================================================================================
CREDIT AGREEMENT
among
PEREGRINE SYSTEMS, INC.
as Borrower,
BANK OF AMERICA, N.A.
as Administrative Agent,
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager,
BANKBOSTON, N.A.
as Syndication Agent,
and
the Lenders named herein
July 30, 1999
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1 - Definitions...........................................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Other Definitional Provisions.........................................................17
Section 1.3 Accounting Terms and Determinations...................................................17
Section 1.4 Time of Day...........................................................................18
ARTICLE 2 - Revolving Credit Facility............................................................................18
Section 2.1 Revolving Commitments.................................................................18
Section 2.2 Notes.................................................................................18
Section 2.3 Repayment of Revolving Loans..........................................................18
Section 2.4 Use of Proceeds.......................................................................18
Section 2.5 Revolving Commitment Fee..............................................................19
Section 2.6 Termination or Reduction of Revolving Commitments.....................................19
Section 2.7 Letters of Credit.....................................................................19
ARTICLE 3 - Interest and Fees....................................................................................23
Section 3.1 Interest Rate.........................................................................23
Section 3.2 Determinations of Margins. ..........................................................23
Section 3.3 Payment Dates.........................................................................24
Section 3.4 Default Interest......................................................................24
Section 3.5 Conversions and Continuations of Accounts.............................................24
Section 3.6 Computations..........................................................................25
ARTICLE 4 - Administrative Matters...............................................................................25
Section 4.1 Borrowing Procedure...................................................................25
Section 4.2 Minimum Amounts.......................................................................25
Section 4.3 Certain Notices.......................................................................25
Section 4.4 Prepayments...........................................................................27
Section 4.5 Method of Payment.....................................................................28
Section 4.6 Pro Rata Treatment....................................................................29
Section 4.7 Sharing of Payments...................................................................29
Section 4.8 Non-Receipt of Funds by Administrative Agent..........................................29
Section 4.9 Participation Obligations Absolute; Failure to Fund Participation. ..................30
ARTICLE 5 - Change in Circumstances..............................................................................30
Section 5.1 Increased Cost and Reduced Return.....................................................30
Section 5.2 Limitation on Libor Accounts..........................................................32
Section 5.3 Illegality. .........................................................................32
Section 5.4 Treatment of Affected Accounts........................................................32
Section 5.5 Compensation. .......................................................................33
CREDIT AGREEMENT - Page i
Section 5.6 Taxes.................................................................................33
Section 5.7 Withholding Tax Exemption.............................................................34
ARTICLE 6 - Security.............................................................................................35
Section 6.1 Collateral............................................................................35
Section 6.2 Guaranties............................................................................36
Section 6.3 New Subsidiaries, New Issuances of Capital Stock......................................36
Section 6.4 New Mortgaged Properties..............................................................37
Section 6.5 Release of Collateral.................................................................37
Section 6.6 Setoff................................................................................38
Section 6.7 Collateral and Guaranties of Foreign Subsidiaries.....................................38
ARTICLE 7 - Conditions Precedent.................................................................................39
Section 7.1 Initial Loan and Letter of Credit.....................................................39
Section 7.2 All Loans and Letters of Credit.......................................................43
ARTICLE 8 - Representations and Warranties.......................................................................44
Section 8.1 Corporate Existence...................................................................44
Section 8.2 Financial Condition...................................................................44
Section 8.3 Corporate Action; No Breach...........................................................44
Section 8.4 Operation of Business.................................................................45
Section 8.5 Litigation and Judgments..............................................................45
Section 8.6 Rights in Properties; Liens...........................................................45
Section 8.7 Enforceability........................................................................45
Section 8.8 Approvals.............................................................................46
Section 8.9 Debt..................................................................................46
Section 8.10 Taxes.................................................................................46
Section 8.11 Margin Securities.....................................................................46
Section 8.12 ERISA.................................................................................46
Section 8.13 Disclosure............................................................................46
Section 8.14 Subsidiaries; Capitalization..........................................................47
Section 8.15 Agreements............................................................................47
Section 8.16 Compliance with Laws..................................................................47
Section 8.17 Investment Company Act................................................................47
Section 8.18 Public Utility Holding Company Act....................................................47
Section 8.19 Environmental Matters.................................................................48
Section 8.20 Broker's Fees.........................................................................49
Section 8.21 Employee Matters......................................................................49
Section 8.22 Solvency..............................................................................49
Section 8.23 Year 2000 Compliance..................................................................49
ARTICLE 9 - Positive Covenants...................................................................................49
Section 9.1 Reporting Requirements................................................................49
Section 9.2 Maintenance of Existence; Conduct of Business.........................................51
Section 9.3 Maintenance of Properties.............................................................52
CREDIT AGREEMENT - Page ii
Section 9.4 Taxes and Claims......................................................................52
Section 9.5 Insurance.............................................................................52
Section 9.6 Inspection Rights.....................................................................53
Section 9.7 Keeping Books and Records.............................................................54
Section 9.8 Compliance with Laws..................................................................54
Section 9.9 Compliance with Agreements............................................................54
Section 9.10 Further Assurances....................................................................54
Section 9.11 ERISA.................................................................................55
Section 9.12 Unified Cash Management System........................................................55
Section 9.13 Year 2000 Compliance..................................................................55
ARTICLE 10 - Negative Covenants..................................................................................55
Section 10.1 Debt..................................................................................55
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries..................................56
Section 10.3 Mergers, Acquisitions, Etc............................................................57
Section 10.4 Restricted Junior Payments............................................................58
Section 10.5 Investments...........................................................................59
Section 10.6 Limitation on Issuance of Capital Stock...............................................60
Section 10.7 Transactions With Affiliates..........................................................60
Section 10.8 Disposition of Assets.................................................................60
Section 10.9 Lines of Business.....................................................................60
Section 10.10 Limitations on Restrictions Affecting Subsidiaries....................................60
Section 10.11 Environmental Protection..............................................................61
Section 10.12 ERISA.................................................................................61
ARTICLE 11 - Financial Covenants.................................................................................61
Section 11.1 Maximum Leverage Ratio................................................................61
Section 11.2 Minimum EBITDA........................................................................61
Section 11.3 Minimum Quick Ratio...................................................................61
ARTICLE 12 - Default.............................................................................................62
Section 12.1 Events of Default.....................................................................62
Section 12.2 Remedies..............................................................................64
Section 12.3 Cash Collateral.......................................................................65
Section 12.4 Performance by Administrative Agent...................................................65
Section 12.5 Set-off...............................................................................65
Section 12.6 Continuance of Default................................................................66
ARTICLE 13 - Administrative Agent................................................................................66
Section 13.1 Appointment, Powers, and Immunities. ................................................66
Section 13.2 Reliance by Administrative Agent......................................................66
Section 13.3 Defaults. ...........................................................................67
Section 13.4 Rights as Lender......................................................................67
Section 13.5 Indemnification. .....................................................................67
Section 13.6 Non-Reliance on Agents and Other Lenders..............................................68
CREDIT AGREEMENT - Page iii
Section 13.7 Resignation of Administrative Agent...................................................68
Section 13.8 Administrative Agent Fee..............................................................69
Section 13.9 Several Revolving Commitments.........................................................69
ARTICLE 14 - Miscellaneous.......................................................................................69
Section 14.1 Expenses..............................................................................69
Section 14.2 Indemnification.......................................................................70
Section 14.3 Limitation of Liability...............................................................71
Section 14.4 No Duty...............................................................................71
Section 14.5 No Fiduciary Relationship.............................................................71
Section 14.6 Equitable Relief......................................................................71
Section 14.7 No Waiver; Cumulative Remedies........................................................71
Section 14.8 Successors and Assigns................................................................72
Section 14.9 Survival..............................................................................73
Section 14.10 Entire Agreement......................................................................74
Section 14.11 Amendments and Waivers................................................................74
Section 14.12 Maximum Interest Rate.................................................................75
Section 14.13 Notices...............................................................................75
Section 14.14 Governing Law; Venue; Service of Process..............................................76
Section 14.15 Counterparts..........................................................................77
Section 14.16 Severability..........................................................................77
Section 14.17 Headings..............................................................................78
Section 14.18 Construction..........................................................................77
Section 14.19 Independence of Covenants.............................................................77
Section 14.20 Waiver of Jury Trial..................................................................77
Section 14.21 Confidentiality.......................................................................77
CREDIT AGREEMENT - Page iv
INDEX TO EXHIBITS
Exhibit Description of Exhibit
------- ----------------------
"A" Revolving Note
"B" Assignment and Acceptance Agreement
"C" Compliance Certificate
"D" Subsidiary Guaranty
"E" Joinder Agreement
INDEX TO SCHEDULES *
Schedule Description of Schedule
-------- -----------------------
8.1 Corporate Existence
8.4 Operation of Business
8.5 Litigation and Judgments
8.6 Rights in Properties; Liens
8.9 Debt
8.14 Subsidiaries; Capitalization
8.15 Agreements
8.19 Environmental Matters
10.2 Liens
14.13 Address for Notices
* The schedules to the Credit Agreement have been omitted. Peregrine agrees
to supplementally furnish such schedules upon request of the Commission.
CREDIT AGREEMENT - Page v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("AGREEMENT"), dated as of July 30, 1999, is
among PEREGRINE SYSTEMS, INC., a corporation duly organized and validly existing
under the laws of the State of Delaware ("BORROWER"), each of the banks or other
lending institutions which is or which may from time to time become a signatory
hereto or any successor or assignee thereof pursuant to SECTION 14.8(b) hereof
(individually, a "LENDER" and, collectively, the "LENDERS"), BANKBOSTON, N.A.,
as syndication agent (in its capacity as syndication agent, together with its
successors in such capacity, the "SYNDICATION AGENT") and BANK OF AMERICA, N.A.,
as Fronting Bank (as defined below) and as administrative agent for the Lenders
(in its capacity as administrative agent, together with its successors in such
capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S:
Borrower has requested that Lenders extend credit to Borrower in the
form of a revolving credit facility and a letter of credit subfacility. Lenders
are willing to extend such credit to Borrower upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"ACCOUNT" means either a Base Rate Account or a Libor Account.
"ACCOUNT DEBTOR" means a Person who is obligated on a Receivable.
"ADJUSTED LIBOR RATE" means, for any Libor Account for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by Administrative Agent to be equal to the
quotient obtained by dividing (a) the Libor Rate for such Libor Account for such
Interest Period by (b) 1 minus the Reserve Requirement for such Libor Account
for such Interest Period.
"ADJUSTED NET INCOME" means, for any period and any Person, such
Person's consolidated net income (or loss) determined in accordance with GAAP,
but excluding: (a) the income of any other Person (other than its Subsidiaries)
in which such Person or any of its Subsidiaries has an ownership interest,
unless received by such Person or its Subsidiary in a cash distribution; and (b)
any after-tax gains or losses attributable to an asset disposition.
CREDIT AGREEMENT - Page 1
"ADMINISTRATIVE AGENT" has the meaning set forth in the introductory
paragraph of this Agreement.
"AFFILIATE" means, with respect to any Person, any other Person (a)
that directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10%) or more of any class
of Voting Stock of such Person; or (c) ten percent (10%) or more of the Voting
Stock of which is directly or indirectly beneficially owned or held by the
Person in question. As used in this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause direction of
the management and policies of a Person, whether through the ownership of Voting
Stock, by contract, or otherwise; PROVIDED, HOWEVER, in no event shall the
Agents or any Lender be deemed an Affiliate of Borrower or any Subsidiary of
Borrower.
"AGENTS" means Administrative Agent and Syndication Agent,
collectively.
"AGREEMENT" has the meaning set forth in the introductory paragraph of
this Agreement, as the same may be amended or otherwise modified.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Account, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Account on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to Administrative Agent and Borrower by written notice in
accordance with the terms hereof as the office by which its Accounts of such
Type are to be made and maintained.
"APPLICABLE RATE" has the meaning set forth in SECTION 3.1.
"ASSET DISPOSITION" means, with respect to any Person, the disposition
of any asset of such Person (including, without limitation, the sale of any
Capital Stock of any Subsidiary of such Person) other than (i) sales of
Inventory in the ordinary course of business and (ii) dispositions of Equipment
no longer used or useful in such Person's business.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance, in
substantially the form of EXHIBIT "B", entered into by a Lender and an Eligible
Assignee and accepted by Administrative Agent pursuant to SECTION 14.8(b).
"AUTHORIZED REPRESENTATIVE" has the meaning set forth in SECTION
9.1(e).
"BANK OF AMERICA" means Bank of America, N.A., and its successors and
assigns.
"BANKRUPTCY CODE" has the meaning set forth in SECTION 12.1(e).
"BASE RATE" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate plus one-half of one percent (0.50%), or (b) the
Prime Rate. Any change in the Base
CREDIT AGREEMENT - Page 2
Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate.
"BASE RATE ACCOUNT" means a portion of a Loan that bears interest at a
rate based upon the Base Rate.
"BASE RATE MARGIN" has the meaning set forth in SECTION 3.2.
"BORROWER" has the meaning set forth in the introductory paragraph of
this Agreement.
"BUSINESS DAY" means (a) any day excluding Saturday, Sunday, and any
day which either is a legal holiday under the laws of the State of California or
is a day on which banking institutions located in any such states are closed,
and (b), with respect to all borrowings, payments, Conversions, Continuations,
Interest Periods, and notices in connection with Loans subject to Libor
Accounts, any day which is a Business Day described in CLAUSE (a) above and
which is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person according to GAAP. For purposes of this Agreement, the
amount of such Capital Lease Obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CAPITAL STOCK" means corporate stock and any and all shares,
partnership interests, membership interests, equity interests, rights,
securities, or other equivalent evidences of ownership, or any options,
warrants, voting trust certificates, or other instruments evidencing an
ownership interest or a right to acquire an ownership interest in a Person
(however designated) issued by any entity (whether a corporation, partnership,
limited liability company, limited partnership, or other type of entity).
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets which
are not, in accordance with GAAP, treated as expense items for such Person in
the year made or incurred or as a prepaid expense applicable to a future year or
years.
"CASH INTEREST EXPENSE" means, for any period for any Person, that
portion of Interest Expense for such period which is actually paid in cash by
such Person.
"CASH TAXES" means, for any period for any Person, that portion of
Taxes for such period which is actually paid in cash by such Person.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Borrower and its Subsidiaries
CREDIT AGREEMENT - Page 3
taken as a whole to any "person" (as such term is used in Section 13(d) (3) of
the Securities Exchange Act), (ii) the adoption of a plan relating to the
liquidation or dissolution of Borrower, (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) first
occurring after the Closing Date the result of which is that any "person" (as
defined above), becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is currently exercisable or
is exercisable only upon the occurrence of a subsequent condition), directly or
indirectly, of more than 50% of the Voting Stock of Borrower (measured by voting
power rather than number of shares), or (iv) the first day on which a majority
of the members of the Board of Directors of Borrower are not Continuing
Directors.
"CLOSING DATE" means July 30, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means all Property of any nature whatsoever upon which a
Lien is created or purported to be created by any Loan Document as security for
the Obligations or any portion thereof.
"COMMITMENT FEE RATE" has the meaning set forth in SECTION 3.2.
"COMMITMENT PERCENTAGE" means, with respect to each Lender, the
percentage equivalent of the amount of the Revolving Commitments of such Lender
divided by the aggregate amount of all the Revolving Commitments of all of the
Lenders.
"COMPLIANCE CERTIFICATE" means a certificate in substantially the form
of EXHIBIT "C", properly completed and executed by the chief financial officer
of Borrower.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to SECTION 3.5 of a Libor Account from one Interest Period
to the next Interest Period.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of Borrower who (i) was a member of such Board
of Directors on the Closing Date or (ii) was nominated for election or elected
to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"CONTRACT RATE" has the meaning specified in SECTION 14.12(a).
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to SECTION 3.5 or ARTICLE 5 of one Type of Account into another Type of
Account.
"DEBT" means, as to any Person at any time (without duplication): (a)
all obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person to pay the deferred
CREDIT AGREEMENT - Page 4
purchase price of property or services, except trade accounts payable of such
Person arising in the ordinary course of business that are not past due by more
than ninety (90) days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established to the satisfaction of Administrative Agent; (d) all Capital Lease
Obligations of such Person; (e) all Debt or other obligations of others
Guaranteed by such Person; (f) all obligations secured by a Lien existing on
property owned by such Person, whether or not the obligations secured thereby
have been assumed by such Person or are non-recourse to the credit of such
Person; PROVIDED, HOWEVER, that the amount of such Debt of any Person described
in this CLAUSE (F) shall, for purposes of this Agreement, be deemed to be equal
to the lesser of (i) the aggregate unpaid amount of such Debt or (ii) the fair
market value of the property or asset encumbered, as determined by
Administrative Agent in its reasonable discretion; (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit); (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); and (i) all vested
obligations of such Person for the payment of money under any noncompete,
consulting, or similar arrangements providing for the deferred payment of the
purchase price for an acquisition consummated prior to the date hereof.
"DEFAULT" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"DEFAULT RATE" means, in respect of any principal of any Loan, any
Reimbursement Obligation, or any other amount payable by Borrower under any Loan
Document, a rate per annum during the period specified in SECTION 3.4, equal to
the sum of two percent (2%), PLUS the Applicable Rate for Base Rate Accounts as
in effect from time to time (PROVIDED, that if such amount is subject to a Libor
Account and the due date is a day other than the last day of an Interest Period
therefor, the "Default Rate" for such amount shall be, for the period from and
including the due date and to but excluding the last day of the Interest Period
therefor, two percent (2%), PLUS the interest rate for such Account for such
Interest Period as provided in SECTION 3.1, and, thereafter, the rate provided
for above in this definition).
"DOLLARS" and "$" mean lawful money of the U.S.
"DOMESTIC SUBSIDIARY" means each direct or indirect Subsidiary of
Borrower formed under the laws of the U.S. or any state thereof.
"EBITDA" means, for any period and any Person, the total of the
following calculated without duplication for such Person on a consolidated basis
for such period: (a) Adjusted Net Income; PLUS (b) any provision for (or less
any benefit from) income or franchise taxes deducted in determining Adjusted Net
Income; PLUS (c) Interest Expense deducted in determining Adjusted Net Income;
PLUS (d) amortization and depreciation expense deducted in determining Adjusted
Net Income; PLUS (e) costs and expenses incurred in connection with acquired
in-process research and development; PLUS (f) transaction costs incurred in
connection with any merger and/or acquisition permitted by SECTION 10.3 to the
extent such costs and expenses arise during the Fiscal Quarter in
CREDIT AGREEMENT - Page 5
which any such merger and/or acquisition is completed deducted in determining
Adjusted Net Income.
"ELIGIBLE ASSIGNEE" has the meaning specified in SECTION 14.8(b)(i).
"ENVIRONMENTAL LAWS" means any and all federal, state, and local laws,
regulations, and requirements regulating health, safety, or the environment, as
such laws, regulations, and requirements may be amended or supplemented from
time to time.
"ENVIRONMENTAL LIABILITIES" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all reasonable fees, disbursements, and expenses of counsel,
expert and consulting fees, and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, or criminal or civil statute, including, without
limitation, any Environmental Law, permit, order, or agreement with any
Governmental Authority or other Person, arising from environmental, health, or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations issued thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Loan Party or is under common control (within
the meaning of Section 414(c) of the Code) with any Loan Party.
"EVENT OF DEFAULT" has the meaning specified in SECTION 12.1.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; PROVIDED that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
"FISCAL QUARTERS" means the three (3) month periods falling in each
Fiscal Year ending June 30, September 30, December 31, and March 31.
"FISCAL YEAR" means a twelve (12) month period ending March 31.
CREDIT AGREEMENT - Page 6
"FOREIGN SUBSIDIARY" means each direct or indirect Subsidiary of
Borrower that is not a Domestic Subsidiary, including, without limitation,
Xxxxxxxxxxx Limited, an Irish company, and Peregrine Company of Canada, a
Canadian company.
"FRONTING BANK" means Bank of America or such other Lender which is a
commercial bank as Borrower and Bank of America may mutually designate from time
to time which agrees to be the issuer of a Letter of Credit.
"FUNDED DEBT" means, with respect to any Person for such Person and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, at the
time of determination, the sum of all Debt other than: (a) Debt or other
obligations of others guaranteed by such Person and its Subsidiaries; (b) all
Reimbursement Obligations (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit); and (c) all liabilities in respect of unfunded vested
benefits under any Plan.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with SECTION 1.3
hereof), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"GRANTING DOMESTIC SUBSIDIARY" means each Domestic Subsidiary of the
Borrower, as identified on SCHEDULE 8.14, whose Net Worth exceeds two percent
(2%) of the aggregate Net Worth of the Borrower and its Subsidiaries determined
on a consolidated basis as of the Closing Date.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person or indemnifying such other Person for an obligation and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (b) entered into for
the purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect the obligee against loss in
respect thereof (in whole or in part), PROVIDED that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee of any guaranteeing Person shall be deemed
to be the lesser of (i) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee is made or (ii) the
maximum amount for which such guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee, unless such primary obligation
and the maximum amount for which such guaranteeing
CREDIT AGREEMENT - Page 7
Person may be liable are not stated or determinable, in which case the amount of
such Guarantee shall be such guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as mutually determined by Borrower and
Administrative Agent in good faith. The term "Guarantee" used as a verb has a
corresponding meaning.
"GUARANTY" means each of the Subsidiary Guaranties, and any and all
amendments, modifications, supplements, renewals, extensions, or restatements
thereof, and "GUARANTIES" means the Subsidiary Guaranties, collectively.
"HAZARDOUS MATERIAL" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law as a result
of its hazardous or toxic nature.
"HEDGE AGREEMENTS" means any and all agreements, devices, or
arrangements designed to protect Borrower from the fluctuations of interest
rates, exchange rates, or forward rates applicable to its assets, liabilities,
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap, swap or collar protection agreements, and forward
rate currency or interest rate options, as the same may be amended or modified
and in effect from time to time, and any and all cancellations, buy backs,
reversals, terminations, or assignments of any of the foregoing.
"INTELLECTUAL PROPERTY" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service xxxx registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights.
"INTEREST EXPENSE" means, for any period and for any Person, the sum of
(a) interest expense of such Person calculated without duplication on a
consolidated basis for such period in accordance with GAAP, PLUS (b) expenses
paid under Hedge Agreements during such period, MINUS (c) payments received
under Hedge Agreements during such period.
"INTEREST PERIOD" means with respect to any Libor Account, each period
commencing on the date such Account is established or Continued, or the last day
of the next preceding Interest Period with respect to such Libor Account, and
ending on the numerically corresponding day in the first calendar month
thereafter, as Borrower may select as provided in SECTION 3.5 or SECTION 4.1,
except that each such Interest Period which commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (a) each Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day (or if such
succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day); (b) any
CREDIT AGREEMENT - Page 8
Interest Period which would otherwise extend beyond the Termination Date shall
end on the Termination Date; (c) no more than five (5) Interest Periods shall be
in effect at the same time; and (d) no Interest Period for any Libor Account
shall have a duration of less than one (1) month and, if the Interest Period
would otherwise be a shorter period, the related Libor Account shall not be
available hereunder.
"INVENTORY" means all inventory now owned or hereafter acquired by
Borrower or any Subsidiary of Borrower wherever located and whether or not in
transit, which is or may at any time be held for sale or lease, or furnished
under any contract (exclusive of leases of real Property) for service or held as
raw materials, work in process, or supplies or materials used or consumed in the
business of Borrower or any Subsidiary of Borrower.
"INVESTMENTS" has the meaning specified in SECTION 10.5.
"JOINDER AGREEMENT" means an agreement which has been or will be
executed by a Subsidiary adding it as a party to the Guaranty and certain
Security Documents, in substantially the form of EXHIBIT "E", as the same may be
amended or otherwise modified.
"LAW" means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including, without
limitation, the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, in each case whether or not having the force of law.
"LEAD ARRANGER" means Banc of America Securities LLC, as sole lead
arranger and sole book manager.
"LENDER" has the meaning set forth in the introductory paragraph of
this Agreement.
"LETTER OF CREDIT LIABILITIES" means, at any time, the sum of (a) the
aggregate undrawn face amount of all outstanding Letters of Credit, PLUS (b) all
unreimbursed drawings under Letters of Credit.
"LETTERS OF CREDIT" has the meaning specified in SECTION 2.7(a).
"LETTER OF CREDIT AGREEMENT" means, with respect to each Letter of
Credit to be issued by the Fronting Bank therefor, the letter of credit
application and reimbursement agreement which such Fronting Bank requires to be
executed by Borrower in connection with the issuance of such Letter of Credit.
"LEVERAGE RATIO" means, for any period, the ratio of Borrower's Funded
Debt to EBITDA for the four (4) Fiscal Quarter period then ending.
"LIBOR ACCOUNT" means any portion of a Loan that bears interest at a
rate based upon the Adjusted Libor Rate.
CREDIT AGREEMENT - Page 9
"LIBOR RATE" means, for any Libor Account for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Dow Xxxxx Market Services (formerly known as Telerate)
display page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Libor Rate" shall mean, for any Libor Account for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"LIBOR RATE MARGIN" has the meaning set forth in SECTION 3.2.
"LIEN" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security
Documents, the Letters of Credit, the Letter of Credit Agreements, the Joinder
Agreements, any Hedge Agreement between Borrower or any Subsidiary of Borrower
and any Lender and all other agreements, documents, and instruments now or
hereafter executed and/or delivered pursuant to or in connection with any of the
foregoing, and any and all amendments, modifications, supplements, renewals,
extensions, or restatements thereof (including, without limitation, any
amendment that increases the amount of any Obligations due thereunder).
"LOAN PARTY" means (a) Borrower, (b) the Granting Domestic
Subsidiaries, (c) each Subsidiary acquired or created after the Closing Date and
(d) any other Person who is or becomes a party to any agreement, document, or
instrument that Guarantees or secures payment or performance of the Obligations
or any part thereof.
"LOANS" means Revolving Loans.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, any
material adverse effect, or the occurrence of any event or the existence of any
condition that could reasonably be expected to have a material adverse effect,
on (a) the prospects, business or financial condition, or performance of such
Person and its Subsidiaries, taken as a whole, (b) the ability of such Person to
pay and perform the obligations for which such Person is responsible when due,
or (c) the validity or enforceability of (i) any of the Loan Documents, (ii) any
Lien created or purported to be created by any of the Loan Documents or the
required priority of any such Lien, or (iii) the rights and remedies of
Administrative Agent or the Lenders under any of the Loan Documents.
CREDIT AGREEMENT - Page 10
"MAXIMUM RATE" means, at any time and with respect to any Lender, the
maximum rate of nonusurious interest under applicable Law that such Lender may
charge Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged, or received in connection with the Loan Documents that constitute
interest under applicable Law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to Borrower at the time of such change in the
Maximum Rate.
"MORTGAGED PROPERTY" means, any Property consisting of real property or
interests therein which becomes or is required to become subject to a Mortgage
pursuant to SECTION 6.4, and "MORTGAGED PROPERTIES" means all of such real
property or interests, collectively.
"MORTGAGE" means any (if any) deed of trust, leasehold deed of trust,
mortgage, leasehold mortgage, collateral assignment of leases, or other real
estate security document executed and delivered pursuant to this Agreement by
any Loan Party in favor of Administrative Agent for the benefit of the Agents
and the Lenders with respect to any Mortgaged Property, and any and all
amendments, modifications, supplements, renewals or restatements thereof, and
"MORTGAGES" means all of such Mortgages, collectively.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by any Loan Party
or any ERISA Affiliate at any time within the six (6) year period preceding the
date hereof or hereafter and which is covered by Title IV of ERISA.
"NET PROCEEDS" means (i) in connection with any disposition of assets
of any Loan Party, the cash proceeds received by such Loan Party from such
disposition (including, without limitation, payments under notes or other debt
Securities received in connection with any such disposition, but only as and
when received) net of (a) the costs of such disposition (including reasonable,
out-of-pocket professional fees and expenses, taxes, notarial fees, survey
costs, title insurance premiums, required escrow deposits, and purchase price
adjustments and other customary fees and expenses, in each case attributable to
and actually paid in connection with such disposition), and (b) amounts applied
to repayment of Debt (other than the Obligations) secured by a lien, security
interest, claim or encumbrance on the asset or property disposed and (ii) in
connection with issuance of any equity Securities, the cash proceeds received
from such issuance, net of all costs of such issuance (including reasonable,
out-of-pocket professional fees and expenses, notarial fees, underwriting
discounts and commissions, and other customary fees and expenses) actually paid.
"NET WORTH" means with respect to any Person, such Person's total
shareholders' equity (including, without limitation, capital stock, additional
paid-in capital and retained earnings, after deducting treasury stock, or other
form of equity (i.e., partner's capital, membership interests, etc.)) which
would appear as such on a balance sheet of such Person prepared in accordance
with GAAP.
"NON-GRANTING DOMESTIC SUBSIDIARY" means any Domestic Subsidiary of
Borrower whose Net Worth is equal to or less than two percent (2%) of the
aggregate Net Worth of the Borrower and its Subsidiaries determined on a
consolidated basis as of the Closing Date; PROVIDED, HOWEVER, in no
CREDIT AGREEMENT - Page 11
event shall the aggregate Net Worth of all Non-Granting Domestic Subsidiaries
determined on a consolidated basis exceed ten percent (10%) of the aggregate Net
Worth of the Borrower and its Subsidiaries determined on a consolidated basis as
of the Closing Date.
"NOTES" means the Revolving Notes referred to in SECTION 2.2.
"OBLIGATIONS" means any and all (a) obligations, indebtedness, and
liabilities of Borrower to the Agents and the Lenders, or any of them, arising
pursuant to any of the Loan Documents, whether now existing or hereafter
arising, whether direct, indirect, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several, including, without limitation, the
obligation of Borrower to repay the Loans, the Reimbursement Obligations,
interest on the Loans and Reimbursement Obligations, and all fees, costs, and
expenses (including, without limitation, attorneys' fees) provided for in the
Loan Documents, and (b) indebtedness, liabilities, and obligations of any Loan
Party under any Hedge Agreement that it may enter into with the Administrative
Agent or any other Person if and to the extent that such Hedge Agreement is
permitted in accordance with SECTION 10.1(h).
"OTHER TAXES" has the meaning specified in SECTION 5.6(b).
"OUTSTANDING REVOLVING CREDIT" means, at any time of determination, the
sum of (a) the aggregate amount of Revolving Loans then outstanding; PLUS (b)
the aggregate amount of Letter of Credit Liabilities (or when calculated with
respect to any Lender, such Lender's pro rata share of the Revolving Loans then
outstanding and participation or other interest in such Letter of Credit
Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PERMITTED LIENS" means the Liens permitted by SECTION 10.2.
"PERSON" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
"PLAN" means any employee benefit plan established or maintained by any
Loan Party or any ERISA Affiliate and which is subject to Title IV of ERISA.
"PRIME RATE" means the per annum rate of interest established from time
to time by Bank of America, as its prime rate, which rate may not be the lowest
rate of interest charged by Bank of America to its customers.
"PRINCIPAL OFFICE" means the office of Administrative Agent, located at
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
"PROHIBITED TRANSACTION" means any transaction described in Section 406
or 407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
CREDIT AGREEMENT - Page 12
"PROJECTIONS" means Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all materially consistent with Borrower's historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
"PROPERTY" means, for any Person, property or assets of all kinds,
real, personal or mixed, tangible or intangible (including, without limitation,
all rights relating thereto), whether owned or acquired on or after the Closing
Date.
"QUARTERLY PAYMENT DATE" means the last Business Day of March, June,
September and December of each year, the first of which shall be September 30,
1999.
"RECEIVABLE" or "RECEIVABLES" means, as at any date of determination
thereof, each and every "account" as such term is defined in article or chapter
9 of the UCC (or any successor statute) and includes, without limitation, the
unpaid portion of the obligation, as stated on the respective invoice, or, if
there is no invoice, other writing, of a customer of Borrower or any Subsidiary
of Borrower in respect of Inventory sold and shipped or services rendered by
Borrower or any Subsidiary of Borrower.
"REGISTER" has the meaning specified in SECTION 14.8(c).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended, modified, or supplemented
from time to time or any successor regulation therefor.
"REGULATORY CHANGE" means, with respect to any Lender, any change after
the date of this Agreement (other than with respect to taxes excluded by the
first sentence of SECTION 5.6(a)) in U.S. federal, state, or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests (other than with respect to
taxes excluded by the first sentence of SECTION 5.6(a)) applying to a class of
lenders including such Lender of or under any U.S. federal or state, or any
foreign, laws or regulations (whether or not having the force of Law) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
"REIMBURSEMENT OBLIGATIONS" means all indebtedness, liabilities, and
obligations of Borrower or any other Loan Party to reimburse Administrative
Agent or the Fronting Bank in accordance with SECTION 2.7(e) for any demand for
payment or drawing under a Letter of Credit.
"RELEASE" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or into
or from property owned by such Person, including, without limitation, the
migration of Hazardous Materials through or in the air, soil, surface water,
ground water, or property in violation of Environmental Laws.
CREDIT AGREEMENT - Page 13
"REMEDIAL ACTION" means all actions required under applicable
Environmental Laws to (a) cleanup, remove, treat, or otherwise address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release of Hazardous Materials, or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care; PROVIDED that "Remedial Action" shall not include such actions taken in
the normal course of business and in material compliance with Environmental
Laws.
"RENTAL EXPENSE" means, for any period and for any Person, the rental
or lease expense of such Person under operating leases calculated without
duplication on a consolidated basis for such period as determined in accordance
with GAAP.
"REQUIRED LENDERS" means any combination of Lenders having (a) more
than fifty percent (50%) of the Revolving Commitments or (b) if the Revolving
Commitments have terminated or have otherwise been fulfilled, more than fifty
percent (50%) of the outstanding principal amount of the Loans and
participations in the Letters of Credit.
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Accounts, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Libor Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Libor Accounts. The Adjusted
Libor Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"REVOLVING COMMITMENT" means, as to each Lender, the obligation of such
Lender to make advances of funds and purchase participation interests in (or
with respect to the Fronting Bank as a Lender, hold other interests in) Letters
of Credit in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount set forth opposite the name of such Lender on the
signature pages hereto (or if applicable, the most recent Assignment and
Acceptance executed by it) under the heading "Revolving Commitment", as the same
may be reduced or terminated pursuant to SECTION 2.6, SECTION 4.4, or SECTION
12.2. The aggregate amount of all the Revolving Commitments as of the Closing
Date equals Twenty Million Dollars ($20,000,000).
"REVOLVING LOANS" means, as to any Lender, the advances made by such
Lender pursuant to SECTION 2.1, and, as to all Lenders making such Loans, all
such Loans made or held by such Lenders pursuant to SECTION 2.1.
"REVOLVING NOTES" means the promissory notes provided for by SECTION
2.2 and all amendments or other modifications thereof.
CREDIT AGREEMENT - Page 14
"SECURITIES" means any stock, shares, options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes, or
other evidences of indebtedness for borrowed money, secured or unsecured.
"SECURITY AGREEMENTS" means security agreements, pledge agreements,
securities pledge agreements, debenture pledge agreements, and other agreements,
documents or instruments evidencing or creating a Lien as security for the
Obligations or any portion thereof in form and substance satisfactory to
Administrative Agent executed by any of Borrower, each Domestic Subsidiary of
Borrower, and any other Loan Party, dated the Closing Date or a subsequent date
(in the case of Domestic Subsidiaries acquired after the Closing Date), in favor
of Administrative Agent, for the benefit of the Agents and the Lenders, and any
such agreement, document, or instrument executed pursuant to ARTICLE 6, and any
and all amendments, modifications, supplements, renewals, extensions, or
restatements thereof.
"SECURITY DOCUMENTS" means the Guaranties, the Security Agreements, and
the Mortgages, as such agreements may be amended, modified, supplemented,
renewed, extended, or restated from time to time, and any and all other
agreements, deeds of trust, mortgages, chattel mortgages, security agreements,
pledges, guaranties, assignments of proceeds, assignments of income, assignments
of contract rights, assignments of partnership interests, assignments of royalty
interests, or other collateral assignments, completion or surety bonds, standby
agreements, subordination agreements, undertakings, and other agreements,
documents, instruments, and financing statements now or hereafter executed
and/or delivered by any Loan Party in connection with or as security or
assurance for the payment or performance of the Obligations or any part thereof.
"SOLVENT" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations, and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SUBORDINATED DEBT" means Debt of Borrower or its Subsidiaries
subordinated to the Obligations on terms and conditions satisfactory to
Administrative Agent in its absolute discretion.
CREDIT AGREEMENT - Page 15
"SUBSIDIARY" means, (a) when used to determine the relationship of a
Person to another Person, a Person of which an aggregate of more than fifty
percent (50%) or more of the Capital Stock is owned of record or beneficially by
such other Person, or by one or more Subsidiaries of such other Person, or by
such other Person and one or more Subsidiaries of such Person, (i) if the
holders of such Capital Stock (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or other individuals performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a contingency,
or (B) are entitled, as such holders, to vote for the election of a majority of
the directors (or individuals performing similar functions) of such Person,
whether or not the right so to vote exists by reason of the happening of a
contingency, or (ii) in the case of Capital Stock which is not issued by a
corporation, if such ownership interests constitute a majority voting interest,
and (b) when used with respect to a Plan, ERISA, or a provision of the Code
pertaining to employee benefit plans, means, with respect to a Person, any
corporation, trade, or business (whether or not incorporated) which is under
common control with such Person and is treated as a single employer with such
Person under Section 414(b) or (c) of the Code and the regulations thereunder.
