Exhibit 10.7
Amended and Restated Credit Amendment
between Bank of America Texas, N.A., and
FFP Operating Partners, L.P.
dated November 27, 1996
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement (this "Restated Credit
Agreement") dated as of November 27, 1996, is between Bank of America Texas,
N.A. (the "Bank") and FFP Operating Partners, L.P., a Delaware limited
partnership (the "Borrower").
REFERENCES
Reference is made to the Credit Agreement (as amended, the "Original Credit
Agreement") dated as of February 25, 1994 by and between Bank and Borrower, as
amended by the following:
(a) First Amendment to Credit Agreement, entered into effective as of
March 30, 1994;
(b) Second Amendment to Credit Agreement, entered into effective as of
August 31, 1994;
(c) Third Amendment to Credit Agreement, entered into effective as of
May 1, 1995;
(d) Fourth Amendment to Credit Agreement, entered into effective as of
December 20, 1995; and
(e) Fifth Amendment to Credit Agreement, entered into effective as of
March 29, 1996.
The Bank and the Borrower desire to amend the Credit Agreement to, inter
alia, provide for a term loan in the amount of $3,000,000.00 to finance
renovation of a fuel terminal and to renew, extend, modify and increase certain
existing debt to the Bank as more fully described in Section 4.3 of this
Restated Credit Agreement. The Bank and the Borrower further desire to restate
the Original Credit Agreement into one agreement that incorporates, on a
cumulative basis, the amendments described above.
1. DEFINITIONS
In addition to the terms which are defined elsewhere in this Restated
Credit Agreement, the following terms have the meanings indicated for the
purposes of this Restated Credit Agreement:
1.1 "Event of Default" has the meaning given such term in Section 13 of
this Restated Credit Agreement.
1.2 "Eurodollar Business Day" shall mean a day on which dealings in
Dollars are carried out in the London interbank market.
1.3 "LIBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. All
amounts in the calculation will be determined by the Bank as of the
first day of the interest period.
London Interbank Offered Rate
LIBOR Rate = ------------------------------------
(1.00 - Reserve Percentage)
Where,
(a) "London Interbank Offered Rate" means the interest rate (rounded upward
to the nearest 1/16th of one percent) determined by the Bank (in accordance with
its customary general practices) as the rate at which Eurodollar deposits are
offered by major banks in the London Interbank Eurodollar Market in immediately
available funds in an amount equal or comparable to the principal amount of the
Term Loan or the Fuel Terminal Loan, as the case may be, as of the time of
determination, and for a ninety (90) day time period.
The initial LIBOR Rate shall be the rate in effect two (2) banking days
prior to January 1, 1997 and shall be automatically adjusted on the last day of
each ninety (90) day time period, beginning ninety (90) days after January 1,
1997, to the LIBOR Rate in effect two (2) banking days prior to such date.
(b) "Reserve Percentage" means the total of the maximum reserve percentages
for determining the reserves to be maintained by member banks of the Federal
Reserve System for Eurocurrency Liabilities, as defined in Federal Reserve Board
Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage
will be expressed as a decimal, and will include, but not be limited to,
marginal, emergency, supplemental, special, and other reserve percentages.
1.4 "Maximum Rate" means the maximum lawful rate of interest permitted
under applicable usury laws now or hereafter enacted.
1.5 "Original Fuel Terminal Loan" means the Fuel Terminal Loan referred to
in the Original Credit Agreement in the amount of One Million Dollars
($1,000,000.00).
1.6 "Potential Default" means any event that, with the giving of notice or
the passage of time, or both, would constitute an Event of Default
under this Restated Credit Agreement.
1.7 "Reference Rate" means the rate of interest publicly announced from
time to time by the Bank in Irving, Texas, as its Reference Rate. The
Reference Rate is set by the Bank based on various factors, including
the Bank's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some
loans. The Bank may price loans to its customers at, above, or below
the Reference Rate. Any change in the Reference Rate shall take effect
at the opening of business on the day specified in the public
announcement of a change in the Bank's Reference Rate.
2. LINE OF CREDIT
AND
LETTER OF CREDIT FACILITY AMOUNT AND TERMS
2.1 Line of Credit Amount.
(a) During the Availability Period described below, the Bank will provide
a line of credit to the Borrower for the purposes continuing
Borrower's existing Ten Million Dollar ($10,000,000.00) line of credit
from the Bank under the Original Credit Agreement to support future
growth in accounts receivable and inventory, along with providing
intra-month fuel tax remittance support. The amount of the line of
credit (the "Revolving Commitment") is equal to Ten Million Dollars
($10,000,000.00).
(b) This is a revolving line of credit for advances with a "within-line"
facility for letters of credit. During the Availability Period, the
Borrower may repay principal amounts and re-borrow them.
(c) Each advance must be for at least One Hundred Thousand Dollars
($100,000.00) or for the amount of the remaining available line of
credit, if less.
(d) The Borrower agrees not to permit the outstanding principal balance of
the line of credit plus the outstanding amounts of any letters of
credit, including amounts drawn on letters of credit and not yet
reimbursed, to exceed the Revolving Commitment. If such outstandings
exceed the Revolving Commitment, the Borrower will immediately pay the
excess to the Bank upon the Bank's demand.
2.2 Availability Period. Subject to the terms and conditions of this
Restated Credit Agreement (including without limitation, Section
10.11), the line of credit is available during the period (the
"Availability Period") beginning on the date of this Restated Credit
Agreement and ending April 30, 1998 (the "Expiration Date"), unless
the Borrower is in default. Upon the occurrence of any Potential
Default, then, in addition to the Bank's other remedies, the Bank may
terminate the Availability Period. If the Borrower cures such
Potential Default or Event of Default, as the case may be, then the
Availability Period may be reinstated so long as no other Potential
Default or Event of Default has occurred and remains in existence.
2.3 Interest Rate. The interest rate is the lesser of (a)_the Maximum
Rate, or (b)_the rate (the "Revolving Loan Basic Rate") that is equal
to the Bank's Reference Rate.
Notwithstanding the foregoing, if at any time the Revolving Loan Basic Rate
shall exceed the Maximum Rate and thereafter the Revolving Loan Basic Rate shall
become less than the Maximum Rate, the rate of interest payable shall be the
Maximum Rate until the Bank shall have received the amount of interest it
otherwise would have received if the interest payable had not been limited by
the Maximum Rate during the period of time the Revolving Loan Basic Rate
exceeded the Maximum Rate.
2.4 Conditions to Each Extension of Credit. Before each extension of
credit under the line of credit, including the first, the Borrower
will deliver to the Bank a borrowing request, in the form of Exhibit H
hereto, or in such other form requested by the Bank, executed by the
authorized representative of Borrower.
2.5 Repayment Terms.
(a) The Borrower will pay accrued interest on December 31, 1996, and then
quarterly thereafter until payment in full of any principal
outstanding under this line of credit.
(b) The Borrower will repay in full all principal outstanding under this
line of credit as required by Section 10.11, Out of Debt Period, of
this Restated Credit Agreement.
(c) The Borrower will repay in full all principal and any unpaid interest
or other charges outstanding under this line of credit no later than
the Expiration Date.
2.6 Letters of Credit. This line of credit may be used for financing
standby letters of credit issued only in support of Borrower's fuel
purchasing activities and other routine business activities, with a
maximum maturity of sixty (60) days (or longer, if approved by the
Bank) but not to extend more than sixty (60) days beyond the
Expiration Date. The aggregate amount of the letters of credit
outstanding at any one time (including amounts drawn on letters of
credit and not yet reimbursed) may not exceed Three Million Dollars
($3,000,000.00).
The Borrower agrees:
(a) any sum drawn under a letter of credit may, at the option of the Bank,
be added to the principal amount outstanding under this Restated
Credit Agreement. The amount will bear interest and be due as
described elsewhere in this Restated Credit Agreement.
(b) if there is an Event of Default under this Restated Credit Agreement,
the Bank, at its option, may require Borrower to provide cash
collateral of any outstanding letters of credit, in the face amount of
such outstanding letters of credit;
(c) the issuance of any letter of credit and any amendment to a letter of
credit is subject to the Bank's written approval and must be in form
and content reasonably satisfactory to the Bank and in favor of a
beneficiary reasonably acceptable to the Bank;
(d) to sign the Bank's form Application and Agreement for Standby Letter
of Credit, a copy of which is attached to this Restated Credit
Agreement as Exhibit E; and
(e) to pay, prior to issuance, any issuance and/or other fees that the
Bank notifies the Borrower will be charged for issuing and processing
letters of credit for the Borrower.
