UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: JANUARY 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number: 0-21825
STREICHER MOBILE FUELING, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 65-0707824
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2720 N.W. 55TH COURT, FORT LAUDERDALE, FLORIDA 33309
(Address of principal executive offices) (Zip Code)
(954) 739-3880
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
REDEEMABLE COMMON STOCK PURCHASE WARRANTS
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's Common Stock held by
non-affiliates as of April 28, 2000 was $5,482,925 computed by reference to the
closing price of the Common Stock on such date.
As of April 28, 2000 there were 2,712,600 shares of the registrant's Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
This Form 10-K contains "forward-looking statements" which involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth in Item 7, Management's Discussion
and Analysis and Plan of Operations under the caption "Certain Factors Affecting
Future Operating Results" and elsewhere in this Form 10-K.
The Company provides mobile fueling services, primarily to customers
which operate large fleets of vehicles (such as governmental agencies,
utilities, major trucking lines, hauling and delivery services and national
courier services). Company-owned custom fuel trucks deliver fuel on a regularly
scheduled or as needed basis directly to vehicles at customer locations,
assuring the Company's customers a dependable supply of fuel at competitive
rates. The Company utilizes its proprietary electronic fuel management system to
measure, record and track fuel dispensed to each vehicle fueled at a customer
location. This allows the Company to verify the amount of fuel delivered and
provides its customers with customized fleet fuel data for management analysis
and tax reporting. Additionally, the Company's fuel management system reduces
the risk of employee theft by dispensing fuel only to authorized vehicles. The
Company believes that mobile fueling provides several economic and other
advantages to its customers, including eliminating the costs and potential
environmental liabilities associated with equipping and maintaining fuel storage
and dispensing facilities, reducing labor and administrative costs associated
with fueling vehicles and providing centralized control over fuel inventories
and usage. The Company also believes that federal and state environmental
regulations have created opportunities for the Company to convert to mobile
fueling customers fleet operators that currently utilize underground storage
tanks.
Founded by Stanley H. Streicher, the Company's President and Chief
Executive Officer, the Company's predecessor commenced its mobile fueling
operations in 1983. The Company presently operates at seven Florida locations;
three California locations; Atlanta, Georgia; Chattanooga and Kingsport,
Tennessee; Dallas/Fort Worth and Houston, Texas; and Kenner, Louisiana. During
April 2000, the Company operated a fleet of 100 custom fuel trucks and was
delivering fuel at a rate of 5.0 million gallons per month.
THE MOBILE FUELING INDUSTRY
Traditionally, business and other entities that operate large fleets of
vehicles have met their fueling requirements by either maintaining their own
supply of fuel in on-site storage tanks or fueling vehicles with credit card
purchases or other credit arrangements at local retail gas stations. On-site
storage tanks and fueling facilities can be expensive to construct and maintain
and expose the property owner and operator to potential liability associated
with fuel leaks or spills. In addition, increasingly stringent federal and state
environmental regulation of underground storage tanks will require businesses
that maintain their own fuel supplies to spend significant amounts to remove or
retrofit underground storage tanks to meet regulatory standards. For example,
federal regulations designed to protect the nation's soil and groundwater from
contamination by leaking underground petroleum storage tanks currently require
that new and existing storage tanks comply with certain construction standards
and contain leak detection systems. Some states, including Florida, have
promulgated their own detailed criteria for new underground storage tanks and
the retrofitting of older underground storage tanks, and in some instances such
criteria are more stringent than the federal regulations. The Company believes
that many fleet operators currently utilizing underground storage tanks will
choose to meet their fueling requirements by other means, including mobile
fueling, instead of investing in upgrading existing facilities.
Fueling fleet vehicles at retail gas stations is an inefficient use of
employee time, creates a significant amount of unnecessary paperwork and exposes
the fleet operator to an increased risk of employee fraud. In addition, while
large users often are able to negotiate favorable fuel pricing from retail gas
stations, the labor time expended by having employees fuel their own vehicles as
well as the costs associated with management and administration of fuel
purchases can exceed the benefits associated with price discounts.
<PAGE>
The Company believes that mobile fueling services, such as those
provided by the Company, offer several benefits over traditional fueling
methods:
o REDUCED OPERATING COSTS AND INCREASED LABOR PRODUCTIVITY.
Mobile fueling enables businesses to reduce operating costs by
eliminating the need for company employees to fuel vehicles
either on-site or at local retail gas stations. Overnight
fueling prepares fleet vehicles for operation at the beginning
of each work day and increases labor productivity by allowing
employees to use their vehicles during time that would
otherwise be spent fueling. Mobile fueling also reduces the
administrative burden required to oversee and administer fuel
purchases and inventories.
o PROVIDES CENTRALIZED INVENTORY CONTROL AND MANAGEMENT. The
Company's fuel management system provides customers with
weekly reports detailing, among other things, the location,
description and daily and weekly fuel consumption of each
vehicle fueled by the Company. This eliminates customers' need
to invest working capital to maintain adequate fuel supplies,
and allows customers to centralize their fuel inventory
controls and track and analyze vehicle movement and fuel
consumption for management and tax reporting purposes.
o PROVIDES TAX REPORTING BENEFITS. The Company's fuel management
system's ability to track fuel consumption to specific
vehicles and fuel tanks provides tax benefits to customers who
consume fuel in uses that are tax-exempt, such as for off-road
vehicles, government-owned vehicles and fuel used to run
refrigerator units on vehicles. For such uses, the customers
receive reports which provide them with the information
required to substantiate such tax exemptions.
o ELIMINATES EXPENSES AND LIABILITIES OF ON-SITE STORAGE. Fleet
operators who previously satisfied their fuel requirements
using on-site storage tanks can eliminate the capital
expenditures and operating costs required to equip and
maintain fuel storage and dispensing facilities and inventory
and to comply with increasingly stringent environmental
regulations. In addition, by removing on-site storage tanks
and relying on mobile fueling, customers avoid potential
liabilities associated with the handling and storage of fuel.
o PREVENTS FUEL THEFT. Fleet operators that rely on employees to
fuel vehicles, whether at on-site facilities or at retail gas
stations, often experience shrinkage of fuel inventories or
excess fuel purchases due to employee fraud. The Company's
fuel management system reduces the risk of employee theft by
dispensing fuel only to authorized vehicles. Utilizing an
independent contractor such as the Company for fueling
services rather than allowing employees to purchase fuel at
local retail stations also eliminates employee fraud due to
credit card abuse.
o EMERGENCY FUEL SUPPLIES. Emergency preparedness, including
fuel availability, is critical to the operation of utilities,
delivery services and other fleet operators. The Company
provides access to emergency fuel supplies to allow customers
to respond more effectively to severe local weather conditions
or other emergency situations.
MARKETING AND CUSTOMERS
The Company markets its services primarily to customers which operate
large fleets of vehicles in connection with their business (such as governmental
agencies, utilities, major trucking lines, hauling and delivery services and
national courier services). The Company also seeks to obtain the business of
smaller fleet operators which are in geographical proximity to its larger
customers. Once engaged to provide fueling services, the Company is usually the
exclusive service for the fueling of a customer's entire fleet or a particular
yard of vehicles. For potential customers with larger fleets, the Company
generally obtains approval from regional corporate offices to supply fuel within
a newly designated area. Whereas large fleet operators offer immediate market
penetration on a regional basis, small fleet operators are equally important
accounts because they provide geographic density which optimizes fuel delivery
efficiency and minimizes cost.
2
<PAGE>
The Company's representatives focus their marketing efforts on fleet
operators within the Company's established service areas. The Company's
representatives identify and directly contact candidates for the Company's
services. Direct marketing, including telephone solicitation, has played a
primary role in the Company's development of new business. Another important
marketing source has been referrals from existing customers.
The Company distributes gas and diesel fuel to approximately 755
customers. Three customers accounted for approximately 26% of the Company's
revenue in the year ended January 31, 2000 and 23% of the company's revenue in
fiscal 1999. Although the Company has contracts to provide mobile fueling
services to several of its larger customers, generally the Company does not
obtain written agreements with its customers.
OPERATIONS
The Company currently operates from 17 locations in California,
Florida, Georgia, Tennessee, Louisiana and Texas. The Company delivers fuel
utilizing its own fleet of 100 custom fuel trucks, most of which are equipped
with the Company's proprietary electronic fuel tracking and reporting system.
The Company's vehicles have fuel capacities ranging from 2,800 to 4,400 gallons.
Generally, each vehicle services between five and fifteen customer locations per
day or night, depending on size of the customers, market density and the
individual customers' fuel requirements. Generally, the custom fuel trucks
acquire fuel inventory daily at local port facilities or large wholesale gas
distributor locations and are assigned to a specified delivery route. The
Company conducts all dispatch and billing functions from corporate headquarters.
Route drivers and service personnel operate from all the Company's offices.
The Company's fuel management system derives its data from the Fuel
Tracking Controller (the "FTC Computer"), which is a computer that the Company
installs on each customized fuel truck. The FTC Computer can be programmed to
control a variety of truck configurations; single or multiple storage container
trucks; and any number of pumps and hoses attached to the fuel truck. The FTC
Computer details fueling from the Company's trucks to each vehicle in the
customer's vehicle fleet to a measurement of 1/100 of a gallon by reading the
state-calibrated meter installed on the fuel trucks. To accomplish this
measurement, the FTC Computer interfaces with hand-held devices operated by the
Company's driver or operator. The Company has a patent registered with the
United States Patent and Trademark Office for its proprietary electronic fuel
management system.
To permit the Company's customers to track their use of fuel, each
fleet vehicle or piece of equipment fueled by the Company is electronically
identified from a list of the customer's asset number previously registered in
the Company's computer. For security and tracking purposes, the FTC Computer
will not permit fuel to be dispensed from the Company's truck unless both the
fleet yard and the individual vehicle to be fueled electronically correspond to
the FTC Computer registration. A hand-held radio connected to a scanning device
links the operator or driver of the fuel truck with the FTC Computer. Only after
verification of both the yard and the truck or piece of equipment will the FTC
Computer allow operation of the fuel pump on the fuel truck to dispense fuel.
All fuel dispensing from a fuel truck is recorded by the FTC Computer
and stored in a tamper free solid state memory cartridge ("SSC") for downloading
at an operations control center where the data is assimilated into reports and
invoices for the customer. The FTC Computer will not allow fuel to be dispensed
unless this removable SSC cartridge is inserted into the FTC Computer. The SSC
has no moving parts and is not susceptible to damage or data loss under normal
conditions. The SSC also is protected by a dual battery back-up system and a
dual disk system to protect data. The Company also maintains a backup computer
system in the event of failure of the primary system.
The Company also has adapted its FTC Computer for use with fixed site
tanks. Upon conversion of a customer tank, the Company services and manages fuel
delivery to the tank and provides the customer with reports detailing fuel
dispensed by the customer from the tank into each fleet vehicle.
FUEL SUPPLY
Gas and diesel fuel are commodities which are processed and sold by
various sources. The Company purchases fuel from several major suppliers at spot
market prices and often qualifies for volume discounts. The
3
<PAGE>
Company monitors fuel prices and price trends in each of its markets on a daily
basis and seeks to purchase at the lowest available prices with the best terms
satisfactory to the Company.
CUSTOM FUEL TRUCK PURCHASES
The Company presently orders and purchases custom fuel trucks from
several manufacturers of trucks suitable for the Company's operations. These
companies provide their customers with the option of purchasing standard
equipment fuel trucks or custom designing a fuel truck to particular
specifications. The typical configuration of the Company's custom fuel trucks is
a Kenworth or International chassis with a 3,400 to 4,400 gallon
multi-compartment aluminum tank, a vapor recovery system and the Company's
proprietary FTC Computer, which records and regulates fuel flow from the storage
compartments. For maintenance of the fuel trucks, the Company relies upon
equipment warranties, fixed fee service contracts and on-site repairs. To date,
the Company has not experienced significant down-time on any of its customized
fuel trucks due to maintenance problems.
COMPETITION
The Company competes with other distributors of fuel, including several
regional distributors and numerous small independent operators. Some of the
Company's competitors have significantly greater financial or marketing
resources than the Company. The Company's competitors also could introduce
services that are superior to the Company's or that achieve greater market
acceptance. The Company also competes for customers whose drivers fuel their own
vehicles at retail gas stations. The Company also could encounter potential
competition from a number of well capitalized companies which distribute fuel
and other similar oil products, some of which are larger, more established and
have greater financial, marketing and other resources than the Company. In
addition, some of the Company's customers are capable of providing the same
services to their vehicles directly. The Company believes that its ability to
compete depends on a number of factors, including price, reliability, credit
terms, name recognition, delivery time and service and support. There can be no
assurance that the Company will be able to continue to compete successfully with
respect to these factors.
EXECUTIVE OFFICERS
The executive officers of the Company as of April 28, 2000 are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Stanley H. Streicher....... 57 President and Chief Executive Officer
Walter B. Barrett.......... 42 Vice President, Finance; Chief Financial Officer; and
Treasurer
Timothy W. Koshollek....... 36 Vice President, Marketing
Steven M. Alford........... 34 Vice President, Operations
</TABLE>
MR. STREICHER has served as President and Chief Executive Officer of
the Company since its inception. Mr. Streicher has also served as the President
and Chief Executive Officer of Streicher Enterprises, Inc. ("Enterprises"), the
Company's predecessor, since its inception in 1983. From 1979 to 1983, Mr.
Streicher operated a mobile fueling business which became the Company's
predecessor. From 1972 to 1979, Mr. Streicher served as supervisor of receiving
of AT&T's Montgomery Material Management Center, where he designed systems to
expedite material and equipment handling. From 1965 to 1972, Mr. Streicher
served to the rank of Captain in the United States Military in various
leadership capacities, including the command of an aviation division together
with the responsibility for scheduling aircraft and their refueling.
MR. BARRETT has served as Vice President, Finance and Chief Financial
Officer of the Company since July 1997. From 1991 to 1997 Mr. Barrett was Vice
President of Finance and Chief Financial Officer of Devcon International Corp.,
a supplier of construction materials and services throughout the Caribbean and
Southeastern Florida.
4
<PAGE>
MR. KOSHOLLEK has served as the Vice President of Marketing of the
Company since March 1998. From 1994 to February 1998, Mr. Koshollek served as
Vice President of Marketing and Operations of Enterprises and the Company. From
1991 to 1994, Mr. Koshollek was responsible for sales and management of a
wholesale seafood company. From 1989 to 1991, he was the operations manager of
Enterprises responsible for its Southeast division fuel delivery operations.
MR. ALFORD has served as Vice President, Operations of the Company
since March 1998. From December 1992 to February 1998, Mr. Alford was employed
by Enterprises and the Company in various supervisory and managerial positions.
EMPLOYEES
At April 28, 2000, the Company had 250 full-time employees, of whom 37
were involved in executive, managerial, supervisory and sales capacities, 182
were route drivers and 31 served in various clerical and other capacities. None
of the Company's employees is covered by a collective bargaining agreement or is
a member of a union. The Company considers its relationship with its employees
to be good.
GOVERNMENTAL REGULATION
The Company's operations are affected by numerous federal, state and
local laws, including those relating to protection of the environment and worker
safety. The transportation of gasoline and diesel fuel is subject to regulation
by various federal, state and local agencies, including the U.S. Department of
Transportation ("DOT"). These regulatory authorities have broad powers, and the
Company is subject to regulatory and legislative changes that can affect the
economics of the industry by requiring changes in operating practices or
influencing the demand for, and the cost of providing, its services. The
regulations provide that, among other things, the Company's drivers must possess
a commercial drivers license with a hazardous materials endorsement. The Company
is also subject to the rules and regulations of the Hazardous Materials
Transportation Act. For example, the Company's drivers and their equipment must
comply with DOT's pre-trip inspection rules, documentation regulations
concerning hazardous materials (i.e., certificates of shipments which describe
type and amount of product transported), and limitations on the amount of fuel
transported as well as driver time limitations. Additionally, the Company is
subject to DOT inspections which occur at random intervals. Any material
violation of DOT rules or the Hazardous Materials Transportation Act may result
in citations and/or fines upon the Company. In addition, the Company depends on
the supply of gasoline and diesel fuel from the oil and gas industry and,
therefore, is affected by changing taxes, price controls and other laws and
regulations relating to the oil and gas industry generally. The Company cannot
determine the extent to which its future operations and earnings may be affected
by new legislation, new regulations or changes in existing regulations.
The technical requirements of these laws and regulations are becoming
increasingly expensive, complex and stringent. These laws may impose penalties
or sanctions for damages to natural resources or threats to public health and
safety. Such laws and regulations may also expose the Company to liability for
the conduct of or conditions caused by others, or for acts of the Company that
were in compliance with all applicable laws at the time such acts were
performed. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. Certain environmental laws provide for joint and several liability
for remediation of spills and releases of hazardous substances. In addition,
companies may be subject to claims alleging personal injury or property damage
as a result of alleged exposure to hazardous substances, as well as damage to
natural resources.
Although the Company believes that it is in substantial compliance with
existing laws and regulations, there can be no assurance that substantial costs
for compliance will not be incurred in the future. There could be an adverse
affect upon the Company's operations if there were any continuing substantial
violations of these rules and regulations. Moreover, it is possible that other
developments, such as stricter environmental laws, regulations and enforcement
policies thereunder, could result in additional, presently unquantifiable, costs
or liabilities to the Company.
5
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY
The following table sets forth certain information concerning the
property and facilities that are owned or leased by the Company for use in its
operations:
<TABLE>
<CAPTION>
LEASE EXPIRATION WITH
DESCRIPTION LOCATION ALL OPTIONS NOTES
----------- -------- ----------- -----
<S> <C> <C> <C>
Principal executive offices, truck yard Ft. Lauderdale, Florida 7/31/14 (1)
and warehouse space
Truck yard and office Ft. Myers, Florida 1/1/02 (2)
Truck yard and office Jacksonville, Florida 8/31/15 (1)
Truck yard and office Orlando, Florida Month to Month (1)
Truck yard and office Tampa, Florida -- (3)
Truck yard and office Tallahassee, Florida 8/31/00 (2)
Truck yard and office Melbourne, Florida Month to Month (2)
Truck yard and office Atlanta, Georgia 7/31/00 (2)
Truck yard and office Kingsport, Tennessee Month to Month (2)
Truck and yard office Chattanooga, Tennessee Month to Month (2)
Truck yard and office Kenner, Louisiana 7/31/00 (1)
Truck yard and office Houston, Texas Month to Month (2)
Truck yard and office Ft. Worth, Texas -- (3)
Truck yard and office Sacramento, California 4/15/02 (2)
Truck yard and office Gardena, California 1/31/01 (2)
Truck yard and office San Jose, California 4/01/02 (2)
</TABLE>
- ---------------
(1) Leased from Stanley H. Streicher, Company President and Chief Executive
Officer.
(2) Leased
(3) Property owned by the Company.
ITEM 3. LEGAL PROCEEDINGS
The Company has no material legal proceedings pending. From time to
time, the Company may become a party to litigation incidental to its business.
There can be no assurance that any future legal proceedings will not have a
material adverse effect on the Company's business, reputation, financial
condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
6
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock, par value $.01 ("Common Stock") and
Redeemable Common Stock Purchase Warrants ("Warrants") have traded in the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
Small-Cap Market under the symbols "FUEL" and "FUELW", respectively, since
December 11, 1996, the date of the Company's initial public offering. The
following table sets forth, for the periods indicated, the high and low closing
prices for the Common stock and Warrants, as reported by NASDAQ.
<TABLE>
<CAPTION>
COMMON STOCK WARRANTS
----------------------- -----------------------
HIGH LOW HIGH LOW
------ ------ ------ ------
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 31, 2000
1st quarter $ 4.63 $ 2.06 $ 0.66 $ 0.22
2nd quarter $ 8.50 $ 4.25 $ 2.50 $ 0.50
3rd quarter $ 8.63 $ 7.06 $ 2.25 $ 1.50
4th quarter $ 8.50 $ 6.25 $ 1.75 $ 1.03
YEAR ENDED JANUARY 31, 1999
1st quarter $ 5.13 $ 3.38 $ 1.38 $ 0.75
2nd quarter $ 4.88 $ 3.06 $ 0.81 $ 0.63
3rd quarter $ 3.50 $ 2.13 $ 0.64 $ 0.28
4th quarter $ 3.88 $ 2.06 $ 0.41 $ 0.13
</TABLE>
As of April 28, 2000, there were 22 holders of record of the Company's
Common Stock and approximately 500 beneficial owners of the Company's Common
Stock. On April 28, 2000, the closing price of the Common Stock was $4.25 per
share and the closing price of the Warrants was $0.75 per Warrant.
To date, the Company has not declared or paid any dividends on its
Common Stock. The payment of dividends, if any, is within the discretion of the
Board of Directors and will depend upon the Company's earnings, its capital
requirements and financial condition and other relevant factors. The Board of
Directors does not intend to declare any dividends in the foreseeable future,
but instead intends to retain future earnings for use in the Company's business
operations.
7
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data of the Company and its
consolidated subsidiaries are qualified in their entirety by, and should be read
in conjunction with, the Consolidated Financial Statements and the notes thereto
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations." The data for each of the 5 years in the period ended January 31,
2000, are derived from the Consolidated Financial Statements of the Company or
the financial statements of the Mobile Fueling Division of Streicher
Enterprises, Inc. audited by KPMG LLP, independent certified public accountants
for the fiscal years ended January 31, 2000 and 1999 and by Arthur Andersen LLP,
independent certified public accountants, for the fiscal years ended January 31,
1998, 1997 and 1996. The Consolidated Financial Statements of the Company as of
January 31, 2000 and 1999 and for each of the years in the three year period
ended January 31, 2000 and the reports thereon appear elsewhere herein.
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
EARNINGS STATEMENT DATA:
Revenues $74,170,995 $47,375,571 $43,041,814 $33,844,969 $23,989,358
Cost of sales 68,557,201 43,821,496 39,736,507 31,458,794 21,752,350
----------- ----------- ----------- ----------- -----------
Gross profit 5,613,794 3,554,075 3,305,307 2,386,175 2,237,008
Operating expenses 4,035,785 3,601,278 3,575,368 2,640,609 1,752,485
----------- ----------- ----------- ----------- -----------
Operating income (loss) 1,578,009 (47,203) (270,061) (254,434) 484,523
Loss on asset disposal (18,965) (6,877) (62,399) (5,928) --
Interest expense (1,151,707) (839,907) (474,923) (432,498) (343,967)
Interest and other income 65,103 73,391 178,811 31,071 33,219
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes 472,440 (820,596) (628,572) (661,789) 173,775
Income tax benefit (expense) -- (261,018) 153,146 232,551 (75,169)
----------- ----------- ----------- ----------- -----------
Basic and diluted net income (loss) $ 472,440 $(1,081,614) $ (475,426) $ (429,238) $ 98,606
=========== =========== =========== =========== ===========
Basic net income (loss) per share $ .17 $ (.42) $ (.18) $ (.26) $ .07
=========== =========== =========== =========== ===========
Diluted net income (loss) per share $ .16 $ (.42) $ (.18) $ (.26) $ .07
=========== =========== =========== =========== ===========
Basic weighted average common shares
outstanding 2,710,400 2,575,000 2,575,000 1,631,250 1,500,000
=========== =========== =========== =========== ===========
Diluted weighted average common shares
outstanding 2,880,529 2,575,000 2,575,000 1,631,250 1,500,000
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit) $(1,932,015) $(2,324,495) $ 3,392,012 $ 2,495,181 $ 737,419
Total assets $23,930,924 $16,194,149 $13,995,540 $11,402,970 $ 6,357,936
Long term debt $ 6,470,171 $ 4,284,271 $ 5,915,049 $ 1,123,498 $ 3,172,737
Total stockholders' equity $ 4,289,172 $ 3,359,636 $ 4,441,250 $ 4,961,413 $ 385,066
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains "forward-looking statements" which
involve risks and uncertainties. The Company's actual results could differ
materially from those anticipated in the forward-looking statements as a result
of certain factors, including those set forth under the caption "Certain Factors
Affecting Future Operating Results," below, and elsewhere in this Form 10-K. The
following discussion also should be read in conjunction with the Company's
financial statements and notes thereto included elsewhere in this Form 10-K.
GENERAL
The Company was incorporated in the State of Florida in October 1996.
Prior to the effective date of the Company's registration statement for its
initial public offering on December 11, 1996, the Company's business was
conducted through the Mobile Fueling Division of Streicher Enterprises, Inc.,
which began mobile fueling operations
8
<PAGE>
in 1983. Streicher Enterprises, Inc. ("Enterprises") completed a corporate
reorganization as of such effective date, pursuant to which the Mobile Fueling
Division of Enterprises transferred its assets, liabilities and operations to
the Company. This corporate reorganization has been retroactively reflected in
the Company's Financial Statements and notes thereto as if such transfer had
occurred at inception of the former Mobile Fueling Division. See Note 1 of Notes
to the Company's Financial Statements included elsewhere in this Form 10-K.
The Company derives all of its revenue from selling fuel and providing
mobile fueling services. Revenue is comprised principally of sales of gasoline
and diesel fuel and related service charges. Cost of sales is comprised
principally of the cost of fuel and transportation costs (primarily payroll).
Included in both revenue and cost of sales are federal and state fuel taxes,
which are collected by the Company from its customers, when required, and
remitted to the appropriate taxing authority.