"SUBSIDIARY GUARANTY" means the guaranty of the Domestic Subsidiaries
of Borrower in favor of Administrative Agent, for the benefit of the Agents and
the Lenders, in substantially the form of EXHIBIT "D", as the same may be
modified pursuant to one or more Joinder Agreements and as the same may be
otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning set forth in the introductory
paragraph if this Agreement.
"TAXES" has the meaning specified in SECTION 5.6.
"TERMINATION DATE" means July 30, 2002.
"TERMINATION EVENT" means (a) a Reportable Event, or (b) the filing of
a notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment
of a trustee to administer any Plan.
"TYPE" shall mean either type of Account (i.e., a Base Rate Account or
Libor Account).
"UCC" means the Uniform Commercial Code as in effect in the State of
California and/or any other jurisdiction, the laws of which may be applicable to
or in connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
"UNFUNDED VESTED ACCRUED BENEFITS" means with respect to any Plan at
any time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits; all determined as of the then most
recent valuation date for such Plan.
"U.S." means the United States of America.
CREDIT AGREEMENT - Page 16
"VOTING STOCK" means Capital Stock of a Person having by the terms
thereof ordinary voting power to elect a majority of the board of directors (or
similar governing body) of such Person (irrespective of whether or not at the
time Capital Stock of any other class or classes of such Person shall have or
might have voting power by reason of the happening of any contingency).
"WHOLLY-OWNED GRANTING DOMESTIC SUBSIDIARY" means any Subsidiary that
(i) is owned 100% by Borrower and/or a Subsidiary of Borrower, (ii) is organized
under the laws of a state within the U.S., and (iii) is a Granting Domestic
Subsidiary.
"YEAR 2000 COMPLIANT" has the meaning set forth in SECTION 8.24 hereof.
"YEAR 2000 PROBLEM" has the meaning set forth in SECTION 8.24 hereof.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article, Section, and Schedule references pertain to Articles,
Sections, and Schedules of this Agreement. Terms used herein that are defined in
the UCC, unless otherwise defined herein, shall have the meanings specified in
the UCC.
Section 1.3 ACCOUNTING TERMS AND DETERMINATIONS. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Administrative Agent and the
Lenders hereunder shall be prepared, in accordance with GAAP, on a "consistent
basis" with those used in the preparation of the financial statements referred
to in SECTION 8.2. All calculations made for the purposes of determining
compliance with the provisions of this Agreement shall be made by application of
GAAP, on a "consistent basis" with those used in the preparation of the
financial statements referred to in SECTION 8.2. Accounting principles are
applied on a "consistent basis" when the accounting principles applied in a
current period are comparable in all material respects to those accounting
principles applied in a preceding period. Changes in the application of
accounting principles which do not have a material impact on calculating the
financial covenants herein shall be deemed comparable in all material respects
to accounting principles applied in a preceding period. To enable the ready and
consistent determination of compliance by Borrower with its obligations under
this Agreement, Borrower will not, nor will it permit any other Loan Party to,
change the manner in which either the last day of its Fiscal Year or the last
days of the first three Fiscal Quarters of its Fiscal Years is calculated
without the prior written consent of the Required Lenders. In the event any
changes in accounting principles required by GAAP, recommended by Borrower's or
any other Loan Party's certified public accountants or requested by Borrower (or
that Borrower otherwise requests and Administrative Agent and the Required
Lenders agree to accept, such agreement not unreasonably to be denied) and
implemented by Borrower or any other Loan Party occur and such changes result in
a change in the method of the calculation of financial covenants under this
Agreement, then Borrower, Administrative Agent, and the Required Lenders agree
to enter into negotiations in order to amend such provisions of this Agreement
so as to equitably reflect such changes with the desired result that the
criteria for evaluating such covenants
CREDIT AGREEMENT - Page 17
shall be the same after such changes as if such changes had not been made. Until
such time as such an amendment shall have been executed and delivered by
Borrower, Administrative Agent, and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such changes had not occurred.
Section 1.4 TIME OF DAY. Unless otherwise indicated, all references in
this Agreement to times of day shall be references to San Francisco, California
time.
ARTICLE 2
REVOLVING CREDIT FACILITY
Section 2.1 REVOLVING COMMITMENTS. Subject to the terms and conditions
of this Agreement, each Lender who has agreed to provide a Revolving Commitment
severally agrees to make advances to Borrower from time to time from and
including the Closing Date to but excluding the Termination Date in an aggregate
principal amount at any time outstanding up to but not exceeding the amount of
such Lender's Revolving Commitment as then in effect; PROVIDED, HOWEVER, (a) the
Outstanding Revolving Credit applicable to a Lender shall not at any time exceed
such Lender's Revolving Commitment and (b) the Outstanding Revolving Credit of
all of the Lenders shall not at any time exceed the aggregate Revolving
Commitments. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, Borrower may borrow, prepay, and reborrow
hereunder the amount of the Revolving Commitments and may establish Base Rate
Accounts and Libor Accounts thereunder and, until the Termination Date, Borrower
may Continue Libor Accounts established under the Revolving Loans or Convert
Accounts established under the Revolving Loans of one Type into Accounts of the
other Type. Accounts of each Type under the Revolving Loans made by each Lender
shall be established and maintained at such Lender's Applicable Lending Office
for Revolving Loans of such Type.
Section 2.2 NOTES. The Revolving Loans made by a Lender shall, if
requested by a Lender, be evidenced by a single promissory note of Borrower in
substantially the form of EXHIBIT "A", payable to the order of such Lender, in
the maximum principal amount equal to its Revolving Commitment as originally in
effect (or, if greater, its Revolving Commitment thereafter increased) and
otherwise duly completed.
Section 2.3 REPAYMENT OF REVOLVING LOANS. Borrower shall pay to
Administrative Agent, for the account of the Lenders, the outstanding principal
amount of all of the Revolving Loans on the Termination Date.
Section 2.4 USE OF PROCEEDS. Subject to the terms of this Agreement,
the proceeds of the Revolving Loans shall be used by Borrower for general
corporate purposes arising in the ordinary course of business of Borrower and
its Subsidiaries, the financing of working capital requirements and Capital
Expenditures of Borrower and its Subsidiaries, the payment of Reimbursement
Obligations, and for acquisitions permitted by SECTION 10.3.
CREDIT AGREEMENT - Page 18
Section 2.5 REVOLVING COMMITMENT FEE. Borrower agrees to pay to Agent
for the account of each Lender a commitment fee on the daily actual unused
amount of such Lender's Revolving Commitment for the period from and including
the Closing Date to and including the Termination Date, at a per annum rate
equal to the Commitment Fee Rate, computed on the basis of a year of 360 days
and the actual number of days elapsed (including the first day but excluding the
last day) provided that for purposes of calculating such fee the amount of
outstanding Letters of Credit shall constitute use of the Revolving Commitment.
Accrued commitment fees under this SECTION 2.5 shall be payable in arrears on
the each Quarterly Payment Date and on the Termination Date.
Section 2.6 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. Borrower
shall have the right to terminate fully or to reduce in part the unused portion
of the Revolving Commitments at any time and from time to time, PROVIDED that:
(a) Borrower shall give Administrative Agent at least five (5) Business Days
notice of each such termination or reduction as provided in SECTION 4.3 hereof;
(b) each partial reduction shall be in an aggregate amount at least equal to One
Million Dollars ($1,000,000) or any multiple One Million Dollars ($1,000,000) in
excess thereof; and (c) the Revolving Commitments may not be reduced below an
amount equal to the Letter of Credit Liabilities. The Revolving Commitments may
not be reinstated after they have been terminated or reduced.
Section 2.7 LETTERS OF CREDIT.
(a) COMMITMENT TO ISSUE. Borrower may utilize Revolving
Commitments by requesting that the Fronting Bank issue, and the
Fronting Bank, subject to the terms and conditions of this Agreement,
shall issue, standby and commercial letters of credit for Borrower's
account (such letters of credit being hereinafter referred to as the
"LETTERS OF CREDIT", which may be for the benefit of a Subsidiary of
Borrower); PROVIDED, HOWEVER, (i) the aggregate amount of outstanding
Letter of Credit Liabilities shall not at any time exceed Ten Million
Dollars ($10,000,000), (ii) the Outstanding Revolving Credit shall not
at any time exceed the maximum amount prescribed by SECTION 2.1, and
(iii) the Outstanding Revolving Credit applicable to any Lender shall
not at any time exceed the maximum amount for a Lender prescribed by
SECTION 2.1. Upon the date of issue of a Letter of Credit,
Administrative Agent shall be deemed, without further action by any
party hereto, to have sold to each Lender who holds a Revolving
Commitment, and each such Lender shall be deemed, without further
action by any party hereto, to have purchased from Administrative
Agent, a participation to the extent of such Lender's Commitment
Percentage in such Letter of Credit and the related Letter of Credit
Liabilities. Upon termination of the Revolving Commitments, any Letter
of Credit then outstanding which has been fully cash collateralized to
the satisfaction of Administrative Agent and the Fronting Bank shall no
longer be considered a "Letter of Credit" as defined in this Agreement
and any participating interest heretofore granted by the Fronting Bank
to the Lenders holding Revolving Commitments in such Letter of Credit
shall be deemed terminated but the letter of credit fees payable
hereunder shall continue to accrue to the Fronting Bank with respect to
such Letter of Credit until the expiry thereof.
CREDIT AGREEMENT - Page 19
(b) LETTER OF CREDIT REQUEST PROCEDURE. Borrower shall give
Administrative Agent at least three (3) Business Days prior notice
(effective upon receipt) specifying the date of each Letter of Credit
and the nature of the transactions to be supported thereby. Upon
receipt of such notice Administrative Agent shall promptly notify the
Fronting Bank and each Lender who holds a Revolving Commitment of the
contents thereof and of such Lender's Commitment Percentage of the
amount of the proposed Letter of Credit. Unless otherwise agreed by
Administrative Agent and the Fronting Bank with the consent of all
Lenders (and provided that any such Letter of Credit is required to be
fully cash collateralized to the satisfaction of Administrative Agent
and the Fronting Bank no later than five (5) days prior to the
Termination Date), each Letter of Credit shall have an expiration date
that does not extend beyond a date which is thirty (30) days prior to
the Termination Date, shall be payable in Dollars, must support a
transaction entered into in the ordinary course of business of Borrower
or its Subsidiaries, must be satisfactory in form and substance to
Administrative Agent and the Fronting Bank, and shall be issued
pursuant to such documentation as Administrative Agent and the Fronting
Bank may require, including, without limitation, the Fronting Bank's
standard form Letter of Credit Agreement; PROVIDED, that, in the event
of any conflict between the terms of such agreement and the other Loan
Documents, the terms of the other Loan Documents shall control.
(c) LETTER OF CREDIT FEES. Borrower will pay to Administrative
Agent for the account of each Lender holding a Revolving Commitment a
fee on such Lender's Commitment Percentage of the daily actual amount
available for drawings under the Letters of Credit, such fee (i) to be
paid in arrears on the first Quarterly Payment Date occurring after the
date of the issuance of the first Letter of Credit and on each
Quarterly Payment Date thereafter until the date of expiration or
termination of all Letters of Credit and (ii) to be calculated at a
rate per annum equal to the Libor Rate Margin on the basis of a year of
360 days and the actual number of days elapsed (including the first day
but excluding the last day). After receiving any payment of any fees
under this CLAUSE (C), Administrative Agent will promptly pay to each
Lender that holds a Revolving Commitment the fees then due such Lender.
Borrower will also pay to the Fronting Bank, for its account only, a
fronting fee on the amount available to be drawn under each Letter of
Credit, such fronting fee (i) to be paid in arrears on the first
Quarterly Payment Date occurring after the date of the issuance of the
first Letter of Credit and on each Quarterly Payment Date thereafter
until the date of expiration or termination of all Letters of Credit
and (ii) to be calculated at a rate per annum equal to one-eighth of
one percent (0.125%) on the basis of a year of 360 days and the actual
number of days elapsed (including the first day but excluding the last
day). Borrower will also pay to the Fronting Bank, for its account
only, all customary fees for amendments to and processing of the
Letters of Credit.
(d) FUNDING OF DRAWINGS. Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment or other drawing under
such Letter of Credit, the Fronting Bank shall promptly so notify
Administrative Agent and Administrative Agent shall promptly so notify
Borrower and each Lender that holds a Revolving Commitment as to the
amount to be paid as a result of such demand or drawing and the
respective payment date. Not later than 11:00 a.m. (San Francisco,
California time) on the applicable payment date if
CREDIT AGREEMENT - Page 20
Borrower has not reimbursed the Fronting Bank for the amount paid as a
result of such demand or drawing, each Lender will make available to
Administrative Agent, at the Principal Office, in immediately available
funds, an amount equal to such Lender's Commitment Percentage of the
amount to be paid as a result of such demand or drawing which has not
been reimbursed even if the conditions to a Loan under ARTICLE 7 hereof
have not been satisfied and Administrative Agent shall promptly pay
such amounts to the Fronting Bank.
(e) REIMBURSEMENTS. Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Fronting Bank
(through Administrative Agent) for any amounts paid by the Fronting
Bank upon any demand for payment or drawing under any Letter of Credit,
without presentment, demand, protest, or other formalities of any kind.
All payments on the Reimbursement Obligations shall be made to
Administrative Agent not later than 11:00 a.m. (San Francisco,
California time) on the date of the corresponding payment under the
Letter of Credit by the Fronting Bank; PROVIDED, that Administrative
Agent has provided notice to Borrower prior to 9:00 a.m. (San
Francisco, California time) on such day that such payment is due. In
the event such notice is received after 9:00 a.m. (San Francisco,
California time) on a Business Day, such payment shall be due not later
than 11:00 a.m. (San Francisco, California time) on the next succeeding
Business Day. Subject to the other terms and conditions of this
Agreement, such reimbursement may be made by Borrower requesting a
Revolving Loan in accordance with SECTION 4.1 hereof, the proceeds of
which shall be credited against Borrower's Reimbursement Obligations.
Administrative Agent will pay to each Lender participating in a Letter
of Credit such Lender's Commitment Percentage of all amounts received
from Borrower for application in payment, in whole or in part, to the
Reimbursement Obligation in respect of any Letter of Credit, but only
to the extent such Lender has made payment to Administrative Agent in
respect of such Letter of Credit pursuant to CLAUSE (d) of this SECTION
2.7.
(f) REIMBURSEMENT OBLIGATIONS ABSOLUTE. The Reimbursement
Obligations of Borrower under this Agreement shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever and Borrower hereby waives any defense to the payment of the
Reimbursement Obligations based on any circumstance whatsoever,
including, without limitation, in either case, the following
circumstances: (i) any lack of validity or enforceability of any Letter
of Credit or any other Loan Document; (ii) the existence of any claim,
set-off, counterclaim, defense, or other rights which any Loan Party or
any other Person may have at any time against any beneficiary of any
Letter of Credit, the Fronting Bank, Administrative Agent, any Lender,
or any other Person, whether in connection with any Loan Document or
any unrelated transaction; (iii) any statement, draft, or other
documentation presented under any Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(iv) payment by the Fronting Bank under any Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; or (v) any other circumstance
whatsoever, whether or not similar to any of the foregoing.
CREDIT AGREEMENT - Page 21
(g) ASSUMPTION OF RISK BY BORROWER. As among Borrower and the
Lenders, Borrower assumes all risks of the acts and omissions of, or
misuse of any of the Letters of Credit by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the applications for the
issuance of Letters of Credit, the Lenders, the Fronting Bank (except
as otherwise set forth below in this Section 2.7(g)), and
Administrative Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any document submitted by any
Person in connection with the application for and issuance of
and presentation of drafts with respect to any of the Letters
of Credit, even if it should prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent, or
forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning, or purporting to transfer or
assign, any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of
Credit to comply duly with conditions required in order to
draw upon such Letter of Credit;
(iv) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex, or otherwise, whether or not they be in
cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such
Letter of Credit; or
(viii) any consequences arising from causes beyond
the control of any Lender or the Fronting Bank, including,
without limitation, any act by a Governmental Authority.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
Lenders, the Fronting Bank or Administrative Agent's rights or powers under this
SECTION 2.7. Borrower shall have a claim against the Fronting Bank, and the
Fronting Bank shall be liable to Borrower, to the extent of any direct (but not
indirect, consequential, remote, exemplary or punitive) damages suffered by
Borrower which Borrower proves in a final nonappealable judgment were caused by
(A) the Fronting Bank's willful misconduct or gross negligence in determining
whether documents presented under any Letter of Credit complied with the terms
thereof or (B) the Fronting Bank's willful failure to pay
CREDIT AGREEMENT - Page 22
under any Letter of Credit after presentation to it of documentation strictly
complying with the terms and conditions of such Letter of Credit. The Fronting
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation.
ARTICLE 3
INTEREST AND FEES
Section 3.1 INTEREST RATE. Borrower shall pay to Administrative Agent,
for the account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender for the period commencing on the date of such Loan to
but excluding the date such Loan is due, at a fluctuating rate per annum equal
to the Applicable Rate. The term "APPLICABLE RATE" means:
(a) during the period that such Loans or portions thereof are
subject to a Base Rate Account, the Base Rate, PLUS the Base Rate
Margin; and
(b) during the period that such Loans or portions thereof are
subject to a Libor Account, the Adjusted Libor Rate, PLUS the Libor
Rate Margin.
Section 3.2 DETERMINATIONS OF MARGINS. The margins identified in
SECTION 3.1 hereof and the Commitment Fee Rate shall be defined and determined
as follows:
(a) "BASE RATE MARGIN" shall mean (i) during the period
commencing on the Closing Date and ending on but not including the
first Adjustment Date (as defined below in this SECTION 3.2), zero
percent (0.00%) per annum; and (ii) thereafter the percent per annum
set forth in the table below in this SECTION 3.2 under the heading
"Base Rate Margin" opposite the Total Funded Debt to EBITDA ratio as
calculated in the Compliance Certificate most recently delivered as
required by SECTION 9.1(c) preceding the relevant Adjustment Date.
(b) "LIBOR RATE MARGIN" shall mean (i) during the period
commencing on the Closing Date and ending on but not including the
first Adjustment Date (as defined below in this SECTION 3.2) one
percent (1.00%) per annum and (ii) thereafter the percent per annum set
forth in the table below in this SECTION 3.2 under the heading "LIBOR
Rate Margin", and opposite the Total Funded Debt to EBITDA Ratio as
calculated in the Compliance Certificate most recently delivered as
required by SECTION 9.1(c) preceding the relevant Adjustment Date.
(c) "COMMITMENT FEE RATE" shall mean (i) during the period
commencing on the Closing Date and ending on but not including the
first Adjustment Date (as defined below in this SECTION 3.2),
three-tenths of one percent (0.30%) per annum; and (ii) thereafter the
percent per annum set forth in the table below in this SECTION 3.2
under the heading "Commitment Fee Rate" opposite the Total Funded Debt
to EBITDA Ratio as calculated in the Compliance Certificate most
recently delivered as required by SECTION 9.1(c) preceding the relevant
Adjustment Date.
CREDIT AGREEMENT - Page 23
The following is the table referred to in CLAUSES (a), (b) and (c) of
this SECTION 3.2:
Total Funded Debt to BASE RATE LIBOR RATE COMMITMENT
EBITDA Ratio MARGIN MARGIN FEE RATE
==================================================== ==================== =================== ===================
Greater than or equal to 1.50 x 1.00% 2.25% 0.50%
---------------------------------------------------- -------------------- ------------------- -------------------
Greater than or equal to 1.00 x but less than 1.50 x 0.50% 1.75% 0.40%
---------------------------------------------------- -------------------- ------------------- -------------------
Greater than or equal to 0.50 x but less than 1.00 x 0.125% 1.375% 0.35%
---------------------------------------------------- -------------------- ------------------- -------------------
Less than 0.50 x 0% 1.00% 0.30%
==================================================== ==================== =================== ===================
Upon delivery of the Compliance Certificate pursuant to SECTION 9.1(c),
commencing with such Compliance Certificate delivered for the Fiscal Quarter
ending June 30, 1999, the Base Rate Margin, Commitment Fee Rate and the Libor
Rate Margin shall automatically be adjusted in accordance with the Total Funded
Debt to EBITDA Ratio set forth in the table set forth above, such automatic
adjustment to take effect prospectively as of the second Business Day following
the date upon which such Compliance Certificate is delivered pursuant to said
SECTION 9.1(c). The term "ADJUSTMENT DATE" shall mean each such day as of which
such margins are deemed to change pursuant to the immediately prior sentence or
the next following sentence. If Borrower fails to deliver such Compliance
Certificate which sets forth the Total Funded Debt to EBITDA Ratio within the
period of time required by SECTION 9.1 (c): (i) the Base Rate Margin shall
automatically be adjusted to one percent (1.00%) per annum, (ii) the Libor Rate
Margin (for Interest Periods commencing after the applicable Adjustment Date)
shall automatically be adjusted to two and one quarter percent (2.25%) per
annum, and (iii) the Commitment Fee Rate shall automatically be adjusted to one
half of one percent (.50%) per annum. The automatic adjustments provided for in
the preceding sentence shall take effect retroactively as of the first day of
the then existing Fiscal Quarter and shall remain in effect until subsequently
adjusted in accordance herewith upon the delivery of such Compliance
Certificate.
Section 3.3 PAYMENT DATES. Accrued interest on the Loans shall be due
and payable as follows: (i) in the case of Loans subject to Base Rate Accounts,
on each Quarterly Payment Date and on the Termination Date; (ii) in the case of
Loans subject to Libor Accounts and with respect to each such Account, on (A)
the last day of the Interest Period with respect thereto, (B) in the case of an
Interest Period greater than three months, at three-month intervals after the
first day of such Interest Period, and (C) on the Termination Date.
Section 3.4 DEFAULT INTEREST. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, Borrower will pay to Administrative Agent for the account
of each Lender interest at the Default Rate on any principal of any Loan made by
such Lender, any Reimbursement Obligation, and (to the fullest extent permitted
by Law) any other amount payable by Borrower under any Loan Document to or for
the account of Administrative Agent or such Lender.
Section 3.5 CONVERSIONS AND CONTINUATIONS OF ACCOUNTS. Subject to
SECTION 4.2 hereof, Borrower shall have the right from time to time to Convert
all or part of any Base Rate Account in existence under a Loan into a Libor
Account under the same Loan or to continue Libor Accounts in
CREDIT AGREEMENT - Page 24
existence under a Loan as Libor Accounts under the same Loan, PROVIDED that: (a)
Borrower shall give Administrative Agent notice of each such Conversion or
Continuation as provided in SECTION 4.3 hereof; (b) subject to SECTION 5.3
hereof, a Libor Account may only be Converted on the last day of the Interest
Period therefor; and (c) except for Conversions into Base Rate Accounts, no
Conversions or Continuations shall be made without the consent of Administrative
Agent and the Required Lenders while a Default has occurred and is continuing.
Section 3.6 COMPUTATIONS. Interest and fees payable by Borrower
hereunder and under the other Loan Documents in respect of the interest and
fees, other than interest based on the Base Rate, shall be computed on the basis
of a year of 360 days and the actual number of days elapsed (including the first
day but excluding the last day) in the period for which interest is payable
unless such calculation would result in a rate that exceeds the Maximum Rate, in
which case interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be; interest based on the Base Rate shall be computed on
the basis of a 365 or 366 day year, as the case may be.
ARTICLE 4
ADMINISTRATIVE MATTERS
Section 4.1 BORROWING PROCEDURE. Borrower shall give Administrative
Agent, and Administrative Agent will give the Lenders, notice of each borrowing
under the Revolving Commitments in accordance with SECTION 4.3 hereof. Not later
than 11:00 a.m. (San Francisco, California time) on the date specified for each
borrowing under the applicable Revolving Commitment, each Lender obligated with
respect to such Revolving Commitment will make available the amount of the Loan
to be made by it on such date to Administrative Agent, at the Principal Office,
in immediately available funds, for the account of Borrower. The amounts
received by Administrative Agent shall, subject to the terms and conditions of
this Agreement, be made available to Borrower promptly at Borrower's direction
by transferring the same, in immediately available funds by wire transfer,
automated clearinghouse debit, or interbank transfer to (a) a bank account of
Borrower designated by Borrower in writing or (b) a Person or Persons designated
by Borrower in writing.
Section 4.2 MINIMUM AMOUNTS. Except for prepayments and Conversions
pursuant to SECTION 4.4(a) and ARTICLE 5 hereof, each Base Rate Account
applicable to a Loan and each prepayment of principal of a Loan shall be in a
minimum principal amount of One Million Dollars ($1,000,000) or increments of
Five Hundred Thousand Dollars ($500,000) in excess thereof. Each LIBOR Account
applicable to a Loan shall be in a minimum principal amount of One Million
Dollars ($1,000,000) or increments of Five Hundred Thousand Dollars ($500,000)
in excess thereof.
Section 4.3 CERTAIN NOTICES. Notices by Borrower to Administrative
Agent of terminations or reductions of Revolving Commitments, of borrowings and
prepayments of Loans and of Conversion and Continuations of Accounts shall be
irrevocable and shall be effective only if received by Administrative Agent not
later than 9:00 a.m. (San Francisco, California time) on the Business Day prior
to (or, with respect to Base Rate Accounts, on) the date of the relevant
termination, reduction, borrowing, Conversion, Continuation, or other repayment
specified below:
CREDIT AGREEMENT - Page 25
Notice Number of Business
Days Prior
========================================================================= =======================
Termination or reduction of Revolving Commitments 5
------------------------------------------------------------------------- -----------------------
Borrowing of Loans subject to Base Rate Accounts, prepayment or
repayment of Loans subject to Base Rate Accounts, or Conversions 0
into Base Rate Accounts
------------------------------------------------------------------------- -----------------------
Borrowing, prepayment, or repayment of Loans subject to Libor 3
Accounts, Conversions into or Continuations as Libor Accounts
========================================================================= =======================
Notwithstanding the foregoing, Borrower may give an effective notice of
borrowing of Revolving Loans subject to Base Rate Accounts in accordance with
SECTION 2.7(e) not later than 11:00 a.m. (San Francisco, California time) on the
Business Day of the proposed borrowing if the proceeds of such borrowing will be
used to satisfy Reimbursement Obligations. Any notices of the type described in
this SECTION 4.3 which are received by Administrative Agent after the applicable
time set forth above on a Business Day shall be deemed to be received and shall
be effective on the next Business Day. Each such notice of termination or
reduction shall specify the applicable Revolving Commitments to be affected and
the amount of the Revolving Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation, or prepayment shall specify (a)
the Loans to be borrowed or prepaid or the Accounts to be Converted or
Continued; (b) the amount (subject to SECTION 4.2 hereof) to be borrowed,
Converted, Continued, or prepaid; (c) in the case of a Conversion, the Type of
Account to result from such Conversion; (d) in the case of a borrowing, the Type
of Account or Accounts to be applicable to such borrowing and the amounts
thereof; (e) in the event a Libor Account is selected, the duration of the
Interest Period therefor; and (f) the date of borrowing, Conversion,
Continuation, or prepayment (which shall be a Business Day). Any notices by
Borrower of the type described in this SECTION 4.3 must be in writing and may be
transmitted by telecopy, provided that any such telecopy transmission must be
immediately confirmed telephonically by Borrower and promptly (which may be by
first class mail) followed by Administrative Agent's receipt of the original
copy of such notice executed by Borrower. Administrative Agent shall notify the
Lenders of the contents of each such notice on the date of its receipt of the
same or, if received on or after the applicable time set forth above on a
Business Day, on the next Business Day. In the event Borrower fails to select
the Type of Account applicable to a Loan, or the duration of any Interest Period
for any Libor Account, within the time period and otherwise as provided in this
SECTION 4.3, such Account (if outstanding as a Libor Account) will be
automatically Converted into a Base Rate Account on the last day of the
preceding Interest Period for such Account or (if outstanding as a Base Rate
Account) will remain as, or (if not then outstanding) will be made as, a Base
Rate Account. Borrower may not borrow any Loans subject to a Libor Account,
Convert any Base Rate Accounts into Libor Accounts, or Continue any Libor
Account as a Libor Account if the Applicable Rate for such Libor Accounts would
exceed the Maximum Rate.
CREDIT AGREEMENT - Page 26
Section 4.4 PREPAYMENTS.
(a) MANDATORY.
(i) REVOLVING LOANS. If at any time the Outstanding
Revolving Credit exceeds the aggregate Revolving Commitments,
Borrower shall, within one (1) Business Day after the
occurrence thereof, prepay the outstanding Revolving Loans by
the amount of such excess.
(ii) PREPAYMENTS FROM ASSET DISPOSITIONS. Immediately
upon receipt by Borrower or any of its Subsidiaries of the Net
Proceeds of any Asset Disposition, Borrower shall make a
prepayment in respect of the Obligations equal to the amount
of such Net Proceeds and the Revolving Commitments shall be
permanently reduced by the amount of such prepayment;
PROVIDED, HOWEVER, that if no Default or Event of Default has
occurred and is continuing, Borrower shall not be required to
make such prepayment to the extent that the Net Proceeds from
such Asset Dispositions during any Fiscal Year of Borrower do
not exceed Five Million Dollars ($5,000,000) in the aggregate
and if they should exceed such amount, then the excess amount
only shall be required to be prepaid. Concurrently with the
making of any such payment, Borrower shall deliver to
Administrative Agent a certificate of Borrower's chief
financial officer demonstrating the calculations of the amount
required to be prepaid. Notwithstanding the foregoing, if no
Default or Event of Default has occurred and is continuing, or
would result therefrom, to the extent that the gross proceeds
from such Asset Dispositions during any Fiscal Year of
Borrower do not exceed, in the aggregate, Five Million Dollars
($5,000,000) if Borrower reasonably expects such proceeds to
be reinvested within six (6) months in productive assets of a
kind then used or useable in the business of Borrower or its
Subsidiaries and that are not subject to any Lien other than
in favor of Administrative Agent, for the benefit of the
Agents and the Lenders, then Borrower shall provide
Administrative Agent with notice of such intent in accordance
with SECTION 4.3, and (A) to the extent such proceeds do not
exceed the balance from time to time of the Revolving Loans,
such proceeds shall be applied to the repayment of the
outstanding balance of the Revolving Loans and Administrative
Agent shall, until such time as the reinvestment of such
proceeds, establish a reserve in the amount of the proceeds so
applied, and (B) to the extent such proceeds exceed the
balance from time to time of the Revolving Loans, Borrower
shall deposit such proceeds with Administrative Agent to be
held as cash collateral in which Administrative Agent, for the
ratable benefit of the Agents and the Lenders, shall have a
first priority security interest. Upon Borrower's or its
Subsidiaries' (as applicable) reinvestment of such proceeds as
described above, and provided that Borrower provides
Administrative Agent with copies of a purchase order, invoice,
or other written evidence of the purchase price of the assets
which such proceeds are reinvested in, and such other
information as may be requested by Administrative Agent with
respect thereto, Administrative Agent shall release its
security interest in such cash collateral in respect of the
reinvested funds and shall eliminate such reserve. To the
extent that Borrower or its
CREDIT AGREEMENT - Page 27
Subsidiaries (as applicable) fail to reinvest such proceeds
within six (6) months as provided above, Borrower authorizes
and directs Administrative Agent to eliminate such reserve, to
apply the amount of the cash collateral in respect of the
unreinvested amount to the prepayment of the Loans and
permanently to reduce the Revolving Commitments in such amount
and/or to reduce the Revolving Commitments in an amount equal
to the reserved amount that is not reinvested.
(iii) PREPAYMENTS FROM DEBT OFFERINGS. In the event
that Borrower, or any Subsidiary of Borrower issues any Debt
Securities (including, without limitation, any Subordinated
Debt Securities), other than Debt referred to in SECTION 10.1
hereof ("DEBT OFFERING"), then no later than the third
Business Day following the date of receipt of the proceeds
from such issuance, Borrower shall make a prepayment in
respect of the Obligations equal to the amount of such
proceeds, net of underwriting discounts and commissions and
other reasonable costs associated therewith, in prepayment of
the Loans. The Revolving Commitments shall be permanently
reduced by the amount of any such prepayment.
(b) OPTIONAL. Subject to SECTION 4.2 and the provisions of
this CLAUSE (b), Borrower may, at any time and from time to time
without premium or penalty upon prior notice to Administrative Agent as
specified in SECTION 4.3, prepay or repay any Loan in full or in part.
Loans subject to a Libor Account may be prepaid or repaid only on the
last day of the Interest Period applicable thereto unless Borrower pays
to Administrative Agent, for the account of the applicable Lenders, any
amounts due under SECTION 5.5 as a result of such prepayment or
repayment.
Section 4.5 METHOD OF PAYMENT. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by
Borrower or any other Loan Party under the Loan Documents shall be made to
Administrative Agent at the Principal Office for the account of each Lender's
Applicable Lending Office in Dollars and in immediately available funds, without
set-off, deduction, or counterclaim, not later than 11:00 a.m. (San Francisco,
California time) on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). Borrower shall, at the time of making each
such payment, specify to Administrative Agent the sums payable under the Loan
Documents to which such payment is to be applied (and in the event that Borrower
fails to so specify, or if an Event of Default has occurred and is continuing,
Administrative Agent may apply such payment to the Obligations in such order and
manner as it may elect in its sole discretion, subject to SECTION 4.6 and
provided that when applying any such amounts to any Loans, Loans subject to Base
Rate Accounts shall be prepaid in full prior to any application to Loans subject
to Libor Accounts). Each payment received by Administrative Agent under any Loan
Document for the account of a Lender shall be paid to such Lender promptly, in
immediately available funds, for the account of such Lender's Applicable Lending
Office. Whenever any payment under any Loan Document shall be stated to be due
on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment fee, as
the case may be.
CREDIT AGREEMENT - Page 28
Section 4.6 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each Loan shall be made by the Lenders holding Revolving Commitments
for such Loan, each payment of commitment fees under SECTIONS 2.5 and letter of
credit fees under SECTION 2.7(c) shall be made for the account of the Lenders
holding Revolving Commitments and each termination or reduction of the Revolving
Commitments shall be applied to the Revolving Commitments of the Lenders holding
the applicable Revolving Commitments, pro rata according to their respective
Revolving Commitment Percentages; (b) the making, Conversion, and Continuation
of Accounts of a particular Type (other than Conversions provided for by SECTION
5.4) shall be made pro rata among the Lenders holding Accounts of such Type
according to their respective Commitment Percentages; (c) each payment and
prepayment of principal of or interest on Loans or Reimbursement Obligations by
Borrower shall be made to Administrative Agent for the account of the Lenders
holding such Loans or Reimbursement Obligations (or participation interests
therein) pro rata in accordance with the respective unpaid principal amounts of
such Loans or participation interests held by such Lenders; PROVIDED that as
long as no default in the payment of interest exists, payments of interest made
when Lenders are holding different types of Accounts applicable to the same Loan
as a result of the application of SECTION 5.4, shall be made to the Lenders in
accordance with the amount of interest owed to each; and (d) the Lenders holding
Revolving Commitments shall purchase from the Fronting Bank participations in
the Letters of Credit to the extent of their respective Commitment Percentages.
If at any time payment, in whole or in part, of any amount distributed by
Administrative Agent hereunder is rescinded or must otherwise be restored or
returned by Administrative Agent as a preference, fraudulent conveyance, or
otherwise under any bankruptcy, insolvency, or similar Law, then each Person
receiving any portion of such amount agrees, upon demand, to return the portion
of such amount it has received to Administrative Agent.
Section 4.7 SHARING OF PAYMENTS. If a Lender shall obtain payment of
any principal of or interest on any of the Obligations due to such Lender
hereunder directly (and not through Administrative Agent) through the exercise
of any right of set-off, banker's lien, counterclaim, or similar right, or
otherwise, it shall promptly purchase from the other Lenders participations in
the Obligations held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders shall share the benefit of such payment pro rata in accordance with the
unpaid principal of and interest on the Obligations then due to each of them. To
such end, all of the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if all or any portion of
such excess payment is thereafter rescinded or must otherwise be restored.
Borrower agrees, to the fullest extent it may effectively do so under applicable
Law, that any Lender so purchasing a participation in the Obligations held by
the other Lenders may exercise all rights of set-off, banker's lien,
counterclaim, or similar rights with respect to such participation as fully as
if such Lender were a direct holder of Obligations in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of Borrower.
