EXHIBIT 10.1
[Xxxxxxx logo]
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LOAN AND SECURITY AGREEMENT
BY AND AMONG
PEREGRINE SYSTEMS, INC.
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
FOOTHILL CAPITAL CORPORATION
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF JUNE 12, 2002
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TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION.............................................................................1
1.1 Definitions.....................................................................................1
1.2 Accounting Terms...............................................................................27
1.3 Code...........................................................................................27
1.4 Construction...................................................................................27
1.5 Schedules and Exhibits.........................................................................27
2. LOAN AND TERMS OF PAYMENT...............................................................................27
2.1 Revolver Advances..............................................................................27
2.2 Term Loan......................................................................................28
2.3 Borrowing Procedures and Settlements...........................................................30
2.4 Payments.......................................................................................37
2.5 Overadvances...................................................................................40
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations....................40
2.7 Cash Management................................................................................42
2.8 Crediting Payments; Float Charge...............................................................43
2.9 Designated Account.............................................................................43
2.10 Maintenance of Loan Account; Statements of Obligations.........................................43
2.11 Fees...........................................................................................44
2.12 Letters of Credit..............................................................................44
2.13 LIBOR Option...................................................................................48
2.14 Capital Requirements...........................................................................48
2.15 Joint and Several Liability of Borrowers.......................................................48
3. CONDITIONS; TERM OF AGREEMENT...........................................................................51
3.1 Conditions Precedent to the Initial Extension of Credit........................................51
3.2 Conditions Subsequent to the Initial Extension of Credit.......................................55
3.3 Conditions Precedent to all Extensions of Credit...............................................55
3.4 Term...........................................................................................56
3.5 Effect of Termination..........................................................................56
3.6 Early Termination by Borrowers.................................................................56
4. CREATION OF SECURITY INTEREST...........................................................................57
4.1 Grant of Security Interest.....................................................................57
4.2 Negotiable Collateral..........................................................................57
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.........................58
4.4 Delivery of Additional Documentation Required..................................................58
4.5 Power of Attorney..............................................................................58
4.6 Right to Inspect...............................................................................59
4.7 Control Agreements.............................................................................59
5. REPRESENTATIONS AND WARRANTIES..........................................................................59
5.1 No Encumbrances................................................................................59
5.2 Eligible Accounts..............................................................................59
5.3 Eligible Inventory.............................................................................60
5.4 Equipment......................................................................................60
5.5 Location of Inventory and Equipment............................................................60
5.6 Inventory Records..............................................................................60
5.7 Location of Chief Executive Office; FEIN.......................................................60
5.8 Due Organization and Qualification; Subsidiaries...............................................60
5.9 Due Authorization; No Conflict.................................................................61
5.10 Litigation.....................................................................................62
5.11 No Material Adverse Change.....................................................................62
5.12 Fraudulent Transfer............................................................................62
5.13 Employee Benefits..............................................................................63
5.14 Environmental Condition........................................................................63
5.15 Brokerage Fees.................................................................................63
5.16 Intellectual Property..........................................................................63
5.17 Leases.........................................................................................63
5.18 DDAs...........................................................................................63
5.19 Complete Disclosure............................................................................64
5.20 Indebtedness...................................................................................64
6. AFFIRMATIVE COVENANTS...................................................................................64
6.1 Accounting System..............................................................................65
6.2 Collateral Reporting...........................................................................65
6.3 Financial Statements, Reports, Certificates....................................................66
6.4 [Guarantor Reports.............................................................................68
6.5 Return.........................................................................................68
6.6 Maintenance of Properties......................................................................68
6.7 Taxes..........................................................................................69
6.8 Insurance......................................................................................69
6.9 Location of Inventory and Equipment............................................................70
6.10 Compliance with Laws...........................................................................70
6.11 Leases.........................................................................................71
6.12 Brokerage Commissions..........................................................................71
6.13 Existence......................................................................................71
6.14 Environmental..................................................................................71
6.15 Disclosure Updates.............................................................................71
7. NEGATIVE COVENANTS......................................................................................72
7.1 Indebtedness...................................................................................72
7.2 Liens..........................................................................................74
7.3 Restrictions on Fundamental Changes............................................................74
7.4 Disposal of Assets.............................................................................74
7.5 Change Name....................................................................................74
7.6 Guarantee......................................................................................74
7.7 Nature of Business.............................................................................74
7.8 Prepayments and Amendments.....................................................................74
7.9 Change of Control..............................................................................75
7.10 Consignments...................................................................................75
7.11 Distributions..................................................................................75
7.12 Accounting Methods.............................................................................75
7.13 Investments....................................................................................75
7.14 Transactions with Affiliates...................................................................75
7.15 Suspension.....................................................................................76
7.16 Compensation...................................................................................76
7.17 Use of Proceeds................................................................................76
7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees.............76
7.19 Securities Accounts............................................................................76
7.20 Financial Covenants............................................................................76
8. EVENTS OF DEFAULT.......................................................................................77
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................................................80
9.1 Rights and Remedies............................................................................80
9.2 Remedies Cumulative............................................................................82
10. TAXES AND EXPENSES......................................................................................82
11. WAIVERS; INDEMNIFICATION................................................................................83
11.1 Demand; Protest; etc...........................................................................83
11.2 The Lender Group's Liability for Collateral....................................................83
11.3 Indemnification................................................................................83
12. NOTICES. 84
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................................................85
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................................................86
14.1 Assignments and Participations.................................................................86
14.2 Successors.....................................................................................88
15. AMENDMENTS; WAIVERS.....................................................................................89
15.1 Amendments and Waivers.........................................................................89
15.2 Replacement of Holdout Lender..................................................................90
15.3 No Waivers; Cumulative Remedies................................................................90
16. AGENT; THE LENDER GROUP.................................................................................90
16.1 Appointment and Authorization of Agent.........................................................90
16.2 Delegation of Duties...........................................................................91
16.3 Liability of Agent.............................................................................91
16.4 Reliance by Agent..............................................................................92
16.5 Notice of Default or Event of Default..........................................................92
16.6 Credit Decision................................................................................93
16.7 Costs and Expenses; Indemnification............................................................93
16.8 Agent in Individual Capacity...................................................................94
16.9 Successor Agent................................................................................94
16.10 Lender in Individual Capacity..................................................................95
16.11 Withholding Taxes..............................................................................95
16.12 Collateral Matters.............................................................................97
16.13 Restrictions on Actions by Lenders; Sharing of Payments........................................98
16.14 Agency for Perfection..........................................................................99
16.15 Payments by Agent to the Lenders...............................................................99
16.16 Concerning the Collateral and Related Loan Documents...........................................99
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information..................................................................99
16.18 Several Obligations; No Liability.............................................................100
16.19 Legal Representation of Agent........................................ERROR! BOOKMARK NOT DEFINED.
17. GENERAL PROVISIONS.....................................................................................101
17.1 Effectiveness.................................................................................101
17.2 Section Headings..............................................................................101
17.3 Interpretation................................................................................101
17.4 Severability of Provisions....................................................................101
17.5 Amendments in Writing.........................................................................101
17.6 Counterparts; Telefacsimile Execution.........................................................101
17.7 Revival and Reinstatement of Obligations......................................................102
17.8 Integration...................................................................................102
17.9 Parent as Agent for Borrowers.................................................................102
LOAN AND SECURITY AGREEMENT
THIS
LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of June 12, 2002, between and among, on the one hand, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), and FOOTHILL
CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders ("Agent"), and, on the other hand,
PEREGRINE SYSTEMS, INC., a Delaware corporation ("PARENT"), and each of Parent's
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as a
"BORROWER", and individually and collectively, jointly and severally, as the
"BORROWERS").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"ACCOUNT DEBTOR" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.
"ACCOUNTS" means all of a Person's now owned or hereafter
acquired right, title, and interest with respect to "accounts" (as that term is
defined in the Code), and any and all supporting obligations in respect thereof.
"ADDITIONAL DOCUMENTS" has the meaning set forth in SECTION
4.4.
"ADMINISTRATIVE BORROWER" has the meaning set forth in SECTION
17.9.
"ADVANCES" has the meaning set forth in SECTION 2.1.
"AFFILIATE" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; PROVIDED, HOWEVER, that, for purposes of the definition of Eligible
Accounts and SECTION 7.14 hereof: (a) any Person which owns directly or
indirectly 10% or more of the securities having ordinary voting power for the
election of directors or other members of the governing body of a Person or 10%
or more of the partnership or other ownership interests of a Person (other than
as a limited partner of such Person) shall be deemed to control such Person; (b)
each director (or comparable manager) of a Person shall be deemed
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to be an Affiliate of such Person; and (c) each partnership or joint venture in
which a Person is a partner or joint venturer shall be deemed to be an Affiliate
of such Person.
"AGENT" means Foothill, solely in its capacity as agent for
the Lenders hereunder, and any successor thereto.
"AGENT'S ACCOUNT" means the account identified on SCHEDULE
A-1.
"AGENT ADVANCES" has the meaning set forth in SECTION
2.3(e)(i).
"AGENT'S LIENS" means the Liens granted by Obligors to Agent
under this Agreement or the other Loan Documents.
"AGENT-RELATED PERSONS" means Agent together with its
Affiliates, officers, directors, employees, and agents.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ANNUALIZED RECURRING MAINTENANCE REVENUES" means, as of the
last day of any Measuring Period, an amount equal to the result of (a) the
Recurring Maintenance Revenues for such Measuring Period, TIMES (b) 4.
"APPLICABLE PREPAYMENT PREMIUM" means, as of any date of
determination, an amount equal to 1% TIMES the Maximum Revolver Amount.
"ASSIGNEE" has the meaning set forth in SECTION 14.1.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
in the form of EXHIBIT A-1.
"AUTHORIZED PERSON" means any officer or other employee of
Administrative Borrower.
"AVAILABILITY" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrowers are entitled to borrow as Advances under
SECTION 2.1 (after giving effect to all then outstanding Obligations and all
sublimits and reserves applicable hereunder).
"BANKRUPTCY CODE" means the United States Bankruptcy Code, as
in effect from time to time.
"BASE RATE" means, the rate of interest announced within
Xxxxx Fargo at its principal office in San Francisco as its "prime rate", with
the understanding that the "prime rate" is one of Xxxxx Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making
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reference thereto and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Xxxxx Fargo may
designate.
"BASE RATE MARGIN" means 2.00 percentage points.
"BASE RATE TERM LOAN MARGIN" means 5.00.
"BENEFIT PLAN" means a "defined benefit plan" (as defined in
SECTION 3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA
Affiliate of any Borrower has been an "employer" (as defined in SECTION 3(5) of
ERISA) within the past six years.
"BOA" means Bank of America, N.A.
"BOARD OF DIRECTORS" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf thereof.
"BOOKS" means a Person's now owned or hereafter acquired books
and records (including all of its Records indicating, summarizing, or evidencing
its assets or liabilities, all of such Person's Records relating to its business
operations or financial condition, and all of its goods or General Intangibles
related to such information).
"BORROWER" and "BORROWERS" have the respective meanings set
forth in the preamble to this Agreement.
"BORROWER COLLATERAL" means all of each Borrower's now owned
or hereafter acquired right, title, and interest in and to each of the
following:
(a) all of its Accounts,
(b) all of its Books,
(c) all of its Equipment,
(d) all of its General Intangibles,
(e) all of its Inventory,
(f) all of its Investment Property,
(g) all of its Negotiable Collateral,
(h) money or other assets of each such Borrower
that now or hereafter come into the possession, custody, or control of any
member of the Lender Group, and
(i) the proceeds and products, whether tangible
or intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Equipment, General
Intangibles, Inventory, Investment Property,
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Negotiable Collateral, Real Property, money, deposit accounts, or other tangible
or intangible property resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.
"BORROWING" means a borrowing hereunder consisting of
Advances (or term loans, in the case of the Term Loan) made on the same day by
the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a
Swing Loan, or by Agent in the case of an Agent Advance, in each case, to
Administrative Borrower.
"BORROWING BASE" has the meaning set forth in SECTION 2.1.
"BORROWING BASE PARTICIPANT" means (a) Parent, (b) each of
Parent's Domestic Subsidiaries, and (c) after the completion of the Canadian
Conditions, the Canadian Obligor.
"BUSINESS DAY" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close.
"CANADIAN CONDITIONS" means that Agent shall have received (a)
duly executed originals of the Canadian Security Documents and satisfactory
evidence that the security interests granted in favor of Agent pursuant thereto
have been duly perfected and are senior in priority to all other liens, claims,
security interests, or encumbrances, except for Permitted Liens, (b) such
opinions of foreign counsel to Canadian Obligor, in form and substance
reasonably satisfactory to Agent, as Agent may request, (c) a certificate from
an authorized senior official of Canadian Obligor attesting to the incumbency
and signatures of authorized officials of Canadian Obligor and to the
resolutions of Canadian Obligor's board of directors (or foreign equivalent)
(and, if necessary, resolutions of Canadian Obligor's shareholders) authorizing
the execution and delivery of the Canadian Security Documents and the
performance of the same, and authorizing specific officials of Canadian Obligor
to execute and deliver the same, (d) Agent shall have completed a collateral
audit with respect to the assets of Canadian Obligor and an examination of
Canadian Obligor's books, (e) certified copies of the policies of insurance,
together with the endorsements thereto, in respect of assets owned by Canadian
Obligor, as are required hereby, the form and substance of which shall be
satisfactory to Agent, and (f) such evidence as Agent may require demonstrating
that all conditions to the effectiveness of the Canadian Security Documents have
been satisfied, including, without limitation, any actions required by any
applicable Canadian financial assistance legislation and any release of any
Liens of Bank of Montreal or Whitecastle Investments.
"CANADIAN DOLLARS" OR "C$" each means the lawful money of
Canada.
"CANADIAN GUARANTY" means a guaranty executed and delivered by
Canadian Obligor in favor of Agent, in form and substance reasonably
satisfactory to Agent, as such agreement may be amended, supplemented or
modified from time to time.
"CANADIAN OBLIGORS" means Peregrine Systems of Canada, Inc., a
corporation organized under the laws of Canada, Peregrine Nova Scotia Company, a
Nova Scotia
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unlimited liability company, Peregrine Systems Ltd., a corporation organized
under the laws of Ontario, Harbinger Canada Corp., a corporation organized under
the laws of Canada, Peregrine Ottawa Nova Scotia Company, a Nova Scotia
unlimited liability company, Peregrine Networks Canada Inc., a corporation
organized under the laws of Canada, Xxxxx International Technologies Inc., a
corporation organized under the laws of Canada, Xxxxx Network Systems Inc., a
corporation organized under the laws of Canada, Remedy Canada Ltd., a
corporation organized under the laws of Ontario, Extricity (Canada) Corp., a
Nova Scotia unlimited liability company and "CANADIAN OBLIGOR" means any one of
them.
"CANADIAN SECURITY AGREEMENT" means a security agreement
executed and delivered by Canadian Obligor in favor of Agent, in form and
substance reasonably satisfactory to Agent, as such agreement may be amended,
supplemented or modified from time to time.
"CANADIAN SECURITY DOCUMENTS" means, collectively, such
instruments, agreements, and documents governed by the laws of Canada or any
political subdivision thereof, as Agent may require in order to secure the
obligations of Canadian Obligor, including the Canadian Security Agreement, the
Hypothec, and the Canadian Guaranty.
"CAPITAL LEASE" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATION" means any Indebtedness
represented by obligations under a Capital Lease.
"CASH EQUIVALENTS" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having a rating of at least "A" from either S&P or Xxxxx'x, (c)
commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
Xxxxx'x, or (ii) less than or equal to $100,000 in the aggregate issued by any
other bank insured by the Federal Deposit Insurance Corporation.
"CASH MANAGEMENT BANK" has the meaning set forth in SECTION
2.7(a).
"CASH MANAGEMENT ACCOUNT" has the meaning set forth in SECTION
2.7(a).
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"CASH MANAGEMENT AGREEMENTS" means those certain cash
management service agreements, in form and substance satisfactory to Agent, each
of which is among an Obligor, Agent, and one of the Cash Management Banks.
"CHANGE OF CONTROL" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 10%, or more, of the Stock of Parent having the right to vote for
the election of members of the Board of Directors, or (b) a majority of the
members of the Board of Directors do not constitute Continuing Directors, or (c)
except for the consummation of the Connectivity Spin-Off and the Permitted
Reorganization Transactions, any Borrower ceases to directly own and control
100% of the outstanding capital Stock of each of its Subsidiaries extant as of
the Closing Date.
"CFC" means a controlled foreign corporation (as that term is
defined in the IRC).
"CLOSING DATE" means the date of the making of the Term Loan
(or other extension of credit) hereunder.
"CLOSING DATE BUSINESS PLAN" means the set of Projections of
Borrowers for the 1 year period ended March 31, 2003 (on a quarterly basis), in
form and substance (including as to scope and underlying assumptions)
satisfactory to Agent.
"CLOSING DATE REQUIRED LIBRARY" means the set or collection of
copyrights of Borrowing Base Participants relating to the software of the
Borrowing Base Participants that generated not less than 80% of the aggregate
amount of current revenues arising from the licensing of software by the
Borrowing Base Participants during the 3 month period immediately preceding the
date of determination.
"CODE" means the
New York Uniform Commercial Code, as in
effect from time to time.
"COLLATERAL" means all of the assets of any Obligor that are
hypothecated in favor of Agent pursuant to the Loan Documents.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory of any Obligor, in each case,
in form and substance reasonably satisfactory to Agent.
"COLLECTIONS" means ALL cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds) of the Obligors.
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"COMMITMENT" means, with respect to each Lender, its Revolver
Commitment, its Term Loan Commitment, or its Total Commitment, as the context
requires, and, with respect to all Lenders, their Revolver Commitments, their
Term Loan Commitments, or their Total Commitments, as the context requires, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on SCHEDULE C-1 or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of SECTION 14.1.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C-1 delivered by the chief financial officer of Parent to
Agent.
"CONNECTIVITY PAYDOWN EVENT" means the occurrence of the
following events; (a) Parent and/or one or more of its Subsidiaries has entered
into an agreement for a Connectivity Spin-Off or a transaction substantially
similar to a Connectivity Spin-Off, with a purchaser other than Golden Gate
Capital LLC ("GGC") at a time when GGC remains ready, willing and able to
consummate a Connectivity Spin-Off according to the terms of a purchase and sale
agreement executed between GGC and Parent and/or one or more of its
Subsidiaries, or (b) Parent has failed to cooperate fully with GGC in providing
due diligence materials or has otherwise failed to proceed in good faith to
consummate such a transaction with GGC, and (c) the Connectivity Spin-Off with
such purchaser other than GGC closes within 30 calendar days of the Closing
Date.
"CONNECTIVITY SPIN-OFF" means the sale or other disposition by
Parent for net cash proceeds of at least $20,000,000 at a point in time when no
material Event of Default has occurred or is continuing of (i) all of the shares
of Stock of Peregrine Connectivity, Inc. ("CONNECTIVITY") owned by Parent
(together with all of the assets of Connectivity, including, all direct and
indirect Subsidiaries of Connectivity and all assets of such Subsidiaries), (ii)
all of Parent's right, title and interest in all agreements, including, without
limitation, maintenance and service agreements that relate solely to the
products and business of the former Peregrine Extricity, Inc. (which has been
merged with and into Parent) or that relate solely to the business of providing
licenses and services relating to the G2C Network, Trusted Link Windows, Trusted
Link Unix/NT, Trusted Link/400, Power Commerce, Supplier+, Catalog+, Gatekeeper,
KNO Book Catalog and Commerce Manager (Power Enterprise) products and (iii) all
of Parent's right, title and interest in (A) the Alliance 4.X and Channels
product, together with all associated intellectual property rights, and (B) the
trademark "Alliance Manager" together with all associated good will.
"CONTINUING DIRECTOR" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent
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(as such terms are used in Rule 14a-11 under the Exchange Act) and whose initial
assumption of office resulted from such contest or the settlement thereof.
"CONTROL AGREEMENT" means a control agreement, in form and
substance satisfactory to Agent, executed and delivered by the applicable
Obligor, Agent, and the applicable securities intermediary with respect to a
Securities Account or a bank with respect to a deposit account.
"COPYRIGHT" shall have the meaning ascribed to such term in
the United States Copyright Act of 1976, as amended, and includes unregistered
copyrights.
"COPYRIGHT SECURITY AGREEMENT" means a copyright security
agreement executed and delivered by each Obligor that owns any interest in
copyrights and Agent, the form and substance of which is satisfactory to Agent.
