***Portions of this exhibit are considered confidential by the registrant and
have been omitted from this filing and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
$20,000,000
CREDIT AND GUARANTY AGREEMENT
DATED AS OF MAY 31, 2001
AMONG
SONUS-USA, INC.
AS BORROWER
SONUS CORP.
AS GUARANTOR
AND
GN GREAT NORDIC A/S
AS LENDER
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TABLE OF CONTENTS
PAGE
ARTICLE 1
SECTION 1.01. Defined Terms......................................4
SECTION 1.02. Certain Terms.....................................10
ARTICLE 2
SECTION 2.01. The Commitment....................................11
SECTION 2.02. Borrowing Procedures..............................11
SECTION 2.03. Repayment of Loans................................11
SECTION 2.04. Notes; Evidence of Debt...........................12
SECTION 2.05. Mandatory Prepayments.............................12
SECTION 2.06. Optional Prepayment...............................12
SECTION 2.07. Interest..........................................12
SECTION 2.08. Payments and Computations.........................13
ARTICLE 3
SECTION 3.01. Conditions Precedent to Effectiveness.............13
SECTION 3.02. Conditions Precedent to Each Loan.................14
ARTICLE 4
SECTION 4.01. Representations and Warranties of the Obligors....14
SECTION 4.02. Representations and Warranties of the Lender......16
ARTICLE 5
SECTION 5.01. Covenants.........................................16
ARTICLE 6
ARTICLE 7
ARTICLE 8
SECTION 8.01. Guaranty..........................................19
SECTION 8.02. Guaranty Unconditional............................20
SECTION 8.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances...........21
SECTION 8.04. Waiver............................................21
SECTION 8.05. Subrogation.......................................21
SECTION 8.06. Stay of Acceleration..............................21
SECTION 8.07. Limit of Liability................................21
ARTICLE 9
SECTION 9.01. Notices, Etc......................................21
SECTION 9.02. Waivers; Remedies; Amendments.....................22
SECTION 9.03. Binding Effect....................................22
SECTION 9.04. Governing Law.....................................23
SECTION 9.05. Submission to Jurisdiction; Waiver of
Jury Trial; Service of Process...................23
SECTION 9.06. Service of Process................................23
SECTION 9.07. Conversion of Currencies..........................24
SECTION 9.08. Waiver of Immunity................................24
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SECTION 9.09. Section Titles....................................25
SECTION 9.10. Execution in Counterparts.........................25
SECTION 9.11. Entire Agreement..................................25
SECTION 9.12. Confidential Treatment............................25
SCHEDULES
Schedule 1.02 Required Acquisition Parameters
Schedule 4.01(j) Existing Investments
Schedule 4.01(k) Existing Indebtedness
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Borrowing Request Certificate
Exhibit C Form of Security and Pledge Agreement
Exhibit D Form of Subsidiary Guaranty
Exhibit E Form of Subsidiary Security and Pledge Agreement
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CREDIT AND GUARANTY AGREEMENT, dated as of May 31, 2001, among Sonus-USA,
Inc., a corporation organized and existing under the laws of Washington (the
"BORROWER"), Sonus Corp., a corporation organized and existing under the laws of
the Yukon Territory of Canada ("SONUS CORP.") and GN Great Nordic A/S, a
corporation organized and existing under the laws of Denmark (the "LENDER").
W I T N E S S E T H :
WHEREAS, the Borrower, as a condition to entering into the Sales Agreement
(as defined herein), has requested that the Lender make available a credit
facility; and
WHEREAS, the Lender is willing to make available to the Borrower such
credit facility upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ACCOUNT SHORTFALL AMOUNT" means, at any time, the excess, if any, of
$3,000,000 over the Specified Account Balance at such time.
"ACCOUNT SURPLUS AMOUNT" means, at any time, the excess, if any, of the
Specified Account Balance over $3,000,000 at such time.
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"ACQUISITION SUBSIDIARY" means the Initial Acquisition Subsidiary and any
wholly-owned subsidiary of the Initial Acquisition Subsidiary, the stock of
which is acquired in, or which holds assets acquired in, a Specified
Acquisition.
"AFFILIATE" means, with respect to any Person, any other Person, directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Credit and Guaranty Agreement.
"BORROWING" means a borrowing of Loans hereunder.
"BORROWING REQUEST CERTIFICATE" means a certificate, substantially in the
form of Exhibit B, executed by the chief executive officer, the president, the
chief operating officer or the chief financial officer of the Borrower and
delivered to the Lender in accordance with Section 9.01.
"BUSINESS DAY" means a day on which banks are not required or authorized
to close in either Minneapolis, Minnesota or Portland, Oregon.
"COLLATERAL ACCOUNT AGREEMENT" has the meaning set forth in the Security
Agreement.
"COMMITMENT" has the meaning specified in Section 2.01.
"COMMITMENT TERMINATION DATE" means May 31, 2006.
"CONFIDENTIAL INFORMATION" has the meaning set forth in Section 9.12(b).
"DEBT" of a Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising and paid in the ordinary course
of business, (iv) all capital leases of such Person, (v) all obligations of such
Person to purchase securities (or other property) which arise out of or in
connection with the issuance or sale of the same or substantially similar
securities (or property), (vi) all non-contingent obligations of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (vii) all equity securities of such Person subject
to repurchase or redemption otherwise than at the sole option of such Person;
provided that for the purposes of calculating the Leverage Ratio, this clause
(vii) shall not be included, (viii) all Debt secured by a Lien on any asset of
such Person, whether or not such Debt is otherwise an obligation of such Person,
and (ix) all Debt of others guaranteed by such Person.
"DEFAULT" means any Event of Default or any event which with the passing
of time or the giving of notice or both would become an Event of Default.
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"EBITDA" means, for any period, the consolidated net income of Sonus Corp.
and its consolidated subsidiaries for such period, plus, to the extent deducted
in determining consolidated net income for such period, depreciation, interest,
amortization and income taxes, determined in accordance with GAAP eliminating
(i) all intercompany items, (ii) all earnings attributable to equity interests
in Persons that are not consolidated subsidiaries unless actually received in
cash by Sonus Corp. or a consolidated subsidiary, (iii) all income arising from
the forgiveness, adjustment, or negotiated settlement of any indebtedness, (iv)
any extraordinary items of income or expense (including gains and losses from
asset sales), (v) any increase or decrease in income arising from any change in
Sonus Corp.'s method of accounting and (vi) any interest income.
"EFFECTIVE DATE" means the date on which the conditions precedent in
Section 3.01 are satisfied.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, hazardous substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous substances or wastes or the
clean-up or other remediation thereof.
"EVENT OF DEFAULT" has the meaning specified in Article 6.
"EXCLUDED JURISDICTION" has the meaning specified in Section 2(a) of
Exhibit C to the Sales Agreement.
"FIRST REFUSAL TRANSACTION" has the meaning set forth in Section 5.01(i).
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of (i)
consolidated EBITDA for such period minus consolidated capital expenditures (but
excluding capital expenditures on any Specified Acquisition or any Related
Acquisition Costs funded in whole or in part with Loans) of Sonus Corp. and its
consolidated subsidiaries for such period to (ii) consolidated interest expense
of Sonus Corp. and its consolidated subsidiaries for such period.
"FUNDING DATE" means any date on which any Loan is made.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"INITIAL ACQUISITION SUBSIDIARY" means the Acquisition Subsidiary formed
by and directly owned by the Borrower for the purpose of making the acquisitions
contemplated by this
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Agreement; provided that the Initial Acquisition Subsidiary shall not be an
entity organized in Texas.
"LEVERAGE RATIO" means, at any date, the ratio of (i) consolidated Debt of
Sonus Corp. and its consolidated subsidiaries at such date to (ii) consolidated
EBITDA for the period of four consecutive fiscal quarters of Sonus Corp. most
recently ended on or prior to such date.
"LIEN" means ,with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has substantially the same practical effect as a
security interest, in respect of such asset. For purposes hereof, an entity
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"LOAN" has the meaning specified in Section 2.01.
"LOAN DOCUMENTS" means this Agreement, the Note and the Security
Documents.
"MATERIAL DEBT" means Debt (other than indebtedness under the Loan
Documents) of the Borrower and/or one or more of its subsidiaries, arising in
one or more related or unrelated transactions, in an aggregate principal or face
amount exceeding $1,000,000.
"MATURITY DATE" means May 31, 2008.
"MAXIMUM COSTS AMOUNT" means, with respect to any Specified Acquisition,
an amount equal to the greater of (i) $50,000 and (ii) 20% of the total Purchase
Price for such Specified Acquisition.
"NOTE" means a promissory note evidencing the Loans hereunder,
substantially in the form of Exhibit A.