RESULTS OF OPERATIONS
COMPARISON OF FISCAL YEAR ENDED JANUARY 31, 2000 TO FISCAL YEAR ENDED
JANUARY 31, 1999
REVENUES
Revenue increased $26.8 million, or 56.5%, for the year ended January
31, 2000 ("fiscal 2000") compared to the year ended January 31, 1999 ("fiscal
1999"). The Company delivered 59.4 million gallons of fuel to its customers in
fiscal 2000, an increase of 41.8% over the 41.9 million gallons delivered in
fiscal 1999. The increase in revenue resulted from a higher volume of fuel sales
and services to existing customers, acquisition of new customers in existing
locations, the introduction of mobile fueling operations into additional
metropolitan areas and an overall increase in the wholesale price of gasoline
and diesel fuel.
GROSS PROFIT
Gross profit increased $2.1 million, or 58.0%, in fiscal 2000 compared
to fiscal 1999. This increase was due primarily to increases in volume, offset
by increases in driver payroll costs, repair and maintenance costs and other
costs associated with the Company's expansion into new markets in fiscal 2000.
OPERATING EXPENSES
Operating expenses increased $435,000, or 12.1%, in fiscal 2000
compared to fiscal 1999. The increase in operating expenses primarily resulted
from an increase in marketing, travel and entertainment and promotion expenses
associated with the expansion of the Company's mobile fueling operations.
INTEREST EXPENSE
Interest expense increased $312,000, or 37.1%, in fiscal 2000 compared
to fiscal 1999 as a result of increased borrowings to fund the Company's
expansion into new markets and to acquire new custom fuel trucks for existing
and new locations.
INCOME TAXES
The Company recorded no income tax expense in fiscal 2000 compared to
an income tax expense of $261,000 in fiscal 1999. The Company has sufficient net
operating loss carryforwards to offset any taxable income for the next several
years. The tax expense in fiscal 1999 resulted from the Company fully reserving
a deferred tax asset.
NET INCOME (LOSS)
The Company had net income of $472,000, or $.16 per diluted share, in
fiscal 2000 and a net loss of $1,082,000, or $.42 per share, in fiscal 1999. The
Company's net loss in fiscal 1999 resulted primarily from the Company's
expansion into new markets; underutilization of equipment in such markets; and
increases in personnel, equipment, and facilities to support current and future
growth. The increase in earnings in fiscal 2000 is due primarily to the
combination of factors discussed above.
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<PAGE>
COMPARISON OF FISCAL YEAR ENDED JANUARY 31, 1999 TO FISCAL YEAR ENDED
JANUARY 31, 1998
REVENUES
Revenue increased $4.3 million, or 10.1%, for the year ended January
31, 1999 ("fiscal 1999") compared to the year ended January 31, 1998 ("fiscal
1998"). The Company delivered 41.9 million gallons of fuel to its customers in
fiscal 1999, an increase of 25.8% over the 33.3 million gallons delivered in
fiscal 1998. The increase in revenue resulted from a higher volume of fuel sales
to existing customers, acquisition of new customers in existing locations, and
the introduction of mobile fueling operations into additional metropolitan
areas, offset by lower average sales prices due to declines in the wholesale
price of gasoline and diesel fuel.
GROSS PROFIT
Gross profit increased $249,000 or 7.5% in fiscal 1999 compared to
fiscal 1998, primarily as a result of increases in volume, increases in fuel
prices charged to customers, and certain cost reductions, offset by additional
payroll and equipment costs associated with the Company's growth during fiscal
1999.
OPERATING EXPENSES
Operating expenses increased $26,000, or 0.7%, in fiscal 1999 compared
to fiscal 1998. As a percentage of revenue, operating expenses decreased to 7.6%
in fiscal 1999 from 8.3% in fiscal 1998. The increase in operating expenses
primarily resulted from an increase in payroll and related administrative costs
associated with the addition of personnel to support expansion of the Company's
mobile fueling operations, offset by reductions in debt guarantee fees,
consulting expenses and professional fees.
INTEREST EXPENSE
Interest expense increased $365,000, or 76.8%, in fiscal 1999 compared
to fiscal 1998 as a result of increased borrowings to fund the Company's
expansion into new markets and to acquire new custom fuel trucks for existing
and new locations.
INCOME TAXES
The Company recorded an income tax charge of $261,000 in fiscal 1999
compared to an income tax benefit of $153,000 in fiscal 1998. The increase in
tax expense in fiscal 1999 resulted from the Company fully reserving a net
deferred tax asset.
NET LOSS
The Company had a net loss of $1,082,000, or $.42 per share, in fiscal
1999 and a net loss of $475,000, or $.18 per share, in fiscal 1998. The
Company's net losses in fiscal 1999 and 1998 resulted primarily from the
Company's expansion into new markets, underutilization of equipment in such
markets and increases in personnel, equipment and facilities to support current
and future growth, and the reserving, in fiscal 1999, of a net deferred tax
asset.
LIQUIDITY AND CAPITAL RESOURCES
The Company's business requires it to expend considerable amounts of
funds for fuel, labor and equipment costs before any payments are received from
the Company's customers. The fuel purchased by the Company for resale to its
customers must generally be paid for within 10 to 15 days of purchase, labor
costs and related taxes are funded bi-weekly and equipment related costs are
generally satisfied within 30 days. The Company bills its customers weekly and
generally collects the majority of its accounts within 35 to 40 days. Days sales
outstanding at January 31, 2000 totaled 41 days as compared to 40 days sales
outstanding at January 31, 1999.
While the Company operated at a profit for the fiscal year 2000, the
Company incurred a net operating loss of $363,000 in the fourth quarter of
fiscal 2000 and has continued to incur operating losses in the periods
subsequent to January 31, 2000. Fourth quarter results were negatively impacted
by a greater than expected reduction in
10
<PAGE>
deliveries over the Thanksgiving, Christmas and New Year's holidays, costs
incurred in preparing for potential Year 2000 service to customers, and
increases in fuel prices in the latter part of the quarter, which led to higher
operating costs for the Company. Higher fuel costs, costs associated with the
Company's continued expansion of its vehicle fleet, increases in interest rates,
marketing and promotion expenses and decreases in higher margin mobile fueling
gallonages have continued to affect operating results since year end. The
Company expects to report a loss for the first quarter of fiscal 2001, which
ends April 30, 2000. The losses incurred subsequent to the fiscal 2000 year end
have placed the Company in violation of the tangible net worth requirement in
the loan agreement with its principal lender. The lender has not provided a
waiver of the violation at this time.
In response to the losses incurred, the Company has taken a number of
steps to improve its operating results by reducing operating costs. The steps
taken include:
o Evaluations of individual customer profitability, with price
and service frequency adjustments implemented for unprofitable
accounts.
o Significant reductions in driver overtime wages as a result of
route restructurings and combinations.
o Significant reduction in the sales and marketing staffs, along
with related expenses and promotion costs.
o Implementing a program to institute a 10% reduction in ongoing
repair and maintenance costs.
o Selling certain high maintenance cost equipment and replacing
it with new equipment.
o Other cost reductions, primarily in the general and
administrative cost area.
The uncertainty surrounding the Company's relationship with its
principal lender, the current level of the Company's cash reserves, and its
ongoing operating losses have caused the Company's independent certified public
accountants to question the Company's ability to continue as a going concern.
The Company believes that the actions noted above, if successfully implemented,
will return the Company to profitability.
The Company has outstanding borrowings of $7.7 million as of January
31, 2000 under its $10.0 million line of credit. This line permits the Company
to borrow up to 85% of the total amount of eligible accounts receivable. Based
on eligible receivables outstanding at January 31, 2000 the line has been fully
drawn as of that date. Interest is payable monthly at 1.0% over the prime rate
(8.75% as of January 31, 2000). The line of credit matures on April 30, 2001 and
is secured by substantially all of the Company's assets. The credit agreement
contains customary covenants such as the maintenance of certain financial ratios
and minimum net worth and working capital requirements. As of January 31, 2000,
the Company was in compliance with the minimum net worth and debt to equity
requirements.
Custom fuel trucks are ordered in advance of need and require a minimal
down payment with the balance due upon delivery. It is expected that this
balance will be funded through a combination of available cash and financing. In
the past, the Company has financed approximately 85% to 95% of the purchase
price of fuel trucks. The Company is unable to estimate the amount of cash
required for the acquisition of fuel trucks as such amount is dependent upon the
terms and conditions of financing available, if any, to the Company at the time
of delivery. At January 31, 2000, the Company had purchase commitments, to be
executed over the next six months, for 4 custom fuel delivery vehicles with an
aggregate cost of approximately $600,000. A significant portion of the Company's
outstanding debt bears interest at variable interest rates. The Company's
financial results will be impacted by significant increases or decreases in
interest rates.
CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS
The following important factors have affected, and may in the future
continue to affect, the Company's business, results of operations and financial
condition, and could cause the Company's operating results to differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company.
11
<PAGE>
NO ASSURANCES OF CONTINUED PROFITABILITY; LOSSES FROM OPERATIONS;
ACCUMULATED DEFICIT. While the Company operated at a profit in the year ended
January 31, 2000 it incurred net losses in the years ended January 31, 1999, and
1998 of $1,081,614 and $475,426, respectively, and there can be no assurance
that the Company will not incur net losses in the future. The Company's
expansion over the past several years and its negative cash flows from operating
activities have been financed by additional bank borrowings and, subsequent to
the Company's initial public offering, the net proceeds from the issuance of
Common Stock and Warrants in that offering. The Company's operating expenses
have increased as its business has grown and can be expected to increase as a
result of the Company's expansion efforts into new markets. There can be no
assurance that the Company will be able to continue to generate sufficient
revenue to meet its operating expenditures or to operate profitably. See
"Results of Operations - Liquidity and Capital Resources."
NEED FOR CAPITAL. The mobile fueling business is capital intensive and
the Company will continue to require substantial capital in order to operate and
expand its business. The Company's primary long-term and working capital
requirements have been to fund capital expenditures for custom fuel trucks and
related equipment and working capital for the financing of customer accounts
receivable. Historically, the Company has depended primarily on debt financing
for its purchases of custom fuel trucks. If the Company is unable to obtain
additional equity or debt financing in the future, the Company may have to limit
its growth. The Company expects that its debt could increase in the future if
the Company utilizes borrowed funds to acquire new vehicles, for acquisitions,
working capital or other corporate purposes. See "Results of Operations -
Liquidity and Capital Resources."
GROWTH DEPENDENT UPON EXPANSION; RISKS ASSOCIATED WITH EXPANSION INTO
NEW MARKETS. A significant element of the Company's future growth strategy
involves the expansion of the Company's business into new markets. The Company
intends to expand its business into additional major metropolitan areas.
Expansion of the Company's operations will be dependent on, among other things,
the Company's ability to demonstrate the benefits of mobile fueling to potential
new customers; successfully establish and operate new locations; hire and retain
qualified management; marketing and other personnel; obtain adequate financing
for vehicle purchases and working capital purposes; secure adequate sources of
supply on a timely basis and on commercially reasonable terms and successfully
manage growth (including monitoring operations, controlling costs and
maintaining effective quality controls). The Company's growth prospects will be
largely dependent upon its ability to achieve greater penetration in new
markets. The Company may also seek to expand its operations through the
acquisition of existing companies or their customer bases. There can be no
assurance that the Company will be able to successfully expand its operations.
POTENTIAL ACQUISITIONS; DIFFICULTY IN ASSIMILATING ACQUISITIONS. The
Company intends to pursue acquisition opportunities as a means of achieving its
growth objectives, although there can be no assurance that the Company will be
able to locate or acquire suitable acquisition candidates on acceptable terms or
that future acquired operations will be effectively and profitably integrated
into the Company. Acquisitions involve a number of risks that could adversely
affect the Company's operating results, including diverting management
attention, the assimilation of the operations and personnel of the acquired
operations, the amortization of acquired intangible assets and the potential
loss of key employees of the acquired operations. Properly managing any growth
through acquisitions, avoiding the problems often attendant therewith, and
continuing to operate in the manner which has proven successful to the Company
to date will be important to the future success of the Company's business.
RISKS ASSOCIATED WITH CUSTOMER CONCENTRATION; ABSENCE OF WRITTEN
AGREEMENTS. Revenue from three major customers totaled approximately $13.4
million, $10.8 million and $13.8 million in fiscal 2000, 1999, and 1998
respectively. Although the Company has contracts to provide mobile fuel services
to several of its larger customers, most of the Company's customers do not have
written agreements with the Company and can terminate the Company's mobile
fueling services at any time and for any reason. As a result of this customer
concentration and absence of written agreements, the Company's business, results
of operations and financial condition could be materially adversely affected by
the loss of one or more of its major customers or if the Company were to
experience a high rate of contract terminations.
MANAGEMENT OF GROWTH. The Company has experienced significant growth
over the past several years. For the Company to be able to continue to grow
effectively it will need to continue to improve its operational, financial
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and other internal systems, and to attract, train, motivate, manage and retain
its employees. If the Company is unable to manage growth effectively, the
Company's results of operations will be adversely affected.
COMPETITION. The Company competes directly and indirectly with other
distributors of fuel, including several regional distributors and numerous small
independent operators. Some of the Company's competitors have significantly
greater financial or marketing resources than the Company. The Company's
competitors also could introduce services that are superior to the Company's or
that achieve greater market acceptance. The Company also competes for customers
whose drivers fuel their own vehicles at retail gas stations. The Company could
encounter potential competition from a number of well capitalized companies
which distribute fuel and other similar oil products, some of which are larger,
more established and have greater financial, marketing and other resources than
the Company. In addition, some of the Company's customers are capable of
providing the same services to their vehicles directly. The Company believes
that its ability to compete depends on a number of factors, including price,
reliability, credit terms, name recognition, delivery time and service and
support. There can be no assurance that the Company will be able to continue to
compete successfully with respect to these factors.
OPERATING RISKS MAY NOT BE COVERED BY INSURANCE. The Company's
operations are subject to all of the operating hazards and risks normally
incidental to handling, storing and transporting gasoline and diesel fuel, which
are classified as hazardous materials. The Company maintains insurance policies
in such amounts and with such coverages and deductibles as the Company believes
are reasonable and prudent. However, there can be no assurance that such
insurance will be adequate to protect the Company from liabilities and expenses
that may arise from claims for personal and property damage arising in the
ordinary course of business or that such levels of insurance will be maintained
by the Company or will be available at economical prices.
GOVERNMENTAL REGULATION. The Company's operations are affected by
numerous federal, state and local laws, including those relating to protection
of the environment and worker safety. The transportation of gasoline and diesel
fuel is subject to regulation by various federal, state and local agencies,
including the DOT. These regulatory authorities have broad powers, and the
Company is subject to regulatory and legislative changes that can affect the
economics of the industry by requiring changes in operating practices or
influencing the demand for, and the cost of providing, its services. The
regulations provide that, among other things, the Company's drivers must possess
a commercial drivers license with a hazardous materials endorsement thereon. The
Company is also subject to the rules and regulations of the Hazardous Materials
Transportation Act. For example, the Company's drivers and their equipment must
comply with DOT's pre-trip inspection rules, documentation regulations
concerning hazardous materials (i.e., certificates of shipments which describe
type and amount of product transported), and limitations on the amount of fuel
transported as well as driver time limitations. Additionally, the Company is
subject to DOT inspections which occur at random intervals. Any material
violation of DOT rules or the Hazardous Materials Transportation Act may result
in citations and/or fines upon the Company. In addition, the Company depends on
the supply of gasoline and diesel fuel from the oil and gas industry and,
therefore, is affected by changing taxes, price controls and other laws and
regulations relating to the oil and gas industry generally. The Company cannot
determine the extent to which its future operations and earnings may be affected
by new legislation, new regulations or changes in existing regulations.
The technical requirements of these laws and regulations are becoming
increasingly expensive, complex and stringent. These laws may impose penalties
or sanctions for damages to natural resources or threats to public health and
safety. Such laws and regulations may also expose the Company to liability for
the conduct of or conditions caused by others, or for acts of the Company that
were in compliance with all applicable laws at the time such acts were
performed. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. Certain environmental laws provide for joint and several liability
for remediation of spills and releases of hazardous substances. In addition,
companies may be subject to claims alleging personal injury or property damage
as a result of alleged exposure to hazardous substances, as well as damage to
natural resources.
Although the Company believes that it is in substantial compliance with
existing laws and regulations, there can be no assurance that substantial costs
for compliance will not be incurred in the future. There could be an adverse
affect upon the Company's operations if there were any continuing substantial
violations of these rules and
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regulations. Moreover, it is possible that other developments, such as stricter
environmental laws, regulations and enforcement policies thereunder, could
result in additional, presently unquantifiable, costs or liabilities to the
Company.
CHANGES IN ENVIRONMENTAL REQUIREMENTS. The Company expects to derive a
significant amount of its future business by converting to mobile fueling
customers fleet operators that currently utilize underground fuel storage tanks
for their fueling needs. Under current federal regulations, the owners of such
underground storage tanks were required, by December 1998, to remove or retrofit
such tanks to comply with technical requirements pertaining to their
construction and operation. If the date for compliance with such regulations is
extended, or if other, more economical means, of compliance are developed or
adopted by owners of underground storage tanks, the opportunity for the Company
to market its services to such persons may be adversely affected.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to market risk is limited primarily to the
fluctuating interest rates associated with variable rate debt outstanding to
finance working capital needs and a portion of the Company's fleet of delivery
vehicles. These debts bear interest at the United States prime interest rate
plus a fixed markup and are subject to change based upon interest rate changes
in the United States. The Company does not currently use, and has not
historically used, derivative instruments to hedge against such market interest
rate risk. Increases or decreases in market interest rates could have a material
impact on the financial condition, results of operations and cash flows of the
Company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company required by Form 10-K are
attached following Part III of this report, commencing on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICE
---- --- -------------------
<S> <C> <C>
Stanley H. Streicher 57 President and Chief Executive Officer, Director
Walter B. Barrett 42 Vice President, Finance; Chief Financial
Officer and Treasurer
Steven M. Alford 34 Vice President, Operations
Timothy W. Koshollek 36 Vice President, Marketing
E. Scott Golden 44 Director
Joseph M. Murphy 53 Director
John H. O'Neil, Jr. 70 Director
C. Rodney O'Connor 67 Director
</TABLE>
MR. STREICHER has served as President and Chief Executive Officer of
the Company since its inception in October 1996. Mr. Streicher has also served
as the President and Chief Executive Officer of Streicher Enterprises, Inc.
("Enterprises") the Company's predecessor, since its inception in 1983. During
the period 1979 to 1983, Mr. Streicher operated a mobile fueling business which
became the Company's predecessor. From 1972 to 1979, Mr. Streicher served as
supervisor of receiving of AT&T's Montgomery Material Management Center, where
he designed systems to expedite material and equipment handling. From 1965 to
1972, Mr. Streicher served to the rank of Captain in the United States Military
in various leadership capacities, including the command of an aviation division
together with the responsibility for scheduling aircraft and their refueling.
MR. BARRETT has served as Vice President, Finance and Chief Financial
Officer of the Company since July 1997. From 1991 to 1997 Mr. Barrett was Vice
President of Finance and Chief Financial Officer of Devcon International Corp.,
a supplier of construction materials and services throughout the Caribbean and
Southeastern Florida.
MR. ALFORD has served as Vice President, Operations of the Company
since March 1998. From December 1992 to February 1998, Mr. Alford was employed
by Enterprises and the Company in various supervisory and managerial positions.
MR. KOSHOLLEK has served as the Vice President of Marketing since March
1998. Prior to that and from October 1996 Mr. Koshollek served as Vice President
of Marketing and Operations of Enterprises and the Company. From 1991 to 1994,
Mr. Koshollek was responsible for sales and management of a wholesale seafood
company. From 1989 to 1991, he was the operations manager of Enterprises
responsible for its Southeast division fuel delivery operations.
MR. GOLDEN has served as a Director of the Company since January 1997.
Mr. Golden has maintained his own law office since 1988.
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MR. MURPHY has served as a Director of the Company since January 1997.
Since August 1983 Mr. Murphy has served as President and Chief Executive Officer
of Murphy Management, a management consulting and executive search firm he
founded, which specializes in the retail, general merchandise, supermarket and
food industries.
MR. O'NEIL, JR. has served as a Director of the Company since January
1997. Until February 2000, Mr. O'Neil served as Chairman and Chief Executive
Officer of Health Foundation of South Florida, a non-profit charitable
foundation. Mr. O'Neil has also served as Chairman of Cedars Medical Center
since May 1992.
MR. O'CONNOR has served as a Director of the Company since July 1999.
Since 1976, Mr. O'Connor has served as the Chairman and Chief Executive Officer
of Cameron Associates, Inc., a financial communications firm. Mr. O'Connor is
also a director of Atrix Laboratories, Inc., a publicly traded manufacturer and
distributor of dental, medical and veterinary drug delivery systems and
products.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers and persons who
own more than ten percent of the Company's Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, during the fiscal year ending January 31, 2000, all of the
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with except that one
Form 4 (Statement of Changes in Beneficial Ownership) was not filed on a timely
basis for a stock sale made by E. Scott Golden.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries to or on behalf
of the Company's Chief Executive Officer and Chief Financial Officer (the "Named
Executive Officers") for the fiscal years ended January 31, 2000, 1999, and
1998. No other executive officer's salary and bonus equaled or exceeded $100,000
for such years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED ALL OTHER
NAME AND PRINCIPAL POSITION JANUARY 31, SALARY BONUS COMPENSATION(1)
- --------------------------------- ----------- ----------------- --------- ---------------
<S> <C> <C> <C> <C>
Stanley H. Streicher,............ 2000 $ 279,760 $ 37,600 --
President and Chief Executive 1999 $ 270,240 -- --
Officer 1998 $ 275,000 -- --
Walter B. Barrett,............... 2000 $ 143,462 $ 17,000 --
Vice President of Finance and 1999 $ 136,539 -- --
Chief Financial Officer 1998 $ 75,885 -- --
</TABLE>
- ---------------
(1) The column for "Other Annual Compensation" has been omitted because there
is no compensation required to be reported in such columns. The aggregate
amount of perquisites and other personal benefits provided to each named
Executive Officer is less that 10% of the total annual salary and bonus of
such officer.
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<PAGE>
EMPLOYMENT CONTRACTS
The Company entered into an employment agreement with Stanley H.
Streicher effective December 11, 1996, pursuant to which Mr. Streicher serves as
President and Chief Executive Officer of the Company. The term of the agreement
is five years. The term of agreement will automatically renew for two successive
two-year terms, unless notice of termination is given prior to a renewal period.
The agreement provides that Mr. Streicher shall receive an initial annual base
salary of $275,000 which shall be increased to reflect the change of the cost of
living, based upon the change, from the preceding January 1, in the consumer
price index for All Urban Consumers, as published by the U.S. Bureau of Labor
Statistics. In addition to salary, Mr. Streicher will be eligible to participate
in a bonus pool which will provide him additional compensation of up to 10% of
the Company's pre-tax earnings.
The agreement provides that if Mr. Streicher's employment is terminated
as a result of his death or disability, he or his estate will receive for a
period of six months his base salary in effect as of the date of termination and
a prorated amount of any bonuses. The agreement also provides that in the event
Mr. Streicher's employment is terminated "without cause" or for "good reason,"
Mr. Streicher will receive, in addition to any salary, bonus and other
compensation accrued through the date of termination, a lump sum equal to the
greater of the full amount of salary, bonuses and other compensation due under
the agreement for the remainder of the term and three times the then-existing
salary and most recent annual bonus. The agreement further provides that Mr.
Streicher will not compete with the Company (i) while employed by the Company,
and (ii) for a period of two years following termination of employment. In the
event that his employment is terminated without cause, as a result of his death
or disability, or upon a change of control (as defined in the employment
agreement), all options to purchase Common Stock held by Mr. Streicher shall
become immediately exercisable. The Company may terminate the agreement for
"justifiable cause" which as defined therein means Mr. Streicher's conviction of
felony involving moral turpitude, fraud, dishonesty, or any crime in connection
with his employment which causes the Company substantial detriment; continual
gross neglect of his duties; unauthorized dissemination or use of confidential
information of the company; or engaging in competition with the Company during
the term of the agreement. Pursuant to the agreement, the Company is obligated
to pay all legal expenses associated with any legal proceedings concerning the
interpretation of the agreement.
The agreement further provides Mr. Streicher with stock options that
will enable him to acquire up to an aggregate of 1,000,000 shares of Common
Stock at an exercise price equal to the initial offering price of the Company
following the closing of the Company's Public Offering. The exercise of the
stock options is contingent upon the Company achieving either a specified
earnings per share level or a specified stock price level (the "performance
threshold"), for the corresponding fiscal year-end. Commencing with fiscal
year-ended January 31, 1998 and at each of the four fiscal year ends thereafter,
200,000 of such options will become exercisable if the Company achieves earnings
per share of $.36, $.43, $.52, $.62 and $.74 for the fiscal years ended January
31, 1998, 1999, 2000, 2001 and 2002, respectively, (or cumulative earnings per
share after fiscal 1998 of $.66, $1.09, $1.61, $2.23 and $2.97, respectively,)
or the closing bid price of the Company's Common Stock on any 20 consecutive
trading days during such fiscal year is $7.25, $8.75, $10.50, $12.50 and $15.00,
respectively, or the Company has cumulative net income of $2 million, $3
million, $4 million, $5 million and $6 million, respectively. For any fiscal
year after January 31, 1998 in which the Company attains the foregoing earnings
per share, stock price or cumulative net income targets, any options eligible
for vesting in prior years which were not vested and exercisable because the
targets for such fiscal years were not achieved, shall become exercisable. In
addition, for any fiscal year in which the Company attains the earnings per
share, stock price or cumulative net income targets applicable to a subsequent
fiscal year, all options eligible for vesting in such subsequent fiscal year
shall vest and become exercisable. If any of the Company's publicly traded
Warrants are exercised, the options shall vest and become exercisable pro rata
(based on the number of Warrants exercised) to the extent not already vested in
accordance with the foregoing. Regardless of the Company's performance, all of
the stock options granted to Mr. Streicher shall vest and become exercisable ten
years from the date of the grant.
