Document:

exhibit10_1.htm

Exhibit 10.1

 

AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT

This AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, dated as of ___________, 2015 (this “Agreement”), by and between Leo Motors, Inc., a Nevada corporation (the “Company”), and the individual identified on the signature page to this Agreement (the “Purchaser”).

 

RECITALS

A.    This Agreement amends and restates in its entirety that Securities Purchase Agreement dated June 24, 2015 by and between the Company and the Purchaser.

B.     Purchaser desires to purchase from the Company and the Company desires to sell to Purchaser certain of the Company’s 4% Convertible Promissory Note, in the aggregate face amount of KRW __________, in the form of Exhibit A attached hereto (the “Note”) and Common Stock Purchase Warrant, each to purchase up to a certain number of shares of the common stock (the “Common Stock”) of the Company, in the form of Exhibit B attached hereto (individually, the “Warrant” and collectively with the Note, the “Securities”).  The face amount of the Note the Purchaser has committed to purchase, and the amount of the purchase price thereof to be paid to the Company by the Purchaser (a “Commitment”) is listed on the signature page such Purchaser executes and delivers to the Company.

C.    The Company’s sale of the Securities to the Purchaser will be made in reliance upon the provisions of Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), Rule 506 of Regulation D promulgated by the Securities and Exchange Commission (the “SEC”) thereunder, and other applicable rules and regulations of the SEC and/or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to the transactions contemplated hereby.

D.    Subject to the terms and provisions of the Note, at any time when any amount of principal or interest of the Note shall be outstanding, such unpaid amounts shall be convertible, at the election of the Purchaser, into Common Stock at a price of $0.15 per share (the “Conversion Price”), subject to certain adjustments as set forth in the Note.

E.    Subject to the terms and provisions of the Warrant and this Agreement, the Warrant shall be issued three months after the Note is issued to the Purchasers hereunder and shall be exercisable at $0.15 per share (the “Exercise Price”), for ______________  shares of Common Stock of the Company.

 

  

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AGREEMENT

NOW THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants and agreements set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Purchaser and the Company hereby agree as follows:

1.           Purchase of the Note and Warrant.  On the terms and subject to the conditions set forth in this Agreement and in the Note and Warrant, the Purchaser shall purchase from the Company and the Company shall sell to the Purchaser the Securities.

 

2.           Purchaser’s Representations, Warranties and Covenants. In order to induce the Company to sell and issue the Securities to the Purchaser under one or more exemptions from registration under the Securities Act, the Purchaser represents and warrants to the Company, and covenants with the Company, that, as of the date hereof and as of each Closing Date (except as otherwise set forth herein):

 

 (a)           (i) Such Purchaser has the requisite power and authority to enter into and perform this Agreement, and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”), and to purchase the Securities in accordance with the terms hereof and thereof.

 

(ii) The execution and delivery of the Transaction Documents by the Purchaser and the consummation by it of the transactions contemplated thereby have been duly and validly authorized by the Purchaser's organizational documents (if any) and no further consent or authorization is required by the Purchaser.

 

(iii) The Transaction Documents have been duly and validly executed and delivered by the Purchaser.

 

(iv) The Transaction Documents, and each of them, constitutes the valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.

 

(b) The execution, delivery and performance of the Transaction Documents by the Purchaser and the consummation by the Purchaser of the transactions contemplated thereby will not conflict with or constitute a default under any agreement or instrument to which the Purchaser is a party or by which the Purchaser is bound.

 

  

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(c) The Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting the Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws).  The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

(e) The Purchaser acknowledges that the Securities have been offered to it in direct communication between itself and the Company and not through any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over the television or radio or presented in any seminar or any other general solicitation or general advertisement.

 

(f) The Purchaser acknowledges that the Company has given it access to all information relating to the Company’s business that it has requested.  The Purchaser has reviewed all materials relating to the Company’s business, finance and operations which it has requested and the Purchaser has reviewed all of such materials as the Purchaser, in the Purchaser’s sole and absolute discretion shall have deemed necessary or desirable. The Purchaser has had an opportunity to discuss the business, management and financial affairs of the Company with the Company’s management.   Specifically but not by way of limitation, the Purchaser acknowledges the Company’s publicly available filings made periodically with the SEC, which filings are available at www.sec.gov and which filings the Purchaser acknowledges reviewing or having had the opportunity of reviewing.

 

 (g) The Purchaser acknowledges that it has, by reason of its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (i) evaluating the merits and risks of an investment in the Securities and making an informed investment decision in connection therewith; (ii) protecting its own interest; and (iii) bearing the economic risk of such investment for an indefinite period of time.  The undersigned hereby agrees to indemnify the Company thereof and to hold the Company and the officers, directors and employees thereof harmless against all liability, costs or expenses (including reasonable attorneys’ fees) arising by reason of or in connection with any misrepresentation or any breach of warranties of the undersigned contained in this Agreement, or arising as a result of the sale or distribution of the Securities or the Common Stock issuable upon conversion of the Note or exercise of the Warrant, by the undersigned in violation of the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any other applicable law, either federal or state.  This subscription and the representations and warranties contained herein shall be binding upon the heirs, legal representatives, successors and assigns of the Purchaser

 

  

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(h) The Purchaser is familiar with the definition of an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the Securities Act and represents and warrants to the Company that it is (and was at such time it was offered the Securities) an accredited investor, on each Closing Date, and will be an accredited investor on each date which it converts the Note or exercises the Warrant.  Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. If the Purchaser is not a resident of the United States, the Purchaser is not a “U.S. person” as that term is defined in Rule 902 of Regulation S promulgated under the Securities Act of 1933, as amended.

 

(i) Commencing on the date on which the Purchaser received a term sheet from the Company or any representative or agent of the Company (written or oral) setting forth the material terms of the transactions contemplated hereunder, until the date on which the Purchaser’s Note and Warrant are no longer outstanding, the Purchaser has complied and will comply with the provisions of Section 9 of the Exchange Act, and the rules and regulations promulgated thereunder, with respect to transactions involving the Common Stock. Commencing on the date on which the Purchaser received a term sheet from the Company or any representative or agent of the Company (written or oral) setting forth the material terms of the transactions contemplated hereunder, until the date on which the Purchaser’s Note and Warrant are no longer outstanding, the Purchaser has not and will not sell the Company's Common Stock short or engage or engaged in any hedging transactions in the Company’s Common Stock, either directly or indirectly, through its affiliates, principals, agents or advisors.

 

(j) The Purchaser is aware that the Note and the Warrant, and the shares of Common Stock issuable upon conversion of the Note or exercise of the Warrant may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of the Note and the Warrant, and the shares of Common Stock issuable upon conversion of the Note or exercise of the Warrant, the Company may require the transferor thereof to provide to the Company an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. Further, the Purchaser understands and acknowledges that any certificates evidencing the Note, the Warrant or the shares of Common Stock issuable upon conversion of the Note or exercise of the Warrant will bear a legend in substantially the following form:

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE SECURITIES LAWS (COLLECTIVELY, “SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER ALL APPLICABLE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, ANY SUCH OFFER, SALE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH SECURITIES LAWS.

