EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Second
Amendment"), made and entered into as of the 29th day of August, 2003, by and
between Xxxxxxxxx Mobile Fueling, Inc., a Florida corporation (hereinafter
referred to as "Borrower"), and Congress Financial Corporation (Florida)
(hereinafter referred to as "Lender").
R E C I T A L S:
A. On September 26, 2002, Borrower and Lender entered into a Loan and
Security Agreement (the "Agreement"), establishing a revolving line of credit
(the "Revolving Loans") by Lender in favor of Borrower.
B. Borrower and Lender executed a Consent and First Amendment to Loan and
Security Agreement dated as of March 31, 2003 (the "First Amendment"),
consenting to certain subordinated debt of Borrower and modifying certain
defined terms in the Agreement.
C. Borrower and Obligor (as defined in the Agreement) have requested that
Lender (1) permit Borrower to incur certain additional secured Indebtedness and
(2) release its security interest in the patents (including the related trade
names utilized in such patents) constituting a portion of the Collateral, 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 foregoing statements 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 Agreement, as modified by the First Amendment; all
references hereinafter made to the Agreement to include the modifications
thereto effectuated pursuant to the First Amendment.
3. Borrower and Obligor each confirm and acknowledge that, as of the date
hereof, the balance due Lender under the Revolving Loans as of the close of
business on August 28, 2003 was the principal amount of $4,424,446.52 plus
accrued interest since the date last paid, all free and clear of any defense,
set-off or counterclaim.
4. The Agreement is hereby modified as follows (all references to Sections
being the applicable Sections of the Agreement):
(a) The following defined terms and definitions are modified or added
to Section 1:
(i) In Section 1.19 (d), the words "and other non-cash charges"
are added after the words "amortization expense".
(ii) In Section 1, the definition of Fixed Charges is added to
read as follows:
"Fixed Charges" shall mean, for any period, the sum of the
following, determined on a consolidated basis, without
duplication, for Borrower and its Subsidiaries in accordance with
GAAP: (a) scheduled principal and interest payments, (b) capital
expenditures, (c) cash income taxes, and (d) cash dividends. For
purposes of this definition, (i) the principal portion of
approximately $3,515,000 in Borrower's Indebtedness to Borrower's
existing lenders other than Lender being repaid on or about
August 29, 2003 will be excluded, and (ii) any non-scheduled
pre-payments of principal made during the period from the net
proceeds of additional paid in capital during the same period,
will be excluded.
(iii) In Section 1.35, the words "patents, patent rights, patent
applications" are deleted from the definition of "Intellectual
Property" and in Section 12.1(b), the proviso in the last
sentence of the section relating to patents beginning with the
words "PROVIDED, HOWEVER" shall be deleted so that the sentence
ends with the words "immediately available funds."
(iv) Section 1.48 "Net Income" is modified in its entirety to
read as follows:
"Net Income" shall mean for any period, for Borrower and its
Subsidiaries on a consolidated basis, the net income of the
Borrower and its Subsidiaries from continuing operations
excluding any interest income and any extraordinary and/or one
time or unusual and non-recurring gains for that period.
Notwithstanding anything to the contrary herein, the $750,000.00
non-recurring gain realized from the August 29, 2003
extinguishment of Borrower's Indebtedness to TransAmerica
Equipment Financial Services Corporation will be included as Net
Income.
(b) In Section 3.4, the amount "three quarters of one (.75%) percent"
is substituted in lieu of the amount "one quarter of one (.25%)
percent".
(c) Section 9.9(g), reading as follows, is added immediately after
Section 9.9(f):
; (g) Indebtedness of Borrower evidenced by the 10% Senior
Secured Notes dated as of August 29, 2003 in the aggregate
principal amount of $7,500,000.00 (the "August 2003
Indebtedness") and secured by a security interest in Borrower's
Vehicles and related patents, all pursuant to documentation
containing terms satisfactorily subordinating such Indebtedness
to the Obligations and otherwise acceptable to Lender
(d) The minimum Effective Book Net Worth required pursuant to Section
9.17 is increased to $12,500,000.00.
(e) The following covenants are added immediately after Section 9.20:
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9.21 FIXED CHARGE COVERAGE RATIO. Borrower shall not, as of
each quarter end, on a cumulative basis for the respective fiscal
year, permit the ratio of (a) EBITDA to (b) Fixed Charges to be
less than the amount shown below for each respective period.
