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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 13, 2008
among
LOWER LAKES TOWING LTD.
as Cdn. Borrower,
LOWER LAKES TRANSPORTATION COMPANY
as US Revolving Borrower,
GRAND RIVER NAVIGATION COMPANY, INC.
as US Term Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Agent and Documentation Agent
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GECC CAPITAL MARKETS GROUP, INC.
as Lead Arranger, Bookrunner and Co-Syndication Agent
and
NATIONAL CITY BANK,
as Co-Syndication Agent
TABLE OF CONTENTS
Page
----
1. AMOUNT AND TERMS OF CREDIT.................................................1
1.1 Credit Facilities................................................1
1.2 Failure to Deliver Borrowing Base Certificate...................11
1.2A Letters of Credit...............................................11
1.3 Prepayments.....................................................11
1.4 Use of Proceeds.................................................14
1.5 Interest and Applicable Margins.................................15
1.6 Eligible Accounts...............................................18
1.7 Cash Management Systems.........................................20
1.8 Fees............................................................21
1.9 Receipt of Payments.............................................22
1.10 Application and Allocation of Payments..........................22
1.11 Loan Account and Accounting.....................................23
1.12 Indemnity.......................................................23
1.13 Access and Audits...............................................25
1.14 Taxes...........................................................25
1.15 Capital Adequacy; Increased Costs; Illegality...................26
1.16 Currency Matters................................................28
2. CONDITIONS PRECEDENT......................................................28
2.1 Conditions to the Initial Loans.................................28
2.2 Further Conditions to Each Loan.................................30
3. REPRESENTATIONS AND WARRANTIES............................................31
3.1 Corporate Existence; Compliance with Law........................31
3.2 Executive Offices, Collateral Locations.........................31
3.3 Corporate Power, Authorization, Enforceable Obligations.........31
3.4 Financial Statements and Projections............................32
3.5 Material Adverse Effect.........................................33
3.6 Ownership of Property; Liens....................................33
3.7 Labor Matters...................................................33
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3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness................................................34
3.9 Government Regulation...........................................34
3.10 Margin Regulations..............................................34
3.11 Taxes...........................................................35
3.12 No Litigation...................................................35
3.13 Canadian Pension Plans, Canadian Benefit Plans and
ERISA Plans.....................................................36
3.14 Brokers.........................................................37
3.15 Intellectual Property...........................................37
3.16 Full Disclosure.................................................37
3.17 Environmental Matters...........................................37
3.18 Insurance.......................................................38
3.19 Deposit and Disbursement Accounts...............................38
3.20 Government Contracts............................................38
3.21 Customer and Trade Relations....................................38
3.22 Bonding; Licenses...............................................39
3.23 Solvency........................................................39
3.24 Material Contracts..............................................39
3.25 Acquisition Agreement...........................................39
3.26 Citizen of the United States....................................40
3.27 Vessels.........................................................40
3.28 Permitted Intercompany Indebtedness.............................40
3.29 Time Charter Agreements.........................................40
3.30 Bareboat Charter Agreement......................................40
4. FINANCIAL STATEMENTS AND INFORMATION......................................41
4.1 Reports and Notices.............................................41
4.2 Communication with Accountants..................................41
5. AFFIRMATIVE COVENANTS.....................................................41
5.1 Maintenance of Existence and Conduct of Business................41
5.2 Payment of Charges..............................................42
5.3 Books and Records...............................................42
5.4 Insurance; Damage to or Destruction of Collateral...............42
5.5 Compliance with Laws............................................44
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5.6 Supplemental Disclosure.........................................45
5.7 Intellectual Property...........................................45
5.8 Environmental Matters...........................................45
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases.......................................46
5.10 Further Assurances..............................................46
5.11 Vessels.........................................................47
5.12 Interest Rate Protection........................................50
5.13 Post-Closing Matters............................................50
6. NEGATIVE COVENANTS........................................................51
6.1 Amalgamations, Mergers, Subsidiaries, Etc.......................51
6.2 Investments; Loans and Advances.................................51
6.3 Indebtedness....................................................52
6.4 Employee Loans and Affiliate Transactions.......................52
6.5 Capital Structure and Business..................................52
6.6 Guaranteed Indebtedness.........................................53
6.7 Liens...........................................................53
6.8 Operating Leases................................................53
6.9 Sale of Stock and Assets........................................53
6.10 Pension and Benefit Plans; ERISA Plans..........................54
6.11 Financial Covenants.............................................54
6.12 Hazardous Materials.............................................54
6.13 Sale-Leasebacks.................................................54
6.14 Restricted Payments.............................................54
6.15 Change of Corporate Name or Location; Change of Fiscal Year.....55
6.16 No Impairment of Intercompany Transfers.........................55
6.17 Real Estate Purchases...........................................55
6.18 Material Contracts..............................................56
6.19 Lower Lakes Guarantee and Lower Lakes Security..................56
6.20 Salt Water Operation............................................56
6.21 Time Charters...................................................56
6.22 Bareboat Charter Agreement......................................56
6.23 Capital/Corporate Structure.....................................56
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6.24 Acquisitions....................................................56
6.25 Capital Expenditures............................................56
7. TERM......................................................................57
7.1 Termination.....................................................57
7.2 Survival of Obligations Upon Termination of Financing
Arrangements....................................................57
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES....................................57
8.1 Events of Default...............................................57
8.2 Remedies........................................................60
8.3 Waivers by Credit Parties.......................................60
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT.......................61
9.1 Assignment and Participations...................................61
9.2 Appointment of Agents...........................................63
9.3 Agents' Reliance, Etc...........................................64
9.4 GE Capital and Affiliates.......................................64
9.5 Lender Credit Decision..........................................64
9.6 Indemnification.................................................65
9.7 Successor Agent.................................................65
9.8 Setoff and Sharing of Payments..................................66
9.9 Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert..............................................66
10. SUCCESSORS AND ASSIGNS....................................................68
10.1 Successors and Assigns..........................................68
11. MISCELLANEOUS.............................................................69
11.1 Complete Agreement; Modification of Agreement...................69
11.2 Amendments and Waivers..........................................69
11.3 Fees and Expenses...............................................71
11.4 No Waiver.......................................................72
11.5 Remedies........................................................72
11.6 Severability....................................................73
11.7 Conflict of Terms...............................................73
11.8 Confidentiality.................................................73
11.9 Governing Law; Submission to Jurisdiction.......................73
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11.10 Notices.........................................................74
11.11 Section Titles..................................................75
11.12 Counterparts....................................................75
11.13 Press Releases and Related Matters..............................75
11.14 Reinstatement...................................................75
11.15 Advice of Counsel...............................................75
11.16 No Strict Construction..........................................75
11.17 Judgment Currency...............................................76
11.18 Joint and Several Obligations...................................76
11.19 Waiver of Jury Trial............................................76
11.20 USA PATRIOT Act Notice..........................................76
11.21 Original Credit Agreement.......................................77
12. COLLATERAL ALLOCATION MECHANISM...........................................78
12.1 Implementaion of CAM............................................78
12.2 Letters of Credit...............................................79
12.3 Net Payments Upon Implementation of CAM Exchange................80
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2A) - Letters of Credit
Annex C (Section 1.7) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 11.10) - Notice Addresses
Annex I (from Annex A-
Commitments definition) - Commitments as of Closing Date
Annex J - Collateral
Annex K (Section 5.4) - Insurance
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(iii) - Form of Cdn. Revolving Note
Exhibit 1.1(b) - Form of Cdn. Term Note
Exhibit 1.1(c)(iii) - Form of US Revolving Note
Exhibit 1.1(d) - Form of US Term Note
Exhibit 1.1(e)(i) - Form of Engine Term Note
Exhibit 1.1(f)(ii) - Form of Cdn. Swing Line Note
Exhibit 1.1(g)(ii) - Form of US Swing Line Note
Exhibit 1.5(e)(ii) - Form of Notice of Conversion/Continuation
Exhibit 1.5(e)(iii) Form of Notice of Conversation - BA RATE
LIBOR
Exhibit 4.1(b) - Form of Borrowing Base Certificate, Accounts
Receivable Reconciliation and Accounts Payable
Rollforward and Reconciliation
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; Jurisdiction of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(c) - Pro Forma
Disclosure Schedule 3.4(d) - Fair Salable Balance Sheet
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - Litigation
Disclosure Schedule 3.13 - Pension and Benefit Plans
Disclosure Schedule 3.14 - Brokers
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
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Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Bonds; Patent, Trademark, Industrial Design
Licenses
Disclosure Schedule 3.24 - Material Contracts
Disclosure Schedule 3.28 - Permitted Intercompany Indebtedness
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 5.13 - Outstanding Material Contract Acknowledgements
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.6 - Guaranteed Indebtedness
Disclosure Schedule 6.7 - Existing Liens
vii
This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of
February 13, 2008 among Lower Lakes Towing Ltd., a Canadian corporation, Lower
Lakes Transportation Company, a Delaware corporation, Grand River Navigation
Company, Inc, a Delaware corporation, the other Credit Parties signatory hereto,
General Electric Capital Corporation (in its individual capacity, "GE Capital")
as Agent, National City Bank, as a Lender and as Co-Syndication Agent and the
other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Lower Lakes, Grand River, LLTC, Agent, GE Capital and GE Canada
Finance Holding Company are parties to a Credit Agreement dated as of March 3,
2006 (as in effect on the date hereof immediately prior to giving effect to this
Agreement, the "Original Credit Agreement");
WHEREAS, the parties hereto desire to enter into this Agreement to, among
other things, (i) amend and restate in its entirety the Original Credit
Agreement, without constituting a novation of the obligations, liabilities and
indebtedness of the Borrowers thereunder, (ii) restructure the tranches of loans
provided for under the Original Credit Agreement and advance certain new loans
(including, without limitation, the Engine Term Loan), (iii) finance in part the
acquisition by Grand River on the Restatement Closing Date of the WMS Vessels
and (iv) provide working capital financing, funds for other general corporate
purposes and funds for other purposes permitted hereunder;
WHEREAS, Borrowers have agreed to continue to secure all of their
respective obligations under the Loan Documents by granting to Agent, for the
benefit of Agent and other Secured Parties, a security interest in and lien
upon, all of their existing and after-acquired personal, real, movable and
immovable property; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern. All
Annexes, Disclosure Schedules, Exhibits and other attachments (collectively,
"Appendices") hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree that the Original Credit Agreement is hereby amended and
restated as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Cdn. Revolving Credit Facility (Cdn. $13,500,000).
(i) Subject to the terms and conditions hereof, each Cdn.
Revolving Lender agrees to make available to Lower Lakes from time to time until
the Commitment Termination Date its Pro Rata Share of Canadian Dollar advances
(each, a "Cdn. Revolving Credit Advance") under the Cdn. Revolving Loan
Commitment (the "Cdn. Revolving Credit Facility"). The Pro Rata Share of the
Cdn. Revolving Loan of any Cdn. Revolving Lender shall not at any time exceed
its separate Cdn. Revolving Loan Commitment. Immediately prior to the
effectiveness of this Agreement, the outstanding principal balance of "Cdn.
Revolving Loans" under the Original Credit Agreement is Cdn. $1,643,505.65. Such
"Cdn. Revolving Loans" under the Original Credit Agreement shall be deemed to
be, and hereby are converted into, on the Restatement Closing Date, outstanding
Cdn. Revolving Loans hereunder. Each Cdn. Revolving Lender with a Cdn. Revolving
Loan Commitment hereunder shall make such payments among themselves and/or shall
fund Cdn. Revolving Loans requested by Lower Lakes on the date hereof as are
necessary to ensure that such converted Cdn. Revolving Loans and all Cdn.
Revolving Loans requested by Lower Lakes on the Restatement Closing Date are
funded by the Cdn. Revolving Lenders holding Cdn. Revolving Loan Commitments
hereunder pro rata based on their respective shares of the Cdn. Revolving Loan
Commitment. The obligations of each Cdn. Revolving Lender hereunder shall be
several and not joint. Until the Commitment Termination Date, Lower Lakes may
from time to time borrow, repay and reborrow under this Section 1.1(a);
provided, that the Canadian Dollar amount of any Cdn. Revolving Credit Advance
to be made at any time shall not exceed Cdn. Borrowing Availability at such
time. Each Cdn. Revolving Credit Advance shall be made on notice by Lower Lakes
to one of the representatives of Agent identified in Schedule 1.1 at the address
specified therein. Any such notice must be given no later than 11:00 a.m. (New
York time) on the Business Day of the proposed Cdn. Revolving Credit Advance.
Each such notice (a "Cdn. Notice of Revolving Credit Advance") must be given in
writing (by telecopy or overnight courier) substantially in the form of Exhibit
1.1(a)(i), and shall include the information required in such Exhibit.
(ii) For the period from April 1 through June 30 of each
calendar year (other than calendar year 2008, in which case such period shall
run through July 31), the Cdn. Revolving Lenders shall establish (on a several
and not joint or joint and several basis) in favor of Lower Lakes a seasonal
overadvance revolving credit facility (the "Cdn. Seasonal Facility") which shall
be subject to the terms contained herein that are applicable to the Cdn.
Revolving Loan. For greater certainty, the Cdn. Seasonal Facility is a sub
facility of the Cdn. Revolving Credit Facility and shall not be subject to the
limits of the Cdn. Borrowing Base but shall be subject to the Cdn. Maximum
Amount. The Cdn. Seasonal Facility shall be in an amount not to exceed (all as
determined in Cdn. Dollars using, where applicable, the Cdn. Dollar Equivalent
Amount) the lesser of: (A) US $8,000,000 (US $10,000,000 for calendar year 2008
only) less the principal amount outstanding under the US Seasonal Facility, or
(B) 75% of the aggregate Fair Market Value of the Cdn. Vessels owned by the Cdn.
Credit Parties and the US Owned Vessels less the aggregate of (i) the principal
amount outstanding under the Cdn. Term Loan, the principal amount outstanding
under the US Term Loan and the principal amount outstanding under the Engine
Term Loan, (ii) the aggregate amount of the obligations secured by Liens
attaching to the Cdn. Vessels and the US Owned Vessels that have priority to the
Liens securing the Obligations, and (iii) the principal amount outstanding under
the US Seasonal Facility. The aggregate of all Cdn. Revolving Credit Advances
(including Advances under the Cdn. Seasonal Facility) shall at no time exceed
the Cdn. Maximum Amount.
(iii) Except as provided in Section 1.11, Lower Lakes shall
execute and deliver to each Cdn. Revolving Lender a Canadian Dollar note to
evidence the Cdn. Revolving Loan Commitment of that Cdn. Revolving Lender. Each
note shall be in the principal amount of the Cdn. Revolving Loan Commitment of
the applicable Cdn. Revolving Lender, dated the Restatement Closing Date and
substantially in the form of Exhibit 1.1(a)(iii) (each, a "Cdn. Revolving Note"
and, collectively, the "Cdn. Revolving Notes"). Each Cdn. Revolving Note shall
2
represent the obligation of Lower Lakes to pay the amount of the Cdn. Revolving
Lender's Cdn. Revolving Loan Commitment or, if less, such Cdn. Revolving
Lender's Pro Rata Share of the aggregate unpaid principal amount of all
outstanding Cdn. Revolving Credit Advances to Lower Lakes together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the Cdn.
Revolving Loan and all other non-contingent Obligations owing by Lower Lakes
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date. All Cdn. Revolving Notes issued under the
Original Credit Agreement shall be deemed replaced as of the Restatement Closing
Date with the notes issued pursuant to this Agreement (without effecting a
novation with respect to any "Obligations" as defined in the Original Credit
Agreement).
(b) Cdn. Term Loan (Cdn.$41,700,000).
(i) Subject to the terms and conditions hereof, each Cdn. Term
Lender agrees to make a term loan denominated in Canadian Dollars (collectively,
the "Cdn. Term Loan") on the Restatement Closing Date to Lower Lakes in the
original principal amount of its Cdn. Term Loan Commitment. The obligations of
each Cdn. Term Lender hereunder shall be several and not joint. Lower Lakes
acknowledges and agrees that, immediately prior to the effectiveness of this
Agreement, the aggregate outstanding principal balance of the "Cdn. Term Loan"
under the Original Credit Agreement is Cdn. $35,596,000 (the "Existing Cdn. Term
Loan") which amount shall be deemed to have been, and hereby is, on the
Restatement Closing Date, converted into Cdn. $35,596,000 of the outstanding
principal balance of the Cdn. Term Loan hereunder, without constituting a
novation. Each Cdn. Term Lender that holds a portion of the Existing Cdn. Term
Loan under the Original Credit Agreement that is converted into a portion of the
Cdn. Term Loan hereunder pursuant to the preceding sentence shall be deemed to
have satisfied all or a portion, as applicable, of its Cdn. Term Loan funding
obligations hereunder to the extent the Existing Cdn. Term Loan held by such
Cdn. Term Lender under the Original Credit Agreement is converted to outstanding
principal under the Cdn. Term Loan hereunder in accordance with the foregoing
provisions of this Section 1.1(b), with such Cdn. Term Lender funding its
remaining portion, if any, of its Cdn. Term Loan Commitment on the Restatement
Closing Date as provided in this Agreement. The Cdn. Term Loan shall be
evidenced by promissory notes substantially in the form of Exhibit 1.1(b) (each,
a "Cdn. Term Note" and, collectively, the "Cdn. Term Notes"), and, except as
provided in Section 1.12, Lower Lakes shall execute and deliver each Cdn. Term
Note to the applicable Cdn. Term Lender. Each Cdn. Term Note shall represent the
obligation of Lower Lakes to pay the amount of the applicable Cdn. Term Lender's
Cdn. Term Loan Commitment, together with interest thereon as prescribed in
Section 1.5. All Cdn. Term Notes issued under the Original Credit Agreement
shall be deemed replaced as of the Restatement Closing Date with the notes
issued pursuant to this Agreement (without effecting a novation with respect to
any "Obligations" as defined in the Original Credit Agreement).
(ii) Lower Lakes shall repay the principal amount of the Cdn.
Term Loan in equal quarterly installments based on the amortization schedule set
forth below on the first day of each March, June, September and December of each
year, commencing September 1, 2008, as follows:
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Period Quarterly Installment Amounts
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September 2008 - March 2009 Cdn.$695,000
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3
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Period Quarterly Installment Amounts
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April 2009 - March 2010 Cdn.$695,000
April 2010 - March 2011 Cdn.$695,000
April 2011 - March 2012 Cdn.$695,000
April 2012 - March 2013 Cdn.$695,000
Commitment Termination Date Cdn.$28,495,000
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The final installment due on the Commitment Termination Date shall be the
remaining principal balance of the Cdn. Term Loan and any accrued and unpaid
interest.
(iii) Notwithstanding Section 1.1(b)(ii), the aggregate
outstanding principal balance of the Cdn. Term Loan shall be due and payable in
full in immediately available funds on the Commitment Termination Date, if not
sooner paid in full. No payment with respect to the Cdn. Term Loan may be
reborrowed.
(iv) Each payment of principal with respect to the Cdn. Term
Loan shall be paid to Agent for the ratable benefit of each Cdn. Term Lender,
ratably in proportion to each such Cdn. Term Lender's respective Cdn. Term Loan
Commitment.
(c) US Revolving Credit Facility (US $13,500,000).
(i) Subject to the terms and conditions hereof, each US
Revolving Lender agrees to make available to LLTC from time to time until the
Commitment Termination Date its Pro Rata Share of US Dollar advances (each, a
"US Revolving Credit Advance") under the US Revolving Loan Commitment (the "US
Revolving Credit Facility"). Immediately prior to the effectiveness of this
Agreement, the outstanding principal balance of "US Revolving Loans" under the
Original Credit Agreement is US $1,406,200.63. Such "US Revolving Loans" under
the Original Credit Agreement shall be deemed to be, and hereby are converted
into, on the Restatement Closing Date, outstanding US Revolving Loans hereunder.
Each US Revolving Lender with a US Revolving Loan Commitment hereunder shall
make such payments among themselves and/or shall fund US. Revolving Loans
requested by LLTC on the date hereof as are necessary to ensure that such
converted US Revolving Loans and all US Revolving Loans requested by LLTC on the
Restatement Closing Date are funded by the US Revolving Lenders holding US
Revolving Loan Commitments hereunder pro rata based on their respective shares
of the US Revolving Loan Commitment. The Pro Rata Share of the US Revolving Loan
of any US Revolving Lender shall not at any time exceed its separate US
Revolving Loan Commitment. The obligations of each US Revolving Lender hereunder
shall be several and not joint. Until the Commitment Termination Date, LLTC may
from time to time borrow, repay and reborrow under this Section 1.1(c);
provided, that the US Dollar amount of any US Revolving Credit Advance to be
made at any time shall not exceed the US Borrowing Availability at such time.
Each US Revolving Credit Advance shall be made on notice by LLTC to one of the
representatives of Agent identified in Schedule 1.1 at the address specified
therein. Any such notice must be given no later than (1) 10:00 a.m. (New York
time) on the Business Day of the proposed US Revolving Credit Advance, in the
case of a US Base Rate Loan, or (2) 10:00 a.m. (New York time) on the date which
is three (3) Business Days prior to the proposed Revolving Credit Advance, in
the case of a LIBOR Loan. Each such notice (a "US Notice of Revolving Credit
4
Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit. If LLTC desires to have a Revolving Credit
Advance bear interest by reference to the LIBOR Rate, it must comply with
Section 1.5(e).
(ii) For the period from April 1 through June 30 of each
calendar year (other than calendar year 2008, in which case such period shall
run through July 31), the US Revolving Lenders shall establish (on a several and
not joint or joint and several basis) in favor of LLTC a seasonal overadvance
revolving credit facility (the "US Seasonal Facility") which shall be subject to
the terms contained herein that are applicable to the US Revolving Loan. For
greater certainty, the US Seasonal Facility is a sub facility of the US
Revolving Credit Facility and shall not be subject to the limits of the US
Borrowing Base but shall be subject to the US Maximum Amount. The amount
outstanding under the US Seasonal Facility shall be in an amount not to exceed
(all as determined in US Dollars using, where applicable, the US Dollar
Equivalent Amount) the lesser of: (A) US $8,000,000 (US $10,000,000 for calendar
year 2008 only) less amounts outstanding under the Cdn. Seasonal Facility, or
(B) 75% of the aggregate Fair Market Value of the Cdn. Vessels owned by the Cdn.
Credit Parties and the US Owned Vessels less the aggregate of (i) the principal
amount outstanding under the Cdn. Term Loan, the principal amount outstanding
under the US Term Loan and the principal amount outstanding under the Engine
Term Loan, (ii) the aggregate amount of the obligations secured by Liens
attaching to the Cdn. Vessels and the US Owned Vessels that have priority to the
Liens securing the Obligations, and (iii) amounts outstanding under the Cdn.
Seasonal Facility. The aggregate principal amount of all US Revolving Credit
Advances (including Advances under the US Seasonal Facility) shall at no time
exceed the US Maximum Amount.
(iii) Except as provided in Section 1.11, LLTC shall execute
and deliver to each US Revolving Lender a US Dollar note to evidence the US
Revolving Loan Commitment of that US Revolving Lender. Each note shall be in the
principal amount of the US Revolving Loan Commitment of the applicable US
Revolving Lender, dated the Restatement Closing Date and substantially in the
form of Exhibit 1.1(c)(iii) (each, a "US Revolving Note" and, collectively, the
"US Revolving Notes"). Each US Revolving Note shall represent the obligation of
LLTC to pay the amount of the US Revolving Lender's Revolving Loan Commitment
or, if less, such US Revolving Lender's Pro Rata Share of the aggregate unpaid
principal amount of all US Revolving Credit Advances to LLTC together with
interest thereon as prescribed in Section 1.5. The entire unpaid balance of the
US Revolving Loan and all other non-contingent Obligations shall be immediately
due and payable in full in immediately available funds on the Commitment
Termination Date. All US Revolving Notes issued under the Original Credit
Agreement shall be deemed replaced as of the Restatement Closing Date with the
notes issued pursuant to this Agreement (without effecting a novation with
respect to any "Obligations" as defined in the Original Credit Agreement).
(d) US Term Loan (US $22,000,000).
(i) Subject to the terms and conditions hereof, each US Term
Lender agrees to make a term loan denominated in US Dollars (collectively, the
"US Term Loan") on the Closing Date to Grand River in the original principal
amount of its US Term Loan Commitment. The obligations of each US Term Lender
hereunder shall be several and not joint. Grand River acknowledges and agrees
that, immediately prior to the effectiveness of this Agreement, the aggregate
outstanding principal balance of the "US Term Loan" under the Original Credit
5
Agreement is US $5,322,012 (the "Existing US Term Loan") which amount shall be
deemed to have been, and hereby is, on the Restatement Closing Date, converted
into US $5,322,012 of the outstanding principal balance of the US Term Loan
hereunder, without constituting a novation. Each US Term Lender that holds a
portion of the Existing US Term Loan under the Original Credit Agreement that is
converted into a portion of the US Term Loan hereunder pursuant to the preceding
sentence shall be deemed to have satisfied all or a portion, as applicable, of
its US Term Loan funding obligations hereunder to the extent the Existing US
Term Loan held by such US Term Lender under the Original Credit Agreement is
converted to outstanding principal under the US Term Loan hereunder in
accordance with the foregoing provisions of this Section 1.1(d), with such US
Term Lender funding its remaining portion, if any, of its US Term Loan
Commitment on the Restatement Closing Date as provided in this Agreement. The US
Term Loan shall be evidenced by promissory notes substantially in the form of
Exhibit 1.1(d) (each, a "US Term Note" and, collectively, the "US Term Notes"),
and, except as provided in Section 1.12, Grand River shall execute and deliver
each US Term Note to the applicable US Term Lender. Each US Term Note shall
represent the obligation of Grand River to pay the amount of the applicable US
Term Lender's US Term Loan Commitment, together with interest thereon as
prescribed in Section 1.5. All US Term Notes issued under the Original Credit
Agreement shall be deemed replaced as of the Restatement Closing Date with the
notes issued pursuant to this Agreement (without effecting a novation with
respect to any "Obligations" as defined in the Original Credit Agreement).
(ii) Grand River shall repay the principal amount of the US
Term Loan in equal quarterly installments based on the amortization schedule set
forth below on the first day of each March, June, September and December,
commencing September 1, 2008, as follows:
--------------------------------------------------------------------------
Period Quarterly Installment Amounts
--------------------------------------------------------------------------
September 2008 - March 2009 US $366,666.67
April 2009 - March 2010 US $366,666.67
April 2010 - March 2011 US $366,666.67
April 2011 - March 2012 US $366,666.67
April 2012 - March 2013 US $366,666.67
Commitment Termination Date US $15,033,333.33
--------------------------------------------------------------------------
The final installment due on the Commitment Termination Date shall be the
remaining principal balance of the US Term Loan and any accrued and unpaid
interest.
(iii) Notwithstanding Section 1.1(d)(ii), the aggregate
outstanding principal balance of the US Term Loan shall be due and payable in
full in immediately available funds on the Commitment Termination Date, if not
sooner paid in full. No payment with respect to the US Term Loan may be
reborrowed.
(iv) Each payment of principal with respect to the US Term
Loan shall be paid to Agent for the ratable benefit of each US Term Lender,
ratably in proportion to each such US Term Lender's respective US Term Loan
Commitment.
(e) Engine Term Loan (Cdn. $8,000,000).
6
(i) Subject to the terms and conditions hereof, each Engine
Term Lender agrees to make a term loan denominated in Canadian Dollars
(collectively, the "Engine Term Loan") on the Restatement Closing Date to Lower
Lakes in the original principal amount of its Engine Term Loan Commitment. The
obligations of each Engine Term Lender hereunder shall be several and not joint.
The Engine Term Loan shall be evidenced by promissory notes substantially in the
form of Exhibit 1.1(e)(i) (each, an "Engine Term Note" and, collectively, the
"Engine Term Notes"), and, except as provided in Section 1.12, Lower Lakes shall
execute and deliver each Engine Term Note to the applicable Engine Term Lender.
Each Engine Term Note shall represent the obligation of Lower Lakes to pay the
amount of the applicable Engine Term Lender's Engine Term Loan Commitment,
together with interest thereon as prescribed in Section 1.5.
(ii) Lower Lakes shall repay the principal amount of the
Engine Term Loan in equal quarterly installments based on the amortization
schedule set forth below on the first day of each March, June, September and
December of each year, commencing September 1, 2008, as follows:
--------------------------------------------------------------------------
Period Quarterly Installment Amounts
--------------------------------------------------------------------------
September 2008 - March 2009 Cdn.$133,333.33
April 2009 - March 2010 Cdn.$133,333.33
April 2010 - March 2011 Cdn.$133,333.33
April 2011 - March 2012 Cdn.$133,333.33
April 2012 - March 2013 Cdn.$133,333.33
Commitment Termination Date Cdn. $5,466,666.67
--------------------------------------------------------------------------
The final installment due on the Commitment Termination Date shall be the
remaining principal balance of the Engine Term Loan and any accrued and unpaid
interest.
(iii) Notwithstanding Section 1.1(e)(ii), the aggregate
outstanding principal balance of the Engine Term Loan shall be due and payable
in full in immediately available funds on the Commitment Termination Date, if
not sooner paid in full. No payment with respect to the Engine Term Loan may be
reborrowed.
(iv) Each payment of principal with respect to the Engine Term
Loan shall be paid to Agent for the ratable benefit of each Engine Term Lender,
ratably in proportion to each such Engine Term Lender's respective Engine Term
Loan Commitment.
(f) Cdn. Swing Line Loan (Cdn. $4,000,000).
(i) Agent shall notify the Cdn. Swing Line Lender upon Agent's
receipt of any Cdn. Notice of Revolving Credit Advance. Subject to the terms and
conditions hereof, the Cdn. Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Cdn. Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(f) shall not relieve Cdn. Revolving Lenders of
their obligations to make Cdn. Revolving Credit Advances under Section 1.1(a);
provided that if the Cdn. Swing Line Lender makes a Cdn. Swing Line Advance
pursuant to any such notice, such Cdn. Swing Line Advance shall be in lieu of
7
any Cdn. Revolving Credit Advance that otherwise may be made by Cdn. Revolving
Credit Lenders pursuant to such notice. The aggregate amount of Cdn. Swing Line
Advances outstanding shall not exceed at any time the lesser of (A) the Cdn.
Swing Line Loan Commitment and (B) the lesser of the Cdn. Maximum Amount and
Cdn. Borrowing Availability, in each case, less the outstanding balance of the
Cdn. Revolving Loans at such time ("Cdn. Swing Line Availability"). Until the
Commitment Termination Date, Lower Lakes may from time to time borrow, repay and
reborrow under this Section 1.1(f). Each Cdn. Swing Line Advance shall be made
pursuant to a Cdn. Notice of Revolving Credit Advance delivered to Agent by
Lower Lakes in accordance with Section 1.1(a). Any such notice must be given no
later than 11:00 a.m. (New York time) on the Business Day of the proposed Cdn.
Swing Line Advance. Unless the Cdn. Swing Line Lender has received at least one
Business Day's prior written notice from Requisite Revolving Lenders instructing
it not to make a Cdn. Swing Line Advance, the Cdn. Swing Line Lender shall,
notwithstanding the failure of any condition precedent set forth in Section 2.2,
be entitled to fund that Cdn. Swing Line Advance, and to have each Cdn.
Revolving Lender make Cdn. Revolving Credit Advances in accordance with Section
1.1(f)(iii) or purchase participating interests in accordance with Section
1.1(f)(iv). Notwithstanding any other provision of this Agreement or the other
Loan Documents, the Cdn. Swing Line Loan shall constitute a Canadian Prime Rate
Loan. Lower Lakes shall repay the aggregate outstanding principal amount of the
Cdn. Swing Line Loan upon demand therefor by Agent.
(ii) Lower Lakes shall execute and deliver to the Cdn. Swing
Line Lender a promissory note to evidence the Cdn. Swing Line Loan Commitment.
Each note shall be in the principal amount of the Cdn. Swing Line Loan
Commitment of the Cdn. Swing Line Lender, dated the Restatement Closing Date and
substantially in the form of Exhibit 1.1(f)(ii) (each a "Cdn. Swing Line Note"
and, collectively, the "Cdn. Swing Line Notes"). Each Cdn. Swing Line Note shall
represent the obligation of Lower Lakes to pay the amount of the Cdn. Swing Line
Loan Commitment or, if less, the aggregate unpaid principal amount of all Cdn.
Swing Line Advances made to Lower Lakes together with interest thereon as
prescribed in Section 1.5. The entire unpaid balance of the Cdn. Swing Line Loan
and all other noncontingent Obligations shall be immediately due and payable in
full in immediately available funds on the Commitment Termination Date if not
sooner paid in full.
(iii) The Cdn. Swing Line Lender, at any time and from time to
time no less frequently than once weekly shall on behalf of Lower Lakes (and
Lower Lakes hereby irrevocably authorizes the Cdn. Swing Line Lender to so act
on its behalf) request each Cdn. Revolving Lender (including the Cdn. Swing Line
Lender) to make a Cdn. Revolving Credit Advance to Lower Lakes (which shall be a
Canadian Prime Rate Loan) in an amount equal to that Cdn. Revolving Lender's Pro
Rata Share of the principal amount of Lower Lakes' Cdn. Swing Line Loan (the
"Cdn. Refunded Swing Line Loan") outstanding on the date such notice is given.
Unless any of the events described in Sections 8.1(j) or 8.1(k) has occurred (in
which event the procedures of Section 1.1(f)(iv) shall apply) and regardless of
whether the conditions precedent set forth in this Agreement to the making of a
Cdn. Revolving Credit Advance are then satisfied, each Cdn. Revolving Lender
shall disburse directly to Agent, its Pro Rata Share of a Cdn. Revolving Credit
Advance on behalf of the Cdn. Swing Line Lender prior to 3:00 p.m. (New York
time) in immediately available funds on the Business Day next succeeding the
date that notice is given. The proceeds of those Cdn. Revolving Credit Advances
shall be immediately paid to the Cdn. Swing Line Lender and applied to repay the
Cdn. Refunded Swing Line Loan of Lower Lakes.
8
(iv) If, prior to refunding a Cdn. Swing Line Loan with a Cdn.
Revolving Credit Advance pursuant to Section 1.1(f)(iii), one of the events
described in Sections 8.1(j) or 8.1(k) has occurred, then, subject to the
provisions of Section 1.1(f)(v) below, each Cdn. Revolving Lender shall, on the
date such Cdn. Revolving Credit Advance was to have been made for the benefit of
Lower Lakes, purchase from the Cdn. Swing Line Lender an undivided participation
interest in the Cdn. Swing Line Loan to Lower Lakes in an amount equal to its
Pro Rata Share of such Cdn. Swing Line Loan. Upon request, each Cdn. Revolving
Lender shall promptly transfer to the Cdn. Swing Line Lender, in immediately
available funds, the amount of its participation interest.
(v) Each Cdn. Revolving Lender's obligation to make Cdn.
Revolving Credit Advances in accordance with Section 1.1(f)(iii) and to purchase
participation interests in accordance with Section 1.1(f)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Cdn.
Revolving Lender may have against the Cdn. Swing Line Lender, any Borrower or
any other Person for any reason whatsoever; (B) the occurrence or continuance of
any Default or Event of Default; (C) any inability of any Borrower to satisfy
the conditions precedent to borrowing set forth in this Agreement at any time or
(D) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Cdn. Revolving Lender does not make
available to Agent or the Cdn. Swing Line Lender, as applicable, the amount
required pursuant to Sections 1.1(f)(iii) or 1.1(f)(iv), as the case may be, the
Cdn. Swing Line Lender shall be entitled to recover such amount on demand from
such Cdn. Revolving Lender, together with interest thereon for each day from the
date of non-payment until such amount is paid in full at the Federal Funds Rate
for the first two Business Days and at the BA Rate thereafter.
(g) US Swing Line Loan (US $4,000,000).
(i) Agent shall notify the US Swing Line Lender upon Agent's
receipt of any US Notice of Revolving Credit Advance. Subject to the terms and
conditions hereof, the US Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "US Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(g) shall not relieve US Revolving Lenders of
their obligations to make US Revolving Credit Advances under Section 1.1(c);
provided that if the US Swing Line Lender makes a US Swing Line Advance pursuant
to any such notice, such US Swing Line Advance shall be in lieu of any US
Revolving Credit Advance that otherwise may be made by US Revolving Credit
Lenders pursuant to such notice. The aggregate amount of US Swing Line Advances
outstanding shall not exceed at any time the lesser of (A) the US Swing Line
Loan Commitment and (B) the lesser of the US Maximum Amount and US Borrowing
Availability, in each case, less the outstanding balance of the US Revolving
Loans at such time ("US Swing Line Availability"). Until the Commitment
Termination Date, LLTC may from time to time borrow, repay and reborrow under
this Section 1.1(g). Each US Swing Line Advance shall be made pursuant to a US
Notice of Revolving Credit Advance delivered to Agent by Lower Lakes in
accordance with Section 1.1(c). Any such notice must be given no later than
11:00 a.m. (New York time) on the Business Day of the proposed US Swing Line
Advance. Unless the US Swing Line Lender has received at least one Business
Day's prior written notice from Requisite Revolving Lenders instructing it not
to make a US Swing Line Advance, the US Swing Line Lender shall, notwithstanding
the failure of any condition precedent set forth in Sections 2.2, be entitled to
fund that US Swing Line Advance, and to have each US Revolving Lender make US
Revolving Credit Advances in accordance with Section 1.1(g)(iii) or purchase
9
participating interests in accordance with Section 1.1(g)(iv). Notwithstanding
any other provision of this Agreement or the other Loan Documents, the US Swing
Line Loan shall constitute a US Base Rate Loan. LLTC shall repay the aggregate
outstanding principal amount of the US Swing Line Loan upon demand therefor by
Agent.
