EXHIBIT 10.1
CREDIT AGREEMENT BETWEEN SEAENA, INC. AND
NORTH FORK BANK DATED JUNE 2, 2006
CREDIT AGREEMENT
Dated as of June 2, 2006
between
SEAENA, INC.,
as Borrower,
and
NORTH FORK BANK
as Lender
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND TERMS; INTERPRETATION................................1
1.1 Definitions..........................................................1
1.2 Accounting Terms....................................................13
1.3 UCC Terms...........................................................14
1.4 Rules of Interpretation.............................................14
ARTICLE II AMOUNT AND TERMS OF LINE OF CREDIT AND TERM LOAN...................14
2.1 Line of Credit......................................................14
2.2 Procedure for Credit Line Loan Borrowing............................15
2.3 Term Loan...........................................................15
2.4 Term Loan Repayment.................................................15
2.5 Optional Prepayment.................................................16
2.6 Conversion and Continuation Options.................................16
2.7 Limitations on Interest Periods.....................................16
2.8 Interest Rates and Payment Dates....................................16
2.9 Computation of Interest and Fees....................................17
2.10 Inability to Determine Interest Rate................................17
2.11 Payments............................................................17
2.12 Requirements of Law.................................................18
2.13 Taxes...............................................................18
2.14 Indemnity...........................................................20
2.15 Interest Rate Limitation............................................20
ARTICLE III CONDITIONS PRECEDENT..............................................20
3.1 Conditions of Loans.................................................20
3.2 Conditions to All Loans.............................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................22
4.1 Financial Statements; No Adverse Change.............................22
4.2 Existence; Compliance with Law......................................22
4.3 Authority...........................................................23
4.4 Binding Effect......................................................23
4.5 No Legal Bar........................................................23
4.6 No Material Litigation..............................................23
4.7 No Default..........................................................23
4.8 No Burdensome Restrictions..........................................23
4.9 Taxes...............................................................24
4.10 Title to Properties; Priority of Liens..............................24
4.11 Leases..............................................................24
4.12 Solvency............................................................24
4.13 Labor Matters.......................................................24
4.14 Erisa Matters.......................................................24
4.15 Environmental Matters...............................................25
4.16 Trade Relations.....................................................25
4.17 Trade Names, Etc....................................................26
4.18 Capital Structure...................................................26
4.19 Surety Obligations..................................................26
4.20 Business Locations; Agent for Process...............................26
4.21 Intellectual Property...............................................26
4.22 Federal Regulations.................................................26
4.23 Governmental Consents...............................................26
4.24 Use of Proceeds.....................................................27
4.25 Accuracy and Completeness of Information............................27
ARTICLE V AFFIRMATIVE COVENANTS...............................................27
5.1 Maintenance of Existence; Compliance................................27
5.2 Financial and Other Information and Compliance Certificates.........27
5.3 Litigation and Other Notices........................................29
5.4 Insurance; Payment of Premiums......................................30
5.5 Preservation of Properties, Compliance with Law and Obligations.....31
5.6 Taxes...............................................................31
5.7 Access to Properties and Inspections................................31
5.8 Further Assurances..................................................31
5.9 Trade Names.........................................................31
5.10 Landlord and Storage Agreements.....................................31
5.11 Environmental Laws..................................................31
5.12 Margin Regulations..................................................32
5.13 Internal Control Events.............................................32
5.14 Operating Accounts..................................................32
5.15 Pledged Assets......................................................32
ARTICLE VI FINANCIAL COVENANTS................................................33
6.1 Minimum Consolidated Tangible Net Worth.............................33
6.2 Maximum Consolidated Leverage Ratio.................................33
6.3 Minimum Consolidated Interest Coverage Ratio.......................33
6.4 Net Loss............................................................34
ARTICLE VII NEGATIVE COVENANTS................................................34
7.1 Indebtedness........................................................34
7.2 Mergers; Consolidations; Acquisitions; Structural Changes...........34
7.3 Loans...............................................................34
7.4 Liens...............................................................34
7.5 Contingent Liabilities..............................................35
7.6 Restricted Payments.................................................35
7.7 Sales of Receivables; Sale - Leasebacks.............................35
7.8 Capital Expenditures................................................35
7.9 Alter Business......................................................35
7.10 Transactions With Affiliates........................................35
7.11 Fiscal Year.........................................................36
7.12 Subordinated Debt...................................................36
7.13 Disposition of Assets...............................................36
7.14 Restricted Investment...............................................36
7.15 Swap Agreements.....................................................36
7.16 Negative Pledge Clauses.............................................36
7.17 Clauses Restricting Subsidiary Distributions........................36
7.18 Subsidiaries........................................................36
ARTICLE VIII EVENTS OF DEFAULT................................................37
8.1 Events of Default...................................................37
8.2 Acceleration........................................................39
8.3 Remedies............................................................39
8.4 Appointment of Attorney-in-fact.....................................40
8.5 Limitation on Duty of Lender with Respect to Collateral.............40
8.6 Application of Proceeds.............................................40
8.7 License of Intellectual Property....................................41
ARTICLE IX MISCELLANEOUS......................................................41
9.1 Set Off.............................................................41
9.2 Assignment and Participations.......................................41
9.3 Notices.............................................................42
9.4 Survival of Representations and Warranties..........................42
9.5 Remedies Cumulative; No Waiver......................................43
9.6 Indemnity; Payment of Expenses and Taxes............................43
9.7 Termination.........................................................44
9.8 Binding Effect......................................................44
9.9 Amendments..........................................................44
9.10 Acknowledgements....................................................44
9.11 Headings............................................................44
9.12 Consents, etc. to be in Writing.....................................45
9.13 Severability........................................................45
9.14 Entire Agreement....................................................45
9.15 Execution in Counterparts...........................................45
9.16 Lender's Consent....................................................45
9.17 Construction........................................................45
9.18 USA PATRIOT Act.....................................................45
9.19 Governing Law.......................................................46
9.20 Submission to Jurisdiction; Waivers.................................46
9.21 WAIVER OF JURY TRIAL................................................46
CREDIT AGREEMENT
CREDIT AGREEMENT (this "AGREEMENT"), dated June 2, 2006, between
SEAENA, INC., a Nevada corporation ("BORROWER"), and NORTH FORK BANK, a New York
banking corporation ("LENDER").
RECITALS
Borrower has requested that Lender provide credit facilities for the
purposes hereinafter set forth.
Lender has agreed to make the requested credit facilities available to
Borrower on the terms and conditions hereinafter set forth.
The parties hereto hereby agree as follows:
ARTICLE I DEFINITIONS AND TERMS; INTERPRETATION
1.1 DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"ABR": the Prime Rate PLUS 1.0%.
"ABR LOANS": Credit Line Loans, or portions of the Term Loan,
the rate of interest applicable to which is based upon the ABR.
"AFFILIATE": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "CONTROL" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT": as defined in the preamble hereto.
"AMORTIZATION DATE": as defined in Section 2.4.
"AUDITED FINANCIAL STATEMENTS": the audited consolidated
balance sheet of Borrower and its Subsidiaries for the fiscal year ended
December 31, 2005 and the related consolidated statements of operations,
comprehensive loss, stockholders' deficit and cash flows for such fiscal year of
Borrower and its Subsidiaries, including the notes thereto.
"AVAILABILITY PERIOD": the period from and including the
Closing Date to, but not including, the date that is one year from the Closing
Date; provided that the Availability Period shall in no event extend beyond the
Termination Date.
"BASE LIBOR RATE": with respect to any LIBOR Rate Loan for any
Interest Period, the rate per annum appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by Lender from time to time for purposes of providing quotations of
interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, three Business Days prior to
the commencement of such Interest Period, as the rate for U.S. dollar deposits
with a maturity comparable to
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such Interest Period (or if not so reported, then as determined by Lender from
another recognized source or interbank quotation).
"BOARD": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWER MEMBERSHIP INTEREST PLEDGE AGREEMENT": the
Membership Interest Pledge Agreement to be executed and delivered by Borrower on
the closing date.
"BORROWER SECURITY AGREEMENT": the Borrower Security Agreement
to be executed and delivered by Borrower on the Closing Date.
"BORROWER STOCK PLEDGE AGREEMENT": the Stock Pledge Agreement
to be executed and delivered by Borrower on the closing date.
"BORROWING DATE": any Business Day specified by Borrower as a
date on which Borrower requests Lender to make a Loan hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close, PROVIDED, that with respect to notices and determinations in
connection with, and payments of principal and interest on, LIBOR Rate Loans,
such day is also a day for trading in London by and between banks in deposits in
the relevant currency.
"CAPITAL EXPENDITURES": for any period, the aggregate of all
expenditures by any Person for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) that
should be capitalized under GAAP on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
"CHANGE OF CONTROL": an event or series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding
any employee benefit plan of such person or its
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subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan), other than U.C. Laser,
Inc., Xxxxx Xxxx, any spouse of any Xxxxx Xxxx, any lineal descendants and
trusts for the exclusive benefit of Xxxxx Xxxx or any entity controlled by Xxxxx
Xxxx, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such person or
group has the right to acquire (such right, an "OPTION RIGHT"), whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the Voting Shares on a fully-diluted basis (and
taking into account all such securities that such person or group has the right
to acquire pursuant to any option right);
(b) during any period of 12 consecutive months, a majority
of the members of the board of directors Borrower cease to be composed of
individuals (i) who were members of that board on the first day of such period,
(ii) whose election or nomination to that board was approved by individuals
referred to in clause (i) above constituting at the time of such election or
nomination at least a majority of that board or (iii) whose election or
nomination to that board was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such election or nomination at least
a majority of that board (excluding, in the case of both clause (ii) and clause
(iii), any individual whose initial nomination for, or assumption of office as,
a member of that board occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for the election of
one or more directors by or on behalf of the board of directors); or
(c) any Person or two or more Persons (other than those
permitted to beneficially own a controlling percentage of equity securities
pursuant to subsection (a) above) acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Borrower (other than pursuant to an employment
arrangement), or control over the Voting Shares on a fully-diluted basis (and
taking into account all such securities that such Person or group has the right
to acquire pursuant to any option right) representing 35% or more of the
combined voting power of the Voting Shares.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 3.1 have been satisfied, which date is June __, 2006.
"CODE": the Internal Revenue Code of 1986.
"COLLATERAL": all Property and interests in Property that now
or hereafter secures the payment and performance of any of the Obligations.
"COLLATERAL INFORMATION CERTIFICATE": the Collateral
Information Certificate to be executed and delivered by Borrower on the Closing
Date.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with Borrower within the meaning of
Section 4001 of ERISA or is part of a group that includes Borrower and that is
treated as a single employer under Section 414 of the Code.
"CONSOLIDATED EBIT": for any period, for Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period PLUS (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Expense for such period,
(ii) the provision for Federal, state, local and foreign income taxes payable by
Borrower and its Subsidiaries for such period, and (iii) other non-recurring
expenses of Borrower and its Subsidiaries
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reducing such Consolidated Net Income which do not represent a cash item in such
period or any future period and MINUS (b) the following to the extent included
in calculating such Consolidated Net Income: (i) Federal, state, local and
foreign income tax credits of Borrower and its Subsidiaries for such period and
(ii) all non-cash items increasing Consolidated Net Income for such period.
"CONSOLIDATED EBITDA": for any period, for Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period PLUS (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Expense for such period,
(ii) the provision for Federal, state, local and foreign income taxes payable by
Borrower and its Subsidiaries for such period, (iii) depreciation and
amortization expense and (iv) other non-recurring expenses of Borrower and its
Subsidiaries reducing such Consolidated Net Income which do not represent a cash
item in such period or any future period and MINUS (b) the following to the
extent included in calculating such Consolidated Net Income: (i) Federal, state,
local and foreign income tax credits of Borrower and its Subsidiaries for such
period and (ii) all non-cash items increasing Consolidated Net Income for such
period.
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period, the
ratio of (a) the Consolidated EBIT for such period to (b) the Consolidated
Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE": for any period, for Borrower
and its Subsidiaries on a consolidated basis, all interest and all amortization
of debt discount and expense (including commitment fees, letter of credit fees,
balance deficiency fees and similar expense) on all Indebtedness of Borrower and
the Subsidiaries on a consolidated basis (including outstanding letters of
credit), paid or required to be paid during such period, all as determined in
accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO": as of any date of
determination, the ratio of (a) Consolidated Funded Indebtedness as of such date
to (b) Consolidated EBITDA for the period of the four fiscal quarters most
recently ended.
"CONSOLIDATED NET INCOME": for any period, for Borrower and
its Subsidiaries on a consolidated basis, the net income of Borrower and its
Subsidiaries (excluding extraordinary gains and extraordinary losses) for that
period.
"CONSOLIDATED NET LOSS": for any period, the Consolidated Net
Income for that period is less than zero.
