Execution Version
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
by and among
VITESSE SEMICONDUCTOR CORPORATION
AND THE OTHER BORROWERS NAMED HEREIN
and
SPECIAL VALUE EXPANSION FUND, LLC AND
SPECIAL VALUE OPPORTUNITIES FUND, LLC
AS LENDERS
and
OBSIDIAN, LLC
AS AGENT AND COLLATERAL AGENT
--------------------------------
Dated as of June 20, 2006
--------------------------------
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
AGREEMENT, dated as of June 20, 2006, by and among VITESSE
SEMICONDUCTOR CORPORATION., a Delaware corporation ("Vitesse"), VITESSE
INTERNATIONAL, INC., a Barbados corporation, and any direct or indirect Domestic
Subsidiary of Vitesse identified on the signature pages of this Agreement as a
borrower (each individually a "Borrower" and all Borrowers, including Vitesse,
collectively, the "Borrowers"), SPECIAL VALUE EXPANSION FUND, LLC and SPECIAL
VALUE OPPORTUNITIES FUND, LLC (each, a "Lender" and collectively, the
"Lenders"), and OBSIDIAN, LLC, as agent and collateral agent for the Lenders (in
such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, certain of the Borrowers and Silicon Valley Bank entered
into that certain Second Amended and Restated Loan and Security Agreement dated
March 2, 2006 (such loan agreement as so modified and otherwise amended or
modified from time to time being referred to herein as the "Second Amended and
Restated Loan Agreement");
WHEREAS, pursuant to certain assignment agreements, Silicon Valley
Bank assigned all outstanding Obligations under and as defined in the Second
Amended and Restated Loan Agreement to the Lenders;
WHEREAS, the parties hereto entered into that certain Third Amended
and Restated Loan and Security Agreement dated June 7, 2006 (such loan agreement
as so modified and otherwise amended or modified from time to time being
referred to herein as the "Third Amended and Restated Loan Agreement"), pursuant
to which the Lenders extended that certain Term Loan A in an aggregate principal
amount of $21,989,876.47 ("Term Loan A");
WHEREAS, pursuant to Section 13.4 of the Third Amended and Restated
Loan Agreement, the Borrowers party thereto and the Lenders have the right to
amend the Third Amended and Restated Loan Agreement; and
WHEREAS, Borrowers have requested that the Lenders and the Agent
amend and restate the Third Amended and Restated Loan Agreement, make certain
loans to the Borrowers and provide certain other financial accommodations to the
Borrowers, all on the terms set forth herein and in the other Loan Documents;
and
WHEREAS, the Agent and the Lenders are willing to amend and restate
the Third Amended and Restated Loan Agreement, to make such loans and to provide
such financial accommodations to Borrowers on the terms and conditions set forth
herein and the other Loan Agreements; and
WHEREAS, as a condition to entering into the Third Amended and
Restated Loan Agreement, the Lenders also required that the Borrowers enter into
a Security Agreement in the form of Exhibit E (as amended from time to time, the
"Security Agreement");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
Article 1
DEFINITIONS
1.1 Definitions.
As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
"Acceptable Colorado Transaction" means a sale/leaseback of
Borrower's Colorado Real Property (and associated personal property) pursuant to
which the Borrowers receive not less than $14,000,000 in gross proceeds;
provided that the Collateral Agent receives a customary landlord waiver from the
owner/lessor in form and substance satisfactory to the Collateral Agent in its
sole and absolute discretion.
"Account Debtor" means, with respect to any Person, any other
Person who may become obligated to such Person under, with respect to, or on
account of, an Account, Chattel Paper or General Intangibles (including a
payment intangible).
"Accounts" means, with respect to any Person, all "accounts," as
such term is defined in the UCC, now owned or hereafter acquired by such Person,
including (a) all accounts receivable, other receivables, book debts and other
forms of obligations (other than forms of obligations evidenced by Chattel
Paper, or Instruments), including any such obligations that may be characterized
as an account or contract right under the UCC, (b) all of such Person's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of such Person's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to such Person for property sold, leased, licensed,
assigned or otherwise disposed of, for a policy of insurance issued or to be
issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Person or in connection with any
other transaction (whether or not yet earned by performance on the part of such
Person), and (e) all collateral security of any kind, given by any Account
Debtor or any other Person with respect to any of the foregoing.
"Acquisition" means (whether by purchase, exchange, issuance of
Stock, merger, reorganization or any other method) (i) an investment by any
Borrower or any of their Subsidiaries and any other Person pursuant to which
such Person shall become a Subsidiary thereof or shall be merged into or, under
GAAP, become consolidated with such Borrower or such Subsidiary, or (ii) an
acquisition by any Borrower or any of their Subsidiaries of all or any
substantial amount of the assets of any other Person.
"Affiliate" means any Person (other than ▇▇▇▇▇▇▇▇▇▇ Capital
Partners, LLC and its funds and managed accounts): directly or indirectly
controlling, controlled by, or under common control with, any Borrower. For
purposes of the preceding sentence of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with") means the possession directly or indirectly of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.
"Agreement" means this Agreement, including the exhibits and
schedules attached hereto, as the same may be amended, supplemented or modified
in accordance with the terms hereof.
"Applicable Law" means all laws, rules and regulations applicable
to a Person, its Property or a transaction, as the case may be, including all
applicable common law principles and all provisions of all applicable United
States federal, state, local and foreign constitutions, treatises, codes,
statutes, rules, regulations, orders and ordinances of any Governmental
Authority; and writs, orders, judgments, injunctions and decrees of all courts
and arbitrators.
"Borrower" means each of the Borrowers.
"Borrowers" means, collectively, each Person listed on the
signature pages hereof as a Borrower and their respective successors and
permitted assigns.
"Business" means the Borrowers' business of supplying
high-performance integrated circuits, principally targeted at systems
manufacturers in the communications and storage industries in the United States
of America and abroad.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in any such state are required to be closed.
"Bylaws" mean, unless the context in which such term is used
otherwise requires, the Bylaws of each Borrower which Bylaws are in effect on
the Closing Date, as amended and/or restated from time to time subject to
compliance with the terms hereof.
"Called Principal" means, with respect to any Loan, the principal
of such Loan (including accrued PIK interest to the date of prepayment or
acceleration) that is to be prepaid pursuant to Section 2.7 or has become or is
declared to be immediately due and payable pursuant to Section 11.2, as the
context requires.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on the balance sheet of such Person.
"Cash" means the currency of the United States of America.
"Cash Equivalents" means: (a) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six (6) months from the date of acquisition thereof;
(b) commercial paper maturing no more than six (6) months from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from ▇▇▇▇▇'▇ Investors Service, Inc.; and (c)
certificates of deposit or bankers' acceptances maturing within six (6) months
from the date of issuance thereof issued by, any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $250,000,000 and
not subject to setoff rights in favor of such bank.
"Certificate of Incorporation" means, unless the context in which
it is used shall otherwise require, the Certificate of Incorporation (or similar
organizational documents) of a Borrower or any Subsidiary, as the case may be,
which Certificate of Incorporation is in effect on the Closing Date, as amended
and/or restated from time to time subject to compliance with the terms hereof.
"Change of Control" means each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any person or
group (within the meaning of Section 13(d)(3) of the Exchange Act), other than
the Lenders, of beneficial ownership of more than 35% of the aggregate
outstanding voting power of the capital Stock of any Borrower;
(b) the first day on which a majority of the members of the board
of directors of Vitesse are not Continuing Directors;
(c) any Borrower shall cease to have beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting
power of the capital Stock of each other Subsidiary, free and clear of all
Liens (other than any Permitted Encumbrances and Liens granted hereunder); or
(d) (i) any Borrower consolidates with or merges into another
entity (other than another Borrower) and is not the surviving entity or conveys,
transfers or leases all or substantially all of its property and assets to
another Person, or (ii) any entity consolidates with or merges into any Borrower
in a transaction pursuant to which the outstanding voting capital Stock of such
Borrower is reclassified or changed into or exchanged for cash, securities or
other property, other than any such transaction described in this clause (ii) in
which either (A) in the case of any such transaction involving a Borrower, no
person or group (within the meaning of Section 13(d)(3) of the Exchange Act)
has, directly or indirectly, acquired beneficial ownership of more than 51% of
the aggregate outstanding voting capital Stock of Vitesse or (B) in the case of
any such transaction involving any Borrower other than Vitesse, Vitesse has
beneficial ownership of 100% of the aggregate voting power of all capital Stock
of the resulting, surviving or transferee entity.
"Chattel Paper" means any "chattel paper" as such term is defined
in the UCC, including electronic chattel paper.
"Closing" shall have the meaning assigned to that term in Section
2.13.
"Closing Date" shall have the meaning assigned to that term in
Section 2.13.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Collateral" means the collateral under the Security Agreement and
the Real Property Collateral.
"Colorado Mortgage" shall mean a mortgage in form and substance
satisfactory to the Collateral Agent with respect to the Real Property of the
Borrowers identified in Part B of Schedule 5.17 hereto.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Commitment" in respect of any Lender means the commitment of such
Lender to provide its portion of the Term Loan A and Term Loan B to Borrowers on
the terms and conditions set forth in this Agreement.
"Common Stock" means the common stock of Vitesse, or any other
capital Stock of Vitesse into which such shares are reclassified or
reconstituted.
"Compliance Certificate" means a certificate duly executed by the
Chief Executive Officer or senior vice president of each Borrower or other
officer of each Borrower acceptable to the Agent appropriately completed and in
substantially the form of Exhibit C.
"Continuing Directors" means, as of any date of determination, any
member of the board of directors of Vitesse who: (1) was a member of such board
of directors on the date of this Agreement; or (2) was nominated for election or
elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination or election.
"Contracts" means all material "contracts," as such term is defined
in the UCC including all contracts, undertakings, or agreements (other than
rights evidenced by Chattel Paper, Documents or Instruments), including any
agreement relating to the terms of payment or the terms of performance of any
Account.
"Contractual Obligations" means as to any Person, any legally
binding provision of any security issued by such Person or of any material
agreement, undertaking, contract, indenture, mortgage, deed of trust or other
instrument or arrangement (whether in writing or otherwise) to which such Person
is a party or by which it or any of such Person's property is bound.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Person under any written agreement granting any right to use any
Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Person: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Default" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default if that condition or event
were not cured or removed within any applicable grace or cure period.
"Default Rate" has the meaning assigned to that term in Section
2.3.
"Defined Benefit Plan" shall mean a defined benefit plan within the
meaning of Section 3(35) of ERISA or Section 414(j) of the Code, whether funded
or unfunded, qualified or non-qualified (whether or not subject to ERISA or the
Code).
"Documents" means all "documents" as such term is defined in the
UCC.
"Domestic Subsidiary" means a Subsidiary organized under the laws
of the United States or any state or territory thereof or the District of
Columbia.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
(6) years been maintained for the employees of any Borrower or any current or
former ERISA Affiliate.
"Environmental Claims" means claims, liabilities, investigations,
litigation, administrative proceedings, judgments or orders relating to
Hazardous Materials.
"Environmental Laws" means any present or future federal, state or
local law, rule, regulation or order relating to pollution, waste, disposal or
the protection of human health or safety, plant life or animal life, natural
resources or the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, and all rules and
regulations promulgated thereunder, in each case, as in effect from time to
time. References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate", as applied to any Borrower, means any Person who
is a member of a group which is under common control with any Borrower, who
together with any Borrower is treated as a single employer within the meaning of
Sections 414(b) and (c) of the Code.
"ERISA Event" means, with respect to any Plan: (a) any reportable
event, as defined in Section 4043(b) of ERISA and the regulations thereunder,
for which notice thereof has not been waived pursuant to such regulations or (b)
any event, transaction or condition that could result in the incurrence of any
liability by the Borrowers or any ERISA Affiliate pursuant to Title I or IV of
ERISA, or in the imposition of any lien on any of the rights, properties or
assets of the Borrowers or any ERISA Affiliate pursuant to Title I or IV of
ERISA, if such liability or lien, taken together with any other such Liabilities
or liens then existing, could reasonably be expected to have a Material Adverse
Effect.
"Event of Default" means each of the events set forth in Section
11.1.
"Excess Interest" shall have the meaning given to such term in
Section 2.5.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Facilities" means any office building, plant or other facility
owned or used by any Borrower in the Business.
"Fiscal Quarter" means a fiscal quarter of the Borrowers and their
Subsidiaries (currently the three month periods ending on each September 30,
December 31, March 31 and June 30 annually).
"Fiscal Year" means each twelve month period ending on the last day
of September in each year.
"Funding Source Agreement" has the meaning given thereto in Section
2.12(f) hereof.
"Funds Flow Memorandum" means that certain Acknowledgement of even
date herewith executed by the Borrowers and delivered to the Agent and the
Lenders, together with Exhibit A thereto.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination.
"General Intangibles" means all "general intangibles," as such term
is defined in the UCC, including all right, title and interest under any
Contract, all payment intangibles, customer lists, Licenses, Copyrights,
Trademarks, Patents, and all applications therefor and reissues, extensions or
renewals thereof, rights in Intellectual Property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any Trademark or Trademark License), all rights and
claims in or under insurance policies (including insurance for fire, damage,
loss and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
chooses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
Stock and Investment Property, rights of indemnification, all books and
records, correspondence, credit files, invoices and other papers, including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of any Person or any computer
bureau or service company from time to time acting for such Person.
"Goods" means all "goods" as defined in the UCC, including embedded
software to the extent included in "goods" as defined in the UCC, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governing Body" means the board of directors or other body having
the power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, regulation or compliance, including,
without limitation, any state or local department of health or social services,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Hazardous Materials" means all or any of the following: (a)
substances that are defined or listed in, or otherwise classified pursuant to,
any Environmental Laws or regulations as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosively, reactivity, carcinogenicity,
reproductive toxicity or "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c)
any flammable substances or explosives or any radioactive materials; and (d)
asbestos in any form or electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"Indebtedness" for any Person, means without duplication: (a) all
indebtedness for borrowed money (other than inter-company indebtedness between
Borrowers) and all obligations evidenced by notes, bonds, debentures or similar
instruments; (b) obligations under leases which in accordance with GAAP
constitute Capital Leases; (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(d) any obligation owed for all or any part of the deferred purchase price of
property or services if the purchase price is due more than six months from the
date the obligation is incurred (other than "earnout" obligations that are
accrued and paid on a monthly basis) or is evidenced by a note or similar
written instrument; (e) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is non recourse to the
credit of th at Person; (f) all reimbursement and other obligations with respect
to letters of credit, bankers' acceptances and surety bonds, whether or not
matured; (g) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property); (h) all obligations of such Person under commodity purchase or option
agreements or other commodity price hedging arrangements, in each case whether
contingent or matured; (i) all obligations of such Person under any foreign
exchange contract, currency swap agreement, interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates,
in each case whether contingent or matured; and (j) the Obligations.
"Instruments" means all "instruments," as such term is defined in
the UCC, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intangible Assets" means all intangible assets (determined in
conformity with GAAP) including, without limitation, goodwill, trademarks, trade
names, licenses, organizational costs, deferred amounts, covenants not to
compete, unearned income and restricted funds.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Interest Payment Date" means (a) each July 15, October 15, January
15 and April 15 commencing October 15, 2006, provided if any such day is not a
Business Day, such Interest Payment Date shall be extended to the next
succeeding Business Day and interest shall accrue for each day of such extension
and (b) the date of any payment of principal in accordance with this Agreement.
"Interest Period" means a period commencing on an Interest Payment
Date and ending on the next succeeding Interest Payment Date determined under
clause (a) of the definition thereof; provided that (x) the first Interest
Period for any Loan shall commence on the Closing Date and end on the next
succeeding Interest Payment Date, and (b) no Interest Period with respect to any
portion of the Loans shall extend beyond the Maturity Date.
"Interest Rate" means interest (i) in cash at a rate of LIBOR plus
4.0% per annum, and (ii) payable-in-kind by an increase in the aggregate
principal amount of the applicable Loan (valued at 100% of the principal amount
thereof, which shall be rounded upward to the nearest $1.00) at a rate of 5.0%
per annum ("PIK"). The Interest Rate for any LIBOR Period shall be as determined
by the Agent on the applicable Interest Rate Determination Date (which
determination shall, absent manifest error, be conclusive and binding upon all
parties) hereto.
"Interest Rate Determination Date" means, in respect of any LIBOR
Period, the date that is two Business Days prior to the first day of such LIBOR
Period.