The Company entered into an employment agreement with Walter B. Barrett
effective July 7, 1997, pursuant to which Mr. Barrett serves as Vice President
of Finance and Chief Financial Officer of the Company. The term of the agreement
is for one year and automatically renews for successive one year terms unless
notice of termination is given by either party within 30 days of the annual
renewal date. The agreement provides that Mr. Barrett will receive
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<PAGE>
an annual base salary of $140,000, reimbursement for certain professional and
educational expenses, and an initial grant of 50,000 stock options. The
agreement provides that if Mr. Barrett's employment is terminated, due to
non-renewal of the agreement or without cause, he will receive as compensation
the greater of all salary remaining due under the agreement until its expiration
or five months salary. In addition, the unvested portion of any stock options
will immediately vest and become exercisable.
Mr. Barrett received a grant of 50,000 stock options in April 1999 at
an exercise price of $4.125 per share. Such options vest ratably over a five
year period.
STOCK OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning option
exercises in fiscal year ending January 31, 2000, the number of options held by
the Named Executive Officers as of January 31, 2000 and the value (based on the
fair market value of a share of stock at fiscal year-end) of in-the-money
options outstanding as of such date.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED JANUARY 31, 2000 JANUARY 31, 2000 (1)
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stanley H. Streicher.... 20,000 $ 37,500 180,000 800,000 $ 90,000 $ 400,000
Walter B. Barrett....... 30,000 $ 121,803 -- 70,000 $ -- $ 194,600
</TABLE>
- ---------------
(1) The closing sale price for the Company's Common Stock as reported on the
NASDAQ SmallCap Market on January 31, 2000 was $6.50. Value is calculated
by multiplying (a) the difference between $6.50 and the option exercise
price by (b) the number of shares of Common Stock underlying the option.
COMPENSATION COMMITTEE REPORT ON COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors which is composed of E. Scott
Golden and C. Rodney O'Connor. The Committee's general philosophy with respect
to compensation of the Company's executive officers has been to offer
competitive compensation designed to attract and retain key executives critical
to the long-term success of the Company and to recognize and individual's
contribution and personal performance. The principal component of executive
compensation has been base salary. Executive officers may also be granted
bonuses and stock options.
BASE SALARIES. Base salaries are initially determined by evaluating the
responsibilities of the position held and by reference to the competitive
marketplace for executive talent through review of an individual's background
and overall expertise in the Company's line of business and the salaries of
similarly situated executives. The Company believes that it is competitive with
respect to initial base salaries. Increases to base salaries are also influenced
by the performance of the Company and the individual against established goals
and objectives.
ANNUAL BONUS. The Company maintains an annual incentive bonus program
which provides for the payment of cash bonuses to executive officers and other
key employees of the Company based upon the Company's financial performance and
individual performance. While these bonus awards are based upon the Company's
pre-tax earnings, the Committee strived to align the bonus plan targets with the
Company's long-term goals so that strategic focus is maintained.
OPTIONS. The Company's Stock Option Plan provides such an incentive
through the award of stock options to executive officers and other key
employees. The Stock Option Plan is administered by the Board of Directors.
Ninety thousand stock options were granted to three of the Company's executive
officers during the fiscal year ended January 31, 2000.
18
<PAGE>
EMPLOYMENT AGREEMENTS. In December of 1996, the Company entered into an
employment agreement with Stanley H. Streicher, the Company's President and
Chief Executive Officer. In July of 1997, the Company entered into an employment
agreement with Walter B. Barrett, the Company's Vice President of Finance and
Chief Financial Officer. Accordingly, the compensation payable to Mr. Streicher
and Mr. Barrett for fiscal 2000 and subsequent years will be determined pursuant
to their employment agreements. See "Executive Compensation -- Employment
Contracts." The Company also has entered into employment agreements with its
other two executive officers.
E. Scott Golden, C. Rodney O'Connor.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Golden performed legal services for the Company during the fiscal
year ended January 31, 2000 and may be retained to provide legal advice to the
Company from time to time in the future.
DIRECTOR COMPENSATION
The Company compensates each non-employee director a director's fee of
$500 per month. In addition, the company's directors are reimbursed for any
out-of-pocket expense incurred by them for attendance at meetings of the Board
of Directors or committees thereof. In February 1997, each non-employee director
was granted options to purchase 12,000 shares of common stock. On February 18,
1998, the Board of Directors lowered the exercise price of such options from
$8.375 per share to $3.69 per share (the closing price of the common stock on
the date of such action). Such options are callable by the Company at any time
(i) after February 1, 2002 or (ii) when the bid price for the common stock is at
least $20.00 per share.
PERFORMANCE TABLE
The following table shows the cumulative total shareholder return of
the Company's Common Stock over the fiscal periods ended January 31, 2000, 1999,
1998 and 1997 as compared to the total returns of the NASDAQ Stock Market Index
and Russell 2000 Index. Returns are based on the change in year-end to year-end
price and assume reinvested dividends. The table assumes $100 was invested on
December 11, 1996 (the date of the Company's inception) in the Company's common
stock, NASDAQ Stock Market Index and Russell 2000 Index.
<TABLE>
<CAPTION>
JANUARY JANUARY JANUARY JANUARY DECEMBER 11,
2000 1999 1998 1997 1996
-------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Streicher Mobile Fueling, Inc....... $ 81.00 $ 26.00 $ 47.00 $ 108.00 $ 100.00
NASDAQ Stock Market-- US............ $ 303.00 $ 198.00 $ 126.00 $ 107.00 $ 100.00
Russell 2000 Index.................. $ 122.00 $ 126.00 $ 124.00 $ 105.00 $ 100.00
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock as of April 28, 2000 by (a)
each person known to the Company to own beneficially more than five percent of
the Company's outstanding Common Stock, (b) each director (including nominees)
who owns any such shares, (c) each Named Executive Officer and (d) the directors
and executive officers of the Company as a group:
19
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(2)
-------------------------
NAME OF BENEFICIAL OWNER(1) SHARES PERCENT
- ---------------------------------------------------------------------------- --------- -------
<S> <C> <C>
Stanley H. Streicher(3)..................................................... 1,501,500 54.4%
Walter B. Barrett(4)........................................................ 5,000 *
E. Scott Golden(5).......................................................... 11,388 *
Joseph M. Murphy(6)......................................................... 12,888 *
John H. O'Neil, Jr.(6)...................................................... 12,888 *
C. Rodney O'Connor(7)....................................................... 100,000 *
All directors and executive officers as a group (8 persons)(8).............. 1,651,664 56.2%
</TABLE>
- ---------------
* Less than one percent.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is c/o Streicher Mobile Fueling, Inc., 2720 N.W. 55th Court,
Fort Lauderdale, Florida 33309.
(2) Based on 2,712,600 shares of Common Stock outstanding. Pursuant to the
rules of the Securities and Exchange Commission (the "Commission"), certain
shares of Common Stock which a person has the right to acquire within 60
days of April 28, 2000 pursuant to the exercise of stock options are deemed
to be outstanding for the purpose of computing the percentage ownership of
any other person.
(3) Includes (i) 1,301,500 shares owned by Supreme Oil Company, Inc.
("Supreme"), of which Stanley H. Streicher owns 100% of the outstanding
capital stock, (ii) 20,000 shares owned by Stanley H. Streicher, and (iii)
180,000 shares issuable upon the exercise of options that are presently
exercisable. Excludes 800,000 shares issuable upon exercise of stock
options held by Mr. Streicher that are not exercisable within 60 days of
April 28, 2000.
(4) Includes 5,000 shares issuable upon the exercise of options that are
presently exercisable. Excludes 65,000 shares issuable upon the exercise of
options that are not presently exercisable.
(5) Includes (i) 1,000 shares owned directly by Mr. Golden and (ii) 10,388
shares issuable upon the exercise of options that are presently
exercisable.
(6) Includes 12,888 shares subject to presently exercisable options.
(7) Includes 100,000 shares owned directly by Mr. O'Connor. Excludes
100,000 shares owned by Mr. O'Connor's adult children, as to which
shares Mr. O'Connor disclaims any ownership interest.
(8) Includes 8,000 shares issuable upon the exercise of presently exercisable
options. Excludes 62,000 shares issuable upon the exercise of options that
are not presently exercisable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was incorporated in October 1996. Prior to the effective
date of the Company's Registration Statement for its initial public offering on
December 11, 1996, the Company's business was conducted through the Mobile
Fueling Division of Streicher Enterprises, Inc. ("Enterprises") which began
mobile fueling operations in 1983. On December 11, 1996, Enterprises completed a
corporate reorganization pursuant to which Enterprises transferred to the
Company all assets, liabilities and operations of its Mobile Fueling Division.
At January 31, 2000, the Company had a note receivable from Enterprises in the
amount of $500,952, which represents tax benefits of the Company used by
Enterprises and certain expenses of Enterprises paid by the Company prior to its
initial public offering. The note receivable bears interest at 8.25% per annum
and requires payment of interest only until January 31, 2007, when all accrued
interest and unpaid principal will become due and payable.
The Company has entered into four operating leases with Mr. Streicher
for the lease of the Company's headquarters and three division offices. These
leases expire at varying times through August 2015. Rental payments totaling
approximately $99,400 for the year ended January 31, 2000 were paid to Mr.
Streicher.
20
<PAGE>
Mr. Golden performed legal services for the Company during the fiscal
year ended January 31, 2000 and may be retained to provide legal advice to the
Company from time to time in the future.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
-------- -----------
<S> <C>
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
4.1 Form of Common Stock Certificate (1)
4.2 Form of Redeemable Common Stock Purchase Warrant (1)
4.3 Underwriters' Purchase Option Agreement between the
Registrant and Argent Securities, Inc. (1)
4.4 Warrant Agreement between the Registrant and American
Stock Transfer & Trust Company (1)
10.1 Employment Agreement between the Registrant and
Stanley H. Streicher (1)(2)
10.2 Registrant's Stock Option Plan (1)(2)
10.3 $10,000,000 Amended and Restated Loan Agreement,
dated May 25, 1999, between the Registrant and Bank
Atlantic and First Amendment, dated December 22,
1999, to Amended and Restated Loan Agreement (5)
10.4 Master Security Agreement, dated July 24, 1997,
between the Registrant and General Electric Capital
Corporation (3)
10.5 Form of Promissory Note with General Electric Capital
Corporation (3)
10.6 Employment Agreement between the Registrant and
Walter B. Barrett (2)(4)
10.7 $10,000,000 Promissory Note, dated December 22, 1999,
between the Registrant and Bank Atlantic(5)
23.1 Consent of KPMG LLP(5)
23.2 Consent of Arthur Andersen LLP(5)
27.1 Financial Data Schedules(5)
</TABLE>
- ---------------
(1) Incorporated by reference to the exhibit of the same number filed with the
Company's Registration Statement on Form SB-2 (No. 333-11541)
(2) Management Contract or Compensatory Plan
(3) Incorporated by reference to the exhibit of the same number filed by the
Company with Form 10K for the fiscal year ended January 31, 1998.
(4) Incorporated by reference to the exhibit of the same number filed by the
Company with Form 10-K for the fiscal year ended December 31, 1999.
(5) Filed herewith.
21
<PAGE>
(b) Financial statement schedule
(c) REPORTS ON FORM 8-K
None.
22
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: May 15, 2000 STREICHER MOBILE FUELING, INC.
By: /S/ STANLEY H. STREICHER
-------------------------------
Stanley H. Streicher,
Chairman of the Board and
Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
By:/S/ STANLEY H. STREICHER Chairman of the Board and Chief May 15, 2000
--------------------------------------- Executive Officer (Principal Executive
Stanley H. Streicher Officer)
By:/S/ WALTER B. BARRETT Vice President-- Finance and Chief May 15, 2000
--------------------------------------- Financial Officer (Principal Financial and
Walter B. Barrett Accounting Officer)
By:/S/ E. SCOTT GOLDEN Director May 15, 2000
---------------------------------------
E. Scott Golden
By:/S/ JOSEPH M. MURPHY Director May 15, 2000
---------------------------------------
Joseph M. Murphy
By:/S/ JOHN H. O'NEIL, JR. Director May 15, 2000
---------------------------------------
John H. O'Neil, Jr.
By:/S/ C. RODNEY O'CONNOR Director May 15, 2000
---------------------------------------
C. Rodney O'Connor
</TABLE>
23
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Certified Public Accountants................................ F-2
Report of Independent Certified Public Accountants................................ F-3
Consolidated Balance Sheets as of January 31, 2000 and 1999....................... F-4
Consolidated Statements of Operations for Each of the Years in the Three Year
Period Ended January 31, 2000................................................ F-6
Consolidated Statements of Shareholders' Equity for Each of the Years in the
Three Year Period Ended January 31, 2000..................................... F-7
Consolidated Statements of Cash Flows for Each of the Years in the Three Year
Period Ended January 31, 2000................................................ F-8
Notes to Consolidated Financial Statements........................................ F-9
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders
Streicher Mobile Fueling, Inc.:
We have audited the accompanying consolidated balance sheets of Streicher Mobile
Fueling, Inc. (a Florida corporation) and subsidiaries as of January 31, 2000
and 1999 and the related consolidated statements of operations, shareholders'
equity and cash flows for the years then ended. In connection with our audits of
the consolidated financial statements, we have also audited the financial
statement schedule for each of the years in the two year period ended January
31, 2000. These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Streicher Mobile
Fueling, Inc. and subsidiaries as of January 31, 2000 and 1999 and the results
of their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles. Also in our opinion, the related
consolidated financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.
The accompanying consolidated financial statements and financial statement
schedule have been prepared assuming the Company will continue as a going
concern. As discussed in Note 3 to the consolidated financial statements, the
Company incurred an operating loss for the fourth quarter of the current fiscal
year and these operating losses have continued in periods subsequent to year
end. These losses, the uncertainty surrounding the Company's relationship with
its principal lender due to a loan covenant violation and the reduction in the
Company's cash reserves have raised substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 3. The consolidated financial statements and financial
statement schedule do not include any adjustments that might result from the
outcome of this uncertainty.
KPMG LLP
Fort Lauderdale, Florida,
March 24, 2000
F-2
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders
Streicher Mobile Fueling, Inc.:
We have audited the accompanying consolidated statements of operations,
shareholders' equity and cash flows of Streicher Mobile Fueling, Inc. (a Florida
corporation) and subsidiaries for the year ended January 31, 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the result of operations and cash flows of
Streicher Mobile Fueling, Inc. and subsidiaries for the year ended January 31,
1998, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
April 10, 1998.
F-3
<PAGE>
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2000 AND 1999
<TABLE>
<CAPTION>
ASSETS 2000 1999
- -------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................. $ 874,972 $ 122,961
Accounts receivable, net of allowance for doubtful
accounts of $111,600 and $79,000, respectively......... 9,587,686 5,774,912
Inventories............................................... 434,871 81,336
Prepaid expenses and other current assets................. 476,581 246,538
-------------- -------------
Total current assets................................ 11,374,110 6,225,747
Property and Equipment:
Land...................................................... 249,302 233,803
Leasehold improvements.................................... 189,684 189,684
Fuel trucks and automobiles............................... 12,280,350 10,150,453
Machinery and equipment................................... 956,980 894,146
Furniture and fixtures.................................... 79,157 69,779
Construction in process................................... 1,328,113 138,910
-------------- -------------
15,083,586 11,676,775
Less accumulated depreciation and amortization...... (3,098,177) (2,186,515)
-------------- -------------
11,985,409 9,490,260
Account receivable from related party (Note 7)................ 500,952 445,956
Other assets.................................................. 70,453 32,186
-------------- -------------
Total assets........................................ $ 23,930,924 $ 16,194,149
============== =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
F-4
<PAGE>
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2000 AND 1999
(CONTINUED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999
- -------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Current Liabilities:
Bank line of credit payable (Note 4)...................... $ 7,679,219 $ 4,570,789
Current portion of long-term debt (Note 5)................ 1,560,893 1,411,984
Accounts payable.......................................... 3,058,460 1,970,099
Accrued expenses.......................................... 753,114 477,475
Customer deposits......................................... 119,895 119,895
-------------- -------------
Total current liabilities........................... 13,171,581 8,550,242
Long-term Liabilities:
Long-term debt, excluding current portion (Note 5)........ 6,470,171 4,284,271
-------------- -------------
Total liabilities................................... 19,641,752 12,834,513
-------------- -------------
Commitments and Contingencies (Note 9)
Shareholders' Equity (Notes 11 and 12)
Preferred stock, $.01 par value, 1,000,000 shares
authorized, none issued and outstanding................ -- --
Common stock, $.01 par value, 20,000,000 shares
authorized, 2,710,400 and 2,575,000 shares issued and
outstanding in 2000 and 1999, respectively............. 27,104 25,750
Additional paid-in capital................................ 5,651,500 5,195,758
Accumulated deficit....................................... (1,389,432) (1,861,872)
-------------- -------------
Total shareholders' equity.......................... 4,289,172 3,359,636
-------------- -------------
Total liabilities and shareholders' equity.......... $ 23,930,924 $ 16,194,149
============== =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-5
<PAGE>
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR EACH OF THE YEARS IN THE THREE YEAR PERIOD ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
2000 1999 1998
--------------- -------------- --------------
<S> <C> <C> <C>
Fuel sales and service revenues...................... $ 50,801,184 $ 30,331,571 $ 29,399,547
Fuel taxes........................................... 23,369,811 17,044,000 13,642,267
--------------- -------------- --------------
Total revenues (Note 6)......................... 74,170,995 47,375,571 43,041,814
Cost of fuel sales and service....................... 45,187,390 26,777,496 26,094,240
Fuel taxes........................................... 23,369,811 17,044,000 13,642,267
--------------- -------------- --------------
Total cost of sales............................. 68,557,201 43,821,496 39,736,507
Gross profit.................................. 5,613,794 3,554,075 3,305,307
Operating expenses................................... 4,035,785 3,601,278 3,575,368
--------------- -------------- --------------
Operating income (loss)....................... 1,578,009 (47,203) (270,061)
Loss on asset disposal............................... (18,965) (6,877) (62,399)
Interest expense..................................... (1,151,707) (839,907) (474,923)
Interest and other income............................ 65,103 73,391 178,811
--------------- -------------- --------------
Income (loss) before income taxes............. 472,440 (820,596) (628,572)
Income tax benefit (provision)....................... -- (261,018) 153,146
--------------- -------------- --------------
Net income (loss)............................. $ 472,440 $ (1,081,614) $ (475,426)
--------------- -------------- --------------
Basic net income (loss) per share.................... $ .17 $ (.42) $ (.18)
--------------- -------------- --------------
Diluted net income (loss) per share.................. $ .16 $ (.42) $ (.18)
--------------- -------------- --------------
Basic weighted average common shares outstanding..... 2,710,400 2,575,000 2,575,000
--------------- -------------- --------------
Diluted weighted average common shares outstanding... 2,880,529 2,575,000 2,575,000
--------------- -------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-6
<PAGE>
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR EACH OF THE YEARS IN THE THREE YEAR PERIOD ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------------------- PAID-IN COMPREHENSIVE
SHARES AMOUNT CAPITAL LOSS
--------- ---------- -------------- -------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 31, 1997....................... 2,575,000 $ 25,750 $ 5,220,758 $ --
Net loss........................................ -- -- -- (475,426)
Change in unrealized gain on investments........ -- -- -- (19,737)
Comprehensive loss.............................. (495,163)
Additional common stock offering expenses....... -- -- (25,000) --
--------- ---------- -------------- -------------
BALANCE, JANUARY 31, 1998....................... 2,575,000 25,750 5,195,758 --
Net loss........................................ -- -- -- --
--------- ---------- -------------- -------------
BALANCE, JANUARY 31, 1999....................... 2,575,000 25,750 5,195,758 --
Net income......................................
Proceeds from exercise of stock options and
warrants..................................... 105,400 1,054 412,292 --
Stock exchanged for services.................... 30,000 300 43,450 --
--------- ---------- -------------- -------------
BALANCE, JANUARY 31, 2000....................... 2,710,400 $ 27,104 $ 5,651,500 $ --
========= ========== ============== =============
</TABLE>
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE ACCUMULATED
INCOME (LOSS) DEFICIT TOTAL
------------- ------------ -------------
<S> <C> <C> <C>
BALANCE, JANUARY 31, 1997....................... $ 19,737 $ (304,832) $ 4,961,413
Net loss........................................ -- (475,426) (475,426)
Change in unrealized gain on investments........ (19,737) -- (19,737)
Comprehensive loss.............................. (495,163)
Additional common stock offering expenses....... -- -- (25,000)
------------- ------------ -------------
BALANCE, JANUARY 31, 1998....................... -- (780,258) 4,441,250
Net loss........................................ -- (1,081,614) (1,081,614)
------------- ------------ -------------
BALANCE, JANUARY 31, 1999....................... -- (1,861,872) 3,359,636
Net income...................................... -- 472,440 472,440
Proceeds from exercise of stock options and
warrants..................................... -- -- 413,346
Stock exchanged for services.................... -- -- 43,750
------------- ------------ -------------
BALANCE, JANUARY 31, 2000....................... $ -- $(1,389,432) $ 4,289,172
============= ============ -------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-7
<PAGE>
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE YEARS IN THE THREE YEAR PERIOD ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
2000 1999 1998
----------- ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)........................................... $ 472,440 $(1,081,614) $ (475,426)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Loss on asset disposal................................... 18,965 6,877 62,399
Gain on sale of investments.............................. -- -- (44,621)
Depreciation and amortization............................ 1,085,813 833,851 510,901
Deferred income tax (benefit) provision.................. -- 259,392 (153,146)
Provision for doubtful accounts.......................... 77,500 65,000 65,000
Amortization of stock exchanged for services............. 43,750 -- --
Changes in operating assets and liabilities..............
Increase in accounts receivable......................... (3,890,274) (774,475) (777,676)
(Increase) Decrease in inventories...................... (353,535) 52,588 (56,963)
(Increase) Decrease in prepaid expenses and
other current assets................................. (230,043) 104,993 (121,983)
Increase in deferred income tax asset................... -- (4,544) (266,921)
(Increase) Decrease in other assets..................... (38,268) 24,724 10,217
(Decrease) Increase in accounts payable and
accrued expenses..................................... 1,348,453 (281,670) (108,604)
Decrease in customer deposits........................... -- -- (49,775)
----------- ----------- ------------
Net cash used in operating activities................. (1,465,198) (794,878) (1,406,598)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment............................ -- -- 74,933
Purchase of investment...................................... -- 69,227 (3,525)
Purchases of property and equipment......................... (3,648,120) (4,143,743) (3,492,706)
Proceeds from disposal of equipment......................... 63,740 13,477 87,462
Note receivable due from related party...................... (54,996) 5,850 (132,763)
----------- ----------- ------------
Net cash used in investing activities..................... (3,639,376) (4,055,188) (3,466,599)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit......................... 3,108,430 1,301,076 1,865,244
Borrowings under long-term debt............................. 7,880,002 3,424,166 4,322,594
Principal payments on long-term debt........................ (5,545,193) (1,163,349) (2,751,507)
Net proceeds from issuance of common stock and common
stock warrants............................................ 413,346 -- --
----------- ----------- ------------
Net cash provided by financing activities................. 5,856,585 3,561,893 3,436,331
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........... 752,011 (1,288,173) (1,436,866)
CASH AND CASH EQUIVALENTS, beginning of year................... 122,961 1,411,134 2,848,000
----------- ----------- ------------
CASH AND CASH EQUIVALENTS, end of year......................... $ 874,972 $ 122,961 $ 1,411,134
----------- ----------- ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest................................................... $ 1,102,645 $ 800,222 $ 453,786
----------- ----------- ------------
Income taxes............................................... $ 1,791 $ 4,544 $ 234,296
----------- ----------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-8
<PAGE>
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 31, 2000, 1999 AND 1998
(1) NATURE OF OPERATIONS
Streicher Mobile Fueling, Inc. (the "Company") was incorporated in the
State of Florida in October 1996. Prior to the effective date of the
Company's registration statement for its initial public offering on
December 11, 1996, the Company's business was conducted through the
Mobile Fueling Division of Streicher Enterprises, Inc. ("Enterprises"),
which began mobile fueling operations in 1983. Enterprises completed a
corporate reorganization as of such effective date, pursuant to which
the Mobile Fueling Division of Enterprises transferred its assets,
liabilities and operations to the Company. Such corporate
reorganization has been retroactively reflected in the accompanying
consolidated financial statements and notes thereto as if such transfer
had occurred at inception of the former Mobile Fueling Division.
Accordingly, accumulated deficit includes the cumulative results of the
former Mobile Fueling Division. Enterprises is wholly owned by the
president of the Company and through an affiliate company currently
owns 47.0% of the outstanding common stock of the Company.
The Company delivers mechanized mobile fleet fueling and electronic
fuel management primarily to customers that operate large fleets of
vehicles (such as governmental agencies, utilities, major trucking
lines, hauling and delivery services, and national courier services).
The Company currently has operations in Florida, Georgia, Louisiana,
Tennessee, California and Texas.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The consolidated financial statements include the accounts of
Streicher Mobile Fueling, Inc. and its wholly owned
subsidiaries, Streicher West, Inc., Streicher Realty, Inc.,
and Mobile Computer Systems, Inc. All significant intercompany
balances and transactions have been eliminated in
consolidation.
