AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.5

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “ Agreement ”) is effective as of July 31, 2007 between INTERNATIONAL ASSETS HOLDING CORPORATION, a Delaware corporation (“ IAHC ”), INTL ASSETS, INC., a Florida corporation and INTL COMMODITIES, INC., a Delaware corporation (“ INTL Commodities ”) (all of the foregoing collectively referred to as the “ Borrowers ”) and BANK OF AMERICA, N.A., a national banking association (the “ Lender ”).

R E C I T A L S

The Lender has established a revolving credit facility pursuant to which the Lender agreed to make advances to the Borrowers from time to time in an aggregate principal amount not to exceed Twenty Five Million Dollars ($25,000,000).

The Borrowers have asked the Lender to amend and restate that certain Credit Agreement dated as of September 15, 2005 between the Lender and the Borrowers, as amended by that certain First Amendment to Credit Agreement dated as of July 6, 2006, and that certain Second Amendment to Credit Agreement dated as of December 8, 2006, as amended by that certain March 2, 2007 Request for Guidance Line Advance (as the same may from time to time be amended, restated, supplemented, or otherwise modified, the “ Original Credit Agreement ”), and the Lender has agreed to do so pursuant to this Agreement and the documents called for herein, subject to and upon the terms and conditions hereinafter set forth.

AGREEMENTS

SECTION 1. The Revolving Credit Facility .

1.1. Definitions . All capitalized terms used herein and not otherwise defined shall have the following meanings:

“Advances” shall mean all advances under the Revolving Credit Facility.

“Applicable Margin” shall mean 2.40% per annum.

“AutoBorrow Service Agreement” means an AutoBorrow Service Agreement in effect from time to time between the Borrowers and the Lender.

“Board” means the Board of Governors of the Federal Reserve System of the United States.

“Borrowers” shall have the meaning set forth in the recitals above.

“Breakage Fees” means an amount equal to any net loss or out-of-pocket expenses which the Lender may sustain or incur (including, without limitation, any net loss or expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired by the Lender to fund or maintain the Advances, or any swap breakage incurred in connection with any Hedge Agreement), as reasonably determined by the Lender, as a result of any prepayment of any the Advances.

“Business Day” shall mean any day other than Saturday, Sunday or other day on which commercial banks in the Commonwealth of Virginia are authorized to close.

“Capital Lease” means any lease that has been or should be capitalized on the books of the lessee in accordance with GAAP.

“Capital Stock” means corporate stock and any and all securities, shares, partnership interests, limited partnership interests, limited liability company interests, membership interests, equity interests, participations, rights or other equivalents (however designated) of corporate stock or any of the foregoing issued by any entity (whether a corporation, a partnership, a limited liability company or another entity) and includes, without limitation, securities convertible into Capital Stock and rights or options to acquire Capital Stock.

“Closing Date” means the date on which all conditions to closing as set forth in Section 2.1 of the Credit Agreement are satisfied.

“Credit Facilities” shall mean the Revolving Credit Facility and any other credit facilities established subsequently hereto.

“Default” shall have the meaning set forth in Section 6 of this Agreement.

“Default Rate” shall mean a floating and fluctuating per annum rate of interest calculated by adding the sum of three percent (3.0%) to the rate of interest then in effect.

“Domestic Loan Parties” shall mean, collectively, the Borrowers and the Guarantor.

“EBITDA” shall mean (a) net income, after income tax, (b) less income or plus loss from discontinued operations and extraordinary items, (c) plus interest expense on all operations, (d) plus taxes, (e) plus depreciation, and (f) plus amortization, calculated on trailing twelve-month basis; provided , however , that to the extent that any portion of the commodity inventory of the Company and its subsidiaries is valued pursuant to GAAP at the end of any period at the lower of cost or market value, then the EBITDA for such period will be increased by the amount of any unrealized gains which the Company or any of its subsidiaries would have recognized if such commodity inventory had been valued at market value in accordance with GAAP.