"OBLIGATIONS" means the Loans and all other amounts, obligations,
covenants and duties owing to the Lender by any Obligor, of every type and
description, present or future, arising under this Agreement and the other Loan
Documents, whether direct or indirect (including those acquired by assignment),
absolute or contingent and however acquired and whether or not evidenced by any
note, guaranty or other instrument, and includes, interest and any other sums
properly chargeable to the Borrower under this Agreement.
"OBLIGOR" means the Borrower, Sonus Corp. and each subsidiary required to
provide a guaranty hereunder in accordance with paragraph 2 of Schedule 1.02.
"OFFER NOTICE" has the meaning specified in paragraph 3 of Schedule 1.02.
"PAYMENT ACCOUNT" means account no. *** of the Lender maintained at ***
under the name GN ReSound North America Corporation (formerly known as GN
ReSound Corporation), into which all payments by or on behalf of an Obligor to
the Lender under the Loan Documents shall be made, or such other account as the
Lender shall from time to time specify by notice to the Borrower.
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"PERMITTED LIENS" means (i) Liens imposed by law for taxes that are not
yet due or are being contested in good faith by appropriate proceedings; (ii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
good faith by appropriate proceedings; (iii) pledges and deposits made in the
ordinary course of business in compliance with workers' compensation,
unemployment insurance and other social security laws or regulations; (iv)
deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business; (v) judgment
liens in respect of judgments that do not constitute an Event of Default; and
(vi) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligation and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any of its subsidiaries; provided that the term
"Permitted Liens" shall not include any Lien that secures indebtedness.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"PURCHASE PRICE" means, with respect to any Specified Acquisition,
consideration for such Specified Acquisition in the form of (i) cash, (ii)
Seller Debt, (iii) earnouts and (iv) payments for agreements not to compete.
"QUARTERLY DATE" means, with respect to each fiscal quarter of the
Borrower beginning after the Effective Date, the tenth (10th) Business Day of
such fiscal quarter (or such later day of such fiscal quarter on which the
Borrower shall have received payment of (or credit for) the Repayment Rebate for
the immediately preceding fiscal quarter).
"RELATED ACQUISITION COSTS" means, with respect to any Specified
Acquisition, fees, costs and expenses related to such Specified Acquisition
including, but not limited to, transition costs.
"REPAYMENT REBATE" has the meaning specified in Section 4 of Exhibit C to
the Sales Agreement.
"REQUIRED ACQUISITION PARAMETERS" means, with respect to each Specified
Acquisition, the parameters set forth on Schedule 1.02 (as such Schedule may be
amended from time to time in accordance with Section 9.02).
"REQUIREMENT OF LAW" means, with respect to any Person, the common law and
all federal, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"REVOLVING TERMINATION DATE" means May 31, 2003.
"RIGHT OF FIRST OFFER" has the meaning specified in paragraph 3 of
Schedule 1.02.
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"SALES AGREEMENT" means the GN Resound North America Sales Agreement dated
as of the date hereof among GN Resound North America Corporation (formerly known
as GN ReSound Corporation), the Borrower, Sonus-Canada, Ltd. and Sonus Corp., as
amended from time to time.
"SECURITY AGREEMENT" means the Security and Pledge Agreement dated as of
the date hereof between the Borrower and the Lender, substantially in the form
of Exhibit C.
"SECURITY DOCUMENTS" means the Security Agreement, the Collateral Account
Agreement, any Subsidiary Security Agreement, any Subsidiary Guaranty and any
additional security documents or pledge agreements required to be delivered
pursuant to the Loan Documents to secure the Obligations of the Borrower under
the Loan Documents, and any instruments of assignment or other instruments or
agreements executed pursuant to the foregoing.
"SELLER" means any seller of the assets or stock in a Specified
Acquisition.
"SELLER DEBT" has the meaning specified in paragraph 3 of Schedule 1.02.
"SELLER NOTE" has the meaning specified in paragraph 4 of Schedule 1.02.
"SELLER NOTE DEFAULT NOTICE" has the meaning specified in paragraph 4 of
Schedule 1.02.
"SPECIFIED ACCOUNT" means account no.*** of the Borrower maintained at ***
under the name "Sonus-USA, Inc." (***), pursuant to and in accordance with the
terms of the Collateral Account Agreement.
"SPECIFIED ACCOUNT BALANCE" means, at any time, the aggregate Dollar
amount of all cash on deposit in the Specified Account.
"SPECIFIED ACQUISITION" means each acquisition agreed upon by the Borrower
and the Lender.
"SUBSIDIARY GUARANTY" means a Subsidiary Guaranty substantially in the
form of Exhibit D.
"SUBSIDIARY SECURITY AGREEMENT" means a Subsidiary Security and Pledge
Agreement substantially in the form of Exhibit E.
"THIRD PARTY" has the meaning set forth in Section 9.12(b).
"YEARLY TERM" means each one-year period commencing on May 31 and ending
on the following May 30.
SECTION 1.02. Certain Terms. The words "herein," "hereof" and "hereunder"
and similar words refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in, this Agreement. References in this
Agreement to an Exhibit, Article, Section, subsection or clause refer to the
appropriate Exhibit to, or Article, Section, subsection or
***Confidential portions omitted pursuant to a request for confidential
treatment
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clause in this Agreement. References in this Agreement to any statute shall be
to such statute as amended or modified and in effect at the time any such
reference is operative.
ARTICLE 2
THE FACILITY
SECTION 2.01. The Commitment. On the terms and subject to the conditions
contained in this Agreement, the Lender agrees to make loans (each a "LOAN") to
the Borrower from time to time on any Business Day during the period from the
Effective Date until the Commitment Termination Date in amounts such that the
aggregate principal amount of all such Loans outstanding at any time shall not
exceed $20,000,000 (or such lesser amount resulting from any reduction from time
to time pursuant to Section 2.05) (the "COMMITMENT"). Within the foregoing
limits, at any time prior to the Commitment Termination Date the Borrower may
borrow under this Section, repay or, to the extent permitted by Section 2.06,
prepay Loans and, at any time prior to the Revolving Termination Date, reborrow.
SECTION 2.02. Borrowing Procedures. (a) Each borrowing of Loans shall be
made two Business Days following receipt by the Lender from the Borrower of a
Borrowing Request Certificate, certifying that the requested Borrowing complies
with the requirements set forth in this Section 2.02(a). The initial Borrowing
on the Effective Date shall be in an aggregate amount equal to $5,000,000.
Subject to the final sentence of this Section 2.02(a), each subsequent Borrowing
shall be (i) for purposes of increasing the Specified Account Balance, in an
aggregate amount not to exceed the Account Shortfall Amount on the date of such
Borrowing; or (ii) for purposes of financing a Specified Acquisition that meets
the Required Acquisition Parameters, in an aggregate amount not to exceed the
excess of (x) the total Purchase Price for such Specified Acquisition over (y)
the Account Surplus Amount; or (iii) for purposes of financing Related
Acquisition Costs in connection with a Specified Acquisition that meets the
Required Acquisition Parameters, in an aggregate amount not to exceed the excess
of (x) the Maximum Costs Amount in respect of such Specified Acquisition over
(y) the Account Surplus Amount; provided that Borrowings pursuant to clause (i)
shall be available only if the Specified Account Balance on the related Funding
Date for such Borrowing is less than $2,300,000; and provided further that, (A)
in the case of a Borrowing pursuant to clause (ii), the proceeds of such
Borrowing shall be applied promptly (and no later than five (5) Business Days
following such Borrowing) toward the Purchase Price of such Specified
Acquisition and (B) in the case of a Borrowing pursuant to clause (iii), the
proceeds of such Borrowing shall be applied promptly toward the Related
Acquisition Costs of such Specified Acquisition as such Related Acquisition
Costs become due. Each Borrowing (other than the initial Borrowing on the
Effective Date) shall be made in the aggregate minimum principal amount of
$700,000 and integral multiples of $100,000 in excess thereof.
(b) Each Loan shall be made by wire transfer of funds directly to the
Specified Account.
SECTION 2.03. Repayment of Loans. The Borrower promises to repay the
entire unpaid principal amount of the Loans on the Maturity Date.
SECTION 2.04. Notes; Evidence of Debt. (a) The Loans shall be evidenced by
a single Note payable to the order of the Lender in an amount equal to the
aggregate unpaid principal amount of the Loans.
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(b) The Lender shall maintain an account evidencing indebtedness of the
Borrower to the Lender resulting from each Loan of the Lender from time to time,
including the amounts of principal and interest payable and paid to the Lender
from time to time under this Agreement. The entries made in the accounts
maintained pursuant to this Section 2.04 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of the Lender
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with their
terms.
