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SECOND AMENDMENT TO
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(this "Second Amendment") is made as of July 27, 2000 (the "Effective Date"), by
and among ADVANCED FIBRE COMMUNICATIONS, INC., a Delaware corporation (with its
successors and permitted assigns, the "Borrower"), the LENDERS from time to time
parties hereto (including their Assignees), BNP PARIBAS (formerly known as
Banque Nationale de Paris), a French banking association, as arranger and
administrative agent (the "Administrative Agent"), and BANK OF AMERICA, N.A.
(formerly known as Bank of America National Trust and Savings Association), a
national banking association, as syndication agent (the "Syndication Agent").
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the
Syndication Agent are parties to that certain AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT, dated as of July 29, 1999 (as amended, modified or otherwise
supplemented prior to the date hereof, the "Agreement");
WHEREAS, the Borrower has requested a 364-day extension of the
Termination Date pursuant to Section 2.1(b) of the Agreement; and
WHEREAS, the Lenders have unanimously agreed to extend the Termination
Date subject to the amendments, terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms that are used in this Second
Amendment without definition shall have the same meanings herein as in the
Agreement.
SECTION 2. TERMINATION DATE. The definition of the term "Termination
Date" in Exhibit A to the Agreement is hereby amended to delete the phrase,
"July 27, 2000" and to substitute therefor the phrase "July 26, 2001."
SECTION 3. CHANGE IN AGGREGATE REVOLVING CREDIT COMMITMENT. Effective
from and after July 27, 2000, the Aggregate Revolving Credit Commitment
(representing the amount available for borrowing under the Agreement, subject to
the terms and conditions of the Agreement) shall be reduced from $30,000,000 to
$25,000,000; and the definition of "Aggregate Revolving Credit Commitment"
contained in Exhibit A to the Agreement shall be changed
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accordingly. Also effective from and after July 27, 2000, the Revolving Credit
Commitment for each of BNP Paribas and Bank of America N.A. shall be reduced
from $15,000,000 to $12,500,000. There shall be no reduction in the amount of
the L/C Commitment, which shall continue to be $10,000,000. The preceding
reductions are subject to the condition that as of the close of business (New
York time) on July 26, 2000, the aggregate Available Revolving Credit Commitment
(after reduction for any then pending requests for Loans or for issuance of
Letters of Credit) shall be not less than $5,000,000.
SECTION 4. AMENDMENT TO SUBSECTION 7.1(a). Subsection 7.1(a) of the
Agreement shall be amended to read in its entirety as follows (and shall apply
to the fiscal quarter ending on or about September 30, 2000 and each fiscal
quarter thereafter):
(a) MINIMUM QUICK RATIO. Permit the Quick Ratio on the last
day of any fiscal quarter of the Borrower to be less than
2.0 to 1.0.
SECTION 5. AMENDMENT TO SUBSECTION 7.1(d). Subsection 7.1(d) of the
Agreement shall be amended to read in its entirety as follows (and shall apply
retroactively to the fiscal quarters immediately preceding and including the
fiscal quarter ending on or about September 30, 2000 and each fiscal quarter
thereafter):
(d) PROFITABILITY TEST. Permit (i) operating losses in any one
fiscal quarter to exceed $10,000,000, (ii) operating
losses in any two consecutive fiscal quarters to exceed
$15,000,000 in the aggregate, or (iii) operating losses in
any three consecutive quarters (regardless of the
magnitude of such losses); provided, however, that for
purposes of this covenant (x) non-cash, nonrecurring
charges taken by the Borrower or its Subsidiaries for the
purchase of in-process technology, and (y) non-cash,
nonrecurring charges taken against investments made by the
Borrower or its Subsidiaries relating to activities of the
Borrower's current material foreign subsidiary (with
respect to its assets) up to the amount of $7,000,000 in
the aggregate, shall not be considered in any calculation
of operating losses.
SECTION 6. FEES AND EXPENSES. On or before the Effective Date, the
Borrower shall pay (a) to the Administrative Agent the administrative agency fee
and (b) to each of the Lenders the extension fee, in each case as provided in
that certain letter from the Administrative Agent to the Borrower dated July 6,
2000. Promptly upon demand, the Borrower shall reimburse the Administrative
Agent for all reasonable expenses, including expenses of counsel, incurred by
the Administrative Agent, the Syndication Agent and the Lenders in connection
with this Second Amendment.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents to the Lenders, the Administrative Agent and the Syndication Agent
that:
(a) REPRESENTATIONS AND WARRANTIES. Its representations and
warranties contained in Article VIII to the Agreement are true and
correct as of
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the date hereof (unless stated to relate solely to an earlier date, in
which case such representations and warranties are true and correct as
of such earlier date).
(b) ENFORCEABILITY. The execution and delivery by this Second
Amendment, and the performance of its obligations under this Second
Amendment and the Agreement, as amended hereby, are within its corporate
powers and have been duly authorized by all necessary corporate action
on its part. This Second Amendment and the Agreement, as amended hereby,
are its valid and legally binding obligations, enforceable in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(c) NO DEFAULT. No Default or Event of Default has occurred
and is continuing.
SECTION 8. EFFECT OF AMENDMENT. Except as expressly amended and modified
by this Second Amendment, all provisions of the Agreement shall remain in full
force and effect. After this Second Amendment becomes effective, all references
in the Agreement (or in any other Credit Document) to "this Agreement",
"hereof", "herein" or words of similar effect referring to the Agreement shall
be deemed to be references to the Agreement as amended by this Second Amendment.
This Second Amendment shall not be deemed to expressly or impliedly waive, amend
or supplement any provision of the Agreement other than as set forth herein.
SECTION 9. EFFECTIVENESS. This Second Amendment shall become effective
as of the date hereof upon receipt by the Administrative Agent of (a)
counterparts of this Second Amendment (whether by facsimile or otherwise)
executed by each of the other parties hereto and (b) the fees and expenses set
forth in Section 6 herein.
SECTION 10. GOVERNING LAW. This Second Amendment shall be governed by,
and construed in accordance with, the internal laws of the State of California
without regard to any otherwise applicable principles of conflicts of law.
SECTION 11. COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, and
each counterpart shall be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
SECTION 12. SECTION HEADINGS. The various headings and sub-headings of
this Second Amendment are inserted for convenience only and shall not affect the
meaning or interpretation of this Second Amendment or the Agreement or any
provision hereof or thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
Advanced Fibre Communications, Inc., Bank of America, N.A.,
as Borrower as Lender and Syndication Agent
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President & CFO Title: Vice President
BNP Paribas,
as Lender and Administrative Agent
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇
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By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
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