Section 4.8 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT. Unless
Administrative Agent shall have been notified by a Lender or Borrower (the
"PAYOR") prior to the date on which such Lender is to make payment to
Administrative Agent hereunder or Borrower is to make a payment to
Administrative Agent, for the account of one or more of the Agents or the
Lenders, as the case
CREDIT AGREEMENT - Page 29
may be (such payment being herein called the "REQUIRED PAYMENT"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to Administrative Agent, Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to Administrative Agent, (a) the recipient of such payment
shall, on demand, pay to Administrative Agent the amount made available to it
together with interest thereon in respect of the period commencing on the date
such amount was so made available by Administrative Agent until the date
Administrative Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period, and (b) Administrative Agent shall be
entitled to offset against any and all sums to be paid to such recipient, the
amount calculated in accordance with the foregoing CLAUSE (a).
Section 4.9 PARTICIPATION OBLIGATIONS ABSOLUTE; FAILURE TO FUND
PARTICIPATION. The obligations of a Lender holding a Revolving Commitment to
fund its participation in the Letters of Credit in accordance with the terms
hereof shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances: (a) any lack of validity of any Loan Document; (b) the occurrence
of any Default; (c) the existence of any claim, set-off, counterclaim, defense,
or other right which such Lender, any Loan Party, or any other Person may have;
(d) the occurrence of any event that has or could reasonably be expected to have
a Material Adverse Effect on Borrower or any other Loan Party; (e) the failure
of any condition to a Loan under ARTICLE 7 hereof to be satisfied; (f) the fact
that after giving effect to the funding of the participation the Outstanding
Revolving Credit may exceed the aggregate Revolving Commitments; or (g) any
other circumstance whatsoever, whether or not similar to any of the foregoing.
If a Lender fails to fund its participation in a Letter of Credit as required
hereby, such Lender shall, subject to the foregoing proviso, remain obligated to
pay to Administrative Agent the amount it failed to fund on demand together with
interest thereon in respect of the period commencing on the date such amount
should have been funded until the date the amount was actually funded to
Administrative Agent at a rate per amount equal to the Federal Funds Rate for
such period and Administrative Agent shall be entitled to offset against any and
all sums to be paid to such Lender hereunder the amount due Administrative Agent
or the Fronting Bank under this sentence.
ARTICLE 5
CHANGE IN CIRCUMSTANCES
Section 5.1 INCREASED COST AND REDUCED RETURN.
(a) INCREASED COST. If, after the Closing Date, any Regulatory
Change or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of Law)
of any Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect
to any Libor Accounts, its Notes, or its
CREDIT AGREEMENT - Page 30
obligation to make Libor Accounts, or change the basis of
taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its Notes
in respect of any Libor Accounts (other than franchise taxes
or taxes imposed on or measured by the net income of such
Lender by the jurisdiction in which such Lender is organized,
has its principal office or such Applicable Lending Office or
is doing business);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the
determination of the Adjusted Libor Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Revolving
Commitments of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or the London interbank market any other
condition affecting this Agreement or its Notes or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Libor Accounts or to reduce any sum
received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or its Notes with respect to any Libor
Accounts, then Borrower shall pay to such Lender on demand such amount
or amounts as will compensate such Lender for such increased cost or
reduction, as then or previously incurred. If any Lender requests
compensation by Borrower under this SECTION 5.1(a), Borrower may, by
notice to such Lender (with a copy to Administrative Agent), suspend
the obligation of such Lender to make or maintain Libor Accounts, or to
Convert Base Rate Accounts into Libor Accounts, until the event or
condition giving rise to such request ceases to be in effect (in which
case the provisions of SECTION 5.4 shall be applicable); PROVIDED that
such suspension shall not affect the right of such Lender to receive
the compensation so requested.
(b) CAPITAL ADEQUACY. If, after the date hereof, any Lender
shall have determined that any Regulatory Change has or would have the
effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change,
request, or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time upon demand, Borrower shall pay to
such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(c) CLAIMS UNDER THIS SECTION 5.1. Each Lender shall promptly
notify Borrower and Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such
Lender to such compensation pursuant to this SECTION 5.1 and will
designate a different Applicable Lending Office if such designation
will avoid the need
CREDIT AGREEMENT - Page 31
for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this SECTION 5.1 shall furnish to Borrower
and Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive
in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
Section 5.2 LIMITATION ON LIBOR ACCOUNTS. If on or prior to the first
day of any Interest Period for any Libor Account:
(a) Administrative Agent determines (which determination shall
be conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Libor Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify Administrative Agent that the Adjusted Libor
Rate will not adequately and fairly reflect the cost to the Lenders of
funding Libor Accounts for such Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof specifying
the amounts or periods, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional Libor Accounts, Continue
Libor Accounts, or to Convert Base Rate Accounts into Libor Accounts and
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Libor Accounts, either prepay such Libor Accounts or Convert
such Libor Accounts into Base Rate Accounts in accordance with the terms of this
Agreement.
Section 5.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Accounts hereunder,
then such Lender shall promptly notify Borrower and Administrative Agent thereof
and such Lender's obligation to make or Continue Libor Accounts and to Convert
Base Rate Accounts into Libor Accounts shall be suspended until such time as
such Lender may again make, maintain, and fund Libor Accounts (in which case the
provisions of SECTION 5.4 shall be applicable).
Section 5.4 TREATMENT OF AFFECTED ACCOUNTS. If the obligation of any
Lender to make a particular Libor Account or to Continue, or to Convert Base
Rate Accounts into, Libor Accounts shall be suspended pursuant to SECTION 5.1 or
SECTION 5.3 (Accounts of such Type being herein called "AFFECTED ACCOUNTS"),
such Lender's Affected Accounts shall be automatically Converted into Base Rate
Accounts on the last day(s) of the then current Interest Period(s) for the
Affected Accounts (or, in the case of a Conversion required by SECTION 5.3
hereof, on such earlier date as such Lender may specify to Borrower with a copy
to Administrative Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in SECTION 5.1 or SECTION 5.3
hereof that gave rise to such Conversion no longer exist:
CREDIT AGREEMENT - Page 32
(a) to the extent that such Lender's Affected
Accounts have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's Affected
Accounts shall be applied instead to its Base Rate Accounts; and
(b) all Accounts that would otherwise be made or
Continued by such Lender as Libor Accounts shall be made or Continued
instead as Base Rate Accounts, and all Accounts of such Lender that
would otherwise be Converted into Libor Accounts shall be Converted
instead into (or shall remain as) Base Rate Accounts.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in SECTION 5.1 or SECTION 5.3 hereof that gave
rise to the Conversion of such Lender's Affected Accounts no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Libor Accounts made by other Lenders are outstanding, such Lender's
Base Rate Accounts shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Libor Accounts, to the
extent necessary so that, after giving effect thereto, all Accounts held by the
Lenders holding Libor Accounts and by such Lender are held pro rata (as to
principal amounts, Types, and Interest Periods) in accordance with their
respective Commitment Percentages.
Section 5.5 COMPENSATION. Upon the request of any Lender, Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
opinion of such Lender) to compensate it for any loss, cost, or expense
(including, without limitation, any such amounts incurred in connection with
syndication of the Loans) incurred by it as a result of:
(a) any payment, prepayment, or Conversion by Borrower of a
Libor Account for any reason (including, without limitation, the
acceleration of the Loans pursuant to SECTION 12.2) on a date other
than the last day of the Interest Period for such Libor Account; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in ARTICLE
7 to be satisfied) to borrow, Convert, Continue, or prepay a Libor
Account on the date for such borrowing, Conversion, Continuation, or
prepayment specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Agreement.
Section 5.6 TAXES.
(a) WITHHOLDING TAXES. Except as otherwise provided in this
Agreement, any and all payments by any Loan Party to or for the account
of any Lender, any of the Agents or the Fronting Bank hereunder or
under any other Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each
Lender, each of the Agents, or the Fronting Bank (as applicable), taxes
imposed on or measured by its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office), such of the Agents, or the
CREDIT AGREEMENT - Page 33
Fronting Bank (as the case may be) is organized, located or doing
business or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "TAXES"). If a Loan Party
shall be required by Law to deduct any Taxes from or in respect of any
sum payable under any Loan Document to any Lender, any of the Agents,
or the Fronting Bank (as applicable), (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
SECTION 5.6) such Lender, such of the Agents, or the Fronting Bank (as
applicable) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the applicable Loan Party shall
make such deductions, (iii) the applicable Loan Party shall pay the
full amount deducted to the relevant taxing authority or other
authority in accordance with applicable Law, and (iv) the applicable
Loan Party shall furnish to Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof.
(b) STAMP TAXES, ETC. In addition, Borrower agrees to pay any
and all present or future stamp or documentary taxes and any other
excise or property taxes or charges or similar levies which arise from
any payment made under this Agreement or any other Loan Document or
from the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "OTHER
TAXES").
(c) TAX INDEMNIFICATION. BORROWER AGREES TO INDEMNIFY EACH
LENDER, EACH OF THE AGENTS, AND THE FRONTING BANK FOR THE FULL AMOUNT
OF TAXES AND OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR
OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION 5.6) PAID BY SUCH LENDER, SUCH OF THE AGENTS, OR THE
FRONTING BANK (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING
PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO.
Section 5.7 WITHHOLDING TAX EXEMPTION. Each Lender organized under the
laws of a jurisdiction outside the U.S., on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Administrative Agent (but only so long as
such Lender remains lawfully able to do so), shall provide Borrower and
Administrative Agent with (a) if such Lender is a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (i) Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the U.S. is a party which reduces to zero the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the U.S., (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
and (iii) any other form or certificate required by any taxing authority
(including any certificate required by Sections 871(h) and 881(c) of the Code),
certifying that such Lender is entitled to a complete exemption from tax on
payments pursuant to any
CREDIT AGREEMENT - Page 34
of the Loan Documents or (b) if such Lender is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code, a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such non-U.S. Lender delivers a Form W-8,
a certificate (including any certificate required by Sections 871(h) and 881(c)
of the Code) representing that such non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of Borrower and is not a controlled
foreign corporation related to Borrower (within the meaning of Section 864(d)(4)
of the Code)), properly completed and duly executed by such non-U.S. Lender
claiming complete exemption from United States Federal withholding tax on
payments of interest by Borrower under this Agreement and the other Loan
Documents. For any period with respect to which a Lender has failed to provide
Borrower and Administrative Agent with the appropriate form pursuant to this
SECTION 5.7 and thereby to establish complete exemption from U.S. withholding
tax (unless such failure to establish complete exemption from U.S. withholding
tax is due to a change in treaty, Law, or regulation occurring subsequent to the
date on which a form originally was required to be provided), (A) the applicable
Loan Party shall deduct all required Taxes from any amounts payable to such
Lender under any Loan Document, (B) the applicable Loan Party shall pay the full
amount allocated to the relevant taxing authority or other authority in
accordance with applicable Law, (C) the applicable Loan Party shall furnish to
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof, and (D) such Lender shall not be entitled to an indemnification
or increases in the sum payable under SECTION 5.6 or SECTION 13.5 with respect
to Taxes imposed by the U.S.; PROVIDED, HOWEVER, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
Borrower shall take such steps as such Lender shall reasonably request to assist
such Lender to recover such Taxes.
ARTICLE 6
SECURITY
Section 6.1 COLLATERAL. To secure the full and complete payment and
performance of the Obligations, Borrower shall, and shall cause each Subsidiary
of Borrower, other than the Foreign Subsidiaries, to grant to Administrative
Agent, for the benefit of the Agents and the Lenders, a perfected (except to the
limited extent otherwise as set forth herein), first priority Lien on all of its
right, title, and interest in and to the following Property, whether now owned
or hereafter acquired, pursuant to the Security Documents:
(a) all Capital Stock of each Subsidiary of Borrower other
than Capital Stock of Foreign Subsidiaries (whether present or future),
owned as of the Closing Date or thereafter acquired by Borrower or any
Domestic Subsidiary of Borrower;
(b) 65% of the shares of each class of Capital Stock of each
Foreign Subsidiary (whether present or future) that is a direct
Subsidiary of Borrower or of a Domestic Subsidiary of Borrower, owned
as of the Closing Date or thereafter acquired by Borrower or such
Domestic Subsidiary; and
CREDIT AGREEMENT - Page 35
(c) all other Property of Borrower and each Subsidiary of
Borrower, other than the Foreign Subsidiaries, owned as of the Closing
Date or thereafter acquired, including, without limitation, all
accounts (including, without limitation, Receivables), inventory
(including, without limitation, Inventory), equipment, furniture,
fixtures, contract rights, general intangibles, documents, instruments,
investment property, chattel paper, permits, Intellectual Property,
intercompany Debt, licenses, and material real property.
Borrower covenants that none of the Capital Stock to be pledged, in accordance
with this SECTION 6.1 shall be subject to any transfer restrictions,
shareholders' agreement, or other restriction except for such restrictions under
applicable securities laws and such restrictions, if any, as may be reasonably
acceptable to Administrative Agent. In connection with and in addition to the
foregoing, Borrower and its Subsidiaries shall execute and/or deliver such
Security Documents and further agreements, documents, and instruments
(including, without limitation, stock certificates, stock powers, and financing
statements) as Administrative Agent may reasonably request in order for it to
obtain and maintain the perfected, first priority Liens to be granted in
accordance with this SECTION 6.1.
Section 6.2 GUARANTIES. Each Granting Domestic Subsidiary (and each
Remaining Subsidiary as set forth in SECTION 9.10(c)) shall guarantee payment
and performance of the Obligations pursuant to the Subsidiary Guaranty.
Section 6.3 NEW SUBSIDIARIES, NEW ISSUANCES OF CAPITAL STOCK.
Contemporaneously with the creation or acquisition of any Subsidiary of Borrower
(other than a Foreign Subsidiary, except as provided in SECTION 6.7) Borrower
shall, and shall cause each of its Subsidiaries to:
(a) grant or cause to be granted to Administrative Agent, for
the benefit of the Agents and the Lenders, a perfected, first priority
security interest in all Capital Stock in such Subsidiary owned by
Borrower or its Domestic Subsidiaries (to the extent such Capital Stock
is not already so pledged to Administrative Agent);
(b) cause each such Subsidiary to Guarantee the payment and
performance of the Obligations by executing and delivering to
Administrative Agent an appropriate Guaranty; and
(c) cause each such Subsidiary to execute and deliver to
Administrative Agent an appropriate Security Agreement and such other
Security Documents as Administrative Agent may reasonably request to
grant Administrative Agent, for the benefit of the Agents and the
Lenders, a perfected, first priority Lien (except for Permitted Liens,
if any) on all Property of such Subsidiary.
Contemporaneously with the issuance of any additional Capital Stock of any
Subsidiary of Borrower, Borrower shall, and shall cause each of its Subsidiaries
and other appropriate Persons (as applicable) to, grant or cause to be granted
to Administrative Agent, for the benefit of the Agents and the Lenders, a
perfected, first priority security interest in all Capital Stock in such
Subsidiary owned by any shareholder of any Subsidiary of Borrower, Borrower, or
any Subsidiary of Borrower (to the extent such Capital Stock are already not so
pledged to Administrative Agent). Borrower covenants
CREDIT AGREEMENT - Page 36
that none of the Capital Stock to be pledged in accordance with this SECTION 6.3
shall be subject to any transfer restriction, shareholders' agreement, or other
restriction except for such restrictions under applicable securities laws and
such restrictions, if any, as may be reasonably acceptable to Administrative
Agent. Notwithstanding anything to the contrary contained in this SECTION 6.3
(but subject to SECTION 6.7), (i) neither Borrower nor any Subsidiary of
Borrower shall be obligated to pledge more than 65% of each class of the issued
and outstanding capital stock of any Foreign Subsidiary that is a direct
Subsidiary of Borrower or its Domestic Subsidiaries or to pledge any Capital
Stock of any Subsidiary of any such Foreign Subsidiaries, (ii) no Foreign
Subsidiary shall be obligated to execute a Guaranty guaranteeing payment or
performance of the Obligations, and (iii) no Foreign Subsidiary shall be
obligated to execute a Security Agreement securing payment or performance of the
Obligations. In connection with and in addition to the foregoing, Borrower and
its Subsidiaries shall execute and/or deliver such further agreements, documents
and instruments (including, without limitation, stock certificates, stock
powers, and financing statements) as Administrative Agent may reasonably request
in order for it to obtain and maintain the perfected, first priority Liens to be
granted in accordance with this SECTION 6.3.
Section 6.4 NEW MORTGAGED PROPERTIES. If requested by Administrative
Agent, Borrower shall, and shall cause each of its Subsidiaries other than its
Foreign Subsidiaries to, contemporaneously with the acquisition of any fee real
Property, execute, acknowledge and deliver to Administrative Agent a Mortgage or
an amendment or modification to a then existing Mortgage covering all fee real
Property acquired by Borrower or any of such Subsidiaries subsequent to the
Closing Date, together with evidence reasonably satisfactory to Administrative
Agent and its counsel, including, without limitation, if requested by
Administrative Agent, a commitment for a mortgagee policy of title insurance or
a title opinion in favor of Administrative Agent, in form and substance
reasonably satisfactory to Administrative Agent, that the Mortgage creates a
valid, first priority Lien on the fee estate in favor of Administrative Agent,
for the benefit of the Agents and the Lenders (except for Permitted Liens, if
any), together with appraisals and surveys if requested by Administrative Agent.
Following the date of each such acquisition of Property, if requested by
Administrative Agent, Borrower shall, and shall cause each of its Subsidiaries
(other than its Foreign Subsidiaries) with an interest in such Properties to,
(a) deliver or cause to be delivered to Administrative Agent, a mortgagee policy
of title insurance insuring the Liens of the Mortgage covering such fee real
Property in an amount reasonably satisfactory to Administrative Agent on
standard form policies (except for Permitted Liens, if any) and (b) provide
Administrative Agent with a current environmental assessment of such Property in
form and substance reasonably satisfactory to Administrative Agent.
Section 6.5 RELEASE OF COLLATERAL. Upon any sale, transfer or other
disposition of Collateral that is expressly permitted under SECTION 10.8 and
upon five (5) Business Days prior written request by Borrower, Administrative
Agent shall execute at Borrower's expense such documents as may be necessary to
evidence the release by Administrative Agent of its Liens on such Collateral
being sold, transferred, or otherwise disposed of; PROVIDED, HOWEVER, that (a)
Administrative Agent shall not be required to release any Lien on any Collateral
if a Default shall have occurred and be continuing, (b) Administrative Agent
shall not be required to execute any such document on terms which, in
Administrative Agent's opinion, would expose Administrative Agent to liability
or create any obligation not reimbursed by Borrower or entail any consequences
other
CREDIT AGREEMENT - Page 37
than the release of such Lien without recourse or warranty, and (c) such release
shall not in any manner discharge, affect or impair any of the Obligations or
any of Administrative Agent's Liens on any Collateral retained by Borrower or
any of its Subsidiaries, including, without limitation, its Liens on the
proceeds of any such sale, transfer or other disposition.
Section 6.6 SETOFF. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to Borrower or any other Person (any such notice being hereby
expressly waived by Borrower and the other Loan Parties), to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of Borrower or any other Loan Party against any
and all of the Obligations of Borrower or such other Loan Party now or hereafter
existing under this Agreement, any of such Lender's Notes or any other Loan
Document, irrespective of whether or not Administrative Agent or such Lender
shall have made any demand under this Agreement, any of such Lender's Note or
any such other Loan Document and although such Obligations may be unmatured.
Each Lender agrees promptly to notify Borrower (with a copy to Administrative
Agent) after any such setoff and application, PROVIDED that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights and remedies of each Lender hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which such
Lender may have.
Section 6.7 COLLATERAL AND GUARANTIES OF FOREIGN SUBSIDIARIES. Borrower
and its Subsidiaries agree that, notwithstanding anything to the contrary
contained in this ARTICLE 6 or elsewhere in this Agreement or in any other Loan
Document, promptly upon (and, in any event, within ten Business Days after) any
written request therefor made by Administrative Agent or the Required Lenders
after and during the continuation of an Event of Default, they will execute
and/or deliver, or cause to be executed and/or delivered, each of the following
as may be so requested and all of which shall be in form and substance
satisfactory to Administrative Agent:
(a) a Security Agreement executed by each of Borrower and each
applicable Subsidiary of Borrower which grants to Administrative Agent
for the benefit of Administrative Agent and the Lenders a perfected,
first priority Lien (except for Permitted Liens, if any) on all of such
Person's right, title and interest in and to the following Property,
whether now owned or hereafter acquired:
(i) all Capital Stock of each Foreign Subsidiary
(whether present or future and whether direct or indirect);
and
(ii) all other Property of each Foreign Subsidiary
then owned or thereafter acquired, including, without
limitation, all accounts (including, without limitation,
Receivables), inventory (including, without limitation,
Inventory), equipment, furniture, fixtures, contract rights,
general intangibles (including, without limitation, franchise
agreements), instruments, investment property, chattel paper,
permits, Intellectual Property, intercompany Debt and real
Property; and
CREDIT AGREEMENT - Page 38
(b) a Guaranty executed by each Foreign Subsidiary (whether
present or future and whether direct or indirect) which guarantees
payment and performance of the Obligations; and
(c) such further agreements, documents and instruments
(including, without limitation, stock certificates, stock powers,
financing statements and other Security Documents) as Administrative
Agent may request in connection with any of the foregoing.
Borrower covenants that none of the capital stock to be pledged in accordance
with this SECTION 6.7 shall be subject to any transfer restrictions,
shareholders' agreement or other restriction except for such restrictions under
applicable securities laws and such restrictions, if any, as may be reasonably
acceptable to Administrative Agent.
ARTICLE 7
CONDITIONS PRECEDENT
Section 7.1 INITIAL LOAN AND LETTER OF CREDIT. The obligation of each
Lender to make its initial Loan and the obligation of Administrative Agent to
issue the initial Letter of Credit are subject to the following conditions
precedent:
(a) DELIVERIES. Administrative Agent shall have received on or
before the Closing Date and on or before the day of any such Loan or
Letter of Credit all of the following, each dated (unless otherwise
indicated) the Closing Date, in form and substance satisfactory to
Administrative Agent:
(i) RESOLUTIONS; AUTHORITY. Resolutions of the board
of directors (or similar governing body) of each Loan Party
certified by its Secretary or an Assistant Secretary which
authorize its execution, delivery, and performance of the Loan
Documents to which it is or is to be a party;
(ii) INCUMBENCY CERTIFICATE. A certificate of
incumbency certified by the Secretary or an Assistant
Secretary of each Loan Party certifying the names of its
officers (A) who are authorized to sign the Loan Documents to
which it is or is to be a party (including the certificates
contemplated herein) together with specimen signatures of each
such officer and (B) who will, until replaced by other
officers duly authorized for that purpose, act as its
representative for the purposes of signing documentation and
giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby;
(iii) ORGANIZATIONAL DOCUMENTS. The certificate of
incorporation of each Loan Party certified by the Secretary of
State of the state of its incorporation and dated a current
date;
CREDIT AGREEMENT - Page 39
(iv) BYLAWS. The bylaws of each Loan Party certified
by its Secretary or an Assistant Secretary;
(v) GOVERNMENTAL CERTIFICATES. Certificates of the
appropriate government officials of the state of incorporation
of each Loan Party as to its existence and, to the extent
applicable good standing, and certificates of the appropriate
government officials of each state in which each Loan Party's
principal business office is located, as to each Loan Party's
qualification to do business and good standing in such state,
all dated a current date;
(vi) NOTES. The Notes executed by Borrower dated the
date hereof;
(vii) GUARANTIES. The Subsidiary Guaranty executed by
the Granting Domestic Subsidiaries;
(viii) LIEN SEARCH REPORTS. UCC, tax, and judgment
Lien search reports listing all documentation on file against
Borrower and its Domestic Subsidiaries in the central filing
locations of each jurisdiction in which any such party's
business offices are located and in the local filing offices
of each jurisdiction in which such party's principal business
office is located;
(ix) TERMINATION OR ASSIGNMENT OF LIENS. Duly
executed UCC-3 termination statements, mortgage releases, and
such other documentation as shall be necessary to terminate,
release, or assign to Administrative Agent all Liens other
Liens other than those permitted by SECTION 10.2 hereof;
(x) SECURITY AGREEMENTS. Security Agreements executed
by Borrower and each Granting Domestic Subsidiary of Borrower;
(xi) STOCK CERTIFICATES; INTERCOMPANY NOTES. The
stock certificates representing all of the issued and
outstanding Capital Stock of the Granting Domestic
Subsidiaries and 65% of the outstanding Capital Stock of its
first tier Foreign Subsidiaries, in each case accompanied by
appropriate instruments of transfer or stock powers executed
in blank (as appropriate), or registration of Administrative
Agent's Lien, in form and substance satisfactory to
Administrative Agent (in the case of book entry securities),
provided, that Borrower shall have sixty (60) days after the
Closing Date to deliver all of the Capital Stock of its first
tier Foreign Subsidiaries (including, without limitation, the
Capital Stock of Xxxxxxxxxxx Limited, an Irish company, and
Peregrine Company of Canada Limited, a Canadian company)
required to be pledged as aforesaid, and all promissory notes
evidencing intercompany Debt between or among Borrower and any
of its Domestic Subsidiaries, accompanied by appropriate
endorsements thereto executed by the holder(s) of such
promissory notes to and in favor of Administrative Agent;
CREDIT AGREEMENT - Page 40
(xii) FINANCING STATEMENTS. UCC Financing statements
and all other requisite filing documents executed by the Loan
Parties necessary to perfect the Liens created pursuant to the
Security Documents;
(xiii) CONSENTS. Copies of all material consents or
waivers (other than consents or waivers previously delivered
to Administrative Agent and certified by a Loan Party as being
true and correct copies) necessary for the execution,
delivery, and performance by each of the Loan Parties of the
Loan Documents to which it is a party, as Administrative Agent
may require, which consents shall be certified by an
Authorized Representative of the applicable Loan Party as true
and correct copies of such consents as of the Closing Date;
(xiv) PERMITS. Copies of all material permits (other
than permits previously delivered to Administrative Agent and
certified by a Loan Party as being true and correct copies)
affecting Borrower or any of its Subsidiaries in connection
with its businesses or any of the Properties owned or leased
by it, and evidence satisfactory to Administrative Agent that
Borrower and its Subsidiaries are able to conduct their
businesses with the use of such permits in full force and
effect;
(xv) INSURANCE POLICIES. Certificates of insurance
summarizing the insurance policies of Borrower and its
Subsidiaries required by this Agreement and reflecting
Administrative Agent as additional insured and loss payee
under such policies;
(xvi) OPINIONS OF COUNSEL. Opinions of legal counsel
to Borrower and the Subsidiaries of Borrower from such
jurisdictions, and as to such matters, as Administrative Agent
may reasonably request;
(xvii) FEES. The underwriting and structuring fees
set forth in that certain letter dated May 26, 1999 from
Agents to Borrower, as the same may be amended from time to
time;
(xviii) EMPLOYMENT AGREEMENTS. Copies of all
employment contracts or other compensation arrangements
between Borrower and any of its Subsidiaries and their
respective executive officers;
(xix) LETTER OF DIRECTION. A letter of direction from
Borrower addressed to Administrative Agent with respect to the
disbursement of the proceeds of the initial Loans;
(xx) SCHEDULES. The Schedules to be attached hereto
in form and substance satisfactory to Lenders in their sole
discretion.
(b) FINANCIAL STATEMENTS. Receipt and satisfactory review by
Administrative Agent of the consolidated financial statements of
Borrower and its Subsidiaries for each of
CREDIT AGREEMENT - Page 41
the 1996, 1997 and 1998 Fiscal Years, including balance sheets, income
and cash flow statements audited by independent public accountants of
recognized national standing and prepared in conformity with GAAP and
such other financial information as Administrative Agent may request.
(c) ATTORNEYS' FEES AND EXPENSES. The reasonable costs and
expenses (including attorneys' fees) referred to in SECTION 14.1 hereof
for which statements have been presented shall have been paid in full;
(d) COMPLIANCE WITH LAWS. As of the Closing Date, each Loan
Party shall have complied with all requirements of all Governmental
Authorities necessary to consummate the transactions contemplated by
this Agreement and the other Loan Documents;
(e) NO PROHIBITIONS. No requirement of any Governmental
Authority shall prohibit the consummation of the transactions
contemplated by this Agreement or any other Loan Document, and no
order, judgment, or decree of any Governmental Authority or arbitrator
shall, and no litigation or other proceeding shall be pending or
threatened which would, enjoin, prohibit, restrain, or otherwise
adversely affect in any material manner the consummation of the
transactions contemplated by this Agreement and the other Loan
Documents or otherwise have a Material Adverse Effect on Borrower or
any other Loan Party;
(f) NO MATERIAL ADVERSE CHANGE. As of the Closing Date, no
material adverse change shall have occurred with respect to the
condition (financial or otherwise), results of operations, business,
operations, capitalization, assets, liabilities, or prospects of
Borrower and its Subsidiary taken as a whole since June 30, 1998 and
Administrative Agent shall be satisfied that the economic performance
of Borrower and each of its Subsidiaries to the Closing Date is not
materially different from the economic projections for Borrower and
each of its Subsidiaries through the Closing Date that were previously
submitted to Administrative Agent;
(g) NO MATERIAL LITIGATION. Except as set forth in SCHEDULE
8.5 hereto, as of the Closing Date, no action, suit, investigation, or
proceeding shall be pending or threatened before any Governmental
Authority that purports to affect Borrower or any Subsidiary of
Borrower that could result in a Material Adverse Effect as to any of
them or that could have an adverse effect on the ability of Borrower or
any Subsidiary of Borrower to perform their Obligations under the Loan
Documents;
(h) COMPLIANCE WITH FINANCIAL OBLIGATIONS. As of the Closing
Date, each of Borrower and the Subsidiaries of Borrower shall be in
compliance with all of their respective existing financial obligations;
(i) DUE DILIGENCE REVIEW. Receipt and review, with results
reasonably satisfactory to Administrative Agent and its counsel, of
information regarding litigation, tax, accounting, labor, insurance,
pension liabilities (actual or contingent), real estate leases,
CREDIT AGREEMENT - Page 42
material contracts, debt agreements, property ownership, environmental
matters, contingent liabilities and management of Borrower and its
Subsidiaries which information may include, if requested by
Administrative Agent, (a) asset appraisal reports with respect to all
of the real and personal property owned by Borrower and its
Subsidiaries and (b) a written audit of the accounts receivable,
controls and systems of Borrower and its Subsidiaries.
(j) YEAR 2000 MATTERS. Receipt and review, with results
satisfactory to Administrative Agent and the Lenders, of information
confirming that (a) Borrower and its Subsidiaries are taking all
necessary and appropriate steps to ascertain the extent of, and to
quantify and successfully address, business and financial risks facing
Borrower and its Subsidiaries as a result of the "Year 2000 Problem"
(i.e., the inability of certain computer applications to recognize
correctly and perform date-sensitive functions involving certain dates
prior to and after December 31, 1999), including risks resulting from
the failure of key vendors and customers of Borrower and its
Subsidiaries to successfully address the Year 2000 Problem, and (b)
Borrower's and its Subsidiaries' material computer applications and
those of its key vendors and customers will, on a timely basis,
adequately address the Year 2000 Problem in all material respects.
(k) NO MATERIAL MARKET CHANGES. The absence of any material
disruption of or material adverse change in conditions in the
financial, banking or capital markets which Administrative Agent and
Lead Arranger, in their sole discretion, deem material in connection
with the syndication of the Loans or of the senior credit facility
expected to refinance the Loans.
(l) ADDITIONAL DOCUMENTATION. Administrative Agent shall have
received such additional approvals, opinions, or other documentation as
Administrative Agent may reasonably request.
Section 7.2 ALL LOANS AND LETTERS OF CREDIT. The obligation of each
Lender to make any Loan (including the initial Loans) and the obligation of the
Fronting Bank to issue any Letter of Credit (including any initial Letter of
Credit) are subject to the following additional conditions precedent:
(a) NO DEFAULT. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit; and
(b) REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties contained in ARTICLE 8 hereof and in the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Loan or Letter of Credit with the same force and
effect as if such representations and warranties had been made on and
as of such date except to the extent that such representations and
warranties relate specifically to another date, and except as to
transactions permitted hereunder.
Each notice of borrowing by Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by Borrower that the conditions precedent set
CREDIT AGREEMENT - Page 43
forth in SECTION 7.1(a) and SECTION 7.1(b) hereof have been satisfied (both as
of the date of such notice and, unless Borrower otherwise notifies
Administrative Agent prior to the date of such borrowing or Letter of Credit, as
of the date of such borrowing or Letter of Credit).
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement,
Borrower represents and warrants to the Agents and the Lenders that the
following statements are, and, after giving effect to the transactions
contemplated hereby, will be true, correct, and complete:
Section 8.1 CORPORATE EXISTENCE.
(a) Except as set forth in SCHEDULE 8.1, Borrower and each
Subsidiary of Borrower (i) is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation
and/or organization; (ii) has all requisite power and authority to own
its assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business in all jurisdictions
in which the nature of its business makes such qualification necessary
and where failure to so qualify would have a Material Adverse Effect;
PROVIDED, HOWEVER, the Loan Parties identified on SCHEDULE 8.1 shall,
within sixty (60) days after the Closing Date, take all steps necessary
to become qualified and authorized to do business in each of the
jurisdictions identified therein where the failure to become so
qualified and authorized to do business would have a Material Adverse
Effect.
(b) Each Loan Party has the power and authority to execute,
deliver, and perform its respective obligations under the Loan
Documents to which it is or may become a party.
Section 8.2 FINANCIAL CONDITION.
(a) FINANCIAL STATEMENTS. All financial statements concerning
Borrower and its Subsidiaries delivered at any time to Administrative
Agent or any Lender have been, and at all times subsequent to the
Closing Date shall be, prepared in accordance with GAAP, and present
fairly, the financial condition of Borrower and its Subsidiaries as of
the respective dates indicated therein and the results of operations
for the respective periods indicated therein. Neither Borrower nor any
Subsidiary of Borrower has any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments
except as referred to or reflected in such financial statements.
(b) PROJECTIONS. The Projections delivered and to be delivered
have been and will be prepared by Borrower in light of the past
operation of the business of Borrower and its Subsidiaries. The
Projections represent, as of the date thereof, a good faith estimate by
Borrower and its senior management of the financial conditions and
performance of
CREDIT AGREEMENT - Page 44
Borrower and its Subsidiaries based on assumptions believed to be
reasonable at the time made.
Section 8.3 CORPORATE ACTION; NO BREACH. The execution, delivery, and
performance by each Loan Party of the Loan Documents to which each is or may
become a party and the transactions contemplated hereby and thereby have been
duly authorized by all requisite action on the part of each Loan Party and do
not and will not (a) violate or conflict with, or result in a breach of, or
require any consent under (i) the articles of incorporation, certificate of
formation, bylaws, or operating agreement of any Loan Party, (ii) any applicable
Law, rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any agreement or instrument to
which any Loan Party is a party or by which any of them or any of their property
is bound or subject, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of any Loan Party.
Section 8.4 OPERATION OF BUSINESS. Each Loan Party possesses all
material licenses, permits, franchises, patents, copyrights, trademarks, and
tradenames, or rights thereto, necessary to conduct its respective businesses
substantially as now conducted and as presently proposed to be conducted, and no
Loan Party is in violation of any valid rights of others with respect to any of
the foregoing where such violation could reasonably be expected to have a
Material Adverse Effect. Except as set forth in SCHEDULE 8.4, since May 31,
1997, the Loan Parties have conducted their respective businesses only in the
ordinary and usual course.
Section 8.5 LITIGATION AND JUDGMENTS. Except as set forth in SCHEDULE
8.5, to Borrower's knowledge there is no action, suit, investigation, or
proceeding before or by any Governmental Authority or arbitrator pending or
threatened against or affecting any Loan Party which could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, except as
set forth in SCHEDULE 8.5, there are no outstanding judgments against any Loan
Party which could reasonably be expected to have a Material Adverse Effect.
Section 8.6 RIGHTS IN PROPERTIES; LIENS. Each Loan Party has good title
to or valid leasehold interests in its respective properties and assets, real
and personal, including, as of the Closing Date, the properties, assets, and
leasehold interests reflected in the financial statements described in SECTION
8.2, and none of such properties, assets, or leasehold interests of any Loan
Party is subject to any Lien, except as permitted by SECTION 10.2. Except as
disclosed on SCHEDULE 8.6(a), as of the Closing Date, no Loan Party owns any
material right, title, or interest in any real Properties. Except as disclosed
on SCHEDULE 8.6(b), as of the Closing Date, no Loan Party owns any right, title,
or interest of a material nature in Intellectual Property that is registered
with any Governmental Authority. As of the Closing Date, SCHEDULE 8.6(c) sets
forth the locations of all of the offices and other places of business of the
Loan Parties and the locations of all of the material Properties of the Loan
Parties, as well as the identities of the Loan Parties who conduct business or
own Properties at such locations and the identities of the predecessor entities
who previously conducted business or owned Properties at such locations and
whose Capital Stock or assets were acquired by any Loan Party. The Lenders' Lien
on the Collateral required by ARTICLE 6 constitutes a perfected first priority
Lien subject only to Permitted Liens.
