Document:

Unassociated Document

 

CONFORMED COPY (SECOND AMENDMENT)

 

EXECUTION VERSION

 

 

 

TERM LOAN CREDIT AGREEMENT

 

Dated as of March 11, 2014

 

among

 

LOWER LAKES TOWING LTD.,

as Cdn. Borrower,

 

GRAND RIVER NAVIGATION COMPANY, INC.,

as US GR Borrower,

 

BLACK CREEK SHIPPING COMPANY, INC.,

as US BC Borrower,

 

THE OTHER CREDIT PARTIES SIGNATORY HERETO,

as Credit Parties,

 

THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders,

 

GUGGENHEIM CORPORATE FUNDING, LLC,

as Agent, Collateral Agent and Co-Arranger

 

and

 

BARCLAYS CAPITAL INC.,

as Co-Arranger

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	
1.

	AMOUNT AND TERMS OF CREDIT	
2

	 	
1.1

	
Credit Facilities

	
2

	 	
1.2

	
Reserved

	
5

	 	
1.3

	
Prepayments

	
5

	 	
1.4

	
Use of Proceeds

	
7

	 	
1.5

	
Interest and Applicable Margins

	
7

	 	
1.6

	
Reserved

	
9

	 	
1.7

	
Cash Management Systems

	
9

	 	
1.8

	
Fees

	
9

	 	
1.9

	
Receipt of Payments

	
9

	 	
1.10

	
Application and Allocation of Payments

	
10

	 	
1.11

	
Loan Account and Accounting

	
10

	 	
1.12

	
Indemnity

	
11

	 	
1.13

	
Access and Audits

	
12

	 	
1.14

	
Taxes

	
12

	 	
1.15

	
Illegality

	
15

	 	
1.16

	
Increased Costs and Reduction of Return

	
15

	 	
1.17

	
Funding Losses

	
17

	 	
1.18

	
Inability to Determine Rates

	
17

	 	
1.19

	
Reserves on LIBOR Loans

	
18

	 	
1.20

	
Certificates of Lenders

	
18

	 	
1.21

	
Currency Matters

	
18

	 	
1.22

	
Reserved

	
18

	 	
1.23

	
Joint and Several Liability of US Borrowers; Waivers; Extent of Liability; Contribution; Joint Enterprise; Subordination

	
18

	
2.

	CONDITIONS PRECEDENT	
21

	 	
2.1

	
Conditions to the Term Loans

	
21

	
3.

	REPRESENTATIONS AND WARRANTIES	
22

	 	
3.1

	
Corporate Existence; Compliance with Law

	
22

	 	
3.2

	
Executive Offices, Collateral Locations

	
22

 

 

i

 

 

	 	
3.3

	
Corporate Power, Authorization, Enforceable Obligations

	
23

	 	
3.4

	
Financial Statements and Projections

	
23

	 	
3.5

	
Material Adverse Effect

	
24

	 	
3.6

	
Ownership of Property; Liens

	
24

	 	
3.7

	
Labor Matters

	
25

	 	
3.8

	
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness

	
25

	 	
3.9

	
Government Regulation

	
25

	 	
3.10

	
Margin Regulations

	
26

	 	
3.11

	
Taxes

	
26

	 	
3.12

	
No Litigation

	
26

	 	
3.13

	
Canadian Pension Plans, Canadian Benefit Plans and ERISA Plans

	
27

	 	
3.14

	
Brokers

	
28

	 	
3.15

	
Intellectual Property

	
28

	 	
3.16

	
Full Disclosure

	
28

	 	
3.17

	
Environmental Matters

	
28

	 	
3.18

	
Insurance

	
29

	 	
3.19

	
Deposit and Disbursement Accounts

	
30

	 	
3.20

	
Government Contracts

	
30

	 	
3.21

	
Customer and Trade Relations

	
30

	 	
3.22

	
Bonding; Licenses

	
30

	 	
3.23

	
Solvency

	
30

	 	
3.24

	
Material Contracts

	
30

	 	
3.25

	
Citizen of the United States

	
31

	 	
3.26

	
Vessels

	
31

	 	
3.27

	
Permitted Intercompany Indebtedness

	
31

	 	
3.28

	
Time Charter Agreements

	
31

	 	
3.29

	
Bareboat Charter Agreements

	
32

	 	
3.30

	
Foreign Assets Control Regulations and Anti-Money Laundering

	
32

	 	
3.31

	
Patriot Act

	
33

	 	
3.32

	
First Lien Debt

	
33

	
4.

	FINANCIAL STATEMENTS AND INFORMATION	
33

	 	
4.1

	
Reports and Notices

	
33

 

 

ii

 

 

	 	
4.2

	
Communication with Accountants

	
34

	
5.

	AFFIRMATIVE COVENANTS	
34

	 	
5.1

	
Maintenance of Existence and Conduct of Business

	
34

	 	
5.2

	
Payment of Charges

	
34

	 	
5.3

	
Books and Records

	
35

	 	
5.4

	
Insurance; Damage to or Destruction of Collateral

	
35

	 	
5.5

	
Compliance with Laws

	
36

	 	
5.6

	
Supplemental Disclosure

	
37

	 	
5.7

	
Intellectual Property

	
37

	 	
5.8

	
Environmental Matters

	
38

	 	
5.9

	
Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases

	
38

	 	
5.10

	
Further Assurances

	
39

	 	
5.11

	
Additional Provisions Regarding Vessels

	
39

	 	
5.12

	
Reserved

	
42

	 	
5.13

	
OFAC; Counter-Terrorism; Patriot Act

	
42

	 	
5.14

	
Reserved

	
42

	 	
5.15

	
The Manitoulin

	
42

	 	
5.16

	
Post-Closing Obligations

	
42

	
6.

	NEGATIVE COVENANTS	
44

	 	
6.1

	
Amalgamations, Mergers, Subsidiaries, Etc

	
44

	 	
6.2

	
Investments; Loans and Advances

	
44

	 	
6.3

	
Indebtedness

	
45

	 	
6.4

	
Employee Loans and Affiliate Transactions

	
45

	 	
6.5

	
Capital Structure and Business

	
45

	 	
6.6

	
Guaranteed Indebtedness

	
46

	 	
6.7

	
Liens

	
46

	 	
6.8

	
Operating Leases

	
46

	 	
6.9

	
Sale of Stock and Assets

	
47

	 	
6.10

	
Pension and Benefit Plans; ERISA Plans

	
47

	 	
6.11

	
Financial Covenants

	
47

	 	
6.12

	
Hazardous Materials

	
47

	 	
6.13

	
Sale-Leasebacks

	
48

 

 

iii

 

 

	 	
6.14

	
Restricted Payments

	
48

	 	
6.15

	
Change of Corporate Name or Location; Change of Fiscal Year

	
49

	 	
6.16

	
No Impairment of Intercompany Transfers

	
49

	 	
6.17

	
Real Estate Purchases

	
49

	 	
6.18

	
Material Contracts and First Lien Loan Documents

	
49

	 	
6.19

	
Reserved

	
49

	 	
6.20

	
Salt Water Operation

	
50

	 	
6.21

	
Time Charters

	
50

	 	
6.22

	
Bareboat Charter Agreements

	
50

	 	
6.23

	
Capital/Corporate Structure

	
50

	 	
6.24

	
Acquisitions

	
50

	
7.

	TERM	
50

	 	
7.1

	
Termination

	
50

	 	
7.2

	
Survival of Obligations Upon Termination of Financing Arrangements

	
50

	
8.

	EVENTS OF DEFAULT; RIGHTS AND REMEDIES	
51

	 	
8.1

	
Events of Default

	
51

	 	
8.2

	
Remedies

	
53

	 	
8.3

	
Waivers by Credit Parties

	
54

	
9.

	ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT	
54

	 	
9.1

	
Assignment and Participations

	
54

	 	
9.2

	
Appointment of Agent

	
55

	 	
9.3

	
Agents' Reliance, Etc

	
57

	 	
9.4

	
Guggenheim and Affiliates

	
57

	 	
9.5

	
Lender Credit Decision

	
57

	 	
9.6

	
Indemnification

	
58

	 	
9.7

	
Successor Agent

	
58

	 	
9.8

	
Setoff and Sharing of Payments

	
59

	 	
9.9

	
Payments; Information; Actions in Concert

	
59

	 	
9.10

	
Release of Collateral or Guarantors

	
60

	
10.

	SUCCESSORS AND ASSIGNS	
61

	 	
10.1

	
Successors and Assigns

	
61

	
11.

	MISCELLANEOUS	
61

 

 

iv

 

 

	 	
11.1

	
Complete Agreement; Modification of Agreement

	
61

	 	
11.2

	
Amendments and Waivers

	
61

	 	
11.3

	
Fees and Expenses

	
62

	 	
11.4

	
No Waiver

	
64

	 	
11.5

	
Remedies

	
64

	 	
11.6

	
Severability

	
64

	 	
11.7

	
Conflict of Terms

	
64

	 	
11.8

	
Confidentiality

	
64

	 	
11.9

	
Governing Law; Submission to Jurisdiction

	
65

	 	
11.10

	
Notices

	
66

	 	
11.11

	
Section Titles

	
66

	 	
11.12

	
Counterparts

	
66

	 	
11.13

	
Press Releases and Related Matters

	
67

	 	
11.14

	
Reinstatement

	
67

	 	
11.15

	
Advice of Counsel

	
67

	 	
11.16

	
No Strict Construction

	
67

	 	
11.17

	
Judgment Currency

	
67

	 	
11.18

	
Joint and Several Obligations (Canada)

	
68

	 	
11.19

	
Waiver of Jury Trial

	
68

	 	
11.20

	
USA PATRIOT Act Notice

	
68

	 	
11.21

	
Anti-Money Laundering Legislation

	
68

	
12.

	COLLATERAL ALLOCATION MECHANISM	
69

	 	
12.1

	
Implementation of CAM

	
69

	 	
12.2

	
Reserved

	
70

	 	
12.3

	
Net Payments Upon Implementation of CAM Exchange

	
70

 

 

v

 

 

INDEX OF APPENDICES

 

	
Annex A (Recitals)

	
-

	
Definitions

	
Annex B (Section 1.2A)

	
-

	
Reserved

	
Annex C (Section 1.7)

	
-

	
Cash Management System

	
Annex D-1 (Section 2.1(a))

	
-

	
Closing Checklist

	
Annex D-2 (Section 5.16(b))

	
-

	
Post-Closing Checklist

	
Annex D-3 (Section 5.16(c))

	
-

	
Post-Closing Checklist (Control Agreements)

	
Annex D-4 (Section 5.16(d))

	
-

	
Post-Closing Checklist

	
 

	  	

(Second Amendment Closing Date)

	
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

	
-

	
Commitments

	
Annex J

	
-

	
Collateral

	
Annex K (Section 5.4)

	
-

	
Insurance

	
Exhibit 1.1(a)(i)

	
-

	
Reserved

	
Exhibit 1.1(a)(iii)

	
-

	
Reserved

	
Exhibit 1.1(b)

	
-

	
Reserved

	
Exhibit 1.1(c)(iii)

	
-

	
Reserved

	
Exhibit 1.1(d)(i)

	
-

	
Reserved

	
Exhibit 1.1(d)(ii)

	
-

	
Reserved

	
Exhibit 1.1(e)(i)

	
-

	
Reserved

	
Exhibit 1.1(f)(i)(G)

	
-

	
Form of Lender Joinder

	
Exhibit 1.1(g)(ii)

	
-

	
Reserved

	
Exhibit 1.5(e)(ii)

	
-

	
Form of Notice of Conversion/Continuation – LIBOR

	
Exhibit 1.5(e)(iii)

	  	
Reserved

	
Exhibit 4.1(b)

	
-

	
Reserved

	
Exhibit 6.14

	
-

	
Form of Subordination Provisions

	
Exhibit 9.1(a)

	
-

	
Form of Assignment Agreement

	
Disclosure Schedule 3.1

	
-

	
Type of Entity; Jurisdiction of Organization

	
Disclosure Schedule 3.2

	
-

	
Executive Offices, Collateral Locations

	
Disclosure Schedule 3.4(c)

	
-

	
Fair Saleable 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

	
Disclosure Schedule 3.19

	
-

	
Deposit and Disbursement Accounts

 

 

vi

 

 

	
Disclosure Schedule 3.20

	
-

	
Government Contracts

	
Disclosure Schedule 3.22

	
-

	
Bonds; Patent, Trademark, Industrial Design

	  	  	
Licenses

	
Disclosure Schedule 3.24

	
-

	
Material Contracts

	
Disclosure Schedule 3.27

	
-

	
Permitted Intercompany Indebtedness

	
Disclosure Schedule 5.1

	
-

	
Trade Names

	
Disclosure Schedule 6.3

	
-

	
Indebtedness

	
Disclosure Schedule 6.4(a)

	
-

	
Transactions with Affiliates

	
Disclosure Schedule 6.4(b)

	
-

	
Employee Loans

	
Disclosure Schedule 6.6

	
-

	
Guaranteed Indebtedness

	
Disclosure Schedule 6.7

	
-

	
Existing Liens

 

 

vii

 

 

Notwithstanding anything herein to the contrary, the liens and security interest granted to Agent and Lenders pursuant to this Agreement and the exercise of any right or remedy by Agent or Lenders hereunder are subject to the provisions of that certain Intercreditor Agreement, dated as of the Second Amendment Closing Date, as it may hereafter be amended, supplemented, modified, extended, restated or replaced (the “Intercreditor Agreement”), among Bank of America, N.A., as “First Lien Agent,” and Guggenheim Corporate Funding, LLC, as “Second Lien Agent”; and each holder of the Obligations hereunder, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Intercreditor Agreement.  In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

 

This TERM LOAN CREDIT AGREEMENT (this "Agreement"), dated as of March 11, 2014, among Lower Lakes Towing Ltd., a Canadian corporation, Grand River Navigation Company, Inc, a Delaware corporation, Black Creek Shipping Company, Inc., a Delaware corporation, the other Credit Parties signatory hereto, Guggenheim Corporate Funding, LLC (in its individual capacity, "Guggenheim") as Agent, as Collateral Agent and as Co-Arranger, Barclays Capital Inc., as Co-Arranger, and the Lenders signatory hereto from time to time.

 

RECITALS

 

WHEREAS, Lower Lakes, LLTC, Grand River, Black Creek, and the other credit parties thereto, Agent and the lenders signatory thereto are parties to a Credit Agreement dated as of the Second Amendment Closing Date (as the same may be amended, restated, replaced, modified or supplemented from time to time, in accordance with the terms thereof and the terms of this Agreement and the Intercreditor Agreement, the "First Lien Credit Agreement");

 

WHEREAS, the parties hereto desire to enter into this Agreement to advance term loans to, among other things, (i) partially repay the indebtedness of the credit parties under the Original Credit Agreement, (ii) partially pay accrued dividends on the preferred stock of Rand Logistics, Inc., (iii) to provide an incremental term loan facility in an amount not to exceed US$22,500,000, subject to the terms and conditions herein, (iv) repay any interest (but not principal) due and payable on the Preferred Equity, (v) partially pay the acquisition and construction costs and expenses in accordance with Section 5.15,  and (vi) continue to provide funds for other general corporate purposes and funds for other purposes permitted hereunder;

 

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 this 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 as follows:

 

 

 

 

 

	
1.

	
AMOUNT AND TERMS OF CREDIT

 

1.1           Credit Facilities.

 

(a)           Maximum Amount of Term Loans.  The aggregate original principal amounts of the Cdn. Term Loan, the US GR Term Loan and the US BC Term Loan shall not exceed US$72,500,000.

 

(b)           Cdn. Term Loan.

 

(i)           On the Closing Date, subject to the terms and conditions of this Agreement, each Cdn. Lender agrees to make to Lower Lakes a term loan denominated in US Dollars (collectively, the "Cdn. Term Loan") in the amount of its respective “Cdn. Term Commitment” as set forth on Annex I. Lower Lakes shall have the obligation to pay the amount of the applicable Cdn. Lender's Term Commitment, together with interest thereon as prescribed in Section 1.5.

 

(ii)           The aggregate outstanding principal balance of the Cdn. Term Loan, together with any accrued and unpaid interest thereon, 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.

 

(iii)           Each payment of principal with respect to the Cdn. Term Loan shall be paid to Agent for the ratable benefit of each Cdn. Lender, ratably in proportion to the amount of the Cdn. Term Loan held by each such Cdn. Lender.

 

(c)           Reserved.

 

(d)           US GR Term Loan.

 

(i)           On the Closing Date, subject to the terms and conditions of this Agreement, each US Lender agrees to make to Grand River a term loan denominated in US Dollars (collectively, the "US GR Term Loan") in the amount, which, together with the amount of the US BC Term Loan (as defined below), shall not exceed its respective “US Term Commitment” as set forth on Annex I. Grand River shall have the obligation to pay the amount of the applicable US Lender's Term Commitment, together with interest thereon as prescribed in Section 1.5.

 

(ii)             The aggregate outstanding principal balance of the US GR Term Loan, together with any accrued and unpaid interest thereon, 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 GR Term Loan may be reborrowed.

 

(iii)           Each payment of principal with respect to the  US GR Term Loan shall be paid to Agent for the ratable benefit of each applicable US Lender, ratably in proportion to the amount of the US GR Term Loan held by each such US Lender.

 

 

2

 

 

(e)           US BC Term Loan.

 

(i)           On the Closing Date, subject to the terms and conditions hereof, each US Lender agrees to make to Black Creek a term loan denominated in US Dollars (collectively, the "US BC Term Loan") in the amount, which, together with the amount of the US GR Term Loan, shall not exceed its respective “US Term Commitment” as set forth on Annex I.  Black Creek shall have the obligation to pay the amount of the applicable US Lender's Term Commitment, together with interest thereon as prescribed in Section 1.5.

 

(ii)           The aggregate outstanding principal balance of the US BC Term Loan, together with any accrued and unpaid interest thereon, 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 BC Term Loan may be reborrowed.

 

(iii)           Each payment of principal with respect to the US BC Term Loan shall be paid to Agent for the ratable benefit of each applicable US Lender, ratably in proportion to the amount of the US BC Term Loan held by each such US Lender.

 

(f)           Incremental Loans.

 

(i)           One or more Borrowers may request additional term loans to be made on the Incremental Funding Date (the “Incremental Loans”) by (1) one or more of the current Lenders agreeing to provide an Incremental Loan (any current Lender which so provides shall be referred to as an “Increasing Lender”) or (2) one or more new lenders (each a “New Lender”) joining this Agreement and providing an Incremental Loan, as applicable, hereunder, subject to the following terms and conditions:

 

(A)           reserved;

 

(B)           the Borrowers shall have a pro forma Total Funded Debt to EBITDA Ratio for the 12-month period then ended of less than 5.75:1.00; provided, that for such foregoing calculation, “EBITDA” shall include, at Borrowers’ option, the projected EBITDA generated from the Manitoulin in an amount equal to $3,834,000; provided, further, (x) Borrowers are only permitted to borrow Advances under the First Lien Credit Agreement for purposes of funding the final payment due to the Conversion Shipyard with respect to the Conversion of the Manitoulin (such Advances, “First Lien Manitoulin Advances”) if Borrowers contemporaneously borrow Incremental Loans for the same purpose in an amount equal to $5,626,152; and (y) notwithstanding anything to the contrary in the First Lien Credit Agreement, no Borrower(s) may borrow any amount in excess of $155,000,000 in the aggregate (such amounts, the “First Lien Additional Advances”) under the First Lien Credit Agreement for any purpose whatsoever, unless (I) the Incremental Loans are at least twenty percent (20%) of the aggregate amount of the Incremental Loans and the First Lien Additional Advances and (II) in the case of any First Lien Additional Advance, each Incremental Loan shall be in a minimum amount of $1,000,000; provided, however, if the Lenders hereunder decline their right to provide the required portion of Incremental Loans hereunder or if the Incremental Loans are otherwise prohibited by this Agreement, including, without limitation, by clause (G) below, then the Borrowers may borrow First Lien Manitoulin Advances or First Lien Additional Advances, as the case may be, without borrowing any Incremental Loans;

 

 

3

 

 

(C)           no current Lender shall be obligated to provide an Incremental Loan, and any agreement to provide an Incremental Loan by any current Lender shall be in the sole discretion of such current Lender;

 

(D)           Borrowers may not request the addition of a New Lender unless (and then only to the extent that) there is insufficient participation on behalf of the existing Lenders in the Incremental Loans being requested by Borrowers, evidenced by a written notice delivered to the Borrowers of such applicable existing Lender’s election not to provide an Incremental Loan;

 

(E)           the aggregate original principal amount of all Incremental Loans shall not exceed US$22,500,000;

 

(F)           subject to the Intercreditor Agreement, the Incremental Loans shall be on terms and conditions (including pricing terms) not less favorable than that provided to the Lenders that have made Term Loans;

 

(G)           Borrowers may not request the Incremental Loans under this Section 1.1(f) more than two (2) times during the period commencing on the Closing Date and ending on the second (2nd) anniversary of the Closing Date unless otherwise agreed to by the Agent and the applicable Lenders;

 

(H)           Borrowers shall deliver to Agent on or before the Incremental Funding Date the following documents in form and substance satisfactory to Agent: (1) an updated Annex I to be attached hereto, reflecting each applicable Lender’s Incremental Commitment, (2) certificate dated as of the Incremental Funding Date certifying that no Default or Event of Default shall have occurred and be continuing and certifying that the representations and warranties made by each Borrower herein and in the Loan Documents are true and complete in all material respects (unless already qualified by materiality in such specific provision) with the same force and effect as if made on and as of such date (except to the extent any such representation or warranty expressly relates only to any earlier and/or specified date) and (3) if not previously executed and delivered, security documents granting or confirming the grant, as the case may be, of the Agent’s security interest in the Manitoulin, in form and substance reasonably satisfactory to Agent;

 

(I)           any New Lender shall be subject to the prior written consent of Agent;

 

(J)           each New Lender shall execute a lender joinder in substantially the form of Exhibit 1.1(f)(i)(G) pursuant to which such New Lender shall join and become a party to this Agreement and the Loan Documents with the Incremental Commitment as set forth in such lender joinder;

 

(K)           the Incremental Loans shall rank pari passu in right of payment and of security with the Term Loans and, except with regard to pricing and as set forth in this Section 1.1(f), shall be treated substantially the same as the Term Loans (including with respect to mandatory and voluntary repayments and voting rights);

 

 

4

 

 

(L)           on the Incremental Funding Date, Borrowers shall pay all reasonable costs and expenses incurred by Agent and by each Increasing Lender and New Lender in connection with the negotiations regarding, and the preparation, negotiation, execution and delivery of all agreements and instruments executed and delivered by any of Agent, Borrowers and/or Increasing Lenders and New Lenders in connection with, such increase (including all fees for any supplemental or additional public filings of any Loan Documents necessary to protect, preserve and continue the perfection and priority of the liens, security interests, rights and remedies of Agent and Lenders hereunder and under the Loan Documents in light of such increase); and

 

(M)           If the Incremental Loan will be used to fund a portion of the final payment due to the Conversion Shipyard with respect to the Conversion of the Manitoulin, then (1) the Conversion Shipyard shall have released or shall contemporaneously release its lien (if any) on the Manitoulin, (2) the Manitoulin shall immediately thereafter comply with all requirements of this Agreement applicable to the other Cdn. Vessels and (3) all obligations of Lower Lakes 17 set forth in Section 5.15(c) shall have been satisfied or shall contemporaneously be satisfied.

 

(g)           Reserved.

 

(h)           Reliance on Notices.  Agent shall be entitled to rely upon, and shall be fully protected in relying upon, any 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.

 

1.2           Reserved.  

 

1.3           Prepayments.

 

(a)           Voluntary Prepayments.  A Borrower may at any time on at least five (5) days' prior written notice to Agent voluntarily prepay all or part of the Loans advanced; provided that any such prepayment shall be in a minimum amount of US$1,000,000 and integral multiples of US$250,000, in excess of such amount (unless the outstanding amounts thereof are less than such minimum payment threshold).  Any voluntary prepayment must be accompanied by payment of any Fee required by the Fee Letter, if any, plus the payment of any LIBOR funding breakage costs in accordance with Section 1.17, as applicable.  Each notice of partial prepayment shall designate the Loan or other Obligations to which such prepayment is to be applied.

 

(b)           Mandatory Prepayments.  Subject to the terms and conditions in the Intercreditor Agreement:

 

(i)           Reserved.

 

 

5

 

 

(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 US$100,000 for each disposition or series of related dispositions, except for those dispositions permitted pursuant to the terms of Section 6.9(a), (b), (c) or (d), the Borrowers shall, in accordance with the provisions of Section 1.3(c), prepay the Loans in an amount equal to all such proceeds (including the first US$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, other than issuances whose proceeds are used exclusively for purposes described in Section 6.14(l) and (m), for acquisition and construction costs and expenses in accordance with Section 5.15, or for any Permitted Acquisitions, then, no later than the Business Day following the date of receipt of the proceeds thereof, the Borrowers shall prepay the Loans 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 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)           Reserved.

 

(vi)           Following the Discharge of First Lien Obligations (as defined in the Intercreditor Agreement) and 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 the 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.

 

 

6

 

 

(c)           Application of Certain Mandatory Prepayments.  Any prepayments required to be made pursuant to Section 1.3(b)(ii), (b)(iii), (b)(iv) 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 Loans; and third, to prepay the Loans until the Loans shall have been paid in full; 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, until such Loan has been paid in full, and then ratably to the other Term Loans. Any mandatory prepayment made pursuant to Section 1.3(b)(ii), (b)(iii) or (b)(iv) must be accompanied by payment of any Fee required by the Fee Letter, if any, plus the payment of any LIBOR funding breakage costs in accordance with Section 1.17, as applicable.

 

(d)           Application of Prepayments from Insurance Proceeds and Condemnation and Expropriation Proceeds.  Following the Discharge of First Lien Obligations (as defined in the Intercreditor Agreement), prepayments from insurance, expropriation or condemnation proceeds, whether received in accordance with Section 5.4(c) or otherwise, shall be applied to the Loans in accordance with Section 5.4(c).  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 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 for the purposes set forth in the second ‘WHEREAS’ clause of this Agreement.

 

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 Term Loans being made by each Lender, in arrears on each applicable Interest Payment Date, at the following rates:  (i) with respect to any LIBOR Loan, the applicable LIBOR Rate plus nine and a half percent (9.50%) per annum or (ii) with respect to any US Base Rate Loan, the US Base Rate plus eight and a half percent (8.50%) per annum; provided, that, subject to the terms and conditions of the Intercreditor Agreement, the interest rate may be increased to match the interest rate of the Incremental Loans.

 

(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 (or 366 days in the case of a leap 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.  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.

 

 

7

 

 

(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 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 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 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)           Subject to the conditions precedent set forth in Section 2.1(i) and (j), each Borrower shall have the option to (A) request that any Loan be made as a LIBOR Loan, (B) convert at any time all or any part of outstanding Loans 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 US$250 and subject to payment of LIBOR breakage costs in accordance with Section 1.17(e) 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 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 11:00 a.m. (New York time) on the third Business Day prior to (1) the date of any proposed Loan 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 Borrower wishes to convert any US Base Rate Loan to a LIBOR Loan for a LIBOR Period designated by such 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 2.1(i) and (j) 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 Borrower must make such election by notice to Agent in writing, by electronic mail 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, none of the Borrowers shall be entitled to obtain LIBOR Loans.  In the event that none of the Borrowers are 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 Lenders.

 

 

8

 

 

(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) or any equivalent legislation of the United States of America.  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) or any equivalent legislation of the United States of America, Borrowers 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 Borrowers.  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 charges, fees or expenses that fall within the meaning of "interest" (as defined in the Criminal Code (Canada) or any equivalent legislation of the United States) 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 relating to “interest” (as defined in the Criminal Code (Canada) paid or payable by the Cdn. Borrower, 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.

 

1.6           Reserved.

 

1.7           Cash Management Systems.  On or prior to the 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").

 

1.8           Fees.  The Borrowers shall pay, on a joint and several basis, to Guggenheim the Fees specified in the Fee Letter at the times specified for payment therein.

 

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 Term Loan Account.  For purposes of computing interest and Fees, all payments shall be deemed received on the Business Day on which immediately available funds therefor are received in the Term Loan 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.

 

 

9

 

 

1.10           Application and Allocation of Payments.

 

(a)           So long as no Event of Default has occurred and is continuing, (i) voluntary prepayments shall be applied in accordance with the provisions of Section 1.3(a); and (ii) 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 applicable Commitment.  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 Loans, ratably in proportion to the interest accrued as to each Loan; (3) to principal of the Loans and (4) to all other Obligations including expenses of Lenders to the extent reimbursable under Section 11.3.

 

1.11           Loan Account and Accounting.

 

(a)           Agent shall maintain a loan account or loan accounts (the "Loan Account") on its books to record:  the 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, the Lender has elected to dispense with the issuance of notes to that Lender and shall rely on the Loan Account as evidence of the amount of Obligations from time to time owing to it.

 

 

10

 

 

(b)           Agent, acting as a non-fiduciary agent of the Borrowers solely for tax purposes and solely with respect to the actions described in this Section 1.11(b), shall establish and maintain at its address referred to in Section 11.10 (or at such other address as Agent may notify the Borrowers) (A) a record of ownership (the “Register”) in which Agent agrees to register by book entry the interests (including any rights to receive payment hereunder) of Agent and each Lender in the Loans, each of their obligations under this Agreement to participate in each Loan, and any assignment of any such interest, obligation or right and (B) accounts in the Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders (and each change thereto pursuant to Section 11.10), (2) the Commitments of each Lender, (3) the amount of each Loan and each funding of any participation described in clause (A) above, and for LIBOR Loans, the LIBOR Period applicable thereto, (4) the amount of any principal or interest due and payable or paid and (5) any other payment received by Agent from a Borrower or other Credit Party and its application to the Obligations.

 

(c)           Notwithstanding anything to the contrary contained in this Agreement, the Loans are registered obligations, the right, title and interest of the Lenders and their assignees in and to such Loans shall be transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective until recorded therein.  This Section 1.11(c) and Section 9.9 shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Revenue Code.

 

(d)           The Credit Parties, Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender for all purposes of this Agreement.  Information contained in the Register with respect to any Lender shall be available for access by the Borrowers, Agent or such Lender during normal business hours and from time to time upon at least one Business Day’s prior notice.  No Lender shall, in such capacity, have access to or be otherwise permitted to review any information in the Register other than information with respect to such Lender unless otherwise agreed by Agent.

 

1.12           Indemnity.  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 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.

 

 

11

 

 

1.13           Access and Audits.  Prior to the occurrence of an Event of Default or a Trigger Period, each Credit Party shall, during normal business hours, upon two (2) Business Days' prior notice on not more than two occasions in any fiscal 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 or a Trigger Period 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, but subject to the rights of applicable landlords and bailees.  Furthermore, so long as any Event of Default or a Trigger Period 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 or a Trigger Period, the Borrowers shall be responsible for the costs of all audits conducted by 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)           Except as required by a Requirement of Law, each payment by any Credit Party under any Loan Document shall be made free and clear of all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax, penalties or other liabilities with respect thereto (collectively, "Taxes").

 

(b)           If any Taxes shall be required by any Requirement of Law to be deducted from or in respect of any amount payable under any Loan Document to any Secured Party (i) if such Tax is an Indemnified Tax, such amount payable shall be increased as necessary to ensure that, after all required deductions for Indemnified Taxes are made (including deductions applicable to any increases to any amount under this Section 1.14), such Secured Party receives the amount it would have received had no such deductions been made, (ii) the relevant Credit Party  shall make such deductions, (iii) the relevant Credit Party shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Requirements of Law and (iv) within 30 days after such payment is made, the relevant Credit Party shall deliver to Agent an original or certified copy of a receipt evidencing such payment or other evidence of payment reasonably satisfactory to Agent.

 

 

12

 

 

(c)           In addition, the Borrowers agree to pay, and authorize Agent to pay in each Borrower’s name, as applicable, any stamp, documentary, excise or property Tax, charges or similar levies imposed by any applicable Requirement of Law or Governmental Authority and all Liabilities with respect thereto (including by reason of any delay in payment thereof), in each case arising from the execution, delivery or registration of, or otherwise with respect to, any Loan Document or any transaction contemplated therein (collectively, “Other Taxes”).   Within thirty (30) days after the date of any payment of Taxes or Other Taxes by any Credit Party, the applicable Borrower shall furnish to Agent, at its address referred to in Section 11.10, the original or a certified copy of a receipt evidencing payment thereof.

 

(d)           The Credit Parties hereby acknowledge and agree that (i) neither Guggenheim nor any Affiliate of Guggenheim has provided any Tax advice to any Tax Affiliate in connection with the transactions contemplated hereby or any other matters and (ii)  the Credit Parties have received appropriate Tax advice to the extent necessary to confirm that the structure of any transaction contemplated by the Credit Parties in connection with this Agreement complies in all material respects with applicable federal, state, provincial and foreign Tax laws.

 

(e)           The Borrowers shall reimburse and indemnify, within 30 days after receipt of demand therefor (with a copy to Agent), each Secured Party for all Indemnified Taxes (including any Indemnified Taxes imposed by any jurisdiction on amounts payable under this Section 1.14) paid or payable by such Secured Party and any Liabilities arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted.  A certificate of the Secured Party (or of Agent on behalf of such Secured Party) claiming any compensation under this clause (d), setting forth the amounts to be paid thereunder and delivered to the Borrowers with a copy to Agent, shall be conclusive, binding and final for all purposes, absent manifest error.  In determining such amount, Agent and such Secured Party may use any reasonable averaging and attribution methods.

 

(f)           Any Lender claiming any additional amounts payable pursuant to this Section 1.14 shall use its reasonable efforts (consistent with its internal policies and Requirements of Law) to change the jurisdiction of its lending office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender.

 

(g)           (i) Each Non-US Lender Party making US Loans to a US Borrower that, at any of the following times, is entitled to an exemption from United States withholding Tax or, after a change in any Requirement of Law, is subject to such withholding Tax at a reduced rate under an applicable Tax treaty, shall (w) on or prior to the date such Non-US Lender Party becomes a “Non-US Lender Party” hereunder, (x) on or prior to the date on which any such form or certification expires or becomes obsolete, (y) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (g) and (z) from time to time if requested by the Borrowers or Agent (or, in the case of a participant, the relevant Lender), provide Agent and the Borrowers (or, in the case of a participant, the relevant Lender) with two completed originals of each of the following, as applicable:  (A) Forms W-8ECI (claiming exemption from U.S. withholding Tax because the income is effectively connected with a U.S. trade or business), W-8BEN-E (claiming exemption from, or a reduction of, U.S. withholding Tax under an income Tax treaty) and/or W-8IMY (accompanied by Form W-8ECI, Form W-8BEN-E, Form W-9, and/or other certification documents from each beneficial owner, as applicable) or any successor forms, (B) in the case of a Non-US Lender Party claiming exemption under Section 871(h) or 881(c) of the Revenue Code, Form W-8BEN-E (claiming exemption from U.S. withholding Tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to Agent that such Non-US Lender Party is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Revenue Code, (2) a “10 percent shareholder” of any of the Borrowers within the meaning of Section 881(c)(3)(B) of the Revenue Code or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Revenue Code or (C) any other applicable document prescribed by the IRS certifying as to the entitlement of such Non-US Lender Party to such exemption from United States withholding Tax or reduced rate with respect to all payments to be made to such Non-US Lender Party under the Loan Documents in respect of US Loans to US Borrowers.  Unless the Borrowers and Agent have received forms or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-US Lender Party in respect of US Loans to US Borrowers are not subject to United States withholding Tax or are subject to such Tax at a rate reduced by an applicable Tax treaty, the Credit Parties and Agent shall withhold amounts required to be withheld by applicable Requirements of Law from such payments at the applicable statutory rate.

 

 

13

 

 

(ii)           Each US Lender Party making US Loans to a US Borrower shall (A) on or prior to the date such US Lender Party becomes a “US Lender Party” hereunder, (B) on or prior to the date on which any such form or certification expires or becomes obsolete, (C) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (g) and (D) from time to time if requested by the Borrowers or Agent (or, in the case of a participant, the relevant Lender), provide Agent and the Borrowers (or, in the case of a participant, the relevant Lender) with two completed originals of Form W-9 (certifying that such US Lender Party is entitled to an exemption from U.S. backup withholding Tax) or any successor form.

 

(iii)           Each Lender having sold a participation in any of its Obligations shall collect from such participant the documents described in this clause (g) and provide them to Agent.

 

(iv)           If a payment in respect of US Loans to a US Borrower made to a Non-US Lender Party would be subject to United States federal withholding Tax imposed by FATCA if such Non-US Lender Party fails to comply with the applicable reporting requirements of FATCA, such Non-US Lender Party shall deliver to Agent and Borrowers any documentation under any Requirement of Law or reasonably requested by Agent or Borrowers sufficient for Agent or Borrowers to comply with their obligations under FATCA and to determine that such Non-U.S. Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for the purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(v)           Each Lender agrees that if any form or certification it previously delivered under this clause (g) expires or becomes obsolete or inaccurate in any respect, it shall promptly update such form or certification or promptly notify the US Borrower of its legal inability to do so.

 

 

14

 

 

(h)           If any Secured Party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes as to which it has been indemnified pursuant to this Section 1.14 (including by the payment of additional amounts pursuant to Section 1.14(b)), it shall pay to the relevant Credit Party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 1.14 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such Secured Party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such Credit Party, upon the request of such Secured Party, shall repay to such Secured Party the amount paid over pursuant to this Section 1.14(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Secured Party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 1.14(h), in no event shall the Secured Party be required to pay any amount to a Credit Party pursuant to this Section 1.14(h) the payment of which would place the Secured Party in a less favorable net after-Tax position than the Secured Party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This Section 1.14(h) shall not be construed to require any Secured Party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Credit Party or any other Person.

 

1.15           Illegality.

 

(a)           Reserved.

 

(b)           Subject to clause (d) below, if any Lender shall determine that it is unlawful to maintain any LIBOR Loan, the Borrowers shall prepay in full all LIBOR Loans of such Lender then outstanding, together with interest accrued thereon, either on the last day of the LIBOR Period thereof if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans, together with any amounts required to be paid in connection therewith pursuant to Section 1.17.

 

(c)            If the obligation of any Lender to maintain LIBOR Loans has been terminated, the Borrowers may elect, by giving notice to such Lender through Agent that all Loans which would otherwise be made by any such Lender as LIBOR Loans shall be instead US Base Rate Loans.

 

(d)           Before giving any notice to Agent pursuant to this Section 1.15, the affected Lender shall designate a different Lending Office with respect to its LIBOR Loans, if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.