SECTION 2.05. Mandatory Prepayments. (a) On the date of any Repayment
Rebate, the Borrower shall immediately apply the full amount of such Repayment
Rebate to pay the Lender any accrued and unpaid interest on the Loans that is
due (or overdue) and payable on such date ("CURRENT INTEREST"). If any Repayment
Rebate exceeds Current Interest, (i) for any Repayment Rebate prior to the
Revolving Termination Date, subject to Section 4(b) of Exhibit C to the Sales
Agreement, such excess amount shall be retained by the Borrower to be used for
such purposes as the Borrower may determine in its sole discretion and (ii) for
any Repayment Rebate on or after the Revolving Termination Date, on the date of
such Repayment Rebate, first, during each Yearly Term, such excess amount shall
be applied to prepay (and shall permanently reduce the Commitment hereunder) the
unpaid principal amount of the Loans until 20% of the unpaid principal amount of
the Loans outstanding on the last day of the immediately preceding Yearly Term
(such amount, the "YEARLY REPAYMENT AMOUNT") is repaid, and second, subject to
Section 4(b) of Exhibit C to the Sales Agreement, any excess amount after
application to such principal shall be retained by the Borrower to be used for
such purposes as the Borrower may determine in its sole discretion. In the event
that the excess of the Repayment Rebate over Current Interest is not sufficient
to fully repay any Yearly Repayment Amount, the Borrower shall make a payment to
the Lender, on the last Business Day of such Yearly Term, in an amount such that
the applicable Yearly Repayment Amount shall have been paid in full.
(b) In the event the Borrower has provided notice to the Lender of a
material adverse change pursuant to Section 5.01(k), the Borrower hereby
authorizes the Lender to apply the full amount of each Repayment Rebate owed by
the Lender or any of its Affiliates to the Borrower or any of its Affiliates to
pay Current Interest. The Lender shall notify the Borrower no later than the
eighth Business Day of the applicable fiscal quarter of its election to apply
such Repayment Rebate.
SECTION 2.06. Optional Prepayment. The Loans may be voluntarily prepaid
without penalty in whole or in part at any time, upon three (3) Business Days'
notice to the Lender; provided that no partial prepayment of the Loans shall
affect the obligations of the Borrower and its Affiliates under the Sales
Agreement; and provided further that upon prepayment in full of the Loans,
Sections 2 and 3 of Exhibit C to the Sales Agreement shall apply.
SECTION 2.07. Interest. All Loans shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loans are made until
paid in full, at a rate per annum equal to six percent (6%). Such interest shall
be due and payable on (i) each Quarterly Date after the Effective Date, (ii) the
Maturity Date and (iii) the date on which any payment of any principal of the
Loans is due (or prepayment of principal is made), in each case on the amount of
such principal so paid on such date. Any principal, interest or other
Obligations not paid when required under the terms of the Loan Documents shall
bear interest, payable on demand, at a rate per annum equal to eight percent
(8%).
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SECTION 2.08. Payments and Computations. The Obligors shall make each
payment hereunder not later than 2:00 P.M. (New York City time) on the day when
due, in Dollars, to the Lender at the Payment Account in immediately available
funds without set-off or counterclaim. All computations of interest and of fees
shall be made by the Lender on the basis of a year of 365 (or 366) days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Each determination
by the Lender of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error. Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, as the case may be.
ARTICLE 3
CONDITIONS TO LOANS
SECTION 3.01. Conditions Precedent to Effectiveness. The Effective Date
shall occur on the date on which the Lender shall have received each of the
following, each dated the date hereof unless otherwise indicated or agreed to by
the Lender, in form and substance satisfactory to the Lender:
(a) this Agreement, duly executed and delivered by the Borrower and
Sonus Corp.;
(b) the Security Agreement, duly executed and delivered by the
Borrower, together with evidence satisfactory to the Lender of the
effectiveness and perfection of the Liens contemplated thereby;
(c) the Note, duly executed and delivered by the Borrower for the
account of the Lender;
(d) a copy of the Sales Agreement, duly executed and delivered by
the Borrower and the other parties thereto;
(e) the Collateral Account Agreement, duly executed and delivered by
the Borrower and the other parties thereto;
(f) the Subsidiary Guaranty and the Subsidiary Security Agreement,
duly executed and delivered by the Initial Acquisition Subsidiary and the
other parties thereto, together with evidence satisfactory to the Lender
of the effectiveness and perfection of the Liens contemplated thereby;
(g) a Certificate of the Secretary of each Obligor as to (i) no
amendments to the certificate of incorporation or bylaws since the date of
the last amendment; (ii) no liquidation or dissolution proceedings; (iii)
attached copy of certificate of incorporation and resolutions of the board
of directors; and (iv) incumbency and signatures of officers; and
(h) such additional documents, information and materials as the
Lender may reasonably request.
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SECTION 3.02. Conditions Precedent to Each Loan. The obligation of the
Lender on any Funding Date (including the Effective Date) to make any Loan is
subject to the satisfaction of all of the following conditions precedent:
(a) Receipt by the Lender of a Borrowing Request Certificate
complying with Section 2.02(a);
(b) The fact that immediately after giving effect to such Loan on
such Funding Date, the aggregate principal amount of all Loans made
hereunder will not exceed $20,000,000;
(c) The following statements shall be true on the date of such Loan,
both before and after giving effect thereto and to the application of the
proceeds therefrom:
(i) the representations and warranties set forth in Article 4
shall be true and correct on and as of the Funding Date as though made on
and as of such date; and
(ii) no Default shall have occurred and be continuing on such
Funding Date: and
(iii) the making of the Loans on such date does not violate
any Requirement of Law on the date of or immediately following such Loan
and is not enjoined, temporarily, preliminarily or permanently.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Obligors. To induce
the Lender to enter into this Agreement, each Obligor, jointly and severally,
represents and warrants to the Lender that, on and as of the Effective Date and
as of each date as required by Section 3.02(c)(i): (a) each Obligor is a duly
organized and existing corporation, and the Borrower is duly authorized to
borrow hereunder, and each Obligor is duly authorized to enter into, deliver and
perform the Loan Documents to which it is a party, each of which constitutes a
valid and binding obligation of such Obligor, enforceable in accordance with its
terms, except as such enforcement may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and general principles of equity, (b) none of the
execution and delivery of the Loan Documents, any borrowing by the Borrower
hereunder, or the performance by any Obligor of its obligations under the Loan
Documents to which it is a party will violate any Requirement of Law or any
agreement, indenture, note or other instrument binding upon such Obligor or any
of its subsidiaries, or its certificate of incorporation or by-laws or other
constitutional documents or give cause for acceleration of any indebtedness of
such Obligor or any of its subsidiaries, (c) no authority from or approval by
any Governmental Authority is required in connection with the validity of and
the execution, delivery and performance of the Loan Documents or any borrowing
hereunder, (d) the consolidated balance sheet of Sonus Corp. as of January 31,
2001 and the related consolidated statements of income and cash flows for the
period then ended, all of which has been heretofore furnished to the Lender, are
complete and correct and fairly present the financial condition and results of
operations of Sonus Corp. and its consolidated subsidiaries as at such date and
since such date there has been no material adverse change in the condition
(financial or otherwise), business, results of operations or prospects of Sonus
Corp. and its subsidiaries, taken as a whole, from that reflected in said
financial statements, (e) since January 31, 2001, there has been no change or
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development which could be reasonably expected to have a material adverse effect
on the condition (financial or otherwise), business, results of operations or
prospects of Sonus Corp. and its subsidiaries taken as a whole, or the ability
of the Obligors to perform their obligations under the Loan Documents, (f) there
are no actions, suits or proceedings pending against or, to the knowledge of any
Obligor, threatened against or affecting, any Obligor or any of their
subsidiaries, in any court or before or by any Governmental Authority, agency or
instrumentality, an adverse decision in which could materially and adversely
affect the condition (financial or otherwise), business, results of operations
or prospects of the Obligors or the ability of the Obligors to perform their
obligations under the Loan Documents, (g) the Obligors and each of their
subsidiaries are in compliance in all material respects with all Requirements of
Law (including, without limitation, Environmental Laws and the Employee
Retirement Income Security Act of 1974, as amended, or any successor statute),
(h) all information heretofore furnished by any Obligor or its Affiliates to the
Lender for purposes of or in connection with the Loan Documents and any
transaction contemplated thereby is, and all information hereafter furnished by
any Obligor or its Affiliates to the Lender will be, true and accurate in all
material respects on the date as of which such information is stated or
certified, (i) all material Federal, state and local tax returns, reports and
statements required to be filed by or on behalf of Sonus Corp. and its
subsidiaries have been filed with the appropriate governmental agencies in all
jurisdictions in which such returns, reports and statements are required to be
filed, except where the failure to so file could not reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of Sonus Corp. and its
subsidiaries, taken as a whole, and all taxes (including real property taxes)
and other charges shown to be due and payable have been timely paid prior to the
date on which any fine, penalty, interest, late charge or loss may be added
thereto for nonpayment thereof, except in cases where (i) the applicable Obligor
or subsidiary is contesting in good faith such assessment or (ii) the failure to
pay such assessment could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), business, results of
operations or prospects of Sonus Corp. and its subsidiaries, taken as a whole,
(j) none of the Obligors or any of their subsidiaries holds any capital stock,
evidence of indebtedness or other securities (including any warrant or option or
other right to acquire any of the foregoing) of, or has made any loans or
advances to, guaranteed any obligations of, or made any investment or any other
interest in, any other Person, or has purchased or otherwise acquired (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except for the investments set forth on Schedule
4.01(j), (k) none of the Obligors or any of their subsidiaries has any Debt or
contingent obligations except for those set forth on Schedule 4.01(k), (l) the
obligations of the Obligors under the Loan Documents are not subject to any
defense, set-off or counterclaim by the Borrower or any other Obligor or any
circumstance whatsoever which might constitute a legal or equitable discharge
from its obligations thereunder, (m) no Obligor or any of its property has any
immunity from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) under the laws of Canada or other relevant
jurisdiction in respect of its obligations under the Loan Documents to which it
is a party, (n) the Loan Documents are in proper legal form under the laws of
Canada for the enforcement thereof in accordance with their respective terms
against the Obligors under such laws, (o) to ensure the legality, validity,
enforceability or admissibility into evidence in Canada of the Loan Documents,
it is not necessary that the Loan Documents or any other document be filed or
recorded with any Governmental Authority in Canada, and (p) it is not necessary
in order for the Lender to enforce any rights or remedies under the Loan
Documents or solely by reason of the execution, delivery and performance by any
Obligor of the
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Loan Documents that the Lender be licensed or qualified with any Governmental
Authority in Canada, or be entitled to carry on business in Canada.