CREDIT AGREEMENT - Page 45
Section 8.7 ENFORCEABILITY. The Loan Documents to which any Loan Party
is a party, when delivered, shall constitute the legal, valid, and binding
obligations of the applicable Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 8.8 APPROVALS. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or other third party
is or will be necessary for the execution, delivery, or performance by any Loan
Party of the Loan Documents to which each is or may become a party or for the
validity or enforceability thereof except for such authorizations, approvals,
consents, filings, and registrations which have been obtained.
Section 8.9 DEBT. Except as set forth in SCHEDULE 8.9, no Loan Party
has any Debt, except as permitted by SECTION 10.1.
Section 8.10 TAXES. The Loan Parties have filed all material tax
returns (federal, state, and local) required to be filed, including all material
income, franchise, employment, property, and sales tax returns, and have paid
all of their respective material liabilities for taxes, assessments,
governmental charges, and other levies that are due and payable other than those
being contested in good faith by appropriate proceedings diligently pursued for
which adequate reserves have been established in accordance with GAAP. Borrower
knows of no pending investigation of any Loan Party by any taxing authority with
respect to any material liability for tax or of any pending but unassessed
material tax liability of any Loan Party.
Section 8.11 MARGIN SECURITIES. No Loan Party is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, or X of the Board of Governors of the Federal Reserve System),
and no part of the proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.
Section 8.12 ERISA. With respect to each Plan, each Loan Party is in
substantial compliance with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. No notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.
No Loan Party nor any ERISA Affiliate has completely or partially withdrawn from
a Multiemployer Plan. The Loan Parties and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to each Plan. The present
value of all vested benefits under each Plan do not exceed the fair market value
of all Plan assets allocable to such benefits, as determined on the most recent
valuation date of the Plan and in accordance with ERISA. No Loan Party nor any
ERISA Affiliate has any outstanding liability to the PBGC under ERISA (other
than liability for the payment of PBGC premiums in the ordinary course of
business).
CREDIT AGREEMENT - Page 46
Section 8.13 DISCLOSURE. All factual information furnished by or on
behalf of any Loan Party in writing to the Agents or any Lender for the purposes
of or in this Agreement, the other Loan Documents, or any transaction
contemplated herein or therein is, and all other such factual information
hereafter furnished by or on behalf of any Loan Party to the Agents or any
Lender, are and 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 not misleading in
any material respect at such time in light of the circumstances under which such
information was provided.
Section 8.14 SUBSIDIARIES; CAPITALIZATION. SCHEDULE 8.14 sets forth as
of the Closing Date the jurisdiction of incorporation or organization of
Borrower and each Subsidiary of Borrower, the percentage of Borrower's or
another Subsidiary's (as applicable) ownership of the outstanding Voting Stock
of each Subsidiary of Borrower, and the authorized, issued, and outstanding
Capital Stock of Borrower and each Subsidiary of Borrower. All of the
outstanding Capital Stock of Borrower and each Subsidiary of Borrower has been
validly issued, is fully paid, is nonassessable, and has not been issued in
violation of any preemptive or similar rights. Except as disclosed in SCHEDULE
8.14, there are (a) no outstanding subscriptions, options, warrants, calls, or
rights (including preemptive rights) to acquire, and no outstanding securities
or instruments convertible into, Capital Stock of any Subsidiary of Borrower and
(b) no shareholder agreements, voting trusts, or similar agreements in effect
and binding on any shareholder of Borrower or any Subsidiary of Borrower or the
Capital Stock of any Subsidiary of Borrower. All shares of Capital Stock of
Borrower and each Subsidiary of Borrower were issued in compliance with all
applicable state and federal securities laws. As of the Closing Date, the
aggregate Net Worth, determined on a consolidated basis, of the Non- Granting
Domestic Subsidiaries of Borrower is less than or equal to ten percent (10%) of
the aggregate Net Worth, determined on a consolidated basis, of the Borrower and
all of its Subsidiaries.
Section 8.15 AGREEMENTS. Except as set forth in SCHEDULE 8.15, no Loan
Party is a party to any indenture, loan, or credit agreement, or to any lease or
other agreement or instrument, or subject to any charter or corporate
restriction that could have a Material Adverse Effect with respect to such Loan
Party. No Loan Party is in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party where such
default could reasonably be expected to cause a Material Adverse Effect with
respect to such Loan Party.
Section 8.16 COMPLIANCE WITH LAWS. No Loan Party is in violation of any
Law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator except for unintentional violations which could not reasonably be
expected to have a Material Adverse Effect with respect to such Loan Party.
Section 8.17 INVESTMENT COMPANY ACT. No Loan Party is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 8.18 PUBLIC UTILITY HOLDING COMPANY ACT. No Loan Party is a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a
CREDIT AGREEMENT - Page 47
"public utility" within the meaning of the Public Utility Borrower Company Act
of 1935, as amended.
Section 8.19 ENVIRONMENTAL MATTERS.
Except as disclosed on SCHEDULE 8.19:
(a) Each Loan Party, and all of their respective properties,
assets, and operations are in compliance in all material respects with
all Environmental Laws. Borrower is not aware of, nor has any Loan
Party received notice of, any past, present, or future conditions,
events, activities, practices, or incidents which may interfere with or
prevent the compliance or continued compliance of the Loan Parties with
all Environmental Laws;
(b) The Loan Parties have obtained and maintained, and are in
material compliance with, all material permits, licenses, and
authorizations that are required under applicable Environmental Laws;
(c) No Hazardous Materials exist on, about, or within or have
been used, generated, stored, transported, disposed of on, or Released
from any of the properties or assets of any Loan Party (other than
lubricants, cleaning solutions, and similar materials used for
maintenance in the ordinary course of business). The use which the Loan
Parties make and intend to make of their respective properties and
assets will not result in the use, generation, storage, transportation,
accumulation, disposal, or Release of any Hazardous Material on, in, or
from any of their properties or assets (other than lubricants, cleaning
solutions, and similar materials used for maintenance in the ordinary
course of business);
(d) No Loan Party nor any of their respective currently or
previously owned or leased properties or operations is subject to any
outstanding or threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or administrative
proceeding with respect to (i) failure to comply with Environmental
Laws, (ii) Remedial Action, or (iii) any Environmental Liabilities
arising from a Release or threatened Release;
(e) There are no conditions or circumstances associated with
the currently or previously owned or leased properties or operations of
any Loan Party that could reasonably be expected to result in any
Environmental Liabilities;
(f) No Loan Party is a treatment, storage, or disposal
facility requiring a permit under the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., regulations thereunder
or any comparable provision of state Law. Except as would not
reasonably be expected to have a Material Adverse Effect with respect
to any Loan Party, as the case may be, the Loan Parties are in
compliance with all applicable financial responsibility requirements
of all applicable Environmental Laws;
CREDIT AGREEMENT - Page 48
(g) Except as would not reasonably be expected to have a
Material Adverse Effect with respect any Loan Party, as the case may
be, no Loan Party has filed or failed to file any notice required under
applicable Environmental Law reporting an unauthorized Release; and
(h) No Lien arising under any Environmental Law has attached
to any property or revenues of any Loan Party.
Section 8.20 BROKER'S FEES. No broker's or finder's fee, commission or
similar compensation will be payable by any Loan Party with respect to the
transactions contemplated by this Agreement. No other similar fees or
commissions will be payable by any Loan Party to any Person (other than the
Agents and the Lenders) for any other services rendered to any Loan Party
ancillary to this Agreement.
Section 8.21 EMPLOYEE MATTERS. As of the Closing Date, (a) no Loan
Party, nor any of their respective employees, is subject to any collective
bargaining agreement, (b) no petition for certification or union election is
pending with respect to the employees of any Loan Party and no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of any Loan Party, and (c) there are no strikes,
slowdowns, work stoppages, or controversies pending or, to the best knowledge of
Borrower after due inquiry, threatened between any Loan Party and its respective
employees.
Section 8.22 SOLVENCY. As of and from and after the date of this
Agreement and after giving effect to the consummation of the transactions
contemplated hereby, each of the Loan Parties individually and on a consolidated
basis is Solvent.
Section 8.23 YEAR 2000 COMPLIANCE. Borrower has (i) undertaken a
detailed review and assessment of all areas within the business and operations
of it and its Subsidiaries that could be adversely affected by the "YEAR 2000
PROBLEM" (that is, the risk that computer applications used by Borrower or its
Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a detailed plan and timeline for addressing the Year 2000
Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Borrower reasonably anticipates that all
computer applications that are material to the business and operations of it and
its Subsidiaries will on a timely basis be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000 (that
is, be "YEAR 2000 COMPLIANT").
ARTICLE 9
POSITIVE COVENANTS
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Revolving Commitment
hereunder or any Letter of Credit remains outstanding, it will perform and
observe the following positive covenants:
CREDIT AGREEMENT - Page 49
Section 9.1 REPORTING REQUIREMENTS. Borrower will furnish to
Administrative Agent and each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within ninety (90) days after the end of each Fiscal Year of
Borrower, beginning with Fiscal Year 1998, (i) a copy of the annual
audit report of Borrower and its Subsidiaries for such Fiscal Year
containing, on a consolidated basis, balance sheets and statements of
income, retained earnings, and cash flow as at the end of such Fiscal
Year and for the Fiscal Year then ended, in each case setting forth in
comparative form the figures for the preceding Fiscal Year, all in
reasonable detail and audited and certified on an unqualified basis by
independent certified public accountants of recognized standing
selected by Borrower and reasonably acceptable to Administrative Agent,
to the effect that such report has been prepared in accordance with
GAAP; (ii) a copy of the annual unaudited report of Borrower and its
Subsidiaries for such Fiscal Year containing, on a consolidating basis,
balance sheets and statements of income, retained earnings, and cash
flow as at the end of such Fiscal Year and for the Fiscal Year then
ended, in each case setting forth in comparative form the figures for
the preceding Fiscal Year, and in reasonable detail certified by the
chief executive officer or chief financial officer of Borrower to have
been prepared in accordance with GAAP and to fairly present the
financial condition and results of operation of Borrower and such
significant business divisions, on a consolidating basis at the date
and for the Fiscal Year then ended; and (iii) a copy of Projections of
Borrower's Fiscal Year immediately following the Fiscal Year which is
the subject of the financial statements delivered pursuant to CLAUSE
(i) preceding;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within forty-five (45) days after the end of each of the
first three Fiscal Quarters beginning with the Fiscal Quarter ending
June 30, 1999, a copy of an unaudited financial report of Borrower and
its Subsidiaries as of the end of such period and for the portion of
the Fiscal Year then ended containing, on a consolidated basis, balance
sheets and statements of income, retained earnings, and cash flow, in
each case setting forth in comparative form the figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail certified by the chief executive officer or chief financial
officer of Borrower to have been prepared in accordance with GAAP and
to fairly present the financial condition and results of operations of
Borrower and its Subsidiaries on a consolidated basis, at the date and
for the periods indicated therein, subject to year-end audit
adjustments;
(c) COMPLIANCE CERTIFICATE. As soon as available, and in any
event within forty-five (45) days after the end of each of the first
three Fiscal Quarters of each year and accompanying the annual
financial statements delivered in accordance with SECTION 9.1(a), a
Compliance Certificate, together with schedules setting forth the
calculations supporting the computations therein;
(d) NOTICE OF LITIGATION. Promptly after receipt by any Loan
Party of notice of the commencement thereof, notice of all actions,
suits, and proceedings before any Governmental Authority or arbitrator
affecting any Loan Party which, if determined
CREDIT AGREEMENT - Page 50
adversely to such Loan Party, could reasonably be expected to have a
Material Adverse Effect with respect to such Loan Party;
(e) NOTICE OF DEFAULT. As soon as possible and in any event
within two (2) Business Days after the chief executive officer,
president, chief financial officer, the general counsel, any vice
president, secretary, assistant secretary, treasurer, or any assistant
treasurer of Borrower (each an "AUTHORIZED REPRESENTATIVE") has
knowledge of the occurrence of a Default, a written notice setting
forth the details of such Default and the action that Borrower has
taken and proposes to take with respect thereto;
(f) ERISA. As soon as possible and in any event within thirty
(30) days after Borrower knows, or has reason to know, that
(i) any Termination Event with respect to a Plan has
occurred or will occur, or
(ii) the aggregate present value of the Unfunded
Vested Accrued Benefits under all Plans is equal to an amount
in excess of $0, or
(iii) any Loan Party is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan required by reason of any Loan Party's
complete or partial withdrawal (as described in Section 4203
or 4205 of ERISA) from such Multiemployer Plan,
Borrower will provide Administrative Agent and the Lenders a
certificate of its president or its chief financial officer setting
forth the details of such event and the action which is proposed to be
taken with respect thereto, together with any notice or filing which
may be required by the PBGC or any other Governmental Authority with
respect to such event.
(g) NOTICE OF MATERIAL ADVERSE EFFECT. As soon as possible and
in any event within two (2) Business Days of the discovery of any event
or condition that could reasonably be expected to have a Material
Adverse Effect with respect to any Loan Party, written notice thereof;
(h) PROXY STATEMENTS, ETC. As soon as available, one copy of
each financial statement, report, notice, or proxy statement sent by
any Loan Party to its stockholders generally and one copy of each
regular, periodic, or special report, registration statement, or
prospectus filed by any Loan Party with any securities exchange or the
Securities and Exchange Commission or any successor agency; and
(i) GENERAL INFORMATION. Promptly, such other information
concerning any Loan Party as Administrative Agent or any Lender may
from time to time reasonably request.
Section 9.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. Borrower
will, and will cause each of its Subsidiaries to, preserve and maintain its
corporate existence and all of its leases,
CREDIT AGREEMENT - Page 51
privileges, licenses, permits, franchises, qualifications, and rights that are
necessary in the ordinary conduct of its business. Borrower will, and will cause
each of its Subsidiaries to, conduct its business in an orderly and efficient
manner in accordance with good business practices.
Section 9.3 MAINTENANCE OF PROPERTIES. Borrower will, and will cause
each other Loan Party to, maintain, keep, and preserve all of its material
properties necessary in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 9.4 TAXES AND CLAIMS. Borrower will, and will cause each other
Loan Party to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; PROVIDED, HOWEVER, that neither no Loan Party shall be
required to pay or discharge any tax, levy, assessment, or governmental charge
(i) which is being contested in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves in accordance with GAAP have been
established or (ii) if the failure to pay the same would not result in a Lien on
the property of any Loan Party.
Section 9.5 INSURANCE.
(a) Each of the Loan Parties will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable
insurers all Property of a character usually insured by responsible
corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations or entities and carry
such other insurance as is usually carried by such corporations or
entities, PROVIDED that in any event each Loan Party (as appropriate)
will maintain:
(i) PROPERTY INSURANCE -- Insurance against loss or
damage covering substantially all of the tangible real and
personal Property and improvements of such Loan Party by
reason of any Peril (as defined below) in such amounts
(subject to any deductibles as shall be reasonably
satisfactory to Administrative Agent) as shall be reasonable
and customary and sufficient to avoid the insured named
therein from becoming a co-insurer of any loss under such
policy, but in any event in such amounts as are reasonably
available as determined by Borrower's independent insurance
broker reasonably acceptable to Administrative Agent.
(ii) AUTOMOBILE LIABILITY INSURANCE FOR BODILY INJURY
AND PROPERTY DAMAGE --Insurance in respect of all vehicles
(whether owned, hired, or rented by any Loan Party) at any
time located at, or used in connection with, its Properties or
operations against liabilities for bodily injury and Property
damage in such amounts as are then customary for vehicles used
in connection with similar Properties and businesses, but in
any event to the extent required by applicable Law.
CREDIT AGREEMENT - Page 52
(iii) COMPREHENSIVE GENERAL LIABILITY INSURANCE --
Insurance against claims for bodily injury, death, or Property
damage occurring on, in or about the Property (and adjoining
streets, sidewalks, and waterways) of any Loan Party, in such
amounts as are then customary for Property similar in use in
the jurisdictions where such Properties are located.
(iv) WORKER'S COMPENSATION INSURANCE -- Worker's
compensation insurance (including, without limitation,
employers' liability insurance) to the extent required by
applicable Law, which may be self-insurance to the extent
permitted by applicable Law.
Such insurance shall be written by financially responsible companies
selected by the applicable Loan Party and having an A.M. Best Rating of
"A-" or better and being in a financial size category of "VI" or
larger, or by other companies reasonably acceptable to Administrative
Agent. Each policy referred to in this SECTION 9.5 shall provide that
it will not be canceled, amended, or reduced except after not less than
thirty (30) days' prior written notice to Administrative Agent and
shall also provide that the interests of Administrative Agent and the
Lenders shall not be invalidated or reduced by any act, omission or
negligence of any Loan Party. Borrower will advise Administrative Agent
promptly of any policy cancellation, reduction, or amendment. For
purposes hereof, the term "PERIL" shall mean, collectively, fire,
lightning, flood, windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and
smoke, and other perils covered by the "all-risk" endorsement then in
use in the jurisdictions where the Properties of the Loan Parties are
located.
(b) Borrower will cause each insurance recovery (other than
any portion of an insurance recovery payable to a landlord to repair or
replace Property leased by Borrower or any of its Subsidiaries) paid to
it or any other Loan Party by any insurance company to be deposited
promptly with Administrative Agent as security for the Obligations if a
Default has then occurred and is continuing.
(c) If a Default shall have occurred and be continuing,
Borrower will cause all proceeds of insurance paid to it or any other
Loan Party on account of the loss of or damage to any Property of any
Loan Party and all awards of compensation for any Property of any Loan
Party taken by condemnation or eminent domain to be paid directly to
Administrative Agent to be applied against or held as security for the
Obligations, at the election of Administrative Agent and the Required
Lenders.
Section 9.6 INSPECTION RIGHTS. Each of the Loan Parties will, and will
cause each of its Subsidiaries to, permit representatives and agents of
Administrative Agent and each Lender, during normal business hours and upon
reasonable notice to Borrower, to examine, copy, and make extracts from its
books and records, to visit and inspect its Properties and to discuss its
business, operations, and financial condition with its officers and independent
certified public accountants. Borrower will authorize its accountants in writing
(with a copy to Administrative Agent) to comply with this SECTION 9.6.
Administrative Agent or its representatives may, at any time and from time to
time at
CREDIT AGREEMENT - Page 53
Borrower's expense, conduct field examinations and audits of the Collateral and
of other matters pertaining to Borrower and its Subsidiaries for such purposes
as Administrative Agent or any Lender may reasonably request PROVIDED that so
long as no Default has occurred and continues to exist no more than two such
field examinations shall be conducted during any calendar year.
Section 9.7 KEEPING BOOKS AND RECORDS. Borrower will, and will cause
each other Loan Party to, maintain proper books of record and account in which
full, true, and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.
Section 9.8 COMPLIANCE WITH LAWS. Borrower will, and will cause each
other Loan Party to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws), rules, regulations,
orders, and decrees of a material nature of any Governmental Authority or
arbitrator other than any such laws, rules, regulations, orders, and decrees
contested by appropriate actions or proceedings diligently pursued, if adequate
reserves in conformity with GAAP and satisfactory to Administrative Agent are
established with respect thereto and except for unintentional violations which
could not reasonably be expected to have a Material Adverse Effect with respect
to any such Loan Party.
Section 9.9 COMPLIANCE WITH AGREEMENTS. Borrower will, and will cause
each other Loan Party to, comply with all agreements, contracts, and instruments
binding on it or affecting its properties or business other than such
noncompliance which could not reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
Section 9.10 FURTHER ASSURANCES.
(a) FURTHER ASSURANCE. Borrower will, and will cause each
other Loan Party to, execute and deliver pursuant to this clause (a)
such further documentation and take such further action as may be
reasonably requested by Administrative Agent to carry out the
provisions and purposes of the Loan Documents.
(b) SUBSIDIARY JOINDER. Within ten (10) days after the end of
each Fiscal Quarter, Borrower shall cause each Domestic Subsidiary
created or acquired during the Fiscal Quarter then ending to execute
and deliver to Administrative Agent a Joinder Agreement and such other
documentation as Administrative Agent may require to cause such
Domestic Subsidiary to evidence, perfect, and otherwise implement the
guaranty and/or security for repayment of the Obligations contemplated
by this Agreement, the Subsidiary Guaranty, and any applicable Security
Document.
(c) REMAINING SUBSIDIARIES. In the event any Non-Granting
Domestic Subsidiary is not merged or consolidated with or into Borrower
or a Wholly-Owned Granting Domestic Subsidiary or is not dissolved
within sixty (60) days after the Closing Date (each such Subsidiary a
"REMAINING SUBSIDIARY"), Borrower shall promptly (i) cause each
Remaining Subsidiary to execute and deliver to Administrative Agent a
Subsidiary Guaranty, Security Agreements, and/or a Joinder Agreement
(as applicable) and such other documentation as
CREDIT AGREEMENT - Page 54
Administrative Agent may reasonably request to cause such Remaining
Subsidiary to evidence, perfect or otherwise implement the guarantee
and security for the repayment and performance of the Obligations
contemplated by the Subsidiary Guaranty and the Security Agreements in
form and substance satisfactory to the Administrative Agent and (ii)
deliver or cause to be delivered to Administrative Agent the stock
certificates representing all the issued and outstanding Capital Stock
of the Remaining Subsidiaries, in each case accompanied by instruments
of transfer or stock powers executed in blank (as appropriate), or
registration of Administrative Agent's Lien, in form and substance
satisfactory to Administrative Agent (in the case of book entry
securities).
Section 9.11 ERISA. With respect to each Plan, Borrower will, and will
cause each other Loan Party to, comply with all minimum funding requirements and
all other material requirements of ERISA, if applicable, so as not to give rise
to any liability which could reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
Section 9.12 UNIFIED CASH MANAGEMENT SYSTEM. If required by
Administrative Agent, Borrower will, and will cause each of its Subsidiaries to
maintain a unified cash management system and will ensure, and will cause each
of its Subsidiaries to ensure, that all proceeds of all Collateral are (a)
deposited directly, as received, into a collection account of Borrower or such
Subsidiary (as applicable) and (b) on a daily basis after such deposit,
transferred into a concentration account of Borrower or such Subsidiary (as
applicable) maintained with a bank selected by Borrower and reasonably
acceptable to Administrative Agent. If required by Administrative Agent, each of
the Loan Parties will maintain in effect, and will cause each of its
Subsidiaries to maintain in effect, an agreement governing each of its
collection accounts and its concentration account in form and substance
satisfactory to Administrative Agent with a depository bank satisfactory to
Administrative Agent.
Section 9.13 YEAR 2000 COMPLIANCE. Borrower will promptly notify
Administrative Agent in the event Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 Compliant on a timely basis.
ARTICLE 10
NEGATIVE COVENANTS
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Revolving Commitment
hereunder or any Letter of Credit remains outstanding, Borrower will perform and
observe the following negative covenants:
Section 10.1 DEBT. Borrower will not, and will not permit any other
Loan Party to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
CREDIT AGREEMENT - Page 55
(b) Debt described on SCHEDULE 8.9 hereto, and any extensions,
renewals, or refinancings of such existing Debt so long as (i) the
principal amount of such Debt after such renewal, extension, or
refinancing shall not exceed the principal amount of such Debt which
was outstanding immediately prior to such renewal, extension, or
refinancing and (ii) such Debt shall not be secured by any assets other
than assets securing such Debt, if any, prior to such renewal,
extension, or refinancing;
(c) Debt of a Wholly-Owned Granting Domestic Subsidiary of
Borrower owed to Borrower or another Wholly-Owned Granting Domestic
Subsidiary of Borrower;
(d) Guaranties incurred in the ordinary course of business
with respect to surety and appeal bonds, performance and
return-of-money bonds, and other similar obligations including those of
the type otherwise described in SECTION 10.2(f);
(e) Debt of Borrower or any Subsidiary of Borrower
constituting purchase money Debt (including, without limitation,
Capital Lease Obligations) incurred after the Closing Date not to
exceed Five Million Dollars ($5,000,000) in the aggregate at any time
outstanding secured by purchase money Liens permitted by SECTION
10.2(g);
(f) Debt constituting obligations to reimburse worker's
compensation insurance companies for claims paid by such companies on
Borrower's or any of its Subsidiaries' behalf in accordance with the
policies issued to Borrower or such Subsidiary of Borrower;
(g) Debt secured by the Liens permitted by CLAUSES (d) and (e)
of SECTION 10.2;
(h) unsecured Debt arising under, created by and consisting of
Hedge Agreements, PROVIDED, (i) such Hedge Agreements shall have been
entered into for the purpose of hedging actual risk and not for
speculative purposes and (ii) that each counterparty to such Hedge
Agreement shall be a Lender (or an Affiliate thereof) or shall be rated
in one of the two highest rating categories of Standard and Poor's
Corporation or Xxxxx'x Investors Service, Inc.; and
(i) Debt in addition to the Debt described in the foregoing
CLAUSES (a) through (h) in an aggregate amount not exceeding Five
Million Dollars ($5,000,000) in the aggregate principal amount at any
one time outstanding.
Section 10.2 LIMITATION ON LIENS AND RESTRICTIONS ON SUBSIDIARIES.
Borrower will not, and will not permit any Subsidiary to, incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except the following:
(a) Liens described on SCHEDULE 10.2 hereto, and any
extensions, renewals, or refinancings of the Debt secured by such Liens
as permitted under SECTION 10.1(b), PROVIDED that (i) no such Lien is
expanded to cover any additional Property (other than after acquired
title in or on such Property and proceeds of the existing collateral)
after the Closing Date and
CREDIT AGREEMENT - Page 56
(ii) no such Lien is spread to secure any additional Debt after the
Closing Date other than Debt permitted by SECTION 10.1(b);
(b) Liens in favor of Administrative Agent, for the benefit of
the Agents and each Lender pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning restrictions,
or other restrictions on the use of real Property that do not
(individually or in the aggregate) materially detract from the value of
the real Property encumbered thereby or materially impair the ability
of Borrower or any other Loan Party to use such real Property in their
respective businesses;
(d) Liens for taxes, assessments, or other governmental
charges (but excluding Environmental Liens or Liens under ERISA) that
are not delinquent or which are being contested in good faith and for
which adequate reserves have been established in accordance with GAAP;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords, or other similar statutory Liens securing obligations that
are not overdue or are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have
been established in accordance with GAAP and are incurred in the
ordinary course of business;
(f) Liens resulting from deposits to secure payments of
worker's compensation, unemployment insurance or other social security
programs or to secure the performance of tenders, statutory
obligations, leases, insurance contracts, surety, performance and
appeal bonds, bids, and other contracts incurred in the ordinary course
of business (other than for payment of Debt);
(g) Liens for purchase money obligations and Liens securing
Capital Lease Obligations; PROVIDED that: (i) the Debt secured by any
such Lien is permitted under SECTION 10.1(e) hereof; and (ii) any such
Lien encumbers only the Property so purchased or leased;
(h) Any attachment or judgment Lien not constituting an Event
of Default;
(i) Any interest or title of a licensor, lessor, or sublessor
under any license or lease entered into in the ordinary course of
business;
(j) Liens against equipment arising from precautionary UCC
financing statement filings regarding operating leases entered into by
Borrower or another Loan Party in the ordinary course of business; and
CREDIT AGREEMENT - Page 57
(k) Nonconsensual Liens in favor of banking institutions
arising as a matter of law and encumbering the deposits (including the
right of set-off) held by such banking institutions in the ordinary
course of business.
Section 10.3 MERGERS, ACQUISITIONS, ETC. Borrower will not, and will
not permit any other Loan Party to, become a party to a merger or consolidation,
or purchase or otherwise acquire all or a substantial part of the business or
Property of any Person or all or a substantial part of the business or Property
of a division or branch of a Person or Capital Stock of any Person, or wind-up,
dissolve, or liquidate itself; PROVIDED that as long as no Default exists or
would result therefrom and provided Borrower gives Administrative Agent and the
Lenders prior written notice:
(i) A Subsidiary may wind-up, dissolve, or liquidate if (a) in
the case of a Domestic Subsidiary, such Domestic Subsidiary's Property
is transferred to Borrower or a Wholly-Owned Granting Domestic
Subsidiary of Borrower and the Loan Party acquiring such Domestic
Subsidiary's Property complies with its obligations under SECTION 9.10
simultaneously with such acquisitions, or (b) in the case of a Foreign
Subsidiary, such Foreign Subsidiary's Property is transferred to
Xxxxxxxxxxx Limited, an Irish company.
(ii) Any Subsidiary of Borrower may merge or consolidate with
Borrower (provided Borrower is the surviving entity) or with any
Wholly-Owned Granting Domestic Subsidiary of Borrower, and any Foreign
Subsidiary may merge or consolidate with or into Xxxxxxxxxxx Limited,
an Irish company (provided Xxxxxxxxxxx Limited is the surviving
entity); and
(iii) Borrower or any Domestic Subsidiary of Borrower may
acquire any Person or all or a substantial part of the business or
Property of a Person (or a division or branch thereof) provided that:
(A) after giving pro forma effect to any such acquisition, no Default
or Event of Default would exist; (B) any new Domestic Subsidiary formed
or acquired in connection with such an acquisition shall
contemporaneously therewith execute and delivery to Administrative
Agent a Joinder Agreement and such Security Documents as Administrative
Agent may require in its absolute discretion; (C) any acquisition of a
Person must be of at least a sufficient interest in the Capital Stock
of such Person to constitute such Person as a "Subsidiary" of Borrower;
and (D) total cash and Debt (including, without limitation, cash,
noncompete payments, consulting payments, earn-outs, and all Debt
assumed, incurred or acquired) consideration for any such acquisition
shall not exceed Forty Million Dollars ($40,000,000) and the total
aggregate consideration for any such acquisition (including, without
limitation, the value (determined as of the date of execution of a
definitive agreement related thereto) of any Capital Stock and other
equity given as consideration) shall not exceed One Hundred Million
Dollars ($100,000,000).
Section 10.4 RESTRICTED JUNIOR PAYMENTS. Borrower will not, and will
not permit any other Loan Party to, directly or indirectly declare, order, pay,
make, or set apart any sum for (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Capital Stock of any Loan
Party now or hereafter outstanding; (b) any redemption, conversion, exchange,
retirement, sinking fund, or similar payment, purchase, or other acquisition for
value, direct or
CREDIT AGREEMENT - Page 58
indirect, of any shares of any class of Capital Stock of any Loan Party now or
hereafter outstanding; or (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options, or other rights to acquire
shares of any class of Capital Stock of any Loan Party now or hereafter
outstanding except:
(i) Subsidiaries of Borrower may make, declare, and pay
dividends and make other distributions with respect to their Capital
Stock to Borrower or Wholly-Owned Granting Domestic Subsidiaries of
Borrower;
(ii) Borrower may declare and pay dividends on any class of
its Capital Stock payable solely in shares of Capital Stock of
Borrower; and
(iii) Borrower may redeem stock, stock rights, options or
similar rights from terminated or departing employees not to exceed Two
Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate in
any Fiscal Year.
Section 10.5 INVESTMENTS. Borrower will not, and will not permit any
other Loan Party to, make or permit to remain outstanding any advance, loan,
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stocks, bonds, notes, debentures, or other Securities of any
Person, or be or become a joint venturer with or partner of any Person (all the
foregoing, herein "INVESTMENTS"), except:
(a) Borrower and its Subsidiaries may make equity investments
in and may make loans to Subsidiaries of Borrower (in the case of
loans, as permitted by SECTION 10.1) and may make the acquisitions
permitted by SECTION 10.3(iii); PROVIDED that total investments in
Foreign Subsidiaries shall never exceed Five Million Dollars
($5,000,000) in the aggregate at any time outstanding;
(b) readily marketable direct obligations of the U.S. or any
agency thereof with maturities of one year or less from the date of
acquisition;
(c) fully insured certificates of deposit with maturities of
one year or less from the date of acquisition issued by any commercial
bank operating in the U.S. having capital and surplus in excess of One
Hundred Million Dollars ($100,000,000);
(d) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper
or debt Securities of such issuer is rated in one of the two highest
rating categories of Standard and Poor's Corporation or Xxxxx'x
Investors Service, Inc. or any successor thereto and shares of any
mutual fund company substantially all the assets of which consist of
cash and the Investments of the type described in CLAUSE (c), CLAUSE
(d), and this CLAUSE (e);
(e) advances to officers, directors, and employees for
business expenses incurred in the ordinary course of business;
CREDIT AGREEMENT - Page 59
(f) if no Event of Default exists, Borrower and its
Subsidiaries may make capital contributions to or investments in, or
purchase any Capital Stock of, Borrower or a Wholly- Owned Granting
Domestic Subsidiary of Borrower;
(g) Borrower and its Subsidiaries may acquire and own any
Investments of any Person received in connection with the bankruptcy or
reorganization of suppliers and customers and in connection with the
settlement of delinquent obligations of, and disputes with, customers
and suppliers arising in the ordinary course of business;
(h) extensions of trade credit in the ordinary course of
business;
(i) Borrower and its Subsidiaries may make Investments in
Persons operating within a related line of business as Borrower;
PROVIDED, that the aggregate amount of any such Investments shall not
exceed Twenty Million Dollars ($20,000,000); and
(j) Investments other than those described in CLAUSES (a)-(i)
of this SECTION 10.5 if the aggregate amount thereof never exceeds Five
Million Dollars ($5,000,000) at any time (determined based on the cost
or outstanding principal amount thereof, as applicable, without regard
to any write up or write down thereof).
Section 10.6 LIMITATION ON ISSUANCE OF CAPITAL STOCK. Borrower will not
permit any Subsidiary to, at any time issue, sell, assign, or otherwise dispose
of: (a) any of its Capital Stock, (b) any securities exchangeable for or
convertible into or carrying any rights to acquire any of its Capital Stock, or
(c) any option, warrant, or other right to acquire any of its Capital Stock.
Section 10.7 TRANSACTIONS WITH AFFILIATES. Borrower will not, and will
not permit any other Loan Party to, enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering
of any service, with any Affiliate of Borrower or such other Loan Party except
in the ordinary course of and pursuant to the reasonable requirements of
Borrower's or such other Loan Party's business and upon fair and reasonable
terms no less favorable to Borrower or such other Loan Party than would be
obtained in a comparable arms-length transaction with a Person not an Affiliate
of Borrower or such other Loan Party.
Section 10.8 DISPOSITION OF ASSETS. Borrower will not, and will not
permit any other Loan Party to, sell, lease, assign, transfer, or otherwise
voluntarily dispose of: (a) any of its Receivables, provided, Borrower or any
other Loan Party may sell up to thirty percent (30%) of its Receivables in any
Fiscal Quarter; (b) any substantial portion of the consolidated assets of the
Loan Parties; or (c) any other Property, other than dispositions of Inventory in
the ordinary course of business.
Section 10.9 LINES OF BUSINESS. Borrower will not, and will not permit
any other Loan Party to engage in any line or lines of business activity other
than the businesses in which they are engaged on the date hereof or a business
reasonably related thereto.
Section 10.10 LIMITATIONS ON RESTRICTIONS AFFECTING SUBSIDIARIES.
Neither Borrower nor any other Loan Party shall enter into or assume any
material agreement (other than the Loan Documents)
CREDIT AGREEMENT - Page 60
prohibiting the creation or assumption of any Lien upon its material properties
or assets, whether now owned or hereafter acquired. Except as provided herein,
Borrower will not, and will not permit any other Loan Party to, directly or
indirectly to create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any Loan
Party to: (a) pay dividends or make any other distribution on any of such Loan
Party's Capital Stock owned by any Loan Party; (b) pay any Debt owed to any Loan
Party; (c) make loans or advances to any Loan Party; or (d) transfer any of its
property or assets to any Loan Party.
Section 10.11 ENVIRONMENTAL PROTECTION. Borrower will not, and will not
permit any other Loan Party to, (a) use (or permit any tenant to use) any of its
Properties for the handling, processing, storage, transportation, or disposal of
any Hazardous Material except in compliance with applicable Environmental Laws,
(b) generate any Hazardous Material except in compliance with applicable
Environmental Laws, (c) conduct any activity that is likely to cause a Release
or threatened Release of any Hazardous Material in violation of any
Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner, that in any material respect violates or is likely to
violate any Environmental Law or create any Environmental Liabilities for which
Borrower or any other Loan Party would be responsible that could reasonably be
expected to have a Material Adverse Effect with respect to any Loan Party.
Section 10.12 ERISA. Borrower will not, and will not permit any other
Loan Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any
action which would cause, any unfunded or unreserved liability for
benefits under any Plan (exclusive of any Multiemployer Plan) to exist
or to be created; or
(b) with respect to any Multiemployer Plan, allow, or take (or
permit any ERISA Affiliate to take) any action which would cause, any
unfunded or unreserved liability for benefits under any Multiemployer
Plan to exist or to be created, either individually as to any such Plan
or in the aggregate as to all such Plans.
ARTICLE 11
FINANCIAL COVENANTS
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Revolving Commitment
hereunder or any Letter of Credit remains outstanding, it will perform and
observe the following financial covenants:
Section 11.1 MAXIMUM LEVERAGE RATIO. As of the end of each Fiscal
Quarter, Borrower shall not permit its Leverage Ratio to exceed 2.00 to 1.00.
Section 11.2 MINIMUM EBITDA. As of the end of each Fiscal Quarter,
Borrower shall not permit its EBITDA for such Fiscal Quarter to be less than
zero dollars ($0).