 

1.16           Increased Costs and Reduction of Return

 

(a)           If any Lender shall determine that, due to either (i) the introduction of, or any change in, or in the interpretation of, any Requirement of Law 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 the case of either clause (i) or (ii) subsequent to the Closing Date, (x) there shall be any increase in the cost to such Lender of maintaining any LIBOR Loans or (y) such Lender shall be subject to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, then the Borrowers shall be liable for, and shall from time to time, within thirty (30) days of demand therefor by such Lender (with a copy of such demand to Agent), pay to Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased costs or such Taxes; provided, that the Borrowers shall not be required to compensate any Lender pursuant to this subsection 1.16(a) for any increased costs incurred more than 180 days prior to the date that such Lender notifies the Borrowers, in writing of the increased costs and of such Lender’s intention to claim compensation thereof; provided, further, that if the circumstance giving rise to such increased costs is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

 

15

 

 

(b)           If any Lender shall have determined that:

 

(i)           the introduction of any Capital Adequacy Regulation;

 

(ii)           any change in any Capital Adequacy Regulation;

 

(iii)           any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof; or

 

(iv)           compliance by such Lender (or its Lending Office) or any entity controlling the Lender, with any Capital Adequacy Regulation;

 

affects the amount of capital required or expected to be maintained by such Lender or any entity controlling such Lender and (taking into consideration such Lender’s or such entities’ policies with respect to capital adequacy and such Lender’s desired return on capital) determines that the amount of such capital is increased as a consequence of its loans, credits or obligations under this Agreement, then, within thirty (30) days of demand of such Lender (with a copy to Agent), the Borrowers shall pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender (or the entity controlling the Lender) for such increase; provided, that the Borrowers shall not be required to compensate any Lender pursuant to this subsection 1.16(b) for any amounts incurred more than 180 days prior to the date that such Lender notifies the Borrowers, in writing of the amounts and of such Lender’s intention to claim compensation thereof; provided, further, that if the event giving rise to such increase is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(c)           Notwithstanding anything to the contrary herein, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith (whether or not having the force of law) and (ii) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of law), in each case pursuant to Basel III, shall in each case be deemed to be a Requirement of Law under subsection (a) above and/or a change in a Capital Adequacy Regulation under subsection (b) above, as applicable, regardless of the date enacted, adopted, issued, promulgated or implemented.

 

 

16

 

 

1.17           Funding Losses.

 

   The Borrowers agree to reimburse each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of:

 

(a)           the failure of the Borrowers to make any payment or mandatory prepayment of principal of any LIBOR Loan (including payments made after any acceleration thereof);

 

(b)           the failure of the Borrowers to borrow, continue or convert a Loan after the Borrowers have given (or are deemed to have given) a Notice of Conversion/Continuation – LIBOR;

 

(c)           the failure of the Borrowers to make any prepayment after the Borrowers have given a notice in accordance with Section 1.3;

 

(d)           the prepayment (including pursuant to Section 1.3) of a LIBOR Loan, on a day which is not the last day of the LIBOR Period with respect thereto; or

 

(e)           the conversion of any LIBOR Loan to a US Base Rate Loan on a day that is not the last day of the applicable LIBOR Period;

 

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained; provided that, with respect to the expenses described in clauses (d) and (e) above, such Lender shall have notified Agent of any such expense within two (2) Business Days of the date on which such expense was incurred.  Solely for purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 1.17 and under subsection 1.16(a): each LIBOR Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR Rate used in determining the interest rate for such LIBOR Loan by a matching deposit or other borrowing in the interbank Eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Loan is in fact so funded.  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 or Lower Lakes, as applicable, with its written calculation of all amounts payable pursuant to this Section 1.17, and such calculation shall be binding on the parties hereto unless such US Borrower or Lower Lakes, as applicable, shall object in writing within ten (10) Business Days of receipt thereof, specifying the basis for such objection in detail.

 

1.18           Inability to Determine Rates.

 

If Agent shall have determined in good faith that for any reason adequate and reasonable means do not exist for ascertaining the LIBOR Rate for any requested LIBOR Period with respect to a proposed LIBOR Loan or that the LIBOR Rate applicable pursuant to subsection 1.5(a) for any requested LIBOR Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to the Lenders of maintaining such Loan, Agent will forthwith give notice of such determination to the Borrowers and each Lender.  Thereafter, the obligation of the Lenders to make or maintain LIBOR Loans hereunder shall be suspended until Agent revokes such notice in writing.  Upon receipt of such notice, the Borrowers may revoke any Notice of Conversion/Continuation - LIBOR then submitted by it.  If the Borrowers do not revoke such notice, the Lenders shall make, convert or continue the Loans, as proposed by the Borrowers, in the amount specified in the applicable notice submitted by the Borrowers, but such Loans shall be made, converted or continued as US Base Rate Loans.

 

 

17

 

 

1.19           Reserves on LIBOR Loans.

 

The Borrowers shall pay to each Lender, as long as such Lender shall be required under regulations of the Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities” in Regulation D of the Federal Reserve Board), additional costs on the unpaid principal amount of each LIBOR Loan equal to actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), payable on each date on which interest is payable on such Loan provided the Borrowers shall have received at least fifteen (15) days’ prior written notice (with a copy to Agent) of such additional interest from the Lender.  If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest shall be payable fifteen (15) days from receipt of such notice.

 

1.20           Certificates of Lenders.

 

  Any Lender claiming reimbursement or compensation pursuant to this Article I shall deliver to the Borrowers (with a copy to Agent) a certificate setting forth in reasonable detail the amount payable to such Lender hereunder and such certificate shall be conclusive and binding on the Borrowers in the absence of manifest error.

 

1.21           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.

 

1.22           Reserved.

 

1.23           Joint and Several Liability of US Borrowers; Waivers; Extent of Liability; Contribution; Joint Enterprise; Subordination.

 

(a)           Joint and Several Liability.  Each US Borrower agrees that it is jointly and severally liable for, and absolutely, unconditionally and irrevocably guarantees to Agent the prompt payment and performance of, all Obligations and all agreements under the Loan Documents in respect of the US Loans.  Each US Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and not of collection, that such obligations shall not be discharged until payment in full of such Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, such Obligations or Loan Document, or any other document, instrument or agreement to which any US Borrower is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for the Obligations or any action, or the absence of any action, by Agent in respect thereof (including the release of any security or guaranty); (d) the insolvency of any US Borrower; (e) any election by Agent in an insolvency proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other US Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent against any US Borrower for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except payment in full of all such Obligations.

 

 

18

 

 

(b)           Waivers.  Each US Borrower expressly waives, to the maximum extent permitted by applicable law, all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent to marshal assets or to proceed against any US Borrower, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such US Borrower.  Each US Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor other than payment in full of all Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of any Obligations as long as it is a US Borrower.  It is agreed among each US Borrower and Agent that the provisions of this Section 1.23 are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, the US Lenders would decline to make the US Loans.  Each US Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.  Agent may, in its discretion, pursue such rights and remedies as it deems appropriate, including realization upon Collateral or any real property by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Section 1.23.  If, in taking any action in connection with the exercise of any rights or remedies, Agent shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any US Borrower or other Person, whether because of any applicable laws pertaining to "election of remedies" or otherwise, each US Borrower consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any US Borrower might otherwise have had.  Any election of remedies that results in denial or impairment of the right of Agent to seek a deficiency judgment against any US Borrower shall not impair any other US Borrower’s obligation to pay the full amount of the Obligations arising in respect of the US Loan.  Each US Borrower waives, to the maximum extent permitted by applicable law, all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for such Obligations, even though that election of remedies destroys such US Borrower's rights of subrogation against any other Person.  Agent may bid all or a portion of such Obligations at any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need not be paid by Agent but shall be credited against such Obligations.  The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of such Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section 1.23, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent might otherwise be entitled but for such bidding at any such sale.

 

 

19

 

 

(c)           Extent of Liability; Contribution.  Notwithstanding anything herein to the contrary, each US Borrower’s liability under this Section 1.23 shall be limited to the greater of (i) all amounts for which such US Borrower is primarily liable, as described below, and (ii) such US Borrower's Allocable Amount.  If any US Borrower makes a payment under this Section 1.23 of any Obligations arising with respect to the US Loan (other than amounts for which such US Borrower is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other US Borrower, exceeds the amount that such US Borrower would otherwise have paid if each US Borrower had paid the aggregate Obligations arising with respect to the US Loan satisfied by such Guarantor Payments in the same proportion that such US Borrower’s Allocable Amount bore to the total Allocable Amounts of all US Borrowers, then such US Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other US Borrower for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable Amount” for any US Borrower shall be the maximum amount that could then be recovered from such US Borrower under this Section 1.23 without rendering such payment voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.  Nothing contained in this Section 1.23 shall limit the liability of any US Borrower to pay any portion of the US Loan made directly or indirectly to that US Borrower (including Loans advanced to any other US Borrower and then re-loaned or otherwise transferred to, or for the benefit of, such US Borrower) and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such US Borrower shall be primarily liable for all purposes hereunder.  Upon the occurrence of any of the above-described circumstances or upon any reasonable expectation by Agent that any such circumstances may occur, Agent shall have the right, in its discretion, to restrict the disbursement and use of such Loans to such US Borrower.

 

(d)           Joint Enterprise.  Each US Borrower has requested that US Term Lenders make the US Loan available to US Borrowers on a combined basis, in order to finance US Borrowers' business most efficiently and economically.  US Borrowers' business is a mutual and collective enterprise, and the successful operation of each US Borrower is dependent upon the successful performance of the integrated group. US Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each US Borrower and ease administration of the facility, all to their mutual advantage.  US Borrowers acknowledge that Agent’s willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to US Borrowers and at US Borrowers' request.

 

(e)           Subordination.  Each US Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the payment in full of all Obligations arising in respect of the US Loans.

 

 

20

 

 

	
2.

	
CONDITIONS PRECEDENT

 

2.1           Conditions to the Term Loans.  No Lender shall be obligated to make any Term Loan on the Closing Date, or to take, fulfill, or perform any other action hereunder, until (i) all conditions provided for in Annex D-1 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 the 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-1 along with satisfaction of all other matters identified in Annex D-1, all in form and substance satisfactory to Agent.

 

(b)           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.

 

(c)           Reserved.

 

(d)           Leverage.  The Borrowers shall have delivered evidence to the satisfaction of Agent demonstrating that: (i) the ratio of (x) Funded Debt of the Credit Parties as of the Closing Date after giving effect to the consummation of the transactions contemplated by the Loan Documents, payment of all costs and expenses in connection therewith, funding of the initial Loans and the issuance of the initial letters of credit under the First Lien Credit Agreement, to (y) EBITDA of the Borrowers for the twelve (12) month period ending January 31, 2014 shall be not greater than 5.75 to 1.00; and (ii) the ratio of (x) (1) Funded Debt of the Credit Parties, less (2) the Loans hereunder, in each instance, as of the Closing Date after giving effect to the consummation of the transactions contemplated by the Loan Documents, payment of all costs and expenses in connection therewith, funding of the initial Loans and the issuance of the initial letters of credit under the First Lien Credit Agreement, to (y) EBITDA of the Borrowers for the twelve (12) month period ending January 31, 2014, shall be not greater than 3.50 to 1.00.

 

(e)           Payment of Fees.  The Borrowers shall have paid the Fees required to be paid on the Closing Date or, to extent that there is an Incremental Loan, on the applicable payment date of such Incremental Loan (“Incremental Loan Payment Date”), in the respective amounts specified in the Fee Letter, and shall have reimbursed Agent (from proceeds of the First Lien Loans to be advanced on the Second Amendment Closing Date) for all fees, costs and expenses of closing presented as of the Second Amendment Closing Date and the Incremental Loan Payment Date, as the case may be.

 

 

21

 

 

(f)           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.

 

(g)           Due Diligence.  Agent shall have completed its legal due diligence.

 

(h)           Security.  Subject to the Intercreditor Agreement, Agent shall have been delivered the items of Collateral set forth in Annex J.

 

(i)           Representations and Warranties.   Each representation or warranty by any Credit Party contained herein or in any other Loan Document is true and correct 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.

 

(j)           Default or Event of Default.  No Default or Event of Default has occurred and is continuing or would result after giving effect to the Term Loans.

 

	
3.

	
REPRESENTATIONS AND WARRANTIES

 

To induce Lenders to make the Loans, 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 organizational 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 Closing Date, each Credit Party's name as it appears in official filings in its jurisdiction of incorporation or organization, organization type, organization number, if any, issued by its jurisdiction of 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 Closing Date and each Credit Party has only one jurisdiction 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 and business number, as applicable, of each Credit Party.

 

 

22

 

 

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 organizational documents, bylaws or partnership agreement or operating agreement, as applicable; (d) do 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 or for Permitted Encumbrances, 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(b), all of which will have been duly obtained, made or complied with or waived prior to the Closing Date.  On or prior to the 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, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

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, 2014 and the combined unaudited financial statements of Rand and its Subsidiaries as at December 31, 2014 have been delivered to Agent.

 

(b)           Projections.  The Projections delivered to Agent on the Closing Date have been prepared by Rand and its Subsidiaries in light of the past operations of its businesses and reflect projections for the five (5) year period beginning on April 1, 2014 on a quarterly 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 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.

 

 

23

 

 

(c)           Fair Saleable Balance Sheet.  The Fair Saleable Balance Sheet delivered on the Closing Date and attached hereto as Disclosure Schedule 3.4(c) 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 saleable 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.

 

3.5           Material Adverse Effect.  Since September 30, 2014, (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, has had or 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 September 30, 2014, no event has occurred, that alone or together with other events, has had or could reasonably be expected to have a Material Adverse Effect.

 

3.6           Ownership of Property; Liens.  As of the 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 good and marketable title to the Vessels, 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 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 Second Amendment 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 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 Second Amendment 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.

 

 

24

 

 

3.7           Labor Matters.  Except as set forth on Disclosure Schedule (3.7), as of the 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 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 certification; 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 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 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 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 nor the application of the proceeds thereof and repayment thereof and the consummation of the transactions contemplated by the Loan Documents 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.

 

 

25

 

 

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 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 could 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 Closing Date (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 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.  Except as described in Disclosure Schedule (3.11), 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 Closing Date, no Credit Party has agreed or been requested to make any adjustment under Revenue Code Section 481(a), by reason of a change in accounting method or otherwise, which could 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 Closing Date, there is no Litigation pending or threatened that seeks damages in excess of US$500,000 or injunctive relief against, or alleges criminal misconduct of, any Credit Party.

 

 

26

 

 

3.13           Canadian Pension Plans, Canadian Benefit Plans and ERISA Plans.

 

(a)           As of the 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.  No Credit Party maintains or contributes to any defined benefit Canadian Pension Plan.

 

(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 Closing Date, (i) all ERISA Affiliates and (ii) all ERISA Plans and separately identifies all US Pension Plans, Multiemployer Plans and US Welfare Plans.  Copies of all such listed ERISA Plans, together with a copy of the most recently filed form 5500-series return, as applicable, for each such ERISA Plan, have been delivered to Agent.  Except as set forth on Disclosure Schedule (3.13): (i) each Qualified Plan (other than Multiemployer Plans) has been determined by the IRS to qualify under Section 401 of the Revenue Code, the trusts created thereunder have been determined to be exempt from tax under the provisions of Section 501 of the Revenue Code, and nothing has occurred that could reasonably be expected to cause the loss of such qualification or tax-exempt status; (ii) each ERISA Plan is in compliance in all material respects with the applicable provisions of ERISA, the Revenue Code and its terms, including the timely filing of all returns required under the Revenue Code or ERISA; (iii) no Credit Party or ERISA Affiliate has failed to make any material contribution or pay any material amount due as required by Section 412 of the Revenue Code, Section 430 of the Revenue Code or Section 302 of ERISA or the terms of any such ERISA Plan; and (iv) no "prohibited transaction," as defined in Section 406 of ERISA and Section 4975 of the Revenue Code, has occurred with respect to any ERISA Plan that could reasonably be expected to subject any Credit Party to a material tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the Revenue Code.

 

 

27

 

 

(d)           Except as set forth in Disclosure Schedule (3.13): (i) no US Pension 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 ERISA Plan or any Person as fiduciary or sponsor of any ERISA 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 US Pension 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 US Pension 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).

 

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 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 Second Amendment Closing Date: (i) the Real Estate is free of the presence of any Hazardous Material except for such presence that could not reasonably be expected to adversely impact the value or marketability of such Real Estate, that is not in breach of Environmental Laws, and that could not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries; (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 could not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries; (iv) the Credit Parties have obtained, and are in compliance with, all Environmental 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 could not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries, 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, either individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries; (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, either individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries; (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; (ix) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities has attached to any property of any Credit Party or any Subsidiary of any Credit Party and, to the knowledge of any Credit Party, no facts, circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such property; and (x) no Credit Party and no Subsidiary of any Credit Party (A) is or has been engaged in, or has permitted any current or former tenant to engage in, operations in violation of any Environmental Law or (B) knows of any facts, circumstances or conditions reasonably constituting notice of a violation of any Environmental Law, including receipt of any information request or notice of potential responsibility under the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et seq.) or similar Environmental Laws.

 

 

28

 

 

(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 Second Amendment Closing Date, for current occurrences by each Credit Party, as well as a summary of the terms of each such policy.

 

 

29

 

 

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 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 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 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.

 

3.22           Bonding; Licenses.  Except as set forth on Disclosure Schedule (3.22), as of the 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 to be made or incurred on the Closing Date, if any, or such other date as Loans requested hereunder are made or incurred, (b) the disbursement of the proceeds of such Loans pursuant to the instructions of Borrowers and (c) the payment and accrual of all transaction costs in connection with the foregoing, each Borrower, individually, and the Credit Parties, taken as a whole, will be Solvent.

 

3.24           Material Contracts.

 

(a)           Disclosure Schedule (3.24) (as amended from time to time upon notice to Agent) accurately sets out all Material Contracts;

 

(b)           a true and complete certified copy of each documented Material Contract has been delivered to Agent and each Material Contract is in full force and effect, unamended except as permitted under this Agreement and except for terminations at the stated expiry thereof (if any);

 

(c)           no event has occurred and is continuing which could reasonably be expected to constitute a breach of or a default under any Material Contract except for those events of which written notice has been provided to 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 prior to the stated expiry thereof (if any);

 

 

30

 

 

(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)           each Credit Party has obtained, as of the Second Amendment 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, (ii) those identified in writing to Agent and expressly acknowledged by Agent to not be required and (iii) those as to which the granting of a security interest is prohibited by its terms (including where the violation of any such prohibition would result in the termination of the applicable Material Contract), provided that such exclusion shall in no way be construed (a) to apply if any such prohibition is unenforceable under Section 9-406, 9-407, 9-408 or 9-409 of the Code or other applicable law, including the PPSA, (b) so as to limit, impair or otherwise affect Agent’s Liens on any Accounts or rights of a Credit Party in or to money due or to become due under such Material Contract or (c) to limit, impair or otherwise affect Agent’s Lien upon any rights or interests of any Credit Party in or to the proceeds from the sale, license or other disposition of such Material Contract.

 

3.25           Citizen of the United States.  Each of Grand River and Black Creek is a "citizen of the United States" within the meaning of 46 U.S.C. § 50501(a), (b) and (d), and the regulations promulgated thereunder, eligible and qualified to own and operate U.S.–flag vessels in the coastwise trade of the United States.

 

3.26           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, is entitled to engage in the coasting trade of Canada and holds all certificates which are required for each Vessel to operate as contemplated herein except the Manitoulin, until such time as the Conversion described in Section 5.15 is completed.

 

3.27           Permitted Intercompany Indebtedness.  Disclosure Schedule (3.27) provides a true and correct list of all Permitted Intercompany Indebtedness along with the amount of Indebtedness existing as of the Closing Date.

 

3.28           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.

 

 

31

 

 

3.29           Bareboat 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 each of the Lewis J. Kuber, the James L. Kuber, the Moore and the Victory, and other rights granted pursuant to the Bareboat Charter Agreements:

 

(i)           comprise all of the agreements necessary for Grand River or Black Creek, as applicable, to secure any right material to the operation, maintenance, possession and use of each of the Lewis J. Kuber, the James L. Kuber, the Moore and the Victory, all in accordance with all applicable law and without reference to any proprietary information not owned by Grand River or Black Creek or available to Grand River or Black Creek, as applicable, under the applicable Bareboat Charter Agreements; and

 

(ii)           comprise non-disturbance agreements from every Person having a recorded or unrecorded interest in any of the Lewis J. Kuber, the James L. Kuber, the Moore and the Victory who could in any circumstances gain possession of any such Vessel or otherwise dispossess Grand River or Black Creek, as applicable, therefrom.

 

(b)           There are no material permits, services, materials or rights required by Grand River or Black Creek, as applicable, for the operation, maintenance, possession or use of each of the Lewis J. Kuber, the James L. Kuber, the Moore and the Victory in accordance with applicable law or the other Material Contracts, other than those available under the Bareboat Charter Agreements or that can reasonably be expected to be commercially available when and as required on commercially reasonable terms.

 

3.30           Foreign Assets Control Regulations and Anti-Money Laundering.

 

(a)           Each Credit Party and each Subsidiary of each Credit Party is in compliance in all material respects with all U.S. economic sanctions laws, Executive Orders and implementing regulations as promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it.  No Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) or Foreign Sanctions Evaders List (“FSE List”) with which a U.S. Person cannot lawfully deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or FSE List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under U.S. law.

 

 

32

 

 

(b)           Each Credit Party and each Subsidiary of each Credit Party is in compliance with all applicable Canadian economic sanctions laws and all applicable anti-money laundering and counter-terrorism financing laws, including the provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Criminal Code (Canada), the United Nations Act (Canada) and any other enabling legislation or executive order relating thereto.  No Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the Canadian government on any list set out in the United Nations Al-Qaida and Taliban Regulations, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism or the Criminal Code (collectively, the “Terrorist Lists”) with which a Canadian Person cannot lawfully deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of Canadian economic sanctions laws such that a Canadian Person cannot lawfully deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on any Terrorist List or a foreign government that is the target of Canadian economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under Canadian law.

 

3.31           Patriot Act.  The Credit Parties, each of their Subsidiaries and each of their Affiliates are in compliance with (a) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and (c) other federal or state laws relating to “know your customer” and anti-money laundering rules and regulations.  No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage in violation of the United States Foreign Corrupt Practices Act of 1977, or otherwise in violation of any other applicable anti-bribery or anti-corruption laws or regulations.

 

3.32           First Lien Debt.  As of the Closing Date, the Borrowers have delivered to Agent a complete and correct copy of the First Lien Loan Documents (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith).

 

	
4.

	
FINANCIAL STATEMENTS AND INFORMATION

 

4.1           Reports and Notices.

 

(a)           Each Credit Party executing this Agreement hereby agrees that from and after the 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 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 required under the First Lien Credit Agreement) at the times, to the Persons and in the manner set forth in Annex F.

 

 

33

 

 

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 Grant Thornton LLP, 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 Closing Date 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 business, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear and obsolescence) 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.

 

 

34

 

 

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 described in Section 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. The Agent hereby confirms that the Credit Parties’ insurance policies and coverage levels existing as of the Second Amendment Closing Date are acceptable to the Agent as of the Second Amendment Closing Date. The Agent agrees to give the Credit Parties twenty (20) days to obtain additional insurance and/or modify their existing insurance, as the case may be, if the Agent determines in its reasonable credit judgment after the Second Amendment Closing Date that the insurance policies or coverage levels maintained by the Credit Parties are not reasonably acceptable to the Agent. If any such request is anticipated and is proposed to be made at the time of the regularly scheduled expiry of any insurance policy, then the Agent shall endeavor to give the Credit Parties notice of requested changes (accompanied by reasonable detail thereof) at least sixty (60) days prior to such expiry.  Such policies of insurance (or the loss payable and additional insured endorsements delivered to Agent) shall contain provisions pursuant to which the insurer agrees to provide thirty (30) day prior written notice to 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 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 within the time periods 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.

 

 

35

 

 

(c)           Following the Discharge of First Lien Obligations (as defined in the Intercreditor Agreement), 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$500,000 or more, whether or not covered by insurance.  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 established at a financial institution designated by the relevant Borrower or Credit Party and acceptable to Agent, 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 permitted by the First Lien Credit Agreement.  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)           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)           (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, Canadian Benefit 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 thirty (30) days of any increases having a cost to one or more of the Credit Parties in excess of US$250,000 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.

 

 

36

 

 

(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 each 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 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 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 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.

 

 

37

 

 

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 except where the failure to comply could not reasonably be expected to, individually or in the aggregate, result in a Material Environmental Liability; (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 for which a Credit Party is responsible unless the failure to do so could not reasonably be expected to 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 by any Governmental Authority that is reasonably likely to result in Material Environmental Liabilities; and (d) promptly forward to Agent a copy of any order, notice, 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 Material Environmental Liabilities, 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.  Without limiting the foregoing, if an Event of Default is continuing or 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 by any Governmental Authority, 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 Closing Date, no real property or warehouse space shall be leased by any Credit Party and no Inventory with a value in excess of US$100,000 individually or US$250,000 in the aggregate shall be shipped to a processor or converter under arrangements established after the 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 Closing Date, it shall first provide to Agent a mortgage, debenture, deed of trust or similar document granting Agent a Lien on such Real Estate (subject only to the Liens securing the First Lien Credit Agreement and Permitted Encumbrances), 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.

 

 

38

 

 

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.

 

5.11           Additional Provisions Regarding Vessels.

 

(a)           Lower Lakes shall maintain (i) the documentation of the Cdn. Vessels under the laws of Canada and the registration of such Cdn. Vessels at any port in the province of Ontario as Canadian Ships within the meaning of the Canada Shipping Act, and (ii) the qualification of the Cdn. Vessels to operate in the Canadian coasting trade.  Lower Lakes will 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 (except with respect to the Manitoulin prior to and while the vessel is undergoing the Conversion at the Conversion Shipyard as contemplated by Section 5.15 below).  Each of Grand River and Black Creek 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 coastwise trade, in each case, except for any failure to comply associated with and only to the extent required during a period of seasonal temporary layup.  Grand River and Black Creek will maintain, or will cause the owners of the US Vessels to maintain, all proper licenses and permits in force at all times to enable the US Vessels to operate in the US coastwise trade and not to do or permit anything to be done which might affect such documentation, registration or qualification, other than, (x) with respect to any period of any seasonal temporary layup and (y) with respect to the Invincible, any failure to comply associated with and only to the extent required during a period of temporary or long-term lay-up.  For the avoidance of doubt and not in limitation of the foregoing, during any period of temporary or long-term lay-up of the Invincible, the Invincible shall not be required to have or maintain a five-year dry dock survey, any other similar survey or inspection or any certificate of compliance to sail.

 

(b)           Except as provided in clause (d) of this Section 5.11 with respect to the Manitoulin and the Invincible, Lower Lakes shall, or shall cause the owners of the Cdn. Vessels to, and Grand River and Black Creek shall, or shall cause the owner of the US Vessels to, ensure that each of them:

 

 

39

 

 

(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 Agent, upon request, the certificate evidencing such classification; and at all times upon reasonable notice allow Agent or its representatives access to each Vessel in order to inspect the state of repair; provided, that unless an Event of Default has occurred and is continuing and except as otherwise provided herein, the Borrowers shall not be required to pay the costs of such access (including liability insurance) or for more than one such inspection per year and provided further, that so long as the Invincible remains in long term lay-up, the owner thereof shall not be required to maintain such Vessel in class;

 

(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 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;

 

(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 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;

 

(vii)           will provide Agent promptly with such information as may be requested by Agent regarding the Vessels, their location and employment, the particulars of all tonnages, salvages and copies of all charters and contracts;

 

 

40

 

 

(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 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 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 its 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;

 

(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 Guggenheim Corporate Funding, LLC, 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 and liens in favor of Bank of America, N.A., as agent, under the Credit Agreement, dated as of March 27, 2015, among the parties thereto.

 

 

41

 

 

NOTICE OF MORTGAGE (US registered Vessels)

 

This Vessel is covered by a Preferred Fleet Mortgage dated March 11, 2014 in favor of Guggenheim Corporate Funding, LLC, 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 Agent.

 

(xii)           ensure that the Cdn. Vessels and the US Vessels are employed only 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. Lawrence Seaway above the Anticosti Island;

 

(xiii)           will notify Agent prior to entering into any contract for the use of any Vessel in salt water other than in any area located within the geographical limits set out in clause (xii) above; 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.

 

(c)           The Credit Parties shall cause the applicable owner of each US Vessel to renew on an annual basis, prior to the reactivation of such US Vessel, any expired certificate evidencing such US Vessel’s classification by the American Bureau of Shipping or by another classification society acceptable to the Lenders, and will promptly, upon such renewal, furnish to Agent each such certificate.

 

(d)           Notwithstanding anything to the contrary set forth in clauses (b) through (c) of this Section 5.11, clauses (i), (ii), (xi), (xii), (xiii) and (xiv) of clause (b) of this Section 5.11 shall not apply with respect to the Manitoulin until the completion of the Conversion and, in the case of clauses (xii) and (xiii), the completion, as well, of the voyage from China to the Great Lakes.

 

5.12           Reserved.                      

 

5.13           OFAC; Counter-Terrorism; Patriot Act.  No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, fail to comply with the laws, regulations and executive orders referred to in Sections 3.30 and 3.31.

 

5.14           Reserved.

 

5.15           Manitoulin.

 

(a)           The Manitoulin was purchased, registered and named or re-named, as the case may be, and title thereto (except for solely the Excluded Portion of the Manitoulin) vested with Lower Lakes 17, prior to the Second Amendment Closing Date, but as of the Second Amendment Closing Date the Manitoulin continues to undergo conversion at the Conversion Shipyard in accordance with the Conversion Contract in order to render it suitable for use in the Business (the “Conversion”).

 

 

42

 

 

(b)           During the Conversion, the Manitoulin shall be insured (i) in accordance with the terms of the Conversion Contract in an amount not less than the purchase price plus the cost of the Conversion and (ii) as otherwise reasonably required by the Agent.  Lower Lakes 17 shall assign all of its right, title and interest with respect to such insurances to the First Lien Agent, with first priority, and to the Agent with second priority, on terms and conditions acceptable to the Agent.

 

(c)           As part of the Conversion, a portion of the forebody of the Manitoulin will be removed, and title to such removed portion of the forebody (“Excluded Portion of the Manitoulin”) will be transferred to the Conversion Shipyard free and clear of all liens and encumbrances. Agent and Lenders agree to waive any interest they may have in the Excluded Portion of the Manitoulin.  As part of the Conversion, a new forebody will be installed on the Manitoulin. Upon attaching the new forebody to the Manitoulin, the existing Mortgages on the Manitoulin in favor of the First Lien Agent and the Agent shall immediately cover such new forebody.

 

(d)           Immediately upon completion of the Conversion and redelivery of the Manitoulin by the Conversion Shipyard to Lower Lakes 17, Lower Lakes 17 shall (i) ensure that insurances are in place with respect to the Manitoulin to satisfy the requirements of this Agreement (including Annex K) and that such insurances are assigned to Agent pursuant an Assignment of Insurances in accordance with Annex K; and (ii) execute and deliver additional Collateral Documents to the Agent sufficient to grant to the Agent security interests in the Manitoulin, its insurances, charters and earnings, equivalent to the security interests granted by Cdn. Borrower with respect to the other Cdn. Vessels.  The Manitoulin shall then undertake a voyage from China to the Great Lakes to commence operation as a Great Lakes vessel.

 

(e)           For the avoidance of doubt, except as otherwise provided in this Section 5.15, the Manitoulin shall, at all times and for all purposes, be considered and treated as a Cdn. Vessel, and all the terms of this Agreement and the other Loan Documents applicable to the Cdn. Vessels shall apply equally to the Manitoulin.  In addition, the Collateral Documents delivered with respect to the Manitoulin shall be considered and treated as Collateral Documents hereunder, and the other provisions of this Agreement applicable to the Collateral Documents with respect to the other Vessels shall apply equally to the Collateral Documents delivered hereunder with respect to the Manitoulin.

 

5.16           Post-Closing Obligations.

 

(a)           Promptly but in any case within six (6) weeks after the Closing Date, the Borrowers shall make reasonable best efforts to obtain from Fitch a rating letter for the Term Loans; provided, that, for the avoidance of any doubt, failure to achieve any minimum rating for any Term Loans shall have no impact on nor result in any rights of Lenders with respect to Borrowers. All fees and expenses associated with the obtaining of such ratings shall be for the account of the Borrowers.

 

 

43

 

 

(b)           Promptly but in any case not later than May 12, 2014 (which time period for delivery may be extended by the Agent in its sole discretion), the Borrowers shall deliver to Agent each of the items set forth on Annex D-2, in form and substance satisfactory to Agent.

 

(c)           Promptly but in any case within sixty (60) days after the Closing Date, the Borrowers shall make commercially reasonable efforts to deliver to Agent each of the Control Agreements set forth on Annex D-3, in form and substance satisfactory to Agent.

 

(d)           In the event that any of the Control Agreements set forth on Annex D-3 are not delivered to Agent within the time-frame specified above, the Borrowers shall, within one hundred twenty (120) days thereafter, (i) cause all funds in each bank account maintained by Borrowers, with respect to which the required Control Agreement has not been delivered, to be transferred to accounts at a bank or banks acceptable to Agent and (ii) enter into Control Agreements with such banks in form and substance satisfactory to Agent.

 

(e)           Promptly but in any case within the periods set forth on Annex D-4 (such later date as agreed to by Agent in its sole discretion), the Borrower shall deliver to Agent each of the items set forth on Annex D-4, in form and substance satisfactory to Agent.

 

	
6.

	
NEGATIVE COVENANTS

 

Each Credit Party agrees as to all Credit Parties that from and after the Closing Date 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. Notwithstanding the foregoing, amalgamations, mergers or acquisitions shall be permitted in connection with a Permitted Acquisition or a Permitted Lower Lakes 17 Combination provided that, to the extent that any such amalgamation or merger involves a Credit Party,:  (i) No Default or Event of Default has occurred or would result therefrom; (ii) in the case of any merger or acquisition, the surviving or continuing resulting entity from such merger or acquisition has the same jurisdiction of incorporation as such Credit Party; and (iii) the Borrower gives the Agent reasonable advance notice of the transaction and promptly takes or causes to be taken whatever steps and delivers or causes to be delivered whatever documents, legal opinions or other items as are reasonably required by the Agent to ensure that the rights of the Agent and the other Secured Parties are not adversely affected as a result of such merger or amalgamation including, without limitation, any steps, documentation, opinions or other items required to address any liens existing in respect of the entity that is proposed to be merging or amalgamating with such Credit Party.

 

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 Closing Date.

 

 

44

 

 

6.3           Indebtedness.  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 pursuant to the First Lien Credit Agreement arranged by the First Lien Agent, entered into with a First Lien Lender or one of its Affiliates or entered into with another financial institution approved by the First Lien Agent, (v) Lower Lakes may enter into one or more other rate contracts in respect of the Term Loans and Incremental Loans incurred hereby in order to provide a US Dollar currency hedge therefor, so long as such rate contracts are entered into for bona fide hedging purposes and not for speculation, (vi) Permitted Intercompany Indebtedness on terms acceptable to the Lenders, and if required by the Agent,  subject to a subordination agreement acceptable to Agent, (vii) the “Obligations” under and as defined in the First Lien Credit Agreement, and (viii) the “Obligations” under and as defined in this Agreement.

 

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 (i) those transactions described in Disclosure Schedule 6.4 and (ii) 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$55,000 to any employee and up to a maximum of US$330,000 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 First Lien Agent or Agent, as applicable, along with the appropriate stock powers and any other documentation that may be required by the First Lien Agent or Agent.  Upon the request of the First Lien Agent or Agent, Borrowers' Counsel shall provide an opinion to the First Lien Agent and 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 organizational documents, by-laws, partnership agreement or operating agreement, as applicable, in a manner that could adversely affect Agent or the Lenders or such Credit Party's duty or ability to repay the Obligations.  No Credit Party shall engage in any business other than its Business. No Credit Party shall amend its constituting or organizational documents to add provisions which require director consent only to the transfer of such Credit Party's shares or other equity securities.

 

 

45

 

 

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, (c) as set forth on Disclosure Schedule (6.6),d) the guaranty by Rand of amounts owing by Black Creek and Black Creek Holdings under the Black Creek Asset Purchase Agreement, so long as such guaranty is subordinated to the Obligations on terms and conditions satisfactory to Agent and the Lenders and (e) the applicable Credit Party’s payment and performance obligations under the Fuel Fixed Forward Price Agreement (in an amount not to exceed $3,000,000 are deemed at any time and/or for any purpose to be Guaranteed Indebtedness, then also such payment and performance obligations.

 

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 Closing Date and summarized on Disclosure Schedule (6.7) securing Indebtedness permitted pursuant to Section 6.3(iii); (c) Liens created after the Closing Date 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$550,000 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); (d) Liens in favor of the First Lien Agent pursuant to the First Lien Loan Documents and (e) the Liens in favor of the Agent pursuant to the Loan Documents.  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 the Secured Parties, 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), (c) or (d) 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$1,500,000 in any Fiscal Year.

 

 

46

 

 

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$275,000 in the aggregate in any Fiscal Year, (c) the sale or other disposition of other assets having a book value not exceeding US$55,000 in the aggregate in any Fiscal Year, (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 be at least 100% of the fair market value of such Vessel (as determined by reference to the most recent appraisal accepted by Agent pursuant to Annex F), unless such sale is consented to in advance in writing by the Agent and (iii) following such sale or disposition the net proceeds have been applied first, to the First Lien Obligations until a Discharge of First Lien Obligations (as defined in the Intercreditor Agreement), until paid in full, and second, to the Term Loans, and (e) Lower Lakes 17 may transfer the Manitoulin to Lower Lakes on terms and documentation reasonably acceptable to the Agent, including, without limitation, applicable mortgage lien requirements and documentation to reaffirm or grant, as the case may be, the Agent’s security interest in the Manitoulin.  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 establish any new defined benefit Canadian Pension Plan or assume or incur any liability in respect of any such Canadian Pension Plan.  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.  No Credit Party shall terminate or wind-up any defined benefit Canadian Pension Plan.

 

(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 430 of the Revenue Code or Section 303 or 4068 of ERISA or (ii) an ERISA Event to the extent such ERISA Event could reasonably be expected to result in taxes, penalties and other liability in excess of US$110,000 in the aggregate.  No Credit Party shall cause or suffer to exist any event that could reasonably be expected to result in the imposition of a Lien with respect to any ERISA Plan.

 

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 could reasonably be expected to (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.