 

  

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(k) The Purchaser understands and acknowledges that the Note, the Warrant and any shares of Common Stock issuable upon conversion of the Note or exercise of the Warrant, may only be disposed of pursuant to either (i) an effective registration statement under the Securities Act or (ii) an exemption from the registration requirements of the Securities Act.

 

(l) The Purchaser understands and acknowledges that the Company has neither filed a registration statement with the SEC or any state authorities nor agreed to do so, nor contemplates doing so in the future for the transactions contemplated by this Agreement or the other Transaction Documents, and in the absence of such a registration statement or exemption, the Purchaser may have to hold the Note, the Warrant and any shares of Common Stock issuable upon conversion of the Note or exercise of the Warrant, indefinitely and may be unable to liquidate any of them in case of an emergency.

 

(m) The Purchaser is not and will not be required to be registered as a “dealer” under the Exchange Act, either as a result of its execution and performance of its obligations under this Agreement or otherwise.

 

(n)  The Purchaser understands and acknowledges that proceeds raised in connection with this Agreement will be used by the Company in its sole discretion.

 

(o) The Purchaser understands that it is liable for its own tax liabilities and has obtained no tax advice from the Company in connection with the purchase of the Securities.

 

(p) The Purchaser will not pay or receive any finder’s fee or commission in respect of the consummation of the transactions contemplated by this Agreement.

 

                       (q)  Purchaser hereby agrees and acknowledges that it has been informed of the following:  (i) there are factors relating to the subsequent transfer of any of the Securities or shares of Common Stock underlying the Note and Warrant that could make the resale of such Securities or shares of Common Stock underlying the Note and Warrant difficult; and (ii) there is no guarantee that the Purchaser will realize any gain from the purchase of the Securities; and (iii) the purchase of the Securities involves a high degree of risk and is subject to many uncertainties (including, without limitation, the risks disclosed in the Company’s filings with the SEC, including without limitation, under “Risk Factor” in the Company’s Form 10-K for the year ended December 31, 2014).  The Purchaser acknowledges that it understands that these risks and uncertainties may adversely affect the Company’s business, operating results and financial condition, and that the trading price for the Common Stock could decline substantially and Purchaser could lose all or part of its investment.

 

  

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         3.    Company’s Representations, Warranties and Covenants. The Company represents and warrants to the Purchasers that:

 

(a) The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Nevada, and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted.

 

(b)           (i) The Company has the requisite corporate power and authority to enter into and perform this Agreement, and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by the Transaction Documents, and to issue the Note and Warrant in accordance with the terms hereof and thereof.

 

(ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation the reservation for issuance and the issuance of the Note and Warrant pursuant to this Agreement, have been duly and validly authorized by the Company's Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, or its shareholders.

 

(iii) The Transaction Documents have been duly and validly executed and delivered by the Company.

 

(iv) The Transaction Documents, and each of them, constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.

 

(c) The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated thereby will not conflict with or constitute a default under any agreement or instrument to which the Company is a party or under any organizational documents of the Company.

 

4.           Closing and Deliverables.

(a) The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date on or prior to ____________, 2015 (“Closing Date”) at such location as may be agreed to by the parties provided that the Company shall have received copies of this Agreement executed by each respective Purchaser. At the Closing:

(i) each Purchaser shall deliver to the Company immediately available funds, by check or by wire transfer (bank wiring instructions as set forth in Exhibit C) in an amount equal to the amount of such Purchaser’s Commitment as set forth beside the name of such Purchaser on such Purchaser’s signature page hereto; and

 

  

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(ii) the Company shall deliver to the Purchaser (x) a Note (which will be counter-signed by the Purchaser), in the Principal Amount equal to the Purchaser’s Commitment and (y) a Warrant to purchase __________ shares of the Company’s Common Stock at the Exercise Price.  The Note will be dated as of the Closing Date.

5.           Miscellaneous.

 

(a). Each party shall pay the fees and expenses of its own advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transactions Documents.

 

(b) This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature transmitted by e-mail shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

(c) The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and neutral shall include the masculine and feminine.

 

(d) If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

(e) This Agreement and the Note and Warrant represent the final agreement between the Purchasers and the Company with respect to the terms and conditions set forth herein, and, the terms of this Agreement and the Note and Warrant may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.  No provision of this Agreement and the Note and Warrant may be amended other than by an instrument in writing signed by the Purchaser and the Company, and no provision hereof or thereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

 

(f) Any notices or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

  

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If to the Company:

Leo Motors, Inc.

3887 Pacific Street

Las Vegas, NV 89121

Attn:        Shi Chul Kang Co-Chief Executive Officer

 Jun Heng Park, Co-Chief Executive Officer

Facsimile: +82 70-4699-3585

If to a Purchaser:

to the address set forth on the Purchaser’s signature page hereto.

 

Each party shall provide five (5) days prior written notice to the other party of any change in address or facsimile number.

 

(g) This Agreement may not be assigned by any Purchaser.

 

(h) This Agreement is intended for the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

(i) The representations and warranties of the Purchasers and the Company contained herein shall survive the Closing and the termination of this Agreement and the other Transaction Documents.

 

(j) The Purchasers and the Company shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement without the prior consent of the other party, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law or the rules and regulations of the SEC.

 

(k) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

 

  

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(l) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party, as the parties mutually agree that each has had a full and fair opportunity to review this Agreement and the other Transaction Documents and seek the advice of counsel on it and them.

 

(m) The Purchaser and the Company each shall have all rights and remedies set forth in this Agreement and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which the Purchaser has by law. Any person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any default or breach of any provision of this Agreement, including the recovery of reasonable attorney’s fees and costs, and to exercise all other rights granted by law.

 

(n)  This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada applicable to contracts made and to be performed wholly within such state. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the County of Clark, State of Nevada for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.

 

[remainder of page intentionally left blank]

 

 

  

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IN WITNESS WHEREOF the Purchaser and the Company have executed this Agreement as of the date first above written.

	
THE COMPANY

	  
	  	  
	
LEO MOTORS, INC.