CREDIT AGREEMENT - Page 61
Section 11.3 MINIMUM QUICK RATIO. As of the end of each Fiscal Quarter,
Borrower shall not permit the ratio of its cash and receivables as of the end of
such Fiscal Quarter period to its current liabilities as of the end of such
Fiscal Quarter to be less than 1.0 to 1.0.
ARTICLE 12
DEFAULT
Section 12.1 EVENTS OF DEFAULT. Each of the following shall be deemed
an "EVENT OF DEFAULT":
(a) Borrower shall fail to pay (i) when due any principal of,
interest on or fees payable in respect of any Loan or any Reimbursement
Obligation payable under any Loan Document or any part thereof or (ii)
within two (2) days after the date Borrower receives written notice of
the failure to pay when due, any other Obligation or any part thereof,
or any indebtedness, liability, or obligation due to any Lender under
any Hedge Agreement.
(b) Any representation, warranty, or certification made or
deemed made by any Loan Party (or any of their respective officers) in
any Loan Document or in any certificate, report, notice, or financial
statement furnished at any time in connection with any Loan Document
shall be false, misleading, or erroneous in any material respect when
made or deemed to have been made.
(c) Any Loan Party shall fail to perform, observe, or comply
with any covenant, agreement, or term contained in SECTION 9.1, ARTICLE
10 or ARTICLE 11 of this Agreement.
(d) Any Loan Party shall fail to perform, observe, or comply
with any other agreement, or term contained in any Loan Document (other
than covenants described in SECTIONS 12.1(a)-(c)) and such failure
shall continue for a period of ten (10) days after the earlier of (i)
the date Administrative Agent provides Borrower with notice thereof or
(ii) the date Borrower should have notified Administrative Agent
thereof in accordance with SECTION 9.1(f) hereof.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator, or the like of itself or of all or a
substantial part of its Property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect, the
"BANKRUPTCY CODE"), (iv) institute any proceeding or file a petition
seeking to take advantage of any other Law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, winding-up, or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code, (vi)
admit in writing its inability to, or be generally unable to pay its
debts as such debts become due, or (vii) take any corporate action for
the purpose of effecting any of the foregoing.
CREDIT AGREEMENT - Page 62
(f) A proceeding or case shall be commenced, without the
application, approval or consent of the applicable Loan Party in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement, or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator, or the like of such
Loan Party or of all or any substantial part of its Property, or (iii)
similar relief in respect of such Loan Party under any Law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment, or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of sixty (60) or more days; or an order for relief against
any Loan Party shall be entered in an involuntary case under the
Bankruptcy Code.
(g) Any Loan Party shall fail within a period of thirty (30)
days after the commencement thereof to discharge or obtain a stay of
any attachment, sequestration, forfeiture, or similar proceeding or
proceedings involving an aggregate amount in excess of One Million
Dollars ($1,000,000) against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in
excess of One Million Dollars ($1,000,000) in the aggregate (to the
extent not paid or fully covered by insurance acknowledged by a carrier
reasonably acceptable to Administrative Agent) shall be rendered by a
court or courts against any Loan Party and the same shall not be
discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within thirty (30)
days from the date of entry thereof and the relevant Loan Party shall
not, within said period of thirty (30) days, or such longer period
during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such
appeal.
(i) Any Loan Party shall fail to pay when due any principal of
or interest on any Debt (beyond the period of grace, if any) if the
aggregate principal amount of the affected Debt equals or exceeds Five
Hundred Thousand ($500,000) (other than the Obligations), or the
maturity of any such Debt shall have been accelerated, or any such Debt
shall have been required to be prepaid prior to the stated maturity
thereof or any event shall have occurred with respect to any Debt in
the aggregate principal amount equal to or in excess of Five Hundred
Thousand ($500,000) that permits any holder or holders of such Debt or
any Person acting on behalf of such holder or holders to accelerate the
maturity thereof or require any prepayment thereof.
(j) This Agreement or any Security Document shall cease to be
in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
any Loan Party or any Loan Party shall deny that it has any further
liability or obligation under any of the Loan Documents or any Lien
created or purported to be created by the Loan Documents shall for any
reason cease to be or fail to be a valid, first priority perfected Lien
(except for Permitted Liens, if any, which are expressly permitted by
the Loan Documents to have priority over the Liens in favor of
Administrative Agent) upon any of the Collateral purported to be
covered thereby.
CREDIT AGREEMENT - Page 63
(k) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Plan; (iii) the filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any Plan; (iv)
any event or circumstance that could reasonably be expected to
constitute grounds entitling the PBGC to institute proceedings under
Section 4042 of ERISA for the termination of, or for the appointment of
a trustee to administer, any Plan, or the institution by the PBGC of
any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan;
and in each case above, such event or condition, together with all
other events or conditions, if any, have subjected or could in the
reasonable opinion of Administrative Agent subject Borrower or any of
its Subsidiaries to any tax, penalty, or other liability to a Plan, a
Multiemployer Plan, the PBGC, or otherwise (or any combination thereof)
which in the aggregate could reasonably be expected to exceed One
Million Dollars ($1,000,000).
(l) The occurrence of any event or condition which constitutes
a Material Adverse Effect with respect to Borrower or any other Loan
Party and thirty (30) days have passed since written notification
thereof to Borrower by Administrative Agent (therein reasonably
identifying such event or condition) without such event or condition
having been remedied, cured or waived.
(m) a Change of Control shall occur.
Section 12.2 REMEDIES. If any Event of Default shall occur and be
continuing, Administrative Agent may (and if directed by Required Lenders,
shall) do any one or more of the following:
(a) ACCELERATION. By notice to Borrower, declare all
outstanding principal of and accrued and unpaid interest on the Notes
and all other amounts payable by Borrower under the Loan Documents
immediately due and payable, and the same shall thereupon become
immediately due and payable, without further notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest, or other formalities of any kind, all of
which are hereby expressly waived by Borrower except as where required
by the specific terms of this Agreement or the other Loan Documents;
(b) TERMINATION OF REVOLVING COMMITMENTS. Terminate the
Revolving Commitments, including, without limitation, the obligation of
the Fronting Bank to issue Letters of Credit, without notice to
Borrower or any other Loan Party;
(c) JUDGMENT. Reduce any valid claim to judgment;
(d) FORECLOSURE. Foreclose or otherwise enforce any Lien
granted to Administrative Agent, for the benefit of the Agents and each
Lender to secure payment and performance of the Obligations in
accordance with the terms of the Loan Documents; and
CREDIT AGREEMENT - Page 64
(e) RIGHTS. Exercise any and all rights and remedies afforded
by the laws of the State of California or any other jurisdiction
governing any of the Loan Documents, by equity, or otherwise;
PROVIDED, HOWEVER, that, upon the occurrence of an Event of Default under
SECTIONS 12.1(e) or SECTION 12.1(f), the Revolving Commitments of all of the
Lenders, and the obligation of the Fronting Bank to issue Letters of Credit,
shall automatically terminate and the outstanding principal of and accrued and
unpaid interest on the Notes and all other amounts payable by Borrower under the
Loan Documents shall thereupon become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by Borrower.
Section 12.3 CASH COLLATERAL. If an Event of Default shall have
occurred and be continuing, Borrower shall, if requested by Administrative Agent
or the Required Lenders, pledge to Administrative Agent as security for the
Obligations, pursuant to agreements in form and substance satisfactory to
Administrative Agent, an amount in immediately available funds equal to the then
outstanding Letter of Credit Liabilities, such funds to be held in a cash
collateral account by Administrative Agent without any right of withdrawal by
Borrower.
Section 12.4 PERFORMANCE BY ADMINISTRATIVE AGENT. Upon the occurrence
of a Default, if any Loan Party shall fail to perform any agreement in
accordance with the terms of the Loan Documents, Administrative Agent may, at
the direction of the Required Lenders, perform or attempt to perform such
agreement on behalf of such Loan Party. In such event, Borrower shall, at the
request of Administrative Agent, promptly pay any amount expended by
Administrative Agent or the Lenders in connection with such performance or
attempted performance, to Administrative Agent at the Principal Office together
with interest thereon at the Default Rate applicable to Base Rate Accounts from
and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agents nor any Lender shall have any liability or
responsibility for the performance of any obligation of any Loan Party under any
Loan Document.
Section 12.5 SET-OFF. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to Borrower (any such notice being hereby expressly waived by
Borrower), to set-off and apply any and all deposits (general, time, demand,
provisional, or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of any Loan Party against any
and all of the obligations of such Loan Party now or hereafter existing under
any Loan Document, irrespective of whether or not Administrative Agent or such
Lender shall have made any demand under such Loan Documents and although such
obligations may be unmatured. Each Lender agrees promptly to notify Borrower
(with a copy to Administrative Agent) after any such set-off and application,
PROVIDED that the failure to give such notice shall not affect the validity of
such set-off and application. The rights and remedies of each Lender hereunder
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
CREDIT AGREEMENT - Page 65
Section 12.6 CONTINUANCE OF DEFAULT. For purposes of all Loan
Documents, a Default shall be deemed to have continued and exist until
Administrative Agent shall have actually received evidence satisfactory to
Administrative Agent that such Default shall have been remedied.
ARTICLE 13
ADMINISTRATIVE AGENT
Section 13.1 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes Bank of America to act as its agent under
this Agreement and the other Loan Documents with such powers and discretion as
are specifically delegated to Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Administrative Agent (which term as used in this
sentence and in SECTION 13.5 and the first sentence of SECTION 13.6 shall
include its Affiliates (including Banc of America Securities LLC) and its own
and its Affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in the Loan
Documents and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Loan Party or any other Person to perform any of its obligations thereunder;
(c) shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any Loan
Party or the satisfaction of any condition or to inspect the property (including
the books and records) of any Loan Party or any of its Affiliates; (d) shall not
be required to initiate or conduct any litigation or collection proceedings
under any Loan Document; and (e) shall not be responsible for any action taken
or omitted to be taken by it under or in connection with any Loan Document,
except for its own gross negligence or willful misconduct. Administrative Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
Section 13.2 RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent
shall be entitled to rely upon any certification, notice, instrument, writing,
or other communication (including, without limitation, any thereof by telephone
or telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any Loan Party),
independent accountants, and other experts selected by Administrative Agent.
Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until Administrative Agent receives
and accepts an Assignment and Acceptance executed in accordance with SECTION
15.8. As to any matters not expressly provided for by this Agreement,
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; PROVIDED, HOWEVER, that Administrative Agent shall not be required to
take any action that exposes
CREDIT AGREEMENT - Page 66
Administrative Agent to personal liability or that is contrary to any Loan
Document or applicable Law.
Section 13.3 DEFAULTS. Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless Administrative Agent
has received written notice from a Lender or Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that
Administrative Agent receives such a notice of the occurrence of a Default,
Administrative Agent shall give prompt notice thereof to the Lenders.
Administrative Agent shall take such action with respect to such Default as it
shall deem appropriate or as shall reasonably be directed by the Required
Lenders.
Section 13.4 RIGHTS AS LENDER. With respect to its Revolving Commitment
and the Loans made by it, Bank of America (and any successor acting as
Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include Administrative
Agent in its individual capacity. Bank of America (and any successor acting as
Administrative Agent) and its Affiliates may (without having to account therefor
to any Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Loan Party or any of their respective Affiliates as if it were
not acting as Administrative Agent, and Bank of America (and any successor
acting as Administrative Agent) and its Affiliates may accept fees and other
consideration from any Loan Party or any of their respective Affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
Section 13.5 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY
ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED UNDER SECTION 14.1 OR SECTION
14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF BORROWER UNDER SUCH SECTIONS)
RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES, FOR ANY AND
ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS'
FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST ADMINISTRATIVE AGENT (INCLUDING BY ANY
LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY
ADMINISTRATIVE AGENT UNDER ANY LOAN DOCUMENT; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARE FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION TO HAVE
ARISEN FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF, THE PERSON TO BE
INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER
THIS SECTION SHALL BE INDEMNIFIED FROM AND
CREDIT AGREEMENT - Page 67
HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE (BUT NOT THE GROSS NEGLIGENCE) OF SUCH PERSON. WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE ADMINISTRATIVE
AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE (CALCULATED BASED ON THE
COMMITMENT PERCENTAGES) OF ANY COSTS OR EXPENSES PAYABLE BY BORROWER UNDER
SECTION 14.1 TO THE EXTENT THAT ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED
FOR SUCH COSTS AND EXPENSES BY BORROWER. IN THE CASE OF AN INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 13.5
APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION,
LITIGATION OR PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR
CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON
AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 13.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on the Agents or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Loan Parties and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agents or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agents hereunder, the Agents shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any Loan
Party or any of their Affiliates that may come into the possession of any Agent
or any of its Affiliates.
Section 13.7 RESIGNATION OF ADMINISTRATIVE AGENT. Administrative Agent
may resign as Administrative Agent at any time by giving notice thereof to the
Lenders and Borrower. If Administrative Agent resigns under this Agreement, the
Required Lenders shall appoint a successor administrative agent for the Lenders,
which successor administrative agent shall be approved by Borrower. If no
successor administrative agent is appointed prior to the effective date of the
resignation of Administrative Agent, Administrative Agent may appoint, after
consulting with the Lenders and Borrower, a successor administrative agent which
shall be a commercial bank organized under the laws of the U.S. having combined
capital and surplus of at least One Hundred Million Dollars ($100,000,000). Upon
the acceptance of its appointment as successor administrative agent hereunder,
such successor administrative agent shall succeed to all the rights, powers, and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent, and the retiring Administrative
Agent's appointment, powers, and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this ARTICLE 13 and SECTION 14.1 and
SECTION 14.2 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was
CREDIT AGREEMENT - Page 68
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is thirty
(30) days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor administrative agent as provided for above. Notwithstanding the
foregoing, if Administrative Agent is also acting as the Fronting Bank,
simultaneously with appointment of a successor administrative agent as provided
herein such successor administrative agent shall assume all of the duties and
obligations of the retiring Administrative Agent as the Fronting Bank pursuant
to documentation in form and substance satisfactory to the retiring
Administrative Agent.
Section 13.8 ADMINISTRATIVE AGENT FEE. Borrower agrees to pay to
Administrative Agent on the date hereof and on each anniversary of the date
hereof the administrative fee described in that certain letter dated May 26,
1999 from Bank of America and the Banc of America Securities LLC to Borrower, as
the same may be amended from time to time.
Section 13.9 SEVERAL REVOLVING COMMITMENTS. The Revolving Commitments
and other obligations of the Lenders under any Loan Document are several. The
default by any Lender in making a Loan in accordance with its Revolving
Commitment shall not relieve the other Lenders of their obligations under any
Loan Document. In the event of any default by any Lender in making any Loan,
each nondefaulting Lender shall be obligated to make its Loan but shall not be
obligated to advance the amount which the defaulting Lender was required to
advance hereunder. No Lender shall be responsible for any act or omission of any
other Lender.
ARTICLE 14
MISCELLANEOUS
Section 14.1 EXPENSES. Borrower hereby agrees to pay promptly after
presentation of supporting documentation without duplication: (a) all reasonable
costs and expenses of Administrative Agent arising in connection with the
preparation, negotiation, execution, and delivery of the Loan Documents and all
amendments or other modifications to the Loan Documents, including, without
limitation, the reasonable fees and expenses of legal counsel for Administrative
Agent; (b) all reasonable fees, costs, and expenses of Administrative Agent or
the Fronting Bank arising in connection with any Letter of Credit, including the
Fronting Bank's customary fees for amendments, transfers, and drawings on
Letters of Credit; (c) all reasonable costs and expenses of Administrative Agent
in connection with any Default and the enforcement of any Loan Document or
collection of the Obligations, including, without limitation, the fees and
expenses of legal counsel for Administrative Agent; (d) all reasonable fees,
costs, and expenses of any Lender arising in connection with an Event of Default
and the enforcement of any Loan Document or collection of the Obligations during
the continuance of an Event of Default; PROVIDED, HOWEVER, that all Lenders
(other than Administrative Agent) shall be limited to the legal fees and
expenses of one counsel for all Lenders unless such representation shall result
in a conflict of interest, in which case Borrower shall pay the fees, costs, and
expenses of as many counsel as necessary to avoid conflicts among the Lenders;
(e) all transfer, stamp, documentary, or other similar recording or filing
taxes, assessments, or charges (including, without limitation, the Taxes and any
penalties or interest) levied by any Governmental Authority in respect of any
Loan Document or the transactions contemplated thereby; (f) all reasonable
costs, expenses, assessments,
CREDIT AGREEMENT - Page 69
and other charges incurred in connection with any filing, registration,
recording, or perfection of any security interest or other Lien contemplated by
any Loan Document; and (g) all other reasonable costs and expenses incurred by
Administrative Agent in connection with any Loan Document. The fees and expenses
of legal counsel for Administrative Agent that Borrower has agreed to pay
hereunder include the fees and expenses of legal counsel for Administrative
Agent arising in connection with advice given to Administrative Agent as to its
rights and responsibilities hereunder.
Section 14.2 INDEMNIFICATION. BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGER, THE FRONTING BANK, AND EACH LENDER AND
EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL
LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES)
TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM
OR RELATE TO (A) ANY BREACH BY ANY LOAN PARTY OF ANY REPRESENTATION, WARRANTY,
COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (B) THE
PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY
HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE ASSETS OF
BORROWER OR ANY OTHER LOAN PARTY, (C) THE USE OR PROPOSED USE OF ANY LETTER OF
CREDIT OR ANY PAYMENT OR FAILURE TO PAY WITH RESPECT TO ANY LETTER OF CREDIT,
(D) ANY AND ALL STAMP, FILING, OR SIMILAR TAXES (INCLUDING, WITHOUT LIMITATION,
THE "TAXES" AND ANY INTEREST OR PENALTY) LEVIES, DEDUCTIONS, AND CHARGES IMPOSED
ON ADMINISTRATIVE AGENT OR ANY LENDER IN RESPECT OF ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY, OR (E) ANY INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING, THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY; PROVIDED THAT THE PERSON
ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR
HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, OR EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES) FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT
OF COMPETENT JURISDICTION TO HAVE ARISEN OUT OF OR RESULTED FROM ITS GROSS
NEGLIGENCE OR ITS WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF ANY LOAN
DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO
BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
CREDIT AGREEMENT - Page 70
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE (BUT
NOT THE GROSS NEGLIGENCE) OF SUCH PERSON. IN THE CASE OF AN INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 14.2
APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION,
LITIGATION, OR PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS, SHAREHOLDERS,
OR CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER
PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 14.3 LIMITATION OF LIABILITY. None of the Agents, any Lender,
or any Affiliate, officer, director, employee, attorney, or agent thereof shall
have any liability with respect to Borrower, and, by the execution of the Loan
Documents to which it is a party, each other Loan Party, hereby waives,
releases, and agrees not to xxx any of them upon, any claim for any special,
indirect, incidental, consequential, remote, exemplary or punitive damages
suffered or incurred by any Loan Party in connection with, arising out of, or in
any way related to any of the Loan Documents, or any of the transactions
contemplated by any of the Loan Documents.
Section 14.4 NO DUTY. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by any of the Agents or any Lender
shall have the right to act exclusively in the interest of the Agents and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to any Loan Party, any
shareholders of any Loan Party, or any other Person.
Section 14.5 NO FIDUCIARY RELATIONSHIP. The relationship between the
Loan Parties on the one hand and the Agents and each Lender on the other is
solely that of debtor and creditor, and neither any of the Agents nor any Lender
has any fiduciary or other special relationship with any Loan Parties, and no
term or condition of any of the Loan Documents shall be construed so as to deem
the relationship between the Loan Parties on the one hand and any of the Agents
and each Lender on the other to be other than that of debtor and creditor.
Section 14.6 EQUITABLE RELIEF. Borrower recognizes that in the event
any Loan Party fails to pay, perform, observe, or discharge any or all of the
obligations under the Loan Documents, any remedy at law may prove to be
inadequate relief to the Agents and the Lenders. Borrower therefore agrees that
the Agents and the Lenders, if Administrative Agent or the Required Lenders so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 14.7 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
Administrative Agent or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege.
CREDIT AGREEMENT - Page 71
The rights and remedies provided for in the Loan Documents are cumulative and
not exclusive of any rights and remedies provided by Law.
Section 14.8 SUCCESSORS AND ASSIGNS.
(a) BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns. Borrower may not assign or transfer any of its
rights or obligations hereunder or under any other Loan Document
without the prior written consent of Administrative Agent and all of
the Lenders.
(b) ASSIGNMENT. Each Lender may assign to one or more Persons
all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Loans, its
Notes, and its Revolving Commitment); PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible
Assignee. As used herein, "ELIGIBLE ASSIGNEE" means (A) a
Lender; (B) an Affiliate of a Lender or, with respect to any
Lender that is a fund that invests in bank loans, any other
fund that invests in bank loans and is managed by the same
investment advisor as such Lender (herein a "RELATED FUND");
and (C) any other Person approved by Administrative Agent
(such approval being not unreasonably withheld); PROVIDED,
HOWEVER, that neither Borrower nor an Affiliate of Borrower
shall qualify as an Eligible Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Agreement or an assignment by a Lender
to one of its Related Funds, any such partial assignment shall
be in an amount at least equal to Five Million Dollars
($5,000,000) and the assignee must have (after giving effect
to such assignment) Revolving Commitments of at least Ten
Million Dollars ($10,000,000);
(iii) the parties to such assignment shall execute
and deliver to Administrative Agent for its acceptance an
Assignment and Acceptance, together with any Note subject to
such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Agreement. Upon the consummation of any
assignment pursuant to this Section, the assignor, Administrative
Agent, and Borrower shall upon return of the assignor's notes, if any,
make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the U.S. or a state thereof, it shall
deliver to Borrower and Administrative Agent certification as to
exemption from deduction or withholding of Taxes in accordance with
SECTION 5.7.
CREDIT AGREEMENT - Page 72
(c) REGISTER. Administrative Agent shall maintain at the
Principal Office a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Commitment of, and principal
amount of the Loans owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and Borrower,
Administrative Agent, and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by
Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice. Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Note or
Notes subject to such assignment and payment of the processing fee,
Administrative Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt
notice thereof to the parties thereto.
(d) PARTICIPATIONS. Each Lender may sell participations to one
or more Persons in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Commitment
and its Loans); PROVIDED, HOWEVER, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
ARTICLE 5 (to the extent that the Lender selling such participation
would have been entitled thereto) and the right of set-off contained in
SECTION 12.5, and (iv) Borrower shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole
right to enforce the obligations of Borrower relating to its Loans and
to approve any amendment, modification, waiver, or consent of any
provision of any Loan Document (other than amendments, modifications,
waivers, or consents of the types referred to in SECTION 14.11(a)).
(e) PLEDGE TO FEDERAL RESERVE. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time
assign and pledge all or any portion of its Loans to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations
hereunder.
(f) DELIVERY OF INFORMATION. Any Lender may furnish any
information concerning any Loan Party in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants) subject to such Persons agreeing to being
bound by the provisions of SECTION 14.22.
Section 14.9 SURVIVAL. All representations and warranties made in any
Loan Document or in any document, statement, or certificate furnished in
connection with any Loan Document shall survive the execution and delivery of
the Loan Documents and no investigation by Administrative Agent or any Lender or
any closing shall affect the representations and warranties or the right of
Administrative Agent or any Lender to rely upon them. Without prejudice to the
survival of any
CREDIT AGREEMENT - Page 73
other obligation of Borrower hereunder, the obligations under ARTICLE 5, SECTION
13.5, SECTION 14.1, and SECTION 14.2 shall survive repayment of the Notes and
termination of the Revolving Commitments and the Letters of Credit.
Section 14.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
Section 14.11 AMENDMENTS AND WAIVERS. Any provision of any Loan
Document may be amended or waived and any consent to any departure by any Loan
Party therefrom may be granted if, but only if, such amendment, waiver, or
consent is in writing and is signed by Borrower and the Required Lenders (and,
if ARTICLE 13 or the rights or duties of Administrative Agent are affected
thereby, by Administrative Agent); PROVIDED that no such amendment, waiver, or
consent applicable to:
(a) a Loan, Letter of Credit, or Revolving Commitment which
has the effect of:
(i) increasing such Revolving Commitment,
(ii) reducing the principal of or rate of
interest on such Loan or any Reimbursement Obligation
relating to such Letter of Credit or any fees or
other amounts payable hereunder to Lenders generally
with respect to such Loan, Letter of Credit, or
Revolving Commitment,
(iii) postponing any date fixed for the
payment of any scheduled installment of principal of
or interest on such Loan or any Reimbursement
Obligation relating to such Letter of Credit or any
fees or other amounts payable hereunder with respect
to such Loan, Letter of Credit, or Revolving
Commitment or changing any optional or mandatory
prepayment provision applicable to such Loan or
Letter of Credit, or
(iv) postponing any date fixed for
termination of such Revolving Commitment
shall be effective unless also signed by each Lender holding (with
respect to Letters of Credit either directly or through a participation
under SECTION 2.7(a)) the Loan, Letter of Credit, or Revolving
Commitment of the type being modified; and
(b) any change (including a waiver) in:
CREDIT AGREEMENT - Page 74
(i) the definition of Required Lenders or
the provisions of this SECTION 14.11; or
(ii) the conditions specified in ARTICLE 7
hereof, or
(iii) which has the effect of releasing any
Loan Party in a transaction which is not otherwise
permitted hereby, or
(iv) releases of all or substantially all of
the Collateral, or
(v) releases of all or substantially all of
the Guaranties
shall not be effective unless signed by all Lenders.
Section 14.12 MAXIMUM INTEREST RATE.
(a) No interest rate specified in any Loan Document shall at
any time exceed the Maximum Rate. If at any time the interest rate (the
"CONTRACT RATE") for any Obligation shall exceed the Maximum Rate,
thereby causing the interest accruing on such Obligation to be limited
to the Maximum Rate, then any subsequent reduction in the Contract Rate
for such Obligation shall not reduce the rate of interest on such
Obligation below the Maximum Rate until the aggregate amount of
interest accrued on such Obligation equals the aggregate amount of
interest which would have accrued on such Obligation if the Contract
Rate for such Obligation had at all times been in effect.
(b) Notwithstanding anything to the contrary contained in any
Loan Document, the interest and fees paid or agreed to be paid under
the Loan Documents shall not exceed the Maximum Rate. If Administrative
Agent or any Lender shall receive interest or a fee in an amount that
exceeds the Maximum Rate, the excessive interest or fee shall be
applied to the principal of the outstanding Obligations or, if it
exceeds the unpaid principal, refunded to Borrower. In determining
whether the interest or a fee contracted for, charged, or received by
Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather
than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the contemplated
term of the so that interest for the entire term does not exceed the
Maximum Rate.
Section 14.13 NOTICES. All notices and other communications provided
for in any Loan Document to which any Loan Party is a party shall be given or
made in writing (except as otherwise permitted by SECTION 4.3) and telecopied,
mailed by certified mail return receipt requested, or delivered to the intended
recipient at the "Address for Notices" specified below its name on SCHEDULE
14.13 or with respect to any Loan Party, at the "Address for Notices" specified
below Borrower's name on SCHEDULE 14.13, or with respect to a Lender not a party
to this Agreement on the Closing Date, in its Assignment and Acceptance, or, as
to any party at such other address as shall be
CREDIT AGREEMENT - Page 75
designated by such party in a notice to each other party given in accordance
with this Section. Except as otherwise provided in any Loan Document, all such
communications shall be deemed to have been duly given when transmitted by
telecopy (if prior to 5:00 p.m., San Francisco, California time, otherwise the
next Business Day), subject to telephone confirmation of receipt, or when
personally delivered or, in the case of a mailed notice, three (3) Business Days
after being duly deposited in the mails, in each case given or addressed as
aforesaid; PROVIDED, HOWEVER, notices to Administrative Agent pursuant to
SECTION 2.7 or SECTION 4.3 shall not be effective until received by
Administrative Agent. Any agreement of Administrative Agent herein to receive
certain notices by telephone or telecopy is solely for the convenience and at
the request of Borrower. Administrative Agent, the Lenders, and the Fronting
Bank shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by Borrower to give such notice and none of Administrative
Agent, any Lender, nor the Fronting Bank shall have any liability to Borrower or
any other Person on account of any action taken or not taken by Administrative
Agent, any Lender, or the Fronting Bank in reliance upon such telephonic or
telecopy notice. The obligation of Borrower to repay the Loans and pay the
Reimbursement Obligations shall not be affected in any way or to any extent by
any failure of Administrative Agent, any Lender, or the Fronting Bank to receive
written confirmation of any telephonic or telecopy notice or the receipt by
Administrative Agent, any Lender, or the Fronting Bank of a confirmation which
is at variance with the terms understood by Administrative Agent, such Lender,
or the Fronting Bank to be contained in such telephonic or telecopy notice.
Section 14.14 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA AND THE APPLICABLE LAWS OF THE U.S. ANY ACTION OR PROCEEDING AGAINST
BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN ANY CALIFORNIA STATE COURT OR FEDERAL COURT LOCATED IN THE
CITY AND COUNTY OF SAN FRANCISCO. BORROWER IRREVOCABLY (a) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (b) WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT
IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. BORROWER AGREES THAT
SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 14.13 OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
OF ADMINISTRATIVE AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST
BORROWER OR WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER
JURISDICTIONS. ANY ACTION OR PROCEEDING BY ANY LOAN PARTY AGAINST ANY OF THE
AGENTS OR ANY LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN SAN FRANCISCO,
CALIFORNIA.
CREDIT AGREEMENT - Page 76
Section 14.15 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 14.16 SEVERABILITY. Any provision of any Loan Document held by
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of such Loan Document and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 14.17 HEADINGS. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 14.18 CONSTRUCTION. Borrower, each Loan Party (by its execution
of the Loan Documents to which it is a party), the Agents, and each Lender
acknowledges that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review the Loan Documents with
its legal counsel and that the Loan Documents shall be construed as if jointly
drafted by the parties thereto.
Section 14.19 INDEPENDENCE OF COVENANTS. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 14.20 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF ANY OF THE AGENTS OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
OR ENFORCEMENT THEREOF.
Section 14.21 CONFIDENTIALITY. Each Lender agrees to keep confidential
any information obtained by it from any Loan Party or its agents or
representatives pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery in accordance with such Lender's
customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (a) to such Lender's officers, directors,
employees, representatives, attorneys, agents, or affiliates who are advised of
the confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-confidential
basis from any source or as such information that is in the public domain at the
time of disclosure, (c) to the extent disclosure is required by Law, regulation,
subpoena, or judicial order or process (provided that notice of such requirement
or order shall be promptly furnished to Borrower unless such notice is legally
prohibited) or requested or required by bank regulators or auditors or any
administrative body,
CREDIT AGREEMENT - Page 77
commission, or other Governmental Authority to whose jurisdiction such Lender
may be subject, (d) to assignees or participants or potential assignees or
participants or to professional advisors or direct or indirect contractual
counter parties in swap agreements provided in each case such Person agrees to
be bound by the provisions of this SECTION 14.22, (e) to the extent required in
connection with any litigation between any Loan Party and any Lender with
respect to the Loans or this Agreement and the other Loan Documents, (f) to
rating agencies, their employees, representatives, attorneys, agents, or
affiliates who are advised of the confidential nature of such information, and
(g) with Borrower's prior written consent.
CREDIT AGREEMENT - Page 78
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PEREGRINE SYSTEMS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Revolving Commitment: BANK OF AMERICA, N.A.,
$10,000,000.00 as Administrative Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Revolving Commitment: BANKBOSTON, N.A.,
$10,000,000.00 as Syndication Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CREDIT AGREEMENT
EXHIBIT "A"
FORM OF REVOLVING NOTE
REVOLVING NOTE
$______________ July___, 1999
FOR VALUE RECEIVED, the undersigned, PEREGRINE SYSTEMS, INC., a
Delaware corporation (the "BORROWER"), hereby promises to pay to the order of
________________________ (the "LENDER"), at the Principal Office of the
Administrative Agent, in lawful money of the United States of America and in
immediately available funds, the principal amount of
_______________________________ NO/100 DOLLARS ($_____________) or such lesser
amount as shall equal the aggregate unpaid principal amount of the Revolving
Loans made by the Lender to the Borrower under the Credit Agreement referred to
below, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such
Revolving Loan, at such office, in like money and funds, for the period
commencing on the date of such Revolving Loan until such Revolving Loan shall be
paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The Borrower hereby authorizes the Lender to record in its records the
amount of each Revolving Loan and Type of Accounts established under each
Revolving Loan and all Continuations, Conversions and payments of principal in
respect thereof, which records shall, in the absence of manifest error,
constitute prima facie evidence of the accuracy thereof; PROVIDED, HOWEVER, that
the failure to make such notation with respect to any such Revolving Loan or
payment shall not limit or otherwise affect the obli gations of the Borrower
under the Credit Agreement or this Revolving Note.
This Revolving Note is one of the Revolving Notes referred to in the
Credit Agreement dated as of July 30, 1999, among the Borrower, the Lender, the
other lenders party thereto (collectively with the Lender, the "LENDERS"),
BankBoston, N.A., as syndication agent and Bank of America, N.A., as
administrative agent for such lenders (the "ADMINISTRATIVE AGENT" and such
Credit Agreement, as the same may be amended or otherwise modified from time to
time, being referred to herein as the "CREDIT AGREEMENT"), and evidences
Revolving Loans made by the Lender thereunder. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity of this Revolving
Note upon the happening of certain stated events and for prepayments of
Revolving Loans prior to the maturity of this Revolving Note upon the terms and
conditions specified in the Credit Agreement. Capitalized terms used in this
Revolving Note, unless otherwise defined herein, have the respective meanings
assigned to them in the Credit Agreement.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
Except for any notices expressly required by the Loan Documents, the
Borrower and each surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this Revolving Note jointly and
severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace and all
other formalities of any
kind, and consent to all extensions without notice for any period or periods of
time and partial payments, before or after maturity, and any impairment of any
collateral securing this Revolving Note, all without prejudice to the holder.
The holder shall similarly have the right to deal in any way, at any time, with
one or more of the foregoing parties without notice to any other party, and to
grant any such party any extensions of time for payment of any of said
indebtedness, or to release any such party or to release or substitute part or
all of the collateral securing this Revolving Note, or to grant any other
indulgences or forbearances whatsoever, without notice to any other party and
without in any way affecting the personal liability of any party hereunder.
PEREGRINE SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
EXHIBIT "B"
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE
Dated _________, 1999
Reference is made to the Credit Agreement dated as of July 30, 1999,
among PEREGRINE SYSTEMS, INC., a Delaware corporation (the "BORROWER"), the
lenders named therein (the "LENDERS"), BankBoston, N.A., as syndication agent,
and BANK OF AMERICA, N.A., as administrative agent for the Lenders (the
"ADMINISTRATIVE AGENT" and such Credit Agreement, as it may be amended, restated
or otherwise modified from time to time, being hereinafter referred to as the
"CREDIT AGREEMENT"; capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Credit Agreement). This
Assignment and Acceptance is being executed pursuant to SECTION 14.8 of the
Credit Agreement.
_________________________________ (the "ASSIGNOR") and ________________
(the "ASSIGNEE") agree as follows:
1. (a) The Assignor hereby sells and assigns to the Assignee without
recourse, representation or warranty except as specifically set
forth herein, and the Assignee hereby purchases and assumes from
the Assignor as of the Effective Date (as defined below), a
___________% interest in and to all the Assignor's rights and
obligations under the Credit Agreement and the other Loan
Documents (including, without limitation, such percentage
interest in the Revolving Commitment of the Assignor on the
Effective Date and such percentage interest in the Letter of
Credit Liabilities (including participations purchased pursuant
to the Credit Agreement) held by and Loans owing to, the Assignor
outstanding on the Effective Date together with such percentage
interest in all unpaid interest and fees accrued from the
Effective Date relating thereto).