“Enforcement Costs” shall mean all reasonable expenses, charges, recordation or other taxes, costs and fees (including reasonable attorneys’ fees and expenses) of any nature whatsoever advanced, paid or incurred by or on behalf of the Lender in connection with (a) the collection or enforcement of this Agreement or any of the other Financing Documents, and (b) the exercise by the Lender of any rights or remedies available to it under the provisions of this Agreement, or any of the other Financing Documents.

 

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“Environmental Laws” shall mean all laws, statutes, rules, regulations or ordinances which relate to Hazardous Materials and/or the protection of the environment or human health.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

“Event of Default” shall have the meaning set forth in Section 6 of this Agreement.

“Financing Documents” shall mean this Agreement, the Note, the Negative Pledge, any Hedge Agreement and any other instrument, document or agreement now or hereafter executed, delivered or furnished by the Borrowers or any other person evidencing, guaranteeing, securing or in connection with this Agreement or all or any part of the Credit Facilities.

“FINRA” means the Financial Industry Regulatory Authority.

“FOCUS Report” shall mean the Financial and Operational Combined Uniform Single Report required to be filed on a monthly or quarterly basis, as the case may be, with FINRA, or any report that is required in lieu of such report.

“GAAP” shall mean generally accepted accounting principles.

“Gainvest Subsidiaries” shall mean the following Subsidiaries of the Borrowers formed before, on or after the Closing Date: Gainvest Asset Management Limited; Gainvest Uruguay Asset Management SA; Gainvest SA Sociedad Gerente de Fondos Comunes de Inversion; Gainvest Argentina Asset Management SA; and Gainvest do Brasil Asset Management Ltda.

“Guarantee-exempt Subsidiary” shall have the meaning set forth in Section 5.18.

“Guarantor” shall mean INTL Trading, Inc., a Florida corporation.

“Guaranty” shall mean the Limited Guaranty of the Guarantor of even date herewith, as the same may be amended, modified or supplemented from time to time.

“Hazardous Materials” shall mean hazardous wastes, hazardous substances, toxic chemicals and substances, oil and petroleum products and their by-products, radon, asbestos, pollutants or contaminants.

“Hedge Agreement” means any agreement between any of the Borrowers and the Lender or any affiliate of the Lender now existing or hereafter entered into, which provides for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross-currency rate swap, currency option, or any similar transaction or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging the Borrowers’ exposure to fluctuations in interest or exchange rates, loan, credit, exchange, security or currency valuations or commodity prices.

“Interest Coverage Ratio” means the ratio of EBITDA to interest expense.

“Interest Payment Date” shall have the meaning set forth in Section 1.2(d).

 

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“Interest Rate Change Date” shall mean the first day of each one month period.

“Letter of Credit” shall mean any letter of credit issued by the Lender for the account of the Borrowers under the Revolving Credit Facility.

“Letter of Credit Agreement” means an Application and Agreement for Letter of Credit on the Lender’s standard form, as such form may be revised by the Lender in its discretion at any time and from time to time hereafter.

“Letter of Credit Exposure” means at any time the sum of (x) the undrawn amount of all Letters of Credit outstanding at such time, and (y) all Letter of Credit Obligations outstanding at such time.

“Letter of Credit Fees” shall have the meaning set forth in Section 1.2(j) of this Agreement, and shall be equal to the Applicable Margin.

“Letter of Credit Obligations” means, collectively, (i) the amount of each draft drawn under or purporting to be drawn under a Letter of Credit, (ii) the amount of any and all charges, reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) which the Lender may charge, pay or incur for drawings under a Letter of Credit, transfers of a Letter of Credit, amendments to and extensions of a Letter of Credit and for the prosecution or defense of any action arising out of or in connection with any Letter of Credit, including, without limitation, any action to enjoin full or partial payment of any draft drawn under or purporting to be drawn under any Letter of Credit, including, but not limited to, Letter of Credit Fees, (iii) interest on all amounts payable under (i) and (ii) above from the date due until paid in full at a per annum rate of interest equal at all times to the Default Rate.

“Lender” shall mean Bank of America, N.A., a national banking association.

“Libor-Based Rate” shall mean a per annum rate of interest equal at all times to the sum of the LIBOR Rate plus the Applicable Margin. The Libor-Based Rate shall change immediately and contemporaneously with each change in the LIBOR Rate.