	  
	  	  
	  	  
	
By:__________________________

	  
	
Name: Shi Chul Kang

	  
	
Title:  Co-Chief Executive Officer

	  
	  	  
	  	  
	
By:__________________________

	  
	
Name: Jun Heng Park

	  
	
Title:  Co-Chief Executive Officer

	  
	  	  
	  	  
	
THE PURCHASER

	  
	  	  
	  	  
	
_______________________________

	
____________________

	
Name (signature)

	
Amount of Commitment

	  	
(KRW)

	
_______________________________

	  
	
Print Name

	  
	  	
______________

	
_______________________________

	
Date

	  	  
	
_______________________________

	  
	
Address

	  
	  	  
	
_______________________________

	  
	
Phone Number

	  
	  	  
	
_______________________________

	  
	
Fax Number

	  
	  	  
	
_______________________________

	  
	
Social Security Number

	  
	  	  
	
_______________________________

	  
	
E-mail Address

 

  

10exhibit_10-1.htm

EXHIBIT 10.1

 

AMENDMENT NO. 4

 

TO AMENDED AND RESTATED CREDIT AGREEMENT

 

This Amendment No. 4 to Amended and Restated Credit Agreement is dated as of June 30, 2015 (this “Agreement”), and is among the Lenders identified on the signature pages hereof as Lenders (which Lenders constitute the Required Lenders and, as applicable, all of the Lenders directly affected by the applicable amendments to be effected by this Agreement), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells Fargo”), as agent for the Lenders (Wells Fargo, in that capacity, “Agent”), PAC-VAN, INC., an Indiana corporation (“Pac-Van”), LONE STAR TANK RENTAL INC., a Delaware corporation (“Lone Star”), GFN REALTY COMPANY, LLC, a Delaware limited liability company (“GFNRC”), SOUTHERN FRAC, LLC, a Texas limited liability company (“Southern Frac” and, together with Pac-Van, Lone Star, and GFNRC, each a “Borrower”), and GFN MANUFACTURING CORPORATION, a Delaware corporation (“GFN Manufacturing”).

 

The Lenders, Agent, Pac-Van, Lone Star, and GFNRC are party to an Amended and Restated Credit Agreement dated as of April 7, 2014 (as amended, restated, supplemented, or otherwise modified before the date of this Agreement, the “Credit Agreement”).

 

The parties desire that Southern Frac become a “Borrower” under and as defined in the Credit Agreement and a “Grantor” under and as defined in the U.S. Guaranty and Security Agreement.

 

The parties desire that GFN Manufacturing become a “Grantor” and a “Guarantor” under and as defined in the U.S. Guaranty and Security Agreement.

 

The parties also desire to modify the Credit Agreement in certain respects.

 

The parties therefore agree as follows:

 

1. Definitions. Defined terms used but not defined in this Agreement are as defined in the Credit Agreement.

 

2. Increase to Maximum Revolver Amount. Agent, Lenders, and the Loan Parties desire that the Maximum Revolver Amount be increased by $12,000,000, such that the Maximum Revolver Amount, after giving effect to that increase and this Agreement, would increase from $220,000,000 to $232,000,000. In connection with that request, the Lenders have agreed to provide new Revolver Commitments or increase their existing Revolver Commitments. Agent, Lenders, and the Loan Parties desire that the desired increase to the Maximum Revolver Amount become effective as of the effective date of this Agreement. The desired increase to the Maximum Revolver Commitment to be effected by this Agreement will not constitute an Increase.

 

3. Joinders (Southern Frac; GFN Manufacturing).

 

(a) Pursuant to the Credit Agreement, Southern Frac, by its signature below, becomes a “Borrower” under the Credit Agreement with the same force and effect as if originally party thereto as a “Borrower,” and Southern Frac hereby (1) agrees to all of the terms and provisions of the Credit Agreement applicable to it as a “Borrower” thereunder and (2) represents and warrants that the representations and warranties made by it as a “Borrower” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. Each reference to a “Borrower” (or to “Borrowers”) in the Credit Agreement shall be deemed to include Southern Frac.

 

  

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(b) In accordance with the U.S. Guaranty and Security Agreement, Southern Frac, by its signature below, becomes a “Grantor” under the U.S. Guaranty and Security Agreement with the same force and effect as if originally named therein as a “Grantor,” and Southern Frac hereby (1) agrees to all of the terms and provisions of the U.S. Guaranty and Security Agreement applicable to it as a “Grantor” thereunder and (2) represents and warrants that the representations and warranties made by it as a “Grantor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. In furtherance of the foregoing, Southern Frac hereby unconditionally grants, assigns, and pledges to Agent, for the benefit of the Lender Group and the Bank Product Providers, to secure the Secured Obligations, a continuing security interest in and to all of Southern Frac’s right, title and interest in and to the Collateral. Each reference to a “Grantor” (or to “Grantors”) in the U.S. Guaranty and Security Agreement shall be deemed to include Southern Frac.

 

(c) In accordance with the U.S. Guaranty and Security Agreement, GFN Manufacturing, by its signature below, becomes a “Grantor” and a “Guarantor” under the U.S. Guaranty and Security Agreement with the same force and effect as if originally named therein as a “Grantor” and a “Guarantor,” and GFN Manufacturing hereby (1) agrees to all of the terms and provisions of the U.S. Guaranty and Security Agreement applicable to it as a “Grantor” or a “Guarantor” thereunder, and (2) represents and warrants that the representations and warranties made by it as a “Grantor” or a “Guarantor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. In furtherance of the foregoing, GFN Manufacturing hereby (1) unconditionally and irrevocably guarantees as a primary obligor and not merely as a surety the full and prompt payment when due, whether upon maturity, acceleration, or otherwise, of all of the Guarantied Obligations and (2) unconditionally grants, assigns, and pledges to Agent, for the benefit of the Lender Group and the Bank Product Providers, to secure the Secured Obligations, a continuing security interest in and to all of GFN Manufacturing’s right, title and interest in and to the Collateral. Each reference to a “Grantor” or a “Guarantor” (or to “Grantors” or to “Guarantors”) in the U.S. Guaranty and Security Agreement shall be deemed to include GFN Manufacturing.

 

(d) Pursuant to the Credit Agreement and the Intercompany Subordination Agreement, each of Southern Frac and GFN Manufacturing, by its signature below, becomes a “Creditor Obligor” under the Intercompany Subordination Agreement and a “Debtor Obligor” under the Debtor Obligors’ consent thereto with the same force and effect as if originally named therein as a “Creditor Obligor” or a “Debtor Obligor,” as applicable, and each of Southern Frac and GFN Manufacturing hereby (1) agrees to all of the terms and provisions of the Intercompany Subordination Agreement and the Debtor Obligors’ consent thereto applicable to it as a “Creditor Obligor” or a “Debtor Obligor” thereunder and (2) represents and warrants that the representations and warranties made by it as a “Creditor Obligor” or a “Debtor Obligor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. Each reference to a “Creditor Obligor” or a “Debtor Obligor” (or to “Creditor Obligors” or to “Debtor Obligors”) in the Intercompany Subordination Agreement or the Debtor Obligors’ consent thereto shall be deemed to include each of Southern Frac and GFN Manufacturing.