"CONSOLIDATED TANGIBLE NET WORTH": as of any date of
determination, for Borrower and its Subsidiaries on a consolidated basis, the
Stockholders' Equity on that date minus the Intangible Assets of Borrower and
its Subsidiaries on that date.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL AGREEMENTS": the Control Agreements to be executed
and delivered by the Securities Intermediary and each Individual Guarantor on
the Closing Date.
"CREDIT LINE LOANS": Loans made pursuant to the terms of
Section 2.1.
"DEFAULT": any of the events specified in Article VIII,
whether or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
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"DISPOSITION": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "DISPOSE" and "DISPOSED OF" shall have correlative meanings.
"DOLLARS" and "$": dollars in lawful currency of the United
States.
"DOMESTIC SUBSIDIARY": any direct or indirect Subsidiary of
Borrower (other than a direct or indirect Subsidiary of a Foreign Subsidiary)
which is incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" and "ERISA AFFILIATES: shall respectively
mean any one or more of any: (a) Subsidiary of any Borrower; and (b) other
trade, business, Person or Persons that together with any Borrower would be
deemed to be a single employer within the meaning of Section 4001 of ERISA.
"EVENT OF DEFAULT": any of the events specified in Article
VIII, PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"FACILITY": collectively, the Line of Credit Facility and the
Term Loan Facility.
"FOREIGN SUBSIDIARY": any direct or indirect Subsidiary of
Borrower which is not is incorporated or organized under the laws of any State
of the United States or the District of Columbia.
"FUNDED INDEBTEDNESS": at a particular date of determination,
all Indebtedness of a Person that (i) has a stated maturity of more than one
year from the date of determination, or (ii) is extendable or renewable at the
option of such Person (if such option is immediately and unconditionally
exercisable by such Person on the date of determination) to a date which is more
than one year from the date of determination, as determined in accordance with
GAAP applied on a consistent basis.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Article VI,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
reviewed financial statements referred to in Section 4.1. In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then Borrower and Lender agree to enter into negotiations in
order to amend such provisions of this Agreement so as to reflect equitably such
Accounting Changes with the desired result that the criteria for evaluating
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by Borrower and Lender, all
financial covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Changes had not occurred.
"ACCOUNTING CHANGES" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the
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Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing Person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any Indebtedness, leases, dividends or other obligations (the
"PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by Borrower in good faith.
"GUARANTORS": the collective reference to the Individual
Guarantors and the Subsidiaries.
"GUARANTY AGREEMENTS": the collective reference to the
Subsidiary Guaranty and the Individual Guaranty.
"GUARANTY JOINDER AGREEMENT": each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Subsidiary Guaranty, executed
and delivered by a Subsidiary to Lender pursuant to Section 7.18.
"HAZARDOUS MATERIALS": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables, advance payments from customers and
deferred revenue, in each case as incurred, received or deferred in the ordinary
course of such Person's business), (c) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d)
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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 of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under or in
respect of acceptances, letters of credit, surety bonds or similar arrangements,
(g) the liquidation value of all mandatorily redeemable preferred Capital Stock
of such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, and (j) for the purposes of
Section 8.1(g) only, all obligations of such Person in respect of Swap
Agreements. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.
"INDIVIDUAL GUARANTY AGREEMENT": each Individual Guaranty to
be executed and delivered by each Individual Guarantor on the Closing Date.
"INDIVIDUAL GUARANTOR PLEDGE AGREEMENT": each Individual
Guarantor Pledge Agreement to be executed and delivered by each Individual
Guarantor on the Closing Date.
"INDIVIDUAL GUARANTORS": Xxxxxxxx Xxxxxx and Xxxxx Xxxx.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTANGIBLE ASSETS": assets that are considered to be
intangible assets under GAAP, including customer lists, goodwill, computer
software, copyrights, trade names, trademarks, patents, franchises, licenses,
unamortized deferred charges, unamortized debt discount and capitalized research
and development costs
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including trade secrets, know-how and other proprietary information; trademarks,
internet domain names, service marks, trade dress, trade names, business names,
designs, logos, slogans (and all translations, adaptations, derivations and
combinations of the foregoing) indicia and other source and/or business
identifiers, and the goodwill of the business relating thereto and all
registrations or applications for registrations which have heretofore been or
may hereafter be issued thereon throughout the world; copyrights (including
copyrights for computer programs) and copyright registrations or applications
for registrations which have heretofore been or may hereafter be issued
throughout the world and all tangible property embodying the copyrights,
unpatented inventions (whether or not patentable); patent applications and
patents; industrial design applications and registered industrial designs;
license agreements related to any of the foregoing and income therefrom; books,
records, writings, computer tapes or disks, flow diagrams, specification sheets,
computer software, source codes, object codes, executable code, data, databases
and other physical manifestations, embodiments or incorporations of any of the
foregoing;
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the right to xxx for all past, present and future infringements or other
impairment of any of the foregoing, including the right to receive all proceeds
and damages therefrom, and all common law and other rights throughout the world
in and to all of the foregoing.
"INTEREST PAYMENT DATE": (a) as to any Credit Line Loan that
is an ABR Loan, the last day of each calendar month to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any LIBOR Rate
Loan, the last day of the Interest Period applicable to such Loan, (c) as to any
Loan (other than any ABR Loan), the date of any repayment or prepayment made in
respect thereof, including, with respect to the Term Loan, each Amortization
Date, and (d) as to any Loan, the Termination Date.
"INTEREST PERIOD": as to any LIBOR Rate Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such LIBOR Rate Loan and ending one, two or three months
thereafter, as selected by Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such LIBOR Rate Loan and ending one, two or three months
thereafter, as selected by Borrower by irrevocable notice to Lender not later
than 11:00 A.M., New York City time, on the date that is three Business Days
prior to the last day of the then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;
(ii) Borrower may not select an Interest Period under the
Line of Credit Facility that would extend beyond the Line of Credit
Termination Date;
(iii) Borrower may not select an Interest Period under the
Term Loan Facility that would extend beyond the Term Loan Maturity Date
and
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"INTERNAL CONTROL EVENT": with respect to Borrower or any
Subsidiary, (i) a determination by management or the Audit Committee of the
Board of Directors of Borrower or by Borrower's Public Accountants that a
material weakness, as described in the Securities Laws, exists in Borrower's or
such Subsidiary's internal controls over financial reporting, or (ii) a member
of the senior management of Borrower or such Subsidiary has committed an act of
fraud on Borrower or any Subsidiary.
"LANDLORDS' DISCLAIMER AND CONSENT AGREEMENTS": the disclaimer
and consent agreements from the landlords of Borrower's facilities set forth on
SCHEDULE 4.20 in favor of Lender, whereby such landlords acknowledge and consent
to the Lien of Lender against Collateral located at such facilities and disclaim
their claims, if any, to such Collateral.
"LENDER": as defined in the preamble hereto.
"LIBOR RATE": with respect to any LIBOR Rate Loan, the Base
LIBOR Rate applicable to such LIBOR Rate Loan plus 3.0%.
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"LIBOR RATE LOAN": Credit Line Loans, or portions of the Term
Loan, the rate of interest applicable to which is based upon the LIBOR Rate.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"LINE OF CREDIT FACILITY": a one-year secured line of credit
facility pursuant to this Agreement, including the extensions of Credit Line
Loans made hereunder.
"LINE OF CREDIT NOTE": the promissory note to be executed and
delivered by Borrower substantially in the form of EXHIBIT A.
"LINE OF CREDIT TERMINATION DATE": the last day of the
Availability Period.
"LOAN": any loan made by Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Guaranty Agreements, the
Guaranty Joinder Agreements, the Notes, the Security Documents, the Landlords'
Disclaimer and Consent Agreements, the Collateral Information Certificate, the
Subordination Agreements and all other agreements, instruments, certificates,
statements (financial or otherwise) and documents heretofore or hereafter
executed or delivered to and in favor of Lender in connection with the Loans.
"LOAN PARTIES": the collective reference to Borrower and the
Guarantors.
"LONG TERM DEBT": as of any date, all Indebtedness of a Person
that has a stated maturity of more than one year from the date it is incurred,
or is extendable or renewable at the option of such Person to a date that is
more than one year from the date it is incurred (including lines of credit), and
all other Indebtedness that would be classified as "funded indebtedness" or
"long-term indebtedness" on a balance sheet of such Person prepared as of such
date in accordance with GAAP.
"MATERIAL ADVERSE EFFECT": a material adverse effect on the
business, property, operations, condition (financial or otherwise) or prospects
of Borrower and its Subsidiaries taken as a whole.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NON-EXCLUDED TAXES": as defined in Section 2.13(a).
"NOTES": the collective reference to the Line of Credit Note
and the Term Loan Note.
"OBLIGATIONS": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, in respect of Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of Loan
Parties to Lender (or, in the case of Specified Swap Agreements, any affiliate
of any Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any
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other Loan Document, any Specified Swap Agreement or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to Lender
that are required to be paid by Borrower pursuant hereto) or otherwise.
"OTHER TAXES": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED LIENS": Liens that Borrower is permitted to create
or suffer to exist pursuant to Section 7.4.
"PERMITTED PURCHASE MONEY INDEBTEDNESS": Purchase Money
Indebtedness of Borrower and its Subsidiaries incurred after the date hereof
which is secured by a Purchase Money Lien and which, when aggregated with the
principal amount of all other such Indebtedness and Capitalized Lease
Obligations of Borrower and its Subsidiaries at the time outstanding, does not
exceed $250,000. For the purposes of this definition, the principal amount of
any Purchase Money Indebtedness consisting of capitalized leases shall be
computed as a Capitalized Lease Obligation.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRIME RATE": the rate of interest announced publicly by
Lender, from time to time, as Lender's prime rate.
"PROHIBITED TRANSACTION": any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"PROPERTIES": as defined in Section 4.15(a).
"PROPERTY": any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PUBLIC ACCOUNTANTS": as defined in Section 5.2(b).
"PURCHASE MONEY INDEBTEDNESS": (i) Indebtedness (other than
the Obligations) for the payment of all or any part of the purchase price of any
fixed assets, (ii) any Indebtedness (other than the Obligations) incurred at the
time of or within ten days prior to or after the acquisition of any fixed assets
for the purpose of financing all or any part of the purchase price thereof, and
(iii) any renewals, extensions or refinancings thereof, but not any increases in
the principal amounts thereof outstanding at the time.
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"PURCHASE MONEY LIEN": a Lien upon fixed assets which secures
Purchase Money Indebtedness, but only if such Lien shall at all times be
confined solely to the fixed assets the purchase price of which was financed
through the incurrence of the Purchase Money Indebtedness secured by such Lien.
"REGULATION U": Regulation U of the Board as in effect from
time to time.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the 30 day notice period
is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. ss. 4043.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president
or chief financial officer of Borrower, but in any event, with respect to
financial matters, the chief financial officer of Borrower.
"RESTRICTED INVESTMENT": any investment made in cash or by
delivery of Property to any Person, whether by acquisition of Capital Stock,
Indebtedness or other obligation, or by loan, advance or capital contribution,
or otherwise, or in any Property except the following:
(i) Property to be used in the ordinary course of
business;
(ii) current assets arising from the sale of goods and
services in the ordinary course of business of Borrower and
its Subsidiaries;
(iii) investments in direct obligations of the United
States, or any agency thereof or obligations guaranteed by
the United States, provided that such obligations mature
within one year from the date of acquisition thereof;
(v) investments in certificates of deposit maturing
within one year from the date of acquisition issued by a bank
or trust company organized under the laws of the United States
or any state thereof having capital surplus and undivided
profits aggregating at least $100,000,000;
(vi) investments in commercial paper given the highest
rating by a national credit rating agency and maturing not
more than 270 days from the date of creation thereof; and
(vii) investments in Subsidiaries existing as of the
Closing Date, as set forth on SCHEDULE 4.18.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"XXXXXXXX-XXXXX": the Xxxxxxxx-Xxxxx Act of 2002.
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"SEC": the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"SECURITIES INTERMEDIARY": as defined in each of the Control
Agreements.
"SECURITIES LAWS": the Securities Act of 1933, the Securities
Exchange Act of 1934, Xxxxxxxx-Xxxxx and the applicable accounting and auditing
principles, rules, standards and practices promulgated, approved or incorporated
by the SEC or the Public Company Accounting Oversight Board, as each of the
foregoing may be amended and in effect on any applicable date hereunder.
"SECURITY AGREEMENTS": the collective reference to the
Borrower Security Agreement and each Subsidiary Security Agreement.