SECTION 4.02. Representations and Warranties of the Lender. (a) The Lender
is a duly organized and existing corporation, and the Lender is duly authorized
to enter into, deliver and perform the Loan Documents to which it is a party,
each of which constitutes a valid and binding obligation of the Lender,
enforceable in accordance with its terms, and (b) no authority from or approval
by any Governmental Authority is required in connection with the validity of and
the execution, delivery and performance of the Loan Documents by the Lender.
ARTICLE 5
COVENANTS
SECTION 5.01. Covenants. So long as the Commitment or any amount is
outstanding under the Loan Documents, unless compliance shall have been waived
in writing by the Lender, each Obligor agrees that:
(a) Sonus Corp. will provide the Lender with consolidated financial
statements of Sonus Corp. and its subsidiaries within 60 days after the
end of each calendar quarter and within 105 days after the end of each
fiscal year of Sonus Corp. Such reports shall include profit and loss
statements for the preceding fiscal period, including comparative figures
for the corresponding period of the preceding fiscal year. If such
financial statements are not audited, Sonus Corp. shall certify to the
Lender that the information set forth in such financial statements is
materially true and correct and fairly presents the financial condition of
Sonus Corp. and its subsidiaries. If such financial statements are
audited, Sonus Corp. will provide the Lender with the annual audit report
of the independent auditor (including a description of any default that
the auditor has become aware of in its examination), together with any
representations made by Sonus Corp. to the auditor with respect to the
Agreement and/or the Sales Agreement in connection with such audit. Sonus
Corp. and the Borrower will provide the Lender with such other information
respecting the business, properties, condition, financial or otherwise, or
operations of Sonus Corp., the Borrower and its subsidiaries as the Lender
may from time to time reasonably request.
(b) Each Obligor will comply with all Requirements of Law,
noncompliance with which could materially adversely affect the condition
(financial or otherwise), business, results of operations or prospects of
such Obligor or any of its subsidiaries.
(c) Each Obligor shall promptly pay and discharge all lawfully due
material taxes, assessments, and other governmental charges or levies
imposed on such Obligor's personal and real property or income.
(d) Each Obligor will not and will not permit any of its
subsidiaries to, create, assume or suffer to exist any lien on any asset
or property now owned or hereafter acquired by it except for (i) Liens on
the assets of the Borrower existing on the date of this Agreement securing
the obligations set forth in Schedule 4.01(k) (including Liens securing
existing obligations owing to U.S. Bank National Association that are set
forth in Schedule 4.01(k)) in an aggregate amount not exceeding $2.4
million, and refinancings or renewals thereof, provided that the amount
secured thereby is not increased and no other assets or property of any
Obligor or any of its subsidiaries are made subject to such Lien, (ii)
Permitted Liens, (iii) Liens created pursuant to
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the Security Documents (iv) Liens on assets acquired in an acquisition in
favor of the seller in such acquisition securing Seller Debt (for
avoidance of doubt, such Liens may be first-priority Liens) and (v) Liens
securing obligations owing to U.S. Bank National Association, X.X. Xxxxxxx
Xxxxxx & Co. LLC and any of its affiliates or another bank or other
financial institution that (1) is not a competitor of Borrower and (2) has
both a short-term and long-term deposit rating of at least p-1 and A-2 by
Xxxxx'x or at least A-1 and A by S&P, or another financial institution
acceptable to the Lender in its sole discretion. For the avoidance of
doubt, Liens on the assets of any Acquisition Subsidiary are prohibited
except for Liens permitted in clauses (ii) through (iv) of this paragraph.
(e) No Acquisition Subsidiary will, and no Acquisition Subsidiary
will permit any of its subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease, or otherwise acquire any
property or assets from, make any investment in, or otherwise engage in
any transactions with its Affiliates; provided that this Section 5.01(e)
shall not prohibit (i) transactions in the ordinary course of business
that are at prices and on terms not less favorable to such Acquisition
Subsidiary or such subsidiary than could be obtained on an arm's-length
basis from unrelated third parties or (ii) such Acquisition Subsidiary's
or such subsidiary's ability to pay dividends ratably with respect to its
common stock.
(f) Sonus Corp. will not permit the Leverage Ratio to exceed
4.00:1.00 at any time.
(g) Sonus Corp. will not permit the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters of Sonus Corp. to be less
than 5.00:1.00.
(h) The proceeds of the Loans hereunder (including amounts on
deposit from time to time in the Specified Account) shall be used only to
pay the Purchase Price (excluding any portion of the Purchase Price
allocable to the purchase of accounts receivable) and Related Acquisition
Costs (not to exceed the applicable Maximum Costs Amount) in respect of
one or more Specified Acquisitions that meet the Required Acquisition
Parameters. No part of the proceeds of the Loans hereunder will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate of buying or carrying any "margin stock" within the meaning of
Regulation U or X.
(i) ***
(j) As soon as practicable, and in any event within five Business
Days after an officer or member of the senior management of any Obligor
has actual knowledge of the existence of any Default or Event of Default,
such Obligor shall give the Lender notice specifying the nature of such
Default or Event of Default or other event, including the anticipated
effect thereof, which notice, if given by telephone, shall be promptly
confirmed in writing on the next Business Day.
(k) As soon as practicable, and in any event on or prior to the
fifth Business day of any fiscal quarter of the Borrower, the Borrower
shall give the Lender notice specifying the nature of any material adverse
change in the condition (financial or otherwise), business, results of
operations or prospects of Sonus Corp. and its subsidiaries, taken as a
whole, from that reflected in financial statements of Sonus Corp. for the
period ending January 31, 2001 as previously furnished to the Lender, or
the ability of the Obligors to perform their Obligations under the Loan
Documents, including the anticipated effect thereof, which notice, if
given by telephone, shall be promptly confirmed in writing on the next
Business Day.
***Confidential portions omitted pursuant to a request for confidential
treatment
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(l) In the event that any Seller which holds Seller Debt provides an
Offer Notice to the Borrower or any Acquisition Subsidiary, the Borrower
shall, or shall cause such Acquisition Subsidiary to, promptly assign the
related Right of First Offer to the Lender, provide a copy of such Offer
Notice to the Lender, and act in good faith to assist the Lender in
exercising such Right of First Offer if the Lender so chooses, including,
without limitation, assisting the Lender in communicating with the seller.
(m) In the event that any Seller which holds a Seller Note provides
a Seller Note Default Notice to the Borrower, the Borrower shall promptly
(but in any event, within 3 Business Days) provide a copy of such notice
to the Lender and communicate with the Lender with respect to its
intentions to cure the default described in such notice. At the Lender's
instruction, the Borrower shall designate the Lender as the lender having
the right to cure such default and act in good faith to assist the Lender
in exercising its right to cure such default if the Lender so chooses,
chooses, including, without limitation, assisting the Lender in
communicating with the seller.