3. TERM LOAN FACILITY AMOUNT AND TERMS
3.1 Loan Amount. Pursuant to the terms of the Original Credit Agreement,
the Bank agreed to provide a term loan to the Borrower in the amount
of Seven Million Five Hundred Thousand Dollars ($7,500,000.00) (the
"Term Loan"). As of the date of this Restated Credit Agreement, the
principal balance of the Term Loan is $5,625,000.
3.2 Purpose. The Term Loan was used to re-finance indebtedness in the
amount of $12,000,000.00 owing by Borrower to Citibank, N.A.
3.3 Interest Rate.
(a) Subject to the provisions of Section 3.4 (a) hereof, the interest rate
is the lesser of (i) the Maximum Rate, or (ii) the rate (the "Term
Loan Basic Rate"), through December 31, ,1996, that is equal to the
Bank's Reference Rate, and thereafter, the LIBOR Rate plus one and
three-quarters (1.75) percentage points. Notwithstanding the
foregoing, if at any time the Term Loan Basic Rate shall exceed the
Maximum Rate and thereafter the Term Loan Basic Rate shall become less
than the Maximum Rate, the rate of interest payable shall be the
Maximum Rate until the Bank shall have received the amount of interest
it otherwise would have received if the interest payable had not been
limited by the Maximum Rate during the period of time the Term Loan
Basic Rate exceeded the Maximum Rate.
(b) The Borrower may prepay the Term Loan in full or in part at any time
in an amount not less than Five Hundred Thousand Dollars
($500,000.00). The prepayment will be applied to installments of
principal due under the Term Loan in inverse order of maturities.
(c) Beginning January 1, 1997, each prepayment will be accompanied by the
amount of accrued interest on the amount prepaid, and a prepayment fee
equal to the amount (if any) by which:
(i) the additional interest which would have been payable on the amount
prepaid had it not been paid until the last day of the interest
period, exceeds
(ii) the interest which would have been recoverable by the Bank by placing
the amount prepaid on deposit in the LIBOR dollar market, in each case
for a period starting on the date on which it was prepaid and ending
on the last day of the interest period.
3.4 Repayment Terms
(a) The Borrower will pay all accrued but unpaid interest beginning on
December 31, 1996 and then on the last day of each ninety (90) day
interest period ("Interest Period") thereafter and upon payment in
full of the principal of the Term Loan. Notwithstanding the foregoing,
(i) any Interest Period which would otherwise end on a day which is
not a Eurodollar Business Day, shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar Business Day
falls in another calendar month, in which case such Interest Period
shall end on the next preceding Eurodollar Business Day; and (ii) any
Interest Period which begins on the last Eurodollar Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clauses (iii) below and (i) above, end on
the last Eurodollar Business Day of a calendar month; and (iii) any
Interest Period which would otherwise end after March 31, 2001, shall
end on March 31, 2001. In lieu of Section 3.4 (a)(iii) hereof, if any
Interest Period would otherwise end after March 31, 2001, then, at the
Bank's option, the Bank may elect for the Term Loan to accrue interest
at the rate which is equal to the Bank's Reference Rate from the end
of the immediately preceding Interest Period through March 31, 2001.
(b) Pursuant to the terms of the Original Credit Agreement, the Borrower
agreed to repay principal in successive installments, made
approximately quarterly, in the amount of Three Hundred Twelve
Thousand Five Hundred Dollars ($312,500.00) each. The remaining
outstanding principal of the Term Loan shall be paid in successive
installments starting December 31, 1996 and, thereafter, on the same
day as each interest payment due under the Term Loan (i.e., on the
last day of each Interest Period). On March 31, 2001, the Borrower
will repay the remaining principal balance plus any interest then due.
4. FUEL TERMINAL LOAN FACILITY AMOUNT AND TERMS
4.1 Loan Amount. The Bank agrees to provide a term loan to the Borrower in
the amount of up to Three Million Dollars ($3,000,000.00) (the "Fuel
Terminal Loan"), to be funded in one or more advances, as requested by
Borrower subject to the Fuel Terminal Availability Period, defined
below. Each advance shall be in the amount of at least $100,000.00,
or, if greater, in integral multiples thereof.
4.2 Fuel Terminal Loan Availability Period. Subject to the terms and
conditions of this Restated Credit Agreement, advances under the Fuel
Terminal Loan are available during the period (the "Fuel Terminal Loan
Availability Period") beginning on the date of this Restated Credit
Agreement and ending December 31, 1996 unless the Borrower is in
default. Upon the occurrence of any Potential Default, then in
addition to the Bank's other remedies, the Bank may terminate the Fuel
Terminal Loan Availability Period. If the Borrower cures such
Potential Default or Event of Default, as the case may be, then the
Fuel Terminal Availability Period may be reinstated so long as no
other Potential Default or Event of Default has occurred and remains
in existence.
4.3 Purpose. The Fuel Terminal Loan shall be used to allow Borrower to
finance renovations of a fuel terminal owned by an affiliate of
Borrower, Direct Fuels, L.P., located in Euless, Texas, which is
located on the real estate described on Exhibit I attached hereto, and
to renew, extend, modify and increase the Original Fuel Terminal Loan.
4.4 Interest Rate.
(a) Subject to the provisions of Section 4.5(a) hereof, the interest rate
is the lesser of (i)_the Maximum Rate, or (ii) the rate (the "Fuel
Terminal Loan Basic Rate"), through December_31, 1996, that is equal
to the Bank's Reference Rate, and thereafter, the LIBOR Rate plus one
and three-quarters (1.75) percentage points. Notwithstanding the
foregoing, if at any time the Fuel Terminal Loan Basic Rate shall
exceed the Maximum Rate and thereafter the Fuel Terminal Loan Basic
Rate shall become less than the Maximum Rate, the rate of interest
payable shall be the Maximum Rate until the Bank shall have received
the amount of interest it otherwise would have received if the
interest payable had not been limited by the Maximum Rate during the
period of time the Fuel Terminal Loan Basic Rate exceeded the Maximum
Rate.
(b) The Borrower may prepay the Fuel Terminal Loan in full or in part at
any time in an amount not less $250,000.00, or, if greater, in
integrated multiples thereof. The prepayment will be applied to
installments of principal due under the Fuel Terminal Loan in inverse
order of maturities. In the event Borrower prepays the outstanding
principal balance of this Note in full, the Bank's obligation to make
subsequent advances hereunder shall terminate as of the date of such
prepayment.
(c) The Borrower shall pre-pay the Fuel Terminal Loan in full or in part,
as the case may be, from all principal amounts collected, if any, from
the note receivable evidencing the $1,200,000.00 advance to Fidelity
Venture Investments, L.L.C. ("Fidelity Advance").
(d) Beginning January 1, 1997, each prepayment will be accompanied by the
amount of accrued interest on the amount prepaid, and a prepayment fee
equal to the amount (if any) by which:
(i) the additional interest which would have been payable on the amount
prepaid had it not been paid until the last day of the interest
period, exceeds
(ii) the interest which would have been recoverable by the Bank by placing
the amount prepaid on deposit in the LIBOR dollar market, in each case
for a period starting on the date on which it was prepaid and ending
on the last day of the interest period.
(iii)Notwithstanding the foregoing, there shall be no prepayment penalty
with respect to a prepayment made as required by Section 4.4 (c)
above.
4.5 Repayment Terms.
(a) The Borrower will pay all accrued but unpaid interest beginning on
December 31, 1996 and then on the last day of each ninety (90) day
interest period ("Interest Period") thereafter and upon payment in
full of the principal of the Fuel Terminal Loan. Notwithstanding the
foregoing, (i) any Interest Period which would otherwise end on a day
which is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day, unless such Eurodollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Eurodollar Business Day; and
(ii) any Interest Period which begins on the last Eurodollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clauses (iii) below and (i) above, end on
the last Eurodollar Business Day of a calendar month; and (iii) any
Interest Period which would otherwise end after March 31, 2003, shall
end on March 31, 2003. In lieu of Section 4.5(a)(iii) hereof, if any
Interest Period would otherwise end after March 31, 2003, then, at the
Bank's option, the Bank may elect for the Fuel Terminal Loan to accrue
interest at the rate which is equal to the Bank's Reference Rate from
the end of the immediately preceding Interest Period through March 31,
2003.