“LIBOR Rate” means, at any time, the rate of interest equal to the rate per annum (rounded upwards to the nearest 1/100 of one percent) equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Lender from time to time) as determined for each Interest Rate Change Date at approximately 11:00 a.m. London time two (2) Business Days prior to the Interest Rate Change Date, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a term of one month, as adjusted from time to time in the Lender’s sole discretion for Reserve Requirements, deposit insurance assessment rates and other regulatory costs. If such rate is not available at such time for any reason, then the rate for that interest period will be determined by such alternate method as reasonably selected by the Lender.

“Loan Party” shall mean any Borrower or any Guarantor.

“London Banking Day” means a day on which the Lender’s London Banking Center is open for business and dealing in offshore dollars.

 

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“Net Worth” means the gross fair market value of total assets less total liabilities, including but not limited to estimated taxes on asset appreciation and any reserves or offsets against assets, paid-in capital or IAHC’s conversion of any of IAHC’s convertible debt into equity, but excluding the non-current portion of any liabilities subordinated in payment to the Borrowers’ obligations to the Lender provided , however , that to the extent that any portion of the commodity inventory of IAHC and its subsidiaries is valued pursuant to GAAP at the end of any period at the lower of cost or market value, then the Net Worth at the end of such period will be increased by the amount of any unrealized gains, after a notional tax charge, which IAHC or any of its subsidiaries would have recognized if such commodity inventory had been valued at market value in accordance with GAAP.

“Negative Pledge” shall have the meaning set forth in Section 1.4 (e) hereof.

“Note” shall mean the $25,000,000 Third Amended and Restated Revolving Loan Note made by the Borrowers and payable to the order of the Lender.

“Obligations” shall mean all present and future indebtedness, liabilities and obligations of any kind and nature whatsoever of the Borrowers to the Lender both now existing and hereafter arising including, without limitation, obligations arising under, as a result of, on account of, or in connection with, this Agreement and any and all amendments, restatements, supplements and modifications hereof made at any time and from time to time hereafter, the Note, any and all extensions, renewals or replacements thereof, amendments thereto and restatements or modifications thereof made at any time or from time to time hereafter, the Letter of Credit Agreements, or the other Financing Documents, including, without limitation, future advances, principal, interest, indemnities, fees, late charges, Letter of Credit Exposure, enforcement costs and other costs and expenses whether direct, contingent, joint, several, matured or unmatured, and the indebtedness owed under any Hedge Agreement, including, without limitation, any master agreement relating to or governing any or all of the foregoing and any related schedule or confirmation, each as amended from time to time.

“PBGC” shall mean the Pension Benefit Guaranty Corporation or its successor entity.

“Permitted Liens” shall mean liens permitted pursuant to Section 5 of this Agreement.

“Person” shall mean any natural person, individual, company, corporation, partnership, joint venture, unincorporated association, government or political subdivision or agency thereof, or any other entity of whatever nature.

“Personal Property” shall mean all of the Borrowers’ personal property, both now owned and hereafter acquired.

“Plan” shall mean any pension, employee benefit, multi-employer, profit sharing, savings, stock bonus or other deferred compensation plan.

“Prime Based Rate” shall mean a floating and fluctuating per annum rate of interest equal at all times to the sum of the Prime Rate plus one percent (1%).

 

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“Prime Rate” shall mean the floating and fluctuating per annum rate of interest of the Lender at any time and from time to time established and declared by the Lender in its sole and absolute discretion as its prime rate, and does not necessarily represent the lowest rate of interest charged by the Lender to borrowers.

“Reserve Requirements” means the maximum rate (expressed as a decimal) at which reserves (including any marginal, supplemental, emergency or other reserves) are required to be maintained under Regulation D of the Federal Reserve Board or otherwise by any statute or regulation applicable to the class of commercial banks which includes the Lender.

“Revolving Credit Account” shall mean the loan account maintained by the Lender with respect to advances, repayments and prepayments of Advances, the accrual and payment of interest on Advances and all other amounts and charges owing to the Lender in connection with Advances.

“Revolving Credit Amount” shall mean the amount of Twenty Five Million Dollars ($25,000,000).