 

 

47

 

 

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 Agent 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 (and Rand shall promptly pay) cash dividends with respect to the Preferred Equity required under Rand’s certificate of designations as in effect on the Second Amendment Closing Date, in any rolling twelve (12) month period not to exceed an aggregate amount equal to the sum of: (A)  US$1,200,000 on account of any accrued and unpaid dividends attributable to such period,  plus (B) up to US$1,200,000 on account of any accrued and unpaid dividends (and any unpaid interest thereon) attributable to the prior rolling twelve (12) month period, so long as (i) immediately prior and upon giving effect thereto, no Default or Event of Default shall have occurred and be continuing and (ii) such dividend has been declared and paid in compliance with all applicable laws; provided that the aggregate amount of any such dividends permitted to be made in any period of twelve consecutive months shall not exceed $2,400,000; (e) dividends by any Subsidiary of Parent to Parent and immediately thereafter by Parent to Rand to pay (and Rand shall promptly 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; (f) [reserved]; (g) (1) the conversion of all or any portion of the Preferred Equity into subordinated notes issued by Rand on the terms specified in Rand’s articles of incorporation and the certificate of designations dated August 1, 2006 relating to such Preferred Equity and on other terms and conditions reasonably acceptable to Agent, so long as such subordinated notes include subordination provisions substantially in the form of Exhibit 6.14 hereof and (2) following such conversion, the payment of dividends by any Credit Party to Parent and immediately thereafter by Parent to Rand to allow Rand to make regularly scheduled cash interest payments on such subordinated notes, so long as in either case no Default or Event of Default is then in existence or could reasonably be expected to result from the payment of such dividends or interest; (h) dividends by Black Creek Holdings to Rand so long as such amount is contributed promptly thereafter by Rand to Parent and by Parent to any Borrower; (i) conversions of Permitted Intercompany Indebtedness owing to Parent of up to US$30,000,000 in the aggregate during the term of this Agreement into preferred equity of the applicable Credit Party having terms acceptable to the Agent, so long as such preferred equity is pledged to the Agent, on behalf of the Secured Parties, as additional Collateral for the Obligations; (j) [reserved]; (k) [reserved]; (l) a Preferred Equity conversion make-whole payment in an amount not to exceed US$2,400,000 in the aggregate so long as (i) no Default or Event of Default exists or would result therefrom and (ii) the Credit Parties are in compliance on a pro forma basis with the covenants contained in Annex G after giving effect to such payment; (m) payments made to redeem Preferred Equity of Rand solely from the proceeds of the issuance of common Stock of Rand in an amount not to exceed US$15,000,000 during the term of this Agreement so long as (i) no Default or Event of Default is then in existence or could reasonably be expected to result therefrom and (ii) the Credit Parties are in compliance on a pro forma basis with the covenants contained in Annex G after giving effect to such payment; and (n) 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).

 

 

48

 

 

6.15           Change of Corporate Name or Location; Change of Fiscal Year.  No Credit Party shall (a) change its corporate name or, if not a corporation, its name as it appears in official filings in the jurisdiction of its organization or formation, (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, organization or formation, 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 clauses (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 Code (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.

 

6.18           Material Contracts and First Lien Loan Documents.

 

(a)           No Credit Party shall amend or terminate a Material Contract in any way that could materially and adversely affect 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.

 

(c)           No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries directly or indirectly to, change or amend the terms of any First Lien Loan Documents except to the extent permitted by the Intercreditor Agreement.

 

6.19           Reserved.

 

 

49

 

 

6.20           Salt Water Operation.    No Credit Party shall, or shall permit any other Person to, operate the Vessels in (a) any manner contrary to the provisions of Sections 5.11(b)(xii) and (xiii) and (b) salt water for any period of time (other than trades permitted by Section 5.11(b)(xii)), in each case, without the consent of the Lenders, except in the case of the Manitoulin, the voyage from China to the Great Lakes as permitted by Section 5.15.

 

6.21           Time Charters.  None of the US Borrowers 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 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 Agreements.  No Credit Party shall either (a) permit any 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 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 could result in any US Borrower failing to be a citizen of the United States within the meaning of 46 U.S.C. § 50501(a), (b) and (d), and the regulations promulgated thereunder, eligible and qualified to own and operate a U.S.-flag vessel in the US coastwise trade.

 

6.24           Acquisitions.  No Credit Party shall make any Acquisition, other than Permitted Acquisitions.

 

	
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.

 

 

50

 

 

	
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 (including mandatory prepayments) 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), 5.14 or 6, any of the provisions set forth in Annex C or G or paragraph (r) of Annex E.

 

(c)           Any Credit Party fails or neglects to perform, keep or observe any of the provisions of Section 4.1 or any provisions set forth in Annex E (other than paragraph (r)) 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.

 

(f)           Any default or breach shall occur under any agreement, document or instrument (other than the First Lien Loan Documents) 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$250,000 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 (other than the Obligations) 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)           Reserved.

 

(h)           Assets of any Credit Party with a fair market value of US$330,000 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.

 

 

51

 

 

(i)           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,

 

(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.

 

(j)           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(i) 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(i), 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.

 

(k)           Final judgment or judgments for the payment of money in excess of US$350,000 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 forty-five (45) 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.

 

(l)           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.

 

 

52

 

 

(m)           Any Change of Control occurs.

 

(n)           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, (ii) the temporary lay-up from service of up to three Vessels (other than Vessels remaining on the hire during such lay-up pursuant to existing Time Charter Agreements) in the ordinary course of business shall constitute an Event of Default or (iii) any other lay-up expressly permitted by this Agreement, including without limitation, as contemplated in respect of the Invincible during its lay-up and the Manitoulin during the period prior to the completion of the Conversion.

 

(o)           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.

 

(p)           Any default under, breach in respect of or termination of, any Time Charter Agreement or any Bareboat Charter Agreement shall occur that allows any party to such agreement to terminate such agreement, in either case, where such breach or termination could result in a Material Adverse Effect.

 

(q)           Any failure by a US Credit Party to be a citizen of the United States within the meaning of 46 U.S.C. § 50501(a), (b) and (d), and the regulations promulgated thereunder, eligible and qualified to own and operate a U.S.-flag vessel in the US coastwise trade.

 

(r)           Any change in the ownership structure of Lower Lakes, Grand River or Black Creek from that existing as of the Closing Date, except as expressly permitted herein.

 

(s)           The Intercreditor Agreement or the subordination provisions of any agreement or instrument governing any Subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the priority contemplated by this Agreement or such subordination provisions.

 

8.2           Remedies.

 

(a)           Reserved.

 

(b)           If any Event of Default has occurred and is continuing or upon acceleration of the First Lien Obligations under the First Lien Credit Agreement in accordance with the terms therein, Agent may (and at the written request of Requisite Lenders shall), without notice:  (i) declare all or any portion of the Obligations, including all or any portion of any Loan, to be forthwith due and payable, 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 (ii) subject to the Intercreditor Agreement, 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(i), (j) or (m), all of the Obligations shall become immediately due and payable without declaration, notice or demand by any Person.

 

 

53

 

 

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 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 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 US$1,000,000 or, if less, the entire 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 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 Loan 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 Loans 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 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.

 

 

54

 

 

(b)           Any participation by a Lender of all or any part of its Loans 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 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 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 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 reasonably 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(b).

 

(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.

 

9.2           Appointment of Agent.  Guggenheim 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 Guggenheim or any of its Affiliates in any capacity.  Neither Agent 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. Without limiting the generality of the foregoing, each Lender acknowledges that it has received a copy of the Intercreditor Agreement, consents to and authorizes Agent’s execution and delivery thereof on behalf of such Lender and agrees to be bound by the terms and provisions thereof, including the purchase option contained therein.

 

 

55

 

 

If Agent shall request instructions from Requisite 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 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 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 hereby appointed to act as the person holding the power of attorney (fondé de pouvoir) pursuant to article 2692 of the Civil Code of Quebec to act on behalf of each of the debentureholders, initially namely Guggenheim in its capacity as Agent for Lenders.  Each Person who is or becomes a Lender shall be deemed to ratify the power of attorney (fondé 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 fondé 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.

 

 

56

 

 

Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Collateral Agent and Co-Arrangers shall not have any duties or responsibilities, nor shall the Collateral Agent and Co-Arrangers have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Collateral Agent and Co-Arrangers.  At any time that any Lender serving (or whose Affiliate is serving) as Collateral Agent and/or Co-Arranger shall have transferred to any other Person (other than any Affiliates) all of its interests in the Loans, such Lender (or an Affiliate of such Lender acting as Collateral Agent or Co-Arranger) shall be deemed to have concurrently resigned as such Collateral Agent and/or Co-Arranger.

 

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 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; (b) 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; (c) 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; (d) 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 (e) 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 electronic mail) believed by it to be genuine and signed or sent by the proper party or parties.

 

9.4           Guggenheim and Affiliates.  With respect to its Loans hereunder, Guggenheim 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 Guggenheim in its individual capacity.  Guggenheim 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 Guggenheim was not Agent and without any duty to account therefor to Lenders.  Guggenheim 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 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.

 

 

57

 

 

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 Commitments, 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 delivering notice of such resignation to the Lenders and the Borrowers, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice shall be effective in accordance with the terms of this Section 9.7.  Upon any such resignation, Requisite Lenders shall have the right to appoint a successor Agent.  If no successor Agent shall have been so appointed by 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 Requisite Lenders shall thereafter perform all the duties of Agent hereunder until such time, if any, as 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.  Effective immediately upon its resignation, (i) the retiring Agent shall be discharged from its duties and obligations under the Loan Documents, except that any indemnity rights or other rights in favor of such resigning Agent shall continue, (ii) the Lenders shall assume and perform all of the duties of Agent until a successor Agent shall have accepted a valid appointment hereunder, (iii) the retiring Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Agent was, or because such Agent had been, validly acting as Agent under the Loan Documents and (iv) the retiring Agent shall take such actions as may be reasonably necessary to assign to the successor Agent its rights as Agent under the Loan Documents.  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.

 

 

58

 

 

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 Commitment thereof shall purchase for cash (and the other Lenders or holders shall sell) such participations in each such other Lender's or holder's respective 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 Commitments, (other than offset rights exercised by any Lender with respect to Sections 1.14 or 1.15).  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 respective 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           Payments; Information; Actions in Concert.

 

(a)           Reserved.

 

(b)           Reserved.

 

(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.

 

 

59

 

 

(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 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)           Reserved.

 

(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 (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 shall be taken in concert and at the direction or with the consent of Agent or Requisite Lenders.

 

9.10           Release of Collateral or Guarantors.  Each Lender hereby consents to the release and hereby directs Agent to release (or, in the case of clause (b)(ii) below, release or subordinate) the following:

 

(a)           any Subsidiary of a Borrower from its guaranty of any Obligation if all of the Stock and Stock Equivalents of such Subsidiary owned by any Credit Party are sold or transferred in a transaction permitted under the Loan Documents (including pursuant to a waiver or consent); and

 

(b)           any Lien held by Agent for the benefit of the Secured Parties against (i) any Collateral that is sold, transferred, conveyed or otherwise disposed of by a Credit Party in a transaction permitted by the Loan Documents (including pursuant to a waiver or consent), (ii) any Property subject to a Lien permitted hereunder in reliance upon subsection 6.7(c)  and (iii) all of the Collateral and all Credit Parties, upon (A) payment and satisfaction in full of all Loans and all other Obligations under the Loan Documents, that Agent has theretofore been notified in writing by the holder of such Obligation are then due and payable, (B) deposit of cash collateral with respect to all contingent Obligations, in amounts and on terms and conditions and with parties satisfactory to Agent and each Indemnitee that is, or may be, owed such Obligations (excluding contingent Obligations) and (C) to the extent requested by Agent, receipt by Agent and the Secured Parties of liability releases from the Credit Parties each in form and substance acceptable to Agent.

 

 

60

 

 

Each Lender hereby directs Agent, and Agent hereby agrees, upon receipt of at least five (5) Business Days’ advance notice from the Borrowers, to execute and deliver or file such documents and to perform other actions reasonably necessary to release the guaranties and Liens when and as directed in this Section 9.10.

 

	
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 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 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 or all affected Lenders, as applicable.  Except to the extent that this Agreement explicitly allows Agent to take action without the consent of the Lenders, all amendments, modifications, terminations or waivers shall require the written consent of Requisite Lenders.

 

 

61

 

 

(b)           In addition, 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 of any affected Lender; (iii) extend any 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 definition of the term "Requisite Lenders" insofar as such definition affects the substance of this Section 11.2.  Furthermore, no amendment, modification, termination or waiver affecting the rights or duties of Agent under this Agreement or any other Loan Document shall be effective unless in writing and signed by Agent, in addition to Lenders required hereinabove to take such action.  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 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 Lender.

 

(c)           If, in connection with any proposed amendment, modification, waiver or termination 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 so obtained being referred to as a "Non Consenting Lender"), 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 Loans 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.

 

(d)           Upon the indefeasible payment in full in cash and performance of all of the Obligations (other than indemnification Obligations), termination of the Credit Facility 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:

 

 

62

 

 

(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;

 

(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.

 

 

63

 

 

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.

 

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 a 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 (i) with the Borrowers’ consent, (ii) to Related Persons of such Lender or Agent, as the case may be, that are advised of the confidential nature of such information and are instructed to keep such information confidential in accordance with the terms hereof, (iii) to the extent such information presently is or hereafter becomes (A) publicly available other than as a result of a breach of this Section 11.8 or (B) available to such Lender or Agent or any of their Related Persons, as the case may be, from a source (other than any Credit Party) not known by them to be subject to disclosure restrictions, (iv) to the extent disclosure is required by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority, (v) to the extent necessary or customary for inclusion in league table measurements, (vi) (A) to the National Association of Insurance Commissioners or any similar organization, any examiner or any nationally recognized rating agency or (B) otherwise to the extent consisting of general portfolio information that does not identify Credit Parties, (vii) to current or prospective assignees or participants, and to their respective Related Persons, in each case to the extent such assignees, investors, participants, or Related Persons agree to be bound by provisions substantially similar to the provisions of this Section 11.8 (and such Person may disclose information to their respective Related Persons in accordance with clause (ii) above), (viii) to any other party hereto, and (ix) in connection with the exercise or enforcement of any right or remedy under any Loan Document, in connection with any Litigation or other proceeding to which such Lender or Agent or any of their Related Persons is a party or bound, or to the extent necessary to respond to public statements or disclosures by Credit Parties or their Related Persons referring to a Lender or Agent or any of their Related Persons.  In the event of any conflict between the terms of this Section 11.8 and those of any other Contractual Obligation entered into with any Credit Party (whether or not a Loan Document), the terms of this Section 11.8 shall govern.

 

 

64

 

 

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.

 

(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.

 

 

65

 

 

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 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. Delivery of an electronic copy of executed counterpart of a signature page to this Agreement by email or telecopier shall be as effective as delivery of an original executed counterpart of this Agreement.

 

 

66

 

 

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.

 

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").

 

 

67

 

 

(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 its affiliate’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 (Canada).  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 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           Anti-Money Laundering Legislation.

 

(a)           Each Credit Party acknowledges that, pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Patriot Act, and other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws, whether within Canada or elsewhere (collectively, including any guidelines or orders thereunder, “AML Legislation”), the Lenders and Agent may be required to obtain, verify and record information regarding each Credit Party, its respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of such Credit Party, and the transactions contemplated hereby.  Borrowers shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or Agent, or any prospective assign or participant of a Lender or Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence.

 

 

68

 

 

(b)           If Agent has ascertained the identity of the Credit Parties or any authorized signatories of the Credit Parties for the purposes of applicable AML Legislation, then Agent:

 

(i)           shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between each Lender and Agent within the meaning of applicable AML Legislation; and

 

(ii)           shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.

 

Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Lenders agrees that Agent has no obligation to ascertain the identity of the Credit Parties or any authorized signatories of the Credit Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from the Credit Parties or any such authorized signatory in doing so.

 

	
12.

	
COLLATERAL ALLOCATION MECHANISM

 

12.1           Implementation of CAM

 

(a)           On the CAM Exchange Date, 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), whether or not such Lender shall previously have participated therein, equal to such Lender's CAM Percentage thereof, 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 Agent all instruments and documents as Agent shall reasonably request to evidence and confirm the respective interests of the Lenders after giving effect to the CAM Exchange; provided, however, that the failure of any Credit Party to execute or deliver or of any Lender to accept any such instrument or document shall not affect the validity or effectiveness of the CAM Exchange.

 

 

69

 

 

(b)           As a result of the CAM Exchange, upon and after the CAM Exchange Date, each payment received by Agent pursuant to any Loan Document in respect of the Obligations, and each distribution made by 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 an Obligation shall be paid over to Agent for distribution to the Lenders in accordance herewith.

 

12.2           Reserved.

 

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 Agent, any Lender or any participant hereunder, the amounts so payable to Agent, such Lender or such participant shall be increased to the extent necessary to yield to 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 1.16) 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 Black Creek or Grand River under this Agreement, neither Black Creek nor 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 1.14(f). 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 Black Creek 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 Agent the required receipts or other required documentary evidence, Black Creek or Grand River, as the case may be, shall indemnify Agent, the Lenders and the participants for any incremental taxes, interest, costs or penalties that may become payable by Agent, such Lenders or such participants as a result of any such failure.

 

[Signature Pages to follow]

 

 

70

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

 

 

 

	 	
LOWER LAKES TOWING LTD.

 

By:__________________________

Name:________________________

Title:_________________________

 

 

GRAND RIVER NAVIGATION COMPANY, INC.

 

By:__________________________

Name:________________________

Title:_________________________

 

 

BLACK CREEK SHIPPING COMPANY, INC.

 

By:__________________________

Name:________________________

Title:_________________________

 

Signature page to Term Loan Credit Agreement

 

 

 

 

 

 

	 	
GUGGENHEIM CORPORATE FUNDING, LLC, as Agent, Collateral Agent and Co-Arranger

 

By:___________________________

Name:________________________

Title:_________________________

 

 

 

Signature page to Term Loan Credit Agreement 

 

 

 

 

 

 

	 	
GUGGENHEIM PRIVATE DEBT FUND NOTE ISSUER, LLC

 

By: Guggenheim Partners Investment Management,

LLC, as a Lender

 

By:___________________________

Name:

Title:

 

NZC GUGGENHEIM FUND LLC

 

By: Guggenheim Partners Investment Management, LLC, as a Lender

 

By: ______________________________________

Name:

Title:

 

 

EQUITRUST LIFE INSURANCE COMPANY

 

By: Guggenheim Partners Investment Management, LLC, as a Lender

 

By: ______________________________________

Name:

Title:

 

 

SUN LIFE ASSURANCE COMPANY OF CANADA

 

By: Guggenheim Partners Investment Management, LLC

 

By: ______________________________________

Name:

Title:

 

Signature page to Term Loan Credit Agreement 

 

 

 

 

 

	 	
WESTERN REGIONAL INSURANCE COMPANY, INC.

 

By: Guggenheim Partners Investment Management, LLC

 

By: ______________________________________

Name:

Title:

 

 

VERGER FUND I LLC

 

By: Guggenheim Partners Investment Management, LLC

 

By: ______________________________________

Name:

Title:

 

Signature page to Term Loan 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:__________________________

Name:________________________

Title:_________________________

 

 

RAND LL HOLDINGS CORP.

 

By:__________________________

Name:________________________

Title:_________________________

 

 

RAND FINANCE CORP.

 

By:__________________________

Name:________________________

Title:_________________________

 

 

BLACK CREEK SHIPPING HOLDING COMPANY, INC.

 

By:__________________________

Name:________________________

Title:_________________________

Signature page to Term Loan 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 this 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

 

 

"Affiliate" means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person; provided, however, that no Secured Party shall be an Affiliate of any Credit Party or of any Subsidiary of any Credit Party solely by reason of the provisions of the Loan Documents.  For purposes of this definition, “control” means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the voting Stock of such Person (either directly or through the ownership of Stock Equivalents) or (b) the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

"Agent" means Guggenheim 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 this 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 any Credit Party from being used to facilitate money laundering; (ii) provide for independent testing for compliance to be conducted by the Credit Parties’ 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 this Agreement.

 

"Appraiser" means the appraiser from time to time retained by Agent to provide an appraisal of the value of specified Collateral of the Credit Parties.

 

“Ashtabula” means the Ashtabula (formerly the Mary Turner), a documented vessel of the United States bearing U.S. Official Number 646730.

 

"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).

 

“Assignment of Material Contracts” means that certain Assignment of Material Contracts, dated as of the Closing Date, by and among the parties signatory thereto.

 

"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978.

 

“Bareboat Charter Agreements” means, collectively, each of the Charter Party Agreements between Black Creek and Grand River dated February 11, 2011 with respect to the Lewis J. Kuber, the James L. Kuber, the Moore and the Victory.

 

“Black Creek” means Black Creek Shipping Company, Inc., a Delaware corporation, being the US BC Borrower hereunder, and includes its successors by merger or otherwise.

 

 

A-2

 

 

“Black Creek Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of February 11, 2011 by and among Black Creek Holdings, Black Creek and the Sellers.

 

“Black Creek Holdings” means Black Creek Shipping Holding Company, Inc., a Delaware corporation.

 

"Blocked Accounts" has the meaning ascribed to it in Annex C.

 

"Borrowers" means, collectively, Lower Lakes, Grand River and Black Creek and "Borrower" means any one of them.

 

"Borrowers' Counsel" means the firms of Brown Rudnick LLP, H. Clayton Cook, Jr., Attorney and Counselor at Law and Norton Rose Fulbright Canada LLP and/or or such other firm or firms of legal counsel as the Borrowers may from time to time designate.

 

"Borrowing Availability" shall have the meaning given to such term in the First Lien Credit Agreement as of the Second Amendment Closing Date or as modified after the Second Amendment Closing Date.

 

"Borrowing Base Certificate" shall have the meaning given to such term in the First Lien Credit Agreement as of the Second Amendment Closing Date or as modified after the Second Amendment Closing Date.

 

"Borrowing Bases" shall have the meaning given to such term in the First Lien Credit Agreement as of the Second Amendment Closing Date or as modified after the Second Amendment Closing Date.

 

"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 any US Borrower, 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 any US Borrower, any day that is not a Saturday, Sunday or a day on which banks are required or authorized to close in New York City and, when determined in connection with notices and determinations in respect of LIBOR or any LIBOR Loan or any funding, conversion, continuation, LIBOR Period or payment of any LIBOR Loan, that is also a day on which dealings in Dollar deposits are carried on in the London interbank market.

 

"CAM" shall mean the mechanism for the allocation and exchange of interests in the Credit Facilities and collections thereunder established under Section 12.

 

"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(i) or (j) shall occur in respect of any Credit Party or (b) an acceleration of the maturity of the Loans pursuant to Section 8 shall occur.

 

 

A-3

 

 

"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 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 immediately prior to such CAM Exchange Date.

 

"CRA" means the Canada Revenue Agency.

 

"Calumet" means the Calumet (formerly the David Z. Norton), a documented vessel of the United States bearing U.S. Official Number 549231.

 

"Canada Shipping Act" means the Canada Shipping Act, 2001, 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 any Credit Party has any liability with respect to any employee or former employee, but excluding any Canadian Pension Plans.

 

"Canadian 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.

 

“Capital Adequacy Regulation” means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any Lender or of any corporation controlling a Lender.

 

"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 Capital Expenditures shall include both paid and accrued amounts, including such amounts relating to deferred dry dock expenses, whether incurred prior to or after the Closing Date, and shall exclude, without duplication, (x) accrued Capital Expenditures relating to the Manitoulin (subject to satisfaction of the requirements set forth in Section 5.15) (y) Capital Expenditures financed on or after the Closing Date with the proceeds from the issuance of common Stock of Rand or Term Loans incurred on or after the Closing Date pursuant to Section 6.3 and applied in accordance with Section 6.24 and (z) $367,000 of financed Capital Expenditures attributable to the Borrower’s fiscal quarter ended June 30, 2014.

 

"Capital Expenditures Reporting Plan" has the meaning set forth in Section (p) of Annex E.

 

 

A-4

 

 

"Capital Lease" means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

 

"Capital Lease Obligation" means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

 

"Cash Management Systems" has the meaning ascribed to it in Section 1.7.

 

"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. Incremental Loans” means all Incremental Loans made to Lower Lakes in accordance with the terms of this Agreement.

 

"Cdn. Lenders" means those Lenders having Cdn. Term Commitments and/or Incremental Cdn. Commitments.

 

“Cdn. Loans” means the Cdn. Term Loan and/or the Cdn. Incremental Loan.

 

"Cdn. Participant" means a Person having participations in the Cdn. Loans.

 

“Cdn. Term Commitment” of any Lender shall mean the amount of “Cdn. Term Commitment” for such Lender as set forth on Annex I to this Agreement or in the most recent Assignment Agreement executed by such Lender, as such commitment may be reduced, amortized or adjusted from time to time in accordance with this Agreement, and "Cdn. Term Commitments" means all of them.

 

"Cdn. Term Loan" has the meaning ascribed to it in Section 1.1(b)(i).

 

“Cdn. Vessels” means, collectively, the Cuyahoga, the Saginaw, the Mississagi, the Michipicoten, the Ojibway, the Kaministiqua, the Pierson, the Manitoba, the Tecumseh and the Manitoulin.

 

"Change of Control" means, with respect to Parent on or after the Closing Date, (i) that any change in the composition of such Borrower's shareholders as of the 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) Scott Bravener 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 thirty (30) days, an interim replacement reasonably acceptable to Agent and Requisite Lenders has been appointed), (iii) Edward Levy ceases to hold the title of Chief Executive Officer or President and be directly and actively involved in the Business on a full time basis unless the Borrowers have, within 180 days of the date on which he ceases to hold such title and be directly and actively involved in the Business, replaced him with a person reasonably acceptable to the Lenders (provided, that after a period of thirty (30) days, an interim replacement reasonably acceptable to Agent and Requisite Lenders has been appointed), (iv) 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, Rand Finance and Black Creek Holdings, (v) Parent ceases to own and control all of the economic and voting rights associated with all of the outstanding capital stock of each Borrower (other than Black Creek), (vi) Black Creek Holdings ceases to own and control all of the economic and voting rights associated with all of the outstanding capital stock of Black Creek or (vii) 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, except, in the case of a Permitted Lower Lakes 17 Combination, the entity which has been amalgamated or merged with Lower Lakes 17.

 

 

A-5

 

 

"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 this Agreement, the other Loan Documents and the transactions contemplated thereunder, substantially in the form attached hereto as Annex D-1.

 

"Closing Date" means the date on which all conditions precedent set forth in Section 2.1 and in Annex D-1 are satisfied or waived by Agent and all Lenders.

 

"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; provided, that “Collateral” shall include, without limitation, the pledge of all of the issued and outstanding Stock of any Borrower and of any Subsidiary owned by any Borrower or owned by any Credit Party (not to exceed 65% of the Equity Interests of any Foreign Subsidiary).

 

 

A-6

 

 

"Collateral Documents" means the Security Agreements, the Pledge Agreements, the Guarantees, the Fleet Mortgages, the 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" shall have the meaning of “Collection Account” in the First Lien Credit Agreement as of the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

“Commitment” of any Lender means, collectively, its Term Commitment and its Incremental Commitment, if any, and of all Lenders, means, collectively, all Term Commitments and Incremental Commitments.

 

"Commitment Termination Date" means the earlier of (a) March 11, 2020 and (b) the date of termination of Lenders' obligations to permit existing Loans to remain outstanding pursuant to Section 8.2(b).

 

"Compliance Certificate" has the meaning ascribed to it in Annex E.

 

"Compliance Procedures" means the memorandum or other writing delivered by the Borrowers to 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.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes.

 

"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.

 

"Contractual Obligations" means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

 

"Control Agreement" means, with respect to any deposit account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance satisfactory to the Agent, among the Agent and/or First Lien Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Credit Party maintaining such account, effective to grant “control” (within the meaning of Articles 8 and 9 under the Code of the applicable jurisdiction or the STA, as applicable) over such account to Agent, which shall be subject to prior control of the First Lien Agent as provided therein.

 

 

A-7

 

 

"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.

 

"Conversion" has the meaning ascribed to it in Section 5.15(a).

 

"Conversion Contract" means that certain Contract For The Construction And Assembly Of a New Forebody And Joining To (AFT Section) Of Owner’s Nominated Vessel, dated as of April 12, 2014, as amended by that certain amendment dated May 13, 2014, each between Lower Lakes 17 and the Conversion Shipyard, as further amended, restated, modified or supplemented from time to time.

 

"Conversion Shipyard" means the Chengxi Shipyard Co., Ltd. Shipyard.

 

"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.

 

“Cover Notes” has the meaning ascribed to it in Annex K.

 

"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 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 Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

 

A-8

 

 

"Default" means any event or circumstance that, with the passing of time or the giving of notice or both, would (if not cured or otherwise remedied during such time) become an Event of Default.

 

"Default Rate" has the meaning ascribed to it in Section 1.5(d).

 

“Defiance” means the Defiance (formerly the Beverly Anderson), a documented vessel of the United States bearing U.S. Official Number 646729.

 

"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.

 

"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 this Agreement.

 

"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) any non-cash (valuation) losses that have been deducted in determining consolidated net income (including losses on interest rate swap or cap contract valuations, write-offs of assets to fair value, write-offs of goodwill to fair value, write-offs of deferred financing costs, write-offs of leasehold improvement costs associated with leasehold assets that have been returned to the lessor and valuation allowances for deferred taxes), 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, (vi) any non-cash lease deferrals in such period, (including any charge to earnings in any period attributable to the McKee Sons Vessel Lease payments not paid in cash in such period due to GAAP requirements to spread the cost of lease payments over the entire lease term without regard to free lease periods), (vii) the amount of any deduction to consolidated net income as the result of any grant of any Stock to any member of the management, any director or any other employee of such Person, and (viii) the financing fees and out-of-pocket third party expenses paid in connection with First Lien Credit Agreement arrangements and this Agreement to the extent that they are treated as an expense upon the effectiveness of this Agreement, in an amount not to exceed US$3,000,000 in the aggregate, 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.

 

 

A-9

 

 

"E-Fax" means any system used to receive or transmit faxes electronically.

 

"E-System" means any electronic system, including Intralinks® 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.

 

"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, oceans, lakes, rivers, streams, 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 (including for certainty the International Conventions listed in Schedule 1 thereto) and the Canada Wildlife Act.

 

 

A-10

 

 

"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, 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.

 

"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 Revenue Code.

 

 

A-11

 

 

"ERISA Event" means, with respect to any Credit Party or any ERISA Affiliate, (a) any event described in Section 4043 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; (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" means, 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 or ERISA Affiliate.

 

"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 paid in cash or accrued 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) quarterly cash dividend payments payable to Parent in connection with the issuance of the Preferred Equity.

 

“Excluded Portion of the Manitoulin” has the meaning ascribed to it in Section 5.15(c).

 

"Excluded Tax" means with respect to any Secured Party (a) taxes measured by net income (including branch profit taxes) and franchise taxes imposed in lieu of net income Taxes, in each case (i) imposed on any Secured Party as a result of being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision  thereof) or (ii) that are Other Connection Taxes; (b) U.S. withholding Taxes to the extent that the obligation to withhold amounts existed on the date that such Person became a "Secured Party" under this Agreement in the capacity under which such Person makes a claim under Section 1.14(b) or designates a new Lending Office, except in each case to the extent such Person is a direct or indirect assignee (other than pursuant to Section 9.1) of any other Secured Party that was entitled, at the time the assignment to such Person became effective, to receive additional amounts under Section 1.14(b); (c) Taxes that are directly attributable to the failure (other than as a result of a change in any Requirement of Law) by any Secured Party to deliver the documentation required to be delivered pursuant to Section 1.14(g); (d) any United States federal withholding Taxes imposed under FATCA; and (e) any Taxes imposed as a result of a Secured Party being a “specified shareholder” (within the meaning of subsection 18(5) of the ITA) of any Credit Party, or not dealing at “arm’s length” (within the meaning of the ITA) with such specified shareholder of any Credit Party.

 

 

A-12

 

 

"Eurocurrency liabilities" has the meaning assigned to it in Section 1.19.

 

"Fair Market Value" means the fair market value of the asset in question, as determined by Agent in good faith and in accordance with its customary practices, less any costs, fees or expenses associated with the disposition of such asset.

 

"FATCA" means Sections 1471, 1472, 1473 and 1474 of the Revenue Code, as of the date of this Agreement (or any amended or successor version), current or future United States Treasury Regulations promulgated thereunder and published guidance with respect thereto, and any agreements entered into pursuant to Section 1471(b)(1) of the Revenue Code.

 

"FCPA" means the United States Foreign Corrupt Practices Act of 1977, as amended.

 

"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as determined by Agent in a commercially reasonable manner.

 

"Federal Reserve Board" means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

 

"Fee Letter" means that certain letter, dated as of the Closing Date, among Guggenheim, the Borrowers and the Guarantors, with respect to certain Fees to be paid from time to time by the Borrowers to Guggenheim, as such letter may be amended, supplemented or replaced from time to time.

 

"Fees" means any and all fees payable to Agent or any Lender pursuant to this Agreement or any of the other Loan Documents.

 

"Financial Covenants" means the financial covenants set forth in Annex G.

 

"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.

 

“First Lien Additional Advances” shall have the meaning set forth in Section 1.1(f)(i)(B) hereof.

 

“First Lien Agent” shall mean Bank of America, N.A., in its capacity as agent under the First Lien Credit Agreement, and any successors and assigns, as well as any applicable branch thereof located in Canada.

 

“First Lien Credit Agreement” shall have the meaning set forth in the recitals in this Agreement.

 

 

A-13

 

 

“First Lien Indebtedness” shall have the meaning of “Indebtedness” in the First Lien Credit Agreement on the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

“First Lien Lenders” shall have the meaning of “Lenders” in the First Lien Credit Agreement on the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

“First Lien Loan Documents” shall mean the First Lien Credit Agreement and the “Other Documents,” as defined therein, as the same may be amended, restated, replaced, modified or supplemented from time to time, including, without limitation, amendments, modifications, supplements, restatements and/or replacements thereof giving effect to increases, renewals, extensions, refundings, deferrals, restructurings, replacements or refinancings of, or additions to, the arrangements provided in such First Lien Loan Documents in accordance with the terms thereof and the terms of the Intercreditor Agreement.

 

“First Lien Loans” shall mean the “Loans” under and as defined in the First Lien Credit Agreement on the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

“First Lien Manitoulin Advances” shall have the meaning set forth in Section 1.1(f)(B).

 

“First Lien Obligations” shall mean the “Obligations” under and as defined in the First Lien Credit Agreement on the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

"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.

 

“Fitch” means Fitch, Inc. and its successors in interest.

 

"Fixed Charge Coverage Ratio" means, with respect to any Person for any fiscal period, the ratio of EBITDA less Capital Expenditures (excluding (x) Capital Expenditures financed by specifically arranged financings approved of by the Lenders in writing and (y) the portion of Capital Expenditures consisting of interest expense for the relevant period that has been capitalized and (z) up to US$7,000,000 of Capital Expenditures (such amount to be correspondingly reduced by the amount of any related Preferred Equity conversion make-whole amount paid pursuant to Section 6.14(l)) incurred in connection with the purchase of the Manitoulin (subject to satisfaction of the requirements set forth in Section 5.15) that the Borrowers confirm in writing to Agent will be financed with the proceeds from the issuance of Incremental Term Loans in accordance with Section 6.3 or with proceeds from the issuance of common Stock of Rand) to Fixed Charges (excluding up to US$2,400,000 of a Preferred Equity conversion make-whole amount paid under Section 6.14(l) (such amount, together with any amounts described in clause (z) above, not to exceed US$7,000,000 in the aggregate)); provided, that for calculations made as of the end of each Fiscal Year, Capital Expenditures incurred in the first Fiscal Quarter of such Fiscal Year shall not be deducted from EBITDA.

 

 

A-14

 

 

"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 in cash with respect to such fiscal period (excluding franchise taxes paid which are accounted for as a general and administrative expense and are included in EBITDA), plus (d) dividends paid in cash in such period in respect of the Preferred Equity, together with any related Preferred Equity conversion make-whole amount paid under Section 6.14(l) to the extent not financed with proceeds from the issuance of Incremental Term Loans or proceeds from the issuance of common Stock of Rand. Notwithstanding the foregoing, for the periods ending on each of June 30, 2014, September 30, 2014 and December 31, 2014, all components of Fixed Charges will be calculated for the period commencing on April 1, 2014 and ending on such date, and (x) for the period ending June 30, 2014, multiplied by four, (y) for the period ending September 30, 2014, multiplied by two and (z) for the period ending December 31, 2014, multiplied by 4/3.

 

"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 Mortgages" means, collectively, (i) the Preferred Fleet Mortgage, dated as of the Closing Date, as further amended, restated, modified or supplemented from time to time, given by Grand River in favor of Agent on Grand River's U.S. Flag Vessels named the Invincible, the Manistee, the Calumet, the Manitowoc, the Defiance and the Ashtabula, respectively, and (ii) the Preferred Fleet Mortgage, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time, given by Black Creek in favor of Agent on Black Creek’s U.S. Flag Vessels named the James L. Kuber, the Lewis J. Kuber, the Victory and the Moore, respectively.

 

“Foreign Subsidiary” shall mean any Subsidiary of any Person that is not organized or incorporated in the United States, any State or territory thereof or the District of Columbia.

 

“Fuel Fixed Forward Price Agreement” means that certain forward fuel purchase contract with World Fuel or another supplier, and which may contain an embedded derivative arrangement, as now or hereafter in effect and as the same may be amended, restated, modified or supplemented from time to time.

 

"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.

 

 

A-15

 

 

“FSE List” has the meaning ascribed to it in Section 3.30.

 

"GAAP" means generally accepted accounting principles in the United States of America, consistently applied, as such term is further defined in Annex G to this Agreement.

 

"Governmental Authority" means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).

 

"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.

 

"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 Closing Date, as amended, restated, modified or supplemented from time to time, 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.

 

 

A-16

 

 

"Guarantors" means each US Borrower, Parent, Rand, Rand Finance, Black Creek Holdings and each direct and indirect Subsidiary of Rand, other than any Subsidiary to the extent a guarantee by such Subsidiary, in each case, is prohibited or restricted by contracts or applicable law or, would result in adverse tax consequences for such Subsidiary as determined by Agent in its sole discretion, and their successors and assigns and "Guarantor" means any one of them;

 

"Guggenheim" means Guggenheim Corporate Funding, LLC.

 

"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.

 

“IGA Club” has the meaning acribed to in in Annex K.

 

"Illegal Proceeds" means any proceeds (i) derived from Money Laundering Activities and/or Racketeering Activities; (ii) procured in violation of the FCPA or applicable Canadian anti-bribery, or similar laws; or (iii) derived from an Illegal Source.

 

"Illegal Source" means any individual or entity on a Government Blacklist.

 

“Immaterial Liens” means all Liens described in the definition of “Permitted Encumbrances” other than in clause (i) thereof.

 

"Increasing Lender" has the meaning ascribed to it in Section 1.1(f)(i).

 

"Incremental Commitment" of any Lender shall mean the amount of “Incremental Cdn. Commitment” or “Incremental US Commitment” for such Lender as set forth on the updated Annex I to this Agreement or in the most recent Assignment Agreement executed by such Lender, as such commitment may be reduced, amortized or adjusted from time to time in accordance with this Agreement, and "Incremental Commitments" means all of them.

 

“Incremental Funding Date” shall mean the date on which each of the following conditions has been satisfied:  (a) Agent has received, no less than ten (10) Business Days prior to the date the Incremental Loans are requested to be funded, a written request duly executed by the Borrowers, specifying the amount of the Incremental Loans requested and the date on which the Incremental Loans are requested to be funded and (b) the conditions set forth in Sections 1.1(f) and 2.1(e), (i) and (j) have been satisfied.

 

“Incremental Loan Date” shall have the meaning set forth in Section 2.1(e).

 

“Incremental Loans” has the meaning ascribed to it in Section 1.1(f)(i).