The accompanying consolidated financial statements include the
operations of the former Mobile Fueling Division of
Enterprises on a retroactive basis as if the transfer
discussed in Note 1 had occurred at the date of inception of
the former Mobile Fueling Division since these entities were
under common control before and after the reorganization.
(b) Cash and Cash Equivalents
The Company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents. Included in cash and cash equivalents in the
accompanying consolidated balance sheets is interest bearing
cash of approximately $552,600 and $123,000 as of January 31,
2000 and 1999, respectively.
(c) Accounts Receivable
Accounts receivable are due from companies within a broad
range of industries and are generally unsecured. The Company
provides for credit losses based on management's evaluation of
collectibility based on current and historical performance of
the customer.
F-9
<PAGE>
(d) Inventories
Inventories, consisting of gasoline and diesel fuel, are
stated at the lower of cost or market which approximates the
first-in, first-out method.
(e) Property and Equipment
Property and equipment is stated at cost less accumulated
depreciation and amortization. Ordinary maintenance and
repairs are expensed as incurred. Improvements which
significantly increase the value or useful life of property
and equipment are capitalized. Property and equipment is
depreciated or amortized using the straight-line method over
the following estimated useful lives:
YEARS
------------------
Mobile fuel delivery trucks 10
Mobile fuel delivery tanks 25
Machinery and equipment 3-5
Furniture and fixtures 10
Leasehold improvements Lesser of lease
term or useful
life
(f) Income Taxes
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. Deferred tax
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes
the enactment date. Income taxes are provided as if the
Company had been a separate taxable entity since the inception
of the former Mobile Fueling Division.
(g) Revenue Recognition
The Company recognizes revenue at the time services are
performed and fuel is delivered.
(h) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions. These assumptions, if not
realized could affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(i) Fair Value of Financial Instruments
The Company's financial instruments, primarily consisting of
cash and cash equivalents, investments, accounts receivable,
note receivable from related party, accounts payable, bank
line of credit payable, and long-term debt, approximate fair
value due to their short-term nature or interest rates that
approximate current market rates.
F-10
<PAGE>
(j) Net Income or Loss Per Share
Net income or loss per share is determined by dividing net
income or loss by the weighted average common shares
outstanding. Certain common stock equivalents, consisting of
employee stock options and common stock warrants in fiscal
2000 were dilutive and were included in the calculation of net
income per share in fiscal 2000. Common stock equivalents
consisting of employee stock options and common stock warrants
in 1999 and 1998 were antidilutive and were not included in
the computation of net loss per share in fiscal 1999 and 1998.
In fiscal 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share"
which simplifies the accounting for earnings per share by
presenting basic earnings per share including only outstanding
common stock and diluted earnings per share including the
effect of dilutive common stock equivalents.
(k) Accounting for Long-Lived Assets
The Company accounts for long-lived assets in accordance with
the provisions of SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." This Statement requires that long-lived assets and
certain identifiable intangibles be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net
cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying
amount of the assets exceed the fair market value of the
assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.
(l) Stock Options
Statement of Financial Accounting Standards No. 123 ("SFAS
123"), "Accounting for Stock Based Compensation," allows
entities to choose between a fair value based method of
accounting for employee stock options or similar equity
instruments and the intrinsic value based method of accounting
prescribed by Accounting Principles Board Opinion No. 25 ("APB
No. 25"), "Accounting for Stock Issued to Employees." Entities
electing to account for employee stock options or similar
equity instruments under APB No. 25 must make pro forma
disclosures of net income and earnings per share as if the
fair value method of accounting had been applied. The Company
has elected to apply the provisions of APB No. 25 in the
preparation of its consolidated financial statements and
provide pro forma disclosure of net income (loss) and earnings
per share as required under SFAS 123 in the notes to the
consolidated financial statements.
(m) Comprehensive Income
In June 1997, the FASB issued Statement of Financial
Accounting Standards No 130, "Reporting Comprehensive Income"
("SFAS No. 130"), which establishes standards for reporting
and display of comprehensive income and its components
(revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. This Statement requires
that all items that are required to be recognized under
accounting standards as components of comprehensive income, be
reported in a financial statement that is displayed with the
same prominence as other financial statements. This Statement
is effective for fiscal years beginning after December 15,
1997. For the years ended January 31, 2000 and 1999,
comprehensive income or loss equaled net income or loss. Prior
year financial statements have been reclassified to conform to
the requirements of SFAS No. 130.
F-11
<PAGE>
(n) Segment Reporting
Effective February 1, 1998, the Company adopted Statement of
Financial Accounting Standards No 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No.
131"), which establishes standards for reporting information
about operating segments in annual financial statements and
requires that selected information about operating segments be
reported in interim financial statements. It also establishes
standards for related disclosures about products and services,
geographic areas and major customers. The adoption of this
pronouncement did not have a significant effect on the
Company's consolidated financial position, results of
operations or cash flows. The Company operates in one
reporting segment as determined under the guidance in SFAS No.
131.
(o) Reclassifications
Certain prior year amounts have been reclassified to conform
to the current year presentation.
(3) LIQUIDITY AND WORKING CAPITAL
While the Company operated at a profit for the fiscal year 2000, the
Company incurred an unaudited net operating loss of $363,000 in the
fourth quarter of fiscal 2000 and has continued to incur operating
losses in the periods subsequent to January 31, 2000. The losses
incurred subsequent to the fiscal 2000 year end have placed the Company
in violation of the tangible net worth requirement in the loan
agreement with its principal lender. The lender has not provided a
waiver of the violation at this time.
In response to the losses incurred, the Company has taken a number of
steps to improve its operating results by reducing operating costs. The
steps taken include:
o Evaluations of individual customer profitability, with price
and service frequency adjustments implemented for unprofitable
accounts.
o Significant reductions on driver overtime wages as a result of
route restructurings and combinations.
o Significant reduction in the sales and marketing staffs, along
with related expenses and promotion costs.
o Implementing a program to institute a 10% reduction in ongoing
repair and maintenance costs.
o Selling certain high maintenance cost older equipment and
replacing it with new equipment.
o Other cost reductions, primarily in the general and
administrative cost area.
The uncertainty surrounding the Company's relationship with its
principal lender, the current level of the Company's cash reserves, and
its ongoing operating losses raises questions about the Company's
ability to continue as a going concern. Management believes that the
continued implementation of the Company's fiscal year 2001 operating
plan will enable the Company to continue as a going concern. The
Company's ability to successfully implement its plans to continue to
improve its operations is dependent upon a number of factors, some of
which are beyond its control. There can be no assurance that the
Company's operating results or financial conditions will improve in
fiscal year 2001.
(4) BANK LINE OF CREDIT PAYABLE
The Company has outstanding borrowings of $7.7 million as of January
31, 2000 under a $10.0 million bank line of credit. This line permits
the Company to borrow up to 85% of the total amount of eligible
accounts receivable. Based on eligible receivables outstanding at
January 31, 2000 the line has been fully drawn as of
F-12
<PAGE>
that date. Interest is payable monthly at 1.0% over the prime rate
(8.75% as of January 31, 2000). The line of credit matures on April 30,
2001 and is secured by substantially all of the Company's assets. The
credit agreement contains customary covenants such as the maintenance
of certain financial ratios and minimum net worth and working capital
requirements. As of January 31, 2000, the Company was in compliance
with the minimum net worth and debt to equity requirements. Operating
losses incurred subsequent to January 31, 2000 have caused the Company
to violate the minimum net worth requirement. See Footnote 3.
(5) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
JANUARY 31,
------------------------------------
2000 1999
------------- -------------
<S> <C> <C>
Equipment loans payable (10.04% weighted average
interest rate at January 31, 2000) due in monthly
installments with varying maturities through $ 8,031,064 $ 5,696,255
January 2005
Less: current portion (1,560,893) (1,411,984)
------------- -------------
Long-term debt, excluding current portion $ 6,470,171 $ 4,284,271
============= =============
</TABLE>
Future principal payments on long-term debt are due as follows as of
January 31, 2000:
YEAR ENDING JANUARY 31,
-----------------------
2001 $ 1,560,893
2002 1,690,958
2003 1,791,811
2004 1,633,819
2005 1,353,583
------------
$ 8,031,064
============
(6) MAJOR CUSTOMERS
Revenue from three major customers was approximately $13.4 million,
$10.8 million and $13.8 million in fiscal 2000, 1999 and 1998,
respectively. Accounts receivable from these customers totaled $2.0
million at January 31, 2000 and $1.2 million at January 31, 1999.
(7) RELATED PARTY TRANSACTIONS
The Company engages in certain transactions with Enterprises. An
account receivable from Enterprises totaled $500,952 and $445,956 as of
January 31, 2000 and 1999, respectively, and bears interest at 8.25
percent per annum. Such amounts represent tax benefits of the Company
used by Enterprises and certain expenses of Enterprises paid by the
Company prior to its initial public offering and cash advances to
Enterprises prior to the Company's initial public offering. Interest
income includes approximately $37,400 in fiscal 2000, $36,000 in fiscal
1999, and $25,000 in fiscal 1998 relating to the account receivable
from Enterprises. The terms of the agreement with Enterprises require
annual payments of interest only with a final payment of all accrued
interest and unpaid principal due on January 31, 2007. The account is
secured by a pledge of 100,000 shares of the Company's common stock,
which is owned by an affiliate of Enterprises.
F-13
<PAGE>
The Company has entered into four operating leases with the sole
shareholder of Enterprises for the lease of the Company's headquarters
and three division offices. These leases expire at varying times
through August 2015. Rent expense totaling approximately $99,400,
$99,000 and $95,000 for the years ended January 31, 2000, 1999 and
1998, respectively, was paid to the sole shareholder of Enterprises.
(8) INCOME TAXES
The benefit (provision) for income taxes consists of the following for
the years ended January 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Federal $ -- $(236,725) $ 118,625
State -- (24,293) 34,521
-------- -------- -------
$ -- $(261,018) $ 153,146
-------- --------- -------
Current -- $ (1,626) $ --
Deferred -- (259,392) 153,146
-------- -------- -------
$ -- $(261,018) $ 153,146
======== ========= =======
The actual tax benefit (provision) of the Company for the years ended
January 31, 2000, 1999 and 1998 differs from the statutory Federal tax
rate of 34% due to the following:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Expected benefit (provision) for income
taxes at statutory Federal income tax rates $(160,630) $ 279,003 $ 213,714
State income taxes (17,811) 30,940 22,783
Other 10,085 36,099 (66,439)
Deferred tax valuation allowance 185,441 (594,822) --
Nondeductible expenses (17,085) (12,238) (16,912)
---------- -------- -------
Actual benefit (provision) for income taxes $ -- $ (261,018) $ 153,146
========== ======== =======
</TABLE>
Deferred income taxes reflect the net effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and their income tax bases, and (b)
operating loss carryforwards.
The tax effects of temporary differences and operating loss
carryforwards that give rise the significant portions of the deferred
tax assets and liabilities at January 31, 2000 and 1999 are presented
below:
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $1,753,199 $1,078,758
Asset basis adjustment for Reorganization 384,223 416,241
---------- ----------
Total gross deferred tax assets 2,137,422 1,494,999
Less valuation allowance (884,470) (1,069,911)
---------- ----------
Total deferred tax assets 1,252,952 425,088
---------- ----------
Deferred tax liabilities:
Depreciation 1,215,322 406,273
Other 37,630 18,815
---------- ----------
Total deferred tax liabilities 1,252,952 425,088
---------- ----------
Net deferred tax assets $ -- $ --
========== ==========
</TABLE>
Realization of deferred tax assets associated with net operating loss
and credit carryforwards is dependent upon generating sufficient
taxable income prior to their expiration. Management believes that
these net operating loss and credit carryforwards may expire unused and
will not meet the "more likely than not" criteria of SFAS No. 109, and,
accordingly has established a valuation allowance for the excess of
deferred tax assets over deferred tax liabilities.
The net change in the valuation allowance for the years ended January
31, 2000 and 1999 was a decrease of $185,411 and an increase of
$594,822, respectively. As of January 31, 2000, the Company has net
operating loss carryforwards of approximately $4.7 million available to
offset future taxable income through 2020.
F-14
<PAGE>
(9) COMMITMENTS AND CONTINGENCIES
(a) Operating Leases
The Company leases real property and buildings under operating
leases that expire at various times through the year 2015.
Future minimum lease payments under non cancelable operating
leases as of January 31, 2000, including the related party
leases discussed in Note 7 are as follows:
YEAR ENDING OPERATING LEASE
JANUARY 31 PAYMENTS
----------- -------------
2001 $ 108,145
2002 79,281
2003 73,209
2004 73,209
2005 73,209
Thereafter 632,710
------------
$ 1,039,763
============
(b) Governmental Regulation
The Company's operations are affected by numerous Federal,
state and local laws, including those relating to protection
of the environment and worker safety. The transportation of
gasoline and diesel fuel is subject to regulation by various
Federal, state and local agencies. These regulatory
authorities have broad powers, and the Company is subject to
regulatory and legislative changes that can affect the
economics of the industry by requiring changes in operating
practices or influencing the demand for, and the cost of
providing, its services. The Company is also subject to the
rules and regulations of the Hazardous Materials
Transportation Act. In addition, the Company depends on the
supply of gasoline and diesel fuel from the oil and gas
industry and, therefore, is affected by changing taxes, price
controls and other laws and regulations relating to the oil
and gas industry. The Company cannot determine the extent to
which its future operations and results may be affected by new
legislation, new regulations or changes in existing
regulations.
The technical requirements of these laws and regulations are
becoming increasingly expensive, complex and stringent. These
laws may impose penalties or sanctions for damages to natural
resources or threats to public health and safety. Such laws
and regulations may also expose the Company to liability for
the conduct of or conditions caused by others, or for acts of
the Company that were in compliance with all applicable laws
at the time such acts were performed. Sanctions for
noncompliance may include revocation of permits, corrective
action orders, administrative or civil penalties and criminal
prosecution. Certain environmental laws provide for joint and
several liability for clean up of spills and releases of
hazardous substances. In addition, companies may be subject to
claims alleging personal injury or property damage as a result
of alleged exposure to hazardous substances, as well as damage
to natural resources. The Company carries liability insurance
of $30,000,000 in the event of such occurrences.
Although the Company believes that it is in substantial
compliance with existing laws and regulations, there can be no
assurance that substantial costs for compliance will not be
incurred in the future. Moreover, it is possible that other
developments, such as stricter environmental laws, regulations
and enforcement policies thereunder, could result in
additional, presently unquantifiable, costs or liabilities to
the Company.
F-15
<PAGE>
(c) Employment Agreements
In December 1996, the Company entered into an employment
agreement with its president. The term of the agreement is
five years and will automatically renew for two successive
two-year terms, unless notice of termination is given by the
Company prior to a renewal period. The agreement provides that
if the president's employment is terminated as a result of his
death or disability, he or his estate will receive for a
period of six months, his base salary in effect as of the date
of such termination and a prorated amount of any bonuses. The
agreement also provides that in the event the president's
employment is terminated "without cause" the president will
receive, in addition to any salary, bonus and other
compensation accrued through the date of termination, a lump
sum equal to the greater of the full amount of salary, bonuses
and other compensation due under the agreement for the
remainder of the term or three times the then-existing salary
and most recent annual bonus. The agreement further provides
that the president will not compete with the Company while
employed by the Company and for a period of two years
following termination of employment. In the event that his
employment is terminated without cause, as a result of his
death or disability, or upon a change of control (as defined
in the employment agreement), all options to purchase common
stock held by the president shall become immediately
exercisable.
The agreement also provides for two percent per annum of the
outstanding balance of any Company debt personally guaranteed
by the president to be paid to the president in quarterly
installments. For the year ended January 31, 1998 payments
totalling $76,000 were made to the president of the Company
pursuant to this agreement. As of January 31, 1998, all debts
guaranteed by the president of the Company have been repaid or
the guarantees have been released by the lender.
The Company has also entered into written employment
agreements with certain other company officers. The agreements
vary in term from one to three years and automatically renew
for successive one year periods unless notice of termination
is given by the Company prior to a renewal period.
(d) Absence of Written Agreements
Most of the Company's customers do not have written agreements
with the Company and can terminate the Company's mobile
fueling services at any time and for any reason. If the
Company were to experience a high rate of terminations, the
Company's business and financial performance could be
adversely affected.
(e) Litigation
The Company may be subject to legal proceedings and claims
which arise in the ordinary course of its business. In the
opinion of management no litigation or claims exist that would
have a material effect on the consolidated financial position
or results of operations of the Company.
(f) Other Commitments
At January 31, 2000, the Company had purchase commitments for
four custom fuel delivery vehicles aggregating approximately
$600,000.
(10) EMPLOYEE BENEFIT PLAN
In May 1998, the Company adopted a 401(k) plan for all employees over
the age of 21 with 1,000 hours of service in the previous six months of
employment. The Plan provides for a discretionary match of employee
F-16
<PAGE>
contributions as determined by the Board of Directors. No Company
contributions were made for the fiscal years ended January 31, 2000 or
1999.
(11) COMMON STOCK WARRANTS
The Company issued 1,150,000 common stock warrants in conjunction with
its initial public offering in December 1996. Each warrant entitles the
holder to purchase one share of common stock at a price of $6.90 per
share for a period of four years commencing in December 1997 (the
"First Exercise Date"). Each warrant is redeemable by the Company at a
redemption price of $0.01 per warrant, at any time after the First
Exercise Date, upon thirty days' prior written notice to the holders,
if the average closing bid price of the common stock, as reported on
the principal exchange on which the common stock is traded, equals or
exceeds $10.50 per share for 20 consecutive trading days ending three
days prior to the date of the notice of redemption. Any warrant holder
who does not exercise prior to the redemption date, as set forth in the
Company's notice of redemption, will forfeit the right to purchase the
common stock underlying the warrants, and after the redemption date or
upon conclusion of the exercise period any outstanding warrants will
become void and be of no further force or effect, unless extended by
the Board of Directors of the Company.
The number of shares of common stock that may be purchased is subject
to adjustment upon the occurrence of certain events including a
dividend distribution to the Company's shareholders, or a subdivision,
combination or reclassification of the outstanding shares of common
stock. Further, the warrant exercise price is subject to adjustment in
the event the Company issues additional stock or rights to acquire
stock at a price per share that is less than the current market price
per share of common stock on the record date established for the
issuance of additional stock or rights to acquire stock. The term
"current market price," is defined as the average of the daily closing
prices, will not be adjusted in the case of the issuance or exercise of
options pursuant to the Company's stock option plans, the issuance or
exercise of the underwriter's warrants (or the warrants included
therein) or any other options or warrants outstanding as of December
1996. The warrant exercise price is also subject to adjustment in the
event of a consolidation or merger where a distribution by the Company
is made to its stockholders of the Company's assets or evidences of the
indebtedness (other than cash or stock dividends) or pursuant to
certain subscription rights or other rights to acquire common stock.
The Company may at any time, and from time to time, extend the exercise
period of the warrants, provided that written notice of such extension
is given to the warrant holders prior to the expiration of the date
then in effect. Also, the Company may reduce the exercise price of the
warrants for limited periods or through the end of the exercise period
in accordance with the terms of the Company's warrant agreement with
the transfer agent if deemed appropriate by the Board of Directors. The
Company does not presently contemplate any extension of the exercise
period nor does it contemplate any reduction in exercise price of the
warrants.
(12) STOCK OPTION PLAN
The Company adopted a Stock Option Plan (the "Plan"), under which
500,000 shares of common stock are reserved for issuance upon exercise
of options. The Plan is designed to serve as an incentive for retaining
qualified and competent employees. The Company's Board of Directors
administers the Plan and is authorized to grant options thereunder to
all eligible employees of the Company, including officers and directors
(whether or not employees) of the Company and consultants. The Plan
provides for the granting of both "incentive stock options" (as defined
in Section 422A of the Internal Revenue Code) and nonqualified stock
options. Options are granted under the Plan on such terms and at such
prices as determined by the Board of Directors, except that the per
share exercise price of incentive stock options cannot be less than the
fair market value of the common stock on the date of grant and the per
share exercise price of nonqualified stock options will not be less
than 85% of the fair market value on the date of grant. Each option is
exercisable after the period or periods specified in the option
agreement, but no option can be exercised until six months after the
date of grant or after the expiration of 10 years from the date of
grant.
F-17
<PAGE>
Options granted under the Plan are not transferable other than by will
or by the laws of descent and distribution. The Plan also authorizes
the Company to make loans to optionees to enable them to exercise their
options and to allow them to use common stock to pay for the exercise
of their options. Such loans must (i) provide for recourse to the
optionee, (ii) bear interest at a rate no less than the rate of
interest payable by the Company to its principal lender at the time the
loan is made, and (iii) be secured by the shares of common stock
purchased. The following table summarizes stock option activity for the
periods indicated:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Options outstanding as of January 31, 1998.... 98,000 $ 3.34
---------
Granted..................................... 112,052 $ 3.68
---------
Exercised................................... --
Expired..................................... --
Options outstanding as of January 31, 1999.... 210,052
Granted..................................... 159,000 $ 5.49
---------
Exercised................................... (60,300) 3.44
---------
Expired..................................... (32,200) 4.60
--------- ---------
Options outstanding as of January 31, 2000.... 276,552 $ 4.55
======= =========
Exercisable................................... 51,952
========
Available for future grant.................... 163,148
=======
</TABLE>
An employment agreement with the Company's president provides for the
issuance of options to acquire 1,000,000 shares of common stock at $6
per share. The timing of vesting of the stock options is contingent
upon the Company achieving either a specified earnings per share level
or a specified stock price level (the "performance threshold"), for the
corresponding fiscal year end. Commencing with fiscal year ending
January 31, 1998 and at each of the four fiscal year ends thereafter,
200,000 of such options will become exercisable if the Company achieves
earnings per share, as defined in the agreement, of $.36, $.43, $.52,
$.62 and $.74 for the fiscal years ending January 31, 1998, 1999, 2000,
2001 and 2002, respectively, (or cumulative earnings per share after
fiscal 1998 of $.66, $1.09, $1.61, $2.23 and $2.97, respectively), or
the closing bid price of the Company's common stock on any 20
consecutive trading days during such fiscal year is $7.25, $8.75,
$10.50, $12.50 and $15.00, respectively, or the Company has cumulative
net income of $2 million, $3 million, $4 million, $5 million and $6
million, respectively, as defined. For the fiscal year ended January
31, 1998 the Company's stock closing price exceeded $7.25 for more than
20 consecutive trading days and thus 200,000 of the options became
exercisable. For any fiscal year after January 31, 1998 in which the
Company attains the foregoing earnings, per share stock price or
cumulative net income targets, any options eligible for vesting in
prior years which were not vested and exercisable because the targets
for such fiscal years were not achieved, shall become exercisable. In
addition, for any fiscal year in which the Company attains the earnings
per share, stock price or cumulative net income targets applicable to a
subsequent fiscal year, all options eligible for vesting in such
subsequent fiscal year shall vest and become exercisable. If any of the
warrants (Note 11) are exercised, the options shall vest and become
exercisable pro rata (based on the number of warrants exercised) to the
extent not already vested in accordance with the foregoing. Regardless
of the Company's performance, all of the stock options granted to the
president shall vest and become exercisable ten years from the date of
the grant.
In connection with the Company's public offering in December 1996, the
underwriter was granted an option to purchase up to 100,000 shares of
common stock at $9.30 per share and 100,000 warrants at a price of
$.19375 per warrant. Each warrant entitles the underwriter to purchase
one share of common stock at $9.30 per share. The underwriter options
and warrants are exercisable for a period of four years, commencing on
December 11, 1997, and expire on December 11, 2001.
F-18
<PAGE>
The Company has adopted SFAS No. 123, "Accounting for Stock-Based
Compensation." As permitted under the provisions of SFAS No. 123, the
Company applies the principles of APB Opinion 25 and related
interpretations in accounting for its stock option plans. If the
Company had elected to recognize compensation cost based on the fair
value of the options granted at grant date as prescribed by SFAS No.
123, net income (loss) and earnings (loss) per share would have been
reduced (increased) to the pro forma amounts indicated in the table
below. The fair value of each option grant was estimated at the date of
grant using the Black-Scholes option pricing model with the following
weighted-average assumptions used for all grants made to date:
risk-free interest rate of 7%, dividend yield of 0%, expected
volatility of 50% and expected life of 10 years.
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Net income (loss) as reported $ 472,440 $ (1,081,614) $ (475,426)
Net income (loss) pro forma $ (37,658) $ (1,526,401) $ (1,450,911)
Fully diluted net income (loss)
per share as reported $ .16 $ (.42) $ (.18)
Fully diluted net income (loss)
per share pro forma $ (.01) $ (.59) $ (.56)
</TABLE>
The full impact of calculating compensation cost for stock options
under SFAS No. 123 is not reflected in the pro forma loss amounts
presented because compensation cost is reflected over the vesting
period of the options.
F-19
<PAGE>
SCHEDULE II
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
For each of the years in the two-year period
ended January 31, 2000
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF (A) (B) AT END
YEAR CHARGES DEDUCTIONS OF YEAR
------------ ------- ---------- --------
<S> <C> <C> <C> <C>
Description:
Reserves and allowances deducted from
asset accounts
FYE 1/31/99
Allowance for doubtful accounts 148,149 65,000 (133,265) 79,884
============ ======== ========== ========
Description:
Reserves and allowances deducted from
asset accounts
FYE 1/31/00
Allowance for doubtful accounts 79,884 77,500 (45,810) 111,574
============ ======== ========== ========
</TABLE>
(a) Charges to the reserve account represent increase in reserve levels and
establishment of specific reserves charge.