“Revolving Credit Expiration Date” shall mean July 31, 2008, or such later date as to which the Lender shall, in its discretion, agree to extend the Revolving Credit Expiration Date.

“Revolving Credit Exposure” shall mean, at any time, the sum of the aggregate principal amount of outstanding Advances plus the Letter of Credit Exposure.

“Revolving Credit Facility” shall mean the revolving credit facility established pursuant to Section 1.2 hereof in a maximum principal amount at any one time outstanding equal to the Revolving Credit Amount, made available to the Borrowers pursuant to this Agreement.

“Subsidiary” means an entity of which the Borrowers directly or indirectly own or control securities or other ownership interests representing more than 50% of the ordinary voting power thereof.

“Total Assets” shall mean current and long term assets presented in accordance with GAAP.

1.2. Revolving Credit Facility .

(a) Advances and Letters of Credit . Subject to and upon the provisions of this Agreement and relying upon the representations and warranties herein set forth, the Lender agrees at any time and from time to time to make Advances to the Borrowers and issue Letters of Credit for the account of the Borrowers from the date hereof until the earlier of the Revolving Credit Expiration Date or the date on which this Revolving Credit Facility is terminated pursuant to Section 7 hereof, in an aggregate principal amount at any time outstanding not to exceed the Revolving Credit Amount.

 

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In no event shall the Lender be obligated to make an Advance hereunder if a Default shall have occurred and be continuing. Unless sooner terminated pursuant to other provisions of this Agreement, this Revolving Credit Facility and the obligation of the Lender to make Advances hereunder shall automatically terminate on the Revolving Credit Expiration Date without further action by, or notice of any kind from, the Lender. Within the limitations set forth herein and subject to the provisions of this Agreement, the Borrowers may borrow, repay and reborrow under this Revolving Credit Facility. The fact that there may be no Advances or Letters of Credit outstanding at any particular time shall not affect the continuing validity of this Agreement.

(b) Use of Proceeds of Advances . The proceeds of the Advances shall be used for working capital financing needs.

(c) Liability of Lender . Lender shall in no event be responsible or liable to any person other than Borrowers for the disbursement of or failure to disburse the Advances or any part thereof.

(d) Interest on Advances . Except for any period during which an Event of Default shall have occurred and be continuing, the Borrowers shall pay interest (calculated on a daily basis) on the unpaid principal balance of the Advances until maturity (whether by acceleration, extension or otherwise) at a per annum rate of interest equal at all times to the Libor-Based Rate in effect from time to time.

After maturity, or during any period in which an Event of Default exists and remains continuing, the unpaid principal balance of the Advances shall bear interest at a rate equal to the Default Rate.

Notwithstanding any other provision of this Agreement, if the Lender determines (which determination shall be conclusive) (i) that any applicable law, rule, or regulation, or any change in the interpretation of any such law, rule, or regulation shall make it unlawful or impossible for the Lender to charge or collect interest at the Libor-Based Rate, or (ii) that quotations of interest rates for the relevant deposits referred to in the definition of the Libor-Based Rate are not being provided in the relevant amounts or for the relevant maturities, then upon notice from the Lender to the Borrowers, the entire outstanding principal balance of the Revolving Credit Facility shall bear interest at the Prime-Based Rate.

Until the maturity of the Revolving Credit Facility, all accrued and unpaid interest on all Advances shall be paid monthly on the first day of each month (each, an “Interest Payment Date”).

If not sooner paid, the entire outstanding principal balance of the Advances, together with all accrued and unpaid interest thereon, shall be due and payable on the Revolving Credit Expiration Date.

(e) Revolving Credit Note; Revolving Credit Account . The Borrowers’ obligation to pay the Advances with interest shall be evidenced by the Revolving Credit Note. The Lender will maintain the Revolving Credit Account with respect to advances, repayments and prepayments of Advances, the accrual and payment of interest on Advances and all other

 

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amounts and charges owing to the Lender in connection with Advances. Except for demonstrable error, the Revolving Credit Account shall be conclusive as to all amounts owing by the Borrowers to the Lender in connection with and on account of Advances.