(n) In the event that the Borrower or an Acquisition Subsidiary
consummates a Specified Acquisition with proceeds of the Loans, the
Borrower shall promptly provide the Lender a copy of (i) the relevant
section(s) of the acquisition document which include the Right of First
Offer (including any other sections referred to therein, and any other
sections that affect any of the rights thereunder) and (ii) the Seller
Note, certified as true and complete copies of such executed section(s) or
documents by the chief executive officer, the president, the chief
operating officer or the chief financial officer of the Borrower.
(o) No Obligor will permit any Acquisition Subsidiary to incur,
assume or be liable for any Debt other than Debt incurred in the ordinary
course of business, Seller Debt and Debt owing to the Borrower, so long as
such Debt owing to the Borrower is evidenced by an intercompany note that
is pledged to the Lender as security for the Obligations. For the
avoidance of doubt, it is understood that Debt incurred for the purpose of
consummating an acquisition of stock or assets will not constitute Debt
incurred in the ordinary course of business.
ARTICLE 6
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur and be
continuing: (i) any Obligor shall fail to make payment when due of any principal
of or interest on the Loan and such non-payment continues for a period of three
Business Days; or (ii) any Obligor shall fail to pay any other amount payable
under any Loan Document and such non-payment continues for a period of ten
Business Days after the due date therefor; or (iii) any representation or
warranty made by any Obligor in the Loan Documents shall prove to have been
incorrect in any material respect when made; or (iv) any Obligor shall fail to
observe or perform any covenant applicable to such Obligor contained in the Loan
Documents; or (v) any Obligor or any of its subsidiaries shall fail to make any
payment in respect of any Material Debt when due or within any applicable grace
period, or any event or condition shall occur which results in the acceleration
of the maturity of any Material Debt of any Obligor or any of its subsidiaries
or enables the holder of such Material Debt or any person acting on such
holder's behalf to accelerate the maturity thereof; or (vi) any Obligor or any
of its subsidiaries shall become insolvent (however such insolvency may be
evidenced) or proceedings are instituted by or against any Obligor or any of its
subsidiaries under the United States Bankruptcy Code or under any bankruptcy,
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reorganization or insolvency law or other law for the relief of debtors; or
(vii) final judgments or orders for the payment of money in excess of $2,000,000
shall be rendered against any Obligor and/or any of its subsidiaries and such
judgments or orders shall remain unstayed and undischarged for a period of 10
days; or (viii) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Obligor not to be, a valid and
perfected Lien (having the priority required by the applicable Security
Document) on any material property or assets purported to be covered thereby; or
(ix) the obligations of Sonus Corp. in Article 8 shall at any time fail to
constitute a valid and binding agreement of Sonus Corp., or Sonus Corp. or the
Borrower shall so assert in writing; or (x) any "Change of Control" (as such
term is defined in the Sales Agreement) occurs with respect to a Customer (as
defined in the Sales Agreement) without the prior written consent of GN Resound
North America Corporation (formerly known as GN ReSound Corporation); or (xi) a
Customer (as defined in the Sales Agreement) breaches any material provision of
the Sales Agreement (other than as described in clause (x) above) and fails to
cure such breach within fifteen days after receipt of written notice thereof; or
(xii) the Sales Agreement is terminated by the Lender pursuant to Section 4.02
thereof;
then, in any such event, (a) the Lender may declare the Commitment terminated,
and (b) the Lender may declare the Loans, all interest thereon and all other
amounts and Obligations payable under the Loan Documents to be forthwith due and
payable, whereupon the Loans, all such interest and all such amounts and
Obligations payable under the Loan Documents shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by each Obligor; provided that in the
case of the Event of Default specified in clause (vi) above with respect to the
Borrower, without any notice to any Obligor or any other act of the Lender, the
Loans shall become forthwith due and payable, together with accrued interest,
without demand, protest, presentment, notice of dishonor or any other notice or
demand whatsoever, all of which are hereby waived by each Obligor.
ARTICLE 7
[INTENTIONALLY OMITTED]
ARTICLE 8
GUARANTY
SECTION 8.01. Guaranty.
Sonus Corp. hereby unconditionally and irrevocably guarantees to the
Lender the due and punctual payment of all present and future amounts payable by
the Borrower under this Agreement or any other Loan Document, including, but not
limited to, the due and punctual payment by the Borrower of principal of and
interest (including, without limitation, interest accruing during the pendency
of any bankruptcy or insolvency proceedings whether or not allowed or allowable
thereunder) on the Note and the due and punctual payment of all other sums now
or hereafter owed by the Borrower under this Agreement and the other Loan
Documents as and when the same shall become due and payable, whether at
maturity, by declaration or otherwise, according to the terms hereof and
thereof. In case of failure by the Borrower punctually to pay any amount
guaranteed hereby, Sonus Corp. hereby unconditionally agrees to cause such
payment to be made punctually as and when the same shall become due and payable,
whether at maturity or by declaration or otherwise, and as if such payment were
made by the Borrower.
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SECTION 8.02. Guaranty Unconditional. The obligations of Sonus Corp. under
this Article 8 shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower under any Loan
Document by operation of law or otherwise;
(b) any modification or amendment of or supplement to any Loan
Document;
(c) any modification, amendment, waiver, release, impairment,
non-perfection or invalidity of any direct or indirect security, or of any
guarantee or other liability of any third party, for any obligation of the
Borrower under any Loan Document;
(d) any change in the corporate existence, structure or ownership of
the Borrower or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Borrower, or its assets or any resulting
release or discharge of any obligation of the Borrower contained in any
Loan Document;
(e) the existence of any claim, set-off or other rights which Sonus
Corp. may have at any time against the Borrower, the Lender or any other
Person, whether or not arising in connection with this Agreement or any
other Loan Document or any unrelated transactions, provided that nothing
herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the
Borrower for any reason of any Loan Document, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Borrower of the principal of or interest on the Note or any other amount
payable by it under this Agreement or any other Loan Document; or
(g) any other act or omission to act or delay of any kind by the
Borrower, the Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of Sonus
Corp. under this Article 8.
SECTION 8.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. The obligations of Sonus Corp. under this Article 8 shall
remain in full force and effect until the Commitment is terminated and the
principal of and interest on the Note and all other amounts payable by the
Borrower under this Agreement or any other Loan Document shall have been paid in
full. If at any time any payment of the principal of or interest on the Note or
any other amount payable by the Borrower under this Agreement or any other Loan
Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, Sonus
Corp.'s obligations under this Article 8 with respect to such payment shall be
reinstated at such time as though such payment had become due but had not been
made at such time.
SECTION 8.04. Waiver. Sonus Corp. irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Borrower or any other Person or against any security.
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SECTION 8.05. Subrogation. Sonus Corp. irrevocably waives all subrogation
rights, including, without limitation, any right to be subrogated to the rights
of the payee against the Borrower with respect to any payment with respect to
any obligation of the Borrower hereunder.
SECTION 8.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or the Note
is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by Sonus Corp. hereunder forthwith on demand by the
Lender.
SECTION 8.07. Limit of Liability. The obligations of Sonus Corp. under
this Article 8 shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state law.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices, Etc.. All notices, demands, requests and other
communications provided for in this Agreement shall be given in writing, or by
any telecommunication device capable of creating a written record, and addressed
to the party to be notified as follows:
(a) if to any Obligor:
c/o Sonus-USA, Inc.
000 XX Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
(b) if to the Lender:
GN Great Nordic A/S
Kongens Nytorv 26
Post Xxx 0000
XX - 0000 Xxxxxxxxxxx X, Xxxxxxx
Attention: Xxxxxxxxx Xxxx-Xxxxxxxxx
Facsimile No.: 011-45-72-111-889
with a copy to:
GN Resound North America Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Carsten Trads
Facsimile No.: 000-000-0000
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or at such other address as the party delivering notice shall be notified in
writing by the party receiving notice. All such notices and communications shall
be effective upon personal delivery (if delivered by hand, including any
overnight courier service), five days after deposit in the mails (if sent by
mail), or when properly transmitted (if sent by a telecommunications device).
SECTION 9.02. Waivers; Remedies; Amendments. (a) No failure on the part of
the Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
(b) Neither this Agreement (including the Schedules hereto) nor any
other Loan Document nor any provision hereof or thereof may be waived,
amended or modified except pursuant to an agreement in writing entered
into by the Borrower, Sonus Corp. and the Lender.
SECTION 9.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower, Sonus Corp. and the Lender and
thereafter shall be binding upon and inure to the benefit of the Borrower, Sonus
Corp., the Lender and their respective successors and permitted assigns(as
described in this Section 9.03). Neither the Borrower nor Sonus Corp. shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender, which consent shall not be unreasonably
withheld. The Lender shall not have the right to assign its rights hereunder or
any interest herein without the prior written consent of the Borrower, which
consent shall not be unreasonably withheld, except that the Lender may assign
its rights hereunder or any interest herein to any of its Affiliates without the
prior consent of the Borrower.
