Exhibit 10.9
LOAN AGREEMENT
by and among
MARITIME LOGISTICS US HOLDINGS INC.
SUMMIT LOGISTICS INTERNATIONAL INC
SEAMASTER LOGISTICS INC.
AMERUSSIA SHIPPING COMPANY INC.
FASHION MARKETING, INC.
FMI INTERNATIONAL LLC
FMI INTERNATIONAL CORP. (WEST)
FMI INTERNATIONAL CORP.
FREIGHT MANAGEMENT LLC
FMI TRUCKING, INC.
FMI EXPRESS CORP.
CLARE FREIGHT, LOS ANGELES, INC.
TUG NEW YORK, INC.
AEROBIC CREATIONS, INC.
TUG USA, INC.
AMR INVESTMENTS INC
FMI HOLDCO I, LLC
as Borrowers
and
THE PARTIES INDICATED AS GUARANTORS
as Guarantors
and
LENDERS FROM TIME TO TIME PARTY HERETO
as Lenders
FORTRESS CREDIT CORP.
as Agent
November 8, 2006
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; CERTAIN TERMS...........................................2
Section 1.01 Definitions................................................2
Section 1.02 Terms Generally...........................................43
Section 1.03 Accounting and Other Terms................................44
Section 1.04 Time References...........................................44
ARTICLE II THE LOANS..........................................................44
Section 2.01 Commitments...............................................44
Section 2.02 Making of Loans...........................................45
Section 2.03 Letters of Credit.........................................48
Section 2.04 Evidence of Debt..........................................52
Section 2.05 Interest..................................................53
Section 2.06 Fees......................................................53
Section 2.07 Obligations Several; Independent Nature of Lenders'
Rights....................................................56
Section 2.08 Joint and Several Liability of Borrowers..................56
ARTICLE III PAYMENTS..........................................................57
Section 3.01 Repayment of Loans........................................57
Section 3.02 Optional Prepayment of Loans..............................58
Section 3.03 Mandatory Prepayments of Loans............................59
Section 3.04 Interest and Fees.........................................61
Section 3.05 Apportionment of Payments.................................61
Section 3.06 Payments; Computations and Statements.....................61
Section 3.07 Sharing of Payments, Etc..................................62
Section 3.08 Taxes.....................................................63
Section 3.09 Increased Costs and Reduced Return........................66
Section 3.10 Inability To Determine Interest Rate......................67
Section 3.11 Illegality................................................68
Section 3.12 Funding Indemnity.........................................68
ARTICLE IV CONDITIONS TO LOANS................................................69
Section 4.01 Conditions Precedent to Loans.............................69
Section 4.02 Conditions Precedent to All Loans.........................75
ARTICLE V REPRESENTATIONS AND WARRANTIES......................................76
Section 5.01 Organization, Good Standing, Etc..........................76
Section 5.02 Authorization, Etc........................................76
Section 5.03 Governmental Approvals....................................76
Section 5.04 Enforceability of Transaction Documents...................77
(ii)
Section 5.05 Capitalization; Subsidiaries..............................77
Section 5.06 Litigation; Commercial Tort Claims........................77
Section 5.07 Financial Condition.......................................77
Section 5.08 Compliance with Law, Etc..................................78
Section 5.09 ERISA.....................................................78
Section 5.10 Taxes, Etc................................................79
Section 5.11 Regulations T, U and X....................................79
Section 5.12 Nature of Business........................................80
Section 5.13 Adverse Agreements, Etc...................................80
Section 5.14 Permits, Etc..............................................80
Section 5.15 Properties................................................80
Section 5.16 Full Disclosure...........................................81
Section 5.17 Environmental Matters.....................................81
Section 5.18 Insurance.................................................82
Section 5.19 Use of Proceeds...........................................82
Section 5.20 Location of Bank Accounts.................................82
Section 5.21 Intellectual Property.....................................82
Section 5.22 Material Contracts........................................84
Section 5.23 Holding Company and Investment Company Acts...............84
Section 5.24 Employee and Labor Matters................................84
Section 5.25 Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive
Office; FEIN..............................................84
Section 5.26 Tradenames................................................85
Section 5.27 Locations of Collateral...................................85
Section 5.28 Solvency..................................................85
Section 5.29 Security Interests........................................85
Section 5.30 Consummation of Acquisitions..............................86
Section 5.31 Acquisition Documents.....................................86
Section 5.32 Anti-Terrorism Laws and Anti-Money Laundering Laws........87
Section 5.33 Mergers...................................................88
Section 5.34 Representations and Warranties in Documents; No Default...88
ARTICLE VI COVENANTS OF LOAN PARTIES..........................................88
Section 6.01 Affirmative Covenants.....................................88
Section 6.02 Negative Covenants.......................................102
Section 6.03 Financial Covenants......................................113
ARTICLE VII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS AND OTHER
COLLATERAL.......................................................115
Section 7.01 Collection of Accounts; Management of Collateral.........115
Section 7.02 Status of Accounts and Other Collateral..................118
Section 7.03 Collateral Custodian.....................................118
Section 7.04 Collateral Reporting.....................................119
Section 7.05 Accounts Covenants.......................................119
(iii)
ARTICLE VIII EVENTS OF DEFAULT...............................................120
Section 8.01 Events of Default........................................120
Section 8.02 Remedies.................................................123
ARTICLE IX AGENT.............................................................124
Section 9.01 Appointment..............................................124
Section 9.02 Nature of Duties.........................................125
Section 9.03 Rights, Exculpation, Etc.................................125
Section 9.04 Reliance.................................................126
Section 9.05 Indemnification..........................................126
Section 9.06 Agent Individually.......................................127
Section 9.07 Successor Agent..........................................127
Section 9.08 Collateral Matters.......................................127
Section 9.09 Events of Default........................................129
Section 9.10 Agency for Perfection....................................129
ARTICLE X GUARANTY...........................................................129
Section 10.01 Guaranty.................................................129
Section 10.02 Guaranty Absolute........................................130
Section 10.03 Waiver...................................................131
Section 10.04 Continuing Guaranty; Assignments.........................131
Section 10.05 Subrogation..............................................132
ARTICLE XI MISCELLANEOUS.....................................................132
Section 11.01 Notices, Etc.............................................132
Section 11.02 Amendments, Etc..........................................133
Section 11.03 No Waiver; Remedies, Etc.................................134
Section 11.04 Expenses; Taxes; Attorneys' Fees.........................134
Section 11.05 Right of Set-off.........................................135
Section 11.06 Severability.............................................136
Section 11.07 Assignments and Participations...........................136
Section 11.08 Counterparts.............................................138
Section 11.09 GOVERNING LAW............................................139
Section 11.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE....139
Section 11.11 WAIVER OF JURY TRIAL, ETC................................139
Section 11.12 Consent by Agent and Lenders.............................140
Section 11.13 No Party Deemed Drafter..................................140
Section 11.14 Reinstatement; Certain Payments..........................140
Section 11.15 Indemnification..........................................140
Section 11.16 MLI as Agent for Borrowers...............................142
Section 11.17 Records..................................................142
Section 11.18 Binding Effect...........................................142
(iv)
Section 11.19 Interest.................................................142
Section 11.20 Confidentiality..........................................144
Section 11.21 Public Disclosures.......................................144
Section 11.22 Know Your Customer.......................................144
Section 11.23 Integration..............................................145
(v)
SCHEDULE AND EXHIBITS
Schedule 1.01 Lenders and Lenders' Commitments
Schedule 4.01(e)(v) Real Property to be Subject to Mortgages
Schedule 4.01(e)(x) Judgment Liens
Schedule 4.01(i) Third Party Consents to Acquisitions Not Obtained
Schedule 5.03 Governmental Approvals
Schedule 5.06 Litigation
Schedule 5.09 ERISA
Schedule 5.10 Taxes
Schedule 5.15 Real Property
Schedule 5.17 Environmental Matters
Schedule 5.18 Insurance
Schedule 5.19 Use of Proceeds
Schedule 5.20 Bank Accounts
Schedule 5.21 Intellectual Property
Schedule 5.22 Material Contracts
Schedule 5.24 Employee and Labor Matters
Schedule 5.25 Subsidiaries; Name; Jurisdiction of Organization;
Organizational ID Number; Chief Place of Business;
Chief Executive Office; FEIN
Schedule 5.26 Tradenames
(vi)
Schedule 5.27 Collateral Locations
Schedule 6.01(t)(iii) Consents to Assignments of Contracts
Schedule 6.01(t)(vi) Post-Closing License Procedures
Schedule 6.02(a) Existing Liens
Schedule 6.02(b) Existing Indebtedness
Schedule 6.02(f)(ii) Existing Loans
Schedule 6.02(k) Transactions with Affiliates
Schedule 6.03(a) Total Leverage Ratio
Schedule 6.03(b) Consolidated EBITDA
Schedule 6.03(c) Fixed Charge Coverage Ratio
Schedule 7.01 Cash Management Banks
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Compliance Certificate
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Letter of Credit Request
Exhibit F Form of Borrowing Base Certificate
(vii)
LOAN AGREEMENT
Loan Agreement, dated as of November 8, 2006, by and among Maritime
Logistics US Holdings Inc., a Delaware corporation ("MLI"), Summit Logistics
International Inc, a New Jersey corporation ("Summit"), SeaMaster Logistics
Inc., a Delaware corporation ("SeaMaster"), AmeRussia Shipping Company Inc., a
Delaware corporation ("AmeRussia Shipping"), FMI International LLC, a Delaware
limited liability company ("FMI International"), Fashion Marketing, Inc., a New
Jersey corporation ("FM"), FMI International Corp. (West), a New Jersey
corporation ("FMIW"), FMI International Corp., a New Jersey corporation
("FMII"), Freight Management LLC, a Delaware limited liability company
("FMLLC"), FMI Trucking, Inc., a New Jersey corporation ("Trucking"), FMI
Express Corp., a New Jersey corporation ("Express"), Clare Freight, Los Angeles,
Inc., a California corporation ("Clare"), TUG New York, Inc., a New York
corporation ("TUG NY"), Aerobic Creations, Inc., a Delaware corporation
("Parent"), TUG USA, Inc., a New Jersey corporation, formerly known as Dolphin
US Logistics Inc ("TUG USA"), AMR Investments Inc, a New Jersey corporation
("AMRI") and FMI Holdco I, LLC, a Delaware limited liability company ("FMI
Holdco", and together with MLI, Summit, SeaMaster, AmeRussia Shipping, FM, FMI
International, FMIW, FMII, FMLLC, Trucking, Express, Clare, TUG NY, Parent, TUG
USA, AMRI and FMI Holdco, each individually, a "Borrower" and collectively,
"Borrowers"), the parties from time to time hereto as guarantors (each
individually, a "Guarantor" and collectively, "Guarantors"), the parties from
time to time hereto as lenders, whether by execution of this Agreement or an
Assignment and Acceptance (each a "Lender" and collectively, the "Lenders"),
Fortress Credit Corp., a Delaware corporation, in its capacity as administrative
and collateral agent for and on behalf of Lenders (in such capacity, "Agent").
W I T N E S S E T H:
WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders
extend credit to Borrowers consisting of (a) a revolving credit facility in an
aggregate principal amount not to exceed $10,000,000 at any time outstanding,
which will include a subfacility for the issuance of letters of credit in an
aggregate amount not to exceed $7,000,000 and (b) term loans in the aggregate
principal amount of $55,000,000; and
WHEREAS, each Lender is willing to agree (severally and not jointly) to
extend such credit to Borrowers on a pro rata basis according to its Commitment
(as defined below) on the terms and conditions set forth herein and Agent is
willing to act as agent for Lenders on the terms and conditions set forth herein
and the other Loan Documents;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"ACAS" means American Capital Financial Services, Inc., a Delaware
corporation.
"ACCOUNT DEBTOR" means each debtor, customer or obligor in any way
obligated on or in connection with any Receivable.
"ACCOUNTS" means, as to each Loan Party, all present and future rights of
such Loan Party to payment of a monetary obligation, whether or not earned by
performance, which is not evidenced by chattel paper or an instrument, (a) for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (b) for services rendered or to be rendered, (c) for a
secondary obligation incurred or to be incurred or (d) arising out of the use of
a credit or charge card or information contained in or for use with the card.
"ACQUISITIONS" means collectively, (a) the purchase by MLI of all of the
Capital Stock of FMI Holdco and FMI Blocker and the assumption by MLI of certain
of the liabilities relating thereto pursuant to the FMI Acquisition Documents,
(b) the purchase by TUG USA of the TUG Acquisition Assets and all of the Capital
Stock of Clare and TUG NY and the assumption by TUG USA of certain of the
liabilities relating thereto pursuant to the TUG Acquisition Documents and (c)
the purchase by MLI of all of the Capital Stock of Sea Master Hong Kong pursuant
to the SeaMaster Acquisition Documents.
"ACQUISITION DOCUMENTS" means collectively, (a) the FMI Acquisition
Documents, (b) the TUG Acquisition Documents, and (c) the SeaMaster Acquisition
Documents.
"ACTION" has the meaning set forth in Section 11.12.
"ADMINISTRATIVE BORROWER" has the meaning set forth in Section 11.16.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote ten (10%) percent or more of the Capital Stock having
ordinary voting power for the election of the Board of Directors of such Person
or (ii) direct or cause the direction of the management and policies of such
Person whether by contract or otherwise. Notwithstanding anything herein to the
contrary, in no event shall Agent or any Lender be considered an "Affiliate" of
any Loan Party.
"AFTER ACQUIRED PROPERTY" has the meaning set forth in Section 6.01(o)
hereof.
"AGENT" has the meaning set forth in the preamble hereto.
"AGENT ADVANCES" has the meaning set forth in Section 9.08(a).
2
"AGENT TERM ADVANCE" has the meaning set forth in Section 9.08(a).
"AGENT'S ACCOUNT" means an account at a bank designated by Agent from time
to time as the account into which Loan Parties shall make all payments to Agent
for the benefit of Agent and Lenders under this Agreement and the other Loan
Documents.
"AGREEMENT" means this Loan Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.
"AMERUSSIA" means AMERUSSIA LTD., a company organized under the laws of
Russia.
"ANTI-MONEY LAUNDERING LAWS" means all applicable laws, regulations and
government guidance on the prevention and detection of money laundering,
including 18 U.S.C. Section 1956 and 1957, and the BSA.
"ANTI-TERRORISM LAWS" means the OFAC Laws and Regulations and the
Executive Orders as each of such terms is defined in Section 5.32 and the USA
Patriot Act.
"APPLICABLE MARGIN" means the amount determined as follows:
--------------------------------------------------------------------------------
Applicable Margin
Ratio of Net Senior Indebtedness to Applicable Margin (Reference Rate
Consolidated EBITDA (LIBOR Rate Loans) Loans)
--------------------------------------------------------------------------------
Greater than 3.0:1.0 4.75% 3.75%
--------------------------------------------------------------------------------
Equal to or less than 3.0:1.0 but 4.50% 3.50%
greater than 2.5:1.0
--------------------------------------------------------------------------------
Equal to or less than 2.5:1.0 but 4.25% 3.25%
greater than 2.0:1.0
--------------------------------------------------------------------------------
Equal to or less than 2.0:1.0 but 4.00% 3.00%
greater than 1.5:1.0
--------------------------------------------------------------------------------
Equal to or less than 1.5:1.0 3.75% 2.75%
--------------------------------------------------------------------------------
PROVIDED, THAT, (a) the Applicable Margin shall be calculated and established
once each fiscal quarter based on the ratio of Net Senior Indebtedness to
Consolidated EBITDA of Parent and its Subsidiaries for the immediately preceding
twelve (12) month period ending as of the last day of the immediately preceding
fiscal quarter and shall remain in effect until adjusted thereafter after the
end of the next fiscal quarter, (b) each adjustment to the Applicable Margin
shall be effective on the date that Agent receives the financial statements of
Parent and its Subsidiaries for the immediately preceding fiscal quarter in
accordance with Section 6.01(a)(i) and shall remain in effect until adjusted
thereafter during the next fiscal quarter, (c) the failure to deliver the
3
financial statements pursuant to Section 6.01(a)(i) hereof on the required date
shall automatically cause the Applicable Margin for each LIBOR Rate Loan and
Reference Rate Loan to be the highest applicable rate set forth above, effective
as of the date on which the delivery of the financial statements was otherwise
required until the date on which such financial statements are so delivered to
Agent at which time the Applicable Margin shall be adjusted in accordance with
clause (a) above, (d) in the event that any of the information provided to Agent
which is used in the calculation of the Applicable Margin for any period is
subsequently restated or is otherwise changed thereafter, then if the Applicable
Margin for the applicable period would have resulted in a higher rate, Borrowers
shall promptly upon demand pay to Agent any additional amount in respect of
interest that would have been required based on the higher Applicable Margin,
and (e) notwithstanding anything to the contrary set forth herein, until the
effective date set forth in clause (b) above that follows the last day of the
fourth full fiscal quarter after the Effective Date, the Applicable Margin shall
be equal to the greater of (i) the amount determined as set forth above based on
the ratio of Net Senior Indebtedness to Consolidated EBITDA of Parent and its
Subsidiaries for the immediately preceding twelve (12) month period ending as of
the last day of each fiscal quarter prior thereto after giving pro forma effect
to the Acquisitions, the Revolving Credit Facility, the Term Loan and the other
transactions contemplated hereunder and (ii) four and one quarter (4.25%)
percent per annum.
"ASSET SALE" means any transaction, or series of related transactions,
pursuant to which any Person or any of its Subsidiaries sells, assigns,
transfers, conveys, leases or subleases, licenses or otherwise disposes of any
property or assets (whether now owned or hereafter acquired) to any other
Person, in each case, whether or not the consideration therefor consists of
cash, securities or other assets owned by the acquiring Person.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by Agent, in
accordance with Section 11.07 hereof and substantially in the form of Exhibit A
hereto or such other form acceptable to Agent.
"AUTHORIZED OFFICER" means, with respect to any Person, the chief
executive officer, chief financial officer, president or vice president of such
Person.
"AVAILABILITY" means the difference between (a) the lesser of (i) the
Borrowing Base and (ii) the Total Revolving Credit Commitments and (b) the sum
of (i) the aggregate outstanding principal amount of all Revolving Loans and
(ii) all Letter of Credit Obligations.
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11 U.S.C. ss.
101, et seq.), as amended, and any successor statute.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors (or comparable managers or managing directors) of such Person or any
committee thereof duly authorized to act on behalf of the board and in the case
of a Loan Party that is a limited liability company, the manager or board of
managers of such Loan Party.
"BORROWERS" has the meaning set forth in the preamble hereto.
4
"BORROWING BASE" means, at any time, the amount equal to (a) the lesser of
(i) eighty-five (85%) percent of the value of the Net Amount of Eligible
Accounts at such time minus any Reserves or (ii) the Total Revolving Loan
Commitments; PROVIDED, that, to the extent that any Reserves are in respect of
amounts that may be payable to third parties, Agent may, at its option, deduct
such Reserves from the Total Revolving Loan Commitments, at any time that such
amount is less than the amount of the Borrowing Base.
"BORROWING BASE CERTIFICATE" means a certificate signed by an Authorized
Officer of Administrative Borrower and setting forth the calculation of the
Borrowing Base in compliance with Section 6.01(a)(iv), substantially in the form
of Exhibit F.
"BSA" means the Bank Secrecy Act (31 U.S.C. Section 5311 et. seq.), and
its implementing regulations, Title 31 Part 103 of the U.S. Code of Federal
Regulations.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close and
on which dealings in Dollars may be carried on in the interbank eurodollar
markets in New York City and London.
"CAPITAL EXPENDITURES" means, with respect to any Person for any period,
the aggregate of all expenditures by such Person and its Subsidiaries during
such period that in accordance with GAAP are or should be included in "property,
plant and equipment" or in a similar fixed asset account on its balance sheet,
whether such expenditures are paid in cash or financed and including all
Capitalized Lease Obligations paid or payable during such period. Nothing in
this definition shall be construed to include expenditures by Parent and its
Subsidiaries for the Acquisitions and Permitted Acquisitions, including, without
limitation, any earn-outs, deferred purchase price payments or Special Incentive
Bonuses payable pursuant thereto.
"CAPITAL GUIDELINE" means any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) of any central bank or Governmental
Authority (a) regarding capital adequacy, capital ratios, capital requirements,
the calculation of a bank's capital or similar matters, or (b) affecting the
amount of capital required to be obtained or maintained by any Lender, any
Person controlling any Lender, or Issuing Bank or the manner in which any
Lender, any Person controlling any Lender, or Issuing Bank allocates capital to
any of its contingent liabilities (including letters of credit), advances,
acceptances, commitments, assets or liabilities.
"CAPITAL STOCK" means (a) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (b) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"CAPITALIZED LEASE" means, with respect to any Person, any lease of real
or personal property by such Person as lessee which is (a) required under GAAP
to be capitalized on the balance sheet of such Person or (b) a transaction of a
type commonly known as a "synthetic lease" (i.e., a lease transaction that is
treated as an operating lease for accounting purposes but with respect to which
payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).
5
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"CASH DOMINION EVENT" means, in the case of an Operating Account, an Event
of Default and in the case of the Cash Management Accounts, the Concentration
Account or any deposit or investment account other than an Operating Account,
either (a) a Default or Event of Default or (b) the sum of Excess Availability
plus Qualified Cash is less than $3,000,000.
"CASH EQUIVALENTS" means (a) marketable direct obligations with a maturity
date of one hundred eighty (180) days or less either (i) issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof or (ii) issued or directly and fully guaranteed or
insured by such other government or any agency or instrumentality thereof in
each case as Agent may approve; PROVIDED, THAT, the full faith and credit of the
United States of America is pledged in support thereof in the case of direct
obligations of the type described in clause (i) above or such other government
in the case of direct obligations of the type described in clause (ii) of this
subsection (a); (b) time deposits and certificates of deposit or bankers'
acceptances with a maturity of one hundred eighty (180) days or less (after the
date of the purchase thereof) of any financial institution that is a member of
the Federal Reserve System, in any case having combined capital and surplus and
undivided profits of not less than $250,000,000 or such other financial
institution as Agent may approve; (c) repurchase obligations with a term of not
more than ninety (90) days for underlying securities of the types described in
clause (a) above entered into with any bank meeting the qualifications specified
in clause (b) above; (d) commercial paper (including variable rate demand notes)
with a maturity of one hundred eighty (180) days or less (after the date of the
purchase thereof) issued or guaranteed by a corporation (except an Affiliate of
Borrower or Guarantor) organized under the laws of any State of the United
States of America or the District of Columbia or a bank organized under the laws
of any State of the United States of America or the District of Columbia or
constituting a national banking association under the laws of the United States
of America, or the laws of such other jurisdictions as Agent may approve, in
each case having a rating of at least A1 by Standard & Poor's Ratings Service, a
division of The McGraw Hill Companies, Inc. or at least P1 by Xxxxx'x Investors
Service, Inc.; and (e) investments in money market funds and mutual funds which
invest substantially all of their assets in securities of the types described in
clauses (a) through (d) above, except that the maturity date of such securities
may be up to one (1) year, so long as such maturity date does not affect the
ability of the person with such investment to withdraw its investments from such
money market funds or mutual funds.
"CASH MANAGEMENT ACCOUNTS" means those bank accounts of each Loan Party
listed on Schedule 7.01, which bank accounts shall not be Operating Accounts.
"CASH MANAGEMENT BANK" has the meaning set forth in Section 7.01.
"CHANGE OF CONTROL" shall mean (a) the liquidation or dissolution of any
Borrower or Guarantor or the adoption of a plan by the stockholders of any
Borrower or Guarantor relating to the dissolution or liquidation of such
Borrower or Guarantor; (b) the acquisition by any Person or
6
group (as such term is used in Section 13(d)(3) of the Exchange Act) of
beneficial ownership, directly or indirectly, of fifty (50%) percent or more of
the voting power of the total outstanding voting stock of Parent, except as
otherwise consented to in writing by Agent and Lenders; (c) during any period of
two (2) years, individuals who at the beginning of such period constituted the
Board of Directors of Parent (together with any new directors whose nomination
for election was approved by a vote of at least a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of Parent then
still in office; or (d) the failure of Parent to own, directly or indirectly,
one hundred (100%) percent of the voting power of the total outstanding voting
stock of each of Borrowers and the other Guarantors other than (1) pursuant to a
transfer of such outstanding voting stock to any Borrower or Guarantor permitted
hereunder, (2) pursuant to a sale of the voting stock of any Borrower or
Guarantor consented to by Agent, and (3) in the case of a Subsidiary acquired
after the date hereof pursuant to a Permitted Acquisition where less than one
hundred (100%) percent of the voting power of the total outstanding voting stock
of such Subsidiary is acquired.
"CLOSING FEE" has the meaning set forth in Section 2.06(a).
"COLLATERAL" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Obligations.
"COLLATERAL ACCESS AGREEMENT" means an agreement in writing, in form and
substance satisfactory to Agent, from any lessor of premises to any Loan Party,
or any other person to whom any Collateral is consigned or who has custody,
control or possession of any such Collateral or is otherwise the owner or
operator of any premises on which any of such Collateral is located, in favor of
Agent with respect to the Collateral at such premises or otherwise in the
custody, control or possession of such lessor, consignee or other person.
"COLLECTIONS" means all cash, checks, notes, instruments and other items
of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds and tax refunds) of Loan Parties.
"COMMITMENTS" means, with respect to each Lender, such Lender's Revolving
Credit Commitments and Term Loan Commitments.
"CONCENTRATION ACCOUNT" means the account identified on Schedule 7.01 as
the concentration account of Loan Parties maintained at the Concentration
Account Bank into which cash received from the Cash Management Banks is wired
pursuant to Section 7.01.
"CONCENTRATION ACCOUNT BANK" means the depository bank at which the
Concentration Account is maintained as set forth on Schedule 7.01 hereto, or
such other Person or Persons as Administrative Borrower (with the prior written
consent of Agent) may designate from time to time.
"CONSOLIDATED EBITDA" means, with respect to any Person for any period,
(a) the Consolidated Net Income of such Person and its Subsidiaries for such
period, plus (b) without duplication, the sum of all or a portion of the
following amounts of such Person and its
7
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, in each case to the extent deducted in determining Consolidated Net
Income of such Person for such period: (a) Consolidated Net Interest Expense,
(b) income tax expense paid or accrued by such Person and its Subsidiaries, (c)
depreciation expense, (d) amortization expense, and (e) cash payments to each of
Xxxxxx Xxx and Xxxxxx Xx pursuant to the TUG China Bonus Agreement by and among
Sea Master Hong Kong, Xxxxxx Xxx and Xxxxxx Xx not to exceed an aggregate amount
of $500,000 in any Fiscal Year.
"CONSOLIDATED INDEBTEDNESS" means, with respect to any Person at any date,
all Indebtedness of such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, and, in any event, with respect to
the Parent and its Subsidiaries, shall include, but not be limited to, (a) the
Indebtedness of Parent evidenced by or arising under the Senior Convertible
Notes, (b) the Obligations, (c) any obligations arising in connection with any
factoring arrangements or other arrangements involving the sale of receivables,
and (d) all Indebtedness arising in connection with any letters of credit,
banker's acceptances, bank guarantees or similar facilities; PROVIDED, THAT, the
term "Consolidated Indebtedness" shall include (i) Contingent Obligations
specified in clauses (c) and (d) of this definition and (ii) other Contingent
Obligations to the extent such other Contingent Obligations are required to be
included on the balance sheet of such Person in accordance with GAAP
consistently applied.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the net income (loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis and in accordance with GAAP, but
excluding from the determination of Consolidated Net Income (without
duplication) (a) any extraordinary or non-recurring (i) gains or (ii) non-cash
losses (and including in any event any non-cash losses from Asset Sales), (b)
non-cash restructuring charges, (c) non-cash write-offs of goodwill and other
intangible assets during such period which are required under Statement 142
issued by the Financial Accounting Standards Board and non-cash write-offs of
equipment during such period which are required under Statement 144 issued by
the Financial Accounting Standards Board, (d) non-cash gains or non-cash losses
due to foreign currency translation adjustments during such period which are
required under Statement 52 of the Financial Accounting Standards Board, (e) the
effect of any change in accounting principles adopted by (or applicable to) such
Person or its Subsidiaries after the date hereof (including any cumulative
effects resulting from changes in purchase accounting principles, except as
reflected in adjustments pursuant to clause (b) of the definition of the term
"GAAP" but only to the extent that the amendment referred to therein has been
executed and delivered by the parties hereto); and (f) the net income (if
positive) of any majority-owned Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such majority-owned Subsidiary
to such Person or to any other majority-owned Subsidiary of such Person is not
at the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such majority-owned Subsidiary. For the purpose of this
definition, net income excludes any gain (or non-cash loss) together with any
related Provision for Taxes for such gain (or non-cash loss) realized upon the
sale or other disposition of any assets that are not sold in the ordinary course
of business (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or of any Capital Stock of such Person or a Subsidiary
of such Person. As to Parent or any of its Subsidiaries for purposes of this
definition, in no event shall Asset Sales
8
be deemed to be sales or other dispositions in the ordinary course of business
and no proceeds from Asset Sales shall be included in the Consolidated Net
Income of such person.
"CONSOLIDATED NET INTEREST EXPENSE" means, for any period, as to any
Person, as determined in accordance with GAAP, the amount equal to: (a) total
interest expense of such Person and its Subsidiaries on a consolidated basis for
such period, whether paid or accrued (including the interest component of any
Capitalized Lease for such period), and in any event, including, without
limitation, (i) all bank fees, commissions, discounts and other fees and charges
owed with respect to letters of credit or any factoring or similar arrangements,
(ii) interest payable by addition to principal or in the form of property other
than cash and any other interest expense not payable in cash, (iii) the costs or
fees for such period associated with Hedging Agreements (to the extent not
otherwise included in such total interest expense) and (iv) the non-cash
component of the expense arising from the valuation of the Senior Convertible
Notes and warrants issued pursuant to the Noteholder Documents and the PIPE
Documents constituting "embedded derivatives", MINUS (b) the sum of (i) any net
payments received by such Person and its Subsidiaries on a consolidated basis
during such period as interest income received in respect of its investments in
cash, and (ii) gains for such period on Hedging Agreements (to the extent not
included in interest income above and excluding any non-cash gains), PLUS (c)
losses for such period on Hedging Agreements (to the extent not deducted in the
calculation of such total interest expenses and excluding any non-cash losses).
"CONTINGENT OBLIGATION" means, with respect to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (c) any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
PROVIDED, THAT, the term "Contingent Obligation" shall not include any product
warranties extended in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
9
"CONTROL AGREEMENT" means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by the applicable Loan Party,
Agent, and the applicable depository institution, financial institution or
intermediary with respect to a deposit account or investment account.
"CURRENT VALUE" shall have the meaning set forth in Section 6.01(n)(ii)
hereof.
"DEBT ISSUANCE" means any issuance or sale by Parent or any of its
Subsidiaries after the Effective Date of any debt securities or other
Indebtedness of the type specified in clause (a) or clause (c) of the definition
of such term; PROVIDED, that, the term "Debt Issuance" as used herein shall not
include the issuance of any Permitted Indebtedness.
"DEFAULT" means an event which, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall have the meaning set forth in Section 2.02(e)
hereof.
"DOLLAR", "DOLLARS" and the symbol "$" each means lawful money of the
United States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary duly organized and validly
existing under the laws of the United States of America and with it chief
executive office and substantially all of its assets and business located in the
United States of America.
"EARLY TERMINATION FEE" shall have the meaning set forth in Section
2.06(f) hereof.
"EFFECTIVE DATE" means the date, on or before November 10, 2006, on which
all of the conditions precedent set forth in Section 4.01 are satisfied or
waived and the initial Loans are made.
"ELIGIBLE ACCOUNTS" means the Accounts of a Borrower which are, and at all
times continue to be, acceptable to Agent in good faith based on the criteria
set forth below. In general, an Account may, in the good faith credit judgment
of Agent, be deemed to be eligible if: such Accounts arise from the actual and
bona fide sale and delivery of goods by a Borrower or rendition of services by a
Borrower in the ordinary course of its business which transactions are completed
in accordance with the terms and provisions contained in any documents related
thereto;
(a) such Accounts are not unpaid more than sixty (60) days after the
original due date for such Accounts and, in any event, are not unpaid more than
the ninety (90) days after the date of the original invoice for them;
(b) such Accounts comply with the terms and conditions contained in
Section 7.05 of this Agreement;
(c) such Accounts do not arise from sales on consignment, guaranteed sale,
sale and return, sale on approval, or other terms under which payment by the
account debtor may be conditional or contingent;
10
(d) the chief executive office of the account debtor with respect to such
Accounts is located in the United States of America or Canada (PROVIDED, THAT,
at any time promptly upon Agent's request, Borrowers shall execute and deliver,
or cause to be executed and delivered, such other agreements, documents and
instruments as may be required by Agent to perfect the security interests of
Agent and Lenders in those Accounts of an account debtor with its chief
executive office or principal place of business in Canada in accordance with the
applicable laws of the Province of Canada in which such chief executive office
or principal place of business is located and take or cause to be taken such
other and further actions as Agent may request to enable Agent or any Lender as
secured party with respect thereto to collect such Accounts under the applicable
Federal or Provincial laws of Canada) or, at Agent's option, if the chief
executive office and principal place of business of the account debtor with
respect to such Accounts is located other than in the United States of America
or Canada, then if either (i) the account debtor has delivered to the applicable
Borrower an irrevocable letter of credit issued or confirmed by a bank
satisfactory to Agent and payable only in the United States of America and in
U.S. dollars, sufficient to cover such Account, in form and substance
satisfactory to Agent and if required by Agent, the original of such letter of
credit has been delivered to Agent or Agent's agent and such Borrower has
complied with the terms of the Security Agreement with respect to the assignment
of the proceeds of such letter of credit to Agent or naming Agent as transferee
beneficiary thereunder, as Agent may specify, or (ii) such Account is otherwise
acceptable in all respects to Agent (subject to such lending formula with
respect thereto as Agent may determine);
(e) such Accounts do not consist of progress xxxxxxxx (such that the
obligation of the account debtors with respect to such Accounts is conditioned
upon a Borrower's satisfactory completion of any further performance under the
agreement giving rise thereto), xxxx and hold invoices or retainage invoices,
except as to xxxx and hold invoices, if Agent shall have received an agreement
in writing from the account debtor, in form and substance satisfactory to Agent,
confirming the unconditional obligation of the account debtor to take the goods
related thereto and pay such invoice;
(f) the account debtor with respect to such Accounts has not asserted a
counterclaim, defense or dispute and does not have, and does not engage in
transactions which may give rise to any right of setoff or recoupment against
such Accounts (but the portion of the Accounts of such account debtor in excess
of the amount at any time and from time to time owed by a Borrower to such
account debtor or claimed owed by such account debtor may be deemed Eligible
Accounts);
(g) there are no facts, events or occurrences which would impair the
validity, enforceability or collectability of such Accounts or reduce the amount
payable or delay payment thereunder;
(h) such Accounts are subject to the first priority, valid and perfected
security interest of Agent for the benefit of Lenders and any goods giving rise
thereto are not, and were not at the time of the sale thereof, subject to any
liens except those permitted in this Agreement;
(i) neither the account debtor nor any officer or employee of the account
debtor with respect to such Accounts is an officer, employee, agent or other
Affiliate of Borrowers;
11
(j) the account debtors with respect to such Accounts are not any foreign
government, the United States of America, any State, political subdivision,
department, agency or instrumentality thereof, unless, if the account debtor is
the United States of America, any State, political subdivision, department,
agency or instrumentality thereof, upon Agent's request, the Federal Assignment
of Claims Act of 1940, as amended or any similar State or local law, if
applicable, has been complied with in a manner satisfactory to Agent;
(k) there are no proceedings or actions which are threatened or pending
against the account debtors with respect to such Accounts which might result in
any material adverse change in any such account debtor's financial condition;
(l) such Accounts are not evidenced by or arising under any instrument or
chattel paper unless Agent has a first priority, valid and perfected security
interest in such instrument or chattel paper;
(m) such Accounts of a single account debtor or its affiliates do not
constitute more than twenty (20%) percent of all otherwise Eligible Accounts
(but the portion of the Accounts not in excess of such percentage may be deemed
Eligible Accounts);
(n) such Accounts are not owed by an account debtor who has Accounts
unpaid more than sixty (60) days after the original due date thereof and, in any
event, unpaid more than ninety (90) days after the original invoice date for
them which constitute more than fifty (50%) percent of the total Accounts of
such account debtor;
(o) the account debtor is not located in a State requiring the filing of a
Notice of Business Activities Report or similar report in order to permit the
applicable Borrower to seek judicial enforcement in such State of payment of
such Account, unless such Borrower has qualified to do business in such State or
has filed a Notice of Business Activities Report or equivalent report for the
then current year or such failure to file and inability to seek judicial
enforcement is capable of being remedied without any material delay or material
cost;
(p) such Accounts are owed by account debtors whose total indebtedness to
Borrowers does not exceed the credit limit with respect to such account debtors
as determined by Borrowers from time to time and as is reasonably acceptable to
Agent (but the portion of the Accounts not in excess of such credit limit may be
deemed Eligible Accounts); and
(q) such Accounts are owed by account debtors deemed creditworthy at all
times by Agent in good faith.
The criteria for Eligible Accounts set forth above may only be changed and any
new criteria for Eligible Accounts may only be established by Agent in good
faith upon prior notice to Administrative Borrower (PROVIDED, THAT, no such
notice shall be necessary when a Default or an Event of Default has occurred and
is continuing). Any Accounts which are not Eligible Accounts shall nevertheless
be part of the Collateral.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws
of the United States, or any State thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for
12
Economic Cooperation and Development or a political subdivision of any such
country and which has total assets in excess of $250,000,000; PROVIDED, THAT,
such bank is acting through a branch or agency located in the United States, (c)
a finance company, insurance company, or other financial institution or fund
that is engaged in making, purchasing, or otherwise investing in commercial
loans in the ordinary course of its business and having (together with its
Affiliates) total assets in excess of $250,000,000, (d) any Affiliate (other
than individuals) of a Lender, (e) so long as no Event of Default has occurred
and is continuing, any other Person approved by Agent and Administrative
Borrower (which approval of Administrative Borrower shall not be unreasonably
withheld, delayed, or conditioned), and (f) during the continuation of an Event
of Default, any other Person approved by Agent.
"EMPLOYEE BENEFIT PLAN" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Person or
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (a) from any assets, properties or businesses owned or
operated by any Loan Party or any of its Subsidiaries or any predecessor in
interest; (b) onto any facilities which received Hazardous Materials generated
by any Loan Party or any of its Subsidiaries or any predecessor in interest.
"ENVIRONMENTAL LAWS" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. ss. 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901, et seq.), the Federal Clean
Water Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.) and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future applicable Federal, State, local or foreign statute, ordinance, rule,
regulation, order, judgment, decree, permit, license or other binding
determination of any Governmental Authority imposing liability or establishing
standards of conduct for protection of the environment or human health or other
government restrictions relating to the protection of the environment or human
health or the Release, deposit or migration of any Hazardous Materials into the
environment.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or
a Release of Hazardous Materials from or onto (a) any property presently or
formerly owned by any Loan Party or any of its Subsidiaries or (b) any facility
which received Hazardous Materials generated by any Loan Party or any of its
Subsidiaries.
13
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental Authority
for Environmental Liabilities and Costs.
"EQUIPMENT" means all of Loan Parties' now owned and hereafter acquired
equipment, wherever located, including machinery, data processing and computer
equipment and computer hardware and software (whether owned or licensed, and
including embedded software), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.
"EQUITY ISSUANCE" means (a) any issuance or sale by Parent or any of its
Subsidiaries on or after the Effective Date of (i) any of such person's Capital
Stock, including, without limitation, as to Parent and MLI, any Capital Stock
issued under the PIPE Documents and the Noteholder Documents (including, without
limitation, any Capital Stock issued upon the exercise of any warrants or
options referred to in clause (ii)), (ii) any warrants or options exercisable in
respect of such person's Capital Stock (other than any Capital Stock, warrants
or options issued to directors, officers or employees of Parent or its
Subsidiaries pursuant to employee benefit plans, equity compensation plan,
restricted stock plan, employee stock ownership plan and/or employment agreement
established in the ordinary course of business and any Capital Stock issued upon
the exercise of such warrants or options) or (iii) any other security or
instrument representing a membership or other equity interest (or the right to
obtain a membership or other equity interest) in such person or (b) the receipt
by Parent or any of its Subsidiaries of any capital contribution (whether or not
evidenced by an membership interest or other equity security issued by such
person upon such contribution).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA AFFILIATE" means (a) any Person subject to ERISA whose employees
are treated as employed by the same employer as the employees of Parent or any
of its Subsidiaries under Internal Revenue Code Section 414(b), (b) any trade or
business subject to ERISA whose employees are treated as employed by the same
employer as the employees of Parent or any of its Subsidiaries under Internal
Revenue Code Section 414(c), (c) solely for purposes of Section 302 of ERISA and
Section 412 of the Internal Revenue Code, any organization subject to ERISA that
is a member of an affiliated service group of which Parent or any of its
Subsidiaries is a member under Internal Revenue Code Section 414(m), or (d)
solely for purposes of Section 302 of ERISA and Section 412 of the Internal
Revenue Code, any Person subject to ERISA that is a party to an arrangement with
Parent or any of its Subsidiaries and whose employees are aggregated with the
employees of Parent or any of its Subsidiaries under Internal Revenue Code
Section 414(o).
"EVENT OF DEFAULT" means any of the events set forth in Section 8.01.
"EXCESS AVAILABILITY" means, at any time, the amount equal to: (a) the
lesser of (i) the Borrowing Base or (ii) the amount of the Total Revolving
Credit Commitments (in each case as
14
to clause (i) and (ii), after taking into account applicable Reserves other than
Reserves to reflect outstanding Letter of Credit Obligations), minus (b) the sum
of (i) the then outstanding principal amount of the Revolving Loans, (ii) all
Letter of Credit Obligations, plus (iii) the aggregate amount of all then
outstanding and unpaid trade payables and other obligations of Borrowers which
are outstanding more than sixty (60) days past due as of the end of the
immediately preceding month or at Agent's option, as of a more recent date based
on such reports as Agent may from time to time specify (other than trade
payables or other obligations being contested or disputed by Borrowers in good
faith).
"EXCESS CASH FLOW" means, with respect to any Person for any period, (a)
Consolidated EBITDA of such Person and its Subsidiaries for such period, less
(b) the sum of (i) all scheduled cash principal payments and all cash principal
prepayments on the Loans made during such period (but, in the case of the
Revolving Loans, only to the extent that the Total Revolving Credit Commitments
are permanently reduced by the amount of such payments), and all scheduled cash
principal payments on other Indebtedness of such Person or any of its
Subsidiaries during such period to the extent such other Indebtedness is
permitted to be incurred, and such payments are permitted to be made, under this
Agreement, (ii) the cash portion of Capital Expenditures made by such Person and
its Subsidiaries during such period to the extent permitted to be made under
this Agreement, (iii) Consolidated Net Interest Expense for such period, (iv)
income taxes paid or accrued by such Person and its Subsidiaries for such
period, (v) earn-outs, incentive bonuses and the deferred payments of
consideration for the Acquisitions and Permitted Acquisitions paid during such
period and (vi) any Closing Fee, Loan Servicing Fee, Unused Line Fee, Letter of
Credit Fee and Prepayment Fee paid during such period.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING LENDERS" means, collectively, (a) lenders party to the Loan and
Security Agreement, dated as of April 1, 2005, among such lenders, FMI
International, Express and Trucking, as borrowers, FMI Holdco, FMLLC, FM, FMIW
and FMII, as guarantors, and GMAC Commercial Finance LLC, as agent, and (b)
holders of notes issued in connection with the Amended and Restated Note and
Equity Purchase Agreement, dated as of April 1, 2005, among FMI Holdco, FMLLC,
FMI International, FM, Express, Trucking, FMIW, FMII and ACAS.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received from three Federal funds
brokers of recognized standing selected by it.
"FINAL MATURITY DATE" means November 3, 2011, or such earlier date on
which any Loan shall become due and payable in accordance with the terms of this
Agreement and the other Loan Documents.
"FINANCIAL STATEMENTS" means (a) the audited consolidated balance sheets
of FMI Holdco and its Subsidiaries as of December 31, 2004 and the related
statements of operations, cash flows
15
and stockholders' equity, (b) the audited consolidated balance sheets of FMI
Holdco and its Subsidiaries as of December 31, 2005 and the related statements
of operations, cash flows and stockholders' equity, (c) the audited consolidated
balance sheets of TUG Logistics Inc. and its domestic subsidiaries as of
December 31, 2005 and the related statements of operations, cash flows and
stockholders' equity, and (d) the pro forma consolidated balance sheet of Parent
and its Subsidiaries as of the Effective Date.
"FISCAL YEAR" means the fiscal year of the Parent and its Subsidiaries
ending on or about December 31 of each year.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of (a) Consolidated EBITDA of such Person and its Subsidiaries
for such period, to (b) the sum of (i) all principal of Indebtedness of such
Person and its Subsidiaries scheduled to be paid or prepaid during such period
without duplication, plus (ii) Consolidated Net Interest Expense of such Person
and its Subsidiaries for such period (provided, that, for purposes Section
6.03(c) hereof, Consolidated Net Interest Expense shall not include the non-cash
component of the expense arising from the valuation of the Senior Convertible
Notes and warrants issued pursuant to the Noteholder Documents and the PIPE
Documents constituting "embedded derivatives") , plus (iii) income taxes paid or
payable by such Person and its Subsidiaries during such period plus (iv) cash
dividends or distributions paid by such Person and its Subsidiaries (other than,
in the case of any Loan Party, dividends or distributions paid by such Loan
Party to any other Loan Party) during such period, plus (v) Capital Expenditures
made by such Person and its Subsidiaries during such period to the extent not
(A) financed by any Permitted Indebtedness or (B) funded with the proceeds of
any Equity Issuance permitted hereunder that does not give rise to a mandatory
prepayment under Section 3.03 hereof.
"FMI ACQUISITION DOCUMENTS" means, collectively, the Equity Purchase
Agreement, dated as of October 23, 2006 among MLI, FMI Holdco and each of the
parties set forth in Schedule A thereto and all other agreements of transfer as
are referred to therein and all side letters with respect thereto, and all
agreements, documents and instruments executed and/or delivered in connection
therewith.
"FMI BLOCKER" means FMI Blocker, Inc., a Colorado corporation.
"FMI HOLDCO" means FMI Holdco I, LLC, a Delaware limited liability
company.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States of America, applied on a consistent basis;
PROVIDED, THAT, (a) for the purpose of Section 6.03 or Section 6.02(h) hereof
and the definitions used therein, "GAAP" shall mean generally accepted
accounting principles in effect on the date hereof and (b) if there occurs after
the date of this Agreement any change in GAAP that affects in any respect the
calculation of any covenant contained in Section 6.03 or Section 6.02(h) hereof,
Agent and Administrative Borrower shall negotiate in good faith amendments to
the provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of Lenders and Borrowers
after such change in GAAP conform as nearly as possible to their respective
positions as of the date of this Agreement and, until any such amendments have
been
16
agreed upon, the covenants in Section 6.03 or Section 6.02(h) hereof shall be
calculated as if no such change in GAAP has occurred.
"GOVERNMENTAL AUTHORITY" means any nation or government, any foreign,
Federal, State, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"GUARANTEED OBLIGATIONS" has the meaning set forth in Section 10.01.
"GUARANTORS" has the meaning set forth in the preamble hereto.
"GUARANTY" means (a) the guaranty of each Guarantor party hereto contained
in Article X hereof, and (b) each guaranty made by any Guarantor in favor of
Agent for the benefit of Agent and Lenders pursuant to Section 6.01(b) or
otherwise.
"HAZARDOUS MATERIAL" means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste or special waste; (b) any element, compound, chemical
or solid waste that is likely to cause immediately, or at some future time, harm
to or have an adverse effect on, the environment or risk to human health or
safety, including, without limitation, any pollutant, contaminant, waste or
hazardous waste, toxic substance or dangerous good which is defined or
identified in any Environmental Law and which is present in the environment in
such quantity or state that it contravenes any Environmental Law; (c) petroleum
and its refined products; (d) polychlorinated biphenyls; (e) any substance
exhibiting a hazardous waste characteristic, including, without limitation,
corrosivity, ignitability, toxicity or reactivity as well as any radioactive or
explosive materials; and (f) any raw materials, building components (including,
without limitation, asbestos-containing materials) and manufactured products
containing hazardous substances listed or classified as such under any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate, foreign currency, commodity
or equity swap, collar, cap, floor or forward rate agreement, or other agreement
or arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including, without limitation, any option
with respect to any of the foregoing and any combination of the foregoing
agreements or arrangements), and any confirmation executed in connection with
any such agreement or arrangement.
"HIGHEST LAWFUL RATE" means, with respect to Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to Agent or such Lender which are currently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum non-usurious interest
rate than applicable laws now allow.
"INDEBTEDNESS" means, with respect to any Person, without duplication, (a)
all indebtedness of such Person for borrowed money; (b) all obligations of such
Person for the
17
deferred purchase price of property or services (provided, that, neither trade
payables or other accounts payable incurred in the ordinary course of such
Person's business and not outstanding for more than ninety (90) days after the
date such payable was due under its original terms nor such trade payables if
outstanding longer that are being contested or disputed by such Person in good
faith in the ordinary course of business shall be deemed to constitute
Indebtedness) and including any earn-outs or similar arrangements in connection
with any acquisition of businesses by such Person, whether contingent or
otherwise subject to any conditions or limitations; (c) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments or
upon which interest payments are customarily made; (d) all reimbursement,
payment or other obligations and liabilities of such Person created or arising
under any conditional sales or other title retention agreement with respect to
property used and/or acquired by such Person, even though the rights and
remedies of the lessor, seller and/or lender thereunder may be limited to
repossession or sale of such property and all obligations and liabilities
arising in connection with factoring arrangements or other arrangements with
respect to the sale of receivables; (e) that portion of Capitalized Lease
Obligations of such Person that is (or is required to be) classified as a
liability on its balance sheet in conformity with GAAP; (f) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (g) all net obligations and
liabilities, calculated on a basis satisfactory to Agent and in accordance with
accepted practice, of such Person under Hedging Agreements; (h) all Contingent
Obligations; (i) liabilities incurred under Title IV of ERISA with respect to
any plan (other than a Multiemployer Plan) covered by Title IV of ERISA and
maintained for employees of such Person or any of its ERISA Affiliates; (j)
withdrawal liability incurred under ERISA by such Person or any of its ERISA
Affiliates with respect to any Multiemployer Plan; and (k) all obligations
referred to in clauses (a) through (j) of this definition of another Person
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness. The Indebtedness of any Person shall include the
Indebtedness of any partnership of or joint venture in which such Person is a
general partner or a joint venturer to the extent such Person is liable therefor
as a result of such Person's ownership interest in such entity, except to the
extent the terms of such Indebtedness expressly provide that such Person is not
liable therefor. Nothing in this definition shall be construed to include any
obligations under any employee benefit plan, equity compensation plan,
restricted stock plan, employee stock ownership plan, incentive bonus plan or
severance benefit plan in the ordinary course of business (excluding Special
Incentive Bonuses).
"INDEMNIFIED MATTERS" has the meaning set forth in Section 11.15(a).
"INDEMNITEES" has the meaning set forth in Section 11.15(a).
"INSOLVENCY PROCEEDING" means (a) any proceeding by or against any Person
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, administration, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors
(including, but not limited to, any case with respect to any such Person under
any provision of the Bankruptcy Code), or seeking the entry of an order for
relief or the appointment of a receiver, administrative receiver, administrator,
manager, examiner, trustee, custodian, liquidator,
18
sequestrator or other similar official for any such Person or for any
substantial part of its property under any provision of the Bankruptcy Code or
under any other Federal, State or other foreign bankruptcy, insolvency,
receivership, liquidation or similar law now or hereafter in effect, or (b) the
appointment of a receiver, administrative receiver, administrator, manager,
examiner, trustee, liquidator, custodian, sequestrator or similar official for
such Person or a substantial part of its assets shall occur under any Federal,
State or foreign bankruptcy, insolvency, receivership, liquidation or similar
law now or hereafter in effect.