(f) Voluntary Prepayments; Voluntary Termination . Within the limitations set forth herein and subject to the provisions of this Agreement, the Borrowers may prepay any Advance in whole or in part, from time to time without premium or penalty (provided, however, that in the event that the Borrowers enter into any Hedge Agreement, any prepayment will be subject to payment of Breakage Costs as set forth therein). Any permitted prepayment need not be accompanied by payment of interest on the amount prepaid except, that any prepayment of Advances which constitutes a final payment of all Advances shall be accompanied by payment of all interest thereon accrued through the date of prepayment.

(g) AutoBorrow . Notwithstanding anything contained herein to the contrary, so long as the Borrowers opt to use the Lender’s “AutoBorrow” program and has executed and delivered to the Lender an AutoBorrow Service Agreement (which AutoBorrow Service Agreement remains in full force and effect), all Advances to be made hereunder shall be made in accordance with, and all interest accrued on such Advances and all repayments of such Advances shall be payable at the times and in the manner provided for in, the AutoBorrow Service Agreement. To the extent that any of the provisions of Section 1.2(a) through 1.2(f) hereof are inconsistent with provisions of the AutoBorrow Service Agreement, the provisions of the AutoBorrow Service Agreement shall govern. Any Advances made to the Borrowers under the AutoBorrow Service Agreement shall nonetheless be deemed to be an Advance hereunder, subject to all other terms hereof.

(h) Terms of Letters of Credit . Each Letter of Credit shall (i) be a commercial Letter of Credit or a standby Letter of Credit, (ii) be opened pursuant to a Letter of Credit Agreement duly executed and delivered to the Lender by the Borrowers prior to the issuance of such Letter of Credit, (iii) expire on the later to occur of (a) one year from the date of issuance or (b) the Revolving Credit Expiration Date, (iv) be in an amount not less than $2,500, (v) be issued in the ordinary course of the Borrowers’ business, and (vi) be issued in accordance with the Lender’s then current practices relating to the issuance of letters of credit. All powers, right, remedies and provisions set forth in any Letter of Credit Agreement shall be in addition to those set forth herein. In the event of any conflict between the provisions of this Agreement and the provisions of any Letter of Credit Agreement, the provisions of this Agreement shall prevail and control unless expressly provided otherwise herein or in the Letter of Credit Agreement.

(i) Procedures for Letters of Credit . The Borrowers shall give the Lender written notice of its (or their) request for a Letter of Credit at least three (3) Business Days prior to the date on which the Letter of Credit is to be opened by delivering to the Lender a duly executed Letter of Credit Agreement in form and content acceptable to the Lender setting forth (i) the face amount of the Letter of Credit, (ii) the name and address of the beneficiary of the Letter of Credit, (iii) whether the Letter of Credit is irrevocable or revocable, (iv) whether the Letter of Credit requested is a standby or commercial Letter of Credit, (v) the date the Letter of Credit is to be opened and the date the Letter of Credit is to expire, (vi) the purpose of the Letter of Credit, (vii) the terms and conditions for any draws under the Letter of Credit, and (viii) such other information as the Lender may reasonably deem to be necessary or desirable.

 

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(j) Letter of Credit Fees . The Borrowers shall pay to the Lender a letter of credit fee equal to the greater of (a) the Applicable Margin or (b) $500.00, payable in advance on or before the date of issuance and on each anniversary thereof plus the Lender’s then standard fee for the issuance, negotiation, processing and administration of letters of credit of the same type as the Letter of Credit.

(k) Agreement to Pay Letter of Credit Obligations . The Borrowers shall pay to the Lender the Letter of Credit Obligations when due; provided , however , that (a) so long as the Borrowers have availability under the Revolving Credit Facility, the Lender may, and is hereby authorized to, make Working Capital Advances to itself to pay when due any or all Letter of Credit Obligations incurred in connection with Letters of Credit. The Lender may maintain on its books a letter of credit account (the “Letter of Credit Account”) with respect to the Letter of Credit Obligations paid and payable from time to time hereunder. Except for demonstrable error, the Letter of Credit Account shall be conclusive as to all amounts owing by the Borrowers to the Lender in connection with and on account of the Letter of Credit Obligations. From the date due until paid in full, all Letter of Credit Obligations shall bear interest at the Default Rate.

