EXHIBIT 10
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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This Second Amendment to Loan and Security Agreement is made
this 1st day of August, 1999 by and between Congress Financial
Corporation, and First Union National Bank (individually and
collectively, "Lender") Congress Financial Corporation, as
Administrative Agent for Lender (in such capacity "Agent") and
Crown Central Petroleum Corporation ("Crown"), Continental
American Corporation, Crown Central Holding Corporation, Crown
Central Pipe Line Company, Crown-Rancho Pipe Line Corporation,
Crown Stations, Inc., FZ Corporation, Fast Fare, Inc., La Gloria
Oil and Gas Company, Locot, Inc., McMurrey Pipe Line Company,
Mollie's Properties, Inc. and Crowncen International N.V. (each
of such parties, including Crown, being referred to herein,
individually and collectively, as "Borrower").
RECITALS
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Borrower, Agent and Lender entered into a certain Loan and
Security Agreement dated December 10, 1998 (together with all
amendments, modifications, addenda and supplements, the "Loan
Agreement") and related documents, evidencing certain financing
arrangements as more particularly described therein.
The parties entered into an Amendment No. 1 to Loan and
Security Agreement on March 29, 1999, to reflect certain
modifications to the terms and conditions of the Loan
Agreement.
The parties wish to make certain technical corrections to the
Loan Agreement and subject to the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the mutual conditions
and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Capitalized terms used herein, which are not otherwise
defined herein, shall
have the respective meanings ascribed thereto in the Loan
Agreement.
2. Section 2.2( b) of the Loan Agreement is hereby
deleted in its entirety as
of December 10, 1998 and the following shall be inserted in lieu
thereof, effective as of December 10, 1998:
"2.2(b) In addition to any charges, fees or expenses
charged by any bank or issuer in connection with the Letter of
Credit Accommodations, Borrowers shall pay to Agent, for the
account of Lender, a letter of credit fee at a rate equal to two
percent (2.00%) per annum, or, after March 31, 1999, such other
annual rate as may be applicable by reference to the Pricing
Grid, on the daily outstanding balance of the Letter of Credit
Accommodations for the immediately preceding month (or part
thereof), payable in arrears as of the first day of each
succeeding month. Unless Borrowers furnish cash collateral as
provided in Section 2.2(d) below, Borrowers shall pay to Agent,
for the account of Lender, a letter of credit fee, at Agent's
option, at a rate equal to two percentage points per annum above
the otherwise applicable rate on such daily outstanding balance
for: (i) the period from and after the date of termination or
non-renewal hereof until Lender has received full and final
payment of all Obligations (notwithstanding entry of a judgment
against Borrowers) and (ii) the period from and after the date
of the occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Agent. Such
letter of credit fee shall be calculated on the
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basis of a three hundred sixty (360) day year and actual days
elapsed and the obligation of Borrowers to pay such fee shall
survive the termination or non-renewal of this Agreement."
3. Section 3.3 of the Loan Agreement is hereby deleted
in its entirety as
of December 10, 1998 and the following shall be inserted in lieu
thereof, effective as of December 10, 1998:
"3.3 UNUSED LINE FEE. Borrowers shall pay to Agent,
for the account of Lender, monthly an unused line fee at a rate
equal to one-half percent (.50%) per annum calculated upon the
amount by which the Maximum Credit exceeds the average daily
principal balance of the outstanding Revolving Loans and Letter
of Credit Accommodations during the immediately preceding month
(or part thereof) while this Agreement is in effect, which fee
shall be payable on the first day of each month in arrears."
4. Schedule 8.3 of the Loan Agreement is deleted in its
entirety and there is substituted in its place, as of the date
hereof, Amended Schedule 8.3 bearing the date hereof, attached
hereto as Schedule 8.3.
5. Section 9.9(a) of the Loan Agreement is hereby
amended to read as follows:
"(a) Borrowers may incur indebtedness consisting of:
(i) the Obligations; (ii) trade obligations and normal accruals
in the ordinary course of business not yet due and payable, or
with respect to which a Borrower is contesting in good faith the
amount or validity thereof by appropriate proceedings diligently
pursued and available to such Borrower, and with respect to which
adequate reserves have been set aside on its books; (iii)
purchase money indebtedness (including capital leases)
outstanding at any time, not to exceed $6,500,000; (iv)
indebtedness for Product Hedging Obligations incurred for hedging
purposes (and not speculation) in order to protect Borrowers
against reasonably anticipated fluctuations in the prices
applicable to existing or reasonably anticipated requirements of
crude oil, other feedstocks, retail petroleum products, or
additives thereto or components thereof or existing or reasonably
anticipated requirements for energy supplies; (v) the
indebtedness shown on Schedule 9.9; (vi) indebtedness of
Borrowers, in addition to that described in clauses (i) through
(v) above and any replacement or refinancing described in Section
9.9(a)(vii), so long as the aggregate principal amount of such
indebtedness does not exceed the greater of (A) $10,000,000 and
(B) the dollar amount represented by the product of 500,000 and
the settlement price on the New York Mercantile Exchange of the
spot month for a barrel of West Texas Intermediate crude oil (or,
if such price cannot be obtained, the arithmetic mean of the
applicable prices shown in the then most recently published
PLATT'S OILGRAM PRICE REPORT or, if such publication is not
published at any time, or if it does not include such prices,
then in any comparable industry publication including such
prices), which amount will be calculated by Borrowers as of the
last day of each calendar quarter using the price per barrel as
determined under (B) above as of such date and shall be in effect
for the next succeeding calender quarter; and (vii) replacement
or refinancing of existing indebtedness and refinancing of
indebtedness incurred under Section 9.9(b)."