"DAILY BALANCE" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account
maintained by any Obligor.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DEFAULTING LENDER" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"DEFAULTING LENDER RATE" means (a) the Base Rate for the first
3 days from and after the date the relevant payment is due, and (b) thereafter,
at the interest rate then applicable to Advances (inclusive of the Applicable
Base Rate Margin applicable thereto).
"DESIGNATED ACCOUNT" means certain DDA of Administrative
Borrower identified on SCHEDULE D-1.
"DILUTION" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior 90 days, that is
the result of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to the
Accounts during such period, by (b) Borrowers' gross xxxxxxxx with respect to
Accounts during such period (excluding extraordinary items).
"DILUTION RESERVE" means, as of any date of determination, an
amount sufficient to reduce the advance rate against Eligible Accounts by one
percentage point for each percentage point by which Dilution is in excess of 5%.
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"DISBURSEMENT LETTER" means an instructional letter executed
and delivered by Administrative Borrower to Agent regarding the extensions of
credit to be made on the Closing Date, the form and substance of which is
satisfactory to Agent.
"DISCLOSURE LETTER" means the disclosure letter dated as of
the Closing Date addressed from the Administrative Borrower to Agent and the
Lenders.
"DOLLARS" or "$" means United States dollars.
"DOMESTIC SUBSIDIARY" means any Subsidiary of Parent that is
not a CFC.
"DUE DILIGENCE LETTER" means the due diligence letter sent by
Agent's counsel to Administrative Borrower, together with Administrative
Borrower's completed responses to the inquiries set forth therein, the form and
substance of such responses to be satisfactory to Agent.
"EBITDA" means, with respect to any fiscal period, Parent's
and its Subsidiaries consolidated net earnings (or loss), minus extraordinary
gains, plus extraordinary losses, interest expense, income taxes, and
depreciation and amortization for such period, as determined in accordance with
GAAP.
"ELIGIBLE ACCOUNTS" means those Receivables created by one of
Borrowers in the ordinary course of its business, that arise out of its sale of
goods or rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made by Borrowers under the Loan
Documents, and that are not excluded as ineligible by virtue of one or more of
the criteria set forth below; PROVIDED, HOWEVER, that such criteria may be fixed
and revised from time to time by Agent in Agent's Permitted Discretion to
address the results of any audit performed by Agent from time to time after the
Closing Date. In determining the amount to be included, Eligible Accounts shall
be calculated net of customer deposits and unapplied cash remitted to Borrowers
and amounts payable in Canadian Dollars shall be calculated at their Dollar
equivalent. Eligible Accounts shall not include the following:
(a) Receivables that the Account Debtor has failed to
pay within 90 days of original invoice date or Receivables with selling terms of
more than 60 days,
(b) Receivables owed by an Account Debtor (or its
Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or
its Affiliates) are deemed ineligible under clause (a) above,
(c) Receivables with respect to which the Account
Debtor is an employee, Affiliate, or agent of any Borrower,
(d) Receivables arising in a transaction containing
terms by reason of which the payment by the Account Debtor may be conditional,
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(e) Receivables that are not payable in Dollars or
Canadian Dollars,
(f) Receivables with respect to which the Account
Debtor either (i) does not maintain its chief executive office in the United
States or Canada, or (ii) is not organized under the laws of the United States
or any state thereof or Canada or any province thereof, or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof, unless (y) the
Account is supported by an irrevocable letter of credit satisfactory to Agent
(as to form, substance, and issuer or domestic confirming bank) that has been
delivered to Agent and is directly drawable by Agent, or (z) the Account is
covered by credit insurance in form, substance, and amount, and by an insurer,
satisfactory to Agent,
(g) Receivables with respect to which the Account
Debtor is either (i) the United States or any department, agency, or
instrumentality of the United States (exclusive, however, of Receivables with
respect to which the applicable Borrowing Base Participant has complied, to the
reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC
Section 3727), or (ii) any state of the United States (exclusive, however, of
(y) Receivables owed by any state that does not have a statutory counterpart to
the Assignment of Claims Act or (z) Receivables owed by any state that does have
a statutory counterpart to the Assignment of Claims Act as to which the
applicable Borrowing Base Participant has complied to Agent's satisfaction),
(h) Receivables with respect to which the Account
Debtor is a creditor of any Borrowing Base Participant, has or has asserted a
right of setoff, has disputed its liability, or has made any claim with respect
to its obligation to pay the Account, to the extent of such claim, right of
setoff, or dispute,
(i) Receivables with respect to an Account Debtor
whose total obligations owing to Borrowing Base Participants exceed 10% (such
percentage as applied to a particular Account Debtor being subject to reduction
by Agent in its Permitted Discretion if the creditworthiness of such Account
Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations
owing by such Account Debtor in excess of such percentage,
(j) Receivables with respect to which the Account
Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of
business, or as to which a Borrowing Base Participant has received notice of an
imminent Insolvency Proceeding or a material impairment of the financial
condition of such Account Debtor,
(k) Receivables with respect to which the Account
Debtor is located in the states of New Jersey, Minnesota, or West Virginia (or
any other state that requires a creditor to file a business activity report or
similar document in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any judicial process of
such state), unless the applicable Borrowing Base Participant has qualified to
do business in New Jersey, Minnesota, West Virginia, or such other states, or
has filed a business activities report with the applicable division of taxation,
the department of revenue,
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or with such other state offices, as appropriate, for the then-current year, or
is exempt from such filing requirement,
(l) Receivables, the collection of which, Agent, in
its Permitted Discretion, believes to be doubtful by reason of the Account
Debtor's financial condition,
(m) Receivables that are not subject to a valid and
perfected first priority Agent's Lien,
(n) Receivables with respect to which (i) the goods
giving rise to such Account have not been shipped and billed to the Account
Debtor, or (ii) the services giving rise to such Account have not been performed
and billed to the Account Debtor, or
(o) Receivables that represent the right to receive
progress payments or other advance xxxxxxxx that are due prior to the completion
of performance by the applicable Borrower of the subject contract for goods or
services.
"ELIGIBLE TRANSFEREE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender that was party hereto as of the Closing Date, (e) so long as no Event
of Default has occurred and is continuing, any other Person approved by Agent
and Administrative Borrower, and (f) during the continuation of an Event of
Default, any other Person approved by Agent.
"ENVIRONMENTAL ACTIONS" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by any Borrower or any predecessor in interest.
"ENVIRONMENTAL LAW" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on
Borrowers, relating to the environment, employee health and safety, or Hazardous
Materials, including CERCLA; RCRA; the Federal Water Pollution Control Act, 33
USC Section 1251 ET SEQ;
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the Toxic Substances Control Act, 15 USC Section 2601 ET SEQ; the Clean Air Act,
42 USC Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 USC Section 3803 ET
SEQ.; the Oil Pollution Act of 1990, 33 USC Section 2701 ET SEQ.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 USC Section 11001 ET
SEQ.; the Hazardous Material Transportation Act, 49 USC Section 1801 ET SEQ.;
and the Occupational Safety and Health Act, 29 USC Section 651 ET SEQ. (to the
extent it regulates occupational exposure to Hazardous Materials); any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"ENVIRONMENTAL LIEN" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means all of a Person's now owned or hereafter
acquired right, title, and interest with respect to equipment, machinery,
machine tools, motors, furniture, furnishings, fixtures, vehicles (including
motor vehicles), tools, parts, goods (other than consumer goods, farm products,
or Inventory), wherever located, including all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA AFFILIATE" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with a Borrower and whose employees are aggregated with the employees of a
Borrower under IRC Section 414(o).
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"EXCESS AVAILABILITY" means the amount, as of the date any
determination thereof is to be made, equal to Availability MINUS the aggregate
amount, if any, of all trade payables of Obligors aged in excess of their
historical levels with respect thereto and all book
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overdrafts in excess of their historical practices with respect thereto, in each
case as determined by Agent in its Permitted Discretion.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
in effect from time to time.
"EXEMPT COPYRIGHT" means any Incipient Copyright or any
Obsolete Copyright.
"EXISTING LENDER" means Fleet National Bank and each of the
other lenders that are parties to the credit agreement with Parent that is
agented by Fleet National Bank.
"EXTRAORDINARY RECEIPTS" means any cash or Cash Equivalents
received by Parent or any of its Subsidiaries not in the ordinary course of
business including (a) foreign, United States, state or local tax refunds, (b)
pension plan reversions, (c) proceeds of insurance (other than from liability or
workers' compensation insurance policies), (d) proceeds of judgments,
settlements or other consideration of any kind in connection with any cause of
action, (e) proceeds of condemnation awards, (f) indemnity payments, and (g) any
purchase price adjustments received in connection with any purchase agreement.
"FAMILY MEMBER" means, with respect to any individual, any
other individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"FAMILY TRUSTS" means, with respect to any individual, trusts
or other estate planning vehicles established for the benefit of Family Members
of such individual and in respect of which such individual serves as trustee or
in a similar capacity.
"FEE LETTER" means that certain fee letter, dated as of even
date herewith, between Borrowers and Agent, in form and substance satisfactory
to Agent.
"FEIN" means Federal Employer Identification Number.
"FOOTHILL" means Foothill Capital Corporation, a California
corporation.
"FORBEARANCE AND SECURITY AGREEMENT" means a forbearance and
security agreement executed and delivered by each of the Junior Lenders and each
of the Obligors, the form and substance of which is satisfactory to Agent.
"FOREIGN SUBSIDIARY CASH MANAGEMENT ARRANGEMENT" means the
transaction or series of related transactions among BOA and certain of the
Parent's CFCs (collectively, the "CASH MANAGEMENT FOREIGN SUBSIDIARIES")
pursuant to which (a) BOA is to provide cash management services to such CFC's
(including, without limitation, overdraft protection, but not including the
loaning of money or issuance of letters of credit or acceptance of bankers
acceptances); (b) in connection with such cash management services, BOA will
consider all of the Cash Management Foreign Subsidiaries as one consolidated
entity for purposes of honoring checks and other purposes related to the cash
management services to be provided;
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(c) each Cash Management Foreign Subsidiary will guaranty any obligations of any
other Cash Management Foreign Subsidiary to BOA which arises out of such case
management services (the "CASH MANAGEMENT GUARANTIES") and will grant to BOA a
security interest in all amounts in such Cash Management Foreign Subsidiary's
deposit accounts held by BOA to secure such guaranty obligations (the "CASH
MANAGEMENT LIENS"); and (d) BOA will obtain certain rights of setoff as to
amounts held in any account owned by a Cash Management Foreign Subsidiary with
BOA to satisfy the obligations owing by any Cash Management Foreign Subsidiary
under the cash management arrangements (the "CASH MANAGEMENT SETOFF RIGHTS").
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means all of a Person's now owned or
hereafter acquired right, title, and interest with respect to general
intangibles (including payment intangibles, contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), and any and all supporting obligations in respect thereof,
and any other personal property other than goods, Accounts, Investment Property,
and Negotiable Collateral.
"GOVERNING DOCUMENTS" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"GUARANTOR" means Canadian Obligor.
"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in
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any form or electrical equipment that contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of 50 parts per
million.
"HEDGE AGREEMENT" means any and all transactions, agreements,
or documents now existing or hereafter entered into by Parent or its
Subsidiaries, which provide 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 combination of, or option with
respect to, these or similar transactions, for the purpose of hedging Parent's
or its Subsidiaries' exposure to fluctuations in interest or exchange rates,
loan, credit exchange, security or currency valuations or commodity prices.
"HYPOTHEC" means the security document made by one or more of
the Canadian Obligors in favor of Agent, in form and substance (including being
governed by the laws of Quebec) satisfactory to Agent.
"INACTIVE SUBSIDIARY" means any of Peregrine Bridge
Subsidiary, Inc., a Delaware corporation; Prototype Inc., a California
corporation; Knowlix Corporation, a Delaware corporation; FMS Acquisition Corp.,
a Delaware corporation; TSMI, Inc., a Virginia corporation; TSB Acquisition
Corp., a corporation; APSYLOG, INC., a California corporation; and Xxxxx
Technologies, Inc., a Virginia corporation.
"INCIPIENT COPYRIGHT" means any copyright that (a) is under
development (whether in the form of a new product, a new version of a
pre-existing product, an upgrade, add-on, or modification to a pre-existing
product, or otherwise) and that has not yet become a completed product, version,
upgrade, add-on, or modification which is ready to be marketed, or (b) is not
the subject of licenses or other dispositions giving rise to Accounts, General
Intangibles, or other forms of obligations.
"INDEBTEDNESS" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations under Capital Leases, (d) all obligations or liabilities of
others secured by a Lien on any asset of Parent or its Subsidiaries,
irrespective of whether such obligation or liability is assumed, (e) all
obligations for the deferred purchase price of assets (other than trade debt
incurred in the ordinary course of business and repayable in accordance with
customary trade practices), and (f) any obligation guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION
11.3.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION
11.3.
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"INDENTURE" means the Indenture dated as of November 14, 2000,
between Parent and the Indenture Trustee. The Obligations shall constitute
Designated Senior Debt under the Indenture.
"INDENTURE TRUSTEE" means State Street Bank and Trust Company,
N.A.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"INTERCOMPANY ADVANCES" means loans or advances (but not
including book entry transactions involving non-cash transactions) from Parent
or one of its Subsidiaries to Parent or one of its Subsidiaries.
"INTERCOMPANY SUBORDINATION AGREEMENT" means a subordination
agreement executed and delivered by Borrowers and Agent, the form and substance
of which is satisfactory to Agent.
"INTERCREDITOR AGREEMENT" means an intercreditor and
subordination agreement executed and delivered by Junior Agent, on behalf of the
Junior Lenders, Agent, on behalf of the Lenders, and each of the Obligors, the
form and substance of which is satisfactory to Agent.
"INVENTORY" means all a Person's now owned or hereafter
acquired right, title, and interest with respect to inventory, including goods
held for sale or lease or to be furnished under a contract of service, goods
that are leased by such Person as lessor, goods that are furnished by such
Person under a contract of service, and raw materials, work in process, or
materials used or consumed in such Person's business.
"INVESTMENT" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"INVESTMENT PROPERTY" means all of a Person's now owned or
hereafter acquired right, title, and interest with respect to "investment
property" as that term is defined in the Code, and any and all supporting
obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
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"ISSUING LENDER" means Foothill or any other Lender that, at
the request of Administrative Borrower and with the consent of Agent agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to SECTION 2.12.
"JUNIOR LENDER AGENT" means Fleet Business Credit Corporation,
in its capacity as agent for the Junior Lenders.
"JUNIOR LENDERS" means Fleet Business Credit Corporation,
Silicon Valley Bank, and Xxxxx Fargo HSBC Trade Bank, N.A.
"L/C" has the meaning set forth in SECTION 2.12(a).
"L/C DISBURSEMENT" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C UNDERTAKING" has the meaning set forth in SECTION
2.12(a).
"LENDER" and "LENDERS" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of SECTION 14.1.
"LENDER GROUP" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"LENDER GROUP EXPENSES" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by an Obligor
under any of the Loan Documents that are paid or incurred by the Lender Group,
(b) fees or charges paid or incurred by Agent in connection with the Lender
Group's transactions with the Obligors, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation, and UCC searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication, appraisal
(including periodic Collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
this Agreement, real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) costs and expenses incurred by Agent
in the disbursement of funds to or for the account of Borrowers (by wire
transfer or otherwise), (d) charges paid or incurred by Agent resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by the
Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to audit examinations
of the Books of the Obligors to the extent of the fees and charges (and up to
the amount of any limitation) contained in this Agreement, (g) reasonable costs
and expenses of third party claims or any other suit paid or incurred by the
Lender Group in enforcing or defending the Loan Documents or in
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connection with the transactions contemplated by the Loan Documents or the
Lender Group's relationship with any Borrower or any guarantor of the
Obligations, (h) Agent's and each Lender's reasonable fees and expenses
(including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents, and (i) Agent's and
each Lender's reasonable fees and expenses (including attorneys fees) incurred
in terminating, enforcing (including attorneys fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning any Obligor or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is
brought, or in taking any Remedial Action concerning the Collateral.
"LENDER-RELATED PERSON" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, and agents of such Lender.
"LETTER OF CREDIT" means an L/C or an L/C Undertaking, as the
context requires.
"LETTER OF CREDIT LOAN AMOUNT" means an amount equal to 105%
of the Letter of Credit Usage.
"LETTER OF CREDIT USAGE" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of
Credit.
"LICENSE RECEIVABLES" means all of the Borrowing Base
Participants' right, title, and interest with respect to rights to payment
created by the Borrowing Base Participants in the ordinary course of their
business and that arise out of their licensing of software.
"LICENSE REPORT" shall have the meaning set forth in SECTION
6.2.
"LIEN" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.10.
"LOAN DOCUMENTS" means this Agreement, the Canadian Guaranty,
the Canadian Security Documents, the Cash Management Agreements, the Control
Agreements,
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the Copyright Security Agreement, the Disbursement Letter, the Due Diligence
Letter, the Fee Letter, the Post Closing Matters Agreement, the Letters of
Credit, the Officers' Certificate, the Patent Security Agreement, the Stock
Pledge Agreement, the Trademark Security Agreement, the Supplemental Side
Letter, the Intercreditor Agreement, the Intercompany Subordination Agreement,
any note or notes executed by a Borrower in connection with this Agreement and
payable to a member of the Lender Group, and any other agreement entered into,
now or in the future, by any Borrower and the Lender Group in connection with
this Agreement.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change
in the business, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Obligors taken as a whole, (b) a
material impairment of an Obligor's ability to perform its obligations under the
Loan Documents to which it is a party or of the Lender Group's ability to
enforce the Obligations or realize upon the Collateral, or (c) a material
impairment of the enforceability or priority of the Agent's Liens with respect
to the Collateral as a result of an action or failure to act on the part of an
Obligor.
"MATURITY DATE" has the meaning set forth in SECTION 3.4.
"MAXIMUM REVOLVER AMOUNT" means $100,000,000.
"MEASURING PERIOD" means as of the last day of each calendar
month, the 3 month period then ended.
"NEGOTIABLE COLLATERAL" means all of a Person's now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"NON-OBLIGOR SUBSIDIARY" means a Subsidiary of Parent that is
not an Obligor.
"NOTES" means Parent's $270,000,000 of 5-1/2% Convertible
Subordinated Notes due 2007 issued pursuant to the Indenture.
"OBLIGATIONS" means all loans (including the Term Loan),
Advances, debts, principal, interest (including any interest that, but for the
provisions of the Bankruptcy Code, would have accrued), contingent reimbursement
obligations with respect to outstanding Letters of Credit, premiums, liabilities
(including all amounts charged to Borrowers' Loan Account pursuant hereto),
obligations, fees (including the fees provided for in the Fee Letter), charges,
costs, Lender Group Expenses (including any fees or expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties of any kind and description owing by Borrowers
to the Lender Group pursuant to or evidenced by the Loan Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now
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existing or hereafter arising, and including all interest not paid when due and
all Lender Group Expenses that Borrowers are required to pay or reimburse by the
Loan Documents, by law, or otherwise. Any reference in this Agreement or in the
Loan Documents to the Obligations shall include all amendments, changes,
extensions, modifications, renewals replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and subsequent to
any Insolvency Proceeding.
"OBLIGOR" means (a) any Borrower or (b) any Canadian Obligor.
"OBSOLETE COPYRIGHT" means any copyright of a Person that, in
such Person's good faith determination (a) is no longer sold or marketed by such
Person, (b) is not generating any material amount of revenues of such Person, or
(c) does not have a material fair market value.
"OFFICERS' CERTIFICATE" means the representations and
warranties of officers form submitted by Agent to Administrative Borrower,
together with Borrowers' completed responses to the inquiries set forth therein,
the form and substance of such responses to be satisfactory to Agent.
"ORIGINATING LENDER" has the meaning set forth in SECTION
14.1(e).
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARENT" has the meaning set forth in the preamble to this
Agreement.
"PARTICIPANT" has the meaning set forth in SECTION 14.1(e).
"PATENT SECURITY AGREEMENT" means a patent security agreement
executed and delivered by Borrowers and Agent, the form and substance of which
is satisfactory to Agent.
"PAY-OFF LETTER" means a letter, in form and substance
satisfactory to Agent, from Existing Lender to Agent respecting the amount
necessary to repay in full all of the obligations of the Obligors owing to
Existing Lender and obtain a release of all of the Liens existing in favor of
Existing Lender in and to the assets of the Obligors.