"INTELLECTUAL PROPERTY" means , as to Parent or any of its Subsidiaries,
Parent or such Subsidiary's now owned and hereafter adopted, arising, acquired
or used and whether foreign or domestic:
(a) copyrights, whether registered or unregistered, including, without
limitation, all copyright rights throughout the universe (whether now or
hereafter arising) in any and all media (whether now or hereafter developed), in
and to all original works of authorship fixed in any tangible medium of
expression, acquired or used by Parent or such Subsidiary (including, without
limitation, all copyrights described in Schedule 5.21 and including all software
and computer software programs), all applications, registrations and recordings
thereof (including, without limitation, applications, registrations and
recordings in the United States Copyright Office or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof;
(b) patents, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques, processes,
proprietary information, technology, know-how, formulae, rights of publicity and
other general intangibles of like nature (including, without limitation, all
domestic and foreign letters patent, design patents, utility patents, industrial
designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described
in Schedule 5.21), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office, or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof;
(c) trademarks, service marks, collective marks, certification marks,
trade names, business names, d/b/a's, Internet domain names, domain name
registrations, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature (including, without
limitation, all domestic and foreign trademarks, service marks, collective
marks, certification marks, trade names, business names, d/b/a's, Internet
domain names, trade styles, designs, logos and other source or business
identifiers described in Schedule 5.21 hereto), all applications, registrations
and recordings thereof (including, without limitation, applications,
registrations and recordings in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State thereof or any
other country or any political subdivision thereof), and all reissues,
extensions or renewals thereof, together with all goodwill of the business
symbolized by such marks and all customer lists, formulae and other records of
Parent or such Subsidiary relating to the distribution of products and services
in connection with which any of such marks are used;
19
(d) all rights to xxx for past, present and future infringement of any of
the foregoing.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Subordination
Agreement, dated of even date herewith, among Agent (for itself and on behalf of
Lenders) and Noteholder Agent (for itself and on behalf of Noteholders).
"INTEREST PERIOD" means, with respect to any LIBOR Rate Loan, the period
commencing on the date of the borrowing or the date of continuation of such
LIBOR Rate Loan, as the case may be, and ending thirty (30), sixty (60) or
ninety (90) days thereafter; PROVIDED, THAT, (a) if any Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day), (b) no Interest Period for any LIBOR Rate Loan
shall extend beyond the Final Maturity Date, (c) any Interest Period with
respect to a Loan that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the relevant calendar month at the end of such Interest Period, and (d) no more
than five (5) Interest Periods in the aggregate for Borrowers may exist at any
time.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
"ISSUING BANK" means such bank as Agent may designate for such purpose and
that is reasonably acceptable to Administrative Borrower.
"LAW DEBENTURE" means Law Debenture Trust Company of New York, a limited
purpose trust company, chartered by the New York State Banking Department.
"LEASE" means any lease of Real Property to which any Loan Party or any of
its Subsidiaries is a party as lessor or lessee.
"LENDERS" has the meaning set forth in the preamble hereto.
"LETTER OF CREDIT APPLICATION" has the meaning set forth in Section
2.03(b).
"LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit, including a Letter of Credit Guaranty)
governing or providing for (a) the rights and obligations of the parties
concerned or at risk or (b) any collateral security for such obligations.
"LETTER OF CREDIT FEE" has the meaning set forth in Section 2.06(d).
"LETTER OF CREDIT GUARANTY" means one or more guarantors by Agent in favor
of Issuing Bank guaranteeing or relating to any Borrower's obligations to
Issuing Bank under a reimbursement agreement, Letter of Credit Application or
like document in respect of any Letter of Credit.
20
"LETTER OF CREDIT OBLIGATIONS" means, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time, plus
(b) the aggregate amount of all drawings under Letters of Credit for which
Issuing Bank has not at such time been reimbursed, plus (c) without duplication,
the aggregate amount of all payments made by each Lender to Issuing Bank with
respect to such Lender's participation in Letters of Credit as provided in
Section 2.03 for which Borrowers have not at such time reimbursed Lender,
whether by way of a Revolving Loan or otherwise.
"LETTERS OF CREDIT" means all letters of credit (whether documentary or
stand-by and whether for the purchase of inventory, equipment or otherwise)
issued by Issuing Bank for the account of a Borrower pursuant to this Agreement,
and all amendments, renewals, extensions or replacements thereof.
"LIBOR" means with respect to each Interest Period for any Loan, the
interest rate per annum equal to the arithmetic average of the rates of interest
per annum (rounded upwards, if necessary, to the next one-hundredth (1/100) of
one (1%) percent) at which the Reference Bank is offered deposits of United
States dollars in the London interbank market (or other LIBOR market selected by
a Borrower or Administrative Borrower on behalf of such Borrower and approved by
Agent) on or about 9:00 a.m. (New York time) two (2) Business Days prior to the
commencement of such Interest Period in amounts substantially equal to the
principal amount of the Loan requested by and available to such Borrower in
accordance with this Agreement, with a maturity of comparable duration to the
Interest Period selected by or on behalf of a Borrower.
"LIBOR RATE" means, with respect to each Interest Period for any Loan, the
rate per annum (rounded upwards, if necessary, to the next one-hundredth (1/100)
of one (1%) percent) determined by dividing (a) LIBOR for such Interest Period
by (b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For
purposes hereof, "Reserve Percentage" shall mean the reserve percentage,
expressed as a decimal, prescribed by any United States or foreign banking
authority for determining the reserve requirement which is or would be
applicable to deposits of United States dollars in a non-United States or an
international banking office of the Reference Bank used to fund a Loan or any
Loan made with the proceeds of such deposit, whether or not the Reference Bank
actually holds or has made any such deposits or loans. The LIBOR Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.
"LIBOR RATE LOAN" means any Loan or a portion thereof bearing interest
calculated based upon the LIBOR Rate.
"LICENSES" means all licenses, contracts or other agreements, whether
written or oral, naming Parent or any of its Subsidiaries as licensee or
licensor (including, without limitation, all Licenses set forth in Schedule 5.21
hereto) and providing for either:
(a) the grant of any right to use or sell any works covered by any
copyright or other Intellectual Property described in clause (a) of the
definition thereof;
(b) the grant of any right to manufacture, use or sell any invention
covered by any patent or other Intellectual Property described in clause (b) of
the definition thereof;
21
(c) the grant of any right concerning any trademark or other Intellectual
Property described in clause (c) of the definition thereof, together with any
goodwill connected with and symbolized by any such trademark licenses, contracts
or agreements and the right to prepare for sale or lease and sell or lease any
and all inventory now or hereafter owned by Parent or any of its Subsidiaries
and now or hereafter covered by such licenses.
"LIEN" means any mortgage, deed of trust, deed to secure debt or similar
instrument, pledge, lien (statutory or otherwise), security interest, charge,
attachment, assignment or other encumbrance or security or preferential
arrangement of any nature, including, without limitation, any conditional sale
or title retention arrangement, any Capitalized Lease and any assignment,
deposit arrangement or financing lease intended as, or having the effect of,
security.
"LOAN ACCOUNT" means the account maintained hereunder by Agent on its
books of account at its Payment Office, and with respect to Borrowers, in which
Borrowers will be charged with all Loans made to, and all other Obligations
incurred by, Borrowers.
"LOAN DOCUMENTS" means this Agreement, any Security Agreement, any Pledge
Agreement, any Mortgage, any Control Agreement, the UCC Filing Authorization
Letter, the Intercreditor Agreement, and any other agreement, instrument, and
other document executed and delivered by any Loan Party pursuant hereto or
thereto or otherwise evidencing or securing any Loan, any Letter of Credit
Obligation or any other Obligation.
"LOAN PARTIES" means Borrowers and Guarantors.
"LOAN SERVICING FEE" has the meaning set forth in Section 2.06(b).
"LOANS" means the Term Loans and Revolving Loans.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on any of (a)
the operations, business, assets, properties, condition (financial or otherwise)
or prospects of Loan Parties (taken as a whole), (b) the ability of any Loan
Party to perform any of its obligations under this Agreement or any other Loan
Document to which it is a party, (c) the legality, validity or enforceability of
this Agreement or any other Loan Document, (d) the rights and remedies of Agent
or any Lender under this Agreement or any other Loan Document, or (e) the
validity, perfection or priority of the Liens on the Collateral (taken as a
whole) in favor of Agent for the benefit of Agent and Lenders.
"MATERIAL CONTRACT" means (a) the Acquisition Documents, (b) each contract
listed on Schedule 5.22, (c) each contract or agreement to which any Loan Party
or any of its Subsidiaries is a party involving aggregate consideration payable
to or by such Person of $1,000,000 or more in any twelve month period and (d)
all other contracts or agreements material to the business, operations,
condition (financial or otherwise), performance, prospects or properties of Loan
Parties and their respective Subsidiaries (taken as a whole).
"MERGER" shall mean the merger of MLI Acquisition Corp., a Delaware
corporation, with and into MLI with MLI as the surviving corporation pursuant to
the terms of the Merger Agreements.
22
"MERGER AGREEMENTS" means, collectively, the Agreement and Plan of Merger,
dated of even date herewith, by and between MLI Acquisition Corp., a Delaware
corporation and MLI, the Certificate of Merger of MLI Acquisition Corp., a
Delaware corporation and MLI and all related agreements, documents and
instruments executed and/or delivered in connection therewith, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor thereto.
"MORTGAGE" means a mortgage, deed of trust or deed to secure debt, in
recordable form and otherwise substantially in a form acceptable to Agent, made
by the applicable Loan Party in favor of Agent for the benefit of Agent and
Lenders, securing the Obligations and delivered to Agent pursuant to Section
4.01(e), Section 6.01(b), Section 6.01(o) or otherwise.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any ERISA Affiliates has
contributed to, or has been obligated to contribute.
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means the gross amount of Eligible
Accounts less (a) sales, excise or similar taxes included in the amount thereof
and (b) returns, discounts, claims, credits and allowances of any nature at any
time issued, owing, granted, outstanding, available or claimed with respect
thereto.
"NET CASH PROCEEDS" means with respect to any Asset Sale, Equity Issuance,
Debt Issuance or Property Loss Event, the cash proceeds received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred consideration) by or on behalf of Parent or
any of its Subsidiaries in respect of such Asset Sale, Equity Issuance, Debt
Issuance or Property Loss Event, after deducting therefrom only:
(a) in the case of any Asset Sale, (i) the reasonable and customary
expenses incurred by Parent or such Subsidiary, as the case may be, directly
related to such sale, (ii) reasonable and customary brokerage costs, fees, or
commissions incurred by Parent or such Subsidiary directly related to such sale;
(iii) the amounts paid from such proceeds at the time of the sale thereof in
respect of any Indebtedness (other than the Obligations) secured by any Lien
permitted by Section 6.02(a) on the asset that is the subject of such Assets
Sale that has priority over the Lien of Agent on such asset in accordance with
applicable law, (iv) taxes paid (directly or indirectly) to any taxing
authorities by Parent or such Subsidiary, as the case may be, in connection
with, or directly attributable to, such sale at the time thereof or not later
than the end of the tax year immediately following the year during which the
sale occurs; PROVIDED, THAT, (A) as to any amounts that are deducted from the
proceeds of any Asset Sale based on taxes that are not required to be paid at
the time of the Asset Sale, Agent shall have received a certificate from an
Authorized Officer of Parent as to the calculation of the amount of the
deduction based on such taxes and the basis for the calculation, in reasonable
detail and otherwise in form and substance satisfactory to Agent and (B) in the
event that the amount of the taxes paid by Parent or such Subsidiary in the
immediately following tax year after such sale are less, or are less in respect
of taxes as a result of such sale, than the amount that was deducted from such
proceeds, then Borrowers shall pay to Agent on the date that the applicable
taxes are or would have been due
23
under applicable tax law, the amount by which the reduction in the proceeds from
the Asset Sale for such taxes as set forth in the certificate from an Authorized
Officer referred to above exceeds the amount of such taxes paid as so determined
and (v) a reasonable reserve for indemnification payments or purchase price
adjustments payable by Parent or such Subsidiary, as the case may be, to the
purchaser thereof under the terms of the sale arrangements up to an amount equal
to ten (10%) percent of the gross cash purchase price receivable by Parent or
such Subsidiary, as the case may be, at the time of the transfer of ownership of
the assets subject to such Asset Sale; PROVIDED, THAT, upon the release or
termination of such reserve, other than to the extent of the payment of such
indemnification payments or purchase price adjustments, the amount of such
reserve shall be deemed to constitute Net Cash Proceeds,
(b) in the case of any Equity Issuance or Debt Issuance, (i) reasonable
and customary expenses directly related to such Equity Issuance or Debt
Issuance, (ii) reasonable and customary underwriting or brokerage costs, fees
and commissions directly related to such Equity Issuance or Debt Issuance, and
(iii) taxes paid to any taxing authorities by Parent or such Subsidiary, as the
case may be, in connection therewith, and
(c) in the case of any Property Loss Event, (i) the amounts paid from such
proceeds at the time of the receipt of such proceeds in respect of any
Indebtedness (other than the Obligations) secured by any Lien permitted by
Section 6.02(a) on the asset that is the subject of such Property Loss Event
that has priority over the Lien of Agent on such asset in accordance with
applicable law, (ii) reasonable and customary expenses related to obtaining such
proceeds, and (iii) taxes paid to any taxing authorities by Parent or such
Subsidiary, as the case may be, in connection therewith.
In each case of clauses (a), (b) and (c) amounts shall only be so deducted
to the extent actually paid to a Person that is not an Affiliate of a Borrower
or Guarantor and to the extent properly attributable to such transaction or to
the asset that is the subject thereof.
"NET SENIOR INDEBTEDNESS" means with respect to any Person at any date,
the amount equal to: (a) the sum of (i) the Consolidated Indebtedness of such
Person plus (ii) the aggregate amount of all then outstanding and unpaid trade
payables and other obligations such Person which are outstanding more than
ninety (90) days past due under its original terms as of the end of the
immediately preceding month or at Agent's option, as of a more recent date based
on such reports as Agent may from time to time specify (other than trade
payables or other obligations being contested or disputed by such Person in good
faith) minus (b) in the case of Parent and its Subsidiaries, the sum of (i) cash
on the balance sheet of such Person as set forth in such Person's financial
statements in the form filed with the SEC for the fiscal quarter immediately
prior to such date plus (ii) the Subordinated Indebtedness of such Person plus
(iii) the Indebtedness evidenced by the Senior Convertible Notes.
"NON-US BORROWERS" means any Person that may be a Borrower after the date
hereof that is not organized under the laws of a jurisdiction in the United
States of America.
"NON-US PERSON" has the meaning set forth in Section 3.08(e).
24
"NOTEHOLDER AGENT" shall mean Law Debenture, in its capacity as collateral
agent pursuant to the applicable Noteholder Documents, and its successors and
assigns, including any replacement or successor trustee or agent or any
additional trustee or agent.
"NOTEHOLDER DOCUMENTS" means the Securities Purchase Agreement, the Senior
Convertible Notes, and all agreements, documents and instruments executed and/or
delivered in connection therewith, as all of the foregoing now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
"NOTEHOLDERS" means any person that at any time is the owner or holder,
directly or indirectly, of record or beneficially, of any of the Senior
Convertible Notes.
"NOTICE OF BORROWING" has the meaning set forth in Section 2.02.
"NOTICE OF CONVERSION/CONTINUATION" has the meaning set forth in Section
2.02.
"NOTICE OF EXCLUSIVE CONTROL" means a written notice from Agent to a Cash
Management Bank or any other depository bank or other financial institution that
has entered into a Control Agreement directing that such depository bank or
other financial institution is to comply exclusively with the instructions of
Agent with respect to funds or investments in the deposit account or investment
account of a Loan Party subject to such Control Agreement and to cease complying
with the instructions originated by such Loan Party with respect thereto.
"OBLIGATIONS" means all present and future indebtedness, obligations, and
liabilities of each Loan Party to Agent and Lenders, whether or not the right of
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured, unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any Insolvency Proceeding or other proceeding
referred to in Section 8.01 (including as to whether all or any portion thereof
is allowed or allowable in such Insolvency Proceeding or other proceeding),
which may arise under, out of, or in connection with, this Agreement, any other
Loan Document, Letters of Credit or any other document made, delivered or given
in connection herewith or therewith. Without limiting the generality of the
foregoing, the Obligations of each Loan Party under the Loan Documents include
(a) the obligation to pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by such
Person under the Loan Documents, and (b) the obligation of such Person to
reimburse any amount in respect of any of the foregoing that Agent or any Lender
(in its sole discretion) may elect to pay or advance on behalf of such Person.
"OPERATING ACCOUNT" means (a) a deposit account of any Loan Party used
exclusively for making payments and other disbursements by such Loan Party and
not for receiving any Collateral, Collections or proceeds thereof; provided,
that, funds may be transferred from the Concentration Account, a Cash Management
Account or the investment account in which Qualified Cash is held to an
Operating Account prior to a Cash Dominion Event and Agent sending a Notice of
Exclusive Control with respect thereto in accordance with Section 7.01, (b) a
deposit account specifically and exclusively used for xxxxx cash so long as the
aggregate balance of the funds on deposit in all of such xxxxx cash deposit
accounts shall not exceed $250,000 at any time and no Default or Event of
Default shall exist or have occurred and be continuing, and
25
(c) a deposit account specifically and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of a
Loan Party's salaried employees.
"PAID IN FULL" means that (a) the Commitments shall have been terminated,
(b) all principal of the Loans, interest thereon and all other Obligations shall
have been paid in full in immediately available funds (excluding contingent
indemnification obligations (other than contingent Obligations referred to in
clause (c) hereof) in respect of which no claim has been asserted and subject to
Section 11.14, in the event that any liabilities arise as provided therein), and
(c) Agent shall have received cash collateral (or at Agent's option, a letter of
credit issued for the account of Borrowers and at Borrowers' expense, in form
and substance satisfactory to Agent, by an issuer acceptable to Agent and
payable to Agent as beneficiary) in such amounts as Agent determines are
necessary to secure Agent and Lenders from loss, cost, damage or expense,
including attorneys' fees and expenses, in connection with any contingent
Obligations (other than solely contingent indemnification obligations that may
arise from events or circumstances of which Agent has no actual knowledge as of
such date), including checks or other payments provisionally credited to the
Obligations and/or as to which Agent or any Lender has not yet received final
and indefeasible payment; PROVIDED, THAT, (i) to the extent of any contingent
obligation of Borrowers or Guarantors to reimburse Agent or any Lender in
respect of any letter of credit issued by or arranged for by Agent or any Lender
the amount of such cash collateral (or letter of credit payable to Agent as
beneficiary, as the case may be), shall not exceed one hundred five (105%)
percent of the then undrawn amount of such letter of credit issued by or
arranged for by Agent or any Lender and (ii) to the extent that Agent or any
Lender may have any continuing obligation to indemnify or otherwise reimburse
any bank or other financial institution at which any deposit or other account is
or was maintained by or for the benefit of any Borrower or Guarantor under a
Control Agreement or otherwise, whether or not Agent has actual knowledge of any
basis for such indemnification by Agent or any Lender, Agent may require such
cash collateral as it determines in respect of the contingent obligation of such
Borrower or Guarantor to indemnify and reimburse Agent or such Lender in the
event Agent or any Lender is required to make any payment to the bank or other
financial institution, which cash collateral may be held until the earlier of
(A) such Borrower or Guarantor obtaining the release of Agent and Lenders from
any such obligation to the bank or other financial institution (in form and
substance satisfactory to Agent) or (B) such obligation of Agent or any Lender
to such bank or other financial institution terminating by its terms.
"PARENT" has the meaning set forth in the preamble hereto.
"PARTICIPANT REGISTER" has the meaning set forth in Section 11.07(g).
"PAYMENT OFFICE" means Agent's office located at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other office or offices of Agent
as Agent may designate in writing from time to time to Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PERMITTED ACQUISITION" means the purchase by a Borrower or Guarantor or
any other Subsidiary of Parent after the date hereof of all, or substantially
all, or a material portion of, the assets of any Person or a business or
division of such Person (whether pursuant to a merger or
26
other transaction) or of any or all of the Capital Stock of such Person (such
assets, Person or interest in such Person being referred to herein as the
"Acquired Business") and in one or a series of transactions, whether involving
cash or stock consideration, that satisfies each of the following conditions as
determined by Agent:
(a) Agent shall have received not less than ten (10) Business Days' prior
written notice of the proposed acquisition and such information with respect
thereto as Agent may request, including (i) the proposed date and amount of the
acquisition, (ii) a list and description of the assets or shares to be acquired,
(iii) the total purchase price for the assets to be purchased (and the terms of
payment of such purchase price), (iv) a summary of the due diligence undertaken
by Borrowers in connection with such acquisition, (v) appropriate financial
statements of the Acquired Business and (vi) an executed term sheet and/or
commitment letter (setting forth in reasonable detail the terms and conditions
of such acquisition) and, at the request of Agent, such other information and
documents that Agent may reasonably request, including executed counterparts of
the respective agreements, instruments or other documents pursuant to which such
acquisition is to be consummated (including any related management, non-compete,
employment, option or other material agreements), any schedules to such
agreements, instruments or other documents and all other material ancillary
agreements, instruments or other documents to be executed or delivered in
connection therewith,
(b) the Acquired Business shall comprise assets used in, or shall be an
operating company or a division of an operating company that engages in, a line
of business substantially similar, complimentary or related to the business that
Borrowers, Guarantors or their Subsidiaries are engaged in on date hereof,
(c) as of the date of any such acquisition and any payment in respect
thereof, and after giving effect thereto, the sum of the Excess Availability
plus the Qualified Cash shall have been not less than $3,000,000 for each of the
ten (10) consecutive Business Days prior to the date of such acquisition or
payment and shall be not less than $3,000,000 as of the date of such acquisition
or payment (and after giving effect thereto),
(d) the aggregate amount of all consideration paid for all Permitted
Acquisitions (including any earn-outs, deferred purchase price payments and
Special Incentive Bonuses to employees, officers, directors and/or sellers of
the Acquired Business in connection with such Permitted Acquisition, in each
case to the extent permitted hereunder and including the value of any Capital
Stock, warrants or other equity interests) shall not exceed $5,000,000,
(e) Agent shall have received: (i) the most recent annual and interim
financial statements with respect to the Acquired Business and related
statements of income and cash flows showing positive cash flows for the
immediately preceding fiscal year of such Acquired Business, (ii) detailed
forecasts of cash flows for the Acquired Business forecasting positive future
cash flows, (iii) detailed projections for Parent and its Subsidiaries through
the Maturity Date giving pro forma effect as of the last day of the fiscal month
most recently ended to such acquisition and all related transactions, based on
assumptions satisfactory to Agent and demonstrating pro forma compliance with
all financial covenants set forth in this Agreement, prepared in good faith an
in a manner and using such methodology as is consistent with the most
27
recent financial statements delivered to Agent pursuant to Section 6.01 and in
form and substance satisfactory to Agent,
(f) if Agent so elects, Agent shall have received an appraisal of such
assets of the Acquired Business as Agent may specify, in each case in form and
containing assumptions and appraisal methods satisfactory to Agent by an
appraiser acceptable to Agent, on which Agent and Lenders are expressly
permitted to rely,
(g) if Agent so elects, Agent shall have completed a field examination or
other business due diligence with respect to the business and assets of the
Acquired Business in accordance with Agent's customary procedures and practices
and as otherwise required by the nature and circumstances of the business of the
Acquired Business, the scope and results of which shall be satisfactory to
Agent,
(h) Agent shall have received all of the agreements and documents provided
for in Section 6.01(b) in connection with the Acquired Business,
(i) in the case of the acquisition of the Capital Stock of another Person,
the board of directors (or other comparable governing body) of such other Person
shall have duly approved such acquisition and such Person shall not have
announced that it will oppose such acquisition or shall not have commenced any
action which alleges that such acquisition will violate applicable law,
(j) Agent shall have received a certificate from the chief financial
officer of Administrative Borrower giving pro forma effect as of the last day of
the fiscal month most recently ended to such acquisition and all related
transactions, based on assumptions satisfactory to Agent and demonstrating pro
forma compliance with all financial covenants set forth in Section 6.03 hereof,
(k) no Default or Event of Default shall exist or have occurred as of the
date of such acquisition or the sale or issuance of any shares or any payment in
respect thereof and after giving effect to such acquisition and all related
transactions or the sale or issuance of any shares or any payment in connection
therewith, and
(l) Agent shall have received true, correct and complete copies of all
agreements, documents and instruments relating to such acquisition and the
related transactions, which documents shall be satisfactory to Agent.
"PERMITTED DISPOSITIONS" means any sale, issuance, assignment, transfer,
conveyance, lease or sublease, license or disposition to the extent permitted
under Section 6.02(c) and subject to the conditions specified therein.
"PERMITTED INDEBTEDNESS" means:
(a) all Obligations;
28
(b) Contingent Obligations of Parent or any of its Subsidiaries with
respect to any Indebtedness described in this definition of Permitted
Indebtedness which Parent or such Subsidiary is otherwise permitted to incur
hereunder;
(c) contingent Indebtedness of Parent or any of its Subsidiaries existing
on the date hereof pursuant to the earn-outs and deferred purchase price
payments under the Acquisition Documents in accordance with the terms thereof as
in effect on the date hereof, PROVIDED, THAT, Parent and its Subsidiaries shall
not make, or be required to make, any payments in respect of any of such
earn-outs or deferred purchase price payments, unless as of the date of any such
payment and after giving effect thereto, each of the conditions set forth in
Section 6.02(i)(vi) with respect thereto are satisfied;
(d) contingent Indebtedness of any Borrower, Guarantor or any of their
Subsidiaries arising after the date hereof pursuant to earn-outs, deferred
purchase price payments or other contingent consideration (including Capital
Stock or warrants) for Permitted Acquisitions; PROVIDED, THAT, in each case as
to any such contingent Indebtedness of any Borrower, Guarantor or any of their
Subsidiaries, (i) the sum of (A) the maximum aggregate amount of such earn-outs,
deferred purchase price payments and other contingent consideration for all
Permitted Acquisitions for which any Borrower, Guarantor or any of their
Subsidiaries shall have any liability (which for this purpose does not include
the earn-outs, deferred purchase price payments or contingent obligations under
the Acquisition Documents), plus (B) the aggregate amount of payments in respect
of Indebtedness for Special Incentive Bonuses to employees, officers and/or
directors of Parent or any Subsidiary and/or to sellers of the Acquired
Business, in each case, in connection with all Permitted Acquisitions, plus (C)
the aggregate amount payments of cash or other consideration paid in respect of
all Permitted Acquisitions (including Capital Stock or warrants), shall not
exceed in the aggregate for (A), (B) and (C), $5,000,000, (ii) such earn-outs,
deferred purchase price payments and other contingent consideration shall be
considered in the application of the limitation on the amount of consideration
that may be paid for a Permitted Acquisition under clause (d) of the definition
of the term Permitted Acquisition, (iii) Parent and its Subsidiaries shall not
make, or be required to make, any payments in respect of any of such earn-outs
or deferred purchase price payments, unless as of the date of any such payment
and after giving effect thereto, each of the conditions set forth in Section
6.02(i)(vi) with respect thereto are satisfied and (iv) such earn-outs and
deferred purchase price payments arising pursuant to Permitted Acquisitions
after the date hereof shall satisfy the requirements of, and shall be,
Subordinated Indebtedness (except for the right of payment which shall be
subordinated solely to the extent and in accordance with Section 6.02(i)(vi)),
except that Parent and its Subsidiaries shall not be required to cause to be
executed and delivered to Agent a subordination agreement in respect of such
Indebtedness so long as the payment thereof shall be expressly subject to the
limitations and conditions applicable thereto set forth in this Agreement as
acknowledged and agreed by the person to whom such amounts are owing on terms
and conditions satisfactory to Agent;
(e) any other Indebtedness of Parent or any Domestic Subsidiary listed on
Schedule 6.02(b) hereto;
(f) purchase money Indebtedness of Parent or any Subsidiary (including
purchase money Capitalized Leases and including all reimbursement, payment or
other obligations and
29
liabilities Parent or such Subsidiary created or arising under any conditional
sales or other title retention agreement with respect to property used and/or
acquired by Parent or such Subsidiary, even though the rights and remedies of
the lessor, seller and/or lender thereunder may be limited to repossession or
sale of such property) arising after the date hereof to the extent secured by
purchase money security interests in Equipment (including Capitalized Leases)
and purchase money mortgage, deed of trust, deed to secure debt or similar
instruments on Real Property; PROVIDED, THAT (i) the sum of (A) the aggregate
amount of such purchase money indebtedness incurred by Parent and its
Subsidiaries and (B) the aggregate amount of the Capital Expenditures made by
Parent and its Subsidiaries shall not exceed $5,000,000 in any Fiscal Year and
(ii) such purchase money Indebtedness of Parent and its Subsidiaries shall not
exceed $15,000,000 in the aggregate at any time outstanding (in each case
including both purchase money Indebtedness secured by Equipment and Real
Property) so long as such security interests and mortgage, deed of trust, deed
to secure debt or similar instruments do not apply to any property of Parent or
any Subsidiary other than the Equipment or Real Property so acquired and other
Equipment or Real Property financed by such lender to the extent that such
financing constitutes Permitted Indebtedness and is evidenced by an agreement
that includes customary provisions requiring cross-collateralization thereof,
and the Indebtedness secured thereby does not exceed the cost of the Equipment
or Real Property so acquired and the cost of other Equipment or Real Property
financed by such lender to the extent that such financing constitutes Permitted
Indebtedness and is evidenced by an agreement that includes customary provisions
requiring cross-collateralization thereof, as the case may be;
(g) Indebtedness of Parent or any Subsidiary arising pursuant to loans or
advances by a Borrower or Guarantor to Parent or such Subsidiary permitted under
Sections 6.02(f) and 6.02(k);
(h) Indebtedness of Parent or any Domestic Subsidiary evidenced by the
Senior Convertible Notes;
(i) contingent Indebtedness existing on the date hereof in the form of
Special Incentive Bonuses to employees, directors and/or officers of Parent or
any Subsidiary and/or to sellers of assets or Capital Stock, in each case, under
the Acquisition Documents consisting of the TUG New York Bonus Agreement, the
TUG Miami and Los Angeles Bonus Agreement and the TUG China Bonus Agreement,
each as in effect on the date hereof; PROVIDED, THAT, Parent and its
Subsidiaries shall not make, or be required to make, any payments in respect of
such Indebtedness to employees, directors and/or officers of Parent or any
Subsidiary or to sellers of assets or Capital Stock, in each case, under the
Acquisition Documents unless as of the date of any such payment and after giving
effect thereto, each of the conditions set forth in Section 6.02(i)(vii) with
respect thereto are satisfied (except that TUG USA may be required to make the
incentive bonus payments to certain New York employees, directors and/or
officers and/or to sellers of assets or Capital Stock, in each case, as set
forth in the TUG New York Bonus Agreement and to certain other employees,
directors and/or officers and/or to sellers of assets or Capital Stock, in each
case, as set forth in the TUG Miami and Los Angeles Bonus Agreement and the TUG
China Bonus Agreement, in each case as such agreements are in effect on the date
hereof or as the same may be amended after the date hereof with the consent of
Agent);
30
(j) contingent Indebtedness in the form of Special Incentive Bonuses to
employees, directors and/or officers of Parent or any Subsidiary and/or sellers
of the Acquired Business, in each case, in connection with all Permitted
Acquisitions pursuant to agreements arising after the date hereof; PROVIDED,
THAT, (i) the sum of (A) the aggregate amount of payments in respect of
Indebtedness for such Special Incentive Bonuses to employees, directors and/or
officers of Parent or any Subsidiary and/or sellers of the Acquired Business, in
each case, in connection with all Permitted Acquisitions, plus (B) the maximum
aggregate amount of earn-outs and deferred purchase price payments for all
Permitted Acquisitions for which any Borrower, Guarantor or any of their
Subsidiaries shall have any liability, plus (C) the aggregate amount payments of
cash or other consideration paid in respect of all Permitted Acquisitions
(including Capital Stock or warrants), shall not exceed in the aggregate for
(A), (B) and (C), $5,000,000 and (ii) Parent and its Subsidiaries shall not
make, or be required to make, any payments in respect of such Indebtedness to
employees, directors and/or officers of Parent or any Subsidiary and/or sellers
of the Acquired Business, in each case, in connection with all Permitted
Acquisitions unless as of the date of any such payment and after giving effect
thereto, each of the conditions set forth in Section 6.02(i)(vii) with respect
thereto are satisfied;
(k) Indebtedness to employees of Parent or any Subsidiary in the form of
retention compensation not to exceed $500,000 in the aggregate outstanding at
any time;
(l) Indebtedness of Parent or any Domestic Subsidiary arising after the
date hereof consisting of the reimbursement obligations to a financial
institution with respect to letters of credit or bank guarantees issued by such
financial institution for the account of Parent or any Domestic Subsidiary, in
the ordinary course of business; PROVIDED, THAT, (i) upon its request, Agent
shall have received true, correct and complete copies of all of agreements,
documents and instruments relating to the facility pursuant to which such
letters of credit are issued, (ii) in no event shall the aggregate amount of all
such Indebtedness (contingent or otherwise) at any time exceed the amount equal
to (A) $10,000,000 minus (B) the Letter of Credit Obligations outstanding at
such time, (iii) Agent shall have received not less than ten (10) Business Days'
prior written notice of the intention of Parent or any Domestic Subsidiary to
enter into any such letter of credit facility, which notice shall set forth in
reasonable detail, the amount of such letter of credit facility, the name and
address of the proposed letter of credit issuer, the proposed rates and fees,
and the maturity date with respect thereto, together with such other information
with respect thereto as Agent may request and any letter of credit issuer
pursuant to such new letter of credit facility shall be acceptable to Agent, and
(iv) Borrowers and Guarantors shall furnish to Agent all material written
notices or demands in connection with such Indebtedness either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;
(m) Indebtedness of Parent and its Domestic Subsidiaries arising after the
date hereof issued in exchange for, or the proceeds of which are used to
refinance, replace or substitute for all or any portion of the Indebtedness
permitted under clauses (e) or (f) of this definition (the "Refinancing
Indebtedness"); PROVIDED, THAT, as to any such Refinancing Indebtedness, each of
the following conditions is satisfied: (i) Agent shall have received not less
than ten (10) Business Days' prior written notice from Administrative Borrower
of the intention of Parent or any of its Domestic Subsidiaries to incur such
Indebtedness, which notice shall set forth in reasonable
31
detail, the amount of such proposed Indebtedness, the person to whom such
Indebtedness is proposed to be owed, the proposed interest rate and fees,
schedule of repayments and maturity date with respect thereto, the collateral
for such Indebtedness (if any), together with such other information with
respect thereto as Agent may reasonably request, (ii) promptly upon Agent's
request, Agent shall have received true, correct and complete copies of all
material agreements, documents and instruments evidencing or otherwise related
to such Indebtedness, as duly authorized, executed and delivered by the parties
thereto and such other agreements, documents or instruments related thereto as
Agent may request, (iii) the Refinancing Indebtedness shall have a Weighted
Average Life to Maturity and a final maturity equal to or greater than the
Weighted Average Life to Maturity and the final maturity, respectively, of the
Indebtedness being refinanced, replaced, or substituted for, (iv) the
Refinancing Indebtedness shall rank in right of payment no more senior than, and
be at least as subordinated (if subordinated) to, the Obligations as the
Indebtedness being refinanced, replaced or substituted for, (v) such extension,
refinancing or modification is pursuant to terms that are not less favorable to
Parent, its Subsidiaries, Agent and Lenders than the terms of the Indebtedness
being refinanced, replaced, or substituted for and (vi) after giving effect to
such refinancing, replacement or substitution, the principal amount of such
Indebtedness is not greater than the principal amount of Indebtedness
outstanding immediately prior to such refinancing, replacement or substitution
(or in the case of the refinancing, replacement or substitution of or for a
revolving credit facility, the aggregate of the commitments of the lender or
lenders under such facility);
(n) in addition to the other Permitted Indebtedness provided for in this
definition, Subordinated Indebtedness of Parent or any Domestic Subsidiary
arising after the date hereof; PROVIDED, THAT, (i) Agent shall have received not
less than ten (10) days prior written notice of the intention of Parent or such
Subsidiary to incur such Indebtedness, which notice shall set forth in
reasonable detail satisfactory to Agent the amount of such Indebtedness, the
person or persons to whom such Indebtedness will be owed, the interest rate, the
schedule of repayments and maturity date with respect thereto and such other
information as Agent may request with respect thereto, (ii) Agent shall have
received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, (iii) in no
event shall the aggregate principal amount of such Indebtedness at any time
outstanding exceed $40,000,000, and (iv) as of the date of incurring such
Indebtedness and after giving effect thereto, no Default or Event of Default
shall exist or have occurred;
(o) Indebtedness of Parent and its Subsidiaries arising after the date
hereof consisting of obligations on surety or appeal bonds; PROVIDED, THAT, (i)
such surety or appeal bonds arise in the ordinary course of business and do not
exceed at any time outstanding $3,000,000, and (ii) in connection with any
performance bonds issued by a surety or other person, the issuer of such bond
shall have waived in writing any rights in or to, or other interest in, any of
the Collateral (other than deposits or pledges of cash permitted to secure such
Indebtedness under clause (j) of the definition of the term Permitted Liens) in
an agreement, in form and substance satisfactory to Agent;
(p) Indebtedness of Sea Master Hong Kong arising after the date hereof to
Protex; PROVIDED, THAT, (i) Agent shall have received not less than ten (10)
days prior written notice of the intention of Sea Master Hong Kong to incur such
Indebtedness, which notice shall set forth in reasonable detail satisfactory to
Agent the amount of such Indebtedness, the interest rate, the
32
schedule of repayments and maturity date with respect thereto and such other
information as Agent may request with respect thereto, (ii) Agent shall have
received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, (iii) in no
event shall the aggregate principal amount of such Indebtedness at any time
outstanding exceed $2,000,000, and (iv) as of the date of incurring such
Indebtedness and after giving effect thereto, no Default or Event of Default
shall exist or have occurred; and
(q) Indebtedness consisting of liabilities incurred under Title IV of
ERISA with respect to any plan (other than a Multiemployer Plan) covered by
Title IV of ERISA and maintained for employees of such Person or any of its
ERISA Affiliates and withdrawal liability incurred under ERISA by such Person or
any of its ERISA Affiliates with respect to any Multiemployer Plan to the extent
that in each case such Indebtedness does not otherwise constitute or give rise
to an Event of Default.
"PERMITTED LIENS" means:
(a) Liens securing the Obligations;
(b) Liens on the Collateral securing the Indebtedness evidenced by the
Senior Convertible Notes pursuant to the Noteholder Documents; PROVIDED, THAT,
such Liens are and shall at all times be junior and subordinate to the Liens of
Agent pursuant to the terms of the Intercreditor Agreement and the Noteholder
Agent and Noteholders shall at all times be in compliance with the terms
thereof;
(c) Liens securing the payment of taxes, assessments or other governmental
charges or levies either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower, or Guarantor or any other Subsidiary of Parent, as
the case may be and with respect to which adequate reserves have been set aside
on its books and for which payment is not required under Section 6.01(c);
(d) Liens constituting purchase money security interests in Equipment
(including Capitalized Leases) and purchase money mortgages, deeds of trust,
deeds to secure debt or similar instruments on real property to secure
Indebtedness permitted under clause (f) of the definition of the term "Permitted
Indebtedness";
(e) Liens imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's and other similar Liens arising in the ordinary course of business
and securing obligations (other than Indebtedness for borrowed money) that are
not overdue by more than thirty (30) days or are being contested in good faith
and by appropriate proceedings promptly initiated and diligently conducted;
PROVIDED, THAT, they are subordinate to Agent's Liens on the Collateral except
to the extent of customary fees payable in respect of such obligations), and a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
(f) Liens described on Schedule 6.02(a), but not the extension of coverage
thereof to other property or the increase of the Indebtedness secured thereby
(other than in respect of accrued interest in accordance with the terms
thereof);
33
(g) Liens and the right of setoff against deposits of cash by any
Borrower, Guarantor or any other Subsidiary or Parent in the ordinary course of
business with any financial institution at which a deposit account of such
Borrower, Guarantor or Subsidiary is maintained to secure obligations of such
Borrower, Guarantor or Subsidiary to such financial institution in connection
with such deposit account and the cash management services provided by such
financial institution for which such deposit account is used consistent with the
current practices of such Borrower, Guarantor or Subsidiary as of the date
hereof; PROVIDED, THAT, such Liens are subordinate to Agent's Liens on the
Collateral except to the extent of customary fees, items returned unpaid and
overdrafts payable in respect of such obligations;
(h) Liens arising from (i) operating leases and the precautionary UCC
financing statement filings in respect thereof and (ii) equipment or other
materials which are not owned by a Borrower, Guarantor or any other Subsidiary
of Parent located on the premises of such Borrower, Guarantor or such Subsidiary
(but not in connection with, or as part of, the financing thereof) from time to
time in the ordinary course of business and consistent with current practices of
such Borrower, Guarantor or any Subsidiary of such Borrower or Guarantor and the
precautionary UCC financing statement filings in respect thereof;
(i) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with importation of
goods in the ordinary course of business;
(j) deposits and pledges of cash securing (i) obligations incurred in
respect of workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, (ii) the performance of bids, tenders,
leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations on surety or appeal bonds permitted under
clause (o) of the definition of the term Permitted Indebtedness;
(k) easements, zoning restrictions and similar encumbrances on real
property owned by any Loan Party or any other Subsidiary of Parent and minor
irregularities in the title thereto that do not (i) secure obligations for the
payment of money, or (ii) materially impair the value of such property or its
use by any Borrower or Guarantor in the normal conduct of such Borrower's or
Guarantor's business;
(l) Liens resulting from any judgment or award so long as (i) such
judgment or award does not constitute an Event of Default under Section 8.01(k)
and (ii) the enforcement of such judgment or award has been stayed by reason of
a pending appeal or otherwise;
(m) licenses with respect to Intellectual Property to the extent permitted
hereunder (including, without limitation, Licenses);
(n) Liens of the financial institution that has issued letters of credit
or bank guarantees for the account of any Loan Party giving rise to Indebtedness
of such Person permitted under clause (l) of the definition of Permitted
Indebtedness on cash and Cash Equivalents of such Person to secure the
reimbursement obligations to such financial institution in respect of such
letters of credit and bank guarantees; PROVIDED, THAT, in no event shall the
aggregate amount of such cash and Cash Equivalents at any time exceed the amount
equal to one
34
hundred five (105%) percent of the undrawn amount of such letters of credit and
bank guarantees then outstanding;
(o) Liens to secure Refinancing Indebtedness to the extent such Liens are
otherwise permitted hereunder;
(p) Liens securing any Subordinated Indebtedness; PROVIDED, THAT, (i) such
Liens are and shall at all times be subject and subordinate to the Liens of
Agent on terms and conditions satisfactory to Agent and (ii) Agent shall have
received a subordination agreement, in form and substance satisfactory to Agent,
with respect to such Subordinated Indebtedness, duly authorized, executed and
delivered by the person or persons to whom such Subordinated Indebtedness is
owing, providing for, among other things, the subordination in right of payment
of such amounts to the payment of the Obligations and the subordination of such
Liens of Agent;
(q) pledges of any xxxx xxxxxxx money deposits, not to exceed $1,000,000
in any Fiscal Year and $3,000,000 in the aggregate, by Parent or any Subsidiary
pursuant to a letter of interest or purchase agreement executed by Parent or
such Subsidiary in connection with any Permitted Acquisition; and
(r) Liens arising under Section 6.02(f)(viii) on the assets of a
Subsidiary that is not a Borrower or Guarantor to secure obligations arising
under loans or advances by a Borrower or Guarantor to such Subsidiary; PROVIDED,
THAT, all of the rights of any Borrower or Guarantor pursuant to such Liens have
been assigned to Agent in form and substance satisfactory to Agent.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"PLAN" means any Employee Benefit Plan or Multiemployer Plan.
"PIPE DOCUMENTS" means the Securities Purchase Agreement (Common Shares
and Warrants), dated on or about the date hereof, between MLI and the buyers
party thereto, and all agreements, documents and instruments executed and/or
delivered in connection therewith, as all of the foregoing now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
"PLEDGE AGREEMENTS" means any Pledge and Security Agreement or Charge over
Shares by a person holding or owning any shares of Capital Stock of any Borrower
or Guarantor (other than Parent) or any Subsidiary of any Borrower or Guarantor
in favor of Agent providing among other things, the grant of a security interest
in and lien upon, and pledge of, such Capital Stock in favor of Agent.
"POST-DEFAULT RATE" means a rate of interest per annum equal to the rate
of interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus three (3%) percent.
"PREPAYMENT FEE" has the meaning set forth in Section 2.06(e).
35
"PRO RATA SHARE" means:
(a) with respect to a Lender's obligation to make a Term Loan and receive
payments of interest, fees, and principal with respect thereto, the percentage
obtained by dividing (i) such Lender's Term Loan Commitment by (ii) the Total
Term Loan Commitments; PROVIDED, THAT, if the Total Term Loan Commitments has
been reduced to zero, the numerator shall be the aggregate unpaid principal
amount of such Lender's Term Loans and the denominator shall be the aggregate
unpaid principal amount of all Term Loans;
(b) with respect to a Lender's obligation to make a Revolving Loan and
participate in Letter of Credit Obligations, and receive payments of interest,
fees, and principal with respect thereto, the percentage obtained by dividing
(i) such Lender's Revolving Credit Commitment by (ii) the Total Revolving Credit
Commitments; PROVIDED, THAT, if the Total Revolving Credit Commitments have been
reduced to zero, the numerator shall be the aggregate unpaid principal amount of
such Lender's Revolving Loans and its interest in the Letter of Credit
Obligations and the denominator shall be the aggregate unpaid principal amount
of all Revolving Loans and Letter of Credit Obligations;
(c) with respect to all other matters (including, without limitation, the
indemnification obligations arising under Section 9.05 and the voting rights set
forth in Section 11.02 and for purposes of Advances), the percentage obtained by
dividing (i) the sum of such Lender's Commitments by (ii) the sum of the Total
Loan Commitments; PROVIDED, THAT, if any of the Commitments has been reduced to
zero, the numerator shall be the aggregate unpaid principal amount of such
Lender's Loans and its interest in the Letter of Credit Obligations and Agent
Advances and the denominator shall be the aggregate unpaid principal amount of
all Loans, Agent Advances and Letter of Credit Obligations.
"PROPERTY LOSS EVENT" means (a) any loss of or damage to any assets or
property of Parent or any of its Subsidiaries that results in a claim to
proceeds of insurance or (b) any condemnation or other taking of any assets or
property of Parent or any of its Subsidiaries.
"PROTEX" means Protex Holdings Limited, a company organized under the laws
of Hong Kong.
"PURCHASE PRICE" means, with respect to an Acquisition, an amount equal to
the sum of (i) the aggregate consideration, whether cash, property or securities
(including, without limitation, the fair market value of any Capital Stock of
any Loan Party issued in connection with such Acquisition), paid or delivered by
a Loan Party in connection with such Acquisition, plus (ii) the aggregate amount
of liabilities of the acquired business (net of current assets of the acquired
business) that would be reflected on a balance sheet (if such were to be
prepared) of the Parent and its Subsidiaries after giving effect to such
Acquisition.
"QUALIFIED CASH" means unrestricted cash or Cash Equivalents of Borrowers
and Guarantors that are subject to the valid, enforceable and first priority
perfected security interest of Agent in an investment account or deposit account
at an institution acceptable to Agent pursuant to a Control Agreement which
account is separate from the Concentration Account, Cash Management Accounts and
Operating Accounts, and which cash and Cash Equivalents are
36
not subject to any other security interest, pledge, lien, encumbrance or claim,
except to the extent that the holder of any of the same has entered into an
intercreditor agreement with Agent, in form and substance satisfactory to Agent,
including the Intercreditor Agreement which Agent confirms is in form and
substance satisfactory to it for this purpose (other than customary liens or
rights of setoff of the institution maintaining such accounts permitted
hereunder solely in its capacity as a depository, PROVIDED, THAT, for purposes
of the amount of Qualified Cash included in the calculation of Excess
Availability, such amount may be reduced, at Agent's option, by any obligations
owing to such institution and Borrowers and Guarantors shall provide such
information with respect to such obligations as Agent may from time to time
request).
"REAL PROPERTY" shall mean all now owned and hereafter acquired real
property of each Borrower and Guarantor, including leasehold interests, together
with all buildings, structures, and other improvements located thereon and all
licenses, easements and appurtenances relating thereto, wherever located.
"RECEIVABLES" means all of the following now owned or hereafter arising or
acquired property of any Loan Party: (a) all Accounts; (b) all interest, fees,
late charges, penalties, collection fees and other amounts due or to become due
or otherwise payable in connection with any Account; (c) all payment intangibles
of such Loan Party; (d) all letters of credit, indemnities, guarantees, security
or other deposits and proceeds thereof issued payable to any Loan Party or
otherwise in favor of or delivered to any Loan Party in connection with any
Account; or (e) all other accounts, contract rights, chattel paper, instruments,
notes, and other forms of obligations owing to such Loan Party, whether from the
sale and lease of goods or other property, licensing of any property (including
Intellectual Property or other general intangibles), rendition of services or
from loans or advances by such Loan Party or to or for the benefit of any third
person (including loans or advances to any Affiliates or Subsidiaries of such
Loan Party) or otherwise associated with any Accounts, inventory or general
intangibles of such Loan Party (including, without limitation, choses in action,
causes of action, tax refunds, tax refund claims, any funds which may become
payable to such Loan party in connection with the termination of any Plan or
other employee benefit plan and any other amounts payable to such Loan party
from any Plan or other employee benefit plan, rights and claims against carriers
and shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which such
Loan Party is beneficiary).
"REFERENCE BANK" means the LaSalle Bank, National Association, its
successors or any other commercial bank designated by Agent to Administrative
Borrower from time to time.
"REFERENCE RATE" means the rate of interest publicly announced by the
Reference Bank in New York, New York from time to time as its reference rate,
base rate or prime rate. The reference rate, base rate or prime rate is
determined from time to time by the Reference Bank as a means of pricing some
loans to its borrowers and is not tied to any external rate of interest or index
nor necessarily reflects the lowest rate of interest actually charged by the
Reference Bank to any particular class or category of customers. Each change in
the Reference Rate shall be effective from and including the date such change is
publicly announced as being effective.
37
"REFERENCE RATE LOAN" means a Loan bearing interest calculated based upon
the Reference Rate.
"REFINANCING INDEBTEDNESS" has the meaning specified in clause (m) of the
definition of the term "Permitted Indebtedness".
"REGISTER" has the meaning set forth in Section 11.07(d).
"REGISTERED" means, with respect to any Intellectual Property, issued,
registered, renewed or the subject of a pending application.
"REGISTERED LOAN" has the meaning set forth in Section 11.07(d).
"REGULATION T", "REGULATION U" and "REGULATION X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
"REIMBURSEMENT OBLIGATIONS" means the obligation of each Borrower to
reimburse Agent or any Lender for amounts payable by Agent or any Lender in
respect of any Letters of Credit issued for the account of such Borrower,
together with interest thereon as provided in Section 2.04.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil, surface or ground water, or property.
"REMEDIAL ACTION" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess or evaluate Hazardous Materials in
the indoor or outdoor environment; (b) prevent or minimize a Release or
threatened Release of Hazardous Materials so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (c) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (d) perform any other
actions authorized by 42 U.S.C. ss. 9601.
"REPORTABLE EVENT" means an event described in Section 4043 of ERISA
(other than an event not subject to the provision for 30-day notice to the PBGC
under the regulations promulgated under such Section).
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares aggregate more than
fifty (50%) percent.
"RESERVES" means as of any date of determination, such amounts as Agent
may from time to time establish and revise in good faith reducing the amount of
Revolving Loans and Letters of Credit which would otherwise be available to
Borrowers under the lending formula(s) provided for herein: (a) to reflect
events, conditions, contingencies or risks which, as determined by Agent in good
faith, adversely affect, or would have a reasonable likelihood of adversely
38
affecting, either (i) the Collateral or any other property which is security for
the Obligations, its value or the amount that might be received by Agent from
the sale or other disposition or realization upon such Collateral, or (ii) the
assets, business or prospects of any Loan Party or (iii) the security interests
and other rights of Agent or any Lender in the Collateral (including the
enforceability, perfection and priority thereof) or (b) to reflect Agent's
belief that any collateral report or financial information furnished by or on
behalf of any Loan Party to Agent is or may have been incomplete, inaccurate or
misleading in any material respect or (c) to reflect outstanding Letters of
Credit or (d) in respect of any state of facts which Agent determines
constitutes a Default or an Event of Default. Without limiting the generality of
the foregoing, Reserves may, at Agent's option, be established to reflect: (A)
dilution with respect to the Accounts (based on the ratio of the aggregate
amount of non-cash reductions in Accounts for any period to the aggregate dollar
amount of the sales of Borrowers for such period) as calculated by Agent for any
period is or is reasonably anticipated to be greater than five (5%) percent; (B)
returns, discounts, claims, credits and allowances of any nature that are not
paid pursuant to the reduction of Accounts; and (C) sales, excise or similar
taxes included in the amount of any Accounts reported to Agent. The amount of
any Reserve established by Agent shall have a reasonable relationship to the
event, condition or other matter which is the basis for such reserve as
determined by Agent and to the extent that such Reserve is in respect of amounts
that may be payable to third parties Agent may, at its option, deduct such
Reserve from the Total Revolving Credit Commitments for the purposes of Section
2.01(b) hereof, at any time that such limit is less than the amount of the
Borrowing Base.