 

  

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(e) Pursuant to the Credit Agreement and the Master Intercompany Note (used in this Agreement as defined in the Intercompany Subordination Agreement), each of Southern Frac and GFN Manufacturing, by its signature below, becomes a “Debtor Obligor” under the Master Intercompany Note and a “Creditor Obligor” under the endorsement thereto with the same force and effect as if originally named therein as a “Debtor Obligor” or a “Creditor Obligor,” as applicable, and each of Southern Frac and GFN Manufacturing hereby (1) agrees to all of the terms and provisions of the Master Intercompany Note and the endorsement thereto applicable to it as a “Debtor Obligor” or a “Creditor Obligor” thereunder and (2) represents and warrants that the representations and warranties made by it as a “Debtor Obligor” or a “Creditor Obligor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. Each reference to a “Debtor Obligor” or a “Creditor Obligor” (or to “Debtor Obligors” or to “Creditor Obligors”) in the Master Intercompany Note or the endorsement thereto shall be deemed to include each of Southern Frac and GFN Manufacturing.

 

(f) Each of Southern Frac and GFN Manufacturing authorizes Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments thereto (1) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of similar effect, (2) describing the Collateral as being of equal or lesser scope or with greater detail, or (3) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance. Each of Southern Frac and GFN Manufacturing also hereby ratifies any and all financing statements or amendments previously filed by Agent in any jurisdiction in connection with the Loan Documents.

 

(g) Attached to this Agreement as Exhibit A are supplemental schedules to the U.S. Guaranty and Security Agreement with respect to Southern Frac and GFN Manufacturing, which supplemental schedules supplement the applicable schedules to the U.S. Guaranty and Security Agreement and shall be deemed a part thereof for all purposes of the U.S. Guaranty and Security Agreement.

 

(h) Attached to this Agreement as Exhibit B are supplementary schedules to the Perfection Certificate with respect to Southern Frac and GFN Manufacturing, which supplementary schedules supplement the applicable schedules to the Perfection Certificate and shall be deemed a part of the Perfection Certificate for all purposes under the Loan Documents.

 

4. Amendments to Credit Agreement.

 

(a) Section 2.3(b) of the Credit Agreement is hereby amended by replacing “$22,000,000” with “$23,200,000”.

 

(b) Section 2.3(d)(i) of the Credit Agreement is hereby amended by replacing “$22,000,000” with “$23,200,000”.

 

  

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(c) Section 2.3(d)(iv) of the Credit Agreement is hereby amended by replacing “$22,000,000” with “$23,200,000”.

 

(d) Section 4.6(b) of the Credit Agreement is hereby amended by replacing each instance of “Amendment No. 2 Effective Date” with “Amendment No. 4 Effective Date”.

 

(e) Section 4.14 of the Credit Agreement is hereby amended as follows: (1) by replacing each of the first and third instance of “Amendment No. 2 Effective Date” with “Amendment No. 4 Effective Date”; and (2) by replacing “after giving effect to Amendment No. 2 on the Amendment No. 2 Effective Date” with “after giving effect to Amendment No. 4 on the Amendment No. 4 Effective Date”.

 

(f) Section 4.22 of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           4.22           Eligible Accounts, Eligible Extended Lone Star Accounts, Eligible Backend-Charge Accounts, and Eligible Southern Frac Accounts. As to each Account that is identified by Borrowers as an Eligible Account, an Eligible Extended Lone Star Account, an Eligible Backend-Charge Account, or an Eligible Southern Frac Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale or lease and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of the Loan Parties’ business, (b) owed to a Borrower or a Qualified Subsidiary Guarantor (or (i) in the case of Eligible Extended Lone Star Accounts, owed to Lone Star, and (ii) in the case of Eligible Southern Frac Accounts, owed to Southern Frac) without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, (c) in the case of Eligible Accounts, not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Accounts, (d) in the case Eligible Extended Lone Star Accounts, not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Extended Lone Star Accounts, (e) in the case Eligible Backend-Charge Accounts, not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Backend-Charge Accounts, and (f) in the case of Eligible Southern Frac Accounts, not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Southern Frac Accounts.”

 

(g) Section 4.23 of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           4.23           Eligible Inventory; Eligible Southern Frac Raw Materials Inventory; Eligible Southern Frac Tanks.

 

(a)           As to each item of Inventory that is identified by Borrowers as Eligible Fleet Inventory, Eligible Step Inventory, or Eligible Southern Frac Finished Goods Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (i) of good and merchantable quality, free from known defects, and (ii) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

 

  

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(b)           As to each item of Inventory that is identified by Borrowers as Eligible Southern Frac Raw Materials Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (i) of good and merchantable quality, free from known defects, and (ii) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Southern Frac Raw Materials Inventory.

 

(c)           As to each Southern Frac Tank that is identified by Borrowers as Eligible Southern Frac Tank in a Borrowing Base Certificate submitted to Agent, such Southern Frac Tank is not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Southern Frac Tanks.”

 

(h) Section 5.6 of the Credit Agreement is hereby amended by replacing each instance of “Amendment No. 2 Effective” with “Amendment No. 4 Effective Date”.

 

(i) Section 6.6(a)(i) of the Credit Agreement is hereby amended by replacing “$22,000,000” with “$23,200,000”.

 

(j) Section 6.7(d) of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           (d)           any Loan Party may make any dividend or distribution to an Affiliate of that Loan Party (other than GFN Manufacturing) on account of Equity Interests of such Loan Party held by such Affiliate, so long as such Affiliate is a Loan Party;”

 

(k) Section 6.7(g) of the Credit Agreement is hereby amended by replacing “$22,000,000” with “$23,200,000”.

 

(l) Section 6.7(i) of the Credit Agreement is hereby amended as follows: (1) by replacing “$22,000,000” with “$23,200,000”; and (2) by replacing “$17,500,000” with “$18,200,000”.

 

(m) Section 6.7(k) of the Credit Agreement is hereby amended as follows: (1) by replacing “$22,000,000” with “$23,200,000”; (2) by replacing “$17,500,000” with “$18,200,000”; and (3) by replacing the period at the end of that section with “; and”.

 

(n) Section 6.7 of the Credit Agreement is hereby further amended as follows: (1) by deleting the word “and” at the end of Section 6.7(j); and (2) by inserting the following new Section 6.7(l) after amended Section 6.7(k):

 

  

5

  

“           (l)           in addition to any Affiliate Distributions or other dividends permitted under this Section 6.7, Southern Frac may declare and pay dividends to GFN Manufacturing on account of Equity Interests issued to GFN Manufacturing by Southern Frac in an aggregate amount not to exceed the outstanding amount of the GFN Manufacturing–Shane Boston Loan, so long as before and immediately after giving effect to the payment of any such dividend, (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom; and (2) such dividends, to the extent that such dividends are used to repay the GFN Manufacturing–Shane Boston Loan, are paid no earlier than ten (10) Business Days prior to the date GFN Manufacturing intends to make one or more repayments in an aggregate like amount in respect of the GFN Manufacturing–Shane Boston Loan.”

 

(o) Section 6.10(e) of the Credit Agreement is hereby amended as follows: (1) by replacing “$22,000,000” with “$23,200,000”; and (2) by replacing “$17,500,000” with “$18,200,000”.