(b) Deductions to the reserve account represent write-offs net of recoveries
which occurred during the year
F-20
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
10.3 $10,000,000 Amended and Restated Loan Agreement,
dated May 25, 1999, between the Registrant and
Bank Atlantic and First Amendment dated December 22, 1999 to
Amended and Restated Loan Agreement
10.7 $10,000,000 Promissory Note, dated December 22, 1999,
between the Registrant and Bank Atlantic
23.1 Consent of KPMG LLP
23.2 Consent of Arthur Andersen LLP
27.1 Financial Data Schedule
EXHIBIT 10.3
FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT is made and
entered into as of the 22nd day of December, 1999 (this "Amendment"), by and
between STREICHER MOBILE FUELING, INC., a Florida corporation, STREICHER REALTY,
INC., a Florida corporation, and STREICHER WEST, INC., a California corporation
(hereinafter collectively referred to as "Borrower"), and BANKATLANTIC, a
Federal Savings Bank (hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have previously entered into that certain
Amended and Restated Loan Agreement dated as of the 25th day of May, 1999 (the
"Loan Agreement" or the "Agreement"); and
WHEREAS, Lender has previously provided Borrower with a revolving line
of credit loan in the principal amount of up to Seven Million Five Hundred
Thousand and 00/100 Dollars ($7,500,000.00) in accordance with the terms and
provisions of the Loan Agreement; and
WHEREAS, Borrower has requested that Lender increase the existing
revolving line of credit loan by the sum of Two Million Five Hundred Thousand
and 00/100 Dollars ($2,500,000.00) thereby increasing the revolving line of
credit loan to the principal amount of up to Ten Million and 00/100 Dollars
($10,000,000.00); and
WHEREAS, Lender is willing to extend such additional credit to the
Borrower of up to such amount upon the terms and conditions set forth herein;
and
WHEREAS, the parties hereto wish to amend the Loan Agreement in
accordance with the terms and provisions of, and as provided in, this Amendment.
NOW, THEREFORE, for and in consideration of the sum of Ten and 00/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the loans
or extensions of credit heretofore, now or hereafter made or to be made for the
benefit of the Borrower by the Lender, the parties do hereby agree as follows:
1. The Borrower and the Lender agree that the recitals set forth above
are true, correct, and complete, and are hereby incorporated herein.
2. All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
3. Article 1, Subsection 1.2(f) of the Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
<PAGE>
(f) "CASH COLLATERAL ACCOUNT": A cash collateral account
pledged by Borrower in favor of Lender, into which all
collections shall be remitted from a lockbox account or from
Borrower, as applicable, into which Borrower or Borrower's
account debtors, as applicable, remit all payments, which
collections shall be applied against the Loan facility balance
in accordance with the terms and provisions of the Security
and Cash Collateral Account Agreement or the Security, Cash
Collateral Account and Lockbox Agreement, as applicable. The
Borrower shall not have access to the Lockbox(s) or the Cash
Collateral Account.
4. Article 1, Subsection 1.2(z) of the Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
(z) "REVOLVING NOTE" OR "NOTE": That certain Amended and
Restated Master Revolving Promissory Note in the principal
amount of Ten Million and 00/100 Dollars ($10,000,000.00) from
Borrower to Lender dated as of December 22, 1999, as the same
may be amended, restated, supplemented or extended from time
to time. The Note amends, restates and increases that certain
Consolidation Master Revolving Promissory Note dated as of May
25, 1999, executed by Borrower in favor of Lender in the
principal amount of Seven Million Five Hundred Thousand and
00/100 Dollars ($7,500,000.00).
5. Article 1, Subsection 1.2(ff) of the Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
(ff) "SECURITY AGREEMENTS": Collectively, Security Agreements
dated as of December 30, 1997 executed by each Borrower in
favor of Lender, each as amended and reaffirmed by Amendment
to and Reaffirmation of Security Agreement dated as of May 25,
1999, as amended and reaffirmed by Second Amendment to and
Reaffirmation of Security Agreement dated as of December 22,
1999, as each of the same may be amended, restated,
supplemented or extended, from time to time, securing the Note
and all other Indebtedness of Borrower to Lender, which is a
valid first lien on all of the Borrower's accounts, accounts
receivables, inventory, chattel paper, general intangibles,
fixtures, furniture, instruments, equipment and personal
property now owned or hereafter acquired by Borrower and all
proceeds of the foregoing, subject only to the Permitted
Encumbrances (as defined in the Security Agreements).
6. Article 1, Subsection 1.2(gg) of the Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
(gg) "SECURITY AND CASH COLLATERAL ACCOUNT AGREEMENT". An
Amended and Restated Security and Cash Collateral Account
Agreement, dated as of December 22, 1999, which amends and
restates that certain Amended and Restated Security and Cash
Collateral Account Agreement dated as of May 25, 1999, as the
same may be
2
<PAGE>
amended, restated, supplemented or extended, from time to
time, whereby and whereunder payment of all of Borrower's
Receivables shall be deposited into the Cash Collateral
Account to be applied against the Loan facility balance in
accordance with the terms and provisions of said agreement,
unless and until such time as the Security, Cash Collateral
Account and Lockbox Agreement goes into full force and effect.
7. Article 1, Subsection 1.2(hh) of the Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
(hh) "SECURITY, CASH COLLATERAL ACCOUNT AND LOCKBOX
AGREEMENT". A Security, Cash Collateral Account and Lockbox
Agreement, dated as of December 22, 1999, whereby and
whereunder payment of all of Borrower's Receivables shall be
directed to a lockbox maintained with Lender (the "Lockbox")
to flow through the Cash Collateral Account, and, be applied
against the Loan facility balance in accordance with the terms
and provisions of said agreement, which shall be implemented
in accordance with the terms and provisions of Article 8,
Section 8.37 of this Agreement.
8. Article 2, Section 2.1 of the Loan Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
2.1 REVOLVING LOAN. Provided there does not exist an Event of
Default, and no event with which notice or lapse of time or
both would become such an Event of Default, and subject to the
terms and provisions of this Agreement, Lender will, under the
Note, lend or advance for the account of Borrower from time to
time, and, Borrower may borrow, repay and re-borrow (provided
that unless Borrower intends to pay and satisfy the Loan in
full, Borrower shall not reduce the outstanding principal
balance under the Loan to a sum of less than One Thousand and
00/100 Dollars ($1,000.00)) such amounts as may be required
for the purpose of providing working capital to the Borrower,
not exceeding in the aggregate an amount equal to (i)
eighty-five percent (85%) of Eligible Receivables, less such
reserves as Lender, in its sole discretion elects to
establish, provided further that a Receivable may be devalued
in such amount as shall be determined by Lender in its sole
discretion due to "Dilution" which is defined as and is the
result of non-cash credits posted against the Receivable which
result in payment or other satisfaction of all or any portion
of the Receivable for reasons other than full payment of the
Receivable in cash (the "Borrowing Base"); or, the sum of Ten
Million and 00/100 Dollars ($10,000,000.00), whichever is
less. It is acknowledged that the Borrowing Base under the
Loan may be adjusted during the term of the Loan by Lender at
any time, in its sole discretion, based upon the result of the
audits and collateral examinations conducted during the term
of the Loan. The aggregate amounts outstanding under the Loan
shall not at any time exceed the amount provided above, and in
the event the amount outstanding at any time exceeds the
permitted amount, said excess amount shall bear interest at
the
3
<PAGE>
rate set forth in the Note and shall be due and payable in
full on DEMAND.
9. Article 8, Section 8.6 of the Agreement is hereby amended and
restated so that, from and after the date hereof, it shall read in its entirety
as follows:
8.6 Streicher Mobile shall maintain a net worth of not less
than Four Million Seventy-Seven Thousand and 00/100 Dollars
($4,077,000.00) from October 31, 1999 until January 31, 2000,
and not less than Four Million Three Hundred Ninety-Two
Thousand and 00/100 Dollars ($4,392,000.00) from January 31,
2000 and thereafter, such requirement to be tested at the end
of each quarter of each fiscal year of Streicher Mobile. The
minimum net worth requirements shall be increased at the end
of each quarter in each fiscal year of Streicher Mobile
thereafter in an amount to be determined by Lender based upon
Streicher Mobile's annual projection for the period in
question.
10. The following Article 8, Section 8.37 is hereby added to the
Agreement, effective from and after the date hereof:
8.37 Borrower does hereby acknowledge that in the event
Borrower at any time does not comply with or achieve any of
the financial covenants or any other covenants set forth in
this Agreement, Lender at Lender's sole option, shall have the
right to implement the Security, Cash Collateral Account and
Lockbox Agreement, such that at said time, the Security, Cash
Collateral Account and Lockbox Agreement shall become
effective and replace and supercede the Security and Cash
Collateral Account Agreement. Borrower shall comply with all
terms and provisions of the Security, Cash Collateral Account
and Lockbox Agreement from and after the date of
implementation of the same.
11. The Borrower represents and warrants to the Lender that (a) each
Borrower has previously furnished Lender with true and correct copies of its
Articles of Incorporation and By-laws, and all amendments thereto through the
date hereof, as in effect on the date hereof, and (b) the Board of Directors of
each Borrower has approved this Amendment and the execution hereof by the
undersigned officer of each Borrower.
12. WAIVER AND RELEASE. AS A MATERIAL INDUCEMENT FOR THE LENDER TO
EXECUTE THIS AMENDMENT, EACH BORROWER DOES HEREBY RELEASE, WAIVE, DISCHARGE,
COVENANT NOT TO SUE, ACQUIT, SATISFY AND FOREVER DISCHARGE THE LENDER, ITS
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS AND ITS AFFILIATES AND
ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS, COUNTERCLAIMS, DEFENSES, ACTIONS,
CAUSES OF ACTION, SUITS, CONTROVERSIES, AGREEMENTS, PROMISES AND DEMAND
WHATSOEVER IN LAW OR IN EQUITY WHICH EACH BORROWER EVER HAD, NOW HAS, OR WHICH
ANY PERSONAL REPRESENTATIVE, SUCCESSOR, HEIR OR ASSIGN OF EACH BORROWER
HEREAFTER CAN, SHALL OR MAY HAVE AGAINST THE LENDER, ITS OFFICERS,
4
<PAGE>
DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, AND ITS AFFILIATES AND ASSIGNS, FOR,
UPON OR BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER, THROUGH THE DATE
HEREOF. EACH BORROWER FURTHER EXPRESSLY COVENANTS WITH AND WARRANTS UNTO THE
LENDER AND ITS AFFILIATES AND ASSIGNS, THAT THERE EXIST NO CLAIMS,
COUNTERCLAIMS, DEFENSES, OBJECTIONS, OFFSETS OR CLAIMS OF OFFSET AGAINST THE
LENDER OR THE OBLIGATION OF EACH BORROWER TO PAY THE LENDER ALL AMOUNTS OWING
UNDER THE NOTE, THE LOAN AGREEMENT AND ALL ASSOCIATED LOAN DOCUMENTS AS AND WHEN
THE SAME BECOME DUE AND PAYABLE. NOTWITHSTANDING THE ABOVE, THE PARTIES DO
HEREBY ACKNOWLEDGE THAT ANY DEPOSIT ACCOUNT(S) OF BORROWER MAINTAINED WITH
LENDER ARE SUBJECT TO THE TERMS AND PROVISIONS OF ANY AGREEMENT(S) RELATED TO
THOSE ACCOUNT(S), PROVIDED HOWEVER, THAT BORROWER IS UNAWARE OF ANY CLAIMS
CONCERNING THOSE ACCOUNT(S) AT THIS TIME.
13. REAFFIRMATION BY BORROWER. THE BORROWER ACKNOWLEDGES AND REAFFIRMS
THAT ALL WARRANTIES, REPRESENTATIONS, AFFIRMATIVE COVENANTS AND NEGATIVE
COVENANTS SET FORTH IN THE LOAN AGREEMENT REMAIN IN FULL FORCE AND EFFECT ON THE
DATE HEREOF AS IF MADE ON THE DATE HEREOF.
14. AMENDED AGREEMENT. THIS AGREEMENT AMENDS THE LOAN AGREEMENT, AND
THE BORROWER ACKNOWLEDGES AND AGREES THAT THE SECURITY INTERESTS, RIGHTS,
DUTIES, AND OBLIGATIONS OF THE BORROWER AND THE LENDER CREATED BY THE LOAN
AGREEMENT ARE NOT EXTINGUISHED, BUT ARE REAFFIRMED AND REMAIN IN FULL FORCE AND
EFFECT AS PROVIDED IN THE LOAN AGREEMENT. IN THE EVENT OF ANY CONFLICT BETWEEN
THE TERMS AND PROVISIONS OF THE LOAN AGREEMENT AND THE TERMS AND PROVISIONS OF
THIS AMENDMENT, THE TERMS AND PROVISIONS OF THIS AMENDMENT SHALL CONTROL AND
PREVAIL.
INTENTIONALLY LEFT BLANK
5
<PAGE>
WAIVER OF JURY TRIAL. THE PARTIES DO HEREBY MUTUALLY, VOLUNTARILY,
INTENTIONALLY, KNOWINGLY AND WILLINGLY WAIVE THEIR RIGHT TO A TRIAL BY JURY OF
ANY AND ALL CLAIMS MADE AMONG THEM, WHETHER NOW EXISTING OR ARISING IN THE
FUTURE, INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES,
COUNTERCLAIMS, CROSS-CLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS, WHETHER
ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE
TRANSACTIONS TO WHICH THE LOAN AGREEMENT AS AMENDED BY THIS AMENDMENT AND THE
LOAN DOCUMENTS, RELATE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
<TABLE>
<S> <C>
Signed, sealed and delivered in BORROWER :
the presence of:
STREICHER MOBILE FUELING, INC., a Florida
corporation
[ILLEGIBLE] By: /s/ Walter B. Barrett
- -------------------------------- --------------------------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
STREICHER REALTY, INC., a Florida corporation
[ILLEGIBLE] By: /s/ Walter B. Barrett
- -------------------------------- --------------------------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
STREICHER WEST, INC., a California corporation
[ILLEGIBLE] By: /s/ Walter B. Barrett
- -------------------------------- --------------------------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
LENDER:
BANKATLANTIC, a Federal Savings Bank
[ILLEGIBLE] By: /s/ Walter B. Barrett
- -------------------------------- --------------------------------------------------------
Jeffrey S. Bilus, Vice President
</TABLE>
STATE OF GEORGIA
COUNTY OF CAMDEN
THE FOREGOING INSTRUMENT WAS EXECUTED BEFORE ME, the undersigned, a
Notary Public in and for the State of Georgia, this 22 day of December, 1999,
by WALTER B. BARRETT, as Vice President of Finance of and on behalf of each of
STREICHER MOBILE FUELING, INC., a Florida corporation, STREICHER REALTY, INC., a
Florida corporation, and STREICHER WEST, INC., a California corporation, who 9
is personally known to me or 9 produced his driver's license as identification.
[SEAL]
/s/ Connie Miller
---------------------------------------
Notary Public - State of Georgia
Print Name: CONNIE MILLER
---------------------------
My Commission Expires:
----------------
Commission Number:
--------------------
STATE OF GEORGIA
COUNTY OF CAMDEN
THE FOREGOING INSTRUMENT WAS EXECUTED BEFORE ME, the undersigned, a
Notary Public in and for the State of Georgia, this 22 day of December, 1999,
by JEFFREY S. BILUS, as Vice President of and on behalf of BANKATLANTIC, a
Federal Savings Bank, who 9 is personally known to me or 9 produced his driver's
license as identification.
[SEAL]
/s/ Connie Miller
---------------------------------------
Notary Public - State of Georgia
Print Name: CONNIE MILLER
---------------------------
My Commission Expires:
----------------
Commission Number:
--------------------
7
<PAGE>
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT is made and entered into as of
the 25th day of May, 1999, by and between STREICHER MOBILE FUELING, INC., a
Florida corporation ("Streicher Mobile"), STREICHER REALTY, INC., a Florida
corporation, and STREICHER WEST, INC., a California corporation (hereinafter
collectively referred to as "Borrower"), and BANKATLANTIC, a Federal Savings
Bank (hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Borrower desires to obtain a revolving line of credit from
Lender in the amount of up to Seven Million Five Hundred Thousand and 00/100
Dollars ($7,500,000.00) in order to provide working capital to the Borrower,
and, Lender is willing to extend such credit to the Borrower of up to such
amount upon the terms and conditions set forth herein (the "Revolving Loan" or
the "Loan");
WHEREAS, in connection with existing line of credit loans in the
current aggregate principal amount of Five Million Three Hundred Fifty Thousand
and 00/100 Dollars ($5,350,000.00) currently outstanding and due and owing by
the Borrower to the Lender, Borrower and Lender entered into that certain Loan
Agreement dated as of the 30th day of December, 1997, as amended by First
Amendment to Loan Agreement dated as of the 29th day of May, 1998, as further
amended by Second Amendment to Loan Agreement dated as of the 26th day of
January, 1999 (collectively, the "Original Loan Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Original Loan
Agreement in its entirety in accordance with the terms and provisions of and as
provided herein.
NOW, THEREFORE, for and in consideration of the sum of Ten and 00/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the loans
or extensions of credit heretofore, now or hereafter made or to be made for the
benefit of the Borrower by the Lender, the parties do hereby agree as follows:
Article 1
RECITALS AND DEFINITIONS
1.1 RECITALS. The foregoing recitals are acknowledged by the parties to
be true and correct, and are incorporated herein by reference.
1.2 DEFINITIONS. As used in this Agreement, the terms listed below
shall have the following meanings:
(a) "ADVANCE": A disbursement by the Lender of a portion of
the Revolving Loan proceeds in accordance with the terms and provisions
of this Agreement.
<PAGE>
(b) "AGREEMENT" or "LOAN AGREEMENT": This Amended and Restated
Loan Agreement.
(c) "BORROWER": Collectively, STREICHER MOBILE FUELING, INC.,
a Florida corporation, STREICHER REALTY, INC., a Florida corporation,
and STREICHER WEST, INC., a California corporation.
(d) "BORROWER'S COUNSEL OPINION LETTER": A letter from
Borrower's Counsel, in form and substance satisfactory to Lender and
Lender's Counsel, opining as to certain matters concerning the Loan.
(e) "BUSINESS DAYS": Days upon which the Lender is open for
normal business.
(f) "CASH COLLATERAL ACCOUNT". A cash collateral account
pledged by Borrower in favor of Lender, into which all collections
shall be remitted from a lockbox account or from Borrower, as
applicable, into which Borrower's account debtors remit all payments,
which collections shall be applied against the Loan facility balance in
accordance with the terms and provisions of the Security, Cash
Collateral Account and Lockbox Agreement. The Borrower shall not have
access to the Lockbox(s) or the Cash Collateral Account.
(g) "CLOSING": The time of the execution and delivery of this
Agreement by Borrower and Lender.
(h) "CODE": The Internal Revenue Code of 1986, as amended from
time to time, and applicable Department of Treasury regulations
thereunder.
(i) "CREDIT FACILITY LETTER": That certain letter executed by
and between Lender and Borrower dated April 28, 1999, and all
amendments thereto, the terms and conditions of which are hereby
incorporated by reference herein, but in the event of any conflict or
discrepancy between the terms of this Agreement and the Credit Facility
Letter, the terms of this Agreement shall control.
(j) "DOLLARS" OR "$": United States Dollars.
(k) "ELIGIBLE RECEIVABLES": Those Receivables which are
Receivables of Streicher Mobile arising out of sales of tangible
personal property made by Streicher Mobile or services rendered by
Streicher Mobile in the ordinary course of its business, which are no
more than ninety (90) days old from the invoice date, according to the
original terms of sale, and, the payment of which is not in dispute and
in which the Lender has a first priority security interest, provided
however, that if fifty (50%) percent or more of the Receivables from
any account debtor are more than ninety (90) days old, all of said
account debtor's Receivables shall be deemed ineligible. The Lender may
treat any receivable as ineligible: (i) if any warranty contained in
this or any related agreement is breached with respect thereto; (ii) if
the customer or account debtor has disputed liability or made any claim
with respect to the
2
<PAGE>
receivable or the merchandise covered thereby or with respect to any
other receivable due from said customer to Streicher Mobile; (iii) if
the customer or account debtor has filed a petition for bankruptcy or
any other application for relief under the Bankruptcy Act, assigned for
the benefit of creditors, or if any petition or any other application
for relief under the Bankruptcy Act has been filed against the said
customer or account debtor, or if the customer or account debtor has
failed, suspended business, become insolvent, or had or suffered a
receiver or trustee to be appointed for any of its assets or affairs;
(iv) if the customer or account debtor is located outside the United
States; (v) if the receivable is a government receivable in which the
Lender will not be able to perfect its lien under the Federal
Assignment of Claims Act for any reason whatsoever, excepting for
receivables due and owing from the United States Post Office which
shall constitute eligible receivables subject to the other exclusions
set forth in this paragraph; (vi) if the Receivable is offset, in whole
or in part, by a credit due and owing from Streicher Mobile to that
account debtor; (vii) if the Receivable is due and owing from an
account debtor who is also a creditor of Streicher Mobile; (viii) if
the Receivable represents sums due and owing for work and/or service
currently being rendered by Streicher Mobile but not yet completed by
Streicher Mobile; (ix) if the Receivable is due and owing from an
affiliate corporation or related entity of Streicher Mobile or
represents an intercompany account; (x) if the Receivable represents a
consignment sale or warranty work; (xi) if the Receivable represents a
C.O.D. sale; (xii) if the Receivable represents sums due and owing from
an employee of Streicher Mobile; (xiii) if the Receivable represents
retainage due and owing to Streicher Mobile; (xiv) if the Receivable
represents a Bill and Hold Invoice for items which have been billed and
are not yet due and payable; (xv) if the Receivable represents the
billing for inventory which has not been delivered to said account
debtor; (xvi) if the Receivable arises from a progress billing for work
not yet completed and delivered to the customer; or (xvii) if the
Lender believes, in its credit judgment in Lender's reasonable
discretion, that collection of such Receivable is insecure or that it
may not be paid by reason of financial inability to pay or otherwise or
that such Receivable is not suitable for use as collateral hereunder.
(l) "ERISA": The Employee Retirement Income Security Act of
1974, as amended from time to time.
(m) "EVENT OF DEFAULT": The occurrence of any one or more of
the Events of Default described in Article 9 hereof.
(n) "FINANCING STATEMENTS": Financing Statements from Borrower
to Lender to perfect Lender's security interest in the property
described in the Security Agreements.
(o) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP":
Those principles of accounting set forth in opinions of the Financial
Accounting Standards Board of the American Institute of Public
Accountants or which have other substantial authoritative support and
are applicable in the circumstances as of the date of any report
required herein or as of the date of an application of such principles
as required herein.
3
<PAGE>
(p) "GOVERNMENTAL AUTHORITY": Any federal, state, county,
municipal or other governmental department, commission, board, bureau,
court, agency, or any instrumentality of any other governmental entity.
(q) "GOVERNMENTAL REQUIREMENTS": Any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, writ, injunction,
franchise, permit, certificate, license, authorization, or other
direction or requirement of any Governmental Authority now existing or
hereafter enacted, adopted, promulgated, entered or issued applicable
to the Loan or to the Borrower.
(r) "INDEBTEDNESS": Collectively, all of each Borrowers'
presently existing or hereafter created or assumed obligations to the
Lender, including without limitation, obligations for borrowed money,
notes payable and drafts accepted representing extensions of credit
(whether or not representing obligations for borrowed money),
obligations representing the Loan and any modifications or renewals
thereof, obligations representing indebtedness to the Lender whether or
not assumed, secured or unsecured, however and wherever incurred,
acquired or evidenced, whether primary or secondary, direct or
indirect, absolute or contingent, joint or several or due or to become
due, including without limitation all such obligations, liabilities and
all indebtedness and obligations now or hereafter owed by each Borrower
to Lender, its affiliates, successors and/or assigns.
(s) "INITIAL ADVANCE": The first Advance of the Revolving Loan
proceeds.
(y) "LANDLORD'S WAIVER OF LIEN AGREEMENT": Waiver Agreements
from all Landlords where any Borrower leases business properties
waiving the Landlord's lien at that location to the lien and effect of
the Loan.
(u) "LEASES: Leases for all locations where each Borrower
leases property in connection with its business operations.
(v) "LOAN ACCOUNT". Borrower's account on the books of the
Lender in which Advances will be recorded, as well as payments made on
the Revolving Loan and other appropriate debits and credits as provided
in this Agreement.
(w) "LOAN DISBURSEMENT ACCOUNT". The account established
pursuant to Article 3, Section 3.4 herein, maintained with Lender under
account no. 055927360.
(x) "LOAN DOCUMENTS": This Agreement, the Revolving Note, the
Security Agreements, the Security, Cash Collateral Account and Lockbox
Agreement, and all other associated loan documents executed in
connection with the making of the Loan (and any modification, renewal
or extension thereof).
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(y) "MATURITY DATE": As to the Loan as evidenced by the Note,
April 30, 2001, upon which date the entire principal balance and
accrued interest and all other applicable charges under the Loan shall
become due and payable in full.
(z) "REVOLVING NOTE OR "NOTE": A Consolidation Master
Revolving Promissory Note in the principal amount of Seven Million Five
Hundred Thousand and 00/100 Dollars ($7,500,000.00) from Borrower to
Lender dated as of even date herewith. The Note consolidates a
Modification Master Revolving Promissory Note in the principal amount
of Five Million and 00/100 Dollars ($5,000,000.00), a Modification
Master Revolving Promissory Note in the principal amount of Three
Hundred Fifty Thousand and 00/100 Dollars ($350,000.00) and a Master
Revolving Promissory Note in the principal amount of Two Million One
Hundred Fifty Thousand and 00/100 Dollars ($2,150,000.00) all dated as
of even date herewith.