(b) Principal of the Fuel Terminal Loan shall be paid in successive
installments starting with the Interest Period ending on or about
June_30, 1997 and, thereafter, on the same day as each interest
payment due under the Fuel Terminal Loan (i.e., on the last day of
each Interest Period), in the amounts set forth as follows:
(i) the first (1st) through and including the fourth (4th) installments of
principal each shall be in the amount of Seventy-Five Thousand Dollars
($75,000.00);
(ii) the fifth (5th) through and including the twentieth (20th)
installments of principal each shall be in the amount of One Hundred
Twenty-Five Thousand Dollars ($125,000.00); and
(iii)the twenty-first (21st) through and including the twenty-fourth
(24th) installments of principal each shall be in the amount of One
Hundred Seventy-Five Thousand Dollars ($175,000.00).
On March 31, 2003, the entire unpaid balance of principal and unpaid
accrued interest then outstanding shall be due and payable.
5. FEES, EXPENSES AND DEPOSITS
5.1 Fees
(a) Unused Commitment Fee. Subject to the provisions of Section 14.14
hereof, the Borrower agrees to pay a fee on any difference between the
Revolving Commitment and the amount of credit it actually uses,
determined by the weighted average loan balance maintained during the
specified period. The fee will be calculated at three-eighths percent
(3/8%) per year. This fee is due the last day of each calendar quarter
until the expiration of the Availability Period.
(b) Fuel Terminal Loan Fee. Subject to the provisions of Section 14.14
hereof, the Borrower agrees to pay a fuel terminal loan fee in the
amount of Twenty-One Thousand Dollars ($21,000.00). This fee is due on
or before the date of execution of this Restated Credit
Agreement.
(c) Waiver Fee. Subject to the provisions of Section 14.14 hereof, if the
Bank, at its option, agrees to waive or amend any terms of this
Restated Credit Agreement, then the Borrower will pay the Bank a Two
Thousand Dollar ($2,000.00) fee for each waiver or amendment. Nothing
in this paragraph shall imply that the Bank is obligated to agree to
any waiver or amendment requested by the Borrower. The Bank may impose
additional requirements as a condition to any waiver or amendment.
5.2 Expenses.
(a) The Borrower agrees to immediately repay the Bank for reasonable
expenses relating to the transactions contemplated by this Restated
Credit Agreement that include, but are not limited to, filing,
recording and search fees, asset value appraisal fees, title report
fees, documentation fees, and environmental analysis and audit fees.
(b) The Borrower agrees to reimburse the Bank for any reasonable expenses
it incurs in the preparation of this Restated Credit Agreement and any
agreement or instrument required by this Restated Credit Agreement.
Expenses include, but are not limited to, reasonable attorneys' fees,
including any allocated costs of the Bank's in-house counsel.
(c) The Borrower agrees to reimburse the Bank for the cost of periodic
audits and appraisals of the collateral securing this Restated Credit
Agreement, at such intervals as the Bank may reasonably require, but
in no event more than one every six (6) months so long as no Event of
Default has occurred and is continuing. During the existence of any
Event of Default, the Bank may conduct audits and appraisals of the
collateral securing this Restated Credit Agreement, at such intervals
as the Bank may reasonably require, and the Borrower agrees to
reimburse the Bank for the cost of such audits and appraisals. The
audits and appraisals may be performed by employees of the Bank or by
independent appraisers.
5.3 Deposits. The Borrower shall not be required to maintain any
compensating balances as a condition to the loan facilities provided
herein.
5.4 No Excess Fees. Notwithstanding anything to the contrary in this
Section 5, in no event shall any sums payable under this Section 5 (to
the extent, if any, constituting interest under any applicable laws),
together with all amounts constituting interest under applicable laws
and payable in connection with the credit evidenced hereby, exceed the
Maximum Rate or the maximum amount of interest permitted to be
charged, taken, reserved, received or contracted for under applicable
usury laws.
6. COLLATERAL
6.1 Accounts and Inventory. The Borrower's obligations to the Bank under
this Restated Credit Agreement will continue to be secured by accounts
and inventory the Borrower now owns or will own in the future. The
collateral is further defined in a security agreement executed by the
Borrower. In addition, all accounts and inventory securing this
Restated Credit Agreement shall also secure all other present and
future obligations of the Borrower to the Bank. All personal property
collateral securing any other present or future obligations of the
Borrower to the Bank shall also secure this Restated Credit Agreement.
6.2 Nu-Way Beverage Note Receivable. The Borrower's obligations to the
Bank under this Restated Credit Agreement will continue to be secured
further by a pledge of that certain promissory note dated July 1,
1992, in the stated principal amount of $500,000.00, executed by
Nu-Way Beverage Company, payable to the order of Borrower, together
with any renewals, extensions and modifications thereof, and the lien
and security interest covering any and all property securing payment
of such promissory note.
6.3 Accounts and Inventory Supporting Guaranty. The obligations of the
guarantors to the Bank will continue to be secured by accounts and
inventory each guarantor now owns or will own in the future. The
collateral is further defined in a security agreement executed by the
guarantors.
6.4 Negative Pledge of Fuel Terminal Facility. Direct Fuels, L.P., a Texas
limited partnership and the Bank previously executed that certain
Negative Pledge Agreement dated March 29, 1996, applicable to that
real property described on Exhibit _I_ attached hereto and the
improvements located or to be located thereon. The aforementioned
Negative Pledge Agreement shall continue in full force and effect
until all loans under this Restated Credit Agreement shall have been
paid in full.
6.5 Negative Pledge of Fixed Assets. Refer to Section 10.23 hereof, for a
full description of Borrower's Negative Pledge of its fixed assets.
7. DISBURSEMENTS, PAYMENTS AND COSTS
7.1 Requests for Credit. Each request for an extension of credit will be
made in a manner reasonably acceptable to the Bank, including without
limitation the manner described in Section 7.3 below.
7.2 Disbursements and Payments. Each disbursement by the Bank and each
payment by the Borrower will be:
(a) made at the Bank's branch (or other location) selected by the Bank
from time to time;
(b) made in immediately available funds, or such other type of funds
selected by the Bank; and
(c) evidenced by records kept by the Bank.
7.3 Telephone Authorization.
(a) The Bank may honor telephone instructions for advances or repayments
given by any one of the individuals authorized to sign loan agreements
on behalf of the Borrower, or any other individual designated by any
one of such authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn from
the Borrower's account number 317499644, or such other of the
Borrower's accounts with the Bank as designated in writing by the
Borrower.
(c) The Borrower indemnifies and excuses the Bank (including its officers,
employees, and agents) from all liability, loss, and costs in
connection with any act resulting from telephone instructions it
reasonably believes are made by any individual authorized by the
Borrower to give such instructions.
7.4 Banking Days. Unless otherwise provided in this Restated Credit
Agreement, a banking day is a day other than a Saturday or a Sunday on
which the Bank is open for business in Texas. For amounts bearing
interest at an offshore rate (if any), a banking day is a day other
than a Saturday or a Sunday on which the Bank is open for business in
Texas and California and dealing in offshore dollars. All payments and
disbursements which would be due on a day which is not a banking day
will be due on the next banking day. All payments received on a day
which is not a banking day will be applied to the credit on the next
banking day.
7.5 Additional Costs. Subject to the provisions of Section 14.14 hereof,
the Borrower will pay the Bank, within thirty (30) days of receipt by
Borrower of the Bank's demand, for the Bank's reasonable costs or
losses arising from any statute or regulation, or any request or
requirement of a regulatory agency which is applicable to all national
banks or a class of all national banks. The costs and losses will be
allocated to the loan in a manner determined by the Bank, using any
reasonable method. The costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets and commitments
for credit.
Notwithstanding the foregoing, in no event shall any sum payable under this
Section 7.5 (to the extent, if any, constituting interest under applicable
laws), together with all amounts constituting interest under applicable laws and
payable in connection with the credit evidenced hereby, exceed the Maximum Rate
or the maximum amount permitted to be charged, taken, reserved, received or
contracted for by any applicable usury laws.
7.6 Interest Calculation. Except as otherwise stated in this Restated
Credit Agreement, all interest and fees, if any, will be computed on
the basis of a 360-day year and the actual number of days elapsed.
This results in more interest or a higher fee than if a 365-day year
is used.
7.7 Interest on Late Payments. At the Bank's sole option in each instance,
any amount not paid when due under this Restated Agreement (including
interest) shall bear interest from the due date at the Maximum Rate.
7.8 Default Rate. Upon the occurrence and during the continuation of any
Event of Default under this Restated Credit Agreement, advances under
this Restated Credit Agreement will at the option of the Bank bear
interest at the Maximum Rate. This will not constitute a waiver of any
Event of Default.