"SECURITY DOCUMENTS": the collective reference to the Security
Agreements, the Borrower Stock Pledge Agreement, the Borrower Membership
Interest Pledge Agreement, the Individual Guarantor Pledge Agreements, the
Control Agreements and all other instruments and agreements granting or
purporting to xxxxx x Xxxx to secure the whole or any part of any Loan Party's
duty to pay or discharge the whole or any part of the Obligations.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"SOLVENT": as to any Person, that such Person (i) owns
Property whose fair saleable value is greater than the amount required to pay
all of such Person's Indebtedness (including contingent debts), (ii) is able to
pay all of its Indebtedness as such Indebtedness matures and (iii) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"SPECIFIED SWAP AGREEMENT": any Swap Agreement entered into by
Borrower or any Guarantor and Lender or affiliate thereof in respect of interest
rates, currency exchange rates or commodity prices.
"STOCKHOLDERS' EQUITY": as of any date of determination, the
consolidated stockholders' equity of Borrower and its Subsidiaries as of that
date determined in accordance with GAAP.
"SUBORDINATION AGREEMENT": each Subordination Agreement to be
executed and delivered by each Individual Guarantor on the Closing Date.
"SUBORDINATED DEBT": unsecured Indebtedness of Borrower that
is subordinated to the Obligations on terms reasonably satisfactory to Lender.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries (in each case whether direct or indirect) of
Borrower.
"SUBSIDIARY GUARANTEE": the Subsidiary Guarantee to be
executed and delivered by each Subsidiary on the Closing Date.
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"SUBSIDIARY SECURITY AGREEMENT": each Subsidiary Security
Agreement to be executed and delivered by each existing Domestic Subsidiary on
the Closing Date and by each Domestic Subsidiary formed after the date hereof
pursuant to Section 7.18.
"SWAP AGREEMENT": any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions.
"TANGIBLE NET WORTH": an amount equal to Net Worth minus
intangible assets, including Restricted Investments, goodwill (whether
representing the excess of cost over book value of assets acquired or
otherwise), patents, patent applications, trademarks, trade names, copyrights,
franchises, experimental and organization expenses, covenants not to compete,
licenses, deferred assets (other than prepaid insurance and prepaid taxes),
unamortized debt discount and expense, and assets located and notes and
receivables from obligors outside the United States.
"TERM LOAN": as defined in Section 2.3.
"TERM LOAN FACILITY": the Term Loan extended by Lender
pursuant to this Agreement.
"TERM LOAN MATURITY DATE": the earlier of (x) May 31, 2010;
and (y) the Termination Date.
"TERM LOAN NOTE": the promissory note to be executed and
delivered by Borrower substantially in the form of EXHIBIT B.
"TERMINATION DATE": the date on which the Obligations become
due and payable pursuant to Article VIII.
"TYPE": as to any Loan, its nature as an ABR Loan or a LIBOR
Rate Loan.
"UCC": the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided, however, in the event that by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of Lender's security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.
"UNITED STATES": the United States of America.
"U.S. LOAN PARTIES": a collective reference to Borrower and
its Domestic Subsidiaries.
"VOTING SHARES": all outstanding shares of any class or
classes (however designated) of Capital Stock of Borrower entitled to vote
generally in the election of members of the board of directors (or similar
governing body) of Borrower.
1.2 ACCOUNTING TERMS. As used in the Loan Documents, accounting
terms not specifically defined therein shall have the respective meanings given
to them under GAAP.
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1.3 UCC TERMS. Each term defined in Article 1 or 9 of the UCC
shall have the meaning in the UCC unless otherwise defined herein or in another
Loan Document.
1.4 RULES OF INTERPRETATION.
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined meanings when used in the other Loan
Documents or any certificate or other document made or delivered pursuant hereto
or thereto.
(b) As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to any Loan Party not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP, (ii) the words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation", (iii) the word "incur" shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
"incurred" and "incurrence" shall have correlative meanings), (iv) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, (v) references to agreements or other Contractual
Obligations shall, unless otherwise specified, be deemed to refer to such
agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified or waived from time to time (provided that nothing contained
in this Section 1.4(b) shall be deemed to permit or authorize any such
amendment, supplement, restatement, modification or waiver that is not in
accordance with the terms of such document or agreement or the terms of the Loan
Documents), (vi) a reference to any Requirement of Law includes any amendment or
modification to such law, and (vii) a reference to any Person includes such
Person's permitted successors and permitted assigns.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms and the
masculine shall include the feminine or a neutral gender, and vice versa,
whenever the context requires.
ARTICLE II
AMOUNT AND TERMS OF LINE OF CREDIT AND TERM LOAN
2.1 LINE OF CREDIT. Subject to the terms and conditions hereof,
Lender may (in its sole and absolute discretion), but shall have no obligation
to, make Credit Line Loans in Dollars to Borrower from time to time during the
Availability Period, in an aggregate amount not to exceed $1,000,000 at any one
time outstanding. Within such limits, and subject to the agreement of Lender to
extend credit under this Section 2.1, Borrower may, subject to the terms and
conditions hereof, borrow, pay, prepay in whole or in part (without premium or
penalty, except as provided in this Article II) and reborrow on a revolving
basis, all in accordance with the terms and conditions hereof. The Credit Line
Loans may from time to time be LIBOR Rate Loans or ABR Loans, as determined by
Borrower and notified to Lender in accordance with Sections 2.2 and 2.6.
Borrower shall repay all outstanding Credit Line Loans on the Line of Credit
Termination Date. The Line of Credit shall be evidenced by the Line of Credit
Note, dated the Closing Date, duly completed and executed by Borrower.
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2.2 PROCEDURE FOR CREDIT LINE LOAN BORROWING. Borrower may request
a Credit Line Loan under the Line of Credit Facility on any Business Day during
the Availability Period, provided that Borrower shall give Lender irrevocable
notice (which notice must be received by Lender prior to 11:00 A.M., New York
City time, (a) three Business Days prior to the requested Borrowing Date, in the
case of LIBOR Rate Loans, or (b) on the requested Borrowing Date, in the case of
ABR Loans), specifying (i) the amount and Type of Credit Line Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of any LIBOR
Rate Loan, the length of the initial Interest Period therefor. Each requested
borrowing under the Line of Credit Facility shall be in an amount equal to (x)
in the case of ABR Loans, $100,000 or a whole multiple thereof (or the remaining
amount available to be borrowed under the Line of Credit Facility, if less) and
(y) in the case of LIBOR Rate Loans, the equivalent of $250,000 or a whole
multiple of the equivalent of $100,000 in excess thereof. Lender will promptly
notify Borrower if it is willing to make the requested Credit Line Loan, in
whole or in part. If Lender agrees to make such Credit Line Loan, such borrowing
will be made available to Borrower by Lender crediting the account of Borrower
on the books of Lender.
2.3 TERM LOAN. Subject to the terms and conditions hereof, Lender
agrees to make a loan to Borrower in a single disbursement on the Closing Date
in the principal amount of $3,000,000 (the "TERM LOAN"). The Term Loan shall
initially be made as an ABR Loan and may from time to time, bear interest at the
ABR or the LIBOR Rate, or both, as determined by Borrower and notified to Lender
in accordance with Section 2.6; provided that if Borrower elects to have any
portion of the Term Loan bear interest at the LIBOR Rate, such portion must at
least be the equivalent of $250,000 or a whole multiple of the equivalent of
$100,000 in excess thereof. Principal amounts of the Term Loan repaid pursuant
to Section 2.4 or 2.5 may not be reborrowed. Borrower shall repay the
outstanding balance of the Term Loan on the Term Loan Maturity Date. The Term
Loan shall be evidenced by the Term Loan Note, dated the Closing Date, duly
completed and executed by Borrower.
2.4 TERM LOAN REPAYMENT. Borrower shall pay to Lender consecutive
quarterly installments of principal of and interest on the Term Loan, commencing
on March 31, 2007, and on the first day of each calendar quarter thereafter
until the Term Loan Maturity Date (said payment dates being collectively
referred to herein as the "AMORTIZATION DATES"), in the following principal
amounts:
DATE AMOUNT
March 31, 2007 $250,000
June 30, 2007 $275,000
September 30, 2007 $175,000
December 31, 2007 $175,000
March 31, 2008 $125,000
June 30, 2008 $125,000
September 30, 2008 $125,000
December 31, 2008 $125,000
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March 31, 2009 $250,000
June 30, 2009 $250,000
September 30, 2009 $250,000
December 31, 2009 $250,000
March 31, 2010 $250,000
May 31, 2010 $375,000
Each payment of principal shall be made together with interest accrued thereon;
PROVIDED, HOWEVER, that the remaining principal amount outstanding in respect of
the Term Loan, together with any other amounts, including any accrued interest
and other costs and expenses, shall be due and payable in full on the Term Loan
Maturity Date without notice or demand.
2.5 OPTIONAL PREPAYMENT. Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to Lender no later than 11:00 A.M., New York City
time, two Business Days prior thereto, in the case of LIBOR Rate Loans, and no
later than 11:00 A.M., New York City time, on the date of such prepayment, in
the case of ABR Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is on account of Credit Line Loans or the
Term Loan and, in each case, of LIBOR Rate Loans or ABR Loans; provided, that if
a LIBOR Rate Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, Borrower shall also pay any amounts owing pursuant to
Section 2.14. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Credit Line Loans that are ABR Loans) accrued interest to such date
on the amount prepaid. Partial prepayments of Loans shall be in an aggregate
principal amount of $100,000 or a whole multiple thereof. Each partial
prepayment of the Term Loan shall be applied to the installments of the Term
Loan in inverse order of maturity. Payments and prepayments of the Loans shall
be applied to accrued interest before principal.
2.6 CONVERSION AND CONTINUATION OPTIONS. (a) Borrower may elect
from time to time to convert LIBOR Rate Loans to ABR Loans by giving Lender
prior irrevocable notice of such election no later than 11:00 A.M., New York
City time, on the third Business Day preceding the proposed conversion date,
provided that any such conversion of LIBOR Rate Loans may only be made on the
last day of an Interest Period with respect thereto. Subject to the applicable
provisions of the term "Interest Period" set forth in Section 1.1 and the
minimum amounts set forth in Sections 2.2 and 2.3, Borrower may elect from time
to time to convert ABR Loans to LIBOR Rate Loans by giving Lender prior
irrevocable notice of such election no later than 11:00 A.M., New York City
time, on the third Business Day preceding the proposed conversion date (which
notice shall specify the length of the initial Interest Period therefor),
provided that no ABR Loan may be converted into a LIBOR Rate Loan when any Event
of Default has occurred and is continuing.
(b) Any LIBOR Rate Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by Borrower
giving irrevocable notice to Lender, in accordance with and subject to the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loan, provided
that no LIBOR Rate Loan may be continued as such when any Event of Default has
occurred and is continuing, and provided, further, that if Borrower fails to
give any required notice as described above in this paragraph such Loans
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shall be automatically converted to LIBOR Rate Loans with an Interest Period of
one month or if such continuation is not otherwise permitted pursuant to the
preceding proviso or pursuant to the applicable provisions of the term "Interest
Period" set forth in Section 1.1, such Loans shall be automatically converted to
ABR Loans, in each case on the last day of such then expiring Interest Period.
2.7 LIMITATIONS ON INTEREST PERIODS. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
LIBOR Rate Loans and all selections of Interest Periods shall be made pursuant
to such elections so that, (a) no more than three Interest Periods in respect of
Credit Line Loans shall be outstanding at any one time, (b) no more than one
Interest Period in respect of the Term Loan shall be outstanding at any one
time.
2.8 INTEREST RATES AND PAYMENT DATES. (a) Each Loan that is an
LIBOR Rate Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the LIBOR Rate determined for
such day.
(b) Each Loan that is an ABR Loan shall bear interest at
a rate per annum equal to the ABR.
(c) (i) If all or a portion of the principal amount of
any Loan is not paid when due (whether at the stated maturity, by acceleration
or otherwise), all outstanding Loans (whether or not overdue) shall bear
interest at a rate per annum equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%,
and (ii) if all or a portion of any interest payable on any Loan or other amount
payable hereunder or any other Loan Document shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum equal to the rate then applicable to ABR Loans
under the Facility plus 2%, in each case, with respect to clauses (i) and (ii)
above, from the date of such non-payment until such amount is paid in full (as
well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.9 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed. Lender shall as soon as practicable notify Borrower of
each determination of a LIBOR Rate. Any change in the interest rate on a Loan
resulting from a change in the ABR shall become effective as of the opening of
business on the day on which such change becomes effective. Lender shall as soon
as practicable notify Borrower of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by Lender pursuant
to any provision of this Agreement shall be conclusive and binding on Borrower
in the absence of manifest error.