(ii) LLTC shall execute and deliver to the US Swing Line
Lender a promissory note to evidence the US Swing Line Loan Commitment. Each
note shall be in the principal amount of the US Swing Line Loan Commitment of
the US Swing Line Lender, dated the Restatement Closing Date and substantially
in the form of Exhibit 1.1(g)(ii) (each a "US Swing Line Note" and,
collectively, the "US Swing Line Notes"). Each US Swing Line Note shall
represent the obligation of Lower Lakes to pay the amount of the US Swing Line
Loan Commitment or, if less, the aggregate unpaid principal amount of all US
Swing Line Advances made to LLTC together with interest thereon as prescribed in
Section 1.5. The entire unpaid balance of the US Swing Line Loan and all other
noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.
(iii) The US Swing Line Lender, at any time and from time to
time no less frequently than once weekly shall on behalf of LLTC (and LLTC
hereby irrevocably authorizes the US Swing Line Lender to so act on its behalf)
request each US Revolving Lender (including the US Swing Line Lender) to make a
US Revolving Credit Advance to LLTC (which shall be a US Base Rate Loan) in an
amount equal to that US Revolving Lender's Pro Rata Share of the principal
amount of LLTC's US Swing Line Loan (the "US Refunded Swing Line Loan")
outstanding on the date such notice is given. Unless any of the events described
in Sections 8.1(j) or 8.1(k) has occurred (in which event the procedures of
Section 1.1(g)(iv) shall apply) and regardless of whether the conditions
precedent set forth in this Agreement to the making of a US Revolving Credit
Advance are then satisfied, each US Revolving Lender shall disburse directly to
Agent, its Pro Rata Share of a US Revolving Credit Advance on behalf of the US
Swing Line Lender prior to 3:00 p.m. (New York time) in immediately available
funds on the Business Day next succeeding the date that notice is given. The
proceeds of those US Revolving Credit Advances shall be immediately paid to the
US Swing Line Lender and applied to repay the US Refunded Swing Line Loan of
LLTC.
(iv) If, prior to refunding a US Swing Line Loan with a US
Revolving Credit Advance pursuant to Section 1.1(g)(iii), one of the events
described in Sections 8.1(j) or 8.1(k) has occurred, then, subject to the
provisions of Section 1.1(g)(v) below, each US Revolving Lender shall, on the
date such US Revolving Credit Advance was to have been made for the benefit of
LLTC, purchase from the US Swing Line Lender an undivided participation interest
in the US Swing Line Loan to LLTC in an amount equal to its Pro Rata Share of
such US Swing Line Loan. Upon request, each US Revolving Lender shall promptly
transfer to the US Swing Line Lender, in immediately available funds, the amount
of its participation interest.
(v) Each US Revolving Lender's obligation to make US Revolving
Credit Advances in accordance with Section 1.1(g)(iii) and to purchase
participation interests in accordance with Section 1.1(g)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such US
Revolving Lender may have against the US Swing Line Lender, any Borrower or any
other Person for any reason whatsoever; (B) the occurrence or continuance of any
Default or Event of Default; (C) any inability of any Borrower to satisfy the
conditions precedent to borrowing set forth in this Agreement at any time or (D)
10
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. If any US Revolving Lender does not make available to
Agent or the US Swing Line Lender, as applicable, the amount required pursuant
to Sections 1.1(g)(iii) or 1.1(g)(iv), as the case may be, the US Swing Line
Lender shall be entitled to recover such amount on demand from such US Revolving
Lender, together with interest thereon for each day from the date of non-payment
until such amount is paid in full at the Federal Funds Rate for the first two
Business Days and at the US Base Rate thereafter.
(h) Reliance on Notices. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Cdn. Notice of Revolving Credit
Advance, US Notice of Revolving Credit Advance, Notice of
Conversion/Continuation - LIBOR or similar notice believed by Agent to be
genuine. Agent may assume that each Person executing and delivering any notice
in accordance herewith was duly authorized, unless the responsible individual
acting thereon for Agent has actual knowledge to the contrary.
(i) Calculation of Amount of Indebtedness Secured by Liens on
Vessels. LLTC and Lower Lakes shall, with the delivery of each Borrowing Base
Certificate and as may be more frequently requested by the Agent acting
reasonably, provide to the Agent an itemized list (certified by the Chief
Financial Officer of Lower Lakes) of all payables owing to Persons in connection
with work performed or services provided by such Persons on the Cdn. Vessels and
the US Owned Vessels. The Borrowers acknowledge that such payables list shall be
utilized by the Agent in determining the amount of obligations which has
priority to the Liens securing the Obligations for the purposes of Sections
1.1(a)(ii) and 1.1(c)(ii).
1.2 Failure to Deliver Borrowing Base Certificate. If a Borrower fails to
deliver a Borrowing Base Certificate as required pursuant to the terms hereof,
the applicable Revolving Lenders shall have no obligation to make any further
Advances to such Borrower until its receipt of such a Borrowing Base
Certificate.
1.2A Letters of Credit. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Lower Lakes shall have the right to
request, and Cdn. Revolving Lenders agree to incur, or purchase participations
in, Letter of Credit Obligations in respect of Lower Lakes.
1.3 Prepayments.
(a) Voluntary Prepayments; Reductions in Revolving Loan Commitments.
A Borrower may at any time on at least five (5) days' prior written notice to
Agent (i) voluntarily prepay all or part of the Term Loans advanced and/or (ii)
permanently reduce (but not terminate) the Revolving Loan Commitment extended to
it; provided that (A) any such prepayment or reduction shall be in a minimum
amount of Cdn.$1,000,000 or US$1,000,000, as applicable, and integral multiples
of Cdn.$250,000 and US$250,000, as applicable, in excess of such amount (unless
the outstanding amounts thereof are less than such minimum payment threshold),
(B) no Revolving Loan Commitment shall be reduced without the agreement of the
applicable Revolving Lenders, and (C) after giving effect to such reductions,
each Borrower shall comply with Section 1.3(b)(i). A Borrower may at any time on
at least ten (10) days' prior written notice to Agent terminate the Revolving
Loan Commitment extended to it, provided, that upon any termination of either
11
Revolving Loan Commitment, all other Commitments shall immediately terminate and
all Loans and other Obligations owing by all Borrowers shall be immediately due
and payable in full and all Letter of Credit Obligations shall be cash
collateralized or otherwise satisfied in accordance with Annex B hereto. Any
voluntary prepayment and any reduction or termination of a Revolving Loan
Commitment must be accompanied by payment of the Fee required by Section 1.8(c),
if any, plus the payment of any LIBOR funding breakage costs in accordance with
Section 1.13(b), as applicable. Upon any such reduction or termination of a
Revolving Loan Commitment, a Borrower's right to request a Revolving Credit
Advance or a Swing Line Advance or request that Letter of Credit Obligations be
incurred on Lower Lakes' behalf, shall simultaneously be permanently reduced or
terminated, as the case may be and to the extent applicable. Each notice of
partial prepayment shall designate the Loan or other Obligations to which such
prepayment is to be applied; provided that any partial prepayments of any Term
Loan shall be applied to prepay the scheduled installments of such Term Loan in
the inverse order of maturity. A permanent reduction of the Cdn. Revolving Loan
Commitment shall not require a corresponding pro rata reduction in the L/C
Sublimit, although any reduction resulting in the Cdn. Revolving Loan Commitment
being less than the L/C Sublimit shall require a corresponding reduction in the
L/C Sublimit.
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balance of all
Cdn. Revolving Loans (including, for greater certainty, all Advances under the
Cdn. Seasonal Facility) and Cdn. Swing Line Loans exceeds the lesser of (A) the
Cdn. Maximum Amount and (B) the Cdn. Borrowing Base, Lower Lakes shall
immediately repay the aggregate outstanding Cdn. Revolving Credit Advances to
the extent required to eliminate such excess. If at any time the aggregate
outstanding balance of all US Revolving Loans (including, for greater certainty,
all Advances under the US Seasonal Facility) and US Swing Line Loans exceeds the
lesser of (A) the US Maximum Amount and (B) the US Borrowing Base, LLTC shall
immediately repay the aggregate outstanding US Revolving Credit Advances to the
extent required to eliminate such excess. Notwithstanding the foregoing, during
the period from April 1 through June 30 of each calendar year (other than
calendar year 2008, in which case such period shall run through July 31),
Advances under the Seasonal Facilities shall not be subject to the applicable
Borrowing Bases and as such, neither Lower Lakes nor LLTC, as applicable, shall
be required to repay Advances to eliminate any excess of Advances over the
related Borrowing Base arising from Advances under a Seasonal Facility during
such period of time. If on any day, the aggregate outstanding balance of all
Cdn. Revolving Loans (including, for greater certainty, all Advances under the
Canadian Seasonal Facility) and Cdn. Swing Line Loans, exceeds the lesser of (A)
the Cdn. Revolving Loan Commitment and (B) the Canadian Borrowing Base, Lower
Lakes shall immediately repay such excess, and if on any day, the aggregate
outstanding balance of the US Revolving Loans (including, for greater certainty,
all Advances under the US Seasonal Facility) and US Swing Line Loans exceeds the
lesser of (A) the US Revolving Loan Commitment and (B) the US Borrowing Base,
LLTC shall immediately repay such excess. The preceding sentence shall not
derogate from the ability of the Borrowers to borrow under the Seasonal
Facilities in excess of the Borrowing Bases in accordance with the terms of this
Agreement.
(ii) As soon as reasonably possible and in any event within
two (2) Business Days, upon receipt by any Credit Party of any cash proceeds of
any asset disposition in excess of $100,000 for each disposition or series of
12
related dispositions, except for those dispositions permitted pursuant to the
terms of Section 6.9(a), (b) or (c), the Borrowers shall, in accordance with the
provisions of Section 1.3(c), prepay the Loans (and cash collateralize Letter of
Credit Obligations) in an amount equal to all such proceeds (including the first
$100,000 of proceeds), net of (A) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by such Credit Party in connection therewith (in each case, paid to
non-Affiliates), and (B) goods and services taxes, sales taxes and transfer
taxes, as applicable. Any such prepayment shall be applied in accordance with
the provisions of Section 1.3(c).
(iii) If a Credit Party issues Stock for cash, no later than
the Business Day following the date of receipt of the proceeds thereof, the
Borrowers shall prepay the Loans (and cash collateralize Letter of Credit
Obligations) in an amount equal to all such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses paid to
non-Affiliates in connection therewith. Any such prepayment shall be applied in
accordance with Section 1.3(c).
(iv) If a Credit Party incurs any Indebtedness other than
Indebtedness expressly permitted under this Agreement (and for greater
certainty, the provisions of this Section 1.3(b)(iv) shall not constitute
approval for the incurrence of any such Indebtedness), the Borrowers shall
prepay the Loans (and cash collateralize Letter of Credit Obligations) in an
amount equal to the proceeds of all of such Indebtedness. Any such prepayment
shall be applied in accordance with the provisions of Section 1.3(c).
(v) If (a) the aggregate of the outstanding principal amount
of (i) the Term Loans plus the principal amount of all Outstanding Advances
under the Seasonal Facilities (all as determined in US Dollars using, where
applicable, the US Dollar Equivalent Amount) exceeds (b) the sum of (i) 75% of
the Fair Market Value of the Cdn. Vessels and the US Owned Vessels (based on the
most recent appraisal obtained by the Agent) less (ii) the obligations secured
by the Liens attaching to the Cdn. Vessels and the US Owned Vessels that have
priority to the Liens securing the Obligations (such amount referred to as the
"Excess Amount"), then within ten (10) days after delivery of a written notice
by Agent to such effect, the Borrowers shall prepay the Loans (and cash
collateralize Letter of Credit Obligations) in such manner that the Borrowers
see fit in an amount equal to such Excess Amount; provided, that if an Event of
Default shall be continuing at the time of any such payment, the Required
Lenders shall determine the manner in which such prepayment shall be applied
against the Loans.
(vi) Until the Termination Date, Borrowers shall prepay the
Obligations on the date that is ten (10) days after the earlier of (A) the date
on which Borrowers' annual audited Financial Statements for the immediately
preceding Fiscal Year are delivered pursuant to Annex E or (B) the date on which
such annual audited Financial Statements were required to be delivered pursuant
to Annex E, in an amount equal to (x) seventy-five percent (75%) of Excess Cash
Flow for the immediately preceding Fiscal Year, (y) fifty percent (50%) of the
Excess Cash Flow for the immediately preceding Fiscal Year if the Senior Funded
Debt to EBITDA Ratio as of the last day of such preceding Fiscal Year is less
than 3.00 to 1.00 or (z) twenty-five percent (25%) of the Excess Cash Flow for
the immediately preceding Fiscal Year if the Senior Funded Debt to EBITDA Ratio
as of the last day of such preceding Fiscal Year is less than 2.00 to 1.00. Any
prepayments from Excess Cash Flow paid pursuant to this clause (vi) shall be
applied in accordance with Section 1.3(c). Each such prepayment shall be
accompanied by a certificate signed by Parent's chief financial officer
certifying the manner in which Excess Cash Flow and the resulting prepayment
were calculated, which certificate shall be in form and substance reasonably
satisfactory to Agent.
13
(c) Application of Certain Mandatory Prepayments. Any prepayments
required to be made pursuant to Section 1.3(b)(ii), (b)(iii), (b)(iv), (b)(v) or
(b)(vi) above shall be applied as follows: first, to reimbursable expenses of
Agent and to Fees then due and payable pursuant to any of the Loan Documents;
second, on a pro rata basis, to interest then due and payable on the Term Loans;
third, on a pro rata basis, to prepay the scheduled principal installments of
the Term Loans in inverse order of maturity, until the Term Loans shall have
been paid in full; fourth, to interest then due and payable on the Swing Line
Loans; fifth, to the principal balance of the Swing Line Loans outstanding until
the same has been repaid in full; sixth, on a pro rata basis, to interest then
due and payable on the Revolving Credit Advances; seventh, as set forth below,
to the outstanding principal balance of Revolving Credit Advances until the same
have been paid in full, and eighth, to any Letter of Credit Obligations, to
provide cash collateral therefor in the manner set forth in Annex B, until all
such Letter of Credit Obligations have been fully cash collateralized in the
manner set forth in Annex B; provided, that any such proceeds arising from a
sale of a Vessel shall be applied first to the principal and interest of the
Term Loan of the Borrower owning such Vessel in inverse order of maturity, until
such Term Loan has been paid in full, and then ratably to the other Term Loans;
provided, further, that the first $15,000,000 of net proceeds arising under
Section 1.3(b)(iii) shall be applied first, on a pro rata basis, to the
remaining principal installments of the Engine Term Loan, until such Engine Term
Loan has been paid in full, and then to the Cdn. Term Loan. Neither the
Revolving Loan Commitments nor the Swing Line Loan Commitments shall be
permanently reduced by the amount of any such prepayments. The Borrowers shall
determine which Revolving Credit Advances are to be repaid pursuant to proceeds
derived pursuant to Section 1.3(b) and Section 1.3(d); provided, that
notwithstanding anything contained in this Section 1.3 to the contrary, if an
Event of Default shall have occurred and be continuing at the time of any such
prepayment, then the amounts to be applied pursuant to Section 1.3(b) and
Section 1.3(d) shall be applied by the Required Lenders as they deem
appropriate.
(d) Application of Prepayments from Insurance Proceeds and
Condemnation and Expropriation Proceeds. Prepayments from insurance,
expropriation or condemnation proceeds, whether received in accordance with
Section 5.4(b) or (c) or otherwise, shall be applied to scheduled installments
of the Term Loans in accordance with Section 5.4(b). Neither a Revolving Loan
Commitment nor a Swing Line Loan Commitment shall be permanently reduced by the
amount of any such prepayments. If the precise amount of insurance,
expropriation or condemnation proceeds allocable to Inventory as compared to
Equipment, Fixtures, Vessels and Real Estate are not otherwise determined, the
allocation and application of those proceeds shall be determined by Agent,
subject to the approval of the Requisite Lenders acting reasonably.
(e) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds. The Borrowers shall utilize the proceeds of the Loans
solely for the WMS Debt Payoff, the WMS Acquisition and the purchase of a new
engine for the Saginaw (and to pay any related transaction expenses), and for
14
the financing of the Borrowers' ordinary working capital and general corporate
needs. Disclosure Schedule (1.4) contains a description of Borrowers' sources
and uses of funds as of the Restatement Closing Date, including Loans and Letter
of Credit Obligations to be made or incurred on that date, and a funds flow
memorandum detailing how funds from each source are to be transferred to
particular uses.
1.5 Interest and Applicable Margins.
(a) Interest. Each Borrower shall pay interest to Agent, for the
ratable benefit of Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date, at the
following rates: (i) with respect to Cdn. Revolving Credit Advances, Cdn. Swing
Line Advances and the Cdn. Term Loan, the BA Rate plus three and three-quarters
percent (3.75%) per annum or the Canadian Prime Rate plus two and three-quarters
percent (2.75%) per annum, (ii) with respect to US Revolving Credit Advances, US
Swing Line Advances and the US Term Loan, the US Base Rate plus two and
three-quarters percent (2.75%) per annum or the applicable LIBOR Rate plus three
and three-quarters percent (3.75%) per annum, as applicable, and (iii) with
respect to the Engine Term Loan, the BA Rate plus five percent (5.00%) per annum
or the Canadian Prime Rate plus four percent (4.00%) per annum. Notwithstanding
the foregoing, from and after the delivery of the audited Financial Statements
of the Parent and its Subsidiaries for the Fiscal Year ending March 31, 2009,
the applicable margins with respect to all Loans (other than the Engine Term
Loan) shall be adjusted quarterly, to the extent applicable, on the date
Financial Statements are required to be delivered pursuant to Annex E after the
end of each related Fiscal Quarter based on the Senior Debt to EBITDA Ratio
calculated as of the last day of such Fiscal Quarter in accordance with the
following table:
--------------------------------------------------------------------
Senior Debt to BA Rate and LIBOR Canadian Prime Rate
EBITDA Ratio Rate and US Base Rate
--------------------------------------------------------------------
< 2.25 3.00% 2.00%
--------------------------------------------------------------------
<2.75, but > 2.25 3.25% 2.25%
-
--------------------------------------------------------------------
<3.25 3.50% 2.50%
--------------------------------------------------------------------
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period,
as applicable) and, with respect to payments of principal, interest thereon
shall be payable at the then applicable rate(s) during such extension.
(c) All computations of Fees and interest in this Agreement or in
any other Loan Document shall be made by Agent on the basis of a 365-day year
(except for LIBOR Loans, which shall be calculated on the basis of a 360-day
year, and unless expressly stated herein to the contrary), in each case for the
actual number of days occurring in the period for which such interest and Fees
are payable. Each of the Canadian Prime Rate and the US Base Rate is a daily
rate and is adjusted daily. Each determination by Agent of an interest rate and
Fees hereunder and under any other Loan Document shall, absent manifest error,
be presumptive evidence of the correctness of such rates and Fees.
(d) If (i) an Event of Default has occurred and is continuing under
Section 8.1(a), (j) or (k), or (ii) any other Event of Default has occurred and
15
is continuing, and at the election of Agent (or upon the written request of
Requisite Lenders) confirmed by written notice from Agent to the Borrowers, the
interest rates applicable to the Loans and the Letter of Credit Fee shall,
subject to the Interest Act (Canada) and applicable law in the United States, be
increased by two percentage points (2%) per annum above the rates of interest or
the rate of such Fees otherwise applicable hereunder unless Agent or Requisite
Lenders elect to impose a smaller increase (the "Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fee at the Default Rate shall
accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand.
(e) (i) Subject to the conditions precedent set forth in Section
2.2, each Cdn. Revolving Credit Advance, each Cdn. Term Loan and each Engine
Term Loan shall be made as a BA Rate Loan or Canadian Prime Rate Loan. Each BA
Rate Loan and Canadian Prime Rate Loan must be in a minimum amount of Cdn.$1,000
and integral multiples of Cdn.$1,000 thereafter.
(ii) Subject to the conditions precedent set forth in Section
2.2, each US Borrower shall have the option to (A) request that any US Revolving
Credit Advance be made as a LIBOR Loan, (B) convert at any time all or any part
of outstanding Loans (other than the US Swing Line Loans) that are denominated
in US Dollars from US Base Rate Loans to LIBOR Loans, (C) convert any LIBOR Loan
to a US Base Rate Loan, upon payment of an administrative fee of $250 and
subject to payment of LIBOR breakage costs in accordance with Section 1.13(c) if
such conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (D) continue all or any portion of any Loan (other than the US Swing
Line Loans) denominated in US Dollars as a LIBOR Loan upon the expiration of the
applicable LIBOR Period and the succeeding LIBOR Period of that continued Loan
shall commence on the first day after the last day of the LIBOR Period of the
Loan to be continued. Any Loan or group of Loans having the same proposed LIBOR
Period to be made or continued as, or converted into, a LIBOR Loan must be in a
minimum amount of US$1,000,000 and integral multiples of US$500,000 in excess of
such amount. Each US Base Rate Loan must be in a minimum amount of US$1,000 and
integral multiples of US$1,000 thereafter. Any such election must be made by
10:00 a.m. (New York time) on the third Business Day prior to (1) the date of
any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of
each LIBOR Period with respect to any LIBOR Loans to be continued as such, or
(3) the date on which the applicable US Borrower wishes to convert any US Base
Rate Loan to a LIBOR Loan for a LIBOR Period designated by such US Borrower in
such election. If no election is received with respect to a LIBOR Loan by 11:00
a.m. (New York time) on the third Business Day prior to the end of the LIBOR
Period with respect thereto (or if a Default or an Event of Default has occurred
and is continuing or the additional conditions precedent set forth in Section
2.2 shall not have been satisfied), that LIBOR Loan shall be converted to a US
Base Rate Loan at the end of its LIBOR Period. Each US Borrower must make such
election by notice to Agent in writing, by telecopy or overnight courier. In the
case of any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation - LIBOR") in the form of
Exhibit 1.5(e)(ii). Following the occurrence of a Default or an Event of
Default, at the sole discretion of the US Revolving Lenders, neither US Borrower
shall be entitled to obtain LIBOR Loans. In the event that neither US Borrower
is entitled to obtain LIBOR Loans, on the maturity of any outstanding LIBOR Loan
such Loan shall automatically be converted into a US Base Rate Loan. The
agreement to any subsequent conversion of a US Base Rate Loan into a LIBOR Loan
shall be at the sole discretion of the US Lenders.
16
(iii) Subject to the conditions precedent set forth in Section
2.2, Lower Lakes shall have the option to (A) request that any Cdn. Revolving
Credit Advance, any Cdn. Term Loan or any Engine Term Loan be made as a BA Rate
Loan or Canadian Prime Rate Loan and (B) convert any BA Rate Loan (other than
the Cdn. Swing Line Loans) to a Canadian Prime Rate Loan upon the expiration of
the applicable BA Period and the converted Loan shall commence as a Canadian
Prime Rate Loan on the first day after the last day of the BA Period of the BA
Rate Loan to be converted. Each BA Rate Loan and Canadian Prime Rate Loan must
be in a minimum amount of Cdn.$1,000 and integral multiples of Cdn.$1,000
thereafter. Any such election must be made by 10:00 a.m. (New York time) on the
third Business Day prior to (1) the date of any proposed Advance which is to
bear interest at the BA Rate or (2) the end of each BA Period with respect to
any BA Rate Loans which Lower Lakes wishes to convert to a Canadian Prime Rate
Loan. Lower Lakes must make such election by notice to Agent in writing, by
telecopy or overnight courier. In the case of any conversion, such election must
be made pursuant to a written notice (a "Notice of Conversion - BA Rate") in the
form of Exhibit 1.5(e)(iii). For a BA Rate Loan that Lower Lakes wishes to
convert, if no election is received by 10:00 a.m. (New York time) on the third
Business Day prior to the end of the BA Period with respect thereto, that BA
Rate Loan shall be continued as a BA Rate Loan at the BA Rate applicable for the
next succeeding BA Period. If a Default or an Event of Default has occurred and
is continuing or the additional conditions precedent set forth in Section 2.2
shall not have been satisfied, each BA Rate Loan shall be converted to a
Canadian Prime Rate Loan at the end of its BA Period. Following the occurrence
of a Default or an Event of Default, at the sole discretion of the Cdn.
Revolving Lenders, the Cdn. Term Lenders or the Engine Term Lenders, as
applicable, Lower Lakes shall not be entitled to obtain BA Rate Loans. In the
event that Lower Lakes is not entitled to obtain BA Rate Loans, on the maturity
of any outstanding BA Rate Loan such Loan shall automatically be converted into
a Canadian Prime Rate Loan. The agreement to any subsequent conversion of a
Canadian Prime Rate Loan into a BA Rate Loan shall be at the sole discretion of
the Cdn. Lenders.
(f) Limitation on Interest. If any provision of this Agreement or of
any of the other Loan Documents would obligate any Borrower or any other Credit
Party to make any payment of interest or other amount payable to any Lender in
an amount or calculated at a rate which would be prohibited by law or would
result in a receipt by such Lender of interest at a criminal rate (as such terms
are construed under the Criminal Code (Canada) or any equivalent legislation of
the United States of America) then, notwithstanding such provisions, such amount
or rate shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by such Lender of interest at a
criminal rate, such adjustment to be effected, to the extent necessary, as
follows: (1) firstly, by reducing the amount or rate of interest required to be
paid to such Lender under this Section 1.5, and (2) thereafter, by reducing any
fees, commissions, premiums and other amounts required to be paid to such Lender
which would constitute "interest" for purposes of Section 347 of the Criminal
Code (Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if a Lender shall have received an amount in
excess of the maximum permitted by that section of the Criminal Code (Canada),
Lower Lakes shall be entitled, by notice in writing to such Lender, to obtain
reimbursement from such Lender in an amount equal to such excess and, pending
such reimbursement, such amount shall be deemed to be an amount payable by such
Lender to Lower Lakes. Any amount or rate of interest referred to in this
Section 1.5(f) shall be determined in accordance with generally accepted
actuarial practices and principles as an effective annual rate of interest over
the term that the applicable Loan remains outstanding on the assumption that any
17
charges, fees or expenses that fall within the meaning of "interest" (as defined
in the Criminal Code (Canada)) shall, if they relate to a specific period of
time, be pro-rated over that period of time and otherwise be pro-rated over the
period from the Closing Date to the Termination Date and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Agent shall be conclusive for the purposes of such determination.
(g) Interest Act (Canada). For purposes of disclosure pursuant to
the Interest Act (Canada), the annual rates of interest or fees to which the
rates of interest or fees provided in this Agreement and the other Loan
Documents (and stated herein or therein, as applicable, to be computed on the
basis of a 365 day year (except for LIBOR Loans which shall be calculated on the
basis of a 360 day year) or any other period of time less than a calendar year)
are equivalent are the rates so determined multiplied by the actual number of
days in the applicable calendar year and divided by 365 (or 360, as applicable)
or such other period of time, respectively.
(h) Notwithstanding anything to the contrary contained herein or in
the Original Credit Agreement, the Borrowers shall pay in full all interest
accrued under the Original Credit Agreement immediately prior to the
effectiveness of this Agreement to the applicable Lender entitled thereto. All
LIBOR Loans and BA Rate Loans, as applicable, under the Original Credit
Agreement shall be "broken" immediately prior to the effectiveness of this
Agreement (without the Borrowers incurring any costs under Section 1.12(c) of
the Original Credit Agreement or this Agreement as a result thereof), and any
"Loans" under the Original Credit Agreement being converted into and continuing
as Loans hereunder shall constitute US Base Rate Loans or Canadian Prime Rate
Loans, as applicable, hereunder.
1.6 Eligible Accounts. All Accounts of Borrowers shall be "Eligible
Accounts" for purposes of this Agreement, except any Account to which any of the
exclusionary criteria set forth below applies. Agent shall have the right to
establish, modify or eliminate Reserves against Eligible Accounts from time to
time in its reasonable credit judgment. In addition, Agent reserves the right,
at any time and from time to time after the Restatement Closing Date, to adjust
any of the criteria set forth below and to establish new criteria, and to adjust
advance rates with respect to Eligible Accounts, in its reasonable credit
judgment, reflecting changes in the collectibility or realization values of such
Accounts arising or discovered by Agent after the Restatement Closing Date
subject to the approval of the Requisite Revolving Lenders in the case of
adjustments or new criteria or changes in advance rates or the elimination of
Reserves which have the effect of making more credit available. Eligible
Accounts of any Borrower shall not include any Account:
(a) that does not arise from the sale of goods or the performance of
services by such Borrower in the ordinary course of its business;
(b) (i) upon which such Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which such Borrower is not able to bring suit or otherwise enforce
its remedies against the Account Debtor through judicial process, or (iii) if
the Account represents a progress billing consisting of an invoice for goods
sold or used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to Borrower's completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer;
18
(c) to the extent that any defense, counterclaim, set-off or dispute
is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for services rendered and
accepted by the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to Agent
in form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by such Borrower or (ii) is subject to any
Lien of any other Person, other than Immaterial Liens;
(g) that arises from a sale to any director, officer, other employee
or Affiliate of such Borrower, or to any entity that has any common officer or
director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the Canadian
government (Her Majesty The Queen in Right of Canada) or a political subdivision
thereof, or any province or territory, or any municipality or department, agency
or instrumentality thereof, or that is the United States government or a
political subdivision thereof, or any state, county or municipality or
department, agency or instrumentality thereof unless (i) Agent, in its sole
discretion, has agreed to the contrary in writing, (ii) the Account is subject
to a first priority security interest in favor of the Agent and (iii) the Credit
Party, if necessary or desirable, has complied with the Financial Administration
Act (Canada) and any amendments thereto, with the Federal Assignment of Claims
Act of 1940 (31 U.S.C. Section 3727) or any applicable state, provincial, county
or municipal law of similar purpose and effect restricting the assignment
thereof with respect to such obligation;
(i) that is the obligation of an Account Debtor located in a country
other than Canada or the United States of America unless payment thereof is
assured by a letter of credit assigned and delivered to Agent, satisfactory to
Agent as to form, amount and issuer;
(j) to the extent the applicable Borrower is liable for goods sold
or services rendered by the applicable Account Debtor to such Borrower but only
to the extent of the potential offset;
(k) that arises with respect to goods that are delivered on a
▇▇▇▇-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; provided, that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier of: sixty (60)
days following its due date or ninety (90) days following its original invoice
date;
(ii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due or is otherwise insolvent; or
19
(iii) if any assignment or petition is filed by or against any
Account Debtor obligated upon such Account or any application for an order to
stay proceedings against such Account Debtor is filed in any case or proceeding
under any Insolvency Laws;
(m) that is the obligation of an Account Debtor if fifty percent
(50%) or more of the Dollar amount of all Accounts owing by that Account Debtor
are ineligible under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of the Secured
Parties, is not a first priority perfected Lien or Lien that is not registered
in first priority but has obtained first priority status because any prior
ranking secured creditor has subordinated and postponed its Lien in form and
substance acceptable to the Secured Parties (subject to Immaterial Liens);
(o) as to which any of the representations or warranties in the Loan
Documents are untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit established
by Agent, in its reasonable credit judgment;
(r) to the extent that such Account, together with all other
Accounts owing by such Account Debtor and its Affiliates as of any date of
determination exceed 20% of all Eligible Accounts;
(s) that is payable in any currency other than Canadian Dollars or
US Dollars; or
(t) that is otherwise unacceptable to Agent in its reasonable credit
judgment.
For the purpose of valuing Lower Lakes' Eligible Accounts denominated in
US Dollars (if any), the amount of such Eligible Accounts shall be converted
into the Equivalent Amount thereof in Canadian Dollars as of the last Business
Day of each Fiscal Month; provided, that Agent reserves the right to adjust, at
any time in its reasonable credit judgment, the value of Canadian Dollars of
such Eligible Accounts to take into account currency rate exchange fluctuations
since the last valuation thereof. For the purpose of valuing LLTC's Eligible
Accounts denominated in Canadian Dollars (if any), the amount of such Eligible
Accounts shall be converted into the Equivalent Amount thereof in US Dollars as
of the last Business Day of each Fiscal Month; provided, that Agent reserves the
right to adjust, at any time in its reasonable credit judgment, the value of US
Dollars of such Eligible Accounts to take into account currency rate exchange
fluctuations since the last valuation thereof.
1.7 Cash Management Systems. On or prior to the Restatement Closing Date,
the Credit Parties will establish and will maintain until the Termination Date,
the cash management systems described in Annex C (the "Cash Management
Systems").
20
1.8 Fees.
(a) The Borrowers shall pay, on a joint and several basis, to GE
Capital the Fees specified in the GE Capital Fee Letter at the times specified
for payment therein.
(b) As additional compensation for the Cdn. Revolving Lenders, Lower
Lakes shall pay to Agent, for the ratable benefit of such Lenders, in arrears,
on the first Business Day of each month prior to the Commitment Termination Date
and on the Commitment Termination Date, a Fee for Lower Lakes' non-use of
available funds in an amount equal to 0.5% per annum (calculated on the basis of
a 365 day year for actual days elapsed) multiplied by the difference between (x)
the Cdn. Maximum Amount and (y) the average for the period of the daily closing
balances of the aggregate Cdn. Revolving Loan and Cdn. Swing Line Loan
outstanding during the period for which the such Fee is due. As additional
compensation for the US Revolving Lenders, LLTC shall pay to Agent, for the
ratable benefit of such Lenders, in arrears, on the first Business Day of each
month prior to the Commitment Termination Date and on the Commitment Termination
Date, a Fee for LLTC's non-use of available funds in an amount equal to 0.5% per
annum (calculated on the basis of a 365 day year for actual days elapsed)
multiplied by the difference between (x) the US Maximum Amount and (y) the
average for the period of the daily closing balances of the aggregate US
Revolving Loan and US Swing Line Loan outstanding during the period for which
the such Fee is due. All "Fees" as defined in the Original Credit Agreement that
shall have accrued under the Original Credit Agreement and remain unpaid
immediately prior to the effectiveness of this Agreement shall be paid in full
to the applicable Lender on the Restatement Closing Date.
(c) If Lower Lakes or Grand River, as the case may be, prepays all
or any portion of the Term Loans, if Lower Lakes or LLTC voluntarily terminates
all or any portion of the Revolving Loan Commitments or if the indebtedness
owing under the Term Loans and/or the Revolving Loans is accelerated and the
Revolving Loan Commitments terminated, whether voluntarily or involuntarily,
Lower Lakes, LLTC and/or Grand River, as applicable, shall pay to Agent, for the
benefit of the applicable Lenders, as liquidated damages and compensation for
the costs of being prepared to make funds available hereunder an amount equal to
the Applicable Percentage (as defined below) multiplied by (x) the sum of the
principal amount of the Term Loans paid or if unpaid, outstanding (in the case
of acceleration) and (y) the amount of the Revolving Loan Commitments
terminated, as applicable. As used herein, the term "Applicable Percentage"
shall mean (x) three percent (3%), in the case of a prepayment on or prior to
the first anniversary of the Restatement Closing Date, (y) two percent (2%), in
the case of a prepayment after the first anniversary of the Restatement Closing
Date but on or prior to the second anniversary thereof, and (z) one percent
(1%), in the case of a prepayment after the second anniversary of the
Restatement Closing Date but on or prior to the fifth anniversary thereof. The
Credit Parties agree that the fee payable herein is a reasonable calculation of
the applicable Lenders' lost profits in view of the difficulties and
impracticality of determining actual damages resulting from an early termination
of the Commitments. Notwithstanding the foregoing, no prepayment fee shall be
payable by Lower Lakes, LLTC or Grand River, as applicable, upon a mandatory
prepayment made pursuant to Section 1.3(b) or 1.15(c); provided that in the case
of prepayments made pursuant to Section 1.3(b)(ii) or (b)(iii), the transaction
giving rise to the applicable prepayment is expressly permitted under Section 6.
21
(d) The Borrowers shall, on a joint and several basis, reimburse the
Agent at the rate of US $950 per person per day, plus reasonable out-of-pocket
expenses for all field examinations conducted by the Agent from time to time.