"Investment Property" means all "investment property" as such term
is defined in the UCC, including (a) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (b) all securities entitlements of any Person, including the
rights of any Person to any securities account and the financial assets held by
a securities intermediary in such securities account and any free credit balance
or other money owing by any securities intermediary with respect to that
account; (c) all securities accounts; (d) all commodity contracts; and (e) all
commodity accounts.
"Investment Property Control Agreement" means an agreement in
writing, in form and substance reasonably satisfactory to the Collateral Agent,
by and among the Collateral Agent and any Borrower and any depository bank,
securities intermediary, commodity intermediary or other person who has custody,
control or possession of any investment property of such Borrower acknowledging
that such securities intermediary, depository bank, commodity intermediary or
other person has custody, control or possession of such Cash, Cash Equivalents,
deposit or investment property on behalf of the Collateral Agent, that it will
comply with entitlement orders originated by the Collateral Agent with respect
to such property, or other instructions of the Collateral Agent to the extent
provided for therein, and has such other terms and conditions as the Collateral
Agent may reasonably require.
"Lease" means any lease of Real Property to which any Borrower or
any of its Subsidiaries is a party as lessor or lessee.
"Lender" and "Lenders" have the respective meanings given thereto
in the preambles hereof and shall include such Persons' successors and assigns
acting in such capacity.
"Letter of Credit" or "Letters of Credit" means commercial letters
of credit and standby letters of credit issued or to be issued by issuing
lenders for the account of any Borrower in the ordinary course of business.
"Liabilities" shall have the meaning given that term in accordance
with GAAP and shall include Indebtedness.
"LIBOR" means, for any date of determination, the London Interbank
Offered Rate for the LIBOR Period (rounded upward to the nearest 1/16 of one
percent) for such date of determination that appears on Bloomberg as of
approximately 11:00 a.m. (Los Angeles time) on such date of determination;
provided, that if such index ceases to exist or is no longer published or
announced, then the term "LIBOR" means the one-month London Interbank Offered
Rate (rounded upward to the nearest 1/16 of one percent) as published in The
Wall Street Journal on such date of determination, and if this later index
ceases to exist or is no longer published or announced, then the term "LIBOR"
means the Prime Rate (rounded upward to the nearest 1/16 of one percent) as
published in The Wall Street Journal on such date of determination. LIBOR shall
be determined on any date of determination by the Agent or, if no Agent then
exists, by the Lender of the Loan on which interest is owed.
"LIBOR Period" means, for any date of determination of LIBOR,
either one month, three months, six months or 12 months from such date of
determination, as selected by the Borrowers and notified to the Agent in writing
at least three Business Days prior to such date of determination of LIBOR. In
the event the Borrowers fail to provide such written notice to the Agent at
least three Business Days prior to such date of determination of LIBOR, the
LIBOR Period shall be deemed to be three months. The initial LIBOR Period shall
(i) commence on the Closing Date and shall end on October 15, 2006, but (ii) for
purposes of determining LIBOR for such period shall be three months.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Person.
"Lien" means any lien, mortgage, pledge, security interest, charge
or encumbrance of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan(s)" means Term Loan A and Term Loan B, as set forth in
Section 2.1.
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Equity Documents and all other instruments, documents and
agreements executed by or on behalf of any Borrower and delivered in connection
herewith or therewith, all as amended, restated, supplemented or modified from
time to time.
"Make-Whole Amount" means, with respect to any Loan, an amount
equal to the aggregate amount of interest (both cash and PIK, including interest
on capitalized PIK interest) that would have otherwise been payable from the
date of prepayment through July 15, 2010 on the Called Principal (including all
accrued PIK interest), minus the aggregate amount of interest the Lenders would
earn if the Called Principal were reinvested for the period from the date of
prepayment through July 15, 2010 at the Treasury Rate plus 0.50%.
"Material Adverse Effect" means a material adverse effect upon (a)
the business, operations, properties, assets or condition (financial or
otherwise) of the Borrowers taken as a whole, (b) the ability of the Borrowers,
taken as a whole, to perform their obligations under any Loan Document to which
any of them is a party, or (c) the Agent's or Lenders' rights and remedies under
this Agreement or the other Loan Documents; provided, however, that any adverse
change, event or effect that is demonstrated to be primarily caused by
conditions affecting the United States economy generally or the economy of any
region in which any of the Borrowers conducts business that is material to the
business of the Borrowers, taken as a whole, shall not be taken into account in
determining whether there has been or would be a "Material Adverse Effect."
"Material Licenses" means all material licenses, permits and other
authorizations issued by any Governmental Authority for the operation of the
Business or any other business conducted by any Borrower, and all applications
therefor, together with any renewals, extensions or modifications thereof and
additions thereto.
"Maturity Date" means July 15, 2011 or such earlier date that the
Obligations become due and payable, whether by acceleration of the Obligations
pursuant to the terms of this Agreement or otherwise.
"Maximum Rate" shall have the meaning set forth in Section 2.5.
"New Revolver" means a credit facility for working capital in an
aggregate principal amount not to exceed $25,000,000 and on terms and conditions
(including intercreditor arrangements) satisfactory to the Agent in its
reasonable discretion.
"Non-GAAP Financials" means any financial statements delivered to
the Lenders in compliance with Section 8.1 which are expressed to be not in
accordance with GAAP.
"Notes" means the notes evidencing the Loans in the form of Exhibit
A.
"Obligations" means all obligations, Liabilities and Indebtedness
for principal amount of all debts, claims and indebtedness (whether incurred
before or after the Maturity Date), accrued and unpaid interest (including all
interest that accrues after the commencement of any case or proceeding by or
against any Borrower in bankruptcy, whether or not allowed in such case or
proceeding) and all fees, costs and expenses now and/or from time to time
hereafter owing, due or payable at any time by any Borrower to the Agent or any
Lender.
"Officer" means the president, chief executive officer, chief
financial officer, treasurer, general partner (if an individual), managing
member (if an individual) or other individual appointed by the Governing Body or
the Organizational Documents of a corporation, partnership, trust or limited
liability company to serve in a similar capacity as the foregoing.
"Officer's Certificate", as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.
"Organizational Documents" means the documents (including Bylaws,
if applicable) pursuant to which a Person that is a corporation, partnership,
trust or limited liability company is organized.
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Person granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which any Person now holds
or hereafter acquires any interest: (a) all letters patent of the United States
or of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"Payor" means any person who bears a responsibility or obligation
to pay part or all of an Account, whether such responsibility or obligation is
absolute or conditional and shall include insurance companies, government
agencies and natural persons.
"Permitted Encumbrances" means the following types of Liens: (a)
Liens (other than Liens relating to Environmental Claims or ERISA) for taxes,
assessments or other governmental charges not yet due and payable; (b)
statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen
and other similar liens imposed by law, which are incurred in the ordinary
course of business for sums not more than thirty (30) days delinquent; (c)
Liens incurred in connection with the grant of Cash or Cash Equivalents
collateral by any Borrower to secure the issuance of a Letter of Credit; (d)
Liens (other than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money); (e) easements,
rights-of-way, restrictions, and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business
of any Borrower; (f) Liens set forth on Schedule 5.10; and (g) Liens on the
Borrowers' and their Subsidiaries' product inventory and receivables securing
Indebtedness under the New Revolver.
"Permitted Refinancing" means, with respect to any Indebtedness,
any extension, refinancing, renewal, replacement or refunding (each a
"refinancing") of such Indebtedness, so long as such refinancing does not result
in any (a) increase in the aggregate principal amount of, or the interest rate
on, the Indebtedness being refinanced, (b) shorten the final maturity or average
life to maturity of, or require any payment of principal or interest to be made
earlier than the date originally scheduled on, the Indebtedness being
refinanced, (c) change any event of default or add any covenant with respect to
the Indebtedness being refinanced in a manner adverse to the Borrowers, or (d)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
the holder of the Indebtedness being refinanced in a manner adverse to any
Borrower, any of its Subsidiaries or any Lender.
"Person" means any individual, firm, corporation, limited liability
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, Governmental Authority or other entity of any
kind, and shall include any successor (by merger or otherwise) of such entity.
"PIK" has the meaning given thereto in the definition of Interest
Rate.
"Projections" means Borrowers' forecasted consolidated profit and
loss statements. The Projections are attached hereto as Exhibit D.
"Property" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"Quarterly Financial Statements" means the financial statements
delivered pursuant to paragraph (c) of Section 8.1.
"Real Property" means any estates or interests in real property now
owned or hereafter acquired by any Borrower and the improvements thereto.
"Reportable Event" means an event described in Section 4043 of
ERISA (other than an event not subject to the provision for 30-day notice to the
PBGC under the regulations promulgated under such Section).
"Required Lenders" means, at any time, the Lenders of more than 50%
in principal amount of the Loans at the time outstanding.
"Requirements of Law" means as to any Person, provisions of the
Certificate of Incorporation and Bylaws or other organizational or governing
documents of such Person, or any law, statute, treaty, code, rule, regulation,
right, privilege, qualification, license or franchise or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
or binding upon such Person or any of such Person's business or property or to
which such Person or any of such Person's business or property is subject or
pertaining to any or all of the transactions contemplated or referred to herein.
"Restatement Date" means the date Vitesse files with the SEC its
restated financial statements for the year end December 31, 2005.
"Restricted Junior Payment" means: (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of Stock
of any Borrower now or hereafter outstanding, except a Stock dividend; (b) any
prepayment of principal of, premium, if any, or interest on, or any redemption,
retirement, defeasance, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Subordinated Indebtedness or
any shares of any class of Stock of any Borrower now or hereafter outstanding;
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Stock of any
Borrower now or hereafter outstanding; and (d) any payment by a Borrower or any
of its Subsidiaries of any management fees or similar fees to any Affiliate,
whether pursuant to a management agreement or otherwise.
"SEC Reports" with respect to any Person shall mean all forms,
reports, statements and other documents (including exhibits, annexes,
supplements and amendments to such documents) required to be filed by it, or
sent or made available by it to its security holders, under the Exchange Act,
the Securities Act, any national securities exchange or quotation system or
comparable Governmental Authority.
"Second Amended and Restated Loan Agreement" has the meaning given
thereto in the recitals hereof.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations thereunder as the
same shall be in effect at the time.
"Security Agreement" shall mean the Security Agreement of the
Borrowers in favor of the Collateral Agent for the benefit of the Secured
Parties (as defined therein) in the form of Exhibit E, as amended from time to
time.
"Software" means all "software" as such term is defined in the UCC,
now owned or hereafter acquired by any Borrower, other than software embedded in
any category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
"Solvent" means, with respect to the Borrowers on a consolidated
basis, that (a) the assets and the property of the Borrowers exceed the
aggregate Liabilities of such Borrowers, (b) after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents, the
Borrowers will not be left with unreasonably small capital, and (c) after giving
effect to the transactions contemplated by this Agreement, the Borrowers are
able to both service and pay their Liabilities as they mature (other than
Liabilities under the Subordinated Notes to the extent such Liabilities mature
before their 2024 stated maturity as a result of any acceleration, conversion,
call for redemption or equivalent provision).
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common Stock,
preferred Stock or any other "equity security" (as such term is defined in Rule
3al1-1 of the General Rules and Regulations promulgated by the Commission under
the Securities Act).
"Subordinated Indebtedness" means all Indebtedness owing by any
Borrower under the Subordinated Notes and all other Indebtedness that is
subordinated in right of payment to the Obligations.
"Subordinated Notes" means those certain 1.50% Convertible
Subordinated Debentures due 2024 issued by Vitesse in an aggregate principal
amount not to exceed $96,700,000.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited liability company, limited or general partnership, trust,
estate, association, joint venture or other business entity (a) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (b) of which more than fifty percent (50%) of (i)
outstanding shares of stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors other managing body
of such Person, (ii) in the case of a partnership or limited liability company,
the interest in the capital or profits of such partnership or limited liability
company or (iii) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or in directly through one or more intermediaries, by such Person.
"Tax" and "Taxes" mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
ss. 59A), customs duties, capital Stock, franchise profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on-minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Tax Liabilities" shall have the meaning ascribed to such term in
Section 2.12.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Term Loan A" shall have the meaning set forth in the recitals
hereof.
"Term Loan A Yield Enhancement Fee" shall have the meaning set
forth in Section 2.6.
"Term Loan B" shall have the meaning set forth in Section 2.1(b).
"Term Loan B Advance" shall have the meaning set forth in Section
2.1(b).
"Term Loan B Advance Date" means the date upon which the Lenders
make the Term Loan B Advance.
"Term Loan B Commitment Expiration Date" means July 4, 2006.
"Term Loan B Yield Enhancement Fee" shall have the meaning set
forth in Section 2.6.
"Third Amended and Restated Loan Agreement" has the meaning given
thereto in the recitals hereof.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Person granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Person: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which and of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"Transactions" means the transactions contemplated hereunder and
under the other Loan Documents, including the grant of security interests in the
Collateral by the Borrowers to the Collateral Agent, and (iii) the payment of
all fees and expenses in connection with the foregoing.
"Treasury Rate" shall mean, in respect of any prepayment, a rate
per annum (computed on the basis of actual days elapsed over a year of 360 days)
equal to the rate determined by the Agent on the date two Business Days prior to
the date of prepayment, to be the yield expressed as a rate listed in The Wall
Street Journal for United States Treasury securities having a term ending
closest to, but prior to, the Maturity Date.
"UCC" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that to
the extent that the UCC is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the UCC, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Collateral Agent's or any Lender's Lien on any
Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term "UCC" shall mean
the Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Vitesse " means Vitesse Semiconductor Corporation, a Delaware
corporation.
"▇▇▇▇▇ Fargo Account" means the Restricted Account under and as
defined in the ▇▇▇▇▇ Fargo Restricted Account Agreement.
"▇▇▇▇▇ Fargo Restricted Account Agreement" means that certain
Restricted Account Agreement of even date herewith, between and among ▇▇▇▇▇
Fargo Bank, National Association, Vitesse and the Collateral Agent.
"Year-End Financial Statements" the financial statements delivered
pursuant to paragraph (d) of Section 8.1.
1.2 Accounting Terms: Financial Statements.
All accounting terms used herein and not expressly defined in this
Agreement shall have the respective meanings given to them in conformance with
GAAP. Other than the Non-GAAP Financials or as otherwise disclosed to the
Lenders, all financial statements and other information furnished after the date
hereof pursuant to this Agreement or the other Loan Documents shall be prepared
in accordance with GAAP as in effect at the time of such preparation.
1.3 Knowledge of the Borrowers.
All references to the knowledge of the Borrowers or to facts known
by the Borrowers shall mean actual knowledge, based on reasonable inquiry, of
the chief executive officer or chief financial officer of Vitesse.
Article 2
LOANS AND COLLATERAL
2.1 Loans.
(a) Term Loan A. Each Lender provided the portion of Term Loan A
set forth opposite its name on Annex A hereto at Closing to Borrowers at their
direction on the terms and conditions set forth herein. Amounts borrowed under
this subsection 2.1(a) and repaid may not be reborrowed.
(b) Term Loan B. Each Lender severally and not jointly agrees to
provide the portion of Term Loan B set forth opposite its name on Annex B hereto
to Borrowers at their direction on the terms and conditions set forth herein
("Term Loan B"). Term Loan B shall be funded in cash in one drawing at any time
prior to the Term Loan B Commitment Expiration Date (the "Term Loan B Advance").
Amounts borrowed under this subsection 2.1(b) and repaid may not be reborrowed.
Borrowers may request the advance of Term Loan B upon the satisfaction of all of
the conditions to such Loan set forth in Article 3 upon two business days'
written notice.
2.2 Notes.
Borrowers executed and delivered to each Lender a Note in respect
of Term Loan A and shall execute and deliver to each Lender with appropriate
insertions a Note in respect of Term Loan B in the form of Exhibit A. In the
event of a permitted assignment, Borrowers shall, upon surrender of a Lender's
Note, issue new Notes to reflect the interest held by the assigning Lender and
its assignee.
2.3 Interest.
The Loans and all other Obligations shall bear interest from the
date such Loans are made or such other Obligations become due to the date paid
at the Interest Rate. After the occurrence and during the continuance of an
Event of Default, the Loans and all other Obligations shall, at the election of
the Required Lenders, bear interest at a rate per annum equal to 2.0% plus the
applicable Interest Rate (the "Default Rate").