2.10 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period Lender shall have determined (which determination
shall be conclusive and binding upon Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the LIBOR Rate for such Interest Period, Lender shall give telecopy
or telephonic notice thereof to Borrower as soon as practicable thereafter. If
such notice is given (x) any LIBOR Rate Loans requested to be made on the first
day of such Interest Period shall be made as ABR Loans, (y) any Loans that were
to have been converted on the first day of such Interest Period to LIBOR Rate
Loans shall be continued as ABR Loans, and (z) any outstanding LIBOR Rate Loans
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by Lender, no
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further LIBOR Rate Loans shall be made or continued as such, nor shall Borrower
have the right to convert Loans to LIBOR Rate Loans.
2.11 PAYMENTS. All payments (including prepayments) to be made by
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to Lender, at its
office set forth in Section 9.3, in Dollars and in immediately available funds.
If any payment hereunder (other than payments on LIBOR Rate Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day. If any payment on a LIBOR Rate Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
2.12 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by Lender with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject Lender to any tax of any kind
whatsoever with respect to this Agreement or any LIBOR Rate Loan made by it, or
change the basis of taxation of payments to Lender in respect thereof (except
for Non-Excluded Taxes covered by Section 2.13 and changes in the rate of tax on
the overall net income of Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of Lender that is not otherwise included in the determination of the
LIBOR Rate; or
(iii) shall impose on Lender any other condition;
and the result of any of the foregoing is to increase the cost to Lender, by an
amount that Lender reasonably deems to be material, of making, converting into,
continuing or maintaining LIBOR Rate Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, Borrower shall promptly
pay Lender, upon its demand, any additional amounts necessary to compensate
Lender for such increased cost or reduced amount receivable. If Lender becomes
entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify Borrower of the event by reason of which it has become so
entitled.
(b) If Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by Lender or any
corporation controlling Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on Lender's or such corporation's capital as a consequence of
its obligations hereunder to a level below that which Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration Lender's or such corporation's policies with respect to capital
adequacy) by an amount deemed by Lender to be material, then from time to time,
after submission by Lender to Borrower of a
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18
written request therefor, Borrower shall pay to Lender such additional amount or
amounts as will compensate Lender or such corporation for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by Lender to Borrower shall be conclusive in
the absence of manifest error. The obligations of Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.13 TAXES. (a) All payments made by Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on Lender as a result of a present or former connection between Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("NON-EXCLUDED
TAXES") or Other Taxes are required to be withheld from any amounts payable to
Lender hereunder, the amounts so payable to Lender shall be increased to the
extent necessary to yield to Lender (after payment of all Non-Excluded Taxes and
Other Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement.
(b) In addition, Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by Borrower, as promptly as possible thereafter Borrower shall send to
Lender a certified copy of an original official receipt received by Borrower
showing payment thereof. If Borrower fails to pay any Non-Excluded Taxes or
Other Taxes when due to the appropriate taxing authority or fails to remit to
Lender the required receipts or other required documentary evidence, Borrower
shall indemnify Lender for any incremental taxes, interest or penalties that may
become payable by Lender as a result of any such failure.
(d) If Lender determines, in its sole discretion, that it
has received a refund of any Non-Excluded Taxes or Other Taxes as to which it
has been indemnified by Borrower or with respect to which Borrower has paid
additional amounts pursuant to this Section 2.13, it shall pay over such refund
to Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower under this Section 2.13 with respect to the
Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided, that Borrower, upon the request of Lender, agrees to repay the amount
paid over to Borrower (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to Lender in the event Lender is required
to repay such refund to such Governmental Authority. This paragraph shall not be
construed to require Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to Borrower or
any other Person.
(e) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
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2.14 INDEMNITY. Borrower agrees to indemnify Lender for, and to
hold Lender harmless from, any loss or expense (in each case as reasonably
determined by Lender) that Lender may sustain or incur as a consequence of (a)
default by Borrower in making a borrowing of, conversion into or continuation of
LIBOR Rate Loans after Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by Borrower in
making any prepayment of or conversion from LIBOR Rate Loans after Borrower has
given a notice thereof in accordance with the provisions of this Agreement or
(c) the making of a prepayment of LIBOR Rate Loans on a day that is not the last
day of an Interest Period with respect thereto (including as a result of an
Event of Default). Without limiting the generality of the foregoing, such
indemnification shall include the costs and expenses of Lender that are
attributable to the premature unwinding of any hedging agreement entered into by
Lender in respect of the foreign currency exposure attributable to such actual
or proposed LIBOR Rate Loan. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by Lender) that would have accrued to Lender on such amount by
placing such amount on deposit for a comparable period with leading banks in the
interbank eurocurrency market. A certificate as to any amounts payable pursuant
to this Section submitted to Borrower by Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.15 INTEREST RATE LIMITATION. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the "CHARGES"), shall exceed the maximum
lawful rate (the "MAXIMUM RATE") which may be contracted for, charged, taken,
received or reserved by Lender in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the ABR
Rate to the date of repayment, shall have been received by Lender.
ARTICLE III
CONDITIONS PRECEDENT
3.1 CONDITIONS OF LOANS. The obligations of Lender to make Loans
from and after the Closing Date shall not become effective until the date on
which the following conditions shall have been satisfied, and Lender shall have
received all of the following, in form and substance satisfactory to Lender:
(a) Executed originals of each of this Agreement, the
Notes, the Security Documents, the Landlords' Disclaimer and Consent Agreements,
the Collateral Information Certificate, the Subordination Agreements and the
Guaranty Agreements (collectively, the "CLOSING DOCUMENTS").
(b) A favorable opinion of counsel for Borrower and
Guarantors, dated the Closing Date, addressed to Lender, in substantially the
form of EXHIBIT C. Such legal opinion shall cover such
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other matters incident to the transactions contemplated by this Agreement as
Lender may reasonably require.
(c) A certified copy of the resolutions of the Board of
Directors of Borrower evidencing approval of each of the Closing Documents to
which Borrower is a party and the other matters contemplated hereby and thereby,
and a certified copy of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect thereto.
(d) A certificate of the Secretary of Borrower which
shall certify the names and true signatures of the officers of Borrower
authorized to sign each of the Closing Documents to which Borrower is a party
and the other documents or certificates to be delivered pursuant to this
Agreement by Borrower or any of its officers.
(e) (i) A certificate of good standing from the
Secretary of State of the state of Borrower's incorporation and of each
jurisdiction in which Borrower does business as a foreign corporation, (ii) a
copy of the certificate of incorporation of Borrower certified by the Secretary
of State of the state of Borrower's incorporation, and (iii) a copy of the
By-laws of Borrower certified by the Secretary of Borrower.
(f) Copies of insurance policies or certificates of
insurance of Borrower evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents.
(g) The non-refundable fees and disbursements of
Lender's independent counsel, Xxxxxx Xxxxxxxxxxx Xxxxxxx LLP, for the
preparation of this Agreement and the instruments, documents and agreements
delivered pursuant thereto to the extent invoiced prior to or on the Closing
Date, plus such additional amounts as shall constitute Lender's reasonable
estimate of any such fees and expenses incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between Borrower and Lender with respect
thereto).
(h) All outstanding fees due Lender.
(i) Evidence satisfactory to Lender that (i) Lender holds
a perfected, first priority Lien on all Collateral and (ii) none of such
Collateral is subject to any other Liens other than Permitted Liens.
(j) All certificates evidencing any certificated Capital
Stock pledged to Lender pursuant to the Borrower Stock Pledge Agreement,
together with duly executed in blank, undated stock powers attached thereto.
(k) Such other documents, instruments, certificates and
opinions as Lender may reasonably request in connection with the consummation of
the transactions contemplated hereby.
All documents and legal matters in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to Lender and its counsel.
3.2 CONDITIONS TO ALL LOANS. The obligations of Lender to make
any Loans on or subsequent to the Closing Date are subject to Lender's
satisfaction with or waiver of the following conditions precedent:
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(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by Borrower herein or which are contained in any of the Loan
Documents shall be true and correct on and as of the date of any such Loan as if
made on and as of such date.
(b) NO DEFAULT OR EVENT OF DEFAULT. At the time of and
immediately after giving effect to such Loan, no Default or Event of Default
shall have occurred and be continuing.
(c) OTHER. Lender shall have received such other
approvals, opinions or documents as Lender in its reasonable discretion may
request.
Each borrowing by Borrower hereunder shall constitute a representation
and warranty by Borrower as of the date of such borrowing that the conditions
contained in this Section 3.2 have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement and to make Loans
hereunder, Borrower warrants, represents and covenants to Lender that:
4.1 FINANCIAL STATEMENTS; NO ADVERSE CHANGE. (a) The Audited
Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present the financial condition of Borrower and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material Indebtedness and other liabilities, direct or
contingent, of Borrower and its Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated balance sheet of Borrower
and its Subsidiaries dated March 31, 2006 (the "INTERIM STATEMENTS"), and the
related consolidated statements of operations and cash flows for the fiscal
quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i)
and (ii), to the absence of footnotes and to normal year-end audit adjustments.
SCHEDULE 4.1 sets forth all material Indebtedness and other liabilities, direct
or contingent, of Borrower and its Subsidiaries as of the date of such financial
statements, including liabilities for taxes, material commitments and
Indebtedness, that is not shown on the Interim Statements.
(c) Since the date of the Audited Financial Statements,
there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.
(d) Since the date of the Audited Financial Statements,
no Internal Control Event has occurred that could reasonably be expected to have
a Material Adverse Effect.
4.2 EXISTENCE; COMPLIANCE WITH LAW. Borrower and each of its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a
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foreign corporation or other organization and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except, as to clauses (c) and (d), to the extent
that the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, or, as to clause (d) to the extent
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a material adverse effect on the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or remedies of
Lender hereunder or thereunder.
4.3 AUTHORITY. Each Loan Party has the power and authority, and
the legal right, to make, deliver and perform the Loan Documents to which it is
a party and, in the case of Borrower, to obtain extensions of credit hereunder.
Each Loan Party has taken all necessary organizational action to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
and, in the case of Borrower, to authorize the extensions of credit on the terms
and conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the extensions of credit hereunder
or with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents.
4.4 BINDING EFFECT. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of any Loan Party and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation. No
Requirement of Law or Contractual Obligation applicable to Borrower or any of
its Subsidiaries could reasonably be expected to have (x) a Material Adverse
Effect or (y) material adverse effect on the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of Lender
hereunder or thereunder.
4.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Borrower, threatened by or against any Loan Party or against
any of their respective properties or revenues.
4.7 NO DEFAULT. No Loan Party is in default under or with respect
to any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect. No event has occurred and no
condition exists which would, upon or after the execution and delivery of this
Agreement or Borrower's performance hereunder, constitute a Default or an Event
of Default.
4.8 NO BURDENSOME RESTRICTIONS. No Contractual Obligation of
Borrower or any of its Subsidiaries and no Requirement of Law materially
adversely affects, or insofar as Borrower may reasonably foresee, is reasonably
likely to so affect, the business, operations, property, condition (financial or
otherwise) or prospects of Borrower and its Subsidiaries, taken as a whole, or
on Borrower's and its Subsidiaries' ability to carry out their respective
obligations under the Loan Documents to which each is a party.
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4.9 TAXES. Each Loan Party has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Loan
Party); no tax Lien has been filed, and, to the knowledge of Borrower, no claim
is being asserted, with respect to any such tax, fee or other charge.
4.10 TITLE TO PROPERTIES; PRIORITY OF LIENS. Nether Borrower nor
any of its Subsidiaries owns any real Property. Borrower and each of its
Subsidiaries has valid and subsisting leasehold interests in all of its real
Property, and good title to all of the Collateral and all of its other Property,
in each case, free and clear of all Liens except Permitted Liens. Borrower and
each of its Subsidiaries has paid or discharged all lawful claims that, if
unpaid, might become a Lien against any of its Properties that is not a
Permitted Lien. Neither Borrower nor any of its Subsidiaries has taken or
suffered to exist any action that would cause the Liens granted to Lender under
the Security Documents to which it is a party to be anything other than
first-priority Liens, subject only to Permitted Liens.
4.11 LEASES. SCHEDULE 4.11 is a complete listing of all
capitalized leases and operating leases of Borrower and each of its
Subsidiaries. Borrower and each of its Subsidiaries is in full compliance with
all of the terms of each of its capitalized and operating leases.
4.12 SOLVENCY. Each Loan Party is now and, after giving effect to
the Loans to be made hereunder, at all times will be, Solvent.
4.13 LABOR MATTERS. There are no strikes or other labor disputes
against Borrower or any of its Subsidiaries pending or, to the knowledge of
Borrower, threatened against Borrower or any of its Subsidiaries. The hours
worked by and payment made to employees of Borrower and each of its Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters. All payments due from
Borrower or any of its Subsidiaries on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of the relevant
Person.