"PERMITTED DISCRETION" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"PERMITTED DISPOSITIONS" means (a) sales or other dispositions
by Parent or its Subsidiaries of Equipment that is substantially worn, damaged,
or obsolete in the ordinary course of business, (b) sales by Parent or its
Subsidiaries of Inventory to buyers in the ordinary course of business, (c) the
use or transfer of money or Cash Equivalents by Parent or its Subsidiaries in a
manner that is not prohibited by the terms of this Agreement or the other Loan
Documents, (d) the licensing by Parent or its Subsidiaries, on a non-exclusive
basis, of patents, trademarks, copyrights, and other intellectual property
rights in the ordinary
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course of business, (e) the sale and leaseback of Equipment in the ordinary
course of business involving Equipment having an aggregate value not in excess
of $50,000 during the term of this Agreement, (f) the sale or other disposition
of Equipment having an aggregate value not exceeding $50,000 during the term of
this Agreement, and (g) the Connectivity Spin-Off.
"PERMITTED INTERCOMPANY ADVANCES" means an Intercompany
Advance, so long as (a) no Default or Event of Default exists at the time of the
making of such Intercompany Advance or would exist after giving effect thereto,
and (b) if a Non-Obligor Subsidiary is the Person acting as the borrower with
respect to such Intercompany Advance, after giving effect to such Intercompany
Advance, (i) the Non-Obligor Subsidiaries do not have unrestricted cash and Cash
Equivalents in excess of $10,000,000 (or the Dollar equivalent thereof) in the
aggregate, and (ii) Obligors have Excess Availability plus unrestricted cash and
Cash Equivalents in an amount not less than $15,000,000 (or the Dollar
equivalent thereof) after giving effect thereto.
"PERMITTED INVESTMENTS" means (a) investments in Cash
Equivalents, (b) investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) Permitted Intercompany Advances, (e) Investments
existing as of the Closing Date and disclosed on SCHEDULE P-1 to the Disclosure
Letter, (f) Investment received by Parent or any of its Subsidiaries in
connection with the bankruptcy or reorganization of customers or suppliers and
in settlement of delinquent obligations owing from such customer or supplier,
arising in the ordinary course of business, and (g) Investments permitted by
Section 7.1 (j) hereunder.
"PERMITTED LIENS" means (a) Liens held by Agent for the
benefit of Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are
not yet delinquent, or (ii) do not constitute an Event of Default hereunder and
are the subject of Permitted Protests, (c) Liens set forth on SCHEDULE P-2, (d)
the interests of lessors under operating leases, (e) purchase money Liens or the
interests of lessors under Capital Leases to the extent that such Liens or
interests secure Permitted Purchase Money Indebtedness and so long as such Lien
attaches only to the asset purchased or acquired and the proceeds thereof, (f)
Liens arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (g) Liens arising from deposits made in connection with obtaining
worker's compensation or other unemployment insurance, (h) Liens or deposits to
secure performance of bids, tenders, or leases incurred in the ordinary course
of business and not in connection with the borrowing of money, (i) Liens granted
as security for surety or appeal bonds in connection with obtaining such bonds
in the ordinary course of business, (j) Liens resulting from any judgment or
award that is not an Event of Default hereunder, (k) with respect to any Real
Property, easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof, (l) Liens in
favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods, (m) Liens
on unearned premiums in favor of insurance companies granted solely to secure
financed
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premiums, (n) leases or subleases, licenses or sublicenses entered into in the
ordinary and usual course of business, (o) Cash Management Liens in and to
deposit accounts maintained by Subsidiaries of Parent that are not Obligors, and
(p) to the extent expressly permitted by the terms of the Intercreditor
Agreement, Liens in favor of the Junior Lenders in and to assets that also serve
as collateral for the Obligations.
"PERMITTED PROTEST" means the right of Parent or any of its
Subsidiaries, as applicable) to protest any Lien (other than any such Lien that
secures the Obligations), taxes (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental payment, provided that
(a) a reserve with respect to such obligation is established on the Books in
such amount as is required under GAAP, (b) any such protest is instituted
promptly and prosecuted diligently by Parent or any of its Subsidiaries, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of the Agent's Liens.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, as of any date
of determination, Purchase Money Indebtedness incurred after the Closing Date in
an aggregate amount outstanding at any one time not in excess of $2,000,000.
"PERMITTED REORGANIZATION TRANSACTIONS" means (a) the merger
of one Borrower (other than Parent) with and into another Borrower, (b) the
dissolution and transfer of assets or properties by a Borrower (other than
Parent) to another Borrower, by a Canadian Obligor to another Canadian Obligor,
or by a non-Obligor to an Obligor, (c) the merger of one Non-Obligor Subsidiary
with and into another Non-Obligor Subsidiary, and (d) the dissolution of any of
the Non-Obligor Subsidiaries.
"PERSON" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"PERSONAL PROPERTY COLLATERAL" means all Borrower Collateral
other than Real Property.
"POST CLOSING MATTERS AGREEMENT" means that certain Post
Closing Matters Agreement, dated as of the date hereof, by and among the
Borrowers and the Agent, dealing with certain post closing matters.
"PREPAYMENT AMOUNT" means, as of any date of determination, an
amount equal the amount by which the aggregate principal amount outstanding of
the Term Loan exceeds 35% of the Annualized Recurring Maintenance Revenues for
the most recently completed Measuring Period.
"PROJECTIONS" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Parent's
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historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions.
"PRO RATA SHARE" means:
(a) with respect to a Lender's obligation to make
Advances and receive payments of principal, interest, fees, costs, and expenses
with respect thereto, the percentage obtained by dividing (i) such Lender's
Revolver Commitment, by (ii) the aggregate Revolver Commitments of all Lenders,
(b) with respect to a Lender's obligation to
participate in Letters of Credit, to reimburse the Issuing Lender, and to
receive payments of fees with respect thereto, the percentage obtained by
dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate Revolver
Commitments of all Lenders,
(c) with respect to a Lender's obligation to make the
Term Loan and receive payments of interest, fees, and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's Term Loan
Commitment, by (ii) the aggregate amount of all Lenders' Term Loan Commitments,
and
(d) with respect to all other matters (including the
indemnification obligations arising under Section 16.7), the percentage obtained
by dividing (i) such Lender's Total Commitment, by (ii) the aggregate amount of
Total Commitments of all Lenders; PROVIDED, HOWEVER, that, in each case, in the
event all Commitments have been terminated, Pro Rata Share shall be determined
according to the Commitments in effect immediately prior to such termination.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"QUALIFIED CASH" means, as of any date of determination, the
amount of unrestricted cash and Cash Equivalents of the Obligors that is on
deposit with banks, or in securities accounts with securities intermediaries, or
any combination thereof, and which such deposit account or securities account is
the subject of a Control Agreement and is maintained by a branch office located
within the United States.
"REAL PROPERTY" means any estates or interests in real
property now owned or hereafter acquired by any Borrower and the improvements
thereto.
"RECEIVABLES" means License Receivables and Services
Receivables.
"RECORD" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
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"RECURRING MAINTENANCE REVENUES" means, with respect to any
period, the revenues of the Borrowing Base Participants for such period that are
derived from contractual provisions providing for an agreed upon periodic
payment (as opposed to a episodic payment, e.g., move-add-change and
maintenance-per-call) for the provision of maintenance services and ongoing
support as reflected in such Borrowing Base Participants' financial statements
prepared in accordance with their historical practices.
"REMEDIAL ACTION" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"REPORT" has the meaning set forth in SECTION 16.17.
"REQUIRED LENDERS" means, at any time, Lenders whose Pro Rata
Shares aggregate a majority of the Total Commitments, or if the Commitments have
been terminated irrevocably, a majority of the Obligations then outstanding.
"REQUIRED LIBRARY" means, as of any date of determination,
the set or collection of copyrights of Borrowing Base Participants relating to
the software of the Borrowing Base Participants that generated not less than 95%
of the aggregate amount of current revenues arising from the licensing of
software by the Borrowing Base Participants during the 3 month period
immediately preceding the date of determination.
"REVOLVER COMMITMENT" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on SCHEDULE C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of SECTION 14.1.
"REVOLVER CONDITIONS" means that (a) no Default or Event of
Default has occurred and is continuing, (b) the condition set forth in SECTION
3.2(b) has been satisfied without regard to whether the time period permitted
thereby has elapsed, and (c) Agent has been able to syndicate (on terms and
conditions satisfactory to Agent in its sole discretion) not less than
$45,000,000 of the Total Commitment hereunder to one or more financial
institutions acceptable to Agent in its sole discretion.
"REVOLVER RESERVE" means (a) prior to the satisfaction of the
Revolver Conditions, $100,000,000 MINUS the Dollar amount available to be drawn
under Letters of Credit issued as of any date of determination (for the
avoidance of doubt, if and when a Letter of Credit is reduced or expires
undrawn, the Revolver Reserve would automatically increase on a
Dollar-for-Dollar basis), and (b) after the satisfaction of the Revolver
Conditions, zero.
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"REVOLVER USAGE" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, PLUS (b) the then
extant amount of the Letter of Credit Usage, plus (c) the then extant amount
principal amount of the Term Loan.
"REVENUE REPORT" shall have the meaning set forth in SECTION
6.2.
"RISK PARTICIPATION LIABILITY" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"SECURITIES ACCOUNT" means a "securities account" as that term
is defined in the Code.
"SERVICES RECEIVABLES" means all of the Borrowing Base
Participants' right, title, and interest with respect to rights to payment
created by the Borrowing Base Participants in the ordinary course of their
business and that arise out of their rendition of professional or consulting
services pursuant to a contract.
"SETTLEMENT" has the meaning set forth in SECTION 2.3(f)(i).
"SETTLEMENT DATE" has the meaning set forth in SECTION
2.3(f)(i).
"SOLVENT" means, with respect to any Person on a particular
date, that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"STOCK" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"STOCK PLEDGE AGREEMENT" means a stock pledge agreement, in
form and substance satisfactory to Agent, executed and delivered by each Obligor
that owns Stock of a Subsidiary of Parent.
"SUBSIDIARY" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or
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appoint other comparable managers) of such corporation, partnership, limited
liability company, or other entity.
"SUPPLEMENTAL SIDE LETTER" means that certain letter
agreement, dated as of the date hereof, by which Borrowers provide Agent with
additional representations and warranties.
"SWING LENDER" means Foothill or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender hereunder.
"SWING LOAN" has the meaning set forth in SECTION 2.3(d)(i).
"TAXES" has the meaning set forth in SECTION 16.11.
"TERM LOAN" has the meaning set forth in SECTION 2.2(a).
"TERM LOAN AMOUNT" means $56,000,000.
"TERM LOAN COMMITMENT" means, with respect to each Lender, its
Term Loan Commitment, and, with respect to all Lenders, their Term Loan
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on SCHEDULE C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of SECTION 14.1.
"TOTAL COMMITMENT" means, with respect to each Lender, its
Total Commitment, and, with respect to all Lenders, their Total Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on SCHEDULE C-1 attached hereto or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of SECTION 14.1.
"TRADEMARK SECURITY AGREEMENT" means a trademark security
agreement executed and delivered by each Borrower and Agent, the form and
substance of which is satisfactory to Agent.
"TTM EBITDA" means, as of any date of determination, the
EBITDA of the Parent and its Subsidiaries for the 12 month period most recently
ended for which the Parent has delivered (or is obligated to have delivered)
financial statements pursuant hereto.
"UNDERLYING ISSUER" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
"UNDERLYING LETTER OF CREDIT" means a letter of credit that
has been issued by an Underlying Issuer.
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"VOIDABLE TRANSFER" has the meaning set forth in SECTION 17.7.
"XXXXX FARGO" means Xxxxx Fargo Bank, National Association, a
national banking association.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("ADVANCES")
to Borrowers in an amount at any one time outstanding not to exceed such
Lender's Pro Rata Share of an amount equal to THE LESSER OF (i) the Maximum
Revolver Amount LESS the sum of (y) the then outstanding
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principal amount of the Term Loan, and (z) the Letter of Credit Usage, or (ii)
the Borrowing Base LESS the Letter of Credit Usage. For purposes of this
Agreement, "BORROWING BASE," as of any date of determination, shall mean the
result of:
(y) THE LESSER OF
(i) 85% of the amount of Eligible Accounts,
LESS the amount, if any, of the Dilution Reserve, and
(ii) an amount equal to Borrowers'
Collections with respect to Accounts for the
immediately preceding 45 day period, MINUS
(z) the sum of (i) the Revolver Reserve, and
(ii) the aggregate amount of reserves, if any,
established by Agent under SECTION 2.1(b).
(b) Anything to the contrary in this SECTION 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Obligors are required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay under any
Section of this Agreement or any other Loan Document, and (ii) amounts owing by
Obligors to any Person to the extent secured by a Lien on, or trust over, any of
the Collateral (other than any existing Permitted Lien set forth on SCHEDULE P-2
which is specifically identified thereon as entitled to have priority over the
Agent's Liens), which Lien or trust, in the Permitted Discretion of Agent likely
would have a priority superior to the Agent's Liens (such as Liens or trusts in
favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for AD VALOREM, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral.
(c) The Lenders with Revolver Commitments shall have no
obligation to make additional Advances hereunder to the extent such additional
Advances would cause the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement.
2.2 TERM LOAN.
(a) Subject to the terms and conditions of this Agreement, on
the Closing Date each Lender with a Term Loan Commitment agrees (severally, not
jointly or jointly and severally) to make term loans (collectively, the "TERM
LOAN") to Borrowers in an
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amount equal to such Lender's Pro Rata Share of the Term Loan Amount. The Term
Loan shall be repaid on the following dates and in the following amounts:
===========================================================================
Date Installment Amount
===========================================================================
February 1, 2003 $1,145,833.33
---------------------------------------------------------------------------
March 1, 2003 $1,145,833.33
---------------------------------------------------------------------------
April 1, 2003 $1,145,833.33
---------------------------------------------------------------------------
May 1, 2003 $1,145,833.33
===========================================================================
June 1, 2003 $1,145,833.33
===========================================================================
July 1, 2003 $1,145,833.33
===========================================================================
August 1, 2003 $1,145,833.33
---------------------------------------------------------------------------
September 1, 2003 $1,145,833.33
===========================================================================
October 1, 2003 $1,145,833.33
===========================================================================
November 1, 2003 $1,145,833.33
===========================================================================
December 1, 2003 $1,145,833.33
===========================================================================
The outstanding unpaid principal balance and all accrued and unpaid interest
under the Term Loan shall be due and payable on the date of termination of this
Agreement, whether by its terms, by prepayment, or by acceleration. All amounts
outstanding under the Term Loan shall constitute Obligations.
(b) If any Revenue Report delivered to Agent pursuant to
SECTION 6.2 hereof demonstrates that the aggregate principal amount outstanding
of the Term Loan exceeds 35% of the Annualized Recurring Maintenance Revenues
for the Measuring Period most recently ended, Borrowers shall immediately prepay
the outstanding principal balance of the Term Loan in an amount equal to the
Prepayment Amount, such Prepayment Amount to be applied to the scheduled
installments of the Term Loan in the inverse order of their maturities.
(c) Immediately upon the occurrence of a Connectivity Paydown
Event and immediately upon any sale or other disposition (other than Permitted
Dispositions) of any other assets by Parent or any of its Subsidiaries,
Borrowers shall prepay the outstanding principal amount of the Term Loan in an
amount equal to 100% of the net cash proceeds received by such Person in
connection with any sale or other disposition with a corresponding
dollar-for-dollar reduction in the Commitments. Nothing contained in this
Section shall be deemed to permit any sale or other disposition otherwise
prohibited by the terms and conditions of this Agreement. Any payments required
to be made under this
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Section shall be applied to the scheduled installments of the Term Loan in the
inverse order of their maturities.
(d) Upon the issuance or incurrence by Parent or any of its
Subsidiaries of any Indebtedness (other than Indebtedness incurred hereunder or
Permitted Purchase Money Indebtedness) or the sale or issuance by Parent or any
of its Subsidiaries of any shares of its Stock, Borrowers shall prepay the
outstanding principal amount of the Term Loan in an amount equal to 100% of the
net cash proceeds received by such Person in connection therewith. Nothing
contained in this Section shall be deemed to permit any such issuance,
incurrence or sale otherwise prohibited by the terms and conditions of this
Agreement. Any payments required to be made under this Section shall be applied
to the scheduled installments of the Term Loan in the inverse order of their
maturities.
(e) Except to the extent Borrower are permitted to use
insurance proceeds pursuant to SECTION 6.8 hereof, upon the receipt by Parent or
any of its Subsidiaries of any Extraordinary Receipts, Borrowers shall prepay
the outstanding principal amount of the Term Loan in an amount equal to 100% of
such Extraordinary Receipts. Any payments required to be made under this Section
shall be applied to the scheduled installments of the Term Loan in the inverse
order of their maturities.
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by
an irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date in the
case of a request for an Advance or the Term Loan specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date, which shall be a Business
Day; PROVIDED, HOWEVER, that in the case of a request for Swing Loan in an
amount of $5,000,000, or less, such notice will be timely received if it is
received by Agent no later than 10:00 a.m. (California time) on the Business Day
that is the requested Funding Date) specifying (i) the amount of such Borrowing,
and (ii) the requested Funding Date, which shall be a Business Day. At Agent's
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice.
(b) AGENT'S ELECTION. Promptly after receipt of a request for
a Borrowing pursuant to SECTION 2.3(a), Agent shall elect, in its discretion,
(i) to have the terms of SECTION 2.3(c) apply to such requested Borrowing, or
(ii) if the Borrowing is for an Advance, to request Swing Lender to make a Swing
Loan pursuant to the terms of SECTION 2.3(d) in the amount of the requested
Borrowing; PROVIDED, HOWEVER, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to SECTION 2.3(d), Agent shall elect to
have the terms of SECTION 2.3(c) apply to such requested Borrowing.
(c) MAKING OF ADVANCES.
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(i) In the event that Agent shall elect to have the
terms of this SECTION 2.3(c) apply to a requested Borrowing as
described in SECTION 2.3(b), then promptly after receipt of a
request for a Borrowing pursuant to SECTION 2.3(a), Agent
shall notify the Lenders, not later than 1:00 p.m. (California
time) on the Business Day immediately preceding the Funding
Date applicable thereto, by telecopy, telephone, or other
similar form of transmission, of the requested Borrowing. Each
Lender shall make the amount of such Lender's Pro Rata Share
of the requested Borrowing available to Agent in immediately
available funds, to Agent's Account, not later than 10:00 a.m.
(California time) on the Funding Date applicable thereto.
After Agent's receipt of the proceeds of such Advances (or the
Term Loan, as applicable), upon satisfaction of the applicable
conditions precedent set forth in SECTION 3 hereof, Agent
shall make the proceeds thereof available to Administrative
Borrower on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by
Agent to Administrative Borrower's Designated Account;
PROVIDED, HOWEVER, that, subject to the provisions of SECTION
2.3(i), Agent shall not request any Lender to make, and no
Lender shall have the obligation to make, any Advance (or its
portion of the Term Loan) if Agent shall have actual knowledge
that (1) one or more of the applicable conditions precedent
set forth in SECTION 3 will not be satisfied on the requested
Funding Date for the applicable Borrowing unless such
condition has been waived, or (2) the requested Borrowing
would exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, at least 1 Business Day prior to the
date of such Borrowing, that such Lender will not make
available as and when required hereunder to Agent for the
account of Borrowers the amount of that Lender's Pro Rata
Share of the Borrowing, Agent may assume that each Lender has
made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may
(but shall not be so required), in reliance upon such
assumption, make available to Borrowers on such date a
corresponding amount. If and to the extent any Lender shall
not have made its full amount available to Agent in
immediately available funds and Agent in such circumstances
has made available to Borrowers such amount, that Lender shall
on the Business Day following such Funding Date make such
amount available to Agent, together with interest at the
Defaulting Lender Rate for each day during such period. A
notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available,
such payment to Agent shall constitute such Lender's Advance
on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify
Administrative Borrower of such failure to fund and, upon
demand by Agent, Borrowers shall pay such amount to Agent
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for Agent's account, together with interest thereon for each
day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the
Advances composing such Borrowing. The failure of any Lender
to make any Advance on any Funding Date shall not relieve any
other Lender of any obligation hereunder to make an Advance on
such Funding Date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by
such other Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrowers to Agent for
the Defaulting Lender's benefit, and, in the absence of such
transfer to the Defaulting Lender, Agent shall transfer any
such payments to each other non-Defaulting Lender member of
the Lender Group ratably in accordance with their Commitments
(but only to the extent that such Defaulting Lender's Advance
was funded by the other members of the Lender Group) or, if so
directed by Administrative Borrower and if no Default or Event
of Default had occurred and is continuing (and to the extent
such Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrowers as if such
Defaulting Lender had made Advances to Borrowers. Subject to
the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of such
Defaulting Lender the amount of all such payments received and
retained by it for the account of such Defaulting Lender.
Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero. This Section shall
remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or
shall have become immediately due and payable, (y) the
non-Defaulting Lenders, Agent, and Administrative Borrower
shall have waived such Defaulting Lender's default in writing,
or (z) the Defaulting Lender makes its Pro Rata Share of the
applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this
Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of
its duties and obligations hereunder, or to relieve or excuse
the performance by Borrowers of their duties and obligations
hereunder to Agent or to the Lenders other than such
Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting
Lender of this Agreement and shall entitle Administrative
Borrower at its option, upon written notice to Agent, to
arrange for a substitute Lender to assume the Commitment of
such Defaulting Lender, such substitute Lender to be
acceptable to Agent. In connection with the arrangement of
such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and
Acceptance Agreement in favor of the
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substitute Lender (and agrees that it shall be deemed to have
executed and delivered such document if it fails to do so)
subject only to being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or
penalty of any kind whatsoever; PROVIDED FURTHER, HOWEVER,
that any such assumption of the Commitment of such Defaulting
Lender shall not be deemed to constitute a waiver of any of
the Lender Groups' or Borrowers' rights or remedies against
any such Defaulting Lender arising out of or in relation to
such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent
of Swing Lender, as a Lender, to have the terms of this
SECTION 2.3(d) apply to a requested Borrowing as described in
SECTION 2.3(b), Swing Lender as a Lender shall make such
Advance in the amount of such Borrowing (any such Advance made
solely by Swing Lender as a Lender pursuant to this SECTION
2.3(d) being referred to as a "SWING LOAN" and such Advances
being referred to collectively as "SWING LOANS") available to
Borrowers on the Funding Date applicable thereto by
transferring immediately available funds to Administrative
Borrower's Designated Account. Each Swing Loan is an Advance
hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that all payments on any
Swing Loan shall be payable to Swing Lender as a Lender solely
for its own account (and for the account of the holder of any
participation interest with respect to such Swing Loan).
Subject to the provisions of SECTION 2.3(i), Agent shall not
request Swing Lender as a Lender to make, and Swing Lender as
a Lender shall not make, any Swing Loan if Agent has actual
knowledge that (i) one or more of the applicable conditions
precedent set forth in SECTION 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless
such condition has been waived, or (ii) the requested
Borrowing would exceed the Availability on such Funding Date.
Swing Lender as a Lender shall not otherwise be required to
determine whether the applicable conditions precedent set
forth in SECTION 3 have been satisfied on the Funding Date
applicable thereto prior to making, in its sole discretion,
any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's
Liens, shall constitute Advances and Obligations hereunder,
and shall bear interest at the rate applicable from time to
time to Advances.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrowers and the
Lenders, from time to time in Agent's sole discretion, (1)
after the occurrence and during the continuance of a Default
or an Event of Default, or (2) at any time that any of the
other applicable conditions precedent set forth in SECTION 3
have not been
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satisfied, to make Advances to Borrowers on behalf of the
Lenders that Agent, in its Permitted Discretion deems
necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Obligations, or (C) to pay any
other amount chargeable to Borrowers pursuant to the terms of
this Agreement, including Lender Group Expenses and the costs,
fees, and expenses described in SECTION 10 (any of the
Advances described in this SECTION 2.3(e) shall be referred to
as "AGENT ADVANCES"). Each Agent Advance is an Advance
hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that all payments on
Agent Advances shall be payable to Agent solely for its own
account (and for the account of the holder of any
participation interest with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable on demand
and secured by the Agent's Liens granted to Agent under the
Loan Documents, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances.
(f) SETTLEMENT. It is agreed that each Lender's funded portion
of the Advances is intended by the Lenders to equal, at all times, such Lender's
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement ("SETTLEMENT")
with the Lenders on a weekly basis, or on a more frequent
basis if so determined by Agent, (1) on behalf of Swing
Lender, with respect to each outstanding Swing Loan, (2) for
itself, with respect to each Agent Advance, and (3) with
respect to Collections received, as to each by notifying the
Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00
p.m. (California time) on the Business Day immediately prior
to the date of such requested Settlement (the date of such
requested Settlement being the "SETTLEMENT DATE"). Such notice
of a Settlement Date shall include a summary statement of the
amount of outstanding Advances, Swing Loans, and Agent
Advances for the period since the prior Settlement Date.
Subject to the terms and conditions contained herein
(including SECTION 2.3(c)(iii)): (y) if a Lender's balance of
the Advances, Swing Loans, and Agent Advances exceeds such
Lender's Pro Rata Share of the
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Advances, Swing Loans, and Agent Advances as of a Settlement
Date, then Agent shall, by no later than 12:00 p.m.
(California time) on the Settlement Date, transfer in
immediately available funds to the account of such Lender as
such Lender may designate, an amount such that each such
Lender shall, upon receipt of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances, Swing
Loans, and Agent Advances, and (z) if a Lender's balance of
the Advances, Swing Loans, and Agent Advances is less than
such Lender's Pro Rata Share of the Advances, Swing Loans, and
Agent Advances as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (California time) on the Settlement Date
transfer in immediately available funds to the Agent's
Account, an amount such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its
Pro Rata Share of the Advances, Swing Loans, and Agent
Advances. Such amounts made available to Agent under clause
(z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loan or Agent
Advance and, together with the portion of such Swing Loan or
Agent Advance representing Swing Lender's Pro Rata Share
thereof, shall constitute Advances of such Lenders. If any
such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required
by the terms hereof, Agent shall be entitled to recover for
its account such amount on demand from such Lender together
with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the
Advances, Swing Loans, and Agent Advances is less than, equal
to, or greater than such Lender's Pro Rata Share of the
Advances, Swing Loans, and Agent Advances as of a Settlement
Date, Agent shall, as part of the relevant Settlement, apply
to such balance the portion of payments actually received in
good funds by Agent with respect to principal, interest, fees
payable by Borrowers and allocable to the Lenders hereunder,
and proceeds of Collateral. To the extent that a net amount is
owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of
such next Settlement.
(iii) Between Settlement Dates, Agent, to the extent
no Agent Advances or Swing Loans are outstanding, may pay over
to Swing Lender any payments received by Agent, that in
accordance with the terms of this Agreement would be applied
to the reduction of the Advances, for application to Swing
Lender's Pro Rata Share of the Advances. If, as of any
Settlement Date, Collections received since the then
immediately preceding Settlement Date have been applied to
Swing Lender's Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing
Lender shall pay to Agent for the accounts of the Lenders, and
Agent shall pay to the Lenders, to be applied to the
outstanding Advances of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such
Settlement Date, its Pro Rata Share of the Advances. During
the period between Settlement Dates, Swing Lender with respect
to Swing Loans, Agent with respect to Agent Advances, and each
Lender (subject to the effect of letter agreements between
Agent and individual Lenders) with respect to the Advances
other than Swing Loans and Agent Advances, shall be entitled
to
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interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing
Lender, Agent, or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Swing Loans owing to
Swing Lender, and Agent Advances owing to Agent, and the interests therein of
each Lender, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and records, including computer
records, such books and records constituting conclusive evidence, absent
manifest error, of the accuracy of the information contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than
Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligations hereunder, and (ii) no
failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.
(i) OPTIONAL OVERADVANCES. Any contrary provision of this
Agreement notwithstanding, from and after the satisfaction of the Revolver
Conditions, the Lenders hereby authorize Agent or Swing Lender, as applicable,
and Agent or Swing Lender, as applicable, may, but is not obligated to,
knowingly and intentionally, continue to make Advances (including Swing Loans)
to Borrowers notwithstanding that an Overadvance exists or thereby would be
created, so long as (i) after giving effect to such Advances (including a Swing
Loan), the Revolver Usage does not exceed the Borrowing Base by more than
$4,000,000, (ii) after giving effect to such Advances (including a Swing Loan)
the outstanding Revolver Usage (except for and excluding amounts charged to the
Loan Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum Revolver Amount, and (iii) at the time of the making of any such Advance
(including a Swing Loan), Agent does not believe, in good faith, that the
Overadvance created by such Advance will be outstanding for more than 90 days.
The foregoing provisions are for the exclusive benefit of Agent, Swing Lender,
and the Lenders and are not intended to benefit Borrowers in any way. The
Advances and Swing Loans, as applicable, that are made pursuant to this SECTION
2.3(i) shall be subject to the same terms and conditions as any other Advance or
Swing Loan, as applicable, except that the rate of interest applicable thereto
shall be the rate applicable to Advances under SECTION 2.6(c) hereof without
regard to the presence or absence of a Default or Event of Default.
(i) In the event Agent obtains actual knowledge that
the Revolver Usage exceeds the amounts permitted by the
preceding paragraph, regardless of the amount of, or reason
for, such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any additional)
intentional
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Overadvances (except for and excluding amounts charged to the
Loan Account for interest, fees, or Lender Group Expenses)
unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders
with Revolver Commitments thereupon shall, together with
Agent, jointly determine the terms of arrangements that shall
be implemented with Borrowers and intended to reduce, within a
reasonable time, the outstanding principal amount of the
Advances to Borrowers to an amount permitted by the preceding
paragraph. In the event Agent or any Lender disagrees over the
terms of reduction or repayment of any Overadvance, the terms
of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders.
(ii) Each Lender with a Revolver Commitment shall be
obligated to settle with Agent as provided in SECTION 2.3(f)
for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender,
any intentional Overadvances made as permitted under this
SECTION 2.3(i), and any Overadvances resulting from the
charging to the Loan Account of interest, fees, or Lender
Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly provided herein,
all payments by Borrowers shall be made to Agent's Account for
the account of the Lender Group and shall be made in
immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment
received by Agent later than 11:00 a.m. (California time),
shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Unless Agent receives notice from Administrative
Borrower prior to the date on which any payment is due to the
Lenders that Borrowers will not make such payment in full as
and when required, Agent may assume that Borrowers have made
(or will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so
required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent Borrowers do not
make such payment in full to Agent on the date when due, each
Lender severally shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at
the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION.
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(i) Except as otherwise provided with respect to
Defaulting Lenders and except as otherwise provided in the
Loan Documents (including letter agreements between Agent and
individual Lenders), aggregate principal and interest payments
shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such
payments relate held by each Lender) and payments of fees and
expenses (other than fees or expenses that are for Agent's
separate account, after giving effect to any letter agreements
between Agent and individual Lenders) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type
of Commitment or Obligation to which a particular fee relates.
All payments shall be remitted to Agent and all such payments
(other than payments received while no Default or Event of
Default has occurred and is continuing and which relate to the
payment of principal or interest of specific Obligations or
which relate to the payment of specific fees), and all
proceeds of Accounts or other Collateral received by Agent,
shall be applied as follows:
A. FIRST, to pay any Lender Group Expenses
then due to Agent under the Loan Documents, until
paid in full,
B. SECOND, to pay any Lender Group Expenses
then due to the Lenders under the Loan Documents, on
a ratable basis, until paid in full,
C. THIRD, to pay any fees then due to Agent
(for its separate accounts, after giving effect to
any letter agreements between Agent and the
individual Lenders) under the Loan Documents until
paid in full,
D. FOURTH, to pay any fees then due to any
or all of the Lenders (after giving effect to any
letter agreements between Agent and individual
Lenders) under the Loan Documents, on a ratable
basis, until paid in full,
E. FIFTH, to pay interest due in respect of
all Agent Advances, until paid in full,
F. SIXTH, ratably to pay interest due in
respect of the Advances (other than Agent Advances),
the Swing Loans, and the Term Loan until paid in
full,
G. SEVENTH, to pay the principal of all
Agent Advances until paid in full,
H. EIGHTH, ratably to pay all principal
amounts then due and payable (other than as a result
of an acceleration thereof) with respect
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to the Term Loan (to be applied ratably between them)
until paid in full,
I. NINTH, to pay the principal of all Swing
Loans until paid in full,
J. TENTH, so long as no Event of Default has
occurred and is continuing, to pay the principal of
all Advances until paid in full,
K. ELEVENTH, if an Event of Default has
occurred and is continuing, to pay the principal of
all Advances until paid in full,
L. TWELFTH, if an Event of Default has
occurred and is continuing, to pay the outstanding
principal balance of the Term Loan (to be applied in
the inverse order of the maturity of the installments
due thereunder) until the Term Loan is paid in full,
M. THIRTEENTH, if an Event of Default has
occurred and is continuing, to Agent, to be held by
Agent, for the ratable benefit of Issuing Lender and
those Lenders having a Revolver Commitment, as cash
collateral in an amount up to 105% of (i) the then
extant Letter of Credit Usage minus (ii) the then
extant Letter of Credit Loan Amount, until paid in
full,
N. FOURTEENTH, to pay any other Obligations
until paid in full, and
O. FIFTEENTH, to Borrowers (to be wired to
the Designated Account) or such other Person entitled
thereto under applicable law.
(ii) Agent promptly shall distribute to each Lender,
pursuant to the applicable wire instructions received from
each Lender in writing, such funds as it may be entitled to
receive, subject to a Settlement delay as provided in SECTION
2.3(h).
(iii) In each instance, so long as no Event of
Default has occurred and is continuing, SECTION 2.4(b) shall
not be deemed to apply to any payment by Borrowers specified
by Borrowers to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of
this Agreement.
(iv) Anything to the contrary set forth in this
section notwithstanding, upon a drawing under an Underlying
Letter of Credit or Letter of Credit, the Issuing Lender shall
be entitled to offset or recoup the amounts so drawn against
the Letter of Credit Loan Amount.
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(v) For purposes of the foregoing, "paid in full"
means payment of all amounts owing under the Loan Documents
according to the terms thereof, including loan fees, service
fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and
expense reimbursements, whether or not the same would be or is
allowed or disallowed in whole or in part in any Insolvency
Proceeding.
(vi) In the event of a direct conflict between the
priority provisions of this SECTION 2.4 and other provisions
contained in any other Loan Document, it is the intention of
the parties hereto that such priority provisions in such
documents shall be read together and construed, to the fullest
extent possible, to be in concert with each other. In the
event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, the terms and provisions of this
SECTION 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrowers to the Lender Group pursuant to SECTIONS 2.1 AND
2.12 is greater than either the Dollar or percentage limitations set forth in
SECTIONS 2.1 OR 2.12, (an "OVERADVANCE"), Borrowers immediately shall pay to
Agent, in cash, the amount of such excess, which amount shall be used by Agent
to reduce the Obligations in accordance with the priorities set forth in SECTION
2.4(b). In addition, Borrowers hereby promise to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full to the Lender
Group as and when due and payable under the terms of this Agreement and the
other Loan Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit) that have been charged to
the Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof as follows (i) if the relevant Obligation is a portion of the
Term Loan (or interest thereon or fees charged in connection therewith), at a
per annum rate equal to the Base Rate plus the Base Rate Term Loan Margin; and
(ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate
Margin.
The foregoing notwithstanding, at no time shall any portion of
the Obligations (other than Letters of Credit) bear interest on the Daily
Balance thereof at a per annum rate less than 6%. To the extent that interest
accrued hereunder at the rate set forth herein would be less than the foregoing
minimum daily rate, the interest rate chargeable hereunder for such day
automatically shall be deemed increased to the minimum rate.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to any letter
agreement between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in SECTION
2.12(e)) which shall accrue at a rate equal to
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3.50% per annum times the Daily Balance of the undrawn amount of all outstanding
Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn Letters of
Credit) that have been charged to the Loan Account pursuant to
the terms hereof shall bear interest on the Daily Balance
thereof at a per annum rate equal to 3 percentage points above
the per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above
shall be increased to 3 percentage points above the per annum
rate otherwise applicable hereunder.
(d) PAYMENT. Interest, Letter of Credit fees, and all other
fees payable hereunder shall be due and payable, in arrears, on the first day of
each month at any time that Obligations or Commitments are outstanding.
Borrowers hereby authorize Agent, from time to time, without prior notice to
Borrowers, to charge such interest and fees, all Lender Group Expenses (as and
when incurred), the charges, commissions, fees, and costs provided for in
SECTION 2.12(e) (as and when accrued or incurred), the fees and costs provided
for in SECTION 2.11 (as and when accrued or incurred), and all other payments as
and when due and payable under any Loan Document (including the installments due
and payable with respect to the Term Loan) to Borrowers' Loan Account, which
amounts thereafter shall constitute Advances hereunder and shall accrue interest
at the rate then applicable to Advances hereunder. Any interest not paid when
due shall be compounded by being charged to Borrowers' Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances.
(e) COMPUTATION. All interest and fees chargeable under the
Loan Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; PROVIDED, HOWEVER, that,
anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, IPSO FACTO, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrowers in excess of such
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legal maximum, whenever received, shall be applied to reduce the principal
balance of the Obligations to the extent of such excess.
2.7 CASH MANAGEMENT.
(a) Each Obligor shall (i) establish and maintain cash
management services of a type and on terms satisfactory to Agent at one or more
of the banks set forth on SCHEDULE 2.7(a) (each a "CASH MANAGEMENT BANK"), and
shall request in writing and otherwise take such reasonable steps to ensure that
all of its Account Debtors forward payment of the amounts owed by them directly
to such Cash Management Bank, and (ii) deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all Collections (including those sent directly by Account
Debtors to a Cash Management Bank) into a bank account in Agent's name (a "Cash
Management Account") at one of the Cash Management Banks.
(b) Each Cash Management Bank shall establish and maintain
Cash Management Agreements with Agent and the applicable Obligor, in form and
substance acceptable to Agent. Each such Cash Management Agreement shall
provide, among other things, that (i) all items of payment deposited in such
Cash Management Account and proceeds thereof are held by such Cash Management
Bank agent or bailee-in-possession for Agent, (ii) the Cash Management Bank has
no rights of setoff or recoupment or any other claim against the applicable Cash
Management Account, other than for payment of its service fees and other charges
directly related to the administration of such Cash Management Account and for
returned checks or other items of payment, and (iii) it immediately will forward
by daily sweep all amounts in the applicable Cash Management Account to the
Agent's Account.
(c) So long as no Default or Event of Default has occurred and
is continuing, Administrative Borrower may amend SCHEDULE 2.7(a) OR (b) to add
or replace a Cash Management Account Bank or Cash Management Account; PROVIDED,
HOWEVER, that (i) such prospective Cash Management Bank shall be satisfactory to
Agent and Agent shall have consented in writing in advance to the opening of
such Cash Management Account with the prospective Cash Management Bank, and (ii)
prior to the time of the opening of such Cash Management Account, the applicable
Obligor and such prospective Cash Management Bank shall have executed and
delivered to Agent a Cash Management Agreement. The Obligors shall close any of
their Cash Management Accounts (and establish replacement cash management
accounts in accordance with the foregoing sentence) promptly and in any event
within 30 days of notice from Agent that the creditworthiness of any Cash
Management Bank is no longer acceptable in Agent's reasonable judgment, or as
promptly as practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Cash Management Accounts
or Agent's liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent's reasonable judgment.
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(d) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the Obligations, and in which Borrowers are hereby deemed to
have granted a Lien to Agent.