 

“Incremental Notes” has the meaning ascribed to it in Section 1.1(f)(i).

 

 

A-17

 

 

"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.

 

“Indemnified Tax” means (a) any Tax other than an Excluded Tax and (b) to the extent not otherwise described in clause (a), Other Taxes.

 

"Insolvency Laws" shall mean any of the Bankruptcy and Insolvency Act (Canada), the Companies’ 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., each 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, Software, Trademarks, trade secrets and customer lists.

 

 

A-18

 

 

“Intercreditor Agreement” means that certain Intercreditor Agreement dated as of the Second Amendment Closing Date by and among Agent, the Credit Parties and the First Lien Agent, as the same may be amended, restated and/or modified from time to time subject to the terms thereof.

 

"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 (x) interest expense with respect to any Funded Debt of such Person (including any subordinated notes issued upon the conversion of Preferred Equity), and (y) interest expense for the relevant period that has been capitalized on the balance sheet of such Person, and, solely for purposes of calculating the Fixed Charge Coverage Ratio, excluding any accrued and unpaid interest on any subordinated notes issued upon the conversion of Preferred Equity.

 

"Interest Payment Date" means (a) as to any US Base Rate Loan, the first Business Day of each month to occur while such Loan is outstanding, beginning April 1, 2014 (for all accrued interest from and after the Closing Date), 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 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 this 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.

 

 "Invincible" means the Invincible, a documented vessel of the United States bearing U.S. Official Number 610267.

 

"IRS" means the Internal Revenue Service of the United States of America.

 

"ITA" means the Income Tax Act (Canada).

 

“James L. Kuber” means the barge James L. Kuber, a documented vessel of the United States bearing U.S. Official Number 265360.

 

"Kaministiqua" means the Kaministiqua, a self-propelled steel cargo vessel bearing Canadian Certificate of Registry Official Number 395510.

 

"Kaministiqua Mortgage" means the statutory ship mortgage of the Kaministiqua made by Lower Lakes in favor of Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

“Lewis J. Kuber” means the barge Lewis J. Kuber, a documented vessel of the United States bearing U.S. Official Number 264391.

 

 

A-19

 

 

"Lenders" means Guggenheim, the other Lenders named on the signature pages of this Agreement (including the Increasing Lenders), the New Lenders and, if any such Lender shall assign all or any portion of the Obligations, such term shall include any assignee of such Lender.

 

"Lenders' Counsel" means the firms of Blank Rome LLP and Osler, Hoskin & Harcourt LLP or such other firm of legal counsel as Agent may from time to time designate and any and all local agent counsel retained by Blank Rome LLP for and on behalf of Agent.

 

“Lending Office” means, with respect to any Lender, the office or offices of such Lender specified as its “Lending Office” on Annex H hereto, or such other office or offices of such Lender as it may from time to time notify the Borrowers and Agent.

 

"Liabilities" means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursements and expenses (including, without limitation, those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

 

"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, an Incremental 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 Lower Lakes, Grand River or Black Creek, as applicable, pursuant to this Agreement and ending one, two or three months thereafter, as selected by Lower Lakes’, Grand River's or Black Creek’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;

 

 

A-20

 

 

(d)           Lower Lakes, Grand River or Black Creek, 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)           Lower Lakes, Grand River or Black Creek, 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 each 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 Agent 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 LIBOR Period by major financial institutions reasonably satisfactory to Agent in the London interbank market for such LIBOR Period for the applicable principal amount on such date of determination. Notwithstanding anything in the foregoing to the contrary, such LIBOR Rate shall be subject to a floor of one and a quarter percent (1.25%) per annum and a cap of two and a quarter percent (2.25%) per annum.

 

"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 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.

 

"LLTC" means Lower Lakes Transportation Company, a Delaware corporation, being the US borrower hereunder, and includes its successors by merger or otherwise.

 

"Loan Account" has the meaning ascribed to it in Section 1.11.

 

"Loan Documents" means the Agreement, the Notes, the Security, the Intercreditor Agreement, the Collateral Documents, Assignment of Material Contracts, 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 or any Lender 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.

 

 

A-21

 

 

"Loans" means the Term Loans and the Incremental Loans.

 

"Lock Boxes" has the meaning ascribed to it in Annex C.

 

“Loss Payable Clause” has the meaning ascribed to it in Annex K.

 

"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 Cdn. Borrower hereunder, and includes its successors by amalgamation or otherwise.

 

“Lower Lakes 17” means Lower Lakes Towing (17) Ltd., an Ontario corporation, and includes its successors by amalgamation or otherwise.

 

“Lower Lakes Ship Repair” means Lower Lakes Ship Repair Company Ltd., a Canadian corporation, and includes its successors by amalgamation or otherwise.

 

"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 (which consent shall not be unreasonably withheld, delayed or conditioned).

 

"Manistee" means the Manistee (formerly the Richard Reiss), a documented vessel of the United States bearing U.S. Official Number 243406.

 

"Manitoba" means the Manitoba (formerly the Maritime Trader), a documented vessel of Canada bearing Canadian Certificate of Registry Official Number 0325744.

 

"Manitoba Mortgage" means the statutory ship mortgage of the Manitoba, made by Lower Lakes in favor of Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

“Manitoulin” means the cargo vessel bearing Canadian Certificate of Registry Official Number 838002.

 

“Manitoulin Mortgage” means the statutory ship mortgage of the Manitoulin, made by Lower Lakes in favor of the Agent, dated on or after the Second Amendment Closing Date, as amended, restated, modified or supplemented from time to time.

 

"Manitowoc" means the Manitowoc (formerly the Earl W. Oglebay), a documented vessel of the United States bearing U.S. Official Number 552395.

 

"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 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.

 

 

A-22

 

 

"Material Contracts" means, collectively, each written agreement, arrangement or understanding entered into by a 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, bareboat charter or employment of a Vessel, including the Time Charter Agreements and the Bareboat Charter Agreements.

 

"Material Environmental Liabilities" means Environmental Liabilities exceeding US$250,000 in the aggregate.

 

“McKee Sons Vessel Lease ” means the Bareboat Charter Agreement that was terminated in December of 2014, and which related to a documented vessel of the United States bearing U.S. Official Number 247490 (Barge McKee).

 

"Michipicoten" means the Michipicoten, a self-propelled steam turbine cargo vessel bearing Canadian Certificate of Registry Official Number 825098.

 

"Michipicoten Mortgage" means the statutory ship mortgage of the Michipicoten made by Lower Lakes in favor of Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

"Mississagi" means the Mississagi (formerly the George A. Sloan), a self-propelled cargo vessel 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 Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

"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.

 

 

A-23

 

 

“Moore” means the tug Olive L. Moore, a documented vessel of the United States bearing U.S. Official Number 227740.

 

"Mortgages" means, collectively, the Fleet Mortgages, the Cuyahoga Mortgage, the Saginaw Mortgage, the Mississagi Mortgage, the Ojibway Mortgage, the Kaministiqua Mortgage, the Michipicoten Mortgage, the Pierson Mortgage, the Manitoba Mortgage, the Tecumseh Mortgage and the Manitoulin 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.

 

"New Lender" has the meaning ascribed to it in Section 1.1(f)(i).

 

“Non-US Lender Party” means each of Agent and each Lender, in each case that is not a United States person as defined in Section 7701(a)(30) of the Revenue Code.

 

“Obligation Currency” has the meaning ascribed to it in Section 11.17(a).

 

"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 or any Lender, 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 or any of the other Loan Documents.  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 or any of the other Loan Documents.

 

“OFAC” has the meaning ascribed to it in Section 3.30.

 

"Ojibway" means the Ojibway, a self-propelled steel cargo vessel bearing Canadian Certificate of Registry Official Number 827118.

 

"Ojibway Mortgage" means the statutory ship mortgage of the Ojibway made by Lower Lakes in favor of Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

"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.

 

 

A-24

 

 

"Original Credit Agreement" means the Credit Agreement dated as of March 3, 2006 by and among Lower Lakes, Grand River, LLTC, Agent, First Lien Agent and GE Canada Finance Holding Company, as amended and restated by that certain Amended and Restated Credit Agreement dated as of February 13, 2008 and amended as of June 24, 2008, June 23, 2009, August 9, 2010 and June 28, 2011, and as amended and restated by that certain Second Amended and Restated Credit Agreement dated as of September 28, 2011 and as amended as of December 1, 2011, and as amended and restated by that certain Third Amended and Restated Credit Agreement dated as of August 30, 2012 and as amended as of March 29, 2013.

 

“Other Connection Taxes” means, with respect to any Secured Party, Taxes imposed as a result of a present or former connection between such Secured Party and the jurisdiction imposing such Tax, other than any such connection arising solely from the Secured Party having executed, delivered, become a party to, performed its obligations or received a payment under, received or perfected as a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document.

 

"Other Taxes" has the meaning ascribed to it in Section 1.14(c).

 

"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.

 

“Permitted Acquisition” means any Acquisition by (i) a Credit Party of substantially all of the assets of a target, which assets are located in the United States or Canada or (ii) a Credit Party of 100% of the Stock and Stock Equivalents of a target organized under the laws of any State in the United States, the District of Columbia, or Canada, in each case, to the extent that each of the following conditions shall have been satisfied:

 

 

A-25

 

 

(a)          to the extent the Acquisition will be financed in whole or in part with the proceeds of any Loan, the conditions set forth in Section 2.1(i) and (j) shall have been satisfied;

 

(b)     the Borrowers shall have notified Agent and Lenders of such proposed Acquisition at least thirty (30) days prior to the consummation thereof and furnished to Agent and Lenders at least fifteen (15) days prior to the consummation thereof (1) an executed term sheet and/or letter of intent (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of Agent, such other information and documents that Agent may request, including, without limitation, executed counterparts of the respective agreements, documents or instruments pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, documents or instruments and all other material ancillary agreements, instruments and documents to be executed or delivered in connection therewith, (2) pro forma financial statements of Parent and its Subsidiaries after giving effect to the consummation of such Acquisition, (3) a certificate of a responsible officer of the Borrowers demonstrating that, after giving effect to such Acquisition, the Borrowers are in pro forma basis compliance with each of the financial covenants set forth in Annex G after giving effect to the consummation of such Acquisition and (4) copies of such other agreements, instruments and other documents as Agent reasonably shall request;

 

(c)     the Borrowers and their Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Section 3.6 and Agent shall have received, for the benefit of the Secured Parties, a collateral assignment of the seller’s representations, warranties and indemnities to the Borrowers or any of their Subsidiaries under the acquisition documents;

 

(d)     such Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar body) and/or the stockholders or other equity holders of the target;

 

(e)     no Default or Event of Default shall then exist or would exist after giving effect thereto;

 

(f)     after giving effect to such Acquisition, the Aggregate Borrowing Availability (as defined in the First Lien Credit Agreement) shall be at least the greater of (x) US$30,000,000 and (y) 20% of the lesser of (1) the Revolving Loan Commitments (as defined in the First Lien Credit Agreement) at such time and (2) the Aggregate Borrowing Base (as defined in the First Lien Credit Agreement) at such time; provided, that, in the calculation thereof, the Borrowers may include up to $10,000,000 of acquired Collateral (as defined in the First Lien Credit Agreement), subject to eligibility criteria in the First Lien Credit Agreement and necessary valuations (including field examinations and appraisals), in each case, reasonably acceptable to the First Lien Agent and the Agent.

 

(g)    the total consideration paid or payable (including without limitation, all transaction costs, assumed unpaid accounts payable and accrued expenses, assumed or reflected on a consolidated balance sheet of the Credit Parties and their Subsidiaries after giving effect to such Acquisition, and the maximum amount of all deferred payments, including earnouts) for all Acquisitions consummated during (i) any Fiscal Year shall not exceed $15,000,000 in the aggregate for all such Acquisitions and (ii) the term of this Agreement shall not exceed US$30,000,000 in the aggregate for all such Acquisitions; provided, that the total consideration paid or payable shall be increased by an amount equal to the equity of Stock of a Credit Party issued for such Acquisition;

 

 

A-26

 

 

(h)    any earn-out obligations incurred in connection with a Permitted Acquisition shall have a determinable amount and be subject to a discernible maximum and shall be reflected as Indebtedness on the Credit Parties’ consolidated balance sheet to the extent required by GAAP, and shall be unsecured and subordinated to the Loans, in form and substance satisfactory to Agent;

 

(i)         after giving effect to such Acquisition, the target and its assets shall be free and clear of all Liens other than Permitted Encumbrances, and no Indebtedness (other than as permitted by Section 6.3 and any unpaid accounts payable and accrued expenses referred to in clause (g) above) is assumed as a result of the Acquisition;

 

(j)     the target has EBITDA, subject to pro forma adjustments acceptable to Agent, for the most recent four quarters prior to the acquisition date for which financial statements are available, greater than zero; and

 

(k)  the Person subject of such Acquisition: (i) does not and has not ever sponsored, administered, participated in or contributed to a retirement or pension arrangement that provides defined benefits to employees or former employees of such Person; and (ii) does not have any liabilities or obligations in respect of any such pension plan described in (i) that has been terminated or wound up.

 

"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 and the Fleet Mortgages; and (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) Permitted Maritime Liens; and (l) Liens securing the First Lien Indebtedness.

 

 

A-27

 

 

"Permitted Intercompany Indebtedness" means any indebtedness owing (a) by a Credit Party to any other Credit Party in the ordinary course of business consistent with past practice or (b) by a Credit Party to an Affiliate which is not a Credit Party to a Credit Party so long as it is either listed on Disclosure Schedule (3.27) or has been approved of in writing by the Lenders.

 

“Permitted Lower Lakes 17 Combination” shall mean an amalgamation, merger or other similar combination by Lower Lakes 17 with and into Lower Lakes, provided that Lower Lakes is the surviving entity and continues to be a Credit Party under this Agreement.

 

“Permitted Maritime Liens” shall mean, at any time with respect to a Vessel, (a) Liens for crew’s wages (including wages of the master of the Vessel), (b) Liens for salvage (including contract salvage) and general average, (c) shipyard Liens and other Liens arising by operation of law in the ordinary course of business in operating, maintaining or repairing the Vessel, (d) Liens for wages of stevedores when employed directly by the Vessel, or the master of the Vessel, (e) Liens for damages arising from maritime torts which are covered by insurance and any deductible applicable thereto, or in respect of which a bond or other security has been posted on behalf of the Vessel owner with the appropriate court or other tribunal to prevent the arrest or secure the release of the Vessel from arrest, (f) Liens for charters or subcharters, or leases or subleases, that existed as of the Closing Date or are subordinate to the Lien of the relevant Mortgage; provided that, in each case, any such Liens shall (i) be discharged in the ordinary course of business and (ii) secure claims not more than thirty (30) days past due unless the same is being contested in good faith by appropriate proceedings being diligently pursued and adequate reserves have been set aside in accordance with GAAP with respect to the same and the failure to satisfy such claim could not reasonably be expected to result in the imminent sale, loss or forfeiture of such Vessel.

 

"Person" means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

 

"Pierson" means the Robert S. Pierson (formerly known as the Wolverine), a documented vessel of Canada and bearing Certificate of Registry Official Number 832253.

 

"Pierson Mortgage" means the statutory ship mortgage of the Pierson made by Lower Lakes in favor of Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

"Pledge Agreements" means the Pledge Agreements delivered by the applicable Credit Parties on the Closing Date, as amended, restated, modified or supplemented from time to time, and any other pledge agreement entered into after the 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, Knott Partners LP and Bay Resource Partners L.P.

 

 

A-28

 

 

"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, Wage Earner Protection Program Act (Canada) obligations and overdue rents.

 

"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 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 consolidated:  (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.

 

"Property" means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

 

"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, 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 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 Closing Date and that holds Stock issued by any Credit Party shall be a Qualified Assignee.

 

 

A-29

 

 

“Qualified Plan” means an ERISA Plan that is intended to be qualified under Section 401(a) of the Revenue Code.

 

"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.

 

"Real Estate" has the meaning ascribed to it in Section 3.6.

 

“Register” has the meaning ascribed to it in Section 1.11(b).

 

"Related Persons" means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other consultants and agents of or to such Person or any of its Affiliates.

 

“Relationship Bank” has the meaning ascribed to it in Annex C.

 

"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.

 

“Requirement of Law” means, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any  Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject. For the avoidance of doubt, the term “Requirement of Law” shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

 

"Requisite Lenders" means two or more Lenders (including, in any event, Agent) which are not Affiliates (which, for purposes of this definition, shall include any joint venture in which any Lender or Affiliate is a member or partner) of each other having, more than 50% of the aggregate outstanding amount of the Loans; provided, that if there are only two Lenders, then Requisite Lenders means both such Lenders.

 

 

A-30

 

 

"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, any Indebtedness (other than the First Lien Obligations and 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.

 

"Revenue Code" means the United States Internal Revenue Code of 1986, as amended.

 

"Revolving Loan" shall have the meaning given to such term in the First Lien Credit Agreement as of the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

"Saginaw" means the Saginaw (formerly the John J. Boland), a single screw steam propulsion self-unloading bulk carrier 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 Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

“SDN List” has the meaning ascribed to it in Section 3.30.

 

"Second Amendment Closing Date" means March 27, 2015.

 

"Secured Parties" means (1) Agent on behalf of (a) itself, (b) the Cdn. Lenders and (c) the US Lenders and (2) the Lenders.

 

"Security" means all security (including guarantees) held from time to time by or on behalf of the Lenders or 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.

 

"Security Agreements" means the security agreements dated as of the Closing Date, as amended, restated, modified or supplemented from time to time, entered into between Agent, on behalf of Secured Parties, and each Credit Party that is a signatory thereto.

 

"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 closing balance of the Revolving Loan on the date of determination, but excluding any Funded Debt which is subordinated to the First Lien Loans), to (b) EBITDA for the twelve months ending on that date of determination.

 

 

A-31

 

 

"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.

 

“STA” means the Securities Transfer Act, 2006 (Ontario) or, to the extent applicable, similar legislation of any jurisdiction, as amended from time to time.

 

"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.

 

"Stock Equivalents" means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

 

"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.

 

"Tax" and "Taxes" have the meaning ascribed to them in Section 1.14(a).

 

 

A-32

 

 

“Tax Affiliate” means, (a) each Borrower and its Subsidiaries, (b) each other Credit Party and (c) any Affiliate of a Borrower with which such Borrower files or is eligible to file consolidated, combined or unitary Tax returns.

 

“Tecumseh” means the Tecumseh (formerly the Tina Litrico), a self-propelled steel cargo vessel and bearing Canadian Certificate of Registry Official Number 836045.

 

“Tecumseh Mortgage” means the statutory ship mortgage of the Tecumseh, made by Lower Lakes in favor of Agent, dated as of the Closing Date, as amended, restated, modified or supplemented from time to time.

 

“Term Commitment” of any Lender shall mean the Cdn. Term Commitment or the US Term Commitment for such Lender.

 

“Term Loan" means the Cdn. Term Loan, the US GR Term Loan or the US BC Term Loan and “Term Loans” means all of them.

 

"Term Loan Account" shall mean Agent's US Dollar account number 07236272493 in the name of Agent at Fifth Third Bank -- Cincinnati, ABA# 042-000-314, Account Name:  Guggenheim Corporate Funding, or such other account(s) as may be specified in writing by Agent as the "Term Loan Account".

 

 “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 and (c) Borrowers shall not have any further right to borrow any monies under the Agreement.

 

“Terrorist Lists” has the meaning ascribed to it in Section 3.30.

 

“Time Charter Agreements” means, collectively, (i) the time charter agreement dated as of September 22, 2004 (as amended on April 22, 2005) between Grand River and LLTC in respect of the Invincible, (ii) the time charter agreement dated as of September 22, 2004 (as amended on April 22, 2005) between Grand River and LLTC in respect of the Manistee, (iii) the time charter agreement dated as of February 29, 2008 between Grand River and LLTC in respect of the Calumet, (iv) the time charter agreement dated as of February 29, 2008 between Grand River and LLTC in respect of the Manitowoc, (v) the time charter agreement dated as of February 11, 2011 between Grand River and LLTC in respect of the Lewis J. Kuber, (vi) the time charter agreement dated as of February 11, 2011 between Grand River and LLTC in respect of the James L. Kuber, (vii) the time charter agreement dated as of February 11, 2011 between Grand River and LLTC in respect of the Victory, (viii) the time charter agreement dated as of February 11, 2011 between Grand River and LLTC in respect of the Moore and (ix) the time charter agreement dated as of April 1, 2013 between Grand River and LLTC in respect of the Ashtabula and Defiance.

 

"Total 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 closing balance of the Revolving Loan on the date of determination), to (b) EBITDA for the twelve months ending on that date of determination.

 

 

A-33

 

 

"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.

 

“Trigger Period” shall have the meaning given to such term in the First Lien Credit Agreement as of the Second Amendment Closing Date or as modified after the Second Amendment Closing Date in a manner not prohibited by the Intercreditor Agreement.

 

“Unfunded Pension Liability” means the excess of a US Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that US Pension Plan’s assets, determined in accordance with the assumptions used for funding the US Pension Plan pursuant to Section 430 of the Revenue Code for the applicable plan year.

 

"US Base Rate" means, for any day, a rate per annum equal to the highest of (a) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by Agent) or any similar release by the Federal Reserve Board (as determined by Agent), (b) the sum of 0.50% per annum and the Federal Funds Rate, and (c) the sum of (x) LIBOR calculated for each such day based on a LIBOR Period of three months determined two (2) Business Days prior to such day plus (y) the excess of the applicable margin for LIBOR Rate Loans (specified in Section 1.5) over the applicable margin for US Base Rate Loans (specified in Section 1.5), in each instance, as of such day.  Any change in the US Base Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the “bank prime loan” rate, the Federal Funds Rate or LIBOR for a LIBOR Period of three months. Notwithstanding anything in the foregoing to the contrary, such US Base Rate shall be subject to a floor of two and a quarter percent (2.25%) per annum and a cap of three and a quarter percent (3.25%) per annum.

 

"US Base Rate Loan" means a Loan denominated in US Dollars that bears interest by reference to the US Base Rate.

 

“US BC Term Loan" has the meaning assigned to it in Section 1.1(e)(i).

 

"US Borrowers" means Grand River and Black Creek.

 

“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.

 

 

A-34

 

 

"US Dollars" or "US$" shall mean the lawful currency of the United States of America.

 

"US GR Term Loan" has the meaning assigned to it in Section 1.1(d)(i).

 

"US Lender Party" means each of Agent and each Lender, in each case that is a United States person as defined in Section 7701(a)(30) of the Revenue Code.

 

"US Lenders" means all Lenders other than Lenders making term loan(s) to Lower Lakes in accordance with the terms of this Agreement.

 

“US Loans” means, collectively, all Loans other than the Cdn. Loans.

 

"US Owned Vessels" means, collectively, the Invincible, the Manistee, the Calumet, the Manitowoc, the Defiance, the Ashtabula, the James L. Kuber, the Lewis J. Kuber, the Moore and the Victory.

 

"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 a 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 Term Commitment” of any Lender shall mean the amount of “US Term Commitment” for such Lender as set forth on Annex I to this Agreement or in the most recent Assignment Agreement executed by such Lender, as such commitment may be reduced, amortized or adjusted from time to time in accordance with this Agreement, and "US Term Commitments" means all of them.

 

"US Vessels" means, collectively, the Invincible, the Manistee, the Calumet, the Manitowoc, the Defiance, the Ashtabula, the James L. Kuber, the Lewis J. Kuber, the Moore and the Victory.

 

"US Welfare Plan" means a "welfare plan", as such term is defined in Section 3(1) of ERISA.

 

"Vessels" means, collectively, the Cdn. Vessels and the US Vessels.

 

“Victory” means the tug Victory, a documented vessel of the United States bearing U.S. Official Number 637185.

 

"Working Capital" means, on a consolidated basis, Parent and its Subsidiaries' current assets (excluding cash balances, interest rate swap valuation assets and deferred income tax assets) less current liabilities (excluding Revolving Loan Advances (as defined in the First Lien Credit Agreement), interest rate swap valuation liabilities, liabilities converted to equity, deferred income tax liabilities, the current portion of long-term debt, deferred payment liabilities and amounts owing under any subordinated notes issued upon the conversion of Preferred Equity).

 

 

A-35

 

 

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-36

 

 

ANNEX B (Section 1.2A)

to

CREDIT AGREEMENT

 

Reserved

 

 

B-1

 

 

ANNEX C (Section 1.7)

to

CREDIT AGREEMENT

 

CASH MANAGEMENT SYSTEM

 

Subject to Section 1.7 and Section 5.14 of the First Lien Credit Agreement, each Credit Party shall establish and maintain the Cash Management Systems described below:

 

(a)           On or before the Closing Date and until the Termination Date, each Credit Party shall (i) establish lock boxes ("Lock Boxes") or, at Agent’s discretion, blocked accounts ("Blocked Accounts") at one or more of the banks set forth in Disclosure Schedule (3.19), and shall request in writing and otherwise take such reasonable steps to ensure that all Account Debtors forward payment directly to such Lock Boxes, and (ii) deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into one or more Blocked Accounts in such Credit Party's name and at a bank identified in Disclosure Schedule (3.19) (each, a "Relationship Bank").  On or before the Closing Date, each Borrower shall have established a concentration account in its name (each, a "Concentration Account" and collectively, the "Concentration Accounts") at the bank that shall be designated as the Concentration Account bank for each such Borrower in Disclosure Schedule (3.19) (the "Concentration Account Bank"), which bank shall be reasonably satisfactory to Agent.

 

(b)           Each of Lower Lakes and LLTC may maintain, in its name, an account (each a "Disbursement Account" and collectively, the "Disbursement Accounts") at a bank acceptable to Agent into which First Lien Agent shall, from time to time, deposit proceeds of Revolving Credit Advances and Swing Line Advances (each, as defined in the First Lien Credit Agreement) made to such Borrower pursuant to Section 1.1 of the First Lien Credit Agreement for use by such Borrower in accordance with the provisions of Section 1.4 of the First Lien Credit Agreement.

 

(c)           On or before the Closing Date (or such later date as Agent shall consent to in writing), the Concentration Account Bank, each bank where a Disbursement Account is maintained and all other Relationship Banks, shall have entered into blocked account agreements with the First Lien Agent, for the benefit of itself and the First Lien Lenders, and/or Agent, for the benefit of itself and Lenders, and the Credit Parties, as applicable, in form and substance reasonably acceptable to Agent, which shall become operative on or prior to the Closing Date.  Each such blocked account agreement shall provide, among other things, that (i) all items of payment deposited in such account and proceeds thereof deposited in the Concentration Account are subject to such agreement held by such bank as agent or bailee-in-possession for the First Lien Agent, on behalf of itself and the First Lien Lenders, or Agent, on behalf of itself and the Lenders, as applicable, (ii) the bank executing such agreement has no rights of setoff or recoupment or any other claim against such account, as the case may be, other than (1) for payment of its service fees and other charges directly related to the administration of such accounts and (if the Relationship Bank is located in Canada) the Disbursement Accounts maintained with such Relationship Bank, (2) (in the cases of Blocked Accounts and Disbursement Accounts maintained in Canada) for the amount of any required adjustments due to clerical error or calculation errors directly relating to such accounts or the Disbursement Accounts, (3) for returned checks or other items of payment, or (4) in accordance with any court order, notice of garnishment or applicable law binding on such Relationship Bank; and (iii) from and after the Closing Date (A) with respect to banks at which a Blocked Account is maintained, such bank agrees, from and after the receipt of a notice (an "Activation Notice") from the First Lien Agent or, subject to the Intercreditor Agreement, Agent (which Activation Notice may be given by the First Lien Agent or, subject to the Intercreditor Agreement, Agent, at any time at which an Event of Default has occurred and is continuing (an "Activation Event")), to forward immediately all amounts in each Blocked Account to the Concentration Account Bank and to commence the process of daily sweeps from such Blocked Account into the Concentration Account and (B) with respect to the Concentration Account Bank, such bank agrees from and after the receipt of an Activation Notice from the First Lien Agent or, subject to the Intercreditor Agreement, Agent, upon the occurrence of an Activation Event, to immediately forward all amounts received in the Concentration Account to the Collection Account through daily sweeps from such Concentration Account into the Collection Account.  From and after the date the First Lien Agent or, subject to the Intercreditor Agreement, Agent, has delivered an Activation Notice to any bank with respect to any Blocked Account(s), no Credit Party shall accumulate or maintain cash in Disbursement Accounts or payroll accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements.

 

 

C-1

 

 

(d)           So long as no Event of Default has occurred and is continuing, the Borrowers may amend Disclosure Schedule (3.19) to add or replace a Relationship Bank, Lock Box or Blocked Account or to replace any Concentration Account or any Disbursement Account; provided, that (i) Agent shall have consented in writing in advance to the opening of such account or Lock Box with the relevant bank and (ii) prior to the time of the opening of such account or Lock Box, a Credit Party and such bank shall have executed and delivered to Agent a blocked account agreement, in form and substance reasonably satisfactory to Agent.  A Credit Party shall close any of its accounts (and establish replacement accounts in accordance with the foregoing sentence) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent's reasonable judgment, or as promptly as practicable and in any event within sixty (60) days following notice from Agent, that the operating performance, funds transfer or availability procedures or performance with respect to accounts or Lock Boxes of the bank holding such accounts or Agent’s liability under any blocked account agreement with such bank is no longer acceptable in Agent's reasonable judgment.

 

(e)           The Lock Boxes, Blocked Accounts, Disbursement Accounts and the Concentration Account shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Loans and all other Obligations, and in which a Credit Party shall have granted a Lien to Agent, on behalf of itself and Lenders, pursuant to the Collateral Accounts.

 

(f)           Reserved.

 

(g)           Each Credit Party shall, and shall cause its Affiliates, officers, employees, agents, directors or other Persons acting for or in concert with such Credit Party (each a "Related Person") to (i) hold in trust for Agent, for the benefit of Secured Parties, all checks, cash and other items of payment received by such Credit Party or any such Related Person, and (ii) within one (1) Business Day after receipt by such Credit Party or any such Related Person of any checks, cash or other items of payment, deposit the same into a Blocked Account.  Each Credit Party on behalf of itself and each Related Person acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of Collateral are part of the Collateral.  Except as otherwise provided in this Agreement, all proceeds of the sale or other disposition of any Collateral, shall be deposited directly into Blocked Accounts.

 

 

C-2

 

ANNEX D-1 (Section 2.1(a))

to

CREDIT AGREEMENT

 

CLOSING CHECKLIST

 

In addition to, and not in limitation of, the conditions described in Section 2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be received by Agent in form and substance satisfactory to Agent on or prior to the Closing Date (each capitalized term used but not otherwise defined herein shall have the meaning ascribed thereto in Annex A to the Agreement):

 

A.           All Appendices to the Agreement, in form and substance satisfactory to Agent.

 

B.           Duly executed copies of the First Lien Credit Agreement establishing a term credit facility in an amount of US$105,000,000 and a revolving credit facility in the amount of US$35,000,000, and each of the other First Lien Loan Documents, in form and substance satisfactory to Agent.

 

C.           Duly executed originals of the Guarantees, the Security Agreements, and the Intercreditor Agreement, dated the Closing Date or such earlier date acceptable to Agent, and all instruments, documents and agreements executed pursuant thereto.

 

D.           Satisfactory evidence that the insurance policies required by Section 5.4 are in full force and effect, together with appropriate evidence showing loss payable and additional insured clauses or endorsements, as reasonably requested by Agent, in favor of Secured Parties.

 

E.           Evidence satisfactory to Agent that Agent (for the benefit of itself and the other Secured Parties) has a valid and perfected security interest in the Collateral, subject only to Permitted Encumbrances, including (i) such documents duly executed by each Credit Party (including financing statements under the PPSA or the Code and other notice filings and applicable documents under the laws of any jurisdiction with respect to the perfection and publication of Liens) as Agent may reasonably request in order to perfect and publish its security interests in the Collateral, and (ii) copies of search reports listing all effective financing statements and other applicable notice of lien filings that name any Credit Party as debtor, together with certificates of the applicable Governmental Authority constituting evidence thereof, none of which shall cover the Collateral, except for those relating to Permitted Encumbrances.

 

F.           Evidence satisfactory to Agent that the stock certificates and related stock powers for each of the Credit Parties (other than Rand and Rand Finance) are in the possession of the First Lien Agent.

 

G.           Evidence satisfactory to Agent that, as of the Closing Date, Cash Management Systems complying with Annex C to the Agreement have been established and are currently being maintained in the manner set forth in such Annex C, together with copies of duly executed blocked account and lock box agreements, reasonably satisfactory to Agent, with the banks as required by Annex C.

 

 

D-1

 

 

H.           For each Credit Party, such Person's (a) organizational documents and all amendments thereto (including any shareholders agreements), and (b) certificates of compliance or status (or applicable equivalent thereof) evidencing each Borrower's qualification to conduct business in each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, each dated a recent date prior to the Closing Date and certified by the applicable authorized Governmental Authority.

 

I.           For each Credit Party, (a) such Person's bylaws, together with all amendments thereto and (b) resolutions of such Person's Board of Directors and shareholders (where necessary), approving and authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and the transactions to be consummated in connection therewith, each certified as of the Closing Date by such Person's corporate secretary or an assistant secretary as being in full force and effect without any modification or amendment and also approving, in the case of Cdn. Credit Parties whose shares are pledged, the pledge of such Credit Party's shares by way of security to Agent pursuant to the Pledge Agreements, and the transfer of such shares pursuant to such Pledge Agreements.

 

J.           For each Credit Party, signature and incumbency certificates of the officers of each such Person executing any of the Loan Documents, certified as of the Closing Date by such Person's corporate secretary or an assistant secretary as being true, accurate, correct and complete.

 

K.           Duly executed originals of opinions of Katten Muchin Rosenman LLP, Seward & Kissel LLP and Norton Rose Fulbright Canada LLP, counsel for the Credit Parties, together with any local counsel opinions reasonably requested by Agent, each in form and substance reasonably satisfactory to Agent and its counsel, dated the Closing Date.

 

L.           Agent shall have received duly executed originals of a certificate of an officer of Rand, dated the Closing Date, stating that, since March 31, 2013, (a) no event or condition has occurred or is existing which could reasonably be expected to have a Material Adverse Effect; (b) there has been no material adverse change in the industry in which Borrowers operate; (c) no Litigation has been commenced which, if successful, would have a Material Adverse Effect or could challenge any of the transactions contemplated by the Agreement and the other Loan Documents; (d) there have been no Restricted Payments made by any Credit Party; (e) after giving effect to the transactions contemplated by the Credit Agreement, each Credit Party will be Solvent; and (f) there has been no material increase in liabilities, liquidated or contingent, and no material decrease in assets of the Borrowers or any of their Subsidiaries.

 

M.           Agent, on behalf of Lenders, shall have received all requested landlord agreements, mortgagee agreements and bailee letters in form and substance satisfactory to Agent, in each case as required pursuant to Section 5.9.

 

N.           Agent shall have received confirmation of projected dry-dock and winter work expenses and schedule which shall be in form and substance reasonably satisfactory to Agent.

 

O.           Agent shall have received the Financial Statements, Projections and other materials set forth in Section 3.4, in each case in form and substance reasonably satisfactory to Agent and Agent shall be satisfied, in its sole discretion with all of the foregoing.  Agent shall have further received a certificate of the Chief Executive Officer and/or the Chief Financial Officer of Rand, based on such Projections, to the effect that the Projections are based upon 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 Closing Date, reflect Rand's good faith and reasonable estimates of its future financial performance and of the other information projected therein for the period set forth therein.

 

 

D-2

 

 

P.           This Agreement shall have been executed and delivered by all parties hereto.

 

Q.           Agent shall have received a source and use of funds statement.

 

R.           Each Credit Party shall be in compliance in all material respects with all Material Contracts.

 

S.           Copies of all documented Material Contracts of the Credit Parties certified by the Credit Parties to be true copies, shall have been delivered to Agent.

 

T.           There shall not exist or have occurred a Material Adverse Effect.

 

U.           The Borrowers shall have received all necessary or required consents from Governmental Authorities and third parties in respect to completion of the transactions contemplated herein and under the First Lien Credit Agreement.

 

V.           Receipt by Agent of an updated quarterly Operating Plan (including budgeted Capital Expenditures) (which shall also be broken down for each of the Borrowers) for the Fiscal Year ending March 31, 2015, which shall include a calculation of anticipated Excess Cash Flow for such Fiscal Year and shall otherwise be reasonably satisfactory to the Lenders.

 

W.           Receipt by Agent of all fees payable to Agent and Lenders, including under the Fee Letter, and receipt by counsels to the Co-Arrangers and third-party advisors deemed appropriate by the Co-Arrangers, of all costs and expenses required to be paid pursuant to Section 11.3.

 

X.           Receipt by Agent of a copy of the executed Termination and Release, with respect to the Lower Lakes mortgages and guaranty.

 

Y.           Such other certificates, documents and agreements respecting any Credit Party as Agent may reasonably request.

 

All documents delivered shall be in full force and effect, and in form and substance satisfactory to the Lenders.

 

 

D-3

 

 

ANNEX E (Section 4.1(a))

to

CREDIT AGREEMENT

 

FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING

 

The Credit Parties 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, (x) within thirty-five (35) days after the end of each Fiscal Month that is not the last Fiscal Month in any Fiscal Quarter and (y) within forty-five (45) days after the end of each Fiscal Month that is the last month in any Fiscal Quarter, 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, (x) within thirty-five (35) days after the end of each Fiscal Month that is not the last Fiscal Month in any Fiscal Quarter and (y) within forty-five (45) days after the end of each Fiscal Month that is the last month in any Fiscal Quarter, 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 (including, without limitation, the last Fiscal Quarter in any Fiscal Year), 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 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 (including, without limitation, the last Fiscal Quarter in any Fiscal Year), 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.

 

 

E-1

 

 

(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 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, First Lien 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, First Lien 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 or First Lien 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, (i) disclosure of losses or casualties required by Section 5.4; (ii) notify Agent promptly if Marsh Canada Ltd. (“Broker”) ceases to be the Broker for the insurance required by Section 5.4 or in the event of any changes to the insurance which would cause the insurance to not comply with Section 5.4; (iii) notify Agent promptly and forward all notices received from the Broker, or any insurance carrier, regarding change in insurance, renewal or non-renewal of insurance, or termination of insurance; (iv) notify Agent, within thirty (30) days of renewal of each insurance required under Section 5.4, of the status of renewal and within fifteen (15) days notify Agent of confirmation of renewal or status of negotiation for renewal; (v) provide on a monthly basis a written report confirming the status of each policy of insurance required under Section 5.4, and confirming that premium payments have been made with evidence of such payments, until such time as the Broker provides a letter of undertaking without a waiver or limitation of liability for negligent failure to perform Broker undertakings.