4.14 ERISA MATTERS. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code; provided, however, that the provisions of this sentence
shall be to the best of Borrower's knowledge with respect to any Multiemployer
Plan administered by a Person other than Borrower or any ERISA Affiliate. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits by a material
amount. Except to the extent that the same has not had or could not reasonably
be expected to have a Material Adverse Effect, neither Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a liability under ERISA, and neither Borrower nor any Commonly Controlled
Entity would become subject to any liability under ERISA if Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
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4.15 ENVIRONMENTAL MATTERS.
(a) The facilities and properties owned, leased or
operated by Borrower and its Subsidiaries (the "PROPERTIES") do not contain any
Hazardous Materials in amounts or concentrations or under circumstances that
constitute a violation of, or could reasonably be expected to give rise to
liability under, any Environmental Law;
(b) Borrower and its Subsidiaries have not received and,
to the knowledge of Borrower, will not receive any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the business operated by Borrower or any of its
Subsidiaries (the "BUSINESS"), nor does Borrower have knowledge of any
circumstances, conditions or events that could reasonably be expected to result
in any such notice being received or threatened;
(c) Hazardous Materials have not been transported or
disposed of by or on behalf of Borrower or any of its Subsidiaries from the
Properties in violation of, or in a manner or to a location that could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Hazardous Materials been generated, treated, stored or disposed of
by or on behalf of Borrower or any of its Subsidiaries at, on or under any of
the Properties in violation of, or in a manner that could reasonably be expected
to give rise to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Borrower, threatened,
under any Environmental Law to which Borrower or any of its Subsidiaries is or
will be named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business;
(e) there has been no release or threat of release of
Hazardous Materials at or from the Properties, or arising from or related to the
operations of Borrower or any of its Subsidiaries in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably be expected to give rise to
liability under Environmental Laws;
(f) the Properties and all operations at the Properties
are in compliance, and have, to the knowledge of Borrower, in the last five
years been in compliance, with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties in violation of or in amounts
that could reasonably be expected to give rise to liability under any
Environmental Law with respect to the Properties or the Business; and
(g) neither Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
4.16 TRADE RELATIONS. There exists no actual or threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship between Borrower or any of its Subsidiaries and any
customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrower or any of its Subsidiaries,
or with any material supplier, and there exists no present condition or state of
facts or circumstances which would materially affect adversely Borrower or any
of its Subsidiaries or prevent Borrower or any of its Subsidiaries from
conducting such business after the consummation of the transaction contemplated
by this Agreement in substantially the same manner in which it has heretofore
been conducted.
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4.17 TRADE NAMES, ETC. Except as set forth on SCHEDULE 4.17, (x)
neither Borrower nor any of its Subsidiaries has been known as or used any
corporate, fictitious or trade names; and (y) neither Borrower nor any of its
Subsidiaries has been the surviving corporation of a merger or consolidation or
acquired all or substantially all of the assets of any Person. Borrower's exact
legal name is "SEAENA, Inc."
4.18 CAPITAL STRUCTURE. SCHEDULE 4.18 states (i) the name of each
of Borrower's Subsidiaries and Affiliates and the nature of the affiliation,
(ii) the number, nature and holder of all outstanding Capital Stock of Borrower
and its Subsidiaries and (iii) the number of authorized, issued and treasury
shares of Borrower. There are no outstanding options to purchase, or any rights
or warrants to subscribe for, or any commitments or agreements to issue or sell,
or any Capital Stock or obligations convertible into, or any powers of attorney
relating to, shares of the capital stock of Borrower or any of its Subsidiaries.
There are no outstanding agreements or instruments binding upon any of
Borrower's shareholders relating to the ownership of its shares of Capital
Stock.
4.19 SURETY OBLIGATIONS. Neither Borrower nor any of its
Subsidiaries is obligated as surety or indemnitor under any surety or similar
bond or other contract, or has issued or entered into any agreement to assure
payment, performance or completion of performance of any undertaking or
obligation of any Person.
4.20 BUSINESS LOCATIONS; AGENT FOR PROCESS. The chief executive
office and other places of business of Borrower and each of its Subsidiaries are
as listed on SCHEDULE 4.20. During the preceding one-year period, neither
Borrower nor any of its Subsidiaries has had an office, place of business or
agent for service of process other than as listed on SCHEDULE 4.20. Except as
shown on SCHEDULE 4.20, no Inventory is stored with a bailee, warehouseman or
similar party, nor is any Inventory consigned to any Person.
4.21 INTELLECTUAL PROPERTY. Borrower and each of its Subsidiaries
owns, or is licensed to use, all Intellectual Property material and necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property. To the knowledge of Borrower, the use of Intellectual Property by
Borrower and its Subsidiaries does not infringe on the rights of any Person in
any material respect. All Intellectual Property owned or possessed by Borrower
and its Subsidiaries is listed on SCHEDULE 4.21.
4.22 FEDERAL REGULATIONS. No part of the proceeds of any Loans,
and no other extensions of credit hereunder, will be used (a) for "buying" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in effect
for any purpose that violates the provisions of the Regulations of the Board or
(b) for any purpose that violates the provisions of the Regulations of the
Board. No Loan Party is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) that limits its ability to incur
Indebtedness.
4.23 GOVERNMENTAL CONSENTS. Borrower and each of its Subsidiaries
has, and is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections and
franchises necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it.
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4.24 USE OF PROCEEDS. The proceeds of the Loans shall be used to
support working capital needs and for general corporate purposes, including
necessary expenditures related to the Merger subject to compliance with all
covenants and conditions of the Loan Documents.
4.25 ACCURACY AND COMPLETENESS OF INFORMATION. All information,
reports, financial statements, exhibits, or schedules furnished by or on behalf
of any Loan Party to Lender in connection with this Agreement or any other Loan
Document were, at the time so furnished, and are, complete and correct in all
material respects to the extent necessary to give Lender a complete and accurate
knowledge of the subject matter, except to the extent that any such information,
report, financial statement, exhibit or schedule has been superseded or
corrected in any information, reports, financial statements, exhibits, or
schedules furnished by or on behalf of a Loan Party to Lender prior to the date
of this Agreement. The representations and warranties contained in this
Agreement shall not be affected or deemed waived by reason of the fact that
Lender knew or should have known that any such representation or warranty is or
might be inaccurate in any respect. Neither this Agreement nor any other Loan
Document or certificate or document executed and delivered by Borrower in
accordance with Section 4.1 contains any misrepresentation or untrue statement
of material fact or omits to state a material fact necessary, in light of the
circumstance under which it was made, in order to make any such representation
or statement contained therein not misleading in any material respect.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Obligations have been paid and satisfied in full, unless
Lender shall otherwise consent, Borrower will and will cause each of its
Subsidiaries to:
5.1 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a)(i) Preserve, renew
and keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary in
the normal conduct of its business, except, in the case of clause (ii) above, to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
5.2 FINANCIAL AND OTHER INFORMATION AND COMPLIANCE CERTIFICATES.
(a) Keep proper books of records and account in which
full, true and correct entries in conformity with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to its business
and activities.
(b) Furnish to Lender as soon as practicable, and in any
event (i) within 90 days after the end of each fiscal year of Borrower (or if
earlier, 15 days after the date required to be filed with the SEC (without
giving effect to any extension permitted by the SEC)), a consolidated and
consolidating balance sheet of Borrower and its Subsidiaries as at the end of
such year and the related consolidated statements of income, retained earnings
and cash flow of Borrower and its Subsidiaries for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by (i) a report and opinion of a Registered Public Accounting Firm
(as defined in the Securities Laws) of nationally recognized standing reasonably
acceptable to the Required Lenders (the "PUBLIC ACCOUNTANTS") as to whether such
financial statements are free of material misstatement, which report and opinion
shall be prepared in accordance with audit standards of the Public Company
Accounting Oversight Board and applicable Securities Laws and shall not be
subject to any "going concern" or like qualification or
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27
exception or any qualification or exception as to the scope of such audit or
with respect to the absence of material misstatement and (ii) (A) an internal
management report as to the effectiveness of the Company's internal controls
pursuant to Section 404 of Xxxxxxxx-Xxxxx, and (B) an attestation report of such
Public Accountants independently assessing the effectiveness of the Company's
internal controls pursuant to Section 404 of Xxxxxxxx-Xxxxx;
(b) and (ii) within 60 days after the end of each fiscal
quarter of Borrower (or if earlier, five days after the date required to be
filed with the SEC (without giving effect to any extension permitted by the
SEC)), a consolidated and consolidating balance sheet of Borrower and its
Subsidiaries as at the end of such fiscal quarter and the related consolidated
statements of income, retained earnings and cash flow of Borrower and it
Subsidiaries for such fiscal quarter and for the portion of Borrower's fiscal
year ended at the end of such fiscal quarter, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter and the
corresponding portion of Borrower's previous fiscal year, all in reasonable
detail and certified by a Responsible Officer that they are complete and correct
and that they fairly present the consolidated financial condition as at the end
of such fiscal quarter, and the consolidated results of operations and cash flow
and to Subsidiaries for such fiscal quarter and such portion of Borrower's
fiscal year in accordance with GAAP (subject to normal, year-end audit
adjustments).
(c) Together with each delivery of the financial statements
required by Section 5.2(b), or more frequently if requested by Lender, deliver
to Lender a certificate of a Responsible Officer (i) stating that to the best of
his knowledge no Default or Event of Default has occurred, or, if a Default or
Event of Default has occurred, containing such notice as is required by Section
5.3(b) to the extent not already provided; and (ii) demonstrating compliance
with Article VI, which certificate shall be in substantially the form of Exhibit
K.
(d) Concurrently with the delivery of the financial
statements described in Section 5.2(b)(i), deliver to Lender the projected
consolidated and consolidating balance sheets and income and cash flow
statements of Borrower and its Subsidiaries for each month of the current fiscal
year, each in reasonable detail, reporting Borrower's good faith projections and
certified by a Responsible Officer as being the most accurate projections
available and identical to the projections used by Borrower and its Subsidiaries
for internal planning purposes, together with a statement of underlying
assumptions and such supporting schedules and information as Lender may in its
discretion require.
(e) Concurrently with the delivery of the financial
statements described in Section 5.2(a)(i), deliver to Lender (x) the personal
financial statement of each of the Individual Guarantors as of December 31 of
the preceding year, in form and substance reasonably acceptable to Lender; (y)
the Federal and state tax returns of each of the Individual Guarantors with
respect to the preceding year; and (z) an accountant letter for each of the
Individual Guarantors with respect to the preceding year, in form and substance
reasonably acceptable to Lender.
(f) Promptly after requested, deliver to Lender such other
information respecting the business, properties, operations or condition
(financial or otherwise) of any Loan Party as Lender may reasonably request.
(g) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or communication
sent to the stockholders of Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower may file
or be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to Lender
pursuant hereto;
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(h) Promptly after the furnishing thereof, copies of any
statement or report furnished to any holder of debt securities of any Loan Party
pursuant to the terms of any indenture, loan or credit or similar agreement and
not otherwise required to be furnished to Lender pursuant to this Agreement; and
(i) Promptly, and in any event within five Business Days
after receipt thereof by any Loan Party, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party .
5.3 LITIGATION AND OTHER NOTICES. Give Lender written notice of:
(a) (promptly after the commencement thereof) the nature,
status, and actual or potential amount of all claims, orders, directives,
complaints, citations, notices, actions, suits, investigations and proceedings
by or before any Person against any Loan Party or affecting the business,
operations, condition (financial or otherwise) or any of the assets (other than
ordinary and routine litigation reasonably expected to be covered under the
limits of existing insurance policies) of any Loan Party, including any such
claims, etc. with respect to (i) air emissions, (ii) spills, releases or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing any real Property, (iii) noise emissions, (iv) solid or liquid waste
disposal, or (v) the use, generation, storage, transportation or disposal of
Hazardous Materials;
(b) (as soon as possible, and in any event within ten
days after the occurrence of the same) any Default or Event of Default,
including the details of such Default or Event of Default and the action
Borrower is taking or proposes to take with respect thereto;
(c) (promptly upon becoming aware of the same) any Person
seeking to obtain a decree or order for relief with respect to any Loan Party in
an involuntary case under any applicable bankruptcy, insolvency, or other
similar law now or hereafter in effect, specifying what action such Loan Party
is taking or proposes to take with respect thereto;
(d) (promptly after adoption) any amendment to the
certificate of incorporation or bylaws of Borrower, which notice shall include a
copy of such amendment;
(e) (promptly upon the occurrence of the same) any
default with respect to any Contractual Obligation or any other event which has
resulted in or which would reasonably be expected to result in a Material
Adverse Effect;
(f) (promptly, and in any event within five Business Days
after Borrower knows or has reason to know of such event) (i) the occurrence of
any material Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan, together with a
statement of a Responsible Officer, setting forth details as to such Reportable
Event and the action which Borrower proposes to take with respect thereto;
(g) (not less than 30 days prior to effecting the same)
any change in the address of the location of any records pertaining to any
Collateral;
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(h) (promptly upon becoming aware of the same) of the
occurrence of any event or the existence of any fact which renders any
representation or warranty in this Agreement or any of the other Loan Documents
inaccurate, incomplete or misleading or which has had or could reasonably be
expected to have a Material Adverse Effect; and
(i) (promptly upon becoming aware of the same) the Public
Accountants' determination or Borrower's determination of the occurrence of any
Internal Control Event.