2.8 CREDITING PAYMENTS; FLOAT CHARGE. The receipt of any payment item
by Agent (whether from transfers to Agent by the Cash Management Banks pursuant
to the Cash Management Agreements or otherwise) shall not be considered a
payment on account unless such payment item is a wire transfer of immediately
available federal funds made to the Agent's Account or unless and until such
payment item is honored when presented for payment. Should any payment item not
be honored when presented for payment, then Borrowers shall be deemed not to
have made such payment and interest shall be calculated accordingly. Anything to
the contrary contained herein notwithstanding, any payment item shall be deemed
received by Agent only if it is received into the Agent's Account on a Business
Day on or before 11:00 a.m. (California time). If any payment item is received
into the Agent's Account on a non-Business Day or after 11:00 a.m. (California
time) on a Business Day, it shall be deemed to have been received by Agent as of
the opening of business on the immediately following Business Day. From and
after the Closing Date, Agent shall be entitled to charge Borrowers for 2
Business Days of `clearance' or `float' at the rate applicable to Advances under
SECTION 2.6 on all Collections that are received by the Obligors (regardless of
whether forwarded by the Cash Management Banks to Agent). This across-the-board
2 Business Day clearance or float charge on all Collections is acknowledged by
the parties to constitute an integral aspect of the pricing of the financing of
Borrowers and shall apply irrespective of whether or not there are any
outstanding monetary Obligations; the effect of such clearance or float charge
being the equivalent of charging 2 Business Days of interest on such
Collections.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances and
the Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person, or without instructions if
pursuant to SECTION 2.6(d). Administrative Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Advances requested by Borrowers and made by
Agent or the Lenders hereunder. Unless otherwise agreed by Agent and
Administrative Borrower, any Advance, Agent Advance, or Swing Loan requested by
Borrowers and made by Agent or the Lenders hereunder shall be made to the
Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrowers (the "LOAN
ACCOUNT") on which Borrowers will be charged with the Term Loan, all Advances
(including Agent Advances and Swing Loans) made by Agent, Swing Lender, or the
Lenders to Borrowers or for Borrowers' account, the Letters of Credit issued by
Issuing Lender for Borrowers' account, and with all other payment Obligations
hereunder or under the other Loan Documents, including, accrued interest, fees
and expenses, and Lender Group Expenses. In accordance with SECTION 2.8, the
Loan Account will be credited with all payments received by Agent
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from Borrowers or for Borrowers' account, including all amounts received in the
Agent's Account from any Cash Management Bank. Agent shall render statements
regarding the Loan Account to Administrative Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
the Lenders in accordance with the terms of letter agreements between Agent and
individual Lenders:
(a) UNUSED LINE FEE. On the first day of each month from and
after the satisfaction of the Revolver Conditions and during the term of this
Agreement, an unused line fee in the amount equal to 0.75% per annum times the
result of (a) the Maximum Revolver Amount, LESS (b) the sum of (i) the average
Daily Balance of Advances that were outstanding during the immediately preceding
month, (ii) the average Daily Balance of the Term Loan outstanding during the
immediately preceding month, and (iii) the average Daily Balance of the Letter
of Credit Usage during the immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable under the
terms of the Fee Letter, Borrowers shall pay to Agent the fees set forth in the
Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. For the separate
account of Agent, audit, appraisal, and valuation fees and charges as follows,
(i) a fee of $850 per day, per auditor, plus out-of-pocket expenses for each
financial audit of a Borrower performed by personnel employed by Agent, (ii) if
implemented, a one time charge of $5,000 for each reporting entity, plus
out-of-pocket expenses, for the establishment of electronic collateral reporting
systems, (iii) a fee of $1,500 per day per appraiser, plus out-of-pocket
expenses, for each appraisal of the Collateral performed by personnel employed
by Agent, and (iv) the actual charges paid or incurred by Agent if it elects to
employ the services of one or more third Persons to perform financial audits of
Borrowers, to appraise the Collateral, or any portion thereof, or to assess a
Borrower's business valuation.
2.12 LETTERS OF CREDIT
(a) Subject to the terms and conditions of this Agreement, the
Issuing Lender agrees to issue letters of credit for the account of Borrowers
(each, an "L/C") or to purchase participations or execute indemnities or
reimbursement obligations (each such undertaking, an "L/C UNDERTAKING") with
respect to letters of credit issued by an Underlying Issuer (as of the Closing
Date, the prospective Underlying Issuer is to be Xxxxx Fargo) for the account of
Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the
amendment, renewal, or extension of an outstanding L/C or L/C Undertaking),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic
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communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and Agent (reasonably in advance of the requested
date of issuance, amendment, renewal, or extension) a notice requesting the
issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking
to be amended, renewed, or extended, the date of issuance, amendment, renewal,
or extension, the date on which such L/C or L/C Undertaking is to expire, the
amount of such L/C or L/C Undertaking, the name and address of the beneficiary
thereof (or of the Underlying Letter of Credit, as applicable), and such other
information as shall be necessary to prepare, amend, renew, or extend such L/C
or L/C Undertaking. Prior to or concurrent with the date of each issuance of a
Letter of Credit by the Issuing Lender, Borrowers shall make a loan to the
Issuing Lender in a Dollar amount equal to 105% of the requested Letter of
Credit. Upon receipt of the proceeds of such loan the Issuing Lender shall not
be obligated to segregate the proceeds thereof or pay Borrowers any interest
thereon. Upon the drawing under any Letter of Credit issued by the Issuing
Lender, it shall be entitled to offset or recoup the amount of such drawing from
such loan amount and, thereafter, shall owe Borrowers only the net amount
remaining. The Issuing Lender shall only be obligated to repay the net amount of
any such loan owing at such time as all of the Letters of Credit have expired or
have been drawn and the Issuing Lender has been reimbursed the amount of such
drawings. If requested by the Issuing Lender, Borrowers also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking. The Issuing Lender shall have
no obligation to issue a Letter of Credit if any of the following would result
after giving effect to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base LESS the sum of (y) the outstanding principal
amount of the Term Loan, and (z) the amount of outstanding
Advances, or
(ii) the Letter of Credit Usage would exceed (y)
prior to the satisfaction of the Revolver Conditions, the
lesser of (1) $19,000,000, or (2) 95% of the Letter of Credit
Loan Amount, and (z) after the satisfaction of the Revolver
Conditions, $25,000,000, or
(iii) the Letter of Credit Usage would exceed the
Maximum Revolver Amount LESS the sum of (y) the outstanding
principal amount of the Term Loan, and (z) the amount of
outstanding Advances.
Borrowers and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support letters of credit
that already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent an amount equal to such L/C Disbursement not later
than 11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Administrative
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Borrower shall have received written or telephonic notice of such L/C
Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Administrative Borrower prior to such time on
such date, then not later than 11:00 a.m., California time, on (i) the Business
Day that Administrative Borrower receives such notice, if such notice is
received prior to 10:00 a.m., California time, on the date of receipt, and, in
the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances under SECTION 2.6. To the
extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers'
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting Advance. Promptly following receipt by Agent of any payment
from Borrowers pursuant to this paragraph, Agent shall distribute such payment
to the Issuing Lender or, to the extent that Lenders have made payments pursuant
to SECTION 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to SECTION 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrowers had requested such
Advance and Agent shall promptly pay to Issuing Lender the amounts so received
by it from the Lenders. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Lender or the Lenders with Revolver
Commitment, the Issuing Lender shall be deemed to have granted to each Lender
with a Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit, and each such Lender agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing
Lender under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender
and not reimbursed by Borrowers on the date due as provided in clause (a) of
this Section, or of any reimbursement payment required to be refunded to
Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges
and agrees that its obligation to deliver to Agent, for the account of the
Issuing Lender, an amount equal to its respective Pro Rata Share pursuant to
this SECTION 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in SECTION
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, Agent (for the account of the
Issuing Lender) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.
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(c) Each Borrower hereby agrees to indemnify, save, defend,
and hold the Lender Group harmless from any loss, cost, expense, or liability,
and reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; PROVIDED, HOWEVER, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability
that is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer's regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender's interpretations of any L/C issued by
Issuing Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers' instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group's
indemnification of any Underlying Issuer; PROVIDED, HOWEVER, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability that is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group.
(d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to the Issuing Lender all instruments, documents, and other
writings and property received by such Underlying Issuer pursuant to such
Underlying Letter of Credit and to accept and rely upon the Issuing Lender's
instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred
by the Issuing Lender relating to Underlying Letters of Credit shall be Lender
Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):
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(i) any reserve, deposit, or similar requirement is
or shall be imposed or modified in respect of any Letter of
Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer
or the Lender Group any other condition regarding any
Underlying Letter of Credit or any Letter of Credit issued
pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Advances hereunder. The determination by Agent of any amount due
pursuant to this Section, as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest or
demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13 [INTENTIONALLY OMITTED].
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), the effect of reducing the return on such Lender's or such
holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
2.15 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each of Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be
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provided by the Agent and the Lenders under this Agreement, for the mutual
benefit, directly and indirectly, of each of Borrowers and in consideration of
the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.
(b) Each of Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this SECTION 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Person composing Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Persons composing Borrowers will make such payment
with respect to, or perform, such Obligation.
(d) The Obligations of each Person composing Borrowers under
the provisions of this SECTION 2.15 constitute the absolute and unconditional,
full recourse Obligations of each Person composing Borrowers enforceable against
each such Borrower to the full extent of its properties and assets, irrespective
of the validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement,
each Person composing Borrowers hereby waives notice of acceptance of its joint
and several liability, notice of any Advances or Letters of Credit issued under
or pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any
action at any time taken or omitted by Agent or Lenders under or in respect of
any of the Obligations, any requirement of diligence or to mitigate damages and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Person composing Borrowers hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or Lenders at any time or times
in respect of any default by any Person composing Borrowers in the performance
or satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or Lenders in respect of any
of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Person
composing Borrowers. Without limiting the generality of the foregoing, each of
Borrowers assents to any other action or delay in acting or failure to act on
the part of any Agent or Lender with respect to the failure by any Person
composing Borrowers to comply with any of its respective Obligations, including,
without limitation, any failure strictly or diligently to assert any right or to
pursue any remedy or to
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comply fully with applicable laws or regulations thereunder, which might, but
for the provisions of this SECTION 2.15 afford grounds for terminating,
discharging or relieving any Person composing Borrowers, in whole or in part,
from any of its Obligations under this SECTION 2.15, it being the intention
of each Person composing Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of such Person composing
Borrowers under this SECTION 2.15 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations
of each Person composing Borrowers under this SECTION 2.15 shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect
to any Person composing Borrowers or any Agent or Lender. The joint and
several liability of the Persons composing Borrowers hereunder shall continue
in full force and effect notwithstanding any absorption, merger, amalgamation
or any other change whatsoever in the name, constitution or place of
formation of any of the Persons composing Borrowers or any Agent or Lender.
(f) Each Person composing Borrowers represents and warrants to
Agent and Lenders that such Borrower is currently informed of the financial
condition of Borrowers and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Person composing Borrowers further represents and warrants to Agent and Lenders
that such Borrower has read and understands the terms and conditions of the Loan
Documents. Each Person composing Borrowers hereby covenants that such Borrower
will continue to keep informed of Borrowers' financial condition, the financial
condition of other guarantors, if any, and of all other circumstances which bear
upon the risk of nonpayment or nonperformance of the Obligations.
(g) The provisions of this SECTION 2.15 are made for the
benefit of the Agent, the Lenders and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all of the
Persons composing Borrowers as often as occasion therefor may arise and without
requirement on the part of any such Agent, Lender, successor or assign first to
marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing Borrowers or
to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
SECTION 2.15 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Agent or Lender upon the insolvency,
bankruptcy or reorganization of any of the Persons composing Borrowers, or
otherwise, the provisions of this SECTION 2.15 will forthwith be reinstated in
effect, as though such payment had not been made.
(h) Each of the Persons composing Borrowers hereby agrees that
it will not enforce any of its rights of contribution or subrogation against the
other Persons composing Borrowers with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to
the Agent or the Lenders with respect to any
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of the Obligations or any collateral security therefor until such time as all of
the Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.
(i) Each of the Persons composing Borrowers hereby agrees
that, after the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any Default or Event of
Default, such Borrower will not demand, xxx for or otherwise attempt to collect
any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced and
received by such Borrower as trustee for the Agent, and the Agent shall deliver
any such amounts to the Administrative Agent for application to the Obligations
in accordance with SECTION 2.4(B).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the Term Loan (or
otherwise to extend any credit provided for hereunder), is subject to the
fulfillment, to the satisfaction of Agent, of each of the conditions precedent
set forth below:
(a) the Closing Date shall occur on or before June 14, 2002;
(b) Agent shall have received all financing statements
required by Agent, duly authorized by the applicable Borrowers, and Agent shall
have received searches reflecting the filing of all such financing statements;
(c) Agent shall have received each of the following documents,
in form and substance satisfactory to Agent, duly executed, and each such
document shall be in full force and effect:
(i) the Canadian Guaranty,
(ii) the Cash Management Agreements,
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(iii) the Control Agreements,
(iv) the Copyright Security Agreement,
(v) the Disbursement Letter,
(vi) the Fee Letter,
(vii) the Officers' Certificate,
(viii) the Patent Security Agreement,
(ix) the Pay-Off Letter, together with UCC termination
statements and other documentation evidencing the termination by
Existing Lender of its Liens in and to the properties and assets of
Borrower, and
(x) the Stock Pledge Agreement, together with certificates
representing 100% of the shares of Stock of Parent's Domestic
Subsidiaries and Canadian Obligor and 65% of the shares of Stock of
Borrowers' direct Subsidiaries that are CFCs (other than Canadian
Obligor), as well as stock powers with respect thereto endorsed in
blank,
(xi) the Trademark Security Agreement,
(xii) the Post Closing Matters Agreement;
(xiii) the Supplemental Side Letter;
(xiv) the Intercompany Subordination Agreement,
(d) Agent shall have received a certificate from the Secretary
of each Borrower attesting to the resolutions of such Borrower's Board of
Directors authorizing its execution, delivery, and performance of this Agreement
and the other Loan Documents to which such Borrower is a party and authorizing
specific officers of such Borrower to execute the same;
(e) Agent shall have received copies of each Borrower's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Borrower;
(f) Agent shall have received a certificate of status with
respect to each Borrower, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;
(g) Agent shall have received certificates of status with
respect to each Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the
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appropriate officer of the jurisdictions (other than the jurisdiction of
organization of such Borrower) in which its failure to be duly qualified or
licensed reasonably could be expected to result in a Material Adverse Change,
which certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
(h) Agent shall have received a certificate from the Secretary
of Guarantor attesting to the resolutions of Guarantor's Board of Directors
authorizing its execution, delivery, and performance of the Loan Documents to
which Guarantor is a party and authorizing specific officers of Guarantor to
execute the same;
(i) Agent shall have received copies of Guarantor's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of Guarantor;
(j) Agent shall have received a certificate of status with
respect to Guarantor, dated within 10 days of the Closing Date, such certificate
to be issued by the appropriate officer of the jurisdiction of organization of
Guarantor, which certificate shall indicate that Guarantor is in good standing
in such jurisdiction;
(k) Agent shall have received certificates of status with
respect to Guarantor, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of Guarantor) in which its failure to be
duly qualified or licensed reasonably could be expected to result in a Material
Adverse Change, which certificates shall indicate that Guarantor is in good
standing in such jurisdictions;
(l) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by SECTION 6.8, the form
and substance of which shall be satisfactory to Agent;
(m) Agent shall have received satisfactory evidence that all
delinquent amounts (of approximately $3,300,000) owed to Borrower's lessors of
its locations situate in San Diego, California (but only as to the leases for
the three buildings currently occupied by Parent or any Borrower), Atlanta,
Georgia, and Mountain View, California (but only as to the leases for the
facilities currently occupied by Peregrine Remedy, Inc.), have been (or with the
application of the proceeds of the Term Loan will be) paid;
(n) Agent shall have received Collateral Access Agreements
with respect to the following locations: San Diego, California (but only as to
the leases for the three buildings currently occupied by Parent or any
Borrower), Atlanta, Georgia, and Mountain View, California (but only as to the
leases for the facilities currently occupied by Peregrine Remedy, Inc.);
(o) Agent shall have received opinions of Obligors' counsel in
form and substance reasonably satisfactory to Agent;
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(p) Agent shall have received satisfactory evidence (including
a certificate of the chief financial officer of Parent) that all material tax
returns required to be filed by Obligors have been timely filed and all material
taxes upon Obligors or their properties, assets, income, and franchises
(including Real Property taxes and payroll taxes) have been paid prior to
delinquency, except such taxes that are the subject of a Permitted Protest;
(q) Agent shall have completed its business, legal, and
collateral due diligence, including a collateral audit and review of Borrowers'
books and records and verification of Borrowers' representations and warranties
to the Lender Group, the results of which shall be satisfactory to Agent;
(r) Agent shall have received satisfactory evidence that
Borrowers have established new disbursement accounts separate from their
existing deposit accounts into which they receive the proceeds of their Accounts
and other rights to payment;
(s) Agent shall have received completed reference checks with
respect to Borrowers' senior management, the results of which are satisfactory
to Agent in its sole discretion;
(t) Agent shall have received Borrowers' Closing Date Business
Plan;
(u) Borrowers shall pay all Lender Group Expenses incurred in
connection with the transactions evidenced by this Agreement;
(v) Agent shall have received satisfactory evidence that
applications for registration of not less than the Closing Date Required Library
of all existing copyrights of the Obligors have been delivered to Agent for
filing with the United States Copyright Office, and that all such copyrights and
any proceeds thereof are specifically encumbered by the Copyright Security
Agreement;
(w) Agent shall have received satisfactory evidence that
Parent and its Subsidiaries have engaged a full time crisis manager (who or
which shall be satisfactory to Agent and shall be authorized to freely
communicate with Agent and the Lenders);
(x) Agent shall have received copies of each of (a) the
Indenture, (b) the Obligors' standard form of software license agreement, and
(c) the Obligors' standard form of maintenance agreement, together with a
certificate of the Secretary of Parent certifying each such document as being a
true, correct, and complete copy thereof;
(y) Borrowers shall have received all licenses, approvals or
evidence of other actions required by any Governmental Authority in connection
with the execution and delivery by Borrowers of this Agreement or any other Loan
Document or with the consummation of the transactions contemplated hereby and
thereby; and
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(z) all other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to Agent.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of each of the conditions subsequent
set forth below (the failure by Borrowers to so perform or cause to be performed
constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to Agent
certified copies of the policies of insurance, together with the endorsements
thereto, as are required by SECTION 6.8, the form and substance of which shall
be satisfactory to Agent and its counsel;
(b) within 45 days of the Closing Date, Agent shall have
received satisfactory evidence that applications for registration for not less
than the Required Library of all existing copyrights of the Obligors have been
filed with the United States Copyright Office, and that all such copyrights and
any proceeds thereof are specifically encumbered by the Copyright Security
Agreement;
(c) within 45 days of the Closing Date, Borrowers shall have
replaced their existing lockbox and depositary arrangements with BOA with
substitute arrangements at one or more depositary banks reasonably acceptable to
Agent and Borrowers and Agent shall have entered into Cash Management Agreements
with such substitute depositary banks in form and substance satisfactory to
Agent;
(d) on or before September 15, 2002, financial statements of
Parent and its Subsidiaries for the fiscal year ended March 31, 2002, audited by
independent certified public accountants reasonably acceptable to Agent and
certified by such accountants to have been prepared in accordance with GAAP
(such audited financial statements to include a balance sheet, income statement,
and statement of cash flow and, if prepared, such accountants' letter to
management), and
(e) within 30 days of the Closing Date, Agent shall have
received an appraisal of the Recurring Maintenance Revenues, such appraisal
shall be conducted by an appraiser acceptable to Agent, and the results of such
appraisal shall be satisfactory to Lender.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of
the Lender Group (or any member thereof) to make all Advances (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
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(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
any Borrower, Agent, any Lender, or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall continue in full force and effect for a
term ending on December 31, 2003 (the "MATURITY DATE"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrowers with respect to any outstanding Letters of Credit) immediately shall
become due and payable without notice or demand (including either (i) providing
cash collateral to be held by Agent for the benefit of those Lenders with a
Revolver Commitment in an amount equal to 105% of the then extant Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be returned to
the Issuing Lender). No termination of this Agreement, however, shall relieve or
discharge Borrowers of their duties, Obligations, or covenants hereunder and the
Agent's Liens in the Collateral shall remain in effect until all Obligations
have been fully and finally discharged and the Lender Group's obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been fully and finally
discharged and the Lender Group's obligations to provide additional credit under
the Loan Documents have been terminated irrevocably, Agent will, at Borrowers'
sole expense, execute and deliver any UCC termination statements, lien releases,
mortgage releases, discharges of security interests, and other similar discharge
or release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, the Agent's Liens and all notices of
security interests and liens previously filed by Agent with respect to the
Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any
time upon 90 days prior written notice by Administrative Borrower to Agent, to
terminate this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations (including either (i) providing cash collateral
to be held by Agent for the benefit of those Lenders with a Revolver Commitment
in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the Issuing Lender), in
full, together with the Applicable Prepayment Premium (to be allocated based
upon letter agreements between Agent and individual Lenders). If Administrative
Borrower has sent a notice of termination pursuant to the provisions of this
Section, then the
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Commitments shall terminate and Borrowers shall be obligated to repay the
Obligations (including either (i) providing cash collateral to be held by Agent
for the benefit of those Lenders with a Revolver Commitment in an amount equal
to 105% of the then extant Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender), in full, together with
the Applicable Prepayment Premium, on the date set forth as the date of
termination of this Agreement in such notice. In the event of the termination of
this Agreement and repayment of the Obligations at any time prior to the
Maturity Date, for any other reason, including (a) termination upon the election
of the Required Lenders to terminate after the occurrence of an Event of
Default, (b) foreclosure and sale of Collateral, (c) sale of the Collateral in
any Insolvency Proceeding, or (iv) restructure, reorganization or compromise of
the Obligations by the confirmation of a plan of reorganization, or any other
plan of compromise, restructure, or arrangement in any Insolvency Proceeding,
then, in view of the impracticability and extreme difficulty of ascertaining the
actual amount of damages to the Lender Group or profits lost by the Lender Group
as a result of such early termination, and by mutual agreement of the parties as
to a reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrowers shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon letter agreements between Agent and individual Lenders),
measured as of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to Agent,
for the benefit of the Lender Group, a continuing security interest in all of
its right, title, and interest in all currently existing and hereafter acquired
or arising Personal Property Collateral in order to secure prompt repayment of
any and all of the Obligations in accordance with the terms and conditions of
the Loan Documents and in order to secure prompt performance by Borrowers of
each of their covenants and duties under the Loan Documents. The Agent's Liens
in and to the Personal Property Collateral shall attach to all Personal Property
Collateral without further act on the part of Agent or Borrowers. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrowers have no authority,
express or implied, to dispose of any item or portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection or priority of Agent's security interest is dependent
on or enhanced by possession, the applicable Borrower, immediately upon the
request of Agent, shall endorse and deliver physical possession of such
Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
Borrowers that the Accounts, chattel paper, or General Intangibles have been
assigned to Agent or that Agent has a security interest therein, or (b) collect
the Accounts, chattel paper, or General Intangibles directly and charge the
collection costs and expenses to the Loan Account. Each Borrower agrees that it
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will hold in trust for the Lender Group, as the Lender Group's trustee, any
Collections that it receives and immediately will deliver said Collections to
Agent or a Cash Management Bank in their original form as received by the
applicable Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon the
request of Agent, Borrowers shall execute and deliver to Agent, any and all
financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, and all other documents (the "Additional
Documents") that Agent may request in its Permitted Discretion, in form and
substance satisfactory to Agent, to perfect and continue perfected or better
perfect the Agent's Liens in the Collateral (whether now owned or hereafter
arising or acquired), to create and perfect Liens in favor of Agent in any Real
Property acquired after the Closing Date, and in order to fully consummate all
of the transactions contemplated hereby and under the other Loan Documents. To
the maximum extent permitted by applicable law, each Borrower authorizes Agent
to execute any such Additional Documents in the applicable Borrower's name and
authorize Agent to file such executed Additional Documents in any appropriate
filing office. In addition, on such periodic basis as Agent shall require,
Borrowers shall (a) provide Agent with a report of all new patentable,
copyrightable, or trademarkable materials acquired or generated by Borrowers
during the prior period, (b) cause all patents, copyrights, and trademarks that
are material to Debtor's business or operations and that are acquired or
generated by Borrowers that are not already the subject of a registration with
the appropriate filing office (or an application therefor diligently prosecuted)
to be registered with such appropriate filing office in a manner sufficient to
impart constructive notice of Borrowers' ownership thereof, and (c) cause to be
prepared, executed, and delivered to Agent supplemental schedules to the
applicable Loan Documents to identify such patents, copyrights, and trademarks
as being subject to the security interests created thereunder.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Borrower's true and lawful attorney, with
power to (a) if such Borrower refuses to, or fails timely to execute and deliver
any of the documents described in SECTION 4.4, sign the name of such Borrower on
any of the documents described in SECTION 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Borrower's name on any invoice
or xxxx of lading relating to the Collateral, drafts against Account Debtors, or
notices to Account Debtors, (c) send requests for verification of Accounts, (d)
endorse such Borrower's name on any Collection item that may come into the
Lender Group's possession, (e) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under such Borrower's
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (f) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting the
Accounts, chattel paper, or General Intangibles directly with Account Debtors,
for amounts and upon terms that Agent determines to be reasonable, and Agent may
cause to be executed and delivered any documents and releases that Agent
determines to be necessary. The appointment of Agent as each Borrower's
attorney, and each and every one of its rights and
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powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully and finally repaid and performed and the Lender
Group's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter during normal business hours to inspect the Books and to check,
test, and appraise the Collateral in order to verify Borrowers' financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral.