"REVOLVING CREDIT COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans to Borrowers in the amount set
forth opposite such Lender's name in Schedule 1.01 hereto, as such amount may be
terminated, increased or reduced from time to time in accordance with the terms
of this Agreement.
"REVOLVING CREDIT FACILITY" means the revolving credit facility described
in Section 2.01(b) of this Agreement.
"REVOLVING LOAN" means a loan made by a Lender to Borrowers pursuant to
Section 2.01(b).
"SEAMASTER ACQUISITION DOCUMENTS" means, collectively, the Stock Purchase
Agreement, dated September 28, 2006, among MLI, Sea Master Hong Kong and Protex,
and all other agreements of transfer as are referred to therein and all side
letters with respect thereto, and all agreements, documents and instruments
executed and/or delivered in connection therewith.
"SEAMASTER CHINA" means SeaMaster Logistics (China) Limited, a company
organized under the laws of the People's Republic of China.
"SEA MASTER HONG KONG" means Sea Master Logistics (Holding) Limited, a
company organized under the laws of Hong Kong.
"SEC" means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.
39
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.
"SECURITIES PURCHASE AGREEMENT" means the Securities Purchase Agreement
(Notes), dated on or about the date hereof, by and among MLI, Noteholder Agent
and the Noteholders in connection with the Senior Convertible Notes.
"SECURITY AGREEMENTS" means (a) the US Security Agreement, and (b) any
other security agreement, debenture, pledge or similar agreement at any time
executed and delivered by any Borrower or Guarantor in favor of Agent for the
benefit of itself and Lenders, including without limitation, the Pledge
Agreements.
"SENIOR CONVERTIBLE NOTES" means, collectively, the Senior Secured
Convertible Notes issued by Parent pursuant to the Securities Purchase Agreement
payable to Noteholders in the original aggregate principal amount of
$65,000,000.
"SETTLEMENT PERIOD" has the meaning set forth in Section 2.02(d) hereof.
"SOLVENT" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person (and including as assets for this
purpose at a fair valuation all rights of subrogation, contribution or
indemnification arising pursuant to any guarantees given by such Person, to the
extent such amount is readily ascertainable), (b) the present fair salable value
of the assets of such Person (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person, to the extent such amount is
readily ascertainable) is not less than the amount that will be required to pay
the probable liability of such Person on its existing debts as they become
absolute and matured, (c) such Person is able to realize upon its assets and pay
its debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (d) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital.
"SPECIAL INCENTIVE BONUSES" means incentive or similar performance based
bonuses payable to employees, directors and/or officers of Parent or any
Subsidiary who are also sellers or transferees of any Capital Stock or other
equity interests or otherwise principals in any business or operating company
purchased as part of an Acquisition or any Acquired Business (as defined in the
definition of Permitted Acquisition) which bonuses are part of the acquisition
thereof and based on the performance of such business, operating company or the
Acquired Business or otherwise on terms and conditions similar to an earn-out or
for the payment of any deferred consideration in respect of the sale or other
transfer of the applicable business, operating company or Acquired Business.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of any Loan Party arising
after the date hereof the terms of which, and the persons to whom owed, are in
each case satisfactory to Agent
40
and which has been expressly subordinated in right of payment to all
Indebtedness of such Loan Party under the Loan Documents, and to the extent
secured, the Liens securing which have been expressly subordinated in priority
to the Liens of Agent, (i) by the execution and delivery of a subordination
agreement, in form and substance satisfactory to Agent, or (ii) otherwise on
terms and conditions (including, without limitation, subordination provisions,
payment terms, interest rates, covenants, remedies, defaults and other material
terms) satisfactory to Agent. The Indebtedness arising pursuant to intercompany
loans permitted under Section 6.02(f) shall not be deemed Subordinated
Indebtedness for purposes of clause (n) of the definition of the term "Permitted
Indebtedness".
"SUBSIDIARY" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company,
unlimited liability company, trust, estate, association, joint venture or other
business entity in all cases whether direct or indirect (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than fifty (50%) percent of (A) the
outstanding Capital Stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such Person, (B) in the case of a partnership, limited liability company
or unlimited liability company, the interest in the capital or profits of such
partnership, limited liability company or unlimited liability company or (C) in
the case of a trust, estate, association, joint venture or other entity, the
beneficial interest in such trust, estate, association or other entity business
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such Person. Notwithstanding anything to
the contrary contained herein, for purposes of Article V hereof, the term
"Subsidiary" shall not include (i) SeaMaster China, at such time as it may
become a Subsidiary after the date hereof to the extent that the representation
and warranty included in Article V would relate to matters of the laws of the
People's Republic of China as to SeaMaster China or (ii) AmeRussia to the extent
that the representation and warranty included in Article V would relate to
matters of the laws of Russia as to AmeRussia.
"TERM LOAN" means, collectively, the loans made by Lenders to Borrowers on
the Effective Date pursuant to Section 2.01(a).
"TERM LOAN COMMITMENT" means, with respect to each Lender, the commitment
of such Lender to make Term Loans to Borrowers in the amount set forth in
Schedule 1.01 hereto, as the same may be terminated, increased or reduced from
time to time in accordance with the terms of this Agreement.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Employee Benefit Plan, (ii) any event that causes any Loan Party or any of its
ERISA Affiliates to incur liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, (iii) the filing of a notice of intent to terminate
an Employee Benefit Plan subject to Title IV of ERISA or the treatment of an
Employee Benefit Plan amendment as a termination under Section 4041 of ERISA,
(iv) the institution of proceedings by the PBGC to terminate an Employee Benefit
Plan, (v) the withdrawal of any Loan Party or ERISA Affiliate from a
Multiemployer Plan or (vi) any other
41
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Employee Benefit Plan.
"TITLE INSURANCE POLICY" means a loan policy of title insurance, in form
and substance satisfactory to Agent, together with all endorsements made from
time to time thereto, issued by or on behalf of a title insurance company
satisfactory to Agent, insuring the Lien created by any mortgage in an amount
and subject only to such exceptions and otherwise on terms reasonably
satisfactory to Agent, delivered to Agent.
"TOTAL COMMITMENT" means the sum of the Total Revolving Credit Commitments
and the Total Term Loan Commitments.
"TOTAL REVOLVING CREDIT COMMITMENTS" means the sum of the Revolving Credit
Commitments. The Total Revolving Credit Commitments shall be automatically and
irrevocably reduced to zero on the Final Maturity Date.
"TOTAL TERM LOAN COMMITMENTS" means the sum of the Term Loan Commitments.
"TRANSACTION DOCUMENTS" means, collectively, the Loan Documents and the
Acquisition Documents.
"TUG ACQUISITION ASSETS" means all of the property and assets (tangible
and intangible) sold, assigned or otherwise transferred to, or assumed or
otherwise acquired by TUG USA from the TUG Sellers pursuant to the TUG
Acquisition Document.
"TUG ACQUISITION DOCUMENTS" means the Asset/Stock Purchase Agreement,
dated October 2, 2006 among TUG USA, TUG Sellers, Clare, TUG NY, Xx. Xxxxxx Xxx,
Mr. Xxxxxx Xx, Xx. Xxxx Dong, Mr. Xx Xxxx and Xxx. Xxx Xxx Xxxx and all other
agreements of transfer as are referred to therein and all side letters with
respect thereto, and all agreements, documents and instruments executed and/or
delivered in connection therewith.
"TUG SELLERS" means, collectively, TUG Logistics, Inc., a California
corporation, Glare Logistics Inc., a California corporation and TUG Logistics
(Miami), Inc., a Florida corporation.
"UCC FILING AUTHORIZATION LETTER" means a letter duly executed by each
Loan Party authorizing Agent to file appropriate financing statements on Form
UCC-1 without the signature of such Loan Party in such office or offices as may
be necessary or, in the opinion of Agent, desirable to perfect the security
interests purported to be created by each Security Agreement, each Pledge
Agreement and each Mortgage.
"UNFUNDED CURRENT LIABILITY" means, with respect to any Plan, the amount,
if any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the fair
market value of the assets (including any amounts contributed to such Plan after
the close of such plan year which have been credited prior to the date of
determination to its funding standard account (within the meaning of Section
412(b) of the Code) as of the end of such plan year) allocable thereto, each
determined in accordance with Statement of Financial Accounting Standards No.
35, based upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan.
42
"UNIFORM COMMERCIAL CODE" has the meaning set forth in Section 1.03.
"UNUSED LINE FEE" has the meaning set forth in Section 2.06(c).
"US SECURITY AGREEMENT" means the Security Agreement, dated of even date
herewith, by Borrowers and Guarantors in favor of Agent.
"USA PATRIOT ACT" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. No. 107-56, 115 Stat. 272 (2001), as amended.
"WARN" has the meaning set forth in Section 5.24.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
Section 1.02 TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented, modified, extended, renewed, restated or replaced (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any right or interest in or to
assets and properties of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible, (f) the word "Federal" shall be construed as
referring to and including the federal government of the United States of
America and the federal government of any other applicable jurisdiction and (g)
an Event of Default shall exist or continue or have occurred and be continuing
until such Event of Default is waived in writing by Agent in accordance with the
terms hereof or is cured and reference herein to a Default or Event of Default
that "exists" or "has occurred and is continuing" shall only include a Default
or Event of Default, as the case may be, that has not been cured or waived in
accordance with the terms hereof, so that such Default or Event of Default, as
the case may be, shall cease to exist and shall not be deemed to be continuing
if it has been so cured or waived. References in this Agreement to
"determination" by Agent include good faith estimates by Agent (in the case of
quantitative
43
determinations) and reasonable good faith beliefs by Agent (in the case of
qualitative determinations).
Section 1.03 ACCOUNTING AND OTHER TERMS. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "Uniform Commercial Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein; PROVIDED, THAT, terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute unless Agent notifies Administrative Borrower in writing of
Agent's acceptance of such replacement or amendment. Except as otherwise
expressly provided herein, for the purposes of determining Borrowers' compliance
with the financial covenants set forth in Section 6.03 of this Agreement, a
business, operating company or assets purchased as part of an Acquisition or an
Acquired Business shall be included as if the Acquisitions or the Permitted
Acquisition(s) had been consummated on the first day of the applicable period
during which such Acquisitions or Permitted Acquisition(s) occurs; provided,
THAT, the treatment, computation, adjustments and assumptions relating to the
amounts included in respect of the business, operating company or assets
purchased as part of such Acquisition or such Acquired Business shall be
satisfactory to Agent in its discretion.
Section 1.04 TIME REFERENCES. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to and including"; PROVIDED, THAT, with respect to a computation of fees
or interest payable to Agent or any Lender, such period shall in any event
consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 COMMITMENTS.
(a) TERM LOAN COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
separately and severally, and not jointly, agrees to make its Term Loans on the
Effective Date, in the amount of such Lender's Term Loan Commitment so that the
aggregate principal amount of all of the Term Loans shall be $55,000,000. The
aggregate principal amount of the Term Loans on the Effective Date shall not
exceed the Total Term Loan Commitments. Term Loans that are repaid may not be
reborrowed.
(b) REVOLVING CREDIT COMMITMENTS. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender, separately and severally, and not jointly, agrees to make Revolving
Loans, calculated based on its Pro Rata Share thereof, as set forth herein from
time to time after the Effective Date and prior to the Final Maturity Date as
may be requested or deemed requested by Administrative Borrower. The aggregate
principal amount of the Revolving Loans and the Letter of Credit Obligations
44
outstanding at any time shall not exceed the lesser of (i) the Total Revolving
Credit Commitments and (ii) the then current Borrowing Base, without
duplication, after giving effect to the Reserves established in respect of
outstanding Letter of Credit Obligations. The Revolving Credit Commitment of
each Lender shall automatically and permanently be reduced to zero on the Final
Maturity Date. Subject to the terms hereof, Revolving Loans that are repaid may
be reborrowed.
Section 2.02 MAKING OF LOANS.
(a) NOTICE FROM ADMINISTRATIVE BORROWER.
(i) Administrative Borrower shall give Agent prior written or
telephonic notice (promptly confirmed in writing), in substantially the form of
Exhibit C hereto (a "Notice of Borrowing"), prior to the making of the Loans;
PROVIDED, THAT, (A) such Notice of Borrowing shall be received by Agent (1) in
the case of a borrowing consisting of a Reference Rate Loan, not later than
12:00 noon on (y) the Effective Date in the case of the Term Loans and (z) the
borrowing date of the proposed Reference Rate Loan, (2) in the case of a
borrowing consisting of LIBOR Rate Loans not later than 12:00 Noon on (y) the
Effective Date in the case of Term Loans, and (z) the third Business Day prior
to the date a Revolving Loan is to be made, and (B) such day shall be a Business
Day. Agent and Lenders may act without liability upon the basis of written,
telecopied or telephonic notice believed by Agent in good faith to be from
Administrative Borrower or any other Borrower (or from any Authorized Officer
thereof designated in writing purportedly from Administrative Borrower or any
other Borrower to Agent). Borrowers hereby waive the right to dispute Agent's
record of the terms of any such telephonic Notice of Borrowing in the absence of
manifest error. Agent and each Lender shall be entitled to rely conclusively on
any Authorized Officer's authority to request a Loan on behalf of Borrowers
until Agent receives written notice to the contrary. Agent and Lenders shall
have no duty to verify the authenticity of the signature appearing on any
written Notice of Borrowing. Notwithstanding the obligation of Administrative
Borrower to send written confirmation of a Notice of Borrowing made by
telephone, in the event that Agent agrees to accept a Notice of Borrowing made
by telephone, such telephonic Notice of Borrowing shall be binding on Borrowers
whether or not written confirmation is sent by Borrowers or requested by Agent.
All Loans shall be made in US Dollars.
(ii) Each Notice of Borrowing for a Revolving Loan shall set
forth (A) the requested date of such borrowing, (B) the aggregate amount of such
requested borrowing, (C) whether such Loan is requested to be a Reference Rate
Loan or a LIBOR Rate Loan and, in the case of a LIBOR Rate Loan, the initial
Interest Period with respect thereto, (D) certification by Administrative
Borrower on behalf of Borrowers that they have complied in all respects with
Article IV or that such compliance has been waived in writing by Agent, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Revolving Loans outstanding hereunder, (E) the Borrower or
Borrowers to whom such Revolving Loans are being made and (F) the deposit
account to which such requested funds should be remitted. Each Notice of
Borrowing pursuant to Section 2.02(a) shall be irrevocable and Borrowers shall
be bound to make a borrowing in accordance therewith. Revolving Loans may be
repaid and reborrowed in accordance with the provisions hereof.
45
(iii) Subject to the other provisions of this Agreement, so
long as no Default or Event of Default shall have occurred and be continuing,
Administrative Borrower shall have the option: (A) to convert at any time all or
any part of any Revolving Loan from a LIBOR Rate Loan to a Reference Rate Loan
or from a Reference Rate Loan to a LIBOR Rate Loan or (B) to continue any
Revolving Loan that is a Reference Rate Loan or a LIBOR Rate Loan as such;
PROVIDED, THAT, a Revolving Loan may only be converted to a Reference Rate Loan
on the expiration of the Interest Period applicable to such Revolving Loan.
(iv) Administrative Borrower shall give Agent prior written or
telephonic notice (promptly confirmed in writing) in substantially the form of
Exhibit D hereto (a "Notice of Conversion/Continuation") no later than 12:00
noon on (A) the continuation or conversion date in the case of continuation as
or conversion to, a Reference Rate Loan, and (B) the third Business Day prior to
the date of continuation or conversion in the case of continuation as or
conversion to, a LIBOR Rate Loan. Except as otherwise provided herein, a Notice
of Conversion/Continuation shall be irrevocable and Borrowers shall be bound to
effect a conversion or continuation in accordance therewith. Notwithstanding
anything to the contrary in the foregoing, no conversion in whole or in part
shall be permitted at any time at which (1) a Default or Event of Default shall
have occurred and be continuing or (2) the continuation of, or conversion into,
a LIBOR Rate Loan would violate any provision of this Loan Agreement.
(v) Each Notice of Conversion/Continuation for a Revolving
Loan shall set forth (A) the requested date of such conversion or continuation,
(B) the aggregate amount of the Revolving Loan to be converted or continued, (C)
whether such Loan is required to be converted to or continued as a Reference
Rate Loan or a LIBOR Rate Loan, and in the case of a LIBOR Rate Loan, the
Interest Period with respect thereto, (D) certification by Administrative
Borrower on behalf of Borrowers that they have complied in all respects with
Article IV or that such compliance has been waived in writing by Agent, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Revolving Loans outstanding hereunder, and (E) the Borrower or
Borrowers to whom the Revolving Loan being converted or continued was made.
(b) FUNDING OF PRO RATA SHARES. Except as otherwise provided in
Section 2.02(d) below, all Term Loans under this Agreement shall be made by
Lenders simultaneously and proportionately to their Pro Rata Shares of the Total
Term Loan Commitments, as the case may be, and all Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
Pro Rata Shares of the Total Revolving Credit Commitments, it being understood
that no Lender shall be responsible for any default by any other Lender in such
other Lender's obligations to make a Loan requested hereunder, nor shall the
Commitment of any Lender be increased or decreased as a result of the default by
any other Lender of that other Lender's obligation to make a Loan requested
hereunder, and each Lender shall be obligated to make the Loans required to be
made by it by the terms of this Agreement regardless of the failure by any other
Lender.
(c) NOTICE TO LENDERS. Agent shall give to each Lender prompt notice
(but in no event later than 2:00 P.M. on the date of Agent's receipt of notice
from Administrative Borrower) of each Notice of Borrowing (other than any Notice
of Borrowing which will be funded by Agent in accordance with subsection (d)
below). No later than 3:00 P.M. on the date
46
on which a borrowing is requested to be made pursuant to the applicable Notice
of Borrowing, each Lender will make available to Agent at the address of Agent
set forth on the signature pages hereto, in immediately available funds, its Pro
Rata Share of such borrowing requested to be made. Unless Agent shall have been
notified by any Lender prior to the date of borrowing that such Lender does not
intend to make available to Agent its portion of the borrowing to be made on
such date, Agent may assume that such Lender will make such amount available to
Agent as required above and Agent may, in reliance upon such assumption, make
available the amount of the borrowing to be provided by such Lender. Upon
fulfillment of the conditions set forth in Article IV for such borrowing to the
extent such conditions are not waived in writing by Agent, Agent will make such
funds available to Borrowers at the account specified by Borrowers in such
Notice of Borrowing.
(d) SETTLEMENT PROCEDURES.
(i) Since Borrowers anticipate requesting borrowings of
Revolving Loans on a regular basis, in order to administer the Revolving Loans
in an efficient manner and to minimize the transfer of funds between Agent and
Lenders, Lenders hereby instruct Agent, and Agent may (but is not obligated to)
(A) make available, on behalf of Lenders, the full amount of all Revolving Loans
requested by Borrowers not to exceed $3,000,000 in the aggregate at any one time
outstanding without giving each Lender prior notice of the proposed borrowing,
of such Lender's Pro Rata Share thereof and the other matters covered by the
Notice of Borrowing and (B) if Agent has made any such amounts available as
provided in clause (A), upon repayment of Revolving Loans by Borrowers, apply
such amounts repaid directly to the amounts made available by Agent in
accordance with clause (A) and not yet settled as described below; PROVIDED,
THAT, Agent shall not advance funds as described in clause (A) above if Agent
has actually received prior to such borrowing (1) an officer's certificate from
Administrative Borrower or any other Borrower pursuant to and in accordance with
Section 9.09 that a Default or Event of Default exists or has occurred and is
continuing or (2) a Notice of Borrowing from any Borrower wherein the
certification provided therein states that the conditions to the making of the
requested Revolving Loans have not been satisfied or waived in writing by Agent
or (3) a written notice from the Required Lenders that the conditions to such
borrowing have not been satisfied or waived in writing by Agent, which officer's
certificate, Notice of Borrowing or notice, in each case, shall not have been
rescinded.
(ii) If Agent advances Revolving Loans on behalf of Lenders,
as provided in clause (d)(i) above, the amount of outstanding Revolving Loans
and each Lender's Pro Rata Share shall be computed weekly rather than daily and
shall be adjusted upward or downward on the basis of the amount of outstanding
Revolving Loans as of 5:00 P.M. on the Business Day immediately preceding the
date of each computation; PROVIDED, THAT, Agent retains the absolute right at
any time or from time to time to make the aforedescribed adjustments at
intervals more frequently than weekly. Agent shall deliver to each Lender after
the end of each week, or such lesser period or periods as Agent shall determine,
a summary statement of the amount of outstanding Revolving Loans for such period
(such week or lesser period or periods being hereafter referred to as a
"Settlement Period"). Each Lender shall make the transfers described in the next
succeeding sentence no later than 3:00 P.M. on the third day after a summary
statement is sent by Agent. If in any Settlement Period, the amount of a
Lender's Pro Rata Share of the Revolving Loans is in excess of the amount of
Revolving Loans actually funded by such
47
Lender, such Lender shall forthwith (but in no event later than the time set
forth in the next preceding sentence) transfer to Agent by wire transfer in
immediately available funds the amount of such excess; and, on the other hand,
if the amount of a Lender's Pro Rata Share of the Revolving Loans in any
Settlement Period is less than the amount of Revolving Loans actually funded by
such Lender, Agent shall forthwith transfer to such Lender by wire transfer in
immediately available funds the amount of such difference. The obligation of
each Lender to transfer such funds shall be irrevocable and unconditional and
without recourse to or warranty by Agent. Each of Agent and Lenders agree to
xxxx their respective books and records at the end of each Settlement Period to
show at all times the dollar amount of their respective Pro Rata Shares of the
outstanding Revolving Loans. Since Agent on behalf of Lenders may be advancing
and/or may be repaid Revolving Loans prior to the time when Lenders will
actually advance and/or be repaid Revolving Loans, interest with respect to
Revolving Loans shall be allocated by Agent to each Lender (including Agent in
its capacity as a Lender) in accordance with the amount of Revolving Loans
actually advanced by and repaid to each Lender (including Agent in its capacity
as a Lender) during each Settlement Period and shall accrue from and including
the date such Revolving Loans are advanced by Agent to but excluding the date
such Revolving Loans are repaid by Borrowers or actually settled by the
applicable Lender as described in this Section 2.02(d).
(e) DEFAULTING LENDER. If the amounts described in Sections 2.02(c)
or 2.02(d) are not in fact made available to Agent by a Lender (such Lender
being hereinafter referred to as a "Defaulting Lender") and Agent has made such
amount available to a Borrower, Agent shall be entitled to recover such
corresponding amount on demand from such Defaulting Lender. If such Defaulting
Lender does not pay such corresponding amount forthwith upon Agent's demand
therefor, Agent shall promptly notify Borrowers and Borrowers shall immediately
(but in no event later than five (5) Business Days after such demand) pay such
corresponding amount to Agent, which amount shall be applied to the obligation
of Borrowers to Agent hereunder. Agent shall also be entitled to recover from
such Defaulting Lender and Borrowers, (i) interest on such corresponding amount
in respect of each day from the date such corresponding amount was made
available by Agent to a Borrower to the date such corresponding amount is
recovered by Agent, at a rate per annum equal to either (A) if paid by such
Defaulting Lender, the overnight Federal Funds Rate or (B) if paid by Borrowers,
the then applicable rate of interest, calculated in accordance with Section
2.05, plus (ii) in each case, an amount equal to any costs (including legal
expenses) and losses incurred as a result of the failure of such Defaulting
Lender to provide such amount as provided in this Agreement. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder.
Section 2.03 LETTERS OF CREDIT.
(a) COMMITMENT AND CONDITIONS.
(i) In order to assist Borrowers in establishing or opening
standby Letters of Credit with Issuing Bank, Borrowers have requested that Agent
join in the applications for such Letters of Credit, and/or guarantee payment or
performance of such Letters of Credit and any drafts thereunder through the
issuance of a Letter of Credit Guaranty, thereby lending Agent's credit to that
of the applicable Borrower, and Agent has agreed to do so. These arrangements
shall be coordinated by Agent, subject to the terms and conditions set forth
below.
48
Agent shall not be required to be the issuer of any Letter of Credit. The
applicable Borrower will be the account party for the application for each
Letter of Credit. The terms and conditions of all Letters of Credit and all
changes or modifications thereof by a Borrower and/or Issuing Bank shall in all
respects be subject to the prior approval of Agent. Upon the issuance of a
Letter of Credit, a reserve for the Revolving Loans that may be payable in the
event Lenders are required to make a payment in respect thereof shall be
established thereby reducing the amount of Revolving Loans otherwise available
to Borrowers in such amount. Upon the receipt by Issuing Bank of such evidence
as it may require of the cancellation or termination of a Letter of Credit, or
in the event of a draw thereunder, the reimbursement of Issuing Bank in respect
of such Letter of Credit, such reserve shall be terminated.
(ii) On the terms and subject to the conditions contained
herein and in the Letter of Credit Documents, Lenders will participate in the
issuance by Issuing Bank from time to time of such Letters of Credit until the
Final Maturity Date as Administrative Borrower may request on a Business Day in
a form acceptable to Issuing Bank and to Agent, which Letters of Credit shall be
denominated in Dollars; PROVIDED, THAT, (A) the Letters of Credit may only be on
a standby basis, (B) the face amount of any Letter of Credit will be not less
than $250,000, and (C) the aggregate amount of the Letter of Credit Obligations
outstanding at any time shall not exceed the amount equal to (1) $7,000,000
minus (2) the aggregate amount of Indebtedness outstanding under clause (l) of
the definition of "Permitted Indebtedness" in excess of $3,000,000, if any.
(iii) No Letter of Credit shall (A) have an original expiry
date more than one year from the date of issuance or (B) as originally issued or
as extended, have an expiry date extending beyond the Final Maturity Date. Each
Letter of Credit (including, without limitation, the issuance and expiry date
thereof) shall comply with the related Letter of Credit Documents. The issuance
and expiry date of each Letter of Credit shall be a Business Day. The renewal,
extension, increase in amount or reduction or elimination of any scheduled
decrease in the face amount of any Letter of Credit shall, for purposes hereof,
be treated in all respects the same as the issuance of a new Letter of Credit
hereunder and the term "issuance" or other reference to issuing a Letter of
Credit shall include the same.
(b) NOTICE OF ISSUANCE. Administrative Borrower shall give Agent a
notice of any requested issuance of any Letter of Credit, which shall be
effective only if received by Agent not later than 11:00 a.m. on the third
Business Day prior to the date of such requested issuance. Such notice shall be
substantially in the form of Exhibit E hereto or on a computer transmission
system approved by Agent and Issuing Bank, or such other written form or
computer transmission system as may from time to time be approved by Agent and
Issuing Bank, and shall be duly completed in a manner and at a time acceptable
to Agent, together with such other certificates, agreements, documents and other
papers and information as Agent and Issuing Bank may reasonably request (the
"Letter of Credit Application"). In the event of any conflict between the terms
of any Letter of Credit Application and this Agreement, for purposes of this
Agreement, the terms of this Agreement shall control.
(c) REPORTING OBLIGATIONS OF ISSUING BANK. Issuing Bank will provide
Agent (which, after receipt, and upon the request of any Lender, Agent will
provide to such Lender), in form and substance satisfactory to Agent, each of
the following on the following dates: (i) on or prior to (A) any issuance of any
Letter of Credit by Issuing Bank, (B) any drawing under any
49
such Letter of Credit or (C) any payment (or failure to pay when due) by a
Borrower of any related Letter of Credit Obligation, notice thereof, which shall
contain a reasonably detailed description of such issuance, drawing or payment,
(ii) upon the request of Agent (or any Lender through Agent), copies of any
Letter of Credit issued by Issuing Bank and any related Letter of Credit
Documents and such other documents and information as may reasonably be
requested by Agent and (iii) on the first Business Day of each calendar week, a
schedule of the Letters of Credit issued by Issuing Bank, in form and substance
reasonably satisfactory to Agent, setting forth the Letter of Credit Obligations
for such Letters of Credit outstanding on the last Business Day of the previous
calendar week.
(d) ACQUISITION OF PARTICIPATIONS. Upon the issuance of a Letter of
Credit in accordance with the terms of this Agreement resulting in any increase
in the Letter of Credit Obligations, each Lender shall be deemed to have
acquired, without recourse or warranty, an undivided interest and participation
in such Letter of Credit and the related Letter of Credit Obligations in an
amount equal to such Lender's Pro Rata Share of such Letter of Credit
Obligations.
(e) REIMBURSEMENT OBLIGATIONS OF BORROWERS.
(i) Each Borrower shall pay to Issuing Bank each Letter of
Credit Obligation owing with respect to each Letter of Credit no later than the
first Business Day after such Borrower (or Administrative Borrower on behalf of
such Borrower) receives notice from Issuing Bank that payment has been made
under such Letter of Credit or that such Letter of Credit Obligation is
otherwise due with interest thereon computed as set forth in clause (A) of this
Section 2.03(i) below. In the event that Issuing Bank incurs any Letter of
Credit Obligation not repaid by Borrowers as provided in this clause (e) (or any
such payment by any Borrower is rescinded or set aside for any reason), Issuing
Bank shall promptly notify Agent of such failure (and, upon receipt of such
notice, Agent shall forward a copy to each Lender) and, irrespective of whether
such notice is given, such Letter of Credit Obligation shall be payable on
demand by Borrowers with interest thereon computed (A) from the date on which
such Letter of Credit Obligation arose to the date that it is paid in full, at
the interest rate applicable during such period to Revolving Loans and (B)
thereafter until payment in full, at the interest rate applicable during such
period to past due Revolving Loans.
(ii) Agent shall have the right to charge the Loan Account
with the amount of any and all Indebtedness, liabilities and obligations of any
kind (including indemnification for breakage costs, capital adequacy and reserve
requirement charges) incurred by Agent or Lenders under the Letter of Credit
Guaranty or incurred by Issuing Bank at the earlier of (A) payment by Agent or
Lenders under the Letters of Credit Guaranty or (B) upon the occurrence of any
Default or Event of Default. Agent shall also have the right to charge the Loan
Account with the amount of any cash collateral or other collateral support that
Issuing Bank may require from Agent or any Lender under a Letter of Credit
Guaranty or otherwise, or at Agent's option, to require Borrowers to provide
such required amounts of cash collateral to Agent in connection with Agent's
obligations under any such Letter of Credit Guaranty or otherwise with respect
to any such Letter of Credit. Any amount charged to the Loan Account shall be
deemed a Revolving Loan hereunder made by Lenders to Borrowers, funded by Agent
on behalf of Lenders and subject to Section 2.02 of this Agreement. Any charges,
fees, commissions, costs and expenses
50
charged to Agent for Borrowers' account by Issuing Bank in connection with or
arising out of Letters of Credit or transactions relating thereto will be
charged to the Loan Account in full when charged to or paid by Agent and, when
charged, shall be conclusive on Borrowers absent manifest error. Each of Lenders
and Borrowers agrees that Agent shall have the right to make such charges
regardless of whether any Default or Event of Default shall have occurred and be
continuing or whether any of the conditions precedent in Article IV have been
satisfied.
(f) REIMBURSEMENT OBLIGATIONS OF LENDERS. Upon receipt of the notice
described in clause (e) above from Agent, each Lender shall pay to Agent for the
account of Issuing Bank, no later than three (3) days after Agent's request
therefor, its Pro Rata Share of such Letter of Credit Obligation. By making such
payment (other than during the continuation of an Event of Default under Section
8.01(f) or 8.01(g)), such Lender shall be deemed to have made a Revolving Loan
to Borrower for whose account the applicable Letter of Credit was issued, which,
upon receipt thereof by such Issuing Bank, Borrowers shall be deemed to have
used in whole to repay such Letter of Credit Obligation. Any such payment that
is not deemed a Revolving Loan shall be deemed a funding by such Lender of its
participation in the applicable Letter of Credit and the related Letter of
Credit Obligations. Such participation shall not otherwise be required to be
funded. Upon receipt by any Issuing Bank of any payment from any Lender pursuant
to this clause (f) with respect to any portion of any Letter of Credit
Obligation, such Issuing Bank shall promptly pay over to such Lender all
payments received after such payment by such Issuing Bank with respect to such
portion of such Letter of Credit Obligations.
(g) INDEMNIFICATION. Borrowers agree to jointly and severally
unconditionally indemnify Agent and each Lender and hold Agent and each Lender
harmless from any and all loss, claim or liability incurred by Agent or any
Lender arising from any transactions or occurrences relating to Letters of
Credit, any drafts or acceptances thereunder, the Collateral relating thereto,
and all Obligations in respect thereof, including any such loss or claim due to
any action taken by Issuing Bank, other than for any such loss, claim or
liability arising out of the gross negligence or willful misconduct of Issuing
Bank, Agent or any Lender as determined by a final judgment of a court of
competent jurisdiction. Borrowers further agree to jointly and severally hold
Agent and each Lender harmless from any errors or omission, negligence or
misconduct by Issuing Bank. Borrowers' unconditional obligations to Agent, each
Lender and Issuing Bank with respect to Letters of Credit hereunder shall not be
modified or diminished for any reason or in any manner whatsoever, other than as
a result of Agent's, such Lender's or Issuing Bank's gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Borrowers agree that any charges incurred by Agent or Issuing Bank
for Borrowers' account hereunder may be charged to the Loan Account.
(h) SUBROGATION. Upon any payments made to Issuing Bank under the
Letter of Credit Guaranty, Agent or Lenders, as the case may be, shall, without
prejudice to their rights under this Agreement (including that such unreimbursed
amounts shall constitute Revolving Loans hereunder), acquire by subrogation, any
rights, remedies, duties or obligations granted or undertaken by Borrowers in
favor of Issuing Bank in any application for Letters of Credit, any standing
agreement relating to Letters of Credit or otherwise, all of which shall be
deemed to have been granted to Agent and Lenders and apply in all respects to
Agent and Lenders and shall be in addition to any rights, remedies, duties or
obligations contained herein.
51
(i) OBLIGATIONS ABSOLUTE. The obligations of Borrowers and Lenders
pursuant to clauses (d), (e), (f) and (g) above shall be absolute, unconditional
and irrevocable and performed strictly in accordance with the terms of this
Agreement irrespective of (i) (A) the invalidity or unenforceability of any term
or provision in any Letter of Credit, any document transferring or purporting to
transfer a Letter of Credit, any Loan Document (including the sufficiency of any
such instrument), or any modification to any provision of any of the foregoing,
(B) any document presented under a Letter of Credit being forged, fraudulent,
invalid, insufficient or inaccurate in any respect or failing to comply with the
terms of such Letter of Credit or (C) any loss or delay, including in the
transmission of any document, (ii) the existence of any setoff, claim,
abatement, recoupment, defense or other right that any Person (including any
other Borrower or Guarantor) may have against the beneficiary of any Letter of
Credit or any other Person, whether in connection with any Loan Document or any
other transaction, or the existence of any other withholding, abatement or
reduction, (iii) in the case of the obligations of any Lender, (A) the failure
of any condition precedent set forth in Article IV to be satisfied (each of
which conditions precedent Lenders hereby irrevocably waive) or (B) any adverse
change in the condition (financial or otherwise) of any Borrower or Guarantor
and (iv) any other act or omission to act or delay of any kind of any Lender or
any other Person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.03, constitute a legal or equitable discharge of any obligation of
Borrowers or any Lender hereunder.
Section 2.04 EVIDENCE OF DEBT.
(a) RECORDS OF LENDERS. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the Indebtedness of
each Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(b) RECORDS OF AGENT. Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder, and (iii) the amount of any sum received by
Agent hereunder for the account of Lenders and each Lender's share thereof.
(c) PRIMA FACIE EVIDENCE. The entries made in the accounts
maintained pursuant to this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; PROVIDED, THAT, the
failure of any Lender or Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of Borrowers to repay the Loans in
accordance with the terms of this Agreement.
(d) PROMISSORY NOTES. Each Lender may at any time request that the
Loans made by it be evidenced by a promissory note. In such event, Borrower
shall execute and deliver to such Lender a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in a form furnished by Agent and reasonably acceptable to
such Borrower. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 11.07) be
52
represented by one or more promissory notes in such form payable to the order of
the payee named therein.
Section 2.05 INTEREST.
(a) LOANS.
(i) Each portion of the Term Loan that is a Reference Rate
Loan shall bear interest on the principal amount thereof from time to time
outstanding from the date such Term Loan is made, continued or converted, as the
case may be, until such principal amount becomes due, at a rate per annum equal
to the Applicable Margin plus the greater of (A) the Reference Rate and (B) six
(6%) percent, subject to Sections 2.05(b) and 2.05(c) below. Each portion of the
Term Loan that is a LIBOR Rate Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date such Term Loan is made,
continued or converted, as the case may be, until such principal amount becomes
due, at a rate per annum equal to the Applicable Margin plus the greater of (A)
the LIBOR Rate and (B) four (4%) percent, subject to Section 2.05(b) and 2.05(c)
below.
(ii) Each portion of the Revolving Loans that is a Reference
Rate Loan shall bear interest on the principal amount thereof from time to time
outstanding at a rate per annum equal to two (2%) percent plus the greater of
(A) the Reference Rate and (B) six (6%) percent, and in each case subject to
Sections 2.05(b) and 2.05(c) below. Each portion of the Revolving Loan that is a
LIBOR Rate Loan shall bear interest on the principal amount thereof from time to
time outstanding at a rate per annum equal to three (3%) percent plus the
greater of (A) the LIBOR Rate and (B) four (4%) percent, and in each case
subject to Sections 2.05(b) and 2.05(c) below.
(b) INTEREST PAYMENT. Interest with respect to each Loan shall be
payable monthly, in arrears, on the first day of each month, by Borrowers to
Agent, for the account of Lenders, in cash or other immediately available funds
and shall be calculated on the basis of a three hundred sixty (360) day year and
actual days elapsed. In no event shall charges constituting interest payable by
Borrowers to Agent and Lenders exceed the Highest Lawful Rate, and if any such
part or provision of this Agreement is in contravention of any such law or
regulation, such part or provision shall be deemed amended to conform thereto.
(c) DEFAULT INTEREST. At any time an Event of Default shall exist or
have occurred and be continuing, at the election of Agent or the Required
Lenders, upon notice from Agent to Administrative Borrower, notwithstanding
anything to the contrary set forth in this Section 2.05, the principal of, and
all accrued and unpaid interest on, all Loans, fees, indemnities, or any other
outstanding Obligations of Borrowers and Guarantors under this Agreement and the
other Loan Documents, shall bear interest, from the date such Event of Default
occurred until the date such Event of Default is cured or waived in writing in
accordance herewith, at a rate per annum equal at all times to the Post-Default
Rate. At any time an Event of Default shall exist or have occurred and be
continuing, all interest shall be payable on demand.
53
Section 2.06 FEES.
(a) CLOSING FEE. On the Effective Date, Borrowers, jointly and
severally, shall pay to Agent, for the account of Lenders in accordance with the
agreement among Agent and such Lenders, a non-refundable closing fee (the
"Closing Fee") in the amount of $1,300,000.
(b) LOAN SERVICING FEE. From and after the Effective Date and until
the date on which all Obligations are Paid in Full, Borrowers shall pay to
Agent, for its own account, a non-refundable loan servicing fee (the "Loan
Servicing Fee") equal to $25,000 per quarter, which shall be deemed fully earned
when paid and which shall be payable on the Effective Date (payable ratably
based on the number of days remaining in the calendar quarter in which the
Effective Date occurs) and quarterly in advance thereafter on the first Business
Day of each calendar quarter.
(c) UNUSED LINE FEE. From and after the Effective Date and until the
date on which all Obligations are Paid in Full, Borrowers shall pay to Agent
monthly, for the account of Lenders, an unused line fee (the "Unused Line Fee")
at a rate equal to one-half (.50%) percent per annum calculated upon the amount
by which the Total Revolving Credit Commitments exceeds the sum of (A) the
average daily principal balance of the outstanding Revolving Loans and (B) the
average daily undrawn amount of all Letters of Credit during the immediately
preceding month (or part thereof), which fee shall be payable on the first day
of each month in arrears, calculated on the basis of a three hundred sixty (360)
day year and actual days elapsed.
(d) LETTER OF CREDIT FEES. With respect to all Letters of Credit,
Borrowers shall pay to Agent, for the account of Lenders, a letter of credit fee
(the "Letter of Credit Fee") at a rate equal to three (3%) percent per annum on
the average daily maximum amount available to be drawn under all of such Letters
of Credit for the immediately preceding month (or part thereof), payable in
arrears as of the first day of each succeeding month, calculated for each day
from the date of issuance to the date of expiration; except that Borrowers shall
pay, at the option of Agent or Required Lenders, without notice, such Letter of
Credit Fee at a rate three (3%) percent greater than the otherwise applicable
rate on such average daily maximum amount for the period from and after the date
of the occurrence of an Event of Default for so long as such Event of Default is
continuing as determined by Agent. Such Letter of Credit Fees shall be
calculated on the basis of a three hundred sixty (360) day year and actual days
elapsed and the obligation of Borrowers to pay such fee shall survive the
termination or non-renewal of this Agreement. In addition to the Letter of
Credit Fees provided above, Borrowers shall pay to Issuing Bank for its own
account (without sharing with Lenders) the letter of credit fronting and
negotiation fees agreed to by Borrowers and Issuing Bank from time to time and
the customary charges from time to time of Issuing Bank with respect to the
issuance, amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit.
(e) PREPAYMENT FEE.
(i) In the event that any of the Term Loans are prepaid prior
to the third anniversary of the Effective Date, except as otherwise provided
below, Borrowers, jointly and severally, shall pay to Agent, for the account of
Lenders in accordance with their respective Pro Rata Shares or as otherwise
determined by an agreement among such Lenders, a non-refundable prepayment fee
("Prepayment Fee"), equal to (A) two (2%) percent of the amount of the
prepayment of any of the Term Loans if such prepayment is made on or before the
second
54
anniversary of the Effective Date, or (B) one (1%) percent of the amount of the
prepayment if such prepayment is made after the second anniversary of the
Effective Date but on or before the third anniversary of the Effective Date.
(ii) Each such Prepayment Fee shall be due and payable on the
date of each such prepayment.
(iii) No such Prepayment Fee is payable in connection with (A)
the first prepayment of the Term Loans in an amount of up to $20,000,000 which
is made after the first anniversary of the Effective Date with the cash proceeds
received (directly or indirectly) by or on behalf of Parent or any of its
Subsidiaries in respect of any Equity Issuance (including, without limitation,
under the PIPE Documents and/or the Noteholder Documents) prior to the first
anniversary of the Effective Date; PROVIDED, THAT, the Prepayment Fee shall be
payable upon any subsequent prepayment of any of the Term Loans other than as
otherwise provided under clauses (B), (C) and (D) of this Section 2.06(e)(iii),
(B) prepayments required to be made under Section 3.03(a), (C) the payments
required to be made under Section 3.01(b) and (D) prepayments made upon the
termination of this Agreement and payment of the Early Termination Fee. The
terms of this clause (iii) only apply to the Prepayment Fee and not the Early
Termination Fee.
(f) EARLY TERMINATION FEE. If for any reason this Agreement is
terminated prior to the third anniversary of the Effective Date, in view of the
impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Agent's and
each Lender's lost profits as a result thereof, Borrowers agree to pay to Agent,
for the benefit of Lenders, upon the effective date of such termination, an
early termination fee ("Early Termination Fee") in the amount equal to (i) two
(2%) percent of the Total Loan Commitment, if such termination occurs on or
prior to the second anniversary of the Effective Date or (ii) one (1%) percent
of the Total Loan Commitment, if such termination occurs after the second
anniversary of the Effective Date and on or prior to the third anniversary of
the Effective Date. Such Early Termination Fee shall be presumed to be the
amount of damages sustained by Agent and Lenders as a result of such early
termination and Borrowers and Guarantors agree that it is reasonable under the
circumstances currently existing (including, but not limited to, the borrowings
that are reasonably expected by Borrowers hereunder and the interest, fees and
other charges that are reasonably expected to be received by Agent and Lenders
pursuant hereto). In addition, Agent and Lenders shall be entitled to such Early
Termination Fee upon the occurrence of any Event of Default described in
Sections 8.01(f) and 8.01(g) hereof, even if Agent and Lenders do not exercise
the right to terminate this Agreement, but elect, at their option, to provide
financing to any Borrower or permit the use of cash collateral under the United
States Bankruptcy Code. The Early Termination Fee provided for in this Section
2.06(f) shall be deemed included in the Obligations. Notwithstanding that
prepayment shall be made on the termination of this Agreement, no Prepayment Fee
shall be required with respect to such prepayments, but instead Borrowers shall
pay the Early Termination Fee. If for any reason this Agreement is terminated
prior to the Final Maturity Date, Borrowers and Guarantors agree that the
Obligations shall be Paid in Full.
(g) AUTHORIZATION TO CHARGE ACCOUNT. Borrowers hereby authorize
Agent to charge the loan account of Borrowers with the amount of all payments
and fees due under this Section 2.06 or any other provision hereof to Lenders,
Agent and Issuing Bank as and when such
55
payments become due. Borrowers confirm that any charges which Agent may so make
to the loan accounts of Borrowers as herein provided will be made as an
accommodation to Borrowers and solely at Agent's discretion.
Section 2.07 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement or any of the other Loan Documents and no
action taken by Lenders pursuant hereto or thereto shall be deemed to constitute
Lenders to be a partnership, an association, a joint venture or any other kind
of entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and subject to Section 9.09 hereof, each Lender
shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
Section 2.08 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, each Borrower, jointly and severally, in consideration
of the financial accommodations to be provided by Agent and Lenders under this
Agreement and the other Loan Documents, for the mutual benefit, directly and
indirectly, of each Borrower and in consideration of the undertakings of the
other Borrowers to accept joint and several liability for the Obligations,
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations (including,
without limitation, any Obligations arising under this Section 2.08), it being
the intention of the parties hereto that all of the Obligations shall be the
joint and several obligations of each Borrower without preferences or
distinction among them. If and to the extent that any Borrower shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event, the other Borrowers will make such payment with respect to, or
perform, such Obligation. Subject to the terms and conditions hereof and except
as otherwise provided above, the Obligations of each Borrower under the
provisions of this Section 2.08 constitute the absolute and unconditional, full
recourse Obligations of each Borrower, enforceable against each such Person to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement, the other Loan Documents or any
other circumstances whatsoever.
(b) The provisions of this Section 2.08 are made for the benefit of
Agent, Lenders, Issuing Bank and their successors and assigns, and may be
enforced by them from time to time against any or all of Borrowers as often as
occasion therefor may arise and without requirement on the part of Agent,
Lenders, Issuing Bank or such successors or assigns first to marshal any of its
or their claims or to exercise any of its or their rights against any of the
other Borrowers or to exhaust any remedies available to it or them against any
of the other Borrowers or to resort to any other source or means of obtaining
payment of any of the Obligations hereunder or to elect any other remedy. The
provisions of this Section 2.08 shall remain in effect until all of the
Obligations shall have been Paid in Full.
56
(c) Each of Borrowers hereby agrees that it will not enforce any of
its rights of contribution or subrogation against the other Borrowers with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to Agent or Lenders with respect to any of
the Obligations or any Collateral, until such time as all of the Obligations
have been Paid in Full in cash. Any claim which any Borrower may have against
any other Borrower with respect to any payments to Agent or Lenders hereunder or
under any other Loan Documents are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations.
ARTICLE III
PAYMENTS
Section 3.01 REPAYMENT OF LOANS.
(a) DUE ON FINAL MATURITY DATE. The outstanding principal amount of
each of the Loans shall be due and payable in full in immediately available
funds on the Final Maturity Date (or earlier as herein provided).
(b) AMORTIZATION. The outstanding principal amount of the Term Loans
shall be repaid in twenty (20) consecutive installments payable on the
penultimate day of each calendar quarter (or earlier as provided herein)
commencing with December 30, 2006, as set forth in the chart below (or if the
date indicated is not a Business Day then on the immediately following Business
Day), of which the last installment shall be due and payable on the Final
Maturity Date in the amount of the entire unpaid balance of all of the Loans.
-------------------------------------------------------------
PRINCIPAL PAYMENTS DATE AMOUNT OF INSTALLMENT ($)
-------------------------------------------------------------
December 30, 2006 $1,000,000
-------------------------------------------------------------
March 30, 2007 $1,000,000
-------------------------------------------------------------
June 29, 2007 $1,000,000
-------------------------------------------------------------
September 29, 2007 $1,000,000
-------------------------------------------------------------
December 30, 2007 $2,000,000
-------------------------------------------------------------
March 30, 2008 $2,000,000
-------------------------------------------------------------
June 29, 2008 $2,000,000
-------------------------------------------------------------
September 29, 2008 $2,000,000
-------------------------------------------------------------
57
-------------------------------------------------------------
PRINCIPAL PAYMENTS DATE AMOUNT OF INSTALLMENT ($)
-------------------------------------------------------------
December 30, 2008 $2,000,000
-------------------------------------------------------------
March 30, 2009 $2,000,000
-------------------------------------------------------------
June 29, 2009 $2,000,000
-------------------------------------------------------------
September 29, 2009 $2,000,000
-------------------------------------------------------------
December 30, 2009 $2,000,000
-------------------------------------------------------------
March 30, 2010 $2,000,000
-------------------------------------------------------------
June 29, 2010 $2,000,000
-------------------------------------------------------------
September 29, 2010 $2,000,000
-------------------------------------------------------------
December 30, 2010 $2,000,000
-------------------------------------------------------------
March 30, 2011 $2,000,000
-------------------------------------------------------------
June 29, 2011 $2,000,000
-------------------------------------------------------------
September 29, 2011 $2,000,000
-------------------------------------------------------------
Section 3.02 OPTIONAL PREPAYMENT OF LOANS.
(a) REVOLVING LOANS. Borrowers may prepay without penalty or premium
the principal of any Revolving Loan, in whole or in part (except as otherwise
provided in Section 2.06(f) hereof).
(b) TERM LOANS.
(i) Borrowers may, upon not less than three (3) Business Days'
prior written notice to Agent, prepay without penalty or premium (except as
otherwise provided in Section 2.06(e) above), the principal of the Term Loans,
in whole or in part.
(ii) Each prepayment of the Term Loans made pursuant to this
Section 3.02 shall be accompanied by the payment of accrued interest to the date
of such payment on the amount prepaid and the applicable Prepayment Fee. Each
such prepayment of the Term Loans pursuant to this Section 3.02 shall be applied
to the remaining installments of principal payable
58
by Borrowers under Section 3.01 above in the inverse order of maturity. Each
such prepayment shall be applied by Agent to the Term Loans to each Borrower in
such amounts and manner as Agent may determine. Each such prepayment of the Term
Loans shall be in an amount which is an integral multiple of $5,000,000 (unless
the outstanding principal amount of the Term Loans immediately prior to such
prepayment is less than $5,000,000, then such prepayment shall be equal to such
outstanding principal amount). Nothing contained herein shall be construed to
limit the right of Agent or Lenders to receive the Early Termination Fee
pursuant to Section 2.06(f) hereof.
(c) PREPAYMENT IN FULL. Borrowers may, upon at least thirty (30)
days prior written notice to Agent, terminate this Agreement by paying to Agent,
in cash, the Obligations (and including either (i) providing cash collateral to
be held by Agent in an amount equal to 105% of the outstanding Letter of Credit
Obligations or (ii) causing the original Letters of Credit to be returned to
Agent together with instructions from the beneficiary for the cancellation
thereof and confirming that no draws have been made thereunder). If
Administrative Borrower has sent a notice of termination pursuant to this clause
(c), then Lenders' obligations to extend credit hereunder shall terminate upon
receipt be Agent of such notice.
Section 3.03 MANDATORY PREPAYMENTS OF LOANS.
(a) Within ten (10) days after the date of the receipt by Agent of
the financial statements for each Fiscal Year of Parent and its Subsidiaries,
commencing with the Fiscal Year ending December 31, 2006, or, if such financial
statements are not delivered to Agent on the date such statements are required
to be delivered pursuant to Section 6.01(a)(ii), ten (10) days after the date
such statements are required to be delivered to Agent pursuant to Section
6.01(a)(ii), Borrowers shall, absolutely and unconditionally without notice or
demand, prepay the outstanding principal amount of the Term Loans in an amount
equal to (i) fifty (50%) percent of the Excess Cash Flow of the Parent and its
Subsidiaries in the immediately preceding Fiscal Year (except in the case of the
Fiscal Year ending December 31, 2006, fifty (50%) percent of the Excess Cash
Flow of the Parent and its Subsidiaries for the period from the Effective Date
to the end of such Fiscal Year) minus (ii) all optional cash prepayments of
principal on the Term Loans made during such period.
(b) Immediately upon any Asset Sale by Parent or any of its
Subsidiaries (except as provided in clause (c) below), Borrowers shall,
absolutely and unconditionally without notice or demand, prepay the outstanding
principal amount of the Term Loans in an amount equal to one hundred (100%)
percent of the Net Cash Proceeds payable to or for the benefit of such Person in
connection with such Asset Sale.
(c) An Asset Sale permitted under Section 6.02(c) will not require a
mandatory prepayment pursuant to Section 3.03(b).