5.4 INSURANCE; PAYMENT OF PREMIUMS. (a) Maintain insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which it
operates.
(b) The companies issuing such policies, and the amounts,
forms, expiration dates and substance of such policy shall be acceptable to
Lender. All insurance covering tangible Collateral shall be for an amount not
less than the replacement value thereof. Borrower and its Subsidiaries shall
cause Lender to be named as "lender's loss payee" on all insurance policies
relating to any Collateral and as "additional insured" under all liability
policies, in each case pursuant to appropriate endorsements in form and
substance reasonably satisfactory to Lender and shall collaterally assign to
Lender as security for the payment of the Obligations all business interruption
insurance of Borrower and its Subsidiaries. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to provide for at least
30 days' prior written notice to Lender of the cancellation, non-renewal or
material modification thereof and a clause specifying that that the interest of
Lender shall not be impaired or invalidated by any act or neglect of Borrower or
any other Person. Borrower shall promptly deliver to Lender a certificate
evidencing such insurance and all renewals and replacements thereof and, upon
request, proof of payment of all premiums therefor. Borrower irrevocably makes,
constitutes and appoints Lender (and all officers, employees or agents
designated by Lender) as Borrower's true and lawful attorney (and
agent-in-fact), effective from and after the occurrence of an Event of Default,
for the purpose of making, settling and adjusting claims under such policies of
insurance, and endorsing the name of Borrower on any check, draft, instrument or
other item or payment for the Proceeds of such policies of insurance.
(c) Borrower shall, pay, or cause to be paid, all
premiums on such policies. If Borrower, at any time or times hereafter, shall
fail to obtain or maintain any of the policies of insurance required herein or
to pay any premium in whole or in part relating thereto, then Lender, without
waiving or releasing any obligation or default by Borrower hereunder, may (but
shall be under no obligation to) 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 which Lender deems advisable. All sums so disbursed
by Lender, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, on demand, by Borrower to Lender,
shall bear interest until paid in full at the rate specified in Section 2.8(c)
and shall be additional Obligations hereunder secured by the Collateral.
Borrower agrees to deliver to Lender, promptly as rendered, true copies of all
reports made in any reporting forms to insurance companies.
(d) Borrower and its Subsidiaries shall apply any
proceeds received from any policies of insurance relating to any Collateral to
the Obligations, PROVIDED, HOWEVER, that unless and until an Event of Default
has occurred and is continuing, proceeds of Collateral arising from the damage,
destruction or condemnation thereof may be retained by Borrower or its
Subsidiary and used by Borrower or its Subsidiary to repair, restore or replace
such Collateral, as the case may be, so long as the fair market value of any
such Collateral damaged, destroyed or condemned in any single incident is less
than $250,000 and the fair market value, in the aggregate, of all such
Collateral owned by Borrower and/or
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such Subsidiary and damaged, destroyed or condemned during any 12-month period
is less than $500,000.
5.5 PRESERVATION OF PROPERTIES, COMPLIANCE WITH LAW AND
OBLIGATIONS. Maintain and preserve all of its properties which are used or which
are useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and comply in all material respects with all
Contractual Obligations and Requirements of Law.
5.6 TAXES. Duly pay and discharge all taxes, assessments and
governmental charges or levies or other claims imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the time at
which penalties may attach thereto, and all lawful claims which might become a
Lien upon any of its property, except to the extent that any thereof are being
in good faith appropriately contested with appropriate reserves established
therefor in accordance with GAAP.
5.7 ACCESS TO PROPERTIES AND INSPECTIONS. Upon reasonable notice
(which may be telephonic) and at all reasonable times and from time to time,
permit any authorized representative designated by Lender to visit and inspect
the properties and financial records of Borrower and its Subsidiaries, and to
make extracts from such financial records at the inspecting party's expense, and
permit any authorized representative designated by Lender to discuss the
business, assets, liabilities, financial condition, business prospects and
results of operations of Borrower and its Subsidiaries with its officers,
employees and independent accountants.
5.8 FURTHER ASSURANCES. Execute and deliver, or cause to be
executed and delivered, any and all further documents and take all further
actions which may be required under Requirements of Law, or which Lender may
reasonably request, to effect fully the purposes of this Agreement or any
agreement, instrument, or document executed in connection herewith including to
grant, preserve, protect and perfect the security interest in the collateral
created by the Security Documents.
5.9 TRADE NAMES. Conduct its business in all respects and obtain
and maintain title to all Collateral solely in its name and not operate under
any other name without (i) giving Lender not less than 30 days' prior written
notice of any change to its name, and (ii) causing all filings to be made
sufficient to continue the perfection of Lender's first priority security
interest in the Collateral.
5.10 LANDLORD AND STORAGE AGREEMENTS. Provide Lender with copies of
all agreements with and any landlord or warehouseman that owns any premises at
which any Inventory may, from time to time, be kept.
5.11 ENVIRONMENTAL LAWS. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required by
any Governmental Authority and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.
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5.12 MARGIN REGULATIONS. If requested by Lender, furnish to Lender
a statement to the foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.
5.13 INTERNAL CONTROL EVENTS. Upon notification from Lender to
Borrower that Lender requires remediation of any Internal Control Event of which
it has received notice pursuant to Section 5.3(i) or as reported in any report
delivered pursuant to Section 5.2(b), remediate or cause to be remediated such
Internal Control Event, and to test and confirm such remediation, not later than
the end of the time period reasonably agreed by Lenders with Borrower as
necessary for such remediation (the "REMEDIATION PERIOD"). It is understood that
the Remediation Period will require a sufficient period of time to permit
testing required by the relevant Securities Laws.
5.14 OPERATING ACCOUNTS. Commencing 90 days from the Closing Date,
maintain all of its primary operating accounts with the Lender.
5.15 PLEDGED ASSETS. Cause (i) 100% of the issued and outstanding
Capital Stock of the direct Domestic Subsidiaries of any U.S. Loan Party to be
subject at all times to a first priority, perfected Lien in favor of Lender
securing the Obligations pursuant to the terms and conditions of the Borrower
Stock Pledge Agreement or such other security documents as Lender shall
reasonably request, and (ii) 65% of the issued and outstanding Capital Stock
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and
100% of the issued and outstanding Capital Stock not entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2)) of any direct Foreign
Subsidiary of any U.S. Loan Party (or such greater percentage that, due to a
change in an applicable Requirement of Law after the date hereof, (1) could not
reasonably be expected to cause the undistributed earnings of as determined for
United States federal income tax purposes to be treated as a deemed dividend to
such Subsidiary's United States parent and (2) could not reasonably be expected
to cause any material adverse tax consequences) to be subject at all times to a
first priority, perfected Lien in favor of Lender securing the Obligations
pursuant to the terms and conditions of the Borrower Stock Pledge Agreement or
such other security documents as Lender shall reasonably request. In connection
with the foregoing, the Loan Parties shall cause to be delivered to Lender (A)
all certificates evidencing any certificated Capital Stock pledged to Lender
pursuant to the Security Documents, together with duly executed in blank,
undated stock powers attached thereto, (B) searches under the Uniform Commercial
Code (or equivalent local legislation) to the extent a filing of a financing
statement pursuant to the Uniform Commercial Code (or equivalent local
legislation) would be necessary to perfect a security interest in such Capital
Stock, (C) appropriate financing statements in Form UCC-1 (or the local
equivalent) necessary to perfect the Collateral Agent's security interest in
such Capital Stock, and (D) certified resolutions and other organizational and
authorizing documents of, and favorable opinions (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of Lender's Liens thereunder)
of counsel to, each Person required to execute or otherwise become a party to
the Security Documents. If a U.S. Loan Party shall create or acquire any
Subsidiary the Capital Stock of which is required to be pledged to Lender as
Collateral hereunder, the Credit Parties shall promptly notify Lender of the
same. Each Loan Party shall, and shall cause each of its Subsidiaries to, take
such action (including but not limited to the actions set forth in this Section
5.15) at its own expense as requested by Lender to ensure that Lender has a
first priority perfected Lien on such Capital Stock to secure the Obligations as
required by this Section 5.15.
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ARTICLE VI
FINANCIAL COVENANTS
Until the Obligations have been paid and satisfied in full, unless
Lender shall otherwise consent, Borrower and its Subsidiaries will:
6.1 MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Maintain, at all
times, Consolidated Tangible Net Worth of not less than $(2,743,000) PLUS 100%
of cumulative Consolidated Net Income for each completed fiscal year (commencing
with the 2006 fiscal year) of Borrower for which Consolidated Net Income is
positive.
6.2 MAXIMUM CONSOLIDATED LEVERAGE RATIO. Maintain for each period
set forth below a Consolidated Leverage Ratio of not greater than the ratio set
forth below opposite such period:
------------------------------------------------------------------------------
Maximum Consolidated
Period: Leverage Ratio:
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter between December 31, 3.50:1.00
2006 through June 30, 2007
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter between July 1, 2007 3.25:1.00
through December 31, 2007
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter between January 1, 3.00:1.00
2008 through June 30, 2008
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter after July 1, 2008 2.50:1.00
------------------------------------------------------------------------------
6.3 MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO. Maintain for
each period set forth below a Consolidated Interest Coverage Ratio of not less
than the ratio set forth below opposite such period:
------------------------------------------------------------------------------
Period: Minimum Consolidated
Interest Coverage Ratio:
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter between December 31, 1.75:1.00
2006 through December 31, 2007
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter between January 1, 2.50:1.00
2008 through December 31, 2008
------------------------------------------------------------------------------
The 12 month period ending on the last day
of each fiscal quarter after January 1, 2009 3.00:1.00
------------------------------------------------------------------------------
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6.4 NET LOSS. Not have a Consolidated Net Loss with respect to any
fiscal quarter (commencing with the fiscal quarter ending September 30, 2006).
ARTICLE VII
NEGATIVE COVENANTS
Until the Obligations have been paid and satisfied in full, unless
Lender shall otherwise consent, Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly:
7.1 INDEBTEDNESS. Create, incur, assume, or suffer to exist any
Indebtedness, except:
(i) Obligations owing to Lender;
(ii) accounts payable to trade creditors and current
operating expenses (other than for borrowed money) which are not aged
more than 120 days from billing date or more than 30 days from the due
date, in each case incurred in the ordinary course of business and paid
within such time period, unless the same are being actively contested
in good faith and by appropriate and lawful proceedings and such Loan
Party shall have set aside such reserves, if any, with respect thereto
as are required by GAAP and deemed adequate by such Loan Party and its
independent accountants;
(iii) Permitted Purchase Money Indebtedness;
(iv) contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or collection in
the ordinary course of business;
(v) Indebtedness to the Individual Guarantors as set
forth on SCHEDULE 7.1(V), provided such Indebtedness is subordinated to
the Obligations on terms reasonably satisfactory to Lender; and
(vi) other unsecured Indebtedness in an aggregate amount
not to exceed $500,000 at any one time outstanding.
7.2 MERGERS; CONSOLIDATIONS; ACQUISITIONS; STRUCTURAL CHANGES.
Merge or consolidate with any Person; acquire all or any substantial part of the
Properties of any Person; or cease to be organized as a corporation.
7.3 LOANS. Make any loans or other advances of money (other than
for salary, travel advances, advances against commissions and other similar
advances in the ordinary course of business) to any Person.
7.4 LIENS. Create or suffer to exist any Lien upon any of its
Property, income or profits, whether now owned or hereafter acquired, except:
(i) Liens in favor of Lender;
(ii) Liens for taxes (excluding any Lien imposed pursuant
to any of the provisions of ERISA) not yet due, or being contested in
the manner described in Section 5.6, but only if in
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Lender's judgment such Lien does not adversely affect Lender's rights
or the priority of Lender's Lien in the Collateral;
(iii) Liens arising in the ordinary course of business by
operation of law or regulation, but only if payment in respect of any
such Lien is not at the time required and such Liens do not, in the
aggregate, materially detract from the value of the Property subject to
such Lien or materially impair the use thereof in the ordinary course
of business;
(iv) Purchase Money Liens securing Permitted Purchase
Money Indebtedness; and
(v) such other Liens as Lender may hereafter approve in
writing.