 

 

E-3

 

 

(l)           Environmental Notices.  To Agent in writing, promptly upon (i) the receipt by any Credit Party of any notice of violation of or potential liability or similar notice under any Environmental Law, (ii) learning of or receipt by any Credit Party of any notice of (A) unpermitted Releases, (B) the existence of any condition that could reasonably be expected to result in violations of or Liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or Liability under any Environmental Law which in the case of clauses (A), (B) and (C) above, in the aggregate for all such clauses, could reasonably be expected to result in Material Environmental Liabilities, (iii) the receipt by any Credit Party of notification that any property of any Credit Party is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iv) learning of or receipt by any Credit Party of any notice of any proposed acquisition or lease of Real Estate, if such acquisition or lease could have a reasonable likelihood of resulting in Material Environmental Liabilities.

 

(m)           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.

 

(n)           Lease Amendments.  To Agent, within two (2) Business Days after receipt thereof, copies of all material amendments to real estate leases.

 

(o)           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.

 

(p)           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.

 

(q)           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.

 

 

E-4

 

 

(r)           Manitoulin.  To Agent and Lenders, concurrently with the delivery of financials specified in clauses (a), (b) or (d) above, a project report and management discussion and analysis report as to the Manitoulin, in form and substance satisfactory to Agent; provided, however, that the items required to be delivered pursuant to this subsection (r) shall not be required to be delivered at any time from and after the date that all of the following are satisfied: (i) the Conversion is completed; (ii) the Manitoulin first arrives in Montreal, Canada; and (iii) the Agent has obtained executed copies of all documentation reasonably deemed necessary by Agent to obtain a security interest in the Manitoulin or confirm its prior security interest therein, as the case may be, which documentation shall also be in form and substance reasonably satisfactory to the Agent.

 

(s)           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.

 

Any materials delivered to Agent pursuant to the foregoing provisions and not otherwise delivered to the Lenders shall be made available to any Lender by Agent promptly following its request therefor.

 

 

E-5

 

 

ANNEX F (Section 4.1(b))

to

CREDIT AGREEMENT

 

COLLATERAL REPORTS

 

Parent shall deliver or cause to be delivered the following:

 

(a)           Reserved.

 

(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 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; provided, that with respect to the Borrowing Base Certificate required to be prepared for the Fiscal Month ending June 30th of each Fiscal Year, such Borrowing Base Certificate shall instead include the period commencing on June 1st and ending on July 1st of such Fiscal Year and shall be delivered no later than July 15th of each Fiscal Year;

 

(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)           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;

 

(ii)           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;

 

 

F-1

 

 

(iii)           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 and continuance of a Trigger Period or Event of Default, the Agent shall be entitled, at the expense of the Borrowers, to cause two (2) appraisals of the Vessels and other Collateral to be conducted per calendar year; provided that in each calendar year not more than one full appraisal and one desktop appraisal shall be conducted at the expense of the Borrowers. Each appraisal shall determine the Orderly Liquidation Value and Fair Market Value (and any other valuation as may be required by the Agent) of the Vessels and other Collateral, which valuations shall remain in effect 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. Following the occurrence and during the continuance of any Trigger Period (other than a Trigger Period arising as a result of the occurrence of an Event of Default), the Borrowers shall be responsible for the cost of one (1) additional full appraisal or desktop appraisal as required by Agent in its sole discretion. Following the occurrence and during the continuance of an Event of Default or a Trigger Period arising as a result of the occurrence of an Event of Default, and during the continuance thereof, the Borrowers shall be responsible for the cost of all such appraisals and there shall be no limit on the number or frequency of full appraisals or desktop appraisals that may be conducted at the request of the Agent in its sole discretion; and

 

(f)           Such other reports, statements and reconciliations with respect to the Collateral or Obligations of any or all Credit Parties as Agent shall from time to time request in its reasonable discretion.

 

Any materials delivered to Agent pursuant to the foregoing provisions and not otherwise delivered to the Lenders shall be made available to any Lender by Agent promptly following its request therefor.

 

 

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, at the end of each Fiscal Quarter ending in the periods set forth below, a Fixed Charge Coverage Ratio for the 12-month period (or other applicable period) then ended of not less than the following:

 

	
                  Period

	
Ratio

	 	 
	
June 30, 2014

	
1.00:1.00

	 	 
	
September 30, 2014

	
1.00:1.00

	 	 
	
December 31, 2014

	
1.00:1.00

	 	 
	
March 31, 2015

	
1.00:1.00

	 	 
	
June 30, 2015

	
1.05:1.00

	 	 
	
September 30, 2015

	
1.10:1.00

	 	 
	
December 31, 2015

	
1.10:1.00

	 	 
	
March 31, 2016

	
1.10:1.00

	 	 
	
June 30, 2016

	
1.10:1.00

	 	 
	
September 30, 2016

	
1.10:1.00

	 	 
	
December 31, 2016

	
1.10:1.00

	 	 
	
March 31, 2017 and thereafter

	
1.15:1.00

 

 

G-1

 

 

(b)           Maximum Senior Funded Debt to EBITDA Ratio.  Rand shall have on a consolidated basis, at the end of each Fiscal Quarter ending on the dates 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:

 

	
            Fiscal Quarter End Dates

	
Ratio

	 	 
	
June 30, 2014

	
5.00:1.00

	 	 
	
September 30, 2014

	
4.75:1.00

	 	 
	
December 31, 2014

	
4.50:1.00

	 	 
	
March 31, 2015

	
4.25:1.00

	 	 
	
June 30, 2015

	
4.50:1.00

	 	 
	
September 30, 2015

	
4.00:1.00

	 	 
	
December 31, 2015

	
3.50:1.00

	 	 
	
March 31, 2016

	
3.50:1.00

	 	 
	
June 30, 2016

	
3.75:1.00

	 	 
	
September 30, 2016

	
3.50:1.00

	 	 
	
December 31, 2016

	
3.50:1.00

	 	 
	
March 31, 2017

	
3.25:1.00

	 	 
	
June 30, 2017

	
3.25:1.00

	 	 
	
September 30, 2017

	
3.25:1.00

	 	 
	
December 31, 2017

	
3.25:1.00

	 	 
	
March 31, 2018

	
3.25:1.00

	 	 
	
June 30, 2018 and thereafter

	
3.00:1.00

 

 

G-2

 

 

(c)           Maximum Total Funded Debt to EBITDA Ratio.  Rand shall have on a consolidated basis, at the end of each Fiscal Quarter ending on the dates set forth below, a Total 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:

 

	
Fiscal Quarter End Dates

	
Ratio

	 	 
	
June 30, 2014

	
7.50:1.00

	 	 
	
September 30, 2014

	
7.50:1.00

	 	 
	
December 31, 2014

	
7.50:1.00

	 	 
	
March 31, 2015

	
7.50:1.00

	 	 
	
June 30, 2015

	
7.50:1.00

	 	 
	
September 30, 2015

	
7.00:1.00

	 	 
	
December 31, 2015

	
6.25:1.00

	 	 
	
March 31, 2016

	
6.25:1.00

	 	 
	
June 30, 2016

	
6.25:1.00

	 	 
	
September 30, 2016

	
6.25:1.00

	 	 
	
December 31, 2016

	
5.50:1.00

	 	 
	
March 31, 2017

	
5.50:1.00

	 	 
	
June 30, 2017

	
5.50:1.00

	 	 
	
September 30, 2017

	
5.50:1.00

	 	 
	
December 31, 2017

	
5.50:1.00

	 	 
	
March 31, 2018

	
5.50:1.00

	 	 
	
June 30, 2018 and thereafter

	
5.25:1.00

 

 

G-3

 

 

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 Closing Date (including capitalization of costs and expenses or payment of pre-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 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.  Notwithstanding any other provision contained herein, (i) all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article VI and this Annex G shall be made, without giving effect to any election under  Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value” and (ii) any obligations of a Person under a lease (whether now existing or entered into in the future) that is not (or would not be) a capitalized lease obligation under GAAP as in effect on the Closing Date, shall not be treated as a capitalized lease obligation solely as a result of the adoption of changes in GAAP outlined by the Financial Accounting Standards Board in its press release dated March 19, 2009.  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 monthly average exchange rates in accordance with GAAP.

 

 

G-4

 

 

ANNEX J

 

Collateral

 

On the Closing Date, as continuing collateral security for the payment and satisfaction of all Obligations of the Borrowers to Agents and the Lenders, each Borrower and Guarantor shall deliver or cause to be delivered to 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 Agent:

 

	
  

	
(a)

	
a general security agreement from each Borrower and each Guarantor in favor of Agent constituting a Lien (subject only to Permitted Encumbrances) on all of the present and future Collateral of such Borrower;

 

	
  

	
(b)

	
a guarantee from each US Borrower, Black Creek Holdings, 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 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 preferred fleet mortgage with respect to the US Vessels owned by Grand River, with such mortgage constituting a Lien (subject only to Permitted Encumbrances) on each of the US Vessels being so mortgaged;

 

	
  

	
(e)

	
the preferred fleet mortgage with respect to the US Vessels owned by Black Creek, with such mortgage constituting a Lien (subject only to Permitted Encumbrances) on each of the US Vessels being so mortgaged;

 

	
  

	
(f)

	
a securities pledge agreement from each of Rand, Parent and Black Creek Holdings, in favor of Agent constituting a Lien (subject only to the Lien of the First Lien Agent) on all the shares of its present and future Subsidiaries; provided, however, that with respect to any Subsidiary of a US Borrower that is a “controlled foreign corporation” (as defined in Section 957 of the Revenue Code), not more than sixty-five percent (65%) of the fully diluted issued and outstanding voting stock of such Subsidiary shall be pledged to secure the Obligations of such US Borrower;

 

	
  

	
(g)

	
a specific assignment to Agent constituting a Lien (subject only to Permitted Encumbrances) of the rights, entitlements and benefits of Lower Lakes, Black Creek and LLTC under any Material Contract and/or the earnings of any such Credit Party in respect thereof, duly acknowledged by each counter-party thereto;

 

	
  

	
(h)

	
deposit control agreements delivered by each Credit Party that maintains bank accounts in the United States and Canada;

 

	
  

	
(i)

	
an assignment by the Credit Parties of all proceeds under their insurance policies as required hereunder in favor of Agent;

 

	
  

	
(j)

	
an Assignment of Earnings and Charters and an Assignment of Insurance from each of the Credit Parties that operates vessels.

 

 

J-1

 

 

ANNEX K (Section 5.4)

to

CREDIT AGREEMENT

 

Insurance

 

	
1.

	
Non-Marine Insurance  Maintain insurance with reputable insurance companies or associations reasonably acceptable to the Lenders in such amounts and covering such risks as are usually carried by corporations with established reputations engaged in similar businesses and owning similar properties in the same general areas in which it operates including, without limitation, environmental insurance and directors and officers liability insurance, and as the Lenders may reasonably require, such insurance policies shall name 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 under a mortgage clause in the standard form which shall contain a requirement that thirty (30) days prior written notice of the proposed cancellation thereof and ten (10) days prior written notice of any material amendment thereto be given to Agent by the underwriter of such policy or policies and shall be assigned to the Lenders, and the Borrowers shall, upon request by Agent, promptly furnish to Agent evidence of the maintenance of all such insurance.  Agent reserves the right at any time, upon review of each Credit Party's risk profile, to require additional forms and limits of insurance.

 

	
2.

	
Marine   Maintain, at its own cost and expense, carry and maintain at least the minimum insurance coverage set forth in this Annex K, in addition to such other risks as Agent may specify, placed with brokers, insurers and reinsurers of recognized responsibility, all being satisfactory to the Lenders.  Such insurance shall be written on such forms and with terms, conditions, limits and deductibles acceptable to the Lenders.  All insurance and/or reinsurance policies shall be assigned to Agent for the benefit of the Lenders pursuant to an Assignment of Insurances in form and substance acceptable to the Agent.

 

	
  

	
(a)

	
The Borrowers shall keep the Vessels insured against:

 

	
  

	
(i)

	
hull and machinery marine risks for named perils;

 

	
  

	
(ii)

	
war risks; and

 

	
  

	
(iii)

	
marine and war protection and indemnity risks and other third party liability risks (including, but not limited to, spillage, leakage and pollution).

 

	
  

	
(b)

	
The hull and machinery marine risks and war risks insurances described in Section 2(a)(i) and 2(a)(ii) of this Annex K, shall be written on a form acceptable to the Lenders and shall be effected in United States Dollars for US Vessels and Canadian Dollars for Cdn. Vessels in amounts not less than the greater of (X) the then current Fair Market Value  of the Vessels (based upon the most recent appraisal received by the Agent) at the time of loss and (Y) the amount of the Obligations plus the First Lien Obligations.  Such deductibles hereunder shall not be greater than US$800,000 for US Vessels or Cdn.$800,000 for Cdn. Vessels.

 

 

K-1

 

 

	
  

	
(c)

	
The protection and indemnity insurance described in Section 2(a)(iii) of this Annex  K shall be effected in United States Dollars in the full amount available (including but not limited to, spillage, leakage and pollution to the maximum amount available but in no case less than US$1,000,000,000) from a protection and indemnity club that is a member of the International Group Association (an "IGA Club").

 

	
  

	
(d)

	
Each of the policies of insurance described in Sections 2(a)(i) and (ii) of this Annex K covering hull and machinery marine risks and war risks shall:

 

	
  

	
(i)

	
name Agent, for itself and the benefit of the Lenders, as additional insured and Agent as loss payee in the case of the Vessels and provide that all losses will be paid in accordance with the terms of the loss payable clause endorsed onto the policies;

 

	
  

	
(ii)

	
if customarily allowed, provide that if such insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interests of Agent or the Lenders, or if such insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective against Agent and the Lenders for thirty (30) days (except seven (7) days in the case of war risks and allied perils insurance and ten (10) days in the case of non-payment of premium) after receipt by Agent of written notice from the insurers of such cancellation, change or lapse;

 

	
  

	
(iii)

	
provide that all payments by or on the behalf of the insurers to Agent shall be made without set-off, counterclaim, deduction or condition whatsoever;

 

	
  

	
(iv)

	
provide that such insurance is primary without right of contribution from any other insurance which may be available to Agent and the Lenders;

 

	
  

	
(v)

	
provide that the insurer's rights of subrogation against the Lenders, shall be waived;

 

	
  

	
(vi)

	
provide that Agent shall have the right but not the obligation to pay premiums but shall have no responsibility for premiums, commissions, calls, assessments or advancements;

 

	
  

	
(vii)

	
provide that Agent may make proof of loss and claim if a Borrower refuses; and

 

	
  

	
(viii)

	
provide a notice of assignment as shall be acceptable to Agent ("Notice of Assignment").

 

	
  

	
(e)

	
For marine and war protection and indemnity associations in which the Vessels are entered, the Borrowers shall ensure that Agent is provided with (i) a certificate of entry for each of the Vessels noting the interests of Agent and the Lenders ("Certificates of Entry") and (ii) a letter of undertaking, in such form as may from time to time be required by Agent ("Letter of Undertaking"), giving efficacy to the assignment(s) of insurance and/or reinsurance policies in favor of Agent, which shall include a loss payable clause in such form and substance as may from time to time be required by Agent ("Loss Payable Clause").  (The parties to this Agreement note that the provisions of such letter of undertaking as respects war protection and indemnity may not be available for issue depending on the manner of the war protection and indemnity placement sought by Agent.)

 

  

K-2  

  

 

	
  

	
(f)

	
The Borrowers shall be responsible for and be required to pay punctually all premiums, calls, contributions or other sums payable in respect of the insurances and to produce all relevant receipts when required by Agent.

 

	
  

	
(g)

	
The Borrowers shall arrange for the execution of such guarantees as may from time to time be required by a protection and indemnity or war risks association.

 

	
  

	
(h)

	
On the Closing Date, and at each policy renewal but not less than annually, the Borrowers shall provide to Agent (i) hull and machinery and war risks certificates of insurance/cover notes ("Cover Notes") as issued by the Borrowers' insurance brokers, and Certificates of Entry as issued by an IGA Club, and (iii) a broker’s letter of undertaking in the form described in Section 2(i) below.  Such Cover Notes shall identify the underwriters and their percentages, the type of insurance, the limits, deductibles, and term thereof, and shall specifically list the special provisions delineated for such insurance in Section 2(d) of this Annex K.  The Loss Payable Clause and Notice of Assignment shall also be made part of the Cover Notes.  Such Certificates of Entry and Letter of Undertaking shall be as described in Section 2(e) of this Annex K.

 

	
  

	
(i)

	
The Borrowers' hull and machinery and war risks broker's Letters of Undertaking shall include undertakings by the brokers that:

 

	
  

	
(i)

	
they will hold the instruments of insurance when issued, and any extensions, renewals or replacements of such instruments together with any subsequent instruments of insurance substituted with Agent's consent, and the benefit of the insurances, to the order of the Agent’s;

 

	
  

	
(ii)

	
should the approved brokers be authorized to collect claims from the insurers, to pay such amounts to the Agent as sole loss payee as arranged in the Loss Payable Clause;

 

	
  

	
(iii)

	
they will advise Agent immediately of any cancellation or any material changes which may be made to the terms of the insurances by the insurers (including any endorsements), and notify Agent not less than 30 days prior to the expiration of the insurance; in the event of their not having received notice of renewal instructions from the Borrowers or, in the event of their receiving instructions to renew, they will advise Agent promptly of the details and deliver to Agent a status report on the renewal negotiations within 10 days of expiry of the then applicable insurance, it being understood and agreed that the operation of any automatic policy conditions dealing with termination or cancellation shall override any undertakings given by the brokers;

 

  

K-3  

  

 

	
  

	
(iv)

	
subject to renewal instructions having been provided to the brokers no later than seven (7) days prior to the expiry of the previous insurances, they will produce to Agent certified copies of renewed certificates of insurance no later than five (5) Business Days prior to the expiry of the previous insurances;

 

	
  

	
(v)

	
they will advise Agent promptly of any default in the payment of any premium, commission, club call, assessment or advance required (whether for new insurance or for insurance extending, replacing or renewing existing insurance) and of any other act, omission or event of which any of such brokers has knowledge and which in its sole judgment could reasonably be expected to invalidate or render unenforceable, or cause the cancellation or lapse or prevent the renewal or extension, in whole or in part of, any insurance;

 

	
  

	
(vi)

	
they provide such evidence as Agent may reasonably require of the Borrowers' compliance with their obligations relating to insurance;

 

	
  

	
(vii)

	
subject to their Lien on the policies for premiums due in respect of the Vessels and their right of cancellation for default in the payment of such premiums, they undertake (i) to advise Agent immediately of any demand for overdue premiums from the insurer(s) and (ii) not to exercise such rights of cancellation by reason of non-payment of such premiums or other amounts without giving Agent fifteen (15) days prior notice in writing, either by letter or facsimile, and providing Agent with a reasonable amount of time to pay such overdue premiums;

 

	
  

	
(viii)

	
they shall state that such insurance is in compliance with the terms of Section 2 of this Annex K and to the best of the applicable broker's knowledge, is comparable to that carried by other experienced and responsible companies engaged in operating vessels similar to the Vessels; and

 

	
  

	
(ix)

	
they will arrange for the Loss Payable Clause and Notice of Assignment to be endorsed on all the appropriate policies.

 

	
  

	
(j)

	
The Borrowers shall procure, at the expense of the Borrowers, and solely for the Agent and Lenders’ own benefit (in form and substance satisfactory to Agent in its reasonable discretion consistent with industry standard practice, mortgagee’s interest insurance and if necessary, mortgagee’s additional perils—pollution policies, or some such other similar policies, providing for the indemnification of the Agent and the Lenders for loss under this Agreement resulting directly or indirectly from loss of or damage to any of the Vessels, which are covered by any of the Borrower’s insurance policies or protection and indemnity club entries, but in respect of which there is subsequent non-payment or reduced payment by the underwriters.

 

  

K-4  

  

 

	
3.

	
The Borrowers and the other Credit Parties shall:

 

	
  

	
(a)

	
not employ the Vessels otherwise than in conformity with any of the insurance policies;

 

	
  

	
(b)

	
not make any alteration in any terms of the insurance which have not been approved by the Lenders and not make, do, consent or agree to any act or omission which would or might render any instrument of insurance invalid, void, voidable or unenforceable;

 

	
  

	
(c)

	
not settle, compromise or abandon any claim under any of the insurances herein mentioned for compromised or arranged total loss without the prior written consent of the Lenders and shall, at its own cost and expense, have the duty and responsibility to make all proofs of loss and take all other steps necessary to collect from underwriters for any loss under the insurances with respect to the Vessels; and

 

	
  

	
(d)

	
provide that the Vessels will, at all times, be equipped and accredited with any required trading documentation and/or authorizations, including but not limited to, valid certification under the International Convention on Civil Liability for Oil Pollution Damage, valid US Coast Guard Certificate of Financial Responsibility (or such other State equivalent), vessel classification certificate, essential to legitimize the entry of the Vessels into the waters of any jurisdiction as may be necessary.

 

	
4.

	
Industry Practice  In the event that there is a material change in the generally accepted industry practice with regard to the insurance of vessels of a type similar to the Vessels, or new or increased risks are identified such that the insurance described in this Agreement is in the opinion of the Agent insufficient to protect its interests or the interests of the Lenders, the insurance requirements may be varied by the Agent to include such modifications or changes as may be reasonably necessary to ensure that the insurance provides comparable protection to that which it would have provided if the change in practice had not occurred, or to meet such new or increased risk.

 

	
5.

	
Mortgagee's Interest Insurance  Agent shall procure, at the expense of the Borrowers, and solely for Agent and Lenders' own benefit, mortgagee's interest insurance and if necessary, mortgagee's additional perils - pollution policies, or some such other similar policies, providing for the indemnification of Agent and the Lenders for loss under this Agreement resulting directly or indirectly from loss of or damage to any of the Vessels, which are covered by any of the Borrower's insurance policies or protection and indemnity club entries, but in respect of which there is subsequent non-payment or reduced payment by the underwriters.

 

  

K-5  

  

 

Exhibit 1.1(a)(i)

Reserved

 

  

1.1(a)(i)-1

  

Exhibit 1.1(a)(iii)

to

CREDIT AGREEMENT

 

Reserved.

 

 

 

1.1(a)(iii)-1

 

 

 

Exhibit 1.1(b)

to

CREDIT AGREEMENT

 

Reserved.

 

 

  

1.1(c)(iii)-1

  

 

 

EXHIBIT 1.1(c)(iii)

to

CREDIT AGREEMENT

 

Reserved.

 

 

  

1.1(b)-1

  

 

 

EXHIBIT 1.1(d)(i)

to

CREDIT AGREEMENT

 

Reserved.

 

 

  

1.1(d)-1

  

 

 

EXHIBIT 1.1(e)(i)

to

CREDIT AGREEMENT

 

Reserved.

 

 

  

 

  

 

EXHIBIT 1.1(e)(ii)

to

CREDIT AGREEMENT

 

FORM OF NOTICE OF CONVERSION/CONTINUATION - LIBOR

 

Reference is made to that certain Term Loan Credit Agreement, dated as of March 11, 2014, by and among Lower Lakes Towing Ltd., Grand River Navigation Company, Inc. ("US GR Borrower"), Black Creek Shipping Company, Inc. (“US BC Borrower”) the other Persons named therein as Credit Parties, Guggenheim Corporate Funding, LLC, as Agent on behalf of the Secured Parties, the other Persons party thereto from time to time as Lenders (including all annexes, exhibits and schedules thereto and as from time to time amended, restated, supplemented or otherwise modified, the "Credit Agreement").  Capitalized terms used herein without definition are so used as defined in the Credit Agreement or in Annex A thereto.

 

[US GR Borrower/US BC Borrower] hereby gives irrevocable notice, pursuant to Section 1.5(e)(ii) of the Credit Agreement, of its request to:

 

	
  

	
(a)

	
on [Date] convert US$___________ of the aggregate outstanding principal amount of the Term Loans made by way of a US Base Rate Loan into a LIBOR Loan having a LIBOR Period of [one] [two] [three] month(s) and ending on [Date];

 

	
  

	
(b)

	
on [Date] convert US$___________ of the aggregate outstanding principal amount of the Term Loans made by way of LIBOR Loan having a LIBOR Period ending on [Date], into a US Base Rate Loan; and

 

	
  

	
(c)

	
on [Date] continue US$___________ of the aggregate outstanding principal amount of the Term Loans made by way of LIBOR Loan having a LIBOR Period ending on [Date], as a LIBOR Loan having a LIBOR Period of [one] [two] [three] months and ending on [Date].

 

[US GR Borrower/US BC Borrower] hereby represents and warrants as of the date of the conversion or continuation requested herein all of the conditions contained in Section 2.1(i) and (j) of the Credit Agreement have been satisfied or waived by the Lenders on and as of the date hereof, and will continue to be satisfied on and as of the date of the conversion/continuation requested hereby, before and after giving effect thereto; and reaffirms the continuance of Agent's Liens, on behalf of the Secured Parties, pursuant to the Collateral Documents.

 

  

  

  

 

IN WITNESS WHEREOF, [US GR Borrower/US BC Borrower] has caused this Notice of Conversion/Continuation - LIBOR be executed and delivered by its duly authorized officer as of the date first set forth above.

  

	 	
[GRAND RIVER NAVIGATION COMPANY, INC./BLACK CREEK SHIPPING COMPANY, INC.]

 

By: _________________________________

       Name:

       Title:

 

By: _________________________________

       Name:

       Title:

 

  

  

 

 

 

 

 

Exhibit 1.1(f)(i)(G)

to

CREDIT AGREEMENT

 

Form of Lender Joinder

 

LENDER JOINDER AND ASSUMPTION AGREEMENT

 

This Lender Joinder and Assumption Agreement (the "Joinder") is made as of [________, 20__] (the "Effective Date") by [____________________________], (the "New Commitment Provider").

 

Background

 

Reference is made to the Term Loan Credit Agreement dated as of March 11, 2014 among Lower Lakes Towing Ltd., a Canadian corporation (“Towing”), Grand River Navigation Company, Inc., a Delaware corporation (“Grand River”), Black Creek Shipping Company, Inc., a Delaware corporation (“Black Creek”, and together with Towing and Grand River, the “Borrowers”, and each a “Borrower”), the other Persons named therein as Credit Parties, Guggenheim Corporate Funding, LLC, as collateral agent (“Agent”) and co-arranger, Barclays Capital Inc., as co-arranger, and the Persons signatory thereto from time to time as lenders (collectively, “Lenders” and each individually a “Lender”) (as the same has been and may hereafter be modified, supplemented, amended or restated the "Agreement").  Capitalized terms defined in the Agreement are used herein as defined therein.

 

Agreement

 

In consideration of Lenders' permitting the New Commitment Provider to become a Lender under the Agreement, the New Commitment Provider agrees that effective as of the Effective Date it shall become, and shall be deemed to be, a Lender under the Agreement and each of the other Loan Documents and agrees that from the Effective Date and so long as the New Commitment Provider remains a party to the Agreement, such New Commitment Provider shall assume the obligations of a Lender under and perform, comply with and be bound by each of the provisions of the Agreement which are stated to apply to a Lender and shall be entitled to the benefits, rights and remedies set forth therein and in each of the other Loan Documents.  The New Commitment Provider hereby acknowledges that it has heretofore received a true and correct copy of the Agreement (including any modifications thereof or supplements or waivers thereto) as in effect on the Effective Date.

 

The Commitments of the New Commitment Provider and each of the other Lenders are as set forth on updated Annex I attached to the Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

  

  

  

 

IN WITNESS WHEREOF, the New Commitment Provider has duly executed and delivered this Joinder as of the Effective Date.

 

	 	
[NEW COMMITMENT PROVIDER]

 

By: _____________________________

Name:

Title:

   

  

  

  

 

 

Exhibit 1.1(g)(ii)

to

CREDIT AGREEMENT

 

Reserved

 

 

  

1.1(g)(ii)-1

  

 

 

EXHIBIT 1.5(e)(ii)

to

CREDIT AGREEMENT

 

Reserved.

 

 

  

1.5(e)(iii)-1

  

 

EXHIBIT 1.5(e)(iii)

to

CREDIT AGREEMENT

 

Reserved.

 

 

  

1.5(e)(iii)-2

  

 

 

Exhibit 4.1(b)

Reserved.

 

 

  

6.14-1

  

 

 

Exhibit 6.14 – Form of Subordination Provisions

 

Form of Subordination Provisions.

 

The Company, for itself and its successors, covenants and agrees, and each holder of the Subordinated Indebtedness (as hereinafter defined), by such holder's acceptance thereof, likewise covenants and agrees, that the payment of the Subordinated Indebtedness is hereby expressly subordinated, to the extent and in the manner immediately hereinafter set forth, in right of payment to the prior payment in full in cash of all Senior Indebtedness (as hereinafter defined).  For all purposes hereof, a payment or distribution on account of the Subordinated Indebtedness may consist of cash, property or securities, by set-off or otherwise, and a payment or distribution on account of the Subordinated Indebtedness shall include, without limitation, any redemption, purchase or other acquisition of the Subordinated Indebtedness.  The subordination provisions herein set forth are made for the benefit of the holders of the Senior Indebtedness, and such holders may proceed to enforce such provisions.

 

"Subordinated Indebtedness" means all principal, interest, fees, indemnities and other amounts owing by the Company pursuant to or in connection with this Note.

 

"Senior Indebtedness" shall mean all indebtedness, obligations and liabilities of any and every kind and nature now existing or hereafter arising, contingent or otherwise, of the Company under, in connection with, or evidenced by, that certain Term Loan Credit Agreement dated as of March 11, 2014, among Lower Lakes Towing Ltd., Grand River Navigation Company, Inc. and Black Creek Shipping Company, Inc., as borrowers, the Company and the other Credit Parties signatory hereto, the lenders party thereto, Guggenheim Corporate Funding, LLC, as agent (the "Agent"), and Barclays Capital Inc., as Co-Arranger (as from time to time amended, modified, restated, refunded or replaced, the "Senior Credit Agreement"), including, without limitation, all principal, premium (if any), interest (including Post-Petition Interest, as hereafter defined), fees, costs, expenses and liabilities provided for therein, and including any obligations arising under Secured Rate Contracts (as defined in the Senior Credit Agreement), and any renewals, extensions, modifications and refundings of such indebtedness.  "Post-Petition Interest" shall mean interest accruing in respect of Senior Indebtedness after the commencement of any bankruptcy, insolvency, receivership or similar proceedings by or against the Company, at the rate applicable to such Senior Indebtedness pursuant to the Senior Credit Agreement, whether or not such interest is allowed as a claim enforceable against the Company in a bankruptcy case under Title 11 of the United States Code, and any other interest that would have accrued but for the commencement of such proceedings.

 

(a)           Distribution on Dissolution, Liquidation and Reorganization.  Upon any distribution of assets of the Company, upon any foreclosure, dissolution, winding up or liquidation of the Company, whether voluntary or involuntary, or upon any reorganization, readjustment, arrangement or similar proceeding relating to the Company, or any of its property, and whether in bankruptcy, insolvency or receivership proceedings or otherwise, or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company or otherwise or upon any exercise by the holders of the Senior Indebtedness (the "Senior Creditors") of any of their rights and remedies under any document evidencing Senior Indebtedness,

 

  

6.14-2

  

 

(i)           the holders of all Senior Indebtedness shall be entitled to receive payment in full in cash of the Senior Indebtedness before the holder or holders of the Subordinated Indebtedness are entitled to receive any payment with respect to the Subordinated Indebtedness; and

 

(ii)           any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities or by set-off or otherwise, to which the holder or holders of the Subordinated Indebtedness would be entitled except for the provisions hereof (except for any distribution of securities which are subordinated, to at least the same extent as the Subordinated Indebtedness, to the payment of all Senior Indebtedness or securities issued in exchange for Senior Indebtedness then outstanding ("Exchange Securities")) shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to Agent to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness, and, if any holder of Subordinated Indebtedness does not file a proper claim or proof of debt therefor prior to thirty (30) days before the expiration of the time to file such claim, then the Senior Creditors are hereby authorized and empowered to demand, sue for, collect and receive every such payment or distribution described herein.

 

(b)           Default Under Senior Indebtedness.  Unless the foregoing paragraph (a) shall be applicable, upon the occurrence and continuance of any event of default with respect to the Senior Indebtedness or of any event which constitutes, or after notice or lapse of time or both would constitute such an event of default, or if the making of any payment on account of the Subordinated Indebtedness would create such an event of default (an "Event of Default"), then (i) no payment or distribution of any assets of the Company of any kind or character, whether in cash, property or securities or by set-off or otherwise, shall be made by or on behalf of the Company on account of the Subordinated Indebtedness and (ii) no holder of Subordinated Indebtedness will take action to accelerate the Subordinated Indebtedness or commence, cause the commencement of, participate in or support any action or proceeding (whether at law or in equity) against the Company or any subsidiary to recover all or any part of the Subordinated Indebtedness or any action to commence or prosecute any bankruptcy or similar proceedings in respect of the Company or any subsidiary (unless Agent shall have agreed in writing in advance to, and shall have joined in, such proceeding), until the date such Event of Default shall have been cured or waived in writing or shall have ceased to exist and any acceleration of such Senior Indebtedness shall have been rescinded or annulled or such Senior Indebtedness shall have been paid in full in cash, after which (subject to the other provisions of this paragraph (b)) the Company shall resume making any and all required payments in respect of the Subordinated Indebtedness, including all accrued and unpaid payments.

 

(c)           Payment Remittance.  In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company, or any payment by or on behalf of the Company, of any kind or character, whether in cash, property or securities or by set-off or otherwise, prohibited by any of the foregoing paragraphs (a) or (b) shall be paid to or received by any holder of Subordinated Indebtedness, then and in such event such payment or distribution shall be held in trust for the benefit of the Senior Creditors and paid over and delivered forthwith to Agent, for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full in cash.

 

  

6.14-3

  

 

(d)           Subrogation.  If any amount payable in respect of the Subordinated Indebtedness is paid over to the Senior Creditors, then subject to the payment in full in cash of all Senior Indebtedness, the holder or holders of the Subordinated Indebtedness shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to Senior Indebtedness until the principal of and interest on the Subordinated Indebtedness shall be paid in full and, for the purposes of such subrogation, no such payments or distributions to the Senior Creditors of cash, property or securities otherwise distributable to the holder or holders of the Subordinated Indebtedness shall, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holder or holders of the Subordinated Indebtedness, be deemed to be a payment by the Company to or on account of Senior Indebtedness.

 

(e)           Delivery of Instruments; Notice from the Company.  If any holder of Subordinated Indebtedness does not file a proper claim or proof of debt in the form required in any proceeding referred to above prior to thirty (30) days before the expiration of the time to file such claim in such proceeding, then the holder of any such Senior Indebtedness shall be hereby irrevocably appointed the agent and attorney-in-fact (in its own name or in the name of any holder of any Subordinated Indebtedness or otherwise), but shall have no obligation, to execute, verify, deliver and file any such proofs of claim, consents, assignments or other instruments for or on behalf of such holder.

 

Each holder of the Subordinated Indebtedness agrees that, while it shall retain the right to vote its claim and otherwise act in any bankruptcy, insolvency or similar proceedings related to the Company (including, without limitation, the right to vote to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension), such holder will not take any acts or vote in any way so as to contest the enforceability of the subordination provisions set forth herein.

 

(f)           Payments Permitted.  Nothing contained herein shall affect the obligation of the Company to make, or prevent the Company from making, at any time except as provided in paragraph (a) or (b) above, payments of interest on the Subordinated Indebtedness.

 

(g)           Notice of Certain Events.  The Company shall give prompt written notice to the holders of the Subordinated Indebtedness and the Senior Creditors of any dissolution, winding up, liquidation, reorganization, readjustment, arrangement or similar proceeding, assignment for the benefit of creditors, or any marshalling of assets and liabilities, in respect of the Company, and shall also give prompt written notice to each such person of any event or condition which, pursuant to the subordination provisions set forth herein, prevents payment by the Company on account of the Subordinated Indebtedness.

 

(h)           Reliance re Identification of Persons.  Upon any distribution of assets of the Company or payments by or on behalf of the Company referred to herein, the holders of the Subordinated Indebtedness shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in paragraph (a) hereof are pending and upon a certificate of the debtor in possession, bankruptcy trustee, liquidating trustee or agent or other Person making any distribution to the holders of the Subordinated Indebtedness for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, and all other facts pertinent thereto.

 

  

6.14-4

  

 

(i)           Reliance on Subordination.  Each holder of the Subordinated Indebtedness by its acceptance hereof acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each Senior Creditor to acquire and continue to hold the Senior Indebtedness and such holder of the Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold such Senior Indebtedness and shall be deemed a third party beneficiary of such provisions.

 

(j)           Waiver and Consent.  Each holder of the Subordinated Indebtedness waives any and all notice of the acceptance of these provisions or of the creation, renewal, extension or accrual, now or at any time in the future, of any Senior Indebtedness or of the reliance of the holders of the Senior Indebtedness on these provisions.  Each holder of the Subordinated Indebtedness acknowledges and agrees that (i) the subordination  provisions set forth herein shall be specifically enforceable against such Persons by the holders of the Senior Indebtedness, and (ii) without notice to or further assent by it, the Senior Indebtedness may from time to time, in whole or in part, be renewed, extended, increased, refunded or released by the holders thereof, as they may deem advisable, that the loan agreements and any other instruments or documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, that any collateral security for any such Senior Indebtedness may from time to time, in whole or in part, be exchanged, sold, or surrendered by the holders thereof, as they may deem advisable, and that such holders may take any other action they may deem necessary or appropriate in connection with the Senior Indebtedness, all without in any manner or to any extent impairing or affecting the obligations of the Company to the holders of the Subordinated Indebtedness.

 

(k)           Subordination Unaffected by Certain Events.  The rights set forth herein of the holders of the Senior Indebtedness as against each holder of the Subordinated Indebtedness shall remain in full force and effect without regard to, and shall not be impaired or affected by:

 

(i)           any act or failure to act on the part of the Company; or

 

(ii)           any extension or indulgence in respect of any payment or prepayment of the Senior Indebtedness or any part thereof or in respect of any other amount payable to any holder of the Senior Indebtedness; or

 

(iii)           any amendment, modification or waiver of, or addition or supplement to, or deletion for, or compromise, release, consent or other action in respect of, any of the terms of any Senior Indebtedness or any other agreement which may be made relating to any Senior Indebtedness; or

 

(iv)           any exercise or nonexercise by any holder of Senior Indebtedness of any right, power, privilege or remedy under or in respect of such Senior Indebtedness or the Subordinated Indebtedness or any waiver of any such right, power, privilege or remedy or any default in respect of such Senior Indebtedness or the Subordinated Indebtedness, or any receipt by any holder of Senior Indebtedness of any security, or any failure by such holder to perfect a security interest in, or any release by such holder of, any security for the payment of such Senior Indebtedness; or

 

  

6.14-5

  

 

(v)           any merger or consolidation of the Company or any of its subsidiaries into or with any of its subsidiaries or into or with any other Person, or any sale, lease or transfer of any or all of the assets of the Company or any of its subsidiaries to any other Person; or

 

(vi)           the absence of any notice to, or knowledge by, any holder of the Subordinated Indebtedness of the existence or occurrence of any of the matters or events set forth in the foregoing clauses (i) through (v).