 

(p) Section 14.1(c) of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           (c)           No amendment, waiver, modification, elimination, or consent shall do any of the following, in each case without written consent of Agent, Borrowers and the Supermajority Lenders: (i) amend, modify, or eliminate the definition of Borrowing Base, Borrowing Base (Individual), or any of the defined terms (including, without limitation, the definitions of Eligible Accounts, Eligible Backend-Charge Accounts, Eligible Branch-Use Equipment, Eligible Equipment, Eligible Extended Lone Star Accounts, Eligible Fleet Inventory, Eligible Inventory, Eligible Real Property, Eligible Rolling Stock Equipment, Eligible Step Inventory, Eligible Southern Frac Accounts, Eligible Southern Frac Finished Goods Inventory, Eligible Southern Frac Raw Materials Inventory, Eligible Southern Frac Tanks, and Real Property Sublimit Formula Amount) that are used in any such definition to the extent that any such change results in more credit being made available to one or more Borrowers based upon the Borrowing Base or any Borrowing Base (Individual), but not otherwise; (ii) amend, modify, or eliminate the definition of Initial Maximum Real Property Sublimit Amount, Maximum Real Property Sublimit Amount, or Maximum Revolver Amount; (iii) change Section 2.1(c); or (iv) permit any principal amount of a Real Property Sublimit Loan that is repaid or prepaid to be reborrowed.”

 

(q) The definition of “Affiliate” in Schedule 1.1 of the Credit Agreement is hereby amended by replacing “the definition of Eligible Accounts and Section 6.10 of the Agreement” with “the definition of Eligible Accounts, the definition of Eligible Southern Frac Accounts, and Section 6.10 of the Agreement”.

 

  

6

  

(r) The definition of “Borrowing Base” in Schedule 1.1 to the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           “Borrowing Base” means, as of any date of determination, the Dollar-equivalent result of:

 

(a)           85% of the amount of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Accounts, less the amount, if any, of the Dilution Reserve, plus

 

(b)           the lesser of

 

(i)           $500,000, and

 

(ii)           50% of the amount of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Backend-Charge Accounts, less the amount, if any, of the Dilution Reserve, plus

 

(c)           the lesser of

 

(i)           $2,000,000, and

 

(ii)           85% of the amount of Lone Star’s Eligible Extended Lone Star Accounts, less the amount, if any, of the Dilution Reserve, plus

 

(d)           the lowest of

 

(i)           $10,000,000,

 

(ii)           the sum of the following:

 

(A)           the product of 50%, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Rolling Stock Equipment, plus

 

(B)           the product of 50%, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Branch-Use Equipment, plus

 

(C)           the lesser of the following:

 

(1)           $500,000, and

 

(2)           the product of 50%, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Step Inventory, and

 

  

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(iii)           the sum of the following:

 

(A)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Rolling Stock Equipment (such determination may be made as to different categories of such Eligible Rolling Stock Equipment based upon the Net Recovery Percentage applicable to such categories) at such time, plus

 

(B)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Branch-Use Equipment (such determination may be made as to different categories of such Eligible Branch-Use Equipment based upon the Net Recovery Percentage applicable to such categories) at such time, plus

 

(C)           the lesser of the following:

 

(1)           $500,000, and

 

(2)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Step Inventory (such determination may be made as to different categories of such Eligible Step Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus

 

(e)           the lesser of

 

(i)           the product of 80%, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Fleet Inventory, and

 

(ii)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Borrowers’ and Qualified Subsidiary Guarantors’ Eligible Fleet Inventory (such determination may be made as to different categories of such Eligible Fleet Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus

 

  

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(f)           the lesser of

 

(i)           the Maximum Real Property Sublimit Amount at such time, and

 

(ii)           the Real Property Sublimit Formula Amount for all Eligible Real Property at such time, plus

 

(g)           85% of the amount of Southern Frac’s Eligible Southern Frac Accounts, less the amount, if any, of the Dilution Reserve, plus

 

(h)           the lesser of

 

(i)           the product of 60%, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Southern Frac’s Eligible Southern Frac Finished Goods Inventory, and

 

(ii)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Southern Frac’s Eligible Southern Frac Finished Goods Inventory (such determination may be made as to different categories of such Eligible Southern Frac Finished Goods Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus

 

(i)           the lesser of

 

(i)           the product of 60%, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Southern Frac’s Eligible Southern Frac Raw Materials Inventory, and

 

(ii)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Southern Frac’s Eligible Southern Frac Raw Materials Inventory (such determination may be made as to different categories of such Eligible Southern Frac Raw Materials Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus

 

(j)           the product of 85%, multiplied by the most recently determined Net Recovery Percentage, multiplied by the value (calculated at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices) of Southern Frac’s Eligible Southern Frac Tanks (such determination may be made as to different categories of such Eligible Southern Frac Tanks based upon the Net Recovery Percentage applicable to such categories) at such time, minus

 

(k)           the aggregate amount of Reserves, if any, established by Agent under Section 2.1(c) of the Agreement.”

 

  

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(s) The definition of “Dilution Reserve” in Schedule 1.1 to the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           “Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts, Eligible Extended Lone Star Accounts, Eligible Backend-Charge Accounts, and/or Eligible Southern Frac Accounts by 1 percentage point for each percentage point by which Dilution is in excess of 5%.”

 

(t) The definition of “Eligible Accounts” in Schedule 1.1 of the Credit Agreement is hereby amended as follows: (1) in the introductory clause, by replacing “created by a Borrower or a Qualified Subsidiary Guarantor” with “created by a Borrower or a Qualified Subsidiary Guarantor (other than Southern Frac)”; and (2) by amending clause (i) to read in its entirety as follows:

 

“           (i)           Accounts with respect to an Account Debtor or a group of Account Debtors that are Affiliates whose total obligations owing to Borrowers and Qualified Subsidiary Guarantors (including Southern Frac) exceed 15% (such percentage, as applied to a particular Account Debtor or group of Account Debtors that are Affiliates, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor or such Account Debtors deteriorates) of the aggregate amount of all otherwise Eligible Accounts and all otherwise Eligible Southern Frac Accounts, to the extent of the obligations owing by such Account Debtor or group of Account Debtors in excess of such percentage; provided, that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts and all otherwise Southern Frac Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,”

 

(u) The definition of “Eligible Backend-Charge Accounts” in Schedule 1.1 of the Credit Agreement is hereby amended by replacing “created by a Borrower or a Qualified Subsidiary Guarantor” with “created by a Borrower or a Qualified Subsidiary Guarantor (other than Southern Frac)”.

 

(v) The definition of “Eligible Branch-Use Equipment” in Schedule 1.1 to the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           “Eligible Branch-Use Equipment” means Equipment of a Borrower or a Qualified Subsidiary Guarantor (other than Southern Frac) that qualifies as Eligible Equipment and consists of Branch-Use Equipment.”

