Limitation on Investments, Loans and Advances Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of, or make any other investment in (such advances, loans, extensions of credit, capital contributions, purchases and investments being herein called "Investments"), any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) any Investment by the Borrower or any Restricted Subsidiary (other than any Special Purpose Subsidiary) in Persons engaged in the telecommunications business or businesses related thereto, provided that (i) such Person, if it shall be a Subsidiary, shall become a Restricted Subsidiary unless (A) such Person or assets shall be acquired with (I) proceeds of capital contributed to the Borrower expressly for such purpose and/or (II) funds of the Borrower in such amount that, after giving effect thereto, the Special Payment Condition shall be satisfied, provided that the Borrower shall have made a Pro Rata Payment Offer in an amount equal to such Investment and (B) the Borrower designates such Person, by notice to the Administrative Agent, as an Unrestricted Subsidiary and (ii) immediately prior and after giving effect to such Investment, the Borrower is in Pro Forma Compliance;
(d) any Investment by the Borrower or any Restricted Subsidiary (other than any Special Purpose Subsidiary) in Persons not engaged in the telecommunications business or businesses related thereto if, after giving effect thereto, the aggregate amount of such Investments then held by the Borrower and its Restricted Subsidiaries does not exceed (x) at any time prior to the date on which the Special Payment Condition shall have occurred, $50,000,000, or (y) thereafter, 5% of then Total Capitalization; provided that (i) such Person, or the Person which shall become the owner of any assets acquired in connection with such Investment, shall become a Restricted Subsidiary unless (A) such Person or assets shall be acquired with (I) proceeds of capital contributed to the Borrower expressly for such purpose and/or (II) funds of the Borrower in such amount that after giving effect thereto, the Special Payment Condition shall be satisfied, provided that the Borrower shall have made a Pro Rata Payment Offer in an amount equal to such Investment and (B) the Borrower designates such Person, by notice to the Administrative Agent, an Unrestricted Subsidiary and (ii) immediately prior and after giving effect to such Investment, the Borrower is in Pro Forma Compliance;
(e) any Investment arising from the acquisition by the Borrower and its Restricted Subsidiaries of any System or Systems in connection with any Asset Swap, provided that (i) to the extent that the Borrower and its Restricted Subsidiaries give consideration for the System or Systems acquired by them in connection with such Asset Swap that is in addition to the System or Systems transferred by them in exchange therefor, such Asset Swap shall be deemed to constitute an Investment and shall be permitted only if the provisions of subsection 6.6(e) and 6.8(c) shall be complied with in connection therewith and (ii) immediately prior and after giving effect to such Investment the Borrower is in Pro Forma Compliance;
(f) loans and advances to employees of the Borrower and its Restricted Subsidiaries in an aggregate principal amount outstanding not to exceed $10,000,000 at any one time outstanding;
(g) Investments by the Borrower in its Restricted Subsidiaries and Investments by any Restricted Subsidiary (other than any Special Purpose Subsidiary) in the Borrower or by any Restricted Subsidiary (other than any Special Purpose Subsidiary) in any other Restricted Subsidiary; and
(h) promissory notes and other deferred payment obligations that constitute proceeds of Asset Sales that are permitted by subsection 6.6.