 

(l)           Reinstatement of Subordination.  The obligations of each holder of the Subordinated Indebtedness under the subordination provisions set forth herein shall continue to be effective, or be reinstated, as the case may be, as to any payment in respect of any Senior Indebtedness that is rescinded or must otherwise be returned by the holder of such Senior Indebtedness upon the occurrence or as a result of any proceeding, all as though such payment had not been made.

 

(m)           Annulment of Acceleration.  Any Event of Default under Section _____ [payment default] above arising out of the Company's observance of its obligations hereunder shall be deemed waived, and any acceleration of the Subordinated Indebtedness predicated solely on such Event of Default shall be automatically rescinded, if, within three (3) Business Days after the restriction on payment of Subordinated Indebtedness has expired or been terminated, the Company has made payment in full of all past due amounts (excluding amounts due solely as a result of acceleration) and no other Event of Default is then continuing.

 

It is understood that the provisions set forth herein are and are intended solely for the purpose of defining the relative rights of the holder or holders of the Subordinated Indebtedness, on the one hand, and the holders of Senior Indebtedness, on the other hand.  Nothing contained herein is intended to or shall impair, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holder or holders of the Subordinated Indebtedness, the obligation of the Company, which is unconditional and absolute, to pay to the holder or holders of the Subordinated Indebtedness the principal of and interest on the Subordinated Indebtedness as and when the same shall become due and payable in accordance with its terms, or to affect the relative rights of the holder or holders of the Subordinated Indebtedness and creditors of the Company other than the holders of Senior Indebtedness.

 

  

6.14-6

  

 

Exhibit 9.1(a) – Form of Assignment Agreement

 

ASSIGNMENT AGREEMENT

 

This Assignment Agreement (this "Agreement") is made as of ____________, 20__ between __________________________________ ("Assignor Lender") and ________________________ ("Assignee Lender") and acknowledged and consented to by GUGGENHEIM CORPORATE FUNDING, LLC, as agent ("Agent").  All capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings set forth in Annex A to the Credit Agreement as hereinafter defined.

 

[DRAFTING NOTE:  THE TERMS OF THIS AGREEMENT MAY VARY SUBSTANTIALLY FOR ASSIGNMENTS OF 100% OF A LENDER'S LOANS AS OPPOSED TO PARTIAL ASSIGNMENT.]

 

RECITALS

 

WHEREAS Lower Lakes Towing Ltd. ("Lower Lakes"), Grand River Navigation Company, Inc. ("Grand River") and Black Creek Shipping Company, Inc. (“Black Creek”), as borrowers ("Borrowers"), the other Credit Parties thereunder from time to time, Barclays Capital Inc., the other Persons signatory thereto as Lenders from time to time, and Agent entered into a Term Loan Credit Agreement dated as of March 11, 2014 (as amended, restated, supplemented and otherwise modified from time to time, the "Credit Agreement") pursuant to which Assignor Lender has agreed to make certain Loans to Borrowers.

 

WHEREAS Assignor Lender desires to assign to Assignee Lender [all/a portion] of its interest in the Loans and the Collateral and to delegate to Assignee Lender [all/a portion] of its Loans and other duties with respect to the Loans and the Collateral.

 

WHEREAS Assignee Lender desires to become a Lender under the Credit Agreement and to accept such assignment and delegation from Assignor Lender.

 

WHEREAS Assignee Lender desires to appoint Agent to serve as Agent for Assignee Lender under the Credit Agreement.

 

FOR VALUE RECEIVED, Assignor Lender and Assignee Lender agree as follows:

 

SECTION 1  ASSIGNMENT, DELEGATION AND ACCEPTANCE

 

	
1.1

	
Assignment

 

Assignor Lender hereby transfers and assigns to Assignee Lender, without recourse and without representations or warranties of any kind (except as set forth in [Section 3.2]), [all/such percentage] of Assignor Lender's right, title, and interest in the [Cdn. Term Loan], [Closing Date/Incremental US GR Term Loan], [Closing Date/ Incremental US BC Term Loan], [Loans], the Loan Documents and the Collateral as will result in Assignee Lender having, as of the Effective Date (as hereinafter defined), a Pro Rata Share thereof, as follows:

 

  

9.1(a)-1

  

 

	
Assignee

Lender's Loans

	
Principal Amount

	
Pro Rata Share

	
Cdn. Term/Incremental Loan

	
US$____________

	
____%

	
US GR Term/Incremental Loan

	
US$____________

	
____%

	
US BC Term/Incremental Loan

	
US$____________

	
____%

 

	
1.2

	
Acceptance by Assignee

 

By its execution of this Agreement, Assignee Lender hereby irrevocably purchases, assumes and accepts such assignment and delegation and agrees to be a Lender with respect to the delegated interest under the Loan Documents and to be bound by the terms and conditions thereof.  By its execution of this Agreement, Assignor Lender agrees, to the extent provided herein, to relinquish its rights and be released from its obligations and duties under the Credit Agreement.

 

	
1.3

	
Effective Date

 

Such assignment and delegation by Assignor Lender and acceptance by Assignee Lender will be effective, and Assignee Lender will become a Lender under the Loan Documents, as of [the date of this Agreement] ("Effective Date") and upon payment of the Assigned Amount and the Assignment Fee (as each term is defined below).  Interest and Fees accrued prior to the Effective Date are for the account of Assignor Lender, and interest and Fees accrued from and after the Effective Date are for the account of Assignee Lender.

 

SECTION 2  INITIAL PAYMENT

 

	
2.1

	
Payment of the Assigned Amount

 

Assignee Lender will pay to Assignor Lender, for value not later than 12:00 noon on the Effective Date, an amount equal to its Pro Rata Share of the then outstanding principal amount of the Loans, as set forth above in Section 1.1 together with accrued interest, fees and other amounts as set forth on Schedule 2.1 (the "Assigned Amount").

 

	
2.2

	
Payment of Assignment Fee

 

Assignor Lender and/or Assignee Lender will pay to Agent, for its own account, for value not later than 12:00 noon (New York time) on the Effective Date, the assignment fee in the amount of US$3,500 (the "Assignment Fee"), as required pursuant to Section 9.1(a) of the Credit Agreement.

 

	
2.3

	
Execution and Delivery of Notes.

 

Following payment of the Assigned Amount and the Assignment Fee, Assignor Lender will deliver to Agent the Notes previously delivered to Assignor Lender for redelivery to the applicable Borrower and Agent will obtain from the applicable Borrower for delivery to [Assignor Lender and] Assignee Lender, new executed Notes (replacing the Notes delivered to the applicable Borrower which shall be cancelled) evidencing Assignee Lender's [and Assignor Lender's respective] Pro Rata Share[s] in the Loans after giving effect to the assignment described in Section 1.  Each new Note will be issued in the aggregate maximum principal amount of the [applicable] Commitment [of the Lender to whom such Note is issued] OR [the Assignee Lender].

 

  

9.1(a)-2

  

 

SECTION 3  REPRESENTATIONS, WARRANTIES AND COVENANTS

 

	
3.1

	
Assignee Lender's Representations, Warranties and Covenants

 

Assignee Lender hereby represents, warrants, and covenants to Assignor Lender and Agent the following:

 

	
(1)

	
this Agreement is a legal, valid, and binding agreement of Assignee Lender, enforceable against Assignee Lender according to its terms;

 

	
(2)

	
the execution and performance by Assignee Lender of its duties and obligations under this Agreement and the Loan Documents will not require any registration with, notice to, or consent or approval by any Governmental Authority;

 

	
(3)

	
Assignee Lender is familiar with transactions of the kind and scope reflected in the Loan Documents and in this Agreement;

 

	
(4)

	
Assignee Lender has made its own independent investigation and appraisal of the financial condition and affairs of each Credit Party, has conducted its own evaluation of the Loans, the Loan Documents and each Credit Party's creditworthiness, has made its decision to become a Lender to the Borrowers under the Credit Agreement independently and without reliance upon Assignor Lender or Agent, and will continue to do so;

 

	
(5)

	
Assignee Lender is entering into this Agreement in the ordinary course of its business, and is acquiring its interest in the Loans for its own account and not with a view to or for sale in connection with any subsequent distribution; provided, however, that at all times the distribution of Assignee Lender's property shall, subject to the terms of the Credit Agreement, be and remain within its control; and

 

	
(6)

	
As of the Effective Date, Assignee Lender, (i) is [not] subject to capital adequacy or similar requirements under Section 1.16(b) of the Credit Agreement, (ii) is [not] a non-resident for purposes of Part XIII of the ITA or is [not] a non-resident of the United States for purposes of the Revenue Code (iii) does [not] require the payment of any amount on account of increased costs under Section 1.16(b) of the Credit Agreement, [(iv) is not unable to fund LIBOR Loans under Section 1.15 of the Credit Agreement] and Assignee Lender will indemnify Agent from and against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, or expenses that result from any inaccuracy in the foregoing; and [NOTE: THE REPS IN CLAUSE (ii) SHOULD BE DELETED IN THE EVENT THIS FORM IS USED TO EFFECT AN ACTUAL ASSIGNMENT AT A TIME WHEN AN EVENT OF DEFAULT IS CONTINUING UNDER THE CREDIT AGREEMENT.]

 

  

9.1(a)-3

  

 

	
3.2

	
Assignor Lender's Representations, Warranties and Covenants

 

Assignor Lender hereby represents, warrants and covenants to Assignee Lender the following:

 

	
(1)

	
Assignor Lender is the legal and beneficial owner of the Assigned Amount;

 

	
(2)

	
this Agreement is a legal, valid and binding agreement of Assignor Lender, enforceable against Assignor Lender according to its terms;

 

	
(3)

	
the execution and performance by Assignor Lender of its duties and obligations under this Agreement and the Loan Documents will not require any registration with, notice to or consent or approval by any Governmental Authority;

 

	
(4)

	
Assignor Lender has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to fulfill the obligations hereunder and to consummate the transactions contemplated hereby;

 

	
(5)

	
Assignor Lender is the legal and beneficial owner of the interests being assigned hereby, free and clear of any adverse claim, lien, encumbrance, security interest, restriction on transfer, purchase option, call or similar right of a third party; and

 

	
(6)

	
this Assignment by Assignor Lender to Assignee Lender complies, in all material respects, with the terms of the Loan Documents.

 

SECTION 4  LIMITATIONS OF LIABILITY

 

Neither Assignor Lender (except as provided in Section 3.2) nor Agent makes any representations or warranties of any kind, nor assumes any responsibility or liability whatsoever, with regard to (a) the Loan Documents or any other document or instrument furnished pursuant thereto or the Loans or other Obligations, (b) the creation, validity, genuineness, enforceability, sufficiency, value or collectibility of any of them, (c) the amount, value or existence of the Collateral,  (d) the perfection or priority of any Lien upon the Collateral, or (e) the financial condition of any Credit Party or other obligor or the performance or observance by any Credit Party of its obligations under any of the Loan Documents.  Neither Assignor Lender nor Agent has or will have any duty, either initially or on a continuing basis, to make any investigation, evaluation, appraisal of, or any responsibility or liability with respect to the accuracy or completeness of, any information provided to Assignee Lender which has been provided to Assignor Lender or Agent by any Credit Party.  Nothing in this Agreement or in the Loan Documents shall impose upon the Assignor Lender or Agent any fiduciary relationship in respect of the Assignee Lender.

 

SECTION 5  FAILURE TO ENFORCE

 

No failure or delay on the part of Agent or Assignor Lender in the exercise of any power, right, or privilege hereunder or under any Loan Document will impair such power, right, or privilege or be construed to be a waiver of any default or acquiescence therein.  No single or partial exercise of any such power, right, or privilege will preclude further exercise thereof or of any other right, power, or privilege.  All rights and remedies existing under this Agreement are cumulative with, and not exclusive of, any rights or remedies otherwise available.

 

  

9.1(a)-4

  

 

SECTION 6  NOTICES

 

Unless otherwise specifically provided herein, any notice or other communication required or permitted to be given will be in writing and addressed to the respective party as set forth below its signature hereunder, or to such other address as the party may designate in writing to the other.

 

SECTION 7  AMENDMENTS AND WAIVERS

 

No amendment, modification, termination, or waiver of any provision of this Agreement will be effective without the written concurrence of Assignor Lender, Agent and Assignee Lender.

 

SECTION 8  SEVERABILITY

 

Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law.  In the event any provision of this Agreement is or is held to be invalid, illegal, or unenforceable under applicable law, such provision will be ineffective only to the extent of such invalidity, illegality, or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.  In addition, in the event any provision of or obligation under this Agreement is or is held to be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality, and enforceability of the remaining provisions or obligations in any other jurisdictions will not in any way be affected or impaired thereby.

 

SECTION 9  SECTION TITLES

 

Section and Subsection titles in this Agreement are included for convenience of reference only, do not constitute a part of this Agreement for any other purpose, and have no substantive effect.

 

SECTION 10  SUCCESSORS AND ASSIGNS

 

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

SECTION 11  APPLICABLE LAW

 

This Agreement will be construed in accordance with and governed by the laws of the State of New York applicable to contracts made and performed in that State.

 

SECTION 12  COUNTERPARTS

 

This Agreement and any amendments, waivers, consents, or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, will be deemed an original and all of which shall together constitute one and the same instrument.

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

 

  

9.1(a)-5

  

 

	
ASSIGNEE LENDER:

	  	
ASSIGNOR LENDER:

	  	  	  	  	  
	
By:

	  	  	
By:

	  
	  	
Name:

	  	  	
Name:

	  	
Title:

	  	  	
Title:

 

 

	
Notice Address:

	  	
Notice Address:

	  	  	  
	  	  	  

 

 

ACKNOWLEDGED AND CONSENTED TO:

 

	
GUGGENHEIM CORPORATE FUNDING, LLC, as Agent

	 	 	 
	
By:

	  	 
	  	
Name:

	 
	  	
Duly Authorized Signatory

	 

 

 

9.1(a)-6Unassociated Document

 

INTERCREDITOR AGREEMENT

 

INTERCREDITOR AGREEMENT (this “Agreement”) dated as of March 27, 2015, by and between the First Lien Agent (such term, and each other term used but not defined in this preamble or in the recitals to this Agreement, having the meaning assigned thereto in Section 1), for itself and on behalf of the other First Lien Creditors, and the Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, and acknowledged and agreed by the Borrowers and the other Obligors.

 

RECITALS:

 

WHEREAS, Lower Lakes Towing Ltd., a Canadian corporation (“Lower Lakes”), Lower Lakes Transportation Company, a Delaware corporation (“LLTC”), Grand River Navigation Company, Inc, a Delaware corporation (“Grand River”), and Black Creek Shipping Company, Inc., a Delaware corporation (“Black Creek”) (each of Lower Lakes, LLTC, Grand River and Black Creek, together with their successors and assigns, including any receiver, trustee or debtor-in-possession, a “Borrower,” and collectively, the “Borrowers”), the other Credit Parties (as defined therein) (together with their successors and assigns, including any receiver, trustee or debtor-in-possession, the “Credit Parties”), the Lenders (as defined therein) (together with their successors and assigns (other than any Second Lien Creditor as a Purchasing Creditor under Section 5), including any successor pursuant to any initial or subsequent Refinancing of a First Lien Loan Agreement, the “First Lien Lenders”) and the First Lien Agent are, simultaneously with the execution and delivery of this Agreement, entering into a Credit Agreement dated as of the date hereof (as amended or otherwise modified from time to time, the “Initial First Lien Loan Agreement”), pursuant to which the First Lien Lenders have made and will from time to time make loans and provide other financial accommodations to the Borrowers;

 

WHEREAS, the Borrowers, the other Credit Parties, the Lenders (as defined therein) (together with their successors and assigns, including any successor pursuant to any initial or subsequent Refinancing of a Second Lien Loan Agreement, and the Second Lien Agent, the “Second Lien Creditors”), and the Second Lien Agent have entered into a Second Lien Loan Agreement dated as of March 11, 2014 (as amended or otherwise modified from time to time, the “Initial Second Lien Loan Agreement”), pursuant to which the Second Lien Lenders have made certain loans to the Borrowers;

 

WHEREAS, the Borrowers and the other Obligors have granted to the First Lien Agent, for the benefit of the First Lien Creditors, a Lien on substantially all of their assets, all as more particularly described in the First Lien Documents;

 

WHEREAS, the Borrowers and the other Obligors have granted to the Second Lien Agent, for the benefit of the Second Lien Creditors, a Lien on substantially all of their assets, all as more particularly described in the Second Lien Documents;

 

WHEREAS, the Second Lien Agent, on behalf of the Second Lien Creditors, and the First Lien Agent, on behalf of the First Lien Creditors, wish to set forth their agreement as to certain of their respective rights and obligations with respect to the assets of the Borrowers and the other Obligors and their understanding relative to their respective positions in certain assets of the Borrowers and the other Obligors; and

 

  

  

  

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

 

Section 1.               Definitions.

 

1.1           General Terms.  As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and the plural forms of the terms defined:

 

“Affiliate”: with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the Voting Stock of such Person or (b) the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

 

“Agreement”: as defined in the preamble hereof.

 

“Assignment”: as defined in Section 5.1.

 

“Bankruptcy Code”: the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.).

 

“Bankruptcy Law”: the Bankruptcy Code, the BIA, the CCAA and any other federal, state, provincial or foreign bankruptcy, winding up, reorganization, insolvency, receivership or similar law affecting creditors’ rights or any other law pursuant to which proceedings may be commenced seeking or imposing any stay, reorganization, arrangement, composition or readjustment of obligations or indebtedness or seeking any arrest or sale of a vessel.

 

“BIA”: the Bankruptcy and Insolvency Act (Canada).

 

“Borrower” and “Borrowers”: as defined in the recitals hereof.

 

“Business Day”: any day of the year that is not a Saturday, a Sunday or a day on which banks are required or authorized to close in New York City.

 

“Cash Management Agreement”: an agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer, or other cash management arrangements, to which an Obligor is a party and a First Lien Lender or an Affiliate of such First Lien Lender is the applicable counterparty at the date hereof or at the time it enters into such agreement (even if such counterparty later ceases to be such a First Lien Lender or Affiliate).

 

“CCAA” means the Companies Creditors’ Arrangement Act (Canada).

 

  

2

  

 

“Cdn. Dollars” shall mean the lawful currency of Canada.

 

“Collateral”: all property and interests in property and proceeds thereof now owned or hereafter acquired by any Obligor in or upon which a Lien (including any Liens granted in an Insolvency Proceeding) is granted or required or purported to be granted by such Obligor in favor of any Secured Creditor as security for all or any part of the Obligations whether or not such Lien is valid, perfected or enforceable.

 

“Credit Party”: as defined in the recitals hereof.

 

“Defaulting Creditor”: as defined in Section 5.6(c).

 

“DIP Financing”: the obtaining of credit or incurring debt secured by Liens on all or any portion of the Collateral pursuant to section 364 of the Bankruptcy Code, section 11.2 of the CCAA or any other analogous Bankruptcy Law.

 

“DIP Liens”: as defined in Section 6.2.

 

“Discharge of Excess First Lien Obligations”: (a) actual payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of an Insolvency Proceeding, whether or not such interest would be allowed or allowable in such proceeding) on all outstanding Indebtedness included in the Excess First Lien Obligations, (b) actual payment in full in cash of all other Excess First Lien Obligations (including indemnification obligations in respect of known contingencies and fees, costs or charges accruing on or after the commencement of an Insolvency Proceeding, whether or not such fees, costs or charges would be allowed or allowable in the proceeding) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than contingent indemnification Obligations for which no claim or demand for payment, whether oral or written, has been made at such time), (c) termination or expiration of all commitments to extend credit that would be Excess First Lien Obligations, and (d) no Person has any further right to obtain any loans or other extensions of credit under the documents relating to such Excess First Lien Obligations.

 

“Discharge of First Lien Obligations”: (a) actual payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of an Insolvency Proceeding, whether or not such interest would be allowed or allowable in such proceeding) on all outstanding Indebtedness (as defined in the First Lien Loan Agreement) included in the First Lien Obligations, (b) actual payment or, in the case of contingent obligations, cash collateralization in full in cash of all other First Lien Obligations (including, without duplication of clause (d) below, First Lien Letter of Credit Obligations and including indemnification obligations in respect of known contingencies and fees, costs or charges accruing on or after the commencement of an Insolvency Proceeding, whether or not such fees, costs or charges would be allowed or allowable in the proceeding) that are due and payable or otherwise accrued and owing at or prior to the time the amounts referenced in clause (a) above  are paid (other than contingent indemnification Obligations for which no claim or demand for payment, whether oral or written, has been made at such time) , (c) termination or expiration of all commitments to extend credit that would be First Lien Obligations (other than pursuant to Cash Management Agreements or Secured Hedge Agreements, in each case as to which satisfactory arrangements have been made with the applicable party in interest), (d) termination and return for cancellation or cash collateralization (in an amount and manner (including by means of back to back letters of credit) required by the First Lien Loan Documents or otherwise reasonably satisfactory to the First Lien Agent, but in no event greater than 105% of the aggregate undrawn face amount) of all First Lien Letters of Credit, and (e) no Person has any further right to obtain any loans, First Lien Letters of Credit, bankers’ acceptances, or other extensions of credit under the documents relating to such First Lien Obligations.

 

  

3

  

 

“Discharge of Second Lien Obligations”: (a) actual payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of an Insolvency Proceeding, whether or not such interest would be allowed or allowable in such proceeding) on all outstanding Indebtedness included in the Second Lien Obligations, (b) actual payment in full in cash of all other Second Lien Obligations (including indemnification obligations in respect of known contingencies and fees, costs or charges accruing on or after the commencement of an Insolvency Proceeding, whether or not such fees, costs or charges would be allowed or allowable in the proceeding) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than contingent indemnification Obligations for which no claim or demand for payment, whether oral or written, has been made at such time), (c) termination or expiration of all commitments to extend credit that would be Second Lien Obligations, and (d) no Person has any further right to obtain any loans or other extensions of credit under the documents relating to such Second Lien Obligations.

 

“Disposition”: any sale, lease, exchange, transfer or other disposition, and “Dispose” and “Disposed of” shall have correlative meanings.

 

“Distribution”: with respect to any indebtedness or obligation, (a) any payment or distribution by any Person of cash, securities or other property, by setoff or otherwise, on account of such indebtedness or obligation or (b) any redemption, purchase or other acquisition of such indebtedness or obligation by any Person.

 

“Documents”: the First Lien Documents and the Second Lien Documents, or any of them.

 

“Dollars” or “$” shall mean the lawful currency of the United States of America.

 

“Enforcement Action”: (a) to take any action to foreclose, execute, arrest, levy, or collect on, take possession or control (by set off or otherwise) of, sell or otherwise realize upon (judicially or non-judicially), or lease, license, or otherwise dispose of (whether publicly or privately), any Collateral, or otherwise exercise or enforce remedial rights with respect to any Collateral under the First Lien Documents or the Second Lien Documents (including by way of set-off, recoupment, notification of a public or private sale or other disposition pursuant to the UCC, PPSA or other applicable law, notification to account debtors, notification to depositary banks under deposit account control agreements, securities intermediaries under securities accounts or commodities intermediaries under commodities accounts, or exercise of rights under landlord consents, bailee waivers or similar agreements, if applicable, but excluding the execution and delivery of documentation solely to obtain control (as defined in Section 3.3(a)) over deposit accounts or securities accounts to the extent permitted by Section 3.3), (b) to, or to enter into (or, if the First Lien Agent consents thereto after the occurrence and during the continuation of an Event of Default, any Obligor enters into) any agreement in order to have a third party to, solicit bids to effect the liquidation or disposition of Collateral or to engage or retain sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers, or other third Persons for the purposes of  marketing, promoting, or selling any Collateral, (c) to receive a transfer of any Collateral (other than a payment in respect of Obligations initiated by a Borrower while no Event of Default is continuing) in satisfaction of Indebtedness or any other Obligation secured thereby or make a credit bid for the purpose of doing so (whether or not in an Insolvency Proceeding), (d) to notify account debtors to make payments to any Secured Creditor or its agents, (e) to otherwise enforce or take any action to enforce a Lien or to exercise another right or remedy, as a secured creditor or an unsecured creditor, pertaining to the Collateral at law, in equity, or pursuant to the First Lien Documents or Second Lien Documents (including  exercising voting rights in respect of equity or debt interests comprising any of the Collateral), (f) to effect the Disposition of any Collateral by any Obligor after the occurrence and during the continuation of an Event of Default, (g) to take any other remedial actions as a Secured Creditor against any Collateral, (h) to commence any legal proceedings or actions against or with respect to any Obligor or any of such Obligor’s assets for the purpose of effecting or facilitating any of the actions described in clauses (a) through (g) above, or (i) to commence any Insolvency Proceeding against any Obligor.

 

  

4

  

 

“Equivalent Amount”: 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 First Lien Agent and the Second Lien Agent.

 

“Event of Default”: each “Event of Default” or similar term, as such term is defined in any First Lien Document or any Second Lien Document.

 

“Excess First Lien Obligations”: at any time, the aggregate outstanding principal amount of First Lien Obligations that is in excess of Maximum First Lien Principal Amount.

 

“Exigent Circumstances”: circumstances that the First Lien Agent reasonably believes render necessary or appropriate an Enforcement Action to prevent or mitigate the destruction of, physical harm to, impairment of or decrease in value of any Collateral or the rights and interests of the First Lien Creditors therein (including without limitation any loss of priority of the Liens of the First Lien Creditors and any impairment of rights arising from any movement of any item of Collateral).

 

“Final Order”: an order of the bankruptcy court or any other court of competent jurisdiction as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for reargument or rehearing shall then be pending, or, in the event that an appeal, writ of certiorari, or reargument or rehearing thereof has been filed or sought, such order of the bankruptcy court or other court of competent jurisdiction shall have been affirmed by the highest court to which such order was appealed, or from which certiorari, reargument or rehearing was sought, and the time to take any further appeal, petition for certiorari or move for reargument or rehearing shall have expired; provided that the possibility that a motion under Rule 59 or Rule 60 of the U.S. Federal Rules of Civil Procedure or any analogous rule under the U.S. Federal Rules of Bankruptcy Procedure or other applicable rules of civil procedure in the relevant jurisdiction, may be filed with respect to such order shall not cause such order not to be a Final Order.

 

  

5

  

 

“First Lien Agent”: Bank of America, N.A. in its capacity as agent for the First Lien Creditors under the First Lien Documents, and its successors and assigns in such capacity (including any New First Lien Agent that is deemed to be the First Lien Agent pursuant to Section 4.5).

 

“First Lien Collateral Documents”: the “Collateral Documents” as defined in the First Lien Loan Agreement, and any other documents or instruments granting or purporting to grant a Lien on real or personal property to secure a First Lien Obligation or granting rights or remedies with respect to such Liens.

 

 “First Lien Creditors”: the First Lien Agent, the First Lien Lenders and the other Persons from time to time holding First Lien Obligations.

 

“First Lien Documents”: the First Lien Loan Agreement, all Loan Documents (as such term is defined in the First Lien Loan Agreement) and all other agreements, instruments and other documents at any time executed or delivered by any Obligor or any other Person with, to or in favor of the First Lien Agent or any other First Lien Creditor in connection therewith or related thereto, including such documents evidencing initial and subsequent Refinancings of the First Lien Obligations, in each case, as the same may be amended, amended and restated, supplemented, modified, replaced, substituted or renewed from time to time.

 

“First Lien Lenders”: as defined in the recitals hereto.

 

“First Lien Letter of Credit”: any letter of credit issued by a First Lien Creditor or another issuer pursuant to the First Lien Documents.

 

“First Lien Letter of Credit Obligations”: all outstanding Obligations incurred by or owing to the First Lien Creditors or another issuer pursuant to the First Lien Documents, whether direct or indirect, contingent or otherwise, due or not due, in connection with First Lien Letters of Credit or the purchase of a participation with respect to First Lien Letters of Credit, including any unpaid reimbursement obligations in respect thereof and obligations to provide cash collateral in respect of First Lien Letters of Credit.  The amount of such First Lien Letter of Credit Obligations shall equal the maximum amount, without duplication, that may be payable at any time to the issuer and the First Lien Creditors pursuant thereto.

 

“First Lien Loan Agreement”: (a) the Initial First Lien Loan Agreement and (b) each loan or credit agreement evidencing any replacement, substitution, renewal, or initial or subsequent Refinancing of the Obligations under the Initial First Lien Loan Agreement, in each case, as the same may be amended, amended and restated, supplemented, modified, replaced, substituted or renewed from time to time or Refinanced in accordance with the terms of this Agreement.

 

  

6

  

 

“First Lien Loans”: any loans or advances outstanding under the First Lien Documents.

 

“First Lien Obligations”: all Obligations of the Obligors under (a) the First Lien Loan Agreement and the other First Lien Documents, including the guaranties under the First Lien Documents and any First Lien Letter of Credit Obligations, (b) any Secured Hedge Agreements, (c) any Cash Management Agreement, or (d) any other agreement or instrument granting or providing for the perfection of a Lien securing any of the foregoing.  Notwithstanding any other provision hereof, the term “First Lien Obligations” will include accrued interest, fees, costs, and other charges incurred under the First Lien Loan Agreement,  the other First Lien Documents, the Cash Management Agreements and the Secured Hedge Agreements, whether incurred before or after the commencement of an Insolvency Proceeding, and whether or not allowed or allowable in an Insolvency Proceeding.  To the extent that any payment with respect to the First Lien Obligations (whether by or on behalf of any Obligor, as proceeds of security, enforcement of any right of set-off, or otherwise) is declared to be fraudulent or preferential in any respect, set aside, avoided, or required to be paid to a debtor in possession, trustee, receiver, or similar Person, then the obligation or part thereof originally intended to be satisfied will be deemed to be reinstated and outstanding as if such payment had not occurred. For the avoidance of doubt, “First Lien Obligations” shall not include any Excess First Lien Obligations.

 

“Governmental Authority”: any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).

 

“Indemnified First Lien Person”: as defined in Section 5.1.

 

“Initial First Lien Loan Agreement”: as defined in the recitals hereto.

 

“Initial Second Lien Loan Agreement”: as defined in the recitals hereto.

 

“Insolvency Proceeding”: as to any Obligor or Collateral, any of the following:  (a) any case, action or proceeding before any court or other Governmental Authority or pursuant to any Bankruptcy Law relating to bankruptcy, reorganization, arrangement, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors or enforcement of a mortgage in respect of a vessel, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case in (a) and (b) above, undertaken under the law of any jurisdiction, including the Bankruptcy Code, the BIA or the CCAA.

 

  

7

  

 

“Junior Adequate Protection Liens”: as defined in Section 6.3(b).

 

“Lien”: any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or otherwise), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a capital lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

 

“Maximum First Lien Principal Amount”: the sum of (a) the excess of (x) $192,500,000, over (y) the aggregate amount of permanent reductions of commitments under the revolving credit facility provided for in the First Lien Loan Agreement (excluding any permanent reductions in such commitments resulting from the commencement of any Insolvency Proceeding or resulting from the exercise by any or all of the First Lien Creditors of their right to reduce or terminate such commitments following the occurrence and during the continuance of any First Lien Default), so long as the principal amount of any revolving credit loans in excess of the revolving credit commitments as so reduced has been paid in full, excluding reductions resulting from a Refinancing or a “roll-up” of such Obligations in connection with a DIP Financing, plus (b) amounts in respect of interest, fees, costs and premium (if any), in each case above accruing in respect of or attributable to, but only accruing in respect of or attributable to, the aggregate principal amount of the First Lien Obligations (including the undrawn amount of all Letters of Credit constituting First Lien Obligations) at any one time not to exceed the amount referred to in clause (a) above, in each case that have been paid in-kind or capitalized, plus (c) Obligations owing by Obligors to the First Lien Creditors under Secured Hedge Agreements, plus (d) Obligations owing by Obligors to the First Lien Creditors under Cash Management Agreements in an amount not to exceed $5,000,000 in the aggregate.

 

“New First Lien Agent”: as defined in Section 4.5(a).

 

“New First Lien Documents”: as defined in Section 4.5(a).

 

“New First Lien Obligations”: as defined in Section 4.5(a).

 

“New Second Lien Agent”: as defined in Section 4.5(b).

 

“New Second Lien Documents”: as defined in Section 4.5(b).

 

“New Second Lien Obligations”: as defined in Section 4.5(b).

 

“Obligations”: with respect to any Obligor, all amounts, obligations, liabilities, covenants and duties of every type and description owing by such Obligor to any Secured Creditor (including any Secured Swap Provider and provider of cash management services under a Cash Management Agreement) arising out of, under, or in connection with, any agreement, whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however acquired, and whether or not evidenced by any instrument or for the payment of money (including all interest, fees, and charges whether or not accruing after the filing of any Insolvency Proceeding with respect to any Obligations, whether or not a claim for such post-filing or post-petition interest, fees, and charges is allowed or allowable in any such proceeding), including all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Obligor under any agreement (including those payable in connection with First Lien Letters of Credit).

 

  

8

  

 

“Obligor”: each Borrower, each Credit Party and each other Person that is a subsidiary of Holdings liable on or in respect of the First Lien Obligations or Second Lien Obligations or that has granted or purported to grant a Lien on any assets as Collateral to secure the First Lien Obligations or Second Lien Obligations, together with such Person’s successors and assigns, including a receiver, trustee or debtor-in-possession on behalf of such Person.

 

“Party”: a party to this Agreement (other than the Obligors).

 

“Permitted Second Lien Disposition” shall mean a Disposition (excluding any collection of any Collateral consisting of an obligation) of any Collateral in connection with an Enforcement Action by any Second Lien Creditors after the expiration of the Standstill Period and subject to the terms of Section 3.1 of this Agreement, which Disposition is commercially reasonable in all respects and undertaken on an arm’s length basis with parties that are not Affiliates of any of the Second Lien Creditors.

 

“Person”: an individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture, other entity or Governmental Authority.

 

“Pledged Collateral”: any Collateral in the possession or control (as defined in Section 3.3) of the First Lien Agent or the Second Lien Agent.

 

“PPSA”: 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 (including the Civil Code of Quebec) 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.

 

“Proceeds”: (a) all “proceeds,” as defined in Article 9 of the UCC or the PPSA, as applicable, of the Collateral, and (b) whatever is recovered when any Collateral is sold, exchanged, collected or  Disposed of, whether voluntarily or involuntarily, including any additional or replacement Collateral provided during any Insolvency Proceeding and any payment or property received in an Insolvency Proceeding on account of, or from, Collateral, an interest in Collateral or the value of any Collateral.

 

  

9

  

 

“Purchase Date”: as defined in Section 5.2.

 

“Purchase Event”: as defined in Section 5.1.

 

“Purchase Notice”: as defined in Section 5.2.

 

“Purchase Obligations”: as defined in Section 5.1.

 

“Purchase Price”: as defined in Section 5.3.

 

“Purchasing Creditors”: as defined in Section 5.2.

 

“Recovery”: as defined in Section 6.8.

 

“Refinance”: in respect of any First Lien Obligations or Second Lien Obligations or the commitments related thereto, to refinance, replace, refund, or repay, or to issue other Obligations or commitments in exchange or replacement for such Obligations or commitments relating thereto (whether or not fully utilized) in whole or in part, whether with the same or different lenders, agents, or arrangers. “Refinanced” and “Refinancing” have correlative meanings.

 

“Release Documents”: termination statements, releases, and other documents reasonably necessary or advisable to release, release of record, or evidence the release of a Lien or of a guaranty obligation in connection with the disposition of Stock of an Obligor.

 

“Requisite Second Lien Creditors”: Second Lien Creditors holding more than 50% of the outstanding principal balance of the Second Lien Loans.

 

“Second Lien Agent”: Guggenheim Corporate Funding, LLC, in its capacity as administrative agent for the Second Lien Creditors under the Second Lien Documents, and its permitted successors and assigns in such capacity (including any New Second Lien Agent that is deemed to be the Second Lien Agent pursuant to Section 4.5)).

 

“Second Lien Collateral Documents”: the “Collateral Documents” as defined in the Second Lien Loan Agreement, and any other documents or instruments granting or purporting to grant a Lien on real or personal property to secure a Second Lien Obligation or granting rights or remedies with respect to such Liens.

 

“Second Lien Creditors”: as defined in the recitals hereto.

 

“Second Lien Default”: any “Event of Default” or similar term, as such term is defined under the Second Lien Documents.

 

“Second Lien Default Notice”: with respect to any Second Lien Default, a written notice from the Second Lien Agent to the First Lien Agent, with a copy to the Obligors, stating that such notice is a “Second Lien Default Notice,” indicating that such Second Lien Default has occurred, and describing such Second Lien Default in reasonable detail.

 

“Second Lien Documents”: the Second Lien Loan Agreement, all Loan Documents (as such term is defined in the Second Lien Loan Agreement) and all other agreements, instruments and other documents at any time executed or delivered by any Obligor or any other Person with, to or in favor of the Second Lien Agent or any Second Lien Creditor in connection therewith or related thereto, including such documents evidencing successive Refinancings of the Second Lien Obligations, in each case, as the same may be amended, amended and restated, supplemented, modified, replaced, substituted or renewed from time to time.

 

  

10

  

 

“Second Lien Loan Agreement”: (a) the Initial Second Lien Loan Agreement and (b) each loan or credit agreement evidencing any replacement, substitution, renewal, or initial or subsequent Refinancing of the Obligations under the Second Lien Loan Agreement, in each case as the same may be amended, amended and restated, supplemented, modified, replaced, substituted or renewed from time to time or Refinanced in accordance with the terms of this Agreement.

 

“Second Lien Loans”: the loans or advances outstanding under the Second Lien Documents.

 

“Second Lien Obligations”: all Obligations of the Obligors under (a) the Second Lien Loan Agreement and the other Second Lien Documents, (b) the guaranties under the Second Lien Documents, or (c) any other agreement or instrument granting or providing for the perfection of a Lien securing any of the foregoing.  Notwithstanding any other provision hereof, the term “Second Lien Obligations” will include accrued interest, fees, costs, and other charges incurred under the Second Lien Loan Agreement and the other Second Lien Documents, whether incurred before or after the commencement of an Insolvency Proceeding, and whether or not allowed or allowable in an Insolvency Proceeding. To the extent that any payment with respect to the Second Lien Obligations (whether by or on behalf of any Obligor, as proceeds of security, enforcement of any right of set-off or recoupment, or otherwise) is declared to be fraudulent or preferential in any respect, set aside, avoided, or required to be paid to a debtor in possession, trustee, receiver, or similar Person, then the obligation or part thereof originally intended to be satisfied will be deemed to be reinstated and outstanding as if such payment had not occurred.

 

“Secured Creditors”: the First Lien Creditors and the Second Lien Creditors, or any of them.

 

“Secured Hedge Agreements”: any Secured Rate Contract (or any similar or equivalent term) under and as defined in the First Lien Loan Agreement.

 

“Senior Adequate Protection Liens”: as defined in Section 6.2.

 

“Standstill Period”: the period commencing on the date of a Second Lien Default and ending upon the date which is the earlier of (a) 150 days after the First Lien Agent has received a Second Lien Default Notice with respect to such Second Lien Default and (b) the date on which the Discharge of First Lien Obligations shall have occurred; provided that in the event that as of any day during such 150 days, no Second Lien Default is continuing, then the Standstill Period shall be deemed not to have commenced.