4.7 CONTROL AGREEMENTS. Each Borrower agrees that it will not transfer
assets out of any Securities Accounts other than as permitted under SECTION 7.19
and, if to another securities intermediary, unless each of the applicable
Borrower, Agent, and the substitute securities intermediary have entered into a
Control Agreement. No arrangement contemplated hereby or by any Control
Agreement in respect of any Securities Accounts or other Investment Property
shall be modified by Borrowers without the prior written consent of Agent. Upon
the occurrence and during the continuance of a Default or Event of Default,
Agent may notify any securities intermediary to liquidate the applicable
Securities Account or any related Investment Property maintained or held thereby
and remit the proceeds thereof to the Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties to
the Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Borrower has good and indefeasible title to
its Collateral, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are bona fide existing
payment obligations of Account Debtors created by the licensing of software to
such Account Debtors in the ordinary course of Borrowers' business, owed to
Borrowers without defenses, disputes, offsets, counterclaims, or rights of
return or cancellation. As to each Account that is identified by Administrative
Borrower as an Eligible Account in a borrowing base report submitted to Agent,
such Account is not excluded as ineligible by virtue of one or more of the
excluding criteria set forth in the definition of eligible Accounts.
5.3 [INTENTIONALLY OMITTED].
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5.4 EQUIPMENT. All of the Equipment of the Obligors is used or held for
use in the Obligors' business and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment of
the Obligors (other than Inventory and Equipment with an aggregate value of less
than $50,000 in any one location) are not stored with a bailee, warehouseman, or
similar party and are located only at the locations identified on SCHEDULE 5.5
to the Disclosure Letter.
5.6 INVENTORY RECORDS. Each Obligor keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its Inventory and
the book value thereof.
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of each Borrower is located at the address indicated in SCHEDULE 5.7 and
each Borrower's FEIN is identified in SCHEDULE 5.7 to the Disclosure Letter.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
(a) Each Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and qualified to
do business in any state where the failure to be so qualified reasonably could
be expected to have a Material Adverse Change.
(b) Set forth on SCHEDULE 5.8(b) to the Disclosure Letter, is
a complete and accurate description of the authorized capital Stock of each
Borrower, by class, and, as of the Closing Date, a description of the number of
shares of each such class that are issued and outstanding. Other than as
described on SCHEDULE 5.8(b) to the Disclosure Letter, there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower's capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on SCHEDULE 5.8(c) to the Disclosure Letter, is
a complete and accurate list of each Borrower's direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their organization; (ii) the
number of shares of each class of common and preferred Stock authorized for each
of such Subsidiaries; and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by the applicable
Borrower. All of the outstanding capital Stock of each such Subsidiary has been
validly issued and is fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 5.8(c) to the Disclosure
Letter, there are no subscriptions, options, warrants, or calls relating to any
shares of any Borrower's Subsidiaries' capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument. No
Borrower or any of its respective Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or
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retire any shares of any Borrower's Subsidiaries' capital Stock or any security
convertible into or exchangeable for any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party have been duly authorized by all necessary action on the part of
such Borrower.
(b) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party do not and will not (i) violate any provision of federal, state,
or local law or regulation applicable to any Borrower, the Governing Documents
of any Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation of any Borrower, (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of Borrower, other than Permitted Liens, or (iv) require
any approval of any Borrower's interestholders or any approval or consent of any
Person under any material contractual obligation of any Borrower.
(c) Other than the filing of financing statements, the
execution, delivery, and performance by each Borrower of this Agreement and the
Loan Documents to which such Borrower is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority or other Person.
(d) As to each Borrower, this Agreement and the other Loan
Documents to which such Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Borrower
will be the legally valid and binding obligations of such Borrower, enforceable
against such Borrower in accordance with their respective terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(e) The Agent's Liens are validly created, perfected, and
first priority Liens, subject only to Permitted Liens
(f) The execution, delivery, and performance by Guarantor of
the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of Guarantor.
(g) The execution, delivery, and performance by Guarantor of
the Loan Documents to which it is a party do not and will not (i) violate any
provision of federal, state, or local law or regulation applicable to Guarantor,
the Governing Documents of Guarantor, or any order, judgment, or decree of any
court or other Governmental Authority binding on
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Guarantor, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of Guarantor, (iii) result in or require the creation or imposition
of any Lien of any nature whatsoever upon any properties or assets of Guarantor,
other than Permitted Liens, or (iv) require any approval of Guarantor's
interestholders or any approval or consent of any Person under any material
contractual obligation of Guarantor.
(h) The execution, delivery, and performance by Guarantor of
the Loan Documents to which Guarantor is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority or other Person.
(i) The Loan Documents to which Guarantor is a party, and all
other documents contemplated hereby and thereby, when executed and delivered by
Guarantor will be legally valid and binding obligations of Guarantor,
enforceable against Guarantor in accordance with their respective terms, except
as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally.
5.10 LITIGATION. Other than those matters disclosed on SCHEDULE 5.10 to
the Disclosure Letter, there are no actions, suits, or proceedings pending or,
to the best knowledge of Borrowers, threatened against Borrowers, or any of
their Subsidiaries, as applicable, except for (a) matters that are fully covered
by insurance (subject to customary deductibles), and (b) matters arising after
the Closing Date that, if decided adversely to Borrowers, or any of their
Subsidiaries, as applicable, reasonably could not be expected to result in a
Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Parent and its Subsidiaries that have been delivered by Borrowers to the Lender
Group have been prepared in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes and being subject to
year-end audit adjustments) and present fairly in all material respects,
Parent's and its Subsidiaries' financial condition as of the date thereof and
results of operations for the period then ended. There has not been a Material
Adverse Change with respect to Parent and the other Obligors, taken as a whole,
since the date of the latest financial statements submitted to the Lender Group
on or before the Closing Date.
5.12 FRAUDULENT TRANSFER.
(a) each Obligor is Solvent.
(b) No transfer of property is being made by any Obligor and
no obligation is being incurred by any Obligor in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of the
Obligors.
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5.13 EMPLOYEE BENEFITS. None of the Obligors, any of their
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 5.14 to
the Disclosure Letter, (a) to Borrowers' knowledge, none of Obligors' properties
or assets has ever been used by Obligors or by previous owners or operators in
the disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such production, storage, handling, treatment,
release or transport was in violation, in any material respect, of applicable
Environmental Law where such violation could reasonably be expected to result in
a Material Adverse Change, (b) to Borrowers' knowledge, none of Obligors'
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) none of Obligors have received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any Real Property
owned or operated by Obligors, and (d) none of Obligors have received a summons,
citation, notice, or directive from the Environmental Protection Agency or any
other federal or state governmental agency concerning any action or omission by
any Borrower resulting in the releasing or disposing of Hazardous Materials into
the environment.
5.15 BROKERAGE FEES. Borrowers have not utilized the services of any
broker or finder in connection with Borrowers' obtaining financing from the
Lender Group under this Agreement and no brokerage commission or finders fee is
payable by Borrowers in connection herewith.
5.16 INTELLECTUAL PROPERTY. Each Obligor owns, or holds licenses in,
all trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of its business as currently conducted.
Attached hereto as SCHEDULE 5.16 to the Disclosure Letter is a true, correct,
and complete listing of all material patents, patent applications, trademarks,
trademark applications, copyrights, and copyright registrations as to which each
Obligor is the owner or is an exclusive licensee.
5.17 LEASES. Except as set forth on SCHEDULE 5.17 to the Disclosure
Letter Parent and its Subsidiaries enjoy peaceful and undisturbed possession
under all leases material to their business and to which Parent or its
Subsidiaries are a party or under which they are operating. All of such leases
are valid and subsisting and no material default by Parent or its Subsidiaries
exists under any of them.
5.18 DDAs. Set forth on SCHEDULE 5.18 to the Disclosure Letter are all
of the DDAs of each Obligor, including, with respect to each depository (i) the
name and address of that depository, and (ii) the account numbers of the
accounts maintained with such depository.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Parent and its Subsidiaries in writing to Agent or
any Lender (including all information contained in the Schedules hereto or in
the other Loan Documents) for purposes of or in connection with this Agreement,
the other Loan Documents or any transaction
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contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of Parent and its Subsidiaries
in writing to the Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided. On the Closing
Date, the Closing Date Projections represent, and as of the date on which any
other Projections are delivered to Agent, such additional Projections represent
Borrowers' good faith best estimate of its future performance for the periods
covered thereby (it is recognized by the Agent and the Lenders that projections
and forecasts provided by or on behalf of the Borrowers, although reflecting the
Borrowers' good faith projections or forecasts based on methods and data which
the Borrowers believe to be reasonable and accurate, are not to be viewed as
facts and that actual results during the periods covered by any such projections
and forecasts may (and are likely to ) differ from the projected or forecasted
results).
5.20 INDEBTEDNESS. Set forth on SCHEDULE 5.20 to the Disclosure Letter
is a true and complete list of all Indebtedness of Parent and each of its
Subsidiaries outstanding immediately prior to the Closing Date that is to remain
outstanding after the Closing Date and such Schedule accurately reflects the
aggregate principal amount of such Indebtedness.
5.21 CFCs. None of Borrower's Subsidiaries that are CFCs (other than
Canadian Obligor) could execute and deliver guaranties of the Obligations or
grant Liens in their assets to secure the Obligations without creating a
material tax obligation under Section 956 of the IRC.
5.22 INACTIVE SUBSIDIARIES. The Inactive Subsidiaries do not own any
material assets and do not engage in any business activity whatsoever.
5.23 INAPPLICABLE FINANCING STATEMENT. The UCC-1 financing statement
bearing filing number 94-419055 filed with the Utah Secretary of State's office
on December 5, 1994 and reflecting Peregrine Systems, Inc. as debtor and
Guardian State Bank as secured party refers to a Person that is not the
Peregrine Systems, Inc. entity that is a party to this Agreement.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrowers shall and shall cause each of their respective
Subsidiaries to do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by Agent. Obligors also shall keep an inventory
reporting system that shows all additions, sales, claims, returns, and
allowances with respect to the Inventory.
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6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by Agent,
with copies for each Lender) with the following documents at the following times
in form reasonably satisfactory to Agent:
================================================================================
Daily (a) after satisfaction of the Revolver Conditions, a
sales journal, collection journal, and credit
register since the last such schedule and a
calculation of the Borrowing Base as of such date.
--------------------------------------------------------------------------------
Weekly (b) a detailed report calculating the Qualified Cash
Amount and the amount of unrestricted cash and Cash
Equivalents of Parent and its Subsidiaries as of the
immediately preceding day, together with such
supporting documentation as Agent may require.
--------------------------------------------------------------------------------
Monthly (not (c) a detailed calculation of Borrowing Base
later than (including detail regarding those the License
the 10th day of each License Receivables that are not Eligible Accounts),
month)
(d) a detailed aging, by total, of the Receivables of
the Borrowing Base Participants, together with a
reconciliation to the detailed calculation of the
Borrowing Base previously provided to Agent,
(e) a summary aging, by vendor, of the Borrowing Base
Participants' accounts payable and any book
overdraft,
(f) after satisfaction of the Revolver Conditions, a
calculation of Dilution for the prior month,
(g) a separate detailed calculation of deferred
revenue on account of the licensing of software,
revenues from the provision of maintenance services,
and revenues from the provision of training and other
services, and
(h) a detailed calculation of Recurring Maintenance
Revenues for the Relevant Measuring Period most
recently ended (a "REVENUE REPORT").
--------------------------------------------------------------------------------
Quarterly (i) a detailed list of each Borrowing Base
Participant's customers,
(j) a report regarding each Borrowing Base
Participant's accrued, but unpaid, AD VALOREM
taxes, and
(k) a detailed report of license revenues by Parent
and its Subsidiaries demonstrating compliance with
SECTION 6.16 (a "LICENSE REPORT").
--------------------------------------------------------------------------------
Upon request by Agent (l) copies of invoices in connection with the
Receivables, credit memos, remittance advices,
deposit slips, shipping and delivery documents in
connection with the Receivables and, for Inventory
and Equipment
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
acquired by Borrowing Base Participants, purchase
orders and invoices, and
(m) such other reports as to the Collateral or any
other assets pledged to Agent pursuant to any of the
Loan Documents, or the financial condition of Parent
or any of its Subsidiaries as Agent may request.
================================================================================
In addition, each Borrower agrees to cooperate fully with
Agent to facilitate and implement a system of electronic collateral reporting in
order to provide electronic reporting of each of the items set forth above.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, with
copies to each Lender:
(a) as soon as available, but in any event within 30 days (45
days in the case of a month that is the end of one of the first 3 fiscal
quarters in a fiscal year) after the end of each month during each of Parent's
fiscal years,
(i) a company prepared consolidated balance sheet, income
statement, and statement of cash flow covering Parent's and its
Subsidiaries' operations during such period,
(ii) a certificate signed by the chief financial officer of
Parent to the effect that:
A. the financial statements delivered hereunder have
been prepared in accordance with GAAP (except for the lack of
footnotes and being subject to year-end audit adjustments) and
fairly present in all material respects the financial
condition of Parent and its Subsidiaries,
B. the representations and warranties of Borrowers
contained in this Agreement and the other Loan Documents are
true and correct in all material respects on and as of the
date of such certificate, as though made on and as of such
date (except to the extent that such representations and
warranties relate solely to an earlier date), and
C. there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the extent
of any non-compliance, describing such non-compliance as to
which he or she may have knowledge and what action Borrowers
have taken, are taking, or propose to take with respect
thereto), and
(iii) for each month that is the date on which a financial
covenant in SECTION 7.21 is to be tested, a Compliance Certificate
demonstrating, in
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reasonable detail, compliance at the end of such period with the
applicable financial covenants contained in SECTION 7.21, and
(b) as soon as available, but in any event within 90 days
after the end of each of Parent's fiscal years commencing with its fiscal year
ended March 31, 2003,
(i) financial statements of Parent and its Subsidiaries for
each such fiscal year, audited by independent certified public
accountants reasonably acceptable to Agent and certified, without any
qualifications, by such accountants to have been prepared in accordance
with GAAP (such audited financial statements to include a balance
sheet, income statement, and statement of cash flow and, if prepared,
such accountants' letter to management),
(ii) a certificate of such accountants addressed to Agent and
the Lenders stating that such accountants do not have knowledge of the
existence of any Default or Event of Default under SECTION 7.21,
(c) as soon as available, but in any event within 30 days
prior to the start of each of Parent's fiscal years,
(i) copies of Borrowers' Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to
Agent, in its sole discretion, for the fiscal year, quarter by quarter,
certified by the chief financial officer of Parent as being such
officer's good faith best estimate of the financial performance of
Parent and its Subsidiaries during the period covered thereby,
(d) if and when filed by any Borrower,
(i) 10-Q quarterly reports, Form 10-K annual reports, and Form
8-K current reports,
(ii) any other filings made by any Borrower with the SEC,
(iii) copies of Borrowers' federal income tax returns, and any
amendments thereto, filed with the Internal Revenue Service, and
(iv) any other information that is provided by Parent to its
shareholders generally,
(e) if and when filed by any Borrower and as requested by
Agent, satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which (i) any Borrower conducts business or is required to pay
any such excise tax, (ii) where any Borrower's failure to pay any such
applicable excise tax would result in a Lien on the
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properties or assets of any Borrower, or (iii) where any Borrower's failure to
pay any such applicable excise tax reasonably could be expected to result in a
Material Adverse Change,
(f) as soon as a Borrower has knowledge of any event or
condition that constitutes a Default or an Event of Default, notice thereof and
a statement of the curative action that Borrowers propose to take with respect
thereto, and
(g) upon the request of Agent, any other report reasonably
requested relating to the financial condition of Borrowers.
In addition to the financial statements referred to above, Borrowers
agree to deliver financial statements prepared on both a consolidated and
consolidating basis and that no Borrower, or any Subsidiary of a Borrower, will
have a fiscal year different from that of Parent. Borrowers agree that their
independent certified public accountants are authorized to communicate with
Agent and to release to Agent whatever financial information concerning
Borrowers that Agent reasonably may request. Each Borrower waives the right to
assert a confidential relationship, if any, it may have with any accounting firm
or service bureau in connection with any information requested by Agent pursuant
to or in accordance with this Agreement, and agree that Agent may contact
directly any such accounting firm or service bureau in order to obtain such
information.
6.4 [INTENTIONALLY OMITTED].
