loan Agreement, and NCFC pursuant to the NCFC
Security Agreements, and as set forth in the Intercreditor Agreement and for
the permitted encumbrances as set forth on Exhibit B hereof, Portfield and each
of the Related Parties, with respect to the Collateral which each pledges to
WLD Trust hereunder, warrants and represents to and covenants with WLD Trust
that:
(i) Portfield or the Related Party, as
the case may be, has and at all times hereafter shall have good, indefeasible
and merchantable title to and ownership of their respective Collateral, free
and clear of all liens, claims, security interests and encumbrances except
those of WLD Trust or as otherwise described in or permitted under this WLD
Security Agreement; and
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their respective Collateral at their ordinary places of business, and they
shall not remove the Collateral from that Place of Business unless and until
Portfield or the respective Related Party gives WLD Trust written notice
thereof at least thirty (30) days prior thereto.
4.2 Insurance.
At its sole cost and expense, Portfield and each
Related Party shall keep and maintain their respective Collateral which is
tangible real or personal property insured for its full insurable value against
loss or damage by fire, theft, explosion, sprinklers and all other hazards and
risks ordinarily insured against by other owners or users of such properties in
similar businesses. Portfield or the Related Party, as appropriate, shall
notify WLD Trust promptly of any event or occurrence which causes a material
loss or decline in value of the Collateral and the estimated, or actual, if
available, amount of such loss or decline. All policies of insurance on the
Collateral shall be in form and with insurers recognized as adequate by prudent
business persons and all such policies shall be in such amounts as may be
satisfactory to WLD Trust. Upon WLD Trust's request, Portfield or the Related
Party, as appropriate, shall deliver to WLD Trust the original or certified
copy of each policy of insurance and evidence of payment of all premiums
therefor. Such policies of insurance shall contain an endorsement, in form and
substance acceptable to WLD Trust, showing loss payable to WLD Trust. Such
endorsement shall provide that the insurance companies will give WLD Trust at
least thirty (30) days prior written notice before any such policy shall be
altered or canceled and that no act or default of Portfield or the Related
Party, as appropriate, or any other person shall affect the right of WLD Trust
to recover under such policy in case of loss or damage. Portfield or the
Related Party, as appropriate, hereby directs all insurers under such policies
to pay all proceeds payable thereunder directly to WLD Trust, and WLD Trust
shall remit to Portfield or the Related Party, as appropriate, any of the
proceeds paid to WLD Trust in excess of the Secured Liabilities at that time.
4.3 Charges and Other Claims.
Portfield or the Related Party, as appropriate, shall
promptly pay when due all of the federal, state, county, city, municipal or
other governmental taxes, levies, assessments, charges, liens, claims or
encumbrances upon or relating to their respective Collateral (collectively, the
"Charges"). In the event Portfield or the Related Party, as appropriate, at any
time or times hereafter, shall fail to pay the Charges or to promptly obtain
the discharge of such Charges, Portfield or the Related Party, as appropriate,
shall so advise WLD Trust in writing and WLD Trust may, without waiving or
releasing any obligation or liability of Portfield or the Related Party, as
appropriate, hereunder or any Event of Default, in its sole discretion, at any
time or times thereafter, make such payment, or any part thereof, or obtain
such discharge and take any other action with respect thereto which WLD Trust
deems advisable. All sums so paid by WLD Trust and any expenses, including
reasonable attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by Portfield or the Related Party, as
appropriate, to WLD Trust and shall be additional Secured Liabilities hereunder
secured by the Collateral. Notwithstanding anything to the contrary herein,
Portfield or the Related Party, as appropriate, may dispute the Charges without
prior payment thereof, even if such non-payment
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may cause a lien to attach to the Collateral, provided that Portfield or the
Related Party, as appropriate, shall give WLD Trust written notice of such
dispute and shall be diligently contesting the same in good faith in an
appropriate proceeding, and provided further, that none of Portfield nor any
Related Party shall permit any Collateral to be lost through foreclosure of any
such lien.
4.4 Valid Existence and Good Standing
Portfield and each Related Party, as appropriate, is
validly incorporated and existing and in good standing under the laws of the
state of their respective incorporation, and is qualified to do business and is
in good standing under the laws of each and every state in which the nature of
Portfield's or the appropriate Related Party's business requires such
qualification.
4.5 Authorization
Portfield's and each Related Party's, as appropriate,
execution and delivery of this WLD Security Agreement and the performance of
its obligations hereunder have been duly authorized by all necessary action and
will not violate any provision of law.