(l) Agreement to Pay Absolute . The obligation of the Borrowers to pay Letter of Credit Obligations set forth above shall be absolute and unconditional and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, (ii) the existence of any claim, setoff, defense or other right which any or all of the Borrowers may at any time have against the beneficiary under any Letter of Credit or the Lender, (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue provided that payment by the Lender under such Letter of Credit against presentation of such draft shall not have constituted gross negligence or willful misconduct, and (v) any other events or circumstances whatsoever, whether or not similar to any of the foregoing provided that the payment by the Lender under the Letter of Credit shall not have constituted gross negligence or willful misconduct of the Lender.

(m) Commitment Fee . In consideration for the agreements of the Lender as set forth herein, Borrowers agree to pay to the Lender at closing a commitment fee of $40,000, which fee shall be deemed earned upon its receipt by the Lender.

1.3. Additional Provisions .

(a) Interest Calculation . All interest and fees payable under the provisions of this Agreement or the Note shall be computed on the basis of actual number of days elapsed over a year of 360 days.

(b) Late Charges . If the Borrowers fail to make any payment of principal, interest, prepayments, fees or any other amount becoming due pursuant to the provisions of this Agreement or the Note (other than the final principal payment due upon maturity), within fifteen (15) days of the date due and payable, the Borrowers shall pay to the Lender a late charge equal

 

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to five percent (5%) of the amount of such payment. Such 15-day period shall not be construed in any way to extend the due date of any such payment. Late charges are imposed for the purpose of defraying the Lender’s expenses incident to the handling of delinquent payments, and are in addition to, and not in lieu of, the exercise by the Lender of any rights and remedies hereunder or under applicable laws and any fees and expenses of any agents or attorneys which the Lender may employ upon the occurrence of an Event of Default.

(c) Payments . Whenever any payment to be made by the Borrowers under the provisions of this Agreement, the Note or the Letter of Credit Agreements is due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, in the case of any payment which bears interest, such extension of time shall be included in computing interest on such payment. All payments of principal, interest, fees or other amounts to be made by the Borrowers under the provisions of this Agreement or the Note shall be paid without set-off or counterclaim to the Lender at the Lender’s office at 1101 Wooton Parkway, 4 ^th Floor, Rockville, Maryland 20852, in lawful money of the United States of America in immediately available funds.

(d) Interest On Overdue Amounts , If the principal of or interest on, the Note or any other amount required to be paid to the Lender hereunder or under the Note is not paid within fifteen (15) days after the date when the same becomes due and payable, whether by acceleration or otherwise, the Borrowers shall on demand from time to time pay to the Lender interest on such principal, interest or other amount from the date due until the date of payment (after as well as before any judgment) at a rate per annum equal to the Default Rate.

(e) Collateral and Subsidiary Obligations. (l) In order to secure the full and punctual payment of the Obligations in accordance with the terms thereof, and to secure the performance of this Agreement and the other Financing Documents, the Borrowers (or any intermediate Subsidiary which is itself a Guarantee-exempt Subsidiary that holds the Capital Stock of another Guarantee-exempt Subsidiary) shall concurrently herewith pledge and assign to the Lender, and grant to the Lender a continuing lien and security interest in and to 66% of the issued and outstanding Capital Stock of the Guarantee-exempt Subsidiaries (or, if the Borrowers’ ownership interest in such Subsidiary is less than 66%, all Capital Stock of such Foreign Subsidiary). Notwithstanding the foregoing, IAHC shall not be obligated to comply with the provisions of this subsection with respect to their ownership of the Capital Stock of INTL Consilium, LLC, a joint venture in which IAHC owns 50.1% of the Capital Stock nor INTL Commodities DMCC, a joint venture in which IAHC owns 50% of the Capital Stock.