The Agent shall be entitled to conduct two field examinations each calendar year
at the expense of the Borrowers. During the continuance of an Event of Default,
the Borrowers shall be responsible for the costs of all field examinations
conducted by the Agent.
(e) Lower Lakes shall pay to Agent, for the ratable benefit of Cdn.
Revolving Lenders, the Letter of Credit Fee as provided in Annex B.
1.9 Receipt of Payments. Each Borrower shall make each payment under this
Agreement not later than 12:00 noon (New York time) on the day when due for
value on that day to the applicable Collection Account. For greater certainty,
all payments made by LLTC and Grand River shall go to the US Collection Account
and all payments made by Lower Lakes shall go to the Cdn. Collection Account.
For purposes of computing interest and Fees and determining Borrowing
Availability as of any date, all payments shall be deemed received on the
Business Day on which immediately available funds therefor are received in the
applicable Collection Account prior to 12:00 noon (New York time). Payments
received after 12:00 noon (New York time) on any Business Day or on a day that
is not a Business Day shall be deemed to have been received on the following
Business Day. Without limiting Section 11.17, if Agent receives any payment from
or on behalf of a Credit Party in any currency other than the currency in which
the Obligation is denominated, Agent may convert the payment (including the
proceeds of realization upon any collateral) into the currency in which such
Obligation is denominated at the rate of exchange (as such term is defined in
Section 11.17(c)).
1.10 Application and Allocation of Payments.
(a) So long as no Event of Default has occurred and is continuing,
(i) payments consisting of proceeds of Accounts received in the ordinary course
of business shall be applied, first, to the Swing Line Loans (with the Agent
applying Accounts from US Credit Parties to US Swing Line Loans and Accounts
from Cdn. Credit Parties to Cdn. Swing Line Loans) and, second, to the Revolving
Loans (with the Agent applying Accounts from US Credit Parties to US Revolving
Loans and Accounts from Cdn. Credit Parties to Cdn. Revolving Loans); (ii)
payments matching specific scheduled payments then due shall be applied to those
scheduled payments; (iii) voluntary prepayments shall be applied in accordance
with the provisions of Section 1.3(a); and (iv) mandatory prepayments shall be
applied as set forth in Sections 1.3(c) and 1.3(d). All payments and prepayments
applied to a particular Loan shall be applied ratably to the portion thereof
held by each Lender as determined by its Pro Rata Share. As to any other
payment, and as to all payments made when an Event of Default has occurred and
is continuing or following the Commitment Termination Date, Borrowers hereby
irrevocably waive the right to direct the application of any and all payments
received from or on behalf of a Borrower, and Borrowers hereby irrevocably agree
that Requisite Lenders shall have the continuing exclusive right to apply any
and all such payments against the Obligations as Requisite Lenders may deem
advisable notwithstanding any previous entry by Agent in the Loan Account or any
other books and records. In the absence of a specific determination by Requisite
Lenders with respect thereto and after acceleration or maturity of the
Obligations, all payments and proceeds of Collateral shall be applied to amounts
then due and payable in the following order: (1) to Agent's expenses and to Fees
reimbursable hereunder; (2) to interest on the Swing Line Loans; (3) to
22
principal payments on the Swing Line Loans; (4) to interest on the other Loans,
ratably in proportion to the interest accrued as to each Loan; (5) to principal
payments on the other Loans and any Obligations under any Secured Rate Contract
and to provide cash collateral for contingent Letter of Credit Obligations in
the manner described in Annex B, ratably to the aggregate, combined principal
balance of the Loans, Obligations under any Secured Rate Contract and
outstanding Letter of Credit Obligations; and (6) to all other Obligations
including expenses of Lenders to the extent reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may, charge to
the applicable Revolving Loan balance on behalf of a Borrower and cause to be
paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than principal
of the applicable Revolving Loan, owing by each Borrower under this Agreement or
any of the other Loan Documents if and to the extent such Borrower fails to pay
promptly any such amounts as and when due, even if the amount of such charges
would exceed Borrowing Availability at such time. At Agent's option and to the
extent permitted by law, any charges so made shall constitute part of the
applicable Revolving Loan hereunder.
1.11 Loan Account and Accounting. Agent shall maintain a loan account or
loan accounts (the "Loan Account") on its books to record: all Advances and the
Term Loans, all payments made by a Borrower, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in accordance with Agent's
customary accounting practices as in effect from time to time. The balance in
the Loan Account, as recorded on Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by each Borrower; provided that any failure
to so record or any error in so recording shall not limit or otherwise affect a
Borrower's duty to pay the Obligations. Agent shall render to Borrowers a
monthly accounting of transactions with respect to the Loans setting forth the
balance of the Loan Account for the immediately preceding month. Unless
Borrowers notify Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within forty-five (45)
days of receipt thereof, each and every such accounting shall, absent manifest
error, be presumptive evidence of all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by a
Borrower. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it.
1.12 Indemnity.
(a) Each Credit Party that is a signatory hereto shall indemnify and
hold harmless each of Agent, Lenders and their respective Affiliates, and each
such Person's respective officers, directors, employees, legal counsel, agents
and representatives (each, an "Indemnified Person"), from and against any and
all suits, actions, proceedings, orders, claims, damages, losses, liabilities
and expenses (including reasonable legal fees and disbursements and other costs
of investigation or defense, including those incurred upon any appeal) that may
be instituted or asserted against or incurred by any such Indemnified Person as
a result of or in connection with credit having been extended, suspended or
terminated under this Agreement or the other Loan Documents and the
administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
23
to act in connection therewith including the taking of any enforcement actions
by Agent, including any and all Environmental Liabilities and legal costs and
expenses arising out of or incurred in connection with disputes between or among
any parties to any of the Loan Documents (collectively, "Indemnified
Liabilities"); provided, that no such Credit Party shall be liable for any
indemnification to an Indemnified Person to the extent that any such suit,
action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person's gross negligence or willful misconduct. NO INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT,
ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) any US
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any US Borrower shall refuse to accept any
borrowing of, or shall request a termination of any borrowing of, conversion
into or continuation of LIBOR Loans after it has given notice requesting the
same in accordance herewith; or (iv) any US Borrower shall fail to make any
prepayment of a LIBOR Loan after it has given a notice thereof in accordance
herewith, then such US Borrower shall indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss (including
loss of margin) or expense arising from the reemployment of funds obtained by it
or from fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant
LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate
in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may fund
each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. This covenant shall survive the termination of this Agreement and
the payment of the Obligations and all other amounts payable hereunder. As
promptly as practicable under the circumstances, each Lender shall provide each
US Borrower with its written calculation of all amounts payable pursuant to this
Section 1.13(c), and such calculation shall be binding on the parties hereto
unless such US Borrower shall object in writing within ten (10) Business Days of
receipt thereof, specifying the basis for such objection in detail.
(c) To induce Lenders to provide the BA Rate option on the terms
provided herein, if (i) any BA Rate Loans are repaid in whole or in part prior
to the last day of any applicable BA Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) Lower Lakes
shall default in payment when due of the principal amount of or interest on any
BA Rate Loan; (iii) Lower Lakes shall refuse to accept any borrowing of, or
24
shall request a termination of any borrowing or continuation of BA Rate Loans
after Lower Lakes has given notice requesting the same in accordance herewith;
or (iv) Lower Lakes shall fail to make any prepayment of a BA Rate Loan after it
has given a notice thereof in accordance herewith, then Lower Lakes shall
indemnify and hold harmless each Lender from and against all losses, costs and
expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be deemed to have actually funded its relevant BA Rate Loan through the purchase
of a deposit bearing interest at the BA Rate in an amount equal to the amount of
that BA Rate Loan and having a maturity comparable to the relevant BA Period;
provided, that each Lender may fund each of its Loans in any manner it sees fit,
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this subsection. This covenant shall survive the
termination of this Agreement and the payment of the Obligations and all other
amounts payable hereunder. As promptly as practicable under the circumstances,
each Lender shall provide Lower Lakes with its written calculation of all
amounts payable pursuant to this Section 1.12(c), and such calculation shall be
binding on the parties hereto unless Lower Lakes shall object in writing within
ten (10) Business Days of receipt thereof, specifying the basis for such
objection in detail.
1.13 Access and Audits. Prior to the occurrence of an Event of Default,
each Credit Party shall, during normal business hours, upon two (2) Business
Days' prior notice on not more than two occasions in any calendar year at the
expense of the Borrowers: (a) provide Agent and any of its officers, employees
and agents access to its properties, facilities, advisors, officers and
employees of each Credit Party and to the Collateral, (b) permit Agent and any
of its officers, employees and agents, to inspect, audit and make extracts from
any Credit Party's books and records, and (c) permit Agent and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Inventory and other Collateral of any Credit Party.
If an Event of Default has occurred and is continuing, or if access is necessary
to preserve or protect the Collateral, as determined by Agent, each such Credit
Party shall provide such access to Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, the Borrowers shall provide and shall cause each
other Credit Party to provide Agent and each Lender with access to its suppliers
and customers. During the occurrence and continuation of an Event of Default,
the Borrowers shall be responsible for the costs of all audits conducted by the
Agent. Each Credit Party shall make available to Agent and its counsel,
reasonably promptly, originals or copies of all books and records that Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for Agent, as it may from time to time request acting reasonably, to
obtain records from any service bureau or other Person that maintains records
for such Credit Party, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by such Credit
Party. Agent will give Lenders at least five (5) days' prior written notice of
regularly scheduled audits. Representatives of other Lenders may accompany
Agent's representatives on regularly scheduled audits at no charge to the
Borrowers.
1.14 Taxes.
(a) Any and all payments by or on behalf of a Credit Party hereunder
or under the Notes or any other Loan Document shall be made, in accordance with
25
this Section 1.14, free and clear of and without deduction for any and all
present or future Taxes (excluding Taxes imposed on or measured by the net
income or capital of Agent or any Lender by the jurisdiction under the laws of
which it is organized or is resident or carries on business through a permanent
establishment located therein or any political subdivisions thereof). If a
Credit Party shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the Notes or any other Loan Document
(excluding Taxes imposed on or measured by the net income or capital of Agent or
any Lender by the jurisdiction under the laws of which it is organized or is
resident or carries on business through a permanent establishment located
therein or any political subdivisions thereof), (i) the sum payable shall be
increased as much as shall be necessary so that, after making all required
withholdings and deductions (including withholdings and deductions applicable to
additional sums payable under this Section 1.14), Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such withholdings or deductions been made, (ii) the applicable Credit Party
shall make such withholdings and deductions, and (iii) the applicable Credit
Party shall pay the full amount withheld or deducted to the relevant taxing or
other authority in accordance with applicable law. Within thirty (30) days after
the date of any payment of Taxes, Borrowers shall furnish to Agent the original
or a certified copy of a receipt evidencing payment thereof.
(b) In addition, each Credit Party agrees to pay any present or
future Taxes that arise from any payment made under this Agreement or under any
other Loan Document or from the execution, sale, transfer, delivery or
registration of, or otherwise with respect to, this Agreement, the other Loan
Documents and any other agreements and instruments contemplated hereby or
thereby (except for Taxes imposed on or measured by the net income or capital of
Agent or any Lender by the jurisdiction under the laws of which it is organized
or is resident or carries on business through a permanent establishment located
therein or any political subdivisions thereof). Each Lender agrees that, as
promptly as reasonably practicable after it becomes aware of any circumstances
referred to above which would result in additional payments under this Section
1.14, it shall notify Borrowers thereof.
(c) Each Credit Party hereby indemnifies Agent and each Lender for
the full amount of Taxes (excluding Taxes imposed on or measured by the net
income or capital of Agent or any Lender by the jurisdiction under the laws of
which it is organized or is resident or carries on business through a permanent
establishment located therein or any political subdivisions thereof but
including any Taxes imposed by any jurisdiction on amounts payable by such
Credit Party under this Section 1.14) paid by Agent or such Lender, as
appropriate, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted. Each payment under this indemnification shall be
made within ten (10) days after Agent makes written demand therefor, for its own
benefit or the benefit of the affected Lender.
(d) For greater certainty, the terms of Section 1.14 shall be
subject to the assignment terms contained in the third full sentence of Section
9.1(a).
1.15 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
26
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Restatement Closing Date,
from any central bank or other Governmental Authority increases or would have
the effect of increasing the amount of capital, reserves or other funds required
to be maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then the
applicable Borrower shall from time to time upon demand by such Lender (with a
copy of such demand to Agent) pay to Agent, for the account of such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to the amount of that reduction and showing the basis of the
computation thereof submitted by such Lender to such Borrower and to Agent shall
be presumptive evidence of the matters set forth therein.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Restatement Closing Date, there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining any
Loan, then the applicable Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to Agent), pay to Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to a Borrower and to Agent by such Lender, shall be presumptive evidence of the
matters set forth therein absent manifest error. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such increased cost, the affected Lender shall,
to the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by a Borrower pursuant to this Section 1.15(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
reasonable opinion, materially adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to each
US Borrower through Agent, (i) the obligation of such Lender to agree to make or
to make or to continue to fund or maintain LIBOR Loans shall terminate and (ii)
each US Borrower shall forthwith prepay in full all outstanding LIBOR Loans
owing to such Lender, together with interest accrued thereon, unless such US
Borrower, within five (5) Business Days after the delivery of such notice and
demand, converts all LIBOR Loans into US Base Rate Loans.
(d) Within thirty (30) days after receipt by a Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Section 1.14(a), 1.15(a) or
1.15(b), such Borrower may, at its option, notify Agent and such Affected Lender
of its intention to replace the Affected Lender. So long as no Default or Event
of Default has occurred and is continuing, a Borrower, with the consent of
Agent, may obtain, at such Borrower's expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement Lender must be
reasonably satisfactory to Agent. If a Borrower obtains a Replacement Lender
within ninety (90) days following notice of its intention to do so, the Affected
27
Lender must sell and assign its Loans and Commitments to such Replacement Lender
for an amount equal to the principal balance of all Loans held by the Affected
Lender and all accrued interest and Fees with respect thereto through the date
of such sale and such assignment shall not require the payment of an assignment
fee to Agent; provided, that such Borrower shall have reimbursed such Affected
Lender for the additional amounts or increased costs that it is entitled to
receive under this Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, a Borrower shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within 15 days following its receipt of such
Borrower's notice of intention to replace such Affected Lender. Furthermore, if
a Borrower gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, such Borrower's rights under
this Section 1.15(d) shall terminate with respect to such Affected Lender and
such Borrower shall promptly pay all increased costs or additional amounts
demanded by such Affected Lender pursuant to Sections 1.14(a), 1.15(a) and
1.15(b).
1.16 Currency Matters.
Principal, interest, reimbursement obligations, fees, and all other
amounts payable under this Agreement and the other Loan Documents to Agent and
Lenders shall be payable in the currency in which such Obligations are
denominated. Unless stated otherwise, all amounts, calculations, comparisons,
measurements or determinations under this Agreement shall be made in US Dollars.
For the purpose of such calculations, comparisons, measurements or
determinations, amounts denominated in other currencies shall be converted in
the Equivalent Amount of US Dollars on the date of calculation, comparison,
measurement or determination. In particular, without limitation, for purposes of
valuations or computations under Sections 1.6, 1.7, 3, 5, 6 and 8 and
calculating a Borrowing Base or Borrowing Availability, unless expressly
provided otherwise, where a reference is made to a dollar amount, (a) if in
respect of Lower Lakes, the amount is to be considered as the amount in Cdn.
Dollars and, therefore, each other currency shall be converted into the
Equivalent Amount thereof in Cdn. Dollars and (b) if in respect of LLTC, the
amount is to be considered as the amount in US Dollars and, therefore, each
other currency shall be converted into the Equivalent Amount thereof in US
Dollars.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated to make
any Loan or incur any Letter of Credit Obligations on the Restatement Closing
Date, or to take, fulfill, or perform any other action hereunder, until (i) all
conditions provided for in Annex D have been satisfied or provided for in a
manner reasonably satisfactory to Agent, or waived in writing by Agent and
Requisite Lenders and (ii) the following conditions have been satisfied or
provided for in a manner reasonably satisfactory to Agent, or waived in writing
by Agent and Requisite Lenders:
(a) Credit Agreement; Loan Documents and Other Matters. This
Agreement or counterparts hereof shall have been duly executed by, and delivered
to, each Borrower, each other Credit Party, Agent and Lenders; and Agent shall
have received such documents, instruments, agreements and legal opinions as
Agent shall reasonably request in connection with the transactions contemplated
by this Agreement and the other Loan Documents, including all those listed in
the Closing Checklist attached hereto as Annex D along with satisfaction of all
other matters identified in Annex D, all in form and substance satisfactory to
Agent.
28
(b) Repayment of Prior Debt. (i) Agent shall have received a fully
executed original of a payoff letter reasonably satisfactory to Agent confirming
that all of the Prior Debt will be repaid in full from the proceeds of the Term
Loans and the initial Revolving Credit Advances, and all Liens upon any of the
property of the applicable Credit Parties in favor of NC in respect of the Prior
Debt shall be terminated immediately upon such payment or an undertaking to
provide for such termination in form and substance acceptable to the Lenders
shall have been delivered to the Agent.
(c) Approvals. Agent shall have received satisfactory evidence that
the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents.
(d) Opening Availability, Etc. The Eligible Accounts supporting the
initial Revolving Credit Advances and the initial Letter of Credit Obligations
incurred and the amount of the Reserves to be established on the Restatement
Closing Date shall be sufficient in value, as determined by Agent, to provide
each of Lower Lakes and LLTC with aggregate Borrowing Availability, after giving
effect to the initial Revolving Credit Advances and the incurrence of any
initial Letter of Credit Obligations (on a pro forma basis, which shall include
payment of closing costs, past due taxes, Prior Claims (other than maritime
liens applied against the Term Loans calculation) and accounts payable more than
60 days past due) of no less than US $3,000,000 as of January 31, 2008. The
aggregate of the US Term Loans and all outstanding Advances under the US
Seasonal Facility shall not exceed the sum of seventy five percent (75%) of the
Fair Market Value of the US Owned Vessels less the amount of indebtedness owing
and secured by Liens attaching to the US Owned Vessels that have priority to the
Liens securing the Obligations. The aggregate of the Cdn. Term Loans, the Engine
Term Loans and all outstanding Advances under the Cdn. Seasonal Facility shall
not exceed the sum of seventy five percent (75%) of the Fair Market Value of the
Cdn. Vessels less the amount of indebtedness owing and secured by Liens
attaching to the Cdn. Vessels that have priority to the Liens securing the
Obligations. The total Indebtedness (exclusive of any interest rate agreement
entered into with GE Capital) of the Borrowers on the Restatement Closing Date
shall in no event exceed US $74,000,000.
(e) WMS Acquisition. The purchase price for the WMS Acquisition
shall not exceed US $20,200,000 (net of excess cash) plus fees and expenses
related thereto not to exceed in the aggregate US $1,000,000.
(f) Sale of Wolverine. The Borrowers shall have provided evidence of
(i) the reflagging of the Wolverine under the law and flag of Canada, (ii) the
change of name of the Wolverine to the ▇▇▇▇▇▇▇, (iii) the closing of the United
States registry in respect of the Wolverine and the absence of any encumbrances,
(iv) a ▇▇▇▇ of sale transferring ownership of such Vessel from Grand River to
Lower Lakes duly authenticated by the appropriate registry official of Canada,
(v) the application for provisional registry of the ▇▇▇▇▇▇▇ with the appropriate
registry official of Canada, (vi) the filing of statutory ship mortgages with
the appropriate registry official of Canada in favor of each of Agent and Grand
River that will create, upon the recordation thereof, first and second priority
Liens, respectively, on the ▇▇▇▇▇▇▇, subject only to Permitted Encumbrances, and
the entry by Lower Lakes into collateral loan agreements in favor of each of
Agent and Grand River, with respect to the ▇▇▇▇▇▇▇, all of which shall be in
29
form and substance reasonably satisfactory to Agent, (vii) all insurance
coverage of the ▇▇▇▇▇▇▇ as required by Annex K to this Agreement, including,
without limitation, an amended and restated assignment of insurance in favor of
Agent with respect to such Vessel and (viii) the posting of a notice within the
▇▇▇▇▇▇▇ that such Vessel is subject to a provisional registry with Transport
Canada and that a statutory ship mortgage and a collateral loan agreement in
favor of Agent have been filed with Transport Canada.
(g) Payment of Fees. The Borrowers shall have paid the Fees required
to be paid on the Restatement Closing Date in the respective amounts specified
in Section 1.9 (including the Fees specified in the GE Capital Fee Letter), and
shall have reimbursed Agent for all fees, costs and expenses of closing
presented as of the Restatement Closing Date.
(h) Capital and Corporate Structure: Other Indebtedness. The capital
and corporate structure of each Credit Party and the terms and conditions of all
Indebtedness of each Credit Party shall be acceptable to Agent in its sole
discretion.
(i) Due Diligence. Agent shall have completed its legal due
diligence, including a roll forward of its previous Collateral audit with
results reasonably satisfactory to Agent.
(j) Security. Agent shall have been delivered the items of
Collateral set forth in Annex J.
2.2 Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, or continue
any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if, as of the
date thereof:
(a) (i) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect as of such date as determined by Agent or Requisite Lenders, except to
the extent that such representation or warranty expressly relates to an earlier
date and except for changes therein expressly permitted or expressly
contemplated by this Agreement, and (ii) Agent or Requisite Revolving Lenders
have determined not to make such Advance, or continue any Loan as a LIBOR Loan
or incur such Letter of Credit Obligation as a result of the fact that such
warranty or representation is untrue or incorrect in any material respect;
(b) (i) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and (ii) Agent or Requisite Revolving
Lenders shall have determined not to make any Advance, or continue any Loan as a
LIBOR Loan, as a result of that Default or Event of Default; or
(c) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation), the outstanding principal amount of the applicable
Revolving Loan would exceed the lesser of (i) the applicable Borrowing Base plus
any amounts permitted to be borrowed under the Cdn. Seasonal Facility or the US
Seasonal Facility, as applicable, and (ii) the applicable Maximum Amount, in
each case, less the then outstanding principal amount of the applicable Swing
Line Loan.
The request and acceptance by a Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligation or the continuation of any Loan
into, or as, a LIBOR Loan shall be deemed to constitute, as of the date thereof,
(i) a representation and warranty by the applicable Borrower that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by the
Borrowers of the granting and continuance of Agent's Liens, on behalf of the
Secured Parties, pursuant to the Collateral Documents.
30
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, each Credit Party executing this Agreement makes the following
representations and warranties to Agent and each Lender with respect to all
Credit Parties, each and all of which shall survive the execution and delivery
of this Agreement.
3.1 Corporate Existence; Compliance with Law. Each Credit Party (a) is a
corporation, limited liability company, partnership or limited partnership duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in Disclosure
Schedule (3.1); (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in exposure to losses or liabilities
which could reasonably be expected to have a Material Adverse Effect; (c) has
the requisite power and authority and the legal right to own, pledge, mortgage,
hypothecate or otherwise encumber and operate its properties, to lease the
property it operates under lease and to conduct its business as now conducted
and proposed to be conducted; (d) subject to specific representations regarding
Environmental Laws, has all licenses, permits, consents or approvals from or by,
and has made all material filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (e) is in compliance with its constating
documents, bylaws or partnership agreement or operating agreement, as
applicable; and (f) subject to specific representations set forth herein
regarding Environmental Laws, tax and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
3.2 Executive Offices, Collateral Locations. As of the Restatement Closing
Date, each Credit Party's name as it appears in official filings in its state of
incorporation or organization, organization type, organization number, if any,
issued by its state incorporation or organization, and the current location of
each Credit Party's chief executive office, principal place of business,
domicile (within the meaning of the Civil Code of Quebec) and the warehouses and
premises at which any Collateral is located are set forth on Disclosure Schedule
(3.2), none of such locations has changed within the four (4) months preceding
the Restatement Closing Date and each Credit Party has only one state of
incorporation or organization. No Credit Party keeps records in the Province of
Quebec. In addition, Disclosure Schedule (3.2) lists the federal employer
identification number of each Credit Party.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by all necessary
corporate, limited liability company, partnership or limited partnership action;
(c) do not contravene any provision of such Person's constating documents,
bylaws or partnership agreement or operating agreement, as applicable; (d) do
31
not violate any law or regulation, or any order or decree of any court or
Governmental Authority; (e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, debenture,
deed of trust, lease, agreement or other instrument to which such Person is a
party or by which such Person or any of its property is bound; (f) do not result
in the creation or imposition of any Lien upon any of the property of such
Person other than those in favor of Agent, on behalf of itself and the Secured
Parties, pursuant to the Loan Documents; and (g) do not require the consent or
approval of any Governmental Authority or any other Person, except those
referred to in Section 2.1(c), all of which will have been duly obtained, made
or complied with prior to the Restatement Closing Date. On or prior to the
Restatement Closing Date, each of the Loan Documents to which a Credit Party is
a party shall have been duly executed and delivered by such Credit Party and
each such Loan Document shall then constitute a legal, valid and binding
obligation of such Credit Party enforceable against it in accordance with its
terms.
3.4 Financial Statements and Projections. Except for the Projections, all
Financial Statements that are referred to below have been prepared in accordance
with GAAP consistently applied throughout the periods covered (except as
disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes and normal year-end audit adjustments) and present
fairly in all material respects the financial position of the Persons covered
thereby as at the dates thereof and the results of their operations and cash
flows for the periods then ended.
(a) Financial Statements. The audited financial statements of Rand
and its Subsidiaries as at March 31, 2007, and the combined unaudited Financial
Statements of Rand and its Subsidiaries as at December 31, 2007 shall have been
delivered to the Agent.
(b) Projections. The Projections delivered to the Agent as the date
hereof have been prepared by Rand and its Subsidiaries in light of the past
operations of its businesses and reflect projections for the four (4) year
period beginning on April 1, 2008 on a month-by-month basis for the first year
and on an annual basis thereafter. The Projections are based upon the same
accounting principles as those used in the preparation of the financial
statements described above and the estimates and assumptions stated therein, all
of which Rand believes to be reasonable and fair in light of current conditions
and current facts known to Rand and, as of the Restatement Closing Date, reflect
Rand's good faith and reasonable estimates of the future financial performance
of Rand and its Subsidiaries, and of the other information projected therein for
the period set forth therein. The Projections are not a guarantee of future
performance, and actual results may differ from the Projections.
(c) Pro Forma. The Pro Forma delivered on the date hereof and
attached hereto as Disclosure Schedule 3.4(c) was prepared by Rand and its
Subsidiaries giving pro forma effect to the Related Transactions, was based on
the unaudited consolidated and consolidating balance sheets of Rand and its
Subsidiaries dated December 31, 2007, and was prepared in accordance with GAAP,
with only such adjustments thereto as would be required in accordance with GAAP.
(d) Fair Salable Balance Sheet. The Fair Salable Balance Sheet
delivered on the date hereof and attached hereto as Disclosure Schedule 3.4(d)
was prepared by Rand and its Subsidiaries on the same basis as the Pro Forma,
except that the Credit Parties' assets are set forth therein at their fair
salable values on a going concern basis and the liabilities set forth therein
include all contingent liabilities of the Credit Parties stated at the
reasonably estimated present values thereof.
32
3.5 Material Adverse Effect. Since March 31, 2007, (a) no Credit Party has
incurred any obligations, contingent or non-contingent liabilities, liabilities
for Charges, long-term leases or unusual forward or long-term commitments and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect,
and (c) no Credit Party is in default and, to the best of each Credit Party's
knowledge, no third party is in default under any material contract, lease or
other agreement or instrument, that alone or in the aggregate could reasonably
be expected to have a Material Adverse Effect. Since March 31, 2007, no event
has occurred, that alone or together with other events, could reasonably be
expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Restatement Closing Date, the
real estate ("Real Estate") listed in Disclosure Schedule (3.6) constitutes all
of the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable (and in the case of Real Estate located
outside the Province of Quebec) fee simple title to all of its owned Real Estate
and, following payment of the Prior Debt on the Restatement Closing Date, good
and marketable title to the Vessels (other than the Barge ▇▇▇▇▇, as to which it
has a valid and marketable leasehold interest), and valid and marketable
leasehold interests in all of its leased Real Estate, all as described on
Disclosure Schedule (3.6), and copies of all such leases or a summary of terms
thereof reasonably satisfactory to Agent have been delivered to Agent.
Disclosure Schedule (3.6) further describes any Real Estate with respect to
which any Credit Party is a lessor, sublessor or assignor as of the Restatement
Closing Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its other personal property and assets. As of the
Restatement Closing Date, none of the Vessels, properties and assets of any
Credit Party are subject to any Liens other than Permitted Encumbrances, and
there are no facts, circumstances or conditions known to any Credit Party that
may result in any Liens (including Liens arising under Environmental Laws) other
than Permitted Encumbrances. Each Credit Party has received all deeds,
assignments, waivers, consents, non-disturbance and attornment or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect, perfect
and publish such Credit Party's right, title and interest in and to all such
Real Estate and other properties and assets. Disclosure Schedule (3.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Restatement Closing
Date, no Vessel and no portion of any Credit Party's Real Estate has suffered
any material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. As of the Restatement Closing Date, all material permits
required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.
3.7 Labor Matters. Except as set forth on Disclosure Schedule (3.7), as of
the Restatement Closing Date: (a) no strikes or other material labor disputes
against any Credit Party are pending or, to any Credit Party's knowledge,
threatened; (b) hours worked by and payment made to employees of each Credit
Party comply in all material aspects with each federal, state, provincial, local
33
or foreign law applicable to such matters; (c) each Credit Party has withheld
all employee withholdings and has made all employer contributions to be withheld
and made by it pursuant to applicable law on account of the Canada and Quebec
Pension plans, employment insurance and employee income taxes; all payments due
from any Credit Party for U.S. employee health and welfare insurance have been
paid or accrued as a liability on the books of such Credit Party; (d) no Credit
Party is a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement, employment agreement, bonus, restricted stock,
stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement (and true and complete copies of any agreements
described on Disclosure Schedule (3.7) have been delivered to Agent); (e) there
is no organizing activity involving any Credit Party pending or, to any Credit
Party's knowledge, threatened by any labor union or group of employees; (f)
there are no certification applications or representative proceedings pending
or, to any Credit Party's knowledge, threatened with any labor relations board,
and no labor organization or group of employees of any Credit Party has made a
pending demand for certificate; and (g) there are no material complaints or
charges against any Credit Party pending or, to the knowledge of any Credit
Party, threatened to be filed with any Governmental Authority or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Restatement Closing Date, no Credit Party has any Subsidiaries, is engaged in
any joint venture or partnership with any other Person, or is an Affiliate of
any other Person. As of the Restatement Closing Date, all of the issued and
outstanding Stock of each Credit Party (other than Rand) is owned by each of the
Stockholders and in the amounts set forth in Disclosure Schedule (3.8). Except
as set forth in Disclosure Schedule (3.8), there are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each
Credit Party, as of the Restatement Closing Date (except for the Obligations),
is described in Section 6.3 (including Disclosure Schedule (6.3)).
3.9 Government Regulation. No Credit Party is an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940. No Credit Party is subject to regulation under the Federal Power Act, or
any other federal, provincial or state statute that restricts or limits its
ability to incur Indebtedness or to perform its obligations hereunder. Neither
the making of the Loans by Lenders to any Borrower, the incurrence of the Letter
of Credit Obligations on behalf of Lower Lakes nor the application of the
proceeds thereof and repayment thereof and the consummation of the Related
Transactions will violate any provision of any applicable statute or any rule,
regulation, order or policy of or issued by any securities commissions,
securities exchange or other securities regulatory authority.
3.10 Margin Regulations. No Credit Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"Margin Stock"). No Credit Party owns any Margin Stock, and none of the proceeds
34
of the Loans or other extensions of credit under this Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 Taxes. All federal, provincial, state and other material tax returns,
reports and statements, including information returns, required by any
Governmental Authority to be filed by any Credit Party have been filed with the
appropriate Governmental Authority, and all Charges have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof (except for those Taxes identified on Disclosure Schedule
(3.11)), excluding Charges or other amounts being contested in accordance with
Section 5.2(b) and unless the failure to so file or pay would not reasonably be
expected to result in fines, penalties or interest in excess of US$250,000 in
the aggregate. Proper and accurate amounts have been withheld by each Credit
Party from its respective employees for all periods in full and complete
compliance with all applicable federal, provincial, state, local and foreign
laws and such withholdings have been timely paid to the applicable Governmental
Authorities. Disclosure Schedule (3.11) sets forth as of the Restatement Closing
Date in respect of (i) those taxation years that have not yet been assessed by
the IRS, the CRA or the applicable provincial, state, local or foreign
Governmental Authorities, (ii) the taxation years that are currently being
audited by the IRS, the CRA or any other applicable Governmental Authority,
(iii) any assessments or threatened assessments in connection with such audits
or otherwise currently outstanding and (iv) the most recent taxation year that
an audit by the IRS, the CRA or the applicable provincial, state, local or
foreign Governmental Authorities has been completed. Except as described in
Disclosure Schedule (3.11), as of the Restatement Closing Date, no Credit Party
has executed or filed with the IRS, the CRA or any other Governmental Authority
any agreement or other document extending, or having the effect of extending,
the period for assessment or collection of any Charges. None of the Credit
Parties and their respective predecessors are liable for any Charges: (a) under
any agreement (including any tax sharing agreements) or (b) to each Credit
Party's knowledge, as a transferee. As of the Restatement Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would reasonably be expected to have a Material Adverse Effect.
3.12 No Litigation. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Credit Party, threatened
against any Credit Party, before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "Litigation"), (a) that
challenges any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that
has a reasonable risk of being determined adversely to any Credit Party and
that, if so determined, could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Disclosure Schedule (3.12), as of the Restatement
Closing Date, there is no Litigation pending or threatened that seeks damages in
excess of US$250,000 or injunctive relief against, or alleges criminal
misconduct of, any Credit Party.
35
3.13 Canadian Pension Plans, Canadian Benefit Plans and ERISA Plans.
(a) As of the Restatement Closing Date, Disclosure Schedule 3.13
lists all ERISA Plans, Canadian Benefit Plans and Canadian Pension Plans
currently maintained or contributed to by any Credit Party.
(b) The Canadian Pension Plans are duly registered under the ITA and
all other applicable laws which require registration. Each Credit Party has
complied with and performed all of its obligations under and in respect of the
Canadian Pension Plans and Canadian Benefit Plans under the terms thereof, any
funding agreements and all applicable laws (including any fiduciary, funding,
investment and administration obligations). All employer and employee payments,
contributions or premiums to be remitted, paid to or in respect of each Canadian
Pension Plan or Canadian Benefit Plan have been paid in a timely fashion in
accordance with the terms thereof, any funding agreement and all applicable
laws. There have been no improper withdrawals or applications of the assets of
the Canadian Pension Plans or the Canadian Benefit Plans. Except as set forth on
Disclosure Schedule (3.13), there are no outstanding disputes concerning the
assets of the Canadian Pension Plans or the Canadian Benefit Plans. Except as
set forth on Disclosure Schedule (3.13), each of the Canadian Pension Plans is
fully funded on a solvency basis (using actuarial methods and assumptions which
are consistent with the valuations last filed with the applicable Governmental
Authorities and which are consistent with generally accepted actuarial
principles).
(c) Disclosure Schedule (3.13) lists, as of the Restatement Closing
Date, (i) all ERISA Affiliates and (ii) all Plans and separately identifies all
Pension Plans, including Title IV Plans, Multiemployer Plans, and all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest form IRS/DOL 5500-series, as applicable, for each such Plan, have been
delivered to Agent. Except with respect to Multiemployer Plans, each Qualified
Plan has been determined by the IRS to qualify under Section 401 of the IRC, the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
in all material respects with the applicable provisions of ERISA, the IRC and
its terms, including the timely filing of all reports required under the IRC or
ERISA. No Credit Party or ERISA Affiliate has failed to make any material
contribution or pay any material amount due as required by either Section 412 of
the IRC or Section 302 of ERISA or the terms of any such Plan. No "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC,
has occurred with respect to any Plan that would subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.
(d) Except as set forth in Disclosure Schedule (3.13): (i) no Title
IV Plan has any material Unfunded Pension Liability; (ii) no ERISA Event has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened material claims (other than claims
for benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any material liability as a result of a complete or partial withdrawal
from a Multiemployer Plan; and (v) within the last five years no Title IV Plan
of any Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041 of ERISA, nor has
any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at any
time within the last five years) with material Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time).
36
3.14 Brokers. Except as set forth on Disclosure Schedule (3.14), no broker
or finder acting on behalf of any Credit Party or Affiliate thereof brought
about the obtaining, making or closing of the Loans, and no Credit Party or
Affiliate thereof has any obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
3.15 Intellectual Property. As of the Restatement Closing Date, each
Credit Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now or heretofore conducted by it or
proposed to be conducted by it. Each Patent, Trademark, Design, Copyright and
License so owned or used by a Credit Party is listed, together with application
or registration numbers, as applicable, in Disclosure Schedule (3.15). Each
Credit Party conducts its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material
respect. Except as set forth in Disclosure Schedule (3.15), no Credit Party is
aware of any material infringement claim by any other Person with respect to any
Intellectual Property.