 

(w) The definition of “Eligible Fleet Inventory” in Schedule 1.1 to the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           “Eligible Fleet Inventory” means Inventory of a Borrower or a Qualified Subsidiary Guarantor (other than Southern Frac) that qualifies as Eligible Inventory and consists of Rental Fleet Inventory or Other Fleet Inventory.”

 

(x) The definition of “Eligible Rolling Stock Equipment” in Schedule 1.1 to the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           “Eligible Rolling Stock Equipment” means Equipment of a Borrower or a Qualified Subsidiary Guarantor (other than Southern Frac) that qualifies as Eligible Equipment and consists of Rolling Stock Equipment.”

 

  

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(y) The definition of “Eligible Step Inventory” in Schedule 1.1 to the Credit Agreement is hereby amended to read in its entirety as follows:

 

“           “Eligible Step Inventory” means Inventory of a Borrower or a Qualified Subsidiary Guarantor (other than Southern Frac) that qualifies as Eligible Inventory and consists of Step Inventory.”

 

(z) The definition of “Fee Letter” in Schedule 1.1 of the Credit Agreement is hereby amended by replacing “Amendment No. 2 Effective Date” with “Amendment No. 4 Effective Date”.

 

(aa) The definition of “Maximum Revolver Amount” in Schedule 1.1 of the Credit Agreement is hereby amended by replacing “$220,000,000” with “$232,000,000”.

 

(bb) Clause (d) of the definition of “Permitted Liens” in Schedule 1.1 to the Credit Agreement is hereby amended by replacing “Amendment No. 2 Effective Date” with “Amendment No. 4 Effective Date”.

 

(cc) The definition of “Receivables Reserves” in Schedule 1.1 of the Credit Agreement is hereby amended by replacing “with respect to the Eligible Accounts or the Maximum Revolver Amount” with “with respect to the Eligible Accounts, the Eligible Extended Lone Star Accounts, the Eligible Backend-Charge Accounts, the Eligible Southern Frac Accounts, or the Maximum Revolver Amount”.

 

(dd) Schedule 1.1 to the Credit Agreement is hereby further amended by inserting the following new definitions in the appropriate alphabetical order:

 

“           “Amendment No. 4” means an Amendment No. 4 to Amended and Restated Credit Agreement dated as of June 30, 2015, between Agent, certain of the Lenders, and certain of the Loan Parties.

 

“Amendment No. 4 Effective Date” means the effective date of Amendment No. 4, which effective date is June 30, 2015.

 

“Eligible Southern Frac Accounts” means those Accounts created by Southern Frac in the ordinary course of its business, that arise out of Southern Frac’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Southern Frac Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any field examination performed by (or on behalf of) Agent from time to time after the Amendment No. 4 Effective Date. In determining the amount to be included, Eligible Southern Frac Accounts shall be calculated net of customer deposits, unapplied cash, taxes, discounts, credits, allowances, and rebates. Eligible Southern Frac Accounts shall not include the following:

 

  

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(a)           (i) in the case of Accounts owed by one or more of Globe Energy Services and its Affiliates, Accounts that the Account Debtor has failed to pay within 120 days of original invoice date; (ii) in the case of Accounts owed by one or more of Baker Corp and its Affiliates, Accounts that the Account Debtor has failed to pay within 105 days of original invoice date; (iii) in the case of Accounts owed by one or more of MVA Trucking & Rentals, L.L.C., and its Affiliates, Accounts that the Account Debtor has failed to pay within 120 days of original invoice date; and (iv) in the case of all other Accounts, Accounts that the Account Debtor has failed to pay within 90 days of original invoice date;

 

(b)           (i) in the case of Accounts owed by one or more of Globe Energy Services and its Affiliates, Accounts with selling terms of more than 90 days; and (ii) in the case of all other Accounts, Accounts with selling terms of more than 60 days;

 

(c)           Accounts owed by an Account Debtor (or its Affiliates) where 25% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) or (b) above or clause (i) or (s) below;

 

(d)           Accounts with respect to which the Account Debtor is an Affiliate of any Borrower or of any Qualified Subsidiary Guarantor or an employee or agent of any Borrower, any Qualified Subsidiary Guarantor, or any Affiliate of any Borrower or of any a Qualified Subsidiary Guarantor;

 

(e)           Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional;

 

(f)           Accounts that are not payable in Dollars;

 

(g)           Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States or a Qualified Canadian Jurisdiction, or (ii) is not organized under the laws of the United States or any state thereof or under the laws of Canada or a Qualified Canadian Jurisdiction, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent;

 

  

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(h)           Accounts with respect to which the Account Debtor is either (i) the United States or Canada or any department, agency, or instrumentality of the United States or Canada (exclusive, however, of Accounts with respect to which Borrowers and Qualified Subsidiary Guarantors have complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), the Financial Administration Act (Canada), or other applicable law, as applicable, or (ii) any state of the United States or any province of Canada;

 

(i)           Accounts with respect to which the Account Debtor is a creditor of a Borrower or a Qualified Subsidiary Guarantor, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute;

 

(j)           that portion of Accounts which reflect a reasonable reserve for warranty claims or returns or amounts which are owed to account debtors, including those for rebates, allowances, co-op advertising, new store allowances or other deductions;

 

(k)           Accounts with respect to an Account Debtor or a group of Account Debtors that are Affiliates whose total obligations owing to Borrowers and Qualified Subsidiary Guarantors (including Southern Frac) exceed 15% (such percentage, as applied to a particular Account Debtor or group of Account Debtors that are Affiliates, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor or such Account Debtors deteriorates) of the aggregate amount of all otherwise Eligible Accounts and all otherwise Eligible Southern Frac Accounts, to the extent of the obligations owing by such Account Debtor or group of Account Debtors in excess of such percentage; provided, that, in each case, the amount of Eligible Southern Frac Accounts that are excluded because they exceed the foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts and all otherwise Southern Frac Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit;

 

(l)           Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which any Borrower or any Qualified Subsidiary Guarantor has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor;

 

(m)           Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor’s financial condition;

 

(n)           Accounts representing credit card sales or “C.O.D.” sales;

 

(o)           Accounts that are not subject to a valid and perfected first-priority Agent’s Lien or that are subject to any other Lien, unless such other Lien is a Permitted Lien and the holder of such Permitted Lien has entered into an intercreditor agreement with Lender reasonably acceptable to Agent;

 

  

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(p)           Accounts that consist of progress billings (such that the obligation of the Account Debtors with respect to such Accounts is conditioned upon Southern Frac’s satisfactory completion of any further performance under the agreement giving rise thereto) or retainage invoices;

 

(q)           Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity;

 

(r)           that portion of Accounts which represent finance charges, service charges, sales taxes, or excise taxes;

 

(s)           that portion of Accounts which has been restructured, extended, amended, or otherwise modified;

 

(t)           bill and hold invoices, except those with respect to which Agent has received an agreement in writing from the Account Debtor, in form and substance reasonably satisfactory to Agent, confirming the unconditional obligation of the Account Debtor to take the goods related thereto and pay such invoice, so long as such Accounts satisfy all other criteria for Eligible Southern Frac Accounts hereunder;