(2) The security interests required to be granted pursuant to this Section shall be granted pursuant to such security documentation as is reasonably satisfactory in form and substance to Lender (the “ Additional Financing Documents ”) and shall constitute valid and enforceable perfected security interests prior to the rights of all third Persons and subject to no other liens except liens permitted hereunder. The Additional Financing Documents and other instruments related thereto shall be duly recorded or filed in such manner and in such places and at such times as are required by law to establish, perfect, preserve and protect the liens, in favor of the Lender, granted pursuant to the Additional Financing Documents and, all taxes, fees and other charges payable in connection therewith shall be paid in full by the Borrowers. At the time

 

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of the execution and delivery of Additional Financing Documents, the Borrowers shall cause to be delivered to Lender such agreements, opinions of counsel, and other related documents as may be reasonably requested by the Lender to assure it that this Section has been complied with.

(3) Confirmation of Negative Pledge on Personal Property and Real Estate . The Borrowers and each Guarantee-exempt Subsidiary agree to execute concurrently herewith a Joinder and Confirmation in form and substance satisfactory to the Lender with respect to the Negative Pledge and Covenant Not to Encumber Agreement (the “ Negative Pledge ”) previously executed with respect to their Personal Property and real property.

(f) Automatic Debit . To ensure timely payment of all interest and other sums due hereunder, the Borrowers hereby authorize and instruct the Lender to either (i) debit, on the due date thereof, the Borrower’s demand deposit account no. 003933343983 maintained at the Lender for the amount then due, or (ii) at the Lender’s option, cause an Advance to be made sufficient to pay the amount then due.

1.4 The Borrowers’ Representatives . Each of the Borrowers hereby represents and warrants to the Lender that each of them will derive benefits, directly and indirectly, from the proceeds of each Advance and Letter of Credit, both in its separate capacity and as a member of the integrated business to which each of the Borrowers belong. For administrative convenience, IAHC is hereby irrevocably appointed by each of the Borrowers as agent for each of the Borrowers for the purpose of requesting Advances and Letters of Credit hereunder from the Lender, receiving the proceeds of Advances and disbursing the proceeds of Advances among the Borrowers. In its capacity as such agent, IAHC shall have the power and authority through its authorized officer or officers to (i) endorse any check for the proceeds of any Advance for and on behalf of each of the Borrowers and in the name of each of the Borrowers, and (ii) instruct the Lender to credit the proceeds of any Advance directly to a banking account of any of the Borrowers. By reason of the foregoing, the Lender is hereby irrevocably authorized by each of the Borrowers to make Advances to the Borrowers and issue Letters of Credit for the account of the Borrowers pursuant to this Agreement upon the request of any one of the persons who is authorized to do so under the provisions of any applicable corporate resolutions of IAHC. The Lender assumes no responsibility or liability for any errors, mistakes and/or discrepancies in any oral, telephonic, written or other transmissions of any instructions, orders, requests and confirmations between the Lender and any one or more of the Borrowers in connection with any Advance, Letter of Credit or other transaction pursuant to the provisions of this Agreement, except for acts of gross negligence and/or willful misconduct.

 

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SECTION 2. Conditions Precedent .

2.1. Initial Advance or Letter of Credit . The Lender shall not be required to make the initial Advance, or issue an initial Letter of Credit hereunder, whichever occurs first, unless the following conditions precedent have been satisfied in a manner reasonably acceptable to the Lender and its counsel:

(a) Borrowers’ Organizational Documents . The Lender shall have received with respect to each of the entities comprising the Borrowers, (i) a copy, certified as of a recent date by the jurisdiction of the Borrower’s state or country of organization of such Borrower, of the Borrower’s Charter and Bylaws, and all amendments thereto, (ii) to the extent available, a Certificate of Good Standing (or similar document) for such Borrower issued by the jurisdiction of the Borrower’s state or country of organization, and (iii) a copy, certified to the Lender as true and correct as of the date hereof by such Borrower, of the resolutions of the Borrowers authorizing the execution and delivery of this Agreement and the other Financing Documents to which the Borrowers are a party and designating by name and title the officers of the Borrowers who are authorized to sign this Agreement and such other Financing Documents for and on behalf of the Borrowers and to make the borrowings hereunder.