3.16 Full Disclosure. No information contained in this Agreement, any of
the other Loan Documents, any Financial Statements or Collateral Reports or
other written reports from time to time prepared by any Credit Party and
delivered hereunder or any written statement prepared by any Credit Party and
furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to
the terms of this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. Projections from time to time
delivered hereunder are or will be based upon the estimates and assumptions
stated therein, all of which Borrowers believed at the time of delivery to be
reasonable and fair in light of current conditions and current facts known to
Borrowers as of such delivery date, and reflect Borrowers' good faith and
reasonable estimates of the future financial performance of Borrowers and of the
other information projected therein for the period set forth therein. Such
Projections are not a guaranty of future performance and actual results may
differ from those set forth in such Projections. The Liens granted to Agent, on
behalf of the Secured Parties, pursuant to the Collateral Documents will at all
times be fully perfected first priority Liens in and to the Collateral described
therein, subject, as to priority, only to Permitted Encumbrances.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the
Restatement Closing Date: (i) the Real Estate is free of the presence of any
Hazardous Material except for such presence that would not adversely impact the
value or marketability of such Real Estate, that is not in breach of
Environmental Laws, and that would not result in Environmental Liabilities that
could reasonably be expected to exceed US$250,000; (ii) no Credit Party has
caused or suffered to occur any material Release of Hazardous Materials; (iii)
the Credit Parties are, and have been in compliance with, all Environmental
Laws, except for such noncompliance that would not result in Environmental
Liabilities which could reasonably be expected to exceed US$250,000; (iv) the
Credit Parties have obtained, and are in compliance with, all Environmental
37
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits would not
result in Environmental Liabilities that could reasonably be expected to exceed
US$250,000, and all such Environmental Permits are valid, uncontested and in
good standing; (v) no Credit Party is involved in operations or knows of any
facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of such
Credit Party which could reasonably be expected to exceed US$250,000; (vi) there
is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material that seeks damages, penalties,
fines, costs or expenses in excess of US$250,000 or injunctive relief against,
or that alleges criminal misconduct by, any Credit Party; (vii) no Credit Party
has knowledge of, nor has any Credit Party received notice of any actual,
pending or threatened investigations, claims, orders, suits, actions or
proceedings regarding the breach of any Environmental Laws or the provisions of
any Environmental Permits, or which may result in any Environmental Liability
that could reasonably be expected to exceed US$250,000 in the aggregate; and
(viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information pertaining
to actual or potential Environmental Liabilities, in each case relating to any
Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent (i)
is not now, and has not ever been, in control of any of the Real Estate or any
Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance policies of
any nature maintained, as of the Restatement Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule (3.19) lists
all banks and other financial institutions at which any Credit Party maintains
lock boxes, deposit and/or other accounts as of the Restatement Closing Date,
including any Disbursement Accounts, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
lock box or account is held, a description of the purpose of the lock box or
account, and the complete lock box address or account number therefor.
3.20 Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Restatement Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts are subject to any of the requirements or proceedings applicable to
assignments of accounts under the Financial Administration Act (Canada), the
Federal Assignment of Claims Act of 1940 (31 U.S.C. Section 3727) or any similar
provincial, local or foreign law.
3.21 Customer and Trade Relations. As of the Restatement Closing Date,
there exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change
in: the business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or the business
relationship of any Credit Party with any supplier essential to its operations.
38
3.22 Bonding; Licenses. Except as set forth on Disclosure Schedule (3.22),
as of the Restatement Closing Date, no Credit Party is a party to or bound by
any surety bond agreement or bonding requirement with respect to products or
services sold by it or any trademark, patent or industrial design license
agreement with respect to products sold by it.
3.23 Solvency. After giving effect to (a) the Loans and Letter of Credit
Obligations to be made or incurred on the Restatement Closing Date or such other
date as Loans and Letter of Credit Obligations requested hereunder are made or
incurred, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrowers, (c) the WMS Debt Payoff and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Credit
Party is and will be Solvent.
3.24 Material Contracts.
(a) Disclosure Schedule (3.24) (as amended from time to time upon
notice to the Agent) accurately sets out all Material Contracts;
(b) a true and complete certified copy of each documented Material
Contract has been delivered to the Agent and each Material Contract is in full
force and effect, unamended except as permitted under this Agreement;
(c) no event has occurred and is continuing which would constitute a
breach of or a default under any Material Contract except for those events of
which written notice has been provided to the Agent setting forth both the event
and the applicable breach or default or breaches which are not material and
which do not give rise to a right by the counterparty to terminate the Material
Contract;
(d) each Material Contract to which a Credit Party is a party is
binding upon such Credit Party and, to its knowledge, is a binding agreement of
each other Person who is a party to the Material Contract; and
(e) subject to the terms of Section 5.13(c), each Credit Party has
obtained, as of the Restatement Closing Date, all necessary consents to the
granting of a security interest in each Material Contract to which it is a party
except for (i) collective bargaining agreements and (ii) those identified in
writing to the Agent and expressly acknowledged by the Agent to not be required.
3.25 Acquisition Agreement. As of the Restatement Closing Date, Borrowers
have delivered to Agent a complete and correct copy of the WMS Acquisition
Agreement (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith). No Credit Party and no other Person party thereto is
in default in the performance or compliance with any provisions thereof. The WMS
Acquisition Agreement complies with, and the WMS Acquisition has been
consummated in accordance with, all applicable laws. The WMS Acquisition
Agreement is in full force and effect as of the Restatement Closing Date and has
not been terminated, rescinded or withdrawn. All requisite approvals by
Governmental Authorities having jurisdiction over Seller, any Credit Party and
39
other Persons referenced therein with respect to the transactions contemplated
by the WMS Acquisition Agreement have been obtained, and no such approvals
impose any conditions to the consummation of the transactions contemplated by
the WMS Acquisition Agreement or to the conduct by any Credit Party of its
business thereafter. The Borrowers have provided notice of the WMS Acquisition
to all "eligible employees" (as such term is defined in paragraph 5 of the
Letter of Agreement dated as of August 30, 2007 between WMS and United
Steelworkers of America and its Local 5000) of WMS. To the best of each Credit
Party's knowledge, none of the Seller's representations or warranties in the WMS
Acquisition Agreement contain any untrue statement of a material fact or omit
any fact necessary to make the statements therein not misleading. Each of the
representations and warranties given by each applicable Credit Party in the WMS
Acquisition Agreement is true and correct in all material respects.
Notwithstanding anything contained in the WMS Acquisition Agreement to the
contrary, such representations and warranties of the Credit Parties are
incorporated into this Agreement by this Section 3.25 and shall, solely for
purposes of this Agreement and the benefit of Agent and Lenders, survive the
consummation of the WMS Acquisition.
3.26 Citizen of the United States. Each of LLTC and Grand River is a
"citizen of the United States" under Sections 2(a) and 2(c) of the Shipping Act,
1916, as amended, and is qualified to own and operate a vessel in the coastwise
trade of the United States.
3.27 Vessels. Each of the US Vessels is duly documented in the name of its
respective owner under the law and flag of the United States and is entitled to
engage in the coastwise trade of the United States. Each of the Cdn. Vessels is
duly documented in the name of its respective owner under the law and flag of
Canada and is entitled to engage in the coastwise trade of Canada.
3.28 Permitted Intercompany Indebtedness. Disclosure Schedule (3.28)
provides a true and correct list of all Permitted Intercompany Indebtedness
along with the amount of Indebtedness existing as of the Restatement Closing
Date.
3.29 Time Charter Agreements.
(a) Other than those that can be reasonably expected to be
commercially available when and as required on commercially reasonable terms,
the services to be performed, the materials to be supplied and the interests in
the US Vessels and other rights granted pursuant to the Time Charter Agreements
comprise all of the agreements necessary for LLTC to secure any right material
to the carrying capacity of the US Vessels in accordance with the Time Charter
Agreements.
(b) There are no material permits, services, materials or rights
required by LLTC to use the carrying capacity of the US Vessels in accordance
with applicable law or the other Material Contracts other than those available
under the Time Charter Agreements.
3.30 Bareboat Charter Agreement.
(a) Other than those that can be reasonably expected to be
commercially available when and as required on commercially reasonable terms,
the services to be performed, the materials to be supplied and the interests in
the Barge ▇▇▇▇▇, and other rights granted pursuant to the Bareboat Charter
Agreement:
40
(i) comprise all of the agreements necessary for Grand River
to secure any right material to the operation, maintenance,
possession and use of the Barge ▇▇▇▇▇, all in accordance with all
applicable law and without reference to any proprietary information
not owned by Grand River or available to Grand River under the
Bareboat Charter Agreement; and
(ii) comprise non-disturbance agreements from every Person
having a recorded or unrecorded interest in the Barge ▇▇▇▇▇ who
could in any circumstances gain possession of such Vessel or
otherwise dispossess Grand River therefrom.
(b) There are no material permits, services, materials or rights
required by Grand River for the operation, maintenance, possession or use of the
Barge ▇▇▇▇▇ in accordance with applicable law or the other Material Contracts,
other than those available under the Bareboat Charter Agreement or that can
reasonably be expected to be commercially available when and as required on
commercially reasonable terms.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that
from and after the Restatement Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the Financial
Statements, notices, Projections and other information at the times, to the
Persons and in the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees that
from and after the Restatement Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the various
Collateral Reports (including Borrowing Base Certificates in the form of Exhibit
4.1(b)) at the times, to the Persons and in the manner set forth in Annex F.
4.2 Communication with Accountants. Each Credit Party (a) authorizes (i)
Agent and (ii) so long as an Event of Default has occurred and is continuing,
each Lender, to communicate directly with its certified public accountants,
including Deloitte & Touche, upon prior notice to Borrowers, and (b) authorizes
and shall instruct those accountants and advisors to disclose and make available
to Agent and each Lender any and all Financial Statements and other supporting
financial documents, schedules and information relating to any Credit Party
(including copies of any issued management letters) with respect to the
business, results of operations and financial condition of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party agrees as to all Credit Parties that, from and after the
date hereof and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit Party
shall: (a) do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its material rights and
franchises; (b) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; (c) at all times maintain, preserve and
protect all of its assets and properties used or useful in the conduct of its
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business, and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
(d) transact business only in such corporate and trade names as are set forth in
Disclosure Schedule (5.1).
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it
before any thereof shall become past due, including (i) Charges imposed upon it,
its income and profits, or any of its property (real, personal or mixed) and all
Charges with respect to employee source deduction obligations and employer
obligations to its employees, (ii) lawful claims for labor, materials, supplies
and services or otherwise, and (iii) all storage or rental charges payable to
warehousemen and bailees, in each case, before any thereof shall become past
due, except, in the case of clauses (ii) and (iii), where the failure to pay or
discharge such Charges would not result in aggregate liabilities in excess of
US$250,000.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall arise or be imposed to secure payment of such Charges
(other than payments to warehousemen and/or bailees) that is superior to any of
the Liens securing payment of the Obligations and such contest is maintained and
prosecuted continuously and with diligence and operates to suspend collection or
enforcement of such Charges, (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met; and (v) Agent has not advised the Borrowers in writing that Agent
reasonably believes that non-payment or non-discharge thereof could have or
result in a Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)). Each Credit Party which keeps records relating to Collateral in the
Province of Quebec shall at all times keep a duplicate copy thereof at a
location outside the Province of Quebec, as designated on Disclosure Schedule
(3.2).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described and detailed in Annex K, in form
and amounts and with insurers acceptable to the Lenders. Such policies of
insurance (or the loss payable and additional insured endorsements delivered to
the Agent) shall contain provisions pursuant to which the insured agrees to
provide thirty (30) day prior written notice to the Agent in the event of any
non-renewal, cancellation or amendment of any such insurance policy. If any
Credit Party at any time or times hereafter shall fail to obtain or maintain any
42
of the policies of insurance required above or to pay all premiums relating
thereto, Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto that Agent deems advisable. Agent shall have no obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By doing so,
Agent shall not be deemed to have waived any Default or Event of Default arising
from any Credit Party's failure to maintain such insurance or pay any premiums
therefor. If any Credit Party at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay all
premiums relating thereto, Agent may at any time or times thereafter obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. All sums so disbursed,
including legal fees, court costs and other charges related thereto, shall be
payable on demand by the Borrowers to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any laws affecting the potential
liability of such Credit Party) to require additional forms and limits of
insurance to, in Agent's opinion, adequately protect the interest of Agent, on
behalf of Secured Parties, in all or any portion of the Collateral and to ensure
that each Credit Party is protected by insurance in amounts and with coverage
customary for its industry. If reasonably requested by Agent, each Credit Party
shall deliver to Agent from time to time a report of a reputable insurance
broker reasonably satisfactory to Agent, with respect to its insurance policies.
(c) Each Credit Party irrevocably makes, constitutes and appoints
Agent (and all officers, employees or agents designated by Agent), so long as
any Default or Event of Default has occurred and is continuing or the
anticipated insurance proceeds exceed US$500,000 as true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Each Borrower shall promptly notify Agent of any loss,
damage, or destruction to the Collateral in the amount of US$100,000 or more,
whether or not covered by insurance. All insurance proceeds not in excess of US
$500,000 that are to be made available to a Borrower to replace, repair, restore
or rebuild the Collateral shall be applied by Agent to reduce the outstanding
principal balance of the applicable Revolving Loan (which application shall not
result in a permanent reduction of the applicable Revolving Loan Commitment) and
upon such application, Agent shall establish a Reserve against the applicable
Borrowing Base in an amount equal to the amount of such proceeds so applied;
provided that at such time as the Borrower shall use such insurance proceeds, or
any part thereof, to replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship of substantially
the same quality as existed before the loss, damage or destruction, such Reserve
against the applicable Borrowing Base shall be removed. All insurance proceeds
in excess of US $500,000 made available to a Borrower or any other Credit Party
to replace, repair, restore or rebuild Collateral shall be deposited in a cash
collateral account. For a period of 180 days following the deposit of such funds
into a cash collateral account, such funds shall be made available to a Borrower
or such Credit Party to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (i) a Borrower shall request a Revolving Credit Advance
or release from the cash collateral account be made to such Borrower or such
Credit Party in the amount requested to be released; (ii) so long as the
conditions set forth in Section 2.2 have been met, Revolving Lenders shall make
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such Revolving Credit Advance or Agent shall release funds from the cash
collateral account; and (iii) in the case of insurance proceeds applied against
the Revolving Loan, the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of such Revolving Credit Advance. To the
extent not used to replace, repair, restore or rebuild the Collateral within
such time period, such insurance proceeds shall be applied in accordance with
Section 1.3(d).
5.5 Compliance with Laws.
(a) General. Each Credit Party shall comply with all federal,
provincial, state, local and foreign laws and regulations applicable to it,
including ERISA, those relating to employment and labor matters, and
Environmental Laws and Environmental Permits, except to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(b) Canadian Pension Plans, Canadian Benefit Plans and ERISA Plans.
(i) For each existing, or hereafter adopted, Canadian Pension
Plan, Canadian Benefit Plan and ERISA Plan, each Credit Party shall in a timely
fashion comply with and perform in all material respects all of its obligations
under and in respect of such Canadian Pension Plan, Canadian Benefit Plan or
ERISA Plan, including under any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration obligations).
(ii) All employer or employee payments, contributions or
premiums required to be remitted or paid to or in respect of each Canadian
Pension Plan, Canadian Benefit Plan or ERISA Plan shall be paid or remitted by
each Credit Party in a timely fashion in accordance with the terms thereof, of
any funding agreements and of all applicable laws.
(iii) Parent shall deliver to Agent (i) if requested by Agent,
copies of each annual and other return, report or valuation with respect to each
Canadian Pension Plan or ERISA Plan as filed with any applicable Governmental
Authority; (ii) promptly after receipt thereof, a copy of any direction, order,
notice, ruling or opinion that any Credit Party may receive from any applicable
Governmental Authority with respect to any Canadian Pension Plan or ERISA Plan;
and (iii) notification within 30 days of any increases having a cost to one or
more of the Credit Parties in excess of US$150,000 per annum in the aggregate,
in the benefits of any existing Canadian Pension Plan, Canadian Benefit Plan or
ERISA Plan, or the establishment of any new Canadian Pension Plan, Canadian
Benefit Plan or ERISA Plan, or the commencement of contributions to any such
plan to which any Credit Party was not previously contributing.
(c) Each Credit Party shall (i) at all times comply with, and
perform such acts as may be required by, all applicable laws (including all laws
relating to dealings with public officials, anti-money laundering, anti-fraud,
consumer credit protection and foreign exchange regulations) in connection with
the servicing and management of the Collateral and performance by Credit Party
under this Agreement, and (ii) maintain an effective system of audits and
controls adequate to ensure that each Credit Party and its agents,
representatives, employees and other staff are trained to and do perform their
respective obligations, meet the requirements of the Credit Party set forth in
this Agreement or pursuant to applicable laws, and comply with applicable laws.
In furtherance thereof, each Credit Party shall obtain and maintain such
44
licenses, permits, and other governmental approvals or qualifications required
to enable each Credit Party to perform its obligations hereunder. Borrowers
shall maintain a file of such documentation as may be required under applicable
laws and shall make such file available to Agent for inspection upon Agent's
reasonable request.
(d) Without limiting the foregoing, each Credit Party and its
officers, directors, employees, shareholders, members, agents or Affiliates,
acting on its behalf, (i) shall not take any action that may constitute a
violation of, or cause Lender or any Affiliate thereof to be in violation of,
the FCPA or any applicable anti-bribery or related laws, and (ii) shall observe
the Compliance Procedures, and, in connection therewith, maintain, an effective
system of audits and controls, including an Anti-Money Laundering Plan, adequate
to ensure that all of their agents, representatives, employees, and other staff
are trained to ensure that any amounts paid to the Agent or to any Lender are
not derived from Illegal Proceeds or an Illegal Source.
5.6 Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of an Event of Default) or at
the Credit Parties' election, the Credit Parties shall supplement each
Disclosure Schedule hereto, or any representation herein or in any other Loan
Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Restatement Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect and shall comply in all material
respects with the terms of its Licenses.
5.8 Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate and Vessels in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate or to
otherwise comply in all material respects with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material to
which a Credit Party is responsible unless the failure to do so would not have a
Material Adverse Effect; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate or of
any order or intention to issue an order under any Environmental Laws that is
reasonably likely to result in Environmental Liabilities in excess of
US$250,000; and (d) promptly forward to Agent a copy of any order, notice,
45
request for information or any communication or report received by such Credit
Party in connection with any such violation, Release or order or any other
matter relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
US$250,000, in each case whether or not any Governmental Authority has taken or
threatened any action in connection with any such violation, Release, order or
other matter. If Agent at any time has a reasonable basis to believe that there
may be a violation of any Environmental Laws or Environmental Permits by any
Credit Party or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate or of the issuance or threat to issue any order under Environmental Laws,
that, in each case, could reasonably be expected to have a Material Adverse
Effect, then each Credit Party shall, upon Agent's written request, (i) cause
the performance of such environmental audits including subsurface sampling of
soil and groundwater, and preparation of such environmental reports, at the
Borrowers' expense, as Agent may from time to time reasonably request, which
shall be conducted by reputable environmental consulting firms reasonably
acceptable to Agent and shall be in form and substance reasonably acceptable to
Agent, and (ii) permit Agent or its representatives to have access to all Real
Estate for the purpose of conducting such environmental audits and testing as
Agent deems appropriate, including subsurface sampling of soil and groundwater.
The Borrowers shall be jointly and severally responsible to reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real
Estate Purchases. Each Credit Party shall use commercially reasonable efforts to
obtain a landlord's agreement, mortgagee agreement or bailee letter, as
applicable, from the lessor of each leased property, the mortgagee of each owned
property and the bailee with respect to each warehouse, processor or converter
facility or other location where Collateral is stored or located, which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against the Collateral
at that location, and shall otherwise be reasonably satisfactory in form and
substance to Agent. After the Restatement Closing Date, no real property or
warehouse space shall be leased by any Credit Party and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Restatement Closing Date without the prior written consent of Agent, unless and
until a satisfactory landlord agreement or bailee letter, as appropriate, shall
first have been obtained with respect to such location. Each Credit Party shall
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located. To the extent permitted hereunder, if any
Credit Party proposes to acquire a fee ownership interest in Real Estate after
the Restatement Closing Date, it shall first provide to Agent a mortgage,
debenture, deed of trust or similar document granting Agent a first priority
Lien on such Real Estate, together with a real property survey, local counsel
opinion(s), and, if required by Agent, an environmental audit, mortgage title
insurance commitment, supplemental casualty insurance and flood insurance, and
such other documents, instruments or agreements reasonably requested by Agent,
in each case, in form and substance reasonably satisfactory to Agent.
5.10 Further Assurances. Each Credit Party agrees that it shall, and shall
cause each other Credit Party to, at such Credit Party's expense and upon the
reasonable request of Agent, duly execute and deliver, or cause to be duly
executed and delivered, to Agent such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement and each Loan Document.
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5.11 Vessels.
(a) Lower Lakes shall maintain the documentation of the Cdn. Vessels
under the laws of Canada and the registration of such Cdn. Vessels at the court
in Nanticoke, Ontario (or ▇▇▇▇▇▇▇▇, Ontario, in the case of the Independent and
the Pioneer) as Canadian Ships within the meaning of the Canada Shipping Act.
Grand River shall maintain the documentation of the US Vessels that it owns
under the laws of the United States of America (and shall ensure that the owner
of each US Vessel not owned by it maintains the documentation of such US Vessels
under the laws of the United States of America) and shall maintain the
qualification of the US Vessels to operate in the US coastwide trade. Grand
River and LLTC will maintain, or will cause the owners of the US Vessels to
maintain, all proper licenses and permits in force at all times, and not do or
permit anything to be done which might affect such documentation, registration
or qualification.
(b) Lower Lakes shall, and Grand River and LLTC shall or shall cause
the owner of the US Vessels to, ensure that each of them:
(i) will at all times preserve, repair and keep in thoroughly
good and seaworthy repair and good order and condition the Vessels and all
machinery and equipment and appurtenances thereto up to a modern standard of
usage, and maintain the same consistently with the best practices in respect of
similar vessels; and in any event, it will maintain each Vessel in such
condition as will entitle her to be classified "+ 100 A1" by Lloyds Register of
Shipping or an equivalent classification by The American Bureau of Shipping or
by another classification society acceptable to the Lenders, and will furnish to
the Agent, upon request, the certificate evidencing such classification; and at
all times upon reasonable notice allow the Agent or its representatives access
to each Vessel in order to view the state of repair; provided, that unless an
Event of Default has occurred and is continuing, the Borrowers shall not be
required to pay the costs of such access (including liability insurance) or for
more than one inspection per year;
(ii) will not suffer or permit the Vessels to be used or
navigated in any manner inconsistent with any of the marine insurance policies
thereon, and it shall comply and shall require the master, officers and
engineers of the Vessels from time to time and at all times to comply in all
material respects with all statutory rules, regulations, by-laws and ordinances
relating to the operation and navigation of the Vessels or which from time to
time may be in force and applicable thereto;
(iii) will warrant and defend the title to the Vessels and its
possession thereof for the benefit of the Lenders against the claims and demands
of all Persons whomsoever;
(iv) will pay and discharge, upon the due date thereof, all
debts, damages and liabilities which have given rise or may give rise to
maritime or possessory liens on the Vessels or to claims enforceable by action
in rem against any thereof or to any similar process so as to keep the Vessels
free from arrest or detention, and, in the event of arrest or detention of a
Vessel being threatened or effected, it will forthwith notify the Agent and
shall take all steps and make all payments necessary to obtain the release
thereof forthwith and no later than 15 days from the date of receiving notice of
any such arrest or detention;
47
(v) except as set forth in Section 6.9(d), will not sell,
mortgage or transfer any Vessel or any share or interest therein, in any manner,
or agree to any charter of any Vessel, without the prior written consent of the
Requisite Lenders, and any such written consent to any one mortgage, transfer or
charter shall not be construed to be a waiver of this provision in respect of
any subsequent mortgage, transfer or charter;
(vi) will comply with and satisfy at all times the
requirements of all requisite laws so as to maintain the Fleet Mortgages and the
Mortgages as valid marine mortgages upon the Vessels and all of their
accessories, appurtenances and equipment and all additions, improvements and
replacements made in and to the Vessels and will not create, incur, cause or
suffer to exist any Lien on the Vessels at any time other than Permitted
Encumbrances; provided that this clause (vi) shall not apply with respect to the
▇▇▇▇▇▇▇ Mortgage prior to the effectiveness of the ▇▇▇▇▇▇▇ Mortgage as set forth
in Section 5.13(b) hereof;
(vii) will provide the Agent promptly with such information as
may be requested by the Agent regarding the Vessels, their location and
employment, the particulars of all tonnages, salvages and copies of all charters
and contracts;
(viii) will pay or cause to be paid, upon the due dates
thereof, all Taxes, rates, fees, levies, fines, tolls, charges, duties,
penalties, excises, assessments, disbursements and all other outgoings payable
in respect of the Vessels and their use, ownership, documentation, registration
and maintenance and, when requested by the Agent, produce all relevant receipts
therefor:
(ix) will permit Agent or its authorized representative,
whenever reasonably requested by Agent, to review the survey files of each
Vessel;
(x) will promptly give notice to the Agent of:
(A) any notice of expropriation of a Vessel or action or
proceeding which it believes might have a materially adverse effect
on the financial condition of it or the Business;
(B) all claims, proceedings or litigation in respect of
a Vessel, whether or not any such claim, proceeding or litigation is
covered by insurance;
(C) any violation of any law, statute, rule or
regulation which does or may materially adversely affect the
operation of a Vessel;
(D) any Lien registered against a Vessel; and
(E) any material change proposed to be made in the
structure, type or speed of a Vessel and will not permit to be made
any such change which could reasonably be expected to prejudice the
interests of the Lenders;
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(xi) will cause to be carried with each Vessel's papers on
board such Vessel a certified copy of the applicable Fleet Mortgage or Mortgage,
and of any amendments or supplements hereto or assignments hereof, and to
exhibit the same on demand, to any person having business with such Vessel and
to any representative of the Borrowers or the Lenders. Unless otherwise approved
by the Lenders, a notice reading as follows, printed in plain type of such size
that each paragraph of reading matter shall cover a space not less than six (6)
inches wide by nine (9) inches high, and framed under glass, shall be placed and
kept prominently displayed on each Vessel:
NOTICE OF MORTGAGE (Canadian registered Vessels)
This Vessel is owned by and is covered by a statutory ship mortgage
for Canadian registered Vessels in favor of General Electric Capital
Corporation, as agent and as mortgagee, as supplemented by an
agreement with such mortgagee. Except as permitted under the terms
of such mortgage or such agreement, no owner, operator, charterer,
cargo owner, subcharterer or master of this Vessel, or any other
person, has the right, power or authority to create, incur or permit
to exist on this Vessel any lien whatsoever other than liens for
crew's wages and salvage and liens for dock, harbor and canal
charges.
NOTICE OF MORTGAGE (US registered Vessels)
This Vessel is covered by an Amended and Restated First Preferred
Fleet Mortgage dated February 13, 2008 in favor of General Electric
Capital Corporation, as Agent (the "Mortgagee"), under authority of
Chapter 313, Title 46 of the United States Code. Under the terms of
said Mortgage, none of the Shipowner, any charterer, the Master of
this Vessel, or any other person or entity has any right, power or
authority to create, incur or permit to be imposed upon this Vessel
any lien whatsoever other than the lien of said Mortgage and liens
for current crew's wages, general average, salvage and liens
incurred in the ordinary course of operation of the Vessel which are
not yet due and payable.
Such notice shall be changed to reflect the identity of any
successor to a Credit Party or the Agent.
(xii) ensure that the Cdn. Vessels are employed in lawful
trades between safe ports and safe places on the Great Lakes of North America
and their connecting and tributary waters and on the St. ▇▇▇▇▇▇▇▇ Seaway above
the Anticosti Island;
(xiii) will notify the Agent prior to entering into any
contract for the use of any Vessel in salt water; and
(xiv) shall, upon request, provide Agent with information
relating to the refitting, winter work or dry dock surveying of the Vessels
including information as to the progress, timing and cost thereof.
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5.12 Interest Rate Protection. Within ninety (90) days after the
Restatement Closing Date and at all times thereafter prior to the Commitment
Termination Date, Borrowers shall enter into and maintain interest rate cap,
swap or collar agreements, or other agreements or arrangements designed to
provide protection against fluctuations in interest rates, which shall be on
terms, for periods and with counterparties reasonably acceptable to Agent, and
pursuant to which Borrowers are protected against increases in interest rates
from and after the date of such contracts as to a notional amount of not less
than 50% of the principal amount of the Term Loans funded on the Restatement
Closing Date.
5.13 Post-Closing Matters. The Credit Parties shall comply with each of
the following post-closing covenants:
(a) USW Union Contract. On or before the 180th day following the
Restatement Closing Date, the Borrowers shall have provided Agent with (x)
evidence that commercially reasonable efforts have been made to contact all
"eligible employees" (as such term is defined in paragraph 5 of the Letter of
Agreement dated as of August 30, 2007 between WMS and United Steelworkers of
America and its Local 5000), and that payments have been made to all eligible
employees who have executed a release, and (y) a status report from WMS
summarizing the payments that have been made to eligible employees as well as
the percentage of all eligible employees that have been contacted and paid.
(b) ▇▇▇▇▇▇▇ Mortgages. On or before the 60th day following the
Restatement Closing Date, the Borrowers shall have delivered to Agent (i)
evidence of the effective registration of the ▇▇▇▇▇▇▇ Mortgages with Transport
Canada representing first and second priority Liens in favor of Agent and Grand
River, respectively, subject only to Permitted Encumbrances, including, without
limitation, certificates of registration, inspection and classification and (ii)
a duly executed original opinion of counsel for the Credit Parties in respect of
the ▇▇▇▇▇▇▇ Mortgages, in form and substance reasonably satisfactory to Agent.
(c) Material Contract Acknowledgments. On or before the 45th day
following the Restatement Closing Date, the Borrowers shall have delivered to
Agent executed acknowledgments and consents, in form and substance reasonably
acceptable to Agent, with respect to the assignments of the Material Contracts
identified on Schedule 5.13 hereto.
(d) Time Charter Agreements. On or before the 45th day following the
Restatement Closing Date, Grand River and LLTC shall have entered into (i) time
charter agreements in respect of each of the Calumet and the Manitowoc, and (ii)
amending agreements in respect of the Lower Lakes Guarantee and Collateral
Documents delivered in connection therewith reflecting such new time charter
agreements, all of which agreements shall be in form and substance reasonably
satisfactory to Agent.
(e) Control Agreements. On or before the 45th day following the
Restatement Closing Date, the Borrowers shall have delivered to Agent (i) a
fully executed tri-party control agreement with Vanguard Group with respect to
prime money market fund account number ▇▇▇▇▇▇▇▇▇▇ maintained by Rand and (ii) a
fully executed tri-party control agreement with National City Bank with respect
to U.S. unrestricted account number 00984949461-001 and U.S. blocked account
number 00984949373-001 maintained by Rand Finance, all in form and substance
reasonably satisfactory to Agent.
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(f) Landlord Waivers. On or before the 45th day following the
Restatement Closing Date, the Borrowers shall have delivered to Agent a fully
executed Landlord's Waiver and Consent with respect to the property leased by
Lower Lakes located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, such waiver
to be in form and substance reasonably satisfactory to Agent.
(g) Retirement of Original Calumet. On or before the 30th day
following the Restatement Closing Date, the Borrowers shall have provided
evidence of the deregistration of the Original Calumet with the United States
Coast Guard.
(h) Insurance. On or before the (A) 30th day following the
Restatement Closing Date, the Borrowers shall have delivered to Agent (i)
insurance certificates with respect to the liability and property insurance
policies maintained by Rand, Rand Finance and Parent naming the Agent for and on
behalf of the Lenders as an additional named insured in respect of all third
party liability insurance and as a loss payee in respect of all other insurance
and (ii) a letter from the Workers Safety and Insurance Board confirming that
Lower Lakes is an employer in good standing, and (B) 15th day following the
Restatement Closing Date, the Borrowers shall have delivered to Agent insurance
certificates with respect to the liability and property insurance policies
maintained by each of the Borrowers naming the Agent for and on behalf of the
Lenders as an additional named insured in respect of all third party liability
insurance and as a loss payee in respect of all other insurance.
(i) Share Capital of Lower Lakes. On or before the 30th day
following the Restatement Closing Date, the Borrowers shall have delivered to
Agent a legal opinion from counsel to Lower Lakes regarding the issued and
outstanding capital of Lower Lakes, in form and substance reasonably
satisfactory to Agent.
6. NEGATIVE COVENANTS
Each Credit Party agrees as to all Credit Parties that from and after the
date hereof until the Termination Date:
6.1 Amalgamations, Mergers, Subsidiaries, Etc. No Credit Party shall
directly or indirectly, by operation of law or otherwise, (a) form or acquire
any Subsidiary, or (b) amalgamate or merge with, consolidate with, acquire all
or substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that: (a) a Credit Party may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to a Credit Party pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
consistent with past practices; and (b) each Credit Party may maintain its
existing investments, stocks, notes or securities in its Subsidiaries as of the
Restatement Closing Date.
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6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) existing Indebtedness
described in Disclosure Schedule (6.3) and refinancings thereof or amendments or
modifications thereof that do not have the effect of increasing the principal
amount thereof or accelerating the amortization thereof (other than to extend
the same) and that are otherwise on terms and conditions no less favorable to
any Credit Party, Agent or any Lender, as determined by Agent, than the terms of
the Indebtedness being refinanced, amended or modified, (iv) hedging obligations
under swaps, caps and collar arrangements arranged by GE Capital entered into
pursuant to Section 5.12 and (v) Permitted Intercompany Indebtedness on terms
acceptable to the Lenders, and if required by the Agent, subject to a
subordination agreement acceptable to the Agent.
(b) Other than the repayment of the Prior Debt to be made pursuant
to the advances made hereunder on the Restatement Closing Date, no Credit Party
shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay
any principal of, premium, if any, interest or other amount payable in respect
of any Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured
by a Permitted Encumbrance if the asset securing such Indebtedness has been sold
or otherwise disposed of in accordance with Section 6.8(b) or (c); and (iii) as
otherwise permitted in Section 6.13.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any Affiliate thereof except (i) the incurrence of Permitted
Intercompany Indebtedness, (ii) those transactions described in Disclosure
Schedule 6.4 and (iii) in the ordinary course of and pursuant to the reasonable
requirements of such Credit Party's business and upon fair and reasonable terms
that are no less favorable to such Credit Party than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate of such
Credit Party.
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees on an arm's-length basis in the ordinary course of business
consistent with past practices for travel and entertainment expenses, relocation
costs and similar purposes up to a maximum of US$50,000 to any employee and up
to a maximum of US$200,000 in the aggregate at any one time outstanding.
6.5 Capital Structure and Business.
If all or part of a Credit Party's Stock is pledged to Agent, that
Credit Party shall not issue additional Stock unless all such additional Stock
is immediately pledged and deposited with and in favor of the Agent along with
the appropriate stock powers and any other documentation that may be required by
the Agent. Upon the request of Agent, Borrowers' Counsel shall provide an
opinion to the Agent regarding the issued and outstanding capital Stock of the
Credit Party that has issued such Stock. No Credit Party shall amend its
constituting or constating documents, by-laws, partnership agreement or
operating agreement, as applicable, in a manner that would adversely affect
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Agent or Lenders or such Credit Party's duty or ability to repay the
Obligations. No Credit Party shall engage in any business other than the
businesses currently engaged in by it. No Credit Party shall amend its
constituting or constating documents to add provisions which require director
consent only to the transfer of such Credit Party's shares or other equity
securities.
6.6 Guaranteed Indebtedness.
No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness except (a) by endorsement of instruments or items of
payment for deposit to the general account of any Credit Party, (b) for
Guaranteed Indebtedness incurred for the benefit of any other Credit Party if
the primary obligation is expressly permitted by this Agreement and (c) as set
forth on Disclosure Schedule (6.6).