7.9 Overdrafts. At the Bank's sole option in each instance, the Bank may
make advances under this Restated Credit Agreement to prevent or cover
an overdraft on any account of the Borrower with the Bank. Each such
advance will accrue interest from the date of the advance or the date
on which the account is overdrawn, whichever occurs first, at the
interest rate described in this Restated Credit Agreement, may be
funded by an advance under the Revolving Commitment, and shall be
secured by the collateral. The Bank agrees to give Borrower notice of
each such advance; however, failure to give such notice will not in
any way impair or reduce the obligations of Borrower to pay principal
and interest owing to the Bank under the terms of this Restated Credit
Agreement or any documents executed in connection with or as security
for this Restated Credit Agreement.
7.10 Payments in Kind. The proceeds of collections of the Borrower's
accounts receivable, when received by the Bank in kind, shall be
credited to interest, principal, and other sums owed to the Bank under
this Restated Credit Agreement in the order and proportion determined
by the Bank in its sole discretion. All such credits will be
conditioned upon collection and any returned items may, at the Bank's
option, be charged to the Borrower.
8. CONDITIONS
The Bank must receive the following items, in form and content reasonably
acceptable to the Bank, before it is required to extend any credit to the
Borrower under this Restated Credit Agreement:
8.1 Authorizations. Evidence that the execution, delivery and performance
by the Borrower (and any guarantor or subordinating creditor) of this
Restated Credit Agreement and any instrument or agreement required
under this Restated Credit Agreement have been duly authorized.
8.2 Security Agreements. Ratification of the original security agreements,
assignments, and financing statements which the Bank reasonably
requires in accordance with the terms of this Restated Credit
Agreement.
8.3 Evidence of Priority. Evidence that security interests and liens in
favor of the Bank are valid, enforceable, and prior to all others'
rights and interests, except those the Bank consents to in writing.
8.4 Insurance. Evidence of insurance coverage, as required in the
"Covenants" section of this Restated Credit Agreement.
8.5 Guaranties. Ratification of the guaranties signed by those parties set
forth on Exhibit A attached to this Restated Credit Agreement.
8.6 Qualification to Do Business. Evidence of qualification to do business
for the general partner of Borrower from its state of incorporation
and from any other state in which the general partner of the Borrower
is required to qualify in order for the Borrower to conduct its
business.
8.7 Other Items. Any other items that the Bank reasonably requires.
9. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Restated Credit Agreement, and until the Bank
is repaid in full, the Borrower makes the following representations and
warranties. Each request for an extension of credit constitutes a renewed
representation:
9.1 Organization of Borrower. The Borrower is a partnership duly formed
and existing under the laws of the state where organized.
9.2 Authorization. This Restated Credit Agreement, and any instrument or
agreement required hereunder, are within the Borrower's powers, have
been duly authorized, and do not conflict with any of its
organizational papers.
9.3 Enforceable Agreement. This Restated Credit Agreement is a legal,
valid and binding agreement of the Borrower, enforceable against the
Borrower in accordance with its terms, and any instrument or agreement
required hereunder, when executed and delivered, will be similarly
legal, valid, binding and enforceable.
9.4 Good Standing. In each state in which the Borrower does business, it
is properly licensed, properly qualified to do business, and, where
required, in compliance with fictitious name statutes.
9.5 No Conflicts. This Restated Credit Agreement does not conflict with
any law, agreement, or obligation by which the Borrower is bound.
9.6 Financial Statements. Each of the financial statements furnished or to
be furnished to the Bank by the Borrower, including the Borrower's
financial statement dated as of September 29, 1996, will have been
prepared, upon delivery to the Bank, in accordance with generally
accepted accounting principles, applied on a consistent basis, and
will fairly and accurately reflect its financial condition as of the
dates thereof. Since the date of the financial statement specified
above, there has been no material adverse change in the assets or the
financial condition of the Borrower (or any guarantor), which has not
been disclosed to the Bank in writing.
9.7 Financial Information. All other financial and other information that
has been or will be supplied to the Bank:
(a) will accurately reflect in all material respects the facts and
circumstances purported to be reflected in the information so supplied
to the Bank; and
(b) will be in compliance with all government regulations that apply.
9.8 Lawsuits. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower involving claims asserted in an amount
of more than $500,000.00 which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as are set
forth in Exhibit C attached to this Restated Credit Agreement and made
a part hereof.
9.9 Collateral. To the best of Borrower's knowledge, all collateral
required in this Restated Credit Agreement is owned by the grantor of
the security interest free of any title defects or any liens or
interests of others.
9.10 Permits, Franchises. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights,
trade name rights, and patent rights necessary to enable it to conduct
the business in which it is now engaged.
9.11 Other Obligations. To the best of Borrower's knowledge, the Borrower
is not in default on any obligation for borrowed money, any purchase
money obligation or any other material lease, commitment, contract,
instrument or obligation, except as have been disclosed in writing to
the Bank.
9.12 Income Tax Returns. The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year, except as
have been disclosed in writing to the Bank.
9.13 No Event of Default. To the best of Borrower's knowledge, there is no
event which is, or with notice or lapse of time or both would be, an
Event of Default under this Restated Credit Agreement.
9.14 Speculative Gasoline Purchases. The Borrower will not engage in any
speculative gasoline purchases, a gasoline purchase being considered
speculative if, at the time of purchase, the price therefor is not at
a known, quantified and fixed dollar amount.
9.15 An Event of Default will not exist at any time the Borrower delivers
to the Bank a Borrowing Certificate or requests an advance under the
Fuel Terminal Loan.
9.16 ERISA Plans.
(a) The following terms have the meanings indicated for purposes of this
Restated Credit Agreement:
(i) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(ii) "ERISA" means the Employee Retirement Income Act of 1974, as amended
from time to time.
(iii)"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
(iv) "Plan" means any employee pension benefit plan maintained or
contributed to by the Borrower and insured by the Pension Benefit
Guaranty Corporation under Title IV of ERISA. ----
(b) The Borrower has fulfilled its obligations, if any, under the minimum
funding standards of ERISA and the Code with respect to each Plan and
is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and has not incurred any
liability with respect to any Plan under Title IV of ERISA.
(c) No reportable event has occurred under Section 4043(b) of ERISA for
which the PBGC requires 30 day notice.
(d) No action by the Borrower to terminate or withdraw from any Plan has
been taken and no notice of intent to terminate a Plan has been filed
under Section 4041 of ERISA.
(e) No proceeding has been commenced with respect to a Plan under Section
4042 of ERISA, and no event has occurred or condition exists which
might constitute grounds for the commencement of such a proceeding.
9.17 Locations of Borrower. The Borrower's chief executive office is
located at the address listed under the Borrower's signature on this
Restated Credit Agreement. The Borrower's other places of business
(including locations of Borrower's convenience stores) are set forth
in Exhibit_B attached to this Restated Credit
Agreement.
10. COVENANTS
The Borrower agrees, so long as credit is available under this Restated
Credit Agreement and until the Bank is repaid in full:
10.1 Use of Proceeds. To use the proceeds of the credit only for the
purposes set forth in Sections 2.1(a), 2.8, 3.2 and 4.2.
10.2 Financial Information. To provide the following financial information
and statements and such additional information as requested by the
Bank from time to time:
(a) Concurrently with the filing of such statement with the Securities and
Exchange Commission, but in any event within one hundred five (105)
days of the Borrower's fiscal year end, the annual financial
statements and Form 10-K annual Report of FFP Partners, L.P. These
financial statements must be audited (with an unqualified opinion) by
a Certified Public Accountant acceptable to the Bank.
(b) Within one hundred five (105) days of Borrower's fiscal year end,
annual financial statements prepared on a consolidating basis. These
consolidating financial statements may be Borrower prepared.
(c) Concurrently with the filing of such statement with the Securities and
Exchange Commission, but in any event within fifty (50) days of the
period's end, the quarterly financial statements and Form 10-Q of FFP
Partners, L.P. These financial statements may be Borrower prepared.
The statements shall be prepared on a consolidated basis.
(d) Within fifty (50) days of the quarter's end, a Compliance Certificate,
in the form attached hereto as Exhibit G, signed by the general
partner of the Borrower.
(e) If requested by the Bank, statements showing an aging and
reconciliation of the Borrower's receivables within twenty-five (25)
days after the end of each month.
(f) If the Bank requires the Borrower to deliver the proceeds of accounts
receivable to the Bank upon collection by the Borrower, a schedule of
the amounts so collected and delivered to the Bank.
(g) If requested by the Bank, an inventory listing within twenty-five (25)
days after the end of each month, in the form of Exhibit D attached
hereto; the listing must include a description of the inventory, its
location and cost, and such other information as the Bank
reasonably may require.