(aa) "PERSON": As the case may be, any corporation, natural
person, firm, joint venture, partnership, trust, unincorporated
organization and government, or any department or agency of any
government.
(bb) "PLAN": Any pension plan which is governed by the terms
and provisions of Title IV of ERISA and in respect of which the
Borrower or a commonly controlled entity of the Borrower is an
"Employer" (as defined in Section 407(d)(7) of ERISA.
(cc) "PRIME RATE": The interest rate announced by the Lender
from time to time as its prime rate, which rate is purely discretionary
and is not necessarily the best or lowest rate charged borrowing
customers of the Lender.
(dd) "RECEIVABLES": All accounts, accounts receivable, general
intangibles, contract rights and other obligations of any kind, whether
now owned or hereafter acquired by Streicher Mobile and all proceeds of
the foregoing and all rights now or hereafter existing in and to all
security agreements, leases and other contracts security or otherwise
relating to any such accounts, contract rights, chattel paper
instruments, general intangibles and obligations and all proceeds,
profits, deposits, products and accessions of and to all of the
foregoing.
(ee) "REPORTABLE EVENT": Any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
(ff) "SECURITY AGREEMENTS": Collectively, Security Agreements
dated as of December 30, 1997 executed by each Borrower in favor of
Lender, each amended and reaffirmed by an Amendment to and
Reaffirmation of Security Agreement executed by each Borrower in favor
of Lender, securing the Note and all other Indebtedness of Borrower to
Lender, which is a valid first lien on all of the Borrower's accounts,
accounts receivables, inventory, chattel paper, general intangibles,
fixtures, furniture, instruments, equipment and personal property now
owned or hereafter acquired by Borrower and all proceeds of the
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foregoing, subject only to the Permitted Encumbrances (as defined in
the Security Agreements).
(gg) "SECURITY AND CASH COLLATERAL ACCOUNT AGREEMENT". An
Amended and Restated Security and Cash Collateral Account Agreement
whereby and whereunder payment of all of Borrower's Receivables shall
be deposited into the Cash Collateral Account to be applied against the
Loan facility balance in accordance with the terms and provisions of
said agreement, until such time as the Security, Cash Collateral
Account and Lockbox Agreement goes into full force and effect.
(hh) "SECURITY, CASH COLLATERAL ACCOUNT AND LOCKBOX
AGREEMENT". A Security, Cash Collateral Account and Lockbox Agreement
whereby and whereunder payment of all of Borrower's Receivables shall
be directed to a lockbox maintained with Lender (the "Lockbox") to flow
through the Cash Collateral Account, and, be applied against the Loan
facility in accordance with the terms and provisions of said agreement.
(ii) "SOLVENT": That, at the time of determination, (i) the
fair market value of the Borrower's assets (both at fair valuation and
at present fair saleable value on an orderly basis) is in excess of the
total amount of its liabilities, including contingent obligations; (ii)
it is then able and expects to be able to pay its debts as they mature;
and (iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
1.3 OTHER DEFINITIONAL PROVISIONS. (a) The terms "material" and
"materially" shall have the meanings ascribed to such terms under Generally
Accepted Accounting Principles as such would be applied to the business of the
Borrower, except as the context shall clearly otherwise set forth; (b) all of
the terms defined in this Agreement shall have such defined meanings when used
in other documents issued under, or delivered pursuant to, this Agreement,
unless the context shall otherwise require; (c) all terms defined in this
Agreement in the singular shall have comparable meanings when used in the
plural, and vice versa; (d) accounting terms to the extent not otherwise defined
shall have the respective meanings given them under, and shall be construed in
accordance with Generally Accepted Accounting Principles; (e) the words
"hereby", "hereto", "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; (f) the masculine and neuter genders
are used herein and whenever used shall include the masculine, feminine and
neuter as well; and (g) whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the heirs, personal
representatives, successors and assigns of such parties unless the context shall
expressly provide otherwise.
Article 2
THE LOAN
2.1 REVOLVING LOAN. Provided there does not exist an Event of Default,
and no event with which notice or lapse of time or both would become such an
Event of Default, and subject to the terms and provisions of this Agreement,
Lender will, under the Note, lend or advance for the account
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of Borrower from time to time, and, Borrower may borrow, repay and re-borrow
(provided that unless Borrower intends to pay and satisfy the Loan in full,
Borrower shall not reduce the outstanding principal balance under the Loan to a
sum of less than One Thousand and 00/100 Dollars ($1,000.00)) such amounts as
may be required for the purpose of providing working capital to the Borrower,
not exceeding in the aggregate an amount equal to (i) eighty-five percent (85%)
of Eligible Receivables, less such reserves as Lender, in its sole discretion
elects to establish, provided further that a Receivable may be devalued in such
amount as shall be determined by Lender in its sole discretion due to "Dilution"
which is defined as and is the result of non-cash credits posted against the
Receivable which result in payment or other satisfaction of all or any portion
of the Receivable for reasons other than full payment of the Receivable in cash
(the "Borrowing Base"); or, the sum of Seven Million Five Hundred Thousand and
00/100 Dollars ($7,500,000.00), whichever is less. It is acknowledged that the
Borrowing Base under the Loan may be adjusted during the term of the Loan by
Lender at any time, in its sole discretion, based upon the result of the audits
and collateral examinations conducted during the term of the Loan. The aggregate
amounts outstanding under the Loan shall not at any time exceed the amount
provided above, and in the event the amount outstanding at any time exceeds the
permitted amount, said excess amount shall bear interest at the rate set forth
in the Note and shall be due and payable in full on DEMAND.
2.2 AUDIT FEES. The Audit Fee due and owing from Borrower to Lender in
connection with the audits set forth in Article 8, Section 8.5 herein shall be
based upon a charge of Four Hundred Twenty and 00/100 Dollars ($420.00) per day,
plus expenses, which per diem rate is subject to change at any time.
2.3 LOAN ACCOUNT. All Advances and paydowns hereunder and under the
Revolving Note shall be recorded by Lender in the Loan Account.
2.4 LOAN DOCUMENTS. Borrower's obligation to repay the Loan is
evidenced by the Note delivered simultaneously herewith, which sets forth the
method for payment, rates of interest, and such further terms as are therein set
forth. The repayment of the Note and the Indebtedness is to be secured by the
following documentation, which documents Borrower shall deliver, or cause to be
delivered, to Lender simultaneously with the delivery of the Note and which
documents must be received prior to any funding hereunder:
(a) The Security Agreements, in form and substance
satisfactory to Lender and Lender's counsel.
(b) Financing statements filed in such public offices as
Lender and Lender's counsel may deem necessary to perfect a security
interest in any of the Security Agreements.
(c) The Security and Cash Collateral Agreement and the
Security, Cash Collateral Account and Lockbox Agreement, in form and
substance satisfactory to Lender and Lender's Counsel.
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(d) Borrower's Counsel Opinion Letter, in form and substance
satisfactory to Lender and Lender's Counsel, from Borrower's counsel
opining as to certain matters concerning the Loan.
(e) Such policies of liability insurance, worker's
compensation insurance and hazard insurance (with fire extended
coverage, vandalism and mischief protection) as the Lender may
reasonably request, subject to a standard loss-payee's and additional
insured's endorsements, as applicable, in the Lender's favor, and
providing at least thirty (30) days prior written notice of any
cancellation, modification or non-renewal of the insurance coverage.
(f) Incumbency Certificate and Resolutions of the directors of
each Borrower authorizing the Loan, and the execution of all Loan
Documents related thereto.
(g) Certificates of Good Standing evidencing that each
Borrower is in good standing under the laws of the State of Florida and
the State of California, as applicable, and in each other state in
which it is required to be qualified to conduct business.
(h) Certified copy of Articles of Incorporation and By-Laws of
each Borrower.
(i) Evidence of compliance by each Borrower with the Florida
Fictitious Name Act, if and as applicable.
(j) Certified copies of the Leases in connection with all
leased premises of each Borrower.
(k) Landlord's Waiver of Lien Agreement(s) executed by all
landlords at business locations of Borrower waiving the landlord's lien
at such locations to the lien and effect of the Loan.
(l) Consolidated financial statements of the Borrower, in form
and substance acceptable to Lender.
(m) Such other documentation as may be required by Lender or
Lender's Counsel.
Article 3
MANNER OF MAKING LOAN ADVANCES
3.1 ADVANCE REQUEST. Each Advance to the Borrower under the Revolving
Loan shall be made by the Lender upon Lender's initiation of said Advance or
upon written request of the Borrower stating the date on which the Advance is to
be made (the "Borrowing Date"), and the principal amount of the Advance
requested, delivered at least one (1) day prior to the date on which the Advance
is to be made. Any notice delivered under this sub-section shall be irrevocable
and bind the Borrower to consummate the Advance on the Borrowing Date.
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3.2 INTENTIONALLY DELETED.
3.3 BORROWING BASE CERTIFICATE. Borrower shall provide to Lender a
Borrowing Base Certificate in form and content acceptable to Lender (the form of
said Borrowing Base Certificate being appended hereto and made a part hereof as
Exhibit "A") not less than monthly within fifteen (15) days of the end of each
monthly period in each fiscal year of Borrower.
3.4 LOAN DISBURSEMENT ACCOUNT. The proceeds of any Advance to the
Borrower shall, on the date of such Advance, be deposited in immediately
available funds in the Loan Disbursement Account, which shall be a demand
deposit account maintained with Lender.
Article 4
INTEREST
All interest under the Loan shall be computed on the basis of a year
containing three hundred sixty (360) days for the actual number of days elapsed.
Interest shall be due and payable in accordance with the terms and provisions of
the Note, and interest shall accrue at the rate of interest provided in the Note
for each Advance thereunder. Payments of principal, interest, fees or other
amounts made by the Borrower shall be made to the Lender at the Lender's offices
located at 1750 East Sunrise Boulevard, Second Floor, Fort Lauderdale, Florida
33304, for the account of Lender, in Dollars and in immediately available funds
before 2:00 p.m. (Florida time) on the date such payment is due. The Lender
shall deem any payment made by or on behalf of the Borrower that is not made in
immediately available funds and prior to 2:00 p.m. (Florida time) to be a
non-conforming payment, which shall not be deemed to be received by the Lender
until the later of (a) the time such funds become available funds or (b) the
next Business Day. Any non-conforming payment may constitute or become an Event
of Default hereunder. Interest shall continue to accrue on any principal as to
which a non-conforming payment is made until the later of (a) the date such
funds become available funds or (b) the next Business Day. All payments to be
made by the Borrower on account of principal, interest and/or fees, shall be
made without diminution, setoff, recoupment or counterclaim.
Article 5
CONDITIONS PRECEDENT TO FIRST ADVANCE AND ADDITIONAL ADVANCES
5.1 The obligations of Lender to make the Initial Advance and all
additional Advances under the Revolving Loan are subject to the following
conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations,
covenants and warranties made by Borrower in this Agreement shall be
true and correct on and as of the date of such Advance.
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(b) NO DEFAULT. There shall be no default, and no event which
with notice or lapse of time or both would become an Event of Default,
under this Agreement, the Revolving Note, any of the Security
Agreements, or any other Loan Document.
(c) NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in the business or financial condition of any
Borrower or in the value of the Collateral (as said term is defined in
the Security Agreements) since January 31, 1999.
(d) LIEN AND JUDGMENT SEARCHES. Lien and judgment searches of
each Borrower shall have been conducted with the Florida Secretary of
State and in any other state or jurisdiction as shall be required by
Lender, which must result in findings satisfactory to Lender, in
Lender's sole discretion.
(e) CREDIT FACILITY LETTER. All terms and provisions of the
Credit Facility Letter shall have been complied with in full.
(f) DELIVERY OF LOAN DOCUMENTS. All of the Loan Documents
shall have been duly executed and delivered to Lender, and the
Financing Statements shall have been recorded in the appropriate public
offices.
(g) DELIVERY OF OTHER DOCUMENTS. Borrower shall have
delivered, or caused to be delivered to Lender, the other documents
required under Article 2 hereof, and shall have also delivered or
caused to be delivered to Lender, the following:
(i) Annual audited financial statements of the
Borrower, in form and substance acceptable to the Lender,
prepared in accordance with GAAP, by certified public
accountant(s) acceptable to the Lender.
(ii) Report on Receivables evidencing that there are
adequate Eligible Receivables to support the Initial Advance
or additional Advances, as applicable.
(iii) Such policies of liability insurance, worker's
compensation insurance and hazard insurance (with fire
extended coverage, vandalism and mischief protection) as
Lender may reasonably request subject to a standard
loss-payee's and additional insured's endorsements, as
applicable, in the Lender's favor.
(iv) Such other certification or documentation to be
executed by Borrower as may be reasonably required by Lender
or Lender's counsel pertaining to the closing of the Initial
Advance and all subsequent Advances of the proceeds hereunder,
it being understood that all such items shall be promptly
delivered prior to Lender's obligation to making further
Advances hereunder.
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Article 6
USE OF LOAN PROCEEDS; MARGIN STOCK
The proceeds of the Revolving Loan shall be used to support the
Borrower's general working capital requirements. Borrower does not own any
margin securities and no portion of any Advance and, no portion of the Loan,
will be used for the purpose of reducing or retiring any indebtedness which was
originally incurred by Borrower to purchase any margin securities, and neither
the making of any and all loans and Advances nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of Regulations G, T, U or X
of the Board of Governors of the Federal Reserve Systems of the United States.
Article 7
REPRESENTATIONS AND WARRANTIES
7.1 Borrower represents and warrants to Lender that, so long as credit
remains available to the Borrower or there is any outstanding balance due under
the Note, as secured by the Loan Documents:
(a) Borrower has the power to engage in all the transactions
contemplated by this Agreement and has full power, authority and legal
right to execute and deliver, and to comply with its respective
obligations under the Loan Documents, which documents constitute the
legally binding obligations of each Borrower enforceable against each
Borrower in accordance with their respective terms.
(b) To the best of its knowledge and belief, there is no suit,
action, or proceeding pending or threatened against or affecting any
Borrower, before or by any court, administrative agency or other
Governmental Authority which brings into question the validity of the
transactions contemplated hereby or would interfere with the ability of
any Borrower to comply with the terms hereof.
(c) Each Borrower is in good standing within the State in
which it is incorporated. Borrower, prior to closing, will deliver to
Lender: (i) resolutions certified as true by the secretary of each
Borrower authorizing such Borrower's participation in connection with
the transactions contemplated herein and execution of the Note and
related Loan Documents, (ii) incumbency certificates of each Borrower,
(iii) certified copies of the Articles of Incorporation and By-laws of
each Borrower, and (iv) corporate Certificates of Good Standing of each
Borrower.
(d) Except as otherwise disclosed on Exhibit "B" appended
hereto and made a part hereof, during the one (1) year period preceding
the date of closing, no Borrower has been known as or used any
corporate of fictitious names other than the corporate name of such
Borrower on the Closing date. All trade names or styles under which the
Borrower sells inventory or equipment or creates receivables or to
which instruments in payment of Receivables are made payable, are set
forth on Exhibit "B".
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(e) Each Borrower owns or possesses all intellectual property
required to conduct its businesses as now and presently planned to be
conducted without, to its knowledge, conflict with the rights of
others.
(f) Each Borrower is Solvent after giving effect to the
transactions contemplated by the Loan Documents.
(g) Neither the execution nor delivery of any of the Loan
Documents, nor any other document relating hereto, will conflict with
or result in a breach of any of the provisions of the Charter, Articles
of Incorporation or By-Laws, where applicable, of any Borrower, or of
any applicable law, judgment, order, writ, injunction, decree, rule or
regulation of any court, administrative agency or other Governmental
Authority, or of any agreement or other instrument to which any
Borrower is a party or by which any of them is bound or constitute a
default under any thereof, or result in the creation or imposition of
any lien, charge or encumbrance upon any property of any Borrower,
other than those created under this transaction in favor of Lender.
(h) No consent, approval or other authorization of or by any
Governmental Authority is required in connection with the execution or
delivery by Borrower of the Loan Documents, or compliance with the
provisions hereof or thereof.
(i) There are no actions, suits or proceedings pending or, to
the knowledge of Borrower, overtly threatened against or affecting the
Borrower at law or in equity, or before or by any Federal, State,
Provincial, municipal or other Governmental Authority, which involve
any of the transactions herein contemplated or the possibility of any
judgment or liability which would result in any material adverse change
in the business, operations, properties or assets or in the financial
condition of any Borrower. No Borrower is in default with respect to
(a) any judgment, order, writ, injunction or decree or (b) any rule or
regulation of any court or Federal, State, municipal or other
Governmental Authority, which would have a material adverse effect on
its business, properties or condition (financial or otherwise).
(j) Subject to any limitation stated thereon or by any
Borrower in writing, all balance sheets, earnings statements and other
financial data which have been or shall hereafter be furnished to the
Lender to induce it to enter into this Agreement or otherwise in
connection herewith, do or will fairly represent the financial
condition of the Borrower as of the dates and the results of their
operations for the period for which the same are furnished to the
Lender and have been or will be prepared in accordance with Lender's
requirements, and that all other information, reports and other papers
and data furnished to the Lender are or will be, at the time the same
are so furnished, accurate and correct in all material respects and
complete insofar as completeness may be necessary to give the Lender a
true and accurate knowledge of the subject matter. There are no
material liabilities of any kind of the Borrower as of the date of the
most recent financial statements which are not reflected therein. There
have been no materially adverse changes in the financial condition or
operation of any
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Borrower since the date of such financial statements. At Lender's
request, Borrower shall provide financial statements prepared in
accordance with Lender's requirements, represented by Borrower that
said financial statements are fairly prepared and consistent with prior
statements provided to the Lender or certified by their respective
accountants that said financial statements are true and accurate, on an
annual basis and interim basis as more fully set forth herein.
(k) Borrower will pay all obligations, including tax claims,
when due, except such as the Borrower contests in an appropriate
proceeding, in which event Borrower shall furnish to Lender, if
requested, a bond or other security satisfactory to Lender in an amount
sufficient to protect Lender and its interest herein.
(l) There is no material uncured default on the part of any
Borrower under this Agreement, the Revolving Note, any of the Security
Agreements, or any of the other Loan Documents.
(m) The Borrower has dealt with no broker or finder in
connection with the Loan, and the Borrower hereby agrees to jointly and
severally indemnify the Lender and to jointly and severally hold the
Lender harmless of and from any and all claims for broker's or finder's
fees or commissions in connection with the Loan, and agrees to pay all
expenses (including but not limited to attorney's fees and expenses)
incurred by the Lender in connection with the defense of any action or
proceeding brought to collect any such fees and commissions, or
otherwise relating to any such broker's claims resulting from or
arising out of any claim that the Borrower consulted, dealt or
negotiated with the person or entity making such brokerage claim.
(n) Each Plan, pension, profit sharing or other employee
benefit plan, maintained by each Borrower is in material compliance
with ERISA, the Code, and all applicable rules and regulations adopted
by regulatory authorities pursuant thereto. The Borrower has filed all
material reports required to be filed by ERISA, the Code and such rules
and regulations. In addition, any qualified Plans subject to the
minimum funding standards, do not, as of the date hereof, have a
funding deficiency, as defined by ERISA. No Reportable Event material
in relation to the business operations, property, financial or other
conditions of the Borrower has occurred with respect to any Plan. No
tax penalty nor other liability in the aggregate material in relation
to business operations, property, or financial conditions of the
Borrower has been assessed against the Borrower with respect to a Plan.
(o) Each Borrower has filed or caused to be filed all tax
returns, which to the knowledge of the Borrower, are required to be
filed, and has fully paid all taxes shown to be due and payable on said
returns or any assessments made against it or its property, and all
other taxes, fees, or other charges imposed on it or any of its
property by any Governmental Authority. No tax liens have been filed
and, to the knowledge of Borrower, no claims are being made or may
hereafter be asserted with respect to any such taxes, fees or other
charges except for: (i) those, the amount or validity of which is
currently being contested in good faith
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by appropriate proceedings and with respect to which reserves in
conformity with Generally Accepted Accounting Principles have been
provided on the books of Borrower, as the case may be; and (ii) such
failures to file or pay such tax liens or claims as could not, in the
aggregate, reasonably be expected to have a material adverse effect on
the business operations, property or financial or other condition of
the Borrower, and can not reasonably be expected to have an adverse
effect on the ability of the Borrower to perform any of its respective
obligations in any material respect under this Agreement, the other
Loan Documents, or under any other contractual obligation.
(p) All copies of all documents, reports, and statements
heretofore furnished by or on behalf of Borrower, or in connection with
this Agreement to the Lender, are, and those delivered subsequent to
the date hereof, will be, true and correct copies of the originals of
such documents, reports and statements. All matters stated or certified
in any written statement, certificate, report or other writing
heretofore furnished pursuant to this Agreement by or on behalf of the
Borrower to the Lender are, and all matters stated or certified
subsequent to the date hereof, will be, true and correct as of the date
stated or certified. All such documents, reports, statements, writings
and certifications shall be in form and detail satisfactory to the
Lender.
(q) Each Borrower owns or leases all of its properties and
assets reflected on the balance sheets referred to in Section 7.1(j)
hereof.
(r) All of the properties and assets set forth in Section
7.1(q) are free and clear of all mortgages, pledges, liens, charges and
other encumbrances of any nature whatsoever, excepting for the
Permitted Encumbrances (as defined and set forth in the Security
Agreements).
(s) No Borrower is in default (subject to any applicable cure
periods) in the performance, observance of fulfillment of any of the
obligations, covenants or conditions contained in any lease for real or
personal property, which would have a material adverse affect on its
business and all such leases are valid and existing and in full force
and effect.
(t) No Borrower is an "investment company" within the meaning
of the Investment Company Act of 1940 and any amendments thereto.
(u) None of the employees of any Borrower or any of its
subsidiaries are subject to any collective bargaining agreement and
there are no strikes, work stoppages, election or decertification
petitions or proceedings, unfair labor charges, equal opportunity
proceedings, or other material labor/employee related controversies or
proceedings pending, or, to the best knowledge of the Borrower,
threatening any Borrower or any of its subsidiaries, or between any
Borrower (or any of its subsidiaries) and any of its employees, other
than employee grievances arising in the ordinary course of business
which could not reasonably be expected, individually or in the
aggregate, to have a materially adverse effect on the Borrower.
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Article 8
COVENANTS OF BORROWER
8.1 Each Borrower shall do, or cause to be done, all of the things
necessary to preserve, renew and keep in full force and effect its corporate
existence and its rights, licenses and permits shall comply with all laws
applicable to it, operate its business in a proper and efficient manner, and
substantially as presently operated or proposed to be operated, and at all times
shall maintain, preserve and protect all franchises and trade names and preserve
all property used or useful in the conduct of its business, and keep the same in
good repair, working order and condition, and from time to time make or cause to
be made any needed and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.
8.2 Each Borrower shall at all times maintain true and correct books
and records and shall keep its books and records in accordance with Generally
Accepted Accounting Principles, and shall furnish the Lender with such financial
statements as may be required by Lender on a yearly and interim basis as set
forth in this paragraph and other parts of this Agreement.
8.3 Each Borrower shall properly pay and discharge: (a) all taxes,
assessments and governmental charges upon or against such Borrower or its assets
prior to the date on which penalties are attached thereto, unless, and to the
extent, such taxes are being diligently contested in good faith by appropriate
proceedings and appropriate reserves therefor have been established; and (b) all
lawful claims for labor, materials, supplies, services or anything else which
might or could, if unpaid, become a lien or charge upon the properties or assets
of such Borrower, unless and to the extent only that the same are transferred to
bond, being diligently contested in good faith, and by appropriate proceedings
and appropriate reserves therefor have been established.
8.4 In accordance with the terms and provisions of the Security, Cash
Collateral Account and Lockbox Agreement at such time as the same becomes
effective, Borrower shall direct all account debtors to remit all payments to
the Lockbox maintained with and administered by Lender, with such collections to
be deposited into the Cash, Collateral Account to be applied against the Loan
facility balance in accordance with the terms and provisions of the Security,
Cash Collateral Account and Lockbox Agreement.
8.5 The Borrower shall allow Lender to conduct audits of the Borrower's
books and records (and to make copies and extracts therefrom), including an
audit confirmation of accounts receivable balances and ownership interest in the
inventory, assets and business properties of Borrower. The above set forth
audits, examinations and inspections shall be conducted not less than four (4)
times in each fiscal year of Borrower. Said audits shall be performed at the
sole cost and expense of Borrower. The current per diem for said audits is Four
Hundred Twenty and 00/100 Dollars ($420.00) per day, plus expenses, subject to
change at any time. The frequency of the audits may be adjusted by Lender at any
time in Lender's sole discretion.
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8.6 Streicher Mobile shall maintain a net worth of not less than Three
Million Five Hundred Twenty-Seven Thousand and 00/100 Dollars ($3,527,000.00)
from April 30, 1999 until July 31, 1999, of not less than Three Million Seven
Hundred Ninety Thousand and 00/100 Dollars ($3,790,000.00) from July 31, 1999
until October 31, 1999, not less than Four Million Seventy-Seven Thousand and
00/100 Dollars ($4,077,000.00) from October 31, 1999 until July 31, 2000 and not
less than Four Million Three Hundred Ninety-Two Thousand and 00/100 Dollars
($4,392,000.00) from July 31, 2000 and thereafter, such requirement to be tested
at the end of each quarter of each fiscal year of Streicher Mobile. The minimum
net worth requirements shall be increased at the end of each quarter in each
fiscal year of Streicher Mobile thereafter in an amount to be determined by
Lender based upon Streicher Mobile's annual projection for the period in
question.