6.7 Liens.
No Credit Party shall create, incur, assume or permit to exist any
Lien on or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on Disclosure Schedule
(6.7) securing Indebtedness permitted pursuant to Section 6.3(a)(iii); and (c)
Liens created after the date hereof by conditional sale or other title retention
agreements (including Capital Leases) or in connection with purchase money
Indebtedness with respect to Equipment and Fixtures acquired by any Credit Party
in the ordinary course of business, involving the incurrence of an aggregate
amount of purchase money Indebtedness and Capital Lease Obligations of not more
than US$300,000 outstanding at any one time for all such Liens (provided that
such Liens attach only to the assets subject to such purchase money debt and
such Indebtedness is incurred within ten (10) days following such purchase and
does not exceed 100% of the purchase price of the subject assets). In addition,
no Credit Party shall become a party to any agreement, note, indenture or
instrument, or take any other action, that would prohibit the creation of a Lien
on any of its properties or other assets in favor of Agent, on behalf of Secured
Parties of, as additional Collateral for the Obligations, except operating
leases, Capital Leases or Licenses which prohibit Liens upon the assets that are
subject thereto. Nothing in this Section 6.7 is intended to evidence an
intention or agreement on the part of the Lenders that the Liens securing the
Obligations or the Obligations be or have been subordinated to any of the Liens
described in paragraphs (a), (b) or (c) hereof or to cause any such
subordination to occur.
6.8 Operating Leases. No Credit Party shall permit the aggregate amount of
all rental payments under Operating Leases made (or scheduled to be made) by
Borrowers and their Subsidiaries (on a consolidated basis) to exceed US$250,000
in any Fiscal Year.
6.9 Sale of Stock and Assets.
No Credit Party shall sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise) or any
of its Accounts, other than (a) the sale of Inventory in the ordinary course of
business, (b) the sale or other disposition by the Credit Parties of Equipment
or Fixtures that are obsolete or no longer used or useful in the Business and
having a book value not exceeding US$250,000 in the aggregate in any Fiscal
Year, (c) the sale or other disposition of other assets having a book value not
53
exceeding US$25,000 in the aggregate in any Fiscal Year, and (d) the sale or
other disposition of a Vessel, provided that (i) no more than one Vessel may be
sold or disposed of in any Fiscal Year and no more than three Vessels shall be
sold or disposed of during the term of this Agreement, (ii) the net proceeds of
such sale shall not be less than the greater of: (x) 75% of the fair market
value of such Vessel as of the Restatement Closing Date (as determined by
reference to the appraisal delivered on or prior to the Restatement Closing
Date) and (y) 75% of the appraised fair market value of such Vessel at the time
of such sale and (iii) following such sale or disposition and after the net
proceeds have been applied in accordance with Section 1.3(c) hereof to prepay
the US Term Loan, the Cdn. Term Loan or the Engine Term Loan, as applicable, (A)
if a Cdn. Vessel is sold, the aggregate principal amount of all outstanding Cdn.
Term Loans and Engine Term Loans shall not exceed 80% of the orderly liquidation
value of the remaining Cdn. Vessels and (B) if a US Owned Vessel is sold, the
aggregate principal amount of all outstanding US Term Loans shall not exceed 80%
of the orderly liquidation value of the remaining US Owned Vessels. Without the
consent of the Lenders, sales permitted pursuant to the terms of Section 6.9(b)
and (c) shall not be permitted during the existence of a Default or an Event of
Default.
6.10 Pension and Benefit Plans; ERISA Plans.
(a) No Credit Party shall permit its unfunded pension fund and other
employee benefit plan obligations and liabilities to remain unfunded other than
in accordance with applicable law.
(b) No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur (i) an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (ii) an ERISA Event to the extent such ERISA Event would reasonably be
expected to result in taxes, penalties and other liability in excess of
US$100,000 in the aggregate.
6.11 Financial Covenants. Rand and its Subsidiaries shall not breach or
fail to comply with any of the Financial Covenants.
6.12 Hazardous Materials. No Credit Party shall cause or permit a Release
of any Hazardous Material where such Release would (a) violate in any respect,
or form the basis for any Environmental Liabilities under, any Environmental
Laws or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any Real Estate or any of the Collateral.
6.13 Sale-Leasebacks. No Credit Party shall engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets.
6.14 Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) dividends and distributions by any Credit Party to any other
Credit Party (other than Rand, Rand Finance or Parent), (b) employee loans
permitted under Section 6.4(b), (c) payments of principal and interest of
Permitted Intercompany Indebtedness issued in accordance with Section 6.3
(provided that, upon the occurrence of a Default or Event of Default, the
Lenders may provide notice that payments may no longer be made); (d) dividends
by any Credit Party to Parent and immediately thereafter by Parent to Rand to
pay dividends with respect to the Preferred Equity required under Rand's
certificate of designations as in effect on the Original Closing Date so long as
(i) no Default or Event of Default is then in existence or would reasonably be
54
expected to result from the payment of such dividends and (ii) such dividend has
been declared and paid in compliance with all applicable laws; (e) dividends by
any Subsidiary of Parent to Parent and immediately thereafter by Parent to Rand
to pay the ratable share of taxes owed by Borrowers and their Subsidiaries,
Parent and Rand's corporate overhead and directors' fees, in each case to the
extent incurred in the ordinary course of business in accordance with a budget
previously provided to the Agent and the Lenders; and (f) commencing March 3,
2008, dividends by any Subsidiary of Parent to Parent and immediately thereafter
by Parent to Rand to pay dividends with respect to Rand's common Stock so long
as (i) the amount of such dividends paid in any Fiscal Year does not exceed an
amount equal to 50% of Parent's consolidated Excess Cash Flow in the prior
Fiscal Year (as calculated from Parent's consolidated fiscal year-end financial
statements), (ii) no Default or Event of Default is then in existence or would
reasonably be expected to result from the payment of such dividends, (iii) both
before and after giving effect to such payment, the Senior Debt to EBITDA Ratio
is less than 2.00 to 1.00 and the Fixed Charge Coverage Ratio is greater than
1.30 to 1.00, (iv) such dividend has been declared and paid in compliance with
all applicable laws, (v) all the required dry dock and winter work has been
completed, and (vi) all Vessel certifications are current and up to date.
6.15 Change of Corporate Name or Location; Change of Fiscal Year. No
Credit Party shall (a) change its incorporated name, or if not a corporation,
its name as it appears in official filings in the jurisdiction of its
organization, (b) change its chief executive office, principal place of
business, domicile (within the meaning of the Civil Code of Quebec), corporate
offices or warehouses or locations at which Collateral is held or stored, or the
location of its records concerning the Collateral, (c) change the type of entity
that it is, or (d) change its jurisdiction of incorporation or organization, in
each case without at least thirty (30) days prior written notice to Agent and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including to continue the perfection and, in the
case of the Province of Quebec, publication, of any Liens in favor of Agent, on
behalf of Secured Parties, in any Collateral, has been completed or taken;
provided, that with respect to paragraphs (b) and (d), any such new location
shall be in Canada, in the case of a Cdn. Credit Party, or the United States, in
the case of a US Credit Party. Without limiting the foregoing, no Credit Party
shall change its name, identity or corporate or organizational structure in any
manner that might make any financing statement filed in connection herewith or
any other Loan Document materially misleading within the meaning of section
46(4) of the PPSA or of the UCC (or any comparable provision then in effect)
except upon prior written notice to Agent and after Agent's written
acknowledgement that any reasonable action requested by Agent in connection
therewith, including to continue the perfection or, in the case of the Province
of Quebec, publication, of any Liens in favor of Agent, on behalf of the Secured
Parties, in any Collateral, has been completed or taken. No Credit Party shall
change its Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary to a Borrower.
6.17 Real Estate Purchases. No Credit Party shall purchase a fee simple
ownership interest in Real Estate.
55
6.18 Material Contracts.
(a) No Credit Party shall amend or terminate a Material Contract in
any way that would be materially detrimental to the business of the Credit
Parties taken as a whole.
(b) No Credit Party shall amend the Management Incentive Plan in any
manner that results in an increase or acceleration of payment of any amounts
payable thereunder.
6.19 Lower Lakes Guarantee and Lower Lakes Mortgages. Except in connection
with the retirement of the Original Calumet and the entering into of the Time
Charter Agreements in respect of the Calumet and the Manitowoc in accordance
with Section 5.13(d), Grand River shall not permit any amendment to or release
of the Lower Lakes Guarantee or Lower Lakes Mortgages without the prior written
consent of the Lenders.
6.20 Salt Water Operation. No Credit Party shall operate the Vessels in
(a) any manner contrary to the provisions of Sections 5.11(b)(xii) and (xiii)
and (b) in salt water for any period of time, in each case, without the consent
of the Lenders. Prior to the effectiveness of the registration of the ▇▇▇▇▇▇▇
Mortgage in accordance with Section 5.13(b) hereof, the ▇▇▇▇▇▇▇ shall not
operate outside of Canada.
6.21 Time Charters. Neither US Borrower shall terminate any Time Charter
Agreement or agree to amend its terms in any manner which would be unfavorable
from the perspective of such US Borrower, without the prior written consent of
the Requisite Lenders, which shall not be unreasonably withheld. Upon the
occurrence of an Event of Default and written notice being provided by Agent to
LLTC, LLTC shall not make any payments under any Time Charter Agreement.
6.22 Bareboat Charter Agreement. No Credit Party shall either (a) permit
the Bareboat Charter Agreement to be terminated or agree to amend its terms in
any manner unfavorable from the perspective of such Credit Party or (b) permit
any sub-bareboat charter of any Vessel, without in any such case first obtaining
the prior written consent of the Requisite Lenders, which consent shall not be
unreasonably withheld.
6.23 Capital/Corporate Structure. No Credit Party shall make any changes
in its capital or corporate structure which would result in Grand River failing
to be a citizen of the United States under Section 2 of the Shipping ▇▇▇ ▇▇▇▇,
as amended, for the purpose of owning and operating a vessel in the US coastwise
trade.
6.24 Acquisitions. No Credit Party shall make any Acquisitions.
6.25 Capital Expenditures. The Borrowers shall not make Capital
Expenditures in any Fiscal Year that exceed, in the aggregate, the lesser of (a)
the applicable amount set forth pursuant to clause (d) of Annex G and (b) the
amounts provided for in the Operating Plan for such Fiscal Year, which plan and
such expenditures shall have been approved of by the Requisite Lenders acting
reasonably.
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7. TERM
7.1 Termination. The financing arrangements contemplated hereby shall be
in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and the other Secured
Parties, all as contained in the Loan Documents, shall not terminate or expire,
but rather shall survive any such termination or cancellation and shall continue
in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.14 and 1.15,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) (i) Any Borrower fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) any Credit Party fails to pay or
reimburse Agent or Lenders for any expense reimbursable hereunder or under any
other Loan Document within ten (10) days following Agent's demand for such
reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Section 1.4, 1.8, 5.4(a), 5.13 or 6, or any of the
provisions set forth in Annex C or G.
(c) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Section 1.2 or Section 4.1 or any provisions set forth
in Annex E or F, and the same shall remain unremedied for three (3) Business
Days or more.
(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for twenty (20) days or more.
(e) Any representation or warranty made by any Credit Party herein
or in any other Loan Document is breached or is false or misleading in any
material respect, or any schedule, certificate, financial statement, report,
notice or other writing furnished by any Credit Party to Agent or any Lender in
connection therewith is false or misleading in any material respect on the date
as of which the facts therein set forth are stated or certified.
57
(f) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party that is not cured
within any applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any Indebtedness
or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of US$150,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or an agent or a trustee therefor to
cause, Indebtedness or Guaranteed Indebtedness or a portion thereof in excess of
US$250,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment, or cash collateral to be demanded
in respect thereof, in each case, regardless of whether such default is waived,
or such right is exercised, by such holder, agent or trustee.
(g) If at any time (i) the sum of (A) the amounts outstanding (all
as determined in US Dollars using, where applicable, the US Dollar Equivalent
Amount) under the Term Loans and (B) the amounts outstanding under the Seasonal
Facilities exceeds (ii) (A) 75% of the Fair Market Value of the Cdn. Vessels and
the US Owned Vessels, less (B) the amount secured by Liens attaching to the Cdn.
Vessels and the US Owned Vessels that have priority to the Liens securing the
Obligations, and such excess is not repaid within three (3) Business Days.
(h) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any material respect (other than (i) inadvertent,
immaterial errors not exceeding US$15,000 in the aggregate in any Borrowing Base
Certificate, (ii) errors understating a Borrowing Base and (iii) errors
occurring when Borrowing Availability continues to exceed US$5,000,000 after
giving effect to the correction of such errors), or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate)
made or delivered to Agent or any Lender by any Credit Party is untrue or
incorrect in any material respect as of the date when made or deemed made.
(i) Assets of any Credit Party with a fair market value of
US$300,000 or more are attached, seized, levied upon or subjected to execution,
garnishment, distress or any other similar process, or come within the
possession of any interim receiver, receiver, receiver and manager, trustee,
custodian, liquidator, administrator, sequestrator, sheriff, bailiff or assignee
for the benefit of creditors of any Credit Party and such condition continues
for thirty (30) days or more.
(j) Any involuntary case or proceeding (including the filing of any
notice of intention in respect thereof) is commenced against any Credit Party
under any Insolvency Law or other applicable law in any jurisdiction in respect
of the:
(i) bankruptcy, liquidation, winding-up, dissolution or
suspension of general operations,
58
(ii) composition, rescheduling, reorganization, arrangement or
readjustment of, or other relief from, or stay of proceedings to enforce, some
or all of the debts or obligations,
(iii) appointment of a trustee, interim receiver, receiver,
receiver and manager, liquidator, administrator, custodian, sequestrator, agent
or other similar official for such Credit Party, or for all or a substantial
part of the assets of such Credit Party, or
(iv) possession, foreclosure, seizure or retention, sale or
other disposition of, or other proceedings to enforce security over, all or any
substantial part of the assets, of such Credit Party,
and such case or proceeding shall remain undismissed or unstayed for 60 days or
more or such court shall enter a decree or order granting the relief sought in
such case or proceeding.
(k) Any Credit Party (i) commences on a voluntary basis, or fails to
contest in a timely and appropriate manner or consents to the institution of any
proceeding referred to in Section 8.1(j) above or to the filing of any such
petition or to the appointment of or taking possession by a custodian, receiver,
interim receiver, receiver and manager liquidator, assignee, trustee or
sequestrator (or similar official) of such Credit Party or of all or any
substantial part of such Credit Party's assets, or (ii) take any corporate (or
analogous) action in furtherance of any of the foregoing or of any of the
proceedings referred to in Section 8.1(j), or (iii) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due
or is otherwise insolvent.
(l) Final judgment or judgments for the payment of money in excess
of US$300,000 in the aggregate at any time is entered or rendered against any
Credit Party (which judgments are not covered by insurance policies as to which
liability has been accepted by the insurance carrier), and the same are not,
within thirty (30) days after the entry thereof, paid or discharged or the
execution thereof stayed or bonded pending appeal, or such judgments are not
discharged prior to the expiration of any such stay.
(m) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party or other Person party to a Loan Document shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in any
action or inaction based on any such assertion, that any provision of any of the
Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any Lien created under any Loan
Document ceases to be a valid and perfected or prohibited (or applicable) first
priority or ranking Lien (except as otherwise permitted herein or therein) in
any of the Collateral purported to be covered thereby.
(n) Any Change of Control occurs.
(o) Any event occurs, whether or not insured or insurable, as a
result of which revenue-producing activities generating more than 15% of any
Borrower's revenues for the Fiscal Year preceding such event cease or are
substantially curtailed and such cessation or curtailment continues for more
than thirty (30) days. For greater certainty, neither (i) the commencement of
the winter season and the cessation of the operation of the Vessels by the
Credit Parties in accordance with past practice as a consequence thereof or (ii)
the temporary lay-up from service of one or two Vessels in the ordinary course
of business shall constitute an Event of Default.
59
(p) Any default or breach by a Credit Party occurs and is continuing
under any Material Contract or any Material Contract shall be terminated and not
replaced with a new contract on substantially similar terms, in either case,
where the result thereof would result in a Material Adverse Effect.
(q) Any default under, breach in respect of or termination of, any
Time Charter Agreement or Bareboat Charter Agreement shall occur that allows any
party to such agreement to terminate such agreement.
(r) Any failure by a US Credit Party to be a citizen of the United
States as defined in Sections 2(a) and 2(b) of the Shipping Act, 1916, as
amended, for the purpose of owning and operating a Vessel in the US coastwise
trade.
(s) Any change in the ownership structure of Grand River from that
existing as of the Original Closing Date.
8.2 Remedies.
(a) If any Default or Event of Default shall have occurred and be
continuing, Agent may (and at the written request of the Requisite Revolving
Lenders shall), without notice, suspend the Revolving Loan facilities with
respect to additional Advances and/or the incurrence of additional Letter of
Credit Obligations, whereupon any additional Advances and additional Letter of
Credit Obligations shall be made in Agent's sole discretion (or in the sole
discretion of the Requisite Revolving Lenders, if such suspension occurred at
their direction) so long as such Default or Event of Default is continuing.
(b) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Lenders shall), without notice:
(i) terminate either or both Revolving Loan Commitments with respect to further
Advances or the incurrence of further Letter of Credit Obligations; (ii) reduce
either or both Revolving Loan Commitments from time to time; (iii) declare all
or any portion of the Obligations, including all or any portion of any Loan, to
be forthwith due and payable and require that the Letter of Credit Obligations
be cash collateralized in the manner set forth in Annex B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by each Borrower and each other Credit Party; and/or (iv)
exercise any rights and remedies provided to Agent under the Loan Documents or
at law or equity, including all remedies provided under the PPSA, the Code and
other applicable laws; provided, that upon the occurrence of an Event of Default
specified in Section 8.1(j), (k) or (n), the Commitments shall be immediately
terminated and all of the Obligations, including the Revolving Loans, shall
become immediately due and payable without declaration, notice or demand by any
Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, non-payment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents of title, instruments, chattel paper
and guarantees at any time held by Agent on which any Credit Party may in any
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way be liable, and hereby ratifies and confirms whatever Agent may do in this
regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may upon
notice to Borrowers make an assignment to a Qualified Assignee of, or sale of
participations in, at any time or times, the Loan Documents, Loans, Letter of
Credit Obligations and any Commitment or any portion thereof or interest
therein, including any Lender's rights, title, interests, remedies, powers or
duties thereunder. Any assignment by a Lender shall: (i) require the consent of
Agent (which consent shall not be unreasonably withheld or delayed with respect
to a Qualified Assignee) and the execution of an assignment agreement (an
"Assignment Agreement") substantially in the form attached hereto as Exhibit
9.1(a) and otherwise in form and substance reasonably satisfactory to, and
acknowledged by, Agent; (ii) be conditioned on such assignee Lender representing
to the assigning Lender and Agent that it is purchasing the applicable Loans to
be assigned to it for its own account, for investment purposes and not with a
view to the distribution thereof; (iii) be in a minimum aggregate amount equal
to $1,000,000 or, if less, the entire commitment or the principal amount of the
loan being assigned; (iv) include a payment to Agent of an assignment fee of
US$3,500. In the case of an assignment by a Lender under this Section 9.1, the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder; provided that so long as no
Event of Default has occurred and is continuing, in the case of an assignment by
a US Revolving Lender or a US Term Lender, if such assignee is a non-resident of
the United States for purposes of the Revenue Code in respect of any payment
that may be made by any US Borrower, such assignee shall not be entitled to any
gross-up payment or indemnification pursuant to Section 1.14 from such US
Borrower on account of any withholding taxes eligible on such payment. So long
as no Event of Default has occurred and is continuing, without the Borrowers'
consent (acting reasonably), no Lender may assign its Commitment to any person
in the business of owning or operating ships transporting bulk cargo on the
Great Lakes or any subsidiary of such a person. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment shall give rise to a
direct obligation of such Borrower to the assignee and that the assignee shall
be considered to be a "Lender". In all instances, each Lender's liability to
make Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify the applicable Borrower and such Borrower
shall, upon the request of Agent or such Lender, execute new Notes in exchange
for the Notes, if any, being assigned.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by the
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
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entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). No Borrower or other Credit Party shall
have any obligation or duty to any participant. Neither Agent nor any Lender
(other than the Lender selling a participation) shall have any duty to any
participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender
shall, as between any Borrower and such Lender, or Agent and such Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and
the preparation of informational materials for, and the participation of
management in meetings with, potential assignees or participants. Each Credit
Party executing this Agreement shall certify the correctness, completeness and
accuracy of all descriptions of the Credit Parties and their respective affairs
contained in any selling materials provided by it and all other information
provided by it and included in such materials, except that any Projections
delivered by a Borrower shall only be certified by such Borrower as having been
prepared by such Borrower in compliance with the representations contained in
Section 3.4(c).
(e) A Lender may furnish any information concerning the Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants) and to the other
Secured Parties; provided, that such Lender shall obtain from such assignees or
participants or such other Secured Parties confidentiality covenants
substantially equivalent to those contained in Section 11.8.
(f) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and the
Borrowers, the option to provide to a Borrower all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to such Borrower
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, the Borrowers and Agent assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by the Borrowers and Agent) providing liquidity and/or credit support to or for
the account of such SPC to support the funding or maintenance of Loans and (ii)
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disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section 9.1(f)
may not be amended without the prior written consent of each Granting Lender,
all or any of whose Loans are being funded by an SPC at the time of such
amendment. For the avoidance of doubt, the Granting Lender shall for all
purposes, including without limitation, the approval of any amendment or waiver
of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to
be the Lender of record hereunder.
9.2 Appointment of Agents. GE Capital is hereby appointed to act on behalf
of all Secured Parties as Agent, under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and the other Secured Parties and no Credit Party or any other Person
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement and the
other Loan Documents, Agent shall act solely as an agent of the Secured Parties
and does not assume, and shall not be deemed to have assumed, any obligation
toward or, relationship of agency or trust with or for any Credit Party or any
other Person. Agent shall have no duties or responsibilities except for those
expressly set forth in this Agreement and the other Loan Documents. The duties
of Agent shall be mechanical and administrative in nature and Agent shall not
have, or be deemed to have, by reason of this Agreement, any other Loan Document
or otherwise a fiduciary relationship in respect of any other Secured Party.
Except as expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of its
Subsidiaries or any Account Debtor that is communicated to or obtained by GE
Capital or any of its Affiliates in any capacity. Neither Agents nor any of its
Affiliates nor any of its officers, directors, employees, agents or
representatives shall be liable to any Secured Party for any action taken or
omitted to be taken by it hereunder or under any other Loan Document, or in
connection herewith or therewith, except for damages caused by its or their own
gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Requisite Revolving Lenders or all Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from Requisite
Lenders, Requisite Revolving Lenders, or all affected Lenders, as the case may
be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
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
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Requisite Revolving Lenders or all Lenders, as applicable.
For the purposes of holding any security granted by any Borrower or
any other Credit Party pursuant to the laws of the Province of Quebec to secure
payment of any debenture issued by a Borrower or any Credit Party, Agent is
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hereby appointed to act as the person holding the power of attorney (fonde de
pouvoir) pursuant to article 2692 of the Civil Code of Quebec to act on behalf
of each of the debentureholders, initially namely GE Capital in its capacity as
Agent for Lenders. Each Person who is or becomes a Lender and each assignee
holder of any Note issued by a Borrower or any Credit Party shall be deemed to
ratify the power of attorney (fonde de pouvoir) granted to Agent hereunder by
its execution of an Assignment Agreement. Agent agrees to act in such capacity.
Each party hereto agrees that, notwithstanding Section 32 of An Act respecting
the special powers of legal persons (Quebec), Agent, as fonde de pouvoir, shall
also be entitled to act as a debentureholder and to acquire and/or be the
pledgee of any debentures or other titles of indebtedness to be issued under any
deed of hypothec executed by or on behalf of a Borrower or any other Credit
Party.
9.3 Agents' Reliance, Etc. Neither Agent nor any of its Affiliates nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement or the other Loan Documents, except for damages caused by its own
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, Agent: (a) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form reasonably satisfactory to Agent; (b) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the 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 Credit Party or to inspect the Collateral
(including the books and records) of any Credit Party; (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 incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy or electronic mail)
believed by it to be genuine and signed or sent by the proper party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments hereunder,
GE Capital shall have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the same as though it
were not Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include GE Capital in its individual capacity. GE Capital
and its Affiliates may lend money to, invest in, and generally engage in any
kind of business with, any Credit Party, any of their Affiliates and any Person
who may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital was not Agent and without any duty to account
therefor to Lenders. GE Capital and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
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reliance upon Agent or any other 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. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Credit Parties and without limiting the obligations of any Credit
Party hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable legal fees) incurred by Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not less than
thirty (30) days' prior written notice thereof to Lenders and Borrowers. Upon
any such resignation, the Requisite Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within thirty (30)
days after the resigning Agent's giving notice of resignation, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent which shall
be a Lender, if a Lender is willing to accept such appointment, or otherwise
shall be a commercial bank or financial institution or other entity whose
business includes making commercial loans, in each case, organized under the
laws of the United States or of any state thereof or of Canada or of any
province thereof or named in Schedule III to the Bank Act (Canada), as the case
may be, and has a combined capital and surplus of at least US$100,000,000. If no
successor Agent has been appointed pursuant to the foregoing, within thirty (30)
days after the date such notice of resignation was given by the resigning Agent,
such resignation shall become effective and the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrowers, such approval not to be unreasonably withheld or delayed;
provided, that such approval shall not be required during such time that a
Default or an Event of Default has occurred and is continuing. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent. Upon the earlier of the acceptance
of any appointment as Agent hereunder by a successor Agent on the effective date
of the resigning Agent's resignation, the resigning Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents, except that any indemnity rights or other rights in favor of such
resigning Agent shall continue. After any resigning Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as Agent under
this Agreement and the other Loan Documents.
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9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
and subject to Section 9.9(f), each Lender is hereby authorized at any time or
from time to time, without notice to any Credit Party or to any other Person
other than Agent, any such notice being hereby expressly waived, to offset and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of a Borrower or any Credit Party (regardless of whether
such balances are then due to such Borrower or any Credit Party) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of a Borrower or any Credit Party against
and on account of any of the Obligations that are not paid when due. Any Lender
exercising a right of setoff or otherwise receiving any payment on account of
the Obligations in excess of its Pro Rata Share thereof shall purchase for cash
(and the other Lenders or holders shall sell) such participations in each such
other Lender's or holder's Pro Rata Share of the Obligations as would be
necessary to cause such Lender to share the amount so offset or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares, (other than offset rights exercised by any Lender with respect
to Sections 1.14 or 1.15). Each Lender's obligation under this Section 9.8 shall
be in addition to and not in limitation of its obligations to purchase a
participation in an amount equal to its Pro Rata Share of the Swing Line Loans
under Section 1.1. Borrowers and each other Credit Party agree, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts to offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in the Swing
Line Loans in accordance with clauses (iii) and (iv) of Sections 1.1(f) and (g).
If such Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of Revolving Credit Advance is
received, by telecopy, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's applicable account as provided to such Revolving Lender in writing by
Agent from time to time not later than 3:00 p.m. (New York time) on the
requested funding date, in the case of a Canadian Prime Rate Loan, a BA Rate
Loan or a US Base Rate Loan and not later than 10:00 a.m. (New York time) on the
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requested funding date in the case of a LIBOR Loan. After receipt of such wire
transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to the applicable Borrower. All payments by each
Revolving Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) Not less than once during each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments and Advances required to be made by it and purchased all participations
required to be purchased by it under this Agreement and the other Loan Documents
as of such Settlement Date, Agent shall pay to each Lender such Lender's Pro
Rata Share of principal, interest and Fees paid by each Borrower since the
previous Settlement Date for the benefit of such Lender on the Loans held by it.
To the extent that any Lender (a "Non-Funding Lender") has failed to fund all
such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
such Borrower. Such payments shall be made by wire transfer to such Lender's
account (as specified by such Lender to Agent in writing from time to time or
the applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on
the next Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify the applicable Borrower and such Borrower shall immediately repay such
amount to Agent. Nothing in this Section 9.9(b) or elsewhere in this Agreement
or the other Loan Documents shall be deemed to require Agent to advance funds on
behalf of any Revolving Lender or to relieve any Revolving Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
such Borrower may have against any Revolving Lender as a result of any default
by such Revolving Lender hereunder. To the extent that Agent advances funds to a
Borrower on behalf of any Revolving Lender and is not reimbursed therefor on the
same Business Day as such Revolving Credit Advance is made, Agent shall be
entitled to retain for its account all interest accrued on such Revolving Credit
Advance until reimbursed by the applicable Revolving Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be received
by Agent from a Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to a Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
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will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to a Borrower or such other Person, without
setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder or to
purchase any participation in any Swing Line Loan to be made or purchased by it
on the date specified therefor, shall not relieve any other Revolving Lender
(each such other Revolving Lender, an "Other Lender") of its obligations to make
such Advance or other payment or purchase such participation on such date, but
neither any Other Lender nor Agent shall be responsible for the failure of any
Non-Funding Lender to make an Advance, purchase a participation or make any
other payment required hereunder. Notwithstanding anything set forth herein to
the contrary, a Non-Funding Lender shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a "Lender" or a
"Revolving Lender" (or be included in the calculation of "Requisite Lenders" or
"Requisite Revolving Lenders" hereunder) for any voting or consent rights under
or with respect to any Loan Document. At the Borrowers' request, Agent or a
Person acceptable to Agent shall have the right, with Agent's consent and in
Agent's sole discretion (but shall have no obligation), to purchase from any
Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at Agent's
request, sell and assign to Agent or such Person, all of the Commitments of that
Non-Funding Lender for an amount equal to the principal balance of all Loans
held by such Non-Funding Lender and all accrued interest and fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
(e) Dissemination of Information. Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; provided, that Agent shall
not be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent's gross negligence or willful misconduct.
Lenders acknowledge that the Borrowers are required to provide Financial
Statements and Collateral Reports to Lenders in accordance with Annexes E and F
hereto and agree that Agent shall have no duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with Agent and each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agents,
Lenders and their respective successors and permitted assigns (including, to the
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extent applicable in the case of any Credit Party, a debtor-in-possession on
behalf of such Credit Party), except as otherwise provided herein or therein. No
Credit Party may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of Agent and Lenders. Any
such purported assignment, transfer, hypothecation or other conveyance by any
Credit Party without the prior express written consent of Agent and Lenders
shall be void. The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of each Credit Party, Agent and
other Secured Parties with respect to the transactions contemplated hereby and
no Person (other than a participant in a credit facility being made available
hereunder, as provided in Section 9.1) shall be a third party beneficiary of any
of the terms and provisions of this Agreement or any of the other Loan
Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 11.2. Any letter of interest, commitment letter, fee letter or
confidentiality agreement, if any, between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement. Notwithstanding the foregoing, the GE Capital
Fee Letter shall survive the execution and delivery of this Agreement and shall
continue to be binding obligations of the parties.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrowers, and by Requisite Lenders,
Requisite Revolving Lenders or all affected Lenders, as applicable. Except as
set forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that increases the percentage
advance rates set forth in the definition of the Cdn. Borrowing Base or US
Borrowing Base, or that makes less restrictive the non-discretionary criteria
for exclusion from Eligible Accounts set forth in Sections 1.6, shall be
effective unless the same shall be in writing and signed by Agent, Requisite
Revolving Lenders and the Borrowers. Additionally, no amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in
Section 2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed by
Agent, Requisite Revolving Lenders and Borrowers. Notwithstanding anything
contained in this Agreement to the contrary, no waiver or consent with respect
to any Default or any Event of Default shall be effective for purposes of the
conditions precedent to the making of Loans set forth in Section 2.2 unless the
same shall be in writing and signed by Agent, Requisite Revolving Lenders and
Borrowers.
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(c) No amendment, modification, termination or waiver shall, unless
in writing and signed by Agent and each Lender directly affected thereby: (i)
increase the principal amount of any Lender's Commitment (which action shall be
deemed to directly affect all Lenders); (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under Section
1.3(b)(ii)-(vi)) or final maturity date of the principal amount of any Loan of
any affected Lender; (iv) waive, forgive, defer, extend or postpone any payment
of interest or Fees as to any affected Lender; (v) release any Guarantee or,
except as otherwise permitted herein or in the other Loan Documents, release, or
permit any Credit Party to sell or otherwise dispose of, any Collateral with a
value exceeding US$5,000,000 in the aggregate (which action shall be deemed to
directly affect all Lenders); (vi) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this Section 11.2 or the definitions of the terms "Requisite Lenders" or
"Requisite Revolving Lenders" insofar as such definitions affect the substance
of this Section 11.2. Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of Agent or L/C Issuer under this
Agreement or any other Loan Document shall be effective unless in writing and
signed by Agent or L/C Issuer, in addition to Lenders required hereinabove to
take such action. No amendment, modification or waiver of this Agreement or any
Loan Document altering the ratable treatment of Obligations arising under
Secured Rate Contracts resulting in such Obligations being junior in right of
payment to principal on the Loans or resulting in Obligations owing to any
Secured Swap Provider becoming unsecured (other than release of Liens in
accordance with the terms hereof), in each case in a manner adverse to any
Secured Swap Provider, shall be effective without the written consent of GE
Capital. Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which it was
given. No amendment, modification, termination or waiver shall be required for
Agent to take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No notice
to or demand on any Credit Party in any case shall entitle such Credit Party or
any other Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination:
(i) requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained, but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clauses (ii), (iii) and (iv) below being
referred to as "Non Consenting Lender");
(ii) requiring the consent of Requisite Revolving Lenders, the
consent of Revolving Lenders holding 51% or more of the aggregate Revolving Loan
Commitments is obtained, but the consent of Requisite Revolving Lenders is not
obtained; or
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(iii) requiring the consent of Requisite Lenders, the consent
of Lenders holding 51% or more of the aggregate Commitments is obtained, but the
consent of Requisite Lenders is not obtained;
then, so long as Agent is not a Non Consenting Lender, at a Borrower's request,
Agent, or a Person reasonably acceptable to Agent, shall have the right, with
Agent's consent and in Agent's sole discretion (but shall have no obligation),
to purchase from such Non Consenting Lenders, and such Non Consenting Lenders
agree that they shall, upon Agent's request, sell and assign to Agent or such
Person, all of the Commitments of such Non Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non Consenting Lenders
and all accrued interest and Fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Upon the indefeasible payment in full in cash and performance of
all of the Obligations (other than indemnification Obligations), termination of
the Commitments and a release of all claims against Agents and Lenders, and so
long as no suits, actions proceedings, or claims are pending or threatened
against any Indemnified Person asserting any damages, losses or liabilities that
are Indemnified Liabilities, Agent shall deliver to the Borrowers financing
termination statements, mortgage releases and other documents or instruments
necessary or appropriate to evidence the termination of the Liens securing
payment of the Obligations.
11.3 Fees and Expenses. Borrowers, on a joint and several basis, shall
reimburse (i) Agents for all fees, costs and expenses (including the reasonable
fees and expenses of all of its legal counsel, advisors, consultants and
auditors) and (ii) Agents (and, with respect to clauses (c) through (d) below,
all Lenders) for all fees, costs and expenses, including the reasonable fees,
costs and expenses of legal counsel or other advisors (including environmental
and management consultants and appraisers) incurred in connection with the
negotiation, preparation and filing and/or recordation of the Loan Documents and
incurred in connection with:
(a) any amendment, modification or waiver of, or consent with
respect to, or termination of, any of the Loan Documents or advice in connection
with the syndication and administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Credit Party or any other Person
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Credit Parties or any other Person that may be obligated to Agent or any Lender
by virtue of the Loan Documents, including any such litigation, contest,
dispute, suit, proceeding or action arising in connection with any work-out or
restructuring of the Loans during the pendency of one or more Events of Default;
provided, that no Person shall be entitled to reimbursement under this clause
(b) in respect of any litigation, contest, dispute, suit, proceeding or action
to the extent any of the foregoing results from such Person's gross negligence
or willful misconduct;
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(c) any attempt to enforce any remedies of Agent or any Lender
against any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan Documents,
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more Events
of Default; provided, that in the case of reimbursement of counsel for Lenders
other than Agent and its Affiliates, such reimbursement shall be limited to one
counsel for all such Lenders;
(d) any work-out or restructuring of the Loans during the pendency
of one or more Events of Default; provided, that in the case of reimbursement of
counsel for Lenders other than Agent and its Affiliates, such reimbursement
shall be limited to one counsel for all such Lenders; and
(e) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (e) above, all reasonable legal
counsels' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such legal counsel and others in any way or respect
arising in connection with or relating to any of the events or actions described
in this Section 11.3, all of which shall be payable, on demand, by Borrowers to
Agent. Without limiting the generality of the foregoing, such expenses, costs,
charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders and directed to Borrowers specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
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11.6 Severability. Wherever possible, each provision of this Agreement and
the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
or any other Loan Document shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. In the event of a conflict in or between the
provisions of this Agreement and the provisions of any of the other Loan
Documents then, notwithstanding anything contained in such other Loan Document,
the provisions of this Agreement will prevail and the provisions of such other
Loan Document will be deemed to be amended to the extent necessary to eliminate
such conflict. In particular, if any act or omission of an Credit Party is
expressly permitted under this Agreement but is expressly prohibited under
another Loan Document, such act or omission shall be permitted. If any act or
omission is expressly prohibited under a Loan Document (other than this
Agreement), but this Agreement does not expressly permit such act or omission,
or if any act is expressly required to be performed under such Loan Document but
this Agreement does not expressly relieve the applicable Credit Party from such
performance, such circumstance shall not constitute a conflict in or between the
provisions of this Agreement and the provisions of such Loan Document.