(h) A listing of the names and addresses of all debtors obligated upon the
Borrower's accounts receivable at closing and thereafter within ninety
(90) days after the end of each calendar year.
(i) Prior to the beginning of each new fiscal year of the Borrower, the
Borrower's annual operating forecast for such new fiscal year, in
form, substance and detail satisfactory to the Bank.
(j) Promptly upon the Bank's request, such other statements, lists of
property and accounts, budgets, forecasts or reports as to the
Borrower and as to each guarantor of the Borrower's obligations to the
Bank as the Bank reasonably may request.
10.3 Other Debts. Not to have outstanding or incur any direct or contingent
debts (other than those to the Bank), or become liable for the debts
of others without the Bank's written consent. This does not prohibit:
(a) Acquiring goods, supplies, or merchandise on trade credit that is
normal for the particular type of goods, supplies or merchandise so
acquired;
(b) Endorsing negotiable instruments received in the usual course of
business;
(c) Obtaining surety bonds in the usual course of business;
(d) Debts in existence on the date of this Restated Credit Agreement, as
set forth in Exhibit F attached hereto and made a part hereof;
(e) Additional debts for purchase money equipment financings (including
capitalized leases) which do not exceed a total principal amount of
One Million Dollars ($1,000,000.00) outstanding at any one time,
excluding debts described in Section 10.3(f), below;
(f) Additional debts owing to BA Leasing and Capital Corporation for
purchase money equipment financings (including capitalized leases)
which do not exceed a total principal amount of Two Million Seven
Hundred Thousand Dollars ($2,700,000.00) outstanding at any one time;
(g) The purchase of lottery tickets from state governmental authorities
and the resale of the same to Borrower's customers; and
(h) The sale of money orders and the resulting money order obligations.
10.4 Other Liens. Not to create, assume, or allow any security interest or
lien (including judicial liens) on property the Borrower now or later
owns, except:
(a) Deeds of trust and security agreements in favor of the Bank;
(b) Liens for taxes not yet due;
(c) Additional purchase money security interests in personal property
acquired after the date of this Restated Credit Agreement, if the
total principal amount of debts secured by such liens does not exceed
One Million Dollars ($1,000,000.00) at any one time, excluding
purchase money security interests described in Section 10.4(d), below;
(d) Additional purchase money security interests in favor of BA Leasing
and Capital Corporation in personal property acquired after the date
of this Restated Credit Agreement, if the total principal amount of
debts secured by such liens does not exceed Two Million Seven Hundred
Thousand Dollars ($2,700,000.00) at any one time; and
(e) Non-consensual, unperfected liens created by state statutes.
10.5 Investments. Not to make any investments in any other person or
entity, except the following: (a)_investments in direct obligations of
the United States of America, or any agency thereof or obligations
guaranteed by the United States of America, provided that such
obligations mature within one year from the date of acquisition
thereof; (b)_investments in certificates of deposit maturing within
one year from the date of acquisition issued by a bank or trust
company organized under the laws of the United States or any state
thereof having capital surplus and undivided profits aggregating at
least $l00,000,000.00; and (c)_investments in commercial paper given
the highest rating by a national credit rating agency and maturing not
more than 270 days from the date of creation thereof.
10.6 Distributions. Without the Bank's prior, written consent, not to
suffer or allow FFP Partners, L.P. to declare or pay any distributions
in respect of any of its partnership interests, except in an amount
that, when measured as of the end of each fiscal quarter of FFP
Partners, L.P. for the period (the "Rolling Four-Quarter Period")
consisting of the fiscal quarter then ended (beginning with the fiscal
quarter ending December_31, 1996) plus the immediately preceding three
fiscal quarters, does not exceed the lesser of (a) fifty percent (50%)
of the consolidated net income of, its subsidiaries and affiliates,
for such Rolling Four-Quarter Period, or (b) such amount as allows the
Borrower to satisfy, after giving effect to such distributions, the
cash flow ratio as set forth in Section 11.3.
10.7 Repurchases and Redemptions. Not to purchase, redeem or otherwise
acquire for value any of FFP Partners, L.P.'s or Borrower's
partnership interests or create any sinking fund in relation thereto.
10.8 Loans and Advances. Not to make any loans, advances or other
extensions of credit outside the ordinary course of Borrower's
business to any third party or affiliate except to the extent such
loans, advances or other extensions of credit do not exceed in the
aggregate Two Hundred Fifty Thousand Dollars ($250,000.00) at any one
time. This does not apply to the existing, non-current receivables
owing to Borrower by certain companies affiliated with Borrower.
10.9 Change of Ownership. Without the Bank's written consent, which will
not be unreasonably withheld, not to cause, permit, or suffer any
change, direct or indirect, in the Borrower's capital ownership.
10.10 Change in Management. Without the Bank's written consent, which will
not be unreasonably withheld, not to cause, permit, or make any change
in the management or control of the Borrower at the chairman of the
board, president and chief financial officer levels.
10.11 Out of Debt Period.
To repay in full any outstanding advances on its revolving line of credit
that are in excess of the aggregate amount of $1,500,000.00, and not to draw any
additional advances on its revolving line of credit for a period of at least
three (3) consecutive days in each calendar quarter ending June 30, 1996 and
thereafter. For the purposes of this Section 10.11, "advances" does not include
undrawn amounts of outstanding letters of credit.
10.12 Notices to Bank. To promptly notify the Bank in writing of:
(a) any lawsuit asserting a claim of over Five Hundred Thousand Dollars
($500,000.00) against the Borrower or any guarantor;
(b) any substantial dispute between the Borrower or any guarantor and any
government authority;
(c) any failure to comply with this Restated Credit Agreement;
(d) any material adverse change in the Borrower's (or any guarantor's)
financial condition or operations; and
(e) any change in the Borrower's name, legal structure, place of business,
or chief executive office if the Borrower has more than one place of
business.
10.13 Books and Records. To maintain adequate books and records.
10.14 Audits. To allow the Bank and its agents to inspect the Borrower's
properties and examine, audit and make copies of books and records at
any reasonable time, upon prior written notice to the Borrower. If any
of the Borrower's properties, books or records are in the possession
of a third party, the Borrower authorizes that third party to permit
the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.
10.15 Compliance with Laws. To comply in all material respects with the
laws (including any fictitious name statute), regulations, and orders
of any government body with authority over the Borrower's business.
10.16 Preservation of Rights. To maintain and preserve all material rights,
privileges, and franchises the Borrower now has.
10.17 Maintenance of Properties. To make any repairs, renewals, or
replacements to keep the Borrower's properties in good working
condition.
10.18 Perfection of Liens. To help the Bank perfect and protect its
security interests and liens, and reimburse it for related costs it
incurs to protect its security interests and liens.
10.19 Cooperation. To take any action reasonably requested by the Bank to
carry out the intent of this Restated Credit Agreement.
10.20 Insurance.
(a) General Business Insurance. To maintain insurance satisfactory to the
Bank as to amount, nature and carrier covering public liability
insurance including coverage for contractual liability, casualty,
product liability and workers' compensation, and any other insurance
which is usual for the Borrower's business.
(b) Evidence of Insurance. Upon the request of the Bank, to deliver to the
Bank a copy of each insurance policy, or, if permitted by the Bank, a
certificate of insurance listing all insurance in force.
10.21 Additional Negative Covenants. Not to, without the Bank's written
consent:
(a) engage in any business activities substantially different from the
Borrower's present business.
(b) liquidate or dissolve the Borrower's business.
(c) enter into any consolidation, merger, pool, joint venture, syndicate,
or other combination.
(d) lease, or dispose of all or a substantial part of the Borrower's
business or the Borrower's assets except in the ordinary course of the
Borrower's business.
(e) acquire or purchase a business or its assets, during any fiscal
quarter, for a consideration, including assumption of debt, which,
when aggregated with:
(i) the amount of consideration given to acquire any other business or its
assets during such fiscal quarter, plus the preceding three (3) fiscal
quarters, and
(ii) the amount of Borrower's actual capital expenditures during such
fiscal quarter, plus the preceding three (3) fiscal quarters, exceeds
the maximum amount of permitted capital expenditures allowed in
Section_11.4 below.
(f) sell or otherwise dispose of any assets for less than fair market
value or enter into any sale and leaseback agreement covering any of
its fixed or capital assets.
10.22 ERISA Plans. To give prompt written notice to the Bank of:
(a) The occurrence of any reportable event under Section 4043(b) of ERISA
for which the PBGC requires 30 day notice.
(b) Any action by the Borrower to terminate or withdraw from a Plan or the
filing of any notice of intent to terminate under Section 4041 of
ERISA.