6.5 RETURN. Cause returns and allowances as between Obligors and their
Account Debtors, to be on the same basis and in accordance with the usual
customary practices of the applicable Obligor, as they exist at the time of the
execution and delivery of this Agreement. If, at a time when no Event of Default
has occurred and is continuing, any Account Debtor returns any Inventory to any
Obligor, the applicable Obligor promptly shall determine the reason for such
return and, if the applicable Obligor accepts such return, issue a credit
memorandum (with a copy to be sent to Agent) in the appropriate amount to such
Account Debtor. If, at a time when an Event of Default has occurred and is
continuing, any Account Debtor returns any Inventory to any Obligor, the
applicable Obligor promptly shall determine the reason for such return and, if
Agent consents (which consent shall not be unreasonably withheld), issue a
credit memorandum (with a copy to be sent to Agent) in the appropriate amount to
such Account Debtor.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct to its business
in good working order and condition, ordinary wear and tear excepted, and comply
at all times with the provisions of all leases to which it is a party as lessee,
so as to prevent any loss or forfeiture thereof or thereunder.
6.7 TAXES. Cause all material assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against them or any of their assets to be paid in full, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a
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Permitted Protest. Borrowers and their Subsidiaries will make timely payment or
deposit of all material tax payments and withholding taxes required of them by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that the applicable
Person has made such payments or deposits. Upon Agent's request, Borrowers shall
deliver satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which Borrowers or their Subsidiaries are required to pay any
such excise tax.
6.8 INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting their
and their Subsidiaries' property and assets wherever located, covering loss or
damage by fire, theft, explosion, and all other hazards and risks as ordinarily
are insured against by other Persons engaged in the same or similar businesses.
Borrowers and their Subsidiaries also shall maintain business interruption,
public liability, and product liability insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation. All such policies of
insurance shall be in such amounts and with such insurance companies as are
reasonably satisfactory to Agent. Borrowers shall deliver copies of all such
policies to Agent with a satisfactory lender's loss payable endorsement naming
Agent as sole loss payee or additional insured, as appropriate. Each policy of
insurance or endorsement shall contain a clause requiring the insurer to give
not less than 30 days prior written notice to Agent in the event of cancellation
of the policy for any reason whatsoever.
(b) Parent shall give Agent prompt notice of any loss covered
by such insurance. If an Event of Default has occurred and is continuing or if
the Borrowers have Excess Availability and Qualified Cash of less than
$15,000,000, then Agent shall have the exclusive right to adjust any losses
payable under any such insurance policies in excess of $50,000, such adjustments
to be made by Agent in its Permitted Discretion; in all other cases, Parent
shall have the exclusive right to adjust any losses payable under any such
insurance policies, such adjustments to be made by Parent in good faith and in
the exercise of reasonable business judgment taking into account the interests
of the Lenders. Any monies received as payment for any loss under any insurance
policy mentioned above (other than liability insurance policies) or as payment
of any award or compensation for condemnation or taking by eminent domain, shall
be paid over to Agent to be applied at the option of the Required Lenders either
to the prepayment of the Obligations or shall be disbursed to Borrowers under
staged payment terms reasonably satisfactory to the Required Lenders for
application to the cost of repairs, replacements, or restorations. The foregoing
notwithstanding, Parent may, at or within 30 days of the date of the receipt of
any such payment by Agent, request that Agent (on behalf of the Lenders)
disburse to Borrowers such monies and Agent agrees (upon its receipt of such
funds from the Lenders) and is authorized to disburse such monies solely for the
repair, replacement, or restoration of the asset that has been damaged, if all
of the following conditions are satisfied: (i) no Default or Event of Default
has occurred and is continuing or would result from any such disbursement, (ii)
Borrowers have cash, Cash Equivalents, Excess Availability or business
interruption
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insurance proceeds in amounts sufficient, in Agent's reasonable judgment, to
ensure that Borrowers will be able to make payment as and when due of each of
their Obligations that will be payable during the period of such repair,
replacement, or restoration, (iii) Agent is reasonably satisfied that the amount
of such cash, cash equivalents, borrowing availability, or insurance proceeds
will be sufficient fully to repair, replace, or restore the affected assets,
(iv) completion of the repair, replacement, or restoration of the affected
assets is to be completed in accordance with plans submitted to and approved by
Agent, which approval shall not be unreasonably withheld or delayed, (v)
completion of the repair, replacement, or restoration shall be effected with
reasonable promptness and shall be of a value (the "REPLACED VALUE") that is (A)
at least equal to the replacement value (the "DESTROYED VALUE") of the assets
destroyed or condemned prior to such destruction or condemnation, or (B) of a
value less than the Destroyed Value so long as the difference between the
Destroyed Value and the Replaced Value is applied to the prepayment of the
Obligations without premium, in such order or manner as the Required Lenders may
elect, and (vi) all monies paid by Borrowers to Agent may be commingled with
other funds of Agent and will not bear interest pending disbursement hereunder.
In the event Agent fails to receive timely such written designation or the
conditions set forth in the following sentence are not satisfied, the payment
shall be applied in the manner set forth in the immediately preceding sentence.
(c) Borrowers and their Subsidiaries shall not take out
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained under this SECTION 6.8, unless Agent is included
thereon as named insured with the loss payable to Agent under a lender's loss
payable endorsement or its equivalent. Parent immediately shall notify Agent
whenever such separate insurance is taken out, specifying the insurer thereunder
and full particulars as to the policies evidencing the same, and copies of such
policies promptly shall be provided to Agent.
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment of the Obligors having an aggregate value in excess of $10,000 at any
one location only at the locations identified on SCHEDULE 5.5 to the Disclosure
Letter; PROVIDED, HOWEVER, that Parent may amend SCHEDULE 5.5 to the Disclosure
Letter so long as such amendment occurs by written notice to Agent not less than
30 days prior to the date on which the Inventory or Equipment of an Obligor is
moved to such new location, so long as such new location is within the
continental United States, and so long as, at the time of such written
notification, the applicable Borrower provides any financing statements or
fixture filings necessary to perfect and continue perfected the Agent's Liens on
such assets and, if requested by Agent, also provides to Agent a Collateral
Access Agreement.
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could not
be expected to result in a Material Adverse Change.
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6.11 LEASES. Pay when due all rents and other amounts payable under
leases with respect to the following locations: San Diego, California (but only
as to the leases for the three buildings currently occupied by Parent or any
Borrower), Atlanta, Georgia, and Mountain View, California (but only as to the
leases for the facilities currently occupied by Peregrine Remedy, Inc.), unless
such payments are the subject of a Permitted Protest.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Borrowers' obtaining
financing from the Lender Group under this Agreement. Borrowers agree and
acknowledge that payment of all such brokerage commissions or finders fees shall
be the sole responsibility of Borrowers, and each Borrower agrees to indemnify,
defend, and hold Agent and the Lender Group harmless from and against any claim
of any broker or finder arising out of Borrowers' obtaining financing from the
Lender Group under this Agreement.
6.13 EXISTENCE. Except for the Permitted Reorganization Transactions,
at all times preserve and keep in full force and effect each Borrower's and its
Subsidiaries' valid existence and good standing and any rights and franchises
material to Borrowers' and its Subsidiaries' businesses.
6.14 ENVIRONMENTAL.
(a) Keep any property either owned or operated by Borrower or
any of its Subsidiaries free of any Environmental Liens or post bonds or other
financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Agent documentation of such compliance
which Agent reasonably requests, except to the extent that non-compliance could
not reasonably be expected to result in a Material Adverse Change, (c) promptly
notify Agent of any release of a Hazardous Material of any reportable quantity
from or onto property owned or operated by any Borrower or its Subsidiaries and
take any Remedial Actions required to xxxxx said release or otherwise to come
into compliance with applicable Environmental Law, and (d) promptly provide
Agent with written notice within 10 days of the receipt of any of the following:
(i) notice that an Environmental Lien has been filed against any of the real or
personal property of any Borrower or its Subsidiaries, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against any Borrower or its Subsidiaries, and (iii) notice of a violation,
citation, or other administrative order which reasonably could be expected to
result in a Material Adverse Change.
6.15 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, (a) notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.
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6.16 COPYRIGHT REGISTRATIONS. Maintain, in accordance with this
Section, valid registered, or applied for, copyrights with the United States
Copyright Office constituting the Required Library. If either (a) any License
Report delivered to Agent pursuant to SECTION 6.2 hereof demonstrates that less
than the Required Library is so registered, within 45 days of the end of the
relevant fiscal quarter to which the applicable License Report relates, or (b)
any Obligor develops a completed product, version, upgrade, add-on, or
modification which results in a change in software version number to the left of
the left most decimal point (a "NEW VERSION"), within 45 days of the date that
such New Version is released generally for commercial distribution, Borrowers
shall and shall cause the other Obligors to (i) cause additional copyrights, or,
if applicable, the New Versions, that are not already the subject of a
registration (or an application therefor diligently prosecuted) with the United
States Copyright Office to be registered in a manner sufficient to impart
constructive notice of the applicable Obligor's ownership thereof, such that,
after giving effect to such registration, copyrights constituting the Required
Library have been registered with the United States Copyright Office, and (ii)
cause to be prepared, executed, and delivered to Agent, with sufficient time to
permit Agent to record no later than the last Business Day within 10 days
following the date that such copyrights, or, if applicable, the New Versions,
have been registered or an application for registration has been filed, a
Copyright Security Agreement or supplemental schedules to the Copyright Security
Agreement reflecting the security interest of Agent in such additional
copyrights or the New Versions, as applicable, which documents shall be in form
and content suitable for registration with the applicable filing office. The
Obligors also shall maintain copies of all source and object code for the
Required Library at safe and secure offsite locations reasonably acceptable to
Agent and shall, at the request of Agent, advise the operators of such locations
of Agent's security interest in such software, shall keep Agent fully informed
of each such location, and shall maintain the currency of all such software
stored offsite.
6.17 CRISIS MANAGER. Maintain the services of the crisis manager (or a
substitute crisis manager satisfactory to the Required Lenders) required to be
obtained pursuant to SECTION 3.1(v) hereof.
7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrowers will not and will not permit any of their respective
Subsidiaries to do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other
Loan Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit;
(b) Indebtedness set forth on SCHEDULE 5.20 to the Disclosure
Letter;
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(c) Permitted Purchase Money Indebtedness;
(d) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b), (c), and (i) of this SECTION 7.1 (and continuance
or renewal of any Permitted Liens associated therewith) so long as: (i) the
terms and conditions of such refinancings, renewals, or extensions do not, in
Agent's judgment, materially impair the prospects of repayment of the
Obligations by Borrowers or materially impair Borrowers' creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions, that, taken as a whole, are materially more burdensome or
restrictive to the applicable Borrower, and (iv) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must be include subordination terms and conditions that
are at least as favorable to the Lender Group as those that were applicable to
the refinanced, renewed, or extended Indebtedness;
(e) Indebtedness composing Permitted Investments,
(f) Indebtedness consisting of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business,
(g) Hedging Agreements,
(h) Indebtedness with respect to surety, appeal, indemnity,
performance or other similar bonds incurred in the ordinary course of business,
(i) Indebtedness evidenced by the Notes;
(j) Indebtedness consisting of the Cash Management Guarantees
and other Indebtedness of the Cash Management Foreign Subsidiaries to BOA
arising pursuant to the Foreign Subsidiary Cash Management Arrangement,
provided, that the aggregate principal amount of all Indebtedness owing pursuant
to this SECTION 7.1(j) that is at any time in excess of the aggregate balance of
amounts on deposit by such Cash Management Foreign Subsidiaries with BOA in the
accounts subject to the Cash Management Lien may not exceed $5,000,000 at any
time.
(k) Other Indebtedness in an aggregate amount not to exceed
$500,000 at any time.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced,
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renewed, or extended under SECTION 7.1(d) and so long as the replacement Liens
only encumber those assets that secured the refinanced, renewed, or extended
Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Except in connection with the consummation of the
consummation of the Permitted Reorganization Transactions, merge, consolidate,
reorganize, or recapitalize, or reclassify its Stock.
(b) except in connection with the consummation of the
consummation of the Permitted Reorganization Transactions, liquidate, wind up,
or dissolve itself (or suffer any liquidation or dissolution).
(c) except in connection with the consummation of the
Permitted Reorganization Transactions or as otherwise permitted herein, convey,
sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of the
assets of any Borrower.
7.5 CHANGE NAME. Change any Borrower's name, FEIN, corporate structure
or identity, or add any new fictitious name; PROVIDED, HOWEVER, that a Borrower
may change its name upon at least 30 days prior written notice by Parent to
Agent of such change and so long as, at the time of such written notification,
such Borrower provides any financing statements or fixture filings necessary to
perfect and continue perfected Agent's Liens.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except (i) by endorsement of
instruments or items of payment for deposit to the account of Borrowers or which
are transmitted or turned over to Agent, or (ii) if otherwise permitted
hereunder.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of
Borrowers' business.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
SECTION 7.1(d) or as otherwise permitted by SECTION 7.11, prepay, redeem,
defease, purchase, or otherwise acquire any Indebtedness of any Borrower, other
than the Obligations in accordance with this Agreement (notwithstanding anything
to the contrary contained herein, Parent may, subject to the subordination
provisions contained in the Indenture, make mandatory regularly scheduled
payments of interest on the Notes), and
(b) Except in connection with a refinancing permitted by
SECTION 7.1(d), directly or indirectly, amend, modify, alter, increase, or
change any of the terms or
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conditions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under SECTIONS 7.1(b), (c), (i),
or (j).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 CONSIGNMENTS. Consign any of their Inventory or sell any of their
Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale.
7.11 DISTRIBUTIONS. Other than distributions or declaration and payment
of dividends by a Borrower to another Borrower, make any distribution or declare
or pay any dividends (in cash or other property, other than common Stock) on, or
purchase, acquire, redeem, or retire any of any Borrower's Stock, of any class,
whether now or hereafter outstanding, except that Borrowers and their
Subsidiaries may convert any of their convertible securities (including, without
limitation, the convertible subordinated notes issued pursuant to the Indenture)
into other securities pursuant to the terms of such convertible securities or
otherwise in exchange therefore, provided that no such transaction shall involve
the payment of cash consideration (other than cash in lieu of fractional
shares).
7.12 ACCOUNTING METHODS. Modify or change its method of accounting
(other than as may be required to conform to GAAP) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Borrowers' accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding the Collateral or
Borrowers' financial condition.
7.13 INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment, or incur any liabilities (including
contingent obligations) for or in connection with any Investment; PROVIDED,
HOWEVER, that Parent and the other Obligors shall not have Permitted Investments
(other than in the Cash Management Accounts) in deposit accounts or Securities
Accounts in excess of $50,000 outstanding at any one time unless Parent or its
Subsidiaries, as applicable, and the applicable securities intermediary or bank
have entered into Control Agreements or similar arrangements governing such
Permitted Investments, as Agent shall determine in its Permitted Discretion, to
perfect (and further establish) the Agent's Liens in such Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower except for
transactions that are in the ordinary course of Borrowers' business, upon fair
and reasonable terms, that are fully disclosed to Agent, and that are no less
favorable to Borrowers than would be obtained in an arm's length transaction
with a non-Affiliate (other than transactions arising from the license of any
intellectual property, or cost sharing arrangements with respect to research and
development costs, between such Affiliate and any Borrower).
7.15 SUSPENSION. Suspend or go out of a substantial portion of the
business of the Obligors taken as a whole.
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7.16 COMPENSATION. Increase the annual fee or per-meeting fees paid to
the members of its Board of Directors during any year by more than 15% over the
prior year; pay or accrue total cash compensation, during any year, to its
officers and senior management employees in an aggregate amount in excess of
115% of that paid or accrued in the prior year.
7.17 USE OF PROCEEDS. Use the proceeds of the Advances and the Term
Loan for any purpose other than (a) on the Closing Date, (i) to repay in full
the outstanding principal, accrued interest, and accrued fees and expenses owing
to Existing Lender, and (ii) to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its lawful and permitted purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without Parent providing 30 days prior written notification thereof to Agent and
so long as, at the time of such written notification, the applicable Borrower
provides any financing statements or fixture filings necessary to perfect and
continue perfected the Agent's Liens and also provides to Agent, if requested by
Agent, a Collateral Access Agreement with respect to such new location. The
Inventory and Equipment of the Obligors having an aggregate value in excess of
$10,000 in any one location shall not at any time now or hereafter be stored
with a bailee, warehouseman, or similar party without Agent's prior written
consent.
7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities Account
unless Agent shall have received a Control Agreement in respect of such
Securities Account. Borrowers agree to not transfer assets out of any Securities
Account; PROVIDED, HOWEVER, that, so long as no Event of Default has occurred
and is continuing or would result therefrom, Borrowers may use such assets (and
the proceeds thereof) to the extent not prohibited by this Agreement.
7.20 INACTIVE SUBSIDIARIES. Permit the Inactive Subsidiaries to (a) own
any material assets, or (b) engage in any business activity.
7.21 FINANCIAL COVENANTS.
(a) Fail to maintain:
(i) MINIMUM EBITDA. EBITDA, measured on a fiscal quarter-end
basis, of not less than the required amount set forth in the following
table for the applicable period set forth opposite thereto;
-----------------------------------------------------------------------
Applicable Amount Applicable Period
-----------------------------------------------------------------------
[arrow left]$12,000,000[arrow right] For the 3 month period
ending September 30, 2002
-----------------------------------------------------------------------
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-----------------------------------------------------------------------
$20,000,000 For the 6 month period
ending December 31, 2002
-----------------------------------------------------------------------
$60,000,000 For the 9 month period
ending March 31, 2003
-----------------------------------------------------------------------
$60,000,000 For the 12 month period
ending each fiscal quarter thereafter
-----------------------------------------------------------------------
(ii) MINIMUM RECURRING MAINTENANCE REVENUES. Have Recurring
Maintenance Revenues, measured on the last day of each of Parent's
fiscal quarters for the fiscal quarter then ended of less than
$35,000,000.
(b) Make:
(i) CAPITAL EXPENDITURES. Make Capital expenditures in any
fiscal year in excess of the amount set forth in the following table
for the applicable period:
---------------------------------------------------
Fiscal Year 2003 Fiscal Year 2004
---------------------------------------------------
$15,000,000 $15,000,000
---------------------------------------------------
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "EVENT OF DEFAULT") under this Agreement:
8.1 If Borrowers fail to pay when due and payable or when declared due
and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 If Borrowers or their Subsidiaries fail to (a) perform, keep, or
observe any covenant or other provision contained in Sections 6.2, 6.3, 6.7,
6.9, or 6.10 hereof and such failure or neglect continues for a period of 5 days
after the date on which such failure or neglect first occurs, or (b) perform,
keep, or observe any covenant or other provision contained in any Section of
this Agreement (other than a Section that is expressly dealt with elsewhere in
this Section 8) or the other Loan Documents (other than a Section of such other
Loan Documents dealt with elsewhere in this Section 8) and such failure or
neglect is not cured within 15 days after the date on which such failure or
neglect first occurs, (c) perform,
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keep, or observe any covenant or other provision contained in Section 3.2,
Section 6 (other than a subsection of Section 6 that is dealt with elsewhere in
this Section 8), or Section 7 of this Agreement or any comparable provision
contained in any of the other Loan Documents;
8.3 If any material portion of any Borrower's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
8.4 If an Insolvency Proceeding is commenced by any Borrower or any of
its Subsidiaries;
8.5 If an Insolvency Proceeding is commenced against any Borrower, or
any of its Subsidiaries, and any of the following events occur: (a) the
applicable Borrower or the Subsidiary consents to the institution of the
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligation to extend credit hereunder, (d) an interim
trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, any Borrower or any of its Subsidiaries, or (e) an order for relief
shall have been entered therein;
8.6 If any Borrower or any of its Subsidiaries is enjoined, restrained,
or in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;
8.7 (a) If a notice of Lien is filed of record with respect to Parent's
or any of its Subsidiaries' assets by the United States or any department,
agency, or instrumentality thereof (a "FEDERAL LIEN"), or by any state, county,
municipal, or governmental agency and such state, county, municipal, or
governmental agency Lien has priority over the Liens of Agent in and to the
Collateral or any portion thereof (a "NON-FEDERAL PRIORITY LIEN"); or
(b) If a notice of Lien is filed of record with respect to
Parent's or any of its Subsidiaries' assets by any state, county, municipal, or
governmental agency that is not a Non-Federal Priority Lien (a "NON-FEDERAL
NON-PRIORITY LIEN"); PROVIDED, HOWEVER, that, if the aggregate amount claimed
with respect to any such Non-Federal Non-Priority Liens, or the combination
thereof, is less than $100,000, an Event of Default shall not occur under this
subsection if the claims that are the subject of such Liens are the subject of
Permitted Protests and if the Liens are released, discharged, or bonded against
within 30 days of each such Lien first being filed of record or, if earlier, at
least 5 days prior to the date on which assets that are subject to such Liens
are subject to being sold or forfeited and, in any such case, Agent shall have
the absolute right to establish and maintain a reserve against the Borrowing
Base and the Maximum Revolver Amount in an amount equal to the aggregate amount
of the underlying claims (determined by Agent, in its Permitted Discretion, and
irrespective of any Permitted Protests with respect thereto and including any
penalties or
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interest that are estimated by Agent, in its Permitted Discretion, to arise in
connection therewith);
8.8 If one or more judgments or other claims involving an aggregate
amount of $100,000, or more, in excess of the amount covered by insurance,
becomes a Lien or encumbrance upon any of the Obligors' assets and the same is
not released, discharged, bonded against, or stayed pending appeal before the
earlier of 30 days after the date it first arises or 5 days prior to the date on
which such asset is subject to being forfeited by the applicable Obligor;
8.9 Commencing ten Business Days after the Closing Date, if there is a
default under or with respect to (a) the Notes, (b) the Forbearance and Security
Agreement, or (c) any other evidence of Indebtedness of Parent or any of its
Subsidiaries (other than to the Lender Group hereunder and other than to the
Junior Lenders, unless the Junior Lenders have commenced the exercise of
material remedies) for borrowed money which, when aggregated with all other
Indebtedness of Parent and its Subsidiaries or any of them which is in default,
equals or exceeds $1,000,000, if the effect of such default is to permit the
holder of such Indebtedness to accelerate the maturity of such Indebtedness;
8.10 If any Borrower or any of its Subsidiaries makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent such payment is
permitted by the terms of the subordination provisions applicable to such
Indebtedness;
8.11 If any misstatement or misrepresentation exists now or hereafter
in any warranty, representation, statement, or Record made to the Lender Group
by any Borrower, its Subsidiaries, or any officer, employee, agent, or director
of any Borrower or any of its Subsidiaries;
8.12 If the obligation of any Guarantor under its guaranty is limited
or terminated by operation of law or by such Guarantor thereunder;
8.13 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby; or
8.14 Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Obligor, or a proceeding shall be commenced by
any Obligor, or by any Governmental Authority having jurisdiction over any
Obligor, seeking to establish the invalidity or unenforceability thereof, or any
Obligor shall deny that it has any liability or obligation purported to be
created under any Loan Document.