2.4 Computation and Payment of Interest.
Interest on the Loans and all other Obligations shall be computed
on the daily principal balance on the basis of a three hundred sixty (360) day
year for the actual number of days elapsed. In computing interest on any Loan,
the date of funding of the Loan or the first day of an Interest Period
applicable to such Loan shall be included; and the date of payment of such Loan
or the expiration date of an Interest Period applicable to such Loan shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one (1) day's interest shall be paid on that Loan. Interest on Loans and all
other Obligations shall be payable to Lenders quarterly in arrears on each
Interest Payment Date and at maturity, whether by acceleration or otherwise. On
any Interest Payment Date (other than the Maturity Date or on such other date
that all principal amounts of such Loan or Loans shall be due and payable),
Borrowers may pay a portion of the cash interest due in the form of PIK
interest; provi ded, however, that for each 1.00% per annum of interest that the
Borrowers elect not to pay in cash, the Borrowers must pay 1.50% per annum of
additional PIK interest; and provided further that for any Interest Period,
Borrowers must pay interest in cash at a rate per annum not less than LIBOR for
such Interest Period (calculated on a weighted average basis in the event LIBOR
has been adjusted during such Interest Period in accordance with the provisions
hereof).
2.5 Interest Laws.
Notwithstanding any provision to the contrary contained in this
Agreement or any other Loan Document, Borrowers shall not be required to pay,
and the Lenders shall not be permitted to collect, any amount of interest in
excess of the maximum amount of interest permitted by applicable law ("Excess
Interest"). If any Excess Interest is provided for or determined by a court of
competent jurisdiction to have been provided for in this Agreement or in any
other Loan Document, then in such event: (a) the provisions of this subsection
shall govern and control; (b) no Borrower shall be obligated to pay any Excess
Interest; (c) any Excess Interest that a Lender may have received hereunder
shall be, at such Lender's option, (i) applied as a credit against the
outstanding principal balance of the Obligations or accrued and unpaid interest
(not to exceed the maximum amount permitted by law), (ii) refunded to the payor
thereof, or (iii) any combination of the foregoing; (d) the interest rate(s)
provided for herein shall be automatically reduced to the maximum lawful rate
allowed from time to time under applicable law (the "Maximum Rate"), and this
Agreement and the other Loan Documents shall be deemed to have been and shall
be, reformed and modified to reflect such reduction; and (e) no Borrower shall
have any action against any Lender or the Agent for any damages arising out of
the payment or collection of any Excess Interest. Notwithstanding the foregoing,
if for any period of time interest on any Obligations is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on such Obligations shall remain at the Maximum Rate until the
Lenders shall have received the amount of interest which Lenders would have
received during such period on such Obligations had the rate of interest not
been limited to the Maximum Rate during such period.
2.6 Yield Enhancement Fees.
At the Closing, the Borrowers paid to each Lender a fee (the "Term
Loan A Yield Enhancement Fee") in an amount equal to 4.00% of the principal
amount of Term Loan A extended by such Lender. At the advance of the Term Loan
B, the Borrower shall pay to each Lender a fee (the "Term Loan B Yield
Enhancement Fee") in an amount equal to 4.00% of the principal amount of Term
Loan B extended by such Lender. All fees paid pursuant to this Section 2.6 shall
be fully earned and nonrefundable as of the date of payment thereof.
2.7 Payments and Prepayments.
(a) Borrowers agree jointly and severally to repay the Loans and
timely pay all other Obligations in accordance with the terms of this Agreement.
The principal amount of the Loans shall be due and payable on the Maturity Date.
All payments made by Borrowers with respect to the Obligations shall be made
without deduction, defense, setoff or counterclaim. All proceeds remitted to the
Lenders shall be credited to the Obligations on the third Business Day following
the day such proceeds were received; provided, however, proceeds remitted to the
Lenders by wire transfer shall be credited to the Obligations on the first
Business Day following the day such proceeds were received. For the purpose of
calculating interest payable by Borrowers on the Obligations, all funds shall be
deemed received on the first Business Day following the day such proceeds were
received.
(b) To the extent that the Term A Notes have already been issued
with terms requiring payment of the principal amount on a date different than
the Maturity Date, the terms of the Term A Notes are hereby amended to conform
to the provisions of Section 2.7(a). For the sake of clarity, the principal
amount of the Term A Notes shall be due and payable on the Maturity Date.
(c) Borrowers may, at any time upon not less than ten (10) Business
Days prior notice to the Agent and the Lenders, prepay the Loans in whole or in
part, at 100% of the principal amount so prepaid (including capitalized PIK
interest thereon), plus accrued and unpaid interest on the Loans being prepaid,
plus the prepayment premium set forth below (the "Prepayment Premium"):
Date of Prepayment Prepayment Premium
From and after the Closing Date until the day before the second Make-Whole Amount with respect to the principal
anniversary of the Closing Date amount of the Loans prepaid
From the second anniversary of the Closing Date to the day before 8.00% of the principal amount of the Loans prepaid,
the third anniversary of the Closing Date including capitalized PIK interest thereon
From the third anniversary of the Closing Date to July 14, 2010 4.00% of the principal amount of the Loans prepaid, including
capitalized PIK interest thereon
From July 15, 2010 to the Maturity Date No prepayment premium.
Each such notice shall specify such prepayment date, the aggregate principal
amount of the Loans to be prepaid on such date, the principal amount of each
Loan owned by such Lender to be prepaid (determined in accordance with Section
2.7(d)), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by an Officer's
Certificate of Vitesse as to the estimated Prepayment Premium due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. In respect of
prepayments from and after the Closing Date until the day before the second
anniversary of the Closing Date, two Business Days prior to such prepayment, the
Borrower shall deliver to each Lender and the Agent an Officer's Certificate of
Vitesse specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
(d) Whenever any payment to be made hereunder shall be stated to be
due on a day that is not a Business Day, the payment may be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the amount of interest or fees due hereunder.
(e) With respect to all of the prepayments described above, such
prepayments shall be applied pro rata in payment of Term Loan A and Term Loan B
and shall be allocated among each Lender's portion of the Loans at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
(f) If the Loans are accelerated for any reason, including, without
limitation, because of default, sale, transfer or encumbrance (including by
operation of law or otherwise) or if the Loans are repaid for any reason
(including, without limitation, pursuant to a plan of reorganization or
otherwise as part of any insolvency, bankruptcy or similar proceeding) following
the occurrence of an Event of Default or otherwise and whether or not the Loans
are accelerated, the Prepayment Premium above will also be due and payable as
though said indebtedness was voluntarily prepaid and shall constitute part of
the Obligations, in view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of the Lenders' lost profits as a result thereof. The
Prepayment Premium shall be presumed to be the liquidated damages sustained by
the Lenders as the result of the early termination and the Borrowers agree that
it is reasonable under the circumstances currently existing. THE BORROWERS
EXPRESSLY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW WHICH
PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREPAYMENT PREMIUM IN
CONNECTION WITH ANY SUCH ACCELERATION.
(g) The Borrowers expressly agree that: (i) the Prepayment Premium
provided for herein is reasonable; (ii) the Prepayment Premium shall be payable
notwithstanding the then prevailing market rates at the time payment is made;
(iii) there has been a course of conduct between the Lenders and the Borrowers
giving specific consideration in this transaction for such agreement to pay the
Prepayment Premium; and (iv) the Borrowers shall be estopped hereafter from
claiming differently than as agreed to in this paragraph. The Borrowers
expressly acknowledge that their agreement to pay the Prepayment Premium to the
Lenders as herein described is a material inducement to the Lenders to make the
Loans.
2.8 Term of this Agreement.
This Agreement shall be effective until the Maturity Date. The
Commitment shall terminate (unless earlier terminated pursuant to the terms
hereunder) upon the Maturity Date and all Obligations (including interest
accrued thereon) shall become immediately due and payable without notice or
demand. Notwithstanding any termination, until all Obligations have been fully
paid and satisfied, the Collateral Agent shall be entitled to retain security
interests in and liens upon all Collateral, and even after payment of all
Obligations hereunder, Borrowers' obligation to indemnify the Agent and the
Lenders in accordance with the terms hereof shall continue.
2.9 Financial Accounting Positions; Tax Reporting.
Each of the parties hereto agrees to take reporting and other
positions with respect to the Loans which are consistent with the purchase price
of the Loans set forth herein for all financial accounting purposes, unless
otherwise required by applicable GAAP, Commission rules or other Requirements of
Laws.
2.10 Grant of Security Interest.
To secure the payment and performance of the Obligations, including
all renewals, extensions, restructurings and refinancings of any or all of the
Obligations, Borrowers are granting to the Collateral Agent for the benefit of
the Secured Parties (as defined in the Security Agreement) pursuant to the
Security Agreement, and other Loan Documents, a continuing security interest in,
lien and mortgage in and to and collateral assignment of the Collateral.
2.11 Borrowers Remain Liable.
Anything herein to the contrary notwithstanding: (a) Borrowers
shall remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein to perform all of their duties and
obligations thereunder to the same extent as if this Agreement or the other Loan
Documents had not been executed; (b) the exercise by the the Agent or the
Lenders of any of their respective rights under this Agreement or the other Loan
Documents shall not release Borrowers from any of their duties or obligations to
the parties under the contracts and agreements included in the Collateral; (c)
neither the Agent nor any Lender shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or the other Loan Documents, neither the Agent nor any Lender shall be
obligated to perform any of the obligations or duties of Borrowers thereunder or
to take any action to collect or enforce any claim for payment assigned under
this Agree ment or the other Loan Documents; and (d) neither Agent nor any
Lender shall have any liability in contract or tort for Borrowers' acts or
omissions.
2.12 Certain Floating Rate Loan Provisions.
(a) Any and all payments or reimbursements made hereunder shall be
made free and clear of and without deduction for any and all taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto (all such taxes, levies, imposts, deductions, charges or withholdings
and all liabilities with respect thereto referred to herein as "Tax
Liabilities"; excluding, however, taxes imposed on the net income of a Lender by
the jurisdiction under the laws of which such Lender is organized or doing
business or any political subdivision thereof and taxes imposed on its net
income by the jurisdiction of such Lender's applicable lending office or any
political subdivision). If Borrowers shall be required by law to deduct any such
Tax Liabilities from or in respect of any sum payable hereunder to Lenders, then
the sum payable hereunder shall be increased as may be necessary so that, after
making all required deductions, each Lender receives an amount equal to the sum
it would ha ve received had no such deductions been made.
(b) Notwithstanding any other provision of this Agreement, if after
the date of this Agreement any change in Applicable Law or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest or Prepayment Premium on any Loan or any fees, expenses
or indemnities payable hereunder (other than changes in respect of taxes imposed
on the overall net income of such Lender by the United States or the
jurisdiction in which such holder has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirements against assets
of, deposits with or for the account of or credit extended by any Lender or
shall impose on such Lender or the London interbank market any other condition
affecting this Agree ment or Loans extended by such Lender and the result of any
of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Loan or to reduce the amount of any payment received or
receivable by such Lender hereunder or under any of the Loan Documents (whether
of principal, interest, Prepayment Premium or otherwise), then the Borrowers
agree to pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.
(c) If any Lender shall have determined that the adoption after the
date hereof of any law, rule, regulation, agreement or guideline regarding
capital adequacy, or any amendment or modification after the date hereof to or
of any such law, rule, regulation, agreement or guideline (whether such law,
rule, regulation, agreement or guideline had been originally adopted before or
after the date hereof) or any change after the date hereof in the interpretation
or administration of any such law, rule, regulation, agreement or guideline by
any Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any Governmental
Authority has or would have the effect of reducing the rate of return on such
Lender's capital as a consequence of the Loans extended pursuant hereto to a
level below that which such Lender could have achieved but for such
applicability, a doption, change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy), then from time to time the
Borrowers agree to pay to such Lender such additional amount or amounts as will
compensate such holder for any such reduction suffered.
(d) A certificate of any Lender setting forth in reasonable detail
the amount or amounts necessary to compensate such Lender as specified in clause
(b) or (c) above shall be delivered to the Borrowers and shall be conclusive
absent manifest error. The Borrowers agree to pay such Lender the amount shown
as due on any such certificate within five Business Days after its receipt of
the same.
(e) If any Lender is funding any portion of its Loans through a
credit agreement, line of credit or other loan arrangement ("Funding Source
Agreement") which contains provisions similar to those set forth in this Section
2.12 and such Lender is required by the terms of such Funding Source Agreement
to pay to one or more lenders under such Funding Source Agreement increased
amounts similar to those payable under Section 2.12(b) or (c), then the
Borrowers shall promptly pay to such Lender, such additional amount or amounts
as may be necessary to compensate such Lender for the increased amounts payable
under such Funding Source Agreement. Such Lender may assume for purposes of
apportioning such increased amounts that the Loans extended hereunder by such
Lender were funded entirely by borrowings under such Funding Source Agreement.
(f) The provisions of this Section 2.12 shall remain operative and
in full force and effect regardless of the occurrence of the expiration of the
term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of any Lender.
2.13 Closing.
The funding of Term Loan A (the "Closing") occurred on June 7, 2006
(the "Closing Date"). The Term Loan B Advance will occur on the Term Loan B
Advance Date. The Notes evidencing the Term Loan B will be delivered to the
Lenders on the Term Loan B Advance Date.
2.14 Obligation of the Lenders.
The Borrowers hereby acknowledge and agree that no Lender shall
have any obligation to extend Term Loan B or otherwise consummate the
transactions contemplated by this Agreement (i) if any of the conditions
described in Section 3 have not been satisfied to such Lender's satisfaction at
or prior to the Term Loan B Advance Date, and (ii) in any event, if any of the
conditions described in Section 3 have not been satisfied to such Lender's
satisfaction at or prior to the Term Loan B Commitment Expiration Date.
Article 3
CONDITIONS TO THE LOANS
The obligation of each Lender to make the Loans (including the Term
Loan B Advance) and to perform any obligations hereunder shall be subject to the
reasonable satisfaction as determined by, or waived by, the Lenders of the
following conditions on or before the Closing Date or the Term Loan B Advance
Date (as applicable):
3.1 Representations and Warranties.
The representations and warranties of the Borrowers contained in
Article 5 hereof shall be true and correct in all material respects at and as of
the date hereof and the Closing Date, and the Term Loan B Advance Date (as
applicable) as if made at and as of such dates except for representations and
warranties made as of a specific date which shall be true and correct in all
material respects as of such specific date, and the Agent and the Lenders shall
have received as of the Closing (or the Term Loan B Advance Date, as applicable)
certificates to the foregoing effect, dated the Closing Date (or Term Loan B
Advance Date, as applicable) and executed by the Chief Executive Officer of each
of the Borrowers in the form of Exhibit C.
3.2 Compliance with this Agreement.
The Borrowers shall each have performed and complied in all
material respects with all of their agreements and conditions set forth or
contemplated herein that are required to be performed or complied with by the
Borrowers and the Agent and the Lenders shall have received at the Closing
certificates to the foregoing effect, dated the Closing Date (or Term Loan B
Advance Date, as applicable), and executed by the Chief Executive Officer of
each of the Borrowers in the form of Exhibit C.
3.3 Secretary's Certificates.
The Agent and the Lenders shall have received certificates from
each of the Borrowers, dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each Borrower, certifying (a) that the copies of the
Certificates of Incorporation and Bylaws of such Borrower as the case may be,
and resolutions of the Board of Directors of such Borrower, as the case may be,
approving the Loan Documents to which it is a party and the transactions
contemplated hereby and thereby are all true, complete and correct and remain
unamended and in full force and effect, and (b) the incumbency and specimen
signature of each officer of each Borrower executing any Loan Document.
3.4 Documents.
The Agent and the Lenders shall have received true, complete and
correct copies of such agreements, schedules, exhibits, certificates, documents,
financial information and filings as they may reasonably request in connection
with or relating to the Transactions, all in form and substance reasonably
satisfactory to the Agent.
3.5 Payment of Fees and Expenses.
The Borrowers shall have paid on or before the Closing Date or the
Term Loan B Advance Date, as applicable, (a) each Lender's and the Agent's
expenses required to be paid pursuant hereto, including the fees, charges and
disbursements of such Lender's or the Agent's counsel to the extent reflected in
a statement rendered to the Borrowers at least one Business Day prior to the
Closing Date, and (b) the Term Loan A Yield Enhancement Fee or Term Loan B Yield
Enhancement Fee, as applicable.
3.6 Opinion of Counsel
The Agent and the Lenders shall have received opinions of outside
counsel to the Delaware incorporated Borrowers, dated as of the Closing Date,
relating to the transactions contemplated by or referred to herein, containing
customary assumptions, exceptions and qualifications, in form and substance
reasonably acceptable to the Lenders.