11.8 Confidentiality. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintain the confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Credit Parties
and designated as confidential, except that Agent and each Lender may disclose
such information (a) to Persons employed or engaged by Agent or such Lender; (b)
to any bona fide assignee or participant or potential assignee or participant
that has agreed to comply with the covenant contained in this Section 11.8 (and
any such bona fide assignee or participant or potential assignee or participant
may disclose such information to Persons employed or engaged by them as
described in clause (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Agent or such Lender to be compelled by any
court order, subpoena or legal or administrative order or process; (d) as, on
the advice of Agent's or such Lender's counsel, is required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any Litigation to which Agent or such Lender is a party; (f)
that ceases to be confidential through no fault of Agent or any Lender; or (g)
Persons employed by Agent's strategic marketing partners.
11.9 Governing Law; Submission to Jurisdiction.
(a) THE LOAN DOCUMENTS (OTHER THAN ANY DOCUMENTS GOVERNED BY ONTARIO
OR CANADIAN LAW) AND THE OBLIGATIONS ARISING UNDER THE LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
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(b) THE BORROWERS AND EACH OTHER CREDIT PARTY EXECUTING THIS
AGREEMENT HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED IN
NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE BORROWERS AND SUCH CREDIT PARTY, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS, THE BORROWERS AND SUCH CREDIT PARTY ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL
BE DEEMED OR OPERATE TO PRECLUDE AGENT AND LENDERS FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT AND LENDERS. THE
BORROWERS AND EACH OTHER CREDIT PARTY EXECUTING THIS AGREEMENT EXPRESSLY SUBMIT
AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND THE BORROWERS AND SUCH CREDIT PARTY HEREBY WAIVE ANY
OBJECTION THAT THEY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS. THE BORROWERS AND EACH OTHER CREDIT PARTY
EXECUTING THIS AGREEMENT HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREE THAT SERVICE OF
SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO THE BORROWERS OR SUCH OTHER CREDIT PARTY AT THE ADDRESS SET
FORTH IN ANNEX H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF THE BORROWERS' OR SUCH OTHER CREDIT PARTY'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
11.10 Notices.
(a) Addresses. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to (A) the party to be notified and sent to the address or facsimile number
indicated in Annex I, or (B) otherwise to the party to be notified at its
address specified on the signature page of any applicable Assignment Agreement
or (ii) addressed to such other address as shall be notified in writing (A) in
the case of Borrowers and Agent, to the other parties hereto and (B) in the case
of all other parties, to Borrowers and Agent. Transmission by electronic mail
(including E-Fax, even if transmitted to the fax numbers set forth in clause (i)
above) shall not be sufficient or effective to transmit any such notice under
this clause (a) unless such transmission is an available means to post to any
E-System.
(b) Effectiveness. All communications described in clause (a) above
and all other notices, demands, requests and other communications made in
connection with this Agreement shall be effective and be deemed to have been
received (i) if delivered by hand, upon personal delivery, (ii) if delivered by
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overnight courier service, one Business Day after delivery to such courier
service, (iii) if delivered by mail, when deposited in the mails and (iv) if
delivered by facsimile, upon sender's receipt of confirmation of proper
transmission. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrowers or Agent) designated in Annex I to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice.
11.11 Section Titles. The Section titles and Table of Contents contained
in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 Press Releases and Related Matters. Each Credit Party and each
Lender agrees that neither it nor its Affiliates will in the future issue any
press releases or other public disclosure using the name of the other or its
affiliates or referring to this Agreement, the other Loan Documents without the
consent of the other unless (and only to the extent that) such Credit Party,
Lender or Affiliate is required to do so under law and then, in any event, such
Credit Party, Lender or Affiliate will consult with the other before issuing
such press release or other public disclosure. Agent or any Lender may publish
advertising material relating to the financing transactions contemplated by this
Agreement using a Credit Party's name, product photographs, logo or trademark.
Agent or such Lender shall provide a draft of any advertising material to
Borrowers for review, comment and consent prior to the publication thereof.
Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.
11.14 Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition or other proceeding be filed by
or against any Credit Party for liquidation or reorganization, should any Credit
Party become insolvent or make an assignment for the benefit of any creditor or
creditors or should an interim receiver, receiver, receiver and manger or
trustee be appointed for all or any significant part of any Credit Party's
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a fraudulent preference reviewable transaction or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations shall
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11.15 Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Section 11.9, with its counsel.
11.16 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
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11.17 Judgment Currency.
(a) If, for the purpose of obtaining or enforcing judgment against
any Credit Party in any court in any jurisdiction, it becomes necessary to
convert into any other currency (such other currency being hereinafter in this
Section 11.17 referred to as the "Judgment Currency") an amount due under any
Loan Document in any currency (the "Obligation Currency") other than the
Judgment Currency, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding the date of actual payment
of the amount due, in the case of any proceeding in the courts of the State of
New York or in the courts of any other jurisdiction that will give effect to
such conversion being made on such date, or the date on which the judgment is
given, in the case of any proceeding in the courts of any other jurisdiction
(the applicable date as of which such conversion is made pursuant to this
Section 11.17 being hereinafter in this Section 11.17 referred to as the
"Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any
jurisdiction referred to in Section 11.17(a), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of actual
receipt for value of the amount due, the applicable Credit Party or Parties
shall pay such additional amount (if any, but in any event not a lesser amount)
as may be necessary to ensure that the amount actually received in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of the Judgment Currency stipulated in the
judgment or judicial order at the rate of exchange prevailing on the Judgment
Conversion Date. Any amount due from any Credit Party under this Section
11.17(b) shall be due as a separate debt and shall not be affected by judgment
being obtained for any other amounts due under or in respect of any of the Loan
Documents.
(c) The term "rate of exchange" in this Section 11.17 means the rate
of exchange at which Agent, on the relevant date at or about 12:00 noon (New
York time), would be prepared to sell, in accordance with its or GE Corporate
Financial Services Inc.'s normal course foreign currency exchange practices, the
Obligation Currency against the Judgment Currency.
(d) Unless otherwise specified, all references to dollar amounts in
this Agreement shall mean US Dollars.
11.18 Joint and Several Obligations. Notwithstanding any other provision
contained in this Agreement or any other Loan Document, if a "secured creditor"
(as that term is defined under the Bankruptcy and Insolvency Act (Canada)) is
determined by a court of competent jurisdiction not to include a Person to whom
obligations are owed on a joint or joint and several basis, then each Borrowers'
Obligations (and the Obligations of its Subsidiaries), to the extent such
Obligations are secured, only shall be several obligations and not joint or
joint and several obligations.
11.19 Waiver of Jury Trial. EACH PARTY HERETO HEREBY KNOWINGLY VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
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ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF AGENT, ANY LENDER OR
ANY OTHER PARTY HERETO.
11.20 USA PATRIOT Act Notice. Each Lender that is subject to the Patriot
Act (as hereinafter defined) and Agent (for itself and not on behalf of any
Lender) hereby notifies each Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "Patriot Act"), it is required to obtain, verify and record information
that identifies each Borrower, which information includes the name and address
of each Borrower and other information that will allow such Lender or Agent, as
applicable, to identify such Borrower in accordance with the Patriot Act.
11.21 Original Credit Agreement.
(a) On the Restatement Closing Date, the Original Credit Agreement
shall be amended, restated and superseded in its entirety. The parties hereto
acknowledge and agree that (i) this Agreement, any Notes delivered pursuant to
Section 1.1 and the other Loan Documents executed and delivered in connection
herewith do not constitute a novation, payment and reborrowing, or termination
of the "Obligations" (as defined in the Original Credit Agreement) under the
Original Credit Agreement as in effect prior to the Restatement Closing Date;
(ii) such "Obligations" are in all respects continuing with only the terms
thereof being modified as provided in this Agreement; (iii) the Liens as granted
under the Collateral Documents securing payment of such "Obligations" are in all
respects continuing and in full force and effect and secure the payment of the
Obligations (as defined in this Agreement) and are hereby fully ratified and
affirmed; and (iv) upon the effectiveness of this Agreement all loans and
letters of credit outstanding under the Original Credit Agreement immediately
before the effectiveness of this Agreement will be part of the Loans and Letters
of Credit hereunder on the terms and conditions set forth in this Agreement.
Without limitation of the foregoing, each Borrower hereby fully and
unconditionally ratifies and affirms all Collateral Documents and agrees that
all collateral granted thereunder shall from and after the date hereof secure
all Obligations hereunder.
(b) Notwithstanding the modifications effected by this Agreement of
the representations, warranties and covenants of the Borrowers contained in the
Original Credit Agreement, each Borrower acknowledges and agrees that any causes
of action or other rights created in favor of any Lender and its successors
arising out of the representations and warranties of the Borrowers contained in
or delivered (including representations and warranties delivered in connection
with the making of the loans or other extensions of credit thereunder) in
connection with the Original Credit Agreement shall survive the execution and
delivery of this Agreement; provided, however, that it is understood and agreed
that the Borrowers' monetary obligations under the Original Credit Agreement in
respect of the loans and letters of credit thereunder are evidenced by this
Agreement as provided in Article I hereof.
(c) All indemnification obligations of the Borrowers pursuant to the
Original Credit Agreement (including any arising from a breach of the
representations thereunder) shall survive the amendment and restatement of the
Original Credit Agreement pursuant to this Agreement.
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(d) On and after the Restatement Closing Date, (i) each reference in
the Loan Documents to the "Credit Agreement", "thereunder", "thereof" or similar
words referring to the Credit Agreement shall mean and be a reference to this
Agreement and (ii) each reference in the Loan Documents to a "Note" shall mean
and be a Note as defined in this Agreement.
12. COLLATERAL ALLOCATION MECHANISM
12.1 Implementation of CAM
(a) On the CAM Exchange Date, (i) the Commitments shall
automatically and without further act be terminated as provided in Section 8,
(ii) the Lenders shall automatically and without further act (and without regard
to the provisions of Section 9.1) be deemed to have exchanged interests in the
Credit Facilities such that in lieu of the interest of each Lender in each
Credit Facility in which it shall participate as of such date (including such
Lender's interest in the Obligations of each Credit Party in respect of each
such Credit Facility), such Lender shall hold an interest in every one of the
Credit Facilities (including the Obligations of each Credit Party in respect of
each such Credit Facility and each L/C Reserve Account established pursuant to
Section 12.2 below), whether or not such Lender shall previously have
participated therein, equal to such Lender's CAM Percentage thereof and (iii)
simultaneously with the deemed exchange of interests pursuant to clause (ii)
above, in the case of any CAM Dollar Lender that has prior to the date thereof
notified the Agent and each of LLTC and Grand River in writing that it has
elected to have this clause (iii) apply to it, the interests in the Loans to be
received by such CAM Dollar Lender in such deemed exchange shall, automatically
and with no further action required, be converted into the Equivalent Amount in
US Dollars, determined using the rate of exchange calculated as of such date, of
such amount and on and after such date all amounts accruing and owed to such CAM
Dollar Lender in respect of such Obligations shall accrue and be payable in US
Dollars at the rate otherwise applicable hereunder, provided that such CAM
Exchange will not affect the aggregate amount of the Obligations of the
Borrowers to the Lenders under the Loan Documents. Each Lender and each Credit
Party hereby consents and agrees to the CAM Exchange, and each Lender agrees
that the CAM Exchange shall be binding upon its successors and assigns and any
person that acquires a participation in its interests in any Credit Facility.
Each Credit Party agrees from time to time to execute and deliver to the Agent
all promissory notes and other instruments and documents as the Agent shall
reasonably request to evidence and confirm the respective interests of the
Lenders after giving effect to the CAM Exchange, and each Lender agrees to
surrender any promissory notes originally received by it in connection with its
Loans hereunder to the Agent against delivery of new promissory notes evidencing
its interests in the Credit Facilities; provided, however, that the failure of
any Credit Party to execute or deliver or of any Lender to accept any such
promissory note, instrument or document shall not affect the validity or
effectiveness of the CAM Exchange.
(b) As a result of the CAM Exchange, upon and after the CAM Exchange
Date, each payment received by the Agent pursuant to any Loan Document in
respect of the Obligations, and each distribution made by the Agent pursuant to
any Loan Document in respect of the Obligations, shall be distributed to the
Lenders pro rata in accordance with their respective CAM Percentages. Any direct
payment received by a Lender upon or after the CAM Exchange Date, including by
way of setoff, in respect of a Obligation shall be paid over to the Agent for
distribution to the Lenders in accordance herewith.
78
12.2 Letters of Credit.
(a) In the event that on the CAM Exchange Date any Letter of Credit
shall be outstanding and undrawn in whole or in part, or any amount drawn under
a Letter of Credit shall not have been reimbursed by Lower Lakes (each such
amount so paid until reimbursed, an "Unpaid Drawing"), each Lender in respect of
Unpaid Drawings on Letters of Credit shall, before giving effect to the CAM
Exchange, promptly pay over to the Agent, in immediately available funds and in
the currency that such Letters of Credit are denominated, an amount equal to
such Lender's Revolving Loan Commitment percentage (as notified to such Lender
by the Agent), of such Letter of Credit's undrawn face amount or (to the extent
it has not already done so) such Letter of Credit's Unpaid Drawing, as the case
may be, together with interest thereon from the CAM Exchange Date to the date on
which such amount shall be paid to the Agent at the rate that would be
applicable at the time to a US Revolving Loan that is a US Base Rate Loan in a
principal amount equal to such amount, as the case may be. The Agent shall
establish a separate account or accounts for each Lender (each, an "L/C Reserve
Account") for the amounts received with respect to each such Letter of Credit
pursuant to the preceding sentence. The Agent shall deposit in each Lender's L/C
Reserve Account such Lender's CAM Percentage of the amounts received from the
Lenders as provided above. The Agent shall have sole dominion and control over
each L/C Reserve Account, and the amounts deposited in each L/C Reserve Account
shall be held in such L/C Reserve Account until withdrawn as provided in
paragraph (b), (c), (d) or (e) below. The Agent shall maintain records enabling
it to determine the amounts paid over to it and deposited in the L/C Reserve
Accounts in respect of each Letter of Credit and the amounts on deposit in
respect of each Letter of Credit attributable to each Lender's CAM Percentage.
The amounts held in each Lender's L/C Reserve Account shall be held as a reserve
against the Letter of Credit Obligations, shall be the property of such Lender,
shall not constitute Loans to or give rise to any claim of or against any Credit
Party and shall not give rise to any obligation on the part of the Borrowers to
pay interest to such Lender, it being agreed that the reimbursement obligations
in respect of Letters of Credit shall arise only at such times as drawings are
made thereunder, as provided in Annex B.
(b) In the event that after the CAM Exchange Date any drawing shall
be made in respect of a Letter of Credit, the Agent shall, at the request of the
L/C Issuer withdraw from the L/C Reserve Account of each Lender any amounts, up
to the amount of such Lender's CAM Percentage of such drawing, deposited in
respect of such Letter of Credit and remaining on deposit and deliver such
amounts to the L/C Issuer in satisfaction of the reimbursement obligations of
the Lenders under Annex B (but not of Lower Lakes under Annex B). In the event
any Lender shall default on its obligation to pay over any amount to the Agent
in respect of any Letter of Credit as provided in this Section 12.2, the L/C
Issuer shall, in the event of a drawing thereunder, have a claim against such
Lender to the same extent as if such Lender had defaulted on its obligations
under Section 9.9, but shall have no claim against any other Lender in respect
of such defaulted amount, notwithstanding the exchange of interests in the
reimbursement obligations pursuant to Section 12.1. Each other Lender shall have
a claim against such defaulting Lender for any damages sustained by it as a
result of such default, including, in the event such Letter of Credit shall
expire undrawn, its CAM Percentage of the defaulted amount.
(c) In the event that after the CAM Exchange Date any Letter of
Credit shall expire undrawn, the Agent shall withdraw from the L/C Reserve
Account of each Lender the amount remaining on deposit therein in respect of
such Letter of Credit and distribute such amount to such Lender.
79
(d) With the prior written approval of the Agent and the L/C Issuer,
any Lender may withdraw the amount held in its L/C Reserve Account in respect of
the undrawn amount of any Letter of Credit. Any Lender making such a withdrawal
shall be unconditionally obligated, in the event there shall subsequently be a
drawing under such Letter of Credit, to pay over to the Agent, for the account
of the L/C Issuer on demand, its CAM Percentage of such drawing.
12.3 Net Payments Upon Implementation of CAM Exchange. Notwithstanding any
other provision of this Agreement, if, as a direct result of the implementation
of the CAM Exchange, any Borrower is required to withhold Taxes from amounts
payable to the Agent, any Lender or any participant hereunder, the amounts so
payable to the Agent, such Lender or such participant shall be increased to the
extent necessary to yield to the Agent, such Lender or such participant (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement; provided, however, that
no Borrower shall be required to increase any such amounts payable to such
Lender or participant under this Section 12.3 (but, rather, shall be required to
increase any such amounts payable to such Lender or participant to the extent
required by Section 1.15) if such Lender or participant was prior to or on the
CAM Exchange Date already a Lender or participant with respect to such Borrower.
If a Cdn. Lender (or Cdn. Participant), in its good faith judgment, is eligible
for an exemption from, or reduced rate of, U.S. Federal withholding tax on
payments by LLTC or Grand River under this Agreement, neither LLTC or Grand
River shall be required to increase any such amounts payable to such Cdn. Lender
(or Cdn participant) if such Cdn. Lender (or Cdn. Participant) fails to comply
with the requirements of Section 1.15. Upon a CAM Exchange, a Lender (or
participant) will use commercially reasonable efforts, and complete any
procedural formalities necessary, to become an eligible Lender with respect to
Lower Lakes and, if such Lender (or participant) fails to do so, Lower Lakes
shall not be required to increase any such amounts payable to such Lender (or
participant). If LLTC or Grand River, as the case may be, fails to pay any such
Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, LTTC or
Grand River, as the case may be, shall indemnify the Agent, the Lenders and the
participants for any incremental taxes, interest, costs or penalties that may
become payable by the Agent, such Lenders or such participants as a result of
any such failure.
80
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
LOWER LAKES TOWING LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Title: President
-------------------------------------
LOWER LAKES TRANSPORTATION COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
GRAND RIVER NAVIGATION COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
Signature page to Amended and Restated Credit Agreement
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent, L/C Guarantor,
Documentation
Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Duly Authorized Signatory
--------------------------------
Signature page to Amended and Restated Credit Agreement
NATIONAL CITY BANK,
as Co-Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
--------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ BRANCH,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
Signature page to Amended and Restated Credit Agreement
KBC BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: First Vice President
--------------------------------
Signature page to Amended and Restated Credit Agreement
The following Persons are signatory to this Agreement in their
capacity as a Credit Party and not as a Borrower.
RAND LOGISTICS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Chief Executive Officer
--------------------------------
RAND LL HOLDINGS CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: President
--------------------------------
RAND FINANCE CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
Signature page to Amended and Restated Credit Agreement
ANNEX A (Recitals)
to
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:
"Account Debtor" means any Person who may become obligated to any Credit
Party under, with respect to, or on account of, an Account.
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts", (as such term is defined in (i) the PPSA
in the case of any of the Cdn. Credit Parties and (ii) the Code in the case of
any of the US Credit Parties), now owned or hereafter acquired by a Credit Party
and, in any event, includes (a) all accounts receivable, other receivables, book
debts and other forms of obligations (other than forms of obligations evidenced
by Chattel Paper (as such term is defined in (i) the PPSA in the case of a Cdn.
Credit Party and (ii) the Code in the case of a US Credit Party), securities or
Instruments) now owned or hereafter received or acquired by or belonging or
owing to a Credit Party, whether arising out of goods sold or services rendered
by it or from any other transaction, (b) all of each Credit Party's rights in,
to and under all purchase orders or receipts now owned or hereafter acquired by
a Credit Party for goods or services, (c) all of each Credit Party's rights to
any goods represented by any of the foregoing (including unpaid sellers' rights
of rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to such
Person for property sold, leased, licensed, assigned or otherwise disposed of,
for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by such
Person or in connection with any other transaction (whether or not yet earned by
performance on the part of such Person), and (e) all collateral security of any
kind given by any Account Debtor or any other Person with respect to any of the
foregoing.
"Acquisition" shall mean, with respect to any Person, any purchase or
other acquisition, regardless of how accomplished or effected (including any
such purchase or other acquisition effected by way of amalgamation, merger,
arrangement, business combination or other form of corporate reorganization or
by way of purchase, lease or other acquisition arrangements), of (a) any other
Person (including any purchase or acquisition of such number of the issued and
outstanding securities of, or such portion of an equity interest in, such other
Person that such other Person becomes a Subsidiary of the purchaser or of any of
its Affiliates) or of all or substantially all of the Collateral of any other
Person, or (b) any division, business, operation or undertaking of any other
Person or of all or substantially all of the Collateral of any division,
business, operation or undertaking of any other Person. For greater certainty,
the purchase of a vessel shall constitute an Acquisition.
A-1
"Advance" means any Revolving Credit Advance or Swing Line Advance, as the
context may require.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers, partners and trustees and
(d) in the case of a Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of a Borrower. For the purposes of
this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
"Agreement" has the meaning ascribed to it in the recitals to the
Agreement.
"Anti-Money Laundering Plan" means a plan or program that shall at a
minimum: (i) establish and implement policies, procedures, and internal controls
reasonably designed to prevent the debtor from being used to facilitate money
laundering; (ii) provide for independent testing for compliance to be conducted
by the debtor's personnel or by a qualified outside party; (iii) designate a
person or persons responsible for implementing and monitoring the operations and
internal controls of the Compliance Procedures; and (iv) provide ongoing
training for appropriate persons.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Appraiser" means the appraiser from time to time retained by the Agent to
provide an appraisal of the value of specified Collateral of the Credit Parties.
"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).
"BA Period" means with respect to any BA Rate Loan bearing interest at a
rate based on the BA Rate, a period of 30 days commencing on a Business Day
selected by Lower Lakes in an irrevocable notice with respect to such BA Rate
Loan delivered to Agent in accordance with Section 1.5(e)(i), provided that the
foregoing provision relating to BA Periods is subject to the following:
(a) any BA Period that would otherwise extend beyond the Commitment
Termination Date shall end two Business Days immediately preceding such
Commitment Termination Date;
(b) Lower Lakes shall not request a BA Rate Loan so as to require a
payment or prepayment of such BA Rate Loan during a BA Period for such; and
A-2
(c) Lower Lakes shall not request a BA Rate Loan so there shall be more
than five separate BA Rate Loans in existence at any one time.
"BA Rate" means, in respect of any BA Period applicable to a BA Rate Loan,
the rate per annum determined by Agent by reference to the average rate quoted
on the Reuters Monitor Screen (Page CDOR, or such other Page as may replace such
Page for such Screen on the purpose of displaying Canadian interbank bid rates
for Canadian Dollars bankers' acceptances) applicable to Canadian Dollars
bankers' acceptances with a term comparable to such BA Period as of 11:00 a.m.
(Toronto time) two (2) Business Days before the first day of such interest
period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used). If for any reason the Reuters Monitor
Screen rates are unavailable, BA Rate shall mean, in respect of any BA Period
applicable to a BA Rate Loan, the per annum rate quoted under "Money Rates" in
the "Report on Business" section of The Globe and Mail for bankers' acceptances
with a period comparable to such BA Period one (1) Business Day prior to the
first day of such BA Period.
"BA Rate Loan" means a Loan denominated in Canadian Dollars that bears
interest at a rate based on the BA Rate.
"Bareboat Charter Agreement" means the bareboat charter party agreement
between Lake Service Shipping Co. and Grand River dated March 3, 2006 with
respect to the Barge ▇▇▇▇▇.
"Barge ▇▇▇▇▇" means the ▇▇▇▇▇ Sons, a documented vessel of the United
States bearing U.S. Official Number 247490.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrowers" means, collectively, Lower Lakes, LLTC and Grand River and
"Borrower" means any one of them.
"Borrowers' Counsel" means the firms of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman LLP, ▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP and/or or such other firm or firms of legal
counsel as the Borrowers may from time to time designate.
"Borrowing Availability" means either Cdn. Borrowing Availability or US
Borrowing Availability.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by each of Lower Lakes and LLTC in the form attached
to the Agreement as Exhibit 4.1(b).
"Borrowing Bases" means, collectively, the Cdn. Borrowing Base and the US
Borrowing Base and "Borrowing Base" means either one of them.
"Business" means the business carried on by the Credit Parties consisting
of providing bulk freight services throughout the Great Lakes of Canada and the
United States.
"Business Day" means, for all purposes other than in respect of a Loan to
LLTC, a day on which banks are generally open for business in Toronto, Ontario
and New York, New York and, in respect of a Loan to LLTC, a day on which banks
are generally open for business in New York, New York and, in respect of a LIBOR
Loan, a day on which banks are generally open for business in Toronto, Ontario,
in Chicago, Illinois and in London, England.
A-3
"CAM" shall mean the mechanism for the allocation and exchange of
interests in the Credit Facilities and collections thereunder established under
Section 12.
"CAM Dollar Lender" shall mean any Lender that has made or holds no Cdn.
Term Loans or Engine Term Loans and has no Cdn. Revolving Loan Commitment.
"CAM Exchange" shall mean the exchange of the Lender's interests provided
for in Section 12.1.
"CAM Exchange Date" shall mean the date on which (a) any event referred to
in Section 8.1(j) or (k) shall occur in respect of any Credit Party or (b) an
acceleration of the maturity of the Loans pursuant to Section 8 shall occur.
"CAM Percentage" shall mean, as to each Lender, a fraction, expressed as a
decimal, of which (a) the numerator shall be the aggregate Equivalent Amount of
US Dollars of the Obligations owed to such Lender and such Lender's
participation in the aggregate Letter of Credit Obligations immediately prior to
the CAM Exchange Date and (b) the denominator shall be the aggregate Equivalent
Amount of US Dollars of the Obligations owed to all the Lenders and the
aggregate Letter of Credit Obligations immediately prior to such CAM Exchange
Date. For purposes of computing each Lender's CAM Percentage, all Obligations
and Letter of Credit Obligations which are denominated in a currency other than
US Dollars shall be translated into US Dollars at the rate of exchange in effect
on the CAM Exchange Date.
"CRA" means the Canada Revenue Agency.
"Calumet" means the Calumet (formerly the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇), a documented
vessel of the United States bearing U.S. Official Number 549231.
"Calumet Mortgage" means the statutory ship mortgage of the Calumet, made
by Grand River in favor of the Agent, such mortgage to be in form reasonably
satisfactory to the Lenders and Lenders' Counsel and suitable for registration.
"Canada Shipping Act" means the Canada Shipping Act, R.S.C., 1985, Chapter
s.9, as it may be amended, re-enacted or replaced from time to time.
"Canadian Benefit Plans" means any plan, fund, program, or policy, whether
oral or written, formal or informal, funded or unfunded, insured or uninsured,
providing employee benefits, including medical, hospital care, dental, sickness,
accident, disability, life insurance, pension, retirement or savings benefits,
under which a Borrower has any liability with respect to any employee or former
employee, but excluding any Canadian Pension Plans.
"Canadian Dollars", "Cdn. Dollars", or "Cdn.$" shall mean the lawful
currency of Canada.
"Canadian Pension Plans" means each pension plan required to be registered
under Canadian federal or provincial law that is maintained or contributed to by
a Credit Party for its employees or former employees, but does not include the
Canada Pension Plan or the Quebec Pension Plan as maintained by the Government
of Canada or the Province of Quebec, respectively.
A-4
"Canadian Prime Rate" means, for any day, a floating rate equal to the
higher of (a) the annual rate of interest quoted from time to time in the
"Report on Business" section of The Globe and Mail as being "Canadian prime",
"chartered bank prime rate" or words of similar description and (b) the BA Rate
existing on such day in respect of a BA Period of 30 days plus 1.75% per annum.
Any change in any interest rate provided for in the Agreement based upon the
Canadian Prime Rate shall take effect at the time of such change in the Canadian
Prime Rate. No adjustments shall be made to account for the difference between
the number of days in a year on which the rates referred to in this definition
are based and the number of days in a year on the basis of which interest is
calculated in the Agreement.
"Canadian Prime Rate Loan" means a Loan denominated in Canadian Dollars
that bears interest at a rate based on the Canadian Prime Rate.
"Capital Expenditures" means, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Indebtedness) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP; provided,
that for the purposes of paragraphs (a) and (d) of Annex G, any proceeds in
excess of $15,000,000 arising in respect of either the warrant exercise program
of Rand or other capital securities issued by Rand which are contributed to LLTC
and applied thereby to reduce the outstanding balance of the US Revolving Credit
Facility shall be deducted from Capital Expenditures in the year in which such
amounts are so applied.
"Capital Expenditures Reporting Plan" has the meaning set forth in Section
(p) of Annex E.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Accounts" has the meaning ascribed to it Annex B.
"Cash Equivalents" means cash or investments in (A) marketable direct
obligations issued or unconditionally guaranteed by Canada, any agency thereof,
the United States of America or any agency thereof maturing within one year from
the date of acquisition thereof, (B) commercial paper maturing no more than one
year from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Ratings Group or ▇▇▇▇▇'▇ Investors
Service, Inc., (C) certificates of deposit, maturing no more than one year from
the date of creation thereof, issued by commercial banks incorporated under the
laws of Canada or the United States of America or a State thereof, each having
combined capital, surplus and undivided profits of not less than US$300,000,000
and having a senior unsecured rating of "A" or better by a nationally recognized
rating agency (an "A Rated Bank"), (D) time deposits, maturing no more than 30
days from the date of creation thereof with A Rated Banks and (E) mutual funds
that invest solely in one or more of the investments described in clauses (A)
through (D) above.
A-5
"Cash Management Systems" has the meaning ascribed to it in Section 1.7.
"Cdn. Borrowing Availability" means, as of any date of determination, the
lesser of (i) the Cdn. Maximum Amount and (ii) the Cdn. Borrowing Base, in each
case, less the sum of the Cdn. Revolving Loans and the Cdn. Swing Line Loans
then outstanding.
"Cdn. Borrowing Base" means, in respect of Lower Lakes, as of any date of
determination thereof by the Agent from time to time, an amount equal to (a)
eighty five percent (85%) of the amount of Eligible Cdn. Accounts, less (b) any
Reserves established in accordance with Section 1.6, plus (c) the amount
available to be drawn under the Special Letter of Credit, in each case as at the
date of determination.
"Cdn. Collection Accounts" shall mean Agent's Canadian Dollar account
number ▇▇▇▇▇▇▇ in the name of GE Capital Corporation at Royal Bank of Canada,
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, BSLA: C58CLG, Swift ID:
▇▇▇▇▇▇▇▇-00002, Ref: CND4068 and Lower Lakes or such other account(s) as may be
specified in writing by Agent as the "Cdn. Collection Accounts".
"Cdn. Credit Parties" means all Credit Parties that exist pursuant to the
laws of any Province of Canada or the federal laws of Canada and "Cdn. Credit
Party" means any one of them.
"Cdn. Lenders" means those Lenders having either Cdn. Revolving Loan
Commitments, Cdn. Term Loan Commitments or Engine Term Loan Commitments.
"Cdn. Maximum Amount" means, as of any date of determination, an amount
equal to the aggregate of the Cdn. Revolving Loan Commitments of all Cdn.
Revolving Lenders as of that date.
"Cdn. Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a)(i).
"Cdn. Participant" means a Person having participations in the Cdn.
Revolving Loans, Cdn. Term Loans or Engine Term Loans.
"Cdn. Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(f)(iii).
"Cdn. Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i).
"Cdn. Revolving Credit Facility" has the meaning ascribed to it in Section
1.1(a)(i).
"Cdn. Revolving Lenders" means those Lenders having Cdn. Revolving Loan
Commitments.
"Cdn. Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Lower Lakes and (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Lower Lakes. Unless
the context otherwise requires, references to the outstanding principal balance
of the Cdn. Revolving Loans shall include the outstanding balance of Letter of
Credit Obligations.
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"Cdn. Revolving Loan Commitment" means (a) as to any Cdn. Revolving
Lender, the aggregate commitment of such Cdn. Revolving Lender to make Cdn.
Revolving Credit Advances or incur Letter of Credit Obligations as set forth on
Annex I to the Agreement or in the most recent Assignment Agreement executed by
such Cdn. Revolving Lender and (b) as to all Cdn. Revolving Lenders, the
aggregate commitment of all Cdn. Revolving Lenders to make Cdn. Revolving Credit
Advances or incur Letter of Credit Obligations, which aggregate commitment shall
be Thirteen Million Five Hundred Thousand Canadian Dollars (Cdn.$13,500,000), as
such amount may be adjusted, if at all, from time to time in accordance with
this Agreement.
"Cdn. Revolving Notes" has the meaning ascribed to it in Section
1.1(a)(ii).
"Cdn. Seasonal Facility" has the meaning set forth in Section 1.1(a)(ii).
"Cdn. Swing Line Advance" has the meaning ascribed to it in Section
1.1(f)(i).
"Cdn. Swing Line Availability" has the meaning ascribed to it in Section
1.1(f)(i).
"Cdn. Swing Line Lender" means GE Capital.
"Cdn. Swing Line Loan" means, at any time, the aggregate amount of Cdn.
Swing Line Advances outstanding to Lower Lakes.
"Cdn. Swing Line Loan Commitment" means, as to the Cdn. Swing Line Lender,
the commitment of the Cdn. Swing Line Lender to make Cdn. Swing Line Advances as
set forth on Annex I to the Agreement, which commitment constitutes a
subfacility of the Cdn. Revolving Loan Commitment of the Cdn. Swing Line Lender.
"Cdn. Swing Line Note" has the meaning ascribed to it in Section
1.1(f)(ii).
"Cdn. Term Lenders" means those Lenders having Cdn. Term Loan Commitments.
"Cdn. Term Loan" has the meaning assigned to it in Section 1.1(b)(i).
"Cdn. Term Loan Commitment" means (a) as to any Cdn. Term Lender with a
Cdn. Term Loan Commitment, the commitment of such Lender to make its Pro Rata
Share of the Cdn. Term Loan as set forth on Annex I to the Agreement or in the
most recent Assignment Agreement executed by such Lender, and (b) as to all Cdn.
Lenders with a Cdn. Term Loan Commitment, the aggregate commitment of all
Lenders to make the Cdn. Term Loan, which aggregate commitment shall be Forty
One Million Seven Hundred Thousand Canadian Dollars (Cdn. $41,700,000) on the
Restatement Closing Date. After advancing the Cdn. Term Loan, each reference to
a Lender's Cdn. Term Loan Commitment shall refer to that Lender's Pro Rata Share
of the outstanding Cdn. Term Loan.
"Cdn. Term Notes" has the meaning assigned to it in Section 1.1(b)(i).
"Cdn. Vessels" means, collectively, the Cuyahoga, the Saginaw, the
Mississagi, the Michipicoten, the Independent, the Pioneer and the ▇▇▇▇▇▇▇.
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"Change of Control" means, with respect to Parent on or after the
Restatement Closing Date, (i) that any change in the composition of such
Borrower's shareholders as of the Restatement Closing Date shall occur which
would result in any shareholder or group acquiring 50.1% or more of any class of
shares of such Borrower (whether directly or indirectly), or that any Person (or
group of Persons acting in concert) shall otherwise acquire, directly or
indirectly (including through Affiliates), the power to elect a majority of the
board of directors of such Borrower or otherwise direct the management or
affairs of such Borrower by obtaining proxies, entering into voting agreements
or trusts, acquiring securities or otherwise, (ii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ceases to be
directly and actively involved in the Business on a full time basis unless Lower
Lakes has, within 90 days of the date on which he ceases to be directly and
actively involved in the Business, replaced him with a person reasonably
acceptable to the Lenders (provided, that after a period of 30 days, an interim
replacement reasonably acceptable to the Agent and Requisite Lenders has been
appointed), (iii) Rand ceases to own and control all of the economic and voting
rights associated with all of the outstanding capital stock of each of Parent
and Rand Finance, (iv) Parent ceases to own and control all of the economic and
voting rights associated with all of the outstanding capital stock of each
Borrower, or (v) Borrowers cease to own and control all of the economic and
voting rights associated with all of the outstanding capital stock of any of
their Subsidiaries.
"Charges" means all Taxes assessed, levied or imposed against a Credit
Party or upon or relating to (a) the Collateral, (b) the Obligations, (c) the
employees, payroll, income or gross receipts or capital of a Credit Party, (d)
any Credit Party's ownership or use of any properties or other assets, or (e)
any other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in the
PPSA in the case of Cdn. Credit Parties and as such term is defined in the Code
in the case of US Credit Parties, now owned or hereafter acquired by any Credit
Party, wherever located.