(b) After giving effect to the foregoing assignment, Assignor's
and Assignee's Revolving Commitments and Letter of Credit
Liabilities shall be as follows:
ASSIGNOR:
Revolving Commitment $____________________
Letter of Credit Liabilities $____________________
ASSIGNEE
Revolving Commitment $____________________
Letter of Credit Liabilities $____________________
ASSIGNMENT AND ACCEPTANCE - Page 1
(c) After giving effect to the foregoing assignment, Assignor's
and Assignee's Loans shall be as follows:
ASSIGNOR:
Loans $____________________
ASSIGNEE
Loans $____________________
2. The Assignor (i) represents that as of the date hereof, its
Revolving Commitment is $_____________, the outstanding Letter of
Credit Liabilities (including participations purchased pursuant
to the Credit Agreement) held by it is $____________ and the
outstanding principal balance of its Loans is $_____________ (all
as unreduced by any assignments which have not yet become
effective); (ii) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit
Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement or any other Loan Document, other than that
it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of the Borrower or any Loan Party or the performance or
observance by the Borrower or any other Loan Party of any of
their obligations under the Credit Agreement or any other Loan
Document; and (iv) attaches the Revolving Note held by Assignor
and requests that the Administrative Agent exchange such
Revolving Note for new Revolving Notes payable to the order of
(A) Assignee in amounts equal to the Revolving Commitments
assumed by the Assignee pursuant hereto and the outstanding
principal amount of the Loans assigned to Assignee pursuant
hereto, as applicable, and (B) the Assignor in amounts equal to
the Revolving Commitments and Loans retained by the Assignor
under the Credit Agreement, as specified above.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter in this Assignment and Acceptance; (ii)
confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements
delivered pursuant to SECTION 9.1 thereof, and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it will,
independently and without reliance upon the Administrative Agent,
the Assignor, 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 the Credit Agreement and the other Loan Documents; (iv)
confirms that it is eligible to be an Assignee; (v) appoints and
authorizes the Administrative Agent to take such action
ASSIGNMENT AND ACCEPTANCE - Page 2
on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably
incidental thereto; (vi) agrees that it will perform in
accordance with their terms all obligations which by the terms of
the Credit Agreement and the other Loan Documents are required to
be performed by it as a Lender; [and (vii) attaches the forms
prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty].1
4. The effective date for this Assignment and Acceptance shall be
_______________, 19__ (the "EFFECTIVE DATE").2 Following the
execution of this Assignment and Acceptance, it will be delivered
to the Administrative Agent for acceptance and recording by the
Administrative Agent.
5. Upon such acceptance and recording, from and after the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance,
shall have the rights and obligations of a Lender thereunder and
under the other Loan Documents and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit
Agreement and the other Loan Documents.
6. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect
of the interest assigned hereby (including payments of principal,
interest, fees, and other amounts) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement and the Note for periods prior to the
Effective Date directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
AND APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
8. This Assignment and Acceptance may be executed in any number of
counterparts and on telecopy counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
---------------------
1 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
2 Such date shall be at least five (5) Business Days after the execution of
this Assignment and Acceptance and delivery thereof to the Administrative Agent
and Borrower.
ASSIGNMENT AND ACCEPTANCE - Page 3
[NAME OF ASSIGNOR]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
[NAME OF ASSIGNEE]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACCEPTED BY:
BANK OF AMERICA, N.A.
as Administrative Agent
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
PEREGRINE SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ASSIGNMENT AND ACCEPTANCE - Page 4
EXHIBIT "C"
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE - Page 1
COMPLIANCE CERTIFICATE
The undersigned, duly appointed and acting president or chief financial
officer (as the case may be) of PEREGRINE SYSTEMS, INC. ("BORROWER"), being duly
authorized, hereby delivers this Compliance Certificate to BANK OF AMERICA,
N.A., as administrative agent ("ADMINISTRATIVE AGENT"), pursuant to SECTION
9.1(c) of that certain Credit Agreement dated as of July 30, 1999, among
Borrower, Administrative Agent, BankBoston, N.A., as Syndication Agent, and the
other Lenders party thereto (as such agreement may be amended, restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"). Terms defined in
the Credit Agreement, wherever used herein, shall have the same meanings as are
prescribed by the Credit Agreement.
1. The Borrower hereby delivers to Administrative Agent [check as
applicable]: ___ the audited fiscal year end financial statements required by
SECTION 9.1(a); or ___ the quarterly financial statements required by SECTION
9.1(b); dated as of _____________, ____. Such financial statements are complete
and correct in all material respects and have been prepared in accordance with
GAAP (except, in the case of the quarterly financial statements, for the
omission of footnotes) applied consistently throughout the periods reflected
therein.
2. The undersigned hereby states that, to the best of his or her
knowledge and based upon an examination sufficient to enable an informed
statement [check as applicable]:
/ / No Default or Event of Default exists as of the date hereof.
/ / One or more Defaults or Events of Default have occurred or
exist as of the date hereof. Included within EXHIBIT "A"
attached hereto is a written description specifying each such
Default or Event of Default, its nature, when it occurred,
whether it is continuing as of the date hereof and the steps
being taken by the Borrower with respect thereto. Except as so
specified, no Default or Event of Default exists as of the
date hereof.
3. EXHIBIT "B" attached hereto sets forth the calculations necessary to
establish the status of Borrower's compliance with the covenants contained in
SECTION 11.1 ("Maximum Leverage Ratio"), SECTION 11.2 ("Minimum EBITDA") and
SECTION 11.3 ("Minimum Quick Ratio") of the Credit Agreement as of the effective
date of the financial statements referenced in PARAGRAPH 1 above.
4. All of the information on the Schedules to the Credit Agreement is
complete and accurate as of the date hereof except as set forth on EXHIBIT "C"
hereto which sets forth the information required to make such Schedules complete
and accurate after its acceptance by Administrative Agent and the Lenders in
accordance with the terms of the Credit Agreement.
COMPLIANCE CERTIFICATE - Page 2
Date of execution of Compliance Certificate: __________, 1999.
PEREGRINE SYSTEMS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
COMPLIANCE CERTIFICATE - Page 3
EXHIBIT "A"
to
COMPLIANCE CERTIFICATE
dated
________, 1999
The following is attached to and made a part of the above referenced Compliance
Certificate.
[specify Defaults or Events of Defaults]
COMPLIANCE CERTIFICATE - Page 4
EXHIBIT "B"
to
COMPLIANCE CERTIFICATE
dated
_________, 1999
The following is attached to and made a part of the above referenced Compliance
Certificate.
[insert calculations and information]
COMPLIANCE CERTIFICATE - Page 5
EXHIBIT "C"
to
COMPLIANCE CERTIFICATE
dated
_________, 1999
The following is attached to and made a part of the above referenced Compliance
Certificate.
[Attach information regarding Schedules, including information
required to update the Schedules]
COMPLIANCE CERTIFICATE - Page 6
EXHIBIT "D"
FORM OF SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY - Page 1
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY (this "SUBSIDIARY GUARANTY"), dated as of July
__, 1999, is executed and delivered by each of the undersigned Subsidiaries and
any Subsidiary who may become a party hereto pursuant to the execution and
delivery of a Joinder Agreement (each a "GUARANTOR" and collectively, the
"GUARANTORS"), to and in favor of Administrative Agent (as defined below).
A. PEREGRINE SYSTEMS, INC. ("BORROWER"), a Delaware corporation, has
entered into that certain Credit Agreement dated as of July 30, 1999, among
Borrower, the lenders party thereto (individually a "LENDER" and collectively,
the "LENDERS"), BankBoston, N.A. , as syndication agent, and BANK OF AMERICA,
N.A., as administrative agent ("ADMINISTRATIVE AGENT") for itself and the other
Lenders and as the Fronting Bank (such Credit Agreement, as it may be amended,
restated or otherwise modified from time to time, being hereinafter referred to
as the "CREDIT AGREEMENT"; capitalized terms not otherwise defined herein shall
have the same meaning as set forth in the Credit Agreement).
B. The execution of this Subsidiary Guaranty is required by the Credit
Agreement and is a condition to the Lenders making extensions of credit
available to Borrower and the Fronting Bank issuing Letters of Credit for the
account of Borrower thereunder.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, each of the undersigned Guarantors and any
Guarantor hereafter added hereto pursuant to a Joinder Agreement, hereby
irrevocably, unconditionally and jointly and severally guarantees to the
Administrative Agent and the Lenders the full and prompt payment and performance
of the Guaranteed Indebtedness (hereinafter defined), this Subsidiary Guaranty
being upon the following terms:
1. The term "GUARANTEED INDEBTEDNESS", as used herein means all of the
"Obligations", as defined in the Credit Agreement and shall include any and all
post-petition interest and expenses (including attorneys' fees) whether or not
allowed under any bankruptcy, insolvency, or other similar law; PROVIDED that,
notwithstanding anything to the contrary contained in this Subsidiary Guaranty,
the Guaranteed Indebtedness shall be limited, with respect to each Guarantor, to
an aggregate amount equal to the greatest amount that would not render such
Guarantor's indebtedness, liabilities or obligations hereunder subject to
avoidance under Sections 544, 548 or 550 of the United States Bankruptcy Code or
subject to being set aside or annulled under any applicable state law relating
to fraud on creditors; PROVIDED, FURTHER, that, for purposes of the immediately
preceding clauses, it shall be presumed that the Guaranteed Indebtedness for
each Guarantor hereunder does not equal or exceed any aggregate amount which
would render such Guarantor's indebtedness, liabilities or obligations hereunder
subject to being so avoided, set aside or annulled, and the burden of proof to
the contrary shall be on the party asserting to the contrary. Subject to but
without limiting the generality of the foregoing sentence, the provisions of
this Subsidiary Guaranty are severable and, in any legally binding action or
proceeding involving any state corporate law or any bankruptcy, insolvency or
other laws of general application relating to the enforcement of creditors'
rights and general principles of equity, if the indebtedness, liabilities or
obligations of any Guarantor hereunder
SUBSIDIARY GUARANTY - Page 2
would otherwise be held or determined to be void, invalid or unenforceable on
account of the amount of its indebtedness, liabilities or obligations hereunder,
then, notwithstanding any other provision of this Subsidiary Guaranty to the
contrary, the amount of such indebtedness, liabilities or obligations shall, for
purposes of determining such Guarantor's obligations under this Subsidiary
Guaranty, without any further action by such Guarantor or any other Person, be
automatically limited and reduced to the greatest amount which is valid and
enforceable as determined in such action or proceeding.
2. Each Guarantor under this Subsidiary Guaranty, and each guarantor
under other guaranties, if any, relating to the Credit Agreement (the "RELATED
GUARANTIES") which contain a contribution provision similar to that set forth in
this paragraph 2, together desire to allocate among themselves (collectively,
the "CONTRIBUTING GUARANTORS"), in a fair and equitable manner, their
obligations arising under this Subsidiary Guaranty and the Related Guaranties.
Accordingly, in the event any payment or distribution is made by a Guarantor
under this Subsidiary Guaranty or a guarantor under a Related Guaranty (a
"FUNDING GUARANTOR") that exceeds its Fair Share (as defined below), that
Funding Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below), with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (i)
the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect to
such Contributing Guarantor to (y) the aggregate of the Adjusted Maximum Amounts
with respect to all Contributing Guarantors, MULTIPLIED BY (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Subsidiary Guaranty and the Related Guaranties in respect of the
obligations guarantied. "FAIR SHARE SHORTFALL" means, with respect to a
Contributing Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Contributing Guarantor over the Aggregate Payments of
such Contributing Guarantor. "ADJUSTED MAXIMUM AMOUNT" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Subsidiary
Guaranty and the Related Guaranties, in each case determined in accordance with
the provisions hereof and thereof; PROVIDED THAT, solely for purposes of
calculating the "Adjusted Maximum Amount" with respect to any Contributing
Guarantor for purposes of this paragraph 2, the assets or liabilities arising by
virtue of any rights to or obligations of contribution hereunder or under any
similar provision contained in a Related Guaranty shall not be considered as
assets or liabilities of such Contributing Guarantor. "AGGREGATE PAYMENTS"
means, with respect to a Contributing Guarantor as of any date of determination,
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Subsidiary Guaranty and
the Related Guaranties (including, without limitation, in respect of this
paragraph 2 or any similar provision contained in a Related Guaranty). The
amounts payable as contributions hereunder and under similar provisions in the
Related Guaranties shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this paragraph 2 or any similar provision contained in a Related Guaranty shall
not be construed in any way to limit the liability of any Contributing Guarantor
hereunder or under a Related Guaranty. Each Contributing Guarantor under a
Related Guaranty is a third party beneficiary to the contribution agreement set
forth in this paragraph 2.
SUBSIDIARY GUARANTY - Page 3
3. This instrument shall be an absolute, continuing, irrevocable and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and each Guarantor shall remain liable on its obligations hereunder
until the payment and performance in full of the Guaranteed Indebtedness. No
set-off, counterclaim, recoupment, reduction, or diminution of any obligation,
or any defense of any kind or nature which Borrower may have against
Administrative Agent, any Lender or any other party, or which any Guarantor may
have against Borrower, Administrative Agent, any Lender or any other party,
shall be available to, or shall be asserted by, any Guarantor against
Administrative Agent, any Lender or any subsequent holder of the Guaranteed
Indebtedness or any part thereof or against payment of the Guaranteed
Indebtedness or any part thereof.
4. If a Guarantor becomes liable for any indebtedness owing by Borrower
to Administrative Agent or any Lender by endorsement or otherwise, other than
under this Subsidiary Guaranty, such liability shall not be in any manner
impaired or affected hereby, and the rights of Administrative Agent and Lenders
hereunder shall be cumulative of any and all other rights that Administrative
Agent and Lenders may ever have against such Guarantor. The exercise by
Administrative Agent and Lenders of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
5. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness
becomes due, whether by its terms, by acceleration, or otherwise, the Guarantors
shall, jointly and severally, promptly pay the amount due thereon to
Administrative Agent and Lenders without notice or demand in lawful currency of
the United States of America and it shall not be necessary for Administrative
Agent or any Lender, in order to enforce such payment by any Guarantor, first to
institute suit or exhaust its remedies against Borrower or others liable on such
Guaranteed Indebtedness, or to enforce any rights against any collateral which
shall ever have been given to secure such Guaranteed Indebtedness. In the event
such payment is made by a Guarantor, then such Guarantor shall be subrogated to
the rights then held by Administrative Agent and any Lender with respect to the
Guaranteed Indebtedness to the extent to which the Guaranteed Indebtedness was
discharged by such Guarantor and, in addition, upon payment by such Guarantor of
any sums to Administrative Agent and any Lender hereunder, all rights of such
Guarantor against Borrower, any other guarantor or any Collateral arising as a
result therefrom by way of right of subrogation, reimbursement, or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full of the Guaranteed Indebtedness.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be
payable by the Guarantors hereunder forthwith on demand by Administrative Agent
or any Lender.
7. Each Guarantor hereby waives all suretyship defenses and agrees that
its obligations under this Subsidiary Guaranty shall not be released,
discharged, diminished, impaired, reduced, or
SUBSIDIARY GUARANTY - Page 4
affected for any reason or by the occurrence of any event, including, without
limitation, one or more of the following events, whether or not with notice to
or the consent of any Guarantor: (a) the taking or accepting of collateral as
security for any or all of the Guaranteed Indebtedness or the release,
surrender, exchange, or subordination of any collateral now or hereafter
securing any or all of the Guaranteed Indebtedness; (b) any partial release of
the liability of any Guarantor hereunder, or the full or partial release of any
other guarantor from liability for any or all of the Guaranteed Indebtedness;
(c) any disability of Borrower, or the dissolution, insolvency, or bankruptcy of
Borrower, any Guarantor, or any other party at any time liable for the payment
of any or all of the Guaranteed Indebtedness; (d) any renewal, extension,
modification, waiver, amendment, or rearrangement of any or all of the
Guaranteed Indebtedness or any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed Indebtedness;
(e) any adjustment, indulgence, forbearance, waiver, or compromise that may be
granted or given by Administrative Agent or any Lender to Borrower, any
Guarantor, or any other party ever liable for any or all of the Guaranteed
Indebtedness; (f) any neglect, delay, omission, failure, or refusal of
Administrative Agent or any Lender to take or prosecute any action for the
collection of any of the Guaranteed Indebtedness or to foreclose or take or
prosecute any action in connection with any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (g) the unenforceability or invalidity of any or all of the
Guaranteed Indebtedness or of any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed Indebtedness;
(h) any payment by Borrower or any other party to Administrative Agent or any
Lender is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason Administrative Agent or any Lender is
required to refund any payment or pay the amount thereof to someone else; (i)
the settlement or compromise of any of the Guaranteed Indebtedness; (j) the
non-perfection of any security interest or lien securing any or all of the
Guaranteed Indebtedness; (k) any impairment of any collateral securing any or
all of the Guaranteed Indebtedness; (l) the failure of Administrative Agent or
any Lender to sell any collateral securing any or all of the Guaranteed
Indebtedness in a commercially reasonable manner or as otherwise required by
law; (m) any change in the corporate existence, structure, or ownership of
Borrower; or (n) any other circumstance which might otherwise constitute a
defense (other than payment and performance in full) available to, or discharge
of, Borrower or any Guarantor.
8. Each Guarantor represents and warrants to Administrative Agent and
Lenders as follows:
(a) All representations and warranties in the Credit Agreement
relating to it are true and correct as of the date hereof and on each date the
representations and warranties hereunder are restated pursuant to any of the
Loan Documents with the same force and effect as if such representations and
warranties had been made on and as of such date except to the extent that such
representations and warranties relate specifically to another date or to the
extent that a fact, event or circumstance has occurred that makes such
representation or warranty untrue but which is not prohibited to occur or exist
(or which does not cause an Event of Default) under the Loan Documents.
(b) The value of the consideration received and to be received
by it as a result of Borrower, Administrative Agent and Lenders entering into
the Credit Agreement and its executing
SUBSIDIARY GUARANTY - Page 5
and delivering this Subsidiary Guaranty and the other Loan Documents to which it
is a party is reasonably worth at least as much as its liability and obligation
hereunder and thereunder, and such liability and obligation and the Credit
Agreement have benefitted and may reasonably be expected to benefit it directly
or indirectly.
(c) It has, independently and without reliance upon
Administrative Agent or any Lender and based upon such documents and information
as it has deemed appropriate, made its own analysis and decision to enter into
the Loan Documents to which it is a party.
(d) It has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition and assets of
Borrower and it is not relying upon Administrative Agent or the Lenders to
provide (and neither the Administrative Agent nor any Lender shall have any duty
to provide) any such information to it either now or in the future.
9. Each Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Lender has any commitment
under the Credit Agreement, it will comply with all covenants set forth in the
Credit Agreement specifically applicable to it.
10. When an Event of Default exists, Administrative Agent and Lenders
shall have the right to set-off and apply against this Subsidiary Guaranty or
the Guaranteed Indebtedness or both, at any time and without notice to any
Guarantor, any and all deposits (general or special, time or demand, provisional
or final, but excluding any account established by a Guarantor as a fiduciary
for another party) or other sums at any time credited by or owing from
Administrative Agent and Lenders to any Guarantor whether or not the Guaranteed
Indebtedness is then due and irrespective of whether or not Administrative Agent
or any Lender shall have made any demand under this Subsidiary Guaranty. Each
Lender agrees promptly to notify the Borrower (with a copy to the Administrative
Agent) after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights and remedies of Administrative Agent and the Lenders hereunder are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which Administrative Agent or any Lender may have.
11. (a) Each Guarantor hereby agrees that the Subordinated Indebtedness
(as defined below) shall be subordinate and junior in right of payment to the
prior payment in full of all Guaranteed Indebtedness as herein provided. The
Subordinated Indebtedness shall not be payable, and no payment of principal,
interest or other amounts on account thereof, and no property or guarantee of
any nature to secure or pay the Subordinated Indebtedness shall be made or
given, directly or indirectly by or on behalf of any Debtor (hereafter defined)
or received, accepted, retained or applied by any Guarantor unless and until the
Guaranteed Indebtedness shall have been paid in full in cash; EXCEPT THAT prior
to occurrence of an Event of Default, a Guarantor shall have the right to
receive payments on the Subordinated Indebtedness made in the ordinary course of
business. After the occurrence and during the continuance of an Event of
Default, no payments of principal or interest may be made or given, directly or
indirectly, by or on behalf of any Debtor or received, accepted, retained or
applied by any Guarantor unless and until the Guaranteed Indebtedness shall have
been paid in full in cash. If any sums shall be paid to a Guarantor by any
Debtor or any other
SUBSIDIARY GUARANTY - Page 6
Person on account of the Subordinated Indebtedness when such payment is not
permitted hereunder, such sums shall be held in trust by such Guarantor for the
benefit of Administrative Agent and the Lenders and shall forthwith be paid to
Administrative Agent without affecting the liability of any Guarantor under this
Subsidiary Guaranty and may be applied by Administrative Agent against the
Guaranteed Indebtedness in accordance with the Credit Agreement. Upon the
request of Administrative Agent, a Guarantor shall execute, deliver, and endorse
to Administrative Agent such documentation as Administrative Agent may request
to perfect, preserve, and enforce its rights hereunder. For purposes of this
Subsidiary Guaranty and with respect to a Guarantor, the term "SUBORDINATED
INDEBTEDNESS" means all indebtedness, liabilities, and obligations of Borrower
or any other Loan Party other than such Guarantor (Borrower and such Loan
Parties herein the "DEBTORS") to such Guarantor, whether such indebtedness,
liabilities, and obligations now exist or are hereafter incurred or arise, or
are direct, indirect, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such indebtedness,
liabilities, or obligations are evidenced by a note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such
indebtedness, obligations, or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by such Guarantor.
(b) Each Guarantor agrees that any and all Liens (including
any judgment liens), upon any Debtor's assets securing payment of any
Subordinated Indebtedness shall be and remain inferior and subordinate to any
and all Liens upon any Debtor's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such Liens in favor of a
Guarantor, Administrative Agent or any Lender presently exist or are hereafter
created or attached. Without the prior written consent of Administrative Agent,
no Guarantor shall (i) file suit against any Debtor or exercise or enforce any
other creditor's right it may have against any Debtor, or (ii) foreclose,
repossess, sequester, or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any obligations of any
Debtor to such Guarantor or any Liens held by such Guarantor on assets of any
Debtor.
(c) In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency proceeding
involving any Debtor as debtor, Administrative Agent shall have the right to
prove and vote any claim under the Subordinated Indebtedness and to receive
directly from the receiver, trustee or other court custodian all dividends,
distributions, and payments made in respect of the Subordinated Indebtedness
until the Guaranteed Indebtedness has been paid in full in cash. Administrative
Agent may apply any such dividends, distributions, and payments against the
Guaranteed Indebtedness in accordance with the Credit Agreement.
(d) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Subsidiary Guaranty.
12. Except for modifications made pursuant to the execution and
delivery of a Joinder Agreement (which only needs to be signed by each
Subsidiary party thereto), no amendment or
SUBSIDIARY GUARANTY - Page 7
waiver of any provision of this Subsidiary Guaranty or consent to any departure
by any Guarantor therefrom shall in any event be effective unless the same shall
be in writing and signed by Administrative Agent and Required Lenders except as
otherwise provided in the Credit Agreement. No failure on the part of
Administrative Agent or any Lender to exercise, and no delay in exercising, any
right, power, or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power, or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
13. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by Borrower or others (including any
Guarantor), with respect to any of the Guaranteed Indebtedness shall, if the
statute of limitations in favor of a Guarantor against Administrative Agent or
any Lender shall have commenced to run, toll the running of such statute of
limitations and, if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
14. This Subsidiary Guaranty is for the benefit of Administrative Agent
and the Lenders and their successors and assigns, and in the event of an
assignment of the Guaranteed Indebtedness, or any part thereof, the rights and
benefits hereunder, to the extent applicable to the indebtedness so assigned,
may be transferred with such indebtedness. This Subsidiary Guaranty is binding
not only on each Guarantor, but on each Guarantor's successors and assigns.
15. Each Guarantor recognizes that Administrative Agent and the Lenders
are relying upon this Subsidiary Guaranty and the undertakings of each Guarantor
hereunder and under the other Loan Documents to which each is a party in making
extensions of credit to Borrower under the Credit Agreement and further
recognizes that the execution and delivery of this Subsidiary Guaranty and the
other Loan Documents to which each Guarantor is a party is a material inducement
to Administrative Agent and the Lenders in entering into the Credit Agreement
and continuing to extend credit thereunder. Each Guarantor hereby acknowledges
that there are no conditions to the full effectiveness of this Subsidiary
Guaranty or any other Loan Document to which it is a party.
16. Any notice or demand to any Guarantor under or in connection with
this Subsidiary Guaranty or any other Loan Document to which it is a party shall
be deemed effective if given to the Guarantor, care of Borrower in accordance
with the notice provisions in the Credit Agreement.
17. The Guarantors shall, jointly and severally, pay on demand all
reasonable attorneys' fees and all other reasonable costs and expenses incurred
by Administrative Agent and Lenders in connection with the administration,
enforcement, or collection of this Subsidiary Guaranty.
18. Each Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of this Subsidiary Guaranty, presentment, notice of protest, notice
of dishonor, notice of the incurring by Borrower of additional indebtedness, and
all other notices and demands with respect to the Guaranteed Indebtedness and
this Subsidiary Guaranty.
SUBSIDIARY GUARANTY - Page 8
19. The Credit Agreement, and all of the terms thereof, are
incorporated herein by reference, the same as if stated verbatim herein, and
each Guarantor agrees that Administrative Agent and the Lenders may exercise any
and all rights granted to any of them under the Credit Agreement and the other
Loan Documents without affecting the validity or enforceability of this
Subsidiary Guaranty.
20. THIS SUBSIDIARY GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF
EACH GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS WITH RESPECT TO EACH
GUARANTOR'S GUARANTY OF THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS SUBSIDIARY GUARANTY
IS INTENDED BY EACH GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS AS A FINAL AND
COMPLETE EXPRESSION OF THE TERMS OF THIS SUBSIDIARY GUARANTY, AND NO COURSE OF
DEALING AMONG ANY GUARANTOR, ADMINISTRATIVE AGENT AND THE LENDERS, NO COURSE OF
PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
SUBSIDIARY GUARANTY. THERE ARE NO ORAL AGREEMENTS AMONG ANY GUARANTOR,
ADMINISTRATIVE AGENT AND THE LENDERS.
21. THIS SUBSIDIARY GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA AND THE APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
EXECUTED as of the date first above written.
GUARANTORS:
----------------------------------------------
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
SUBSIDIARY GUARANTY - Page 9
EXHIBIT "E"
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT - Page 1
JOINDER AGREEMENT
(Subsidiary of Peregrine Systems, Inc.)
This JOINDER AGREEMENT (the "AGREEMENT") dated as of ___________,
______, is executed by the undersigned (the "SUBSIDIARY") for the benefit of
BANK OF AMERICA, N.A., in its capacity as administrative agent (in such
capacity, herein the "ADMINISTRATIVE AGENT") for the Lenders party to the
hereafter identified Credit Agreement and for the benefit of such Lenders in
connection with that certain Credit Agreement dated as of July 30, 1999 among
Administrative Agent, PEREGRINE SYSTEMS, INC., BankBoston, N.A., as Syndication
Agent, and the other Lenders from time to time party thereto (as amended,
restated or otherwise modified from time to time, the "CREDIT AGREEMENT";
capitalized terms not otherwise defined herein being used herein as defined in
the Credit Agreement).
RECITALS:
The Subsidiary is a Domestic Subsidiary and is required to execute this
Agreement pursuant to the terms of the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Subsidiary hereby agrees as follows:
1. The Subsidiary assumes all the obligations of a "Guarantor" under
that certain Pledge and Security Agreement dated as of July __, 1999, by and
among each Domestic Subsidiary, Administrative Agent and other parties who from
time to time may become party thereto (as amended, the "SECURITY AGREEMENT") and
agrees that it is a "Guarantor" and bound as a "Guarantor" under the terms of
the Security Agreement as if it had been an original signatory thereto. In
furtherance of the foregoing, the Subsidiary hereby assigns, pledges and grants
to Administrative Agent a security interest in all of its right, title and
interest in and to the Subsidiary's Collateral (as defined in the Security
Agreement) to secure the Obligations (as defined in the Security Agreement)
under the terms of the Security Agreement.
2. SCHEDULES 1.1, 3.1, 3.2, 3.3, and 3.5 of the Security Agreement are
hereby amended to add the information relating to the Subsidiary set out on
SCHEDULES 1.1, 3.1, 3.2, 3.3, and 3.5 hereto. The Subsidiary hereby confirms
that the representations and warranties set forth in the Security Agreement
applicable to it and its Collateral and the representations and warranties set
forth in the Credit Agreement applicable to it and its Collateral are true and
correct in all material respects after giving effect to such amendment to the
Schedules.
3. In furtherance of its obligations under SECTION 4.2 of the Security
Agreement, the Subsidiary agrees to execute and deliver to the Administrative
Agent (i) appropriately completed UCC financing statements naming the Subsidiary
as debtor and the Administrative Agent as secured party and describing its
Collateral and (ii) such other documentation as the Administrative Agent may
require to protect and perfect the Liens created by the Security Agreement, as
modified hereby.
JOINDER AGREEMENT - Page 2
4. The Subsidiary hereby assumes all the obligations of a "Guarantor"
under that certain Subsidiary Guaranty, dated as of July 30, 1999, executed by
each Domestic Subsidiary party thereto in favor of the Administrative Agent and
the Lenders (as amended, the "SUBSIDIARY GUARANTY") and agrees that it is a
"Guarantor" and bound as a "Guarantor" under the terms of the Subsidiary
Guaranty as if it had been an original signatory thereto. In accordance with the
foregoing and for valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Subsidiary irrevocably and unconditionally guarantees
to the Administrative Agent and the Lenders the full and prompt payment and
performance of the Guaranteed Indebtedness (as defined in the Subsidiary
Guaranty) upon the terms and conditions set forth in the Subsidiary Guaranty.
5. This Agreement shall be deemed to be part of, and a modification to,
the Security Agreement and the Subsidiary Guaranty and shall be governed by all
the terms and provisions of the Security Agreement and the Subsidiary Guaranty,
which terms are incorporated herein by reference, are ratified and confirmed and
shall continue in full force and effect as valid and binding agreements of the
Subsidiary enforceable against the Subsidiary. The Subsidiary hereby waives
notice of Administrative Agent's or any Lender's acceptance of this Agreement.
IN WITNESS WHEREOF, the Subsidiary has executed this Agreement as of
the day and year first written above.
SUBSIDIARY:
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
JOINDER AGREEMENT - Page 3
Schedule 1.1
TO
JOINDER AGREEMENT
PLEDGED SHARES
Description of Each
Class and Series Number of Number of
Name State of Incorporation (If Applicable) Par Value Issued Shares Pledged Shares Certificate No.
---- ---------------------- --------------- --------- ------------- -------------- ---------------
Schedule 1.1, Solo Page
SCHEDULE 3.1
TO
JOINDER AGREEMENT
LOCATIONS
Address Landlord/Mortgagee
------- ------------------
I. PRINCIPAL PLACE OF BUSINESS
II. OTHER LOCATIONS
Schedule 3.1, Solo Page
SCHEDULE 3.2
TO
JOINDER AGREEMENT
DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS
Schedule 3.2, Solo Page
SCHEDULE 3.3
TO
JOINDER AGREEMENT
TRADE AND OTHER NAMES; TAX IDENTIFICATION NUMBER
I. Trade and Other Names:
II. United States Income Tax Identification Number:
Schedule 3.3, Solo Page
SCHEDULE 3.5
TO
JOINDER AGREEMENT
INTELLECTUAL PROPERTY
COPYRIGHTS
====================================================================================================================================
Owner of Record Country of Registration Copyright Applications Registration or Expiration Title
or Registration Filing Date Date
No.
================== ========================= ================== ================= ================= ================ ===========
================== ========================= ================== ================= ================= ================ ===========
COPYRIGHT LICENSES
==================================================================================================================================
Name of Agreement Patent Date of Agreement
================================== ======================================== ====================================================
================================== ======================================== ====================================================
PATENTS
==========================================================================================================================
Owner of Record After Application or Registration or Issue Date
Assignment Agreements are Filed Country of Origin Patent Identification Registration No. Filing Date (if known)
=============================== ================== ===================== ================ =============== ============
=============================== ================== ===================== ================ =============== ============
===============
Expiration Date
===============
===============
PATENT LICENSES
==================================================================================================================================
Name of Agreement Patent Date of Agreement
========================== ============================= =======================================================================
========================== ============================= =======================================================================
Schedule 3.5, Page 1 of 2
TRADEMARKS
===================================================================================================================================
Application or Filing Expiration
Owner of Record Country of Registration Trademark Registration No. Date Date
====================== ============================= ======================== ==================== ============= ==============
====================== ============================= ======================== ==================== ============= ==============
================================================
Goods
===============================================
TRADEMARK LICENSES
====================== ===================================== ====================================================================
Name of Agreement Parties Date of Agreement
====================== ===================================== ====================================================================
====================== ===================================== ====================================================================
Schedule 3.5, Page 2 of 2
REVOLVING NOTE
$10,000,000.00 July 30, 1999
FOR VALUE RECEIVED, the undersigned, PEREGRINE SYSTEMS, INC., a
Delaware corporation (the "BORROWER"), hereby promises to pay to the order of
BANK OF AMERICA, N.A. (the "LENDER"), at the Principal Office of the
Administrative Agent, in lawful money of the United States of America and in
immediately available funds, the principal amount of TEN MILLION AND NO/100
DOLLARS ($10,000,000.00) or such lesser amount as shall equal the aggregate
unpaid principal amount of the Revolving Loans made by the Lender to the
Borrower under the Credit Agreement referred to below, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of each such Revolving Loan, at such office, in like
money and funds, for the period commencing on the date of such Revolving Loan
until such Revolving Loan shall be paid in full, at the rates per annum and on
the dates provided in the Credit Agreement.
The Borrower hereby authorizes the Lender to record in its records the
amount of each Revolving Loan and Type of Accounts established under each
Revolving Loan and all Continuations, Conversions and payments of principal in
respect thereof, which records shall, in the absence of manifest error,
constitute prima facie evidence of the accuracy thereof; PROVIDED, HOWEVER, that
the failure to make such notation with respect to any such Revolving Loan or
payment shall not limit or otherwise affect the obligations of the Borrower
under the Credit Agreement or this Revolving Note.
This Revolving Note is one of the Revolving Notes referred to in the
Credit Agreement dated as of July 30, 1999, among the Borrower, the Lender, the
other lenders party thereto (collectively with the Lender, the "LENDERS"),
BankBoston, N.A., as syndication agent and Bank of America, N.A., as
administrative agent for such lenders (the "ADMINISTRATIVE AGENT" and such
Credit Agreement, as the same may be amended or otherwise modified from time to
time, being referred to herein as the "CREDIT AGREEMENT"), and evidences
Revolving Loans made by the Lender thereunder. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity of this Revolving
Note upon the happening of certain stated events and for prepayments of
Revolving Loans prior to the maturity of this Revolving Note upon the terms and
conditions specified in the Credit Agreement. Capitalized terms used in this
Revolving Note, unless otherwise defined herein, have the respective meanings
assigned to them in the Credit Agreement.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
Except for any notices expressly required by the Loan Documents, the
Borrower and each surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this Revolving Note jointly and
severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace and all
other formalities of any
kind, and consent to all extensions without notice for any period or periods of
time and partial payments, before or after maturity, and any impairment of any
collateral securing this Revolving Note, all without prejudice to the holder.
The holder shall similarly have the right to deal in any way, at any time, with
one or more of the foregoing parties without notice to any other party, and to
grant any such party any extensions of time for payment of any of said
indebtedness, or to release any such party or to release or substitute part or
all of the collateral securing this Revolving Note, or to grant any other
indulgences or forbearances whatsoever, without notice to any other party and
without in any way affecting the personal liability of any party hereunder.
PEREGRINE SYSTEMS, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
REVOLVING NOTE
$10,000,000.00 July 30, 1999
FOR VALUE RECEIVED, the undersigned, PEREGRINE SYSTEMS, INC., a
Delaware corporation (the "BORROWER"), hereby promises to pay to the order of
BANKBOSTON, N.A. (the "LENDER"), at the Principal Office of the
Administrative Agent, in lawful money of the United States of America and in
immediately available funds, the principal amount of TEN MILLION AND NO/100
DOLLARS ($10,000,000.00) or such lesser amount as shall equal the aggregate
unpaid principal amount of the Revolving Loans made by the Lender to the
Borrower under the Credit Agreement referred to below, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest
on the unpaid principal amount of each such Revolving Loan, at such office,
in like money and funds, for the period commencing on the date of such
Revolving Loan until such Revolving Loan shall be paid in full, at the rates
per annum and on the dates provided in the Credit Agreement.
The Borrower hereby authorizes the Lender to record in its records the
amount of each Revolving Loan and Type of Accounts established under each
Revolving Loan and all Continuations, Conversions and payments of principal in
respect thereof, which records shall, in the absence of manifest error,
constitute prima facie evidence of the accuracy thereof; PROVIDED, HOWEVER, that
the failure to make such notation with respect to any such Revolving Loan or
payment shall not limit or otherwise affect the obligations of the Borrower
under the Credit Agreement or this Revolving Note.
This Revolving Note is one of the Revolving Notes referred to in the
Credit Agreement dated as of July 30, 1999, among the Borrower, the Lender, the
other lenders party thereto (collectively with the Lender, the "LENDERS"),
BankBoston, N.A., as syndication agent and Bank of America, N.A., as
administrative agent for such lenders (the "ADMINISTRATIVE AGENT" and such
Credit Agreement, as the same may be amended or otherwise modified from time to
time, being referred to herein as the "CREDIT AGREEMENT"), and evidences
Revolving Loans made by the Lender thereunder. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity of this Revolving
Note upon the happening of certain stated events and for prepayments of
Revolving Loans prior to the maturity of this Revolving Note upon the terms and
conditions specified in the Credit Agreement. Capitalized terms used in this
Revolving Note, unless otherwise defined herein, have the respective meanings
assigned to them in the Credit Agreement.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
Except for any notices expressly required by the Loan Documents, the
Borrower and each surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this Revolving Note jointly and
severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace and all
other formalities of any
kind, and consent to all extensions without notice for any period or periods of
time and partial payments, before or after maturity, and any impairment of any
collateral securing this Revolving Note, all without prejudice to the holder.