 

“Stock”: all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

 

  

11

  

 

“UCC”: the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect in the State of New York.

 

“Voting Stock”: Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers, trustees or other controlling Persons of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the occurrence of any contingency).

 

1.2           Certain Matters of Construction.  Unless otherwise stated or the context clearly requires otherwise: (a) references to the First Lien Agent or the Second Lien Agent will refer to the First Lien Agent or the Second Lien Agent acting on behalf of itself and on behalf of all of the other First Lien Creditors or Second Lien Creditors, respectively; (b) definitions of terms apply equally to the singular and plural forms; pronouns will include the corresponding masculine, feminine, and neuter forms; (c) “will” and “shall” have the same meaning; (d) in computing periods from a specified date to a later specified date, (i) the words “from” and “commencing on” (and the like) mean “from and including,” (ii) the words “to,” “until” and “ending on” (and the like) mean “to but excluding” and (iii) the word “through” means “to and including”; (e) except as otherwise provided in this Agreement, any action permitted under this Agreement may be taken at any time and from time to time; (f) all indications of time of day mean New York City time; (g) “including” means “including, but not limited to”; (h) “A or B” means “A or B or both”; (i) references to a statute refer to the statute and all regulations promulgated under or implementing the statute as in effect at the relevant time, references to a specific provision of a statute or regulation include successor provisions; (j) references to a section of the Bankruptcy Code also refer to any similar provision of other Bankruptcy Law; (k) references to an agreement (including this Agreement) refer to the agreement as the same may be amended, supplemented or modified at the relevant time; (l) references to a Governmental Authority include any successor Governmental Authority; (m) section references refer to sections of this Agreement, references to numbered sections refer to all included sections (for example, a reference to Section 6 also refers to Sections 6.1, 6.1(a), etc.), and references to a section or article in an agreement, statute, or regulation include successor and renumbered sections and articles of that or any successor agreement, statute, or regulation; (n) references to a Person include the Person’s permitted successors and assigns; (o) “herein,” “hereof,” “hereunder,” and words of similar import refer to this Agreement in its entirety and not to any particular provision; and (p) “asset” and “property” have the same meaning and refer to both real and personal, tangible and intangible assets and property, including cash, securities, accounts, and general intangibles, wherever located.

 

Section 2.               Security Interests; Priorities.

 

2.1           Priorities.  Each Secured Creditor hereby acknowledges that other Secured Creditors have been granted Liens upon the Collateral to secure their respective Obligations.  A Lien on Collateral securing or purporting to secure any First Lien Obligation will at all times be senior and prior in all respects to a Lien on such Collateral securing or purporting to secure any Second Lien Obligation, and a Lien on Collateral securing or purporting to secure any Second Lien Obligation will at all times be junior and subordinate in all respects to a Lien on such Collateral securing or purporting to secure any First Lien Obligation.

 

  

12

  

 

2.2           No Alteration of Priority.  Except as otherwise expressly provided herein, the priority of the Liens securing the First Lien Obligations, and the rights and obligations of the Parties under this Agreement, will remain in full force and effect irrespective of  (a) how a Lien was acquired (whether by grant, possession, statute, operation of law, subrogation, judgment or otherwise), (b) the time, manner, or order of the grant, attachment, filing, recordation, or perfection of a Lien, (c) any conflicting provision of the UCC, PPSA or other applicable law, (d) any defect or deficiencies in, or non-perfection (including any failure to perfect or lapse in perfection), setting aside, recharacterization, or avoidance of, any Lien or a First Lien Document or a Second Lien Document, (e) the modification, subordination or recharacterization of a First Lien Obligation or a Second Lien Obligation, (f) the modification of a First Lien Document or the modification of a Second Lien Document, (g) the voluntary (to the extent not prohibited by the First Lien Documents or the Second Lien Documents) or involuntary subordination of a Lien on Collateral securing a First Lien Obligation to a Lien securing another obligation of an Obligor or other Person, (h) the exchange of a security interest in any Collateral for a security interest in other Collateral, (i) the commencement of an Insolvency Proceeding, or (j) any other circumstance whatsoever, including a circumstance that might be a defense available to, or a discharge of, an Obligor in respect of a First Lien Obligation or a Second Lien Obligation or holder of such Obligation and notwithstanding any conflicting terms or conditions which may be contained in any of the Documents.

 

2.3           Perfection; Contesting Liens.  Except as provided in Section 3.3 as between the First Lien Creditors and Second Lien Creditors, (a) the First Lien Agent will be solely responsible for perfecting and maintaining the perfection of its Liens on the First Lien Collateral, and (b) the Second Lien Agent will be solely responsible for perfecting and maintaining the perfection of its Liens on the Second Lien Collateral.  This Agreement is intended solely to govern the respective Lien priorities as between the First Lien Creditors and the Second Lien Creditors and does not impose on the First Lien Creditors or the Second Lien Creditors any obligations in respect of the disposition of Proceeds of foreclosure on any Collateral that would conflict with a prior perfected claim in favor of another Person, an order or decree of a court or other Governmental Authority, or applicable law.  Notwithstanding any other provision of this Agreement, if the First Lien Agent receives notice of the First Lien Obligations arising under Cash Management Agreements or Secured Hedge Agreements, the First Lien Agent may rely, without further inquiry, on such notice and  any supporting documentation the First Lien Agent receives from the applicable Person.  In the absence of such notice, the First Lien Agent will have no obligation to the Secured Party under any Cash Management Agreement or Secured Hedge Agreement, including any obligation to verify the payment of the Obligations thereunder or the provision of cash collateral in respect thereof, in each case for purposes of determining the Discharge of First Lien Obligations. The First Lien Agent and the First Lien Creditors will have no liability to any Second Lien Creditor for (and the Second Lien Agent hereby waives, on behalf of itself and the other Second Lien Secured Parties, any claim arising from) any action or inaction by a First Lien Creditor with respect to any First Lien Document, First Lien Obligations or Collateral, including (1) the maintenance, preservation, or collection of the First Lien Obligations or any Collateral, and (2) the foreclosure upon, or the sale, liquidation, maintenance, preservation, or other disposition of, any Collateral, including any such action or inaction that results in a default or event of default under the Second Lien Documents.  The First Lien Agent will not have by reason of this Agreement or any other document a fiduciary relationship with any First Lien Creditor or any Second Lien Creditor, and the Second Lien Agent will not have by reason of this Agreement or any other document a fiduciary relationship with any First Lien Creditor or any Second Lien Creditor. The parties recognize that the interests of the First Lien Agent and the Second Lien Agent may differ, and the First Lien Agent may act in its own interest or in the interest of the First Lien Creditors without taking into account the interests of any Second Lien Creditor.  The First Lien Agent will not contest, or support any Person in contesting, directly or indirectly, in any proceeding (including an Insolvency Proceeding) the validity, enforceability, perfection, characterization or priority of any Lien securing or purportedly securing a Second Lien Obligation.  The Second Lien Agent will not contest, or support any Person in contesting, directly or indirectly, in any proceeding (including an Insolvency Proceeding) the validity, enforceability, perfection, characterization or priority of any Lien securing or purportedly securing a First Lien Obligation.  Nothing in this Agreement shall be construed to (x) prevent or impair the rights of any Secured Creditor to enforce this Agreement, or (y) waive any default or event of default under the Second Lien Loan Documents resulting from the incurrence of First Lien Loans under the First Lien Loan Documents with a principal amount in excess of the Maximum First Lien Principal Amount.

 

  

13

  

 

2.4           Payment Over; Application of Proceeds of Collateral.

 

(a)  Until the Discharge of First Lien Obligations, whether or not an Insolvency Proceeding has commenced and without regard to whether the First Lien Creditors have exhausted all of their remedies against the Obligors under the First Lien Documents or otherwise, any Collateral, Distributions in respect thereof or Proceeds thereof received by any Second Lien Creditor, including any such Collateral constituting Proceeds, or any payment or Distribution, that may be received by any Second Lien Creditor (a) in connection with the exercise of any right or remedy (including any right of set-off or recoupment) with respect to the Collateral, (b) in connection with any insurance policy claim or any condemnation award (or deed in lieu of condemnation) in respect of the Collateral, (c) from the collection or other Disposition of, or realization on, the Collateral in any Enforcement Action or (except as provided in Section 6.10) pursuant to any Insolvency Proceeding or (d) in violation of this Agreement, shall be segregated and held in trust and promptly paid over to the First Lien Agent, for the benefit of the First Lien Creditors, in the same form as received, with any necessary endorsements.  The First Lien Agent is authorized to make such necessary endorsements as agent for the Second Lien Creditor.  This authorization is coupled with an interest and is irrevocable until the Discharge of First Lien Obligations.

 

(b)  After the Discharge of First Lien Obligations and until the Discharge of Second Lien Obligations, whether or not an Insolvency Proceeding has commenced and without regard to whether the Second Lien Creditors have exhausted all of their remedies against the Obligors under the Second Lien Documents or otherwise, any Collateral, Distributions in respect thereof or Proceeds thereof received by any First Lien Creditor, including any such Collateral constituting Proceeds, or any payment or Distribution, that may be received by any First Lien Creditor (a) in connection with the exercise of any right or remedy (including any right of set-off or recoupment) with respect to the Collateral, (b) in connection with any insurance policy claim or any condemnation award (or deed in lieu of condemnation) in respect of the Collateral, (c) from the collection or other Disposition of, or realization on, the Collateral in any Enforcement Action or (except as provided in Section 6.10) pursuant to any Insolvency Proceeding or (d) in violation of this Agreement, shall be segregated and held in trust and promptly paid over to the Second Lien Agent, for the benefit of the Second Lien Creditors, in the same form as received, with any necessary endorsements.  The Second Lien Agent is authorized to make such necessary endorsements as agent for the First Lien Creditor.  This authorization is coupled with an interest and is irrevocable until the Discharge of Second Lien Obligations.

 

  

14

  

 

(c)  All Collateral and all Proceeds thereof received after the Discharge of Second Lien Obligations shall be segregated and held in trust for and forthwith paid over, in the kind or funds and currency received, to the First Lien Agent, for the benefit of the First Lien Creditors, for application to the Excess First Lien Obligations (unless otherwise required by law or court order) and, after the Discharge of Excess First Lien Obligations, to whomever may be lawfully entitled thereto.

 

2.5           Release of Collateral Upon Enforcement Action or Permitted Sale or Disposition.  If the First Lien Agent releases a Lien on all or any portion of the Collateral in connection with:  (a) an Enforcement Action, (b) a sale in the ordinary course pursuant to Section 363 of the Bankruptcy Code or other Bankruptcy Law, the entry of an order of the Bankruptcy Court pursuant to Section 363 of the Bankruptcy Code or section 36 of the CCAA or any other analogous Bankruptcy Law, or in connection with the confirmation of a plan of reorganization or arrangement in any Insolvency Proceeding, or (c) a Disposition of any Collateral other than pursuant to an Enforcement Action (whether or not there is an Event of Default under the First Lien Documents), then any Lien of the Second Lien Agent on such Collateral will be, except as otherwise provided below, automatically and simultaneously released to the same extent, and the Second Lien Agent will be deemed to have consented under the Second Lien Documents to such transaction free and clear of the Second Lien Agent’s security interest (it being understood that the Second Lien Agent shall still, subject to the terms of this Agreement, have a security interest with respect to the Proceeds of such Collateral except to the extent applied to First Lien Obligations) and to have waived the provisions of the Second Lien Documents to the extent necessary to permit such transaction and will promptly execute and deliver to the First Lien Agent such Release Documents as the First Lien Agent requests to effectively release or confirm the release of such Lien of the Second Lien Agent and take such further actions as the First Lien Agent shall reasonably require in order to release or terminate such Second Lien Agent’s Liens on such Collateral (or release any applicable Obligor, including any Obligor that is an issuer of the equity that is the subject of such transaction and any subsidiary thereof); provided that such release will not occur without the consent of the Second Lien Agent for (x) an Enforcement Action, as to any Collateral the net cash Proceeds of the Disposition of which will not be applied to permanently repay (or otherwise reduce in the case of a “credit bid”) the First Lien Obligations or any DIP Financing, (y) a Disposition (other than a Disposition described in (a) or (b) above), if the Disposition is prohibited by a provision of the Second Lien Loan Agreement other than solely as the result of the existence of a default or event of default under the Second Lien Documents or (z) a release in connection with any matter described in clause (b) above, if pursuant to court order, (i) the Liens of the Second Lien Creditors would not attach to the net Proceeds of the Disposition with the same priority and validity as the Liens held by the Second Lien Creditors on such Collateral, with the Liens remaining subject to the terms of this Agreement, or (ii) the net Proceeds of a Disposition of Collateral received by First Lien Agent in excess of those necessary to achieve the Discharge of First Lien Obligations would not be distributed in accordance with the UCC, the PPSA and applicable law.

 

  

15

  

 

2.6           Power of Attorney.  The Second Lien Agent hereby appoints the First Lien Agent and any officer or agent of the First Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the place and stead of the Second Lien Agent and the other Second Lien Creditors or in the First Lien Agent’s own name, in the First Lien Agent’s discretion to take any action and to execute any and all documents and instruments that may be reasonable and appropriate for the purpose of carrying out the terms of Section 2.5, including any endorsements or other instruments of transfer or release; provided, that the First Lien Agent shall not be permitted to provide any consent described in the proviso to Section 2.5 which is required of the Second Lien Agent. This appointment is coupled with an interest and is irrevocable until the Discharge of First Lien Obligations or such time as this Agreement is terminated in accordance with its terms.  No Person to whom this power of attorney is presented, as authority for the First Lien Agent (or any officer or agent of the First Lien Agent) to take any action or actions contemplated hereby, shall be required to inquire into or seek confirmation from any Second Lien Creditor as to the authority of the First Lien Agent (or any such officer or agent) to take any action described herein, or as to the existence of or fulfillment of any condition to this power of attorney, which is intended to grant to the First Lien Agent (or any officer or agent of the First Lien Agent) the authority to take and perform the actions contemplated herein.

 

2.7           Waiver.  Each of the Secured Creditors, (a) waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations under the Documents and notice of or proof of reliance by the Secured Creditors upon this Agreement and protest, demand for payment or notice except to the extent otherwise specified herein and (b) acknowledges and agrees that the other Secured Creditors have relied upon the Lien priority and other provisions hereof in entering into the Documents and in making funds available to the Borrowers thereunder.

 

2.8           Notice of Interest In Collateral.  This Agreement is intended, in part, to constitute an authenticated notification of a claim by each Secured Creditor to the other Secured Creditors of an interest in the Collateral in accordance with the provisions of Sections 9-611 and 9-621 of the UCC.

 

2.9           New Liens. So long as the Discharge of First Lien Obligations shall not have occurred, the parties hereto agree that no additional Liens shall be granted or permitted on any asset of any Borrower or any other Obligor to secure any Second Lien Obligation unless, subject to the terms of this Agreement, immediately after giving effect to such grant or concurrently therewith, a senior and prior Lien shall be granted on such asset to secure the First Lien Obligations.  So long as the Discharge of Second Lien Obligations shall not have occurred, the parties hereto agree that no additional Liens shall be granted or permitted on any asset of any Borrower or any other Obligor to secure any First Lien Obligation unless, subject to the terms of this Agreement, immediately after giving effect to such grant or concurrently therewith, a junior and subordinated Lien shall be granted on such asset to secure the Second Lien Obligations.  To the extent that the foregoing provisions of this Section are not complied with for any reason, without limiting any other rights and remedies available to the First Lien Agent or the First Lien Creditors, the Second Lien Agent, on behalf of the Second Lien Creditors, agrees that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.9 shall be subject to the terms of this Agreement, including the turnover provisions of Section 2.4.

 

  

16

  

 

2.10           Similar Liens and Agreements.  The Parties intend that the Collateral securing all or any portion of the First Lien Obligations and the Collateral securing the Second Lien Obligations be identical (other than cash and other assets specifically securing First Lien Letter of Credit Obligations or Cash Management Obligations).  Accordingly, subject to the other provisions of this Agreement, the Parties will use commercially reasonable efforts to cooperate:

 

(a)           to determine, upon the reasonable written request of the First Lien Agent or the Second Lien Agent, the specific assets included in the Collateral securing their respective Obligations, the steps taken to perfect the Liens thereon and the identity of the Obligors;

 

(b)           to make the forms, documents, and agreements creating or evidencing the Liens of the Parties in the Collateral materially the same, other than with respect to the relative priority of the Liens created or evidenced thereunder, the identity of the Secured Parties benefitted thereby and other matters contemplated by this Agreement; and

 

(c)           to provide that any Lien obtained by any Secured Creditor in respect of any judgment obtained in respect of any Obligations shall be subject in all respects to the terms of this Agreement.

 

Section 3.               Enforcement of Security.

 

3.1           Exercise of Remedies against Collateral.

 

(a)  Subject to subsection (b) below, until the Discharge of First Lien Obligations, the First Lien Creditors will have the exclusive right to (1) commence and maintain Enforcement Actions (including the rights to set-off or “credit bid” their debt), (2) subject to Section 2.5, make determinations regarding the release or disposition of, or restrictions with respect to, the Collateral, and (3) otherwise enforce the rights and remedies of a secured creditor under the UCC, the PPSA and other applicable law and the Bankruptcy Laws of any applicable jurisdiction in such order and in such manner as the First Lien Creditors may determine in their sole discretion without consulting with or obtaining the consent of any Second Lien Creditor and regardless of whether any such exercise is adverse to the interests of any Second Lien Creditor, except as otherwise required pursuant to the UCC, the PPSA and other applicable law, subject to the relative priorities described in Section 2.1.  In conducting any public or private sale under the UCC or the PPSA, 10 days’ notice shall be deemed to be commercially reasonable notice.  The First Lien Agent and the other First Lien Creditors may take Enforcement Actions pursuant to the provisions of the First Lien Documents and applicable law, all in such manner as they may determine in the exercise of their sole discretion. Such Enforcement Actions may include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC or the PPSA and of a secured creditor under the Bankruptcy Laws of any applicable jurisdiction.  Except as provided in this Section 3.1 and Section 3.2 below, notwithstanding any rights or remedies available to a Second Lien Creditor under any of the Second Lien Documents, applicable law or otherwise, a Second Lien Creditor shall not take any Enforcement Action.  Until the Discharge of First Lien Obligations, each Second Lien Creditor (1) shall not take any action that would hinder any exercise of remedies or the taking of any Enforcement Action under the First Lien Documents, and (2) waives any right it may have as a junior lien creditor or otherwise to object to the manner in which the First Lien Agent or the First Lien Creditors may seek to take any Enforcement Action (including any right to object to a First Lien Creditor accepting any Collateral in full or partial satisfaction of First Lien Obligations under Section 9-620 of the UCC or any applicable law in Canada), regardless of whether any action or omission by or on behalf of the First Lien Agent and the First Lien Creditors is adverse to the interest of the Second Lien Creditors.

 

  

17

  

 

(b)  Notwithstanding the preceding Section 3.1(a), Second Lien Creditors may commence and may continue an Enforcement Action with respect to a Second Lien Default only if: (1) the Standstill Period with respect thereto shall have elapsed; (2) the First Lien Agent is not then pursuing with commercially reasonable diligence an Enforcement Action with respect to all or a material portion of the Collateral (which would include the notification of account debtors to make payments to the First Lien Agent or its agents and exercising dominion over any cash or security accounts of any Obligor) or attempting with commercially reasonable diligence to vacate any stay or prohibition against such exercise; (3) any acceleration of the Second Lien Obligations has not been rescinded; and (4) the applicable Obligor is not then a debtor in an Insolvency Proceeding.

 

3.2           Permitted Actions.  Notwithstanding Section 3.1(a), a Second Lien Creditor may (a) file a proof of claim or statement of interest, vote on a plan of reorganization (including a vote to accept or reject a plan of partial or complete liquidation, reorganization, arrangement, composition, or extension), and make other filings, arguments, and motions, with respect to the Second Lien Obligations and the Collateral in any Insolvency Proceeding commenced by or against any Obligor; (b) take action to create, perfect, preserve, or protect (but not enforce) its Lien on the Collateral, so long as such actions are not adverse to the priority status in accordance with this Agreement of Liens on the Collateral securing the First Lien Obligations or the First Lien Creditors’ rights to exercise remedies or otherwise not in accordance with this Agreement; (c) file necessary pleadings in opposition to a claim objecting to or otherwise seeking the disallowance of a Second Lien Obligation or a Lien securing the Second Lien Obligation; (d) join (but not exercise any control over) a judicial foreclosure or Lien enforcement proceeding with respect to the Collateral initiated by the First Lien Agent, to the extent that such action could not reasonably be expected to interfere materially with the Enforcement Action, but no Second Lien Creditor may receive any Proceeds thereof unless expressly permitted herein; (e) bid for or purchase Collateral at any public, private, or judicial foreclosure upon such Collateral initiated by any First Lien Creditor, or any sale of Collateral during an Insolvency Proceeding; provided that such bid may not include a “credit bid” in respect of any Second Lien Obligations unless the net cash Proceeds of such bid are otherwise sufficient to cause the Discharge of First Lien Obligations and are applied to cause the Discharge of the First Lien Obligations, in each case, at the closing of such bid; (f) accelerate any Second Lien Obligations in accordance with the provisions of the Second Lien Documents; and (g) seek adequate protection during an Insolvency Proceeding to the extent expressly permitted by Section 6, in the case of each of clauses (a) through (g) in a manner not inconsistent with the other terms of this Agreement. Except as expressly provided for herein, (1) no provision hereof shall be construed to prohibit the payment by a Borrower of regularly scheduled principal, interest and other amounts owed in respect of the Second Lien Obligations so long as the receipt thereof is not the direct or indirect result of any Enforcement Action, and (2) unless and until the Discharge of the First Lien Obligations shall have occurred, the sole right of the Second Lien Creditors with respect to the Collateral is to hold a lien on the Collateral pursuant to the Second Lien Collateral Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of the First Lien Obligations shall have occurred.

 

  

18

  

 

3.3           Collateral In Possession.

 

(a)  If the First Lien Agent has any Pledged Collateral in its possession or control, then, subject to Section 2.1 and this Section 3.3, the First Lien Agent will possess or control such Pledged Collateral as bailee or agent for perfection for the benefit of the Second Lien Agent as secured party, so as to satisfy the requirements of sections 8-106(d)(3), 8-301(a)(2), 9-313(c) and 9-314(a) of the UCC and section 22.1 of the PPSA.  The First Lien Agent will have no obligation to any First Lien Creditor or Second Lien Creditor to ensure that any Pledged Collateral is genuine or owned by any of the Obligors or to preserve rights or benefits of any Person except as expressly set forth in this Section 3.3.  In this Section 3.3, “control” has the meaning given that term in sections 8-106 and 9-314 of the UCC.

 

(b)  The duties or responsibilities of the First Lien Agent under this Section 3.3 will be limited solely to possessing or controlling the applicable Pledged Collateral as bailee or agent for perfection in accordance with this Section 3.3 and delivering such Pledged Collateral upon a Discharge of First Lien Obligations, as provided in subsection (e) below.  The First Lien Agent makes no representation or warranty as to whether the provisions of this Section 3.3 are sufficient to perfect the security interest in any Collateral in which the First Lien Agent has such possession or control.

 

(c)  If the Second Lien Agent has any Pledged Collateral in its possession or control, then, subject to Section 2.1 and this Section 3.3, the Second Lien Agent will promptly notify the First Lien Agent of its possession or control of such Pledged Collateral and if requested by the First Lien Agent, deliver or transfer such Pledged Collateral in its possession or control, together with any necessary endorsements (which endorsements will be without recourse and without any representation or warranty), to the First Lien Agent in such manner as the First Lien Agent shall reasonably direct.  Until such delivery or transfer is complete, the Second Lien Agent shall possess or control such Pledged Collateral as bailee or agent for perfection for the benefit of the First Lien Agent as secured party, so as to satisfy the requirements of sections 8-106(d)(3), 8-301(a)(2), 9-313(c) and 9-314(a) of the UCC and section 22.1 of the PPSA. The Second Lien Agent will have no obligation to any First Lien Creditor or Second Lien Creditor to ensure that any Pledged Collateral is genuine or owned by any of the Obligors or to preserve rights or benefits of any Person except as expressly set forth in this Section 3.3.  The First Lien Agent hereby waives and releases the Second Lien Agent from all claims and liabilities arising out of the Second Lien Agent’s role under this Section 3.3(c) as bailee or agent with respect to any Pledged Collateral. The Second Lien Agent makes no representation or warranty as to whether the provisions of this Section 3.3(c) are sufficient to perfect the security interest in any Collateral in which the Second Lien Agent has such possession or control.

 

  

19

  

 

 

(d)  The duties or responsibilities of the Second Lien Agent under this Section 3.3 will be limited solely to possessing or controlling the Pledged Collateral as bailee or agent for perfection in accordance with this Section 3.3 and delivering the Pledged Collateral to the First Lien Agent promptly upon the request by the First Lien Agent therefor.  The Second Lien Agent makes no representation or warranty as to whether the provision of this Section 3.3 are sufficient to perfect the security interest in any Collateral in which the Second Lien Agent has such possession or control.

 

(e)  Upon the Discharge of First Lien Obligations, First Lien Agent will promptly deliver or transfer (subject to the terms of any control agreement) control of any Pledged Collateral in its possession or control, together with any necessary endorsements (which endorsements will be without recourse and without any representation or warranty), first, to the Second Lien Agent if any Second Lien Obligations remain outstanding, and second, to the applicable Obligor or Obligors or, in the case of clauses first and second, as a court of competent jurisdiction may otherwise direct.

 

(f)  Upon the Discharge of Second Lien Obligations, Second Lien Agent will promptly deliver or transfer (subject to the terms of any control agreement) control of any Pledged Collateral in its possession or control, together with any necessary endorsements (which endorsements will be without recourse and without any representation or warranty), first, to the First Lien Agent if any Excess First Lien Obligations remain outstanding, and second, to the applicable Obligor or Obligors or, in the case of clauses first and second, as a court of competent jurisdiction may otherwise direct.

 

3.4           Waiver of Marshalling and Similar Rights.  Until the Discharge of First Lien Obligations, the Second Lien Agent and each other Second Lien Creditor, to the fullest extent permitted by applicable law, waives as to the First Lien Agent and each other First Lien Creditor any requirement regarding, and agrees not to demand, request, plead or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law.

 

3.5           Insurance and Condemnation Awards.  Until the Discharge of First Lien Obligations, and subject to the rights of the Obligors under the First Lien Documents, First Lien Agent will have the exclusive right to adjust settlement for any losses covered by an insurance policy covering the Collateral, and to approve an award granted in a condemnation or similar proceeding (or a deed in lieu of condemnation) affecting the Collateral, and all proceeds of such policy, award, or deed will be applied in accordance with Section 2.4 and thereafter, if no Second Lien Obligations are outstanding, to the payment to the owner of the subject property, such other Person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct.

 

  

20

  

 

Section 4.               Covenants

 

4.1           Amendments to First Lien Documents.

 

(a)  The First Lien Creditors may at any time and from time to time and without consent of or notice to any Second Lien Creditor, without incurring any liability to any Second Lien Creditor and without impairing or releasing any rights or obligations hereunder or otherwise, amend, restate, supplement, modify, substitute, renew or replace any or all of the First Lien Documents; provided that without the consent of the Requisite Second Lien Creditors, the First Lien Creditors shall not amend, restate, supplement, modify, substitute, renew or (except as provided in Section 6.2) Refinance any or all of the First Lien Documents to (a) directly increase the interest rate margins on the First Lien Obligations to an amount greater than 300 basis points per annum on a weighted average basis above the applicable interest rate margins on the First Lien Obligations in effect on the date hereof (excluding, without limitation, fluctuations in underlying rate indices and imposition of a default rate of 2% per annum), (b) extend the final maturity date of the First Lien Obligations to a date later than October 1, 2019, (c) restrict the amendment of the Second Lien Documents except as set forth in Section 4.2, (d) increase the principal portion of the First Lien Obligations in excess of the Maximum First Lien Principal Amount, (e) modify a mandatory prepayment provision relating to the sale of Vessels in a manner that (i) allows amounts that would otherwise be required to be used to prepay First Lien Obligations to be retained by the Obligors to an amount greater than permitted under the Second Lien Documents or (ii) provides that proceeds of the sale of Vessels applied to the prepayment of revolving loans would not also provide for a corresponding permanent reduction of the applicable revolving loan commitment, (f) modify a covenant that directly restricts one or more Obligors from making payments under the Second Lien Documents that would otherwise be permitted under the First Lien Documents as in effect on the date hereof, or (g) increase the maximum amount of Protective Advances above the amount equal to (x) $17,500,000 less (y) the amount equal to ten percent (10%) of all permanent reductions of commitments under the revolving credit facility provided for in the First Lien Loan Agreement (excluding any permanent reductions in such commitments resulting from the commencement of any Insolvency Proceeding or resulting from the exercise by any or all of the First Lien Creditors of their right to reduce or terminate such commitments following the occurrence and during the continuance of any First Lien Default).

 

(b)  Notwithstanding any provision contained in the Second Lien Documents to the contrary, the Obligors, the First Lien Agent and the other First Lien Creditors may at any time and from time to time without the consent of or notice to any Second Lien Creditor and without violating any Second Lien Document or creating any Second Lien Default, amend the payment waterfall provisions contained in the First Lien Documents, create or add new tranches of First Lien Obligations, and/or reallocate all or a portion of the First Lien Obligations to the principal amount of one or more newly created loan tranches or facilities (which new tranches or facilities shall constitute “First Lien Obligations” hereunder, subject to the proviso below), each of which (and/or the Liens securing same) may be contractually senior, junior or pari passu to the then existing or thereafter arising First Lien Obligations (and/or the Liens securing same) and contain such terms and provisions to be determined and agreed among the Obligors (or any one or more of them), First Lien Agent, and relevant First Lien Creditors; provided, however, that any such amendments, creations, additions, reallocations and modifications shall be subject to the limitations set forth in Section 4.1(a).

 

  

21

  

 

4.2           Amendments to Second Lien Documents.  Until the Discharge of First Lien Obligations has occurred, and notwithstanding anything to the contrary contained in the Second Lien Documents, the Second Lien Creditors shall not, without the prior written consent of the First Lien Agent, amend, restate, supplement, modify, substitute, renew or Refinance any or all of the Second Lien Documents to (a) directly or indirectly increase the applicable interest rates in respect of the Second Lien Obligations (excluding, without limitation, fluctuations in underlying rate indices and imposition of a default rate of 2% per annum) by more than 300 basis points per annum, (b) shorten the maturity or weighted average life to maturity of the Second Lien Obligations, require that any payment on the Second Lien Obligations be made earlier than the date originally scheduled for such payment or that any commitment expire any earlier than the date originally scheduled therefor, or add or make more restrictive any mandatory prepayment, redemption, repurchase, sinking fund or similar requirement, provided that the prior written consent of the First Lien Agent shall not be required with respect to any modification which shortens the maturity of the Second Lien Obligations upon the effectiveness of any change made to shorten the maturity of the First Lien Obligations by an equivalent period, (c) add or modify in a manner adverse to any Obligor or any First Lien Creditor any covenant, agreement or event of default under the Second Lien Documents (except to the extent necessary to conform to changes made to the First Lien Documents, excluding changes related to the first priority status of the First Lien Obligations and subject to the preservation of cushions on financial covenant levels and dollar amounts consistent with those contained in the First Lien Documents in effect prior to such addition or modification), (d) restrict the amendment of the First Lien Documents except as set forth in Section 4.1 or (e) increase the principal amount of the Second Lien Obligations (other than, subject to clause (a) above, as a result of interest thereon having been paid in-kind or capitalized).

 

4.3           Amendments to Collateral Documents.  If a First Lien Creditor and an Obligor modify a First Lien Collateral Document, the modification will apply automatically to any comparable provision of a Second Lien Collateral Document, without the consent of any Second Lien Creditor and without any action by Second Lien Agent or any Obligor; provided that no such modification will (a) remove or release the Lien of the Second Lien Creditors on the Collateral, except to the extent that (1) the release is permitted hereunder and (2) there is a corresponding release of the Lien of the First Lien Creditors on the Collateral, (b) impose duties on the Second Lien Agent without its consent, (c) permit other Liens on the Collateral not permitted under the terms of the Second Lien Documents other than as provided in Section 6, or (d) by its terms be adverse to the interest of the Second Lien Creditors to a greater extent than the First Lien Creditors (other than by virtue of their relative priorities and rights and obligations hereunder).

 

4.4           Prepayments.  Without the prior written consent of the First Lien Agent, no Second Lien Creditor will take, demand or receive from any Obligor any prepayment of principal (whether optional, voluntary, mandatory or otherwise or by redemption, defeasance or other payment or distribution) with respect to any Second Lien Obligations, except for mandatory prepayments in respect of Dispositions of assets, the issuance or incurrence of Indebtedness, the issuance of Stock or receipt of capital contributions and the existence of excess cash flow, in each case only to the extent expressly permitted by the terms of the First Lien Documents.

 

  

22

  

 

4.5           Effect of Refinancing.

 

(a)  If the Discharge of First Lien Obligations is being effected through a Refinancing; provided that (1) the First Lien Agent gives a notice of such Refinancing to the Second Lien Agent at least 5 Business Days prior to such Refinancing (except as otherwise provided in Section 6.2) and (2) the credit agreement and the other documents evidencing such new First Lien Obligations (the “New First Lien Documents”) do not effect an amendment, supplement or other modification of the terms of the First Lien Obligations in a manner that is prohibited by Section 4.1, then (A) such Discharge of First Lien Obligations shall be deemed not to have occurred for all purposes of this Agreement, (B) the indebtedness under such Refinancing and all other obligations under the credit documents evidencing such indebtedness (the “New First Lien Obligations”) shall be treated as First Lien Obligations for all purposes of this Agreement, (C) the New First Lien Documents shall be treated as the First Lien Documents and (D) the agent under the New First Lien Documents (the “New First Lien Agent”) shall be deemed to be the First Lien Agent for all purposes of this Agreement.  Upon receipt of a notice of Refinancing under the preceding sentence, which notice shall include the identity of the New First Lien Agent, the Second Lien Agent shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as the New First Lien Agent may reasonably request in order to provide to the New First Lien Agent and the holders of the New First Lien Obligations the rights and powers set forth herein; provided, that the failure of the Second Lien Agent to enter into such documents and agreements shall not affect the rights of the party that consummates the Refinancing to rely on and enforce the terms of this Agreement.

 

(b)  If the Discharge of Second Lien Obligations is being effected through a Refinancing; provided that (1) the Second Lien Agent gives a notice of such Refinancing to the First Lien Agent at least 5 Business Days prior to such Refinancing and (2) the credit agreement and the other documents evidencing such New Second Lien Obligations (the “New Second Lien Documents”) do not effect an amendment, supplement or other modification of the terms of the Second Lien Obligations in a manner that is prohibited by Section 4.2, then (A) such Discharge of Second Lien Obligations shall be deemed not to have occurred for all purposes of this Agreement, (B) the indebtedness under such Refinancing and all other obligations under the credit documents evidencing such indebtedness (the “New Second Lien Obligations”) shall be treated as Second Lien Obligations for all purposes of this Agreement, (C) the New Second Lien Documents shall be treated as the Second Lien Documents and (D) the agent under the New Second Lien Documents (the “New Second Lien Agent”) shall be deemed to be the Second Lien Agent for all purposes of this Agreement.  Upon receipt of a notice of Refinancing under the preceding sentence, which notice shall include the identity of the New Second Lien Agent, the First Lien Agent shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as the New Second Lien Agent may reasonably request in order to provide to the New Second Lien Agent the rights and powers set forth herein; provided, that the failure of the First Lien Agent to enter into such documents and agreements shall not affect the rights of the party that consummates the Refinancing to rely on and enforce the terms of this Agreement.

 

  

23

  

 

 

(c)  By their acknowledgement hereto, Obligors agree to cause the agreement, document or instrument pursuant to which any New First Lien Agent or any New Second Lien Agent is appointed to provide that the New First Lien Agent or New Second Lien Agent, as applicable, agrees to be bound by the terms of this Agreement.

 

Section 5.               Second Lien Creditors’ Purchase Option.

 

5.1           Purchase Option.  If there is (a) an acceleration of the First Lien Obligations in accordance with the First Lien Loan Agreement, (b) an Event of Default arising from the failure of a Borrower to make any payment in respect of principal, interest or fees (other than administrative agency or collateral agency fees) under the First Lien Loan Agreement that is not waived by the First Lien Creditors, within 45 days of its occurrence, or (c) the commencement of an Insolvency Proceeding (each a “Purchase Event”), then Second Lien Creditors may within 15 Business Days of notice from the First Lien Agent pursuant to clause (a) or (b) above or within 15 Business Days of the first Purchase Event to occur under clause (c) above (as the case may be, the “Purchase Deadline”), and not afterwards, purchase all, but not less than all, of the First Lien Obligations (the “Purchase Obligations”) for the Purchase Price.  Notwithstanding anything in the First Lien Documents to the contrary, no consent of any Obligor to such purchase shall be required.  Such purchase will (1) include all principal of, and all accrued and unpaid interest, fees, and expenses in respect of, all First Lien Obligations, and all other First Lien Obligations, outstanding at the time of purchase, (2) be made pursuant to an “Assignment” (as such term is defined in the First Lien Loan Agreement, but including only those representations and warranties of the Assignor thereunder as are specified in Section 5.6), whereby the Second Lien Creditors will assume all funding commitments and Obligations of First Lien Creditors under the First Lien Documents, and (3) otherwise be subject to the terms and conditions of this Section 5.  Each First Lien Creditor will retain all rights to indemnification provided in the relevant First Lien Documents for all claims and other amounts relating to facts and circumstances relating to such First Lien Creditor’s holdings of the First Lien Obligations (except to the extent such claims and other amounts were included in the Purchase Price).  No amendment, modification or waiver following any purchase under this Section 5 of any indemnification provisions under the First Lien Documents shall be effective as to any First Lien Creditor or any Affiliate or officer, director, employee or other related indemnified person of such First Lien Creditor (“Indemnified First Lien Person”) without the prior written consent of such Indemnified First Lien Person, and such indemnification provisions shall continue in full force and effect for the benefit of the Indemnified First Lien Persons whether or not any First Lien Documents otherwise remain in effect. Notwithstanding the occurrence of a Purchase Event, the delivery of a Purchase Notice or the existence or operation of the terms in this Section 5, the First Lien Creditors may take or refrain from taking any Enforcement Action at any time; provided, that following the delivery of a Purchase Notice, the First Lien Creditors may only take an Enforcement Action to the extent set forth in Section 5.2(b).