(c) Any notice of noncompliance made with respect to a Plan under Section
4041(b) of ERISA.
(d) The commencement of any proceeding with respect to a Plan under
Section 4042 of ERISA.
10.23 Negative Pledge. Without the Bank's prior written consent or as
expressly permitted otherwise in this Restated Credit Agreement, not
to:
(a) except for encumbrances permitted by this Restated Credit Agreement
and non-consensual, unperfected liens created at law, and except for
equipment leases, tenant leases and existing mortgages (including
re-financings of such existing mortgages to the extent of the
specified and particular property that is the subject matter of such
existing mortgage) that have prohibitions of further encumbrance with
regard to specified and particular property that is the subject matter
of such lease or existing mortgage, create, incur, assume or suffer to
exist or to be created, incurred or assumed, any pledge, security
interest, option or other encumbrance of any kind upon any of its
right, title and interest in any of its fixed assets whatsoever,
whether real or personal, or sell, transfer, convey or assign any of
its fixed assets, except in the ordinary course of its business; or
(b) except for encumbrances permitted by this Restated Credit Agreement
and non-consensual, unperfected liens created at law, and except for
equipment leases, tenant leases and existing mortgages (including
re-financings of such existing mortgages to the extent of the
specified and particular property that is the subject matter of such
existing mortgage) that have prohibitions of further encumbrance with
regard to specified and particular property that is the subject matter
of such lease or existing mortgage, enter into any agreement with or
in favor of any person or entity other than the Bank, which agreement
would hinder, qualify, prohibit or otherwise limit in any manner the
Borrower's right or ability to create, incur, assume or suffer to
exist or to be created, incurred or assumed, any pledge, security
interest, option or other encumbrance of any kind upon any of its
right, title and interest in any of its fixed assets whatsoever,
whether real or personal, or sell, transfer, convey or assign any of
its fixed assets, except in the ordinary course of its business.
"Fixed assets" means, individually and collectively, all fixtures,
equipment, machinery, and real estate, now owned or existing as well
as any and all that may hereafter arise or be acquired by the
Borrower, and all proceeds and products thereof, including, without
limitation, all notes, drafts, acceptances, instruments, general
intangibles (including tax refunds) and chattel paper arising there
from.
10.24 Security Interest in Fixed Assets. Upon the Bank's request and at
Borrower's expense, to grant to the Bank a security interest in and
lien on the Borrower's fixed assets.
10.25 Environmental Questionnaire. To provide to Bank by March 3l of each
year a completed form of the Bank's "Environmental Questionnaire",
reflecting the status of the Borrower's properties and operations as
of the end of the Borrower's immediately preceding fiscal year.
10.26 Collections. Upon the request of the Bank, to segregate all
collections and proceeds of the collateralso that they are capable of
identification and deliver daily such collections and proceeds to the
Bank in kind.
11. FINANCIAL COVENANTS
The Borrower agrees that effective as of the financial reporting period
ended June 30, 1996 and so long as credit is available under this Restated
Credit Agreement and until the Bank is repaid in full:
11.1 Total Liabilities to Tangible Net Worth. To maintain on a consolidated
basis a ratio of total liabilities to tangible net worth not exceeding
2.25:1.0.
"Total liabilities" means the sum of current liabilities plus long term
liabilities.
"Tangible net worth" means the gross book value of the Borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
treasury stock, unamortized debt discount and expense, deferred research and
development costs, deferred marketing expenses, and other like intangibles, and
monies due from affiliates (except for NuWay Beverage, officers, directors or
partners of the Borrower) less total liabilities, including but not limited to
accrued and deferred income taxes, and any reserves against assets. For purposes
of calculating Borrower's debt to tangible net worth ratio under this Section
11.1, Borrower agrees that the Fidelity Advance will be classified as an
intangible asset.
11.2 Tangible Net Worth. To maintain on a consolidated basis tangible net
worth equal to at least Twenty-Two Million Dollars ($22,000,000.00).
For purposes of calculating Borrower's tangible net worth under this
Section 11.2, Borrower agrees that the note receivable evidencing the
Fidelity Advance will be classified as
an intangible asset.
11.3 Cash Flow Ratio. To maintain on a consolidated basis a cash flow ratio
of at least 1.35:1.0.
"Cashflow ratio" means the ratio of (a) cash flow to (b) the sum of (i) the
current portion of long term debt owing to all creditors of the Borrower plus
(ii) interest. This ratio will be calculated at the end of each fiscal quarter,
using the results of that quarter and each of the 3 immediately preceding
quarters.
"Cashflow" is defined as net income from operations, after taxes, plus
interest, depreciation and amortization, less cash distributions made in
accordance with Section 10.6, and less gains from the sale of convenience stores
that are recognizable for any fiscal quarter ending on or after September 30,
1996.
The current portion of long term debt will be measured as of the last day
of the preceding calendar quarter and include amounts due over the next four
calendar quarters, and will exclude the liabilities of Borrower under the
Revolving Commitment.
11.4 Capital Expenditures. Not to spend or incur obligations (including the
total amount of any capital leases, but excluding those capital
expenditures financed with borrowed funds, as permitted by this
Agreement), to acquire fixed or capital assets during any calendar
year, in amount which, when aggregated with:
(a) the amount of Borrower's actual capital expenditures during such
calendar year, and
(b) the amount of consideration given to acquire or purchase a business or
its assets as allowed in Section 10.21(e) above, during such calendar
year, exceeds Three Million Five Hundred Thousand Dollars
($3,500,000.00) for the calendar year ending December 31, 1996 and
Three Million Dollars ($3,000,000.00) for each calendar year ending
thereafter.
12. HAZARDOUS WASTE
12.1 Indemnity Regarding Hazardous Substances. Upon the granting of a lien
to the Bank on any real property, the Borrower agrees to indemnify and
hold the Bank harmless from and against all liabilities, claims,
actions, foreseeable and unforeseeable consequential damages, costs
and expenses (including sums paid in settlement of claims and all
consultant, expert and legal fees and expenses of the Bank's counsel,
including the reasonable estimate of the allocated cost of in-house
counsel and staff) or loss directly or indirectly arising out of or
resulting from any of the following:
(a) Any hazardous substance being present at any time during the period
the Bank holds a lien on the real property, in or around any part of
the real property upon which Borrower conducts any of its business and
the Bank holds a lien (including retail store locations) (the " Real
Property"), or in the soil, groundwater or soil vapor on or under the
Real Property, including those incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work, or any resulting damages or injuries to the person
or property of any third parties or to any natural resources.
(b) Any use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a hazardous
substance by Borrower. This indemnity will apply whether the hazardous
substance is on, under or about any of the Borrower's property or
operations or property leased to the Borrower.
Upon demand by the Bank, the Borrower will defend any investigation, action
or proceeding alleging the presence of any hazardous substance in any such
location, which affects the Real Property or which is brought or commenced
against the Bank, whether alone or together with the Borrower or any other
person, all at the Borrower's own cost and by counsel to be approved by the Bank
in the exercise of its reasonable judgment. In the alternative, the Bank may
elect to conduct its own defense at the expense of the Borrower. The indemnity
extends to the Bank, its parent, subsidiaries and all of their directors,
officers, employees, agents, successors, attorneys and assigns.
12.2 Compliance Regarding Hazardous Substances. The Borrower will comply,
and cause all occupants of the Real Property to comply, with all laws,
regulations and ordinances governing or applicable to hazardous
substances as well as the recommendations of any qualified
environmental engineer or other expert which apply or pertain to the
Real Property or the operations of the Borrower. The Borrower
acknowledges that hazardous substances may permanently and materially
impair the value and use of the Real Property.
12.3 Notices Regarding Hazardous Substances. Until full repayment of the
loan, the Borrower will promptly notify the Bank if it knows, suspects
or believes there may be any hazardous substance in or around the Real
Property, or in the soil, groundwater or soil vapor on or under the
Real Property, or that the Borrower or the Real Property may be
subject to any threatened or pending investigation by any governmental
agency under any law, regulation or ordinance pertaining to any
hazardous substance which can reasonably be foreseen to have a
material negative on Borrower's financial condition or results of
operations.