(d) Immediately upon any Debt Issuance or Equity Issuance, Borrower
shall, absolutely and unconditionally without notice or demand, prepay the
outstanding principal amount of the Term Loans in an amount equal to one hundred
(100%) percent of the Net Cash Proceeds payable to or for the benefit of such
Person in connection with such Debt Issuance or Equity Issuance, PROVIDED, THAT,
any such prepayment shall not be required upon (i) an Equity Issuance by Parent
of any of such Capital Stock, warrants, options, security or instruments or the
receipt of such capital contribution, in each case, under and in accordance with
the Noteholder Documents, the PIPE Documents, any equity compensation plan,
restricted stock plan, employee stock ownership plan or employment agreement in
accordance with such plan or agreement, (ii) an Equity
59
Issuance to a seller of assets (including Capital Stock) as consideration for
the purchase by a Borrower or Guarantor or any of its Subsidiaries of such
assets pursuant to a Permitted Acquisition or Acquisitions, or as payment of
earn-outs, deferred purchase price payments and/or Special Incentive Bonuses
permitted hereunder, in each case to the extent such Capital Stock is permitted
to be issued for such purpose, and (iii) an Equity Issuance, the proceeds of
which are used to pay all or a portion of the consideration payable with respect
to any Permitted Acquisition or any Acquisition and (iv) a capital contribution
made to fund the purchase price for any Permitted Acquisition or any
Acquisition, or pay any earn-outs, deferred purchase price payments or Special
Incentive Bonuses. Nothing contained in this Section 3.03(d) shall be construed
to limit the use of the proceeds of the Equity Issuance under the PIPE Documents
or the Noteholder Documents.
(e) Subject to Section 3.03(f) below, immediately upon the receipt
by or on behalf of Parent or any of its Subsidiaries (or of Agent as the loss
payee with respect thereto) of any proceeds of insurance, condemnation award or
other compensation or payment in respect of any Property Loss Event, Borrowers
shall, absolutely and unconditionally without notice or demand, prepay the
outstanding principal amount of the Term Loans in an amount equal to one hundred
(100%) percent of the Net Cash Proceeds payable to or for the benefit of such
person in connection therewith.
(f) To the extent of a Property Loss Event with respect to Real
Property or Equipment, instead of making the payment required pursuant to
Section 3.03(e) above (except as otherwise provided below), if any of the
Equipment or any portion of any building, structure or other improvement on any
Real Property is lost, physically damaged or destroyed, upon the written request
of Administrative Borrower, Agent shall release the Net Cash Proceeds from
insurance received by Agent based on a claim by any Borrower, Guarantor or
Subsidiary as a result of such loss, damage or destruction to the extent
necessary for the repair, refurbishing or replacement of such Equipment or
building, structure or improvement, and to the extent provided in Section
6.01(h)(ii) hereof.
(g) Each such prepayment of the Term Loans pursuant to this Section
3.03 shall be applied to the remaining installments of principal payable by
Borrowers under Section 3.01 above in the inverse order of maturity.
(h) Any prepayment made pursuant to this Section 3.03 shall first be
applied to accrued interest on the principal amount being prepaid to the date of
prepayment as set forth in Section 3.05 below.
(i) Except as otherwise expressly provided in this Section 3.03,
payments with respect to any subsection of this Section 3.03 are in addition to
payments made or required to be made under any other subsection of this Section
3.03.
(j) No amounts prepaid in respect of the Term Loans may be
reborrowed.
60
Section 3.04 INTEREST AND FEES. Any prepayment made pursuant to Section
3.03 shall be accompanied by accrued interest on the principal amount being
prepaid to the date of prepayment and the Prepayment Fee applicable thereto.
Section 3.05 APPORTIONMENT OF PAYMENTS. Subject to Section 2.02 hereof and
to any other written agreement among Agent and/or any of Lenders, all payments
of principal and interest in respect of outstanding Loans, all payments of fees
and all other payments in respect of any other Obligations provided for herein
as of the date hereof, shall be allocated by Agent among such of Lenders as are
entitled thereto, in proportion to their respective Pro Rata Shares or otherwise
as provided herein or, in respect of payments not made on account of Loans, as
designated by the Person making payment when the payment is made.
Section 3.06 PAYMENTS; COMPUTATIONS AND STATEMENTS.
(a) PROCEDURES. Borrowers and Guarantors will make each payment
under this Agreement not later than 12:00 p.m. (New York City time) on the day
when due, in lawful money of the United States of America and in immediately
available funds, to Agent's Account. All payments received by Agent after 12:00
p.m. (New York City time) on any Business Day will be credited to Agent's
Account on the next succeeding Business Day. All payments shall be made by
Borrowers and Guarantors without set-off, counterclaim, deduction or other
defense. Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal ratably to Lenders in accordance with their
Pro Rata Shares and like funds relating to the payment of any other amount
payable to any Lender to such Lender, in each case to be applied in accordance
with the terms of this Agreement. Lenders shall make any payment hereunder or
under any Loan Document in immediately available Dollars and without set-off,
counterclaim, deduction or other defense.
(b) PAYMENT DATES. Whenever any payment to be made under any Loan
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be. Each determination by Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.
(c) APPLICATION OF PAYMENTS GENERALLY. Except for payments and other
amounts received by Agent and applied in accordance with clause (d) below (or
required to be applied in accordance with Section 3.03), all payments and any
other amounts received by Agent from or for the benefit of any Borrower or
Guarantor shall be applied as follows: first, to pay principal of, and interest
on, any portion of the Loans Agent may have advanced pursuant to the provisions
of this Agreement on behalf of any Lender and on any Letter of Credit
Obligation, for which Agent or Issuing Bank has not then been reimbursed by
Lender or Borrowers, second, to pay all other Obligations then due and payable,
and third, as Borrower so designates. If sufficient amounts are not available to
repay all outstanding Obligations described in any priority level set forth in
this Section 3.06(c), the available amounts shall be applied, unless otherwise
expressly specified herein, to such Obligations ratably based on the proportion
of Lenders' interest in such Obligations. Any priority level set forth in this
Section 3.06(c) that includes interest shall include all such interest, whether
or not accruing after the filing of any petition in bankruptcy or
61
the commencement of any insolvency, reorganization or similar proceeding, and
whether or not a claim for post-filing or post-petition interest is allowed in
any such proceeding. Notwithstanding anything to the contrary contained in this
Agreement, (i) unless so directed by Administrative Borrower, or unless a
Default or an Event of Default shall exist or have occurred and be continuing,
Agent shall not apply any payments which it receives to any LIBOR Rate Loans,
except (A) on the expiration date of the Interest Period applicable to any such
LIBOR Rate Loans or (B) in the event that there are no outstanding Reference
Rate Loans and (ii) to the extent any Borrower uses any proceeds of the Loans or
Letters of Credit to acquire rights in or the use of any Collateral or to repay
any Indebtedness used to acquire rights in or the use of any Collateral,
payments in respect of the Obligations shall be deemed applied first to the
Obligations arising from Loans and Letters of Credit that were not used for such
purposes and second to the Obligations arising from Loans and Letters of Credit
the proceeds of which were used to acquire rights in or the use of any
Collateral in the chronological order in which such Borrower acquired such
rights in or the use of such Collateral.
(d) APPLICATION OF PAYMENTS DURING AN EVENT OF DEFAULT. Each
Borrower and Guarantor hereby irrevocably waives the right to direct the
application during the continuance of an Event of Default of any and all
payments in respect of any Obligation and any proceeds of Collateral at any time
on or after an Event of Default and for so long as the same is continuing and
notwithstanding the provisions of clause (c) above and notwithstanding anything
to the contrary contained in Section 3.03, Agent may, and, upon either (A) the
direction of the Required Lenders or (B) the termination of any Commitment or
the acceleration of any Obligation, shall, apply all payments in respect of any
Obligation, all funds held as cash collateral and all other proceeds of
Collateral (i) first, to pay Obligations in respect of any cost or expense
reimbursements, fees or indemnities then due to Agent, (ii) second, to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to Lenders and Issuing Bank, (iii) third, to pay interest
then due and payable in respect of the Loans, Advances and Letter of Credit
Obligations, (iv) fourth, to repay the outstanding principal amounts of the
Advances, (v) fifth, to repay the outstanding principal amounts of the Loans and
Letter of Credit Obligations, and to provide cash collateral for Letters of
Credit in the manner and to the extent described in Section 8.02 and (vi) sixth,
to the ratable payment of all other Obligations.
(e) ADVANCING PAYMENTS. Unless Agent shall have received notice from
Administrative Borrower prior to the date on which any payment is due hereunder
that any Borrower will not make such payment in full, Agent may assume that such
Borrower has made such payment in full to Agent on such date and Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that a Borrower shall not have made such payment in full to Agent, each
Lender shall repay to Agent on demand such amount distributed to such Lender
together with interest thereon (at the Federal Funds Rate for the first Business
Day and thereafter, at the rate then applicable to Revolving Loans) for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to Agent.
Section 3.07 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of any Obligation in excess of its ratable
share of payments on account of similar obligations obtained by all Lenders,
such Lender shall forthwith be deemed to have purchased
62
from the other Lenders such participations in such similar obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; PROVIDED, THAT, if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (a) the amount of such Lender's required repayment to (b) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid by
the purchasing Lender in respect of the total amount so recovered. Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 3.07 may, to the fullest extent permitted by law,
exercise all of its rights (including such Lender's right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation.
Section 3.08 TAXES.
(a) Except as otherwise provided in Section 3.08(b) below, all
payments made by any Borrower or Guarantor hereunder or under any other Loan
Document shall be made free and clear of, and without deduction or withholding
for, any present or future income, franchise, sales, use, excise, stamp or other
taxes, levies, imposts, deductions, charges, fees, withholdings, restrictions or
conditions of any nature now or hereafter imposed, levied, collected, withheld
or assessed by any jurisdiction (whether pursuant to Federal, State, local or
foreign law) or by any political subdivision or taxing authority thereof or
therein, and all interest, penalties or additional amounts, excluding taxes
imposed on the net income of Agent or any Lender or franchise taxes imposed in
lieu of income taxes, in each case imposed by the jurisdiction in which Agent or
such Lender is organized or any political subdivision thereof or taxing
authority thereof or any jurisdiction in which such Person's principal office is
located or any political subdivision thereof or taxing authority thereof as a
result of a present or former connection between Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein, other than any such
connection arising solely from Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document (such nonexcluded taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions, conditions, interest,
penalties and additional amounts being hereinafter collectively referred to as
"Taxes").
(b) If any Borrower or Guarantor shall be required by applicable law
to deduct or to withhold any Taxes from or in respect of any amount payable
hereunder or under any other Loan Document,
(i) the amount so payable shall be increased so that after
making all required deductions and withholdings (including Taxes on amounts
payable pursuant to this sentence) Agent and each Lender, as the case may be,
receives an amount equal to the sum it would have received had no such deduction
or withholding been made (unless as to the amount owed to any Lender such
deduction or withholding results from such Lender's failure to comply with the
requirements of Sections 3.08(e) and (f) below, including for this purpose the
failure of such Lender to provide a form required by a taxing authority
described in such Sections but only if such Lender is legally able to deliver
such a form),
63
(ii) Borrowers and Guarantors shall make such deductions or
withholdings,
(iii) Borrowers and Guarantors shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with
applicable law, and
(iv) as promptly as possible thereafter, Borrowers and
Guarantors shall send Agent an official receipt (or, if an official receipt is
not available, such other documentation as shall be satisfactory to Agent)
evidencing payment of the amount or amounts so deducted or withheld.
Notwithstanding anything to the contrary in this Section 3.08, Borrowers and
Guarantors, jointly and severally, agree to pay additional amounts and to
indemnify each Lender (in the manner set forth in Section 3.08(d)) in respect of
any amounts deducted or withheld by it, as described in the immediately
preceding sentence, as a result of any changes after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deduction or withholding of Taxes.
(c) In addition, each Borrower and Guarantor agrees to pay any
present or future Taxes that arise from any payment made hereunder or from the
execution, delivery, performance, recordation or filing of, or otherwise with
respect to, this Agreement or any other Loan Document.
(d) Borrowers and Guarantors, jointly and severally, hereby
indemnify and agree to hold Agent and each Lender harmless from and against
Taxes (including, without limitation, any Taxes imposed by any jurisdiction on
amounts payable under this Section 3.08 paid by Agent or such Lender, and any
liability (including penalties, interest and expenses for nonpayment, late
payment or otherwise) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. Such indemnification shall be
paid within ten (10) days from the date on which Agent or any such Lender makes
written demand therefor, which demand shall identify in reasonable detail the
nature and amount of such Taxes (and provide such other evidence thereof as has
been received by Agent or such Lender). If Agent or any Lender receives a refund
in respect of any Taxes for which Agent or such Lender has received payment from
a Borrower or Guarantor hereunder, so long as no Event of Default shall exist or
have occurred and be continuing, Agent or such Lender (as the case may be) shall
credit to the loan account of such Borrower the amount of such refund plus any
interest received (but only to the extent of indemnity payments made, or
additional amounts paid, by or on behalf of such Borrower under this Section
3.08 with respect to the Taxes giving rise to such refund). If Taxes were not
correctly or legally asserted, Agent or any Lender shall, upon Administrative
Borrower's request and at the expense of Borrowers and Guarantors, provide such
documents to Administrative Borrower in form and substance satisfactory to Agent
or such Lender, as Administrative Borrower may reasonably request, to enable
such Borrower or Guarantor to contest such Taxes pursuant to appropriate
proceedings then available to such Borrower or Guarantor (so long as providing
such documents shall not, in the good faith determination of Agent or such
Lender, have a reasonable likelihood of resulting in any liability of Agent or
such Lender and doing so is otherwise permitted under applicable law as
determined by Agent or such Lender). This Section 3.08(d) shall not be construed
to require Agent or any Lender to make available its tax returns or any other
information relating to taxes which it deems confidential to any Borrower,
Guarantor or any other Person.
64
(e) Each Lender that is not a "U.S. Person" as defined in Section
7701(a)(30) of the Internal Revenue Code organized in a jurisdiction outside the
United States of America (a "Non-US Person") hereby agrees that it shall, no
later than the Effective Date or, in the case of a Lender which becomes a party
hereto pursuant to Section 11.07 hereof after the Effective Date, the date upon
which such Lender becomes a party hereto (and from time to time thereafter upon
the reasonable request of Agent, only if such Lender is legally able to do so),
deliver to Agent (or in the case of an assignment that is not disclosed to Agent
and Borrowers in accordance with the provisions of Section 11.07(c) to the
assigning Lender) two accurate, complete and duly signed originals of any of
U.S. Internal Revenue Service Form W-8ECI or successor form, U.S. Internal
Revenue Service Form W-8IMY or successor form (including any U.S. Internal
Revenue Service Form W-8 BEN or successor form as may be required by the
Internal Revenue Code), or U.S. Internal Revenue Service Form W-8BEN or
successor form. In addition, in the case of any Lender that is claiming
exemption from withholding of United States Federal income tax under Section
871(h) or Section 881(c) of the Internal Revenue Code with respect to the
payment of portfolio interest, such Lender (i) represents that such Lender is
not a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (2) not a "10 percent shareholder" of any Borrower within the meaning of
Section 881(c)(3)(B) of the Internal Revenue Code and (3) not a controlled
foreign corporation receiving interest from a related person within the meaning
of Section 881(c)(3)(C) of the Internal Revenue Code and (ii) shall, if not
previously delivered pursuant to the first sentence of this Section 3.08(e),
deliver to Agent (or in the case of an assignment that is not disclosed to Agent
and Borrowers in accordance with the provisions of Section 11.07(c) to the
assigning Lender) two accurate, complete and duly signed originals of either
U.S. Internal Revenue Service Form W-8IMY or successor form (including any U.S.
Internal Revenue Service Form W-8 BEN or successor form as may be required by
the Internal Revenue Code) or U.S. Internal Revenue Service Form W-8BEN or
successor form. Each Lender that is a Non-US Person shall promptly notify
Administrative Borrower and Agent (or in the case of an assignment that is not
disclosed to Agent or any Borrower in accordance with the provisions of Section
11.07(c) to the assigning Lender) at any time that it determines that it is no
longer in a position to provide any previously delivered form referred to above
(or any other form of certification adopted by the U.S. taxing authorities for
this purpose after the date hereof). In addition, a Non-U.S. Person shall upon
written notice from Agent promptly deliver such new forms as are required by the
relevant Governmental Authority to claim exemption from, or reduction in the
rate of, U.S. Federal withholding tax upon the obsolescence or invalidity of any
form previously delivered by such Non-US Person but only if such Lender is
legally able to do so. Notwithstanding anything set forth in this Section
3.08(e), a Non-US Person which (i) pursuant to Section 11.07(g) purchases a
participation in a Loan and/or (ii) is party to an assignment of a Loan for
which assignment no Assignment and Acceptance was delivered to Agent (as
permitted under Section 11.07(c)) shall not be required to deliver any of the
aforementioned tax forms or documentation to Administrative Borrower or Agent.
In addition, notwithstanding anything set forth in this Section 3.08(e), each
Lender shall not be required to deliver any of the aforementioned tax forms or
documentation to or for the benefit of Non-US Borrowers.
(f) Agent or any Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
any Borrower is located, or under any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement, shall deliver to
Administrative Borrower or Agent, at the time or times prescribed by applicable
law or reasonably requested by Administrative Borrower, such properly completed
and executed documentation prescribed by applicable
65
law as will permit such payments to be made without withholding or at a reduced
rate, but only if such Lender is legally able to claim such exemption or reduced
rate; provided, however, that nothing in this Section 3.08(e) shall require a
Lender to disclose any confidential information (including, without limitation,
its tax returns or its calculations).
(g) If any Borrower or Guarantor fails to perform any of its
obligations under this Section 3.08, each Borrower or Guarantor, as appropriate,
shall indemnify Agent and Lenders for any Taxes, interest or penalties that may
become payable as a result of any such failure. The obligations of Borrowers and
Guarantors under this Section 3.08 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
Section 3.09 INCREASED COSTS AND REDUCED RETURN.
(a) If Agent or any Lender, shall have determined that the adoption
or implementation of, or any change in, any law, rule, treaty or regulation, or
any policy, guideline or directive of, or any change in, the interpretation or
administration thereof by, any court, central bank or other agency or
Governmental Authority, or compliance by Agent or any Lender or any Person
controlling Agent or any such Lender with any directive of, or guideline from,
any central bank or other Governmental Authority or the introduction of, or
change in, any accounting principles applicable to Agent or any Lender or any
Person controlling Agent or any such Lender (in each case, whether or not having
the force of law), shall (i) subject Agent or any Lender or any Person
controlling Agent or any such Lender to any tax, duty or other charge with
respect to this Agreement or any Loan made by Agent or such Lender, or change
the basis of taxation of payments to Agent or any Lender or any Person
controlling Agent or any such Lender of any amounts payable hereunder (except
for taxes on the overall net income of Agent or any Lender or any Person
controlling Agent or any such Lender), (ii) impose, modify or deem applicable
any reserve, special deposit or similar requirement against any Loan or against
assets of or held by, or deposits with or for the account of, or credit extended
by, Agent or any Lender or any Person controlling Agent or any such Lender or
(iii) impose on Agent or any Lender or any Person controlling Agent or any such
Lender, any other condition regarding this Agreement or any Loan, and the result
of any event referred to in clauses (i), (ii) or (iii) above shall be to
increase the cost to Agent or any Lender of making any Loan, or agreeing to make
any Loan, or to reduce any amount received or receivable by Agent or any Lender
hereunder, then, upon demand by Agent or any such Lender, Borrowers shall pay to
Agent or such Lender the amount of such increased costs or reduction of return
of capital, payable within sixty (60) days after presentation by Agent or such
Lender of a statement in the amount and setting forth in reasonable detail such
Person's calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
(b) If Agent or any Lender shall have determined that any Capital
Guideline or the adoption or implementation of, or any change in, any Capital
Guideline by the Governmental Authority charged with the interpretation or
administration thereof, or compliance by Agent or any Lender or any Person
controlling Agent or such Lender with any Capital Guideline or with any request
or directive of any such Governmental Authority with respect to any Capital
Guideline, or the implementation of, or any change in, any applicable accounting
principles (in
66
each case, whether or not having the force of law), either (i) affects or would
affect the amount of capital required or expected to be maintained by Agent or
any Lender or any Person controlling Agent or such Lender, or Agent or such
Lender determines that the amount of such capital is increased as a direct or
indirect consequence of any Loans made or maintained, or Agent's or any Lender's
or any such other controlling Person's other obligations hereunder, or (ii) has
or would have the effect of reducing the rate of return on Agent's or any
Lender's or any such other controlling Person's capital to a level below that
which Agent or such Lender or such controlling Person could have achieved but
for such circumstances as a consequence of any Loans made or maintained, or any
guaranty or participation with respect thereto or any agreement to make Loans or
Agent's or such Lender's or such other controlling Person's other obligations
hereunder (in each case, taking into consideration, Agent's or such Lender's or
such other controlling Person's policies with respect to capital adequacy),
then, upon demand by Agent or any Lender, Borrowers shall pay to Agent or such
Lender from time to time such additional amounts as will compensate Agent or
such Lender for such cost of maintaining such increased capital or such
reduction in the rate of return on Agent's or such Lender's or such other
controlling Person's capital, payable within sixty (60) days after presentation
by Agent or such Lender of a statement in the amount and setting forth in
reasonable detail such Person's calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error).
(c) All amounts payable under this Section 3.09 shall bear interest
from the date that is sixty (60) days after the date of the presentation by
Agent or such Lender of the applicable statement referred to above and until
payment in full to Agent or such Lender at the LIBOR Rate. A certificate of
Agent or such Lender claiming compensation under this Section 3.09, specifying
the event herein above described and the nature of such event shall be submitted
by Agent or such Lender to Borrowers, setting forth the additional amount due
and an explanation of the calculation thereof, and Agent's or such Lender's
reasons for invoking the provisions of this Section 3.09, and shall be final and
conclusive absent manifest error.
(d) If Agent or any Lender requests compensation under this Section
3.09, then Agent or such Lender shall, if requested by Borrowers, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate a
different lending office for funding or booking its Loans hereunder, to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates or to take such other actions as such Lender or Agent determines, if,
in the sole judgment of such Lender or Agent, such designation, assignment or
other action (i) would eliminate or reduce amounts payable pursuant to this
Section 3.09 in the future and (ii) would not subject Agent or such Lender to
any unreimbursed cost or expense and Agent or such Lender would not suffer any
economic, legal or regulatory disadvantage. Nothing in this subsection (d) shall
affect or postpone any of the obligations of Borrowers or the rights of Agent or
such Lender pursuant to this Section 3.09. Borrowers hereby agree to pay on
demand all reasonable costs and expenses incurred by Agent or any Lender in
connection with any such designation or assignment.
Section 3.10 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period, (a) Agent shall have determined in good faith (which
determination shall be conclusive and binding upon Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate for such
67
Interest Period, (b) Agent has received notice from the Required Lenders that
the LIBOR Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their LIBOR Rate Loans during such Interest Period, or (c) Dollar deposits in
the principal amounts of the LIBOR Rate Loans to which such Interest Period is
to be applicable are not generally available in the London interbank market,
Agent shall give telecopy or telephonic notice thereof to Administrative
Borrower and Lenders as soon as practicable thereafter, and will also give
prompt written notice to Administrative Borrower when such conditions no longer
exist. If such notice is given, any LIBOR Rate Loans requested to be made on the
first day of such Interest Period shall be made as Reference Rate Loans.
Section 3.11 ILLEGALITY. Notwithstanding any other provision herein, if
the adoption of or any change in any law, treaty, rule or regulation or final,
non-appealable determination of an arbitrator or a court or other Governmental
Authority or in the interpretation or application thereof occurring after the
Effective Date shall make it unlawful for any Lender to make or maintain LIBOR
Rate Loans as contemplated by this Agreement, (a) such Lender shall promptly
give written notice of such circumstances to Borrowers and Agent (which notice
shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans, shall forthwith be
canceled and, until such time as it shall no longer be unlawful for such Lender
to make or maintain LIBOR Rate Loans, such Lender shall then have a commitment
only to make a LIBOR Rate Loan when a LIBOR Rate Loan is requested and (c) such
Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
automatically to Reference Rate Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a LIBOR Rate Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, Borrowers shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.12.
Section 3.12 FUNDING INDEMNITY. Borrowers, jointly and severally, promise
to indemnify Agent and each Lender and to hold Agent and each Lender harmless
from any loss or expense which Agent or such Lender may sustain or incur (other
than through Agent or such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by any Borrower in making a borrowing of or
continuation of LIBOR Rate Loans after Administrative Borrower or any Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by any Borrower in making any prepayment of a LIBOR Rate
Loan after Administrative Borrower or any other Borrower has given a notice
thereof in accordance with the provisions of this Agreement, and (c) the making
of a prepayment of LIBOR Rate Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to LIBOR Rate Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed or continued, for the period from the date of such prepayment or of
such failure to borrow or continue to the last day of the applicable Interest
Period (or, in the case of a failure to borrow or continue, the Interest Period
that would have commenced on the date of such failure) in each case at the
applicable rate of interest for such LIBOR Rate Loans provided for herein over
(ii) the amount of interest (as reasonably determined by Agent or such Lender)
which would have accrued to Agent or such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
LIBOR market. This
68
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
ARTICLE IV
CONDITIONS TO LOANS
Section 4.01 CONDITIONS PRECEDENT TO LOANS. The agreement of Lenders to
provide the Loans shall become effective as of the Effective Date when each of
the following conditions precedent shall have been satisfied in a manner
acceptable to Agent:
(a) PAYMENT OF FEES, ETC. Borrowers shall have paid on or before the
Effective Date all fees, costs, expenses and taxes then payable pursuant to
Sections 2.06 and 11.04 (which amounts will, upon the request and authorization
of Administrative Borrower, and subject to the other terms and conditions
contained herein, be paid with a portion of the proceeds of the Loans).
(b) REPRESENTATIONS AND WARRANTIEs. The representations and
warranties contained in Article V and in each other Loan Document, certificate
or other writing delivered to Agent or any Lender pursuant hereto or thereto on
or prior to the Effective Date are true and correct on and as of the Effective
Date as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an earlier date (in which
case any such representation or warranty shall be true and correct on and as of
such earlier date).
(c) NO EVENT OF DEFAULT. No Default or Event of Default shall have
occurred and be continuing on the Effective Date or would result from this
Agreement or the other Loan Documents becoming effective in accordance with its
or their respective terms.
(d) LEGALITY. The making of the Loans shall not contravene any law,
rule or regulation applicable to Agent or any Lender.
(e) DELIVERY OF DOCUMENTS AND OTHER INFORMATION. Agent shall have
received on or before the Effective Date the following, each in form and
substance satisfactory to Agent and, unless indicated otherwise, dated the
Effective Date:
(i) this Agreement duly executed by each Borrower and
Guarantor and each other party thereto;
(ii) the Security Agreements duly executed by each Borrower
and Guarantor;
(iii) a Pledge Agreement duly executed by each Borrower and
Guarantor holding Capital Stock, together with any original stock certificates,
certificate or other instrument or document evidencing or representing the
Capital Stock subject to such Pledge Agreement, accompanied by such undated
instruments of transfer as Agent may request representing (A) one hundred (100%)
percent of the common stock of such Borrower's or Guarantor's Subsidiaries
(other than those representing the shares of AmeRussia and Sea Master Hong Kong)
and (B) sixty five (65%) percent of the common stock of AmeRussia and Sea Master
Hong Kong;
69
(iv) the Intercreditor Agreement duly executed by each
Borrower and Guarantor and Noteholder Agent;
(v) a Mortgage, duly executed by each applicable Loan Party
with respect to the owned and leased real property identified on Schedule
4.01(e)(v);
(vi) a Title Insurance Policy or bring-down of the existing
Title Insurance Policy with respect to each Mortgage, dated as of the Effective
Date;
(vii) [Intentionally omitted];
(viii) the UCC Filing Authorization Letters, dated on or
before the date hereof, duly executed by each Borrower (other than Parent) and
Guarantor, together with appropriate UCC financing statements, in each case duly
filed in such office or offices as may be necessary or, in the opinion of Agent,
desirable to perfect the liens and security interests purported to be created by
each Security Agreement and Pledge Agreement;
(ix) all releases, terminations, registrations, filings and
such other documents as Agent may reasonably request to evidence and effectuate
the termination by the Existing Lenders of their financing arrangements with any
Borrower or Guarantor (other than as to certain letters of credit issued in
connection with such financing arrangements on terms and conditions satisfactory
to Agent) and the termination and release by them, of any interest in and to any
assets and properties of any Borrower or Guarantor (other than certain cash
collateral pledged to GMAC on the date hereof) duly authorized, executed and
delivered by it, including, but not limited to, (A) the authorization by or on
behalf of the Existing Lenders for Agent to file UCC discharge and termination
statements for all UCC financing statements previously filed by any of them or
their predecessors, as secured party and any Borrower or Guarantor, as debtor
and (B) satisfactions and discharges of any mortgage, deed of trust, deed to
secure debt or similar instruments by any Borrower or Guarantor in favor of any
of the Existing Lenders, in form acceptable for recording with the appropriate
Governmental Authority, and Agent is hereby authorized to file all such UCC
discharge and termination statements;
(x) to the extent available in such jurisdictions, lien and
judgment search results for the jurisdiction of organization of Borrowers and
Guarantors, the jurisdiction of the chief executive office of each Borrower and
Guarantor and all jurisdictions in which assets of Borrowers and Guarantors are
located (but not searches for UCC financing statements in such jurisdictions),
including copies of all financing statements disclosed by such search results,
none of which, except for financing statements solely evidencing Permitted Liens
and as otherwise agreed in writing by Agent, shall cover any of the Collateral
and the results of searches for any tax lien and judgment lien filed against
such Person or its property, which results, except for the judgment liens and
tax liens listed on Schedule 4.01(e)(x) hereof and as otherwise agreed to in
writing by Agent, shall not show any such liens;
(xi) a copy of the resolutions of each Borrower and Guarantor,
certified as of the Effective Date by a corporate secretary or an Authorized
Officer thereof, authorizing (A) the borrowings hereunder and the transactions
contemplated by the Loan Documents to which such Borrower or Guarantor is or
will be a party, (B) the execution, delivery and performance by
70
such Borrower or Guarantor of each Loan Document to which such Borrower or
Guarantor is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and therewith
and (C) the execution, delivery and performance by such Borrower or Guarantor
(to the extent applicable) of each Acquisition Document to which such Borrower
or Guarantor is or will be a party and the execution and delivery of the other
documents to be delivered by Borrower or Guarantor in connection therewith;
(xii) a certificate of a corporate secretary or an Authorized
Officer of each Borrower and Guarantor, certifying the names and true signatures
of the representatives of such Borrower or Guarantor authorized to sign each
Loan Document to which such Borrower or Guarantor is or will be a party and the
other documents to be executed and delivered by such Borrower or Guarantor in
connection herewith and therewith, together with evidence of the incumbency of
such authorized officers;
(xiii) a certificate of the appropriate official(s) of the
jurisdiction of organization of each Borrower and Guarantor and each
jurisdiction of foreign qualification of each Borrower and Guarantor where such
Borrower or Guarantor conducts any material portion of its business or
operations certifying as to the subsistence in good standing of such Borrower or
Guarantor in such jurisdictions, which certificates shall be certified as of a
recent date not more than thirty (30) days prior to the Effective Date (or in
such jurisdictions where such certificate is not available, then extracts with
the relevant details about Borrower or Guarantor obtained from the appropriate
Governmental Authority);
(xiv) a true and complete copy of the certificate of
incorporation, articles of association, certificate of formation or other
publicly filed organizational document of each Borrower and Guarantor certified
as of a recent date not more than thirty (30) days prior to the Effective Date
by an appropriate official of the State or jurisdiction of organization of such
Borrower or Guarantor which shall set forth the same complete name of such
Borrower or Guarantor as is set forth herein and the organizational number of
such Borrower or Guarantor, if an organizational number is issued in such
jurisdiction;
(xv) where applicable, a copy of the charter and by-laws,
memorandum of association, corporate by-laws, limited liability company
agreement, operating agreement, or other organizational document of each
Borrower and Guarantor, together with all amendments thereto, certified as true
and complete as of the Effective Date by a corporate secretary or an Authorized
Officer of such Borrower or Guarantor;
(xvi) such opinion letters of counsel to Borrowers and
Guarantors with respect to the Loan Documents, the Merger Agreements and the
effectiveness of the Merger as of the date hereof, such opinion letters of
counsel to TUG Sellers with respect to the TUG Acquisition Document and such
other opinion letters as Agent may request;
(xvii) a certificate of an Authorized Officer of Parent,
certifying as to the matters set forth in Sections 4.01(b) and 4.01(c) hereof;
(xviii) evidence that the Acquisition Documents have been duly
executed and delivered by and to the appropriate parties thereto and the
transactions contemplated to be
71
consummated on or before the Effective Date under the terms of the Acquisition
Documents have been consummated prior to or on the Effective Date (such that on
or before the Effective Date, the applicable Borrower has ownership of the
assets (including shares of Capital Stock) to be transferred pursuant thereto)
and prior to the disbursement of the initial Loans, the receipt of certificates,
in form and substance satisfactory to Agent, from each of the sellers and
transferors under the Acquisition Documents certifying that all conditions to
the sale and transfer of assets (including Capital Stock) have been satisfied or
waived by such sellers and transferors, other than the receipt of cash payments
and stock in accordance with the terms of the applicable Acquisition Documents;
(xix) true and complete copies of the Acquisition Documents
duly executed by the parties thereto;
(xx) true and complete copies of any employment agreement
between any Loan Party and Xxxxxx X. Xxxxxxx, Xxxxxx X'Xxxxx, Xxxxxxx XxXxxx,
Xxxxxx Xx, Xxxxxx Xxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxx XxXxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxxxxxxxxx Danbalis, respectively,
each on terms and conditions satisfactory to Agent;
(xxi) a certificate of an officer of each Borrower and
Guarantor certifying as to the solvency of such Borrower or Guarantor;
(xxii) a pro forma balance sheet of Parent and its
Subsidiaries reflecting the initial transactions contemplated hereunder,
including, but not limited to, (A) the consummation of the Acquisitions and the
other transactions contemplated by the Acquisition Documents (B) the
consummation of the Merger and the transactions contemplated in connection
therewith in accordance with the Merger Agreements, and (C) the Loans provided
by Lenders to each Borrower on the date hereof and the use of the proceeds
thereof, accompanied by a certificate, dated of even date herewith, of the chief
financial officer of each Borrower and Guarantor stating that such pro forma
balance sheet represents the reasonable, good faith opinion of such officer as
to the subject matter thereof as of the date of such certificate;
(xxiii) evidence that the Consolidated EBITDA of Parent and
its Subsidiaries for the twelve (12) month period ending as of the last day of
the fiscal month immediately preceding the Effective Date after giving pro forma
effect to the Acquisitions shall be equal to not less than $16,000,000;
(xxiv) evidence that Parent has received or contemporaneously
with the execution of this Agreement will receive, (A) directly or indirectly,
cash proceeds of not less than $65,000,000 in the aggregate from the issuance of
the Senior Convertible Notes and (B) cash proceeds of not less than $25,000,000
in the aggregate from the issuance of common stock, and that a portion of such
cash proceeds have been used in connection with the Acquisitions;
(xxv) evidence that the common stock of Parent is qualified to
be quoted on a national securities exchange in a manner satisfactory to Agent;
(xxvi) evidence of the insurance coverage required by Section
6.01(h) and the terms of each Security Agreement and such other insurance
coverage with respect to the business and operations of Borrowers and Guarantors
as Agent may reasonably request in accordance
72
with the terms hereof, in each case in a form satisfactory to Agent and, where
requested by Agent, with such endorsements as to the named insureds or loss
payees thereunder as Agent may request;
(xxvii) the Material Contracts as in effect on the Effective
Date (after giving effect to the Acquisitions), together with a certificate of
an Authorized Officer of the Parent stating that attached thereto are true,
correct and complete copies thereof, such agreements remain in full force and
effect and that no Borrower or Guarantor is then in material default under such
agreement;
(xxviii) such Control Agreements and other agreements as Agent
may request with respect to any Borrower's or Guarantor's cash management system
to the extent that such Control Agreements and other agreements are required to
be obtained by such Borrower or Guarantor pursuant to the provisions of the Loan
Documents;
(xxix) evidence that the Merger Agreements have been duly
executed and delivered by and to the appropriate parties thereto and the
transactions contemplated under the terms of the Merger Agreements have been
consummated prior to or contemporaneously with the execution of this Agreement;
(xxx) evidence that the certificates of Merger with respect to
the Merger have been filed with the Secretary of State of the State of Delaware
and the Merger is valid and effective in accordance with the terms and
provisions of the Merger Agreements and the applicable corporation statutes of
the State of Delaware; and
(xxxi) such other agreements, instruments, approvals, opinions
and other documents, as Agent may reasonably request.
(f) MATERIAL ADVERSE EFFECT. Agent shall have determined, in its
reasonable judgment, that no event or development shall have occurred since June
30, 2006 which could reasonably be expected to have a Material Adverse Effect.
(g) APPROVALS. All consents, authorizations and approvals of, and
filings (other than the post-effective filings with the SEC under applicable
securities laws promptly after the Merger and in any event within the time
periods required by such securities laws), and registrations with, and all other
actions in respect of, any Governmental Authority or other Person required in
the making of the Loans or the conduct of the businesses of Parent and its
Subsidiaries shall have been obtained and shall be in full force and effect and
all applicable waiting periods shall have expired without any action being taken
by any Governmental Authority the result of which could otherwise have a
Material Adverse Effect on the consummation of the transactions contemplated by
the Acquisition Documents.
(h) PROCEEDINGS; RECEIPT OF DOCUMENTS. All proceedings in connection
with the making of the Loans and the other transactions contemplated by this
Agreement and the other Loan Documents, and all documents incidental hereto and
thereto, shall be satisfactory to Agent and its counsel, and Agent and its
counsel shall have received all such information and such counterpart originals
or certified or other copies of such documents as Agent or such counsel may
reasonably request.
73
(i) THE ACQUISITIONS. On or prior to the Effective Date, (i)
Borrowers shall have purchased the TUG Acquisition Assets and the Capital Stock
of TUG NY, Clare, FMI Blocker, FMI Holdco and Sea Master Hong Kong pursuant to
the Acquisition Documents (no provision of which shall have been amended or
otherwise modified or waived without the prior written consent of Agent), and
shall have become the owner, free and clear of all Liens (other than Permitted
Liens), of all of the TUG Acquisition Assets and the Capital Stock of TUG NY,
Clare, FMI Blocker, FMI Holdco and Sea Master Hong Kong, (ii) each of Parent and
its Subsidiaries shall have fully performed all of the obligations to be
performed by it on or prior to the Effective Date under the Acquisition
Documents, (iii) the Acquisitions, including all of the terms and conditions
thereof, shall have been duly authorized by the board of directors (or other
managing body) and (if required by applicable law) the shareholders or members
of the parties to the Acquisition Documents and all Acquisition Documents shall
have been duly executed and delivered by the parties thereto and shall be in
full force and effect in all respects as if made on and as of the Effective
Date, (iv) the representations and warranties set forth in the Acquisition
Documents shall be true and correct as if made on and as of the Effective Date
(except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties were true and
correct on such earlier date), (v) each of the conditions precedent to the
obligations of each of the parties to the Acquisition Documents to consummate
the Acquisitions as set forth in the Acquisition Documents (other than the
making of the Term Loans hereunder, the receipt of the proceeds of the issuance
of the Senior Convertible Notes pursuant to the Noteholder Documents, the
receipt of the cash proceeds of the issuance of common stock of Parent pursuant
to the PIPE Documents and the receipt by the sellers under the Acquisition
Documents of stock in accordance with the terms of the applicable Acquisition
Documents) shall have been satisfied or waived with the consent of Agent and the
Acquisitions shall have been consummated in accordance with all applicable laws
and the Acquisition Documents and (vi) Agent shall have received evidence
satisfactory to it as to the foregoing, as to the receipt by all parties to the
Acquisition Documents of all necessary regulatory, creditor, lessor, and other
third-party approvals and as to compliance with all laws applicable to any of
such parties, other than the third party consents set forth on Schedule 4.01(i)
hereto.
(j) THE MERGER. On or prior to the Effective Date, (i) the Merger
shall have become effective, (ii) each of Parent and its Subsidiaries shall have
fully performed all of the obligations to be performed by it on or prior to the
Effective Date under the Merger Agreements, (iii) the Merger, including all of
the terms and conditions thereof, shall have been duly authorized by the board
of directors (or other managing body) and (if required by applicable law) the
shareholders or members of the parties to the Merger Agreements and all Merger
Agreements shall have been duly executed and delivered by the parties thereto
and shall be in full force and effect in all respects as if made on and as of
the Effective Date, (iv) the representations and warranties set forth in the
Merger Agreements shall be true and correct as if made on and as of the
Effective Date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true and correct on such earlier date), (v) each of the
conditions precedent to the obligations of each of the parties to the Merger
Agreements to consummate the Merger as set forth in the Merger Agreements shall
have been satisfied or waived with the consent of Agent and the Merger shall
have been consummated in accordance with all applicable laws and the Merger
Agreements and (vi) Agent shall have received evidence satisfactory to it as to
the foregoing, as to the receipt by all parties to the
74
Merger Agreements of all necessary regulatory, creditor, lessor, and other
third-party approvals and as to compliance with all laws applicable to any of
such parties.
Section 4.02 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of Agent or
any Lender to make any Loan on or after the Effective Date is subject to the
fulfillment, in a manner reasonably satisfactory to Agent, of each of the
following conditions precedent:
(a) PAYMENT OF FEES, ETC. Borrowers shall have paid all fees, costs,
expenses and taxes then payable by Borrowers pursuant to this Agreement and the
other Loan Documents, including, without limitation, Section 2.06 and Section
11.04 hereof.
(b) REPRESENTATIONS AND WARRANTIES; NO EVENT OF DEFAult. The
following statements shall be true and correct, and the submission by
Administrative Borrower to Agent of a Notice of Borrowing with respect to each
such Loan, and Borrowers' acceptance of the proceeds of such Loan, shall each be
deemed to be a representation and warranty by each Borrower and Guarantor on the
date of such Loan that: (i) the representations and warranties contained in
Article V and in each other Loan Document, certificate or other writing
delivered to Agent or any Lender pursuant hereto or thereto on or prior to the
date of such Loan are true and correct on and as of such date as though made on
and as of such date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true and correct on such earlier date), (ii) at the time of and
after giving effect to the making of such Loan and the application of the
proceeds thereof, no Default or Event of Default has occurred and is continuing
or would result from the making of the Loan to be made on such date and (iii)
the conditions set forth in this Section 4.02 have been satisfied as of the date
of such request.
(c) LEGALITY. The making of such Loan shall not contravene any law,
rule or regulation applicable to Agent or any Lender.
(d) NOTICES. Agent shall have received a Notice of Borrowing
pursuant to Section 2.02 hereof.
(e) DELIVERY OF DOCUMENTS. Agent shall have received such other
agreements, instruments, approvals, opinions and other documents, each in form
and substance reasonably satisfactory to Agent, as Agent may reasonably request.
(f) PROCEEDINGS; RECEIPT OF DOCUMENTs. All proceedings in connection
with the making of such Loan and the other transactions contemplated by this
Agreement and the other Loan Documents, and all documents incidental hereto and
thereto, shall be reasonably satisfactory to Agent and its counsel, and Agent
and such counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents, in form and substance
satisfactory to Agent, as Agent or such counsel may reasonably request.
75
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party hereby represents and warrants to Agent, Lenders and
Issuing Bank as of the Effective Date after giving effect to the Acquisitions
and the initial Loans, and as of such other date or dates as specifically
provided for, as follows:
Section 5.01 ORGANIZATION, GOOD STANDING, ETC. Each Borrower and Guarantor
(a) is a corporation, limited liability company, limited partnership or other
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, (b) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated to be
conducted and, in the case of Borrowers, to make the borrowings hereunder, and
to execute and deliver each Transaction Document to which it is a party, and to
consummate the transactions contemplated thereby, and (c) is duly qualified to
do business or to conduct its activities and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
where the failure to be so qualified and in good standing has or could
reasonably be expected to have a Material Adverse Effect.
Section 5.02 AUTHORIZATION, ETC. The execution, delivery and performance
by any Borrower or Guarantor of each Transaction Document to which each Borrower
and Guarantor is or will be a party, (a) has been duly authorized by all
necessary action, (b) does not contravene such Borrower's or Guarantor's
charter, articles of association, memorandum of association, certificate of
incorporation, certificate of formation, limited liability company agreement,
operating agreement or other organizational document, as applicable, or any
applicable law compliance with which is material to the business of any Borrower
or Guarantor, or any Transaction Document or any Material Contract, or any other
contractual restriction binding on or otherwise affecting such Borrower or
Guarantor or any of such Borrower's or Guarantor's properties where the
contravention of such other contractual restriction has or could reasonably be
expected to have a Material Adverse Effect, (c) does not result in or require
the creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of such Borrower's or Guarantor's properties, and (d) does not
result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to such Borrower's or Guarantor's operations or any of such
Borrower's or Guarantor's properties where any of such default, noncompliance,
suspension, revocation, impairment, forfeiture or nonrenewal has or could
reasonably be expected to have a Material Adverse Effect.
Section 5.03 GOVERNMENTAL APPROVALS. Except as set forth on Schedule 5.03,
before and after giving effect to the Acquisitions, no authorization or approval
or other action by, and no notice to or filing with, any Governmental Authority
is required in connection with the due execution, delivery and performance by
any Borrower or Guarantor of any Transaction Document to which such Borrower or
Guarantor is a party, except for any of the foregoing that will have been made
or obtained and in full force and effect on or before the Effective Date and
filings to perfect the Liens created by the Loan Documents and the
post-effective filings with the SEC under applicable securities laws that shall
be filed promptly after the Merger and in any event within the time periods
required by such securities laws.
76
Section 5.04 ENFORCEABILITY OF TRANSACTION DOCUMENTS. This Agreement is,
and each other Transaction Document to which any Borrower or Guarantor is a
party, when delivered, will be, a legal, valid and binding obligation of such
Borrower or Guarantor, enforceable against such Borrower or Guarantor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar
laws affecting creditors' rights generally.
Section 5.05 CAPITALIZATION; SUBSIDIARIES. Schedule 5.25 is a complete and
correct list of the name, jurisdiction of organization and ownership of all of
the outstanding Capital Stock of Parent's Subsidiaries on the date hereof after
giving effect to the Acquisitions. After giving effect to the Acquisitions, all
of the issued and outstanding Capital Stock of each Subsidiary of Parent have
been validly issued and are fully paid and non-assessable, and except as set
forth on Schedule 5.25 the holders thereof are not entitled to any preemptive,
first refusal or other similar rights. After giving effect to the Acquisitions,
except as described on Schedule 5.25, all of the Capital Stock of the
Subsidiaries of Parent is owned by Parent or one or more of its wholly-owned
Subsidiaries free and clear of all Liens, other than applicable Permitted Liens.
After giving effect to the Acquisitions, except as described on Schedule 5.25,
there are no outstanding debt securities of Parent or any debt or equity
securities of any of Parent's Subsidiaries and no outstanding obligations of
Parent or any of its Subsidiaries, in each case, convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from Parent or any of its Subsidiaries, or other obligations of
Parent or any of its Subsidiaries to issue, directly or indirectly, any shares
of Capital Stock of Parent or any of its Subsidiaries.
Section 5.06 LITIGATION; COMMERCIAL TORT CLAIMS. Except as set forth in
Schedule 5.06, (a) there is no pending or, to the best of the knowledge of any
Borrower or Guarantor, threatened action, suit or proceeding affecting Parent or
any of its Subsidiaries or any of their respective properties before any court
or other Governmental Authority or any arbitrator that (i) if adversely
determined, could reasonably be expected to have a Material Adverse Effect or
(ii) relates to this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby and (b) as of the Effective Date, no Borrower or
Guarantor holds any commercial tort claims in respect of which a claim has been
filed in a court of law or a written notice by an attorney has been given to a
potential defendant.
Section 5.07 FINANCIAL CONDITION.
(a) The Financial Statements referred to in clauses (a), (b), (c)
and (d) of the definition thereof, copies of which have been delivered to Agent
and each Lender, fairly present the consolidated results of operations of FMI
Group and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP (except for the absence of footnotes and
normal year-end adjustments), and since June 30, 2006, no event or development
has occurred as of the Effective Date that has had or could reasonably be
expected to have a Material Adverse Effect.
(b) The Financial Statements referred to in clause (d) of the
definition thereof, copies of which have been delivered to Agent, fairly present
in all material respects the pro forma consolidated financial condition of
Parent and its Subsidiaries as of the Effective Date in accordance with GAAP.
77
(c) Parent has heretofore furnished to Agent and each Lender (i)
projected quarterly balance sheets, statements of operations and cash flows of
Parent and its Subsidiaries (after giving effect to the Acquisitions) on a
consolidated basis, in each case for the period from October 1, 2006 through
December 31, 2007 and (ii) projected annual balance sheets, statements of
operations and cash flows of Parent and its Subsidiaries (after giving effect to
the Acquisitions) on a consolidated basis, in each case for the Fiscal Years
ending in 2007 through 2011, which projected financial statements shall be
updated from time to time pursuant to Section 6.01(a)(vi). Such projections, as
so updated, shall be believed by Borrowers and Guarantors at the time furnished
to be reasonable, shall have been prepared on a reasonable basis and in good
faith by Borrowers and Guarantors, and shall have been based on assumptions
believed by Borrowers and Guarantors to be reasonable at the time made and upon
the best information then reasonably available to Borrowers or Guarantors, and
no Borrower or Guarantor shall be aware of any facts or information that would
lead it to believe that such projections, as so updated, are incorrect or
misleading in any material respect.
Section 5.08 COMPLIANCE WITH LAW, ETC. No Borrower or Guarantor, or any of
its Subsidiaries, is in violation of its organizational documents, any law,
rule, regulation, judgment or order of any Governmental Authority applicable to
it or any of its property or assets, or any material term of any agreement or
instrument (including, without limitation, any Acquisition Document or other
Material Contract) binding on or otherwise affecting it or any of its
properties, which violation could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
Section 5.09 ERISA.
(a) Except as listed on Schedule 5.09 hereto, none of Parent, any of
it Subsidiaries or any of their ERISA Affiliates maintains or contributes to, or
within the preceding six (6) years has maintained or contributed to, any
Employee Benefit Plan. Parent and its Subsidiaries do not have any current labor
problems or disputes that have resulted in, or Parent or any Borrower or
Guarantors reasonably believes could be expected to have, a Material Adverse
Effect. No Employee Benefit Plan has an accumulated or waived funding deficiency
or permitted decrease which would create a deficiency in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the Internal Revenue Code as of the date hereof, and
no Lien imposed under the Internal Revenue Code or ERISA exists or is likely to
arise on account of any Employee Benefit Plan within the meaning of Section 412
of the Internal Revenue Code.
(b) Liabilities under any Employee Benefit Plan of Parent or any of
its Subsidiaries or any ERISA Affiliates have been appropriately reflected on
the financial statements of Parent and its Subsidiaries in accordance with GAAP.
(c) All of the Employee Benefit Plans are and have been established,
registered, qualified, invested and administered in all respects in accordance
with all applicable laws, regulations or orders with respect thereto, where such
failure to comply has, or could be reasonably expected to have, a Material
Adverse Effect. To the extent that any Employee Benefit Plan maintained by
Parent or any of its Subsidiaries is intended to qualify for favorable
78
tax treatment under any applicable law, regulation or order, no fact or
circumstance exists that could reasonably be expected to adversely affect the
tax-exempt status of such Employee Benefit Plan.
(d) All obligations regarding the Employee Benefit Plans have been
satisfied to the extent due and owing on the date hereof, there are no
outstanding defaults or violations by any party to any Employee Benefit Plan and
no taxes, penalties or fees are owing under any of the Employee Benefit Plans
where such obligations, defaults, violations, unpaid taxes, unpaid penalties or
unpaid fees have or could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 5.09, no Borrower, Guarantor or any
ERISA Affiliate has incurred any withdrawal liability under ERISA with respect
to any Multiemployer Plan, or is aware of any facts indicating that it or any of
its ERISA Affiliates may in the future incur any such withdrawal liability, that
has, or could reasonably be expected to have, a Material Adverse Effect.
(e) Parent and each of its Subsidiaries have made available to
Lenders true, correct and complete copies of all material Employee Benefit Plans
as amended as of the date hereof, as requested by Agent or any Lender.
(f) Each Employee Benefit Plan is fully funded to the extent
required by any applicable law, regulation or order or fully insured; PROVIDED,
THAT, no Employee Benefit Plan is required to be fully insured except to the
extent required by any applicable law, regulation or order.
(g) Except as disclosed in Schedule 5.09 or as required by any
applicable law, regulation or order, none of the Employee Benefit Plans provides
health and welfare benefits to retired employees or to the beneficiaries or
dependents of retired employees.
