ASSUMPTION AGREEMENT AND EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit
10.1
ASSUMPTION
AGREEMENT AND EIGHTH
AMENDMENT
TO LOAN AND SECURITY AGREEMENT
THIS
ASSUMPTION AGREEMENT AND EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the
"Eighth Amendment"), made and entered into as of the 14th day of February,
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").
RECITALS:
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. Contemporaneously
with this Eighth Amendment, STR is being merged into SMF (the “Merger”), which
is assuming all the liabilities of STR, including, without limitation, all
liabilities to Lender under and in connection with the Loan
Agreement.
J. SMF,
STR,
SSI, H & W and Xxxxxxxxx Realty, Inc., a Florida corporation, have each
requested Lender’s consent to the Merger, and Lender hereby agrees to grant its
consent thereto, conditioned upon the terms and conditions set forth
below.
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 and the Seventh Amendment; all references hereinafter made
to
the Loan Agreement shall include the modifications thereto effectuated pursuant
to the First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment and the Seventh
Amendment.
3. Borrower
confirms and acknowledges that the principal balance of Revolving Loans
outstanding under the Loan Agreement as of the close of business on February
9,
2007 was $10,114,321, 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.
4. The
terms
of the Loan Agreement are hereby amended such that:
(a) |
the
term “Borrower”, as used in the Loan Agreement, shall hereafter refer to
SMF Energy Corporation, a Delaware corporation, SMF Services, Inc.,
a
Delaware corporation, and H & W Petroleum Company, Inc., a Texas
corporation; and
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(b) |
all
representations, warranties, covenants and other terms of the Loan
Agreement which have been applicable to STR, SSI and H & W shall,
effective from and after the date of this Eighth Amendment, apply
to
Borrower, as hereinabove
redefined.
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5. SMF
hereby reaffirms the grant of, and hereby grants, the security interest in
property described in and pursuant to the Loan Agreement. As security for the
prompt payment and performance of all of the Obligations, SMF hereby grants
and
re-grants to Lender a continuing security interest in, and lien upon all, and
right of setoff against, and hereby assigns and re-assigns to Lender as
security, all personal property (except Vehicles and patents, patent rights
and
patent applications) and real property and fixtures of SMF, whether now owned
or
hereafter acquired or existing, and wherever located, including, without
limitation:
(a) |
all
Accounts;
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(b) |
all
general intangibles, including without limitation, all Intellectual
Property;
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(c) |
all
goods, including, without limitation, Inventory and
Equipment;
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(d) |
all
Real Property and fixtures;
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(e) |
all
chattel paper (including all tangible and electronic chattel
paper);
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(f) |
all
instruments (including all promissory
notes);
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(g) |
all
documents;
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(h) |
all
deposit accounts;
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(i)
|
all
letters of credit, banker's acceptances and similar instruments and
including all letter-of-credit
rights;
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(j)
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all
supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect
of
Receivables and other Collateral, including (i) rights and remedies
under
or relating to guaranties, contracts of suretyship, letters of credit
and
credit and other insurance related to the Collateral, (ii) rights
of
stoppage in transit, replevin, repossession, reclamation and other
rights
and remedies of an unpaid vendor, lienor or secured party, (iii)
goods
described in invoices, documents, contracts or instruments with respect
to, or otherwise representing or evidencing, Receivables or other
Collateral, including returned, repossessed and reclaimed goods,
and (iv)
deposits by and property of account debtors or other persons securing
the
obligations of account debtors;
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(k)
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all
(i) investment property (including securities, whether certificated
or
uncertificated, securities accounts, security entitlements, commodity
contracts or commodity accounts) and (ii) monies, credit balances,
deposits and other property of SMF now or hereafter held or received
by or
in transit to Lender or its Affiliates or at any other depository
or other
institution from or for the account of Borrower, whether for safekeeping,
pledge, custody, transmission, collection or
otherwise;
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(l)
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all
commercial tort claims, including, without limitation, those disclosed
to
Lender in writing;
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(m) |
to
the extent not otherwise described above, all
Receivables;
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(n) |
all
Records; and
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(o)
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all
products and proceeds of the foregoing, in any form, including insurance
proceeds and all claims against third parties for loss or damage
to or
destruction of or other involuntary conversion of any kind or nature
of
any or all of the other Collateral.