SECTION 9.04. Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of New York.
SECTION 9.05. Submission to Jurisdiction; Waiver of Jury Trial; Service of
Process. EACH OBLIGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK,
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY
APPELLATE COURT OR BODY THERETO (COLLECTIVELY, THE "NEW YORK COURTS") AND TO THE
COURTS OF ITS OWN CORPORATE DOMICILE, WITH RESPECT TO ACTIONS BROUGHT AGAINST IT
AS A DEFENDANT, OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. IN ADDITION, EACH
OBLIGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE
PROVINCIAL AND FEDERAL COURTS LOCATED IN THE JURISDICTION IN WHICH SUCH OBLIGOR
HAS BEEN ORGANIZED IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING THAT
MAY BE BROUGHT AGAINST SUCH OBLIGOR AS A DEFENDANT. EACH OBLIGOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-21-
EACH OF THE OBLIGORS AND THE LENDER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
SECTION 9.06. Service of Process. (a) Sonus Corp. hereby irrevocably
appoints Corporation Service Company, having offices on the date hereof at 00
Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000-0000 (the "PROCESS AGENT"), as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any suit, action or proceeding of the nature
referred to above in any New York Court. Such designation and appointment shall
be irrevocable until all Obligations of Sonus Corp. hereunder and other sums
payable hereunder shall have been paid in full in accordance with the provisions
hereof and the Commitments shall have been reduced to zero. Sonus Corp.
covenants and agrees that it shall take any and all reasonable action, including
the execution and filing of any and all documents, that may be necessary to
continue the foregoing designations and appointments in full force and effect
and to cause the Process Agent to continue to act in such capacity. If the
Process Agent shall desire to cease so to act, Sonus Corp. covenants and agrees
that prior to the Process Agent ceasing so to act it shall irrevocably designate
and appoint without delay another such agent in such jurisdiction satisfactory
to the Lender and, if requested by the Lender, shall promptly deliver to the
Lender evidence in writing of such other agent's acceptance of such appointment
in form and substance reasonably acceptable to the Lender.
(b) Sonus Corp. consents to process being served in any suit, action
or proceeding of the nature referred to in Section 9.05 by serving a copy
thereof upon the Process Agent. Without prejudice to the foregoing, the
Lender agrees that to the extent lawful and possible, written notice of
said service upon the Process Agent shall also be mailed by registered or
certified airmail, postage prepaid, return receipt requested, to Sonus
Corp. at its address specified on the signature page hereof or to any
other address of which Sonus Corp. shall have given written notice to the
Lender. If said service upon the Process Agent shall not be possible or
shall otherwise be impractical after reasonable efforts to effect the
same, Sonus Corp. consents to process being served in any suit, action or
proceeding of the nature referred to in Section 9.05 by the mailing of a
copy thereof by registered or certified airmail, postage prepaid, return
receipt requested, to the address of Sonus Corp. specified in Section 9.01
or to any other address of which Sonus Corp. shall have given written
notice to the Lender, which service, to the fullest extent permitted by
law, shall be effective 14 days after deposit in the United States Postal
Service. Sonus Corp. irrevocably waives, to the fullest extent permitted
by law, all claim of error by reason of any such service and agrees that
such service (i) shall be deemed in every respect effective service of
process upon Sonus Corp. in any such suit, action or proceeding and (ii)
shall to the fullest extent permitted by law, be taken and held to be
valid personal service upon and personal delivery to Sonus Corp.
(c) Nothing in this Section shall affect any right of the Lender to
serve process in any manner permitted by law or limit the right of the
Lender to bring proceedings against Sonus Corp. in the courts of any
jurisdiction or jurisdictions or to bring proceedings in more than one
jurisdiction concurrently.
SECTION 9.07. Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
in U.S. Dollars into another currency, the parties hereto agree, to the fullest
extent that they may legally and effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Lender could purchase U.S. Dollars with such other currency in New York, New
York on the Business Day immediately preceding the day on which final judgment
is given, or, in the event that any such final judgment is registered for
enforcement in the courts of any province
-22-
of Canada, then on the Business Day immediately preceding the day on which such
final judgment is registered in the courts of such province.
(b) The obligation of Sonus Corp. in respect of any sum due to any
Person in U.S. Dollars hereunder shall, to the extent permitted by
applicable law, notwithstanding any judgment in a currency other than U.S.
Dollars, be discharged only to the extent that on the Business Day
following receipt of any sum adjudged to be so due in the judgment
currency such Person may in accordance with normal banking procedures
purchase U.S. Dollars in the amount originally due to such Person with the
judgment currency. If the amount of U.S. Dollars so purchased is less than
the sum originally due to such Person, Sonus Corp. agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Person
against the resulting loss; and if the amount of U.S. Dollars so purchased
is greater than the sum originally due to such Person, such Person agrees
to repay such excess.
SECTION 9.08. Waiver of Immunity. To the extent that Sonus Corp. has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid or execution, or otherwise) with respect to itself or its
property, Sonus Corp. hereby irrevocably waives such immunity in respect of its
obligations hereunder and under the other Loan Documents to the extent permitted
by applicable law and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this Section shall have effect to the fullest
extent permitted under the Foreign Sovereign Immunities Act of 1976 of the
United States of America and are intended to be irrevocable for purposes of such
Act.
SECTION 9.09. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
SECTION 9.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties 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. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are attached to the same
document.
SECTION 9.11. Entire Agreement. This Agreement embodies the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof. Delivery of an executed signature page of
this Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.
SECTION 9.12. Confidential Treatment. (a) With respect to any of Sonus
Corp.'s filings with the Securities and Exchange Commission (the "SEC"), at the
request of the Lender, Sonus Corp. and its Affiliates agree to use their best
efforts to obtain from the SEC confidential treatment of any information
contained in this Agreement for which such treatment may reasonably be argued to
be available and for as long as is permitted under applicable law. Sonus
-23-
Corp. and its Affiliates agree to cooperate fully with the Lender in applying
for such confidential treatment, including, but not limited to, allowing the
Lender and its counsel to review any application in advance of its submission
and incorporating such of the Lender's and its counsel's comments in such
application as may reasonably be requested. Furthermore, Sonus Corp. and its
Affiliates agree not to publicly disclose in any manner, oral or written,
including, but not limited to, in any portion of its filings with the SEC, press
releases or other communications, any information with respect to which
confidential treatment has been requested, unless required to so disclose
pursuant to applicable law. Any breach of any provision of this paragraph shall
be considered a material breach of this Agreement.
(b) Any technical, health, environmental and safety, manufacturing,
market or customer information, or price or cost related information
communicated to one party by the other, under any provision of this
Agreement, whether in writing, verbally or visually observed (hereinafter
"CONFIDENTIAL INFORMATION") shall be considered confidential at the time
of communication and shall not be disclosed to any person or entity other
than the parties hereto, their Affiliates and their respective officers,
directors, employees and agents (each, a "THIRD PARTY"), nor used by the
recipient party other than as contemplated by this Agreement. The
recipient party shall use the same degree of care protecting this
Confidential Information as it applies to its own confidential
information. This Section 9.12(b) shall not apply to:
(i) Confidential Information already in the public domain, or
released to the public through no fault of the recipient;
(ii) Confidential Information already known to the recipient
except through prior disclosure by the other party hereto or which is
developed by the recipient independently of its relationship to the other
party hereunder;
(iii) Confidential Information acquired by the recipient from
a Third Party entitled to disclose it; and
(iv) Confidential Information the recipient is legally
required to disclose; provided that, subject to applicable law, prior to
any disclosure permitted by this clause (iv), the recipient gives the
other party hereto, to the extent reasonably practicable, reasonable
notice and a reasonable opportunity to seek a protective order protecting
against the disclosure of such Confidential Information.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SONUS-USA, INC., as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: Chairman
SONUS CORP., as Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Chairman
-24-
GN GREAT NORDIC A/S, as Lender
By: /s/ Jirn Kildegaard
--------------------------
Title: Chief Executive Officer
-25-
SCHEDULE 1.02
REQUIRED ACQUISITION PARAMETERS
1. ***
2. Each Specified Acquisition shall be a purchase of the stock of an
Acquisition Subsidiary by the Initial Acquisition Subsidiary or an
Acquisition Subsidiary that is a wholly owned subsidiary of the Initial
Acquisition Subsidiary (which acquired Acquisition Subsidiary may be
merged into the acquiring Acquisition Subsidiary only if the surviving
entity of such merger is the acquiring Acquisition Subsidiary) or a
purchase of assets by an the Initial Acquisition Subsidiary or an
Acquisition Subsidiary that is a wholly owned subsidiary of the Initial
Acquisition Subsidiary , and the Borrower (or the acquiring Acquisition
Subsidiary, as applicable) shall, pursuant to arrangements satisfactory
to the Lender, immediately, where such actions have not already been
performed, (a) pledge and deposit with the Lender certificates
representing all shares of such Acquisition Subsidiary as additional
security for the Obligations and (b) cause such Acquisition Subsidiary
to (i) guarantee the Obligations by executing a Subsidiary Guaranty
substantially in the form of Exhibit D hereto and (ii) xxxxx x Xxxx on
all of the assets of such Acquisition Subsidiary to the Lender to
secure such guaranty by executing a Subsidiary Security and Pledge
Agreement substantially in the form of Exhibit E hereto.