Section 5.10 TAXES, ETC. Except as disclosed in Schedule 5.10, all
Federal, State, local and foreign tax returns and other reports ("Returns")
required by applicable law to be filed by or with respect to the income,
properties or operations of any Borrower or Guarantor, or its Subsidiaries, have
been timely filed with the appropriate taxing authority, or extensions have been
obtained, and such Returns accurately reflect in all material respects all
liability for taxes of any Borrower or Guarantor, or its Subsidiaries for the
periods covered thereby, all taxes, assessments and other governmental charges
(including penalties, fines and interest) imposed upon any Borrower or
Guarantor, or any of its Subsidiaries, or any property of any Borrower or
Guarantor, or any of its Subsidiaries, and which are payable on or prior to the
date hereof have been paid, except to the extent contested in good faith by
proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof on the Financial Statements
of such Borrower or Guarantor in accordance with GAAP.
Section 5.11 REGULATIONS T, U AND X. No Borrower or Guarantor is and will
be engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation T, U or X), and no
proceeds of any Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
79
Section 5.12 NATURE OF BUSINESS. No Borrower or Guarantor, or any of its
Subsidiaries, is engaged in any business other than logistics services and
businesses reasonably related, similar, ancillary or complementary to the
businesses in which Borrowers, Guarantors and/or any Subsidiary of Parent are
engaged on the date hereof, including, without limitation, ocean transportation
intermediary and logistics services, customs brokerage, indirect air carrier,
insurance, transloading, warehousing, value-added warehousing services,
distribution, and local and long distance ground transportation.
Section 5.13 ADVERSE AGREEMENTS, ETC. No Borrower or Guarantor, or any of
its Subsidiaries, is a party to any agreement or instrument, or subject to any
charter, certificate of incorporation, articles of association, limited
liability company agreement, partnership agreement or other corporate,
partnership or limited liability company restriction or any judgment, order,
regulation, ruling or other requirement of a court or other Governmental
Authority, which has, or in the future could reasonably be expected to have
(solely with respect to such agreement or instrument, in the absence of any
breach or default thereunder), a Material Adverse Effect.
Section 5.14 PERMITS, ETC. Each Borrower and Guarantor, and its
Subsidiaries, has, and is in compliance with, all permits, licenses,
authorizations, approvals, entitlements and accreditations required for such
Person lawfully to own, lease, manage or operate, or to acquire, each business
currently owned, leased, managed or operated by such Borrower or Guarantor and
contemporaneously with any Permitted Acquisition will have and be in compliance
with all permits, licenses, authorizations, approvals, entitlements and
accreditations required for such Person to lawfully own, lease, manage or
operate or to acquire the Acquired Business, in each case, where the failure to
have or be in compliance with such permits, licenses, authorizations, approvals,
entitlements and accreditations has or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. No condition
exists or event has occurred which, in itself or with the giving of notice or
lapse of time or both, would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such permit, license, authorization, approval,
entitlement or accreditation, and there is no claim that any thereof is not in
full force and effect where such suspension, revocation, impairment, forfeiture
or non-renewal or failure to be in full force and effect would have a Material
Adverse Effect.
Section 5.15 PROPERTIES.
(a) Each Borrower and Guarantor has good and marketable title to,
valid leasehold interests in, or valid licenses to use, all property and assets
material to its business, free and clear of all Liens, except Permitted Liens.
All such properties and assets are, and will be maintained, in good working
order and condition, ordinary wear and tear excepted.
(b) Schedule 5.15 sets forth a complete and accurate list, as of the
Effective Date of the location, by State and street address, of all Real
Property owned or leased by Parent and any Subsidiary of Parent. As of the
Effective Date, each Borrower and Guarantor has valid leasehold interests in the
Leases described on Schedule 5.15 to which such Borrower and Guarantor is a
party. Each such Lease is in full force and effect and is valid and enforceable
against each Borrower and Guarantor that is a party thereto and, to the
knowledge of such Borrower and Guarantor, all other parties thereto in
accordance with its terms in all material respects, except as to those Leases
identified in Schedule 5.15 where the consent to the assignment of such Lease as
80
part of the applicable Acquisition is required under the terms of such Lease and
such consent has not been obtained, provided, that, no such Lease is material to
the business of Borrowers taken as a whole. No consent or approval of any
landlord or other third party in connection with any such Lease is necessary for
any Borrower or Guarantor to enter into and execute the Loan Documents or the
Acquisition Documents to which it is a party except as set forth on Schedule
5.15. To the knowledge of any Borrower or Guarantor, (i) no other party to any
such Lease is in default in any material respect of its obligations thereunder,
(ii) no Borrower or Guarantor (or any party to any such Lease) has at any time
delivered or received any notice of default which remains uncured (beyond
applicable notice and cure periods) under any such Lease and (iii) as of the
Effective Date (after giving effect to the Acquisitions), no event has occurred
which, with the giving of notice or the passage of time or both, would
constitute a default under any such Lease, except as to those Leases identified
in Schedule 5.15 where the consent to the assignment of such Lease as part of
the applicable Acquisition is required under the terms of such Lease and such
consent has not been obtained, provided, that, no such Lease is material to the
business of Borrowers taken as a whole.
Section 5.16 FULL DISCLOSURE. Each Borrower and Guarantor has disclosed to
Agent all agreements, instruments and corporate or other restrictions to which
such Borrower or Guarantor is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other written information furnished by any Borrower or Guarantor to Agent or
any Lender in connection with the negotiation of this Agreement (including the
Schedules hereto) or delivered hereunder (as modified or supplemented by other
written information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which it was made, not misleading;
PROVIDED, THAT, with respect to projected financial information, each Borrower
and Guarantor represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time. There is no
contingent liability or fact that could reasonably be expected to have a
Material Adverse Effect which has not been set forth in a footnote included in
the Financial Statements or a Schedule hereto.
Section 5.17 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.17,
(a) the operations of each Borrower and Guarantor, and its Subsidiaries, are in
material compliance with all Environmental Laws; (b) there has been no Release
at any of the properties owned or operated by any Borrower or Guarantor or a
predecessor in interest which could reasonably be expected to have a Material
Adverse Effect; (c) no Environmental Action has been asserted against any
Borrower or Guarantor or any of its Subsidiaries, nor does any Borrower or
Guarantor have knowledge or notice of any threatened or pending Environmental
Action against any Borrower or Guarantor or any of its Subsidiaries or any
predecessor in interest which could reasonably be expected to have a Material
Adverse Effect; (d) no Environmental Actions have been asserted against any
facilities that may have received Hazardous Materials generated by any Borrower
or Guarantor, or any of its Subsidiaries, or any predecessor in interest which
could reasonably be expected to have a Material Adverse Effect; (e) no property
now or formerly owned or operated by a Borrower or Guarantor, or any of its
Subsidiaries, or a predecessor in interest has been used as a treatment or
disposal site for any Hazardous Material; (f) no Borrower or Guarantor, or any
of its Subsidiaries, has failed to report to the proper Governmental Authority
any Release which is required to be so reported by any Environmental Laws where
81
such failure could reasonably be expected to have a Material Adverse Effect; (g)
each Borrower and Guarantor, and its Subsidiaries, holds all licenses, permits
and approvals required under any Environmental Laws in connection with the
operation of the business carried on by it; and (h) no Borrower or Guarantor, or
any of its Subsidiaries, has received any notification pursuant to any
Environmental Laws that (i) any work, repairs, construction or Capital
Expenditures are required to be made as a condition of continued compliance with
any Environmental Laws, or any license, permit or approval issued pursuant
thereto or (ii) any license, permit or approval referred to above is about to be
reviewed, made, subject to limitations or conditions, revoked, withdrawn or
terminated, in each case, where any of the foregoing could reasonably be
expected to have a Material Adverse Effect.
Section 5.18 INSURANCE. Each Borrower and Guarantor, and each Subsidiary,
keeps its property adequately insured and maintains (a) insurance to such extent
and against such risks, including fire, as is customary with companies in the
same or similar businesses, (b) workmen's compensation insurance in the amount
required by applicable law, (c) public liability insurance, which shall include
product liability insurance, in the amount customary with companies in the same
or similar business against claims for personal injury or death on properties
owned, occupied or controlled by it, and (d) such other insurance as may be
required by law or as may be reasonably required by Agent (including, without
limitation, against larceny, embezzlement or other criminal misappropriation).
Schedule 5.18 sets forth all insurance maintained by each Borrower and Guarantor
and Subsidiary on the Effective Date.
Section 5.19 USE OF PROCEEDS. The proceeds of the Loans shall be used (a)
to pay a portion of the Purchase Price, fees and expenses in connection with the
Acquisitions and the financing thereof, including, without limitation, the
financing provided for in this Agreement and the financing pursuant to the
Senior Convertible Notes, (b) to repay the Indebtedness of any Borrower or
Guarantor to the Existing Lenders, and (c) for working capital and other proper
corporate purposes not prohibited hereunder, including, but not limited to, the
purposes set forth on Schedule 5.19 hereto.
Section 5.20 LOCATION OF BANK ACCOUNTS. Schedule 5.20 sets forth a
complete and accurate list as of the Effective Date of all deposit, checking and
other bank accounts, all securities and other accounts maintained with any
broker dealer and all other similar accounts maintained by Parent and each of
its Subsidiaries (including all Operating Accounts, Cash Management Accounts,
the Concentration Account and any account(s) in which Qualified Cash is held),
together with a description thereof (i.e., the bank or broker dealer at which
such deposit or other account is maintained and the account number and the
purpose thereof).
Section 5.21 INTELLECTUAL PROPERTY.
(a) Parent and each of its Subsidiaries owns or licenses or
otherwise has the right to use all Intellectual Property necessary for the
operation of its business as presently conducted or presently proposed to be
conducted. As of the date hereof, Parent and each of its Subsidiaries do not
have any Intellectual Property registered, or subject to pending applications,
in the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency or any political subdivision thereof or
in any other country, other than those described in Schedule 5.21. All such
Intellectual Property is subsisting and in full force and effect, has not
82
been adjudged invalid or unenforceable, is valid and enforceable and has not
been abandoned in whole or in part. No event has occurred which permits or would
permit after notice or passage of time or both, the revocation, suspension or
termination of such rights. No action is pending or threatened in writing which
alleges that any Intellectual Property is invalid or unenforceable. Parent and
each of its Subsidiaries have timely made all filings and payments with the
appropriate foreign and domestic Governmental Authorities required to maintain
in subsistence all Intellectual Property that is issued, registered or
applied-for in any jurisdiction, including without limitation office action
responses, affidavits of use, affidavits of continuing use, renewals, requests
for extension of time, maintenance fees, application fees and foreign convention
priority filings other than where the failure to make such filing or payment has
or could reasonably be expected to have an adverse effect on the rights of any
Borrower or Guarantor as to any Intellectual Property being used in the business
or that has value of more than $250,000.
(b) As of the date hereof, Parent and each of its Subsidiaries has
not granted to any other Person, and has not been granted by any other Person,
any material License with respect to any Intellectual Property other than as set
forth in Schedule 5.21. The Licenses set forth on Schedule 5.21 constitute all
of the Licenses material to the business of Parent and each of its Subsidiaries
existing on the date hereof (other than such Licenses which under the terms
thereof or applicable law with respect thereto, the valid grant of a security
interest or lien therein to Agent is prohibited and such prohibition has not
been or is not waived or the consent of the other party to such License has not
been or is not otherwise obtained or under applicable law such prohibition
cannot be waived) and complete and correct copies of each License described on
Schedule 5.21 have been delivered to Agent. Each such License sets forth the
entire agreement and understanding of the parties thereto relating to the
subject matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby or the
rights of Parent or any of its Subsidiaries or any of their affiliates in
respect thereof. Each such License now existing, which is material to any Loan
Party's business, is the legal, valid and binding obligation of the parties
thereto, enforceable against such parties in accordance with its terms. To the
knowledge of the Loan Parties, no default by Parent or any of its Subsidiaries
or any other party has occurred under any License, nor does any defense, offset,
deduction or counterclaim exist thereunder in favor of any such party. As to
each License of Intellectual Property where Parent or any of its Subsidiaries is
the licensee, Parent or such Subsidiary, as the case may be, is current in its
payments under such Licenses, and has not failed to meet any minimum sales
volumes, minimum royalty payments or other similar requirements necessary to
maintain such party's rights, or the exclusivity thereof, under any such
License.
(c) Except as set forth in Schedule 5.21, to the knowledge of Parent
and its Subsidiaries, Parent and its Subsidiaries have not infringed upon or
misappropriated any patent, industrial design, trademark, servicemark,
tradename, copyright, license or other intellectual property owned by any other
Person or received any charge, complaint, claim, demand or notice alleging any
such infringement or misappropriation or otherwise contesting the right of
Parent or any of its Subsidiaries to sell or use any of the Intellectual
Property and to the knowledge of Parent and its Subsidiaries, no other Person is
now infringing or in conflict with any such properties, assets and rights owned
or used by Parent or any of its Subsidiaries.
83
Section 5.22 MATERIAL CONTRACTS. Set forth on Schedule 5.22 is a complete
and accurate list as of the Effective Date (after giving effect to the
Acquisitions) of all Material Contracts (other than the Loan Documents) of each
Borrower and Guarantor, showing the parties and promptly upon Agent's request,
containing a brief description of the subject matter thereof and amendments and
modifications thereto. Each such Material Contract (a) is in full force and
effect and is binding upon and enforceable against each Borrower or Guarantor
and, to the best of the knowledge of such Borrower or Guarantor, all other
parties thereto in accordance with its terms, (b) has not been otherwise amended
or modified as of the Effective Date, and (c) is not in default due to the
action of any Borrower or Guarantor or, to the best of the knowledge of any
Borrower or Guarantor, any other party thereto. Schedule 5.22 lists all of the
Acquisition Documents that are material.
Section 5.23 HOLDING COMPANY AND INVESTMENT COMPANY ACTS. No Borrower or
Guarantor is (a) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (b) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
Section 5.24 EMPLOYEE AND LABOR MATTERs. Except as set forth on Schedule
5.24, there is (a) no unfair labor practice complaint pending or, to the best of
the knowledge of any Borrower or Guarantor, threatened against any Borrower or
Guarantor, or any of its Subsidiaries, before any Governmental Authority and no
grievance or arbitration proceeding pending or threatened against any Borrower
or Guarantor, or any of its Subsidiaries, which arises out of or under any
collective bargaining agreement, (b) no strike, labor dispute, slowdown,
stoppage or similar action or grievance pending or threatened against any
Borrower or Guarantor or (c) to the best of the knowledge of any Borrower or
Guarantor, no union representation question existing with respect to the
employees of any Borrower or Guarantor, or any of its Subsidiaries and no union
organizing activity taking place with respect to any of the employees of any
Borrower or Guarantor, or any of its Subsidiaries. No Borrower, Guarantor or any
ERISA Affiliate has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act ("WARN") or similar State law, which
remains unpaid or unsatisfied. The hours worked and payments made to employees
of any Borrower or Guarantor have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements. All material payments
due from any Borrower or Guarantor on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as a liability on
the books of such Borrower or Guarantor.
Section 5.25 NAME; JURISDICTION OF ORGANIZATION; ORGANIZATIONAL ID NUMBER;
CHIEF PLACE OF BUSINESS; CHIEF EXECUTIVE OFFICE; FEIN. Schedule 5.25 sets forth
a complete and accurate list as of the date hereof and the Effective Date of (a)
the exact legal name of each Borrower and Guarantor, (b) the jurisdiction of
organization of each Borrower and Guarantor, (c) the organizational
identification number of each Borrower and Guarantor (or indicates that such
Borrower or Guarantor has no organizational identification number), (d) each
place of business of each Borrower and Guarantor, (e) the chief executive office
of each Borrower and Guarantor and (f) as to any Borrower or Guarantor organized
under the laws of any State of the United States of America, the federal
employer identification number of such Borrower and Guarantor.
84
Section 5.26 TRADENAMES. Schedule 5.26 hereto sets forth a complete and
accurate list as of the Effective Date of all tradenames used by each Borrower
or Guarantor.
Section 5.27 LOCATIONS OF COLLATERAL. There is no location at which any
Borrower or Guarantor has any Collateral other than (a) those locations listed
on Schedule 5.27 and (b) any other locations approved in writing by Agent from
time to time except for, (i) inventory in transit which is shipped from the
manufacturer or vendor thereof to the location set forth or permitted in clause
(a) or (b) hereof, (ii) Equipment, to the extent necessary for any repair or
maintenance thereof in the ordinary course of any Borrower's or Guarantor's
business, (iii) Equipment in transit from one location set forth or permitted in
clause (a) or (b) hereof to another such location to the extent necessary to
move such Equipment in the ordinary course of any Borrower's or Guarantor's
business, and (iv) motor vehicles used by or for the benefit of any Borrower or
Guarantor in the ordinary course of business. Schedule 5.27 hereto contains a
true, correct and complete list, as of the Effective Date, of the legal names
and addresses of each warehouse at which Collateral of each Borrower or
Guarantor is stored. None of the receipts received by any Borrower or Guarantor
from any warehouse states that the goods covered thereby are to be delivered to
bearer or to the order of a named Person or to a named Person and such named
Person's assigns.
Section 5.28 SOLVENCY. Each Borrower and Guarantor is Solvent and will
continue to be Solvent on a consolidated basis after the creation of the
Obligations, the security interests of Agent and the other transactions
contemplated hereunder.
Section 5.29 SECURITY INTERESTS. Each Security Agreement creates in favor
of Agent, for the benefit of itself and Lenders, a legal, valid and enforceable
security interest in the Collateral secured thereby. Upon the filing of the UCC
financing statements described in Section 4.01(e), the execution and delivery of
the Control Agreements described in Section 7.01, the recording of the Trademark
Collateral Assignment and Security Agreement and Copyright Collateral Assignment
and Security Agreement, if any, referred to in each Security Agreement in the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, and the recording or filing required under any similar
law of any foreign jurisdiction, and as to motor vehicles upon notation of the
security interest of Agent on the certificates of title, such security interests
in and Liens on the Collateral granted thereby shall be perfected, first
priority security interests (except as to priority, subject to clauses (c), (d),
(e), (g), (j), (l), (n) and (q) of the definition of "Permitted Liens" in each
case to the extent such Liens referred to in such clauses have priority under
applicable law), and no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than (a) the filing of continuation statements in
accordance with applicable law, (b) the recording of the Trademark Collateral
Assignment and Security Agreement, the Patent Collateral Assignment and Security
Agreement and the Copyright Collateral Assignment and Security Agreement, if
any, pursuant to the US Security Agreement in the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, with
respect to after-acquired U.S. patent and trademark applications and
registrations and U.S. copyright applications and registration, (c) the
recordation of appropriate evidence of the security interest in the appropriate
foreign registry with respect to all foreign intellectual property, and (d) the
recording of each Mortgage in the applicable county where the Real Property
subject to such Mortgage is located.
85
Section 5.30 CONSUMMATION OF ACQUISITIONS.
(a) On or before the Effective Date, the Acquisition Documents have
been duly executed and delivered in accordance with their terms by Parent and
its Subsidiaries and the transactions contemplated to be consummated under the
Acquisition Documents on or before the Effective Date shall have been
consummated, and to the best of the knowledge of Borrowers and Guarantors, the
other parties thereto, in all respects, including the fulfillment (not merely
the waiver, except as may be disclosed to Agent and consented to in writing by
Agent) of all conditions precedent set forth therein. After giving effect to the
terms of the Acquisition Documents and the assignments to be executed and
delivered thereunder, Borrowers have acquired and have good and marketable title
to the TUG Acquisition Assets and the Capital Stock of Clare, TUG NY, FMI
Blocker, FMI Holdco and Sea Master Hong Kong, free and clear of all Liens of any
kind, except as permitted hereunder.
(b) On or before the Effective Date, all actions and proceedings,
required by the Acquisition Documents, applicable law or regulation (including,
but not limited to, compliance with the Xxxx-Xxxxx-Xxxxxx Anti-Trust
Improvements Act of 1976, as amended, if required) to be taken on or before the
Effective Date have been taken and the transactions required to be consummated
on or before the Effective Date thereunder have been duly and validly taken and
consummated.
(c) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the Acquisition Documents and no governmental or other
action or proceeding has been commenced or, to the best of the knowledge of any
Loan Party, threatened, seeking any injunction, restraining order or other order
which seeks to void or otherwise modify the transactions described in the
Acquisition Documents.
Section 5.31 ACQUISITION DOCUMENTS.
(a) Borrowers and Guarantors have delivered, or caused to be
delivered, to Agent, true, correct and complete copies of the Acquisition
Documents.
(b) The Acquisition Documents set forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof, and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby.
(c) None of the Acquisition Documents have been amended or otherwise
modified without the prior written consent of Agent.
(d) The execution, delivery and performance of the Acquisition
Documents have been duly authorized by all necessary action on the part of
Parent and each of its Subsidiaries that is a party thereto and to the best of
the knowledge of Borrowers and Guarantors, each other party thereto. Each of the
Acquisition Documents is the legal, valid and binding obligation of the parties
thereto, enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or other similar laws affecting
creditors' rights generally. All actions taken by Parent and its Subsidiaries
pursuant or in connection with the purchase of the TUG Acquisition Assets
86
and the Capital Stock of TUG NY, Clare, FMI Blocker, FMI Holdco and Sea Master
Hong Kong have been taken in compliance with the terms of the Acquisition
Documents.
(e) No party to any of the Acquisition Documents is in default with
respect to any of its obligations under such Acquisition Documents in any
material respect and all representations and warranties made by the parties
thereto in the Acquisition Documents and in the certificates delivered in
connection therewith are true and correct as of the date hereof, except as
waived in writing with the approval of Agent. The reports, financial statements,
certificates and other written information with respect to the purchase of the
TUG Acquisition Assets and the Capital Stock of TUG NY, Clare, FMI Blocker, FMI
Holdco and Sea Master Hong Kong in connection with the Acquisition Documents,
furnished to Agent by Borrowers, taken as a whole (as modified or supplemented
by other written information so furnished), do not contain any material
misstatement of fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which it was made,
not misleading.
Section 5.32 ANTI-TERRORISM LAWS AND ANTI-MONEY LAUNDERING LAWS.
(a) No Borrower, Guarantor or its Subsidiaries are, and after making
due inquiry no Person who owns a controlling interest in or otherwise controls
any Borrower or Guarantor or such Subsidiary is or shall be, (i) listed on the
Specially Designated Nationals and Blocked Persons List maintained by the Office
of Foreign Assets Control ("OFAC"), Department of the Treasury, and/or on any
other similar list (collectively, the "Lists") maintained by the OFAC pursuant
to any authorizing statute, Executive Order or regulation (collectively, "OFAC
Laws and Regulations"); or (ii) a Person (a "Designated Person") either (A)
included within the term "designated national" as defined in the Cuban Assets
Control Regulations, 31 C.F.R. Part 515, or (B) designated under Sections 1(a),
1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published
September 25, 2001) or similarly designated under any related enabling
legislation or any other similar Executive Orders (collectively, the "Executive
Orders").
(b) No Borrower, Guarantor or its Subsidiaries (i) is a Person or
entity with which any Lender is prohibited from dealing or otherwise engaging in
any transaction by any Anti-Terrorism Law or (ii) is a Person or entity that
commits, threatens or conspires to commit or supports "terrorism" as defined in
the Executive Orders or (iii) is affiliated or associated with a Person or
entity listed in the preceding clause (i) or clause (ii). To the knowledge of
Borrowers and Guarantors, no Borrower, Guarantor or its Subsidiaries or
Affiliates, nor any brokers or other agents acting in any capacity in connection
with the Loans hereunder (A) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to the
Executive Orders or (B) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.
(c) To the best of the knowledge of Borrowers or Guarantors after
due inquiry, no Borrower, Guarantor or its Subsidiaries nor any holder of a
direct or indirect interest in any Borrower, Guarantor or any Subsidiary (i) is
under investigation by any governmental authority for, or has been charged with,
or convicted of, money laundering under 18 U.S.C. xx.xx. 1956 and 1957, drug
trafficking, terrorist-related activities or other money laundering predicate
crimes, or any violation of the BSA, (ii) has been assessed civil penalties
under any Anti-Money
87
Laundering Laws, or (iii) has had any of its funds seized or forfeited in an
action under any Anti-Money Laundering Laws.
Section 5.33 MERGERS.
(a) The Merger is valid and effective in accordance with the terms
of the Merger Agreements, and the corporation statutes of the State of Delaware
and MLI is the surviving corporation pursuant to the Merger.
(b) All actions and proceedings required by the Merger Agreements,
applicable law and regulations (including, but not limited to, compliance with
the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976, as amended) have been
taken and the transactions required thereunder had been duly and validly taken
and consummated.
(c) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the Merger Agreements and no governmental action or
proceeding has been threatened or commenced seeking any injunction, restraining
order or other order which seeks to void or otherwise modify the transactions
described in the Merger Agreements.
(d) Borrowers and Guarantors have delivered, or caused to be
delivered, to Agent, true, correct and complete copies of the Merger Agreements.
Section 5.34 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS; NO DEFAULt. All
representations and warranties set forth in this Agreement and the other Loan
Documents shall be true and correct at the time as of which such representations
were made and on the Effective Date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
to the extent required hereunder or under the other Loan Documents on and as of
such earlier date).
ARTICLE VI
COVENANTS OF LOAN PARTIES
Section 6.01 AFFIRMATIVE COVENANTS. On and after the Effective Date,
unless and until the Obligations have been Paid in Full, each Borrower and
Guarantor will, and will cause each Subsidiary to, unless in each case the
Required Lenders shall otherwise consent in writing:
(a) REPORTING REQUIREMENTS. Furnish to Agent and, upon Agent's
request, each Lender:
(i) as soon as available and in any event within thirty (30)
days after the end of each fiscal month of Parent and its Subsidiaries (A)
commencing with the first month of Parent and its Subsidiaries ending after the
Effective Date, consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and retained earnings and consolidated
and consolidating statements of cash flows of Parent and its Subsidiaries as at
the end of such month setting forth in comparative form any projections with
respect thereto previously provided to Agent and Lenders, and (B) on and after
the end of the first twelve (12) months of Parent and its Subsidiaries ending
after the Effective Date, for the period commencing
88
at the end of the immediately preceding Fiscal Year and ending with the end of
such month, setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding Fiscal Year setting
forth in comparative form any projections with respect thereto, in each case all
in reasonable detail and certified by an Authorized Officer of Parent as fairly
presenting, in all material respects, the financial position of Parent and its
Subsidiaries on a consolidated basis as of the end of such month and the results
of operations and cash flows of the Parent and its Subsidiaries on a
consolidated basis for such month, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements of Parent
and its Subsidiaries furnished to Agent and Lenders, subject to the absence of
footnotes and normal year-end adjustments;
(ii) as soon as available, and in any event within ninety (90)
days after the end of each Fiscal Year of the Parent and its Subsidiaries,
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and retained earnings and consolidated and
consolidating statements of cash flows of the Parent and its Subsidiaries as at
the end of such Fiscal Year, and on and after the end of the first Fiscal Year
of Parent and its Subsidiaries ending after the Effective Date, setting forth in
each case in comparative form the corresponding figures for the immediately
preceding Fiscal Year and for any projections with respect thereto previously
provided to Agent and Lenders, in each case, all in reasonable detail and
prepared in accordance with GAAP, and accompanied by a report and an unqualified
opinion, prepared in accordance with generally accepted auditing standards, of
independent certified public accountants of nationally recognized standing
selected by Parent and satisfactory to Agent (which opinion shall be without (A)
a "going concern" or like qualification or exception, (B) any qualification or
exception as to the scope of such audit, or (C) any qualification which relates
to the treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item, the
effect of which would be to cause any noncompliance with the provisions of
Section 6.03), together with a written statement of such accountants to a
Borrower (1) to the effect that, in making the examination necessary for their
certification of such financial statements, they have not obtained any knowledge
of the existence of an Event of Default or a Default in each case under Section
6.03 hereof and (2) if such accountants shall have obtained any knowledge of the
existence of such an Event of Default or such Default, describing the nature
thereof. The acceptance by Agent of an opinion from a firm of independent
certified public accountants shall not be construed to in any way limit the
right of Agent thereafter to determine that such firm is not acceptable to it
for purposes of this Section.
(iii) simultaneously with the delivery of the financial
statements of the Parent and its Subsidiaries required by clauses (i) and (ii)
of this Section 6.01(a), a certificate substantially in the form of Exhibit B
hereto of an Authorized Officer of Parent (A) stating that such Authorized
Officer has reviewed the provisions of this Agreement and the other Loan
Documents and has made or caused to be made under his or her supervision a
review of the condition and operations of Parent and its Subsidiaries during the
period covered by such financial statements with a view to determining whether
Parent and its Subsidiaries were in compliance with all of the provisions of
this Agreement and such Loan Documents at the times such compliance is required
hereby and thereby, and that such review has not disclosed, and such Authorized
Officer has no knowledge of, the existence during such period of an Event of
Default or Default or, if an Event of Default or Default existed, describing the
nature and period of
89
existence thereof and the action which Parent and its Subsidiaries propose to
take or have taken with respect thereto and (B) attaching a schedule showing the
calculations of the financial covenants set forth in Section 6.03.
(iv) as soon as available and in any event within three (3)
Business Days after the end of each fiscal month commencing with the first
fiscal month ending after the Effective Date or more frequently as Agent may
from time to time require (but in no event more frequently than weekly, so long
as no Default or Event of Default shall exist or have occurred and be
continuing), a Borrowing Base Certificate substantially in the form of Exhibit F
hereto, current as of the close of business on the last day of the immediately
preceding fiscal month, supported by schedules showing the derivation thereof
and containing such detail and other information as Agent may request from time
to time; PROVIDED, THAT, (A) the Borrowing Base set forth in the Borrowing Base
Certificate shall be effective from and including the date such Borrowing Base
Certificate is duly received by Agent up to but not including the date on which
a subsequent Borrowing Base Certificate is received by Agent, unless Agent
disputes the eligibility of any property included in the calculation of the
Borrowing Base or the valuation thereof by notice of such dispute to
Administrative Borrower and (B) in the event of any conflict or inconsistency
between the calculation of the Revolving Loans and Letters of Credit available
to Borrowers as set forth in any Borrowing Base Certificate and as determined by
Agent, the determination of Agent shall govern and be conclusive and binding
upon Borrowers absent manifest error;
(v) within sixty (60) days after the date hereof, the
unaudited opening balance sheet of MLI and its Subsidiaries after giving effect
to the Merger, the Acquisitions and the other transactions contemplated herein
and within ninety (90) days after the end of the Fiscal Year of Parent and its
Subsidiaries ending December 31, 2006, (A) the audited consolidated opening
balance sheet of TUG USA and its Subsidiaries as of the Effective Date, all in
reasonable detail and prepared in accordance with GAAP, and accompanied by a
report and an unqualified opinion, prepared in accordance with GAAP, of
independent certified accountants of nationally recognized standing selected by
MLI and acceptable to Agent, and (B) a valuation of the assets of Parent and its
Subsidiaries after giving effect to the Merger, the Acquisitions and the other
transactions contemplated herein prepared in accordance with GAAP by independent
certified accountants of nationally recognized standing selected by MLI and
acceptable to Agent;
(vi) (A) as soon as available and in any event not later than
twenty (20) days prior to the end of each Fiscal Year (commencing with the
Fiscal Year ending December 31, 2008), financial projections (including, without
limitation, projected balance sheets, statements of operations and cash flows),
supplementing and superseding the financial projections referred to in Section
5.07(c)(ii), prepared on a monthly basis and otherwise in form and substance
satisfactory to Agent, for the immediately succeeding Fiscal Year for Parent and
its Subsidiaries and (B) as soon as available and in any event not later than
forty-five (45) days prior to the end of each fiscal quarter (commencing with
the fiscal quarter ending June 30, 2007), financial projections (including,
without limitation, projected balance sheets, statements of operations and cash
flows), supplementing and superseding the financial projections referred to in
Section 5.07(c)(i), prepared on a quarterly basis and otherwise in form and
substance satisfactory to Agent, for each remaining quarterly period in such
Fiscal Year, all such financial projections to be on a reasonable basis and in
good faith, and to be based on assumptions
90
believed by the Parent to be reasonable at the time made and from the best
information then available to the Parent;
(vii) promptly after submission to any Governmental Authority,
all documents and information furnished to such Governmental Authority in
connection with any investigation of any Loan Party other than routine inquiries
by such Governmental Authority;
(viii) as soon as possible, and in any event within three (3)
days after the occurrence of any Event of Default or Default or the occurrence
of any event or development that could reasonably be expected to have a Material
Adverse Effect, the written statement of an Authorized Officer of Administrative
Borrower setting forth the details of such Event of Default or Default or other
event or development that could reasonably be expected to have a Material
Adverse Effect and the action which Parent or any of its Subsidiaries proposes
to take with respect thereto;
(ix) (A) as soon as possible and in any event within ten (10)
days after any Loan Party or any ERISA Affiliate thereof knows or has reason to
know that (1) any Reportable Event with respect to any Employee Benefit Plan has
occurred, (2) any other Termination Event with respect to any Employee Benefit
Plan has occurred, or (3) an accumulated funding deficiency has been incurred or
an application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the Internal
Revenue Code with respect to an Employee Benefit Plan, a statement of an
Authorized Officer of Administrative Borrower setting forth the details of such
occurrence and the action, if any, which such Loan Party or such ERISA Affiliate
proposes to take with respect thereto, (B) promptly and in any event within
three (3) days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from the PBGC, copies of each notice received by any Loan Party or any
ERISA Affiliate thereof of the PBGC's intention to terminate any Employee
Benefit Plan or to have a trustee appointed to administer any Employee Benefit
Plan, (C) promptly and in any event within ten (10) days after the filing
thereof with the Internal Revenue Service if requested by Agent, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Employee Benefit Plan and Multiemployer Plan, (D) promptly and
in any event within ten (10) days after any Loan Party or any ERISA Affiliate
thereof knows or has reason to know that a required installment within the
meaning of Section 412 of the Internal Revenue Code has not been made when due
with respect to any Employee Benefit Plan, notice that such required installment
has not been made, (E) promptly and in any event within three (3) days after
receipt thereof by any Loan Party or any ERISA Affiliate thereof from a sponsor
of a Multiemployer Plan or from the PBGC, a copy of each notice received by any
Loan Party or any ERISA Affiliate thereof concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of ERISA,
(F) promptly and in any event within ten (10) days after any Loan Party or any
ERISA Affiliate thereof sends notice of a plant closing or mass layoff (as
defined in WARN) to employees, copies of each such notice sent by such Loan
Party or such ERISA Affiliate thereof, and (G) promptly and in any event within
ten (10) days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know than any of its Plans has an Unfunded Current Liability which
when aggregated with the Unfunded Current Liability of all other Plans is in
excess of $2,000,000;
91
(x) promptly after the commencement thereof but in any event
not later than five (5) days after service of process with respect thereto on,
or the obtaining of knowledge thereof by, any Loan Party, notice of each action,
suit or proceeding before any court or other Governmental Authority or other
regulatory body or any arbitrator which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;
(xi) upon the sending or promptly after the receipt thereof,
all notices, certificates and financial statements delivered to or to be
delivered by Parent or any of its Subsidiaries under the terms of the
Acquisition Documents;
(xii) promptly after the sending or filing thereof, copies of
all statements, reports and other material information any Loan Party sends to
any holder of its Indebtedness in excess of $2,500,000 or its securities or
files with the SEC or any national (domestic or foreign) securities exchange;
(xiii) promptly upon receipt thereof, copies of all financial
reports (including, without limitation, management letters), if any, submitted
to any Loan Party by its auditors in connection with any annual or interim audit
of the books thereof; and
(xiv) promptly upon request, such other information concerning
the condition or operations, financial or otherwise, of any Loan Party as Agent
may from time to time reasonably request.
(b) ADDITIONAL GUARANTIES AND COLLATERAL SECURITY.
(i) Cause each Subsidiary of any Loan Party not in existence
on the Effective Date (other than SeaMaster China at such time as it becomes a
Subsidiary) to execute and deliver to Agent, each in form and substance
satisfactory to Agent, promptly and in any event within ten (10) days after the
formation, acquisition or change in status thereof (A) a Guaranty guaranteeing
the Obligations, (B) a Security Agreement, (C) if such Subsidiary has any
Subsidiaries, a Pledge Agreement together with (1) if certificated, certificates
evidencing (aa) all of the Capital Stock of any Person organized under the laws
of the United States of America and owned by such Subsidiary or (bb) sixty-five
(65%) percent of the Capital Stock of any Person organized under the laws of a
jurisdiction other than the United States of America and owned by such
Subsidiary, (2) undated stock powers or other appropriate instruments of
assignment executed in blank with signature guaranteed executed in blank with
signature guaranteed, and (3) such opinion of counsel as Agent may reasonably
request, (D) to the extent that such Subsidiary has any interest in real
property having a Current Value in excess of $250,000 in the case of a fee
interest or requiring the payment of annual rent exceeding in the aggregate
$250,000 in the case of a leasehold interest, upon the request of Agent or at
the direction of Required Lenders, each in form and substance satisfactory to
Agent: (1) Mortgages with respect to such real property and related assets
located at the real property, each duly executed by such Person and in
recordable form; (2) evidence of the recording of such Mortgages in such office
or offices as may be necessary or, in the opinion of Agent, desirable to create
and perfect a valid and enforceable first priority Lien (subject to Permitted
Liens) on the real property and related assets intended to be covered thereby or
to otherwise protect the rights of Agent and Lenders thereunder, (3) a Title
Insurance Policy, (4) a survey of such real property, certified to Agent and to
the issuer of the
92
Title Insurance Policy by a licensed professional surveyor reasonably
satisfactory to Agent, (5) Phase I environmental site assessments with respect
to such real property, certified to Agent by a company satisfactory to Agent,
and (6) such other documents or instruments (including guarantees and opinions
of counsel) as Agent may require, and (E) such other agreements, instruments,
approvals, legal opinions or other documents reasonably requested by Agent in
order to create, perfect, establish the first priority (subject to Permitted
Liens) of or otherwise protect any Lien purported to be covered by any such
Security Agreement, Pledge Agreement or Mortgage or otherwise to effect the
intent that such Subsidiary shall become bound by all of the terms, covenants
and agreements contained in the Loan Documents and that all property and assets
of such Subsidiary shall become Collateral for the Obligations, except as Agent
may otherwise agree; and
(ii) each owner of the Capital Stock of any such Subsidiary to
execute and deliver promptly and in any event within three (3) days after the
formation or acquisition of such Subsidiary a Pledge Agreement, together with
(A) if certificated, certificates evidencing (1) all of the Capital Stock of any
such Subsidiary organized under the laws of the United States of America, or (2)
sixty-five (65%) percent of the Capital Stock of any such Subsidiary organized
under the laws of a jurisdiction other than the United States of America, (B)
undated stock powers or other appropriate instruments of assignment executed in
blank with signature guaranteed, (C) such opinion of counsel as Agent may
reasonably request and (D) such other agreements, instruments, approvals, legal
opinions or other documents requested by Agent.
(c) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply with all applicable laws, rules, regulations, judgments
and orders (including, without limitation, all Environmental Laws) in each case
material to the conduct of its business and operations, such compliance to
include, without limitation, (i) paying before the same become delinquent all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any of its properties, and (ii) paying all lawful
claims which if unpaid might become a Lien or charge upon any of its properties,
in each case except (A) to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting
from the non-payment thereof and with respect to which adequate reserves have
been set aside for the payment thereof in accordance with GAAP, (B) to the
extent that such Lien would constitute a Permitted Lien and (C) to the extent
set forth on Schedule 5.10; provided, that, in the case of (A), (B) and (C)
Agent may establish such Reserves as it determines in respect of such claims and
in the case of (A) and (B) only, the right to exercise any remedies pursuant to
such Lien shall at all times be effectively stayed.
(d) PRESERVATION OF EXISTENCE, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain, and cause each of its Subsidiaries to become
or remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, where the failure to qualify or
be in good standing could reasonably be expected to have a Material Adverse
Effect.
(e) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep, and cause each of
its Subsidiaries to keep, adequate records and books of account, with complete
entries made to permit the preparation of financial statements in accordance
with GAAP.
93
(f) INSPECTION RIGHTS. Permit, and cause each of its Subsidiaries to
permit, Agent and representatives of Agent at any time and from time to time
during normal business hours so long as no Default or Event of Default shall
exist or have occurred and be continuing and at any time a Default or an Event
of Default shall exist or shall have occurred and be continuing, no more than
two (2) times in any twelve (12) month period so long as no Default or Event of
Default shall exist or have occurred and be continuing, but otherwise as Agent
may request, at the expense of Borrowers, to examine and make copies of and
abstracts from its records and books of account, to visit and inspect its
properties, to verify materials, leases, notes, Accounts, deposit accounts and
its other assets, to conduct audits, physical counts, valuations, appraisals,
phase I environmental site assessments or examinations (and, if requested by
Agent based upon the results of any such phase I environmental site assessment,
and after the occurrence and during the continuance of an Event of Default, a
phase II environmental site assessment) and to discuss its affairs, finances and
accounts with any of its directors, officers, managerial employees, independent
accountants or any of its other representatives. Each Loan Party shall promptly
furnish to Agent and Lenders all financial and other information as Agent shall
reasonably request relating to the Collateral and the assets, business and
operations of the Loan Parties, and Administrative Borrower shall notify the
auditors and accountants of the Loan Parties that Agent is authorized to obtain
such information directly from them. Each Loan Party hereby irrevocably
authorizes and directs all accountants or auditors to deliver to Agent, at
Agent's request and at Loan Parties' expense, copies of the financial statements
of any Loan Party and any reports or final (and not draft) management letters
prepared by such accountants or auditors on behalf of any Loan Party and to
disclose to Agent and Lenders such information as they may have regarding the
business of any Loan Party. Such information provided by the accountants or
auditors shall be subject to Section 11.20 hereof to the extent applicable
thereto. From time to time upon Agent's request, but no more than two (2) times
in any twelve (12) month period, but at any time or times as Agent may, or at
the direction of Required Lenders shall, request on or after an Event of
Default, Borrowers and Guarantors shall, at the expense of Borrowers, deliver or
cause to be delivered to Agent and Lenders (1) written appraisals as to any of
the assets or properties of Parent or any of its Subsidiaries in form, scope and
methodology reasonably acceptable to Agent and by an appraiser acceptable to
Agent, addressed to Agent and Lenders and upon which Agent and Lenders are
expressly permitted to rely and (2) any third party evaluations of the earnings
or other aspects of the performance of Parent and its Subsidiaries.
(g) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties which
are necessary or useful in the proper conduct of its business in good working
order and condition, ordinary wear and tear excepted, and comply, and cause each
of its Subsidiaries to comply in all material respects at all times with the
provisions of all material Leases to which it is a party as lessee or under
which it occupies property, so as to prevent any loss or forfeiture thereof or
thereunder. Nothing in this Section 6.01(g) shall prohibit (i) any Permitted
Disposition or (ii) any merger or consolidation to the extent permitted under
Section 6.02(d) hereof.
(h) MAINTENANCE OF INSURANCE.
(i) Maintain, and cause each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or associations
(including, without
94
limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real
property leased or owned by it) and business, in such amounts and covering such
risks as is required by any Governmental Authority having jurisdiction with
respect thereto or as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated and in any event
in amount, adequacy and scope satisfactory to Agent; PROVIDED, THAT, the
aggregate book value of Collateral located on any real property leased or owned
by any Loan Party in respect of which insurance is not maintained in accordance
with this Section 6.01(h) shall not exceed $1,000,000 at any time. All policies
covering the Collateral are to be made payable to Agent for the benefit of Agent
and Lenders, as its interests may appear, in case of loss, under a standard
non-contributory "lender" or "secured party" clause and are to contain such
other provisions as Agent may require to fully protect the interests of Agent
and Lenders in the Collateral and to any payments to be made under such
policies.
(ii) In the event of a Property Loss Event with respect to
Real Property or Equipment, (except as otherwise provided below), if any of the
Equipment or any portion of any building, structure or other improvement on any
Real Property is lost, physically damaged or destroyed, upon the written request
of Administrative Borrower, Agent shall release the Net Cash Proceeds from
insurance received by Agent based on a claim by any Borrower, Guarantor or
Subsidiary as a result of such loss, damage or destruction to the extent
necessary for the repair, refurbishing or replacement of such Equipment or
building, structure or improvement; PROVIDED, THAT, all of the following
conditions are satisfied: (A) no Default or Event of Default shall exist or have
occurred and be continuing, (B) the amount of the insurance proceeds are
sufficient, in Agent's good faith determination, to effect such repair,
refurbishing or replacement in a satisfactory manner, (C) such proceeds shall be
used only to repair, refurbish or replace such Equipment or building, structure
or improvement and all related expenses and costs in connection therewith within
one hundred eighty (180) days after receipt by Parent or any of its Subsidiaries
of such proceeds, (D) Agent shall have a first priority perfected Lien (subject
to Permitted Liens) on such replacement (or repaired or restored) property or
assets, (E) the aggregate amount of such proceeds in excess of the amount
necessary to repair, refurbish or replace such replacement (or repaired or
restored) property or assets shall be applied to the Obligations in such order
and manner as Agent determines, (F) Agent shall have received within ten (10)
days after Agent notifies Administrative Borrower that Agent has received any
proceeds of insurance (or if Parent or any Subsidiary receives any such
proceeds, then within ten (10) days after Parent or such Subsidiary receives
such proceeds, which shall be delivered to Agent), a certificate duly executed
by an Authorized Officer of Administrative Borrower addressed to Agent stating
that such proceeds shall be used to repair, refurbish or replace such Equipment
or building, structure or improvement, (G) if all or any portion of such
proceeds are not so used or being used within such one hundred eighty (180) day
period, Agent shall apply such unused proceeds to the Obligations; (H) as to a
Property Loss Event with respect to assets of any Borrower or Guarantor, until
such time as the proceeds are so used, such proceeds will be held in a deposit
account or investment account that is subject to a Control Agreement and
released upon receipt of written request of Administrative Borrower that such
proceeds are to be so used and so long as no Default or Event of Default exists
or has occurred and is continuing, and (I) notwithstanding anything to the
contrary contained herein, at any time a Default or Event of Default exists or
has occurred and is continuing, any such proceeds may be applied to the
Obligations.
95
(iii) All certificates of insurance are to be delivered to
Agent and the policies are to be premium prepaid, with the loss payable and
additional insured endorsement in favor of Agent and such other Persons as Agent
may designate from time to time, and shall provide for not less than ten (10)
days' prior written notice to Agent of the exercise of any right of cancellation
as a result of the failure to pay premiums and not less than thirty (30) days'
prior written notice to Agent of the exercise of any other right of
cancellation. If any Loan Party or any of its Subsidiaries fails to maintain
such insurance, Agent may arrange for such insurance, but at Borrowers' expense
and without any responsibility on Agent's part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. Upon the occurrence and during the continuance of an Event
of Default, Agent shall have the sole right, in the name of Lenders, any Loan
Party and its Subsidiaries, to file claims under any insurance policies, to
receive, give receipt and acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
(i) OBTAINING OF PERMITS, ETC. Obtain, maintain and preserve, and
cause each of its Subsidiaries to obtain, maintain and preserve, and take all
necessary action to timely renew, all permits, licenses, authorizations,
approvals, entitlements and accreditations which are necessary in the proper
conduct of its business where the failure to obtain, maintain, preserve or renew
such permits, licenses, authorizations, approvals, entitlements and
accreditations has or could reasonably be expected to have a Material Adverse
Effect.
(j) ENVIRONMENTAL. (i) Keep any property either owned or operated by
it or any of its Subsidiaries free of any Environmental Liens; (ii) provide
Agent written notice within five (5) days of any Release of a Hazardous Material
in excess of any reportable quantity from or onto property at any time owned or
operated by it or any of its Subsidiaries and take any Remedial Actions required
under Environmental Laws to xxxxx such Release; and (iii) provide Agent with
written notice within ten (10) days of the receipt of any of the following: (A)
notice that an Environmental Lien has been filed against any property of any
Loan Party or any of its Subsidiaries; (B) commencement of any Environmental
Action or notice that an Environmental Action will be filed against any Loan
Party or any of its Subsidiaries; and (C) notice of a violation, citation or
other administrative order which could have a Material Adverse Effect, (iv)
comply, and cause each of its Subsidiaries to comply with Environmental Laws and
provide to Agent any documentation of such compliance which Agent may reasonably
request; and (v) defend, indemnify and hold harmless Agent and Lenders and their
respective transferees, and their respective employees, Agent, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation, attorney
and consultant fees, investigation and laboratory fees, court costs and
litigation expenses) arising out of (A) the generation, presence, disposal,
Release or threatened Release of any Hazardous Materials on, under, in,
originating or emanating from any property at any time owned or operated by any
Loan Party or any of its Subsidiaries (or its predecessors in interest or
title), (B) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to the presence or Release of such
Hazardous Materials, (C) any request for information, investigation, lawsuit
brought or threatened, settlement reached or order by a Governmental Authority
relating to the presence or Release of such Hazardous Materials, (D)
96
any violation of any Environmental Law by a Loan Party or any of its
Subsidiaries and/or (E) any Environmental Action filed against Agent or any
Lender.
(k) FURTHER ASSURANCES. Take such action and execute, acknowledge
and deliver, and cause each of its Subsidiaries to take such action and execute,
acknowledge and deliver, at its sole cost and expense, such agreements,
instruments or other documents as Agent may reasonably require from time to time
in order (i) to carry out more effectively the purposes of this Agreement and
the other Loan Documents, (ii) to subject to valid and perfected first priority
Liens (subject to Permitted Liens) any of the Collateral or, to the extent not
expressly prohibited by the Loan Documents, any other property of any Loan Party
and its Subsidiaries (other than AmeRussia, Sea Master Hong Kong and SeaMaster
China upon it becoming a Subsidiary), (iii) to establish and maintain the
validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created thereby, and (iv) to
better assure, convey, grant, assign, transfer and confirm unto Agent, each
Lender and Issuing Bank the rights now or hereafter intended to be granted to it
under this Agreement or any other Loan Document. In furtherance of the
foregoing, to the maximum extent permitted by applicable law, each Loan Party
(i) authorizes Agent to execute any such agreements, instruments or other
documents in such Loan Party's name and to file such agreements, instruments or
other documents in any appropriate filing office, (ii) authorizes Agent to file
any financing statement required hereunder or under any other Loan Document, and
any continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of such Loan Party, and (iii) ratifies the
filing of any financing statement, and any continuation statement or amendment
with respect thereto, filed prior to the date hereof. Without limiting any other
rights and remedies of Agent under this Agreement, Agent may, at its option and
after consultation with Administrative Borrower, make payments to satisfy the
judgment filed by the New Jersey Department of Labor on December 13, 2005
against FMII in favor of the State of New Jersey and each Loan Party
acknowledges and agrees that Agent is authorized to charge the Loan Account for
such payments which shall constitute Revolving Loans hereunder.
(l) CHANGE IN COLLATERAL; COLLATERAL RECORDS. (i) Give Agent not
less than thirty (30) days' prior written notice of any change in the location
of any Collateral, other than to locations set forth on Schedule 5.27 or any of
the locations of Collateral otherwise permitted under Section 5.27 and with
respect to which Agent has filed financing statements and otherwise fully
perfected its Liens thereon as provided for in the Security Agreements, (ii)
advise Agent promptly, in sufficient detail, of any material adverse change
relating to the type, quantity or quality of the Collateral or the Lien granted
thereon and (iii) execute and deliver, and cause each of its Subsidiaries to
execute and deliver, to Agent for the benefit of Agent and Lenders from time to
time, solely for Agent's convenience in maintaining a record of Collateral, such
written statements and schedules as Agent may require, designating, identifying
or describing the Collateral.
(m) LANDLORD WAIVERS. At any time that any Collateral with a book
value in excess of $500,000 (when aggregated with all other Collateral at the
same location) is located on any real property of a Loan Party (whether such
real property is now existing or acquired after the Effective Date) or as to any
location of the chief executive office or principal location of books and
records of a Loan Party, in any case which real property is not owned by a Loan
Party, use commercially reasonable efforts to obtain Collateral Access
Agreements; PROVIDED, THAT, (A) in
97
the event Loan Parties are unable to obtain any such Collateral Access Agreement
Agent may, in its reasonable discretion, establish such Reserves as it deems
necessary with respect to any such Collateral (which shall be in addition to,
and not in limitation of, the right of Agent to establish Reserves with respect
to leased locations where a Loan Party may not be required under the terms
hereof to obtain a Collateral Access Agreement from the owner or lessor of such
premises) and (B) as to the leased premises of Glare at 00000 Xxxxx Xxxxxx Xxx,
Xxxxxx, Xxxxxxxxxx, no such Collateral Access Agreement shall be required unless
any Collateral with a book value in excess of $500,000 is located there on or
after February 1, 2007 (and in such event, Borrowers and Guarantors shall
promptly make arrangements to provide such Collateral Access Agreement to Agent
and otherwise comply with the terms hereof as to such location).