3.7 Approval of Counsel to the Agent.
All actions and proceedings hereunder and all agreements,
schedules, exhibits, certificates, financial information, filings and other
documents required to be delivered by any Borrower hereunder or in connection
with the consummation of the transactions contemplated hereby, and all other
related matters, shall have been in form and substance reasonably acceptable to
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel to the Agent, in its reasonable
judgment (including, without limitation, the opinions of counsel referred to in
Section 3.6).
3.8 Consents and Approvals.
All consents, exemptions, authorizations of, or other actions by,
or notices to, or filings with, all Governmental Authorities and other Persons
in respect of all Requirements of Law and with respect to those Contractual
Obligations of the Borrowers necessary in connection with the execution,
delivery or performance (including, without limitation, approvals, if necessary,
of the Borrowers' stockholders and debtholders for the Loan Documents and the
payment of interest on the Loans) by the Borrowers shall have been made or
obtained and be in full force and effect, and the Agent and the Lenders shall
have been furnished with appropriate evidence thereof, and all waiting periods
shall have lapsed without extension or the imposition of any conditions or
restrictions.
3.9 Collateral Documents.
The Security Agreement, Investment Property Control Agreements, any
landlord or warehouse waivers, consents from licensors under Licenses, and all
other collateral filings deemed necessary by the Collateral Agent in its sole
and absolute discretion shall have been executed and delivered to the Collateral
Agent. Without limiting the generality of the foregoing, Borrowers acknowledge
that the Agent and the Lenders require (a) Investment Property Control
Agreements on all deposit accounts and accounts holding Investment Property
identified in Part I of Schedule 3.9 hereto, (b) waivers from all warehousemen
and consignees holding inventory identified in Part II of Schedule 3.9 hereto
and (c) consents and nondisturbance agreements from all lessors of the Real
Property identified in Part III of Schedule 3.9 hereto; provided, however, that
the Agent and the Lenders agree that (x) waivers from warehousemen, consignees
and lessors; (y) Investment Property Control Agreements identified in a
side-letter d elivered by the Agent to Borrowers at Closing and (z)
registrations of foreign patents and trademarks shall not be conditions to the
advance of Term Loan A. Solely with respect to the Term Loan B Advance, (A) the
Borrowers shall have executed and delivered to the Collateral Agent the Colorado
Mortgage and shall have delivered an opinion of counsel with respect thereto
reasonably satisfactory to the Collateral Agent, and (B) Vitesse and ▇▇▇▇▇ Fargo
Bank, National Association shall have executed and delivered the ▇▇▇▇▇ Fargo
Restricted Account Agreement in form and substance satisfactory to the
Collateral Agent, and the Collateral Agent shall have been furnished with
evidence satisfactory to it that (i) any remaining proceeds of Term Loan A shall
have been deposited in such account and (ii) the proceeds of Term Loan B shall
be deposited in such account.
3.10 Projections.
With the consent of the Borrowers, the Borrowers shall have
delivered to the Agent and the Lenders as of the Closing Date the Projections in
form and substance reasonably satisfactory to the Agent and the Lenders.
3.11 Good Standing Certificates.
The Borrowers shall have delivered to the Agent and the Lenders,
good standing certificates for each Borrower for its jurisdiction of
incorporation and all other material jurisdictions where it does business.
3.12 No Litigation.
No action, suit or proceeding before any court or any Governmental
Authority shall have been commenced or, to the Borrowers' knowledge, threatened,
no investigation by any Governmental Authority shall have been commenced and no
action, suit or proceeding by any Governmental Authority shall, to the
Borrowers' knowledge, have been threatened against any Borrower (a) seeking to
restrain, prevent or change the transactions contemplated hereby or questioning
the validity or legality of any of such transactions, or (b) which could
reasonably be expected to result in a Material Adverse Effect (except to the
extent specifically previously disclosed to Agent and the Lenders on or prior to
the Closing Date which exceptions for the avoidance of doubt shall include any
action, suit or proceeding which is linked to or results or follows from any
such specific prior disclosed action, suit or proceeding).
3.13 [Intentionally Omitted].
3.14 Solvency Certificate; Insurance Certificates.
On the Closing Date, the Agent and the Lenders shall have received:
(a) a solvency certificate from the Chief Financial Officer in the
form of Exhibit F; and
(b) evidence of insurance, in an amount and form reasonably
acceptable to the Agent, for the business and properties of the Borrowers and
its Subsidiaries.
3.15 Fees, Etc.
On the Closing Date, the Borrowers shall have paid to the Agent and
the Lenders all reasonable out of pocket costs, fees and expenses (including,
without limitation, reasonable legal fees and expenses) payable to the Agent and
the Lenders to the extent then due.
3.16 [Intentionally Omitted].
3.17 No Material Adverse Effect
No event or series of events has occurred subsequent to June 5,
2006 which singularly or as a whole reasonably can be expected to result in a
Material Adverse Effect.
3.18 [Intentionally Omitted].
3.19 Collateral
The Collateral Agent shall hold a perfected first priority lien or
security interest on all the Collateral, subject only to Permitted Encumbrances;
provided, however, that (i) a perfected security interest on foreign patents;
(ii) any local perfection required in respect of the assets of Vitesse
International, Inc. and (iii) possession by the Collateral Agent of stock
certificates in respect of interests of any Borrower in any of its Subsidiaries
shall not be conditions to Term Loan A.
Article 4
BORROWERS' CONDITIONS TO CLOSING
The obligations of the Borrowers to close the Transaction and to
perform their other respective obligations hereunder relating thereto shall be
subject to the reasonable satisfaction (as determined by, or waived by, the
Borrowers) of the following conditions on or before the Closing Date:
4.1 Representations and Warranties.
The representations and warranties of the Lenders contained in
Article 6 shall be true and correct in all material respects at and as of the
date hereof and the Closing Date as if made at and as of such dates.
4.2 Compliance with this Agreement.
The Lendesr shall have performed and complied in all material
respects with all of the agreements and conditions set forth or contemplated
herein that are required to be performed or complied with by the Lenders on or
before the Closing Date.
Article 5
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
The Borrowers hereby jointly and severally represent and warrant to
the Agent and the Lenders as of the Closing Date and the Term Loan B Advance
Date as follows:
5.1 Organization and Powers.
Except as set forth on Schedule 5.1, each of the Borrowers is a
corporation or limited liability company, as applicable, duly organized or
formed, validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization and qualified to do business in all states
where such qualification is required except those states in which a failure to
be so qualified is not reasonably expected to have a Material Adverse Effect.
Each of the Borrowers has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and proposed
to be conducted and to enter into each Loan Document.
5.2 Capitalization.
(a) The authorized capital Stock of each of the Borrowers and each
Subsidiary is as set forth on Schedule 5.2. All issued and outstanding shares of
capital Stock of each of the Borrowers are duly authorized and validly issued,
fully paid, nonassessable, free and clear of all Liens other than Permitted
Encumbrances, and such shares were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. The capital Stock
of each of the Borrowers other than Vitesse is owned by the equityholders and in
the amounts set forth on Schedule 5.2. No shares of the capital Stock of any
Borrower (other than Vitesse), other than those described above, are issued and
outstanding. There are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Borrower (other than Vitesse), of any shares of
capital Stock except as set forth in Schedule 5.2.
(b) On the Closing Date, except for the Subordinated Notes and
stock options and purchase rights set forth on Schedule 5.2, there will be no
outstanding securities convertible into or exchangeable for shares of Vitesse
capital Stock or options, warrants or other rights to purchase or subscribe for
shares of Vitesse capital Stock or contracts, commitments, agreements,
understandings or arrangements of any kind to which Vitesse or another Borrower
is a party relating to the issuance of any shares of capital Stock of Vitesse or
a Borrower.
5.3 Authorization of Borrowing; No Conflict.
Each Borrower has the corporate power and authority to incur the
Obligations and to grant Liens on the Collateral. This Agreement is, and the
other Loan Documents when executed and delivered will be, the legally valid and
binding obligations of the applicable Borrowers, each enforceable against the
applicable Borrower in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, reorganization, moratorium and
similar laws relating to or affecting creditors rights generally or by general
equity principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The execution, delivery and performance by each
Borrower of each Loan Document to which it is or will be a party and the
consummation of the transactions contemplated hereby and thereby: (a) has been
duly authorized by all necessary corporate, and if required, stockholder action;
(b) do not and will not contravene or violate the terms of the Certificate of In
corporation or Bylaws of such Borrower, as the case may be, as amended to date
or any Requirement of Law applicable to such Borrower, as the case may be, or
any of its assets, business or properties; (c) do not and will not (i) conflict
with, contravene, result in any violation or breach of or default under any
material Contractual Obligation (with or without the giving of notice or the
lapse of time or both), (ii) create in any other Person a right or claim of
termination or amendment of any material Contractual Obligation of such
Borrower, as the case may be, or (iii) require modification, acceleration or
cancellation of any material Contractual Obligation, and (d) do not and will not
result in the creation of any Lien (or obligation to create a Lien) against any
property, asset or business of any Borrower other than in favor of the
Collateral Agent. The Security Agreement created a legal, valid and effective
first priority Lien on the Collateral pledged by the Borrowers to the Collateral
Agent, subject o nly to Permitted Encumbrances.
5.4 Governmental Authorization; Third Party Consents.
Except as set forth on Schedule 5.4, no approval, consent,
compliance, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person in respect of any
material Requirement of Law or Contractual Obligation, and no lapse of a waiting
period under a Requirement of Law or Contractual Obligation, is necessary or
required in connection with the execution, delivery or performance by
(including, without limitation, the payment of interest on the Notes) any
Borrower of the Loan Documents to which it is a party or the consummation of the
transactions contemplated hereby or thereby.
5.5 Projections.
Except as set forth on Schedule 5.5 and save for the Non-GAAP
Financials and the Projections, all financial statements concerning Borrowers
and their Subsidiaries which will hereafter be furnished by Borrowers to the
Agent and the Lenders pursuant to this Agreement have been or will be prepared
in accordance with GAAP consistently applied throughout the periods involved
(except as disclosed therein). Unless otherwise disclosed to the Lenders, all
financial statements concerning Borrowers and their Subsidiaries which will
hereafter be furnished by Borrowers to the Agent and the Lenders pursuant to
this Agreement do or will present fairly the financial condition of the
corporations covered thereby as at the dates thereof and the results of their
operations for the periods then ended. The Projections delivered and to be
delivered have been and will be prepared by Borrowers in light of the past
operations of the business of Borrowers and their Subsidiaries, and such
Projections represent and will represent the reasonable estimate of Borrowers
and their senior management concerning the course of their business as of the
date such Projections are prepared and delivered. The Fiscal Year end of each
Borrower is September 30 in each year, and the first, second and third Fiscal
Quarters of Borrower end on December 31, March 30 and June 30, respectively, in
each year.
5.6 Indebtedness.
As of the Closing Date, no Borrower or any of its Subsidiaries has
(a) any Indebtedness except as reflected on Schedule 5.6; or (b) any material
Liabilities other than as reflected on the most recent financial statements
delivered to the Agent and the Lenders or as incurred in the ordinary course of
business following the date of the most recent financial statements delivered to
the Agent and the Lenders.
5.7 Account Warranties.
Except as set forth on Schedule 5.7, each Borrower represents,
warrants and covenants as to each Account that, at the time of its creation, the
Account is a valid, bona fide account, representing an undisputed indebtedness
incurred by the named Account Debtor for goods actually sold and delivered or
for services completely rendered; to the knowledge of the Borrowers, there are
no setoffs, offsets or counterclaims, genuine or otherwise outside of the
ordinary course of business, against the Account; to the knowledge of the
Borrowers, the Payor on such Account is not an Affiliate of a Borrower; such
Account has not arisen from a consignment, sale or return or a ▇▇▇▇ and hold
transaction; no agreement exists permitting any deduction or discount (other
than the discount stated on the invoice); a Borrower is the lawful owner of the
Account and has the right to assign the same to Collateral Agent, for the
benefit of itself and the Secured Parties (as defined in the Security
Agreement); the Account is free of all security interests, liens and
encumbrances other than Permitted Encumbrances, and the Account is due and
payable in accordance with its terms.
5.8 Names.
Schedule 5.8 sets forth (a) all names, trade names, fictitious
names and business names under which each Borrower currently conducts business
or has at any time during the past five years conducted business, and (b) the
federal employer identification number and organizational number of each
Borrower.
5.9 Locations.
Schedule 5.9 sets forth the location of each Borrower's principal
place of business, the location of each Borrower's books and records, the
location of all other offices of each Borrower and all locations of tangible
Collateral, and such locations are each Borrower's sole locations for its
business and the tangible Collateral.
5.10 Title to Properties; Liens.
Each Borrower and each of its Subsidiaries has good, sufficient and
legal title, subject to Permitted Encumbrances, to all its respective material
properties and assets. Except for Permitted Encumbrances, all such properties
and assets (including the Collateral) are free and clear of Liens. To the
knowledge of Borrowers and except as set forth on Schedule 5.10, there are no
actual, threatened or alleged defaults with respect to any leases of real
property under which any Borrower or any of its Subsidiaries is lessee or lessor
which could reasonably be expected to result in a Material Adverse Effect.
5.11 Litigation; Adverse Facts.
Except as set forth on Schedule 5.11, as of the Closing Date, there
are no judgments outstanding against any Borrower or affecting any property of
any Borrower that could reasonably be expected to have a Material Adverse
Effect, nor is there any action, charge, claim, demand, suit, proceeding,
petition, governmental investigation or arbitration now pending or, to the best
knowledge of Borrowers, threatened against or affecting any Borrower or any
property of any Borrower which could reasonably be expected to result in any
Material Adverse Effect.
5.12 Payment of Taxes.
Except as set forth on Schedule 5.12, all material Tax Returns and
reports of each Borrower and each of its Subsidiaries required to be filed by
any of them have been timely filed, and all Taxes, assessments, fees and other
governmental charges upon such Persons and upon their respective properties,
assets, income and franchises which are shown on such returns as due and payable
have been paid when due and payable. As of the Closing Date, none of the United
States income Tax Returns of any Borrower or any of its Subsidiaries are under
audit. Except as set forth on Schedule 5.12, to the knowledge of Borrowers, no
material Liens have been filed and no claims are being asserted with respect to
any such Taxes. The charges, accruals and reserves on the books of each Borrower
and each of its Subsidiaries in respect of any Taxes or other governmental
charges are in accordance with GAAP.
5.13 Performance of Agreements.
Except as set forth on Schedule 5.13, none of the Borrowers and
none of their respective Subsidiaries is in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation of any such Person, and to
the knowledge of Borrowers, no condition exists that, with the giving of notice
or the lapse of time or both, would constitute such a default that could
reasonably be expected to have a Material Adverse Effect.
5.14 Employee Benefit Plans.
Each Borrower, each of its Subsidiaries and each ERISA Affiliate is
in compliance in all material respects with all applicable provisions of ERISA,
the Code and all other applicable laws and the regulations and interpretations
thereof with respect to all Employee Benefit Plans. No material liability has
been incurred by any Borrower, any of its Subsidiaries or any ERISA Affiliate
which remains unsatisfied for any funding obligation, taxes or penalties with
respect to any Employee Benefit Plan.
5.15 Intellectual Property.
Each Borrower and each of its Subsidiaries owns, is licensed to use
or otherwise has the right to use, all Intellectual Property used in or
necessary for the conduct of its Business as currently conducted. As of the
Closing Date, all such Intellectual Property is identified (to the extent
identifiable) on Schedule 5.15 (other than Intellectual Property license
agreements of which none of the Borrowers or any of their Subsidiaries have up
to date records), and as of the Term Loan B Advance Date all such Intellectual
Property is identified (to the extent identifiable) on Schedule 5.15 (other
than license agreements with vendors permitting the use of Intellectual
Property in connection with the development with such vendors of Vitesse
technology, of which in the ordinary course Vitesse does not have accurate
records). To the knowledge of Borrowers, no Borrower is infringing on any
patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, franchises, licenses, any rights with respect
to the foregoing, or any other Intellectual Property rights of others which
individually or collectively could reasonably be expected to result in a
Material Adverse Effect on any Borrower and no Borrower is aware of any
material infringement by others of any such rights owned by any Borrower,
except as shown on Schedule 5.15.