3. With respect to each Specified Acquisition for which the Purchase Price
includes Seller Debt, the acquisition agreement shall contain a right
of first offer substantially the same as the following:
Seller agrees that [Sonus-USA, Inc.][specify Acquisition
Subsidiary] (together with its assigns1, "BUYER") shall have a
right of first offer (the "RIGHT OF FIRST OFFER") to purchase
any indebtedness issued by Buyer to Seller in connection with
the acquisition of [target] (such indebtedness, the "SELLER
DEBT").
If, at any time, Seller desires to transfer the Seller Debt to
any third party, Seller shall give notice (an "OFFER NOTICE")
to Buyer that Seller desires to make such a transfer (a
"SALE") and that sets forth the amount of the Seller Debt
proposed to be transferred by Seller (which amount shall
constitute the full amount of the Seller Debt outstanding),
the cash price that Seller proposes to be paid for the Seller
Debt (the "OFFER PRICE") and any other material terms sought
by Seller.
The giving of an Offer Notice to Buyer shall constitute an
offer (the "OFFER") by Seller to transfer the Seller Debt to
Buyer for cash at the Offer Price and on the other terms set
forth in the Offer Notice. Buyer shall have a 30-day period
(the "OFFER PERIOD") in which to accept such Offer by giving a
notice of acceptance to Seller prior to the expiration of such
Offer Period. If Buyer fails to notify Seller
--------
1 It is imperative that there are no restrictions on Sonus' assignees, or
if there are restrictions, GN Great Nordic A/S must be a permitted assignee.
***Confidential portions omitted pursuant to a request for confidential
treatment
-26-
prior to the expiration of the Offer Period, it shall be
deemed to have declined the Offer.
If Buyer elects to purchase the Seller Debt, Buyer shall
purchase and pay, by wire transfer, bank or certified check
(in immediately available funds), for the Seller Debt within
20 business days after the date on which Buyer accepted the
Offer. Upon receipt of such payment, Seller shall release all
security interests in all assets and property of [target],
including the delivery of any UCC-3 termination statements,
mortgage satisfactions and other release documentation
reasonably requested by Buyer.
Upon the earlier to occur of (i) rejection of the Offer by
Buyer and (ii) the expiration of the Offer Period without
Buyer electing to purchase the Seller Debt, Seller shall have
a 120-day period during which to effect a transfer of the
Seller Debt on substantially the same or more favorable (as to
the Seller) terms and conditions as were set forth in the
Offer Notice at a price in cash not less than the Offer Price.
If Seller does not consummate the transfer of the Seller Debt
in accordance with the foregoing time limitations, then the
right of Seller to effect the transfer of the Seller Debt
pursuant to this paragraph shall terminate and Seller shall
again comply with the procedures set forth in this Agreement
with respect to any proposed transfer of the Seller Debt to a
third party.
4. With respect to each Specified Acquisition for which the
Purchase Price includes Seller Debt, the note or other
instrument (the "SELLER NOTE") evidencing the Seller Debt
shall contain a right to cure defaults under Seller Debt
substantially the same as the following: Seller agrees to
provide the Buyer with written notice of any default or
claimed default by the Buyer under the Seller Note (a "SELLER
NOTE DEFAULT NOTICE"), and shall provide a lender of the Buyer
designated by the Buyer with a period of 15 days following the
Buyer's receipt of such Seller Note Default Notice, during
which period such lender may cure such default before Seller
shall be permitted to exercise any remedies under the Seller
Note.
5. No Specified Acquisition shall be made in an Excluded
Jurisdiction.
-27-
SCHEDULE 4.01(J)
EXISTING INVESTMENTS
--------------------- ----------------------- ----------------------
Payee Description Amount Outstanding
--------------------- ----------------------- ----------------------
--------------------- ----------------------- ----------------------
US Bank Revolving Credit Line
--------------------- ----------------------- ----------------------
Phonak Inc. Working Capital Loan
--------------------- ----------------------- ----------------------
-28-
SCHEDULE 4.01(K)
EXISTING INDEBTEDNESS
FOR THE PERIOD ENDED FEBRUARY 28, 2001
Interest Payment Balance
Payee Rate Maturity Payment Terms at 2/28/01 Secured Secured Balance
---- -------- --------- - ------ ---------- ------- ---------------
---------------------------------------
MONTHLY DEBT
---------------------------------------
*** 6.00% 7/1/01 833.33 Monthly 4,166.77 No $0.00
6.00% 6/23/03 4,167.00 Monthly 116,660.00 Yes $116,660.00
10.00% 6/23/01 3,369.84 Monthly 13,479.66 Yes $13,479.66
11.00% 12/3/01 2,163.67 Monthly 20,787.44 Yes $20,787.44
18.00% 4/15/02 351.08 Monthly 4,640.91 Yes $4,640.91
9.00% 3/10/01 41,666.67 Monthly 41,634.01 Yes $41,634.01
8.00% 6/10/01 3,133.64 Monthly 21,433.82 No $0.00
0.00% 4/2/01 30,000.00 one-time 30,000.00 Yes $30,000.00
10.00% 7/1/03 486.00 Monthly 14,335.54 No $0.00
QUARTERLY DEBT
---------------------------------------
*** 6.00% 6/30/01 43,333.33 Quarterly 86,666.70 Yes $86,666.70
7.75% 5/1/03 14,788.41 Quarterly 103,125.05 Yes $103,125.05
8.00% 10/1/01 8,500.00 Quarterly 25,500.00 No $0.00
8.00% 10/1/01 4,833.33 Quarterly 14,500.03 No $0.00
5.00% 5/31/05 3,000.00 Quarterly 33,540.00 No $0.00
7.50% 9/6/04 3666.67+int. Quarterly 55,000.00 Yes $55,000.00
ANNUAL DEBT
---------------------------------------
*** 6.00% 3/31/01 4,333.34 Annually 3,455.83 No $0.00
6.00% 2/27/03 112,000.00 Annually 224,000.00 Yes $224,000.00
6.00% 4/13/01 16,667.00 Annually 16,666.00 No $0.00
6.00% 7/16/01 30,000.00 Annually 30,000.00 Yes $30,000.00
6.00% 7/10/01 85,000.00 Annually 85,000.00 No $0.00
6.00% 9/24/01 116,667.00 Annually 116,666.00 No $0.00
6.00% 12/19/04 16,666.67 Annually 66,666.66 No $0.00
6.00% 6/1/02 30,000.00 Annually 60,000.00 No $0.00
6.00% 7/6/02 50,000.00 Annually 100,000.00 Yes $100,000.00
7.00% 3/31/01 78,445.33 Annually 69,614.18 No $0.00
6.00% 12/1/02 50,000.00 Annually 100,000.00 Yes $100,000.00
6.00% 2/28/03 10,833.33 Annually 21,666.67 No $0.00
7.50% 4/7/03 11,666.67 Annually 35,000.00 Yes $35,000.00
9.00% 4/21/03 25,000.00 Annually 75,000.00 No $0.00
6.00% 10/23/03 8,333.00 Annually 25,000.00 No $0.00
6.00% 10/23/03 8,333.00 Annually 25,000.00 No $0.00
7.50% 12/1/03 51668+int Annually 51,668.00 Yes $51,668.00
6.00% 5/14/03 27,000.00 Annually 81,000.00 No $0.00
6.00% 7/22/02 50,000.00 Annually 100,000.00 No $0.00
6.00% 12/31/02 43,000.00 Annually 57,000.00 Yes $57,000.00
NON-COMPETE DEBT
---------------------------------------
*** 0.00% 6/30/01 2,500.00 Quarterly 5,000.00 No $0.00
0.00% 3/31/01 14,167.00 Quarterly 28,330.00 Yes $28,330.00
0.00% 7/10/01 2,500.00 Monthly 12,500.00 No $0.00
0.00% 9/1/01 6,303.00 Monthly 23,821.00 No $0.00
0.00% 9/1/01 4,091.00 Monthly 6,637.00 No $0.00
0.00% 9/1/01 4,455.00 Monthly 8,585.00 No $0.00
0.00% 9/24/01 16,666.67 Annually 16,666.66 No $0.00
0.00% 3/31/02 2,500.00 Quarterly 20,000.00 Yes $20,000.00
0.00% 3/31/03 4,167.00 Quarterly 37,499.00 No $0.00
US Bank Revolving Credit Line 9.50% 600,000.00 Yes $600,000.00
US Bank letter of Credit 31,657.00 Yes $31,657.00
CONTINGENT PAYMENT
---------------------------------------
*** 3/31/02 6,250.00 Quarterly 31,250.00 No $0.00
6/30/02 7,917.00 Quarterly 47,498.00 No $0.00
3/31/01 12,500.00 Quarterly 62,500.00 Yes $62,500.00
3/31/02 9,583.00 Quarterly 47,919.00 Yes $47,919.00
3/31/02 21,667.00 Quarterly 108,333.00 No $0.00
9/4/01 6,250.00 Quarterly 75,000.00 Yes $75,000.00
3/31/04 8,333.00 Quarterly 83,330.00 No $0.00