 

(u)           Accounts that have not been invoiced;

 

(v)           Accounts constituting (i) proceeds of copyrightable material, unless such copyrightable material has been registered with the United States Copyright Office, or (ii) proceeds of patentable inventions, unless such patentable inventions have been registered with the United States Patent and Trademark Office;

 

(w)           Accounts owned by a target acquired in connection with a Permitted Acquisition, until the completion of an appraisal and field examination with respect to such target, in each case, reasonably satisfactory to Agent (which appraisal and field examination (i) may be conducted prior to the closing of such Permitted Acquisition and (ii) if conducted by or for Agent, will be subject to Section 2.10(c) and will be excluded for purposes of the limitation set forth in Section 2.10(c) as to the number of appraisals and field examinations for which Borrowers are obligated to reimburse Agent); or

 

(x)           Accounts or that portion of Accounts otherwise deemed ineligible by Agent in its Permitted Discretion.

 

“Eligible Southern Frac Finished Goods Inventory” means Inventory of Southern Frac (other than Southern Frac Tanks) that qualifies as Eligible Inventory and consists of first-quality finished goods held for sale in the ordinary course of Southern Frac’s business.

 

  

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“Eligible Southern Frac Raw Materials Inventory” means Inventory of Southern Frac (other than Southern Frac Tanks) that consists of first-quality raw materials and that would be Eligible Inventory but for its being excluded as ineligible by virtue of the excluding criteria relating to raw materials set forth in clause (i) of the definition of Eligible Inventory.

 

“Eligible Southern Frac Tanks” means Southern Frac Tanks that qualify as Eligible Inventory.

 

“GFN Manufacturing” means GFN Manufacturing Corporation, a Delaware corporation. GFN Manufacturing became a Guarantor effective as of the Amendment No. 4 Effective Date.

 

“GFN Manufacturing–Shane Boston Loan” means Indebtedness evidenced by an Amended and Restated Promissory Note dated February 22, 2013, in the original principal amount of $1,670,000 executed by GFN Manufacturing and payable to the order of Shane Boston, an individual, the proceeds of which Indebtedness were used to finance a portion of the acquisition of Southern Frac by GFN Manufacturing.

 

“Southern Frac Tank” means a completed but unpainted frac tank or portable liquid storage tank that constitutes Inventory of Southern Frac held for sale or lease in the ordinary course of Southern Frac’s business.”

 

(ee) Schedule C-1 to the Credit Agreement is hereby amended to read in its entirety as set forth in Exhibit C to this Agreement.

 

(ff) Schedules A-2, D-1, P-1, P-2, 4.1(b), 4.1(c), 4.1(d), 4.6(b), 4.10, 4.11, 4.14, 4.24, 4.27, 5.6, 5.14, and 6.5 to the Credit Agreement are hereby amended (including in connection with the joinder of Southern Frac to the Credit Agreement and the joinder of GFN Manufacturing to the U.S. Guaranty and Security Agreement) to read in their entirety as set forth in Exhibit D to this Agreement.

 

5. Representations. To induce Agent and the Lenders to enter into this Agreement, each Loan Party signatory to this Agreement hereby represents to Agent and the Lenders as follows:

 

	
(1)  

	
that that Loan Party is duly authorized to execute and deliver this Agreement and, if it is a Borrower, is and will continue to be duly authorized to borrow monies under the Credit Agreement, as amended by this Agreement, and to perform its obligations under the Credit Agreement, as amended by this Agreement;

 

	
(2)  

	
that, with respect to each Borrower, the execution and delivery of this Agreement and the performance by that Borrower of its obligations under the Credit Agreement, as amended by this Agreement, do not and will not conflict with any provision of law or of the articles of incorporation or bylaws of that Borrower or of any agreement binding upon that Borrower;

 

	
(3)  

	
that, with respect to each Borrower, the Credit Agreement, as amended by this Agreement, is a legal, valid, and binding obligation of that Borrower, enforceable against that Borrower in accordance with its terms, except as enforceability is limited by bankruptcy, insolvency, or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies;

 

  

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(4)  

	
that the representations and warranties set forth in Section 4 of the Credit Agreement, as amended by this Agreement, are true and correct in all material respects (but if any representation or warranty is by its terms qualified by concepts of materiality, that representation or warranty is true and correct in all respects), in each case with the same effect as if such representations and warranties had been made on the date of this Agreement, with the exception that all references to the financial statements mean the financial statements most recently delivered to Agent except for such changes as are specifically permitted under the Credit Agreement and except to the extent that any such representation or warranty expressly relates to an earlier date;

 

	
(5)  

	
that, with respect to each Borrower, that Borrower has complied with and is in compliance with all of the covenants set forth in the Credit Agreement, as amended by this Agreement, including those set forth in Section 5, Section 6, and Section 7 of the Credit Agreement; and

 

	
(6)  

	
that as of the date of this Agreement, no Default or Event of Default has occurred and is continuing.

 

6. Conditions. The effectiveness of this Agreement is subject to satisfaction of the following conditions:

 

	
(1)  

	
that Agent has received this Agreement executed by Agent, the Lenders, Borrowers, and GFN Manufacturing;

 

	
(2)  

	
that Agent has received an amendment to the Intercompany Subordination Agreement, in form and substance reasonably satisfactory to Agent, executed by each applicable Person;

 

	
(3)  

	
that Agent has received a fee letter, in form and substance reasonably satisfactory to Agent, executed by each applicable Person;

 

	
(4)  

	
that Agent has received a letter, in form and substance reasonably satisfactory to Agent and executed by each applicable Person, from Wells Fargo, in its capacity as the lender to Southern Frac under Southern Frac’s credit facility governed by a Credit and Security Agreement dated as of October 1, 2012, and other related loan documentation, respecting the amount necessary to repay in full all of the obligations of Southern Frac and GFN Manufacturing owing under that credit facility and obtain a release of all of the Liens existing in favor of that lender in and to the assets of Southern Frac, together with termination statements and other documentation evidencing the termination by that lender of its Liens in and to the properties and assets of Southern Frac and of GFN Manufacturing;

 

	
(5)  

	
that Agent has received evidence satisfactory to Agent that Borrowers will have Excess Availability plus Qualified Cash of at least $23,200,000 immediately after giving effect to the transactions contemplated by this Agreement or to be effected under the Credit Agreement, as amended by this Agreement, on or before the effective date of this Agreement (including, without limitation, (A) the repayment in full of the existing credit facility of Southern Frac referred to in clause (4) of this Section 6, and (B) the payment of all fees and expenses required to be paid by Borrowers on or before the effective date of this Agreement under this Agreement, the Credit Agreement, or the other Loan Documents);

 

  

16

  

	
(6)  

	
that Agent has received copies (executed or certified, as appropriate) of all other legal documents or minutes of proceedings taken in connection with the execution and delivery of this Agreement to the extent Agent or its counsel reasonably requests;

 

	
(7)  

	
that Borrowers have paid all fees and expenses required to be paid by Borrowers on the date of this Agreement under this Agreement, the Credit Agreement, or the other Loan Documents; and

 

	
(8)  

	
that all legal matters incident to the execution and delivery of this Agreement are satisfactory to Agent and its counsel.