5.16 Broker's Fees.
No broker's or finder's fee or commission will be payable by any
Borrower with respect to any of the transactions contemplated hereby, except for
▇▇▇▇▇▇ Brothers Inc., the fees and expenses of which will be paid by Vitesse.
5.17 Title to Real Property.
All Real Property leased by the Borrowers is correctly set forth on
Schedule 5.17. Except as set forth on Schedule 5.17, each Borrower has a valid
leasehold interest in all its leased Real Property. Except as set forth on
Schedule 5.17, the leased Real Property used in connection with the Business,
are used and operated in material compliance and conformity with all Contractual
Obligations and Requirements of Law, except to the extent that the failure so to
comply could not have a Material Adverse Effect. Each lease relating to leased
Real Property used in connection with the Business is in full force and effect
and each Borrower thereto enjoys peaceful and undisturbed possession thereunder.
There is no material default on the part of any Borrower or event or condition
which (with notice or lapse of time, or both) would constitute a material
default on the part of any Borrower to any such lease under any such lease that
could reasonably be expected to have a Material Adverse Effect. Except as set
forth on Schedule 5.17, there are no actions, suits or proceedings pending or,
to the knowledge of the Borrowers, threatened against the leased Real Property
used in connection with the Business, at law or in equity, before any
arbitrator, federal, state, municipal or governmental department, commission,
board, bureau, agency or instrumentality which would in any way affect title to
such leased Real Property.
5.18 Environmental Compliance.
Each Borrower has been and is currently in compliance in all
material respects with all applicable Environmental Laws, including obtaining
and maintaining in effect all permits, licenses or other authorizations required
by applicable Environmental Laws. There are no Environmental Claims pending or,
to the knowledge of the Borrowers, threatened against any Borrower or relating
to any real property currently or formerly owned, leased or operated by any
Borrower that could reasonably be expected to have a Material Adverse Effect.
5.19 Solvency.
The Borrowers on a consolidated basis are Solvent. There is no
material fact known to any Borrower that has or could have a Material Adverse
Effect and that has not been fully disclosed herein or in such other documents,
certificates and statements furnished to the Agents and the Lenders for use in
connection with the transactions contemplated hereby.
5.20 Disclosure.
No representation or warranty of any Borrower, any of its
Subsidiaries or any other Borrower contained in this Agreement, the financial
statements, or the other Loan Documents contains any untrue statement of a
material fact or omitted, omits or will omit to state a material fact necessary
in order to make the statements contained herein or therein not materially
misleading in light of the circumstances in which the same were made. The
Projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by such Persons to be
reasonable at the time made, it being recognized by the Agent and the Lenders
that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There is no material fact known to any
Borrower that has had or will have a Material Adverse Effect and that has not
been disclosed her ein or in such other documents, certificates and statements
furnished to the Agent and the Lenders for use in connection with the
transactions contemplated hereby.
5.21 Insurance.
Each Borrower and each of its Subsidiaries maintains insurance
policies for public liability, property damage for its business and properties,
and business interruption, no notice of cancellation has been received with
respect to such policies and each Borrower and each of its Subsidiaries is in
compliance in all material respects with all conditions contained in such
policies. All such policies will remain in full force and effect and will not in
any way be affected by, or terminate or lapse by reason of any of the
transactions contemplated hereby.
5.22 Compliance with Laws.
Except as set forth on Schedule 5.22, to the knowledge of the
Borrowers, no Borrower or any of its Subsidiaries is in violation of any law,
ordinance, rule, regulation, order, policy, guideline or other Requirement of
Law of any domestic or foreign government or any instrumentality or agency
thereof, having jurisdiction over the conduct of its business or the ownership
of its properties reasonably likely to result in a Material Adverse Effect,
including, without limitation, any violation relating to any use, release,
storage, transport or disposal of any Hazardous Material, which violation would
subject any Borrower or any of its Subsidiaries, or any of its officers to
criminal liability or have a Material Adverse Effect, and no such violation has
been alleged.
5.23 Bank and Investment Property Accounts.
Schedule 5.23 sets forth the account numbers and locations of all
bank accounts and each account in which Investment Property of any Borrower and
any of its Subsidiaries is held. As of the Closing Date, the Borrowers' and
their Subsidiaries' accounts with Bank of America have a principal balance of
not more than $350,000 in aggregate.
5.24 Subsidiaries.
Borrowers have no Subsidiaries other than as set forth on Schedule
5.24.
5.25 Employee Matters.
Except as set forth on Schedule 5.25, (a) no Borrower nor any of
such Borrower's employees is subject to any collective bargaining agreement, (b)
no petition for certification or union election is pending with respect to the
employees of any Borrower and no union or collective bargaining unit has sought
such certification or recognition with respect to the employees of any Borrower
and (c) there are no strikes, slowdowns, work stoppages or controversies pending
or, to the knowledge of Borrowers, threatened between any Borrower and its
respective employees (other than employee grievances arising in the ordinary
course of business) that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
5.26 Investment Company/Government Regulations.
None of the Borrowers is, or after giving effect to this Loan
Agreement and the extension of the Loans will be, subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940 or to any federal or state statute or regulation
limiting its ability to incur indebtedness for borrowed money.
5.27 [Intentionally Omitted].
5.28 Licenses and Approvals.
(a) Material Licenses. Each Borrower has obtained and continuously
maintained all Material Licenses necessary for the operation of the Business.
(b) Permits. To Borrowers' knowledge, each Material License with
respect to the Business was duly and validly issued by the Governmental
Authority pursuant to procedures which comply with all Requirements of Law and
no Borrower has any knowledge of the occurrence of any event or the existence of
any circumstance which, in the reasonable judgment of such Borrower, is likely
to lead to the revocation of any Material License. Each Borrower has the right
to use all of the Material Licenses and all permits required for the operation
of the Business as presently conducted and as proposed to be conducted
immediately following the Closing Date. Each such Material License is in full
force and effect and does not, to the knowledge of the Borrowers, conflict with
the valid rights of others in each case where such failure to be in full force
and effect or conflict could have a Material Adverse Effect.
(c) Investigations. No Borrower is a party to or has knowledge of
any investigation, notice of apparent liability, violation, forfeiture or other
order or complaint issued by or before any court or regulatory body, or of any
other proceedings which could in any manner threaten or adversely affect the
validity or continued effectiveness of the Material Licenses of the Borrowers or
give rise to any order of forfeiture. The Borrowers have no reason to believe
that the Material Licenses will not be renewed in the ordinary course. Each
Borrower has filed in a timely manner all material reports, applications,
documents, instruments and information required to be filed by it pursuant to
applicable rules and regulations or requests of every regulatory body having
jurisdiction over any of its Material Licenses.
(d) Facilities. To the knowledge of the Borrowers, no Borrower has
received written notice that the Facilities used in connection with the Business
of the Borrowers currently violate in any material respect the provisions of any
applicable building codes, fire regulations, building restrictions or other
governmental ordinances, orders, regulations or Requirement of Law and each such
Facility is zoned so as to permit the commercial uses intended by the owner or
occupier thereof and there are no outstanding variances or special use permits
materially affecting any of the facilities or the uses thereof.
Article 6
REPRESENTATIONS AND WARRANTIES OF THE LENDER
Each Lender hereby severally and not jointly represents and
warrants as follows:
6.1 Authorization; No Contravention.
The execution, delivery and performance by such Lender of this
Agreement: (a) is within its power and authority and has been duly authorized by
all necessary action; (b) does not and will not contravene the terms of its
organizational documents or any amendment thereof; and (c) does not and will not
violate, conflict with or result in any breach or contravention of any of its
Contractual Obligations, or any order or decree directly relating to it.
6.2 Binding Effect.
This Agreement has been duly executed and delivered by such Lender
and this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
6.3 No Legal Bar.
The execution, delivery and performance of this Agreement by such
Lender will not violate any Requirement of Law applicable to it.
6.4 [Intentionally Omitted].
6.5 ERISA.
No part of the funds used by such Lender to make the Loans
hereunder constitutes assets of any "employee benefit plan" (as defined in
Section 3(3) of ERISA) or "plan" (as defined in Section 4975 of the Code).
6.6 Broker's, Finder's or Similar Fees.
There are no brokerage commissions, finder's fees or similar fees
or commissions payable in connection with the transactions contemplated hereby
based on any agreement, arrangement or understanding with such Lender or any
action taken by it, except for UBS Securities LLC, the fees and expenses of
which will be paid by the Lenders.
6.7 Governmental Authorization; Third Party Consent.
No approval, consent, compliance, exemption, authorization, or
other action by, or notice to, or filing with, any Governmental Authority or any
other Person in respect of any Requirement of Law, and no lapse of a waiting
period under a Requirement of Law, is necessary or required in connection with
the execution, delivery or performance by it or enforcement against such Lender
of this Agreement or the transactions contemplated hereby.
Article 7
INDEMNIFICATION
7.1 Indemnification.
In addition to all other sums due hereunder or provided for in this
Agreement, Borrowers agree jointly and severally to indemnify and hold harmless
the Agent, each Lender and their respective Affiliates and each of their
respective officers, directors, lenders, employees, subsidiaries, partners,
stockholders, attorneys, accountants and controlling persons (each, an
"Indemnified Party") to the fullest extent permitted by law from and against any
and all losses, claims, damages, expenses (including, without limitation,
reasonable fees, disbursements and other charges of counsel and costs of
investigation incurred by an Indemnified Party in any action or proceeding
between any Borrower and such Indemnified Party (or Indemnified Parties) or
between an Indemnified Party (or Indemnified Parties) and any third party or
otherwise) or other Liabilities or losses (collectively, "Liabilities")
resulting from or arising out of any material breach of any representation or
warranty, covenant or agreement of any Borrower in this Agreement, the Security
Agreement, the Notes or the other Loan Documents, including without limitation,
the failure to make payment when due of amounts owing to the Agent or the
Lenders pursuant to this Agreement, the Notes or the other Loan Documents, on
the due date thereof (whether at the scheduled maturity, by acceleration or
otherwise) or any legal, administrative or other actions (including, without
limitation, actions brought by the Agent, any Lender, any Borrower or any
holders of equity or indebtedness of any Borrower or derivative actions brought
by any Person claiming through or in the Borrowers' or any Subsidiary's name,
other than any action against the Agent or a Lender for its breach of this
Agreement or any other Loan Document), proceedings or investigations (whether
formal or informal), or written threats thereof, based upon, relating to or
arising out of the Loan Documents, the transactions contemplated thereby, or any
Indemnified Party's role therein or in the transact ions contemplated thereby;
provided, however, that no Borrower shall be liable under this Section 7.1 to an
Indemnified Party to the extent that it is finally judicially determined that
such Liabilities resulted primarily from the willful misconduct or gross
negligence of such Indemnified Party; provided, further, that if and to the
extent that such indemnification is unenforceable for any reason, the Borrowers
shall make the maximum contribution to the payment and satisfaction of such
Liabilities which shall be permissible under applicable laws. In connection with
any obligation of the Borrowers to indemnify for expenses as set forth above,
the Borrowers further agree, upon presentation of appropriate invoices
containing reasonable detail, to reimburse each Indemnified Party for all such
reasonable expenses (including, without limitation, fees, disbursements and
other charges of counsel and costs of investigation incurred by an Indemnified
Party in any action or proceeding between the Borrowers and such In demnified
Party (or Indemnified Parties) or between an Indemnified Party (or Indemnified
Parties) and any third party or otherwise) as they are incurred by such
Indemnified Party; provided, however, that if an Indemnified Party is reimbursed
hereunder for any expenses, such reimbursement of expenses shall be refunded to
the extent it is finally judicially determined that the Liabilities in question
resulted primarily from the willful misconduct or gross negligence of such
Indemnified Party.
7.2 Procedure; Notification.
Each Indemnified Party under this Article 7 will, promptly after
the receipt of notice of the commencement of any action, investigation, claim
or other proceeding against such Indemnified Party in respect of which
indemnity may be sought from the Borrowers under this Article 7, notify the
Borrowers in writing of the commencement thereof. The delay or omission of any
Indemnified Party so to notify the Borrowers of any such action shall not
relieve the Borrowers from any liability which they may have to such
Indemnified Party, except to the extent that such delay or omission impairs the
Borrowers' ability to defend the action, claim or other proceeding. In case any
such action, claim or other proceeding shall be brought against any Indemnified
Party and it shall notify the Borrowers of the commencement thereof, the
Borrowers shall be entitled to assume the defense thereof at their own expense,
with counsel satisfactory to such Indemnified Party in its reasonable judgment;
provided, however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense. Notwithstanding the foregoing,
in any action, claim or proceeding in which any of the Borrowers, on the one
hand, and an Indemnified Party, on the other hand, is, or is reasonably likely
to become, a party, such Indemnified Party shall have the right to employ
separate counsel at the Borrowers' expense and to control its own defense of
such action, claim or proceeding if, in the reasonable opinion of counsel to
such Indemnified Party, a conflict or potential conflict exists between the
Borrowers, on the one hand, and such Indemnified Party, on the other hand, that
would make such separate representation advisable; provided, however, that in
no event shall the Borrowers be required to pay fees and expenses under this
Article 7 for more than one firm of attorneys in any jurisdiction in any one
legal action or group of related legal actions. The Borrowers each agree that
it will not, without the prior written consent of the Required Lenders, which
consent shall not be unreasonably withheld or delayed, settle, compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding relating to the matters contemplated hereby (if any Indemnified
Party is a party thereto or has been actually threatened to be made a party
thereto) unless such settlement, compromise or consent includes an
unconditional release of the Agent, the Lenders and each other Indemnified
Party from all liability arising or that may arise out of such claim, action
or proceeding. The Borrowers shall not be liable for any settlement of any
claim, action or proceeding effected against an Indemnified Party without its
written consent, which consent shall not be unreasonably withheld. The rights
accorded to Indemnified Parties hereunder shall be in addition to any rights
that any Indemnified Party may have at common law, by separate agreement or
otherwise.
Article 8
COVENANTS
Each of the Borrowers covenants and agrees that, until payment in
full of all Obligations and the termination of the Commitment, unless the
Required Lenders shall otherwise give their prior written consent, the Borrowers
shall perform, and shall cause each of their Subsidiaries to perform, all
covenants in this Article 8 applicable to such Person.
8.1 Financial Statements and Other Reports
Borrowers shall maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements after the
Restatement Date in conformity with GAAP. Borrowers will deliver to Agent and
each Lender the financial statements and other reports described below.
(a) Monthly Financials (2006 Non-GAAP Period). For the period from
the Closing Date to and including December 31 2006 (the "2006 Non-GAAP Period"),
as soon as available and in any event within thirty (30) days after the end of
each month falling within the 2006 Non-GAAP Period, Borrowers shall deliver (i)
the consolidated statements of income and cash flow of Borrowers and their
Subsidiaries for such month, and (ii) a schedule of the outstanding Indebtedness
for borrowed money of Borrowers and their Subsidiaries describing in reasonable
detail each such debt issue or loan outstanding and the principal amount and
amount of accrued and unpaid interest with respect to each such debt issue or,
loan and (iii) a report analyzing the Borrowers' working capital; it being
understood and agreed by the Lenders that (A) any financial statements the
subject of this paragraph (a) which relate to months falling within the 2006
Non-GAAP Period shall not be prepared in accordance with GAAP and (B) for those
mon th end dates which fall on the last day of a Fiscal Quarter the Borrower
shall have no obligation to deliver financial information under his paragraph
(a).
(b) Monthly Financials (the Pre-Restatement Period). For the period
from January 1, 2007 until the Restatement Date (the "Pre-Restatement Period")
as soon as available and in any event within thirty (30) days after the end of
each month falling within the Pre-Restatement Period, Borrowers shall deliver
(i) the consolidated statements of income and cash flow of Borrowers and their
Subsidiaries for such month, and (ii) a schedule of the outstanding Indebtedness
for borrowed money of Borrowers and their Subsidiaries describing in reasonable
detail each such debt issue or loan outstanding and the principal amount and
amount of accrued and unpaid interest with respect to each such debt issue or,
loan and (iii) a report analyzing the Borrowers' working capital; it being
understood and agreed by the Lenders that for those month end dates which fall
on the last day of a Fiscal Quarter the Borrower shall have no obligation to
deliver financial information under this paragraph (b).