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9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Borrowers:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrowers under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit the Loan Account with only the net amounts received by
Agent in payment of such disputed Accounts after deducting all Lender Group
Expenses incurred or expended in connection therewith;
(e) Cause Borrowers to hold all of their returned Inventory in
trust for the Lender Group, segregate all of their returned Inventory from all
other assets of Borrowers or in Borrowers' possession and conspicuously label
said returned Inventory as the property of the Lender Group;
(f) Without notice to or demand upon any Borrower or
Guarantor, make such payments and do such acts as Agent considers necessary or
reasonable to protect its security interests in the Collateral. Each Borrower
agrees to assemble the Personal Property Collateral if Agent so requires, and to
make the Personal Property Collateral available to Agent at a place that Agent
may designate which is reasonably convenient to both parties. Each Borrower
authorizes Agent to enter the premises where the Personal Property Collateral is
located, to take and maintain possession of the Personal Property Collateral, or
any part of it, and to pay, purchase, contest, or compromise any Lien that in
Agent's determination appears to conflict with the Agent's Liens and to pay all
expenses incurred in connection therewith and to charge Borrowers' Loan Account
therefor. With respect to any of Borrowers' owned or leased premises, each
Borrower hereby grants Agent a license to enter into possession of such premises
and to occupy the same, without charge, in order to exercise any of the Lender
Group's rights or remedies provided herein, at law, in equity, or otherwise;
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(g) Without notice to any Borrower (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of any Borrower
held by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of any Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of any Borrower held by the Lender Group, and any amounts received in
the Cash Management Accounts, to secure the full and final repayment of all of
the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Personal Property Collateral. Each Borrower hereby grants to Agent a
license or other right to use, without charge, such Borrower's labels, patents,
copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Personal Property Collateral, in completing production of, advertising for sale,
and selling any Personal Property Collateral and such Borrower's rights under
all licenses and all franchise agreements shall inure to the Lender Group's
benefit;
(j) Sell the Personal Property Collateral at either a public
or private sale, or both, by way of one or more contracts or transactions, for
cash or on terms, in such manner and at such places (including Borrowers'
premises) as Agent determines is commercially reasonable. It is not necessary
that the Personal Property Collateral be present at any such sale;
(k) Agent shall give notice of the disposition of the Personal
Property Collateral as follows:
(i) Agent shall give Parent (for the benefit of the applicable
Borrower) a notice in writing of the time and place of public sale, or,
if the sale is a private sale or some other disposition other than a
public sale is to be made of the Personal Property Collateral, the time
on or after which the private sale or other disposition is to be made;
and
(ii) The notice shall be personally delivered or mailed,
postage prepaid, to Parent as provided in SECTION 12, at least 10 days
before the earliest time of disposition set forth in the notice; no
notice needs to be given prior to the disposition of any portion of the
Personal Property Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a recognized
market;
(l) Agent, on behalf of the Lender Group may credit bid and
purchase at any public sale;
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(m) Agent may seek the appointment of a receiver or keeper to
take possession of all or any portion of the Collateral or to operate same and,
to the maximum extent permitted by law, may seek the appointment of such a
receiver without the requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights and remedies
available to it at law or in equity pursuant to any other Loan Documents; and
(o) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by
Borrowers. Any excess will be returned, without interest and subject to the
rights of third Persons, by Agent to Administrative Borrower (for the benefit of
the applicable Borrower).
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Borrower, may do any or all of the following:
(a) make payment of the same or any part thereof, (b) set up such reserves in
Borrowers' Loan Account as Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with SECTION 6.8 hereof, obtain and maintain insurance policies of the
type described in SECTION 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Each Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments,
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chattel paper, and guarantees at any time held by the Lender Group on which any
such Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Each Borrower hereby
agrees that: (a) so long as the Lender Group complies with its obligations, if
any, under the Code, Agent shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.
11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons with respect to each
Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "INDEMNIFIED PERSON")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other reasonable costs and
expenses actually incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"). The foregoing to the
contrary notwithstanding, Borrowers shall have no obligation to any Indemnified
Person under this SECTION 11.3 with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART CAUSED BY OR ARISE
OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Agent to the other relating to this Agreement or any
other Loan Document
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shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, electronic mail (at such email
addresses as Parent or Agent, as applicable, may designate to each other in
accordance herewith), or telefacsimile to Borrowers in care of Parent or to
Agent, as the case may be, at its address set forth below:
If to Administrative
Borrower: PEREGRINE SYSTEMS, INC.
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Fax No. 000-000-0000
with copies to: WILSON, SONSINI, XXXXXXXX & XXXXXX
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No. 000.000.0000
If to Agent: FOOTHILL CAPITAL CORPORATION
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Division
Manager
Fax No. 000.000.0000
with copies to: XXXXXXX, XXXXXXX & XXXXXXXX LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No. 000.000.0000
Agent and Borrowers may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this SECTION
12, other than notices by Agent in connection with enforcement rights against
the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
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13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF
NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
NEW
YORK, STATE OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND THE LENDER GROUP
WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).
BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent
(provided that no written consent of Agent shall be required in connection with
any assignment and
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delegation by a Lender to an Eligible Transferee), assign and delegate to one or
more assignees (each an "ASSIGNEE") all, or any ratable part of all, of the
Obligations, the Commitments and the other rights and obligations of such Lender
hereunder and under the other Loan Documents, in a minimum amount of $5,000,000
(except such minimum amount shall not apply to any Affiliate of a Lender or to a
fund or account managed by a Lender provided that if the minimum amount is not
met Borrowers and Agent may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee); PROVIDED,
HOWEVER, that Borrowers and Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Administrative Borrower and Agent by such Lender and the Assignee, (ii) such
Lender and its Assignee have delivered to Administrative Borrower and Agent an
Assignment and Acceptance in form and substance satisfactory to Agent, and (iii)
the assignor Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of $5,000. Anything contained herein to the
contrary notwithstanding, the consent of Agent shall not be required (and
payment of any fees shall not be required) if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of such Lender or the
assignee is an Affiliate (other than individuals) of, or a fund, money market
account, investment account or other account managed by a Lender or an Affiliate
of a Lender.
(b) From and after the date that Agent notifies the assignor
Lender (with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except with respect to SECTION 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall affect
a novation between Borrowers and the Assignee.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or
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observance by Borrowers of any of their obligations under this Agreement or any
other Loan Document furnished pursuant hereto, (3) such Assignee confirms that
it has received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (4) such Assignee will,
independently and without reliance upon Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (5) such Assignee appoints and
authorizes Agent to take such actions and to exercise such powers under this
Agreement as are delegated to Agent, by the terms hereof, together with such
powers as are reasonably incidental thereto, and (6) such Assignee agrees that
it will perform all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
Agent of such fully executed Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender PRO TANTO.
(e) Any Lender may at any time, with the written consent of
Agent, sell to one or more commercial banks, financial institutions, or other
Persons not Affiliates of such Lender (a "PARTICIPANT") participating interests
in its Obligations, the Commitment, and the other rights and interests of that
Lender (the "ORIGINATING LENDER") hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); PROVIDED, HOWEVER, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a "Lender" hereunder or under the other Loan
Documents and the Originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or a material portion of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
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the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums; and (v) all amounts
payable by Borrowers hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collections, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to Borrowers or
Borrowers' business.
(g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; PROVIDED, HOWEVER,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void AB INITIO. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to SECTION 14.1 hereof and, except as expressly required pursuant to
SECTION 14.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Administrative Borrower (on behalf of all
Borrowers) and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
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PROVIDED, HOWEVER, that no such waiver, amendment, or consent shall, unless in
writing and signed by all of the Lenders affected thereby and Administrative
Borrower (on behalf of all Borrowers) and acknowledged by Agent, do any of the
following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any
loan or other extension of credit hereunder, or reduce any fees or other amounts
payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is required
to take any action hereunder,
(e) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted by SECTION
16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's Liens,
(i) release any Borrower or Guarantor from any obligation for
the payment of money, or
(j) change the definition of Borrowing Base or the definitions
of Canadian Conditions, Eligible Accounts, Letter of Credit Loan Amount, Maximum
Revolver Amount, Revolver Conditions, Revolver Reserve, Term Loan Amount, or
change SECTION 2.1(b); or
(k) amend any of the provisions of SECTION 2.12, SECTION
2.4(b), or SECTION 16.
and, PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document. The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.
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15.2 REPLACEMENT OF HOLDOUT LENDER If any action to be taken by the
Lender Group or Agent hereunder requires the unanimous consent, authorization,
or agreement of all Lenders, and a Lender ("Holdout Lender") fails to give its
consent, authorization, or agreement, then Agent, upon at least 5 Business Days
prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute Lenders (each, a "Replacement
Lender"), and the Holdout Lender shall have not right to refuse to be replaced
hereunder. Such notice to replace the Holdout Lender shall specify an effective
date for such replacement, which date shall not be later than 15 Business Days
after the date such notice is given.
Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance Agreement prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance Agreement. The replacement of any Holdout Lender
shall be made in accordance with the terms of SECTION 14.1. Until such time as
the Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of the Risk Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender
to exercise any right, remedy, or option under this Agreement or, any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its representative under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this
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SECTION 16. The provisions of this SECTION 16 are solely for the benefit of
Agent, and the Lenders, and Borrowers shall have no rights as a third party
beneficiary of any of the provisions contained herein. Any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent; it being
expressly understood and agreed that the use of the word "Agent" is for
convenience only, that Foothill is merely the representative of the Lenders, and
only has the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions that Agent expressly is
entitled to take or assert under or pursuant to this Agreement and the other
Loan Documents. Without limiting the generality of the foregoing, or of any
other provision of the Loan Documents that provides rights or powers to Agent,
Lenders agree that Agent shall have the right to exercise the following powers
as long as this Agreement remains in effect: (a) maintain, in accordance with
its customary business practices, ledgers and records reflecting the status of
the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections as
provided in the Loan Documents, (e) open and maintain such bank accounts and
cash management arrangements as Agent deems necessary and appropriate in
accordance with the Loan Documents for the foregoing purposes with respect to
the Collateral and the Collections, (f) perform, exercise, and enforce any and
all other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender Group
Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained
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in this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books or properties of Borrowers or the books or
records or properties of any of Borrowers' Subsidiaries or Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders,
except with respect to Events of Default of which Agent has actual knowledge,
unless Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a "notice of default." Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
SECTION 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
SECTION 9; PROVIDED, HOWEVER, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
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16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrowers
and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to Borrowers. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person (other than the Lender Group)
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of Borrowers and any other
Person party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to the Loan Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; PROVIDED, HOWEVER, that no Lender shall be liable for
the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent
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upon demand for such Lender's ratable share of any costs or out-of-pocket
expenses (including attorneys fees and expenses) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment, or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that Agent is not reimbursed for such expenses
by or on behalf of Borrowers. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of
Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents as though Foothill were not Agent hereunder, and, in
each case, without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, Foothill or its Affiliates may receive information regarding
Borrowers or their Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrowers or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to
the Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this SECTION 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
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16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person (other than the
Lender Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the sub-agent of the
Agent.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrowers, to deliver to Agent and
Administrative Borrower:
(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception, (a) a statement of the
Lender, signed under penalty of perjury, that it is not a (I) a "bank"
as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder
(within the meaning of Section 881(c)(3)(B) of the IRC), or (III) a
controlled foreign corporation described in Section 881(c)(3)(C) of the
IRC, and (B) a properly completed IRS Form W-8BEN, before the first
payment of any interest under this Agreement and at any other time
reasonably requested by Agent or Administrative Borrower;
(ii) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Form W-8BEN before the first payment of any interest
under this Agreement and at any other time reasonably requested by
Agent or Administrative Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form W-8ECI
before the first payment of any
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interest is due under this Agreement and at any other time reasonably
requested by Agent or Administrative Borrower;
(iv) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrowers to such Lender, such
Lender agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender. To the extent
of such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
(e) All payments made by Borrowers hereunder or under any note
or other Loan Document will be made without setoff, counterclaim, or other
defense, except as required by applicable law other than for Taxes (as defined
below). All such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction (other than the United States) or by any political subdivision or
taxing authority thereof or therein (other than of the United States) with
respect to such payments (but excluding, any tax imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein (i) measured
by or based on the net
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income or net profits of a Lender, or (ii) to the extent that such tax results
from a change in the circumstances of the Lender, including a change in the
residence, place of organization, or principal place of business of the Lender,
or a change in the branch or lending office of the Lender participating in the
transactions set forth herein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, each Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any note,
including any amount paid pursuant to this SECTION 16.11(e) after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein; PROVIDED, HOWEVER, that Borrowers shall not be required to
increase any such amounts payable to Agent or any Lender (i) that is not
organized under the laws of the United States, if such Person fails to comply
with the other requirements of this SECTION 16.11, or (ii) if the increase in
such amount payable results from Agent's or such Lender's own willful misconduct
or gross negligence. Borrowers will furnish to Agent as promptly as possible
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by Borrowers.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Borrowers of all Obligations, (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if
Administrative Borrower certifies to Agent that the sale or disposition is
permitted under SECTION 7.4 of this Agreement or the other Loan Documents (and
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Borrower owned any interest at the time
the security interest was granted or at any time thereafter, or (iv)
constituting property leased to a Borrower under a lease that has expired or is
terminated in a transaction permitted under this Agreement. Except as provided
above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this SECTION 16.12; PROVIDED, HOWEVER, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
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(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Borrowers or is
cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise
provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to Borrowers or any deposit accounts of
Borrowers now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by
Agent, take or cause to be taken any action, including, the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral the purpose of which is, or
could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
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16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as
its agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
in accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member
of the Lender Group authorizes and directs Agent to enter into this Agreement
and the other Loan Documents relating to the Collateral, for the benefit of the
Lender Group. Each member of the Lender Group agrees that any action taken by
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "REPORT" and collectively, "REPORTS") prepared by
Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i)
make any representation or warranty as to the accuracy of any Report, and (ii)
shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or any other party performing
any audit or examination will inspect only specific information regarding
Borrowers and will rely significantly upon the Books, as well as on
representations of Borrowers' personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrowers and their Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner;
it being understood and agreed by Borrowers that in any event such Lender may
make disclosures (a) to counsel for and other advisors, accountants, and
auditors to such Lender, (b) reasonably required by any BONA FIDE potential or
actual Assignee or Participant in connection with any contemplated or
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actual assignment or transfer by such Lender of an interest herein or any
participation interest in such Lender's rights hereunder, (c) of information
that has become public by disclosures made by Persons other than such Lender,
its Affiliates, assignees, transferees, or Participants, or (d) as required or
requested by any court, governmental or administrative agency, pursuant to any
subpoena or other legal process, or by any law, statute, regulation, or court
order; PROVIDED, HOWEVER, that, unless prohibited by applicable law, statute,
regulation, or court order, such Lender shall notify Administrative Borrower of
any request by any court, governmental or administrative agency, or pursuant to
any subpoena or other legal process for disclosure of any such non-public
material information concurrent with, or where practicable, prior to the
disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender, (y) to the extent that Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from Borrowers, any Lender may, from time to time,
reasonably request Agent to exercise such right as specified in such Lender's
notice to Agent, whereupon Agent promptly shall request of Administrative
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Administrative Borrower, Agent promptly
shall provide a copy of same to such Lender, and (z) any time that Agent renders
to Administrative Borrower a statement regarding the Loan Account, Agent shall
send a copy of such statement to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any
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liability for, or in respect of, the business, assets, profits, losses, or
liabilities of any other Lender. Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent any such notice may be required, and no Lender shall have any obligation,
duty, or liability to any Participant of any other Lender. Except as provided in
SECTION 16.7, no member of the Lender Group shall have any liability for the
acts or any other member of the Lender Group. No Lender shall be responsible to
any Borrower or any other Person for any failure by any other Lender to fulfill
its obligations to make credit available hereunder, nor to advance for it or on
its behalf in connection with its Commitment, nor to take any other action on
its behalf hereunder or in connection with the financing contemplated herein.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrowers, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing in accordance with SECTION 15.1.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
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17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or Guarantor or the transfer to the
Lender Group of any property should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a "VOIDABLE TRANSFER"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
17.8 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "ADMINISTRATIVE BORROWER") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group's relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this SECTION
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17.9 with respect to any liability that has been finally determined by a court
of competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.
[Signature page to follow.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
PEREGRINE SYSTEMS, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE REMEDY, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
HARBINGER HOLDINGS, INC.,
a California corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE E-MARKETS, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
TELCO RESEARCH CORPORATION,
a Tennessee corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
S-1
PEREGRINE CONNECTIVITY, INC.,
a Georgia corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE DIAMOND, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE CALIFORNIA PADRES, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE ONTARIO BLUE JAYS, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
BALLGAME ACQUISITION CORPORATION,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
S-2
OCTOBER ACQUISITION CORPORATION,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE BODHA, INC.,
a Delaware corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
PEREGRINE FEDERAL SYSTEMS, INC.,
an Illinois corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
XXXXX NETWORK SYSTEMS, LLC,
a Delaware limited liability company
By: _______________________________
Name: _____________________________
Title: ______________________________
S-3
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and
as a Lender
By: _______________________________
Name: _____________________________
Title: ______________________________
ABLECO FINANCE LLC,
a Delaware limited liability company as
a Lender
By: _______________________________
Name: _____________________________
Title: ______________________________
S-4
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule P-1 Permitted Investments
Schedule P-2 Permitted Liens
Schedule 2.8(a) Cash Management Banks
Disclosure Letter
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, 0 Xxx Xxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA #000000000.
SCHEDULE C-1
COMMITMENTS
=============================================================================
REVOLVER TERM LOAN
LENDER COMMITMENT COMMITMENT TOTAL COMMITMENT
-----------------------------------------------------------------------------
FOOTHILL CAPITAL -0- -0- -0-
CORPORATION
-----------------------------------------------------------------------------
ABLECO FINANCE LLC $56,000,000 $56,000,000 $56,000,000
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
ALL LENDERS $56,000,000 $56,000,000 $56,000,000
=============================================================================
SCHEDULE D-1
DESIGNATED ACCOUNT
Account number 14501-08273 of Administrative Borrower
maintained with Administrative Borrower's Designated Account Bank, or such other
deposit account of Administrative Borrower (located within the United States)
that has been designated as such, in writing, by Administrative Borrower to
Agent.
"DESIGNATED ACCOUNT BANK" means Bank of America, whose office is
located at _________, whose contact is Xxxxxxx Xxxxx, telephone number:
000-000-0000, and whose ABA number is 121 000 358.