7.5 CONTINGENT LIABILITIES. Incur any Guaranty Obligations except:
(a) for the endorsement of negotiable instruments for deposit or collection in
the ordinary course of business; and (b) in connection with obligations to
Lender as agreed to by Lender.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of Borrower or any Subsidiary, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of
Borrower or any Subsidiary (collectively, "RESTRICTED PAYMENTS"), except that:
(a) any Subsidiary may make Restricted Payments to
Borrower or any other Subsidiary of Borrower; and
(b) Borrower may declare and pay dividends with respect
to its Capital Stock payable solely in additional shares of its Capital Stock.
7.7 SALES OF RECEIVABLES; SALE - LEASEBACKS. Sell, discount or
otherwise dispose of notes, accounts receivable or other obligations owing to
such Loan Party, with or without recourse, except for the purpose of collection
in the ordinary course of business; or sell any asset pursuant to an arrangement
to thereafter lease such asset from the purchaser thereof.
7.8 CAPITAL EXPENDITURES. Make Capital Expenditures that, in the
aggregate, exceed $300,000 during any fiscal year.
7.9 ALTER BUSINESS. Cause, suffer or permit the alteration of the
nature of its business in any material respect, or offer or agree to do so, or,
other than in the ordinary course of business (as determined by past practices),
suspend all or any part of its operations material to the conduct of its
business. Without limiting the generality of the foregoing, no Loan Party will
change its corporate name or the state of its incorporation without providing
Lender with at least 30 days' prior notice.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than Borrower or any Subsidiary) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of the relevant Loan Party, and (c) upon fair and reasonable terms no less
favorable to the relevant Loan Party than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate.
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7.11 FISCAL YEAR. Permit the fiscal year of Borrower and its
Subsidiaries to end on a day other than December 31 or change Borrower's or its
Subsidiaries method of determining fiscal quarters.
7.12 SUBORDINATED DEBT. Make any payment, including interest, of or
on any part or all of any Subordinated Debt or take any other action or omit to
take any other action in respect of any Subordinated Debt, except in accordance
with the subordination agreement relative thereto.
7.13 DISPOSITION OF ASSETS. Dispose of any of its Properties to or
in favor of any Person, except (i) sales of Inventory in the ordinary course of
business for so long as no Event of Default exists; (ii) the Disposition of
obsolete or worn out Property in the ordinary course of business; or (iii)
Dispositions expressly authorized by the Loan Documents.
7.14 RESTRICTED INVESTMENT. Make or have any Restricted Investment.
7.15 SWAP AGREEMENTS. Enter into any Swap Agreement, except (a)
Swap Agreements entered into to hedge or mitigate risks to which Borrower or any
Subsidiary has actual exposure (other than those in respect of Capital Stock)
and (b) Swap Agreements entered into in order to effectively cap, collar or
exchange interest rates (from fixed to floating rates, from one floating rate to
another floating rate or otherwise) with respect to any interest-bearing
liability or investment of Borrower or any Subsidiary.
7.16 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of Borrower
or any Subsidiary to create, incur, assume or suffer to exist any Lien upon any
of its property or revenues, whether now owned or hereafter acquired, other than
(a) this Agreement and the other Loan Documents and (b) any agreements governing
any purchase money Liens or Capital Lease Obligations otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against
the assets financed thereby).
7.17 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, Borrower or any other Subsidiary of Borrower, (b) make loans or
advances to, or other investments in, Borrower or any other Subsidiary of
Borrower or (c) transfer any of its assets to Borrower or any other Subsidiary
of Borrower, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement that
has been entered into in connection with the Disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary.
7.18 SUBSIDIARIES. Borrower and its Subsidiaries shall not
establish or create any Subsidiaries unless (i) Lender grants its prior written
consent thereto (which consent shall not be unreasonably withheld, conditioned,
or delayed); (ii) Borrower and its Subsidiaries shall have given Lender not less
than 20 days prior written notice of the proposed establishment or creation
which notice shall include, in reasonable detail, a description of the proposed
transaction including all relevant financial information; (iii) such Subsidiary
conducts substantially the same business as is being conducted by Borrower and
its Subsidiaries, (iv) such transaction otherwise complies with the provisions
of this Agreement; (v) no Event of Default shall have occurred and remain
outstanding at the time such transaction occurs, or would occur after giving
effect to such transaction; (vi) such Subsidiary shall have bound itself as a
guarantor of the Obligations by executing and delivering to Lender a Guaranty
Joinder Agreement duly executed by such Subsidiary or such other documents as
Lender shall reasonably deem appropriate for such purpose; (vii) such Subsidiary
shall have granted to Lender, and Lender shall have perfected, a first priority
lien on, and security interest in, all of its Property (if so requested by
Lender), subject to Permitted Encumbrances,
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pursuant to a Guarantor Security Agreement; (viii) Borrower delivers to Lender
documents of the types referred to in clause (e) of SECTION 3.1 and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to in clauses (vi) and (vii)), all in form, content and scope
reasonably satisfactory to Lender; (ix) such Subsidiary is not being established
or created for the purpose of acquiring all or any substantial part of the
Properties of any Person; and (x) the Loan Parties have complied with Section
5.15.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. The occurrence of one or more of the
following events shall constitute an Event of Default:
(a) Borrower shall fail to pay any principal of any Loan
when due in accordance with the terms hereof; or Borrower shall fail to pay any
interest on any Loan or any fees or other amount payable hereunder or under any
other Loan Document within three business days after any such interest or other
amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by
any Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made; or
(c) Borrower shall default in the observance or
performance of any of its agreements set forth in Sections 5.1 (a), 5.2(b),
5.2(c), 5.2(e),5.3, 5.6, 5.7 or Articles VI or VII; or
(d) Borrower shall fail or neglect to perform, keep or
observe any covenant contained in this Agreement (other than a covenant which is
dealt with specifically elsewhere in this Section 8.1) and the breach of such
other covenant is not cured to Lender's satisfaction within 30 days after the
sooner to occur of Borrower's receipt of notice of such breach from Lender or
the date on which such failure or neglect first becomes known to any Responsible
Officer; or
(e) Any event of default shall occur under, or Borrower
shall default in the performance or observance of any term, covenant, condition
or agreement contained in, any of the other Loan Documents and such default
shall continue beyond any applicable grace period; or
(f) Any Loan Party shall (i) default in making any
payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the due date with respect thereto; or
(ii) default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of
such holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become payable;
PROVIDED, that a default, event or condition described in clause (i), (ii) or
(iii) of this paragraph (f) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (g) shall
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37
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $250,000; or
(g) (i) any Loan Party shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or any
Loan Party shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against any Loan Party any case, proceeding or
other action of a nature referred to in clause (i) above that (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed or undischarged for a period of 60 days; or (iii) there
shall be commenced against any Loan Party any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in the
entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) any Loan Party shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) any Loan Party shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(h) Any material loss, theft, damage or destruction of
any of the Collateral not fully covered (subject to such deductibles as Lender
shall have permitted) by insurance; or
(i) There shall occur a cessation of a substantial part
of the business of Borrower for a period which significantly affects Borrower's
capacity to continue its business, on a profitable basis; or Borrower shall
suffer the loss or revocation of any license or permit now held or hereafter
acquired by Borrower which is necessary to the continued or lawful operation of
its business; or Borrower shall be enjoined, restrained or in any way prevented
by court, governmental or administrative order from conducting all or any
material part of its business affairs; or any material Contractual Obligation
pursuant to which Borrower leases, uses or occupies any Property shall be
canceled or terminated prior to the expiration of its stated term; or
(j) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Loan Party or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of Lender, likely to
result in the termination of such Plan for purposes of Title IV of ERISA, (iv)
any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
any Loan Party or any Commonly Controlled Entity shall, or in the reasonable
opinion of Lender is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the
judgment of Lender, reasonably be expected to have a Material Adverse Effect; or
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(k) any Loan Party shall challenge or contest in any
action, suit or proceeding the validity or enforceability of this Agreement, or
any of the other Loan Documents, the legality or enforceability of any of the
Obligations or the perfection or priority of any Lien granted to Lender; or
(l) any Loan Party shall be criminally indicted or
convicted under any law that could lead to a forfeiture of any Property of such
Loan Party; or
(m) one or more judgments or decrees shall be entered
against any Loan Party involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has acknowledged
coverage) of $250,000 or more, and all such judgments or decrees shall not have
been vacated, paid or discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(n) a Change of Control shall occur; or
(o) the guarantee contained in any Guaranty Agreement
shall cease, for any reason, to be in full force and effect or any Loan Party or
any Affiliate of any Loan Party shall so assert; or
(p) either Individual Guarantor shall die or be adjudged
mentally incompetent by a court of competent jurisdiction or be otherwise unable
to manage his affairs; or
(q) there is a material adverse change in the Borrower's
operations or condition, financial or otherwise.
8.2 ACCELERATION. Without in any way limiting the right of Lender
to demand payment of any portion of the Obligations otherwise payable on demand
in accordance with this Agreement, upon or at any time after the occurrence of
an Event of Default any or all of the following actions may be taken: (i) Lender
may declare any obligation of Lender to make further Loans terminated forthwith,
whereupon the obligations of Lender to make Loans shall immediately terminate,
and (ii) Lender may, by notice to Borrower, declare all or any of the
Obligations to be due and payable immediately, and the same, including all
interest accrued thereon and all other obligations of Borrower to Lender shall
be immediately due and payable, without presentment, demand, protest or further
notice of any kind all of which are hereby expressly waived and without the
necessity of any action by Lender, and Borrower shall forthwith pay to Lender,
the full amount of such Obligations; PROVIDED, HOWEVER, that notwithstanding the
above, if there shall occur an Event of Default under clause (g)(i) or (ii)
above, then the obligation of Lender to lend hereunder shall automatically
terminate and any and all of the Obligations shall be immediately due and
payable without the necessity of any action by Lender or notice to Borrower.
8.3 REMEDIES. If any Event of Default shall have occurred and be
continuing, in addition to and not in limitation of any rights or remedies
available to Lender at law or in equity, Lender may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
in any of the Security Documents or otherwise available to it, all the rights
and remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral) and may also: (a) notify any or all obligors
on the Accounts to make all payments directly to Lender; (b) require Borrower
and each of its Subsidiaries to, and Borrower and each of its Subsidiaries
hereby agrees that it will, at its expense and upon request of Lender forthwith,
assemble all or part of the Collateral as directed by Lender and make it
available to Lender at a place to be designated by Lender which is reasonably
convenient to both parties; (c) without notice or demand or legal process, enter
upon any premises of Borrower and each of its Subsidiaries and take possession
of the Collateral; and (d) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
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at any of Lender's offices or elsewhere, at such time or times, for cash, on
credit or for future delivery, and at such price or prices and upon such other
terms as Lender may deem commercially reasonable. Borrower and each of its
Subsidiaries agrees that, to the extent notice of sale shall be required by law,
at least ten days notice to Borrower of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. At any sale of the Collateral, if permitted by law, Lender may bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for the purchase of the Collateral or any portion thereof for the
account of Lender and/or disclaim all warranties. Lender shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
Borrower and each of the Guarantors shall remain liable for any deficiency.
Lender may adjourn any public or private sale from time to time by announcement
at the time and place fixed thereof, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. To the extent
permitted by law, each of Borrower and each of its Subsidiaries hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter enacted. Lender shall not be
required to proceed against any Collateral but may proceed against Borrower and
any of the Guarantors directly.
8.4 APPOINTMENT OF ATTORNEY-IN-FACT. Borrower and its Subsidiaries
hereby constitute and appoint Lender as Borrower's and its Subsidiaries'
attorney-in-fact with full authority in the place and stead of Borrower and its
Subsidiaries and in the name of Borrower and its Subsidiaries, Lender or
otherwise, from time to time in Lender's discretion while an Event of Default is
continuing to take any action and to execute any instrument that Lender may deem
necessary or advisable to accomplish the purposes of this Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral; (b) to adjust, settle or compromise the amount or payment
of any Account, or release wholly or partly any customer or obligor thereunder
or allow any credit or discount thereon; (c) to receive, endorse, and collect
any drafts or other instruments, documents and chattel paper, in connection with
clause (a) above; (d) to file any claims or take any action or institute any
proceedings that Lender may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of Lender with respect
to any of the Collateral; and (e) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral. The appointment of Lender as Borrower's and its
Subsidiaries' attorney and Lender's rights and powers are coupled with an
interest and are irrevocable until payment in full and complete performance of
all of the Obligations.
8.5 LIMITATION ON DUTY OF LENDER WITH RESPECT TO COLLATERAL.
Beyond the safe custody thereof, Lender shall have no duty with respect to any
Collateral in its possession or control (or in the possession or control of any
agent or bailee) or with respect to any income thereon or the preservation of
rights against prior parties or any other rights pertaining thereto. Lender
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which Lender accords its own property.
Lender shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by Lender in good faith.