12.4 Site Visits, Observations and Testing. The Bank and its agents and
representatives will have the right at any reasonable time to enter
and visit the Real Property and any other place where any property is
located for the purposes of observing the Real Property, taking and
removing soil or groundwater samples, and conducting tests on any part
of the Real Property. The Bank is under no duty, however, to visit or
observe the Real Property or to conduct tests, and any such acts by
the Bank will be solely for the purposes of protecting the Bank's
security and preserving the Bank's rights under this Restated Credit
Agreement. No site visit, observation or testing by the Bank will
result in a waiver of any Event of Default of the Borrower or impose
any liability on the Bank. In no event will any site visit,
observation or testing by the Bank be a representation that hazardous
substances are or are not present in, on or under the Real Property,
or that there has been or will be compliance with any law, regulation
or ordinance pertaining to hazardous substances or any other
applicable governmental law. Neither the Borrower nor any other party
is entitled to rely on any site visit, observation or testing by the
Bank. The Bank owes no duty of care to protect the Borrower or any
other party against, or to inform the Borrower or any other party of,
any hazardous substances or any other adverse condition affecting the
Real Property. The Bank will not be obligated to disclose to the
Borrower or any other party any report or findings made as a result
of, or in connection with, any site visit, observation or testing by
the Bank. In each instance, the Bank will give the Borrower reasonable
notice before entering the Real Property or any other place the Bank
is permitted to enter under this Paragraph. The Bank will make
reasonable efforts to avoid interfering with the Borrower's use of the
Real Property or any other property in exercising any rights provided
in this paragraph.
12.5 Continuation of Indemnity. The Borrower's obligations to the Bank
under this Article, except the obligation to give notices to the Bank,
shall survive termination of this Restated Credit Agreement and
repayment of the Borrower's obligations to the Bank under this
Restated Credit Agreement, and shall also survive as unsecured
obligations after any acquisition by the Bank of the collateral
securing this Restated Credit Agreement, including the Real Property
or any part of it, by foreclosure or any other means.
12.6 Definition of Hazardous Substance. For purposes of this Restated
Credit Agreement, the term "hazardous substances" means any substance
which is or becomes designated as "hazardous" or "toxic" under any
federal, state or local law.
12.7 Annual Environmental Audits. The Bank shall have the right to request
that Borrower, at the Borrower's expense, have an environmental audit
of the Real Property conducted each year while any credit is
outstanding under this Restated Credit Agreement, using the Bank's
internal consultant or a consultant satisfactory to the Bank, to
ensure that the Borrower remains in compliance with all laws,
regulations and ordinances governing or applicable to hazardous
substances. The Borrower agrees, at the Borrower's sole expense, to
follow all reasonable recommendations of any qualified environmental
engineer or other expert which apply or pertain to the Real Property
or the operations of the Borrower. The Borrower shall deliver to the
Bank a written certification of the Borrower's compliance with these
requirements no later than sixty (60) days after the date specified by
such recommendations for completion of such compliance, together with
a copy of the annual environmental audit required above.
13. DEFAULT
If any of the following events occur (each, an "Event of Default"), the
Bank may do one or more of the following: (a) declare the Borrower in default,
(b) stop making any additional credit available to the Borrower, (c) exercise
any and all rights and remedies as may be available to the Bank under the terms
of any collateral documents, security instruments, debt instruments or any other
document or instrument executed in connection herewith or in any way related
hereto, (d) exercise any and all rights and remedies as may be available to the
Bank at law or in equity, and (e)declare the entire debt created and evidenced
hereby to be immediately due and payable in full, whereupon the entire unpaid
principal indebtedness evidenced hereby, and all accrued unpaid interest
thereon, shall at once mature and become due and payable without presentment,
demand, protest, grace or notice of any kind (including, without limitation,
notice of intent to accelerate, notice of acceleration or notice of protest),
all of which are hereby severally waived by the Borrower. If the Borrower or any
partners of Borrower files a bankruptcy petition with respect to the Borrower,
the entire debt outstanding under this Restated Credit Agreement will
automatically be due immediately.
13.1 Failure to Pay. The Borrower fails to make a payment under this
Restated Credit Agreement when due.
13.2 Lien Priority. The Bank fails to have an enforceable first lien
(except for (a) any prior liens to which the Bank has consented in
writing and (b) any liens securing indebtedness in an aggregate amount
of $25,000.00 or less, so long as the Borrower obtains a release of
such liens within thirty (30) days following request therefor by the
Bank) on or security interest in any property given as security for
this loan.
13.3 False Information. The Borrower has given the Bank any materially
false or misleading information or representations.
13.4 Bankruptcy. The Borrower (or any guarantor) or any general partner of
the Borrower files a bankruptcy petition, or the Borrower (or any
guarantor) or any general partner of the Borrower makes a general
assignment for the benefit of creditors.
13.5 Bankruptcy. A bankruptcy petition is filed against the Borrower (or
any guarantor) or any general partner of the Borrower, and the
bankruptcy petition has not been dismissed within sixty (60) days of
the filing thereof.
13.6 Receivers. A receiver or similar official is appointed for the
Borrower's (or any guarantor's) business, or the business is
terminated.
13.7 Judgments. Any judgments or arbitration awards are entered against the
Borrower (or any guarantor), or the Borrower (or any guarantor) enters
into any settlement agreements with respect to any litigation or
arbitration, in an aggregate amount of Five Hundred Thousand Dollars
($500,000.00) or more in excess of any insurance coverage.
13.8 Material Adverse Chance. A material adverse change occurs in the
Borrower's (or any guarantor's) financial condition, properties or
prospects, or ability to repay the loan.
13.9 Cross-default. Any default occurs under any agreement in connection
with any credit the Borrower (or any guarantor) has obtained from
anyone else or which the Borrower (or any guarantor) has guaranteed in
the amount of One Hundred Thousand Dollars ($100,000.00) or more in
the aggregate.
13.10 Default under Guaranty or Subordination Agreement. Any guaranty,
subordination agreement, security agreement, deed of trust, or other
document required by this Restated Credit Agreement is violated or no
longer in effect, and, if violated, such violation continues beyond
the expiration of any applicable cure period.
13.11 Other Bank Agreements. The Borrower (or any guarantor) fails to meet
the conditions of, or fails to perform any obligation under any other
agreement the Borrower (or any guarantor) has with the Bank or any
affiliate of the Bank, and such failure continues beyond the
expiration of any applicable cure period.
13.12 ERISA Plans. The occurrence of any one or more of the following
events with respect to the Borrower, provided such event or events
could reasonably be expected, in the judgment of the Bank, to subject
the Borrower to any tax, penalty or liability (or any combination of
the foregoing) which, in the aggregate, could have a material adverse
effect on the financial condition of the Borrower with respect to a
Plan:
(a) A reportable event shall occur with respect to a Plan which is, in the
reasonable judgment of the Bank likely to result in the termination of
such Plan for purposes of Title IV of ERISA.
(b) Any Plan termination (or commencement of proceedings to terminate a
Plan) or the Borrower's full or partial withdrawal from a Plan.
13.13 Other Breach Under Agreement. The Borrower fails to meet the
conditions of, or fails to perform any obligation under, any term of
this Restated Credit Agreement not specifically referred to in this
Article, and such failure continues for a period of ten (10) days
after Borrower receives notice of such failure from the Bank.
14. ENFORCING THIS AGREEMENT; MISCELLANEOUS
14.1 GAAP. Except as otherwise stated in this Restated Credit Agreement,
all financial information provided to the Bank and all financial
covenants will be made under generally accepted accounting principles,
consistently applied.
14.2 Governing Law. This Restated Credit Agreement is governed by Texas
law.
14.3 Successors and Assigns. This Restated Credit Agreement is binding on
the Borrower's and the Bank's successors and assignees. The Borrower
agrees that it may not assign this Restated Credit Agreement without
the Bank's prior consent. The Bank may sell participations in or
assign this loan, and may exchange financial information about the
Borrower with actual or potential participants or assignees.
14.4 Arbitration.
(a) This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Bank, including but not limited to those
that arise from:
(i) This Restated Credit Agreement (including any renewals, extensions or
modifications of this Restated Credit Agreement);
(ii) Any document, agreement or procedure related to or delivered in
connection with this Restated Credit Agreement;
(iii) Any violation of this Restated Credit Agreement; or
(iv) Any claims for damages resulting from any business conducted between
the Borrower and the Bank, including claims for injury to persons,
property or business interests (torts).
(b) At the request of the Borrower or the Bank, any such controversies or
claims will be settled by arbitration in accordance with the United
States Arbitration Act. THE UNITED STATES ARBITRATION ACT WILL APPLY
EVEN THOUGH THIS RESTATED CREDIT AGREEMENT PROVIDES THAT IT IS
GOVERNED BY TEXAS LAW.
(c) Arbitration proceedings will be administered by the American
Arbitration Association and will be subject to its commercial rules of
arbitration. The arbitration will be conducted within the following
Texas county or counties: Dallas.