7/1/03 to 9/30/03 1.0 to 1.0
7/1/03 to 12/31/03 1.0 to 1.0
7/1/03 to 3/31/04 1.25 to 1.0
7/1/03 to 6/30/04 1.25 to 1.0
7/1/04 to 9/30/04 1.50 to 1.0
7/1/04 to 12/31/04 1.50 to 1.0
7/1/04 to 3/31/05 1.50 to 1.0
7/1/04 to 6/30/05 1.50 to 1.0
9.22 EXCESS AVAILABILITY. Borrower shall, at all times,
maintain Excess Availability, as determined by Lender, in an
amount not less than $500,000.00.
(f) Section 12.1(c) is deleted in its entirety.
5. Each and every reference to the Agreement in the other Financing
Agreements shall be deemed to refer to the Agreement, as modified by this Second
Amendment.
6. The effectiveness of this Second Amendment is subject to satisfactory
compliance with conditions precedent requiring that Lender shall have received
from Borrower:
(a) copies of the final executed documents evidencing and securing
the August 2003 Indebtedness in form and substance satisfactory
to Lender;
(b) a copy of the Amendment to Articles (hereinafter defined),
certified by the Florida Secretary of State; and
(c) such additional documents, instruments and agreements as are
required hereunder as well as those which Lender or its counsel
may reasonably request.
7. Borrower represents and warrants to Lender that, except as has been
otherwise disclosed to Lender in writing, the representations and warranties
contained in the 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 Second Amendment and the related documentation referenced herein, and
that no Default or Event of Default shall have occurred and be continuing.
Specifically, Borrower represents and warrants that its Articles of
Incorporation and Bylaws, certified on September 26, 2002 were not amended on or
subsequent to their aforesaid certification date, other than the July 23, 2003,
amendment to Articles of Incorporation increasing the number of authorized
shares of common stock from 20,000,000 to 50,000,000 shares (the "Amendment to
Articles").
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8. Borrower acknowledges and confirms that all Collateral furnished in
connection with the Agreement, except patents, continue to secure the
Obligations and indebtedness thereunder, as hereby modified. Lender acknowledges
and agrees that (a) it does not have a security interest in the Vehicles or
Borrower's patents, and (b) it shall not, as a result of receiving proceeds of
the August 2003 Indebtedness towards reduction of the outstanding Obligations
(the "Paydown Amount"), either (i) prohibit subsequent Revolving Loans
reborrowing the Paydown Amount (subject to the terms of the Agreement), or (ii)
require a security interest in any Vehicle(s) which may be acquired with the
proceeds of such Revolving Loan(s).
9. Borrower and Obligor each hereby release and forever discharge 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 or Obligor, 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 Second 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 and Obligor
each acknowledges that this provision is a material inducement for Lender
entering into this Second Amendment and this provision shall survive payment in
full of all Obligations and termination of all Financing Agreements.
10. 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 Second Amendment, including, without limitation, the 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 Agreement, as
hereby amended, and all related documents, instruments and agreements.
11. Except as expressly modified herein, all terms and provisions of the
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection with the 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 Agreement and the terms of this
Second Amendment, the terms of this Second 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 Second Amendment nor any earlier waiver or amendment of the Agreement will
constitute a novation or have the effect of discharging any liability or
obligation evidenced by the Agreement or any related document. This Second
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 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 Second
Amendment is part of the Agreement and constitutes a Financing Agreement
thereunder.
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12. 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.
13. This Second 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.
14. This Second 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.
15. LENDER, BORROWER AND OBLIGOR 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
SECOND AMENDMENT OR THE 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 SECOND
AMENDMENT.
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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
the day and year first above written.
BORROWER:
XXXXXXXXX MOBILE FUELING, INC., a Florida
corporation
By: /S/XXXXXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Title: President and Chief Executive Officer
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LENDER:
CONGRESS FINANCIAL CORPORATION (FLORIDA)
By: /S/XXX XXXXXXXXX
----------------------------------------
Name: Xxx Xxxxxxxxx
Title: Vice President
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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 Second
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 its 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 Second Amendment.
GUARANTOR:
XXXXXXXXX REALTY, INC., a Florida
corporation
By: /S/XXXXXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Title: President and Chief Executive Officer
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