Limitation on Borrowings Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of (i) seventy-five percent (75.0%) of Borrower's Eligible Accounts Receivable (as defined below), plus (ii) the lesser of (A) $14,000,000, and (B) eighty percent (80.0%) of the Appraised Net Recovery Value (as defined below) of Borrower's inventory. The amount calculated pursuant to the preceding sentence is referred to herein as the "Borrowing Base". All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that the Borrowing Base was established by Bank with the understanding that if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against Eligible Accounts Receivable to a percentage appropriate to reflect additional dilution and/or establish additional reserves against Borrower's Eligible Accounts Receivable. As used herein, "Eligible Accounts Receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, net of all (x) returned goods authorizations, and (y) allowances for warranties, and upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which remains unpaid more than sixty (60) days past the due date thereof;
(ii) that portion of any account for which there exists any right of setoff (including deposits, loans and warranties), defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country other than an account debtor located in the Canadian provinces of Alberta, British Columbia, Manitoba, Ontario, Saskatchewan or the Yukon Territory so long as, in Bank's determination, such Canadian jurisdictions recognize Bank's first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank and except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(v) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, director, affiliate, partner, member, parent or subsidiary of Borrower;
(vi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above;
(viii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts; provided, however, that this limitation shall not apply to any accounts owing by AutoZone so long as the senior unsecured debt rating of AutoZone, Inc. by Standard & Poor's (a division of the McGraw-Hills Companies) is BBB- or better and such rating by Xxxxx'x Investors Service is Baa3 or better; and
(ix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory. As used herein, "Appraised Net Recovery Value" of Borrower's inventory shall mean the amount reflected as the "net recovery value" of Borrower's inventory in the most recent quarterly appraisal of inventory (performed by the Great American Group or another appraiser acceptable to Bank) required pursuant to Section 4.11.
Advances; Reimbursement of Advances (a) From time to time, (i) pursuant to terms of the Servicing Agreement, the Lead Servicer and/or the related Trustee may be obligated to make (1) Property Advances with respect to the Mortgage Loan or the Mortgaged Property and (2) P&I Advances with respect to the Lead Note and (ii) pursuant to the terms of the Non-Lead Servicing Agreement, the related Non-Lead Master Servicer and/or the related Trustee may be obligated to make P&I Advances with respect to the Non-Lead Note. The Lead Servicer and/or the related Trustee will not be required to make any P&I Advance with respect to the Non-Lead Note and the related Non-Lead Master Servicer and/or the related Trustee will not be required to make any P&I Advance with respect to any Lead Note or any Property Advance. The Lead Servicer, the Non-Lead Master Servicer and any Trustee will be entitled to interest on any Advance made in the manner and from the sources provided in the Note A-1 PSA and the Note A-2 PSA, as applicable.
(b) The Lead Servicer and the related Trustee, as applicable, will be entitled to reimbursement for a Property Advance, first from the Collection Account established with respect to the Mortgage Loan, and then, if such Property Advance is a Nonrecoverable Advance, if such funds on deposit in the Collection Account are insufficient, from general collections of the Lead Securitization as provided in the Servicing Agreement.
(c) To the extent amounts on deposit in the Collection Account with respect to the Mortgage Loan are insufficient to reimburse the Lead Servicer for any Property Advance and/or interest thereon and the Lead Servicer or the related Trustee, as applicable, obtains funds from general collections of the Lead Securitization as a reimbursement for a Property Advance or interest thereon, the Non-Lead Note Holder (including any Securitization into which the Non-Lead Note is deposited) shall be required to, promptly following notice from the Lead Servicer, pay to the Lead Securitization for its pro rata share of such Property Advance and/or interest thereon at the Reimbursement Rate. In addition, the Non-Lead Note Holder (including any Securitization into which the Non-Lead Note is deposited) shall promptly reimburse the Lead Servicer or the related Trustee for the Non-Lead Note Holder’s pro rata share of any fees, costs or expenses incurred in connection with the servicing and administration of the Mortgage Loan as to which the Lead Securitization or any of the parties thereto are entitled to be reimbursed pursuant to the terms of the Servicing Agreement (to the extent amounts on deposit in the Collection Account with respect to the Mortgage Loan are insufficient for reimbursement of such amounts).
(d) The parties to each of the Note A-1 PSA and the Note A-2 PSA shall each be entitled to make their own recoverability determination with respect to a P&I Advance based on the information that they have on hand and in accordance with the Note A-1 PSA and the Note A-2 PSA, as applicable.
(e) If the Lead Servicer or the related Trustee elects to defer the reimbursement of a Property Advance in accordance with the terms of the Servicing Agreement, the Lead Servicer or the related Trustee shall also defer its reimbursement of the Non-Lead Note share from the Non-Lead Note Holder.
Amounts and Terms of the Advances and Letters of Credit SECTION 2.01. The Advances and Letters of Credit.