 

5.2           Purchase Notice.

 

(a)  The Second Lien Creditors desiring to purchase all of the Purchase Obligations (the “Purchasing Creditors”) will deliver a written notice (the “Purchase Notice”) to the First Lien Agent no later than three Business Days before the Purchase Deadline that (1) is signed by the Purchasing Creditors, (2) states that it is a Purchase Notice under this Section 5, (3) states that each Purchasing Creditor is irrevocably electing to purchase, in accordance with this Section 5, the percentage of all of the Purchase Obligations stated in the Purchase Notice for that Purchasing Creditor, which percentages must aggregate exactly 100% for all Purchasing Creditors, (4) contains a representation and warranty by each Purchasing Creditor that the Purchase Notice conforms with the Second Lien Documents and any other binding agreement among the Second Lien Creditors, and (5) designates a purchase date (the “Purchase Date”) on which the purchase will occur, that is not later than the Purchase Deadline. A Purchase Notice will be ineffective if it is received by the First Lien Agent after the occurrence giving rise to the Purchase Event is waived, cured, or otherwise ceases to exist.

 

  

24

  

 

(b)  Upon the First Lien Agent’s receipt of an effective Purchase Notice conforming to this Section 5.2, the Purchasing Creditors will be irrevocably obligated to purchase, and the First Lien Creditors will be irrevocably obligated to sell, the First Lien Obligations in accordance with and subject to this Section 5.  If so instructed by the Second Lien Creditors in the Purchase Notice, the First Lien Creditors shall not complete any Enforcement Action (other than (1) the exercise of control over any Obligor’s deposit or securities accounts, (2) the collection of proceeds of accounts and payment intangibles, and (3) Enforcement Actions taken under Exigent Circumstances), as long as the purchase and sale of the First Lien Obligations provided for in this Section 5 shall have closed, and the First Lien Creditors shall have received payment in full of the First Lien Obligations as provided for in Section 5.3, in each case by the date designated as the Purchase Date in the Purchase Notice.

 

5.3           Purchase Price. The purchase price (“Purchase Price”) for the Purchase Obligations will equal the sum of (a) the principal amount of all loans, advances, or similar extensions of credit included in the Purchase Obligations (including unreimbursed amounts drawn on First Lien Letters of Credit, but excluding the undrawn amount of outstanding First Lien Letters of Credit), and all accrued and unpaid fees and interest thereon through the Purchase Date (including any acceleration prepayment penalties or premiums and breakage costs that would be required to be paid to the First Lien Creditors if the Obligations were prepaid on the Purchase Date), (b) the net aggregate amount then owing to counterparties under Secured Hedge Agreements, including any amounts owing to the counterparties as a result of the termination (or early termination) of such Secured Hedge Agreements, (c) the net aggregate amount then owing to creditors under Cash Management Agreements that are First Lien Documents, including all amounts owing to the creditors as a result of the termination (or early termination) thereof, (d) all accrued and unpaid fees, expenses, indemnities, and other amounts owed to the First Lien Creditors under the First Lien Documents on the Purchase Date, and (e) amounts according to the good faith estimate of the First Lien Agent of contingent obligations in respect of claims which are known to the First Lien Agent or First Lien Creditors and which are reasonably expected by the First Lien Agent to require the making of a payment under the First Lien Documents.

 

5.4           Purchase Closing. On the Purchase Date, (a) the Purchasing Creditors will execute and deliver the Assignment, (b) the Purchasing Creditors will pay the Purchase Price to First Lien Agent by wire transfer of immediately available funds, (c) the Purchasing Creditors will deposit with First Lien Agent or its designee by wire transfer of immediately available funds, 105% of the aggregate undrawn amount of all then outstanding First Lien Letters of Credit and the aggregate facing and similar fees that will accrue thereon through the stated maturity of the Letters of Credit (assuming no drawings thereon before stated maturity), and (d) each of the  Purchasing Creditors will execute and deliver to the First Lien Agent a waiver and release of, and covenant not to sue in respect of, all claims arising out of this Agreement, the relationship between the First Lien Creditors and the Second Lien Creditors in connection with First Lien Documents and the Second Lien Documents, and the transactions contemplated hereby as a result of exercising the purchase option contemplated by this Section 5.

 

  

25

  

 

5.5           Actions After Purchase Closing.

 

(a)  Promptly after the closing of the purchase of all Purchase Obligations, the First Lien Agent will distribute the Purchase Price to the First Lien Creditors in accordance with the terms of the First Lien Documents. The First Lien Agent shall promptly turn over all possessory collateral to the Second Lien Agent.  After the closing of the purchase of all Purchase Obligations, the Purchasing Creditors may request that First Lien Agent immediately resign as administrative agent and, if applicable, collateral agent under the First Lien Loan Documents, and First Lien Agent will immediately resign if so requested.  Upon such resignation, a new administrative agent and, if applicable, a new collateral agent will be elected or appointed in accordance with the First Lien Loan Documents.

 

(b)  The First Lien Agent will apply cash collateral to reimburse First Lien Letter of Credit issuers for drawings under First Lien Letters of Credit, any customary fees charged by the issuer in connection with such draws, and facing or similar fees. When all Letters of Credit have been cancelled with the consent of the beneficiary thereof, expired, or been fully drawn, and after all payments from the account described above have been made, any remaining cash collateral will be returned to the Purchasing Creditors, as their interests appear. If for any reason the cash collateral is less than the amount owing with respect to a First Lien Letter of Credit described in the preceding sentence, then the Purchasing Creditors will, in proportion to their interests determined as of the time of demand for such reimbursement, promptly reimburse the First Lien Agent (who will then pay the applicable First Lien Creditors) the amount of the deficiency.

 

5.6           No Recourse or Warranties; Defaulting Creditors.

 

(a)  The First Lien Creditors will be entitled to rely on the statements, representations, and warranties in the Purchase Notice without investigation, even if the First Lien Creditors are notified that any such statement, representation, or warranty is not or may not be true.

 

(b)  The purchase and sale of the Purchase Obligations under this Section 5 will be without recourse and without any representation or warranty whatsoever by the First Lien Creditors, except that the First Lien Creditors shall represent and warrant that on the Purchase Date, immediately before giving effect to the purchase, (i) the First Lien Creditors own the Purchase Obligations free and clear of all Liens, (ii) the principal of and accrued and unpaid interest on the First Lien Obligations, and the fees and expenses thereof, are as stated in the assignment agreement and (iii) each First Lien Creditor has the full right and power to assign its First Lien Obligations and such assignment has been duly authorized by all necessary corporate action by such First Lien Creditor.

 

  

26

  

 

(c)  The obligations of the First Lien Creditors to sell their respective Purchase Obligations under this Section 5 are several and not joint and several. If a First Lien Creditor breaches its obligation to sell its Purchase Obligations under this Section 5 (a “Defaulting Creditor”), no other First Lien Creditor will be obligated to purchase the Defaulting Creditor’s Purchase Obligations for resale to the holders of the Second Lien Obligations.  A First Lien Creditor that complies with this Section 5 will not be in default of this Agreement or otherwise be deemed liable for any action or inaction of any Defaulting Creditor, provided that nothing in this subsection (c) will affect the Purchasing Creditors’ obligation to purchase all of the Purchase Obligations.

 

(d)  Each Obligor hereby consents to any assignment effected to one or more Purchasing Creditors pursuant to this Section 5.

 

Section 6.              Bankruptcy Matters.

 

6.1           Bankruptcy.  This Agreement shall be applicable both before and after the filing of any petition by or against any Obligor under the Bankruptcy Code or the commencement of any other Insolvency Proceeding and all converted or succeeding cases in respect thereof.  The relative rights of the First Lien Creditors and the Second Lien Creditors in respect of any Collateral or Proceeds thereof shall continue after the filing of such petition or commencement of such proceeding on the same basis as prior to the date of such filing or commencement of such proceeding.  All references in this Agreement to any Obligor will include such Person as a debtor-in-possession and any receiver, trustee, trustee in bankruptcy, liquidator or other estate representative for such Person in an Insolvency Proceeding.  This Agreement is a “subordination agreement” under section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding.

 

6.2           Post-Petition Financing.  Until the Discharge of First Lien Obligations, if an Insolvency Proceeding has commenced, no Second Lien Creditor may, directly or indirectly, contest, protest, or object to, and each Second Lien Creditor will be deemed to have consented to, and hereby consents in advance to, (1) any use, sale, or lease of “cash collateral” (as defined in section 363(a) of the Bankruptcy Code), and (2) any Borrower or any other Obligor obtaining DIP Financing if the First Lien Agent consents to such use, sale, or lease, or DIP Financing; provided that (A) in the case of a DIP Financing, the Second Lien Agent is not required as a condition to such DIP Financing to release its Lien on the Collateral as the same may exist at the time of such DIP Financing, (B) the Second Lien Agent, on behalf of the Second Lien Creditors, may seek adequate protection as permitted by Section 6.3, (C) the Second Lien Agent may object to the amount of any DIP Financing if, after taking into account the principal amount of such DIP Financing (after giving effect to any Refinancing or “roll-up” of First Lien Obligations) on any date, the sum of the then outstanding principal amount of any First Lien Obligations and the then outstanding principal amount of any DIP Financing (including the unfunded commitments under such DIP Financing) would exceed the Maximum First Lien Principal Amount, and (D) in the case of a DIP Financing, the Liens securing such DIP Financing are pari passu with, or superior in priority to, the then outstanding First Lien Obligations and the Liens securing such First Lien Obligations, respectively.  The Second Lien Creditors further agree that: (i) adequate notice to the Second Lien Creditors for such DIP Financing or use of cash collateral shall be deemed to have been given to the Second Lien Creditors if the Second Lien Agent receives notice in advance of the hearing to approve such DIP Financing or use of cash collateral on an interim basis and at least 5 Business Days in advance of the hearing to approve such DIP Financing or use of cash collateral on a final basis, (ii) such DIP Financing (and any First Lien Obligations) may be secured by Liens on all or a part of the assets of the Obligors that shall be superior in priority to the Liens on the assets of the Obligors held by any other Person, (iii) the Second Lien Creditors consent to, and will, subordinate (and will be deemed hereunder to have subordinated) their Liens (A) to the Liens securing such DIP Financing (the “DIP Liens”) on the same terms (but on a basis junior to the Liens of the First Lien Creditors) as the Liens of the First Lien Creditors are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (B) to any “replacement Liens” or Liens on additional collateral granted to the First Lien Creditors as adequate protection of their interests in the Collateral (the “Senior Adequate Protection Liens”) and (C) to any professional fee or other “carve-out” agreed to by the First Lien Agent or the other First Lien Creditors and (iv) any customary “carve-out” or other similar administrative priority expense or claim consented to in writing by the First Lien Agent (or granted pursuant to any order in any Insolvency Proceeding as to which the First Lien Agent did not object), including, without limitation, breakup fees and expense reimbursement in connection with an auction of any assets of any Obligor to be paid prior to or contemporaneously with the Discharge of First Lien Obligations, will be deemed for purposes of Section 6.2 to be a use of cash collateral or will otherwise be deemed consented to by the Second Lien Creditors.  No Second Lien Creditor may, directly or indirectly, provide or propose, or support any other Person in providing or proposing, DIP Financing to an Obligor; provided, that (x) if no First Lien Creditor or Affiliate of a First Lien Creditor offers to provide DIP Financing to the extent permitted under Section 6.2 on or before the date of the hearing to approve DIP Financing, then a Second Lien Creditor may seek to provide DIP Financing to such extent, so long as (i) no such DIP Financing secured by Liens equal or senior in priority to the Liens securing any First Lien Obligations shall include a “roll-up” of any Second Lien Obligations, (ii) the First Lien Agent shall not be required as a condition to such DIP Financing to release its Lien on the Collateral as the same may exist at the time of such DIP Financing, (iii) any such DIP Financing shall provide adequate protection acceptable to the First Lien Agent or as otherwise determined in an Insolvency Proceeding, and (iv) such DIP Financing shall otherwise be extended in accordance with the terms of this Agreement, and (y) First Lien Creditors may object to any such proposed DIP Financing.

 

  

27

  

 

 

6.3           Adequate Protection

 

(a)  No Second Lien Creditor will contest, protest, or object to (1) any request by a First Lien Creditor for “adequate protection” under any Bankruptcy Law, (2) an objection by a First Lien Creditor to a motion, relief, action, or proceeding based on a First Lien Creditor claiming a lack of adequate protection, or (3) any request by the First Lien Agent for relief from any stay or other relief based upon a lack of adequate protection.

 

(b)  Notwithstanding the preceding Section 6.2, in an Insolvency Proceeding: (1)  except as permitted in this Section 6.3, no Second Lien Creditors may seek or request adequate protection or relief from the automatic stay imposed by section 362 of the Bankruptcy Code or any other applicable Bankruptcy Law, (2) if a First Lien Creditor is granted Senior Adequate Protection Liens, then the Second Lien Agent may seek or request adequate protection in the form of a Lien on the Collateral subject to the Senior Adequate Protection Liens (the “Junior Adequate Protection Liens”), which Junior Adequate Protection Liens will be subordinated to (A) the Liens securing the First Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are subordinated to the Liens securing First Lien Obligations under this Agreement, (B) to the DIP Liens on the same terms (but on a basis junior to the Liens of the First Lien Creditors) as the Liens of the First Lien Creditors are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), and (C) any professional fee or other “carve-out” or other similar administrative priority expense or claim, including, without limitation, breakup fees and expense reimbursement in connection with an auction of any assets of any Obligor to be paid prior to or contemporaneously with the Discharge of First Lien Obligations, agreed to by the First Lien Agent or the other First Lien Creditors; provided that any failure of the Second Lien Creditors to obtain such Junior Adequate Protection Liens shall not impair or otherwise affect the agreements, undertakings and consents of the Second Lien Creditors hereunder; and (3) if a First Lien Creditor is granted adequate protection in the form of a claim under section 507(b) of the Bankruptcy Code or analogous claim under the provisions of any other applicable Bankruptcy Law, then the Second Lien Agent may seek or request adequate protection in the form of a subordinate claim under section 507(b) of the Bankruptcy Code or other provision.  Any claim by a Second Lien Creditor under section 507(b) of the Bankruptcy Code will be subordinate in right of payment to any claim of the First Lien Creditors (and the lenders under any DIP Financing) under section 507(b) of the Bankruptcy Code and any payment thereof will be deemed to be Proceeds of Collateral and the Second Lien Creditors hereby waive their rights under section 1129(a)(9) of the Bankruptcy Code and consent and agree that such section 507(b) claims may be paid under a plan of reorganization in any form having a value on the effective date of such plan equal to the allowed amount of such claims.  The foregoing sentence will apply mutatis mutandis to any analogous claims of the First Lien Creditors and Section Lien Creditors, respectively, under the provisions of any other applicable Bankruptcy Law. Except as expressly set forth above, the Second Lien Creditors shall not seek or request adequate protection in any Insolvency Proceeding, and the First Lien Creditors may oppose any adequate protection proposed to be made by any Obligor to the Second Lien Creditors.  Furthermore, in the event that any Second Lien Creditor actually receives any payment of (or through) adequate protection in any Insolvency Proceeding (including any payment in respect of a claim granted under Section 5.07(b) of the Bankruptcy Code), the same shall be segregated and held in trust and promptly paid over to the First Lien Agent, for the benefit of the First Lien Creditors, in the same form as received, with any necessary endorsements, and each Second Lien Creditor hereby authorizes the First Lien Agent to make any such endorsements as agent for the Second Lien Agent (which authorization, being coupled with an interest, is irrevocable) to be held or applied by the First Lien Agent in accordance with the terms of the First Lien Documents until the Discharge of First Lien Obligations shall have occurred before any of the same may be retained by one or more of the Second Lien Creditors.  Each Second Lien Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority to pay or otherwise deliver all such payments to the First Lien Agent.

 

  

28

  

 

6.4           Sale of Collateral; Waivers.  Notwithstanding anything to the contrary contained herein, the Second Lien Creditors will not contest, protest, or object, and will be deemed to have consented pursuant to section 363(f) of the Bankruptcy Code (or section 36 of the CCAA or any other analogous Bankruptcy Law), to a Disposition of Collateral, or the process or procedures for obtaining bids for and effecting a Disposition of Collateral (including the right of the First Lien Creditors to credit bid and the retention by the Obligors of professionals in connection with any potential Disposition), or any motion or order in connection with any such Disposition, process or procedures, under section 363 of the Bankruptcy Code (or section 36 of the CCAA or any other provision of the Bankruptcy Code or applicable Bankruptcy Law), if the First Lien Agent consents to such Disposition, such process or procedures or such motion or order; provided that (a) either (i) pursuant to court order, the Liens of the Second Lien Creditors attach to the net Proceeds of the Disposition with the same priority and validity as the Liens held by the Second Lien Creditors on such Collateral, and the Liens remain subject to the terms of this Agreement, or (ii) the net Proceeds of a Disposition of Collateral received by First Lien Agent in excess of those necessary to achieve the Discharge of First Lien Obligations are distributed in accordance with the UCC, the PPSA and applicable law, and (b) the net cash Proceeds of any Disposition under Section 363(b) of the Bankruptcy Code (or section 36 of the CCAA or any other provision of the Bankruptcy Code or applicable Bankruptcy Law), net of any reasonable and customary “carve-outs”, breakup fees, expense reimbursement and administrative claims, are permanently applied to the DIP Financing or to the First Lien Obligations or are set aside for any reasonable and customary wind-down, liquidation or similar costs in an amount not to exceed $500,000 in the aggregate for all such Dispositions.  Notwithstanding the foregoing, the Second Lien Agent, on behalf of itself and the other Second Lien Creditors, may raise any objections to any such Disposition that could be raised by any creditor of the Obligors whose claims were not secured by any Liens on such Collateral, provided such objections are not inconsistent with any other term or provision of this Agreement and are not based on the status of the Second Lien Agent or the Second Lien Creditors as secured creditors (without limiting the foregoing, neither the Second Lien Agent nor the Second Lien Creditors may raise any objections based on rights afforded by Sections 363(e) and (f) of the Bankruptcy Code to secured creditors (or by any comparable provision of any Bankruptcy Law)) with respect to the Liens granted to the Second Lien Agent.

 

  

29

  

 

 

6.5           No Waiver.  Nothing in this Section 6 limits a First Lien Creditor from objecting in an Insolvency Proceeding or otherwise to any action taken by the Second Lien Creditor, including the Second Lien Creditor’s seeking adequate protection (other than adequate protection for the Second Lien Creditors expressly contemplated by Section 6.3), proposing a DIP Financing unless permitted by Section 6.2 or asserting any of its rights and remedies under the Second Lien Documents or otherwise.

 

6.6           Relief From the Automatic Stay.  Until the Discharge of First Lien Obligations, no Second Lien Creditor may seek relief from the automatic stay or any other stay in an Insolvency Proceeding in respect of the Collateral without the First Lien Agent’s prior written consent or oppose any request by the First Lien Agent for relief from such stay.

 

6.7           Waiver.  The Second Lien Agent and the Second Lien Creditors waive (a) any claim they may now or hereafter have arising out of the First Lien Creditors’ election in any proceeding instituted under Chapter 11 of the Bankruptcy Code of the application of Section 1111(b)(2) of the Bankruptcy Code, out of any cash collateral or financing arrangement or out of any grant of security interest in the Collateral in any Insolvency Proceeding, (b) any right to assert or enforce any claim under section 506(c) or 552 of the Bankruptcy Code as against First Lien Creditors or any of the Collateral to the extent securing the First Lien Obligations, or (c) any claim they may have, pursuant to any other applicable Bankruptcy Law, which is analogous to any claim described in (a) or (b).

 

  

30

  

 

6.8           Avoidance Issues; Reinstatement.  If a First Lien Creditor or a Second Lien Creditor receives payment or property on account of a First Lien Obligation or Second Lien Obligation, and the payment is subsequently invalidated, avoided, declared to be fraudulent, reviewable or preferential, set aside, or otherwise required to be transferred to a trustee, receiver, or an Obligor or an the estate of an Obligor (a “Recovery”), then, to the extent of the Recovery, the First Lien Obligations or Second Lien Obligations intended to have been satisfied by the payment will be reinstated as First Lien Obligations or Second Lien Obligations, as applicable, on the date of the Recovery, and no Discharge of First Lien Obligations or Discharge of Second Lien Obligations, as applicable, will be deemed to have occurred for all purposes hereunder. If this Agreement is terminated prior to a Recovery, this Agreement will be reinstated in full force and effect, and such prior termination will not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from the date of reinstatement. Upon any such reinstatement of First Lien Obligations, each Second Lien Creditor will deliver to First Lien Agent any Collateral or Proceeds thereof received between the date of Discharge of First Lien Obligations and the Recovery.  No Second Lien Creditor may benefit from a Recovery, and any distribution made to a Second Lien Creditor as a result of a Recovery will be paid over to the First Lien Agent for application to the First Lien Obligations in accordance with this Agreement.

 

6.9           Certain Voting Rights.  No Second Lien Creditor shall, without the consent of the First Lien Agent, directly or indirectly propose, support or vote in favor of any a plan of reorganization or arrangement or similar dispositive restructuring plan in connection with an Insolvency Proceeding that provides for treatment of the First Lien Creditors, the First Lien Obligations, the Second Lien Creditors or the Second Lien Obligations in a manner, or that is otherwise, inconsistent with this Agreement.

 

6.10           Reorganization Securities.  Nothing in this Agreement prohibits or limits the right of a Second Lien Creditor to receive and retain (a) any debt or equity securities that are issued by a reorganized debtor pursuant to a plan of reorganization or similar dispositive restructuring plan in connection with an Insolvency Proceeding, provided that any debt or equity securities received prior to the Discharge of First Lien Obligations by a Second Lien Creditor on account of a Second Lien Obligation that constitutes a distribution from or on account of the Collateral, an interest in Collateral or the value of Collateral, whether such distribution is made in respect of a “secured claim” within the meaning of section 506(b) of the Bankruptcy Code  or (except as provided below) otherwise, will be paid over or otherwise transferred to the First Lien Agent for application in accordance with this Agreement, unless such distribution is made under a plan that is consented to by the affirmative vote of all classes composed of the secured claims of the First Lien Creditors (and such classes do not include the claims of any creditors other than First Lien Creditors), or (b) any Distribution received by such Second Lien Creditor pursuant to a plan of reorganization or arrangement or similar dispositive restructuring plan in connection with an Insolvency Proceeding in respect of any claim classified under such plan as an unsecured claim in accordance with section 506(a)(1) of the Bankruptcy Code (or analogous Bankruptcy Law).

 

  

31

  

 

6.11           Post-Petition Interest.

 

(a)  Neither the Second Lien Agent nor any other Second Lien Creditor shall oppose or seek to challenge any claim by the First Lien Agent or any other First Lien Creditor for allowance in any Insolvency Proceeding of First Lien Obligations consisting of post-petition interest, fees or expenses, or the payment of any such amount during the pendency of such proceedings, to the extent of the value of the Lien on the Collateral of the First Lien Creditors, without regard to the existence of the Lien of the Second Lien Agent and the other Second Lien Creditors.

 

(b)  Neither the First Lien Agent nor any other First Lien Creditor shall oppose or seek to challenge any claim by the Second Lien Agent or any other Second Lien Creditor for allowance in any Insolvency Proceeding of Second Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Lien on the Collateral of the Second Lien Creditors (after taking into account the Lien of the First Lien Creditors on the Collateral and the extent of the First Lien Obligations, including any post-petition interest, fees or expenses included in such First Lien Obligations).

 

6.12           Separate Grants of Security and Separate Classification.  Each Second Lien Creditor acknowledges and agrees that (a) the grants of Liens pursuant to the First Lien Documents and the Second Lien Documents constitute two separate and distinct grants of Liens and (b) because of their differing rights in the Collateral, the Second Lien Obligations are fundamentally different from the First Lien Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding.  The Second Lien Creditors shall not seek in any Insolvency Proceeding to be treated as part of the same class of creditors as the First Lien Creditors and shall not oppose any pleading or motion by the First Lien Creditors for the First Lien Creditors and the Second Lien Creditors to be treated as separate classes of creditors.  Notwithstanding the foregoing, if it is held that the First Lien Obligations and the Second Lien Obligation constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Second Lien Creditors hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Obligors in respect of the Collateral, with the effect being that, to the extent that the aggregate value of the Collateral exceeds the amount of the First Lien Obligations incurred and accrued before the commencement of any Insolvency Proceeding, the First Lien Creditors shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, and fees, costs and charges incurred subsequent to the commencement of the applicable Insolvency Proceeding before any distribution is made in respect of any of the claims held by the Second Lien Creditors.  The Second Lien Creditors hereby agree to turn over to the First Lien Creditors amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of the preceding sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Lien Creditors.

 

6.13           Rights as Unsecured Lenders.  In any Insolvency Proceeding, the Second Lien Creditors may exercise any rights and remedies that could be exercised by an unsecured creditor in accordance with the terms of the Second Lien Documents and applicable law, in each case in a manner not inconsistent with the terms of this Agreement.

 

  

32

  

 

Section 7.               Representations and Warranties.

 

7.1           Representations and Warranties of Each Party.  Each party hereto represents and warrants to the other parties hereto as follows:

 

(a)  Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to execute and deliver this Agreement and perform its obligations hereunder.

 

(b)  This Agreement has been duly executed and delivered by such party and constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

(c)  The execution, delivery and performance by such party of this Agreement (i) do not require any consent or approval of, registration or filing with or any other action by any governmental authority and (ii) will not violate any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or other constitutive documents or by-laws of such party or any order of any governmental authority or any provision of any material indenture, material agreement or other material instrument binding upon such party.

 

7.2           Representations and Warranties of First Lien Agent and Second Lien Agent.  Each of the First Lien Agent and the Second Lien Agent  represents and warrants to the other parties hereto that it has been authorized by the Lenders under and as defined in the First Lien Loan Agreement or the Second Lien Loan Agreement, as applicable, to enter into this Agreement.

 

Section 8.                      Miscellaneous.

 

8.1           Termination.  Subject to Section 4.5, this Agreement shall terminate and be of no further force and effect upon the first to occur of (a) the Discharge of Excess First Lien Obligations or (b) the Discharge of Second Lien Obligations.

 

8.2           Successors and Assigns; No Third Party Beneficiaries.

 

(a)  This Agreement shall be binding upon each Secured Creditor and its respective successors and assigns and shall inure to the benefit of each Secured Creditor and its respective successors, participants and assigns. However, no provision of this Agreement shall inure to the benefit of any other Person, including a trustee, debtor-in-possession, creditor trust or other representative of an estate or creditor of any Borrower, or other Obligor, including where such estate or creditor representative is the beneficiary of a Lien on Collateral by virtue of the avoidance of such Lien in an Insolvency Proceeding.  If either the First Lien Agent or Second Lien Agent resigns or is replaced pursuant to the First Lien Loan Agreement or Second Lien Loan Agreement, as applicable, its successor will be a party to this Agreement with all the rights, and subject to all the obligations, of this Agreement.  Notwithstanding any other provision of this Agreement, this Agreement may not be assigned to any Person except as expressly contemplated herein.

 

  

33

  

 

(b)  Each Secured Creditor reserves the right to grant participations in, or otherwise sell, assign, transfer or negotiate all or any part of, or any interest in, their respective Obligations.  No Secured Creditor shall be obligated to give any notices to or otherwise in any manner deal directly with any participant in the Obligations and no participant shall be entitled to any rights or benefits under this Agreement, except through the Secured Creditor with which it is a participant.

 

(c)  In connection with any participation or other transfer or assignment, a Secured Creditor shall disclose to such participant or other transferee or assignee the existence and terms and conditions of this Agreement and require that such participant or other transferee or assignee agree in writing to be bound by the terms of this Agreement.  The Second Lien Agent agrees that the Second Lien Loan Agreement and each Second Lien Collateral Document will include the following legend (or language to a similar effect approved by the First Lien Agent):

 

“Notwithstanding anything herein to the contrary, the lien and security interest granted to the Second Lien Agent pursuant to or in connection with this Agreement, the terms of [any Security Document] [this Agreement], and the exercise of any right or remedy by the Second Lien Agent [t]hereunder are subject to the provisions of the Intercreditor Agreement dated as of March 27, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Bank of America, N.A., as the First Lien Agent, and Guggenheim Corporate Funding, LLC, as Second Lien Agent.  In the event of any conflict between the terms of the Intercreditor Agreement and this agreement [or any Security Document], the terms of the Intercreditor Agreement shall control.”

 

8.3           Notices.  All notices and other communications provided for hereunder shall be in writing and shall be mailed, sent by overnight courier, telecopied or delivered, as follows:

 

(a)  if to the First Lien Agent, to it at the following address:

 

c/o Bank of America, N.A., as First Lien Agent

One Bryant Park

New York, New York 10036

Attention:  Portfolio Manager (Rand Logistics)

Telecopier:  (312) 453-5562

 

  

34

  

 

with a copy to:

 

Otterbourg P.C.

230 Park Avenue

New York, NY 10169

Attention:  Richard L. Stehl, Esq.

Telecopier No.:  (212) 682-6104

 

(b)  if to the Second Lien Agent, to it at the following address:

 

Guggenheim Corporate Funding, LLC

c/o Guggenheim Partners

330 Madison Avenue

New York, NY 10017

Attention:  Legal Department

Telephone:  (212) 389-9295

Telecopier:  (212) 644-8107

with a copy to:

 

Blank Rome LLP

The Chrysler Building

405 Lexington Avenue

New York, NY 10174

Attention:  Scott R. Smith

 

 

Telephone:  (917) 332-3711

Telecopier:  (212) 885-5303

or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 7.3.  All such notices and other communications shall be effective (1) if sent by registered mail, return receipt requested, when received, (2) if sent by facsimile, when transmitted and a confirmation is received, provided that the same is on a Business Day and, if not, on the next Business Day or (3) if delivered by messenger or overnight courier, upon delivery, provided that the same is on a Business Day and, if not, on the next Business Day.

 

 

8.4           Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, and each such counterpart shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

 

 

8.5           GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

  

35

  

 

8.6           CONSENT TO JURISDICTION AND VENUE.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE FIRST LIEN AGENT ON BEHALF OF THE FIRST LIEN CREDITORS AND THE SECOND LIEN AGENT ON BEHALF OF THE SECOND LIEN CREDITORS HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS.

 

 

8.7           MUTUAL WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AS APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.7.

 

8.8           Amendments.  No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Person from the terms hereof, shall in any event be effective unless it is in writing and signed by the Second Lien Agent, with the consent of the Requisite Second Lien Creditors and the First Lien Agent, with the consent required under the First Lien Loan Agreement.  In no event shall the consent of any Obligor be required in connection with any amendment or other modification of this Agreement, except with respect to amendments to Sections 4.5(c) and 8.22.

 

8.9           No Waiver.  No failure or delay on the part of any Secured Creditor in exercising any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.

 

8.10           Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provisions in any other jurisdiction.

 

8.11           Further Assurances.  Each party hereto agrees to cooperate fully with each other party hereto to effectuate the intent and provisions of this Agreement and, from time to time, to take such further action and to execute and deliver such additional documents and instruments (in recordable form, if requested) as the First Lien Agent or Second Lien Agent may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.

 

  

36

  

 

8.12           Headings.  The section headings contained in this Agreement are and shall be without meaning or content whatsoever and are not part of this Agreement.

 

8.13           Credit Analysis.  The Secured Creditors shall each be responsible for keeping themselves informed of (a) the financial condition of the Obligors and all other endorsers, obligors or guarantors of the  Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Obligations, and have made and shall continue to make, independently and without reliance upon each other, their own credit analysis and decision in entering into the First Lien Documents and Second Lien Documents to which they are parties and taking or not taking any action thereunder.  No Secured Creditor shall have any duty to advise any other Secured Creditor of information known to it regarding such condition or any such other circumstances, and no disclosure of any such information shall create any obligation to provide any further information or be deemed to constitute or require any representation or warranty from the disclosing Secured Party regarding that or any other information.  No Secured Creditor assumes any liability to any other Secured Creditor or to any other Person with respect to:  (i) the financial or other condition of Obligors and all other endorsers, obligors or guarantors of the  Obligations, (ii) the enforceability, validity, value or collectability of the Obligations, any Collateral therefor or any guarantee or security which may have been granted in connection with any of the Obligations,  (iii) any Obligor’s title or right to transfer any Collateral or security or (iv) any other circumstance that might bear on the risk of nonpayment of any Obligations.

 

8.14           Waiver of Claims.  To the maximum extent permitted by law, each party hereto waives any claim it might have against any Secured Creditor with respect to, or arising out of, any action or failure to act or any error of judgment or negligence, mistake or oversight whatsoever on the part of any other party hereto or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Documents or any transaction relating to the Collateral in accordance with this Agreement.  None of the Secured Creditors, nor any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or, except as specifically provided in this Agreement, shall be under any obligation to Dispose of any Collateral upon the request of any Obligor or any Secured Creditor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.

 

8.15           Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of the Documents, the provisions of this Agreement shall govern.

 

8.16           Specific Performance.  Each of the First Lien Agent and the Second Lien Agent may demand specific performance of this Agreement and, on behalf of itself and the respective other Secured Creditors, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action which may be brought by the respective Secured Creditors.  The rights and remedies provided in this Agreement will be cumulative and not exclusive of other rights or remedies provided by law.

 

  

37

  

 

8.17           Indirect Action.  Unless otherwise expressly stated, if a Party may not take an action under this Agreement, then it may not take that action indirectly, or take any action assisting or supporting any other Person in taking that action directly or indirectly. “Taking an action indirectly” means taking an action that is not expressly prohibited for the Party but is intended to have substantially the same effects as the prohibited action.

 

8.18           Provisions Solely to Define Relative Rights.  The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Secured Creditors.  None of the Obligors or any other creditor thereof shall have any rights hereunder, and none of the Obligors may rely on the terms hereof.  Nothing in this Agreement is intended to or shall impair the obligations of Obligors, which are absolute and unconditional, to pay the First Lien Obligations and the Second Lien Obligations as and when the same shall become due and payable in accordance with their respective, or to affect the relative rights of the lenders of any Obligor, other than the relative rights between the First Lien Agent and the First Lien Creditors, on the one hand, and the Second Lien Agent and the Second Lien Creditors, on the other.

 

8.19           Subrogation.  If a Second Lien Creditor pays or distributes cash, property, or other assets to a First Lien Creditor under this Agreement, the Second Lien Creditor will be subrogated to the rights of the First Lien Creditor with respect to the value of the payment or distribution, provided that the Second Lien Creditor waives all rights of subrogation arising hereunder or otherwise in respect of any such payment or distribution until the Discharge of First Lien Obligations.  Such payment or distribution will not reduce the Second Lien Obligations.

 

8.20           Entire Agreement.  This Agreement and the Documents embody the entire agreement of the Obligors, the First Lien Agent, the First Lien Creditors, the Second Lien Agent and the Second Lien Creditors with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings relating to the subject matter hereof and thereof and any draft agreements, negotiations or discussions involving any Obligor and any of the First Lien Agent, the First Lien Creditors, the Second Lien Agent and the Second Lien Creditors relating to the subject matter hereof.

 

8.21           Survival.  All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.  The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency Proceeding.  The Second Lien Agent, for itself and on behalf of the other Second Lien Secured Parties, hereby waives any and all rights the Second Lien Secured Parties may now or hereafter have under applicable law to revoke this Agreement or any of the provisions of this Agreement.

 

  

38

  

 

8.22           Intercompany Indebtedness.  By their execution thereof, each of the Obligors hereby covenants and agrees that all Indebtedness owing by any Obligor to any other Obligor is hereby expressly subordinated, to the extent and in the manner immediately hereinafter set forth, in right of payment to the prior payment in full in cash of all First Lien Obligations and all Second Lien Obligations.  For all purposes hereof, a payment or distribution on account of such intercompany Indebtedness may consist of cash, property or securities, by set-off or otherwise, and a payment or distribution on account of such intercompany Indebtedness shall include, without limitation, any redemption, purchase or other acquisition of such intercompany Indebtedness.  The subordination provisions herein set forth are made for the benefit of the holders of the First Lien Obligations and the Second Lien Obligations, and such holders may proceed to enforce such provisions.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

  

39

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

	 	

FIRST LIEN AGENT:

	 
	 	 	 
	 	BANK OF AMERICA, N.A., as First Lien Agent	 
	 	 	 	 
	
 

	
By: 

	/s/ Daniel K. Clancy	 
	 	Name:	Daniel K. Clancy	 
	 	Title:	Senior Vice President	 

 

  

Signature page to Intercreditor Agreement

  

 

	 	
SECOND LIEN AGENT:

	 
	 	 	 
	 	
GUGGENHEIM CORPORATE FUNDING, LLC,

 as Second Lien Agent

	 
	 	 	 	 
	
 

	
By: 

	/s/ William R. Hagner	 
	 	Name:	William R. Hagner	 
	 	Title:	Attorney-in-Fact	 

 

  

Signature page to Intercreditor Agreement

  

 

Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions.

 

BORROWERS:

 

	 	
LOWER LAKES TOWING LTD.,

a Canadian corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	 Joseph W. McHugh, Jr.	 
	 	Title:	
Vice President, Assistant Treasurer and 

Assistant Secretary

	 
	 	 	 

	 	
LOWER LAKES TRANSPORTATION COMPANY,

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	Joseph W. McHugh, Jr.	 
	 	Title:	
Vice President, Assistant Treasurer and 

Assistant Secretary

	 
	 	 	 

	 	
GRAND RIVER NAVIGATION COMPANY, INC.,

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	Joseph W. McHugh, Jr.	 
	 	Title:	
Vice President, Assistant Treasurer and

Assistant Secretary

	 
	 	 	 

	 	
BLACK CREEK SHIPPING COMPANY, INC.,

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	Joseph W. McHugh, Jr.	 
	 	Title:	
Chief Financial Officer, Vice President, 

Secretary and Treasurer

	 

 

  

Signature page to Intercreditor Agreement

  

 

	 	
OBLIGORS:

	 
	 	 	 
	 	
LOWER LAKES SHIP REPAIR COMPANY LTD.,

a Canadian corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	Joseph W. McHugh, Jr.	 
	 	Title:	
Vice President, Assistant Secretary and 

Assistant Treasurer

	 
	 	 	 

	 	
RAND LOGISTICS, INC., a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	Joseph W. McHugh, Jr.	 
	 	Title:	
Chief Financial Officer, Vice President, 

Treasurer and Assistant Secretary

	 
	 	 	 

	 	
RAND LL HOLDINGS CORP., a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	 Joseph W. McHugh, Jr.	 
	 	Title:	
 Chief Financial Officer, Vice President, 

Treasurer and Assistant Secretary

	 
	 	 	 

 

	 	
RAND FINANCE CORP., a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	 Joseph W. McHugh, Jr.	 
	 	Title:	
 Chief Financial Officer, Vice President, 

Secretary and Treasurer

	 
	 	 	 

	 	
BLACK CREEK SHIPPING HOLDING COMPANY, INC.,

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	 Joseph W. McHugh, Jr.	 
	 	Title:	Chief Financial Officer, Vice President, Secretary and Treasurer	 

 

  

Signature page to Intercreditor Agreement

  

 

	 	
LOWER LAKES TOWING (17) LTD.,

an Ontario corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Joseph W. McHugh, Jr.	 
	 	Name:	 Joseph W. McHugh, Jr.	 
	 	Title:	Vice President, Assistant Secretary and Assistant Treasurer	 

 

  

Signature page to Intercreditor Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00243-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00243-of-00352.parquet"}]]