(n) SUBORDINATION. Cause all Indebtedness and other obligations now
or hereafter owed by it to any of its Affiliates to be subordinated in right of
payment and security to the Indebtedness and other Obligations owing to Agent
and Lenders and promptly upon Agent's request, deliver to Agent a subordination
agreement in form and substance satisfactory to Agent duly authorized, executed
and delivered by such Borrower or Guarantor and Affiliate, provided, that the
foregoing requirement to deliver a subordination agreement shall not apply to
(i) the earn-outs and deferred purchase price payments under the Acquisition
Documents or in connection with Permitted Acquisitions, in each case which shall
at all times be subject to clauses (c) and (d) of the definition of "Permitted
Indebtedness" and the provisions of Section 6.02(i)(vi) hereof and otherwise
satisfy the requirements of, and shall be, Subordinated Indebtedness (except for
the right of payment which shall be subordinated solely to the extent and in
accordance with Section 6.02(i)(vi)), other than for the delivery to Agent of
such a subordination agreement, provided, that, such Indebtedness and all
payments thereof shall be expressly subject to the limitations and conditions
applicable thereto set forth in this Agreement as acknowledged and agreed by the
person to whom such amounts are owing on terms and conditions satisfactory to
Agent, (ii) the Special Incentive Bonus payments under the Acquisition Documents
or in connection with the Permitted Acquisitions, in each case which shall at
all times be subject to clauses (i) and (j) of the definition of "Permitted
Indebtedness" and the provisions of Sections 6.02(i)(vi) and 6.02(vii) and
otherwise satisfy the requirements of, and shall be, Subordinated Indebtedness
(except for the right of payment which shall be subordinated solely to the
extent and in accordance with Section 6.02(i)(vii)), other than for the delivery
to Agent of such a subordination agreement, provided, that, such Indebtedness
and all payments thereof shall be expressly subject to the limitations and
conditions applicable thereto set forth in this Agreement as acknowledged and
agreed by the person to whom such amounts are owing on terms and conditions
satisfactory to Agent and (iii) Indebtedness owing by a Borrower, a Guarantor,
or a Subsidiary that is not a Borrower or Guarantor, to a Borrower.
(o) AFTER ACQUIRED REAL PROPERTY.
(i) Upon the acquisition by any Loan Party after the date
hereof of any interest in any real property wherever located (each such interest
being an "After Acquired Property") (A) with a Current Value (as defined below)
in excess of $250,000 in the case of a fee interest or (B) requiring the payment
of annual rent exceeding in the aggregate $250,000 in the case of a leasehold
interest, promptly so notify Agent, setting forth with reasonable specificity a
description of the interest acquired, the location of the real property, any
structures or improvements thereon and an appraisal or such Loan Party's
good-faith estimate of the current
98
value of such real property (for purposes of this Section, the "Current Value").
Agent may, or at the direction of Required Lenders shall, notify such Loan Party
that Agent intends to require a Mortgage and the other documents referred to
below.
(ii) Upon receipt of such notice requesting a Mortgage, in
addition thereto, the Person which has acquired such After Acquired Property
shall promptly furnish to Agent the following, each in form and substance
satisfactory to Agent: (A) a Mortgage with respect to such real property and
related assets located at the After Acquired Property, each duly executed by
such Person and in recordable form; (B) evidence of the recording of the
Mortgage referred to in clause (i) above in such office or offices as may be
necessary or, in the opinion of Agent, desirable to create and perfect a valid
and enforceable first priority Lien (subject to Permitted Liens) on the real
property and related assets intended to be covered thereby or to otherwise
protect the rights of Agent and Lenders thereunder, (C) a Title Insurance
Policy, (D) a survey of such real property, certified to Agent and to the issuer
of the Title Insurance Policy by a licensed professional surveyor reasonably
satisfactory to Agent, (E) Phase I environmental site assessments with respect
to such real property, certified to Agent by a company satisfactory to Agent,
and (F) such other documents or instruments (including guarantees and opinions
of counsel) as Agent may require. Borrowers shall pay all fees and expenses,
including attorneys' fees and expenses, and all title insurance charges and
premiums, in connection with each Loan Party's obligations under this Section
6.01(o).
(p) FISCAL YEAR. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on or about December 31 of each calendar year unless Agent
consents to a change in such Fiscal Year (and appropriate related changes to
this Agreement).
(q) BORROWING BASE. Maintain all Revolving Loans and Letter of
Credit Obligations in compliance with the then current Borrowing Base.
(r) COMPLIANCE WITH ANTI-TERRORISM LAWS AND ANTI-MONEY LAUNDERING
LAWS. Borrowers and Guarantors shall immediately notify Agent if, after due
inquiry, any Borrower or Guarantor obtains knowledge that any holder of a direct
or indirect interest in any Borrower, Guarantor or any Subsidiary, or any
director, manager or officer of any of such holder, (i) has been listed on any
of the Lists, (ii) has become a Designated Person, (iii) is under investigation
by any governmental authority for, or has been charged with or convicted of,
money laundering drug trafficking, terrorist-related activities or other money
laundering predicate crimes, or any violation of the BSA, (iv) has been assessed
civil penalties under any Anti-Money Laundering Laws, or (v) has had funds
seized or forfeited in an action under any Anti-Money Laundering Laws. Each
Borrower and Guarantor has taken, and agrees that it shall continue to take,
reasonable measures (including, without limitation, the adoption of adequate
policies, procedures and internal controls) appropriate to the circumstances (in
any event as required by applicable requirements of law), to ensure that such
Person is and shall be in compliance with all current and future Anti-Money
Laundering Laws and Anti-Terrorism Laws and applicable laws and regulations and
governmental guidance for the prevention of terrorism, terrorist financing and
drug trafficking.
99
(s) FILING WITH THE SEC. File the Form 8-K and any other statement,
report or other information required in respect of the Merger with the SEC
promptly after the consummation of the Merger in accordance with applicable
securities laws.
(t) POST-CLOSING ACTIONS.
(i) On or before November 30, 2006, furnish to Agent, (A)
evidence of life insurance with respect to Xxxxxx X. Xxxxxxx, in a form
satisfactory to Agent, with such endorsements as to the named insureds or loss
payees thereunder as Agent may request and (B) a collateral assignment of life
insurance policy with respect to the life insurance policies arranged by
Borrowers with respect to Xxxxxx X. Xxxxxxx, executed by each Borrower as
applicable.
(ii) Furnish to Agent promptly upon any Borrower arranging or
obtaining life insurance with respect to any employee, (A) evidence of such life
insurance, in a form satisfactory to Agent, with such endorsements as to the
named insureds or loss payees thereunder as Agent may request and (B) a
collateral assignment of life insurance policy with respect to the life
insurance policy arranged by Borrowers with respect to such employee, executed
by each Borrower as applicable.
(iii) On or before March 31, 2007, furnish to Agent, either
(A) consents to the assignments of the contracts listed on Schedule 6.01(t)(iii)
hereto pursuant to the applicable Acquisition or (B) new contracts with the same
parties or other parties engaged in the same or similar business to replace such
contracts.
(iv) On or before December 31, 2006, furnish to Agent
evidence, in form and substance satisfactory to Agent, that all deposit accounts
and investment accounts of Borrowers and Guarantors are closed with no funds
held therein or credited thereto and thereafter subject to standing instructions
that any amounts remitted to such accounts are to be forwarded to a deposit
account or investment account of a Borrower or Guarantor at Bank of America that
is subject to a Control Agreement and, in the case of a deposit account, either
a Cash Management Account or Concentration Account, other than (A) deposit
accounts or investment accounts at Bank of America that are subject to a Control
Agreement duly authorized, executed and delivered by such bank and Borrower or
Guarantor to Agent, (B) deposit accounts or investment accounts of Subsidiaries
that are not a Loan Party, (C) deposit accounts specifically and exclusively
used for xxxxx cash so long as the aggregate balance of the funds on deposit in
all of such xxxxx cash deposit accounts shall not exceed $250,000 at any time
and no Default or Event of Default shall exist or have occurred and be
continuing, and (D) deposit accounts specifically and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of a Loan Party's employees.
(v) Use its reasonable efforts to consummate the acquisition
of all Capital Stock of SeaMaster China or substantially all of its business and
to promptly obtain (A) all necessary governmental, regulatory and shareholder
approvals of such acquisition on terms satisfactory to Agent and (B) all other
required permits and licenses to operate the business of providing ocean, air
and land transportation services in China to major retailers, wholesalers,
importers and domestic manufacturers in the Transpacific and South African trade
lanes as an
100
international freight agency, at each branch office or other office operating in
Asia, if and when required.
(vi) On or before December 31, 2006, have sent all notices
required as a result of the Acquisitions in connection with certain licenses for
the businesses of Borrowers and Guarantors as set forth on Schedule 6.01(t)(vi)
hereto.
(vii) On or before November 30, 2006, furnish to Agent a
survey of the mortgaged real property located at 000 Xxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000, in form and substance reasonably satisfactory to
Agent and to the issuer of the Title Insurance Policy.
(viii) On or before November 30, 2006, furnish to Agent
evidence, in form and substance satisfactory to Agent, that FMI Blocker has been
merged with or consolidated into a Borrower or Guarantor and that such Borrower
or Guarantor is the surviving entity or that articles of dissolution have been
filed for FMI Blocker or that FMI Blocker has been sold and all of its assets
have been transferred to a Borrower prior to such sale on terms and subject to
conditions satisfactory to Agent; PROVIDED, THAT, if such merger or
consolidation is not consummated, such articles of dissolution have not been
filed or FMI Blocker has not been sold and all of its assets have not been
transferred to a Borrower in accordance with this Section 6.01(t)(viii) by no
later than November 30, 2006, FMI Blocker shall by no later than November 30,
2006 execute and deliver to Agent (A) a joinder agreement pursuant to which FMI
Blocker becomes a party to this Agreement as a Borrower or Guarantor as
determined by Agent at its option, (B) Security Agreements, (C) if FMI Blocker
has any Subsidiaries, a Pledge Agreement together with (1) if certificated,
certificates evidencing (aa) all of the Capital Stock of any Person organized
under the laws of the United States of America and owned by FMI Blocker or (bb)
sixty-five (65%) percent of the Capital Stock of any Person organized under the
laws of a jurisdiction other than the United States of America and owned by FMI
Blocker, (2) undated stock powers or other appropriate instruments of assignment
executed in blank with signature guaranteed, and (3) such opinion of counsel as
Agent may reasonably request, (D) to the extent that FMI Blocker has any
interest in real property having a Current Value in excess of $250,000 in the
case of a fee interest or requiring the payment of annual rent exceeding in the
aggregate $250,000 in the case of a leasehold interest, upon the request of
Agent or at the direction of Required Lenders, each in form and substance
satisfactory to Agent: (1) Mortgages with respect to such real property and
related assets located at the real property, each duly executed by FMI Blocker
and in recordable form; (2) evidence of the recording of such Mortgages in such
office or offices as may be necessary or, in the opinion of Agent, desirable to
create and perfect a valid and enforceable first priority Lien (subject to
Permitted Liens) on the real property and related assets intended to be covered
thereby or to otherwise protect the rights of Agent and Lenders thereunder, (3)
a Title Insurance Policy, (4) a survey of such real property, certified to Agent
and to the issuer of the Title Insurance Policy by a licensed professional
surveyor reasonably satisfactory to Agent, (5) Phase I environmental site
assessments with respect to such real property, certified to Agent by a company
satisfactory to Agent, and (6) such other documents or instruments (including
guarantees and opinions of counsel) as Agent may require, and (E) such other
agreements, instruments, approvals, legal opinions or other documents reasonably
requested by Agent in order to create, perfect, establish the first priority
(subject to Permitted Liens) of or otherwise protect any Lien purported to be
covered by any Security Agreement, Pledge Agreement or Mortgage or otherwise to
effect the intent that FMI Blocker shall become
101
bound by all of the terms, covenants and agreements contained in the Loan
Documents and that all property and assets of FMI Blocker shall become
Collateral for the Obligations, except as Agent may otherwise agree.
(ix) Cause no less than $20,000,000 of the proceeds from the
transactions pursuant to the Noteholder Documents and the PIPE Documents to be
held in escrow by Law Debenture until delivery to Agent of the Control
Agreements required under Section 7.01 and in the event that such Control
Agreements are not received by Agent on or before November 20, 2006, to transfer
such funds to such investment or other account as Agent may specify to be held
as cash collateral by or on behalf of Agent (including an account at Law
Debenture). Agent shall hold such funds as cash collateral and release such
funds to Administrative Borrower at such time as the Control Agreements required
under Section 7.01 are effective, except if any other Event of Default shall
occur.
Section 6.02 NEGATIVE COVENANTS. On and after the Effective Date, unless
and until the Obligations have been Paid in Full, no Borrower or Guarantor
shall, or shall permit any Subsidiary to, unless in each case the Required
Lenders shall otherwise consent in writing:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
upon or with respect to any of its properties, whether now owned or hereafter
acquired; file or suffer to exist under the Uniform Commercial Code or any
similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or
suffer to exist any security agreement authorizing any secured party thereunder
to file such financing statement (or the equivalent thereof); sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of Accounts)
with recourse to it or any of its Subsidiaries or assign or otherwise transfer,
or permit any of its Subsidiaries to assign or otherwise transfer, any account
or other right to receive income; other than, as to all of the above, Permitted
Liens.
(b) INDEBTEDNESS. Create, incur, assume, guarantee or suffer to
exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness other than
Permitted Indebtedness.
(c) SALE OF ASSETS. Sell, issue, assign, transfer, convey, lease or
sublease, license or otherwise dispose of, or permit any Subsidiary to sell,
issue, assign, transfer, convey, lease or sublease, license or otherwise dispose
of, in each case whether in one transaction or a series of related transactions,
all or any part of its business, property or assets, or any interest therein,
whether now owned or hereafter acquired (or agree to do any of the foregoing),
or permit or suffer any other Person to acquire any interest in its business,
assets or property (or agree to do any of the foregoing); except:
(i) the sale by any Borrower or Guarantor or any of their
respective Subsidiaries of any inventory in the ordinary course of business;
102
(ii) the sale or other disposition by any Borrower or
Guarantor or any of their respective Subsidiaries of obsolete or discontinued
inventory, and the sale or other disposition by any Borrower or Guarantor or any
of their respective Subsidiaries of obsolete or worn-out Equipment, in each
case, in the ordinary course of business, whether now owned or hereafter
acquired, PROVIDED, THAT, the aggregate amount of any such assets sold in any
Fiscal Year shall not exceed $1,000,000;
(iii) in addition to sales permitted under clause (ii) above,
the sale or other disposition of Equipment or Real Property or of equipment or
real property of a Subsidiary of Parent that is not a Borrower or Guarantor;
PROVIDED, THAT, each of the following conditions is satisfied as to with respect
thereto: (A) such proceeds as to any individual sale do not exceed $250,000; (B)
as to an Asset Sale of Real Property or Equipment of any Borrower or Guarantor,
such proceeds from all such Asset Sales with respect to assets of Borrower and
Guarantor during any year shall not, after giving effect to such Asset Sale, in
the aggregate exceed $1,000,000; (C) in the case of the sale or other
disposition of Equipment or Real Property, the proceeds are used to purchase
other Real Property or Equipment that will be free and clear of any Lien, except
for Permitted Liens; (D) such new Real Property or Equipment is and continues to
be subject to the first priority perfected Lien of Agent (subject to applicable
Permitted Liens); (E) such new Real Property or Equipment is purchased within
one hundred eighty (180) days after the sale or other disposition of the
Equipment or Real Property that was subject to such Asset Sale; (F) if all or
any portion of such proceeds are not so used within such one hundred eighty
(180) day period, Agent shall apply such unused proceeds to the Obligations in
accordance with Section 3.03(i) above or earlier upon an Event of Default; and
(G) as to an Asset Sale of Real Property or Equipment of any Borrower or
Guarantor, until such time as the proceeds are so used and so long as no Default
or Event of Default exists or has occurred and is continuing (1) such proceeds
will be held in a deposit account or investment account that is subject to a
Control Agreement and only released from such account for the payment of the
purchase price of such new Real Property or Equipment, or (2) a reserve against
Availability shall be established under the Revolving Credit Facility and, in
either case, released upon receipt of written request of Administrative Borrower
certifying that such proceeds are to be so reinvested;
(iv) the sale, assignment, lease or sublease, license or other
disposition of property by any Borrower, Guarantor or any other Subsidiary of
Parent to any Borrower; PROVIDED, THAT, (A) such sale or other disposition is
permitted under Section 6.02(k) hereof, and (B) such property is subject to a
perfected, first priority Lien in favor of Agent (subject to Permitted Liens);
(v) any disposition permitted under Section 6.02(d) hereof;
(vi) the non-exclusive License of Intellectual Property rights
(including, without limitation, Licenses) granted to a customer of any Borrower
or Guarantor in the ordinary course of business, substantially consistent with
past practice and not interfering in any material respect with the conduct of
the business of any Borrower or Guarantor;
(vii) any lease or sub-lease of Real Property to any Person
other than a Borrower on terms and subject to conditions consistent with the
market with respect to such lease or sub-lease at such time;
103
(viii) an Asset Sale of Equipment or Real Property that is
part of the consideration for a Permitted Acquisition and each of the conditions
to such Permitted Acquisition are satisfied, PROVIDED, THAT, the aggregate value
of all such Equipment or Real Property subject to all of such Asset Sales, shall
not exceed $1,000,000 and as of the date thereof and after giving effect thereto
on a pro forma basis, no Default or Event of Default shall exist or have
occurred and be continuing;
(ix) issuances and sales of Capital Stock to the extent
permitted under Section 6.02(l) below;
(x) any Permitted Lien;
(xi) an Asset Sale of Equipment or Real Property as a
contribution to an Affiliate as an investment in such Affiliate to the extent
permitted under Section 6.02(f)(vi) hereof;
(xii) the transfer of funds as a payment on Indebtedness owing
by or to a Borrower, Guarantor or any other Subsidiary of Parent to the extent
not otherwise prohibited hereunder; and
(xiii) investments and capital contributions to the extent
permitted under Section 6.02(f) hereof.
(d) MERGERS AND OTHER FUNDAMENTAL CHANGES. Merge into or with or
consolidate with any other Person or permit any other Person to merge into or
with or consolidate with it or wind up, liquidate or dissolve, or permit any
Subsidiary to do any of the foregoing, except that (i) any Borrower, Guarantor
or Subsidiary organized under the laws of a jurisdiction in the United States
may merge with and into or consolidate with a Borrower, Guarantor or Subsidiary
organized under the laws of a jurisdiction in the United States, and a Borrower,
Guarantor or Subsidiary organized under the laws of a jurisdiction outside of
the United States may merge with or consolidate with a Borrower, Guarantor or
Subsidiary organized under the laws of a jurisdiction outside of the United
States that is acceptable to Agent, PROVIDED, THAT, each of the following
conditions is satisfied: (A) Agent shall have received not less than ten (10)
Business Days' prior written notice of the intention of such Borrower, Guarantor
or Subsidiary to so merge or consolidate, which notice shall set forth in
reasonable detail satisfactory to Agent, the persons that are merging or
consolidating, which person will be the surviving entity, the locations of the
assets of the persons that are merging or consolidating, and the material
agreements and documents relating to such merger or consolidation, (B) Agent
shall have received such other information with respect to such merger or
consolidation as Agent may reasonably request, (C) the rights of Agent and any
Lender in any Collateral, including, but not limited to, the existence,
perfection and priority of any Lien thereon, are not adversely affected by such
merger or consolidation, (D) as of the effective date of the merger or
consolidation and after giving effect thereto, no Default or Event of Default
shall exist or have occurred and be continuing, (E) upon Agent's request, the
surviving entity shall expressly confirm, ratify and assume the Obligations and
the Loan Documents in writing, in form and substance satisfactory to Agent, and
(F) Agent shall have received, true, correct and complete copies of all
agreements, documents and instruments relating to such merger or consolidation,
including, but not limited
104
to, the certificate or certificates of merger to be filed with each appropriate
Secretary of State or equivalent Governmental Authority in the applicable
jurisdiction (with a copy as filed promptly after such filing), and (ii) any
Borrower, Guarantor or any other Subsidiary of Parent may merge with and into or
consolidate with another Person pursuant to a Permitted Acquisition; PROVIDED,
THAT, (A) the other party to such merger or consolidation shall be organized
under the laws of a jurisdiction, and the surviving entity shall be organized
under the laws of a jurisdiction, in each case that is acceptable to Agent, or
if such Borrower, Guarantor or any other Subsidiary of Parent is organized under
the laws of a jurisdiction in the United States, such other party shall be
organized under the laws of a jurisdiction in the United States, (B) the
surviving entity shall expressly confirm, ratify and assume the Obligations and
the Loan Documents in writing, in form and substance satisfactory to Agent, and
(C) such Borrower or Guarantor shall expressly confirm, ratify and assume the
Obligations and the Loan Documents to which such Borrower or Guarantor was a
party in writing, in form and substance satisfactory to Agent and (iii) MLI
Acquisition Corp. may merge with and into MLI pursuant to the Merger.
(e) CHANGE IN NATURE OF BUSINESS. Engage in any business, or permit
any Subsidiary to engage in any business, other than the businesses of
Borrowers, Guarantors and/or any other Subsidiary of Parent on the date hereof
and any business reasonably related, similar, ancillary or complementary to the
business in which Borrowers, Guarantors or the Subsidiaries of Borrowers or
Guarantors are engaged on the date hereof.
(f) LOANS, ADVANCES, INVESTMENTS, ETC. Make, directly or indirectly,
any loans or advance money or property to any person, or invest in (by capital
contribution, dividend or otherwise) or purchase or repurchase the Capital Stock
or Indebtedness or all or a substantial part of the assets or property of any
person, or form or acquire any Subsidiaries, or agree to do any of the
foregoing, or permit any Subsidiary to do any of the foregoing, except:
(i) the Acquisitions contemplated by the Acquisition
Documents;
(ii) loans existing on the date hereof as set forth on
Schedule 6.02(f)(ii) hereto, but not any increase in the principal amount
thereof as set forth in such Schedule or any other modification of the terms
thereof which is less favorable to any of the Loan Parties, Agent or Lenders
than the existing terms;
(iii) any investment in cash or Cash Equivalents so long as
the deposit account, investment account or other account in which such cash or
Cash Equivalents are held is subject to a Control Agreement and Agent has a Lien
in such account and cash or Cash Equivalents;
(iv) loans, capital contributions or other investments by a
Borrower to another Borrower after the date hereof; PROVIDED, that, as of the
date of any such loan, capital contribution or other investment and after giving
effect thereto, the Borrower making such loan, capital contribution or other
investment shall be Solvent;
(v) loans by a Guarantor to a Borrower after the date hereof;
PROVIDED, THAT, (A) the Indebtedness arising pursuant to such loan shall be
subject to, and subordinate in right of payment to, the right of Agent and
Lenders to receive the prior final payment and
105
satisfaction in full of all of the Obligations on terms and conditions
reasonably acceptable to Agent, (B) promptly upon Agent's request, Agent shall
have received evidence reasonably satisfactory to Agent of the subordination in
right of payment of such Indebtedness of such Borrower to the prior final
payment and satisfaction in full of all of the Obligations, duly authorized,
executed and delivered by such Guarantor and Borrower, and (C) such Borrower
shall not, directly or indirectly make, or be required to make, any payments in
any of such Indebtedness prior to the end of the then current term of this
Agreement, except such Borrower may make such payments PROVIDED, THAT, (1) as of
the date of making any such payment and after giving effect thereto, the sum of
the Excess Availability plus the Qualified Cash shall have been not less than
$3,000,000 for each of the ten (10) consecutive Business Days prior to the date
of such payment and shall be not less than $3,000,000 as of the date of such
payment (and after giving effect thereto), and (2) as of the date of making any
such payment and after giving effect thereto, on a pro forma basis, no Default
or Event of Default shall exist or have occurred and be continuing;
(vi) loans, capital contributions or other investments by a
Borrower or Guarantor to a Subsidiary that is not organized under the laws of a
jurisdiction in the United States of America or otherwise to any Subsidiary or
Affiliate that is not a Borrower or Guarantor; PROVIDED, THAT, (A) the aggregate
amount of all such loans at any time outstanding and all payments made for such
capital contributions or other investments shall not, in the aggregate, exceed
$10,000,000; (B) as of the date of making any such loan, capital contribution or
other investments and after giving effect thereto, the sum of the Excess
Availability plus the Qualified Cash shall have been not less than $3,000,000
for each of the ten (10) consecutive Business Days prior to the date of such
payment and shall be not less than $3,000,000 as of the date of such payment
(and after giving effect thereto), (C) any such loan, capital contribution or
other investment shall only be made within thirty (30) days after the payment of
a regularly scheduled installment of principal in respect of the Term Loans, (D)
upon Agent's request, any obligations arising in connection with loans by a
Borrower to a Subsidiary or Affiliate that is not a Borrower or Guarantor shall
be secured by a valid and enforceable perfected security interest, lien and
fixed and floating charge on the assets of such Subsidiary or Affiliate pursuant
to agreements in form and substance satisfactory to Agent and Agent shall have
received all of such agreements as duly executed and delivered by such parties,
together with such related agreements and documents as Agent may require and (E)
as of the date of any such loan, capital contribution or other investment, and
after giving effect thereto, on a pro forma basis, no Default or Event of
Default shall exist or have occurred and be continuing;
(vii) Permitted Acquisitions;
(viii) the acquisition by Sea Master Hong Kong (or a wholly
owned Subsidiary of Parent organized under the laws of the People's Republic of
China formed for such purpose) of the business, assets and/or Capital Stock of
SeaMaster China on terms and subject to conditions required hereunder for any
Permitted Acquisition and the formation of such Subsidiary; and
(ix) dividends, redemptions, repurchases and other
distributions permitted under Section 6.02(i) hereof.
106
(g) SALE/LEASEBACK TRANSACTIONS. Create, incur or suffer to exist,
or permit any of its Subsidiaries to create, incur or suffer to exist, any
obligations as lessee for the payment of rent for any real or personal property
in connection with any sale and leaseback transaction.
(h) CAPITAL EXPENDITURES. Make or commit or agree to make, or permit
any of its Subsidiaries to make or commit or agree to make, any Capital
Expenditure that would cause the sum of (i) the aggregate amount of the Capital
Expenditures made by Parent and its Subsidiaries and (ii) the aggregate amount
of purchase money Indebtedness of Parent or any Subsidiary incurred under clause
(f)(A)(1) of the definition of "Permitted Indebtedness" to exceed $5,000,000 in
any Fiscal Year.
(i) RESTRICTED PAYMENTS.
(i) Declare or pay any dividend or other distribution, or
permit any Subsidiary to declare or pay any dividend or other distribution, in
each case directly or indirectly, on account of any Capital Stock of Parent or
any Subsidiary, except:
(A) any Subsidiary of Parent may pay dividends or make
other distributions to a Borrower and any Subsidiary of Parent that is neither a
Borrower nor a Guarantor may pay dividends or make other distributions to
another Subsidiary of Parent that is neither a Borrower nor a Guarantor;
(B) Parent may pay dividends in the form of Capital
Stock consisting of common stock or preferred stock otherwise permitted to be
issued hereunder (but in no event in the form of redeemable preferred Capital
Stock requiring any payment prior to the Final Maturity Date); or
(ii) Make any repurchase, redemption, retirement, defeasance,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Capital Stock of any Borrower or Guarantor or any direct or
indirect parent of any Borrower or Guarantor, now or hereafter outstanding or
make any payment to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights for the purchase or acquisition of shares of
any class of Capital Stock of any Borrower or Guarantor, now or hereafter
outstanding, except Borrowers and Guarantors may repurchase Capital Stock on
account of Special Incentive Bonuses otherwise permitted hereunder and Capital
Stock consisting of common stock held by employees, officers and/or directors
pursuant to any equity compensation plan, restricted stock plan, employee stock
ownership plan or employment agreement upon the termination, retirement or death
of any such employee, officers and/or directors in accordance with the
provisions of such plan or agreement, PROVIDED, THAT, as to any such repurchase,
each of the following conditions is satisfied: (1) as of the date of the payment
for such repurchase and after giving effect thereto on a pro forma basis, no
Default or Event of Default shall exist or have occurred and be continuing, (2)
such repurchase shall be paid with funds legally available therefor, (3) such
repurchase shall not violate any law or regulation or the terms of any
indenture, agreement or undertaking to which such Borrower or Guarantor is a
party or by which such Borrower or Guarantor or its or their property are bound,
and (4) the aggregate amount of all payments for such repurchases in any
calendar year shall not exceed $2,000,000; or
107
(iii) Return any Capital Stock to any shareholders or other
equity holders of Parent or any of its Subsidiaries, or make any other
distribution of property, assets, shares of Capital Stock, warrants, rights,
options, obligations or securities thereto as such (other than as permitted
pursuant to clauses (i), (ii), (vi), (vii) of this Section 6.02(i) or, in the
case of such distribution of property or assets, to the extent not otherwise
prohibited hereunder); or
(iv) Pay any management fees or any other fees or expenses
(including the reimbursement thereof by any Borrower or Guarantor) pursuant to
any management, consulting or other services agreement to any of the
shareholders or other equity holders of any Borrower or Guarantor or other
Affiliates except any such management fees or any other fees or expenses (A)
paid to any Borrower (whether paid by any other Borrower, any Guarantor, any
other Subsidiary of Parent or any Affiliate of any Loan Party that is not a
Borrower or Guarantor), (B) paid by SeaMaster China to Sea Master Hong Kong and
(C) paid by a Subsidiary of Parent that is neither a Borrower nor a Guarantor to
another Subsidiary of Parent that is neither a Borrower nor a Guarantor; or
(v) Make any payment (whether for principal or interest or any
other amount, and whether an optional prepayment, mandatory payment or
otherwise), repurchase, redeem, defease or segregate funds with respect to the
Indebtedness of Parent to Noteholders under the Senior Convertible Notes except
as permitted in the Intercreditor Agreement; or
(vi) Make any payments in respect of the earn-outs and
deferred purchase price payments under the Acquisition Documents, or any
earn-outs and deferred purchase price payments or other consideration for
Permitted Acquisitions arising after the date hereof except (A) as to earn-outs
and deferred purchase price payments under the Acquisition Documents, regularly
scheduled payments in respect thereof in accordance with the terms of the
Acquisition Documents as in effect on the date hereof (but not any prepayments,
non-mandatory payments or any payments pursuant to the acceleration or claims of
breach or to acquire the obligations, liabilities and indebtedness owing by any
Loan Party in respect of the Acquisition Documents or otherwise) and (B) as to
earn-outs and deferred purchase price payments for Permitted Acquisitions
arising after the date hereof, regularly scheduled payments in respect thereof
in accordance with the terms of the applicable agreements with respect thereto
as in effect on the date of the execution thereof (but not any prepayments,
non-mandatory payments or any payments pursuant to the acceleration or claims of
breach or to acquire the obligations, liabilities and indebtedness owing by any
Loan Party in respect of the Permitted Acquisition(s) or otherwise); PROVIDED,
THAT, in the case of payment as described in each of clauses (A) and (B) above,
as of the date of any such payment and after giving effect thereto, each of the
following conditions is satisfied: (1) Borrowers shall be in compliance with the
financial covenants set forth in Section 6.03 of this Agreement on a pro forma
basis after giving effect to the payment as of the last day of the fiscal month
most recently ended, and Agent shall have received such certificates and other
evidence thereof as it shall request, (2) the sum of Excess Availability plus
Qualified Cash shall have been not less than $3,000,000 for each of the ten (10)
consecutive Business Days prior to the date of such payment and shall be not
less than $3,000,000 as of the date of such payment (and after giving effect
thereto and to the incurrence of any Permitted Indebtedness and any Equity
Issuance pursuant to the Acquisition(s) or Permitted Acquisition(s), in each
case, to the extent permitted hereunder), (3) any such payment shall only be
made within sixty (60) days after the payment of a regularly scheduled
installment of principal in respect of
108
the Term Loans and (4) no Default or Event of Default under Section 8.01(a), (f)
or (g) shall exist or have occurred and be continuing; or
(vii) Make any payments in respect of Indebtedness in the form
of Special Incentive Bonuses to employees, directors and/or officers of Parent
or any Subsidiary and/or to sellers of the Acquired Business or the business,
assets or Capital Stock under the Acquisition Documents unless as of the date of
any such payment and after giving effect thereto, each of the following
conditions is satisfied: (A) Borrowers shall be in compliance with the financial
covenants set forth in Section 6.03 of this Agreement on a pro forma basis after
giving effect to such payment as of the last day of the fiscal month most
recently ended, and Agent shall have received such certificates and other
evidence thereof as it shall request, (B) the sum of Excess Availability plus
Qualified Cash shall have been not less than $3,000,000 for each of the ten (10)
consecutive Business Days prior to the date of such payment and shall be not
less than $3,000,000 as of the date of such payment (and after giving effect
thereto), (iii) any such payment shall only be made within sixty (60) days after
the payment of a regularly scheduled installment of principal in respect of the
Term Loans and (iv) no Default or Event of Default under Section 8.01(a), (f) or
(g) shall exist or have occurred and be continuing.
(j) FEDERAL RESERVE REGULATIONS. Permit any of the Loans or the
proceeds of any of the Loans under this Agreement to be used for any purpose
that would cause such Loan to be a margin loan under the provisions of
Regulation T, U or X of the Board.
(k) TRANSACTIONS WITH AFFILIATES. Enter into, renew, extend or be a
party to, or permit any Subsidiary to enter into, renew, extend or be a party
to, any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any Affiliate,
except:
(i) in the ordinary course of business and to the extent
necessary or desirable for the prudent operation of its business and for fair
consideration and on terms no less favorable to it than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof; PROVIDED, THAT, (A) if each party to such transaction is a Borrower,
then the consideration and terms may be less favorable to one Borrower to the
extent it is more favorable to the other Borrower and the Borrower to whom it is
less favorable is Solvent at the time of the transaction or (B) if a party to
such transaction is a Borrower and the other is a Guarantor or a Subsidiary or
Affiliate that is not a Borrower or Guarantor, the consideration and terms may
be less favorable to such Guarantor or Subsidiary or Affiliate;
(ii) transactions expressly permitted by Sections 6.02(c),
6.02(f), 6.02(i) or 6.02(l) above; or
(iii) loans existing on the date hereof as set forth on
Schedule 6.02(k) hereto, but not any increase in the principal amount thereof as
set forth in such Schedule or any other modification of the terms thereof.
(l) LIMITATION ON ISSUANCE OF CAPITAL STOCK. Issue or sell or enter
into any agreement or arrangement for the issuance and sale of any of its
Capital Stock, any securities
109
convertible into or exchangeable for its Capital Stock or any warrants except
for (i) the issuance by Parent of common stock, options or warrants (A) in
connection with the Acquisition Documents, (B) pursuant to the Noteholder
Documents and the PIPE Documents, (C) the proceeds of which are used to make a
substantially contemporaneous payment of the consideration required to be paid
for a Permitted Acquisition, or which stock, options or warrants constitute all
or a portion of the consideration required to be paid for a Permitted
Acquisition (and any such stock, options or warrants, or proceeds, shall in each
case be considered in the calculation of the limitation on the amount of
consideration that may be paid for Permitted Acquisitions), or (D) pursuant to
any equity compensation plan, restricted stock plan, employee stock ownership
plan or employment agreement in accordance with the provisions of such plan or
agreement, or (ii) the issuance of Capital Stock, options or warrants to a
Borrower, Guarantor or other Subsidiary by an Affiliate or Subsidiary pursuant
to a capital contribution or other investment by such Borrower, Guarantor or
Subsidiary in such Affiliate or Subsidiary that is permitted under this
Agreement; PROVIDED, THAT, (1) as of the date of any such issuance or sale under
clauses (i)(A), (i)(C), and (ii), and after giving effect thereto, on a pro
forma basis, no Default or Event of Default shall exist or have occurred and be
continuing and (2) as to any issuance or sale pursuant to the Noteholder
Documents referred to in clause (i)(B), such issuance or sale is subject to the
terms of the Intercreditor Agreement. Nothing contained in this Section 6.02(l)
shall be construed to limit the use of the proceeds of the Equity Issuance under
the PIPE Documents or the Noteholder Documents.
(m) MODIFICATIONS OF INDEBTEDNESS, ORGANIZATIONAL DOCUMENTS AND
CERTAIN OTHER AGREEMENTS; ETC.
(i) Amend, modify or otherwise change (or permit the
amendment, modification or other change in any manner of) any of the provisions
of any of its Indebtedness or of any instrument or agreement (including, without
limitation, any Noteholder Documents, purchase agreement, indenture, loan
agreement or security agreement but excluding, solely for the purposes of this
clause (i), any employment agreement to which any Loan Party or any other
Subsidiary of Parent is a party) relating to any such Indebtedness, except that
such Borrower or Guarantor may, after prior written notice to Agent, amend,
modify, alter or change the terms thereof so as to extend the maturity thereof,
or defer the timing of any payments in respect thereof, or to forgive or cancel
any portion of such Indebtedness (other than pursuant to payments thereof), or
to reduce the interest rate or any fees in connection therewith; or
(ii) except for the Obligations,
(A) make any voluntary or optional payment, prepayment,
redemption, defeasance, sinking fund payment or other acquisition for value of
any of its Indebtedness (including, without limitation, by way of depositing
money or securities with the trustee therefor before the date required for the
purpose of paying any portion of such Indebtedness when due); provided, that (1)
the foregoing shall not apply to Indebtedness owing to a Borrower that is
permitted hereunder and (2) the amount of $250,000 paid into escrow on the date
hereof that is used to make a payment or prepayment of certain Indebtedness
owing to Xxxxxxx Xxxxxxx xxx be used for such payments or prepayments in
accordance with the terms of the arrangements of Borrowers with such person, or
110
(B) refinance, replace or exchange any other
Indebtedness for any such Indebtedness (except to the extent of Refinancing
Indebtedness expressly permitted by the definition of Permitted Indebtedness),
PROVIDED, THAT, as to the refinance, replacement or exchange of any other
Indebtedness that is less than $500,000, such Indebtedness may be so refinanced,
replaced or exchanged for other Indebtedness, so long as on the date of such
refinancing, replacement or exchange and after giving effect thereto (on a pro
forma basis), each of the following conditions is satisfied: (1) no Default or
Event of Default shall exist or have occurred and be continuing, (2) the sum of
Excess Availability plus Qualified Cash shall not be less than $3,000,000, (3)
any such refinancing, replacement or exchange shall give rise to Indebtedness
that does not exceed the amount of Indebtedness so refinanced, replaced or
exchanged and the terms of the Indebtedness arising pursuant to such
refinancing, replacement or exchange are no less favorable to Parent, its
Subsidiaries, Agent and Lenders than the terms of the Indebtedness being
refinanced, replaced, or exchanged, or
(C) make any payment, prepayment, redemption,
defeasance, sinking fund payment or repurchase of any outstanding Indebtedness
as a result of any Asset Sale, Change of Control, issuance and sale of debt
securities not constituting Permitted Indebtedness or equity securities or
similar event other than payments made in stock or other equity interests
permitted hereunder or from the proceeds of an Equity Issuance permitted
hereunder, in each case, to pay (i) any consideration (including, without
limitation, earn-outs, deferred purchase price payments, other contingent
consideration and Special Incentive Bonuses) with respect to an Acquisition or
Permitted Acquisition (and any such stock or warrants, or proceeds paid with
respect to Permitted Acquisitions, shall in each case be considered in the
calculation of the limitation on the amount of consideration that may be paid
for Permitted Acquisitions) or (ii) any Permitted Indebtedness to the extent not
prohibited hereunder, PROVIDED, THAT, nothing contained in this Section
6.02(m)(ii)(C) shall be construed to limit the use of the proceeds of the Equity
Issuance under the PIPE Documents and the Noteholder Documents; or
(iii) amend, modify or otherwise change its name, jurisdiction
of organization, organizational identification number or FEIN; provided that
Parent may change its name to "Summit Global Logistics, Inc." within forty-five
(45) days after the date hereof, if notice of such name change is immediately
provided to Agent, or
(iv) amend, modify or otherwise change its certificate of
incorporation, articles of association, certificate of formation, limited
liability agreement or other organizational documents, including, without
limitation, entering into any new agreement with respect to any of its Capital
Stock, except that (A) Parent or any of its Subsidiaries may amend, modify or
otherwise change any of such organizational documents or enter into any new
agreement with respect to any Capital Stock, after written notice to Agent which
shall describe such amendment, modification or other change or new agreement so
long as such amendment, modification or other change or new agreement are
acceptable to Agent and (B) Parent or any of its Subsidiaries may amend, modify
or otherwise change such organization documents solely to the extent necessary
to reflect any merger or consolidation permitted under Section 6.02(d) hereof.
(n) INVESTMENT COMPANY ACT OF 1940. Engage in any business, enter
into any transaction, use any securities or take any other action, or permit any
of its Subsidiaries to do any of the foregoing, that would cause it to become
subject to the registration requirements of the
111
Investment Company Act of 1940, as amended, by virtue of being an "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.
(o) COMPROMISE OF ACCOUNTS. Compromise or adjust any Account (or
extend the time of payment thereof) or grant any discounts, allowances or
credits or permit any of its Subsidiaries to do so, in each case, other than in
the prudent conduct of its business.
(p) PROPERTIES. Permit any property of any Loan Party to become a
fixture with respect to real property or to become an accession with respect to
other personal property with respect to which real or personal property Agent
does not have a valid and perfected first priority Lien.
(q) ERISA. (i) Engage in any transaction described in Section 4069
of ERISA; (ii) fail to make any contribution or payment to any Multiemployer
Plan which it or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto which is
greater than $2,000,000; or (iii) fail, or permit any ERISA Affiliate to fail,
to pay any required installment or any other payment required under Section 412
of the Internal Revenue Code which is greater than $500,000 on or before the due
date for such installment or other payment.
(r) ENVIRONMENTAL. Permit the use, handling, generation, storage,
treatment, Release or disposal of Hazardous Materials at any property owned or
leased by it or any of its Subsidiaries, except in compliance with Environmental
Laws and so long as such use, handling, generation, storage, treatment, Release
or disposal of Hazardous Materials could not reasonably be expected to result in
a Material Adverse Effect.
(s) CERTAIN AGREEMENTS. Agree to any amendment or other change to,
or waiver of any of its rights under, any Material Contract (but not including
for this purpose any Material Contract subject to Section 6.02(m) or Section
6.02(t)), except for such amendments, changes, or waivers which could not
reasonably be expected to have a Material Adverse Effect.
(t) LIMITATIONS ON RESTRICTIONS AFFECTING SUBSIDIARIES. Create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or limits the ability of any Subsidiary of a Borrower or Guarantor to
(i) pay dividends or make other distributions or pay any Indebtedness owed to
such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (ii)
make loans or advances to such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (iii) transfer any of its properties or assets to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; or (iv)
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than
encumbrances and restrictions arising under (A) applicable law, (B) this
Agreement, (C) the Noteholder Documents and PIPE Documents as in effect on the
date hereof, (D) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of such Borrower or Guarantor or any
Subsidiary of such Borrower or Guarantor, (E) customary provisions restricting
the creation, incurrence, assumption or existence of Liens on Equipment financed
solely with purchase money indebtedness, (F) any agreement relating to Permitted
Indebtedness incurred by a Subsidiary of such Borrower or Guarantor prior to the
date
112
on which such Subsidiary was acquired by such Borrower or such Guarantor and
outstanding on such acquisition date, and (G) the extension or continuation of
contractual obligations in existence on the date hereof; PROVIDED, THAT, any
such encumbrances or restrictions contained in such extension or continuation
are no less favorable to Agent and Lenders than those encumbrances and
restrictions under or pursuant to the contractual obligations so extended or
continued.
(u) AMENDMENT TO ACQUISITION DOCUMENTS. Amend, modify, change, agree
to any amendment, modification or other change to (or make any payment
consistent with any amendment or other change to) or waive any of its rights
under any of the Acquisition Documents.
(v) NO VIOLATION OF ANTI-TERRORISM LAWS. Borrowers and Guarantors
shall not, and shall not permit any Subsidiary to: (i) violate any of the
prohibitions set forth in the Anti-Terrorism Laws applicable to any of them or
the business that they conduct, (ii) require Agent or Lenders to take any action
that would cause Agent or Lenders to be in violation of the prohibitions set
forth in the Anti-Terrorism Laws, it being understood that Agent or any Lender
can refuse to honor any such request or demand otherwise validly made by a
Borrower under this Agreement or any Loan Document, (iii) knowingly conduct any
business or engage in making or receiving any contribution of funds, goods or
services to or for the benefit of any Designated Person or any other Person
identified in any List, (iv) knowingly deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to any Anti-Terrorism Law, (v) repay the Loans with any funds derived from any
unlawful activity with the result that the making of the Loans would be in
violation of law, or (vi) knowingly engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law
(and Administrative Borrower shall deliver to Agent any certification or other
evidence requested from time to time by Agent in its reasonable discretion,
confirming compliance with this Section 6.02(v)).
(w) KEY EMPLOYEES. Amend, modify, change, agree to any amendment,
modification or other change in each case in any material respect to any
employment agreement between any Loan Party and Xxxxxx X. Xxxxxxx, Xxxxxx
X'Xxxxx, Xxxxxxx XxXxxx, Xxxxxx Xx, Xxxxxx Xxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxx XxXxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxxxxxxxxx
Danbalis or any of their respective successors, without prior written notice to
Agent and delivery to Agent of a copy of any such amendment, modification or
change.
Section 6.03 FINANCIAL COVENANTS. Unless and until the Obligations have
been Paid in Full, no Borrower or Guarantor shall, unless the Required Lenders
shall otherwise consent in writing:
(a) TOTAL LEVERAGE RATIO. Permit the ratio of Net Senior
Indebtedness to Consolidated EBITDA of Parent and its Subsidiaries for the
twelve (12) consecutive months ending on the last day of the month set forth on
Schedule 6.03(a) hereto to be greater than the applicable ratio for such date
set forth on such Schedule; provided, that, (i) for the purposes of calculating
the ratio of Net Senior Indebtedness to Consolidated EBITDA under this Section
113
6.03(a) for the twelve (12) consecutive months ending December 31, 2006, March
31, 2007, June 30, 2007 and September 30, 2007 respectively, Consolidated EBITDA
for the three (3) month period from October 1, 2006 to December 31, 2006 shall
be equal to: (A) the amount equal to (1) Consolidated EBITDA for the period from
the Effective Date to December 31, 2006 divided by (2) the number of days during
such period multiplied by (B) the number of days during the period from and
including October 1, 2006 to and including December 31, 2006 and (ii) for the
purposes of this Section 6.03(a), the amounts included in respect of the
Consolidated EBITDA of Parent and its Subsidiaries for the fiscal quarters
ending March 31, 2006, June 30, 2006 and September 30, 2006 shall be equal to
$4,652,000, $2,915,000 and $5,217,000 respectively.
(b) CONSOLIDATED LAST TWELVE MONTHS EBITDA. Permit Consolidated
EBITDA of the Parent and its Subsidiaries for the twelve (12) consecutive months
ending on the last day of the month set forth on Schedule 6.03(b) hereto to be
less than the applicable amount for such period set forth on such Schedule;
provided, that, (i) prior to the end of the first twelve (12) consecutive month
period commencing on the last day of the month prior to the date hereof, such
Consolidated EBITDA shall be for the three (3), six (6), and nine (9) month
periods as set forth on such Schedule and (ii) for the purposes of calculating
Consolidated EBITDA under this Section 6.03(b) for the periods October 1, 2006
to December 31, 2006, October 1, 2006 to March 31, 2007, October 1, 2006 to June
30, 2007 and the twelve (12) consecutive months ending September 30, 2007,
Consolidated EBITDA for the three (3) month period from October 1, 2006 to
December 31, 2006 shall be equal to: (A) the amount equal to (1) Consolidated
EBITDA for the period from the Effective Date to December 31, 2006 divided by
(2) the number of days during such period multiplied by (B) the number of days
during the period from and including October 1, 2006 to and including December
31, 2006.
(c) FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage
Ratio of the Parent and its Subsidiaries for the twelve (12) consecutive months
ending on the last day of the month set forth on Schedule 6.03(c) hereto to be
less than the applicable amount for such period set forth on such Schedule,
provided, that, (i) prior to the end of the first twelve (12) consecutive month
period commencing on the last day of the month prior to the date hereof, such
Fixed Charge Coverage Ratio shall be for the three (3), six (6), and nine (9)
month periods as set forth on such Schedule, and (ii) for the purposes of
calculating the Fixed Charge Coverage Ratio under this Section 6.03(c) for the
periods October 1, 2006 to December 31, 2006, October 1, 2006 to March 31, 2007,
October 1, 2006 to June 30, 2007 and the twelve (12) consecutive months ending
September 30, 2007, the Fixed Charge Coverage Ratio shall be calculated using
Consolidated EBITDA for the three (3) month period from October 1, 2006 to
December 31, 2006 equal to: (A) the amount equal to (1) Consolidated EBITDA for
the period from the Effective Date to December 31, 2006 divided by (2) the
number of days during such period multiplied by (B) the number of days during
the period from and including October 1, 2006 to and including December 31,
2006, and (iii) for purposes of the periods October 1, 2006 to December 31,
2006, October 1, 2006 to March 31, 2007, October 1, 2006 to June 30, 2007 and
the twelve (12) consecutive months ending September 30, 2007, the portion of the
Fixed Charge Coverage Ratio comprising principal of Indebtedness scheduled to be
paid or prepaid during the period from October 1, 2006 to December 31, 2006
shall be based on the actual amount of such principal Indebtedness scheduled to
be paid or prepaid during the period from the Effective Date to December 31,
2006.
114
ARTICLE VII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS AND OTHER COLLATERAL
Section 7.01 COLLECTION OF ACCOUNTS; MANAGEMENT OF COLLATERAL.
(a) Loan Parties shall (i) establish and maintain cash management
services of a type and on terms satisfactory to Agent at one or more of the
banks set forth on Schedule 7.01 (each a "Cash Management Bank"), and shall take
such reasonable steps to enforce, collect and receive all amounts owing on the
Accounts of Parent or any of its Subsidiaries, and (ii) deposit or cause to be
deposited promptly, and in any event no later than the third Business Day after
the date of receipt thereof prior to November 30, 2006 and no later than the
next Business Day after the date of the receipt thereof at all times on and
after November 30, 2006, all proceeds in respect of any Collateral and all
Collections and other amounts received by any Loan Party other than assets
and/or funds of any Subsidiary that do not constitute Loan Parties (including
payments made by the Account Debtors directly to any Loan Party) into a Cash
Management Account or the Concentration Account. To the extent that any funds in
the Concentration Account, any Cash Management Account or the investment account
in which Qualified Cash is maintained are transferred to an Operating Account
prior to a Cash Dominion Event and Agent sending a Notice of Exclusive Control
with respect thereto, such funds that are so transferred shall not thereafter be
required to be transferred back to a Cash Management Account or the
Concentration Account.
(b) As soon as possible, but in any event on or before November 20,
2006, Loan Parties shall, with respect to each Cash Management Account, the
Concentration Account and the Operating Accounts and investment account in which
any Qualified Cash is held, deliver to Agent a Control Agreement, EXCEPT that
Loan Parties shall not be required to deliver a Control Agreement (i) for any
Cash Management Account that is not at Bank of America, provided, that, any such
account is closed on or before December 31, 2006 and any funds at any time
received therein are transferred to a Cash Management Account at Bank of America
or the Concentration Account as provided below, (ii) deposit accounts
specifically and exclusively used for xxxxx cash so long as the aggregate
balance of the funds on deposit in all of such xxxxx cash deposit accounts shall
not exceed $250,000 at any time and no Default or Event of Default shall exist
or have occurred and be continuing, and (iii) deposit accounts specifically and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of a Loan Party's employees. Prior to November
30, 2006, each Loan Party shall cause to be transferred all funds deposited or
credited to each Cash Management Account by manual transfer on a weekly basis to
the Concentration Account and on and after November 30, 2006, each Loan Party
shall cause to be transferred all funds deposited or credited to each Cash
Management Account by manual transfer every other Business Day to the
Concentration Account at which such account is maintained, provided, that, Loan
Parties shall cause such transfers from the Cash Management Accounts to be done
automatically as soon as reasonably practicable. Each Control Agreement shall
provide, among other things that each Cash Management Bank or Concentration
Account Bank irrevocably agrees that it will comply at any time with the
instructions originated by Agent to such Cash Management Bank or Concentration
Account Bank directing the disposition of cash, securities, payments and all
other items from time to time credited to such account, without the further
consent of such Loan Party, provided that Agent
115
will not give a Notice of Exclusive Control to such Cash Management Banks or
Concentration Account Bank unless a Cash Dominion Event has occurred.