8.6 APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, (a) each of Borrower and each of its
Subsidiaries irrevocably waives the right to direct the application of any and
all payments at any time or times thereafter received by Lender from or on
behalf of Borrower or any of its Subsidiaries, and each of Borrower and each of
its Subsidiaries hereby irrevocably agrees that Lender shall have the continuing
exclusive right to apply and to reapply any and all payments received at any
time or times after the occurrence and during the continuance of an Event of
Default against the Obligations in such manner as Lender may deem advisable
notwithstanding any
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previous entry by Lender upon any books and records and (b) the proceeds of any
sale of, or other realization upon, all or any part of the Collateral shall be
applied: first, to all fees, costs and expenses incurred by Lender with respect
to this Agreement, the other Loan Documents or the Collateral; second, to all
fees due and owing to Lender; third, to accrued and unpaid interest on the
Obligations; fourth, to the principal amounts of the Obligations outstanding;
and fifth, to any other indebtedness or obligations of Borrower or any other
Loan Party owing to Lender.
8.7 LICENSE OF INTELLECTUAL PROPERTY. Borrower and its
Subsidiaries hereby assign, transfer and convey to Lender, effective upon the
occurrence, and during the continuance, of any Event of Default hereunder, the
non-exclusive right and license to use all Intellectual Property owned or used
by Borrower and its Subsidiaries together with any goodwill associated
therewith, all to the extent necessary to enable Lender to realize on the
Collateral and any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all successors, assigns and
transferees of Lender and its successors, assigns and transferees, whether by
voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed
in lieu of foreclosure or otherwise. Such right and license is granted free of
charge, without requirement that any monetary payment whatsoever be made to
Borrower and its Subsidiaries by Lender.
ARTICLE IX
MISCELLANEOUS
9.1 SET OFF. 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, Lender, each
assignee of Lender's interest, and each participant is hereby authorized by
Borrower and its Subsidiaries at any time or from time to time, without notice
to Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all balances held by
it at any of its offices for the account of Borrower or its Subsidiaries
(regardless of whether such balances are then due to Borrower) and any other
property at any time held or owing by that Lender or assignee to or for the
credit or for the account of Borrower or its Subsidiaries against and on account
of any of the Obligations then outstanding; provided, that no participant shall
exercise such right without the prior written consent of Lender.
Borrower and its Subsidiaries hereby agree, to the fullest
extent permitted by law, that any Lender, assignee or participant may exercise
its right of setoff with respect to amounts in excess of its pro rata share of
the Obligations (or, in the case of a participant, in excess of its pro rata
participation interest in the Obligations) and that such Lender, assignee or
participant, as the case may be, shall be deemed to have purchased for cash in
the amount of such excess, participations in each other Lender's or holder's
share of the Obligations.
9.2 ASSIGNMENT AND PARTICIPATIONS. (a) Borrower hereby consents to
Lender's participation, sale, assignment, transfer or other disposition, at any
time or times hereafter, of this Agreement and any of the other Loan Documents,
or of any portion hereof or thereof, including Lender's rights, title,
interests, remedies, powers, and duties hereunder or thereunder; provided that
any assignment shall be subject to the consent of Borrower, such consent not to
be unreasonably withheld or delayed, provided, further, that no consent of
Borrower shall be required (i) if a Default or an Event of Default exists and is
continuing, or (ii) in the case of an assignment to an Affiliate of Lender. In
the case of an assignment, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as it would if it were
"Lender" hereunder and Lender shall be relieved of all obligations hereunder
upon any such assignment. Borrower agrees that it will use its best efforts to
assist and cooperate with Lender in any manner reasonably requested by Lender to
effect the sale of participations in or assignments of any of the
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41
Loan Documents or any portion thereof or interest therein, including assisting
in the preparation of appropriate disclosure documents. Borrower further agrees
that Lender may disclose credit information regarding Borrower or its
Subsidiaries to any potential participant or assignee to effect the purposes of
this Section 9.2(a).
(b) Lender may at any time pledge all or any portion of
its rights under the Loan Documents including any portion of any Note to any of
the Federal Reserve Banks organized under Section 4 of the Federal Reserve Act,
12 U.S.C. Section 341. No such pledge or enforcement thereof shall release
Lender from its obligations under any of the Loan Documents.
9.3 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made on the first Business Day after it is sent by nationally recognized courier
service and deposited into such service's custody before the cut-off time for
next day delivery and is designated for next day delivery, or five days after
having been deposited and sent by certified mail return receipt requested, in
either case addressed as follows, or to such address as may be hereafter
notified in writing by the respective parties hereto:
Lender: North Fork Bank
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
Borrower: SEAENA, Inc.
0000 Xxxxx Xx. Xxx X
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxx Xxx
with a copy to the attorney for Borrower:
Xxxxx & Xxxxxx, L.L.P.
0000 Xxxxxx Xxxxxx Xxxxxxx #0000
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
provided, however, that the failure of Lender to provide a copy of any notice to
Borrower to said attorneys will not be deemed a failure of Lender to give such
notice to Borrower or otherwise affect the effectiveness of such notice; and
provided further that that any notice, request or demand to or upon Lender
pursuant to Subsection 2.2 or 2.6 shall not be effective until received by
Lender. Lender and Borrower may, in their discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; PROVIDED that approval of such procedures may be
limited to particular notices or communications.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Borrower contained in this Agreement or any of
the other Loan Documents shall survive the execution, delivery and acceptance
thereof by Lender and the parties thereto and the closing of the transactions
described therein or related thereto. Each representation and warranty contained
in this Agreement and the other Loan Documents shall be continuous in nature and
shall remain accurate, complete and not misleading at all times during the term
of this Agreement, except for changes in the nature of Borrower's business or
operations that would render the information in any exhibit attached hereto
either inaccurate,
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incomplete or misleading, so long as Lender has consented to such changes or
such changes are expressly permitted by this Agreement.
9.5 REMEDIES CUMULATIVE; NO WAIVER. No failure to exercise and no
delay in exercising, on the part of Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
9.6 INDEMNITY; PAYMENT OF EXPENSES AND TAXES. Borrower agrees (a)
to pay or reimburse Lender for all of its reasonable out-of-pocket costs and
expenses incurred in connection with the syndication, development, preparation,
execution, delivery and administration of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable fees and disbursements of counsel to Lender and filing and
recording fees and expenses, with statements with respect to the foregoing to be
submitted to Borrower prior to the Closing Date (in the case of amounts to be
paid on the Closing Date) and from time to time thereafter on a quarterly basis
or such other periodic basis as Lender deems appropriate, (b) to pay or
reimburse Lender for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
reasonable fees and disbursements of counsel to Lender, (c) to pay, indemnify,
and hold Lender harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold Lender and its officers, directors, employees,
affiliates, agents and controlling persons (each, an "INDEMNITEE") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of any Loan Party or
any of the Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the "INDEMNIFIED LIABILITIES"), provided, that Borrower shall have
no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee. Without
limiting the foregoing, and to the extent permitted by applicable law, Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby
waives and agrees to cause its Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 9.6 shall be payable not later than ten Business Days after
written demand therefor. Statements payable by Borrower pursuant to this Section
9.6 shall be submitted to Borrower as set forth in Section 9.3, or to such other
Person or address as may be hereafter designated by Borrower in a written notice
to Lender. The agreements in this Section 9.6 shall survive repayment of the
Loans and all other amounts payable hereunder.
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9.7 TERMINATION. The termination of this Agreement shall not
affect the security interests, liens, rights and indemnities granted to Lender
hereunder and under the other Loan Documents or any rights of Borrower or Lender
or any obligation of Borrower or Lender arising prior to the effective date of
such termination, and the same shall continue in full force and effect and the
provisions hereof shall continue to be fully operative until all transactions
entered into or rights created or obligations incurred prior to such termination
have been fully disposed of, concluded or liquidated and the Obligations arising
prior to or after such termination have been irrevocably paid in full or
Borrower has furnished Lender with an indemnification satisfactory to Lender
with respect thereto. Notwithstanding the foregoing, if after receipt of any
payment of all or any part of the Obligations, Lender is for any reason
compelled to surrender such payment to any Person because such payment is
determined to be void or voidable as a preference, impermissible setoff, a
diversion of trust funds or for any other reason, this Agreement shall continue
in full force and Borrower shall be liable to, and shall indemnify and hold
Lender harmless for, the amount of such payment surrendered until Lender shall
have been finally and irrevocably paid in full. The provisions of the
immediately preceding sentence shall be and remain effective notwithstanding any
contrary action that may have been taken by Lender in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
Lender's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
9.8 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of Borrower and Lender and any (permitted) successors and assigns
of such parties. Borrower may not sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including Borrower's rights, title, interests, remedies,
powers, and duties hereunder or thereunder.
9.9 AMENDMENTS. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by
Lender to any departure herefrom or therefrom by Borrower shall be effective
unless such amendment, modification or waiver shall be in writing and signed by
Lender, and the same shall then be effective only for the period and on the
conditions and for the specific instances and purposes specified in such
writing. No notice to or demand on Borrower not required by the terms of this
Agreement or any of the Loan Documents in any case shall entitle Borrower to any
other or further notice or demand in similar or other circumstances, except as
otherwise expressly provided herein or therein. No delay or omission on Lender's
part in exercising any right, remedy or option shall operate as a waiver of such
or any other right, remedy or option or of any Default or Event of Default.
9.10 ACKNOWLEDGEMENTS. Borrower hereby acknowledges that:
(a) Lender does not have any fiduciary relationship with
or duty to Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between Lenders and Borrower
in connection herewith or therewith is solely that of debtor and creditor; and
(b) no joint venture, partnership, tenancy-in-common, or
joint tenancy relationship is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby between
Borrower and Lender.
9.11 HEADINGS. The headings of the Articles and Sections of this
Agreement are inserted for convenience of reference only and are not intended to
be a part of, or to affect the meaning or interpretation of, this Agreement.
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9.12 CONSENTS, ETC. TO BE IN WRITING. Wherever, in this Agreement
or any other Loan Document, reference is made to the agreement, approval,
consent, decision, determination, election or request by a party or parties
hereto or thereto, the same must be in writing unless this Agreement
specifically states otherwise.
9.13 SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement 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.
9.14 ENTIRE AGREEMENT. This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or written.
There are no promises, undertakings, representations or warranties by Lender
relative to the subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
9.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
9.16 LENDER'S CONSENT. Whenever Lender's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, Lender shall be authorized to give
or withhold such consent in its sole and absolute discretion and to condition
its consent upon the giving of additional collateral security for the
Obligations, the payment of money or any other matter.
9.17 CONSTRUCTION. The parties hereto acknowledge that counsel of
their respective choosing in connection with the negotiation, drafting and
execution of the Loan Documents represented them and that such counsel and the
parties themselves have carefully considered and negotiated the language of each
of the Loan Documents, so none of the Loan Documents shall be subject to the
principle of construing their meaning against the party that drafted same.
Borrower acknowledges that, with respect to the Loan Documents and the
transactions contemplated by each of them and by all of them together, Borrower
has and will rely solely on its own judgment and advisors in entering into each
of the Loan Documents and performing the obligations required by each of them to
be performed by Borrower without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender.
9.18 USA PATRIOT ACT. Lender hereby notifies Borrower that pursuant
to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), Lender may be required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow Lender to identify
Borrower in accordance with said Act.
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9.19 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.20 SUBMISSION TO JURISDICTION; WAIVERS.
(a) AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED,
AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS
OF BORROWER OR LENDER, BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPREME
COURT OF NEW YORK, COUNTY OF SUFFOLK, OR THE UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND LENDER PERTAINING TO THIS
AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. BORROWER
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH
BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
(b) BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT ITS ADDRESS SET FORTH IN
THIS AGREEMENTAND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OR
ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
(c) Borrower hereby waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against its by Lender or its agents or otherwise to offset any
obligations to make the payments required by the Loan Documents. No failure by
Lender to perform any of its obligations hereunder shall be a valid defense to,
or result in any offset against, any payments that Borrower is obligated to make
under any of the Loan Documents.
(d) Borrower hereby waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action
or proceeding any special, exemplary, punitive or consequential damages.
9.21 WAIVER OF JURY TRIAL. BORROWER AND LENDER WAIVE THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. BORROWER
AND LENDER ACKNOWLEDGE THAT THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT TO
SUCH PARTY'S ENTERING INTO THIS
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AGREEMENT AND THAT THE OTHER PARTY IS RELYING UPON THE FOREGOING WAIVER IN ITS
FUTURE DEALINGS WITH THE WAIVING PARTY. BORROWER WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SEAENA, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------------
Name: Xxxxxx XxXxxxxxx
Title: Executive Vice President
NORTH FORK BANK
By: /s/ XXXXXX X. XXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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