6. Section 9.10 of the Loan Agreement is hereby amended
to be read as follows:
"9.10 LOANS, INVESTMENT, GUARANTEES, ETC.: No
Borrower shall directly or indirectly, make any loans or advance
money or property to any Person (except (i) to another Borrower,
or (ii)to another Person to fund temporarily the construction
costs of new retail locations to be leased by a Borrower,
provided however, that such construction loans and advances, by
their express terms, are required to be repaid or reimbursed to
said Borrower within 90 days of the later of completion of
construction or commencement of
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full operations at such retail location, and provided further,
that the aggregate amount of all such construction loans and
advances at any time outstanding shall not exceed $10,000,000),
or invest in (by capital contribution, dividend or otherwise) or
purchase or repurchase (except for the repurchase of such
Borrower's own capital stock) the stock or indebtedness or all or
a substantial part of the assets or property of any Person
(except another Borrower), or guarantee, assume, endorse, or
otherwise become responsible for (directly or indirectly) the
indebtedness, performance, obligations or dividends of any Person
(except another Borrower) or agree to do any of the foregoing,
EXCEPT: the endorsement of instruments for collection or deposit
in the ordinary course of business; investments in (i) direct
obligations of the United States of America or any agency thereof
with maturities of one year or less from the date of acquisition,
(ii) repurchase agreements with a term of not more than one year
or less from the date of acquisition, (iii) repurchase agreements
with a term of not more than 30 days and fully collateralized by
securities described in (b) (i), (iv) commercial paper (or other
instruments with a maturity of one year or less from the date of
acquisition) of a domestic issuer rated at least A-2 by S&P or P-
2 by Moody's, (v) eurodollar time deposits rated at least A-2 by
S&P or P-2 by Moody's, (vi) municipal bonds or notes with
maturities of one year or less from the date of acquisition rated
A or better by S&P or Moody's or guaranteed by one or more banks
rated at least A by S&P or Moody's, (vii) obligations of U.S.
savings and loan and thrift institutions or commercial banks
operating within the United States of America with maturities of
one year or less, provided that such institutions have total
assets of $500,000,000 or more at the time of investment and have
a long-term rating of at least A by S&P or Moody's, (viii)
participation in or notes evidencing loans with maturities of one
year or less made by any bank to any corporation organized under
the laws of the United States of America or any state thereof
having a short-term rating of at least A-2 by S&P or P-2 by
Moody's or a long-term rating of at least A by S&P or Moody's;
(ix) shares in an open-end money market fund organized by a bank
or financial institution with combined total assets of at least
$500,000,000 investing solely in obligations permitted by the
foregoing clauses (i) through (viii) inclusive; (x) contributions
made to Crown Central Petroleum Foundation, Inc. for charitable
purposes not to exceed $500,000.00 per annum; and (xi) payments
to Tiara for ordinary and customary business purposes."
7. There is hereby added to the Loan Agreement a new
Section 12.6 which shall read as follows:
"12.6 SCHEDULES. Any reference in this
Agreement to any Schedule hereto, shall include any and all
amendments, modifications, supplements, revisions, replacements
and restatements delivered to and accepted by Agent (a
"Supplemental Schedule"). Each Supplemental Schedule shall be
signed by Crown, dated its effective date, and delivered to
Agent. Unless Agent shall object so such Supplemental Schedule
in writing within ten (10) days of receipt, the Supplemental
Schedule shall be deemed to take effect on and as of its
Effective Date."
8. Borrowers represent, warrant and covenant with and to
Lender as follows,
which representations, warranties and covenants are continuing
and shall survive the execution and delivery hereof, and the
truth and accuracy of, or compliance with each, together with the
representations, warranties and covenants in the other Financing
Agreements, being a continuing condition of the making of Loans
by Lender to Borrower:
(a) No Event of Default or act, condition or event
which with notice or passage of time or both would constitute an
Event of Default exists or has occurred as of the date of this
Amendment (after giving effect to the amendments to the Loan
Agreement made by this Amendment).