(c) So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may amend Schedule 7.01 to add or replace a
Cash Management Bank, Cash Management Account, Operating Account or bank or
depository institution at which an Operating Account is maintained; provided,
however, that (i) such prospective Cash Management Bank or bank or depository
institution at which such Operating Account is maintained shall be satisfactory
to Agent and Agent shall have consented in writing in advance to the opening of
such Cash Management Account with the prospective Cash Management Bank or such
Operating Account with the prospective bank or depository institution at which
such Operating Account is to be maintained, and (ii) prior to the time of the
opening of such Cash Management Account or Operating Account (other than (A)
deposit accounts specifically and exclusively used for xxxxx cash so long as the
aggregate balance of the funds on deposit in all of such xxxxx cash deposit
accounts shall not exceed $250,000 at any time and no Default or Event of
Default shall exist or have occurred and be continuing, and (B) deposit accounts
specifically and exclusively used for payroll, payroll taxes and other employee
wage and benefit payments to or for the benefit of a Loan Party's employees),
each Loan Party and such prospective Cash Management Bank or prospective bank or
depository institution at which such Operating Account is maintained shall have
executed and delivered to Agent a Control Agreement. Each Loan Party shall close
any of its Cash Management Accounts (and establish replacement cash management
accounts in accordance with the foregoing sentence) promptly and in any event
within thirty (30) days of notice from Agent that the creditworthiness of any
Cash Management Bank is no longer acceptable in Agent's reasonable judgment, or
as promptly as practicable and in any event within sixty (60) days of notice
from Agent that the operating performance, funds transfer, or availability
procedures or performance of the Cash Management Bank with respect to Cash
Management Accounts or Agent's liability under any Control Agreement with such
Cash Management Bank is no longer acceptable in Agent's reasonable judgment.
(d) All cash, checks and similar items of payment in the Cash
Management Accounts and the Concentration Account shall constitute Collateral
securing payment of the Obligations, and in which Loan Parties are hereby deemed
to have granted a Lien to Agent for the benefit of Lenders. All checks, drafts,
notes, money orders, acceptances, cash and other evidences of Indebtedness
received directly by any Loan Party as proceeds of any Collateral shall be held
by such Loan Party in trust for Agent and Lenders and upon receipt be deposited
by such Loan Party in original form and no later than the third Business Day
after the date of receipt thereof prior to November 30, 2006 and no later than
the next Business Day after the date of the receipt thereof at all times on and
after November 30, 2006 into the Concentration Account (provided, that, such
funds held in the Concentration Account or any Cash Management Account may be
transferred to an Operating Account by any Borrower at any time prior to a Cash
Dominion Event and Agent sending a Notice of Exclusive Control). A Loan Party
shall not commingle such collections in the Cash Management Accounts or the
Concentration Account with the proceeds of any assets not included in the
Collateral. No checks, drafts or other instrument received by Agent shall
constitute final payment to Agent unless and until such instruments have
actually been collected.
116
(e) After the occurrence and during the continuance of an Event of
Default, Agent may send a notice of assignment and/or notice of Lenders'
security interest to any and all Account Debtors or third parties holding or
otherwise concerned with any of the Collateral, and thereafter Agent shall have
the sole right to collect the Accounts and/or take possession of the Collateral
and the books and records relating thereto. On and after an Event of Default,
Loan Parties shall not, without prior written consent of Agent, grant any
extension of time of payment of any Receivable, compromise or settle any
Receivable for less than the full amount thereof, release, in whole or in part,
any Person or property liable for the payment thereof, or allow any credit or
discount whatsoever thereon.
(f) Each Loan Party hereby appoints Agent or its designee on behalf
of Agent as Loan Parties' attorney-in-fact with power exercisable during the
continuance of an Event of Default to endorse any Loan Party's name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Receivables, to sign any Loan Party's name on any invoice or
xxxx of lading relating to any of the Receivables, drafts against Account
Debtors with respect to Receivables, assignments and verifications of
Receivables and notices to Account Debtors with respect to Receivables, to send
verification of Receivables, and to notify the Postal Service authorities to
change the address for delivery of mail addressed to any Loan Party to such
address as Agent may designate and to do all other acts and things reasonably
necessary to carry out this Agreement. All acts of said attorney or designee are
hereby ratified and approved, and said attorney or designee shall not be liable
for any acts of omission or commission (other than acts of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction), or for any error of
judgment or mistake of fact or law. This power being coupled with an interest is
irrevocable until all of the Obligations are Paid in Full and all of the Loan
Documents are terminated.
(g) Nothing herein contained shall be construed to constitute Agent
as agent of any Loan Party for any purpose whatsoever, and Agent shall not be
responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of
the cause thereof (other than from acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction). Agent shall not, under any
circumstance or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof or for
any damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction). Agent, by
anything herein or in any assignment or otherwise, does not assume any of the
obligations under any contract or agreement assigned to Agent and shall not be
responsible in any way for the performance by any Loan Party of any of the terms
and conditions thereof.
(h) If any Receivable includes a charge for any tax payable to any
Governmental Authority, Agent is hereby authorized (but in no event obligated)
in its discretion to pay the amount thereof to the proper taxing authority for
Loan Parties' account and to charge Loan Parties therefor. Loan Parties shall
notify Agent if any Receivable includes any taxes due to any such Governmental
Authority and, in the absence of such notice, Agent shall have the right to
117
retain the full proceeds of such Receivable and shall not be liable for any
taxes that may be due by reason of the sale and delivery creating such
Receivable.
(i) Notwithstanding any other terms set forth in the Loan Documents,
the rights and remedies of Agent and Lenders provided for herein, and the
obligations of Loan Parties set forth herein, are cumulative of, may be
exercised singly or concurrently with, and are not exclusive of, any other
rights, remedies or obligations set forth in any other Loan Document or as
provided by law.
Section 7.02 STATUS OF ACCOUNTS AND OTHER COLLATERAL. With respect to
Collateral of any Loan Party at the time the Collateral becomes subject to
Agent's Lien, each Loan Party covenants, represents and warrants: (a) such Loan
Party shall be the sole owner, free and clear of all Liens (except for the Liens
granted in the favor of Agent for the benefit of Agent and Lenders and Permitted
Liens), and shall be fully authorized to sell, transfer, pledge and/or grant a
security interest in each and every item of said Collateral; (b) each Eligible
Account shall be a good and valid account representing an undisputed bona fide
indebtedness incurred or an amount indisputably owed by the Account Debtor
therein named, for a fixed sum as set forth in the invoice relating thereto with
respect to an absolute sale and delivery upon the specified terms of goods sold
or services rendered by such Loan Party; (c) no Account shall be subject to any
defense, offset, counterclaim, discount or allowance except as may be stated in
the invoice relating thereto, discounts and allowances as may be customary in
such Loan Party's business and as otherwise disclosed to Agent; (d) none of the
transactions underlying or giving rise to any Account shall violate any
applicable State or Federal laws or regulations, and all documents relating
thereto shall be legally enforceable under such laws in accordance with their
terms; (e) no agreement under which any deduction or offset of any kind, other
than normal trade discounts, may be granted or shall have been made by such Loan
Party at or before the time such Receivable is created; (f) all agreements,
instruments and other documents relating to any Receivable shall be true and
correct and in all material respects what they purport to be; (g) such Loan
Party shall maintain books and records pertaining to the Collateral in such
detail, form and scope as Agent shall reasonably require; (h) such Loan Party
shall immediately notify Agent if any Receivable arises out of contracts with
any Governmental Authority, and will execute any instruments and take any steps
reasonably required by Agent in order that all monies due or to become due under
any such contract shall be assigned to Agent and notice thereof given to such
Governmental Authority under the Federal Assignment of Claims Act or any similar
State or local law; (i) such Loan Party will, immediately upon learning thereof,
report to Agent any material loss or destruction of, or substantial damage to,
any of the Collateral, and any other matters affecting the value, enforceability
or collectability of any of the Collateral; (j) if any amount payable under or
in connection with any Collateral is evidenced by a promissory note or other
instrument, such promissory note or instrument shall be immediately pledged,
endorsed, assigned and delivered to Agent for the benefit of Agent and Lenders
as additional Collateral; and (k) such Loan Party is not and shall not be
entitled to pledge Agent's or any Lender's credit on any purchases or for any
purpose whatsoever.
Section 7.03 COLLATERAL CUSTODIAN. Upon the occurrence and during the
continuance of any Default or Event of Default, Agent may at any time and from
time to time employ and maintain on the premises of any Loan Party a custodian
selected by Agent who shall have full authority to do all acts necessary to
protect Agent's and Lenders' interests. Each Loan Party
118
hereby agrees to, and to cause its Subsidiaries to, cooperate with any such
custodian and to do whatever Agent may request to preserve the Collateral. All
costs and expenses incurred by Agent by reason of the employment of the
custodian shall be the responsibility of Borrowers and payable upon demand to
Agent or charged to the Loan Account.
Section 7.04 COLLATERAL REPORTING.
(a) Borrowers shall provide Agent with the following documents in a
form satisfactory to Agent:
(i) as soon as possible after the end of each month (but in
any event within ten (10) Business Days after the end thereof), on a monthly
basis or more frequently as Agent may request: (A) agings of Accounts (together
with a reconciliation to the previous month's aging and general ledger) and (B)
agings of accounts payable (and including information indicating the amounts
owing to owners and lessors of leased premises, and other third parties from
time to time in possession of any Collateral);
(ii) upon Agent's request, (A) copies of customer statements,
sales invoices, credit memos, remittance advices and reports, and copies of
deposit slips and bank statements and (B) copies of shipping and delivery
documents;
(iii) such other reports as to the portion of the Collateral
comprised of Accounts and Receivables as Agent shall reasonably request from
time to time.
(b) If any Loan Party's records or reports of the Collateral are
prepared or maintained by an accounting service, contractor, shipper or other
agent, such Loan Party hereby irrevocably authorizes such service, contractor,
shipper or agent to deliver such records, reports, and related documents to
Agent and to follow Agent's instructions with respect to further services at any
time that an Event of Default or has occurred and is continuing.
Section 7.05 ACCOUNTS COVENANTS.
(a) Borrowers shall notify Agent promptly of: (i) any material delay
in any Borrower's performance of any of its material obligations to any Account
Debtor or the assertion of any material claims, offsets, defenses or
counterclaims by any Account Debtor, or any material disputes with Account
Debtors, or any settlement, adjustment or compromise thereof, (ii) all material
adverse information known to any Borrower or Guarantor relating to the financial
condition of any Account Debtor and (iii) any event or circumstance which, to
the best of any Loan Party's knowledge, would cause Agent to consider any then
existing Accounts as no longer constituting Eligible Accounts. No credit,
discount, allowance or extension or agreement for any of the foregoing shall be
granted to any Account Debtor without Agent's consent, except in the ordinary
course of a Loan Party's business in accordance with practices and policies
previously disclosed in writing to Agent. As long as no Event of Default has
occurred and is continuing, Loan Parties shall settle, adjust or compromise any
claim, offset, counterclaim or dispute with any Account Debtor. At any time that
an Event of Default has occurred and is continuing, Agent shall, at its option,
have the exclusive right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with Account Debtors or grant any credits, discounts or
allowances.
119
(b) With respect to each Account: (i) the amounts shown on any
invoice delivered to Agent or schedule thereof delivered to Agent shall be true
and complete, (ii) no payments shall be made thereon except payments made to a
Cash Management Account or as Agent may otherwise direct, (iii) no credit,
discount, allowance or extension or agreement for any of the foregoing shall be
granted to any Account Debtor except as reported to Agent in accordance with
this Agreement and except for credits, discounts, allowances or extensions made
or given in the ordinary course of each Loan Party's business in accordance with
practices and policies previously disclosed to Agent, (iv) there shall be no
setoffs, deductions, contras, defenses, counterclaims or disputes existing or
asserted with respect thereto except as reported to Agent in accordance with the
terms of this Agreement, (v) none of the transactions giving rise thereto will
violate any applicable foreign, Federal, State or local laws or regulations, all
documentation relating thereto will be legally enforceable under such laws and
regulations in accordance with its terms.
(c) Agent shall have the right at any time or times, in Agent's name
or in the name of a nominee of Agent, to verify the validity, amount or any
other matter relating to any Receivables or Accounts, by mail, telephone,
facsimile transmission or otherwise.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01 EVENTS OF DEFAULT. Each of the following events shall be an
Event of default (referred to herein as an "Event of Default"):
(a) any Borrower shall fail to pay any principal of or interest on
any Loan, any Agent Advance, any Reimbursement Obligation or any fee, indemnity
or other amount payable under this Agreement or any other Loan Document when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise);
(b) any representation or warranty made or deemed made by or on
behalf of any Loan Party or by any senior officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate, or other document delivered by or on behalf of any Loan Party to
Agent, any Lender or Issuing Bank pursuant to any Loan Document shall have been
incorrect in any material respect when made or deemed made;
(c) (i) any Loan Party shall fail to perform or comply with any
covenant or agreement contained in Sections 6.01(b), 6.01(c), 6.01(e), 6.01(f),
6.01(g), 6.01(i), 6.01(j), 6.01(l), 6.01(m), 6.01(o), 6.01(p), 6.02(e), 6.02(p),
and 6.02(r) of this Agreement and such failure shall continue for ten (10) days,
provided that such ten (10) day period shall not apply in the case of any
failure to perform or comply with such covenant which is not capable of being
cured at all or within such ten (10) day period or which has been the subject of
a prior failure within the prior six (6) month period or (ii) any Loan Party
shall fail to perform or comply with any covenant or agreement contained in
Article VI of this Agreement (other than those listed in clause (c)(i) above) or
Article VII of this Agreement or (iii) any Loan Party shall fail to perform or
comply with any covenant or agreement contained in any Security Agreement to
which it is a party;
120
(d) any Loan Party shall fail to perform or comply with any covenant
or agreement contained in any Loan Document to be performed or observed by it
and, except as set forth in subsections (a), (b) or (c) of this Section 8.01,
such failure, if capable of being remedied, shall remain unremedied for fifteen
(15) days after the date of such failure;
(e) any Loan Party shall fail to make any payment in respect of any
of its Indebtedness (excluding Indebtedness evidenced by this Agreement) in
excess of $2,000,000, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or any other default under any
agreement or instrument relating to any such Indebtedness, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased or an offer to prepay, redeem,
purchase or defease such Indebtedness shall be required to be made, in each
case, prior to the stated maturity thereof;
(f) any Loan Party (i) shall institute any proceeding or voluntary
case seeking to adjudicate it bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, administrative receiver,
administrator, trustee, custodian, liquidator or other similar official for any
such Person or for any substantial part of its property, or any other Insolvency
Proceeding, (ii) shall be generally not paying its debts as such debts become
due or shall admit in writing its inability to pay its debts generally or shall
be unable to pay its debts, (iii) shall make a general assignment for the
benefit of creditors, or (iv) shall take any action to authorize or effect any
of the actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against any Loan Party
seeking to adjudicate it bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, administrative receiver, administrator, trustee,
custodian, liquidator or other similar official for any such Person or for any
substantial part of its property, or any other Insolvency Proceeding shall be
instituted against any Loan Party, and any such proceeding shall remain
undismissed or unstayed for a period of thirty (30) days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against any such Person or the appointment of a receiver,
administrative receiver, administrator, trustee, custodian, liquidator or other
similar official for it or for any substantial part of its property) shall
occur;
(h) any provision of any Loan Document shall at any time for any
reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against any Loan Party intended to be a party thereto,
or the validity or enforceability thereof shall be contested by any party
thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity
121
or unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document;
(i) any Security Agreement, any Pledge Agreement, any Mortgage or
any other security document entered into for the benefit of Agent or any Lender,
after delivery thereof pursuant hereto, shall for any reason fail or cease to
create a valid and perfected and, except to the extent permitted by the terms
hereof or thereof, first priority Lien in favor of Agent for the benefit of
Agent and Lenders on any Collateral purported to be covered thereby;
(j) any depository institution at which any deposit account, blocked
account, or lockbox account of any Loan Party is maintained shall fail to comply
with any of the terms of any Control Agreement or any securities intermediary,
commodity intermediary or other financial institution at any time in custody,
control or possession of any investment property of any Loan Party shall fail to
comply with any of the terms of any Control Agreement to which such Person is a
party;
(k) one or more judgments or orders for the payment of money is
rendered against any Loan Party in excess of $500,000 in the aggregate
(PROVIDED, THAT, any judgment covered by insurance where the insurer has assumed
responsibility in writing for such judgment and acknowledged that the applicable
Borrower or Guarantor will receive the proceeds of such insurance within thirty
(30) days of the issuance of a final, non-appealable judgment and execution
thereon is effectively stayed shall not be included in calculating such amount)
and shall remain undischarged or unvacated for a period in excess of thirty (30)
days or execution shall at any time not be effectively stayed, or any judgment
other than for the payment of money, or injunction, attachment, garnishment or
execution is rendered against any Loan Party or any of the Collateral having a
value in excess of $2,000,000 and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be
effectively stayed;
(l) any Loan Party is enjoined, restrained or in any way prevented
by the order of any court or any Governmental Authority from conducting all or
any material part of its business for more than ten (10) days, provided, that,
it shall not be an Event of Default under this clause (l) if (i) such event has
occurred as to one or more Loan Parties and the aggregate amount of the
Consolidated EBITDA of such Loan Parties and their Subsidiaries is less than
five (5%) percent of the Consolidated EBITDA of Parent and its Subsidiaries for
the immediately preceding four (4) fiscal quarters for which Agent has received
financial statements in accordance with the terms hereof and (ii) Agent
determines that such event does not otherwise have and could not reasonably be
expected to otherwise have a Material Adverse Effect;
(m) any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than ten (10) days, the cessation or substantial curtailment of
revenue producing activities at any facility of any Loan Party, if any such
event or circumstance has or could reasonably be expected to have a Material
Adverse Effect;
(n) any cessation of a substantial part of the business of any Loan
Party for a period which could reasonably be expected to have a material adverse
effect on the ability of such
122
Person to continue its business on a profitable basis, provided, that, it shall
not be an Event of Default under this clause (n) if (i) such event has occurred
as to one or more Loan Parties and the aggregate amount of the Consolidated
EBITDA of such Loan Parties and their Subsidiaries is less than five (5%)
percent of the Consolidated EBITDA of Parent and its Subsidiaries for the
immediately preceding four (4) fiscal quarters for which Agent has received
financial statements in accordance with the terms hereof and (ii) Agent
determines that such event does not otherwise have and could not reasonably be
expected to otherwise have a Material Adverse Effect;
(o) the loss, suspension or revocation of, or failure to renew, any
license or permit now held or hereafter acquired by any Loan Party, if such
license or permit is not replaced with a similar license or permit and after
giving effect to such replacement license or permit, such loss, suspension,
revocation or failure to renew has or could reasonably be expected to have a
Material Adverse Effect;
(p) the indictment of any Loan Party under any criminal statute, or
commencement of criminal or civil proceedings against any Loan Party, pursuant
to which statute or proceedings the penalties or remedies sought or available
include forfeiture to any Governmental Authority of any material portion of the
property of such Person;
(q) any Loan Party or any of its ERISA Affiliates shall have made a
complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal, any Loan Party or any of its ERISA
Affiliates incurs a withdrawal liability in an annual amount exceeding
$2,000,000; or a Multiemployer Plan enters reorganization status under Section
4241 of ERISA, and, as a result thereof any Loan Party's or any of its ERISA
Affiliates' annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $2,000,000;
(r) any Termination Event with respect to any Employee Benefit Plan
shall have occurred that results in a liability in excess of $2,000,000, or the
then current value of such Employee Benefit Plan's vested benefits exceeds the
then current value of assets allocable to such benefits in such Employee Benefit
Plan by more than $2,000,000; or any Plan of any Loan Party has an Unfunded
Current Liability in excess of $2,000,000;
(s) a Change of Control shall have occurred;
(t) a breach, default, event of default or termination shall occur
under any Acquisition Document or other Material Contract after giving effect to
applicable grace periods, if any, contained in any such Acquisition Document or
other Material Contract that gives any third party the right to terminate any
such Acquisition Document or other Material Contract or that otherwise could
reasonably be expected to have a Material Adverse Effect; and
(u) an event or development occurs which has or could reasonably be
expected to have a Material Adverse Effect.
Section 8.02 REMEDIES. If an Event of Default shall occur and be
continuing, then, and in any such event, Agent may, and at the request of the
Required Lenders, shall (i) terminate or reduce all Commitments, whereupon all
Commitments shall immediately be so terminated or reduced and any obligation of
any Issuing Bank hereunder shall terminate, (ii) declare all or any
123
portion of the Loans and Reimbursement Obligations then outstanding to be due
and payable, whereupon all or such portion of the aggregate principal of all
Loans and Reimbursement Obligations, all accrued and unpaid interest thereon,
all fees and all other amounts payable under this Agreement and the other Loan
Documents shall become due and payable immediately, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Loan Party and (iii) exercise any and all of its other rights and
remedies under applicable law, hereunder and under the other Loan Documents;
PROVIDED, THAT, upon the occurrence of any Event of Default described in Section
8.01(f) or 8.01(g), without any notice to any Loan Party or any other Person or
any act by Agent or any Lender, all commitments of each Lender to make Loans and
of Issuing Bank to issue Letters of Credit shall automatically terminate and all
Loans and Reimbursement Obligations then outstanding, together with all accrued
and unpaid interest thereon, all fees and all other amounts due under this
Agreement and the other Loan Documents shall become due and payable
automatically and immediately, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by each Loan Party. Upon demand by
Agent after the occurrence and during the continuation of any Event of Default,
Borrowers shall deposit with Agent with respect to each Letter of Credit then
outstanding cash in an amount equal to 105% of the greatest amount for which
such Letter of Credit may be drawn. Such deposits shall be held by Agent as
security for, and to provide for the payment of, the Letter of Credit
Obligations.
ARTICLE IX
AGENT
Section 9.01 APPOINTMENT. Each Lender hereby (and each subsequent maker of
any Loan by its making thereof) irrevocably appoints and authorizes Agent to
perform the duties of Agent as set forth in this Agreement including: (a) to
receive on behalf of each Lender any payment of principal of or interest on the
Loans outstanding hereunder and all other amounts accrued hereunder for the
account of Lenders and paid to Agent, and, subject to Section 2.02 of this
Agreement, to distribute promptly to each Lender its Pro Rata Share of all
payments so received; (b) to distribute to each Lender copies of all material
notices and agreements received by Agent and not required to be delivered to
each Lender pursuant to the terms of this Agreement; PROVIDED, THAT, Agent shall
not have any liability to Lenders for Agent's inadvertent failure to distribute
any such notices or agreements to Lenders; (c) to maintain, in accordance with
its customary business practices, ledgers and records reflecting the status of
the Obligations, the Loans, and related matters and to maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Collateral and related matters; (d) to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to this Agreement or any other Loan Document; (e) to make the Loans
and Agent Advances, for Agent or on behalf of the applicable Lenders as provided
in this Agreement or any other Loan Document; (f) to perform, exercise, and
enforce any and all other rights and remedies of Lenders with respect to Loan
Parties, the Obligations, or otherwise related to any of same to the extent
reasonably incidental to the exercise by Agent of the rights and remedies
specifically authorized to be exercised by Agent by the terms of this Agreement
or any other Loan Document; (g) to incur and pay such fees necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to this Agreement or any other Loan Document; and (h) subject to
Section 9.03 of this Agreement, to take such action as Agent deems
124
appropriate on its behalf to administer the Loans and the Loan Documents and to
exercise such other powers delegated to Agent by the terms hereof or the other
Loan Documents (including, without limitation, the power to give or to refuse to
give notices, waivers, consents, approvals and instructions and the power to
make or to refuse to make determinations and calculations) together with such
powers as are reasonably incidental thereto to carry out the purposes hereof and
thereof. As to any matters not expressly provided for by this Agreement and the
other Loan Documents (including, without limitation, enforcement or collection
of the Loans), Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions of the Required Lenders shall be
binding upon all Lenders and all makers of Loans; PROVIDED, THAT, Agent shall
not be required to take any action which, in the reasonable opinion of Agent,
exposes Agent to liability or which is contrary to this Agreement or any other
Loan Document or applicable law.
Section 9.02 NATURE OF DUTIES. Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature. Agent shall not have by reason of this Agreement or any other Loan
Document a fiduciary relationship with respect to any Lender. Nothing in this
Agreement or any other Loan Document, express or implied, is intended to or
shall be construed to impose upon Agent any obligations with respect to this
Agreement or any other Loan Document except as expressly set forth herein or
therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of Loan Parties in connection with the making
and the continuance of the Loans hereunder and shall make its own appraisal of
the creditworthiness of Loan Parties and the value of the Collateral, and Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect thereto,
whether coming into their possession before the initial Loan hereunder or at any
time or times thereafter; PROVIDED, THAT, upon the reasonable request of any
Lender, Agent shall provide to such Lender any documents or reports delivered to
Agent by Loan Parties pursuant to the terms of this Agreement or any other Loan
Document. If Agent seeks the consent or approval of the Required Lenders to the
taking or refraining from taking any action hereunder, Agent shall send notice
thereof to each Lender. Agent shall promptly notify each Lender any time that
the Required Lenders have instructed Agent to act or refrain from acting
pursuant hereto.
Section 9.03 RIGHTS, EXCULPATION, ETC. Agent and its directors, officers,
agents or employees shall not be liable for any action taken or omitted to be
taken by them under or in connection with this Agreement or the other Loan
Documents, except for their own gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, Agent (a) may
treat the payee of any Loan as the owner thereof until Agent receives written
notice of the assignment or transfer thereof, pursuant to Section 11.07 hereof,
signed by such payee and in form satisfactory to Agent; (b) may consult with
legal counsel (including, without limitation, counsel to Agent or counsel to
Loan Parties), independent public accountants, and other experts selected by any
of them and shall not be liable for any action taken or omitted to be taken in
good faith by any of them in accordance with the advice of such counsel or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the
125
other Loan Documents; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement or the other Loan Documents on the part of any Person, the
existence or possible existence of any Default or Event of Default, or to
inspect the Collateral or other property (including, without limitation, the
books and records) of any Person; (e) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto; and (f) shall not be deemed to
have made any representation or warranty regarding the existence, value or
collectibility of the Collateral, the existence, priority or perfection of
Agent's Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall Agent be responsible or liable to Lenders for
any failure to monitor or maintain any portion of the Collateral. Agent shall
not be liable for any apportionment or distribution of payments made in good
faith pursuant to Section 2.02, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount which they are determined to be
entitled. Agent may at any time request instructions from Lenders with respect
to any actions or approvals which by the terms of this Agreement or of any of
the other Loan Documents Agent is permitted or required to take or to grant, and
if such instructions are promptly requested, Agent shall be absolutely entitled
to refrain from taking any action or to withhold any approval under any of the
Loan Documents until it shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of the Required Lenders.
Section 9.04 RELIANCE. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
Section 9.05 INDEMNIFICATION. To the extent that Agent or Issuing Bank is
not reimbursed and indemnified by any Loan Party, Lenders will reimburse and
indemnify Agent and Issuing Bank from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by, or asserted against Agent or Issuing Bank in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted by Agent or Issuing Bank under this Agreement or
any of the other Loan Documents, in proportion to each Lender's Pro Rata Share,
including, without limitation, advances and disbursements made pursuant to
Section 9.08; PROVIDED, THAT, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances or disbursements for which there has been a final
non-appealable order of a court of competent authority that such liability
resulted from Agent's or Issuing Bank's gross negligence or willful misconduct.
The obligations of Lenders under this Section 9.05 shall survive the payment in
full of the Loans and the termination of this Agreement.
126
Section 9.06 AGENT INDIVIDUALLY. With respect to its Pro Rata Share of the
Total Commitment hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms "Lenders" or "Required Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender or one of the Required Lenders.
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Borrower as if
it were not acting as Agent pursuant hereto without any duty to account to the
other Lenders.
Section 9.07 SUCCESSOR AGENT.
(a) Agent may resign from the performance of all its functions and
duties hereunder and under the other Loan Documents at any time by giving at
least thirty (30) Business Days' prior written notice to Administrative Borrower
and each Lender. Such resignation shall take effect upon the acceptance by a
successor Agent of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After Agent's
resignation hereunder as Agent, the provisions of this Section 9.07 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed within
such thirty (30) Business Day period, the retiring Agent shall then appoint a
successor Agent who shall serve as Agent until such time, if any, as the
Required Lenders appoint a successor Agent as provided above.
Section 9.08 COLLATERAL MATTERS.
(a) Agent may, at its option, from time to time make such
disbursements and advances (collectively, the "Agent Advances"), which Agent, in
its sole discretion, deems necessary or desirable (i) either to preserve or
protect the Collateral or to prepare for sale or lease or disposition of the
Collateral (or any portion thereof) or (ii) to enhance the likelihood or
maximize the amount of repayment by Borrowers and Guarantors of the Loans and
other Obligations; PROVIDED, THAT, the aggregate principal amount of Agent
Advances at any time outstanding shall not exceed $1,000,000 or (iii) to pay any
other amount payable by to any Borrower or Guarantor pursuant to the terms of
this Agreement or any of the other Loan Documents consisting of costs, fees and
expenses, including, without limitation, costs, fees and expenses as described
in Section 11.04. Agent Advances shall be repayable on demand and be secured by
the Collateral. Except as otherwise expressly provided below, Agent Advances
shall not constitute Loans but shall otherwise constitute Obligations hereunder.
Agent Advances shall constitute Obligations hereunder which may be charged to
the Loan Account in accordance with
127
Section 3.06. Agent shall notify each Lender and Administrative Borrower in
writing of each Agent Advance, which notice shall include a description of the
purpose of such Agent Advance. Without limiting its obligations pursuant to
Section 9.05, each Lender agrees that it shall make available to Agent, upon
Agent's demand, in Dollars in immediately available funds, the amount equal to
such Lender's Pro Rata Share of each Agent Advance. If such funds are not made
available to Agent by such Lender, Agent shall be entitled to recover such funds
on demand from such Lender, together with interest thereon for each day from the
date such payment was due until the date such amount is paid to Agent, at the
Federal Funds Rate for each day during such period (as published by the Federal
Reserve Bank of New York or at Agent's option based on the arithmetic mean
determined by Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York time) on that day by each of the
three leading brokers of Federal funds transactions in New York City selected by
Agent) and if such amounts are not paid within three (3) days of Agent's demand,
at the interest rate then applicable to Revolving Loans. Notwithstanding
anything in this Section 9.08(a) to the contrary, Agent may (in its sole
discretion) elect to convert an Agent Advance to a Term Loan (an "Agent Term
Advance"), subject to receipt of the prior written approval of each Lender (but
without any approval of any Loan Party). Upon such conversion, Agent Term
Advance shall be added to the outstanding principal amount of the Term Loan and
shall otherwise bear interest and be payable hereunder as if it had originally
been part of the outstanding principal of the Term Loan.
(b) Lenders hereby irrevocably authorize Agent, at its option and in
its discretion, to release any Lien upon any Collateral: (i) upon termination of
the Total Commitment and payment and satisfaction of all non-contingent
Obligations, or (ii) constituting property being sold or disposed of if each
Borrower and Guarantor certifies to Agent that the sale or disposition is made
in compliance with Section 6.02(c) hereof (and Agent may rely conclusively on
any such certificate, without further inquiry), or (iii) constituting property
in which a Borrower or Guarantor did not own an interest at the time the Lien
was granted or at any time thereafter, or (iv) if required or permitted under
the terms of any of the other Loan Documents, including the Intercreditor
Agreement, or (v) approved, authorized or ratified in writing by all of Lenders.
Except as provided above, Agent will not release any Lien upon any of the
Collateral without the prior written authorization of all of Lenders.
(c) Without in any manner limiting Agent's authority to act without
any specific or further authorization or consent by Lenders (as set forth in
Section 9.08(b)), each Lender, upon the request of Agent at any time, will
promptly confirm in writing Agent's authority to release particular types or
items of Collateral pursuant to this Section 9.08 if such release is permitted
hereunder. Upon receipt by Agent of confirmation from Lenders of its authority
to release any particular item or types of Collateral, and upon prior written
request by any Loan Party, Agent shall (and is hereby irrevocably authorized by
Lenders to) execute such documents as may be necessary to evidence the release
of the Liens granted to Agent for the benefit of Agent and Lenders upon such
Collateral; provided, however, that (i) Agent shall not be required to execute
any such document on terms which, in Agent's opinion, would expose Agent to
liability or create any obligations or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Lien upon
(or obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
128
(d) Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by Loan Parties or is cared for,
protected or insured or has been encumbered or that the Lien granted to Agent
pursuant to this Agreement or any other Loan Document has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this Section 9.08 or in any other Loan Document, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, Agent may act in any manner it may deem appropriate, in its
sole discretion, given Agent's own interest in the Collateral as one of Lenders
and that Agent shall have no duty or liability whatsoever to any other Lender,
except as otherwise provided herein.
Section 9.09 EVENTS OF DEFAULT.
(a) Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or an Event of Default, unless and until Agent has
received written notice from a Lender, or any Borrower or Guarantor specifying
such Event of Default, and stating that such notice is a "Notice of Default". In
the event that Agent receives such a Notice of Default Agent shall give prompt
notice thereof to the Lenders.
(b) Except with the prior written consent of Agent, no Lender may
assert or exercise any enforcement right or remedy in respect of the Loans or
other Obligations, as against any Borrower or Guarantor or any of the Collateral
or other property of any Borrower or Guarantor.
Section 9.10 AGENCY FOR PERFECTION. Each Lender hereby appoints Agent as
agent and bailee for the purpose of perfecting the security interests in and
liens upon the Collateral in assets which, in accordance with Article 9 of the
Uniform Commercial Code, can be perfected only by possession or control (or
where the security interest of a secured party with possession or control has
priority over the security interest of another secured party) and Agent hereby
acknowledges that it holds possession of or otherwise controls such Collateral
for the benefit of Agent and Lenders as secured party. Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent's request therefor shall deliver such
Collateral to Agent or in accordance with Agent's instructions or at Agent's
option shall hold such possession or control as agent for purposes of perfection
on behalf of Agent. Each Loan Party by its execution and delivery of this
Agreement hereby consents to the foregoing.
ARTICLE X
GUARANTY
Section 10.01 GUARANTY.
(a) Each Guarantor hereby unconditionally and irrevocably jointly
and severally guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of Borrowers now or
hereafter existing under any Loan Document, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement
of any Insolvency Proceeding of any Borrower), Letter of Credit Obligations,
129
fees, commissions, expense reimbursements, indemnifications or otherwise (such
obligations, to the extent not paid by Borrowers, being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by Agent, Lenders and Issuing Bank in
enforcing any rights under the guaranty set forth in this Article X. Without
limiting the generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by Borrowers to Agent, Lenders and Issuing Bank under any Loan
Document but for the fact that they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Borrower or any other
Guarantor.
(b) Notwithstanding anything to the contrary contained herein, the
amount of the obligations payable by any Guarantor hereunder shall be the
aggregate amount of the Guaranteed Obligations unless a court of competent
jurisdiction adjudicates such Guarantor's obligations to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), in which case the amount of the Guaranteed Obligations payable by
such Guarantor hereunder shall be limited to the maximum amount that could be
guaranteed by such Guarantor without rendering such Guarantor's obligations
hereunder invalid, avoidable or unenforceable under such applicable law.
Section 10.02 GUARANTY ABSOLUTE. Each Guarantor, jointly and severally,
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of Agent, Lenders or Issuing Bank with respect thereto. Guarantors
agree that this Article X constitutes a guaranty of payment when due and not of
collection and waive any right to require that any resort be made by Agent or
any Lender to any Collateral. The joint and several obligations of each
Guarantor under this Article X are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against each
Guarantor to enforce such obligations, irrespective of whether any action is
brought against any Loan Party or whether any Loan Party is joined in any such
action or actions. The joint and several liability of each Guarantor under this
Article X shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives, to the full extent permitted by law,
any defenses it may now or hereafter have in any way relating to, any or all of
the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to any Loan Party, the release of any
Guarantor without the express consent of the other Guarantors or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
130
(d) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Loan
Party;
(e) the existence of any claim, set-off, defense or other right that
Guarantors may have at any time against any Person, including, without
limitation, Agent, or any Lender; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
Agent, Lenders or Issuing Bank that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.
This Article X shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by Agent, Lenders, Issuing Bank or any other
Person upon the insolvency, bankruptcy or reorganization of any Borrower or
otherwise, all as though such payment had not been made.
Section 10.03 WAIVER. Each Guarantor hereby waives, to the full extent
permitted by law, (a) promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this Article X, (b)
any requirement that Agent, Lenders or Issuing Bank exhaust any right or take
any action against any Loan Party or any other Person or any Collateral, (c) any
right to compel or direct Agent or any Lender to seek payment or recovery of any
amounts owed under this Article X from any one particular fund or source or to
exhaust any right or take any action against any other Loan Party or any other
Person or any Collateral or any other assets of any Loan Party, including the
right to compel or direct the application of any proceeds or value of the assets
of any Borrower or any Guarantor to pay the Obligations and (d) any requirement
that Agent or any Lender protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against Borrowers or any other Person or any Collateral. Guarantors
agree that Agent and Lenders shall have no obligation to xxxxxxxx any assets in
favor of Guarantors or against or in payment of any or all of the Obligations.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated herein and that the waiver set
forth in this Section 10.03 is knowingly made in contemplation of such benefits.
Each Guarantor hereby waives any right to revoke this Article X, and
acknowledges that this Article X is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future. Each Loan Party
agrees that the waivers set forth in this Section 10.03 apply to the joint and
several obligations of Borrowers as described in Section 2.08 hereof.
Section 10.04 CONTINUING GUARANTY; ASSIGNMENTS. This Article X is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Article X and the Final Maturity Date, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by Agent, Lenders and Issuing Bank and their successors,
pledgees, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may pledge, assign or otherwise transfer all or
any portion of its rights and obligations under this Agreement (including,
without limitation, all or any portion of its Commitments, its Loans, the
Reimbursement Obligations and the Letter of Credit Obligations owing to it) to
any other Person,
131
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted such Lender herein or otherwise, in each case as
provided in Section 11.07.
Section 10.05 SUBROGATION. No Guarantor will exercise any rights that it
may now or hereafter acquire against any Loan Party or any other guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under this Article X, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of Agent,
Lenders and Issuing Bank against any Loan Party or any other guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from any Loan Party or any other guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and
until all of the Guaranteed Obligations and all other amounts payable under this
Article X shall have been paid in full in cash and the Final Maturity Date shall
have occurred. If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the later of the payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Article X and the Final Maturity Date, such amount shall be held in trust
for the benefit of Agent, Lenders and Issuing Bank and shall forthwith be paid
to Agent, Lenders and Issuing Bank to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Article X, whether matured
or unmatured, in accordance with the terms of this Agreement, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under this
Article X thereafter arising. If (a) any Guarantor shall make payment to Agent,
Lenders and Issuing Bank of all or any part of the Guaranteed Obligations, (b)
all of the Guaranteed Obligations and all other amounts payable under this
Article X shall be paid in full in cash and (c) the Final Maturity Date shall
have occurred, Agent, Lenders and Issuing Bank will, at such Guarantor's request
and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
ARTICLE XI
MISCELLANEOUS
Section 11.01 NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered,
if to any Loan Party, at the following address:
If to Administrative Borrower:
Maritime Logistics US Holdings Inc.
000 Xxxxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
132
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx Israels LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxXxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to Agent, to it at the following address:
Fortress Credit Opportunities I LP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
Otterbourg, Steindler, Houston & Xxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000)-000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 11.01. All such notices and other communications shall be
effective, (i) if mailed, when received or three (3) days after deposited in the
mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices
to Agent or Issuing Bank pursuant to Article II and Article III shall not be
effective until received by Agent or Issuing Bank, as the case may be.
Section 11.02 AMENDMENTS, ETC. (a) No amendment or waiver of any provision
of this Agreement, and no consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders (or by Agent with the consent of the Required Lenders),
and, in the case of an amendment, Administrative Borrower, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given, PROVIDED, THAT, no amendment, waiver or consent shall
(i) increase the Commitment of any Lender, reduce the principal of, or interest
on, the Loans or the Reimbursement Obligations payable to any Lender, reduce the
amount of any fee payable for the account of any Lender, or postpone or extend
any date fixed for any payment of principal of, or interest or fees on, the
Loans or Letter of Credit Obligations payable to any Lender, in each case
without the written consent of any Lender affected thereby, (ii) increase the
Total Commitment
133
without the written consent of each Lender, (iii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans that is
required for Lenders or any of them to take any action hereunder without the
written consent of each Lender, (iv) amend the definition of "Required Lenders"
or "Pro Rata Share" without the consent of each Lender, (v) release all or a
substantial portion of the Collateral (except as otherwise provided in this
Agreement and the other Loan Documents), subordinate any Lien granted in favor
of Agent for the benefit of Agent and Lenders, or release any Borrower or any
Guarantor, in each case, without the written consent of each Lender, (vi) amend,
modify or waive this Section 11.02 without the written consent of each Lender,
(vii) amend the definition of "Borrowing Base", "Collections", "Eligible
Accounts", "Net Amount of Eligible Accounts", "Total Revolving Credit
Commitments", "Total Term Loan Commitments" or "Total Commitment", in each case
without the written consent of each Lender. Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing and signed by Agent,
affect the rights or duties of Agent (but not in its capacity as a Lender) under
this Agreement or the other Loan Documents.
Section 11.03 NO WAIVER; REMEDIES, ETC. No failure on the part of Agent or
any Lender to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of Agent and Lenders provided herein and in the other Loan Documents
are cumulative and are in addition to, and not exclusive of, any rights or
remedies provided by law. The rights of Agent and Lenders under any Loan
Document against any party thereto are not conditional or contingent on any
attempt by Agent and Lenders to exercise any of their rights under any other
Loan Document against such party or against any other Person.
Section 11.04 EXPENSES; TAXES; ATTORNEYS' FEES. Borrowers will pay on
demand, all reasonable costs and expenses incurred by or on behalf of Agent
(and, in the case of clauses (b) through (m) below, each Lender), regardless of
whether the transactions contemplated hereby are consummated, including, without
limitation, reasonable attorneys' and paralegals' fees, costs, client charges
and expenses of counsel for Agent (and, in the case of clauses (b) through (m)
below, each Lender), accounting, due diligence, periodic field audits, physical
counts, valuations, investigations, searches and filings, monitoring of assets,
appraisals of Collateral, title searches and reviewing environmental
assessments, miscellaneous disbursements, examination, travel, lodging and
meals, arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Agreement and the other Loan
Documents (including, without limitation, the preparation of any additional Loan
Documents pursuant to Section 6.01(b) or the review of any of the agreements,
instruments and documents referred to in Section 6.01(f)), (b) any requested
amendments, waivers or consents to this Agreement or the other Loan Documents
whether or not such documents become effective or are given, (c) the
preservation and protection of any rights of Agent or any Lender under this
Agreement or the other Loan Documents, (d) the defense of any claim or action
asserted or brought against Agent or any Lender by any Person that arises from
or relates to this Agreement, any other Loan Document, Agent's or Lenders'
claims against any Loan Party, or any and all matters in connection therewith,
(e) the commencement or defense of, or intervention or participation in, any
court or judicial proceeding arising from or related to this Agreement or any
other Loan Document, including in connection with any bankruptcy,
reorganization, assignment for the benefit of creditors, foreclosure, Insolvency
Proceeding or other similar proceedings related to
134
any Loan Party or the Collateral, including in any adversary proceeding or
contested matter commenced or continued by, on behalf of, or against any Loan
Party or its estate, and any appeal or review thereof, (f) the filing of any
petition, complaint, answer, motion or other pleading by or on behalf of Agent
or any Lender, or the taking of any action in respect of the Collateral or other
security, in connection with this Agreement or any other Loan Document, (g) the
protection, collection, lease, sale, taking possession of or liquidation of, any
Collateral or other security in connection with this Agreement or any other Loan
Document, (h) any attempt to enforce any Lien or security interest in any
Collateral or other security in connection with this Agreement or any other Loan
Document, (i) any attempt to collect from any Loan Party, (j) all liabilities
and costs arising from or in connection with the past, present or future
operations of any Loan Party involving any damage to real or personal property
or natural resources or harm or injury alleged to have resulted from any Release
of Hazardous Materials on, upon or into such property, (k) any Environmental
Liabilities and Costs incurred in connection with the investigation, removal,
cleanup and/or remediation of any Hazardous Materials present or arising out of
the operations of any facility of any Loan Party, (l) any Environmental
Liabilities and Costs incurred in connection with any Environmental Lien, or (m)
the receipt by Agent or any Lender of any advice from professionals with respect
to any of the foregoing. Without limitation of the foregoing or any other
provision of any Loan Document: (x) Borrowers agree to pay all stamp, document,
transfer, recording (including Mortgage recording) or filing taxes or fees and
similar impositions now or hereafter determined by Agent or any Lender to be
payable in connection with this Agreement or any other Loan Document, and
Borrowers agree to save Agent and each Lender harmless from and against any and
all present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions,
(y) Borrowers agree to pay all broker fees that may become due in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, and (z) if Borrowers fail to perform any covenant or agreement
contained herein or in any other Loan Document, Agent may itself perform or
cause performance of such covenant or agreement, and the expenses of Agent
incurred in connection therewith shall be reimbursed on demand by Borrowers.
Section 11.05 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by Loan Parties) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by Agent or such Lender to or for the credit or
the account of any Loan Party against any and all obligations of Loan Parties
either now or hereafter existing under any Loan Document, irrespective of
whether or not Agent or such Lender shall have made any demand hereunder or
thereunder and although such obligations may be contingent or unmatured. Agent
and each Lender agrees to notify such Loan Party promptly after any such set-off
and application made by Agent or such Lender; PROVIDED, THAT, the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of Agent and Lenders under this Section 11.05 are in addition to the
other rights and remedies (including other rights of set-off) which Agent and
Lenders may have under this Agreement or any other Loan Documents of law or
otherwise.
135
Section 11.06 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.07 ASSIGNMENTS AND PARTICIPATIONS. (a) This Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of each Loan
Party and Agent and each Lender and their respective successors and assigns;
PROVIDED, THAT, none of Loan Parties may assign or transfer any of its rights
hereunder without the prior written consent of Agent's and each Lender and any
such assignment without Agent's and Lenders' prior written consent shall be null
and void.
(b) Each Lender may, with the prior written consent of Agent (which
consent shall not be required in connection with any assignment by a Lender to
an Affiliate of such Lender), assign to an Eligible Assignee all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Loans made by it and its Pro Rata Share
of Letter of Credit Obligations); PROVIDED, HOWEVER, THAT (i) such assignment is
in an amount which is at least $5,000,000 and incremental multiples of
$1,000,000 in excess thereof (or all of the remainder of such Lender's
Commitment) (except such minimum amount shall not apply to an assignment by a
Lender to an Affiliate of such Lender or a fund or account managed by such
Lender or an Affiliate of such Lender) and (ii) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance, an Assignment
and Acceptance, together with any promissory note subject to such assignment and
such parties shall deliver to Agent a processing and recordation fee of $5,000
(except the payment of such fee shall not be required in connection with an
assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender). Borrowers and Agent may
continue to deal solely and directly with an assigning Lender in connection with
the interest so assigned until such Lender and its assignee shall have executed
and delivered to Administrative Borrower and Agent, and Agent shall have
accepted, an Assignment and Acceptance. Upon such execution, delivery and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least three (3) Business Days after
the delivery thereof to Agent (or such shorter period as shall be agreed to by
Agent and the parties to such assignment), (A) the assignee thereunder shall
become a "Lender" hereunder and, in addition to the rights and obligations
hereunder held by it immediately prior to such effective date, have the rights
and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any
136
other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the assigning
Lender, Agent or any Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents;
(v) such assignee appoints and authorizes Agent to take such action as Agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental hereto and thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
(d) Borrowers authorize Agent, and Agent agrees, to maintain, or
cause to be maintained at the Payment Office, a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the "Register") for
the recordation of the names and addresses of Lenders and the Commitments of,
and principal amount of the Loans (the "Registered Loans") and Letter of Credit
Obligations owing to each Lender from time to time. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
Borrowers, Agent and Lenders shall treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Administrative Borrower and any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any promissory notes subject to
such assignment, Agent shall, if Agent consents to such assignment and if such
Assignment and Acceptance has been completed (i) accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register.
(f) A Registered Loan (and the registered note, if any, evidencing
the same) may be assigned or sold in whole or in part only by registration of
such assignment or sale on the Register (and each registered note shall
expressly so provide). Any assignment or sale of all or part of such Registered
Loan (and the registered note, if any, evidencing the same) may be effected only
by registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any, evidencing the same), Agent shall treat
the Person in whose
137
name such Registered Loan (and the registered note, if any, evidencing the same)
is registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary.
(g) In the event that any Lender sells participations in a
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall
expressly so provide). Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(h) Any Non-US Person who purchases or is assigned or participates
in any portion of such Registered Loan shall provide Agent and the applicable
Lender with completed U.S. Internal Revenue forms required to be delivered
pursuant to Section 3.08(e) for such purchaser, assignee or any other affiliate
who is a holder of beneficial interests in the Registered Loan. Notwithstanding
the preceding sentence, any Non-US Person which purchases a participation in a
Registered Loan pursuant to Section 11.07(g) shall be required to provide any of
the aforementioned forms only to the applicable Lender.
(i) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Commitments, the Loans made by it and its Pro Rata Share of
the Letter of Credit Obligations); PROVIDED, THAT (i) such Lender's obligations
under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and Borrowers, Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents; and
(iii) a participant shall not be entitled to require such Lender to take or omit
to take any action hereunder except (A) action directly effecting an extension
of the maturity dates or decrease in the principal amount of the Loans or Letter
of Credit Obligations, (B) action directly effecting an extension of the due
dates or a decrease in the rate of interest payable on the Loans or the fees
payable under this Agreement, or (C) actions directly effecting a release of all
or a substantial portion of the Collateral or any Loan Party (except as set
forth in Section 9.08 of this Agreement or any other Loan Document). Loan
Parties agree that each participant shall be entitled to the benefits of Section
3.07 and Section 3.08 of this Agreement with respect to its participation in any
portion of the Commitments and the Loans as if it was a Lender.
Section 11.08 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Agreement by telecopier shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telecopier also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart
138
shall not affect the validity, enforceability, and binding effect of this
Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
Section 11.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF NEW YORK.
Section 11.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ADMINISTRATIVE BORROWER AT ITS
ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01, SUCH SERVICE TO BECOME
EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF AGENT AND LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN
PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
Section 11.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
139
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR
ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER
WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO
ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR AGENT AND LENDERS ENTERING INTO THIS
AGREEMENT.
Section 11.12 CONSENT BY AGENT AND LENDERS. Except as otherwise expressly
set forth herein to the contrary, if the consent, approval, satisfaction,
determination, judgment, acceptance or similar action (an "Action") of Agent or
any Lender shall be permitted or required pursuant to any provision hereof or
any provision of any other Loan Document to which any Loan Party is a party and
to which Agent or any Lender has succeeded thereto, such Action shall be
required to be in writing and may be withheld or denied by Agent or such Lender,
in its sole discretion, with or without any reason, and without being subject to
question or challenge on the grounds that such Action was not taken in good
faith.
Section 11.13 NO PARTY DEEMED DRAFTER. Each of the parties hereto agrees
that no party hereto shall be deemed to be the drafter of this Agreement.
Section 11.14 REINSTATEMENT; CERTAIN PAYMENTS. If any claim is ever made
upon Agent, any Lender or Issuing Bank for repayment or recovery of any amount
or amounts received by Agent, such Lender or Issuing Bank in payment or on
account of any of the Obligations, Agent, such Lender or Issuing Bank shall give
prompt notice of such claim to each other Lender and Administrative Borrower,
and if Agent, such Lender or Issuing Bank repays all or part of such amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over Agent, such Lender or Issuing Bank or any of its
property, or (ii) any good faith settlement or compromise of any such claim
effected by Agent, such Lender or Issuing Bank with any such claimant, then and
in such event each Loan Party agrees that (A) any such judgment, decree, order,
settlement or compromise shall be binding upon it notwithstanding the
cancellation of any Indebtedness hereunder or under the other Loan Documents or
the termination of this Agreement or the other Loan Documents, and (B) it shall
be and remain liable to Agent, such Lender or Issuing Bank hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by Agent, such Lender or Issuing Bank.
Section 11.15 INDEMNIFICATION.
(a) GENERAL INDEMNITY. In addition to each Loan Party's other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless Agent, each Lender and
Issuing Bank and all of their respective officers, directors, employees,
attorneys, consultants and agents (collectively called the "Indemnitees") from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred
140
by such Indemnitees, whether prior to or from and after the Effective Date,
whether direct, indirect or consequential, as a result of or arising from or
relating to or in connection with any of the following: (i) the negotiation,
preparation, execution or performance or enforcement of this Agreement, any
other Loan Document or of any other document executed in connection with the
transactions contemplated by this Agreement, (ii) Agent's or any Lender's
furnishing of funds to Borrowers or Issuing Bank's issuing of Letters of Credit
for the account of Borrowers under this Agreement or the other Loan Documents,
including, without limitation, the management of any such Loans, Reimbursement
Obligations or Letter of Credit Obligations, (iii) any matter relating to the
financing transactions contemplated by this Agreement or the other Loan
Documents or by any document executed in connection with the transactions
contemplated by this Agreement or the other Loan Documents, or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (collectively, the "Indemnified
Matters"); PROVIDED, THAT, Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a
final non-appeallable judgment of a court of competent jurisdiction.