(c) Monthly Financials (from the Restatement Date). For the period
from the Restatement Date, as soon as available and in any event within thirty
(30) days after the end of each month, Borrowers shall deliver (i) the
consolidated balance sheets of Borrowers and their Subsidiaries as at the end of
such month and the related consolidated statements of income, stockholders'
equity (if requested by the Agent or any Lender) and cash flow for such month
and for the period from the beginning of the then current Fiscal Year to the end
of such month, and (ii) a schedule of the outstanding Indebtedness for borrowed
money of Borrowers and their Subsidiaries describing in reasonable detail each
such debt issue or loan outstanding and the principal amount and amount of
accrued and unpaid interest with respect to each such debt issue or, loan and
(iii) a report analyzing the Borrowers' working capital; it being understood and
agreed by the Lenders that for those month end dates which fall on the last day
of a Fiscal Quarter the Borrower shall have no obligation to deliver financial
information under this paragraph (c).
(d) Quarterly Financials (2006 Non-GAAP Period). For the 2006
Non-GAAP Period, as soon as available and in any event within sixty (60) days
after the end of each Fiscal Quarter, Borrowers shall deliver (i) the
consolidated balance sheets of Borrowers and their Subsidiaries as at the end of
such quarter and the related consolidated statement s of income, stockholders'
equity (if requested by the Agent or any Lender) and cash flow for such quarter,
and (ii) a schedule of the outstanding Indebtedness for borrowed money of
Borrowers and their Subsidiaries describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or, loan and (iii) a report
analyzing the Borrowers' working capital; it being understood and agreed by the
Lenders that any financial statements the subject of this paragraph (d) which
relate to Fiscal Quarters which fall within the 2006 Non-GAAP Period shall not
be prepar ed in accordance with GAAP.
(e) Quarterly Financials (the Pre-Restatement Period). For the
Pre-Restatement Period, as soon as available and in any event within forty-five
(45) days after the end of each Fiscal Quarter, Borrowers shall deliver (i) the
consolidated balance sheets of Borrowers and their Subsidiaries as at the end of
such quarter and the related consolidated statements of income, stockholders'
equity (if requested by the Agent or any Lender) and cash flow for such quarter,
and (ii) a schedule of the outstanding Indebtedness for borrowed money of
Borrowers and their Subsidiaries describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or, loan and (iii) a report
analyzing the Borrowers' working capital; it being understood and agreed by the
Lenders that the consolidated balance sheets to be provided under this paragraph
(e) shall not be prepared in accordance with GAAP.
(f) Quarterly Financials (from the Restatement Date). For the
period from the Restatement Date, as soon as available and in any event within
forty-five (45) days after the end of each Fiscal Quarter, Borrowers shall
deliver (i) the consolidated balance sheets of Borrowers and their Subsidiaries
as at the end of such quarter and the related consolidated statements of income,
stockholders' equity (if requested by the Agent or any Lender) and cash flow for
such quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, and (ii) a schedule of the outstanding
Indebtedness for borrowed money of Borrowers and their Subsidiaries describing
in reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or, loan and (iii) a report analyzing the Borrowers' working capital.
(g) Year-End Financials (from the Restatement Date). After the
Restatement Date, as soon as available and in any event within ninety (90) days
after the end of each such Fiscal Year ending after the Restatement Date,
Borrowers will deliver: (i) the consolidated balance sheet of Borrowers and
their Subsidiaries as at the end of such year and the related consolidated
statements of income, stockholders' equity and cash flow for such Fiscal Year;
(ii) a schedule of the outstanding Indebtedness of Borrowers and their
Subsidiaries describing in reasonable detail each such debt issue or loan
outstanding and the principal amount and amount of accrued and unpaid interest
with respect to each such debt issue or loan; (iii) a report with respect to the
financial statements from an independent certified public accounting firm of
recognized national standing selected by Borrowers and reasonably acceptable to
the Agent, which report shall be unqualified as to going concern and scope of
audit of Borrowers an d their Subsidiaries and shall state that (1) such
financial statements present fairly the financial position of Borrowers and
their Subsidiaries as at the dates indicated and the results of their operations
and cash flow for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years and (2) that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards; and (iv) copies
of the consolidated financial statements of Borrowers and their Subsidiaries,
including (1) consolidated balance sheets of Borrowers and their Subsidiaries as
at the end of such Fiscal Year showing intercompany eliminations, if applicable
and (2) related consolidated statements of earnings of Borrowers and their
Subsidiaries showing intercompany eliminations, if applicable.
(h) Accountants' Certification and Reports. Together with each
delivery of SEC Reports containing annual financial statements of Borrowers and
their Subsidiaries pursuant to Section 8.1(b), Borrowers shall deliver a written
statement by its Chief Financial Officer (a) stating that the examination has
included a review of the terms of this Agreement as same relate to accounting
matters and (b) stating whether, in connection with the examination, any
condition or event that constitutes a Default or an Event of Default has come to
their attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof. Promptly upon receipt
thereof, Borrowers will deliver copies of all significant reports submitted to
Borrowers by independent public accountants in connection with each annual,
interim or special audit of the financial statements of Borrowers made by such
accountants, including the comment letter submitted by such accountants to
managemen t in connection with their annual audit.
(i) Compliance Certificate. Together with the delivery of each set
of financial statements pursuant to Section 8.1, Borrowers shall deliver a
Compliance Certificate executed by Borrowers' Chief Financial Officer.
(j) Management Report. Together with each delivery of financial
statements of Borrowers and the Subsidiaries pursuant to paragraphs (a) and (b)
of this Section 8.1 Borrowers shall deliver to the Agent and the Lenders (i) a
copy of the financial statements provided to Vitesse's board of directors for
such reporting period and (ii) to the extent not included in such financial
statements, a report (1) setting forth in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the most recent budget delivered to the Agent and the
Lenders, (2) discussing the reasons for any significant variations and (3)
setting forth any other items presented to or discussed by Vitesse's board of
directors with respect to the preparation, calculation or determination of the
financial statements. The information above shall be presented in reasonable
detail and shall be certified by the Chief Financial Officer of Borrowers to the
effect th at such information fairly presents the results of operations and
financial condition of Borrowers and their Subsidiaries as at the dates and for
the periods indicated.
(k) Government Notices. Borrowers shall deliver to the Agent and
the Lenders promptly after receipt copies of all notices, requests, subpoenas,
inquiries or other writings received from any Governmental Agency concerning any
Employee Benefit Plan, the violation or alleged violation of any Environmental
Laws, the storage, use or disposal of any Hazardous Material, the violation or
alleged violation of the Fair Labor Standards Act, or Borrowers' failure to make
payment of any Taxes exceeding $100,000 or the commencement of any tax audit.
(l) Events of Default, etc. Promptly upon either the Chief
Executive Officer or Chief Financial Officer of Vitesse obtaining knowledge of
any of the following events or conditions, Borrowers shall deliver a certificate
of Borrowers' Chief Executive Officer or Chief Financial Officer specifying the
nature and period of existence of such condition or event and what action
Borrowers have taken, are taking and propose to take with respect thereto: (i)
any condition or event that constitutes an Event of Default or Default; or (ii)
any notice of default that any Person has given to any Borrower or any of its
Subsidiaries or any other action taken with respect to a claimed default that is
reasonably likely to have a Material Adverse Effect.
(m) Trade Names. Borrowers shall give the Agent at least thirty
(30) days advance written notice of any change of name of any Borrower or of any
new trade name or fictitious business name of any Borrower. Each Borrower's use
of any trade name or fictitious business name will be in compliance with all
laws regarding the use of such names.
(n) Locations. Borrowers shall give the Agent at least thirty (30)
days advance written notice of any change in any Borrower's principal place of
business or any change in the location of its books and records or the
Collateral or of any new location for its books and records or the Collateral.
(o) Bank Accounts.
(i) Borrowers shall deliver to the Collateral Agent an executed
Investment Property Control Agreement in form and substance satisfactory to
the Collateral Agent in respect of any new bank accounts any Borrower or any
of its Subsidiaries intends to establish prior to its opening same.
(ii) Borrowers shall provide written notice (which notice may be
delivered by email from an Officer of Vitesse to an email address designated by
the Agent) at least one Business Day prior to any withdrawal of funds from the
▇▇▇▇▇ Fargo Account, which notice shall state (i) the proposed use of proceeds
of such advance, (ii) whether such use of proceeds will constitute a Default
under Section 8.10 hereof, and (iii) whether any Default or Event of Default
shall have occurred and be continuing; provided that Vitesse shall initiate the
wire transfers set forth in Part II of Exhibit A to the Funds Flow Memorandum
immediately upon receipt of the wire transfers set forth in Part I of Exhibit A
to the Funds Flow Memorandum and no notice of such withdrawals need be delivered
pursuant to this Section 8.10 . Without limiting the rights of the Agent and the
Lenders hereunder and under the other Loan Documents, the Borrowers hereby
acknowledge that (A) the Agent may deliver the Instructions under and as defined
in the ▇▇▇▇▇ Fargo Restricted Account Agreement if the use of proceeds of any
withdrawal of funds from the ▇▇▇▇▇ Fargo Account would constitute a Default
under Section 8.10 hereof or any Default or Event of Default shall have occurred
and be continuing at the time any notice delivered pursuant to this Section
8.1(o)(ii) is given, and (B) any withdrawal by the Borrowers of funds from the
▇▇▇▇▇ Fargo Account without the written consent of the Agent following such
delivery of the Instructions shall be an Event of Default hereunder.
(p) Litigation. Promptly upon either the Chief Executive Officer or
Chief Financial Officer of Vitesse obtaining knowledge of (i) the institution of
any action, suit, proceeding, governmental investigation or arbitration against
or affecting any Borrower or any property of any Borrower not previously
disclosed by Borrowers to the Agent which is reasonably likely to have a
Material Adverse Effect or (ii) any material development in any action, suit,
proceeding, governmental investigation or arbitration at any time pending
against or affecting any Borrower or any property of any Borrower which is
reasonably likely to have a Material Adverse Effect, Borrowers will promptly
give notice thereof to the Agent and the Lenders and provide such other
information as may be reasonably available to them to enable the Agent, the
Lenders and their respective counsel to evaluate such matter.
(q) Projections. As soon as available and in any event no later
than sixty (60) days after the end of each Fiscal Year, Borrowers will deliver
combined Projections of Borrowers and their Subsidiaries for such Fiscal Year,
including income statements, balance sheets, statements of cash flow, and
financial covenants calculations, and set forth Fiscal Quarter by Fiscal
Quarter, together with all material assumptions made in connection therewith,
all in form and substance satisfactory to the Agent.
(r) Subordinated Indebtedness and Other Indebtedness Notices.
Borrowers shall promptly deliver copies of all notices given or received by any
Borrower and any of their Subsidiaries with respect to noncompliance with any
term or condition related to any Subordinated Indebtedness and other
Indebtedness, and shall promptly notify the Agent and the Lenders of any event
of default with respect to any Subordinated Indebtedness or other Indebtedness.
(s) Tax Lien Information; Information Regarding Financial
Performance. Borrowers shall promptly (and in any event within three Business
Days after receipt) deliver to the Agent copies of any and all notices,
correspondence, pleadings, orders, agreements or other documents received by any
Borrower from (or sent by any Borrower to) the Internal Revenue Service or any
other Governmental Authority with respect to any tax Lien or any penalties,
interest assessments, fees and late charges relating thereto heretofore, now or
hereafter arising which is reasonably likely to have a Material Adverse Effect.
Without limiting the foregoing, Borrowers shall notify the Agent immediately of
any enforcement action or attempted enforcement action (or any oral or written
communication by Internal Revenue Service or any other governmental authority of
its intent to take or pursue any enforcement action) by the Internal Revenue
Service or any other governmental authority against any Borrower or any of its
assets w ith respect to any tax Lien now or hereafter arising. Borrowers shall
promptly (and in any event within three Business Days) notify the Agent upon
receiving notice of the filing of any tax Liens against any Borrower or any of
their Subsidiaries.
(t) Securities Filings. Borrowers shall deliver to the Agent and
the Lenders all SEC Filings made by Vitesse within five (5) days of filing.
(u) Financial Reporting to Holders of Subordinated Indebtedness.
Borrowers shall promptly deliver to the Agent and the Lenders all financial
reporting delivered by any Borrower to holders of Subordinated Indebtedness.
(v) Additional Information. Borrowers shall promptly deliver to the
Agent and the Lenders complete copies of any and all information and data of any
nature whatsoever provided by any Borrower to any other Person from whom any
Borrowers has incurred Indebtedness for money borrowed to the extent that such
information is being furnished to such Person in its capacity as a holder of
such Indebtedness.
(w) Other Information. With reasonable promptness, the Borrowers
shall deliver such other information and data with respect to any Borrower, any
Subsidiary or the Collateral as the Agent or the Required Lenders may reasonably
request from time to time.
8.2 Access to Accounts.
Borrowers authorize the Agent and the Lenders to discuss the
financial condition and financial statements of Borrowers and their Subsidiaries
with Borrowers' independent public accountants upon reasonable notice to
Borrowers of their intention to do so, and authorizes such accountants to
respond to all of the Agent's and the Lenders' inquiries with regard to the
financial condition and financial statements of Borrowers and their
Subsidiaries.
8.3 Inspection.
Borrowers shall permit the Agent and the Lenders and any authorized
representatives designated by the Agent or such Lenders to visit and inspect any
of the properties or Facilities of Borrowers or any of their Subsidiaries,
including their financial and accounting records, and to make copies and take
extracts therefrom, and to discuss their affairs, finances and business with
their officers and independent public accountants, at such reasonable times
during normal business hours and as often as may be reasonably requested.
Borrowers acknowledge that the Agent and the Lenders intend to make such
inspections on at least a quarterly basis. Nevertheless, the Agent and the
Lenders agree to give the Borrowers and where relevant their officers and
independent public accountants as much notice as is reasonably possible of any
such inspection permitted under this Section 8.3.
8.4 Collateral Records.
Borrowers shall keep full and accurate books and records relating
to the Collateral and shall ▇▇▇▇ such books and records to indicate the
Collateral Agent's security interests in the Collateral.
8.5 Corporate Existence.
Each Borrower will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect its corporate existence and
all licenses, rights and franchises material to its business. Each Borrower will
promptly notify the Agent and the Lenders of any change in its or its
Subsidiaries' or Facilities' ownership, licensure status or corporate structure
which is reasonably likely to have a Material Adverse Effect.
8.6 Payment of Taxes.
Each Borrower will, and will cause each of its Subsidiaries to, pay
all Taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or with respect to any of its franchises, business,
income or property before any penalty that could reasonably be expected to have
a Material Adverse Effect accrues thereon provided that no such tax need be paid
if the appropriate Borrower or one of its Subsidiaries is contesting same in
good faith by appropriate proceedings promptly instituted and diligently
conducted and if the appropriate Borrower or such Subsidiary has established
appropriate reserves (and after the Restatement Date such reserves shall be in
conformity with GAAP).
8.7 Maintenance of Properties; Insurance.
Each Borrower will maintain or cause to be maintained in good
repair, working order and condition all material properties used in the business
of such Borrower and its Subsidiaries and will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Each Borrower will
maintain or cause to be maintained, with financially sound and reputable
insurers, public liability and property damage insurance with respect to its
business and properties and the business and properties of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained by
corporations of established reputation engaged in similar businesses and in
amounts consistent with such Borrowers' prior practices.
8.8 Compliance with Laws.
Each Borrower will, and will cause each of its Subsidiaries to,
comply with the requirements of all applicable laws, rules, regulations, other
Requirements of Law and orders of any Governmental Authority as now in effect
and which may be imposed in the future in all jurisdictions in which such
Borrower or any of its Subsidiaries is now doing business or may hereafter be
doing business, other than those laws the noncompliance with which would not
have a Material Adverse Effect.
8.9 Further Assurances.
Each Borrower shall, and shall cause each of its Subsidiaries to,
from time to time, execute such guaranties, financing or continuation
statements, documents, security agreements, reports and other documents, or
deliver to the Collateral Agent such instruments, certificates of title or other
documents, as the Collateral Agent at any time may reasonably request to
evidence, confirm, perfect or otherwise implement the pledges of security
interests in the Collateral and guaranties as security for repayment of the
Obligations contemplated by the Loan Documents.