The holder shall similarly have the right to deal in any way, at any time, with
one or more of the foregoing parties without notice to any other party, and to
grant any such party any extensions of time for payment of any of said
indebtedness, or to release any such party or to release or substitute part or
all of the collateral securing this Revolving Note, or to grant any other
indulgences or forbearances whatsoever, without notice to any other party and
without in any way affecting the personal liability of any party hereunder.
PEREGRINE SYSTEMS, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
PLEDGE AND SECURITY AGREEMENT
(Peregrine Systems, Inc.)
THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of July
30, 1999, is between PEREGRINE SYSTEMS, INC., a Delaware corporation ("DEBTOR"),
and BANK OF AMERICA, N.A. as Administrative Agent for the Lenders referred to
below (in such capacity, the "SECURED PARTY").
R E C I T A L S:
A. Debtor has entered into that certain Credit Agreement dated as of
July 30, 1999, with the lenders party thereto (each individually a "LENDER" and
collectively, the "LENDERS"), BankBoston, N.A., as Syndication Agent, and
Secured Party, as Administrative Agent for the Lenders (such agreement as it may
be amended, restated or otherwise modified from time to time is referred to
herein as the "CREDIT AGREEMENT").
B. The execution and delivery of this Agreement is required by the
Credit Agreement as a condition to the Lenders' obligations under the Credit
Agreement.
C. Terms defined in the Credit Agreement, and not otherwise defined
herein, are used herein with their meanings so defined.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt, and sufficiency of which are
hereby acknowledged, and in order to induce Secured Party and the Lenders to
make Loans and issue Letters of Credit pursuant to the Credit Agreement, the
parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"ACCOUNT" means any "account," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by Debtor: (a)
all rights of Debtor to payment for goods sold or leased, services
rendered or the license of Intellectual Property, whether or not earned
by performance; (b) all accounts receivable of Debtor; (c) all rights
of Debtor to receive any payment of money or other form of
consideration; (d) all security pledged, assigned, or granted to or
held by Debtor to secure any of the foregoing; (e) all guaranties of,
or indemnifications with respect to, any of the foregoing; (f) all
rights of Debtor as an unpaid seller of goods or services, including,
but not limited to, all rights of stoppage in transit, replevin,
reclamation, and resale; and (g) all rights to brokerage commissions.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 1
"AMENDMENT" means any amendment of this Agreement between
Debtor and Secured Party required hereby or entered into pursuant to
the terms of the Credit Agreement, including, without limitation, any
amendment in the form of EXHIBIT A hereto.
"CAPITAL STOCK" means corporate stock and any and all shares,
partnership interests, equity interests, rights, securities or other
equivalent evidences of ownership (however designated) issued by any
entity (whether a corporation, partnership, limited liability company,
limited partnership or other type of entity).
"CHATTEL PAPER" means any "chattel paper," as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by Debtor.
"COLLATERAL" has the meaning specified in SECTION 2.1 of this
Agreement.
"COPYRIGHT LICENSE" means any written agreement now or
hereafter in existence granting to Debtor any right to use any
Copyright, including, without limitation, the agreements identified on
SCHEDULE 3.5.
"COPYRIGHTS" means all of the following: (a) all copyrights,
works protectable by copyright, copyright registrations, and copyright
applications, including, without limitation, those identified on
SCHEDULE 3.5; (b) all renewals, extensions, and modifications thereof;
(c) all income, royalties, damages, profits, and payments relating to
or payable under any of the foregoing; (d) the right to xxx for past,
present, or future infringements of any of the foregoing; and (e) all
other rights and benefits relating to any of the foregoing throughout
the world; in each case, whether now owned or hereafter acquired by
Debtor.
"COPYRIGHT SECURITY AGREEMENT" means a copyright security
agreement to be executed and delivered by Debtor to Secured Party,
substantially in the form of EXHIBIT B hereto and otherwise in form and
substance satisfactory to Secured Party, for the purpose of recording
such agreement with any copyright office of a Governmental Authority,
as such agreement may be amended, restated, or otherwise modified from
time to time.
"DEPOSIT ACCOUNTS" means any and all deposit accounts,
certificates of deposit, or other bank accounts now owned or hereafter
acquired or opened by Debtor, and any account which is a replacement or
substitute for any of such accounts including, without limitation,
those deposit accounts identified on SCHEDULE 3.2.
"DOCUMENT" means any "document," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, including, without limitation, all documents of title and all
receipts covering, evidencing, or representing goods now owned or
hereafter acquired by Debtor.
"EQUIPMENT" means any "equipment," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor and, in any event, shall include, without limitation, all
machinery, furniture, trailers, rolling stock, vessels, aircraft, and
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 2
vehicles now owned or hereafter acquired by Debtor and any and all
additions, substitutions, and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts,
equipment, and accessories installed thereon or affixed thereto.
"FINANCIAL ASSETS" means any "financial asset," as such term
is defined in Article or Chapter 8 of the UCC.
"FIXTURES" means any "fixtures," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor and in any event shall include, without limitation, all plant
fixtures, business fixtures, other fixtures, and storage office
facilities, wherever located, and all additions and accessions thereto
and replacements therefor.
"GENERAL INTANGIBLES" means any "general intangibles," as such
term is defined in Article or Chapter 9 of the UCC, now owned or
hereafter acquired by Debtor and, in any event, shall include, without
limitation, each of the following, whether now owned or hereafter
acquired by Debtor: (a) all of Debtor's Intellectual Property together
with all of Debtor's trade secrets, proprietary information, customer
lists, designs, and inventions; (b) all of Debtor's books, records,
data, plans, manuals, computer software, computer tapes, computer
disks, computer programs, source codes, object codes, and all rights of
Debtor to retrieve data and other information from third parties; (c)
all of Debtor's contract rights (including, without limitation, all of
Debtor's right, title, and interest in and to the Loan Documents),
which include, without limitation, (i) all rights of Debtor to receive
moneys due and to become due under or pursuant to such agreements, (ii)
all rights of Debtor to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to such agreements, (iii) all claims
of Debtor for damages arising out of or for breach of or default under
such agreements, (iv) all rights of Debtor to terminate such
agreements, to perform thereunder, and to compel performance and
otherwise exercise all rights and remedies thereunder, and (v) any
rights to Liens securing Pledged Collateral, Accounts, or obligations
arising under any Loan Document, (d) all rights or interests of Debtor
in any partnership or joint venture; (e) all rights of Debtor to
payment under letters of credit and similar agreements; (f) all tax
refunds and tax refund claims of Debtor; (g) all choses in action and
causes of action of Debtor (whether arising in contract, tort, or
otherwise and whether or not currently in litigation) and all judgments
in favor of Debtor; (h) all rights and claims of Debtor under
warranties and indemnities; and (i) all rights of Debtor under any
insurance, surety, or similar contract or arrangement, including,
without limitation, all claims under governmental health care programs
and claims under private insurance to which Debtor is entitled or which
have been assigned to it.
"INSTRUMENT" means any "instrument," as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include all promissory notes, drafts,
bills of exchange, and trade acceptances, whether now owned or
hereafter acquired by Debtor.
"INTELLECTUAL PROPERTY" means the Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, and Trademark Licenses.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 3
"INVENTORY" means any "inventory," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by Debtor: (a)
all goods and other personal property that are held for sale or lease
or to be furnished under any contract of service; (b) all raw
materials, work-in-process, finished goods, inventory, supplies, and
materials; (c) all wrapping, packaging, advertising, and shipping
materials; (d) all goods that have been returned to, repossessed by, or
stopped in transit by Debtor; and (e) all Documents evidencing any of
the foregoing.
"INVESTMENT PROPERTY" means any "investment property" as such
term is defined in Article or Chapter 9 of the UCC, now owned or
hereafter acquired by Debtor, and, in any event, shall include, without
limitation, each of the following, whether now owned or hereafter
acquired: (a) any security, whether certificated or uncertificated; (b)
any security entitlement; (c) any securities account (including,
without limitation, those described on SCHEDULE 3.2); (d) any commodity
contract; and (e) any commodity account (including, without limitation,
those identified on SCHEDULE 3.2).
"OBLIGATIONS" means and includes the "Obligations" as such
term is defined in the Credit Agreement.
"PATENT LICENSE" means any written agreement now or hereafter
in existence granting to Debtor any right to use any invention on which
a Patent is in existence, including, without limitation, the agreements
identified on SCHEDULE 3.5.
"PATENTS" means any and all of the following: (a) all patents,
patent applications, and patentable inventions, including, without
limitation, those identified on SCHEDULE 3.5, and all of the inventions
and improvements described and claimed therein; (b) all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing; (c) all
income, royalties, profits, damages, awards, and payments relating to
or payable under any of the foregoing; (d) the right to xxx for past,
present, and future infringements of any of the foregoing; and (e) all
other rights and benefits relating to any of the foregoing throughout
the world; in each case, whether now owned or hereafter acquired by
Debtor.
"PATENT SECURITY AGREEMENT" means a patent security agreement
to be executed and delivered by Debtor to Secured Party, substantially
in the form of EXHIBIT C hereto and otherwise in form and substance
satisfactory to Secured Party, for the purpose of recording such
agreement with any copyright office of a Governmental Authority, as
such agreement may be amended, restated, or otherwise modified from
time to time.
"PLEDGED COLLATERAL" means the Pledged Shares and the
Instruments evidencing the obligations of Subsidiaries to Debtor
described in SECTION 2.1(c).
"PLEDGED SHARES" means the Capital Stock identified on
SCHEDULE 1.1 attached hereto, which constitutes 100% of the Capital
Stock of each of the direct Domestic Subsidiaries of
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 4
Debtor and 65% of the Capital Stock of each of the direct Foreign
Subsidiaries of Debtor, or on SCHEDULE 1 to an Amendment (all of which
shall not, in any event, except as described in Section 6.7 of the
Credit Agreement or an Amendment hereto, include more than 65% of the
Capital Stock of any direct Foreign Subsidiary).
"PROCEEDS" means any "proceeds," as such term is defined in
Article or Chapter 9 of the UCC and, in any event, shall include, but
not be limited to, (a) any and all proceeds of any insurance,
indemnity, warranty, or guaranty payable to Debtor from time to time
with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to Debtor from time to time in
connection with any requisition, confiscation, condemnation, seizure,
or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting, or purporting to act, for or on behalf
of any Governmental Authority), and (c) any and all other amounts from
time to time paid or payable under or in connection with any of the
Collateral.
"TRADEMARK LICENSE" means any written agreement now or
hereafter in existence granting to Debtor any right to use any
Trademark, including, without limitation, the agreements identified on
SCHEDULE 3.5.
"TRADEMARKS" means all of the following: (a) all trademarks,
trade names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos, other business
identifiers, prints and labels on which any of the foregoing appear,
all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations,
recordings, and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision
thereof, including, without limitation, those identified in SCHEDULE
3.5; (b) all reissues, extensions, and renewals thereof; (c) all
income, royalties, damages, and payments now or hereafter relating to
or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements of any of the
foregoing; (d) the right to xxx for past, present, and future
infringements of any of the foregoing; (e) all rights corresponding to
any of the foregoing throughout the world; and (f) all goodwill
associated with and symbolized by any of the foregoing; in each case,
whether now owned or hereafter acquired by Debtor.
"TRADEMARK SECURITY AGREEMENT" means a trademark security
agreement to be executed and delivered by Debtor to Secured Party,
substantially in the form of EXHIBIT D hereto and otherwise in form and
substance satisfactory to Secured Party, for the purpose of recording
such agreement with any copyright office of a Governmental Authority,
as such agreement may be amended, restated, or otherwise modified from
time to time.
"UCC" means the Uniform Commercial Code as in effect in the
State of California and/or any other jurisdiction the laws of which may
be applicable to or in connection with the creation, perfection or
priority of any Lien on any Collateral.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 5
Section 1.2 OTHER DEFINITIONAL PROVISIONS. References to "Sections,"
"subsections," "Exhibits," and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. All definitions contained in this Agreement are equally
applicable to the singular and plural forms of the terms defined. All references
to statutes and regulations shall include any amendments of the same and any
successor statutes and regulations. References to particular sections of the UCC
should be read to refer also to parallel sections of the Uniform Commercial Code
as enacted in each state or other jurisdiction where any portion of the
Collateral is or may be located. Terms used herein, which are defined in the
UCC, unless otherwise defined herein or in the Credit Agreement, shall have the
meanings determined in accordance with the UCC.
ARTICLE 2
SECURITY INTEREST
Section 2.1 SECURITY INTEREST. As collateral security for the prompt
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), Debtor hereby pledges and assigns to
Secured Party, and grants to Secured Party a continuing lien on and security
interest in, all of Debtor's right, title, and interest in and to the following,
whether now owned or hereafter arising or acquired and wherever located (the
"COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments, including, without limitation, or in
addition, all instruments evidencing indebtedness from time to
time owed to Debtor by any Person, and all interest, cash, and
other property from time to time received, receivable, or
otherwise distributed or distributable in respect of or in
exchange for any or all of such Instruments;
(d) all General Intangibles;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all Inventory;
(i) all Financial Assets and Investment Property, including,
without limitation, or in addition, the following:
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 6
(1) all of the Pledged Shares and the certificates (if
any) representing the Pledged Shares, and all
dividends, cash, Instruments, and other property from
time to time received, receivable, or otherwise
distributed or distributable in respect of or in
exchange for any or all of the Pledged Shares;
(2) all additional Capital Stock from time to time owned
or acquired by Debtor in any manner, and all
dividends, cash, Instruments, and other property from
time to time received, receivable, or otherwise
distributed or distributable in respect of or in
exchange for any or all of such Capital Stock;
provided, except as otherwise provided in Section 6.7
of the Credit Agreement or an Amendment hereto, no
more than 65% of the Capital Stock of a Foreign
Subsidiary shall be required to be pledged and no
Capital Stock owned by a Foreign Subsidiary shall be
required to be pledged; and
(j) all of Debtor's Deposit Accounts and all funds, certificates,
Documents, Instruments, checks, drafts, wire transfer
receipts, and other earnings, profits, or other Proceeds from
time to time representing, evidencing, deposited into, or held
in the Deposit Accounts;
(k) all other goods and personal property of Debtor of any kind or
character, whether tangible or intangible, including, without
limitation, any and all rights in and claims under insurance
policies, judgments and rights thereunder, and tort claims;
and
(l) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing CLAUSES (a) THROUGH (k).
Section 2.2 DEBTOR REMAINS LIABLE. Notwithstanding anything to the
contrary contained herein, (a) Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights or remedies hereunder shall not release Debtor from any of its
duties or obligations under such documentation, (c) Secured Party shall not have
any obligation under any of such documentation included in the Collateral by
reason of this Agreement, and (d) Secured Party shall not be obligated to
perform any of the obligations of Debtor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce Secured Party and the Lenders to enter into this Agreement
and the Credit Agreement, Debtor represents and warrants as follows:
Section 3.1 LOCATION OF EQUIPMENT, FIXTURES, AND INVENTORY; THIRD
PARTIES IN POSSESSION. All of the Equipment, Fixtures and Inventory are located
in the jurisdictions and at the places
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 7
specified in SCHEDULE 3.1. SCHEDULE 3.1 correctly identifies the landlords or
mortgagees, if any, of each location identified in SCHEDULE 3.1. Except for the
Persons identified on SCHEDULE 3.2, no Person other than Debtor and Secured
Party has possession of any of the Collateral. None of the Collateral other than
the Pledged Collateral has been located in any location within the past six (6)
months other than as set forth on SCHEDULE 3.1.
Section 3.2 DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS. SCHEDULE 3.2
correctly identifies all deposit, commodity, and securities accounts owned by
Debtor and the institutions holding such accounts. No Person other than Debtor
has control over any Investment Property.
Section 3.3 OFFICE LOCATIONS; FICTITIOUS NAMES; TAX I.D. NUMBER. The
principal place of business and the chief executive office of Debtor is
identified on SCHEDULE 3.1. SCHEDULE 3.1 also sets forth all other places where
Debtor keeps its books and records and all other locations where Debtor has a
place of business. Debtor does not do business and has not done business during
the past five (5) years under any trade-name or fictitious business name except
as disclosed on SCHEDULE 3.3. Debtor's United States Federal Income Tax
Identification Number is set forth on SCHEDULE 3.3.
Section 3.4 DELIVERY OF COLLATERAL. Except as provided by SECTION 4.3,
Debtor has delivered to Secured Party all Collateral the possession of which is
necessary to perfect the security interest of Secured Party therein. All
certificates of title evidencing Equipment have been delivered to Secured Party
to the extent required to perfect the security interest of Secured Party
therein.
Section 3.5 INTELLECTUAL PROPERTY. All of Debtor's Intellectual
Property that is registered with or for which an application for registration
has been filed with any Governmental Authority is identified on SCHEDULE 3.5,
and such information is true, correct, and complete.
ARTICLE 4
COVENANTS
Debtor covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment under the Credit
Agreement, Debtor will perform and observe each of the following covenants:
Section 4.1 ACCOUNTS. Debtor shall, in accordance with its customary
business practices, endeavor to collect or cause to be collected from each
account debtor under its Accounts, as and when due, any and all amounts owing
under such Accounts. Without the prior written consent of Secured Party, Debtor
shall not, except in the ordinary course of business and in no event when any
Default exists, (a) grant any extension of time for any payment with respect to
any of the Accounts beyond sixty (60) days after such payment's due date, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof, (c) release, in whole or in part, any Person liable for payment
of any of the Accounts, (d) allow any credit or discount for payment with
respect to any Account other than trade or other customary discounts granted in
the ordinary course of business, or (e) release any Lien or guaranty securing
any Account unless the Account has been paid.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 8
Section 4.2 FURTHER ASSURANCES; EXCEPTIONS TO PERFECTION. At any time
and from time to time, upon the request of Secured Party, and at the sole
expense of Debtor, Debtor shall promptly execute and deliver all such further
agreements, documents, and instruments and take such further action as Secured
Party may reasonably deem necessary or appropriate to preserve and perfect its
security interest in the Collateral and carry out the provisions and purposes of
this Agreement or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, Debtor shall upon reasonable request by Secured
Party (a) execute and deliver to Secured Party such financing statements as
Secured Party may from time to time require, (b) take such action after the
occurrence of a Default as Secured Party may request to permit Secured Party to
have control over any Investment Property or any Deposit Account, (c) deliver to
Secured Party all Collateral the possession of which is necessary to perfect the
security interest therein, duly endorsed and/or accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party; EXCEPT that, prior to the occurrence of a Default, Debtor may:
(i) retain for collection in the ordinary course of business checks representing
Proceeds of Accounts received in the ordinary course of business; (ii) retain
any letters of credit received in the ordinary course of business; (iii) retain
and utilize in the ordinary course of business all dividends and interest paid
in respect to any of the Pledged Collateral or any other Investment Property;
and (iv) retain any Documents received and further negotiated in the ordinary
course of business, (d) deliver any and all certificates of title, applications
for title or similar evidence of ownership of Equipment and cause Secured Party
to be named as lienholder thereon, and (e) execute and deliver to Secured Party
such other agreements, documents, and instruments as Secured Party may
reasonably require to perfect and maintain the validity, effectiveness, and
priority of the Liens intended to be created by this Agreement or any other Loan
Document.
Section 4.3 THIRD PARTIES IN POSSESSION OF COLLATERAL. Debtor shall not
permit any third Person (including any warehouseman, bailee, agent, consignee,
or processor) to hold any Collateral, unless Debtor shall: (i) notify such third
Person of the security interests created hereby; (ii) instruct such Person to
hold all such Collateral for Secured Party's account subject to Secured Party's
instructions; and (iii) take all other actions Secured Party reasonably deems
necessary to perfect and protect its and Debtor's interests in such Collateral
pursuant to the requirements of the UCC of the applicable jurisdiction where
such warehouseman, bailee, consignee, agent, processor, or other third Person is
located (including the filing of financing statements in the proper
jurisdictions naming the applicable third Person as debtor and Debtor as secured
party and notifying the third Person's secured lenders of Debtor's interest in
such Collateral before the third Person receives possession of the Collateral in
question).
Section 4.4 CORPORATE CHANGES. Debtor shall not change its name,
identity, corporate structure, or its United States Tax Identification Number in
any manner that might make any financing statement filed in connection with this
Agreement seriously misleading unless Debtor shall have given Secured Party not
less than thirty (30) days prior written notice thereof and shall have taken all
action reasonably deemed necessary or desirable by Secured Party to protect its
Liens with the perfection and priority thereof required by the Loan Documents.
Debtor shall not change its principal place of business, chief executive office,
or the place where it keeps its books and records unless it shall have given
Secured Party not less than thirty (30) days prior written notice thereof and
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 9
shall have taken all action deemed necessary or desirable by Secured Party to
cause its security interest in the Collat eral to be perfected with the priority
required by the Loan Documents.
Section 4.5 EQUIPMENT, FIXTURES, AND INVENTORY. Debtor shall keep the
Equipment, Fixtures, and Inventory in (or in transit to) any of the
jurisdictions specified on SCHEDULE 3.1 hereto or, upon not less than thirty
(30) days prior written notice to Secured Party, at such other places within the
United States of America where all actions required to perfect Secured Party's
security interest in such Collateral with the priority required by the Loan
Documents shall have been taken.
Section 4.6 WAREHOUSE RECEIPTS NON-NEGOTIABLE. Debtor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
in respect of any portion of the Collateral, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the UCC) unless such warehouse receipt or receipt in the nature thereof
is delivered to Secured Party.
Section 4.7 VOTING RIGHTS; DISTRIBUTIONS, ETC. So long as no Event of
Default shall have occurred and be continuing, Debtor shall be entitled to
exercise any and all voting and other consensual rights (including, without
limitation, the right to give consents, waivers, and notifications) pertaining
to any of the Pledged Collateral or any other Investment Property; PROVIDED,
HOWEVER, that without the prior written consent of Secured Party no vote shall
be cast or consent, waiver, or ratification given or action taken which would be
inconsistent with or violate any provision of this Agreement or any other Loan
Document.
Section 4.8 TRANSFERS AND OTHER LIENS; ADDITIONAL INVESTMENTS. Except
as provided otherwise by the Credit Agreement or this Agreement, Debtor agrees
that it will (i) cause each issuer of any of the Pledged Collateral not to issue
any Capital Stock, notes, or other securities or instruments in addition to or
in substitution for any of the Pledged Collateral, (ii) pledge hereunder,
immediately upon its acquisition thereof, any and all such Capital Stock, notes,
or other securities or instruments, and (iii) promptly (and in any event within
three (3) Business Days) deliver to Secured Party an Amendment, duly executed by
Debtor, in respect of such Capital Stock, notes, or other securities or
instruments, together with all certificates, notes, or other securities or
instruments representing or evidencing the same. Debtor hereby (i) authorizes
Secured Party to attach each Amendment to this Agreement, and (ii) agrees that
all such Capital Stock, notes, or other securities or instruments listed on any
Amendment delivered to Secured Party shall for all purposes hereunder constitute
Pledged Collateral.
Section 4.9 INTELLECTUAL PROPERTY COVENANTS. If, before the Obligations
are paid in full, Debtor obtains any new Intellectual Property or rights thereto
or becomes entitled to the benefit of any Intellectual Property, Debtor shall
give to Secured Party prompt written notice thereof, and shall execute and
deliver, in form and substance satisfactory to Secured Party, a Copyright
Security Agreement, Patent Security Agreement, or Trademark Security Agreement,
as applicable, describing any such new Intellectual Property. Debtor shall (a)
prosecute diligently any copyright, patent, or trademark application at any time
pending which is necessary for the conduct of Debtor's business, (b) make
application on all new copyrights, patents, and trademarks as reasonably deemed
appropriate by Debtor, (c) preserve and maintain all rights in the Intellectual
Property that is
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 10
necessary for the conduct of Debtor's business, and (d) upon and after the
occurrence and during the continuance of an Event of Default, use its reasonable
efforts to obtain any consents, waivers, or agreements necessary to enable
Secured Party to exercise its remedies with respect to the Intellectual
Property. Debtor shall not, without the prior written consent of Secured Party,
abandon any pending copyright, patent, or trademark application, or Copyright,
Patent, Trademark, or any other Intellectual Property which is necessary for the
conduct of Debtor's business.
Section 4.10 DEPOSIT, COMMODITY, AND SECURITY ACCOUNTS. Debtor shall
not open any new deposit, commodity, or securities account or otherwise utilize
any such account other than the accounts identified on SCHEDULE 3.2 unless
Debtor shall have given Secured Party not less than thirty (30) days prior
written notice thereof and shall have taken all action deemed necessary or
desirable by Secured Party to cause its security interest therein to be
perfected with the priority required by the Loan Documents. Prior to the
occurrence and continuance of any Event of Default, Debtor may make purchases
and sales of Investment Property or Financial Assets in accordance with the
restrictions on investment set out in the Credit Agreement. After the occurrence
and during the continuance of an Event of Default, Debtor shall not be
authorized to make purchases and sales of the Investment Property or Financial
Assets and Debtor shall take such steps as Secured Party may reasonably request
to give Secured Party control over all Investment Property and Financial Assets.
Debtor will not give any party control over any Investment Property or Financial
Assets.
ARTICLE 5
RIGHTS OF SECURED PARTY
Section 5.1 POWER OF ATTORNEY. DEBTOR HEREBY IRREVOCABLY CONSTITUTES
AND APPOINTS SECURED PARTY AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF
SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE
POWER AND AUTHORITY IN THE NAME OF DEBTOR OR IN ITS OWN NAME, TO TAKE, WHEN AN
EVENT OF DEFAULT EXISTS, ANY AND ALL ACTIONS AND TO EXECUTE ANY AND ALL
DOCUMENTS AND INSTRUMENTS WHICH SECURED PARTY AT ANY TIME AND FROM TIME TO TIME
DEEMS NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND, WITHOUT
LIMITING THE GENERALITY OF THE FORE GOING, DEBTOR HEREBY GIVES SECURED PARTY THE
POWER AND RIGHT ON BEHALF OF DEBTOR AND IN ITS OWN NAME TO DO ANY OF THE
FOLLOWING UPON THE OCCURRENCE OF A DEFAULT WITHOUT NOTICE TO, OR THE CONSENT OF,
DEBTOR:
(a) to demand, xxx for, collect, or receive, in the name of
Debtor or in Secured Party's own name, any money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, documents of title, or any other instruments
for the payment of money under the Collateral or any policy of
insurance;
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 11
(b) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address
for delivery of Debtor's mail to an address designated by Secured Party
and to receive, open, and dispose of mail addressed to Debtor;
(d) (i) to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and
all monies due and to become due thereunder directly to Secured Party
or as Secured Party shall direct (Debtor agrees that if any Proceeds of
any Collateral (including payments made in respect of Accounts) shall
be received by Debtor after the occurrence of a Default, Debtor shall
promptly deliver such Proceeds to Secured Party with any necessary
endorsements, and until such Proceeds are delivered to Secured Party,
such Proceeds shall be held in trust by Debtor for the benefit of
Secured Party and shall not be commingled with any other funds or
property of Debtor); (ii) to receive payment of and receipt for any and
all monies, claims and other amounts due and to become due at any time
in respect of or arising out of any Collateral; (iii) to sign and
endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
proxies, stock powers, verifications, and notices in connection with
accounts and other documents relating to the Collateral; (iv) to
commence and prosecute any suit, action, or proceeding at law or in
equity in any court of competent jurisdiction to collect the Collateral
or any part thereof and to enforce any other right in respect of any
Collateral; (v) to defend any suit, action, or proceeding brought
against Debtor with respect to any Collateral; (vi) to settle,
compromise, or adjust any suit, action, or proceeding described above
and, in connection therewith, to give such discharges or releases as
Secured Party may deem appropriate; (vii) to exchange any of the
Collateral for other property upon any merger, consolidation,
reorganization, recapitalization, or other readjustment of the issuer
thereof and, in connection therewith, deposit any of the Collateral
with any committee, depositary, transfer agent, registrar, or other
designated agency upon such terms as Secured Party may determine;
(viii) to add or release any guarantor, indorser, surety, or other
party to any of the Collateral; (ix) to renew, extend, or otherwise
change the terms and conditions of any of the Collateral; (x) to grant
or issue any exclusive or nonexclusive license under or with respect to
any of the Intellectual Property (subject to the rights of third
parties under pre-existing licenses); (xi) to endorse Debtor's name on
all applications, documents, papers, and instruments necessary or
desirable in order for Secured Party to use any of the Intellectual
Property; (xii) to make, settle, compromise, or adjust any claims under
or pertaining to any of the Collateral (including claims under any
policy of insurance); and (xiii) to sell, transfer, pledge, convey,
make any agreement with respect to, or otherwise deal with any of the
Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Party's
option and Debtor's expense, at any time, or from time to time, all
acts and things which Secured Party deems necessary or desirable to
protect, preserve, maintain, or realize upon the Collateral and Secured
Party's security interest therein.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 12
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL
BE IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION
7.11 HEREOF. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be
liable for any failure to do so or any delay in doing so. Neither Secured
Party nor any Person designated by Secured Party shall be liable for any act
or omission or for any error of judgment or any mistake of fact or law,
except any of the same resulting from its or their gross negligence or
willful misconduct. This power of attorney is conferred on Secured Party
solely to protect, preserve, maintain, and realize upon its security interest
in the Collateral. Secured Party shall not be responsible for any decline in
the value of the Collateral not caused by Secured Party's gross negligence or
willful misconduct and shall not be required to take any steps to preserve
rights against prior parties or to protect, preserve, or maintain any Lien
given to secure the Collateral.
Section 5.2 ASSIGNMENT BY SECURED PARTY. Secured Party and each Lender
may at any time assign or otherwise transfer all or any portion of their rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person, to the extent
permitted by, and upon the conditions contained in, the Credit Agreement, and
such Person shall thereupon become vested with all the benefits thereof granted
to Secured Party or the Lenders, as applicable, herein or otherwise.
Section 5.3 POSSESSION; REASONABLE CARE. Secured Party may, from time
to time, in its sole discretion, appoint one or more agents to hold physical
custody, for the account of Secured Party, of any or all of the Collateral that
Secured Party has a right to possess. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property, it being understood that
Secured Party shall not have any responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders, or
other matters relative to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
ARTICLE 6
DEFAULT
Section 6.1 RIGHTS AND REMEDIES. If an Event of Default shall have
occurred and be continuing, Secured Party shall have the following rights and
remedies:
(a) In addition to all other rights and remedies granted to
Secured Party in this Agreement or in any other Loan Document or by
applicable law, Secured Party shall have all of the rights and remedies
of a secured party under the UCC (whether or not the UCC applies to the
affected Collateral). Without limiting the generality of the foregoing,
Secured Party may (i) without demand or notice to Debtor or any other
person, collect, receive, or take possession of the Collateral or any
part thereof and for that purpose Secured Party may
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 13
enter upon any premises on which the Collateral is located and remove
the Collateral therefrom or render it inoperable, and/or (ii) sell,
lease, or otherwise dispose of the Collateral, or any part thereof, in
one or more parcels at public or private sale or sales, at Secured
Party's offices or elsewhere, for cash, on credit, or for future
delivery, and upon such other terms as Secured Party may deem
commercially reasonable or otherwise as may be permitted by law.
Secured Party shall have the right at any public sale or sales, and, to
the extent permitted by applicable law, at any private sale or sales,
to bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) and become a purchaser of the Collateral
or any part thereof free of any right or equity of redemption on the
part of Debtor, which right or equity of redemption is hereby expressly
waived and released by Debtor. Upon the request of Secured Party,
Debtor shall assemble the Collateral and make it available to Secured
Party at any place designated by Secured Party that is reasonably
convenient to Debtor and Secured Party. Debtor agrees that Secured
Party shall not be obligated to give more than ten (10) days prior
written notice of the time and place of any public sale or of the time
after which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. Secured Party shall not
be obligated to make any sale of Collateral if it shall determine not
to do so, regardless of the fact that notice of sale of Collateral may
have been given. Secured Party may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned
from time to time by announcement at the time and place fixed for sale,
and such sale may, without further notice, be made at the time and
place to which the same was so adjourned. Debtor shall be liable for
all reasonable expenses of retaking, holding, preparing for sale, or
the like, and all reasonable attorneys' fees, legal expenses, and other
costs and expenses incurred by Secured Party in connection with the
collection of the Obligations and the enforcement of Secured Party's
rights under this Agreement. Debtor shall remain liable for any
deficiency if the Proceeds of any sale or other disposition of the
Collateral applied to the Obligations are insufficient to pay the
Obligations in full. Secured Party may apply the Collateral against the
Obligations as provided in the Credit Agreement. Debtor waives all
rights of marshaling, valuation, and appraisal in respect of the
Collateral. Any cash held by Secured Party as Collateral and all cash
proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by Secured
Party as Collateral for, and then or at any time thereafter, shall be
applied in whole or in part by Secured Party against, the Obligations
in the order permitted by the Credit Agreement. Any surplus of such
cash or cash proceeds and interest accrued thereon, if any, held by
Secured Party and remaining after payment in full of all the
Obligations shall be promptly paid over to Debtor or to whomsoever may
be lawfully entitled to receive such surplus; PROVIDED that Secured
Party shall have no obligation to invest or otherwise pay interest on
any amounts held by it in connection with or pursuant to this
Agreement.
(b) Secured Party may cause any or all of the Collateral held
by it to be transferred into the name of Secured Party or the name or
names of Secured Party's nominee or nominees.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 14
(c) Secured Party may exercise any and all rights and remedies
of Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of Debtor to demand or otherwise require
payment of any amount under, or performance of any provision of, any of
the Collateral and any and all voting rights and corporate powers in
respect of the Collateral. Debtor shall execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies and
other instruments as Secured Party may reasonably request for the
purpose of enabling Secured Party to exercise the voting and other
rights which it is entitled to exercise pursuant to this CLAUSE (c) and
to receive the dividends, interest, and other distributions which it is
entitled to receive hereunder.
(d) Secured Party may collect or receive all money or property
at any time payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do so.
(e) On any sale of the Collateral, Secured Party is hereby
authorized to comply with any limitation or restriction with which
compliance is necessary, in the view of Secured Party's counsel, in
order to avoid any violation of applicable law or in order to obtain
any required approval of the purchaser or purchasers by any applicable
Governmental Authority.
(f) For purposes of enabling Secured Party to exercise its
rights and remedies under this SECTION 6.1 and enabling Secured Party
and its successors and assigns to enjoy the full benefits of the
Collateral in each case as Secured Party shall be entitled to exercise
its rights and remedies under this SECTION 6.1, Debtor hereby grants to
Secured Party an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to Debtor) to use, assign,
license, or sublicense any of the Intellectual Property, including in
such license reasonable access to all media in which any of the
licensed items may be recorded or stored and all computer programs used
for the completion or printout thereof and further including in such
license such rights of quality control and inspection as are reasonably
necessary to prevent the Trademarks included in such license from
claims of invalidation. This license shall also inure to the benefit of
all successors, assigns, and transferees of Secured Party.
Section 6.2 PRIVATE SALES. Debtor recognizes that Secured Party may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States or in the Securities Act of 1933, as amended from time to time
(the "SECURITIES ACT") and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. Debtor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall, to the extent permitted by law, be
deemed to have been made in a commercially reasonable manner. Neither Secured
Party nor the Lenders shall be under any obligation to delay a sale of any of
the Collateral for the period of time necessary to permit the issuer of such
securities to register such securities under the laws of any jurisdiction
outside the United States, under the Securities Act, or under any applicable
state
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 15
securities laws, even if such issuer would agree to do so. Debtor further agrees
to do or cause to be done, to the extent that Debtor may do so under applicable
law, all such other reasonable acts and things as may be necessary to make such
sales or resales of any portion or all of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees, or awards of any and all courts, arbitrators, or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at Debtor's expense.
ARTICLE 7
MISCELLANEOUS
Section 7.1 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section 7.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of Debtor and Secured Party and their respective
successors and assigns, except that Debtor may not assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party, and Secured Party may not appoint a successor as Secured Party except in
accordance with the Credit Agreement.
Section 7.3 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS
AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY
THE PARTIES HERETO.
Section 7.4 NOTICES. All notices and other communications provided for
in this Agreement shall be given or made in accordance with the Credit
Agreement.
Section 7.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA AND APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
Section 7.6 HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 16
Section 7.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by Secured Party shall affect the
representations and warranties or the right of Secured Party to rely upon them.
Section 7.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 7.9 WAIVER OF BOND. In the event Secured Party seeks to take
possession of any or all of the Collateral by judicial process, Debtor hereby
irrevocably waives any bonds and any surety or security relating thereto that
may be required by applicable law as an incident to such possession, and waives
any demand for possession prior to the commencement of any such suit or action.