 

7. Release. Each Loan Party signatory to this Agreement hereby waives and releases any and all current existing claims, counterclaims, defenses, or set-offs of every kind and nature which it has or might have against Agent or any Lender arising out of, pursuant to, or pertaining in any way to the Credit Agreement, any and all documents and instruments delivered in connection with or relating to the foregoing, or this Agreement. Each Loan Party signatory to this Agreement hereby further covenants and agrees not to sue Agent or any Lender or assert any claims, defenses, demands, actions, or liabilities against Agent or any Lender which occurred prior to or as of the date of this Agreement arising out of, pursuant to, or pertaining in any way to the Credit Agreement, any and all documents and instruments delivered in connection with or relating to the foregoing, or this Agreement.

 

8. Miscellaneous.

 

(a) This Agreement is governed by, and is to be construed in accordance with, the laws of the State of Illinois. Each provision of this Agreement is severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

(b) This Agreement binds Agent, the Lenders, and the Loan Parties signatory to this Agreement and their respective successors and assigns, and will inure to the benefit of Agent, the Lenders, and the Loan Parties signatory to this Agreement and the successors and assigns of Agent and each Lender.

 

(c) Except as specifically modified or amended by the terms of this Agreement, all other terms and provisions of the Credit Agreement and the other Loan Documents are incorporated by reference in this Agreement and in all respects continue in full force and effect. Each Loan Party signatory to this Agreement, by execution of this Agreement, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Credit Agreement and the other Loan Documents.

 

(d) Each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Credit Agreement in any and all instruments or documents delivered in connection therewith, will be deemed to refer to the Credit Agreement, as amended by this Agreement.

 

(e) This Agreement is a Loan Document. Each Borrower acknowledges that Agent’s reasonable costs and out-of-pocket expenses (including reasonable attorneys’ fees) incurred in drafting this Agreement and in amending the Loan Documents as provided in this Agreement constitute Lender Group Expenses.

 

  

17

  

(f) The parties may sign this Agreement in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument.

 

[Signature pages to follow]

 

  

18

  

The parties are signing this Amendment No. 4 to Amended and Restated Credit Agreement as of the date stated in the introductory clause.

	  	  	  	  
	  	
PAC-VAN, INC.,

as a Borrower

 

	  	
By:  

	
/s/ Christopher A. Wilson

	  	
Name: 

	
Christopher A. Wilson

	  	
Title

	
Secretary

	  	  	  	  
	  	
LONE STAR TANK RENTAL INC.,

as a Borrower

 

	  	
By:  

	
/s/ Christopher A. Wilson

	  	
Name: 

	
Christopher A. Wilson

	  	
Title

	
Secretary

	  	  	  	  
	  	
GFN REALTY COMPANY, LLC,

as a Borrower

 

	  	
By:  

	
/s/ Christopher A. Wilson

	  	
Name: 

	
Christopher A. Wilson

	  	
Title

	
Secretary

	  	  	  	  
	  	
SOUTHERN FRAC, LLC,

as a Borrower

 

	  	
By:  

	
/s/ Christopher A. Wilson

	  	
Name: 

	
Christopher A. Wilson

	  	
Title

	
Secretary

	  	  	  	  
	  	
GFN MANUFACTURING CORPORATION,

as a Borrower

 

	  	
By:  

	
/s/ Christopher A. Wilson

	  	
Name: 

	
Christopher A. Wilson

	  	
Title

	
Secretary

  Signature page to Amendment No. 4 to Amended and Restated Credit Agreement (Pac-Van)

  

  

	  	  	  	  
	  	
WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent and as a Lender

 

	  	
By:  

	
/s/ Brian Hynds

	  	
Name: 

	
Brian Hynds

	  	  	
Its Authorized Signatory

Signature page to Amendment No. 4 to Amended and Restated Credit Agreement (Pac-Van)

  

  

  

 

	  	  	  	  
	  	
HSBC BANK USA, N.A.,

as a Lender

 

	  	
By:  

	
/s/ William M. Ozaki

	  	
Name: 

	
William M. Ozaki

	  	  	
Its Authorized Signatory

 

Signature page to Amendment No. 4 to Amended and Restated Credit Agreement (Pac-Van)

  

  

  

 

	  	  	  	  
	  	
ONEWEST BANK N.A.,

f/k/a OneWest Bank, FSB,

as a Lender

 

	  	
By:  

	
/s/ John Farrace

	  	
Name: 

	
John Farrace, EVP

	  	  	
Its Authorized Signatory

 

 

Signature page to Amendment No. 4 to Amended and Restated Credit Agreement (Pac-Van)

  

  

  

GUARANTOR ACKNOWLEDGMENT

 

This Guarantor Acknowledgment refers to, and is attached to, an Amendment No. 4 to Amended and Restated Credit Agreement dated as of June 30, 2015, among Pac-Van, Inc., an Indiana corporation (“Pac-Van”), Lone Star Tank Rental Inc., a Delaware corporation (“Lone Star”), GFN Realty Company, LLC, a Delaware limited liability company (“GFNRC”), Southern Frac, LLC, a Texas limited liability company (“Southern Frac” and, together with Pac-Van, Lone Star, and GFNRC, each a “Borrower”), GFN Manufacturing Corporation, a Delaware corporation, the Lenders identified on the signature pages thereof as Lenders, and Wells Fargo Bank, National Association, a national banking association, as agent for the Lenders (the “Amendment”). Defined terms used but not defined in this Guarantor Acknowledgment are as defined in the Amendment.

 

Each of the undersigned, in its capacity as a Guarantor, hereby does the following: (1) consents to the Amendment; (2) acknowledges that the Amendment does not in any way modify, limit, or release any of its obligations under the Guaranty and Security Agreement to which it is a party; (3) ratifies and confirms its obligations under the Guaranty and Security Agreement to which it is a party and acknowledges that those obligations continue in full force and effect; and (4) acknowledges that its consent to any other modification to any Loan Document will not be required as a result of the consent set forth in this Guarantor Acknowledgment having been obtained, except to the extent, if any, required by the specific terms of that Loan Document.

 

Dated as of the date of the Amendment.

 

	  	  	  	  
	  	
PV ACQUISITION CORP.,

an Alberta corporation

 

	  	
By:  

	
/s/ Christopher A. Wilson

	  	
Name: 

	
Christopher A. Wilson

	  	
Title

	
Secretary

 

 

Guarantor Acknowledgment to Amendment No. 4 to Amended and Restated Credit Agreement (Pac-Van)

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