8.10 Use of Proceeds.
The Borrowers shall use the cash proceeds of the Loans only for the
following: (a) the cash collateralizing of the Company's outstanding letters of
credit issued pursuant to the Second Amended and Restated Loan Agreement; (b)
fees and expenses associated with the Loan Documents; and (c) working capital,
capital expenditures and other general corporate purposes. The proceeds of the
Loans shall not be used for any payment to the Borrowers' shareholders in
settlement of shareholder lawsuits or otherwise without the prior written
consent of the Required Lenders. In all instances, proceeds of Loans shall only
be used in a manner that is consistent with all applicable laws, statutes,
rules and regulations. No portion of the proceeds of any Loan shall be used by
any Borrower or any of its Subsidiaries for the purpose of purchasing or
carrying margin stock within the meaning of Regulation U, or in any manner that
might cause the borrowing or the application of such proceeds to violate
Regulations T, U or X or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the Exchange Act.
8.11 Collateralization of Real Estate
If any Borrower owns any Real Estate other than the Real Estate
already subject to the Colorado Mortgage, such Borrower shall deliver to
Collateral Agent promptly a deed of trust or mortgage in respect thereof, in
form and substance satisfactory to Collateral Agent in its sole and absolute
discretion.
8.12 Landlord Waivers
If (i) any of the Leases in respect of the Real Property identified
on Schedule 8.12 hereto is renewed or any Borrower otherwise occupies or
maintains any Collateral at any such Real Property after the date of termination
of such Lease identified on such Schedule, or (ii) any Borrower enters into a
Lease with respect to which the aggregate amount of all rents payable during any
one year exceeds $1,200,000, then the applicable Borrower(s) shall deliver to
the Collateral Agent, within 30 days of the date of such termination or the date
of such Lease, as applicable, a landlord waiver in respect of such Real Property
in form and substance reasonably satisfactory to the Collateral Agent.
8.13 Post-Closing Covenants
The failure by Borrowers to satisfy the post-closing covenants set
forth in Part I of Schedule 8.13 within the prescribed time periods shall
constitute an Event of Default. The Borrowers shall use their commercially
reasonable efforts to satisfy the post-closing covenants set forth in Part II of
Schedule 8.13 within the prescribed time periods.
Article 9
CO-BORROWER ISSUES
9.1 Joint and Several Liability
Each Borrower shall be jointly and severally liable for the payment of
all Obligations as a primary obligation. Nonetheless, if and to the extent any
Borrower is construed as a guarantor or surety of any Obligations under this
Agreement, all Borrowers hereby unconditionally, jointly and severally guarantee
as primary obligors and not as sureties to the Agent and the Lenders and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on (including any interest, fees, costs or charges that would accrue
but for the provisions of Title 11 of the United States Code after any
bankruptcy or insolvency petition under Title 11 of the United States Code) the
Loans made by the Lenders to each Borrower, and all other Obligations from time
to time owing to the Agent or the Lenders by any Borrower under any Loan
Document, in each case strictly in accordance with the terms thereof (the
"Guarantee", and su ch obligations being herein collectively called the
"Guaranteed Obligations"). Each Borrower hereby irrevocably and unconditionally,
jointly and severally agrees that if any Borrower shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, each Borrower will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
9.2 Obligations Unconditional.
The obligations of the Borrowers under Section 9.1 shall constitute a
guaranty of payment (and not of collection) and are absolute, irrevocable and
unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the Guaranteed Obligations of such
parties under this Agreement, the Notes, if any, or any other agreement or
instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations and, to the fullest extent permitted by applicable law, irrespective
of any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor (except for payment in
full). Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not alter or impair the
liability of the Borrowers hereunder, which shall remain absolute, irrevocable
and unconditional u nder any and all circumstances as described above:
(i) at any time or from time to time, without notice to each Borrower,
the time for any performance of or compliance with any of the Guaranteed
Obligations shall be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or waived in any
respect or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iv) any Lien or security interest granted to, or in favor of, the
Collateral Agent or the Lenders for any of the Guaranteed Obligations shall
fail to be perfected; or
(v) the release of any other Borrower.
The Borrowers hereby expressly waive diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the Agent
or the Lenders exhaust any right, power or remedy or proceed against any other
Borrower under this Agreement or the Notes, if any, or any other agreement or
instrument referred to herein or therein, or against any other person under any
other guarantee of, or security for, any of the guaranteed Obligations. The
Borrowers waive any and all notice of the creation, renewal, extension, waiver,
termination or accrual of any of the Guaranteed Obligations and notice of or
proof of reliance by the Agent and the Lenders upon this Guarantee or acceptance
of this Guarantee, and the Guaranteed Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Guarantee, and all dealings between Borrowers and the Agent and the
Lenders shall likewise be conclusively presumed to have been had or consummated
i n reliance upon this Guarantee. This Guarantee shall be construed as a
continuing, absolute, irrevocable and unconditional guarantee of payment without
regard to any right of offset with respect to the Guaranteed Obligations at any
time or from time to time held by the Agent and the Lenders, and the obligations
and liabilities of the Borrowers hereunder shall not be conditioned or
contingent upon the pursuit by the Agent or any Lender or any other person at
any time of any right or remedy against any Borrower or against any Obligations
or against any collateral or guarantee therefor or right of offset with respect
thereto. This Guarantee shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon the Borrowers and the
successors and assigns thereof, and shall inure to the benefit of the Agent and
the Lenders and their respective successors and assigns, notwithstanding that
from time to time during the term of this Agreement there may be no Guaranteed
Obligati ons outstanding.
For the purposes of this paragraph only, references to the "principal"
include each Borrower and references to the "creditor" include the Agent and
each Lender. In accordance with Section 2856 of the California Civil Code, each
Borrower waives all rights and defenses (i) available to such Borrower by
reason of Section 2787 through 2855, 2899, and 3433 of the California Civil
Code, including all rights or defenses such Borrower may have by reason of
protection afforded to the principal with respect to any of the Guaranteed
Obligations, or to any other guarantor of any of the Guaranteed Obligations
with respect to any of such guarantor's obligations under its guarantee, in
either case in accordance with the anti-deficiency or other laws of the State
of California limiting or discharging the principal's Indebtedness or such
other guarantor's obligations, including Sections 580a, 580b, 580d and 726 of
the California Code of Civil Procedure; and (ii) arising out of an election of
remedies by the creditor, even though such election, such as a nonjudicial
foreclosure with respect to security for any Guaranteed Obligation (or any
obligation of any other guarantor of any of the Guaranteed Obligations), has
destroyed such Borrower's right of subrogation and reimbursement against the
principal (or such other guarantor) by the operation of Section 580d of the
California Code of Civil Procedure or otherwise. No other provision of this
Guarantee shall be construed as limiting the generality of any of the covenants
and waivers set forth in this paragraph. As provided below, this Agreement
shall be governed by, and shall be construed and enforced in accordance with
the laws of the State of New York. This paragraph is included solely out of an
abundance of caution, and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this
Agreement or to any of the Guaranteed Obligations.
9.3 Subordination.
Any Indebtedness of the Guarantors now or hereafter held by any Borrower
is hereby subordinated in right of payment in full in cash to the Obligations.
Each Borrower agrees that it will not demand, ▇▇▇ for or otherwise attempt to
collect any such indebtedness of any Borrower to another Borrower until the
Obligations shall have been indefeasibly paid in full.
9.4 Continuing Guarantee.
The Guarantees in this Article 9 are continuing guarantees of payment,
and shall apply to all Guaranteed Obligations whenever arising.
Article 10
NEGATIVE COVENANTS
Borrowers covenant and agree that so long as the Obligations remain
outstanding and until the termination of the Commitment, unless Borrowers have
received the prior written consent of the Required Lenders, Borrowers shall not
and will not permit any of their Subsidiaries to:
10.1 Indebtedness.
Directly or indirectly create, incur, assume, guaranty, or
otherwise become directly or indirectly liable for, on a fixed or contingent
basis, any Indebtedness except: (a) the Obligations; (b) intercompany
Indebtedness owing from a Borrower to a Borrower, provided that such
Indebtedness is subordinated in right of payment to the Obligations; (c)
Indebtedness secured by purchase money Liens and under Capital Leases arising
or entered into after the Closing Date not to exceed $10,500,000, minus the
aggregate amount of all such Indebtedness outstanding on the Closing Date, in
the aggregate at any time outstanding for all Borrowers; (d) Indebtedness
existing on the Closing Date and described on part (a) of Schedule 10.1 and any
Permitted Refinancing thereof; (e) Indebtedness incurred in connection with any
hedging transaction which is entered into to hedge the interest rate risk under
this Agreement (provided that such hedging transaction has been approved and
consented to in writing by the Agent); (f) Indebtedness under the New Revolver
in an aggregate principal amount not to exceed $25,000,000 at any one time
outstanding; and (g) additional unsecured Indebtedness in an aggregate
principal amount not to exceed $7,500,000 (other than, for the avoidance of
doubt, trade payables to the extent not expressly included in the definition of
Indebtedness).
10.2 Guaranties.
Except for (a) endorsements of instruments or items of payment for
collection in the ordinary course of business, (b) guaranties of the
Obligations, and (c) the guaranties listed on Schedule 10.2, guaranty, endorse,
or otherwise in any way become or be responsible for any obligations of any
other Person, whether directly or indirectly by agreement to purchase the
Indebtedness of any other Person or through the purchase of goods, supplies or
services, or maintenance of working capital or other balance sheet covenants or
conditions, or by way of Stock purchase, capital contribution, advance or loan
for the purpose of paying or discharging any indebtedness or obligation of such
other Person or otherwise.
10.3 Transfers, Liens and Related Matters.
(a) Transfers. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to any Property other
than in the ordinary course of business.
(b) Liens. Except for Liens securing the Obligations, and other
Permitted Encumbrances, directly or indirectly create, incur, assume or permit
to exist any Lien on or with respect to any Property or any proceeds, income or
profits therefrom.
(c) No Negative Pledges. Enter into or assume any agreement (other
than the Loan Documents) prohibiting the creation or assumption of any Lien upon
the Collateral except those Liens in favor of the Collateral Agent.
10.4 Investments and Loans.
Except as set forth on Schedule 10.4, make or permit to exist
investments in or loans to any other, Person (including, without limitation,
intercompany loans among Borrowers), except: (a) Cash Equivalents; (b) loans and
advances to employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business in an aggregate outstanding amount
not in excess of $100,000 at any time; and (c) loans by a Borrower to a Borrower
in accordance with the provisions of Section 10.1(b). Without limiting the
generality of the foregoing, and notwithstanding any provision in this Agreement
to the contrary, no Borrower shall consummate any Acquisition without the prior
written consent of the Required Lenders in their sole discretion.
10.5 Restricted Junior Payments
Directly or indirectly declare, order, pay, make or set apart any
sum for any Restricted Junior Payment.
10.6 Restrictions on Fundamental Changes.
(a) Enter into any transaction of merger or consolidation except
whereby a Borrower will be the surviving entity; (b) liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution); (c)
convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of
its business or assets, or the capital Stock of any of its Subsidiaries,
whether now owned or hereafter acquired; or (d) directly or indirectly
enter into any arrangement other than the Acceptable Colorado Transaction
whereby such Borrower sells or transfers all or any material portion of
its assets and thereupon and within one year thereafter rents or leases
the assets so sold or transferred without prior written notice to and the
prior written consent of the Required Lenders, which consent shall not be
unreasonably withheld.
10.7 Changes Related to Subordinated Indebtedness.
Change or amend the terms of any Subordinated Indebtedness or other
Indebtedness if the effect of such amendment is to: (a) increase the interest
rate on such Indebtedness; (b) shorten the final maturity or average life to
maturity of, or require any payment of principal or interest to be made earlier
than the date originally scheduled on, such Indebtedness; (c) change any event
of default or add any covenant with respect to such Indebtedness in a manner
adverse to the Borrowers or the Lenders; (d) change the subordination provisions
of any Subordinated Indebtedness; or (e) change or amend any other term if such
change or amendment would materially increase the obligations of the obligor or
confer additional material rights on the holder of such Indebtedness in a manner
adverse to any Borrower, any of its Subsidiaries or any Lender.
10.8 Transactions with Affiliates.
Directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale or exchange of property or the
rendering of any service) with any Affiliate or with any officer, director or
employee of any Borrower, except for transactions in the ordinary course of, and
pursuant to the reasonable requirements of, Borrowers' business or upon fair and
reasonable terns which are fully disclosed to the Agent and the Lenders and
which are no less favorable to any Borrower than it would obtain in a comparable
arm's length transaction with an unaffiliated Person.
10.9 Environmental Liabilities.
To the extent that any of the following could reasonably be
expected to have a Material Adverse Effect; (a) violate any applicable
Environmental Law; (b) dispose of any Hazardous Materials (except in accordance
with applicable law) into or onto or from, any real property owned, leased or
operated by any Borrower; or (c) permit any Lien imposed pursuant to any
Environmental Law to be imposed or to remain on any real property owned, leased
or operated by any Borrower.
10.10 Conduct of Business.
Engage in the business of providing services payable under
litigated or disputed workers' compensation claims or engage in any business
other than businesses of the type engaged in by Borrowers on the Closing Date.
10.11 Compliance with ERISA.
Establish any new Employee Benefit Plan or amend any existing
Employee Benefit Plan if the liability or increased liability resulting from
such establishment or amendment is material provided that up to $2,000,000 of
resulting liability is hereby expressly permitted in any year. No Borrower and
none of its Subsidiaries shall establish, maintain or operate any Employee
Benefit Plan other than in compliance in all material respects with the
provisions of ERISA, the IRC and all other applicable laws and the regulations
and interpretations thereof.
10.12 Tax Consolidations.
File or consent to the filing of any consolidated income tax return
with any Person other than a Borrower.
10.13 Fiscal Year.
Change their Fiscal Year.
10.14 Press Release; Public Offering Materials.
Disclose the name of the Agent or any Lender in any press release
or in any prospectus, proxy statement or other materials filed with any
governmental entity relating to a public offering of the capital Stock of any
Borrower except as may be required by law; in each case prior to receiving prior
written consent regarding the content thereof from the Agent or such Lender
(which consent shall not be unreasonably withheld).
10.15 Bank Accounts.
(a) Establish any new bank accounts (other than the ▇▇▇▇▇ Fargo
Account), or accounts holding Investment Property or (b) deposit or
maintain any Cash, Cash Equivalents or Investment Property in any account
that is not subject to an Investment Property Control Agreement. 10.16
Change in Capital Structure.
Make any change in the ownership of any Borrower's (other than
Vitesse) or any of their respective Subsidiaries' capital Stock (or partnership
interests, as applicable) or in such Borrower's or Subsidiary's capital
structure, each as set forth in Schedule 5.2.
10.17 Contracts and Agreements.
Become a party to any contract or agreement which would breach this
Agreement.
10.18 Margin Stock.
Carry or purchase any "margin security" within the meaning of
Regulations U, T or X of the Board of Governors of the Federal Reserve System.
10.19 Truth of Statements and Certificates.
Furnish to the Agent or any Lender any certificate or other
document that contains any untrue statement of a material fact or that omits to
state a material fact necessary to make it not materially misleading in light of
the circumstances under which it was furnished.
10.20 Subsidiaries
Create or acquire any new Subsidiaries.
10.21 Cash Transfers
Transfer any Cash or Cash Equivalents to any Subsidiary other than
a Domestic Subsidiary that is a Borrower under this Agreement and has granted a
Lien on its Property to the Collateral Agent without the prior written consent
of the Required Lenders (which consent shall not be unreasonably withheld or
delayed) other than any transfer of Cash or Cash Equivalents to any Subsidiary
which when calculated on a quarterly basis does not exceed in aggregate
$3,500,000 for that Fiscal Quarter.