"Closing Checklist" means the schedule, including all appendices, exhibits
or schedules thereto, listing certain documents and information to be delivered
in connection with the Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, that in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of, or remedies with respect to, the Lenders' Lien on any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions of this Agreement relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions;
provided further, that to the extent that the Code is used to define any term
herein or in any Loan Document and such term is defined differently in different
Articles or Divisions of the Code, the definition of such term contained in
Article or Division 9 shall govern.
"Collateral" means the property covered by the Security and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, movable or immovable, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or other Lien in favor
of Agent, on behalf of itself and Lenders, to secure the Obligations.
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"Collateral Documents" means the Security Agreements, the Pledge
Agreements, the Guarantees, the Lower Lakes Guarantee, the Fleet Mortgages, the
Mortgages, the Lower Lakes Mortgages and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex F.
"Collection Account" means any of the Cdn. Collection Accounts or the US
Collection Accounts and "Collection Accounts" means all of them.
"Commitment Termination Date" means the earliest of (a) ▇▇▇▇▇ ▇, ▇▇▇▇, (▇)
the date of termination of Lenders' obligations to make Advances or permit
existing Loans to remain outstanding pursuant to Section 8.2(b), and (c) the
date of indefeasible prepayment in full by Borrowers of the Loans and the
cancellation and return of all Letters of Credit or the cash collateralization
of all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of the Commitments to zero dollars (Cdn.$0/US$0).
"Commitments" means (a) as to any Cdn. Lender, the aggregate of such
Lender's Cdn. Revolving Loan Commitment (including without duplication the Cdn.
Swing Line Lender's Cdn. Swing Line Loan Commitment as a subset of its Cdn.
Revolving Loan Commitment), Cdn. Term Loan Commitment and Engine Term Loan
Commitment and as to any US Lender, the aggregate of such Lender's US Revolving
Loan Commitment (including without duplication the US Swing Line Lender's US
Swing Line Loan Commitment as a subset of its US Revolving Loan Commitment), and
US Term Loan Commitment, all as set forth on Annex I to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate of all Lenders' Revolving Loan Commitments (including
without duplication the Swing Line Lender's Swing Line Loan Commitment as a
subset of its Revolving Loan Commitment) and Term Loan Commitments, which
aggregate commitment shall be Ninety-Eight Million Seven Hundred Thousand US
Dollars (US$98,700,000) on the Restatement Closing Date, as to each of clauses
(a) and (b), as such Commitments may be reduced, amortized or adjusted from time
to time in accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Compliance Procedures" means the memorandum or other writing delivered by
the Borrowers to the Agent setting forth the Borrowers' compliance procedures
and intended plan of action for the ongoing investigation and diligence of Money
Laundering Activities and Racketeering Activities with respect to the Assets.
"Concentration Account" has the meaning ascribed to it in Annex C.
"Contracts" means all contracts, undertakings, or agreements (other than
rights evidenced by Chattel Paper, securities or Instruments) in or under which
a Borrower may now or hereafter have any right, title or interest, including any
agreement relating to the terms of payment or the terms of performance of any
Account.
"Control Letter" means a letter agreement between Agent and (i) the issuer
of uncertificated securities with respect to uncertificated securities in the
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name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims any security interest or other Lien in the
applicable financial assets in a manner reasonably satisfactory to Agent,
acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Agent without further consent by the affected Credit Party.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control, which together with a Borrower and any of
its subsidiaries, are treated as a single employer under Section 414 of the
Revenue Code or Section 4001 of ERISA.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and intangibles of like nature
(whether registered or unregistered) now owned or existing or hereafter adopted
or acquired, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the US or Canadian Copyright Office or in any similar office or agency in any
other country or any political subdivision thereof, and (b) all reissues,
extensions or renewals thereof.
"Credit Facility" shall mean a category of Commitments and extensions of
credit thereunder.
"Credit Parties" means, collectively, the Borrowers and the Guarantors and
their respective successors and assigns and "Credit Party" means any one of
them.
"Cuyahoga" means the Cuyahoga, a single screw steam propulsion
self-unloading bulk carrier of 10,532 gross tons built in 1943 and bearing
Canadian Certificate of Registry Official Number 815560.
"Cuyahoga Mortgage" means the statutory ship mortgage of the Cuyahoga,
made by Lower Lakes in favor of the Agent, such mortgage to be in form
satisfactory to the Lenders and Lenders' Counsel and suitable for registration.
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Design License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Design.
"Designs" means all of the following now owned or hereafter acquired by
any Credit Party: (a) all industrial designs and intangibles of like nature
(whether registered or unregistered), now owned or existing or hereafter adopted
or acquired, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the Canadian Industrial Design Office or in any similar office or agency in
any other country or any political subdivision thereof, and (b) all reissues,
extensions or renewals thereof.
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"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to the
Agreement.
"Document of Title" means any "document of title", as such term is defined
in the Code or the PPSA, now owned or hereafter acquired by any Credit Party.
"EBITDA" means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period, determined in accordance with GAAP, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (v) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) depreciation and
amortization for such period, (iv) amortized debt discount for such period, (v)
non-cash deferred transaction costs incurred as of the Original Closing Date
with respect to the transactions contemplated by the Original Credit Agreement
not to exceed $1,000,000 in the aggregate and (vi) the amount of any deduction
to consolidated net income as the result of any grant to any members of the
management of such Person of any Stock, in each case to the extent included in
the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was amalgamated or consolidated into, such
Person or any of such Person's Subsidiaries; (2) the income (or deficit) of any
other Person (other than a Subsidiary) in which such Person has an ownership
interest, except to the extent any such income has actually been received by
such Person in the form of cash dividends or distributions; (3) the
undistributed earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary; (4) any restoration to income
of any contingency reserve, except to the extent that provision for such reserve
was made out of income accrued during such period; (5) any write-up of any
asset; (6) any net gain from the collection of the proceeds of life insurance
policies; (7) any net gain arising from the acquisition of any securities, or
the extinguishment, under GAAP, of any Indebtedness, of such Person; (8) in the
case of a successor to such Person by consolidation or amalgamation or as a
transferee of its assets, any earnings of such successor prior to such
consolidation, amalgamation or transfer of assets; and (9) any deferred credit
representing the excess of equity in any Subsidiary of such Person at the date
of acquisition of such Subsidiary over the cost to such Person of the investment
in such Subsidiary.
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"E-Fax" means any system used to receive or transmit faxes electronically.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade or
business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV Plan unless such failure is cured within thirty (30) days; (g)
any other event or condition that would reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ERISA Plan" mean, at any time, an "employee benefit plan," as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any Credit Party.
"E-System" means any electronic system, including Intralinks(R) and any
other Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by Agent, any of its Affiliates, or any of such Person's
respective officers, directors, employees, attorneys, agents and representatives
or any other Person, providing for access to data protected by passcodes or
other security system.
"Eligible Accounts" has the meaning ascribed to it in Section 1.6 of the
Agreement.
"Eligible Cdn. Accounts" means Eligible Accounts that are owing to Lower
Lakes.
"Eligible US Accounts" means Eligible Accounts that are owing to LLTC.
"Engine Term Lenders" means those Lenders having Engine Term Loan
Commitments.
"Engine Term Loan" has the meaning assigned to it in Section 1.1(e)(i).
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"Engine Term Loan Commitment" means (a) as to any Cdn. Term Lender with an
Engine Term Loan Commitment, the commitment of such Lender to make its Pro Rata
Share of the Engine Term Loan as set forth on Annex I to the Agreement or in the
most recent Assignment Agreement executed by such Lender, and (b) as to all Cdn.
Lenders with an Engine Term Loan Commitment, the aggregate commitment of all
Lenders to make the Engine Term Loan, which aggregate commitment shall be Eight
Million Canadian Dollars (Cdn. $8,000,000) on the Restatement Closing Date.
After advancing the Engine Term Loan, each reference to a Lender's Engine Term
Loan Commitment shall refer to that Lender's Pro Rata Share of the outstanding
Engine Term Loan.
"Engine Term Notes" has the meaning assigned to it in Section 1.1(e)(i).
"Environmental Laws" means all applicable federal, provincial, state,
territorial, municipal, local and foreign laws (including the common law),
statutes, ordinances, codes, rules, guidelines, policies, procedures, standards,
orders-in-council, and regulations, now or hereafter in effect, and in each case
as amended or supplemented from time to time, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human,
plant or animal health or safety, the environment or natural resources
(including air, surface water, groundwater, wetlands, land, soil, land surface
or subsurface strata, wildlife, aquatic species and vegetation). Environmental
Laws include, without limitation, the Canadian Environmental Protection Act,
1999, Fisheries Act, Transportation of Dangerous Goods Act, 1992, the Migratory
Birds Protection Act, 1994, the Species At Risk Act, the Hazardous Products Act,
the Canada Shipping Act and the Canada Wildlife Act.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, costs (including any response,
remedial and removal costs, investigation and feasibility study costs, capital
costs, operation and maintenance costs), losses, damages (including any punitive
damages, property damages, natural resource damages, consequential damages,
treble damages) and expenses (including all reasonable fees, disbursements and
expenses of legal counsel, experts and consultants), fines, penalties, sanctions
and interest incurred as a result of or related to any claim, suit, action,
administrative order, investigation order (including judicial and administrative
orders), proceeding or demand by any Person, whether based in contract, tort,
implied or express warranty, strict liability, statute regulation, equity or
common law, including any arising under or related to any Environmental Laws,
Environmental Permits, or in connection with any Release or threatened Release
or presence of a Hazardous Material, whether on, at, in, under, from or about or
in the vicinity of any real or personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," (as such term is defined in (i) the
PPSA in the case of any of the Cdn. Credit Parties and (ii) the Code in the case
of any of the US Credit Parties), now owned or hereafter acquired by any Credit
Party, wherever located and, in any event, including all such Credit Party's
machinery and equipment, including processing equipment, conveyors, machine
tools, data processing and computer equipment, including embedded software and
peripheral equipment and all engineering, processing and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks, forklifts,
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molds, dies, stamps, motor vehicles, rolling stock and other equipment of every
kind and nature, trade fixtures and fixtures not forming a part of real
property, all whether now owned or hereafter acquired, and wherever situated,
together with all additions and accessions thereto, replacements therefor, all
parts therefor, all substitutes for any of the foregoing, fuel therefor, and all
manuals, drawings, instructions, warranties and rights with respect thereto, and
all products and proceeds thereof and condemnation awards and insurance proceeds
with respect thereto.
"Equivalent Amount" means, on any date of determination, with respect to
obligations or valuations denominated in one currency (the "first currency"),
the amount of another currency (the "second currency") which would result from
the conversion of the relevant amount of the first currency into the second
currency at the 12:00 noon rate quoted on the Reuters Monitor Screen (Page BOFC
or such other Page as may replace such Page for the purpose of displaying such
exchange rates) on such date or, if such date is not a Business Day, on the
Business Day immediately preceding such date of determination, or at such other
rate as may have been agreed in writing between the Borrowers and Agent.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Cash Flow" means, without duplication, with respect to any Fiscal
Year of Parent on a consolidated basis, EBITDA plus decreases in Working Capital
minus (a) Capital Expenditures during such Fiscal Year, minus (b) cash paid
Interest Expense and scheduled and mandatory principal payments paid or payable
in respect of Funded Debt, (c) cash Taxes, (d) increases in Working Capital and
(e) semi-annual cash dividend payments payable to Parent in connection with the
issuance of the Preferred Equity.
"Existing Cdn. Term Loan" has the meaning assigned to it in Section
1.1(b)(i).
"Existing US Term Loan" has the meaning assigned to it in Section
1.1(d)(i).
"Fair Market Value" means the fair market value of the asset in question,
as determined by the Agent in good faith and in accordance with its customary
practices, less any costs, fees or expenses associated with the disposition of
such asset.
"FCPA" means the United States Foreign Corrupt Practices Act of 1977, as
amended.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender pursuant to
the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in Annex G.
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"Financial Statements" means the income statements, statements of cash
flows and balance sheets of a Person delivered in accordance with Section 3.4
and Annex E.
"Fiscal Month" means any of the monthly accounting periods of Parent and
its Subsidiaries.
"Fiscal Quarter" means each three month period of Parent's Fiscal Year
ending on June 30, September 30, December 31 and March 31.
"Fiscal Year" means, in respect of Parent, the twelve month period ending
on the last day of March in any year.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
fiscal period, the ratio of EBITDA less Capital Expenditures (excluding Capital
Expenditures financed through specifically arranged financings approved of by
the Lenders in writing) to Fixed Charges.
"Fixed Charges" means, with respect to any Person for any fiscal period,
(a) the aggregate of all Interest Expense paid or accrued during such period,
plus (b) scheduled payments of principal with respect to Indebtedness during
such period, plus (c) Taxes paid or payable in cash with respect to such fiscal
period, plus (d) dividends paid in cash in such period in respect of the
Preferred Equity.
"Fixtures" means all fixtures (including trade fixtures), facilities and
equipment, howsoever affixed or attached to real property or buildings or other
structures on real property, now owned or hereafter acquired by any Credit
Party.
"Fleet Mortgage" means the first preferred fleet mortgage, dated the date
hereof, given by Grand River in favor of GE Capital on Grand River's U.S. Flag
Vessels named INVINCIBLE, MAUMEE, MANISTEE, CALUMET, and MANITOWOC,
respectively.
"Funded Debt" means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and that by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
the Borrowers, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United States
of America, consistently applied, as such term is further defined in Annex G to
the Agreement.
"GE Capital" means General Electric Capital Corporation and its successors
and assigns.
"GE Capital Fee Letter" means that certain letter, dated January 24, 2008,
between GE Capital and the Borrowers with respect to certain Fees to be paid
from time to time by the Borrowers to GE Capital, as such letter may be amended,
supplemented or replaced from time to time.
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"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Government Blacklist" means (i) The Specially Designated Nationals and
Blocked Persons List maintained by the Office of Foreign Assets Control, U.S.
Department of the Treasury, or (ii) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the rules
and regulations of Office of Foreign Assets Control, U.S. Department of the
Treasury, (iii) any similar list maintained by the U.S. Department of State, the
U.S. Department of Commerce or pursuant to any Executive Order of the President
of the United States, or (iv) any similar list maintained by any state or
applicable foreign jurisdiction.
"Grand River" means Grand River Navigation Company, Inc., a Delaware
corporation, and includes its successors by merger or otherwise.
"Grand River Subordination Agreement" means the subordination agreement
made by Grand River in favor of the Agent on behalf of the Lenders in which it
subordinates its interest in the Lower Lakes Guarantee and the Lower Lakes
Mortgages to all indebtedness owing by Lower Lakes to the Lenders.
"Guaranteed Indebtedness" means, as to any Person, any obligation of such
Person guaranteeing, providing comfort or otherwise supporting any Indebtedness,
lease, dividend, or other obligation ("primary obligation") of any other Person
(the "primary obligor") in any manner, including any obligation or arrangement
of such Person to (a) purchase or repurchase any such primary obligation, (b)
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, 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, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or (e)
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
incurred and (y) the maximum amount for which such Person may be liable pursuant
to the terms of the instrument embodying such Guaranteed Indebtedness, or, if
not stated or determinable, the maximum reasonably anticipated liability
(assuming full performance) in respect thereof.
"Guarantees" means, collectively, each of the guarantees executed on the
date hereof by a Guarantor and any other guarantee executed from time to time by
any other Person in favor of Agent and other Secured Parties in respect of the
Obligations of a Borrower.
"Guarantors" means each US Borrower, Parent, Rand, Rand Finance and each
other Person that may from time to time become a guarantor hereunder and their
successors and assigns and "Guarantor" means any one of them.
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"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
applicable Environmental Laws, including any material or substance that is (a)
defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "dangerous goods", "extremely hazardous waste," "restricted
hazardous waste," "pollutant," "contaminant," "hazardous constituent," "special
waste," "toxic substance" or other similar term or phrase under any applicable
Environmental Laws, or (b) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB's), or any radioactive substance.
"IRS" means the Internal Revenue Service of the United States of America.
"ITA" means the Income Tax Act (Canada).
"Illegal Proceeds" means any proceeds (i) derived from Money Laundering
Activities and/or Racketeering Activities; (ii) procured in violation of the
FCPA or applicable Mexican anti-bribery, or similar laws; or (iii) derived from
an Illegal Source.
"Illegal Source" means any individual or entity on a Government Blacklist.
"Immaterial Lien" means all Liens described in the definition of
"Permitted Encumbrances" other than in clause (i) thereof.
"Indebtedness" means , with respect to any Person, without duplication (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred 6 months or more, but excluding
obligations to trade creditors incurred in the ordinary course of business that
are unsecured and not overdue by more than 6 months unless being contested in
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations and the present value (discounted at the US Base
Rate as in effect on the Closing Date) of future rental payments under all
synthetic leases, (f) all obligations of such Person under commodity purchase or
option agreements or other commodity price hedging arrangements, in each case
whether contingent or matured, (g) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the
risks of that Person arising from fluctuations in currency values or interest
rates, in each case whether contingent or matured, (h) all Indebtedness referred
to above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property or other assets (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, and (i) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section 1.12.
"Indemnified Person" has the meaning ascribed to it in Section 1.12.
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"Independent" means the Voyageur Independent, a self-propelled steel cargo
vessel bearing Canadian Certificate of Registry Official Number 827118.
"Independent Mortgage" means the statutory ship mortgage of the
Independent made by Lower Lakes in favor of the Agent, such mortgage to be in a
form reasonably satisfactory to the Lenders and Lenders' Counsel and suitable
for registration.
"Insolvency Laws" shall mean any of the Bankruptcy and Insolvency Act
(Canada), the Company's Creditors Arrangement Act (Canada), the Winding Up and
Restructuring Act (Canada) and the Bankruptcy Code of 1978, as amended, 11
U.S.C. Section 101 et seq. as now and hereafter in effect, any successors to
such statute and any other applicable insolvency or other similar law of any
jurisdiction, including any law of any jurisdiction permitting a debtor to
obtain a stay or a compromise of the claims of its creditors against it.
"Instruments" shall mean in the case of the Cdn. Credit Parties any
"instrument", as such term is defined in the PPSA, and in the case of the US
Credit Parties any "instrument", as such term is defined in the Code, in each
case now owned or hereafter acquired by a Borrower or a Credit Party, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all notes and other evidences of indebtedness,
other than instruments that constitute, or are a part of a group of writings
that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents, Designs,
Copyrights, Trademarks, trade secrets and customers lists.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Payment Date" means (a) as to any Canadian Prime Rate Loan, BA
Rate Loan and US Base Rate Loan, the first Business Day of each month to occur
while such Loan is outstanding, and (b) as to any LIBOR Loan, the last day of
the applicable LIBOR Period; provided, that, in addition to the foregoing, each
of (x) the date upon which all of the Commitments have been terminated and the
Loans have been paid in full and (y) the Commitment Termination Date shall be
deemed to be an "Interest Payment Date" with respect to any interest that has
then accrued under the Agreement.
"Inventory" shall mean in the case of the Cdn. Credit Parties any
"inventory," as such term is defined in the PPSA, and in the case of the US
Credit Parties any "inventory" as such term is defined in the Code, now or
hereafter owned or acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
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"Invincible" means the Invincible, a documented vessel of the United
States bearing U.S. Official Number 610267.
"L/C Guarantor" has the meaning ascribed to it in Annex B.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"LIBOR Business Day" means a Business Day on which banks in the City of
London, England are generally open for interbank or foreign exchange
transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by LLTC or Grand River, as
applicable, pursuant to the Agreement and ending one, two or three months
thereafter, as selected by LLTC's or Grand River's irrevocable notice to Agent
as set forth in Section 1.5(e); provided, that the foregoing provision relating
to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior to
such date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) LLTC or Grand River, as the case may be, shall select LIBOR
Periods so as not to require a payment or prepayment of any LIBOR Loan
during a LIBOR Period for such Loan; and
(e) LLTC or Grand River, as the case may be, shall select LIBOR
Periods so that there shall be no more than 5 separate LIBOR Loans in
existence at any one time.
"LIBOR Rate" means, for any LIBOR Period, the offered rate per annum for
deposits of Dollars for the applicable LIBOR Period that appears on Reuters
Screen LIBOR01 Page as of 11:00 A.M. (London, England time) two (2) Business
Days prior to the first day in such LIBOR Period. If no such offered rate
exists, such rate will be the rate of interest per annum, as determined by the
Agent (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which
deposits of Dollars in immediately available funds are offered at 11:00 A.M.
(London, England time) two (2) Business Days prior to the first day in such
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LIBOR Period by major financial institutions reasonably satisfactory to the
Agent in the London interbank market for the applicable LIBOR Period and for an
amount equal or comparable to the principal amount of the Loans to be borrowed,
converted or continued as LIBOR Rate Loans on such date of determination.
"LLTC" means Lower Lakes Transportation Company, a Delaware corporation,
being the US Revolving Loan borrower hereunder, and includes its successors by
merger or otherwise.
"Lease Expenses" means, with respect to any Person for any fiscal period,
the aggregate rental obligations of such Person determined in accordance with
GAAP which are payable in respect of such period under leases of real or
personal property (net of income from subleases thereof, but including taxes,
insurance, maintenance and similar expenses that the lessee is obligated to pay
under the terms of such leases), whether or not such obligations are reflected
as liabilities or commitments on a consolidated balance sheet of such Person or
in the notes thereto, excluding, however, any such obligations under Capital
Leases.
"Lenders" means (a) GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall assign all or any portion
of the Obligations, such term shall include any assignee of such Lender, and (b)
solely for the purpose of obtaining the benefit of the Liens granted to the
Agent for the benefit of the Lenders under the Collateral Documents, a Person to
whom any Obligations in respect of a Secured Rate Contract are owed. For the
avoidance of doubt, any Person to whom any Obligations in respect of a Secured
Rate Contract are owed and which does not hold any Loans or Commitments shall
not be entitled to any other rights as a "Lender" under this Agreement or any
other Loan Document.
"Lenders' Counsel" means the firms of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and Winston &
▇▇▇▇▇▇ LLP or such other firm of legal counsel as the Agent may from time to
time designate and any and all local agent counsel retained by Winston & ▇▇▇▇▇▇
LLP for and on behalf of the Agent.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations incurred
by Agent and Lenders at the request of Lower Lakes, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance of
Letters of Credit by the L/C Issuer or the purchase of a participation as set
forth in Annex B with respect to any Letter of Credit. The amount of such Letter
of Credit Obligations shall equal the maximum amount that may be payable by
Agent or Lenders thereupon or pursuant thereto.
"Letters of Credit" means documentary or standby letters of credit issued
for the account of Lower Lakes by any L/C Issuer for which Agent and Lenders
have incurred Letter of Credit Obligations.
"License" means any Copyright License, Design License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
A-20
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the PPSA, the
Code or comparable notice filing under the law of any other jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.12.
"Loan Account" has the meaning ascribed to it in Section 1.11.
"Loan Documents" means the Agreement, the Notes, the Security, the
Collateral Documents, the Secured Rate Contracts, the Grand River Subordination
Agreement and all other agreements, instruments, documents and certificates
whether or not identified in the Closing Checklist executed and delivered to, or
in favor of, Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices and all other written matter
whether heretofore, now or hereafter executed by or on behalf of any Credit
Party, or any employee of any Credit Party, and delivered to Agent, any Lender
or any Secured Swap Provider in connection with the Agreement or the
transactions contemplated thereby. Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
"Loans" means the Revolving Loans, the Swing Line Loans and the Term
Loans.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Lower Lakes" means Lower Lakes Towing Ltd. as the corporation continuing
from an amalgamation on March 1, 2007 between Port Dover Steamship Company Inc.
and Lower Lakes Towing Ltd., being the Canadian borrower hereunder, and includes
its successors by amalgamation or otherwise.
"Lower Lakes Guarantee" means the guarantee by Lower Lakes in favor of
Grand River dated as of the March 3, 2006 in which it guarantees the obligations
of LLTC to Grand River pursuant to the Time Charter Agreements, as such
guarantee may be amended, restated, supplemented or replaced from time to time.
"Lower Lakes Mortgages" means the mortgages over each of the Cdn. Vessels
granted by Lower Lakes in favor of Grand River to secure its obligations under
the Lower Lakes Guarantee, as such mortgages may be amended, restated,
supplemented or replaced from time to time.
"Management Incentive Plan" means the management incentive plan of Rand
adopted by Rand as of July 26, 2007, as such plan may be subsequently amended or
replaced with the consent of the Lenders.
"Manistee" means the Manistee (formerly the ▇▇▇▇▇▇▇ ▇▇▇▇▇), a documented
vessel of the United States bearing U.S. Official Number 243406.
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"Manistee Mortgage" means the statutory ship mortgage of the Manistee made
by Grand River in favor of the Agent, such mortgage to be in a form reasonably
satisfactory to the Lenders and Lenders' Counsel and suitable for registration.
"Manitowoc" means the Manitowoc (formerly the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇), a
documented vessel of the United States bearing U.S. Official Number 552395.
"Manitowoc Mortgage" means the statutory ship mortgage of the Manitowoc,
made by Grand River in favor of the Agent, such mortgage to be in form
reasonably satisfactory to the Lenders and Lenders' Counsel and suitable for
registration.
"Margin Stock" has the meaning ascribed to it in Section 3.10.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, liabilities, operations, prospects, properties or other
condition (financial or otherwise) of a Credit Party, (b) a Borrower's ability
to pay or perform any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement or any Credit Party's ability to honor its
guarantee obligations, (c) the Collateral or Agent's Liens, on behalf of the
Secured Parties, on the Collateral or the priority of such Liens, (d) the
ability of the Agent or any Lender to enforce its rights and remedies under the
Agreement and the other Loan Documents, or (e) the validity or enforceability of
this Agreement or any Loan Document.
"Material Contracts" means, collectively, each written agreement,
arrangement or understanding entered into by an Credit Party which:
(a) if not complied with or expires, could reasonably be expected
to have a Material Adverse Effect; or
(b) provides for a binding obligation from the Credit Party to
make annual expenditures of an amount greater than US$500,000
or a binding obligation from the other contract party to
purchase services from the Credit Party in volumes generating
annual receipts to such Credit Party of an amount greater than
US$1,000,000, which has a term of more than one year or has a
lesser term with rights of renewal that, if renewed, would
result in a term of more than one year; or
(c) provides for the time charter or the bareboat charter of a
Vessel, including the Time Charter Agreements and the Bareboat
Charter Party Agreement.
"Maumee" means the Maumee (formerly the Calcite II), a documented vessel
of the United States bearing U.S. Official Number 228886.
"Maximum Amount" means either of the Cdn. Maximum Amount or the US Maximum
Amount.
"Michipicoten" means the Michipicoten , a self-propelled steam turbine
cargo vessel bearing Canadian Certificate of Registry Official Number 825098.
A-22
"Michipicoten Mortgage" means the statutory ship mortgage of the
Michipicoten made by Lower Lakes in favor of the Agent, such mortgage to be in a
form reasonably satisfactory to the Lenders and Lenders' Counsel acting
reasonably and suitable for registration.
"Mississagi" means the Mississagi (formerly the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇), a
self-propelled cargo vessel and bearing Canadian Certificate of Registry
Official Number 822914.
"Mississagi Mortgage" means the statutory ship mortgage of the Mississagi
made by Lower Lakes in favor of the Agent, such mortgage to be in a form
satisfactory to the Lenders and Lenders' Counsel and suitable for registration.
"Money Laundering Activities" means activities involving funds which are
(i) proceeds of crime in violation of law or (ii) derived or potentially derived
from any Illegal Source.
"Mortgages" means, collectively, the Cuyahoga Mortgage, the Saginaw
Mortgage, the Mississagi Mortgage, the Manistee Mortgage, the Independent
Mortgage, the Pioneer Mortgage, the Michipicoten Mortgage, the Calumet Mortgage,
the Manitowoc Mortgage and the ▇▇▇▇▇▇▇ Mortgage.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making,
is obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
"NC" means National City Commercial Capital Company, LLC, an Indiana
limited liability company.
"Non-Funding Lender" has the meaning ascribed to it in Section 9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes, the Swing Line Notes and
the Term Notes.
"Notice of Conversion/Continuation-LIBOR" has the meaning ascribed to it
in Section 1.5(e)(ii).
"Notice of Conversion/Continuation-BA Rate" has the meaning ascribed to it
in Section 1.5(e)(iii).
"Notice of Revolving Credit Advance" means either a Cdn. Notice of
Revolving Credit Advance or a US Notice of Revolving Credit Advance and "Notice
of Revolving Credit Advances" means both of them.
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent, any Lender or any Secured Swap Provider, and all covenants and
duties regarding such amounts, of any kind or nature, present or future, whether
or not evidenced by any note, agreement, letter of credit agreement or other
instrument, arising under the Agreement, any of the other Loan Documents or any
Secured Rate Contract. This term includes all principal, interest (including all
interest that accrues after the commencement of any bankruptcy or insolvency
proceeding upon or after the insolvency of a Credit Party, whether or not
allowed in such proceeding), Fees, expenses, legal fees and any other sum
chargeable to any Credit Party under the Agreement, any of the other Loan
Documents or any Secured Rate Contract.
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"Operating Lease" means any lease of (or other agreement conveying the
right to use) any real or personal property by any Borrower or any Subsidiary
thereof, as lessee, other than any Capital Lease and other than any time charter
or bareboat charter.
"Operating Plan" has the meaning set forth in Section (c) of Annex E.
"Organizational Documents" means, with respect to any Person, such
Person's articles or other charter documents, by-laws, unanimous shareholder
agreement, partnership agreement, joint venture agreement, operating agreement,
limited liability company agreement or trust agreement, as applicable, and any
and all other similar agreements, documents and instruments relative to such
Person.
"Original Calumet" means the Calumet (formerly the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇), a
documented vessel of the United States bearing U.S. Official Number 228960.
"Original Closing Date" means March 3, 2006.
"Original Credit Agreement" has the meaning assigned to it in the recitals
to the Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PPSA" shall mean the Personal Property Security Act (Ontario) and the
Regulations thereunder, as from time to time in effect, provided, however, if
attachment, perfection or priority of Agent's security interests in any
Collateral are governed by the personal property security laws of any
jurisdiction other than Ontario, PPSA shall mean those personal property
security laws in such other jurisdiction for the purposes of the provisions
hereof relating to such attachment, perfection or priority and for the
definitions related to such provisions.
"Parent" means Rand LL Holdings Corp., a Delaware corporation.
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which any Credit Party now holds
or hereafter acquires any interest: (a) all letters patent of invention and all
applications for letters patent, all design patents and all registrations and
recordings thereof, including registrations, recordings and applications in the
Canadian or US Patent and Trademark Office or in any similar office or agency in
any other country or political subdivision thereof, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"Patriot Act" has the meaning ascribed to it in Section 11.20.
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"Permitted Encumbrances" means the following encumbrances: (a) Liens for
taxes or assessments or other governmental Charges not yet due and payable or
which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
employment insurance, social security or public liability laws or similar
legislation; (c) pledges or deposits of money securing bids, tenders, contracts
(other than contracts for the payment of money) or leases to which any Credit
Party is a party as lessee made in the ordinary course of business; (d) inchoate
and unperfected workers', mechanics' or similar liens arising in the ordinary
course of business, so long as such Liens attach only to Equipment, Fixtures,
Vessels and/or Real Estate; (e) deposits securing, or in lieu of, surety, appeal
or customs bonds in proceedings to which any Credit Party is a party; (f) any
attachment or judgment lien not constituting an Event of Default under Section
8.1(l); (g) zoning restrictions, easements, licenses, or other restrictions on
the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use,
value, or marketability of such Real Estate; (h) presently existing or hereafter
created Liens in favor of Agent, on behalf of the Secured Parties; (i) Liens
expressly permitted under clauses (b) and (c) of Section 6.7 of the Agreement,
the Fleet Mortgage and the Lower Lakes Mortgages; (j) to the extent not included
in clause (a) or (d), Prior Claims that are unregistered and secure amounts that
are not yet due and payable or being contested in good faith with adequate
reserves therefor in accordance with GAAP; (k) Liens for wages claimed by
masters and seamen, claims for salvage expenses, claims for damage and masters
disbursements so long as such amounts owed are not past due or being contested
in good faith with adequate reserves therefor in accordance with GAAP; (l) Liens
for dock, harbor and canal charges and claims in respect of pollution damage so
long as such amounts owed are not past due or being contested in good faith with
adequate reserves therefor in accordance with GAAP; and (m) other maritime Liens
so long as the indebtedness to which such Liens relate are not past due or being
contested in good faith with adequate reserves therefor in accordance with GAAP.
"Permitted Intercompany Indebtedness" means any indebtedness owing by a
Credit Party to an Affiliate (including another Credit Party) that is listed on
Disclosure Schedule (3.28) or has been approved of in writing by the Lenders.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, provincial, state, county, city, municipal, local,
foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).
"▇▇▇▇▇▇▇" means the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (formerly known as the Wolverine),
a documented vessel of Canada bearing Canadian International Maritime
Organization Number 7366403.
"▇▇▇▇▇▇▇ Mortgage" means the statutory ship mortgage of the ▇▇▇▇▇▇▇ made
by Lower Lakes in favor of the Agent, such mortgage to be in a form reasonably
satisfactory to the Lenders and Lenders' Counsel and suitable for registration.
"Pioneer" means the Voyageur Pioneer, a self-propelled steel cargo vessel
bearing Canadian Certificate of Registry Official Number 395510.
A-25
"Pioneer Mortgage" means the statutory ship mortgage of the Pioneer made
by Lower Lakes in favor of the Agent, such mortgage to be in a form reasonably
satisfactory to the Lenders and Lenders' Counsel and suitable for registration.
"Pledge Agreements" means pledge agreements delivered by the applicable
Credit Parties on the Restatement Closing Date, and any other pledge agreement
entered into after the Restatement Closing Date by any Credit Party (as required
by the Agreement or any other Loan Document).
"Preferred Equity" means the 300,000 shares of Series A Convertible
Preferred Stock issued by Rand pursuant to the Preferred Stock Purchase
Agreement.
"Preferred Stock Purchase Agreement" means the Preferred Stock Purchase
Agreement dated as of September 2, 2005 by and among Parent, ▇▇▇▇▇ Partners LP
and Bay Resource Partners L.P.
"Prior Claims" shall mean all Liens created by applicable law (in contrast
with Liens voluntarily granted) which rank or are capable of ranking prior or
pari passu with Agent's security interests (or interests similar thereto under
applicable law) against all or part of the Collateral, including for amounts
owing for employee source deductions, goods and services taxes, sales taxes,
harmonized sales taxes, municipal taxes, workers' compensation, Quebec corporate
taxes, pension fund obligations and overdue rents.
"Prior Debt" means the WMS/NC Debt and the WMS Subordinated Debt.
"Pro Rata Share" means with respect to all matters relating to any Lender
(a) with respect to a Revolving Loan, the percentage obtained by dividing (i)
the Revolving Loan Commitment of that Lender by (ii) the aggregate Revolving
Loan Commitments of all applicable Lenders, (b) with respect to a Term Loan, the
percentage obtained by dividing (i) the Term Loan Commitment of that Lender by
(ii) the aggregate Term Loan Commitments of all applicable Lenders, as any such
percentages may be adjusted by assignments permitted pursuant to Section 9.1,
(c) with respect to all Loans, the percentage obtained by dividing (i) the
aggregate Commitments of that Lender by (ii) the aggregate Commitments of all
Lenders, and (d) with respect to all Loans on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Loans held by that Lender, by (ii) the
outstanding principal balance of the Loans held by all Lenders.
"Proceeds" means "proceeds," as such term is defined in the Code, and in
any event shall include (a) any and all proceeds of any insurance, indemnity,
warranty or guarantee payable to any Credit Party from time to time with respect
to any of the Collateral, (b) any and all payments (in any form whatsoever) made
or due and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) recoveries from any claim of any Credit
Party against third parties (i) for past, present or future infringement of any
Patent or Patent License, or (ii) for past, present or future infringement or
dilution of any Copyright, Copyright License, Design, Design License, Trademark
or Trademark License, or for injury to the goodwill associated with any
Trademark or Trademark License, (d) any recoveries by any Credit Party against
third parties with respect to any litigation or dispute concerning any of the
Collateral including claims arising out of the loss or non-conformity of,
interference with the use of, defects in, or infringement of rights in, or
A-26
damage to, Collateral, (e) all amounts collected on, or distributed on account
of, other Collateral, including dividends, interest, distributions and
Instruments with respect to Investment Property and pledged Stock, and (f) any
and all other amounts, rights to payment or other property acquired upon the
sale, lease, license, exchange or other disposition or dealing with any of the
Collateral and all rights arising out of Collateral.