(b) Lists of Locations, Etc. The Borrowers shall have delivered to the Lender a list showing the street address, city or county and state of the Borrowers, chief executive office and of any other location where the Borrowers conducts or has a place of business;

(c) Insurance . The Borrowers shall have delivered to the Lender copies of such insurance policies as the Lender shall reasonably require;

(d) Searches . The Lender shall have received the results of a search by an attorney or company satisfactory to the Lender of the Uniform Commercial Code filings with respect to the Borrowers in their jurisdiction of organization or in which any Personal Property is or will be located, accompanied by copies of such filings, if any, and evidence satisfactory to the Lender that any security interest or other lien indicated in any such filing has or will be released or is permitted by the Lender;

(e) Opinions . The Lender shall have received the written opinion of counsel of the Borrowers reasonably satisfactory in form and content to the Lender, opining, among other things, that the Borrowers are duly organized, validly existing and in good standing, that the Financing Documents executed and delivered by the Borrowers have been duly authorized by all requisite corporate action, and that the Financing Documents executed and delivered by the Borrowers constitute the legal, valid, binding, and enforceable obligations of the Borrowers, enforceable against the Borrowers in accordance with the terms thereof, subject to customary exceptions and limitations reasonably acceptable to the Lender.

(f) Financing Documents . The Lender shall have received each of the Financing Documents required by the Lender to be executed and delivered prior to the making of the initial Advance.

(g) Due Diligence . The Lender shall have received and reviewed such financial information and other due diligence reports as the Lender shall reasonably require.

(h) Additional Documents . The Borrowers shall have furnished in form and content acceptable to the Lender any additional documents, agreements, certifications, record searches, insurance policies or opinions which the Lender may reasonably deem necessary or desirable.

 

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2.2 All Advances and Letters of Credit . No Advances, including the initial Advance, shall be made, and no Letter of Credit shall be issued, until compliance to the satisfaction of the Lender with all of the following conditions at the time of and with respect to each Advance or Letter of Credit:

(a) Representations and Warranties . No representation or warranty made in or in connection with this Agreement and the other Financing Documents shall be untrue, incorrect or incomplete in all material respects on and as of the date of any Advance or Letter of Credit as if made on such date; and

(b) Event of Default or Default . No Event of Default or Default shall have occurred and be continuing.

SECTION 3. Representations and Warranties . The Borrowers represent and warrant to the Lender that, except as specifically set forth on Schedule 3 attached hereto, the following statements are true, correct and complete as of the date hereof and as of each date any Advance is to be made or any Letter of Credit is to be issued hereunder:

3.1. Authority, Etc . The Borrowers are duly organized and in good standing under the laws of their state or country of incorporation, and are qualified to do business in all states where the Borrowers do business. The Borrowers have the full power and authority to execute, deliver and perform this Agreement and the other Financing Documents to which the Borrowers are a party. Neither such execution, delivery and performance, nor compliance by the Borrowers with the provisions of this Agreement and of the other Financing Documents to which the Borrowers are a party will conflict with or result in a breach or violation of the Borrowers’ certificates of formation, articles of organization or operating agreement, or any judgment, order, regulation, ruling or law to which the Borrowers are subject or any contract or agreement to which the Borrowers are a party or to which the Borrowers’ assets and properties is subject, or constitute a default thereunder. The execution, delivery and performance of this Agreement and all other Financing Documents to which the Borrowers are a party have been duly authorized and approved by all necessary action by the Borrowers and constitute the legal, valid and binding obligations of the Borrowers, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

3.2. Litigation . There is no litigation or proceeding pending or, to the knowledge of any representative of the Borrowers signing this Agreement on behalf of the Borrowers, threatened against or affecting the Borrowers which might materially adversely affect the business, financial condition or operations of the Borrowers or the ability of the Borrowers to perform and comply with this Agreement or the other Financing Documents to which the Borrowers are a party.

3.3. No Subsidiaries . Other than IAHC’s interest in (i) the Domestic Loan Parties other than IAHC, (ii) the Guarantee-exempt Subsidiaries, (iii) INTL Consilium, LLC, a joint venture in which IAHC owns 50.1% (iv) INTL Commodities DMCC, a joint venture in which

 

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IAHC owns 50%, the Borrowers do not directly or indirectly own or control securities or other ownership interests in any corporation, partnership, association, o