Equipment Advances (i) Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Equipment Advances to Borrower. Borrower may request Equipment Advances at any time during the Draw Period, provided that the initial Equipment Advance shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000) (the “Initial Equipment Advance”). The aggregate outstanding amount of Equipment Advances shall not exceed the Equipment Line. Each Equipment Advance shall not exceed sixty percent (60%) of the invoice amount of equipment and software listed in that certain Machinery and Equipment 2013 Projection delivered to Bank on or about the Closing Date (which Borrower shall, in any case, have purchased, (i) with respect to the Initial Equipment Advance, within one hundred eighty (180) days and (ii) with respect to all subsequent Equipment Advances, within ninety (90) days, of the date of the corresponding Equipment Advance), excluding taxes, shipping, warranty charges, freight discounts and installation expense. Each Equipment Advance must be in an amount equal to the lesser of One Hundred Fifty Thousand Dollars ($150,000) or the amount that has not yet been drawn under the Equipment Line.
(ii) Interest shall accrue from the date of each Equipment Advance at the rate specified in Section 2.3(a), and shall be payable in accordance with Section 2.3(c). Any Equipment Advances that are outstanding on June 30, 2013 shall be payable in twenty seven (27) equal monthly installments of principal, plus all accrued interest, beginning on July 1, 2013, and continuing on the same day of each month thereafter through the Equipment Maturity Date. Any Equipment Advances made by Bank after June 30, 2013 shall immediately amortize and be payable in equal monthly installments of principal, plus all accrued interest, beginning on the first (1st) day of the month immediately following such Equipment Advance and continuing on the same day of each month thereafter through the Equipment Maturity Date, at which time all amounts due in connection with the Equipment Advances made under this Section 2.1(b) shall be immediately due and payable. Equipment Advances, once repaid, may not be reborrowed. Except as set forth in the Pricing Addendum, Borrower may prepay the Equipment Advances prior to the Equipment Maturity Date, provided that on the date of such prepayment Borrower shall, (i) prepay all but not less than all of the Equipment Advances and (ii) in connection with such prepayment, pay to the Bank to the Prepayment Fee, if applicable.
(iii) When Borrower desires to obtain an Equipment Advance, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three (3) Business Days before the day on which the Equipment Advance is to be made. Such notice shall be substantially in the form of Exhibit C. The notice shall be signed by a Responsible Officer or its designee and include a copy of the invoice for any Equipment to be financed. Bank shall be entitled to rely on any facsimile notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.”
2. Section 2.1(c) of the Agreement hereby is amended and restated in its entirety to read as follows:
Payments Pursuant to Letters of Credit The Borrower agrees to reimburse immediately the Letter of Credit Issuer for any draw under any Letter of Credit and the Agent for the account of the Lenders upon any payment pursuant to any Credit Support, and to pay the Letter of Credit Issuer the amount of all other charges and fees payable to the Letter of Credit Issuer in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right which the Borrower may have at any time against the Letter of Credit Issuer or any other Person. Each drawing under any Letter of Credit shall constitute a request by the Borrower to the Agent for a Borrowing of a Base Rate Revolving Loan in the amount of such drawing. The Funding Date with respect to such borrowing shall be the date of such drawing.
Maximum Advances In the case of any type of Advance requested to be made, after giving effect thereto, the aggregate amount of such type of Advance shall not exceed the maximum amount of such type of Advance permitted under this Agreement. Each request for an Advance by any Borrower hereunder shall constitute a representation and warranty by each Borrower as of the date of such Advance that the conditions contained in this subsection shall have been satisfied.