"Projections" means the Borrowers' four (4) year forecasted combined: (a)
balance sheets; (b) profit and loss statements; and (c) cash flow statements and
otherwise consistent with the historical Financial Statements of Parent and its
Subsidiaries, together with appropriate supporting details and a statement of
underlying assumptions.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender
and, with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor, and (b) any "accredited investor" (as
defined under Regulation D, Rule 501, promulgated under the US Securities Act of
1933, as amended) which extends credit or buys loans as one of its businesses,
including a mutual fund, lease financing company and commercial finance company,
in each case, which has a rating of BBB or higher from Standard & Poor's Ratings
Group or Dominion Bond Rating Service Limited or a rating of Baa2 or higher from
▇▇▇▇▇'▇ Investor Services Inc. at the date that it becomes a Lender and which,
through its applicable lending office, is capable of lending to the applicable
Borrower; provided, that absent Agent's prior consent, (x) no Person proposed to
become a Lender after the Restatement Closing Date and determined by Agent to be
acting in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee, and (y) no Person or Affiliate of such Person proposed to
become a Lender other than a Person that is already a Lender after the
Restatement Closing Date and that holds Stock issued by any Credit Party shall
be a Qualified Assignee.
"Racketeering Activities" means involvement or affiliation with any
organization, group or individual that engages in or encourages its members to
engage in any illegal activities specified in (i) Title 18 of the U.S. Code,
(ii) the Mexican Federal Penal Code (Codigo Penal Federal) or the local penal
codes of the States of Mexico, or (iii) any other similar state or applicable
foreign criminal law
"Rand" means Rand Logistics, Inc., a Delaware corporation.
"Rand Finance" means Rand Finance Corp., a Delaware corporation.
"Rate Contracts" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Related Transactions" means the initial borrowing under the Revolving
Loans and the Term Loans on the Restatement Closing Date, the WMS Acquisition,
the WMS Debt Payoff, the payment of all fees, costs and expenses associated with
all of the foregoing and the execution and delivery of all of the Related
Transactions Documents.
A-27
"Related Transactions Documents" means the Loan Documents, the WMS
Acquisition Agreement and all other agreements or instruments executed in
connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
"Relevant Jurisdiction" means, from time to time, with respect to a Person
that is granting Security hereunder, any province or territory of Canada, any
state of the United States or any other country, political subdivision thereof,
in which such Person has its jurisdiction of formation, chief executive office
or chief place of business or has Collateral.
"Requisite Lenders" means Lenders having (a) more than 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of the Loans.
"Requisite Revolving Lenders" means Lenders having (a) more than 66 2/3%
of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, more than 66 2/3% of the aggregate outstanding
amount of the Revolving Loans.
"Reserves" means, with respect to the Borrowing Base of Lower Lakes or
LLTC, reserves established pursuant to Section 5.4(c), and such other reserves
(including on account of Prior Claims) against Eligible Accounts or Borrowing
Availability of such Borrower that Agent may, in its reasonable credit judgment,
establish from time to time.
"Restatement Closing Date" means the date on which all conditions
precedent set forth in Section 2.1 and in Annex D are satisfied or waived by the
Agent and all Lenders.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, the Permitted Intercompany Indebtedness; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Credit Party's Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Credit Party other than payment of compensation in the ordinary course of
business to Stockholders who are employees of such Credit Party; and (g) any
payment of management fees (or other fees of a similar nature) by such Credit
Party to any Stockholder of such Credit Party or its Affiliates.
A-28
"Revenue Code" means the United States Internal Revenue Code of 1986, as
amended.
"Revolving Credit Advance" means either a Cdn. Revolving Credit Advance or
a US Revolving Credit Advance and "Revolving Credit Advances" means both of
them.
"Revolving Lenders" means, as of any date of determination, Lenders having
a Revolving Loan Commitment.
"Revolving Loan" means either of the Cdn. Revolving Loan or the US
Revolving Loan and "Revolving Loans" means both of them.
"Revolving Loan Commitment" means either of the Cdn. Revolving Loan
Commitment or the US Revolving Loan Commitment and "Revolving Loan Commitments"
means both of them.
"Revolving Notes" means the Cdn. Revolving Notes and the US Revolving
Notes.
"Saginaw" means the Saginaw (formerly the ▇▇▇▇ ▇. ▇▇▇▇▇▇), a single screw
steam propulsion self-unloading bulk carrier of 14,066 gross tons built in 1953
and bearing Canadian Certificate of Registry Official Number 822418.
"Saginaw Mortgage" means the statutory ship mortgage of the Saginaw made
by Lower Lakes in favor of the Agent, such mortgage to be in a form reasonably
satisfactory to the Lenders and Lenders' Counsel acting reasonably and suitable
for registration.
"Seasonal Facilities" means the Cdn. Seasonal Facility and the US Seasonal
Facility.
"Secured Parties" means (1) the Agent on behalf of (a) itself, (b) the
Cdn. Revolving Lenders, (c) the Cdn. Term Lenders, (d) the US Revolving Lenders,
(e) the US Term Lenders, (f) the Engine Term Lenders, (g) the L/C Guarantor and
(h) a Secured Swap Provider, (2) the Revolving Lenders, (3) the Term Lenders and
(4) the L/C Guarantor.
"Secured Rate Contract" means any Rate Contract between a Borrower and the
counterparty thereto which has been provided or arranged by GE Capital or an
Affiliate of GE Capital.
"Secured Swap Provider" means a Person with whom a Borrower has entered
into a Secured Rate Contract provided or arranged by GE Capital or an Affiliate
of GE Capital, and any assignee thereof.
"Security" means all security (including guarantees) held from time to
time by or on behalf of the Lenders or the Agent on behalf of the Lenders,
securing or intended to secure directly or indirectly repayment of the
Obligations and includes, without limitation, all security described in Annex J.
A-29
"Security Agreements" means the security agreements dated as of the
Restatement Closing Date (or March 3, 2006, in the case of Lower Lakes) entered
into between Agent, on behalf of Secured Parties, and each Credit Party that is
a signatory thereto.
"Seller" means WMS.
"Senior Funded Debt to EBITDA Ratio" means, with respect to Parent and its
Subsidiaries, on a consolidated basis, the ratio of (a) Funded Debt as of any
date of determination (including the average daily closing balance of the
Revolving Loan for the thirty day period ending on (and including) the date of
determination), to (b) EBITDA for the twelve months ending on that date of
determination.
"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (i) the property of such Person is sufficient, if disposed of
at a fairly conducted sale under legal process, to enable payment of all its
obligations, due and accruing due, (ii) the property of such Person is, at a
fair valuation, greater than the total amount of liabilities, including
contingent liabilities, of such Person; (iii) such Person has not ceased paying
its current obligations in the ordinary course of business as they generally
become due; and (iv) such Person is not for any reason unable to meet its
obligations as they generally become due. The amount of contingent liabilities
(such as litigation, guarantees and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Special Letter of Credit" means the Letter of Credit issued August 27,
2007 for the benefit of GE Canada Finance Holding Company, as agent, which
supports the guarantee by Lower Lakes of the loan facility extended to Voyageur
Maritime Trading Inc.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or non-voting, participating or
non-participating, including common stock, preferred stock or any other equity
security.
"Stockholder" means, with respect to any Person, each holder of Stock of
such Person.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
A-30
"Swing Line Advance" means either a Cdn. Swing Line Advance or a US Swing
Line Advance and "Swing Line Advances" means both of them.
"Swing Line Advance" means either Cdn. Swing Line Availability or US Swing
Line Availability.
"Swing Line Lenders" means, as of any date of determination, Lenders
having a Swing Line Loan Commitment.
"Swing Line Loan" means either of the Cdn. Swing Line Loan or the US Swing
Line Loan and "Swing Line Loans" means both of them.
"Swing Line Loan Commitment" means either of the Cdn. Swing Line Loan
Commitment or the US Swing Line Loan Commitment and "Swing Line Loan
Commitments" means both of them.
"Swing Line Notes" means the Cdn. Swing Line Notes and the US Swing Line
Notes.
"Tax" and "Taxes" includes all present and future taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings and other charges of any
nature (including income, corporate, capital (including large corporations), net
worth, sales, consumption, use, transfer, goods and services, value-added,
stamp, registration, franchise, withholding, payroll, employment, health,
education, employment insurance, pension, excise, business, school, property,
occupation, customs, anti-dumping and countervail taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings and other charges)
imposed by any Governmental Authority, together with any fines, interest,
penalties or other additions on, to, in lieu of, for non-collection of or in
respect of those taxes, surtaxes, duties, levies, imposts, rates, fees,
assessments, withholdings and other charges.
"Term Lenders" means, as of any date of determination, Lenders holding any
Term Loan.
"Term Loan" means the Cdn. Term Loan, the US Term Loan or the Engine Term
Loan and "Term Loans" means all of them.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged, (c) all Letter of
Credit Obligations have been cash collateralized, cancelled or backed by standby
letters of credit in accordance with Annex B, and (d) Borrowers shall not have
any further right to borrow any monies under the Agreement.
"Time Charter Agreement" means (i) the time charter agreement dated as of
September 22, 2004 between Grand River and LLTC in respect of the Invincible,
(ii) the time charter agreement dated as of September 22, 2004 between Grand
River and LLTC in respect of the Barge ▇▇▇▇▇, (iii) the time charter agreement
dated as of September 22, 2004 between Grand River and LLTC in respect of the
Maumee, (iv) the time charter agreement dated as of September 22, 2004 between
Grand River and LLTC in respect of the Manistee, and (v) pursuant to Section
5.13(d), time charter agreements to be entered into between Grand River and LLTC
in respect of the Calumet and the Manitowoc.
A-31
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
"Trademarks" means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all trademarks, trade names, corporate names,
business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and Intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the Canadian or US Patent and Trademark Office or in any similar office or
agency in any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"US Base Rate" means, for any day, a floating rate equal to the greater of
(i) the rate publicly quoted from time to time by The Wall Street Journal (or
another national publication selected by the Agent) as the "base rate on
corporate loans posted by at least 75% of the nation's largest banks", and (ii)
the Federal Funds Rate plus 0.5% per annum. Each change in any interest rate
provided for in this Agreement based upon the US Base Rate shall take effect at
the time of such change in the US Base Rate.
"US Base Rate Loan" means a Loan denominated in US Dollars that bears
interest by reference to the US Base Rate.
"US Borrowers" means LLTC and Grand River.
"US Borrowing Availability" means, as of any date of determination, the
lesser of (i) the US Maximum Amount and (ii) the US Borrowing Base, in each
case, less the sum of the US Revolving Loans and the US Swing Line Loans then
outstanding.
"US Borrowing Base" means, in respect of LLTC, as of any date of
determination thereof by the Agent from time to time, an amount equal to eighty
five percent (85%) of the amount of Eligible US Accounts less any Reserves
established in accordance with Section 1.6, as at the date of determination.
"US Collection Accounts" shall mean Agent's US Dollar account number
▇▇-▇▇▇-▇▇▇ in the name of Agent at Deutsche Bank Trust Company Americas, New
York, NY, ABA# ▇▇▇-▇▇▇-▇▇▇, Account Name: GECC CFS CIF Collection A/C, Ref:
CFN8857 and Lower Lakes, or such other account(s) as may be specified in writing
by Agent as the "US Collection Accounts".
"US Credit Parties" means all Credit Parties that exist pursuant to the
laws of any State of the United States and "US Credit Party" means any one of
them.
"US Dollars" or "US$" shall mean the lawful currency of the United States
of America.
"US Maximum Amount" means, as of any date of determination, an amount
equal to the aggregate of the US Revolving Loan Commitments of all US Revolving
Lenders as of that date.
"US Notice of Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(c)(i).
A-32
"US Owned Vessels" means, collectively, the Invincible, the Maumee, the
Manistee, the Calumet and the Manitowoc.
"US Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which an
Credit Party, or any corporation, trade or business that is, along with any
other Person, a member of a Controlled Group, may reasonably be expected to have
liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.
"US Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(g)(iii).
"US Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(c)(i).
"US Revolving Credit Facility" has the meaning ascribed to it in Section
1.1(c)(i).
"US Revolving Lenders" means those Lenders having US Revolving Loan
Commitments.
"US Revolving Loan" means, at any time, the sum of the aggregate amount of
US Revolving Credit Advances outstanding to LLTC.
"US Revolving Loan Commitment" means (a) as to any US Revolving Lender,
the aggregate commitment of such US Revolving Lender to make US Revolving Credit
Advances as set forth on Annex I to the Agreement or in the most recent
Assignment Agreement executed by such US Revolving Lender and (b) as to all US
Revolving Lenders, the aggregate commitment of all US Revolving Lenders to make
US Revolving Credit Advances, which aggregate commitment shall be Thirteen
Million Five Hundred Thousand US Dollars (US$13,500,000), as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.
"US Revolving Notes" has the meaning ascribed to it in Section
1.1(c)(iii).
"US Seasonal Facility" has the meaning set forth in Section 1.1(c)(ii).
"US Swing Line Advance" has the meaning ascribed to it in Section
1.1(g)(i).
"US Swing Line Availability" has the meaning ascribed to it in Section
1.1(g)(i).
"US Swing Line Lender" means GE Capital.
"US Swing Line Loan" means, at any time, the aggregate amount of US Swing
Line Advances outstanding to LLTC.
"US Swing Line Loan Commitment" means, as to the US Swing Line Lender, the
commitment of the US Swing Line Lender to make US Swing Line Advances as set
forth on Annex I to the Agreement, which commitment constitutes a subfacility of
the US Revolving Loan Commitment of the US Swing Line Lender.
A-33
"US Swing Line Note" has the meaning ascribed to it in Section 1.1(g)(ii).
"US Term Lenders" means those Lenders having US Term Loan Commitments.
"US Term Loan" has the meaning assigned to it in Section 1.1(d)(i).
"US Term Loan Commitment" means (a) as to any Term Lender with a US Term
Loan Commitment, the commitment of such Lender to make its Pro Rata Share of the
US Term Loan as set forth on Annex I to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
US Term Loan Commitment, the aggregate commitment of all Lenders to make the US
Term Loan, which aggregate commitment shall be Twenty Two Million US Dollars
(US$22,000,000) on the Restatement Closing Date. After advancing the US Term
Loan, each reference to a Lender's US Term Loan Commitment shall refer to that
Lender's Pro Rata Share of the outstanding US Term Loan.
"US Term Notes" has the meaning assigned to it in Section 1.1(d)(i).
"US Vessels" means, collectively, the Invincible, the Maumee, the Barge
▇▇▇▇▇, the Manistee, the Calumet and the Manitowoc.
"US Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"USW Union Contract" means that certain Labor Contract dated as of October
10, 2007 between WMS and United Steel, Paper & Forestry, Rubber, Manufacturing,
Energy, Allied Industrial & Service Workers International Union (USW) for itself
and on behalf of its Local 500, includes all appendixes and letter agreements
thereto.
"Unpaid Drawing" has the meaning assigned to it in Section 12.2(a).
"Vessels" means, collectively, the Cdn. Vessels and the US Vessels.
"WMS" means Wisconsin & Michigan Steamship Company, a Michigan
corporation.
"WMS Acquisition" means the acquisition by Grand River of the WMS Vessels
pursuant to the WMS Acquisition Agreement.
"WMS Acquisition Agreement" means the Vessel Purchase Agreement dated as
of the Restatement Closing Date by and among Grand River, WMS and Parent.
"WMS Debt Payoff" means the repayment in full of the WMS/NC Debt and the
WMS Subordinated Debt on the Restatement Closing Date.
"WMS/NC Debt" means all Indebtedness evidenced or governed by that certain
Credit and Security Agreement dated as of August 1, 2006 between WMS and NC, as
in effect as of such date or as amended in accordance with the terms of this
Agreement.
"WMS Subordinated Debt" means all Indebtedness evidenced or governed by
that certain Senior Subordinated Note Purchase Agreement dated as of August 1,
2006 by and among WMS and the WMS Subordinated Lenders, as in effect as of such
date or as amended in accordance with the terms of this Agreement.
A-34
"WMS Subordinated Lenders" means Rand Finance and Oglebay Norton Marine
Services Company, LLC.
"WMS Vessels" means, collectively, the Wolverine, the Calumet and the
Manitowoc.
"Wolverine" means the Wolverine, a documented vessel of the United States
bearing U.S. Official Number 560339.
"Working Capital" means, on a consolidated basis, Parent and its
Subsidiaries' assets (excluding cash balances) less current liabilities
(excluding Revolving Loan Advances).
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. Unless
otherwise specified, references in the Agreement or any of the Appendices to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to the Agreement as a whole, including all
Annexes, Exhibits and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-35
ANNEX E (Section 4.1(a))
to
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
The Borrowers shall deliver, or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within thirty-five (35) days
after the end of each Fiscal Month, financial information regarding Parent and
its Subsidiaries, certified by the Chief Financial Officer of Parent, consisting
of consolidated and consolidating (i) unaudited balance sheets as of the close
of such Fiscal Month and the related statements of income and cash flows for
that portion of the Fiscal Year ending as of the close of such Fiscal Month;
(ii) unaudited statements of income and cash flows for such Fiscal Month,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments); and (iii) a summary of the outstanding balance of all Permitted
Intercompany Debt as of the last day of that Fiscal Month; provided, that such
financial information shall be delivered within sixty (60) days after the first
month in each Fiscal Year. Such financial information shall be accompanied by
the certification of the Chief Financial Officer of Parent that (i) such
financial information presents fairly in accordance with GAAP (subject to normal
year-end adjustments and the absence of footnotes) the financial position and
results of operations of Parent and its Subsidiaries, on an unconsolidated and
combined basis, in each case as at the end of such Fiscal Month and for that
portion of the Fiscal Year then ended and (ii) any other information presented
is true, correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Parent shall deliver to Agent and Lenders, within thirty-five (35)
days after the end of each Fiscal Month, a management discussion and analysis
that includes a comparison to budget for that Fiscal Month and a comparison of
performance for that Fiscal Month to the corresponding period in the prior year.
(b) Quarterly Financials. To Agent and Lenders, within forty-five (45)
days after the end of each Fiscal Quarter, consolidated and consolidating
financial information for Parent and its Subsidiaries, certified by the Chief
Financial Officer of Parent, including (i) unaudited balance sheets as of the
close of such Fiscal Quarter and the related statements of income and cash flow
for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments and the absence of footnotes). Such financial
E-1
information shall be accompanied by (A) a statement in reasonable detail (each,
a "Compliance Certificate") showing the calculations used in determining
compliance with each of the Financial Covenants that is tested on a quarterly
basis and (B) the certification of the Chief Financial Officer of Parent that
(i) such financial information presents fairly in accordance with GAAP (subject
to normal year-end adjustments) the financial position, results of operations
and statements of cash flows of Parent and its Subsidiaries, as at the end of
such Fiscal Quarter and for that portion of the Fiscal Year then ended, (ii) any
other information presented is true, correct and complete in all material
respects, (iii) all current and special payments required to have been made
pursuant to applicable law in respect of Canadian Pension Plans and all ERISA
Plans have been made and (iv) that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default. In addition, Parent shall deliver to Agent and
Lenders, within forty-five (45) days after the end of each Fiscal Quarter, a
management discussion and analysis that includes a comparison to budget for that
Fiscal Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.
(c) Operating Plan. To Agent and Lenders, as soon as available, but not
later than thirty (30) days after the end of each Fiscal Year, an annual
combined operating plan (the "Operating Plan") for Parent and its Subsidiaries,
approved by the Board of Directors of Parent, for the following Fiscal Year,
which (i) includes a statement of all of the material assumptions on which such
plan is based, (ii) includes projected monthly income statement, balance sheets
and source and use of funds for the following year and (iii) Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within ninety (90)
days after the end of each Fiscal Year, audited consolidated Financial
Statements for Rand and the unaudited management prepared Financial Statements
of Parent and its Subsidiaries on a consolidating basis, consisting of balance
sheets and statements of income and retained earnings and cash flows, setting
forth in comparative form in each case the figures for the previous Fiscal Year,
which Financial Statements shall be prepared in accordance with U.S. GAAP;
provided, that if Rand acquires any operating entity that is not a Subsidiary of
Parent, then the audited Financial Statements shall be delivered with respect to
Parent and its Subsidiaries. The consolidated Financial Statements shall be
certified annually without qualification, by an independent accounting firm of
national standing or otherwise acceptable to Agent. Such Financial Statements
shall be accompanied by (i) a statement prepared in reasonable detail showing
the calculations used in determining compliance with each of the Financial
Covenants, (ii) a report from such accounting firm to the effect that, in
connection with their audit examination, nothing has come to their attention to
cause them to believe that an Event of Default has occurred with respect to the
Financial Covenants (or specifying those Events of Default that they became
aware of), it being understood that such audit examination extended only to
accounting matters and that no special investigation was made with respect to
the existence of Events of Default, (iii) the annual letters to such accountants
in connection with their audit examination detailing contingent liabilities and
material litigation matters, and (iv) the certification of the Chief Executive
Officer or Chief Financial Officer of Parent that all such Financial Statements
present fairly in accordance with GAAP the financial position, results of
operations and statements of cash flows of Parent and its Subsidiaries, as at
the end of such Fiscal Year and for the period then ended, and that there was no
Event of Default in existence as of such time or, if an Event of Default has
occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Event of Default.
E-2
(e) Management Letters. To Agent and Lenders, within five (5) Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent chartered accountants.
(f) Default Notices. To Agent and Lenders, as soon as practicable, and in
any event within five (5) Business Days after an executive officer of a Borrower
has actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(g) Securities Filings and Press Releases. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all prospectuses and
registration statements, if any, filed by any Credit Party with any securities
exchange or securities commission or any governmental or private regulatory
authority; and (iii) all press releases and other statements made available by
any Credit Party to the public concerning material changes or developments in
the business of any such Person.
(h) Subordinated Indebtedness and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any subordinated Indebtedness or Stock of such
Person, and, within two (2) Business Days after any Credit Party obtains
knowledge of any matured or unmatured event of default with respect to any
subordinated Indebtedness, notice of such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if any,
required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) seeks damages in excess of US$500,000, (ii) seeks injunctive relief, (iii)
is asserted or instituted against any Canadian Pension Plan or ERISA Plan, its
fiduciaries or its assets or against any Credit Party or ERISA Affiliate in
connection with any Canadian Pension Plan or ERISA Plan, (iv) alleges criminal
misconduct by any Credit Party, or (v) alleges the violation of any law
regarding, or seeks remedies in connection with, any Environmental Liabilities.
(k) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
(l) Lease Default Notices. To Agent, (i) within two (2) Business Days
after receipt thereof, copies of any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, and (ii) such other notices or documents as Agent may reasonably
request.
(m) Lease Amendments. To Agent, within two (2) Business Days after receipt
thereof, copies of all material amendments to real estate leases.
E-3
(n) Hedging Agreements. To Agent, within two (2) Business Days after
entering into such agreement or amendment, copies of all interest rate,
commodity or currency hedging agreements or amendments thereto.
(o) Material Contracts. To Agent, (i) within fifteen (15) Business Days
after entering into any new Material Contract or any amendment, restatement,
extension or renewal of an existing Material Contract, an executed copy of such
Material Contract and (ii) within thirty (30) days after entering into any new
Material Contract or any amendment, restatement, extension or renewal of an
existing Material Contract, a specific assignment to Agent constituting a
first-priority Lien (subject only to Permitted Encumbrances) of the rights,
entitlements and benefits of any Credit Party under such Material Contract
and/or the earnings of any Credit Party in respect thereof, duly acknowledged by
each counter-party thereto, in form and substance reasonably satisfactory to
Agent.
(p) Capital Expenditures Reporting Plan. To Agent and Lenders, on December
31 of each Fiscal Year and with updated reports due on the fifteenth day and the
final day of each Fiscal Month through and including April 15 of such Fiscal
Year, a capital expenditures, dry-dock and winter work reporting plan (the
"Capital Expenditures Reporting Plan") for Parent and its Subsidiaries, which
shall be in form and substance reasonably satisfactory to Agent and in the form
of Schedule I to this Annex E.
(q) Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's business or financial condition as
Agent or any Lender shall, from time to time, reasonably request.
E-4
ANNEX F (Section 4.1(b))
to
CREDIT AGREEMENT
COLLATERAL REPORTS
Parent shall deliver or cause to be delivered the following:
(a) With each revolving borrowing request, a Notice of Revolving Credit
Advance with respect to Lower Lakes and LLTC, accompanied by such supporting
detail and accommodation as shall be requested by the Agent in its reasonable
discretion.
(b) To Agent, upon its reasonable request, and in any event at least once
every month (together with a copy of all or any part of the following reports
requested by any Lender in writing after the Restatement Closing Date), at the
time of delivery of each of the monthly Financial Statements delivered pursuant
to Annex E, each of the following reports, each of which shall be prepared by
the applicable Borrower as of the last day of the immediately preceding month or
the date two (2) days prior to the date of any such request:
(i) a Borrowing Base Certificate with respect to Lower Lakes and
LLTC, accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(ii) with respect to each Borrower, a monthly trial balance showing
Accounts outstanding aged from invoice date as follows: 1 to 30 days past
due, 31 to 60 days past due, 61 to 90 days past due and 91 days or more
past due, accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion.
(iii) with respect to each Borrower, a monthly trial balance showing
payables outstanding aged from invoice date as follows: 1 to 30 days past
due, 31 to 60 days past due, 61 to 90 days past due and 91 days or more
past due, accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion.
(c) To Agent, at the time of delivery of each of the monthly Financial
Statements delivered pursuant to Annex E (or as otherwise requested by Agent in
its reasonable discretion):
(i) a reconciliation of the most recent Borrowing Base and general
ledger of Lower Lakes and LLTC to their respective general ledger and
monthly Financial Statements delivered pursuant to such Annex E, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(ii) an aging of accounts payable and a reconciliation of that
accounts payable aging to each Borrower's general ledger and monthly
Financial Statements delivered pursuant to Annex E in the form set out in
Exhibit 4.1(b), in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion;
F-1
(iii) an aging of accounts receivable and a reconciliation of that
accounts receivable aging to each Borrower's general ledger and monthly
Financial Statements delivered pursuant to Annex E in the form set out in
Exhibit 4.1(b), in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion;
(iv) a reconciliation of the outstanding Loans as set forth in the
monthly Loan Account statement provided by Agent to each Borrower's
general ledger and monthly Financial Statements delivered pursuant to
Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion;
(d) To Agent, at the time of delivery of each of the quarterly Financial
Statements delivered pursuant to Annex E, (i) a list of government contracts of
the Borrowers subject to any of the requirements or procedures applicable to
assignments of accounts under the Financial Administration Act (Canada), as
amended, the Federal Assignment of Claims Act of 1940 (31 U.S.C. Section 3727),
as amended, or any similar provincial, local or foreign law; and (ii) a list of
any applications for the registration of any Intellectual Property with the
Canadian or US Industrial Design Office, Canadian or US Patent and Trademark
Office, Canadian or US Intellectual Property Office, Canadian or US Copyright
Office or any similar office or agency in which a Borrower has filed during the
prior Fiscal Month; and a statement as to the amount of each Account owed by
such Account Debtor that is insured by a credit insurance provider, and if so
insured, the name of such insurance provider;
(e) Prior to the occurrence of an Event of Default, the Agent and the
Lenders shall be entitled at the expense of the Borrowers, to cause one (1)
appraisal by an Appraiser to be conducted of the Collateral. The appraisal shall
determine the Fair Market Value (and any other valuation as may be required by
the Lenders) of the Collateral and the Vessels for the period from the date on
which such appraisal is accepted by the Agent until the date on which the Agent
accepts the next such appraisal. In addition, prior to the occurrence of an
Event of Default, the Agent and the Lenders shall be entitled to cause
semi-annual desktop appraisals to be conducted of the Vessels by an Appraiser
acceptable to the Agent, one at the expense of the Borrowers and a second at the
expense of the Agent and the Lenders. Following the occurrence of an Event of
Default, the Borrowers shall be responsible for the cost of all such appraisals
and there shall be no limit on the number of appraisals that may be conducted at
the request of the Agent; and
(f) Such other reports, statements and reconciliations with respect to the
Borrowing Base or Collateral or Obligations of any or all Credit Parties as
Agent shall from time to time request in its reasonable discretion.
F-2
ANNEX G (Section 6.10)
to
CREDIT AGREEMENT
FINANCIAL COVENANTS
The Credit Parties shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Minimum Fixed Charge Coverage Ratio. Rand shall have on a consolidated
basis, (i) for the fiscal year to date periods then ended as of June 30, 2008,
September 30, 2008, and December 31, 2008, a Fixed Charge Coverage Ratio for
such fiscal year to date period then ended of 2.90:1.00, 2.75:1.00 and
2.45:1.00, respectively and (ii) at the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the 12-month period then ended of not
less than the following:
Period Ratio
------ -----
March 31, 2009 through December 31, 2009 1.10:1.0
March 31, 2010 through December 31, 2010 1.15:1.0
March 31, 2011 and for each Fiscal Quarter
ending thereafter 1.20:1.0
(b) Minimum EBITDA. Rand shall have on a consolidated basis, (i) for the
fiscal year to date periods then ended as of June 30, 2008, September 30, 2008,
and December 31, 2008, EBITDA for such fiscal year to date period then ended of
$6,200,000, $15,700,000 and $21,400,000, respectively and (ii) at the end of
each Fiscal Quarter set forth below, EBITDA for the 12-month period then ended
of not less than the following:
Period EBITDA
------ ------
March 31, 2009 through December 31, 2009 Cdn.$16,500,000
March 31, 2010 through December 31, 2010 Cdn.$17,000,000
March 31, 2011 through December 31, 2011 Cdn.$17,500,000
March 31, 2012 and for each Fiscal Quarter
ending thereafter Cdn.$18,500,000
(c) Maximum Senior Funded Debt to EBITDA Ratio. Rand shall have on a
consolidated basis, at the end of each Fiscal Quarter set forth below, a Senior
Funded Debt to EBITDA Ratio as of the last day of such Fiscal Quarter and for
the 12-month period then ended of less than the following:
G-1
Fiscal Quarters Ratio
--------------- -----
March 31, 2009 4.00:1.0
June 30, 2009 4.45:1.0
September 30, 2009 4.00:1.0
December 31, 2009 4.00:1.0
March 31, 2010 2.90:1.0
June 30, 2010 3.90:1.0
September 30, 2010 2.90:1.0
December 31, 2010 2.90:1.0
March 31, 2011 2.60:1.0
June 30, 2011 3.60:1.0
September 30, 2011 2.60:1.0
December 31, 2011 2.60:1.0
March 31, 2012 2.20:1.0
June 30, 2012 3.20:1.0
September 30, 2012 2.20:1.0
December 31, 2012 2.20:1.0
March 31, 2013 and each Fiscal 2.00:1.0
Quarter ending thereafter
(d) Maximum Capital Expenditures. Rand and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:
Maximum
Capital
Expenditures
Period per Period
------ ------------
Fiscal Year 2008 Cdn.$22,500,000
Fiscal Years 2009 and 2010 Cdn.$8,000,000
Fiscal Year 2011 Cdn.$8,500,000
Fiscal Year 2012 Cdn.$8,200,000
Each Fiscal Year Thereafter Cdn.$8,600,000
G-2
(e) Minimum Appraised Value to Term Loan Outstandings. Rand shall have on
a consolidated basis, at the end of each Fiscal Year, a ratio of (i) the
aggregate appraised orderly liquidation value of the Vessels as of such date to
(ii) the aggregate principal amount outstanding of the Term Loans as of such
date of not less than the following:
Minimum Appraised
Value to Term Loan
Period Outstandings
------ ------------------
Fiscal Year 2008 1.25:1.0
Fiscal Years 2009 1.30:1.0
Fiscal Year 2010 1.40:1.0
Fiscal Year 2011 and each 1.50:1.0
Fiscal Year Thereafter
Unless otherwise specifically provided herein, any accounting term used in
the Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then the Borrowers, Agent and Lenders agree to enter into negotiations
in order to amend such provisions of the Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for evaluating
Rand and its Subsidiaries' financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made; provided,
however, that the agreement of Requisite Lenders to any required amendments of
such provisions shall be sufficient to bind all Lenders. "Accounting Changes"
means (i) changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board (or successor thereto or any comparable body or agency with similar
functions), (ii) changes in accounting principles concurred in by Rand's
independent chartered accountants; and (iii) the reversal of any reserves
established as a result of purchase accounting adjustments. All such adjustments
resulting from expenditures made subsequent to the Restatement Closing Date
(including capitalization of costs and expenses or payment of pre-Restatement
Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of EBITDA in such
period. If Agent, Borrowers and Requisite Lenders agree upon the required
amendments (and all other Credit Parties shall be deemed to agree to such
G-3
amendments so agreed to by Borrowers), then after appropriate amendments have
been executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree upon
the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all Financial Statements delivered
and all calculations of financial covenants and other standards and terms in
accordance with the Agreement and the other Loan Documents shall be prepared,
delivered and made without regard to the underlying Accounting Change. For
purposes of Section 8.1, a breach of a Financial Covenant contained in this
Annex G shall be deemed to have occurred as of any date of determination by
Agent or as of the last day of any specified measurement period, regardless of
when the Financial Statements reflecting such breach are delivered to Agent.
For the purposes of calculating the Financial Covenants, conversions from
US Dollars to Canadian Dollars or from Canadian Dollars to US Dollars, as
applicable, shall be done using the overnight spot rate; provided that with
respect to Interest Expense, EBITDA, Capital Expenditures, preferred dividend
payments, principal amortization and average revolver balance, such conversions
shall be determined using the trailing twelve month average exchange rates.
G-4
ANNEX I (from Annex A - Commitments definition)
to
CREDIT AGREEMENT
Lender(s):
US Term Loan Commitment: US$22,000,000
General Electric Capital Corporation US$14,265,450.86
National City Bank US$1,537,366.04
KBC Bank US$6,197,183.10
Cdn. Term Loan Commitment: Cdn$41,700,000
General Electric Capital Corporation Cdn$27,039,513.68
National City Bank, Canada Branch Cdn$14,660,486.32
Engine Term Loan Commitment: Cdn$8,000,000
General Electric Capital Corporation Cdn$5,187,436.68
National City Bank, Canada Branch Cdn$2,812,563.32
US Revolving Loan Commitment
(including a US Swing Line Loan Commitment
of $4,000,000): US$13,500,000
General Electric Capital Corporation US$8,753,799.39
National City Bank US$943,383.71
KBC Bank US$3,802,816.90
Cdn. Revolving Loan Commitment
(including a Cdn. Swing Line Loan Commitment
of $4,000,000): Cdn$13,500,000
General Electric Capital Corporation Cdn$8,753,799.39
National City Bank, Canada Branch Cdn$4,746,200.61
I-1
ANNEX J
Collateral
On the Restatement Closing Date, as continuing collateral security for the
payment and satisfaction of all Obligations of the Borrowers to the Agents and
the Lenders, each Borrower and Guarantor shall deliver or cause to be delivered
to the Agent for itself and on behalf of the Lenders the following items of
Collateral, all of which shall be in form and substance satisfactory to the
Agent:
(a) a general security agreement from each Borrower and each Guarantor
in favor of Agent constituting a first-priority Lien (subject only
to Permitted Encumbrances) on all of the present and future
Collateral of such Borrower;
(b) a guarantee from each US Borrower, Parent, Rand and Rand Finance
guaranteeing the due payment and performance to Agent and the
Lenders of all present and future Obligations of the Cdn. Borrower
and each other US Borrower to Agent and the Lenders under the Loan
Documents;
(c) an assignment by Lower Lakes in favor of Agent constituting a
first-priority Lien (subject only to Permitted Encumbrances) in
respect of all indebtedness owing to it by LLTC and all security
granted in connection therewith;
(d) the Fleet Mortgage, the Saginaw Mortgage, the Cuyahoga Mortgage, the
Mississagi Mortgage, the Michipicoten Mortgage, the Independent
Mortgage, the Pioneer Mortgage and the ▇▇▇▇▇▇▇ Mortgage, with each
such mortgage constituting a first-priority Lien (subject only to
Permitted Encumbrances) on each of the Vessels being so mortgaged;
provided that the ▇▇▇▇▇▇▇ Mortgage shall be delivered in accordance
with the terms set forth in Section 5.13(b);
(e) collateral loan agreements in favor of Agent in respect of each of
the Saginaw, Cuyahoga, Mississagi, the Michipicoten, the
Independent, the Pioneer and the ▇▇▇▇▇▇▇;
(f) a securities pledge agreement from each of Rand, Parent, each
Borrower and each other Guarantor in favor of Agent constituting a
first-priority Lien on all the shares of its present and future
Subsidiaries;
(g) subject to the terms of Section 5.13(c), a specific assignment to
Agent constituting a first-priority Lien (subject only to Permitted
Encumbrances) of the rights, entitlements and benefits of any Credit
Party under any Material Contract and/or the earnings of any Credit
Party in respect thereof, duly acknowledged by each counter-party
thereto;
(h) subject to the terms of Section 5.13(e), deposit control agreements
delivered by each Credit Party that maintains bank accounts in the
United States and Canada; and
J-1
(i) an assignment by the Credit Parties of all proceeds under their
insurance policies as required hereunder in favor of Agent.
J-2