4.6 No Consent or Default
Portfield's and each Related Party's execution and
delivery of this WLD Security Agreement and the performance of their respective
obligations hereunder do not require any consent under and will not result in a
breach of or default under any resolution, indenture, note, contract, agreement
or other instrument to which Portfield or the Related Party, as appropriate, is
a party or is otherwise subject or bound, and does not contravene any provision
of applicable law or regulation, or any order, decree, writ or injunction or
any of Portfield's or the appropriate Related Party's organizational documents.
4.7 Solvency.
Portfield and each Related Party is now and at all
times hereafter, shall be solvent and generally paying its debts as they
mature, and each of Portfield and the Related Parties now own and shall at all
times hereafter own property which, at a fair valuation, is greater than the
sum of its debts.
4.8 No Actions or Proceedings
There are no actions, suits or proceedings pending or
to the best of Portfield's or the appropriate Related Party's knowledge
threatened, before or by any court, regulatory or governmental agency, or
public board or body, against or affecting the Portfield or the Related Party,
as appropriate, or the Collateral.
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4.9 Further Assurances.
Portfield or the Related Party, as appropriate,
shall, at any time or from time to time, upon the written request of WLD Trust,
execute, and, if required, record, and pay all fees, taxes or other expenses
relating thereto, all such further documents and do all such other acts and
things as WLD Trust may reasonably request to effectuate the transaction herein
contemplated.
4.10 Maintenance of Ability to Pay.
Portfield shall not enter into any transaction not in
the ordinary course of business which materially and adversely affects its
ability to repay the Secured Liabilities, or any other obligations and
liabilities of Portfield to any third party or the Collateral.
5. DEFAULT.
5.1 Event of Default.
The occurrence of any one of the following events
("Event of Default") shall constitute a default under this WLD Security
Agreement: (a) if Portfield fails to perform, keep or observe any term,
provision, condition, covenant, warranty or representation contained in the
Portfield Indemnification, or Portfield or any Related Party fails to perform,
keep or observe any term, provision, condition, covenant, warranty or
representation contained in this WLD Security Agreement, after the expiration
of all applicable notice and cure periods; (b) if any of Portfield's assets are
attached, seized, subjected to a writ of distress warrant, or are levied upon
or become subject to any lien or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors; (c) if Portfield
becomes insolvent or generally fails to pay, or admits in writing its inability
to pay its debts as they become due; (d) if a petition under any section or
chapter of the United States Bankruptcy Act or any similar law or regulation is
filed by or against Portfield, or if Portfield shall make an assignment for the
benefit of creditors, or the appointment of a conservator for all or any
portion of Portfield's assets; or (e) if there is an Event of Default under
either the Xxxxx-Xxxx/Colorado Loan Documents or the Xxxxxxx Loan Documents,
subject to the terms and conditions of the Intercreditor Agreement.
5.2 WLD Trust's Rights and Remedies.
Upon the occurrence of an Event of Default, subject
to the prior rights of NCFC and Xxxxxx Financial as their interests may appear
in the Xxxxxx Loan Agreement, the NCFC Security Agreements and the
Intercreditor Agreement, WLD Trust shall have the rights and remedies provided
in the Colorado Uniform Commercial Code and other applicable laws and in
addition to, in substitution for, in modification of, or in conjunction with
those rights and remedies, WLD Trust or its agents may, in its discretion,
sell, assign and deliver all or any part of the Collateral at any brokers'
board or at public or private sale without notice or advertisement, and bid and
become purchasers at any public sale or at any broker's board, and, if notice
to Portfield or any of the Related Parties is required by law, give written
notice to Portfield or the appropriate Related Party five (5) business days
prior to the date of public sale of the Collateral or prior to the date after
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which private sale of the Collateral will be made by mailing such notice to the
address designated in this WLD Security Agreement. Portfield and the Related
Parties agree that the proceeds of the disposition of the Collateral may be
applied by WLD Trust to the satisfaction of Portfield's Liabilities in any
order of preference which WLD Trust, in its sole discretion, chooses, and that
the excess, if any, shall be returned to Portfield or the appropriate Related
Party, which shall continue liable to WLD Trust for any deficiency remaining
with interest thereon.
6. MISCELLANEOUS.
6.1 Release of Security Interest.
Upon payment in full of all of Portfield's
Liabilities, WLD Trust shall release its security interest in the Collateral
created by this WLD Security Agreement.
6.2 Application of Payments.
Portfield and the Related Parties waive the right to
direct the application of any and all payments at any time or times hereafter
received by WLD Trust on account of Portfield's Liabilities and Portfield and
the Related Parties agree that WLD Trust shall have the continuing exclusive
right to apply and re-apply any and all such payments in such manner as WLD
Trust may deem advisable, notwithstanding any entry by Portfield or the Related
Parties upon any of their respective books and records.