Nature of Participation and Reimbursement Obligations Each Lender’s obligation in accordance with this Agreement to make the Loans or Participation Revolving Loans as a result of a drawing under a Letter of Credit, and the obligations of the Borrowers to reimburse the Administrative Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.03 under all circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Administrative Agent, the Borrowers or any other Person for any reason whatsoever;
(ii) the failure of the Borrowers or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Revolving Loans under Section 2.03(d);
(iii) any lack of validity or enforceability of any Letter of Credit;
(iv) any claim of breach of warranty that might be made by any Borrower or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right which any Borrower or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Person for whom any such transferee may be acting), the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement, such Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transactions between the Borrowers or any other party and the beneficiary for which any Letter of Credit was procured);
(v) the lack of power or authority of any signatory of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if the Administrative Agent or any of the Administrative Agent’s Affiliates has been notified thereof;
(vi) except as provided in Section 2.03(g), any payment by the Administrative Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;
(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;
(viii) any failure by the Administrative Agent or any of the Administrative Agent’s Affiliates to issue any Letter of Credit in the form requested by the Borrowers, unless the Administrative Agent has received written notice from the Parent Borrower of such failure within three Business Days after the Administrative Agent shall have furnished Parent Borrower a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;
(ix) any Material Adverse Effect on any Borrower or any Guarantor;
(x) any breach of this Agreement or any Loan Document by any party thereto;
(xi) the occurrence or continuance of a proceeding under any Debtor Relief Law with respect to any Borrower or any Guarantor;
(xii) the fact that a Default or Event of Default shall have occurred and be continuing;
(xiii) the fact that the Revolving Facility Maturity Date shall have expired or this Agreement or the Finance Obligations hereunder shall have been terminated; and
(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing. Nothing contained in this Section 2.03(h) shall be deemed to relieve the Administrative Agent or the L/C Issuer from any claim by the Borrowers for the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer, respectively, in respect of honoring or failing to honor any drawing under any Letter of Credit or otherwise in respect of any Letter of Credit, but any such claim may not be used as a defense to the reimbursement obligation for any such drawing.
Optional Payments and Modifications of Certain Debt Instruments (a) Make or offer to make any optional or voluntary payment, prepayment, repurchase or redemption of (including any “call,” open market purchase or cash payment in connection with the Borrower’s election to cash settle or “net share” settle in connection with a “conversion” requirement under any Convertible Notes) or otherwise optionally or voluntarily defease or segregate funds with respect to any Junior Financing except (i) pursuant to Restricted Payments permitted by Section 8.6(f), (g), (h), (i), (k) and (l), (ii) with the proceeds of other Junior Indebtedness pursuant to a Permitted Refinancing or (iii) the conversion of any Junior Financing to Capital Stock (other than Disqualified Capital Stock that is not permitted hereunder) including payments permitted under Section 8.6(h) in connection therewith; provided that nothing in this Section 8 shall restrict the Group Members from repaying intercompany loans so long as such repayments are in accordance with the terms of the Intercompany Note, if applicable; provided further that with respect to the Convertible Notes,
(A) the 2026 Convertible Notes may be converted into the right to receive cash in accordance with the conversion provisions of the 2026 Convertible Notes Indenture (and the Borrower may pay cash settlements to the holders of the 2026 Convertible Notes in accordance with the 2026 Convertible Notes Indenture); and
(B) the 2026 Convertible Notes may be redeemed or repurchased in connection with the “call” provisions set forth in Section 3.01 of the 2026 Convertible Notes Indenture pursuant to the terms thereof.
(b) Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Junior Financing other than any amendment that is not (i) materially adverse to the Borrower and the Restricted Subsidiaries and/or the Secured Parties or (ii) more onerous in any material respect than the existing applicable provisions in the Junior Financing or the applicable provision set forth in this Agreement, in each case as determined by the board of directors (including an authorized committee thereof) of the Borrower in good faith; provided that, for the avoidance of doubt, in no event shall any such amendment, modification or change shorten the maturity or average life to maturity of any Junior Financing (or any Permitted Refinancings thereof), require any payment with respect thereto sooner than previously scheduled, increase the interest rate or fees applicable thereto or grant collateral as security thereof.
(c) Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Organizational Document of any Restricted Subsidiary if such amendment, modification, waiver or change could reasonably be expected to have a Material Adverse Effect or would be materially adverse to the Lenders.
General Provisions Applicable to Loans and Letters of Credit 4.1. Interest Rates and Payment Dates
4.2. Conversion and Continuation Options
4.3. Minimum Amounts of Sets