8.7 Streicher Mobile shall maintain a debt-to-worth ratio of not more
than 4.5 to 1 at all times during the term of the Loan, said ratio to be tested
at the end of each quarter of each fiscal year of Streicher Mobile, provided
that the debt-to-worth ratio may be adjusted by Lender at the end of each
quarter in each fiscal year of Streicher Mobile based upon Streicher Mobile's
annual projections for the period in question.
NOTE: In connection with the above, all accounting terms used shall be
construed in accordance with GAAP.
8.8 Each Borrower shall, at its expense, comply with all of the
insurance requirements set forth in this Agreement and the Security Agreements
throughout the term of the Loan.
8.9 The Borrower shall jointly and severally indemnify and save
harmless Lender from any and all loss or damage of whatsoever kind and from any
suits, claims, or demands, including, without limitation, Lender's reasonable
legal fees and expenses, at all trial and appellate levels, on account of any
matter or thing arising out of this Agreement or in connection herewith, or on
account of any act or omission to act by Borrower in connection with this
Agreement and the Loan. The Borrower further agrees to pay any and all taxes
(other than taxes on or measured by net income of Lender) incurred or payable in
connection with the execution and delivery of this Agreement, the Loan and all
other loans from Lender to Borrower. Such obligation shall survive repayment of
the Loan.
8.10 Lender shall have the right, from time to time hereafter and until
the maturity of the Loan, to publicize and advertise in any manner Lender's
participation as lender in connection with the Loan.
8.11 The Borrower shall: (a) make full and timely payments of the
principal and interest due and owing under the Note and the Indebtedness of the
Borrower to the Lender, whether now existing or hereafter arising; (b) duly
comply with all of the terms and covenants contained in each of the Loan
Documents; and (c) at all times maintain the liens and security interests
provided for under or pursuant to this Agreement and all other applicable Loan
Documents as valid and perfected liens and security interests on the property
intended to be covered thereby.
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8.12 The Borrower shall promptly notify the Lender upon the
commencement of any material action, suit or claim or counter-claim or
proceeding against or investigation of any Borrower.
8.13 The Borrower shall pay all indebtedness and obligations promptly
and in accordance with its respective terms and pay and discharge promptly all
taxes, assessments, and governmental charges or levies imposed upon it or in
respect of its property, before the same shall become in default, as well as all
lawful claims for labor, materials, and supplies or otherwise which, if unpaid,
might become a lien or charge upon such property or any part thereof, and timely
comply with all applicable laws and governmental rules and regulations.
8.14 The Borrower shall promptly notify the Lender in writing of: (a)
any material assessments by any taxing authorities for unpaid taxes as soon as
Borrower has knowledge thereof; and (b) any alleged default by any Borrower in
the performance of or any modification of any of the terms and conditions
contained in any agreement, mortgage or indenture or instrument to which any
Borrower is a party, or which is binding upon any Borrower, and upon any default
by any Borrower in the payment of any of its indebtedness.
8.15 The Borrower shall provide to Lender annual audited consolidated
financial statements of the Borrower, in form and substance acceptable to
Lender, prepared in accordance with GAAP, by certified public accountant(s)
acceptable to Lender, within one hundred twenty (120) days following the end of
each fiscal year of Borrower. Additionally, the Borrower shall provide to Lender
quarterly internally prepared consolidated financial statements of the Borrower,
represented by the Chief Financial Officer of the Borrower that said financial
statements are fairly prepared and consistent with prior statements provided to
the Lender or certified by their respective accountants as being true and
correct in all respects, and otherwise in form and substance acceptable to
Lender, within forty-five (45) days following the end of each quarterly period
in each fiscal year of Borrower, together with annual tax returns (with all
attached schedules) of each Borrower within fifteen (15) days of timely filing
of the same.
8.16 Borrower shall provide to Lender its annual report including its
10K Statement within one hundred and twenty (120) days following the end of each
fiscal year of Borrower.
8.17 Borrower shall provide to Lender its quarterly 10-Q Statements
within thirty (30) days of the end of each quarterly period in each fiscal year
of Borrower.
8.18 The Borrower shall provide to the Lender an aged analysis of all
outstanding accounts receivable of Borrower, in form and substance acceptable to
the Lender, within fifteen (15) days following the end of each monthly period in
each fiscal year of the Borrower. Lender reserves the right to increase the
frequency of said aging reports based upon the findings set forth in the audits.
8.19 The Borrower shall provide to the Lender an aged analysis of all
outstanding accounts payable of Borrower, in form and substance acceptable to
Lender, within fifteen (15) days following the end of each monthly period in
each fiscal year of the Borrower. Lender reserves the right to increase the
frequency of said aging reports based upon the findings set forth in the audits.
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8.20 The Borrower shall provide to the Lender all information necessary
for the Lender to verify the credit standing of each Borrower during the term of
the Loan. Borrower shall additionally provide to Lender sales reports in form
and content acceptable to Lender (which reports shall include, without
limitation, copies of purchase orders), at such times as Lender shall require,
in Lender's sole discretion.
8.21 The Borrower shall allow the Lender, or Lender's designated agent,
to enter upon the Borrower's premises and inspect the Borrower's property at all
reasonable times, which inspections shall be at Borrower's sole cost and
expense.
8.22 Any existing and future loans to Borrower from any shareholders,
officers or directors of each Borrower shall be subordinated to the lien and
effect of the Loan. Provided that no Event of Default has occurred under the
Loan, each Borrower shall be entitled to make scheduled payments (but not
prepayments) of interest (but not principal) under such subordinated debt.
8.23 No Borrower shall sell or convey any of its assets, except in the
normal and ordinary course of business, including any merger, consolidation or
reorganization, unless consented to in writing by Lender. BORROWER SHALL NOT
CONVEY OR TRANSFER ANY CASH, ASSETS OR PROPERTY TO ANY AFFILIATE, SUBSIDIARY,
RELATED ENTITY OF THE BORROWER OR ANY ENTITY IN WHICH STANLEY H. STREICHER HAS
ANY OWNERSHIP INTEREST, AT ANY TIME DURING THE TERM OF THE LOAN, EXCEPTING
HOWEVER, THAT BORROWER SHALL BE PERMITTED TO TRANSFER ASSETS AMONG THEMSELVES.
Additionally, there shall be no material change in the management of any
Borrower without the prior written consent of Lender. For purposes hereof a
material change in management shall occur when Stanley H. Streicher ceases to
hold the offices of President or Chief Executive Officer, or is otherwise no
longer actively engaged in the management, of Streicher Mobile. Notwithstanding
anything to the contrary set forth above, sales from Streicher Mobile to
affiliated entities shall be permitted provided that such sales constitute arms
length transactions with normal prices, terms and conditions made in the normal
and ordinary course of business.
8.24 There shall be no loans or other advances from Borrower to
affiliates or related entities of any Borrower during the term of the Loan.
8.25 Each Borrower shall maintain all of its business, company and
depository accounts with Lender during the term of the Loan. Notwithstanding the
foregoing, Borrower shall be entitled to maintain depository accounts with
financial institutions other than Lender in connection with Borrower's
operations in locations outside of the State of Florida. Additionally, Lender
acknowledges that Borrower currently maintains an investment account with Paine
Webber (the "Paine Webber Account"). Borrower shall be permitted to keep not
more than Fifty Thousand and 00/100 Dollars in the Paine Webber Account at any
time.
8.26 The Borrower shall establish no additional employee benefit plans
of any nature without the prior written consent of the Lender, which consent
shall not be unreasonably withheld.
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Each pension, profit sharing, or other employee benefit plan, at any time,
maintained by each Borrower, shall be in material compliance with ERISA, the
Code, and all applicable rules and regulations adopted by regulatory
authorities, pursuant thereto. The Borrower will cause to be filed all material
reports required to be filed by ERISA, the Code, and such rules and regulations.
8.27 The Borrower within ten (10) days after written request from the
Lender, will furnish a written statement in form satisfactory to the Lender,
duly acknowledged: (i) setting forth the unpaid principal balance of, and the
interest and other sums due on, the Indebtedness evidenced by the Note and/or
secured by any of the other Loan Documents; (ii) stating whether or not any
offsets or defenses exist against the payments due under the Note or any of the
other Loan Documents; (iii) stating the current maturity date of the Note; and
(iv) setting forth such other information as the Lender may request from time to
time.
8.28 The Borrower shall notify the Lender immediately of any change in
the name of any Borrower, the principal place of business of any Borrower, the
office where the books and records of any Borrower are kept or any change in the
registered agent of any Borrower for the purpose of service of process.
8.29 Borrower shall not incur any additional debt (other than
indebtedness incurred in connection with the financing of trucks, including all
equipment located on and attached to the trucks) without Lender's prior written
consent, which consent shall be in Lender's sole discretion.
8.30 Borrower shall provide to Lender a Borrowing Base Certificate in
form and content acceptable to Lender on a monthly basis within fifteen (15)
days of the end of each monthly period in each fiscal year of Borrower and at
such other times as shall be requested by Lender, in Lender's sole discretion.
8.31 The Borrower shall give Lender prompt written notice of any Event
of Default hereunder, or any event of default with respect any Borrower's
obligations under any of the other Loan Documents, indicating the nature and
status thereof and the action which it proposes to take with respect thereto.
8.32 No Borrower shall directly or indirectly engage in any business
activity which would represent a material change from the kind of business
activity currently engaged in by it, which in the aggregate would have a
substantial and material effect on the Borrower's business, without the prior
written consent of Lender, which consent shall be in Lender's sole discretion.
8.33 Borrower shall provide to Lender on a semi-annual basis, a
complete and updated listing of all of its customers and account debtors, which
listing shall include all of the customers' and account debtors' addresses and
phone numbers. In connection with the same, Lender shall use its best efforts to
insure that said lists are not released outside of the Bank, provided however,
that Lender shall incur no liability whatsoever in the event the same occurs.
8.34 There shall be no subordinate financing of the collateral
encumbered by the Security Agreements and Financing Statements.
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8.35 The Borrower shall use the funds borrowed by the Borrower under
this Agreement solely for general working capital requirements of the Borrower.
8.36 Borrower shall take all necessary and appropriate steps and
procedures to ascertain the extent of, quantify and successfully address
business and financial risks facing Borrower as a result of what is commonly
referred to as the "Year 2000 Problem" (i.e. the inability of certain computer
application to recognize correctly and properly perform date-sensitive functions
involving certain dates prior to and after December 31, 1999), and to verify
that Borrower's material computer applications will, on a timely basis,
adequately address the Year 2000 Problem in all material respects. At the
request of Lender, Borrower shall provide Lender assurance acceptable to Lender
of Borrower's Year 2000 compatibility. Borrower hereby covenants and agrees that
all of Borrower's information systems, including without limitation all computer
hardware and software, networks, databases, and all other electronic data
storage, retrieval and computation hardware, software and devices of any kind
(collectively, the "Information Systems"), have been and/or will be updated and
modified to accommodate and conform to the Year 2000 date change, and are and/or
will be in full compliance with any and all federal, state and local laws,
regulations and ordinances relating to the same, whether now in effect, or
hereafter enacted (collectively, the "Information System Laws"). Lender's
acknowledgment of evidence satisfactory to it confirming the foregoing shall not
constitute a representation by Lender as to Borrower's compliance with this
provision.
Borrower hereby agrees, unconditionally, absolutely, and irrevocably,
to jointly and severally indemnify, defend, and hold harmless Lender, its
affiliates, successors, assigns, and the officers, directors, employees, and
agents of Lender against and in respect of any loss, liability, cost, injury,
expense, or damage of any and every kind whatsoever (including without
limitation, court costs and attorneys' fees and expenses) which at any time or
from time to time may be suffered or incurred, directly or indirectly, in
connection with, with respect to, or as a direct or indirect result of the
failure of Borrower to update or modify its Information Systems to accommodate
and conform to the Year 2000 date change and/or fully comply with all
Information System Laws including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses, or claims asserted or arising under the
Information System Laws, whether now known or unknown.
Article 9
EVENTS OF DEFAULT
Each of the following is an Event of Default:
(a) If Borrower fails to pay any installment of interest or
principal under the Note within ten (10) days after the date the same
shall become due;
(b) If there occurs any default under any other term of this
Agreement, the Note, the Security and Cash Collateral Account
Agreement, the Security, Cash Collateral Account and Lockbox Agreement,
any of the Security Agreements or any of the other Loan Documents
relating hereto or thereto subject to any applicable cure period(s) set
forth therein;
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(c) If any representation or warranty of Borrower hereunder
shall prove to be incorrect in any material respect;
(d) The dissolution, termination of existence, merger,
consolidation or reorganization of any Borrower;
(e) The commencement of levy, execution or attachment
proceedings in excess of Fifty Thousand and 00/100 Dollars ($50,000.00)
against any Borrower or, or the application for or appointment of a
liquidator, receiver, custodian, sequester, conservator, trustee, or
other similar judicial officer (and such appointment continues for a
period of thirty (30) days in the case of an involuntary proceeding),
or the insolvency, in the bankruptcy or equity sense, of any Borrower;
(f) The assignment for the benefit of creditors, or the
admission in writing of any inability to pay any debts generally as
they become due, or ordering the winding up or liquidation of its
affairs, by any Borrower, or the commencement of a case by or against
any Borrower under any insolvency, bankruptcy, creditor adjustment,
debtor rehabilitation or similar law, state or federal;
(g) The determination by any Borrower to request relief under
any insolvency, bankruptcy, creditor adjustment, debtor rehabilitation
or similar proceeding, state or federal, including without limitation
the consent by any of them to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or similar official for it or for any of its respective property or
assets;
(h) There shall have occurred any substantial adverse change
in the financial condition of any Borrower;
(i) If the Borrower shall have failed to comply with any other
agreement, covenant, condition, provision or term contained in this
Agreement and Borrower fails to cure said default within thirty (30)
days of the date of the occurrence of said default;
(j) There shall be entered against any Borrower one (1) or
more judgments or decrees in excess of $50,000.00, or which are not
satisfied or transferred to bond within thirty (30) days of entry.
(k) There shall occur an Event of Default by any Borrower in
the performance of its obligations under the Indebtedness or under any
other loan agreement with the Lender and/or the occurrence of any
monetary event of default under any loan agreement and/or financing
arrangement with any other lender; or
(l) If at any time Lender deems itself insecure for any reason
whatsoever (notwithstanding any grace period in any Loan Documents), or
if any change or event shall occur which in Lender's exclusive judgment
impairs any security for the Loan, increases
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Lender's risk in connection with the Loan, or indicates that any
Borrower may be unable to perform its respective obligations under any
Loan Document.
Article 10
SET-OFFS
In addition to any other rights the Lender may have at law or in
equity, if any Borrower becomes insolvent howsoever evidenced, or any Event of
Default occurs and is continuing, or if Lender deems itself insecure, any
indebtedness from the Lender to each Borrower, and any other property of each
Borrower held by the Lender, may be set-off and applied towards the payment of
the Indebtedness of the Borrower under this Agreement (including, but not
limited to all indebtedness evidenced by the Note) to the Lender, including,
without limitation, any note payable to the Lender, whether or not such
Indebtedness of the Borrower to the Lender on such note or any part thereof
shall then be due.
Article 11
LENDER'S REMEDIES IN EVENT OF DEFAULT
11.1 Upon any Event of Default, subject only to any cure period(s)
expressly provided in the Note or the Security Agreements, the Lender shall be
entitled to all of its rights or remedies hereunder, at law or in equity and
under the Note, the Security Agreements and any other Loan Document, including,
without limitation, the right to declare the outstanding principal balance of
the Note, the accrued interest thereon, and all other obligations of the
Borrower to the Lender under this Agreement or otherwise to be immediately due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything in this Agreement or in the
Note to the contrary notwithstanding, and the Lender's obligation to make any
additional Advances hereunder shall be permanently terminated.
11.2 All of the remedies herein given to Lender or otherwise available
to it shall be cumulative and may be exercised concurrently. Failure to exercise
any of the remedies herein provided shall not constitute a waiver thereof by
Lender, nor shall use of any such remedies prevent the subsequent or concurrent
resort to any other remedy or remedies which shall be vested in Lender by this
Agreement or at law or in equity. To be effective, any waiver by Lender must be
in writing and such waiver shall be limited in its effect to the condition or
default specified therein; but no such waiver shall extend to any subsequent
condition or default or impair any right consequent thereon.
Article 12
TAX INDEMNIFICATION
<PAGE>
Borrower hereby agrees to and does hereby jointly and severally
indemnify and hold harmless Lender of and from any and all liability in
connection with payment of any and all intangible, documentary stamp, transfer,
recording and other taxes due and owing to the State of Florida, the State of
Alabama, the State of California, the State of Louisiana, the State of
Tennessee, the State of Georgia, the State of Texas and all other applicable
jurisdictions in connection with the execution, delivery and/or enforcement of
this Agreement, the Revolving Note, the Security Agreements, and
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all associated Loan Documents, together with all penalties and interest
associated therewith, if any. Accordingly, Borrower does hereby authorize Lender
to reimburse itself for any such taxes that Lender pays upon behalf of Borrower
from the proceeds under the Revolving Note, in the event Lender, at any time, in
its sole discretion, deems it necessary to pay such taxes, together with any
penalties and interest associated therewith. This indemnification and Borrowers'
liability for payment of all of the above set forth taxes shall survive
repayment and/or satisfaction of the Loan.
Article 13
MISCELLANEOUS
13.1 Any condition of this Agreement which requires the submission of
evidence of the existence or non-existence of a specified fact or facts implies
as a condition the existence or non-existence, as the case may be, of such fact
or facts, and Lender shall, at all times, be free independently to establish to
its satisfaction and in its absolute discretion such existence or non-existence.
13.2 No part of the Loan will be, at any time, subject or liable to
attachment or levy at the suit of any creditor of Borrower or of any other
interested party, or at the suit of any contractor, subcontractor,
sub-subcontractors or materialman, or any of their creditors.
13.3 If performance of any provision hereof or any transaction related
hereto is limited by law, then the obligation to be performed shall be reduced
accordingly, and if any clause or provision herein contained operates or would
operate to invalidate this Agreement in part, then the invalid part of said
clause or provisions only shall be held for naught as though not contained
herein, and the remainder of this Agreement shall remain operative and in full
force and effect.
13.4 If Lender shall waive any provisions of the Loan Documents, or
shall fail to enforce any of the conditions or provisions of this Agreement,
such waiver shall not be deemed to be a continuing waiver, and shall never be
construed as such, and Lender shall thereafter have the right to insist upon the
enforcement of such conditions or provisions. Furthermore, no provision of this
Agreement shall be amended, waived, modified, discharged or terminated except by
instrument in writing, signed by the parties hereto.
13.5 This Agreement and the documents expressly referred to herein
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to the subject matter. This Agreement may be changed,
waived, discharged, or terminated only by an instrument in writing duly executed
by the party against which enforcement of such change, waiver, discharge, or
termination is sought.
13.6 Anything in this Agreement to the contrary notwithstanding, the
Lender shall not be obligated to extend credit to the Borrower in violation of
any limitation or prohibition provided by any applicable statute or regulation.
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13.7 All notices given hereunder shall be in writing and
addressed as follows:
(a) Lender: BANKATLANTIC
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
Attention: Marcia K. Snyder,
Executive Vice President
with copy to: GARY S. SINGER, ESQ.
Mombach, Boyle & Hardin, P.A.
500 East Broward Boulevard
Suite 1950
Fort Lauderdale, Florida 33394
(b) Borrowers: STREICHER MOBILE FUELING, INC.
STREICHER REALTY, INC.
STREICHER WEST, INC.
2720 N.W. 55th Court
Ft. Lauderdale, Florida 33309
Attn: Stanley H. Streicher, President
with copy to: E. SCOTT GOLDEN, ESQUIRE
644 S.E. 4th Avenue
Fort Lauderdale, Florida 33301
13.8 This Agreement, the Loan Documents and all other documents
relating hereto or thereto may be reproduced by the Lender, and the Borrower
agrees and stipulates that any such reproduction shall be admissible in evidence
as the original itself in any jurisdiction or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction was
made by the Lender in the regular course of business) and that any enlargement,
facsimile, or further reproduction of said document shall likewise be admissible
in evidence.
13.9 In no event shall the Lender's rights hereunder or under any of
the Loan Documents grant the Lender the right to or be deemed to indicate that
the Lender is in control of the business, management or properties of the
Borrower, or has power over the daily management functions and operating
decisions made by the Borrower. The Lender is the Lender only and shall not be
considered a shareholder, joint venturer or partner of the Borrower.
13.10 The headings preceding the text of the sections of this Agreement
are used solely for convenience of reference and shall not affect the meaning,
construction, or effect of this Agreement.
13.11 Lender shall have the right at any time to convey or assign the
Loan or any portion thereof, and, additionally, shall have the right to sell a
participation in the Loan to another lending institution at any time that the
Loan is outstanding, in any amount as solely determined by Lender.
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Lender is hereby authorized to release all financial information of the Borrower
to said assignee or participating lender(s).
13.12 Borrower shall not assign this Agreement without the prior
written consent of Lender, and any assignment in violation hereof shall be of no
force and effect and shall constitute an Event of Default herein. Subject to the
previous sentence, this Agreement shall extend to and bind the parties hereto,
and their respective successors and assigns.
13.13 Except as otherwise noted herein, all covenants, agreements,
representations and warranties made herein and in the Loan Documents shall
survive the respective dates of effectiveness thereof and shall continue in full
force and effect so long as the Loan Documents, or any of them, remain in effect
or any of the obligations evidenced thereby are outstanding and unpaid.
13.14 In the event of any conflict, inconsistency or ambiguity between
the provisions of this Agreement and the provisions of the Revolving Note, any
of the Security Agreements, the Security and Cash Collateral Account Agreement,
the Security, Cash Collateral Account and Lockbox Agreement, or any other Loan
Documents, the provisions of this Agreement shall control and prevail.
13.15 This Agreement may be executed in one or more counterparts, each
of which shall constitute an original, but all of which, when taken together,
shall constitute but one instrument. Any term used herein shall be equally
applicable to both the singular and plural forms.
13.16 Borrower will pay all reasonable out-of-pocket expenses incurred
by Lender in connection with the preparation of the Loan Documents (whether or
not the transactions contemplated hereby shall be consummated), the making and
assumption of the Loan, as applicable, the enforcement and protection in any
legal or equitable proceeding of the rights of the Lender in connection with the
Loan Documents, and in connection with any action or claim under the Loan
Documents including the Revolving Note, or in any way related thereto,
including, without limitation, the reasonable fees and disbursements of counsel
of the Lender.
13.17 It is the intention of the parties hereto to comply with the
usury laws of applicable governmental authority(ies); accordingly, it is agreed
that, notwithstanding any provision to the contrary in the Revolving Note, this
Loan Agreement or any of the other documents securing payment thereof or
otherwise relating hereto, no such provision shall require the payment or permit
the collection of interest in excess of the maximum permitted by law. In
determining the maximum rate allowed, Lender may take advantage of any state or
federal law, rule or regulation in effect from time to time which may govern the
maximum rate of interest which may be charged. If any excess of interest in such
respect is provided for, or shall be adjudicated to be so provided for, in the
Revolving Note, the Loan Agreement or in any of the other documents securing
payment thereof or otherwise relating hereto, then in such event: (a) the
provisions of this paragraph shall govern and control; (b) neither Borrower nor
its heirs, personal representatives, successors or assigns or any other party
liable for the payment thereof, shall be obligated to pay the amount of such
interest to the extent that it is in excess of the maximum amount permitted by
law; (c) any such excess which may have been collected shall be either applied
as a credit against the then unpaid principal amount of the
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Revolving Note or refunded to Borrower; and (d) the effective rate of interest
shall be automatically reduced to the maximum lawful contract rate allowed under
the applicable usury laws.
13.18 Borrower hereby waives any right to require a proceeding first
against any other Borrower or other party providing collateral, or to exhaust
any security for the performance of the Indebtedness. The Borrower further
covenants that no security now or subsequently held by the Lender for the
payment of the Indebtedness evidenced by the Revolving Note made by Borrower
under the Agreement, or for the payment of any other Indebtedness of Borrower to
the Lender under this Agreement or the other Loan Documents, whether in the
nature of a security interest, pledge, lien, assignment, setoff, suretyship,
guaranty, indemnity, insurance or otherwise, and no act, omission or other
conduct of the Lender in respect of such security (excluding fraud, gross
negligence or willful misconduct), shall affect in any manner whatsoever the
unconditional obligation of the Borrower under this Agreement and the Revolving
Note, and the Lender may release, exchange, enforce, apply the proceeds of and
otherwise deal with any such security without affecting in any manner the
unconditional obligation of each of the Borrower under this Agreement and the
Note.
Without limiting the generality of the foregoing, such obligations, and
the rights of the Lender to enforce the same, by proceedings, whether by action
at law, suit in equity or otherwise, shall not be in any way affected by (i) any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding up or other proceeding involving or affecting the Borrower
or others, or (ii) any change in the ownership of any of the capital stock of
the Borrower or any other party providing collateral for any of the
Indebtedness, or any of their respective affiliates.
Each Borrower hereby waives to the fullest extent possible under
applicable law:
i. any defense based upon the doctrine of marshaling of
assets or upon an election of remedies by the Lender,
including, without limitation, an election to proceed
by nonjudicial rather than judicial foreclosure;
ii. any defense based upon any statute or rule of law
which provides that the obligation of a surety must
be neither larger in amount nor in other respects
more burdensome than that of the principal;
iii. any other event or action (excluding the Borrower's
compliance with the provisions hereof) that would
result in the discharge by operation of law or
otherwise of the Borrower from the performance or
observance of any obligation, covenant or agreement
contained in this Agreement, the Revolving Note, or
any other Loan Documents.