(b) ENVIRONMENTAL INDEMNITY. Without limiting Section 11.15(a)
hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless the Indemnitees against any and all Environmental Liabilities and
Costs and all other claims, demands, penalties, fines, liability (including
strict liability), losses, damages, costs and expenses (including without
limitation, reasonable legal fees and expenses, consultant fees and laboratory
fees), arising out of (i) any Releases or threatened Releases (x) at any
property presently or formerly owned or operated by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest, or (y) of any
Hazardous Materials generated and disposed of by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (ii) any
violations of Environmental Laws; (iii) any Environmental Action relating to any
Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest;
(iv) any personal injury (including wrongful death) or property damage (real or
personal) arising out of exposure to Hazardous Materials used, handled,
generated, transported or disposed by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; and (v) any breach of any warranty
or representation regarding environmental matters made by Loan Parties in
Section 5.17 or the breach of any covenant made by Loan Parties in Section
6.01(j). Notwithstanding the foregoing, Loan Parties shall not have any
obligation to any Indemnitee under this subsection (b) regarding any potential
environmental matter covered hereunder which is caused by the gross negligence
or willful misconduct of such Indemnitee, as determined by a final
non-appealable judgment of a court of competent jurisdiction.
(c) GENERAL. The indemnification for all of the foregoing losses,
damages, fees, costs and expenses of the Indemnitees are chargeable against the
Loan Account. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 11.15 may be unenforceable because it is
violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. The indemnities set forth in this Section
11.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
141
Section 11.16 MLI AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints MLI as the borrowing agent and attorney-in-fact for Borrowers (the
"Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
all of Borrowers that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes Administrative Borrower (i) to provide to
Agent and receive from Agent all notices with respect to Loans obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as Administrative Borrower deems
appropriate on its behalf to obtain Loans and to exercise such other powers as
are reasonably incidental thereto to carry out the purposes of this Agreement.
It is understood that the handling of the Loan Account and Collateral of
Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to Borrowers in order to utilize the collective borrowing
powers of Borrowers in the most efficient and economical manner and at their
request, and that neither Agent nor Lenders shall incur liability to Borrowers
or Guarantors as a result hereof. Each Borrower and Guarantor expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
and Guarantor is dependent on the continued successful performance of the
integrated group. To induce Agent and Lenders to do so, and in consideration
thereof, each Borrower and Guarantor hereby jointly and severally agrees to
indemnify the Indemnitees and hold the Indemnitees harmless against any and all
liability, expense, loss or claim of damage or injury, made against such
Indemnitee by any Borrower or Guarantor or by any third party whosoever, arising
from or incurred by reason of (a) the handling of the Loan Account and
Collateral as herein provided, (b) Agent and Lenders relying on any instructions
of Administrative Borrower, or (c) any other action taken by Agent or any Lender
hereunder or under the other Loan Documents.
Section 11.17 RECORDS. The unpaid principal of and interest on the Loans,
the interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Section 2.06 hereof, including, without limitation, the
Closing Fee, Loan Servicing Fee, the Unused Line Fee, the Early Termination Fee,
the Prepayment Fee, and the Letter of Credit Fee, shall at all times be
ascertained from the records of Agent, which shall be conclusive and binding
absent manifest error.
Section 11.18 BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by each Loan Party, Agent and each Lender and when
the conditions precedent set forth in Section 4.01 hereof have been satisfied or
waived in writing by Agent, and thereafter shall be binding upon and inure to
the benefit of each Loan Party, Agent and each Lender, and their respective
successors and assigns, except that Loan Parties shall not have the right to
assign their rights hereunder or any interest herein without the prior written
consent of each Lender, and any assignment by any Lender shall be governed by
Section 11.07 hereof.
Section 11.19 INTEREST. (a) It is the intention of the parties hereto that
Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to Agent or any Lender under laws applicable to it
(including the laws of the United States of America and the State of New York or
any other jurisdiction whose laws may be mandatorily applicable to Agent
142
or such Lender notwithstanding the other provisions of this Agreement), then, in
that event, notwithstanding anything to the contrary in this Agreement or any
other Loan Document or any agreement entered into in connection with or as
security for the Obligations, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under any law applicable to Agent or
any Lender that is contracted for, taken, reserved, charged or received by Agent
or such Lender under this Agreement or any other Loan Document or agreements or
otherwise in connection with the Obligations shall under no circumstances exceed
the Highest Lawful Rate, any excess shall be canceled automatically and if
theretofore paid shall be credited by Agent or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be Paid in Full, refunded by Agent
or such Lender, as applicable, to Borrowers); and (ii) in the event that the
maturity of the Obligations is accelerated by reason of any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under any law
applicable to Agent or any Lender may never include more than the Highest Lawful
Rate, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically by Agent or such Lender, as applicable, as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by Agent or such Lender, as applicable, to the principal amount of the
Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be Paid in Full, refunded by Agent or such
Lender to Borrowers).
(b) All sums paid or agreed to be paid to Agent or any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to Agent or such Lender, be amortized, prorated,
allocated and spread throughout the full term of the Loans until payment in full
so that the rate or amount of interest on account of any Loans hereunder does
not exceed the Highest Lawful Rate. If at any time and from time to time (x) the
amount of interest payable to Agent or any Lender on any date shall be computed
at the Highest Lawful Rate applicable to Agent or such Lender pursuant to this
Section 11.19 and (y) in respect of any subsequent interest computation period
the amount of interest otherwise payable to Agent or such Lender would be less
than the amount of interest payable to Agent or such Lender computed at the
Highest Lawful Rate applicable to Agent or such Lender, then the amount of
interest payable to Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to Agent or such Lender until the total amount of interest payable to
Agent or such Lender shall equal the total amount of interest which would have
been payable to Agent or such Lender if the total amount of interest had been
computed without giving effect to this Section 11.19.
(c) For purposes of this Section 11.19, the term "applicable law"
shall mean that law in effect from time to time and applicable to the loan
transaction between Borrowers, on the one hand, and Agent and Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
(d) The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
143
Section 11.20 CONFIDENTIALITY. Agent and each Lender agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any non-public information supplied to it by any
Loan Party or its independent public accountants or auditors pursuant to this
Agreement or the other Loan Documents; provided, that (a) information supplied
by such independent public accountants or auditors shall be deemed to be
confidential unless Agent receives written confirmation to the contrary from
such independent accountants or auditors and (b) information supplied by any
Loan Party shall only be treated as confidential for the purposes of this
Section 11.20 if it is identified in writing by such Loan Party as being
confidential at the time the same is delivered to such Person. Nothing herein
shall limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for Agent or any
Lender, (iii) to examiners, auditors or accountants of Agent, any Lender or any
of their respective Affiliates, (iv) if required in connection with any
litigation to which Agent or any Lender is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first agrees, in writing,
to be bound by confidentiality provisions similar in substance to this Section
11.20. Agent and each Lender agrees that, upon receipt of a request or
identification of the requirement for disclosure pursuant to clause (iv) hereof,
it will make reasonable efforts to keep Loan Parties informed of such request or
identification; PROVIDED, THAT, each Loan Party acknowledges that Agent and each
Lender may make disclosure as required or requested by any Governmental
Authority or representative thereof and that Agent and each Lender may be
subject to review by regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties or
agencies any such non-public information.
Section 11.21 PUBLIC DISCLOSURES. Each Borrower and Guarantor agrees that
neither it nor its Affiliates will in the future issue any press releases or
other public disclosure using the name of Agent or any Lender or referring to
this Agreement or the other Loan Documents without at least three (3) Business
Days' prior notice to Agent and any such Lender and without the prior written
consent of Agent and the Lenders unless (and only to the extent that) such
Borrower or Guarantor or such Affiliate is required to do so under law and then,
in any event, such Borrower or Guarantor or such Affiliate will consult with
Agent and any such Lender before issuing such press release or other public
disclosures. Each Borrower and Guarantor consents to the publication by Agent
and Lenders of a tombstone or similar advertising materials relating to the
financing transactions contemplated by this Agreement. In addition, Agent and
Lenders may disclose information relating to the credit facilities in connection
with this Agreement to Gold Sheets and other similar bank trade publications,
with such information to consist of deal terms and other information customarily
found in such publications, PROVIDED, THAT, such disclosure is permitted under
all applicable securities laws.
Section 11.22 KNOW YOUR CUSTOMER. If:
(a) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the date of
this Agreement; or
144
(b) any change in the status of any Borrower or Guarantor or the
composition or ownership of the shareholders or partners of any Borrower or
Guarantor, as the case may be, after the date of this Agreement; or
(c) a proposed assignment or transfer by Agent or any Lender of any
of their respective rights and/or obligations under this Agreement to a third
party prior to such assignment or transfer, requires Agent or any Lender (or, in
the case of paragraph (c) above, any prospective new Agent or new Lender) to
comply with "know your customer" or similar identification procedures in
circumstances where the necessary information is not already available to it,
Borrowers and Guarantors shall, promptly upon the request of Agent or such
Lender provide such documentation and other evidence as is reasonably requested
by Agent (for itself or on behalf of any Lender) or any Lender (for itself or,
in the case of any event described in paragraph (c) above, on behalf of any
prospective new Lender) in order for Agent, such Lender or, in the case of the
event described in paragraph (c) above, any prospective new Lender to carry out
and be satisfied with the results of all necessary "know your customer" or other
similar checks under all applicable law and regulations pursuant to the
transactions contemplated in the Loan Documents.
Section 11.23 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
145
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
MARITIME LOGISTICS US HOLDINGS INC.
By:________________________________
Name:
Title:
SUMMIT LOGISTICS INTERNATIONAL INC
By:________________________________
Name:
Title:
SEAMASTER LOGISTICS INC.
By:________________________________
Name:
Title:
AMERUSSIA SHIPPING COMPANY INC.
By:________________________________
Name:
Title:
FASHION MARKETING, INC.
By:________________________________
Name:
Title:
FMI INTERNATIONAL LLC
By:________________________________
Name:
Title:
Signature Page to Loan and Security Agreement
FMI INTERNATIONAL CORP. (WEST)
By:________________________________
Name:
Title:
FMI INTERNATIONAL CORP.
By:________________________________
Name:
Title:
FREIGHT MANAGEMENT LLC
By:________________________________
Name:
Title:
FMI TRUCKING, INC.
By:________________________________
Name:
Title:
FMI EXPRESS CORP.
By:________________________________
Name:
Title:
CLARE FREIGHT, LOS ANGELES, INC.
By:________________________________
Name:
Title:
TUG NEW YORK, INC.
By:________________________________
Name:
Title:
Signature Page to Loan and Security Agreement
AEROBIC CREATIONS, INC.
By:________________________________
Name:
Title:
TUG USA, INC. (formerly known as
Dolphin US Logistics Inc.)
By:________________________________
Name:
Title:
AMR INVESTMENTS INC
By:________________________________
Name:
Title:
FMI HOLDCO I, LLC
By:________________________________
Name:
Title:
Signature Page to Loan and Security Agreement
AGENT AND LENDER:
FORTRESS CREDIT CORP.
By:________________________________
Name:
Title:
Signature Page to Loan and Security Agreement
LENDERS:
____________________________
By:________________________________
Name:
Title:
Signature Page to Loan and Security Agreement
EXHIBIT A
TO
LOAN AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Reference is made to the Loan Agreement, dated as of November 8, 2006
(such Agreement, as amended, restated, supplemented or otherwise modified from
time to time, including any replacement agreement therefor, being hereinafter
referred to as the "Loan Agreement"), by and among Maritime Logistics US
Holdings Inc., a Delaware corporation ("MLI"), Summit Logistics International
Inc, a New Jersey corporation ("Summit"), SeaMaster Logistics Inc., a Delaware
corporation ("SeaMaster"), AmeRussia Shipping Company Inc., a Delaware
corporation ("AmeRussia Shipping"), FMI International LLC, a Delaware limited
liability company ("FMI International"), Fashion Marketing, Inc., a New Jersey
corporation ("FM"), FMI International Corp. (West), a New Jersey corporation
("FMIW"), FMI International Corp., a New Jersey corporation ("FMII"), Freight
Management LLC, a Delaware limited liability company ("FMLLC"), FMI Trucking,
Inc., a New Jersey corporation ("Trucking"), FMI Express Corp., a New Jersey
corporation ("Express"), Clare Freight, Los Angeles, Inc., a California
corporation ("Clare"), TUG New York, Inc., a New York corporation ("TUG NY"),
Aerobic Creations, Inc., a Delaware corporation ("Parent"), TUG USA, Inc., a New
Jersey corporation, formerly known as Dolphin US Logistics Inc ("TUG USA"), AMR
Investments Inc, a New Jersey corporation ("AMRI") and FMI Holdco I, LLC, a
Delaware limited liability company ("FMI Holdco", and together with MLI, Summit,
SeaMaster, AmeRussia Shipping, FM, FMI International, FMIW, FMII, FMLLC,
Trucking, Express, Clare, Parent, TUG USA, AMRI and FMI Holdco, each
individually, a "Borrower" and collectively, "Borrowers"), certain of their
affiliates, the lenders from time to time party thereto (each a "Lender" and
collectively, the "Lenders") and Fortress Credit Corp. ("Fortress"), as agent
for the Lenders (in such capacity, together with any successors and assigns, if
any, "Agent"). Capitalized terms used herein which are defined in the Loan
Agreement and not otherwise defined herein shall have the same meaning herein as
set forth therein.
_____________ (solely in its capacity as a Lender under the Loan
Agreement) (the "Assignor") and ______________ (the "Assignee") agree as
follows:
1. Subject to the terms and conditions of this Agreement, the Assignor
hereby sells, transfers and assigns to the Assignee, without recourse,
representation or warranty (except as set forth in Section 2 hereof), and the
Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse, representation or warranty (except as provided in this Agreement), all
of the Assignor's interests, rights and obligations, as set forth in Exhibit A
hereto (the "Assigned Interest"), solely as a Lender, in the Assignor's
[Revolving Loan Commitment] [Revolving Loans] [Term Loan] under the Loan
Agreement and the other Loan Documents as of the Effective Date (as defined
below) (including, without limitation, the Assigned Interest related to (i) the
outstanding principal amount of the [Revolving Loans] [Term Loan] made by the
Assignor [and] [(ii) the promissory note[s], if any, evidencing the Assignor's
[Revolving Loans] [Term Loan]).
2. The Assignor (i) represents and warrants as of the date hereof that
[its Revolving Loan Commitment] [the outstanding principal amount of its
[Revolving Loans] [Term Loan]] is
A-1
equal to or in excess of the Assigned Interest (without giving effect to
assignments thereof which have not yet become effective); (ii) represents and
warrants that it is the legal and beneficial owner of the interest it is
assigning hereunder and that such interest is free and clear of any security
interest, lien, encumbrance or other adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made by or in connection with the Loan
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other Loan Document, or any other instrument or document furnished pursuant
thereto; [and] (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or
Guarantor or the performance or observance by any Borrower or Guarantor of any
of its obligations under the Loan Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto[and (v) attaches the
promissory note[s] referred to in paragraph 1 above, and requests that the Agent
exchange the promissory note[s] for [a] new promissory note[s] (appropriately
dated so that no loss of interest accrued prior to the Effective Date shall
result with respect to the portion of the applicable Loans assigned [or the
portion of the applicable Loans retained] by the Assignor), consisting of a
promissory note in the aggregate principal amount of $_______________, with
respect to the [Revolving Loans] [Term Loan], payable to the order of the
Assignee [and a promissory note in the aggregate principal amount of
$___________, with respect to the [Revolving Loans] [Term Loan], payable to the
order of the Assignor]].
(a) The Assignee represents and warrants that it has become a party
hereto solely in reliance upon its own independent investigation of the
financial and other circumstances surrounding the Borrowers and Guarantors, the
Collateral, the Loans, and all aspects of the transactions evidenced by or
referred to in the Loan Documents, or has otherwise satisfied itself thereto,
and that it is not relying upon any representation, warranty or statement
(except any such representation, warranty or statement expressly set forth in
this Agreement) of the Assignor in connection with the assignment made under
this Agreement. The Assignee further acknowledges that the Assignee will,
independently and without reliance upon the Assignor, Agent or any other Lender
and based upon the Assignee's review of such documents and information as the
Assignee deems appropriate at the time, make and continue to make its own credit
decisions in entering into this Agreement and taking or not taking action under
the Loan Documents. The Assignor shall have no duty or responsibility either
initially or on a continuing basis to make any such investigation or any such
appraisal on behalf of the Assignee or to provide the Assignee with any credit
or other information with respect thereto, whether coming into its possession
before the making of the initial extension of credit under the Loan Agreement or
at any time or times thereafter.
(b) The Assignee represents and warrants to the Assignor that it has
experience and expertise in the making of loans such as the Loans or with
respect to the other types of credit which may be extended under the Loan
Agreement; that it has acquired its Assigned Interest for its own account and
not with any intention of selling all or any portion of such interest; and that
it has received, reviewed and approved copies of all Loan Documents.
(c) The Assignor shall not be responsible to the Assignee for the
execution, effectiveness, accuracy, completeness, legal effect, genuineness,
validity, enforceability, collectibility or sufficiency of any of the Loan
Documents or for any representations, warranties, recitals or statements made
therein or in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents made or
furnished or made
A-2
available by the Assignor to the Assignee or by or on behalf of the Borrowers
and Guarantors to the Assignor or the Assignee in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Borrowers and Guarantors or any other
Person liable for the payment of any Loan or payment of amounts owed in
connection with other extensions of credit under the Loan Agreement or the value
of the Collateral or any other matter. The Assignor shall not be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or other extensions of
credit under the Loan Agreement or as to the existence or possible existence of
any Event of Default or Default.
(d) Each party to this Agreement represents and warrants to the
other party to this Agreement that it has full power and authority to enter into
this Agreement and to perform its obligations under this Agreement in accordance
with the provisions of this Agreement, that this Agreement has been duly
authorized, executed and delivered by such party and that this Agreement
constitutes a legal, valid and binding obligation of such party, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles.
(e) Each party to this Agreement represents and warrants that the
making and performance by it of this Agreement do not and will not violate any
law or regulation of the jurisdiction of its organization or any other law or
regulation applicable to it.
(f) Each party to this Agreement represents and warrants that all
consents, licenses, approvals, authorizations, exemptions, registrations,
filings, opinions and declarations from or with any agency, department,
administrative authority, statutory corporation or judicial entity necessary for
the validity or enforceability of its obligations under this Agreement have been
obtained, and no governmental authorizations other than any already obtained are
required in connection with its execution, delivery and performance of this
Agreement.
(g) The Assignor makes no representation or warranty and assumes no
responsibility with respect to (i) the operations, condition (financial or
otherwise), business or assets of the Borrowers and Guarantors or the
performance or observance by the Borrowers and Guarantors of any of their
obligations under the Loan Agreement or any other Loan Document and (ii) any
statements, warranties or representations made in or in connection with the Loan
Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto.
(h) [INCLUDE ONLY IF ASSIGNOR IS AGENT] Assignee (i) hereby appoints
and authorizes Assignor in its capacity as Agent to take such action as agent on
its behalf to exercise such powers under the Loan Agreement as are delegated to
Agent by Lenders pursuant to the terms of the Loan Agreement and (ii) shall
assume no duties or obligations held by Assignor in its capacity as Agent under
the Loan Agreement.]
(i) The Assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Agreement and
the other Loan Documents are required to be performed by it as a Lender.
A-3
(j) The Assignee confirms that it has received all documents and
information it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement.
(k) The Assignee specifies as its address for notices the office set
forth beneath its name on the signature pages hereof.
3. The effective date for this Agreement (the "Effective Date") shall be
the date that is at least three (3) Business Days (or such shorter period as
Agent may agree) after the latest of (a) the execution of this Agreement, (b)
the delivery of this Agreement to Agent for acceptance, (c) the date on which
the Assignor has received the payment, in immediately available funds, by the
Assignee of $___________, which amount represents the purchase price for the
Assigned Interest (the "Purchase Price"), (d) if required pursuant to the terms
of the Loan Agreement, the consent of Agent shall have been duly obtained and
shall be in full force and effect and (e) if required pursuant to the terms of
the Loan Agreement, Assignee shall pay to Agent the processing and recordation
fee in the amount specified in Section 11.07 of the Loan Agreement.
4. Upon such acceptance, as of the Effective Date (a) the Assignee shall,
in addition to the rights and obligations under the Loan Agreement and the other
Loan Documents, if any, held by it immediately prior to the Effective Date, have
the rights and obligations under the Loan Agreement and the other Loan Documents
that have been assigned to it pursuant to this Agreement, including the
requirements concerning confidentiality and the requirement to indemnify Agent,
and (b) the Assignor shall, to the extent provided in this Agreement, relinquish
its rights and be released from its obligations under the Loan Agreement and the
other Loan Documents that have been assigned by the Assignor to the Assignee
pursuant to this Agreement; PROVIDED, THAT, Assignor shall not relinquish its
rights under Sections 2.01, 3.04, 3.05 and 3.06 of the Loan Agreement to the
extent such rights relate to the time prior to the Effective Date.
5. Upon such acceptance, from and after the Effective Date, Agent shall
make all payments under the Loan Agreement in respect of the rights assigned
hereby (including, without limitation, all payments of principal, interest and
fees with respect thereto) to the Assignee. If the Assignor receives or collects
any payment of interest or fees attributable to the interests assigned to
Assignee by this Agreement which has accrued after the Effective Date, the
Assignor shall distribute to the Assignee such payment. If the Assignee receives
or collects any payment of interest or fees which is not attributable to the
interests assigned to the Assignee by this Agreement or which has accrued on or
prior to the Effective Date, the Assignee shall distribute to the Assignor such
payment.
6. Assignee (a) represents and warrants to Assignor, Agent and Borrowers
that under applicable law and treaties no tax will be required to be withheld by
Assignee, Agent or Borrowers with respect to any payments to be made to Assignee
hereunder or under any of the Loan Documents, (b) agrees to furnish (if it is
organized under the laws of any jurisdiction other than the United States of
America or any State thereof) to Agent and Borrowers prior to the time that
Agent or Borrowers are required to make any payment of principal, interest or
fees hereunder, duplicate executed originals of either U.S. Internal Revenue
Service Form W-8BEN or W-8ECI, as applicable (wherein Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax on all payments hereunder)
and agrees to provide such new forms upon the expiration of any previously
delivered form or comparable statements in accordance with applicable U.S. law
and regulations and
A-4
amendments thereto, duly executed and completed by Assignee, and (c) agrees to
comply with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
7. Assignor and Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or instruments to
Borrowers or Agent, which may be required in connection with the assignment and
assumption contemplated hereby
8. Any amendment or waiver of any provision of this Agreement shall be in
writing and signed by the parties hereto. No failure or delay by either party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof and any waiver of any breach of the provisions of this Agreement
shall be without prejudice to any rights with respect to any other or further
breach thereof.
9. All payments made hereunder shall be made without any setoff or
counterclaim.
10. Assignor and Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
11. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK. Assignor and Assignee each irrevocably submits
to the non-exclusive jurisdiction of any State or Federal court sitting in New
York County, New York over any suit, action or proceeding arising out of or
relating to this Agreement and irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such New York State or
Federal court. Each party to this Agreement hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding.
12. ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS AGREEMENT, THE LOAN AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
13. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by facsimile,
or other electronic transmission, shall be equally effective as delivery of an
original executed counterpart.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
A-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized,
as of the ___ day of ___________, 20__.
[NAME OF ASSIGNOR]
By:____________________________________
Title:_________________________________
Date:__________________________________
NOTICE ADDRESS AND PAYMENT
INSTRUCTIONS FOR ASSIGNOR
_______________________________________
_______________________________________
_______________________________________
Telephone No.:_________________________
Telecopy No.:__________________________
[NAME OF ASSIGNEE]
By:____________________________________
Title:_________________________________
Date:__________________________________
NOTICE ADDRESS AND PAYMENT
INSTRUCTIONS FOR ASSIGNEE
_______________________________________
_______________________________________
_______________________________________
Telephone No.:_________________________
Telecopy No.:__________________________
A-6
ACCEPTED AND CONSENTED TO
this _____ day of _________, 20__
FORTRESS CREDIT CORP.,
as Agent
By:____________________________________
Title:_________________________________
A-7
EXHIBIT A
-----------------------------------------------------------------------------------------------
PERCENTAGE
INTEREST OF TOTAL
AGGREGATE AMOUNT OF AMOUNT OF REVOLVING REVOLVING LOAN
REVOLVING LOAN LOAN COMMITMENT/ COMMITMENT OR
COMMITMENT/ APPLICABLE TOTAL APPLICABLE
REVOLVING LOAN COMMITMENT/ APPLICABLE LOANS FOR LOANS ASSIGNED TO LOANS ASSIGNED TO
APPLICABLE LOANS ASSIGNED ALL LENDERS ASSIGNEE ASSIGNEE*
-----------------------------------------------------------------------------------------------
[Revolving Loan Commitment] $ $ ___.___%
-----------------------------------------------------------------------------------------------
[Revolving Loans] $ $ ___.___%
-----------------------------------------------------------------------------------------------
[Term Loan] $ $ ___.___%
-----------------------------------------------------------------------------------------------
----------
* Specify percentage to no more than 4 decimal points.
A-8
EXHIBIT B
TO
LOAN AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
To: Fortress Credit Corp., as Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
I hereby certify to you pursuant to Section 6.01(a) of the Loan Agreement
(as defined below) as follows:
1. [I am the duly appointed [Chief Executive Officer] [Chief Financial
Officer] [President] [Vice President] of Aerobic Creations, Inc. ("Parent").
Capitalized terms used herein without definition shall have the meanings given
to such terms in the Loan Agreement, dated November 8, 2006, by and among
Fortress Credit Corp., as agent for the parties thereto as lenders (in such
capacity, "Agent"), the parties thereto as lenders (collectively, "Lenders"),
Parent and certain of its Subsidiaries (as such Loan Agreement is amended,
modified or supplemented, from time to time, the "Loan Agreement").
2. I have reviewed the terms of the Loan Agreement, and have made, or have
caused to be made under my supervision, a review of the transactions and the
condition and operations of Parent and its Subsidiaries, during the immediately
preceding [fiscal month] [Fiscal Year].
3. The review described in Section 2 above did not disclose the existence
during or at the end of such [fiscal month] [Fiscal Year], and I have no
knowledge of the existence and continuance on the date hereof, of any condition
or event which constitutes a Default or an Event of Default, except as set forth
on Schedule I attached hereto. Described on Schedule I attached hereto are the
exceptions, if any, to this Section 3 listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Parent or any Subsidiary has taken, is taking, or proposes to take with respect
to such condition or event.
4. Attached hereto as Schedule III are the calculations used in
determining, as of the end of such fiscal month whether Parent or any of its
Subsidiaries is are in compliance with the covenants set forth in Section 6.03
of the Loan Agreement for such [fiscal month] [Fiscal Year].
The foregoing certifications are made and delivered this day of
___________, 20__.
Very truly yours,
AEROBIC CREATIONS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
B-1
EXHIBIT C
TO
LOAN AGREEMENT
FORM OF NOTICE OF BORROWING
[Date]
Fortress Credit Corp.,
as Agent under the below-referenced Loan Agreement
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Ladies and Gentlemen:
The undersigned, Maritime Logistics US Holdings Inc., a Delaware
corporation (the "Administrative Borrower"), (i) refers to the Loan Agreement,
dated as of November 8, 2006 (as the same may be further amended, supplemented
or otherwise modified from time to time, the "Loan Agreement"), by and among
Administrative Borrower, Summit Logistics International Inc, a New Jersey
corporation ("Summit"), SeaMaster Logistics Inc., a Delaware corporation
("SeaMaster"), AmeRussia Shipping Company Inc., a Delaware corporation
("AmeRussia Shipping"), FMI International LLC, a Delaware limited liability
company ("FMI International"), Fashion Marketing, Inc., a New Jersey corporation
("FM"), FMI International Corp. (West), a New Jersey corporation ("FMIW"), FMI
International Corp., a New Jersey corporation ("FMII"), Freight Management LLC,
a Delaware limited liability company ("FMLLC"), FMI Trucking, Inc., a New Jersey
corporation ("Trucking"), FMI Express Corp., a New Jersey corporation
("Express"), Clare Freight, Los Angeles, Inc., a California corporation
("Clare"), TUG New York, Inc., a New York corporation ("TUG NY"), Aerobic
Creations, Inc., a Delaware corporation ("Parent"), TUG USA, Inc., a New Jersey
corporation, formerly known as Dolphin US Logistics Inc ("TUG USA"), AMR
Investments Inc, a New Jersey corporation ("AMRI") and FMI Holdco I, LLC, a
Delaware limited liability company ("FMI Holdco", and together with
Administrative Borrower, Summit, SeaMaster, AmeRussia Shipping, FM, FMI
International, FMIW, FMII, FMLLC, Trucking, Express, Clare, Parent, TUG USA,
AMRI and FMI Holdco, each individually, a "Borrower" and collectively,
"Borrowers"), the Guarantors party thereto, each of the Lenders from time to
time party thereto, Fortress Credit Corp. ("Fortress"), as agent for the Lenders
(in such capacity, the "Agent"), and (ii) hereby gives you notice pursuant to
Section 2.02 of the Loan Agreement that the undersigned hereby requests a Loan
under the Loan Agreement, and in that connection sets forth below the
information relating to such Loan (the "Proposed Loan") as required by Section
2.02(a) of the Loan Agreement. All capitalized terms used but not defined herein
have the same meanings herein as set forth in the Loan Agreement.
(i) The aggregate principal amount of the Proposed Loan is
$____________.
C-1
(ii) The borrowing date of the Proposed Loan is _________ __, 200_. (1)
(iii) The Proposed Loans requested [are Revolving Loans] [is a Term Loan].
(iv) The Proposed Loans requested are [Reference Rate Loans] [LIBOR Rate
Loans and the Interest Period with respect to the Proposed Loans is ______
months(2)].
(v) The proceeds of the Proposed Loan will be used for the following
purposes: [to pay a portion of the Purchase Price, fees and expenses in
connection with the Acquisitions and the financing thereof, including, without
limitation, the financing provided for in the Loan Agreement and the financing
pursuant to the Senior Convertible Notes in accordance with the Loan Agreement]
[to repay the Indebtedness of any Borrower or Guarantor to the Existing Lenders
in accordance with the Loan Agreement](3), to pay fees and expenses in
connection with the transactions contemplated by the Loan Agreement, to fund
working capital of the Borrowers and for other proper corporate purposes and to
pay fees and expenses related thereto.
(vi) The proceeds of the Proposed Loan should be made available to the
undersigned by wire transferring such proceeds in accordance with the payment
instructions attached hereto as Exhibit A.
(vii) The Borrower of the Proposed Loan is _____________.
The undersigned certifies that (i) the representations and warranties
contained in Article V of the Loan Agreement and in each other Loan Document and
certificate or other writing delivered to Agent or any Lender pursuant thereto
on or prior to the date hereof are true and correct in all material respects on
and as of the date hereof as though made on and as of the date hereof (except to
the extent such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties were true and correct in
all material respects on such earlier date), (ii) no Default or Event of Default
has occurred and is continuing or will result from the making of the Proposed
Loan and (iii) all applicable conditions set forth in Article IV of the Loan
Agreement have been satisfied as of the date hereof and will remain satisfied as
of the date of the Proposed Loan.
Very truly yours,
MARITIME LOGISTICS US HOLDINGS INC.
By:________________________________
Name:______________________________
Title:_____________________________
----------
(1) This date must be a Business Day. In addition, this date must be the
Effective Date for a Term Loan.
(2) The Interest Period for LIBOR Rate Loans shall be thirty (30), sixty (60)
or ninety (90) days.
(3) Include bracketed language for borrowings on the Effective Date.
C-2
EXHIBIT D
TO
LOAN AGREEMENT
FORM OF NOTICE OF CONVERSION/CONTINUATION
[Date]
Fortress Credit Corp.,
as Agent under the below-referenced Loan Agreement
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Ladies and Gentlemen:
The undersigned, Maritime Logistics US Holdings Inc., a Delaware
corporation (the "Administrative Borrower"), (i) refers to the Loan Agreement,
dated as of November 8, 2006 (as the same may be further amended, supplemented
or otherwise modified from time to time, the "Loan Agreement"), by and among
Administrative Borrower, Summit Logistics International Inc, a New Jersey
corporation ("Summit"), SeaMaster Logistics Inc., a Delaware corporation
("SeaMaster"), AmeRussia Shipping Company Inc., a Delaware corporation
("AmeRussia Shipping"), FMI International LLC, a Delaware limited liability
company ("FMI International"), Fashion Marketing, Inc., a New Jersey corporation
("FM"), FMI International Corp. (West), a New Jersey corporation ("FMIW"), FMI
International Corp., a New Jersey corporation ("FMII"), Freight Management LLC,
a Delaware limited liability company ("FMLLC"), FMI Trucking, Inc., a New Jersey
corporation ("Trucking"), FMI Express Corp., a New Jersey corporation
("Express"), Clare Freight, Los Angeles, Inc., a California corporation
("Clare"), TUG New York, Inc., a New York corporation ("TUG NY"), Aerobic
Creations, Inc., a Delaware corporation ("Parent"), TUG USA, Inc., a New Jersey
corporation, formerly known as Dolphin US Logistics Inc ("TUG USA"), AMR
Investments Inc, a New Jersey corporation ("AMRI") and FMI Holdco I, LLC, a
Delaware limited liability company ("FMI Holdco", and together with
Administrative Borrower, Summit, SeaMaster, AmeRussia Shipping, FM, FMI
International, FMIW, FMII, FMLLC, Trucking, Express, Clare, Parent, TUG USA,
AMRI and FMI Holdco, each individually, a "Borrower" and collectively,
"Borrowers"), the Guarantors party thereto, each of the Lenders from time to
time party thereto, Fortress Credit Corp. ("Fortress"), as agent for the Lenders
(in such capacity, the "Agent"), and (ii) hereby gives you notice pursuant to
Section 2.02 of the Loan Agreement that the undersigned hereby requests to
[convert] [continue] [all] [a portion of] the Revolving Loan referred to below,
and in that connection sets forth below the information relating to such
[conversion] [continuation] (the "Proposed [Conversion] [Continuation]") as
required by Section 2.02 of the Loan Agreement. All capitalized terms used but
not defined herein have the same meanings herein as set forth in the Loan
Agreement.
D-1
(i) The Proposed [Conversion] [Continuation] relates to the Revolving Loan
originally made on __________ __, 20__ (the "Outstanding Borrowing") in the
principal amount of $______ and currently maintained as a [Reference Rate Loan]
[LIBOR Rate Loan] with an Interest Period ending on __________ __, _______].
(ii) The Business Day of the Proposed [Conversion] [Continuation] is
___________ __, _____(1).
(iii) [All] [A portion] of the Outstanding Borrowing in the principal
amount of $____________shall be [continued as a [Reference Rate Loan] [LIBOR
Rate Loan] with an Interest Period of ________________] [converted into a
[Reference Rate Loan] [LIBOR Rate Loan] with an Interest Period of ___________.
The undersigned certifies that (i) the representations and warranties
contained in Article V of the Loan Agreement and in each other Loan Document and
certificate or other writing delivered to Agent or any Lender pursuant thereto
on or prior to the date hereof are true and correct in all material respects on
and as of the date hereof as though made on and as of the date hereof (except to
the extent such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties were true and correct in
all material respects on such earlier date), (ii) no Default or Event of Default
has occurred and is continuing or will result from the Proposed [Conversion]
[Continuation] and (iii) all applicable conditions set forth in Article IV of
the Loan Agreement have been satisfied as of the date hereof and will remain
satisfied as of the date of the Proposed [Conversion] [Continuation].
Very truly yours,
MARITIME LOGISTICS US HOLDINGS INC.
By:________________________________
Name:______________________________
Title:_____________________________
----------
(1) Shall be a Business Day at least three (3) Business Days after the date
hereof; PROVIDED that such notice shall be deemed to have been given on a
certain day only if given before 12:00 noon on such day.
D-2
EXHIBIT E
TO
LOAN AGREEMENT
FORM OF LETTER OF CREDIT REQUEST
[Date]
Fortress Credit Corp., as Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: MARITIME LOGISTICS US HOLDINGS INC.
Ladies and Gentlemen:
This Letter of Credit Request is delivered to you pursuant to Section 2.03 of
the Loan Agreement, dated as of November 8, 2006 (as the same may be further
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"), by and among Maritime Logistics US Holdings Inc., a Delaware
corporation ("MLI"), Summit Logistics International Inc, a New Jersey
corporation ("Summit"), SeaMaster Logistics Inc., a Delaware corporation
("SeaMaster"), AmeRussia Shipping Company Inc., a Delaware corporation
("AmeRussia Shipping"), FMI International LLC, a Delaware limited liability
company ("FMI International"), Fashion Marketing, Inc., a New Jersey corporation
("FM"), FMI International Corp. (West), a New Jersey corporation ("FMIW"), FMI
International Corp., a New Jersey corporation ("FMII"), Freight Management LLC,
a Delaware limited liability company ("FMLLC"), FMI Trucking, Inc., a New Jersey
corporation ("Trucking"), FMI Express Corp., a New Jersey corporation
("Express"), Clare Freight, Los Angeles, Inc., a California corporation
("Clare"), TUG New York, Inc., a New York corporation ("TUG NY"), Aerobic
Creations, Inc., a Delaware corporation ("Parent"), TUG USA, Inc., a New Jersey
corporation, formerly known as Dolphin US Logistics Inc ("TUG USA"), AMR
Investments Inc, a New Jersey corporation ("AMRI") and FMI Holdco I, LLC, a
Delaware limited liability company ("FMI Holdco", and together with MLI, Summit,
SeaMaster, AmeRussia Shipping, FM, FMI International, FMIW, FMII, FMLLC,
Trucking, Express, Clare, Parent, TUG USA, AMRI and FMI Holdco, each
individually, a "Borrower" and collectively, "Borrowers"), the Guarantors party
thereto, each of the Lenders from time to time party thereto, Fortress Credit
Corp. ("Fortress"), as agent for the Lenders (in such capacity, "Agent"). Unless
otherwise defined herein or the context otherwise requires, capitalized terms
used herein have the meanings provided in the Loan Agreement.
MLI , in its capacity as the Administrative Borrower, hereby requests that on
_____________ __, 200_, ____________ (the "Issuing Bank")(1) [issue a Letter of
Credit in the initial stated amount of $ ________ with a Stated Expiry Date (as
defined therein) of ____________, 200_,
----------
(1) Insert as appropriate
E-1
for the account of (2) _______________] [extend the Stated Expiry Date (as
defined under Irrevocable Letter of Credit No.__ issued on ______________, 200_,
in the initial stated amount of $ _____________) to a revised Stated Expiry Date
(as defined therein) of ______________, 200_].
The beneficiary of the requested Letter of Credit will be(3) _______________,
and such Letter of Credit will be in support of _______________.
The Administrative Borrower hereby acknowledges, on behalf of all the Borrowers,
that each of the delivery of this Letter of Credit Request and the [issuance]
[extension] of the Letter of Credit requested hereby constitutes a
representation and warranty by each Borrower that on such date of (4) [issuance]
[extension] all statements set forth in Section 4.02(b) are true and correct.
The Administrative Borrower agrees, on behalf of all of Borrowers, that if,
prior to the time of the [issuance] [extension] of the Letter of Credit
requested hereby, any matter certified to herein by them will not be true and
correct at such time as if then made, Administrative Borrower will immediately
so notify the Agent. Except to the extent, if any, that prior to the time of the
issuance or extension requested hereby, Agent and Issuing Bank shall receive
written notice to the contrary from any Borrower, each matter certified to
herein shall be deemed to be certified at the date of such issuance or
extension.
----------
(2) Insert name of applicable Obligor.
(3) Insert name and address of beneficiary.
(4) Complete as appropriate.
E-2
The Administrative Borrower has caused this Letter of Credit Request to be
executed and delivered, and the certification and warranties contained herein to
be made, by its duly Authorized Officer this _______________ day of ________,
200_.
MARITIME LOGISTICS US HOLDINGS INC.,
as Administrative Borrower
By:_________________________________
Title:______________________________
E-3
EXHIBIT F
TO
LOAN AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
SECTION A: COMPUTATION OF COLLATERAL SEGMENTS
-----------
1 Date of Aging
-----------
2 Borrowing Date
-----------
ACCOUNTS RECEIVABLE
-----------
3 0-30 Days
4 31-60 Days
5 61-90 Days
6 Over 90 Days
-----------
7 TOTAL A/R PER AGING
-----------
ROLLFORWARD ACTIVITY
-----------
Identify time
BEGINNING A/R, FROM LAST BORROWING CERTIFICATE period
8 (+) New Xxxxxxxx since prior aging (date from ): _____________
9 (-) Gross Collections since prior aging (date from): _____________
10 (+) Non- A/R cash _____________
11 (+/-) Adjustments and/or intercompany invoicing _____________
12 (+/-) Other Adjustments since prior aging (date from): _____________
-----------
ENDING A/R AS OF :
-----------
INELIGIBLES (CALCULATED FROM AGING DATED ____________)
-----------
(a) 90 + Days Past Invoice
13 Date
-----------
14 (b) Section 7.05 ineligibles -----------
(c) Conditional or Contingent
15 Sales
-----------
16 (d) Foreign Receivables
17 (e) Progress Xxxxxxxx or Xxxx and Holds
18 (f) Disputed Receivables
19 (g) Impaired Receivables
20 (h) Subject to Other Liens (except permitted liens)
21 (i) Related Party, Intercompany or Affiliates
22 (j) Government Receivables
23 (k) Subject to threatened litigation
24 (l) Not subject to Fortress security if applicable
(m) Receivables exceeding 20% of total for a single account
25 debtor
26 (n) Cross Age 50%
27 (o) Notice of Business Activities State
28 (p) Receivables exceeding a pre-established credit limit
29 (q) Account debtors not deemed creditworthy
F-1
-----------
30 TOTAL INELIGIBLES
-----------
-----------
31 BILLED RECEIVABLES BORROWING BASE (LINE #7 - #30)
32 Advance rate 85%
-----------
33 Availability under Receivables Borrowing Base
-----------
SECTION B: COMPUTATION OF REVOLVING AVAILABILITY
-----------
34 Combined gross availability
35 Facility Cap or Gross Availability -----------
36 (-) Dilution Factors
37 (-) Amounts reserved by Lender
38 (-) Letters of Credit
-----------
39 REVOLVING AVAILABILITY
40 Revolving Facility Cap 10,000,000
-----------
41 Maximum advances allowed under the Revolving Facility
-----------
SECTION C: COMPUTATION OF AVAILABILITY AND ADVANCE
-----------
42 Beginning Revolving Advance Balance (from previous Borrowing Certificate)
43 (-) Net A/R Collections
44 (-) Net Non-A/R Collections
45 (+/-) Adjustments (Attach supporting detail)
46 (+) Revolving Advance request
-----------
47 REVOLVING ADVANCE
-----------
-----------
48 AVAILABILITY (LINE 39)
49 (-) ADVANCE (LINE 47)
-----------
50 Remaining Unused Availability $
-----------
Attach a supporting schedule showing all accounts that are not Eligible
Accounts pursuant to the definitions in the Loan Agreement. If there is
any discrepancy between the definition of Eligible Accounts as set forth
in the Loan Agreement and any of the information set forth in this
certificate, the attached schedule, or any other supporting documentation,
the provisions of the Loan Agreement shall control. Capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to
such terms in that certain Loan Agreement dated November 8, 2006, as from
time to time in effect (the "Loan Agreement"), among Maritime Logistics US
Holdings Inc., a Delaware corporation ("MLI"), Summit Logistics
International Inc, a New Jersey corporation ("Summit"), SeaMaster
Logistics Inc., a Delaware corporation ("SeaMaster"), AmeRussia Shipping
Company Inc., a Delaware corporation ("AmeRussia Shipping"), FMI
International LLC, a Delaware limited liability company ("FMI
International"), Fashion Marketing, Inc., a New Jersey corporation ("FM"),
FMI International Corp. (West), a New Jersey corporation ("FMIW"), FMI
International Corp., a New Jersey corporation ("FMII"), Freight Management
LLC, a Delaware limited liability company ("FMLLC"), FMI Trucking, Inc., a
New Jersey corporation ("Trucking"), FMI Express Corp., a New Jersey
corporation ("Express"), Clare Freight, Los Angeles, Inc., a California
corporation ("Clare"), TUG New York, Inc., a New York corporation ("TUG
NY"), Aerobic Creations, Inc., a Delaware corporation ("Parent"), TUG USA,
Inc., a New Jersey corporation, formerly known as Dolphin US Logistics Inc
("TUG USA"), AMR Investments Inc, a New Jersey corporation ("AMRI") and
FMI Holdco I, LLC, a Delaware limited liability company ("FMI Holdco", and
together with MLI, Summit, SeaMaster, AmeRussia Shipping, FM, FMI
International, FMIW, FMII, FMLLC, Trucking, Express, Clare, TUG NY,
Parent, TUG USA, AMRI and FMI Holdco, each individually, a "Borrower" and
collectively, "Borrowers"), the parties from time to time hereto as
guarantors (each individually, a "Guarantor" and collectively,
"Guarantors"), the parties from time to time hereto as lenders (each a
"Lender" and collectively, the "Lenders") and Fortress Credit Corp., a
Delaware corporation, in its capacity as administrative and collateral
agent for and on behalf of Lender (in such capacity, "Agent").
F-2
SCHEDULE 1.01
LENDERS' COMMITMENTS
--------------------------------------------------------------------------------
Revolving Credit Term Loan Total
Lender Commitment Commitment Commitment Percentage
--------------------------------------------------------------------------------
Fortress Credit Corp. $6,923,076.92 $38,076,923.08 $45,000,000 69.231%
--------------------------------------------------------------------------------
Ableco Finance LLC $3,076,923.08 $16,923,076.92 $20,000,000 30.769%
--------------------------------------------------------------------------------
TOTAL $10,000,000 $55,000,000 $65,000,000 100%
--------------------------------------------------------------------------------
SCHEDULE 6.03(a)
TOTAL LEVERAGE RATIO
(THE TOTAL LEVERAGE RATIO FOR THE FOLLOWING PERIODS ARE BASED ON THE ASSUMPTION
THAT A MINIMUM OF $33,000,000 OF EQUITY AND $65,000,000 FROM THE CONVERTIBLE
NOTES WILL BE RAISED ON THE EFFECTIVE DATE--SUBJECT TO CHANGE IF SUCH
ASSUMPTIONS DO NOT OCCUR)
-------------------------------------------------------------------------
Applicable Period-- Twelve (12) Total Leverage Ratio
consecutive months ending:
-------------------------------------------------------------------------
December 31, 2006 2.7 : 1.0
-------------------------------------------------------------------------
March 31, 2007 2.4 : 1.0
-------------------------------------------------------------------------
June 30, 2007 2.1 : 1.0
-------------------------------------------------------------------------
September 30, 2007 1.7 : 1.0
-------------------------------------------------------------------------
December 31, 2007 1.5 : 1.0
-------------------------------------------------------------------------
March 31, 2008 1.5 : 1.0
-------------------------------------------------------------------------
June 30, 2008 1.5 : 1.0
-------------------------------------------------------------------------
September 30, 2008 1.5 : 1.0
-------------------------------------------------------------------------
December 31, 2008 1.5 : 1.0
-------------------------------------------------------------------------
March 31, 2009 1.5 : 1.0
-------------------------------------------------------------------------
June 30, 2009 1.5 : 1.0
-------------------------------------------------------------------------
September 30, 2009 1.5 : 1.0
-------------------------------------------------------------------------
December 31, 2009 1.5 : 1.0
-------------------------------------------------------------------------
March 31, 2010 1.5 : 1.0
-------------------------------------------------------------------------
June 30, 2010 1.5 : 1.0
-------------------------------------------------------------------------
September 30, 2010 1.5 : 1.0
-------------------------------------------------------------------------
December 31, 2010 1.5 : 1.0
-------------------------------------------------------------------------
March 31, 2011 1.5 : 1.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
June 30, 2011 1.5 : 1.0
-------------------------------------------------------------------------
September 30, 2011 1.5 : 1.0
-------------------------------------------------------------------------
SCHEDULE 6.03(b)
CONSOLIDATED LAST TWELVE MONTHS EBITDA
(THE CONSOLIDATED MINIMUM EBITDA FOR THE FOLLOWING PERIODS ARE BASED ON THE
ASSUMPTION THAT A MINIMUM OF $33,000,000 OF EQUITY AND $65,000,000 FROM THE
CONVERTIBLE NOTES WILL BE RAISED ON THE EFFECTIVE DATE--SUBJECT TO CHANGE IF
SUCH ASSUMPTIONS DO NOT OCCUR)
------------------------------------------------------------------------
Applicable Period--October 1, 2006 to period ending on: Minimum EBITDA
------------------------------------------------------------------------
December 31, 2006 $4,000,000
------------------------------------------------------------------------
March 31, 2007 $9,012,000
------------------------------------------------------------------------
June 30, 2007 $14,416,000
------------------------------------------------------------------------
Applicable Period-- Twelve (12) consecutive months ending:
------------------------------------------------------------------------
September 30, 2007 $21,985,000
------------------------------------------------------------------------
December 31, 2007 $24,631,000
------------------------------------------------------------------------
March 31, 2008 $26,755,000
------------------------------------------------------------------------
June 30, 2008 $28,630,000
------------------------------------------------------------------------
September 30, 2008 $30,803,000
------------------------------------------------------------------------
December 31, 2008 $32,912,000
------------------------------------------------------------------------
March 31, 2009 $34,755,000
------------------------------------------------------------------------
June 30, 2009 $36,536,000
------------------------------------------------------------------------
September 30, 2009 $37,857,000
------------------------------------------------------------------------
December 31, 2009 $39,124,000
------------------------------------------------------------------------
March 31, 2010 $40,150,000
------------------------------------------------------------------------
June 30, 2010 $41,129,000
------------------------------------------------------------------------
September 30, 2010 $42,021,000
------------------------------------------------------------------------
December 31, 2010 $42,872,000
------------------------------------------------------------------------
March 31, 2011 $43,891,000
------------------------------------------------------------------------
------------------------------------------------------------------------
June 30, 2011 $44,850,000
------------------------------------------------------------------------
September 30, 2011 $46,056,000
------------------------------------------------------------------------
SCHEDULE 6.03(c)
FIXED CHARGE COVERAGE RATIO
(THE FIXED CHARGE COVERAGE RATIO FOR FOLLOWING PERIODS ARE BASED ON THE
ASSUMPTION THAT A MINIMUM OF $33,000,000 OF EQUITY AND $65,000,000 FROM THE
CONVERTIBLE NOTES WILL BE RAISED ON THE EFFECTIVE DATE--SUBJECT TO CHANGE IF
SUCH ASSUMPTIONS DO NOT OCCUR)
------------------------------------------------------------------------
Applicable Period--October 1, 2006 to Fixed Charge Coverage Ratio
period ending on:
------------------------------------------------------------------------
December 31, 2006 0.90 : 1.00
------------------------------------------------------------------------
March 31, 2007 0.90 : 1.00
------------------------------------------------------------------------
June 30, 2007 1.00 : 1.00
------------------------------------------------------------------------
Applicable Period-- Twelve (12) consecutive months ending on:
------------------------------------------------------------------------
September 30, 2007 1.00 : 1.00
------------------------------------------------------------------------
December 31, 2007 1.10 : 1.00
------------------------------------------------------------------------
March 31, 2008 1.10 : 1.00
------------------------------------------------------------------------
June 30, 2008 1.10 : 1.00
------------------------------------------------------------------------
September 30, 2008 1.10 : 1.00
------------------------------------------------------------------------
December 31, 2008 1.10 : 1.00
------------------------------------------------------------------------
March 31, 2009 1.20 : 1.00
------------------------------------------------------------------------
June 30, 2009 1.20 : 1.00
------------------------------------------------------------------------
September 30, 2009 1.20 : 1.00
------------------------------------------------------------------------
December 31, 2009 1.20 : 1.00
------------------------------------------------------------------------
March 31, 2010 1.20 : 1.00
------------------------------------------------------------------------
June 30, 2010 1.20 : 1.00
------------------------------------------------------------------------
September 30, 2010 1.20 : 1.00
------------------------------------------------------------------------
December 31, 2010 1.20 : 1.00
------------------------------------------------------------------------
------------------------------------------------------------------------
March 31, 2011 1.20 : 1.00
------------------------------------------------------------------------
June 30, 2011 1.20 : 1.00
------------------------------------------------------------------------
September 30, 2011 1.20 : 1.00
------------------------------------------------------------------------