Section 7.10 SEVERABILITY. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 7.11 TERMINATION. If all of the Obligations shall have been
paid and performed in full and all Commitments of Secured Party and the Lenders
shall have expired or terminated, Secured Party shall, upon the written request
of Debtor, execute and deliver to Debtor a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement, and shall duly assign and deliver to Debtor (without recourse
and without any representation or warranty) such of the Collateral as may be in
the possession of Secured Party and has not previously been sold or otherwise
applied pursuant to this Agreement; notwithstanding anything to the contrary
contained in this Agreement, if the payment of any amount of the Obligations is
rescinded, voided or must otherwise be refunded by Secured Party or any Lender
upon the insolvency, bankruptcy or reorganization of Debtor or any other Loan
Party or otherwise for any reason whatsoever, then the security interests
created by this Agreement will be automatically reinstated and become
automatically effective and in full force and effect, all to the extent that and
as though such payment so rescinded, voided or otherwise refunded had never been
made and such release and termination of such security interest had never been
given.
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 17
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR:
PEREGRINE SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
PLEDGE AND SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 18
Schedule 1.1
TO
PLEDGE AND SECURITY AGREEMENT
PLEDGED SHARES
Description of Each
Class and Series Number of Number of
Name State of Incorporation (If Applicable) Par Value Issued Shares Pledged Shares(1) Certificate No.
---- ---------------------- --------------- --------- ------------- -------------- ---------------
--------
(1) 100% for Domestic Subsidiaries; 65% for first tier Foreign Subsidiaries
Schedule 1.1, Solo Page
SCHEDULE 3.1
TO
PLEDGE AND SECURITY AGREEMENT
LOCATIONS
Address Landlord/mortgagee
------- ------------------
I. PRINCIPAL PLACE OF BUSINESS
II. OTHER LOCATIONS
Schedule 3.1, Solo Page
SCHEDULE 3.2
TO
PLEDGE AND SECURITY AGREEMENT
DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS
Schedule 3.2, Solo Page
SCHEDULE 3.3
TO
PLEDGE AND SECURITY AGREEMENT
TRADE AND OTHER NAMES; TAX IDENTIFICATION NUMBER
I. Trade and Other Names:
II. United States Income Tax Identification Number:
Schedule 3.3, Solo Page
SCHEDULE 3.5
TO
PLEDGE AND SECURITY AGREEMENT
INTELLECTUAL PROPERTY
COPYRIGHTS
===============================================================================================================================
Owner of Record Country of Registration Copyright Applications Registration or Expiration
or Registration Filing Date Date
No.
========================== ========================= ================== ================= ================= ================
========================== ========================= ================== ================= ================= ================
=======================
Title
=======================
=======================
COPYRIGHT LICENSES
===================================================================================================================
Name of Agreement Patent Date of Agreement
======================================== =================================== ====================================
======================================== =================================== ====================================
PATENTS
======================================================================================================================
Owner of Record After Application or
Assignment Agreements are Filed Country of Origin Patent Identification Registration No.
======================================= ======================= ======================== ==========================
======================================= ======================= ======================== ==========================
====================================================================
Registration or Issue Date Expiration Date
Filing Date (if known)
=================== ======================= =======================
=================== ======================= =======================
Schedule 3.5, Page 1 of 2
PATENT LICENSES
==============================================================================================================================
Name of Agreement Patent Date of Agreement
========================================== ==================================== ============================================
========================================== ==================================== ============================================
TRADEMARKS
====================================================================================================================================
Application or Filing Expiration
Owner of Record Country of Registration Trademark Registration No. Date Date
======================== ============================= ======================== ==================== ============= =============
======================== ============================= ======================== ==================== ============= =============
===========================
Goods
===========================
===========================
TRADEMARK LICENSES
===================================================================================================================
Name of Agreement Parties Date of Agreement
========================================= ================================== ====================================
========================================= ================================== ====================================
Schedule 3.5, Page 2 of 2
EXHIBIT A
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF AMENDMENT
This Amendment, dated _______________, _____, is delivered pursuant to
SECTION 4.8 of the Pledge and Security Agreement referred to below. The
undersigned hereby agrees that this Amendment may be attached to that certain
Pledge and Security Agreement, dated as of July __, 1999, between the
undersigned and Bank of America, N.A. as Administrative Agent for the Lenders
referred to therein (the "PLEDGE AND SECURITY AGREEMENT"), and that the Capital
Stock, notes, or other securities or instruments listed on SCHEDULE 1 annexed
hereto shall be and become part of the Collateral referred to in the Pledge and
Security Agreement and shall secure payment and performance of all Obligations
as provided in the Pledge and Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Pledge and Security Agreement.
DEBTOR:
PEREGRINE SYSTEMS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Amendment to Pledge and Security Agreement - Solo Page
Schedule 1
to
Amendment to Pledge and Security Agreement
Number Percentage
Stock Par Number of of Of
Stock Issuer Class of Certificate Value Issued Pledged Outstanding
------------ -------- ----------- ----- ------ ------- Shares
Stock No(s). Shares Shares(1) ------
----- ------ ------ ------
--------
(1) 100% for Domestic Subsidiaries; 65% for first tier Foreign Subsidiaries
Schedule 1 to Amendment to Pledge and Security Agreement, Solo Page
EXHIBIT B
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF COPYRIGHT SECURITY AGREEMENT
See attached.
COPYRIGHT SECURITY AGREEMENT
(Peregrine Systems, Inc.)
THIS COPYRIGHT SECURITY AGREEMENT ("AGREEMENT") is between PEREGRINE
SYSTEMS, INC., a Delaware corporation ("DEBTOR"), and BANK OF AMERICA, N.A.
("SECURED PARTY"), acting in its capacity as Administrative Agent pursuant to
that certain Credit Agreement dated as of July __, 1999 (as amended, restated,
or otherwise modified, the "CREDIT AGREEMENT") among Debtor, Secured Party,
BankBoston, N.A., as syndication agent and each of the "Lenders" party thereto.
R E C I T A L S:
A. Debtor and Secured Party have entered into that certain Pledge and
Security Agreement, dated as of June __, 1999 (as amended, restated, or
otherwise modified, the "SECURITY AGREEMENT"; all terms defined in the Security
Agreement, wherever used herein, shall have the same meanings herein as are
prescribed by the Security Agreement).
B. Pursuant to the terms of the Security Agreement, Debtor has granted
to Secured Party a lien and security interest in all General Intangibles of
Debtor including, without limitation, all of Debtor's right, title, and interest
in, to and under all now owned and hereafter acquired Copyrights and Copyright
Licenses, and all products and Proceeds thereof, to secure the payment of the
Obligations (as defined in the Credit Agreement).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby grants to Secured
Party a lien and continuing security interest in all of Debtor's right, title,
and interest in, to, and under the following (all of the following items or
types of property being herein collectively referred to as the "COPYRIGHT
COLLATERAL"), whether presently existing or hereafter created or acquired:
(1) each Copyright, each registration of a Copyright
("COPYRIGHT REGISTRATION"), and each application for registration of a
Copyright ("COPYRIGHT APPLICATION"), including, without limitation,
each Copyright, Copyright Registration, and Copyright Application
referred to in SCHEDULE 1 annexed hereto;
(2) each Copyright License, to the extent assignable,
including, without limitation, each Copyright License referred to in
SCHEDULE 1 annexed hereto; and
(3) all products and Proceeds of the foregoing, including,
without limitation, any claim by Debtor against third parties for past,
present, or future infringement or breach of any Copyright, Copyright
Registration, Copyright Application, or Copyright License, including,
without limitation, any Copyright, Copyright Registration, or Copyright
License listed in SCHEDULE 1 annexed hereto, and any Copyright
Registration issued pursuant to a Copyright Application referred to in
SCHEDULE 1 annexed hereto.
The lien and security interest contained in this Agreement is granted in
conjunction with the liens and security interests granted to Secured Party
pursuant to the Security Agreement.
COPYRIGHT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 4
Debtor hereby acknowledges and affirms that the rights and remedies of
Secured Party with respect to the liens and security interests in the Copyright
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly
executed by its duly authorized officer as of the ___ day of ____________, 1999.
DEBTOR:
PEREGRINE SYSTEMS, INC.,
a Delaware corporation
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
COPYRIGHT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 5
ACKNOWLEDGMENT
STATE OF ______________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me this __ day of _________,
1999, by ______________, as ___________ of Peregrine Systems, Inc., a Delaware
corporation, on behalf of such company.
-------------------------------------
{Seal} Notary Public in and for the State of
---------
My commission expires:
---------------------
STATE OF ______________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me this __ day of __________,
1999, by _______________, as _____________ of Bank of America, N.A., on behalf
of such bank.
-------------------------------------
{Seal} Notary Public in and for the State of
---------
My commission expires:
---------------------
COPYRIGHT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 6
Schedule 1
to Copyright
SECURITY AGREEMENT
COPYRIGHTS
OWNER OF COUNTRY OF COPYRIGHT APPLICATION OR REGISTRATION EXPIRATION TITLE
RECORD REGISTRATION REGISTRATION OR FILING DATE DATE
NO.
---------- ------------ --------- -------------- -------------- ---------- -----
COPYRIGHT LICENSES
NAME OF AGREEMENT COPYRIGHT DATE OF AGREEMENT
----------------- --------- -----------------
COPYRIGHT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 7
EXHIBIT C
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF PATENT SECURITY AGREEMENT
See attached.
COPYRIGHT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 8
PATENT SECURITY AGREEMENT
(Peregrine Systems, Inc.)
THIS PATENT SECURITY AGREEMENT ("AGREEMENT") is between PEREGRINE
SYSTEMS, INC., a Delaware corporation ("DEBTOR"), and BANK OF AMERICA, N.A.
("SECURED PARTY"), acting in its capacity as Administrative Agent pursuant to
that certain Credit Agreement dated as of July __, 1999 (as amended, restated,
or otherwise modified, the "CREDIT AGREEMENT") among Debtor, Secured Party,
BankBoston, N.A., as syndication agent and each of the "Lenders" party thereto.
R E C I T A L S:
A. Debtor and Secured Party have entered into that certain Pledge and
Security Agreement, dated as of July __, 1999 (as amended, restated, or
otherwise modified, the "SECURITY AGREEMENT"; all terms defined in the Security
Agreement, wherever used herein, shall have the same meanings herein as are
prescribed by the Security Agreement).
B. Pursuant to the terms of the Security Agreement, Debtor has granted
to Secured Party a lien and security interest in all General Intangibles of
Debtor including, without limitation, all of Debtor's right, title, and interest
in, to and under all now owned and hereafter acquired Patents and Patent
Licenses, and all products and Proceeds thereof, to secure the payment of the
Obligations (as defined in the Credit Agreement).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby grants to Secured
Party a lien and continuing security interest in all of Debtor's right, title,
and interest in, to, and under the following (all of the following items or
types of property being herein collectively referred to as the "PATENT
COLLATERAL"), whether presently existing or hereafter created or acquired:
(1) each Patent and each application for a Patent ("PATENT
APPLICATION"), including, without limitation, each Patent and Patent
Application referred to in SCHEDULE 1 annexed hereto, together with any
reissues, continuations, divisions, modifications, substitutions or
extensions thereof;
(2) each Patent License, to the extent assignable, including,
without limitation, each Patent License referred to in SCHEDULE 1
annexed hereto; and
(3) all products and Proceeds of the foregoing, including,
without limitation, any claim by Debtor against third parties for past,
present, or future infringement or breach of any Patent or Patent
License, including, without limitation, any Patent or Patent License
referred to in SCHEDULE 1 annexed hereto, and any Patent issued
pursuant to a Patent Application referred to in SCHEDULE 1 annexed
hereto.
The lien and security interest contained in this Agreement is granted in
conjunction with the liens and security interests granted to Secured Party
pursuant to the Security Agreement.
PATENT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 9
Debtor hereby acknowledges and affirms that the rights and remedies of
Secured Party with respect to the liens and security interests in the Patent
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly
executed by its duly authorized officer as of the ___ day of July, 1999.
DEBTOR:
PEREGRINE SYSTEMS, INC.,
a Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
PATENT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 10
ACKNOWLEDGMENT
STATE OF ______________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me this __ day of July, 1999,
by ______________, as ___________ of Peregrine Systems, Inc., a Delaware
corporation, on behalf of such company.
-------------------------------------
{Seal} Notary Public in and for the State of
----------
My commission expires:
---------------------
STATE OF ______________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me this __ day of July, 1999,
by _______________, as _____________ of Bank of America, N.A., on behalf of such
bank.
-------------------------------------
{Seal} Notary Public in and for the State of
----------
My commission expires:
---------------------
PATENT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 11
Schedule 1
to Patent
SECURITY AGREEMENT
PATENTS
OWNER OF COUNTRY OF PATENT APPLICATION OR REGISTRATION ISSUE DATE EXPIRATION
RECORD ORIGIN IDENTIFICATION REGISTRATION OR FILING DATE (IF KNOWN) DATE
NO.
===================== =============== =================== =================== ================== =============== ==============
--------------------- --------------- ------------------- ------------------- ------------------ --------------- --------------
===================== =============== =================== =================== ================== =============== ==============
PATENT LICENSES
NAME OF AGREEMENT PATENT DATE OF AGREEMENT
----------------- ------ -----------------
PATENT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 12
EXHIBIT D
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF TRADEMARK SECURITY AGREEMENT
See attached.
PATENT SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 13
TRADEMARK SECURITY AGREEMENT
(Peregrine Systems, Inc.)
THIS TRADEMARK SECURITY AGREEMENT ("AGREEMENT") is between PEREGRINE
SYSTEMS, INC., a Delaware corporation ("DEBTOR"), and BANK OF AMERICA, N.A.
("SECURED PARTY"), acting in its capacity as Administrative Agent pursuant to
that certain Credit Agreement dated as of July __, 1999 (as amended, restated,
or otherwise modified, the "CREDIT AGREEMENT") among Debtor, Secured Party,
BankBoston, N.A., as syndication agent and each of the "Lenders" party thereto.
R E C I T A L S:
A. Debtor and Secured Party have entered into that certain Pledge and
Security Agreement, dated as of July __, 1999 (as amended, restated, or
otherwise modified, the "SECURITY AGREEMENT"; all terms defined in the Security
Agreement, wherever used herein, shall have the same meanings herein as are
prescribed by the Security Agreement).
B. Pursuant to the terms of the Security Agreement, Debtor has granted
to Secured Party a lien and security interest in all General Intangibles of
Debtor, including, without limitation, all of Debtor's right, title, and
interest in, to and under all now owned and hereafter acquired Trademarks,
together with the goodwill of the business symbolized by Debtor's Trademarks,
and Trademark Licenses, and all products and Proceeds thereof, to secure the
payment of the Obligations (as defined in the Credit Agreement).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby grants to Secured
Party a lien and continuing security interest in all of Debtor's right, title,
and interest in, to, and under the following (all of the following items or
types of property being herein collectively referred to as the "TRADEMARK
COLLATERAL"), whether presently existing or hereafter created or acquired:
(1) each Trademark, trademark registration ("TRADEMARK
REGISTRATION") and trademark application ("TRADEMARK APPLICATION"),
including, without limitation, each Trademark, Trademark Registration
and Trademark Application referred to in SCHEDULE 1 annexed hereto,
together with the goodwill of the business symbolized thereby; and
(2) each Trademark License, to the extent assignable,
including, without limitation, each Trademark License listed in
SCHEDULE 1 annexed hereto; and
(3) all products and proceeds of the foregoing, including,
without limitation, any claim by Debtor against third parties for past,
present or future (a) infringement, dilution or breach of any
Trademark, Trademark Registration, Trademark Application and Trademark
License, including, without limitation, any Trademark, Trademark
Registration and Trademark License referred to in SCHEDULE 1 annexed
hereto, and any Trademark Registration issued pursuant to a Trademark
Application referred to in SCHEDULE 1 annexed hereto; or (b) injury to
the goodwill associated with any Trademark, Trademark Registration and
Trademark Application.
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 14
The lien and security interest contained in this Agreement is granted in
conjunction with the liens and security interests granted to Secured Party
pursuant to the Security Agreement.
Debtor hereby acknowledges and affirms that the rights and remedies of
Secured Party with respect to the liens and security interests in the Trademark
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page is left intentionally blank.]
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 15
IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly
executed by its duly authorized officer as of the ___ day of July, 1999.
DEBTOR:
PEREGRINE SYSTEMS, INC.
a Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SECURED PARTY:
BANK OF AMERICA, N.A,
as Administrative Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 16
ACKNOWLEDGMENT
STATE OF ______________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me this __ day of July, 1999,
by ______________, as ___________ of Peregrine Systems, Inc., a Delaware
corporation, on behalf of such company.
-------------------------------------
{Seal} Notary Public in and for the State of
----------
My commission expires:
---------------------
STATE OF TEXAS )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me this __ day of July, 1999,
by _______________, as _____________ of Bank of America, N.A., on behalf of such
bank.
-------------------------------------
{Seal} Notary Public in and for the State of
----------
My commission expires:
---------------------
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 17
Schedule 1
to Trademark
SECURITY AGREEMENT
FEDERAL TRADEMARKS
TRADEMARK COUNTRY OF FILE DATE APPLICATION REGISTRATION REGISTRATION STATUS
REGISTRATION NO. DATE NO.
======================== ================= ============== ================== ================= ================ ==================
------------------------ ----------------- -------------- ------------------ ----------------- ---------------- ------------------
======================== ================= ============== ================== ================= ================ ==================
STATE TRADEMARKS - NONE
TRADEMARK LICENSES - NONE
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 18
TRADEMARK SECURITY AGREEMENT
(Peregrine Systems, Inc.)
THIS TRADEMARK SECURITY AGREEMENT ("AGREEMENT") is between PEREGRINE
SYSTEMS, INC., a Delaware corporation ("DEBTOR"), and BANK OF AMERICA, N.A.
("SECURED PARTY"), acting in its capacity as Administrative Agent pursuant to
that certain Credit Agreement dated as of July 30, 1999 (as amended, restated,
or otherwise modified, the "CREDIT AGREEMENT") among Debtor, Secured Party,
BankBoston, N.A., as syndication agent and each of the "Lenders" party thereto.
R E C I T A L S:
A. Debtor and Secured Party have entered into that certain Pledge and
Security Agreement, dated as of July 30, 1999 (as amended, restated, or
otherwise modified, the "SECURITY AGREEMENT"; all terms defined in the Security
Agreement, wherever used herein, shall have the same meanings herein as are
prescribed by the Security Agreement).
B. Pursuant to the terms of the Security Agreement, Debtor has granted
to Secured Party a lien and security interest in all General Intangibles of
Debtor, including, without limitation, all of Debtor's right, title, and
interest in, to and under all now owned and hereafter acquired Trademarks,
together with the goodwill of the business symbolized by Debtor's Trademarks,
and Trademark Licenses, and all products and Proceeds thereof, to secure the
payment of the Obligations (as defined in the Credit Agreement).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby grants to Secured
Party a lien and continuing security interest in all of Debtor's right, title,
and interest in, to, and under the following (all of the following items or
types of property being herein collectively referred to as the "TRADEMARK
COLLATERAL"), whether presently existing or hereafter created or acquired:
(1) each Trademark, trademark registration ("TRADEMARK
REGISTRATION") and trademark application ("TRADEMARK APPLICATION"),
including, without limitation, each Trademark, Trademark Registration
and Trademark Application referred to in SCHEDULE 1 annexed hereto,
together with the goodwill of the business symbolized thereby; and
(2) each Trademark License, to the extent assignable,
including, without limitation, each Trademark License listed in
SCHEDULE 1 annexed hereto; and
(3) all products and proceeds of the foregoing, including,
without limitation, any claim by Debtor against third parties for past,
present or future (a) infringement, dilution or breach of any
Trademark, Trademark Registration, Trademark Application and Trademark
License, including, without limitation, any Trademark, Trademark
Registration and Trademark License referred to in SCHEDULE 1 annexed
hereto, and any Trademark Registration issued pursuant to a Trademark
Application referred to in SCHEDULE 1 annexed
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 1
hereto; or (b) injury to the goodwill associated with any Trademark,
Trademark Registration and Trademark Application.
The lien and security interest contained in this Agreement is granted in
conjunction with the liens and security interests granted to Secured Party
pursuant to the Security Agreement.
Debtor hereby acknowledges and affirms that the rights and remedies of
Secured Party with respect to the liens and security interests in the Trademark
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page is left intentionally blank.]
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 2
IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly
executed by its duly authorized officer as of the ___ day of July, 1999.
DEBTOR:
PEREGRINE SYSTEMS, INC.
a Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SECURED PARTY:
BANK OF AMERICA, N.A,
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 3
ACKNOWLEDGMENT
STATE OF ______________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me this __ day of July, 1999,
by ______________, as ___________ of Peregrine Systems, Inc., a Delaware
corporation, on behalf of such company.
-------------------------------------
{Seal} Notary Public in and for the State of
--------
My commission expires:
---------------------
STATE OF TEXAS )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me this __ day of July, 1999,
by _______________, as _____________ of Bank of America, N.A., on behalf of such
bank.
-------------------------------------
{Seal} Notary Public in and for the State of
--------
My commission expires:
---------------------
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 4
Schedule 1
to Trademark
SECURITY AGREEMENT
FEDERAL TRADEMARKS
APPLICATION REGISTRATION REGISTRATION
TRADEMARK COUNTRY NAME FILE DATE NUMBER DATE NUMBER STATUS
===================================== ================ ============= ============= ============== ================= ===========
PEREGRINE SYSTEMS Australia 06-Oct-88 A496,832 06-Oct-88 A496,832 Registered
SERVICECENTER Australia 26-Apr-96 707348 26-Apr-96 707348 Registered
PEREGRINE SYSTEMS Austria 11-Oct-88 AM 4550/88 06-Feb-89 123787 Registered
PEREGRINE SYSTEMS Benelux 20-Jan-89 724277 01-Aug-89 455170 Renewed
APSYLOG Canada 24-Dec-96 832450 21-Apr-98 TMA493.410 Registered
APSYLOG Canada 24-Dec-96 832450 Filed
INTERNATIONAL SOFTWARE Canada 20-Jun-96 815831 23-Sep-97 TMA482,810 Registered
SOLUTIONS
OPENSNA Canada 10-Jul-92 708838 09-Dec-94 436776 Registered
PEREGRINE SYSTEMS Canada 15-Nov-88 618954 18-Jan-91 378289 Registered
SERVICECENTER Canada 26-Apr-96 811112 Filed
SESSIONVIEW Canada 05-Nov-91 693036 29-Dec-95 452311 Registered
STATIONVIEW Canada Proposed
THE IT ASSET MANAGEMENT Canada 24-Dec-96 832451 Abandoned
COMPANY
PEREGRINE SYSTEMS China 09-Feb-89 8903876 10-Dec-89 506584 Registered
PEREGRINE SYSTEMS Denmark 20-Oct-88 07.296 1988 13-Jul-90 4659 1990 Registered
POLYPM/2 Denmark 17-Jan-95 VA00.395 12-May-95 02.929.1995 Aband Inst
199
OPEN ADMINISTRATOR European 01-Apr-96 76372 Withdrawn
Community
PEREGRINE SYSTEMS European 01-Apr-96 76273 Published
Community
PEREGRINE SYSTEMS European 01-Apr-96 76539 Published
SERVICECENTER Community
SERVICECENTER European 01-Apr-96 77156 Filed
Community
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 5
APPLICATION REGISTRATION REGISTRATION
TRADEMARK COUNTRY NAME FILE DATE NUMBER DATE NUMBER STATUS
===================================== ================ ============= ============= ============== ================= ===========
STATIONVIEW European 01-Apr-96 76216 01-Apr-96 76216 Registered
Community
INTERNATIONAL SOFTWARE Fed. Republic of 24-Jun-96 39628354.3 Aband Inst
SOLUTIONS Germany
OPENSNA Fed. Republic of 14-Sep-92 P43518/9 Wz Abandoned
Germany
PEREGRINE SYSTEMS AND DESIGN Fed. Republic of 23-Jan-89 P37511/9 Wz 12-Mar-90 1155670 Renewed
Germany
SESSION VIEW Fed. Republic of 05-Nov-91 P42026/9 Wz 21-Jan-93 2028515 Registered
Germany
SESSIONVIEW Fed. Republic of Proposed
Germany
PEREGRINE SYSTEMS Finland 12-Jan-89 146/89 22-Apr-91 111544 Registered
INTERNATIONAL SOFTWARE France 04-Jul-96 13-Dec-96 96/632,919 Registered
SOLUTIONS
OPENSNA France 16-Sep-92 92434058 16-Sep-92 92434058 Registered
PEREGRINE SYSTEMS France 03-Feb-89 107979 03-Feb-89 1512787 Renewed
SESSION VIEW France 13-Dec-91 325072 13-Dec-91 1711904 Registered
SESSIONVIEW France Proposed
PEREGRINE SYSTEMS Hong Kong 09-Aug-88 349/89 30-Apr-90 1187/1990 Registered
PEREGRINE SYSTEMS Italy 27-Jan-89 17252 X/00 00-Xxx-00 000000 Xxxxxxx
XXXXXXX Xxxxx 16-Sep-92 4-185083 13-Mar-98 3369248 Registered
OPENSNA Japan 16-Sep-92 4-185,084 28-Apr-95 3038068 Registered
PEREGRINE SYSTEMS Japan 17-Nov-88 63-129444 29-Nov-91 2349251 Registered
PEREGRINE SYSTEMS Japan 30-Jun-98 55991/1998 Filed
SERVICECENTER
SERVICECENTER Japan 26-Apr-96 046959/1996 Aband Inst
SESSION VIEW Japan 26-Nov-91 3-121,838 31-Mar-94 2640568 Registered
SESSIONVIEW Japan Proposed
STATIONVIEW Japan Proposed
PEREGRINE SYSTEMS Norway 28-Dec-88 88.5911 02-Aug-90 142276 Registered
STATIONVIEW Norway Proposed
PEREGRINE SYSTEMS Spain 20-Jan-89 1296663 04-May-90 1296663 Registered
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 6
APPLICATION REGISTRATION REGISTRATION
TRADEMARK COUNTRY NAME FILE DATE NUMBER DATE NUMBER STATUS
===================================== ================ ============= ============= ============== ================= ===========
PEREGRINE SYSTEMS Sweden Proposed
OPENSNA Switzerland 11-Sep-92 6667/1992.8 11-Sep-92 401248 Registered
PEREGRINE SYSTEMS Switzerland 23-Jan-89 599 23-Jan-89 369666 Registered
SESSION VIEW Xxxxxxxxxxx 00-Xxx-00 7824/1991.7 Abandoned
PEREGRINE SYSTEMS Taiwan Proposed
PEREGRINE SYSTEMS Thailand Proposed
INTERNATIONAL SOFTWARE United Kingdom 25-Jun-96 2103760 Aband Inst
SOLUTIONS
OPENSNA United Kingdom 09-Jul-92 1506798 Abandoned
PEREGRINE SYSTEMS United Kingdom 09-Aug-88 1370984 09-Aug-88 1370984 Registered
SESSION VIEW United Kingdom 31-Oct-91 1481386 Abandoned
*AVAILABLE* United States of Unfiled
America
APSYLOG United States of 18-Mar-96 75/073,691 23-Sep-97 2098819 Registered
America
ASSETCENTER United States of 14-Apr-98 75/467,895 Allowed
America
BRIDGE/ADMIN United States of 19-Feb-91 74/139,994 10-Dec-91 1667504 Cancelled
America
BRIDGE/FASTLOAD United States of 26-Mar-92 74/259,415 08-Dec-92 1738149 Aband Inst
America
BRIDGE/MONITOR United States of 13-Jan-92 74/237,326 22-Feb-94 1823960 Aband Inst
America
BRIDGE/SNAPSHOT United States of 19-Feb-91 74/139,993 10-Dec-91 1667503 Cancelled
America
CLIENTVIEW United States of 01-Oct-92 74/319,929 Abandoned
America
COMMANYWHERE United States of 03-Feb-98 75/427,962 Allowed
America
DBAID United States of Proposed
America
E.FLEET United States of 31-Jul-97 75/333,912 Filed
America
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 7
APPLICATION REGISTRATION REGISTRATION
TRADEMARK COUNTRY NAME FILE DATE NUMBER DATE NUMBER STATUS
===================================== ================ ============= ============= ============== xxxxxxxxxxxxxxxxx xxxxxxxxxxx
XXXXXXXXXXXXXX Xxxxxx Xxxxxx of 03-Jun-99 75/720,997 Filed
America
FLEETANALYST United States of 24-Jul-96 75/139,320 Abandoned
America
FLEETANYWHERE United States of 04-Aug-97 75/334,964 Allowed
America
FLEETCENTRAL United States of Searched
America
GLOBAL CONTROL United States of Searched
America
GLOBAL DISCOVERY United States of Searched
America
GLOBAL DISTRIBUTION United States of Searched
America
INFRACENTER United States of Searched
America
INFRATOOLS United States of Searched
America
INTELLIFLEET United States of Searched
America
INTERNATIONAL SOFTWARE United States of 04-Jan-96 75/040,165 16-Jun-98 2166201 Registered
SOLUTIONS America
INTERNATIONAL SOFTWARE United States of 04-Jan-96 75/040,165 16-Jun-98 2166201 Registered
SOLUTIONS America
IRPCENTER United States of Searched
America
NETWORK EDGE United States of 01-Oct-92 74/319,926 Abandoned
America
NTV United States of Proposed
America
NV/MONITOR United States of 24-Apr-92 74/268,838 29-Dec-92 1742921 Registered
America
OFFICE TECHNICAL United States of 22-Jun-99 75/689,002 Filed
America
OPEN ADMINISTRATOR United States of 19-Jan-95 74/623,035 17-Dec-96 2024487 Registered
America
OPENSNA United States of 15-Jun-92 74/284,668 14-Dec-93 1811705 Registered
America
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 8
APPLICATION REGISTRATION REGISTRATION
TRADEMARK COUNTRY NAME FILE DATE NUMBER DATE NUMBER STATUS
===================================== ================ ============= ============= ============== ================= ===========
PEREGRINE SOFTWARE United States of 01-Apr-85 73/529,811 03-Jun-86 1396177 Cancelled
America
PEREGRINE SYSTEMS United States of
America 08-Dec-95 75/029,988 07-Jan-97 2028646 Registered
PEREGRINE SYSTEMS United States of 09-Aug-88 73/745,003 27-Jun-89 1545802 Registered
America
PEREGRINE SYSTEMS United States of 09-Aug-88 73/745,004 15-Aug-89 1551702 Registered
America
PEREGRINE SYSTEMS (STYLIZED) United States of Proposed
America
PEREGRINE SYSTEMS United States of 08-Dec-95 75/029,986 Allowed
SERVICECENTER America
PEREGRINE-RMON United States of Proposed
America
PNMS EXPRESS United States of Proposed
America
POLYMP/2 United States of 23-Nov-94 74/602,188 11-Jun-96 1979300 Registered
America
POLYPM/2 United States of 23-Nov-94 74/602,188 11-Jun-96 1979300 Registered
America
PROTOTYPE INCORPORATED United States of 24-Jun-97 75/314,290 Published
America
RECAP United States of Proposed
America
REMOTE SERVICES United States of Searched
America
REMOTE SERVICES MANAGEMENT United States of 07-Apr-95 74/657,626 30-Jul-96 1990556 Reg SuppR
America
REMOTE SERVICES MANAGEMENT United States of 07-Apr-95 74/657,626 30-Jul-96 1990556 Registered
America
SERVERVIEW United States of Abandoned
America
SERVERVIEW United States of 01-Oct-92 74/319,928 Abandoned
America
SERVICECENTER United States of 30-Oct-95 75/011,922 11-Mar-97 2045202 Reg SuppR
America
SERVICEINFO United States of Proposed
America
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 9
APPLICATION REGISTRATION REGISTRATION
TRADEMARK COUNTRY NAME FILE DATE NUMBER DATE NUMBER STATUS
===================================== ================ ============= ============= ============== xxxxxxxxxxxxxxxxx xxxxxxxxxxx
XXXXXXX XXXX Xxxxxx Xxxxxx of 08-Aug-91 74/192,681 Abandoned
America
SESSIONVIEW United States of Proposed
SESSIONVIEW United States of 07-Jan-93 74/346,176 Abandoned
America
SNAPRO United States of Proposed
America
STATIONVIEW United States of 01-Oct-92 74/319,927 27-Dec-94 1870375 Registered
America
TECHNOLOGY FOR MANAGING United States of Proposed
TECHNOLOGY America
TECHNOLOGY MANAGEMENT United States of Searched
SOLUTIONS America
THE INFRASTRUCTURE United States of Searched
MANAGEMENT COMPANY America
THE IT ASSET MANAGEMENT United States of 16-Jul-96 75/134,990 Abandoned
COMPANY America
STATE TRADEMARKS - NONE
TRADEMARK LICENSES - NONE
TRADEMARK SECURITY AGREEMENT (Peregrine Systems, Inc.) - Page 10
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated and
effective as of December 31, 1999, is between PEREGRINE SYSTEMS, INC.
("BORROWER"), a Delaware corporation, each of the banks or other lending
institutions which is a party hereto (individually, each a "LENDER", and
collectively the "LENDERS") and BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A., as administrative agent for itself and the other Lenders (in
such capacity herein, the "ADMINISTRATIVE AGENT").
RECITALS:
A. Borrower, Administrative Agent, and the Lenders have entered into
that certain Credit Agreement dated as of July 30, 1999 (as amended, restated,
or modified from time to time, the "AGREEMENT").
B. Borrower has requested that the Agreement be amended in certain
respects, and Administrative Agent and the Lenders are willing to comply with
such request subject to the terms and provisions of this Amendment.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE 2
AMENDMENTS
Section 2.1 AMENDMENT TO SECTION 10.8. Section 10.8(a) of the Agreement
is hereby amended and restated in its entirety as follows:
(a) any of its Receivables, provided that Borrower or any
other Loan Party may sell up to thirty percent (30%) of its Receivables
in any Fiscal Quarter; PROVIDED, FURTHER, that Borrower or any other
Loan Party may sell up to forty percent (40%) of its Receivables in any
Fiscal Quarter if, on a pro forma basis, the Borrower would have
satisfied SECTION 11.3 of this Agreement for the prior Fiscal Quarter
had such Receivables been sold in such prior Fiscal Quarter.
FIRST AMENDMENT TO CREDIT AGREEMENT, Page 1
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:
(a) The representations and warranties contained herein and in
all other Loan Documents, as amended hereby, shall be true and correct
in all material respects as of the date hereof as if made on the date
hereof, except for such representations and warranties limited by their
terms to a specific date;
(b) No Default or Event of Default shall have occurred and be
continuing;
(c) Borrower and the Lenders shall have delivered to the
Administrative Agent an executed original copy of this Amendment;
(d) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documentation and other legal
matters incident thereto shall be satisfactory to the Administrative
Agent.
ARTICLE 4
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 4.1 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrower, Administrative Agent and the Lenders agree that the Agreement
as amended hereby and the other Loan Documents shall continue to be legal,
valid, binding and enforceable in accordance with their respective terms.
Section 4.2 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants to Administrative Agent and the Lenders that (i) the execution,
delivery and performance of this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith have been authorized by all
requisite action on the part of Borrower and will not violate the articles of
incorporation or bylaws of Borrower; (ii) the representations and warranties
contained in the Agreement, as amended hereby, and any other Loan Document, are
true and correct on and as of the date hereof as though made on and as of the
date hereof (except to the extent that such representations and warranties were
expressly, in the Agreement, made only in reference to a specific date); (iii)
after giving effect to this Amendment, no Default or Event of Default has
occurred and
FIRST AMENDMENT TO CREDIT AGREEMENT, Page 2
is continuing; and (iv) Borrower is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby, and the other Loan
Documents.
ARTICLE 5
MISCELLANEOUS
Section 5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other Loan Document
including any Loan Document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Administrative Agent or any Lender shall
affect the representations and warranties or the right of Administrative Agent
or any Lender to rely upon them.
Section 5.2 REFERENCE TO AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement as amended hereby.
Section 5.3 EXPENSES OF ADMINISTRATIVE AGENT. As provided in the
Agreement, Borrower agrees to pay on demand all reasonable costs and expenses
incurred by Administrative Agent in connection with the preparation,
negotiation, and execution of this Amendment and the other Loan Documents
executed pursuant hereto.
Section 5.4 SEVERABILITY. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5.5 APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section 5.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Administrative Agent, the Lenders, and Borrower
and their respective successors and assigns, except Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders.
Section 5.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 5.8 EFFECT OF WAIVER. No consent or waiver, express or implied,
by Administrative Agent or any Lender to or for any breach of or deviation from
any covenant, condition or duty by
FIRST AMENDMENT TO CREDIT AGREEMENT, Page 3
Borrower or any Loan Party shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.9 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
[remainder of page intentionally left blank]
FIRST AMENDMENT TO CREDIT AGREEMENT, Page 4
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment effective as of the date first written above.
BORROWER: PEREGRINE SYSTEMS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
LENDERS: BANK OF AMERICA, N.A.,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
BANKBOSTON, N.A.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
FIRST AMENDMENT TO CREDIT AGREEMENT, Page 5