(d) For purposes of the application of the statute of limitations, the
filing of an arbitration pursuant to this paragraph is the equivalent
of the filing of a lawsuit, and any claim or controversy which may be
arbitrated under this paragraph is subject to any applicable statute
of limitations. The arbitrators will have the authority to decide
whether any such claim or controversy is barred by the statute of
limitations and, if so, to dismiss the arbitration on that basis.
(e) If there is a dispute as to whether an issue is arbitrable, the
arbitrators will have the authority to resolve any such dispute.
(f) The decision that results from an arbitration proceeding may be
submitted to any authorized court of law to be confirmed and enforced.
(g) This provision does not limit the right of the Borrower or the Bank
to:
(i) exercise self-help remedies such as set-off;
(ii) foreclose against or sell any real or personal property collateral; or
(iii)act in a court of law, before, during or after the arbitration
proceeding to obtain:
(A) an interim remedy; and/or
(B) additional or supplementary remedies.
(h) The pursuit of or a successful action for interim, additional or
supplementary remedies, or the filing of a court action, does not
constitute a waiver of the right of the Borrower or the Bank,
including the suing party, to submit the controversy or claim to
arbitration if the other party contests the lawsuit.
(i) The foregoing provisions may not be construed to allow either party to
act in a court of law to submit a controversy or claim to judicial
resolution where such controversy or claim previously has been decided
by the arbitrators.
14.5 Severability; Waivers. If any part of this Restated Credit Agreement
is not enforceable, the rest of the Restated Credit Agreement may be
enforced. The Bank retains all rights, even if it makes a loan after
the occurrence of an Event of Default. If the Bank waives an Event of
Default, it may enforce a later Event of Default. Any consent or
waiver under this Restated Credit Agreement must be in writing.
14.6 Costs. If the Bank incurs any expenses in connection with
administering or enforcing this Restated Credit Agreement, or if the
Bank takes collection action under this Restated Credit Agreement, it
is entitled to costs and reasonable attorneys' fees, including any
allocated costs of in-house counsel.
14.7 Attorneys' Fees. In the event of a lawsuit or arbitration proceeding,
the prevailing party is entitled to recover costs and reasonable
attorneys' fees (including any allocated costs of in-house counsel)
incurred in connection with the lawsuit or arbitration proceeding, as
determined by the court or arbitrator.
14.8 Destruction of Borrower's Documents. The Bank will not be obligated to
return any schedules, invoices, statements, budgets, forecasts,
reports or other papers delivered by the Borrower. The Bank will
destroy or otherwise dispose of such materials at such time as the
Bank, in its discretion, deems appropriate.
14.9 Verification of Receivables. The Bank may at any time, either orally
or in writing, request confirmation from any debtor of the current
amount and status of the accounts receivable upon which such debtor is
obligated.
14.10 Indemnification. The Borrower agrees to indemnify the Bank against,
and hold the Bank harmless from, all claims, actions, losses, costs
and expenses (including reasonable attorneys' fees and allocated costs
for in-house legal services) incurred by the Bank and arising from any
contention, whether well-founded or otherwise, that there has been a
failure to comply with any law regulating the Borrower's sales or
leases to or performance of services for debtors obligated upon the
Borrower's accounts receivable and disclosures in connection
therewith. This indemnity will survive repayment of the Borrower's
obligations to the Bank and termination of this Restated Credit
Agreement.
14.11 Notices. All notices required under this Restated Credit Agreement
shall be personally delivered or sent by first class mail, return
receipt requested, postage prepaid, to the addresses on the signature
page of this Restated Credit Agreement, or to such other addresses as
the Bank and the Borrower may specify from time to time in writing.
Notice sent by facsimile transmission shall be effective for delivery
of notice under this Restated Credit Agreement.
14.12 Headings. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of
this Restated Credit Agreement.
14.13 Counterparts. This Restated Credit Agreement may be executed in as
many counterparts as necessary or convenient, and by the different
parties on separate counterparts each of which, when so executed,
shall be deemed an original but all such counterparts shall constitute
but one and the same agreement.
14.14 Usury Laws. It is the intention of the parties hereto to comply with
applicable usury laws; accordingly, it is agreed that notwithstanding
any provisions to the contrary in this Restated Credit Agreement or in
any of the documents evidencing or securing payment hereof or
otherwise relating hereto, in no event shall this Restated Credit
Agreement or such instruments or documents require or permit the
payment, charging, taking, reserving or receiving of any sums
constituting interest, as defined under applicable usury laws, in
excess of the maximum amount permitted by such laws. If any such
excess of interest is contracted for, paid, charged, taken, reserved
or received under this Restated Credit Agreement or under the terms of
any of the documents evidencing or securing payment hereof or
otherwise relating hereto, or in any communication by Bank or any
other person to Borrower or any other party liable for the payment of
the indebtedness evidenced hereby, or if the maturity of the
indebtedness is accelerated in whole or in part, or in the event that
all or part of the principal or interest shall be prepaid, so that
under any of such circumstances or under any other circumstances
whatsoever, the amount of interest contracted for, paid, charged,
taken, reserved or received under this Restated Credit Agreement or
under any of the documents securing payment hereof or otherwise
relating hereto, on the amount of principal actually outstanding from
time to time shall exceed the maximum amount of interest permitted by
applicable usury laws, then in any such event (a)_the provisions of
this Section shall govern and control, (b)_any such excess shall be
canceled automatically to the extent of such excess, and shall not be
collected or collectible, (c)_any such excess which is or has been
received shall be credited against the then unpaid principal balance
hereof or refunded to Borrower, at the Bank's option, and (d)_the
effective rate of interest shall be automatically reduced to the
maximum lawful rate allowed under applicable laws as construed by
courts having jurisdiction thereof. It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest
contracted for, paid, charged, taken, reserved or received under this
Restated Credit Agreement or under such other documents or instruments
that are made for the purpose of determining whether such rate exceeds
the maximum lawful rate of interest, shall be made, to the extent
permitted by applicable usury laws, by amortizing, prorating,
allocating and spreading in equal parts during the period of the full
stated term of the indebtedness, all interest at any time contracted
for, paid, charged, taken, reserved or received from the Borrower or
otherwise by the holder or holders hereof. The terms of this Section
shall be deemed to be incorporated in every loan document, security
instrument, debt instrument and communication relating to this
Restated Credit Agreement and the loan evidenced hereby. The term
"applicable usury laws" shall mean such laws of the State of Texas or
the laws of the United States, whichever laws allow the higher rate of
interest, as such laws now exist; provided, however, that if such laws
shall hereafter allow higher rates of interest, then the applicable
usury laws shall be the laws allowing the higher rates, to be
effective as of the effective date of such laws.
14.15 AMENDMENT AND RESTATEMENT. This Restated Credit Agreement is given in
amendment, modification, supplementation, restatement and renewal (and
not in extinguishment or satisfaction) of the Original Credit
Agreement. All rights, titles, liens, security interests and
priorities under the Original Credit Agreement are preserved,
maintained and carried forward under this Restated Credit Agreement,
subject, however, to the terms of this Restated Credit Agreement.
14.16 NO ORAL AGREEMENTS. This Restated Credit Agreement and any related
security or other agreements required by this Restated Credit
Agreement, collectively:
(a) represent the sum of the understandings and agreements between the
Bank and the Borrower concerning this credit;
(b) replace any prior oral or written agreements between the Bank and the
Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete and
exclusive statement of the terms agreed to by them.
In the event of any conflict between this Restated Credit Agreement and
any other agreements required by this Restated Credit Agreement, this Restated
Credit Agreement will prevail.
THIS WRITTEN AGREEMENT AND THE INSTRUMENTS AND DOCUMENTS EXECUTED IN
CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
This Restated Credit Agreement is executed as of the date stated at the
top of the first page.
Bank of America Texas, N.A. FFP Operating Partners, L.P.
By: FFP Partners Management Company, Inc.,
General Partner
By:/s/Xxxxxx X. Xxxxxxx By: /s/Xxxxxx X. Xxxxxxx
-------------------------- ---------------------------
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
Vice President Vice President-Finance
Address where notices to Address where notices to
the Bank are to be sent: the Borrower are to be sent:
1925 W. Xxxx Xxxxxxxxx Freeway 0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000 Xxxx Xxxxx, Xxxxx 00000-0000
Exhibits:
A - Guarantors
B - Locations
C - Litigation
D - Form of Inventory Summary
E - Form of Application and Agreement for Standby Letter of Credit
F - Existing Debt
G - Form of Compliance Certificate
H - Form of Borrowing Request
I - Fuel Terminal Facility