6.3 WLD Trust's Right to Assign.
WLD Trust may assign, negotiate, pledge or otherwise
hypothecate this WLD Security Agreement, enter into participation agreements,
or any of its rights and security hereunder and, in case of such assignment,
Portfield and the Related Parties will accord full recognition thereto and
agree that all rights and remedies of WLD Trust in connection with the interest
so assigned shall be enforceable against Portfield and the Related Parties by
such assignee with the same force and effect and to the same extent as the same
would have been enforceable by WLD Trust but for such assignment.
6.4 Prohibition of Assignments by Portfield and the
Related Parties.
None of Portfield or the Related Parties shall assign
or transfer any of their respective rights hereunder without WLD Trust's prior
written consent, except for transfers or assignments by the Related Parties to
entities in which Portfield owns, directly or indirectly, a majority interest.
6.5 Costs of Enforcement.
Portfield and the Related Parties shall pay and
reimburse WLD Trust for all costs, expenses and reasonable attorney's fees
incurred in seeking to enforce the terms of this WLD Security Agreement and in
connection with preparations for the commencement of any action, proceeding or
suit or preparations for the defense of any threatened action, proceeding or
suit,
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whether or not actually filed, affecting this WLD Security Agreement, including
without limitation appraiser's fees, documentary and expert evidence fees and
costs, stenographers' charges and title charges. All such costs, expenses and
fees shall become additional indebtedness secured by the Collateral and shall
become immediately due and payable when paid or incurred by WLD Trust.
6.6 Remedies.
Each right, power and remedy of WLD Trust now or
hereafter existing at law or in equity shall be cumulative and concurrent and
shall be in addition to every right, power and remedy provided for in this WLD
Security Agreement, and the exercise of any right, power or remedy shall not
preclude the simultaneous or later exercise of any other right, power or
remedy.
6.7 No Waiver.
Time is of the essence of this WLD Security
Agreement. No delay or failure by WLD Trust to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
provided for herein or therein as a consequence of an Event of Default
hereunder or thereunder, and no acceptance of any payment of the principal,
interest or premium if any, on the respective note during the continuance of
any such Event of Default, shall constitute a waiver of any such term, such
Event of Default or such right, power or remedy. The exercise by WLD Trust of
any right, power or remedy conferred hereunder upon WLD Trust or by law or
equity shall not preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. No waiver of any Event of Default
hereunder shall affect or alter this WLD Security Agreement, which shall
continue in full force and effect with respect to any other then existing or
subsequent Events of Default.
6.8 Amendment.
This WLD Security Agreement shall not be amended,
modified or terminated orally but may only be amended, modified or terminated
pursuant to written agreement among the parties.
6.9 Notices.
Any notice, demand, request or other communication
desired to be given or re quired pursuant to the terms hereof shall be in
writing and shall be delivered by telecopy, facsimile, personal service or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows or to such other address as the parties hereto may
designate in writing from time to time:
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Portfield and Related Parties:
Portfield Investments, Inc.
0000 Xxxxxxxx 0 xxx 00
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, President
WLD Trust: The WLD Trust
Las Olas Centre
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Vice President
of Finance and Administration -
Chief Financial Officer
Any such notice, demand, request or other communication shall be deemed given
when personally delivered or if mailed five (5) business days after deposit in
the mail.
6.10 Headings.
The various headings used in this WLD Security
Agreement as headings for paragraphs or otherwise are for convenience only and
shall not be used in interpreting the text of the paragraphs in which they
appear and shall not limit or otherwise affect the meanings thereof.
6.11 Severability.
If any provision in this WLD Security Agreement is
held by a court of law to be in violation of any applicable local, state or
federal law, statute, ordinance, administration or judicial decision, or public
policy, and if such court should declare such provision of this WLD Security
Agreement to be illegal, invalid, unlawful, void, voidable, or unenforceable as
written, then such provision shall be given full force and effect to the
fullest possible extent that is legal, valid and enforceable, that the
remainder of this WLD Security Agreement shall be construed as if such illegal,
invalid, unlawful, void, voidable or unenforceable provision was not contained
therein, and that the rights, obligations and interest of the parties under the
remainder of this WLD Security Agreement shall continue in full force and
effect.
6.12 Names.
Regardless of their form, all words shall be deemed
singular or plural and to have such gender as required by the text.
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6.13 Applicable Law.
This WLD Security Agreement has been executed,
delivered and accepted at and shall have been deemed to have been made at
Fruita, Colorado, and shall be interpreted and the rights and liabilities of
the parties hereto determined in accordance with the laws of the State of
Colorado other than laws pertaining to conflicts.