12/31/03 20,833.00 Quarterly 250,000.00 Yes $250,000.00
5/31/02 25,000.00 100,000.00 No $0.00
8/1/01 25,000.00 Annual 25,000.00 No $0.00
10/31/01 25,050.00 Quarterly 75,150.00 No $0.00
CAPITAL LEASE PAYMENT
---------------------------------------
Siemens # 1 Revised 8.25% 3/1/01 9,227.48 Monthly 9,164.48 Yes $9,164.48
Siemens #2 8.25% 6/1/01 2,243.08 Monthly 8,820.25 Yes $8,820.25
-29-
***Confidential portions omitted pursuant
to a request for confidential treatment
Lexington Capital Lease 17.50% 8/2/02 4,866.88 Monthly 67,253.20 Yes $67,253.20
Lexington Capital Lease 17.50% 8/2/02 3,154.81 Monthly 44,690.52 Yes $44,690.52
NA Commercial Leasing Co 8/1/01 700.00 Monthly 7,300.00 Yes $7,300.00
NA Commercial Leasing Co 3/1/01 800.00 Monthly 4,800.00 Yes $4,800.00
IBM Credit Corp. 11.89% 7/1/02 1,300.00 Monthly 21,335.08 Yes $21,335.08
IBM Credit Corp. 12.15% 10/1/01 151.00 Monthly 2,843.27 Yes $2,843.27
TOTAL 3,791,755.73 2,351,274.57
-00-
XXXXXXX X
XXXX
Xxx Xxxx, Xxx Xxxx
May 31, 2001
For value received, Sonus-USA, Inc., a corporation organized and existing
under the laws of Washington (the "BORROWER"), promises to pay to the order of
GN Great Nordic A/S, a corporation organized and existing under the laws of
Denmark (the "LENDER"), the unpaid principal amount of each Loan made by the
Lender to the Borrower pursuant to the Credit Agreement referred to below on the
maturity date provided for in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at Xxxxxx Bank Plc, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, routing no. 000000000, account no. 50024029275001.
All Loans made by the Lender and all repayments of the principal thereof
shall be recorded by the Lender and, if the Lender so elects in connection with
any transfer or enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding may be
endorsed by the Lender on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the failure of
the Lender to make (or any error in making) any such recordation or endorsement
shall not affect the Borrower's obligations hereunder or under the Credit
Agreement.
This note is the Note referred to in the Credit Agreement dated as of May
31, 2001 among Sonus-USA, Inc., Sonus Corp. and GN Great Nordic A/S (as the same
may be amended from time to time, the "CREDIT Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
SONUS-USA, INC.
By:
-------------------------------
Name:
Title:
-31-
LOANS AND PAYMENTS OF PRINCIPAL
---------- ----------------- --------- ----------------- ----------------------
DATE AMOUNT OF LOAN AMOUNT OF NOTATION MADE BY
PRINCIPAL REPAID
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
---------- ----------------- --------- ----------------- ----------------------
-------------- ----------------- --------- ----------------- ------------------
-32-
EXHIBIT B
BORROWING REQUEST CERTIFICATE
--------------------, 200-
The undersigned, [SPECIFY OFFICER'S TITLE] of
-------------------------
Sonus-USA, Inc. (the "BORROWER") refers to the Credit Agreement dated as of May
---, 2001 (the "CREDIT AGREEMENT") among the Borrower, Sonus Corp. and GN Great
Nordic A/S, as Lender. Terms defined in the Credit Agreement are used herein as
therein defined.
The undersigned hereby gives you irrevocable notice, pursuant to
Section 2.02(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth and
certifies below the information relating thereto required by Section 2.02(a) of
the Credit Agreement:
(i) The aggregate amount of the requested Borrowing is $ ---
(the "REQUESTED BORROWING AMOUNT").2
(ii) The date of the Borrowing shall be , which is a
--------
Business Day.
(iii) As of the date hereof, and as of the Funding Date for
the Borrowing requested hereby (before and after giving effect
to such Borrowing), all of the representations and warranties
of each Obligor contained in the Loan Documents shall be true
and correct, except to the extent that any failure of such
representations and warranties, or any event, change or
development which has caused such representations and
warranties to be untrue or incorrect, could not reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), business, results of operations or
prospects of any Obligor or any of its subsidiaries.
(iv) As of the date hereof, and as of the Funding Date for the
Borrowing requested hereby (before and after giving effect to
such Borrowing), no Default or Event of Default shall have
occurred and be continuing.
(v) The making of the Loans on the Funding Date for the
Borrowing requested hereby does not violate any Requirement of
Law on the date of or immediately following such Loan and is
not enjoined, temporarily, preliminarily or permanently.
----------------------------------
2 For the intial Borrowing on the Effective Date, specify $5,000,000.
-33-
(vi) The Requested Borrowing Amount will not exceed the
Account Shortfall Amount on the Funding Date for the Borrowing
requested hereby. On such Funding Date, the Specified Account
Balance (before giving effect to such requested Borrowing) is
less than $2,300,000.]3
(vii) The proceeds of the Borrowing requested hereby will be
applied promptly (and within 5 Business Days after receipt
thereof) toward the payment of the Purchase Price in
connection with the acquisition of
------------------------
[IDENTIFY ACQUISITION TO BE FINANCED WITH THE LOAN PROCEEDS]
(the "FINANCED ACQUISITION").
(viii) The Requested Borrowing Amount does not exceed the
excess of (x) the total Purchase Price for the Financed
Acquisition over (y) the Account Surplus Amount on the Funding
Date for the Borrowing requested hereby.
(ix) The Financed Acquisition is a Specified Acquisition.
(x) The Financed Acquisition satisfies all of the Required
Acquisition Parameters (compliance with the Required
Acquisition Parameters in paragraph 1 in Schedule 1.02 of the
Credit Agreement is set forth in reasonable detail below), and
***
(xi) The proceeds of the Borrowing requested hereby will be
applied promptly toward the payment of the Related Acquisition
Costs in connection with the acquisition of
------------------
[IDENTIFY ACQUISITION TO BE FINANCED WITH THE LOAN PROCEEDS]
(the "FINANCED ACQUISITION").
(xii) The Related Acquisition Costs to be financed with the
proceeds of the Borrowing requested hereby are set forth in
reasonable detail below: [INCLUDE REASONABLY DETAILED
DESCRIPTION OF RELATED ACQUISITION COSTS]
(xiii) The Requested Borrowing Amount does not exceed the
excess of (x) the Maximum Costs Amount in respect of the
Financed Acquisition over (y) the Account Surplus Amount on
the Funding Date for the Borrowing requested hereby. The
Maximum Costs Amount is respect of the Financed Acquisition is
set forth in
-------------------------
3 Include clause (vi) only for Borrowings to increase the Specified Account
Balance (in amounts not to exceed the Account Shortfall Amount and only at
times when the Specified Account Balance is less than $2.3 million) after
the Effective Date.
***Confidential portions omitted pursuant to a request for confidential
treatment
-34-
reasonable detail below: [INCLUDE CALCULATIONS OF MAXIMUM
COSTS AMOUNT FOR THE FINANCED ACQUISITION]
(xiv) The Financed Acquisition is a Specified Acquisition.
(xv) The Financed Acquisition satisfies all of the Required
Acquisition Parameters (compliance with the Required
Acquisition Parameters in paragraph 1 in Schedule 1.02 of the
Credit Agreement is set forth in reasonable detail below), and
***
***Confidential portions omitted pursuant to a request for confidential
treatment
-35-
IN WITNESS WHEREOF, the undersigned has set his hand as the
[PROVIDE OFFICER'S TITLE] of Sonus-USA, Inc. as of
---------------- this day of , 200 .
---- ----------
------------------------
Name:
Title:
-36-