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6. SMF
hereby assumes all obligations under the Loan Agreement and the other Financing
Agreements to which STR is a party (including, without limitation, that certain
Subordination Agreement dated January 21, 2003, by and among Active Investors
III and C. Xxxxxx X'Xxxxxx, Lender, as successor by merger to Congress Financial
Corporation (Florida), and STR (the "Subordination Agreement") and any other
agreements, instruments or documents executed in connection therewith or which
incorporate the terms thereof by reference thereto (collectively, the "Other
Agreements"), and covenants and agrees to fully and faithfully pay, perform,
observe, satisfy and discharge each and every one of the obligations and
covenants of its merger predecessor under the Loan Agreement and the other
Financing Agreements to which it is a party, as though the Loan Agreement and
such Financing Agreements had originally been made, executed and delivered
by
SMF. Each of SSI and H & W acknowledges and agrees that it is bound by the
Subordination Agreement and the Other Agreements as if it had originally been
made, executed and delivered by SSI and H & W.
7. 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 Eighth
Amendment.
8. The
effectiveness of the amendments contained in Section 4 of this Eighth Amendment
is subject to satisfactory compliance with conditions precedent requiring that
Lender shall have received:
(a) |
evidence,
in form and substance satisfactory to Lender, that Lender has valid
perfected and first priority security interests in and liens upon
the
Collateral;
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(b) |
all
requisite corporate action and proceedings in connection with this
Eighth
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;
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(c) |
the
following documents, each fully executed and/or delivered in form
and
substance acceptable to Lender: (i) a Delaware UCC-1 financing statement
and/or UCC-3 statement of change reflecting SMF as debtor; and (ii)
an
amended and restated guarantee agreement from Xxxxxxxxx Realty, Inc.
for
the Obligations;
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(d) |
copies
of all executed documentation pertaining to the
Merger;
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(e) |
copies
of such current certified good standing, organizational and authorizing
documents for SMF as Lender may reasonably request in connection
with the
Merger and this Eighth Amendment;
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(f) |
a
written opinion of counsel for Borrower and Xxxxxxxxx Realty, Inc.,
in
form and substance acceptable to
Lender;
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(g) |
All
consents, waivers, acknowledgments and other agreements from third
persons
which Lender may reasonably deem necessary in order to permit, protect
and
perfect its security interests in and liens upon the Collateral furnished
by SMF or to effectuate the provisions or purposes of the Agreement
and
the other Financing Agreements, including acknowledgments by lessors,
mortgagees and warehousemen of Lender’s security interests in the
Collateral, waivers by such persons of any security interests, liens
or
other claims by such persons to the Collateral and agreements permitting
Lender access to, and the right to remain on, the premises to exercise
its
rights and remedies and otherwise deal with the
Collateral;
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(h) |
evidence
of insurance and loss payee endorsements required under the Agreement
and
under the other Financing Agreements;
and
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(i) |
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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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 Eighth
Amendment and the related documentation referenced herein, and that no Default
or Event of Default shall have occurred and be continuing. Specifically, (a)
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 (b) 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.
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10. Borrower
acknowledges and confirms that all Collateral furnished in connection with
the
Loan Agreement, except patents, continue to secure the Obligations and
indebtedness thereunder, as hereby modified.
11. 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, 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 Eighth
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 Eighth Amendment and this provision
shall survive payment in full of all Obligations and termination of all
Financing Agreements.
12. 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 Eighth
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.
13. 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; provided,
however,
in the
event of any inconsistency, incongruity or conflict between the terms of the
Loan Agreement and the terms of this Eighth Amendment, the terms of this Eighth
Amendment shall govern and control. 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 Eighth 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
Agreement or any related document. This Eighth 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 Eighth Amendment
is
part of the Loan Agreement and constitutes a Financing Agreement
thereunder.
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14. 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.
15. This
Eighth 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.
16. This
Eighth 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. 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 EIGHTH 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 EIGHTH AMENDMENT.
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begin on following page.]
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IN
WITNESS WHEREOF, the parties hereto have executed this Eighth Amendment the
day
and year first above written.
BORROWER: | ||
SMF ENERGY CORPORATION, a Delaware corporation, successor by merger to XXXXXXXXX MOBILE FUELING, INC., a Florida corporation | ||
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By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
Name: | Xxxxxxx X. Xxxxxxxxx | |
Title: | President and Chief Executive Officer |
SMF SERVICES, INC., a Delaware corporation | ||
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By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
Name: | Xxxxxxx X. Xxxxxxxxx | |
Title: | President and Chief Executive Officer |
H & W PETROLEUM COMPANY, INC., a Texas corporation | ||
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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) | ||
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By: | /s/ Xxx Xxxxxxxxx | |
Name: | Xxx Xxxxxxxxx | |
Title: | Director |