6.14 Disclaimer by WLD Trust.
Except as set forth in this WLD Security Agreement,
WLD Trust shall not be liable for any debts or claims accruing in favor of any
parties against any of Portfield, the Related Parties or the Collateral. WLD
Trust is not and shall not be an agent of Portfield or the Related Parties for
any purposes. Approvals granted by WLD Trust for any matters covered under this
WLD Security Agreement shall be narrowly construed to cover only the parties
and facts identified in any written approval or if not in writing such
approvals shall be solely for the benefit of WLD Trust.
6.15 Effect of Termination.
Except to the extent provided to the contrary in this
WLD Security Agreement, no termination or cancellation of this WLD Security
Agreement, regardless of cause or procedure, shall in any way affect or impair
the powers, obligations, duties, rights and liabilities of the parties in any
way or respect relating to (i) any transaction or event occurring prior to such
termination or cancellation, or (ii) any of the undertakings, agreements,
covenants, warranties and representations of Portfield or the Related Parties
contained in this WLD Security Agreement. All such undertakings, agreements,
covenants, warranties and representations shall survive such termination or
cancellation.
6.16 Portfield's and Related Parties' Waiver of Notice.
Except as otherwise specifically provided in this WLD
Security Agreement, Portfield and each of the Related Parties waive any and all
notice or demand which Portfield or the Related Parties might be entitled to
receive with respect to this WLD Security Agreement by virtue of the Colorado
Uniform Commercial Code or any applicable statute or law, and waives
presentment, demand and protest and notice of presentment, protest, default,
dishonor, non-payment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by WLD Trust on
which any of the WLD Trust may in any way be liable and hereby ratifies and
confirms whatever WLD Trust may do in this regard.
6.17 Multiple Counterparts.
This WLD Security Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this WLD Security Agreement has been duly executed
as the day and year specified at the beginning hereof.
The WLD Trust, Portfield Investments, Inc.,
an Ohio Testamentary Trust a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxxxx X. Xxxxxxxx, Xxxxx Xxxxxx, President
Attorney-in-Fact
Wescourt Group, Inc., Wescourt Distributing, Inc.,
a Delaware corporation a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxxx Xxxxxx, President Xxxxx Xxxxxx, President
Wesfrac, Inc., Westec Denver, Inc.,
a Colorado corporation a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxx X. Xxxx, Secretary Xxxx X. Xxxx, Secretary
Xxxxx-Xxxx Corp. Utah, Xxxxx-Xxxx Corp.,
a Colorado corporation a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxxx Xxxxxx, President Xxxx X. Xxxx, Secretary
Xxxxx-Xxxx Corp. Montrose, Inc., Westec Fruita, Inc.,
a Colorado corporation a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxx X. Xxxx, Secretary Xxxxx Xxxxxx, President
Montrose Propane, Inc., Grand Mesa Texaco, Inc.,
a Colorado corporation a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxxx Xxxxxx, President Xxxxx Xxxxxx, President
Fruita RP Holding, Inc., Xxxxx-Xxxx Convenience Stores,Inc.,
a Delaware corporation a Colorado corporation
by: by:
------------------------------ -----------------------------
Xxxxx Xxxxxx, President Xxxxx Xxxxxx, President
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EXHIBIT A
PERMITTED ENCUMBRANCES
Permitted Encumbrances shall mean the following:
(i) liens incurred and pledges and deposits made in the ordinary
course of business in connection with workmen's compensation, unemployment
insurance, old-age pensions and other social security benefits;
(ii) liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety, customs and appeal bonds and other obligations of like
nature, incurred as an incident to and in the ordinary course of business:
(iii) liens imposed by law, such as carriers' warehousemen's,
mechanics', materialmen's and vendors' liens, incurred in good faith in the
ordinary course of business and securing obligations which are not yet due or
which are being contested in good faith by appropriate proceedings;
(iv) liens securing the payment of taxes, assessments and
governmental charges or levies, either (x) not delinquent or (y) being
contested in good faith by appropriate legal or administrative proceedings and
as to which Xxxxx-Xxxx shall have set aside on its books adequate reserves in
accordance with generally accepted accounting principals;
(v) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of property
or irregularities of title, none of which materially impairs the use of any
material property of Xxxxx-Xxxx or the value or such property;
(vi) liens on property existing at the time such property is acquired
by Xxxxx-Xxxx;
(vii) liens arising out of judicial proceedings to the extent they do
not constitute an Event of Default under Section 5; and
(viii) extensions, renewals and replacements of liens referred to
above; provided, however, that any such extension, renewal or replacement lien
shall be limited to the property or assets covered by the lien extended,
renewed or replaced and that the obligations secured by any such extension,
renewal or replacement lien shall be in an amount not greater than the amount
of the obligations secured by the lien extended, renewed or replaced.