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(b) This Amendment has been duly executed and
delivered by Borrower and is in full force and effect as of the
date hereof and the agreements and obligations of Borrower
contained herein constitute legal, valid and binding obligations
of Borrower enforceable against Borrower in accordance with their
respective terms.
9. The effectiveness of the amendments contained herein
shall be subject to the satisfaction of each of the following
conditions, in a manner satisfactory to Agent and its counsel:
(a) Agent shall have received this Second Amendment
to the Loan
Agreement duly authorized, executed and delivered by the parties
hereto;
(b) Agent shall have received the consents to this
Amendment from each Lender and from Rosemore; and
(c) No Event of Default, or event, act or condition
which with notice or passage of time or both would constitute an
Event of Default, shall exist or have occurred.
10. Except as expressly amended herein, the terms and
conditions of the Loan
Agreement are hereby reaffirmed and ratified in all respects, and
Borrower reaffirms each of the representations and warranties
under the Loan Agreement made by it, as if said representations
and warranties were made and given on and as of the date hereof.
11. The parties hereto shall execute and deliver such
additional documents and take such additional action as may be
reasonably necessary or desirable to effectuate the provisions
and purposes of this Amendment.
12. The validity, interpretation and enforcement of this
Amendment and the other Financing Agreements and any dispute
arising out of the relationship between the parties hereto,
whether in contract, tort, equity or otherwise, shall be governed
by the internal laws of the State of New York (without giving
effect to principles of conflicts of laws).
13. This Amendment shall be binding upon and inure to
the benefit of each of the parties hereto and their respective
successors and assigns.
14. The headings listed herein are for convenience only
and do not constitute
matters to be construed in interpreting this Amendment.
15. The Amendment may be executed in any number of
counterparts and by
different parties on separate counterparts (including by
facsimile transmission of executed signature pages hereto), each
of which counterparts, when so executed and delivered, shall be
deemed to be an original and all of which counterparts, taken
together, shall constitute but one and the same Amendment. This
Amendment shall become effective upon the execution and delivery
of a counterpart hereof by each of the parties hereof.
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be duly executed the date and year first above
written.
CROWN CENTRAL PETROLEUM CORPORATION
By: /s/--John E. Wheeler, Jr.
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John E. Wheeler, Jr., Executive Vice
President and Chief Financial Officer
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CONTINENTAL AMERICAN CORPORATION
By: /s/--John E. Wheeler, Jr.
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John E. Wheeler, Jr., President
CROWN CENTRAL HOLDING CORPORATION
By: /s/--John E. Wheeler, Jr.
-------------------------
John E. Wheeler, Jr., President
CROWN CENTRAL PIPE LINE COMPANY
By: /s/--John E. Wheeler, Jr.
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John E. Wheeler, Jr., Vice President
CROWN-RANCHO PIPE LINE CORPORATION
By: /s/--John E. Wheeler, Jr.
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John E. Wheeler, Jr., Vice President
CROWN STATIONS, INC
By: /s/--John E. Wheeler, Jr.
------------------------
John E. Wheeler, Jr., Vice President
F Z CORPORATION
By: /s/--John E. Wheeler, Jr.
------------------------
John E. Wheeler, Jr., Vice President
FAST FARE, INC.
By: /s/--John E. Wheeler, Jr.
------------------------
John E. Wheeler, Jr., Vice President
LA GLORIA OIL AND GAS COMPANY
By: /s/--John E. Wheeler, Jr.
------------------------
John E. Wheeler, Jr., Vice President
LOCOT, INC.
By: /s/--John E. Wheeler, Jr.
------------------------
John E. Wheeler, Jr., President
MCMURREY PIPE LINE COMPANY
By: /s/--John E. Wheeler, Jr.
------------------------
John E. Wheeler, Jr., President
MOLLIE'S PROPERTIES, INC.
By: /s/--John E. Wheeler, Jr.
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John E. Wheeler, Jr., Vice President
CROWNCEN INTERNATIONAL N.V.
By: /s/--John E. Wheeler, Jr.
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John E. Wheeler, Jr., Supervisory
Director
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AGREED AND ACCEPTED:
CONGRESS FINANCIAL CORPORATION,
as Agent
By: /s/Drew Stawin
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I. Title: VP
CONSENTED TO:
ROSEMORE HOLDINGS, INC.
By: Kenneth H. Trout
Title: EXECUTIVE VICE PRESIDENT
CONGRESS FINANCIAL CORPORATION
as Lender
By: /s/--Drew Stawin
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I. Title: VP
FIRST UNION NATIONAL BANK
as Lender
By: /s/--William Fee
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Title: S VP
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