13.19 The Borrower shall jointly and severally indemnify and hold
harmless the Lender, and its directors, officers, employees and agents against
all losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Lender is a party thereto) which it may pay or incur
arising out of or relating to, directly or indirectly, this Agreement, the
Revolving Note, the other Loan Documents, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
any Loan hereunder, excepting for gross negligence or willful misconduct on the
part of Lender.
13.20 This Agreement shall be governed by and construed in accordance
with the internal statutes and laws of the State of Florida (other than with
respect to conflicts of laws), but giving effect to federal laws applicable to
national banks to the extent applicable, and except to the extent that the
validity or perfection of the security interest created hereby, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of Florida.
13.21 WAIVER AND RELEASE. AS A MATERIAL INDUCEMENT FOR THE LENDER TO
EFFECTUATE THE LOAN AND THE LENDER TO EXECUTE THIS AGREEMENT, EACH BORROWER DOES
HEREBY RELEASE, WAIVE, DISCHARGE, COVENANT NOT TO SUE, ACQUIT, SATISFY AND
FOREVER DISCHARGE THE LENDER, ITS OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND
AGENTS AND ITS AFFILIATES AND ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS,
COUNTERCLAIMS, DEFENSES, ACTIONS, CAUSES OF ACTION, SUITS, CONTROVERSIES,
AGREEMENTS, PROMISES AND DEMANDS WHATSOEVER IN LAW OR IN EQUITY WHICH ANY
BORROWER EVER HAD, NOW HAS, OR WHICH ANY PERSONAL REPRESENTATIVE, SUCCESSOR,
HEIR OR ASSIGN OF THE BORROWERS HEREAFTER CAN, SHALL OR MAY HAVE AGAINST THE
LENDER, ITS OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, AND ITS
AFFILIATES AND ASSIGNS, FOR, UPON OR BY REASON OF ANY MATTER, CAUSE OR THING
WHATSOEVER, THROUGH THE DATE HEREOF. EACH BORROWER FURTHER EXPRESSLY COVENANTS
WITH AND WARRANTS UNTO THE LENDER AND ITS AFFILIATES AND ASSIGNS, THAT THERE
EXIST NO CLAIMS, COUNTERCLAIMS, DEFENSES, OBJECTIONS, OFFSETS OR CLAIMS OF
OFFSET AGAINST THE LENDER OR THE OBLIGATION OF THE BORROWERS TO PAY THE LENDER
ALL AMOUNTS OWING UNDER THE NOTES, THIS LOAN AGREEMENT, AND ALL ASSOCIATED LOAN
DOCUMENTS AS AND WHEN THE SAME BECOME DUE AND PAYABLE.
13.22 AMENDED AND RESTATED AGREEMENT. THIS AGREEMENT AMENDS AND
RESTATES THE ORIGINAL LOAN AGREEMENT SUCH THAT THE SECURITY INTERESTS, RIGHTS,
DUTIES AND OBLIGATIONS OF THE BORROWERS AND THE LENDER CREATED BY THE ORIGINAL
LOAN AGREEMENT ARE NOT EXTINGUISHED, BUT ARE REAFFIRMED AND REMAIN IN FULL FORCE
AND EFFECT AS MODIFIED BY AND AS PROVIDED IN THIS AMENDED AND RESTATED LOAN
AGREEMENT.
INTENTIONALLY LEFT BLANK
26
<PAGE>
WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY MUTUALLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
CONTEMPLATED OR TO BE EXECUTED IN CONJUNCTION HEREWITH, UNDER ANY OF
THE LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. THE
BORROWER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL
INDUCEMENT TO THE LENDER IN ACCEPTING THIS AGREEMENT, AND, THAT THE
LENDER WOULD NOT HAVE ACCEPTED THIS AGREEMENT WITHOUT THIS JURY TRIAL
WAIVER, AND, THAT THE UNDERSIGNED HAS BEEN REPRESENTED BY AN ATTORNEY
OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY REGARDING THIS
JURY TRIAL WAIVER, AND, UNDERSTANDS THE LEGAL EFFECT OF THIS JURY TRIAL
WAIVER.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
<TABLE>
<S> <C>
Signed, sealed and delivered in BORROWER :
the presence of:
STREICHER MOBILE FUELING, INC., a Florida corporation
By:
- ------------------------- ----------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
STREICHER REALTY, INC., a Florida corporation
By:
- ------------------------- ----------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
STREICHER WEST, INC., a California corporation
By:
- ------------------------- ----------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
LENDER:
BANKATLANTIC, a Federal Savings Bank
By:
- ------------------------- ----------------------------------------
Jeffrey S. Bilus, Vice President
</TABLE>
STATE OF GEORGIA
COUNTY OF __________________
THE FOREGOING INSTRUMENT WAS EXECUTED BEFORE ME, the undersigned, a
Notary Public in and for the State of Georgia, this ___ day of May, 1999, by
WALTER B. BARRETT, as Vice President of Finance of and on behalf of each of
STREICHER MOBILE FUELING, INC., a Florida corporation, STREICHER REALTY, INC., a
Florida corporation, and STREICHER WEST, INC., a California corporation, who 9
is personally known to me or 9 produced his driver's license as identification.
------------------------------------------
Notary Public - State of Georgia
Print Name: _______________________________
My Commission Expires: ____________________
Commission Number: _______________________
STATE OF GEORGIA
COUNTY OF __________________
THE FOREGOING INSTRUMENT WAS EXECUTED BEFORE ME, the undersigned, a
Notary Public in and for the State of Georgia, this ___ day of May, 1999, by
Jeffrey S. Bilus, as Vice President of and on behalf of BANKATLANTIC, a Federal
Savings Bank, who 9 is personally known to me or 9 produced his/her driver's
license as identification.
------------------------------------------
Notary Public - State of Georgia
Print Name: _______________________________
My Commission Expires: ____________________
Commission Number: _______________________
27
<PAGE>
EXHIBIT "A"
BORROWING BASE CERTIFICATE FORM
To Be Provided
28
<PAGE>
EXHIBIT "B"
FICTITIOUS NAMES, TRADENAMES, ETC.
None
29
EXHIBIT 10.7
THIS PROMISSORY NOTE IS BEING EXECUTED AND DELIVERED OUTSIDE OF THE STATE OF
FLORIDA. ACCORDINGLY, THIS PROMISSORY NOTE IS EXEMPT FROM DOCUMENTARY STAMP TAX
PURSUANT TO THE FLORIDA ADMINISTRATIVE CODE.
AMENDED AND RESTATED MASTER REVOLVING PROMISSORY NOTE
$10,000,000.00 EXECUTED AT ST. MARY'S, GEORGIA
DATED AS OF DECEMBER 22, 1999
The undersigned, STREICHER MOBILE FUELING, INC., a Florida corporation,
STREICHER REALTY, INC., a Florida corporation, and STREICHER WEST, INC., a
California corporation (hereinafter collectively called "Maker"), jointly and
severally promise to pay to the order of BANKATLANTIC, a Federal Savings Bank
(hereinafter, together with any holder hereof, called "Payee" or "Holder"), at
its office at 1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304, or at
such other place as Payee may from time to time designate, the principal sum of
Ten Million and 00/100 Dollars ($10,000,000.00), together with interest thereon
from the date hereof at the interest rate set forth below, which sums are to be
repaid as follows:
The proceeds of this Note shall be used for the purpose of supporting
working capital requirements of the Maker, as more fully set forth in
that certain Amended and Restated Loan Agreement executed by Maker and
Payee, dated as of May 25, 1999, as amended by First Amendment to
Amended and Restated Loan Agreement, dated as of even date herewith, as
the same may be amended, restated or supplemented from time to time
(collectively, the "Loan Agreement"), the terms and provisions of which
are incorporated by reference herein. Advances effectuated hereunder
(each advance under this Note hereinafter referred to as an "Advance")
shall be made in accordance with and subject to the terms and
provisions of the Loan Agreement. Each Advance hereunder shall bear
interest at a variable interest rate of one percent (1%) above the
"Prime Rate" (as defined herein) in effect on the date of the Advance,
to be adjusted daily with any change in said Prime Rate to an interest
rate of one percent (1%) above the Prime Rate then in effect. Payments
of interest only on the outstanding principal balance shall be due and
payable on a monthly basis, with the first payment due and owing on the
1st day of January, 2000, with like payments of interest only due and
payable on the 1st day of each month thereafter through and until the
Maturity Date (as defined and set forth below). Interest charged under
this Note shall be computed on the basis of a three hundred sixty (360)
day year for the actual number of days elapsed. All payments hereunder
shall be made in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of
public and private debts, and shall be applied first to interest and
lawful charges then accrued and then to principal. All accrued and
unpaid interest, together with the entire principal balance and all
other applicable
<PAGE>
charges hereunder, shall be due and payable in full on the "Maturity
Date", as defined in and set forth in the Loan Agreement.
The interest rate charged hereunder shall change on the date that Payee
changes its announced Prime Rate, to the aforesaid one percent (1%) above the
Prime Rate established on such date, and, shall be the effective rate until the
next date that the Prime Rate announced by Payee is changed. "Prime Rate" shall
mean that certain rate of interest announced from time to time by Payee as its
Prime Rate, which rate is purely discretionary and is not necessarily the best
or lowest rate charged to borrowing customers of Payee. Payee shall not be
required to notify Maker of any changes in the Prime Rate, which shall be
reflected solely by the billing thereof to Maker. Regardless of the above, said
interest rate shall never exceed the maximum rate permitted by applicable law.
In order to compensate Payee for loss and expense occasioned by
handling delinquent payments, which include, but are not limited to, the cost of
processing and collecting delinquencies, Maker shall pay to Payee, in addition
to any interest or other sums payable under this Note, a service charge equal to
five percent (5%) of the amount of any payment not received by Payee within five
(5) days of the due date thereof.
This Note may be prepaid in whole or in part at any time without
premium or penalty.
From and after the date upon which any payment of principal or interest
hereunder becomes due and payable (whether by acceleration or otherwise) if the
same is not timely paid, or upon the occurrence of any other default under this
Note or any default under any of the Loan Documents, interest shall be payable
on all sums outstanding hereunder at the maximum rate permitted by applicable
law (the "Default Rate"), and shall be due and payable ON DEMAND. Any judgment
obtained by Payee against Maker as to any amounts due under this Note shall also
bear interest at the Default Rate.
This Note is secured by certain security documents encumbering the
property described therein, including, without limitation, the following:
A. Security Agreements, as amended and reaffirmed.
B. UCC-1 Financing Statements.
C. The Loan Agreement.
D. Amended and Restated Security and Cash Collateral Account
Agreement.
E. Associated affidavits, disclosures and miscellaneous loan
documentation.
This Note, the Loan Agreement, all documents listed above, and any other
documents previously, now or hereafter executed in connection with this Note, as
the same may be amended, extended, renewed or restated from time to time, are
hereinafter collectively referred to as the "Loan Documents".
-2-
<PAGE>
In the event of the continuation of any default in the payment of any
interest or principal under this Note for a period of ten (10) days after such
payment becomes due, or upon the occurrence of any other event of default under
the terms and provisions of this Note, the Loan Agreement, or any of the Loan
Documents, or any other documents delivered to Payee in connection with this
Note, or any other obligation of Maker to Payee, then Payee may declare the
entire unpaid principal amount outstanding hereunder, together with interest
accrued thereon and any other lawful charges accrued hereunder, immediately due
and payable.
Maker and any endorsers, sureties, guarantors, and all others who are,
or at some future date may become, liable for the payments required hereunder
grant a continuing first lien security interest in and to, and authorize Payee,
in its sole discretion at any time after an event of default hereunder, in such
order as Payee may elect, to apply to the payment of obligations due and owing
hereunder, or to the payment of any and all indebtedness, liabilities and
obligations of such parties to Payee, whether now existing or hereafter created,
any and all monies, general or specific deposits, or collateral of whatsoever
nature of any of the above noted parties, now or hereafter in the possession of
Payee. All property described in this paragraph above, along with all property
secured by the Loan Documents, including all proceeds thereof and rights in
connection therewith, together with additions and substitutions, are hereinafter
collectively referred to as the "Collateral".
Additions to, releases, reductions, or exchanges of or substitutions
for the Collateral, payments on account of this Note, or increases of the same,
or other loans made partially or wholly upon the Collateral, may from time to
time be made without affecting the provisions of this Note or the liabilities of
any party hereto. If any of the Collateral is personal property, Payee shall
exercise reasonable care in the custody and preservation of the Collateral in
its possession, and shall be deemed to have exercised reasonable care if it
takes such action for that purpose as Maker shall reasonably request in writing,
but no omission to comply with any request of Maker shall of itself be deemed a
failure to exercise reasonable care. Payee shall not be bound to take any steps
necessary to preserve any rights in the Collateral against prior parties, and
Maker shall take all necessary steps for such purposes. Payee or its nominee
need not collect interest on or principal of any Collateral or give any notice
with respect thereto.
In the event the Payee hereof has reason to deem itself insecure or
upon the happening of any of the following events, each of which shall
constitute a default hereunder, all sums due hereunder shall thereupon or
thereafter, at Payee's option, without notice or demand, become immediately due
and payable: (a) failure of any Obligor (which term shall mean and include each
Maker, Endorser, Surety, Guarantor or other party liable for payment of or
pledging collateral or security under this Note) to pay any sum due hereunder
within ten (10) days of its due date or due by any Obligor to Payee under any
other Promissory Note or under any security instrument or written obligation of
any kind now existing or hereafter created subject to any cure period(s) set
forth therein, if any; (b) occurrence of default under any of the Loan Documents
or any other loan agreement or security instrument now or hereafter in effect
which by its terms covers this Note or the indebtedness evidenced hereby subject
to any cure period(s) set forth therein, if any; (c) death of any Obligor; (d)
filing of any petition under the Bankruptcy Code or any similar federal or state
statute by or against
-3-
<PAGE>
any Obligor or the insolvency of any Obligor; (e) making of a General Assignment
by any Obligor for the benefit of creditors, appointment of or taking possession
by a receiver, trustee or custodian or similar official for any Obligor or for
any assets of any such Obligor or institution by or against any Obligor of any
kind of insolvency proceedings or any proceeding for dissolution or liquidation
of any Obligor; (f) entry of a judgment against any Obligor in excess of
$50,000.00 or which is not satisfied or transferred to bond within thirty (30)
days of entry; (g) material falsity in any certificate, statement,
representation, warranty or audit at any time furnished to the Payee by or on
behalf of any Obligor pursuant to or in connection with this Note, the Loan
Documents or any loan agreement or Security Agreements now or hereafter in
effect, which by its terms covers this Note for the indebtedness evidenced
hereby or otherwise including any omission to disclose any substantial
contingent or liquidated liabilities or any material adverse change in any facts
disclosed by any certificate, statement, representation, warranty or audit
furnished to Payee; (h) issuance of any writ of attachment or writ of
garnishment or filing of any lien against any collateral securing payment of
this Note or the property of any Obligor, which attachment or writ is not
satisfied or otherwise removed within thirty (30) days of issuance, and in the
case of a lien, which lien is not satisfied or transferred to bond within thirty
(30) days of filing of the same; (i) taking of possession of any material
collateral securing payment of this Note or of any substantial part of the
property of any Obligor at the instance of any governmental authority; (j)
dissolution, merger, consolidation, or reorganization of any Obligor; (k)
assignment or sale by any Obligor of any equity in any collateral securing
payment of this Note without the prior written consent of Payee, excepting for
sales of trucks, including all equipment located thereon and attached thereto,
provided that such trucks are not encumbered by a first priority lien in favor
of the Payee, and constitute sales occurring in the normal and ordinary course
of business of said Obligor; or (l) cancellation of any guaranty with respect
hereto without the prior written consent of the Payee hereof.
Payee shall have all of the rights and remedies of a creditor,
mortgagee and secured party under all applicable law. Without limiting the
generality of the foregoing, upon the occurrence of any uncured event of default
hereunder or in the event Payee, at any time, deems itself insecure, Payee may,
at its option, and without notice or demand (i) declare the entire unpaid
principal and accrued interest accelerated and due and payable at once, together
with any and all other liabilities of Maker or any of such liabilities selected
by Payee; and (ii) set-off against this Note all monies owed by Payee in any
capacity to Maker, whether or not due, and also set-off against all other
liabilities of Maker to Payee all monies owed by Payee in any capacity to Maker,
and Payee shall be deemed to have exercised such right of set-off, and to have
made a charge against any such money immediately upon the occurrence of such
default, although made or entered on the books subsequent thereto. To the extent
that any of the Collateral is personal property and Payee elects to proceed with
respect to it in accordance with the Uniform Commercial Code then, unless that
collateral is perishable or threatens to decline speedily in value, or is of a
type customarily sold on a recognized market, Payee will give Maker reasonable
notice of the time and place of any public or private sale thereof. The
requirement of reasonable notice shall be met if such notice is, at the option
of Payee, hand delivered, sent via expedited courier, or mailed, postage
pre-paid to Maker, at the address given to Payee by Maker, or at any other
address shown on the records of Payee at least five (5) days before the time of
sale. Upon disposition of any Collateral after the occurrence
-4-
<PAGE>
of any default hereunder, Maker shall be and shall remain liable for any
deficiency; and Payee shall account to Maker for any surplus, but Payee shall
have the right to apply all or part of such surplus (or to hold the same as
reserve) against any and all other liabilities of Maker to Payee.
Payee may, at any time, whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, and the pledgee or the
transferee shall, for all purposes, stand in the place of Payee and have all the
rights of Payee set forth herein; (ii) transfer the whole or any part of the
Collateral into the name of itself or its nominee; (iii) vote the Collateral;
(iv) notify Maker to make payment to Payee of any amounts due or to become due
thereon; (v) demand, sue for, collect, or make any compromise or settlement it
deems desirable with reference to the Collateral; (vi) take possession or
control of any proceeds of the Collateral; and (vii) exercise all other rights
necessary or required, in Payee's discretion, in order to protect its interests
hereunder. Items (ii) through (vi) shall be applicable only after the occurrence
of a default under this Note or under any of the Loan Documents.
In no event shall Payee be entitled to unearned or unaccrued interest
or other charges or rebates, except as may be authorized by law, and should any
interest or other charges paid by Maker or other parties liable for the payment
of this Note result in the computation or earning of interest in excess of the
maximum rate of interest that is legally permitted under applicable law, then
any and all such excess shall be and the same is hereby waived by Payee, and any
and all such excess shall be automatically credited against and reduce the
balance due under this indebtedness, and the portion of said excess which
exceeds the balance due under this indebtedness, shall be paid by Payee to Maker
and parties liable for the payment of this Note. Payee may, in determining the
maximum rate permitted under applicable law in effect from time to time, take
advantage of (i) the maximum rate of interest permitted under Florida law or
federal law, whichever is higher, including any laws regarding parity among
lenders; and (ii) any other law, rule or regulation in effect from time to time
available to Payee, which exempts Payee from any limit upon the rate of interest
it may charge, or grants to Payee the right to charge a higher rate of interest
than that permitted by Chapter 687, Florida Statutes.
The provisions of this Note and the Loan Documents shall be construed
according to the internal laws (and not the law of conflicts) of the State of
Florida; except as set forth above, if Federal law would allow the payment of
interest hereunder at a higher maximum rate than would be applicable under
Florida law, in which case such Federal law shall apply to the determination of
the highest applicable lawful rate of interest hereunder.
No delay or omission on the part of Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor and all other
notices are hereby waived by Maker. Maker promises and agrees to pay all costs
of collection and attorneys' fees, which shall include reasonable attorneys'
fees in connection with any suit, out of court, in trial, on appeal, in
bankruptcy proceedings or otherwise, incurred or paid by Payee in enforcing this
Note or preserving any right or interest of Payee set forth herein. Any notice
to Maker shall be sufficiently served for all purposes if placed in the mail,
-5-
<PAGE>
postage prepaid, addressed to, or left upon the premises at the address of Maker
as provided to Payee.
This Note is not assumable without Payee's prior written consent, which
consent may be granted by Payee or denied by Payee, in Payee's sole and absolute
discretion.
Maker agrees that Broward County, Florida shall be the proper venue for
any and all legal proceedings arising out of this Note or any of the Loan
Documents.
THIS PROMISSORY NOTE AMENDS, RESTATES, INCREASES AND REPLACES THAT
CERTAIN CONSOLIDATION MASTER REVOLVING PROMISSORY NOTE IN THE PRINCIPAL AMOUNT
OF SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00)
EXECUTED BY MAKER IN FAVOR OF PAYEE DATED AS OF MAY 25, 1999 (THE "ORIGINAL
NOTE") FOR THE PURPOSE OF MODIFYING CERTAIN TERMS AND PROVISIONS OF THE ORIGINAL
NOTE AND INCREASING THE INDEBTEDNESS EVIDENCED BY THE ORIGINAL NOTE TO THE SUM
OF TEN MILLION AND 00/100 DOLLARS ($10,000,000.00). THIS PROMISSORY NOTE DOES
NOT CONSTITUTE AN EXTINGUISHMENT OR A NOVATION OF THE DEBT EVIDENCED BY THE
ORIGINAL NOTE, BUT MERELY CONSTITUTES AN AMENDMENT, RESTATEMENT AND INCREASE OF
THE SAME, SUCH THAT THE LIENS OF ANY EXISTING LOAN DOCUMENTS SECURING THE
ORIGINAL NOTE ARE NOT AFFECTED OR IMPAIRED BY THE EXECUTION OF THIS AMENDED AND
RESTATED MASTER REVOLVING PROMISSORY NOTE. THE ORIGINAL NOTE IS ATTACHED TO THIS
PROMISSORY NOTE.
INTENTIONALLY LEFT BLANK
-6-
<PAGE>
WAIVER OF TRIAL BY JURY. MAKER AND PAYEE HEREBY MUTUALLY, KNOWINGLY,
WILLINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE THEIR RIGHT TO TRIAL BY JURY AND
NO PARTY, NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF THE
PARTIES (ALL OF WHOM ARE HEREINAFTER REFERRED TO AS THE "PARTIES") SHALL SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEEDING BASED UPON OR ARISING OUT OF THIS NOTE OR THE LOAN DOCUMENTS, OR ANY
INSTRUMENT EVIDENCING, SECURING, OR RELATING TO THE INDEBTEDNESS AND OTHER
OBLIGATIONS EVIDENCED HEREBY OR ANY RELATED AGREEMENT OR INSTRUMENT, ANY OTHER
COLLATERAL FOR THE INDEBTEDNESS EVIDENCED HEREBY OR ANY COURSE OF ACTION, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS RELATING TO THE
LOAN OR TO THIS NOTE. THE PARTIES ALSO WAIVE ANY RIGHT TO CONSOLIDATE ANY ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES. THE WAIVER CONTAINED HEREIN IS IRREVOCABLE,
CONSTITUTES A KNOWING AND VOLUNTARY WAIVER, AND SHALL BE SUBJECT TO NO
EXCEPTIONS. PAYEE HAS IN NO WAY AGREED WITH OR REPRESENTED TO MAKER OR ANY OTHER
PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
STREICHER MOBILE FUELING, INC., a Florida corporation
By: /s/ Walter B. Barrett
-----------------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
STREICHER REALTY, INC., a Florida corporation
By: /s/ Walter B. Barrett
-----------------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
STREICHER WEST, INC., a California corporation
By: /s/ Walter B. Barrett
-----------------------------------------------
WALTER B. BARRETT, Vice President of Finance
(Corporate Seal)
-7-
<PAGE>
STATE OF GEORGIA
COUNTY OF CAMDEN
THE FOREGOING INSTRUMENT WAS EXECUTED BEFORE ME, the undersigned, a
Notary Public in and for the State of Georgia, this ___ day of December, 1999,
by WALTER B. BARRETT, as Vice President of Finance of and on behalf of each of
STREICHER MOBILE FUELING, INC., a Florida corporation, STREICHER REALTY, INC., a
Florida corporation, and STREICHER WEST, INC., a California corporation, who 9
is personally known to me or 9 produced his driver's license as identification.
[seal]
/s/ Connie Miller
------------------------------------------
Notary Public - State of Georgia
Print Name: CONNIE MILLER
-------------------------------
My Commission Expires:
--------------------
Commission Number:
------------------------
(Signing as a notary public and not as a
maker or endorser of this Note.)
-8-
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Streicher Mobile Fueling, Inc.
We consent to the incorporation by reference in this registration statement of
Streicher Mobile Fueling, Inc., on Forms S-8 (Nos. 333-84275 and 333-79801) and
S-3 (Nos. 333-30950, 333-30952 and 333-84273) of our report dated March 24,
2000, relating to the consolidated balance sheets of Streicher Mobile Fueling,
Inc. and subsidiaries as of January 31, 2000 and 1999, and the related
consolidated statements of operations, shareholders' equity and cash flows for
the years then ended, and the related schedule, which report appears in the
January 31, 2000 Annual Report on Form 10-K of Streicher Mobile Fueling, Inc.
Fort Lauderdale, Florida
May 15, 2000
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference of our report dated April 10, 1998 included in
Streicher Mobile Fueling, Inc.'s Form 10-K for the year ended January 31, 2000,
into the Company's previously filed Registration Statements on Forms S-3 (Nos.
333-30950, 333-30952 and 333-84273) and on Forms S-8 (Nos. 333-8275 and
333-7901).
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida
May 15, 2000.
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