Article 11
DEFAULT RIGHTS AND REMEDIES
11.1 Events of Default.
"Event of Default" shall mean the occurrence or existence of any
one or more of the following:
(a) Payment. Failure of any Borrower to make payment of any of the
Obligations when due and in the case of interest after the applicable due date;
or
(b) Default in Other Agreements. (i) Failure of any Borrower or any
of their respective Subsidiaries to pay when due any principal or interest on
any Indebtedness (other than the Obligations) or (ii) breach or default of any
Borrower or any of their respective Subsidiaries with respect to any
Indebtedness (other than the Obligations); if such failure to pay, breach or
default entitles the holder to cause such Indebtedness having an individual
principal amount in excess of $500,000 or having an aggregate principal amount
in excess of $1,000,000 to become or be declared due prior to its stated
maturity; or
(c) Breach of Certain Provisions. Failure of a Borrower to perform
or comply with any term or condition contained in Article 10, Section 8.1(l),
Section 8.1(o)(ii) or Section 8.10; or
(d) Breach of Warranty. Any representation, warranty, certification
or other. statement made by any Borrower in any Loan Document or in any
statement or certificate at any time given by such Person in writing pursuant or
in connection with any Loan Document is false in any material respect on the
date made (which shall result in an immediate Event of Default); or
(e) Other Defaults Under Loan Documents. Any Borrower defaults in
the performance of or compliance with any term contained in this Agreement or
the other Loan Documents and such default is not remedied or waived within ten
(10) days after receipt by Borrowers of notice from the Agent or any Lender of
such default (other than occurrences described in other provisions of this
Section 11.1 for which no grace period or a different grace or cure period is
specified or which constitute immediate Events of Default); or
(f) Change of Control. A Change of Control shall have occurred; or
(g) Involuntary Bankruptcy: Appointment of Receiver, etc. (i) A
court enters a decree or order for relief with respect to any Borrower or any of
its Subsidiaries in an involuntary case under Title 11 of the United States Code
or any applicable bankruptcy, insolvency or other similar law now, or hereafter
in effect, which decree or order is not stayed or other similar relief is not
granted under any applicable federal or state law; or (ii) the continuance of
any of the following events for sixty (60) days unless dismissed, bonded or
discharged: (1) an involuntary case is commenced against any Borrower or any of
its Subsidiaries, under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect; or (2) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over any Borrower or any of its Subsidiaries, or
over all or a substantial part of their respective property, is entered; or (3)
an interim receiver, trustee or other custodian is appointed without the consent
of a Borrower or any of its Subsidiaries, for all or a substantial part of the
property of such Borrower or any such Subsidiary; or
(h) Voluntary Bankruptcy: Appointment of Receiver. etc. (i) An
order for relief is entered with respect to any Borrower or any of its
Subsidiaries or any Borrower or any of its Subsidiaries commences a voluntary
case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case or to the conversion of an involuntary case to a
voluntary case under any such law or consents to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or (ii) any Borrower or any of its Subsidiaries makes any
assignment for the benefit of creditors; or (iii) the board of directors of any
Borrower or any of its Subsidiaries adopts any resolution or otherwise
authorizes action to approve any of the actions referred to in this Section
11.1(h); or
(i) Liens. Any lien, levy or assessment (other than any Permitted
Encumbrance) is filed or recorded with respect to or otherwise imposed upon all
or any part of the Collateral or the assets of any Borrower or any of its
Subsidiaries by the United States or any department or instrumentality thereof
or by any state, county, municipality or other Governmental Agency and the
Borrowers do not take substantial steps to stay, vacate, pay or discharge such
lien, levy or assessment within thirty (30) days; or
(j) Judgment and Attachments. Any money judgment, writ or warrant
of attachment, or similar process involving (i) an amount in any individual case
in excess of $500,000 or (ii) an amount in the aggregate at any time in excess
of $750,000 (in either case not adequately covered by insurance as to which the
insurance company has acknowledged coverage) is entered or filed against any
Borrower or any of its Subsidiaries or any of their respective assets and
remains unappealed, undischarged, unvacated, unbonded or unstayed for a period
of thirty (30) days or in any event later than five (5) days prior to the date
of any proposed sale hereunder; or
(k) Dissolution. Any order, judgment or decree is entered against
any Borrower or any of its Subsidiaries decreeing the dissolution or split up of
such Borrower or Subsidiary and such order remains undischarged or unstayed for
a period in excess of twenty (20) days; or
(l) Solvency. The Borrowers, taken as a whole, cease to be solvent
(as represented in Section 5.19), or a Borrower admits in writing its present or
prospective inability to pay its debts as they become due; or
(m) Injunction. Any Borrower or any of its Subsidiaries is
enjoined, restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting the Business in any manner
that could reasonably be expected to have a Material Adverse Effect and such
order continues for more than thirty (30) days; or
(n) Invalidity of Loan Documents. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or any Borrower denies that it has any further liability under any Loan
Documents to which it is party, or gives notice to such effect; or
(o) Failure of Security. Collateral Agent does not have or ceases
to have a valid and perfected first priority security interest in the Collateral
(subject to Permitted Encumbrances), in each case, for any reason other than the
failure of the Collateral Agent to take any action within its control; or
(p) Licenses and Permits. The loss, suspension or revocation of, or
failure to renew, any License or permit now held or hereafter acquired by any
Borrower or any of its Subsidiaries, if such loss, suspension, revocation or
failure to renew could have a Material Adverse Effect; or
(q) Forfeiture. There is filed against any Borrower or any of its
Subsidiaries any civil or criminal action, suit or proceeding under any federal
or state racketeering statute (including, without limitation, the Racketeer
Influenced and Corrupt Organization Act of 1970), which action, suit or
proceeding (i) is not dismissed within one hundred twenty (120) days; and (ii)
could result in the confiscation or forfeiture of any material portion of the
Collateral.
11.2 Acceleration.
Upon the occurrence of any Event of Default described in the
foregoing Sections 11.1(g) or 11.1(h), all Obligations shall automatically
become immediately due and payable, without presentment, demand, protest or
other requirements of any kind, all of which are hereby expressly waived by the
Borrowers. Upon the occurrence and during the continuance of any other Event of
Default, the Required Lenders may, by written notice to Borrowers, declare all
or any portion of the Obligations to be, and the same shall forthwith become,
immediately due and payable.
Upon any Loans becoming due and payable under this Section 11.2,
whether automatically or by declaration, such Loans will forthwith mature and
the entire unpaid principal amount of such Loans, plus (x) all accrued and
unpaid interest thereon and (y) the Prepayment Premium determined in respect of
such principal amount (to the full extent permitted by Applicable Law), shall
all be immediately due and payable in immediately available funds, in each and
every case without presentment, demand, protest or further notice and without
setoff, counterclaim or deduction of any kind, all of which are hereby waived.
The Borrowers acknowledge, and the parties hereto agree, that each Lender has
the right to own its Loans free from repayment by the Borrowers (except as
herein specifically provided for) and that the provision for payment of the
Prepayment Premium by the Borrowers in the event that the Loans are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation f or the deprivation of such right under such circumstances.
11.3 Remedies.
If any Event of Default shall have occurred and be continuing, in
addition to and not in limitation of any other rights or remedies available to
the Agent and the Lenders at law or in equity, the Collateral Agent (acting at
the direction of the Required Lenders) may, exercise in respect of the
Collateral all the rights and remedies of a secured party on default under the
UCC (whether or not the UCC applies to the affected Collateral) and may also (a)
notify any or all obligors on the Accounts to make all payments directly to the
Collateral Agent; (b) require Borrowers to, and each Borrower hereby agrees that
it will, at its expense and upon request of the Collateral Agent, forthwith
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to Collateral Agent at a place to be designated by Collateral
Agent which is reasonably convenient to both parties; (c) withdraw all cash in
any bank accounts or accounts holding Investment Property and apply such monies
in payment of the Obligations in the manner provided in Section 11.6 without
notice or demand or legal process, enter upon any premises of any Borrower and
take possession of the Collateral; and (e) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Collateral Agent's offices or elsewhere, at such
time or times, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as Collateral Agent may deem commercially
reasonable. Each of the Borrowers agree that, to the extent notice of sale shall
be required by law, at least ten (10) days notice to the Borrowers of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. At any sale of the Collateral, if
permitted by law, the Collateral Agent, the Agent or any Lender may bid (which
bid may be, in whole or in part, in the form of cancellation of indebtedn ess)
for the purchase of the Collateral or any portion thereof for its own account.
The Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Borrowers shall remain liable
for any deficiency. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. To the extent permitted by law, each Borrower hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter enacted. None of the Collateral Agent,
the Agent or any Lender shall be required to proceed against any Collateral but
may proceed against any or all Borrowers directly.
11.4 Appointment of Attorney-in-Fact.
Each Borrower hereby constitutes and appoints the Collateral Agent
as such Borrower's attorney-in-fact with full authority in the place and stead
of such Borrower and in the name of such Borrower, the Collateral Agent or
otherwise, from time to time in the Collateral Agent's discretion while an Event
of Default is continuing to take any action and to execute any instrument that
the Collateral Agent reasonably may deem necessary or advisable to accomplish
the purposes of this Agreement, including: (a) to ask, demand, collect, ▇▇▇ for,
recover, compound, receive and give acquaintance and receipts for moneys due and
to become due under or in respect of any of the Collateral; (b) to adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any Payor or obligor thereunder or allow any credit or discount thereon;
(c) to receive, endorse, and collect any drafts or other instruments, documents
and chattel paper, in connection with clause (a) above; (d) to file any cl aims
or cost reports (final or interim) or take any action or institute any
proceedings that the Collateral Agent or the Required Lenders may deem necessary
or desirable for the collection of any of the Collateral or otherwise to enforce
the rights of the Collateral Agent with respect to any of the Collateral; and
(e) to sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, assignments, verifications and notices in
connection with Accounts and other documents relating to the Collateral. The
appointment of the Collateral Agent as each Borrower's attorney and the
Collateral Agent's rights and powers are coupled with an interest and are
irrevocable until payment in full and complete performance of all of the
Obligations.
11.5 Limitation on Duty of Collateral Agent with Respect to Collateral.
Beyond the safe custody thereof, the Collateral Agent shall have no
duty with respect to any Collateral in its possession or control (or in the
possession or control of any lender or bailee) or with respect to any income
thereon or the preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property. The Collateral Agent shall
not be liable or responsible for any loss or damage to any of the Collateral, or
for any diminution in the value thereof, by reason of the act or omission of the
Collateral Agent or bailee selected by the Collateral Agent in good faith.
11.6 Application of Proceeds.
Upon the occurrence and during the continuance of an Event of
Default, (a) Borrowers irrevocably waive the right to direct the application of
any and all payments at any time or times thereafter received by the Collateral
Agent from or on behalf of Borrowers, and Borrowers hereby irrevocably agree
that the Collateral Agent shall have the continuing exclusive right to apply and
to reapply any and all payments received at any time or times after the
occurrence and during the continuance of an Event of Default against the
Obligations in such manner as the Collateral Agent may deem advisable
notwithstanding any previous entry by the Collateral Agent upon any books and
records and (b) the proceeds of any sale of, or other realization upon, all or
any part of the Collateral shall be applied: first, to all fees, costs and
expenses incurred by the Agent and Collateral Agent with respect to this
Agreement, the other Loan Documents or the Collateral; second, to all fees due
and owing to the Lenders; third , to accrued and unpaid interest on the
Obligations; third, to the principal amounts and Prepayment Premium of the Loans
outstanding until the Loans are paid in full; and fourth, to any other
indebtedness or obligations of Borrowers owing to the Agent or the Lenders.
11.7 Waivers; Non-Exclusive Remedies.
No failure on the part of the Agent or any Lender to exercise, and
no delay in exercising and no course of dealing with respect to, any right under
this Agreement or the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise by the Agent or any Lender of any right
under this Agreement or any other Loan Document preclude any other or further
exercise thereof or the exercise of any other right. The rights in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other remedies provided by law.
Article 12
APPOINTMENT OF AGENT
12.1 Appointment. Each of the Lenders hereby irrevocably appoints the
Agent as its agent hereunder and under the other Loan Documents, and to act as
the Collateral Agent on behalf of the Lenders hereunder and under the other Loan
Documents, and in each case authorizes the Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. Any reference herein to the Agent shall include the Agent in
its capacity as Agent hereunder and as Collateral Agent under any Loan Document.
Each Lender does hereby make, constitute and appoint the Agent its true and
lawful attorney-in-fact with full powers of substitution and resubstitution for
such Lender and in its name, place and stead, in any and all capacities, to
execute for such Lender and on its behalf any document or agreement for which
the Agent is empowered to act on behalf of such Lender under this Article 12,
gra nting to the Agent full power and authority to do and perform each act
requisite and necessary to be done, as fully to all intents and purposes as the
Lender could do in person, provided that such power shall be granted only to the
extent necessary to undertake the actions permitted to be done or taken by the
Agent under this Article 12. Each of the Lenders hereby irrevocably authorizes,
and each holder of any Loan by the acceptance of such Loan shall be deemed
irrevocably to authorize, the Agent to take such action on their behalf under
the provisions of this Agreement, the other Loan Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental hereto and thereto. The Agent may
perform any of its duties hereunder by or through its officers, directors,
agents, employees or affiliates. The Agent shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender or the Borrowers, and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. Each Lender hereby accepts the pledges, mortgages and
fiduciary assignments created for its benefit under the Security Agreement and
empowers the Agent to enter into such agreements and act as Collateral Agent on
behalf and for the benefit of each Lender. The provisions of this Article 12 are
solely for the benefit of the Agent and the Lenders, and neither the Borrowers
nor any of the Subsidiaries or Affiliates of the Borrowers shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Agent shall act solely as agent
of the Lenders and the Agent does not assume and shall not be deemed to have
assumed any fiduciary relationship or other obligation or relationship of agency
or trust with the Borrowers or for any of their Subsidiaries or Affiliates.
12.2 Rights of Agent. With respect to its obligation to extend Loans
under this Agreement, the Agent shall have the rights and powers specified
herein for a "Lender" and may exercise the same rights and powers as though it
were not performing the duties specified herein; and the term "Lenders,"
"Required Lenders," or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as such (as
the case may be). The Agent and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking, investment banking, trust
or other business with, or provide debt financing, equity capital or other
services (including financial advisory services) to, the Borrowers or any of
their Subsidiaries or Affiliates (or any Person engaged in similar business with
the Borrowers or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrowers or any of their Subsidiaries or Affiliates for services in connection
with this Agreement and otherwise without having to account for the same to the
Lenders.
12.3 Administration of the Collateral. The Agent as Collateral Agent
shall administer the Collateral and any Lien thereon for the benefit of the
Lenders in the manner provided herein and in the Security Agreement and in any
other related Loan Documents; provided, however, that in the event of conflict
between the provisions relating to administration of Collateral included in
this Agreement and those included in the Security Agreement, the latter shall
prevail. The Agent shall exercise such rights and remedies with respect to the
Collateral as are granted to it hereunder and as Collateral Agent under the
Security Agreement and related documents and applicable law and as shall be
directed by the Required Lenders. Upon payment in full of all Obligations under
the Loan Documents, the Agent and its Affiliates shall promptly release any and
all Liens, Collateral and other security arrangements entered into in
connection with this Agreement, the Loan Documents and the transactions
contemplated hereby and thereby. The Lenders hereby authorized and direct the
Collateral Agent to release any and all Liens on the Real Estate subject to the
Colorado Mortgage in connection with an Acceptable Colorado Transaction.
12.4 Duties of Agent. The Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Agent is required to exercise in writing by the Required Lenders, and
(c) except as expressly set forth herein and in the other Loan Documents, the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrowers or any of their
Subsidiaries that is communicated to or obtained by the Person serving as Agent
or any of its Affiliates in any capacity. The Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders or in the absence of its own gross negligence or willful
misconduct. The Agent shall be deemed not to have knowledge of any Default
unless and until notice thereof is given to the Agent by the Borrowers or a
Lender, and the Agent shall not be responsible for or have any duty to ascertain
or inquire into (v) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (w) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (x) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein, (y) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document, or (z) the satisfaction of any condition set forth herein or therein,
other than to c onfirm receipt of items expressly required to be delivered to
the Agent. In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the other Lenders and the Borrowers (if received
from a Lender) or to the Lenders (if received from the Borrowers).
12.5 Reliance by Agent. The Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Agent may consult with legal counsel (who may
be counsel for a Lender, the Borrowers or any Subsidiary), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
12.6 Appointment of Sub-Agents. The Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Agent. The Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their
respective Affiliates. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Affiliates of the Agent and any
such sub-agent, an shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Agent.
12.7 Resignation of Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by notifying
the Lenders and the Borrowers. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, upon not less than
ten days' notice, on behalf of the Lenders, appoint a successor Agent, which
institution shall be a bank with an office in Los Angeles, California or New
York, New York, with a combined capital and surplus of at least $500,000,000.
Upon the acceptance of its appointment as Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring (or retired) Agent and the retiring Agent
shall be discharged from its duties and obligations hereunder. The fees payable
by the Borrowers to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the Agent's resignation hereunder, the provisions of this Article 12 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
12.8 Lender Non-Reliance. Independently and without reliance upon the
Agent, each Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrowers and their Subsidiaries in connection with
the extension of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrowers and their Subsidiaries and, except as expressly provided in this
Agreement, the Agent shall not have any duty or responsibility, either initially
or on continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
extension of the Loans or at any time or times thereafter. The Agent shall not
be responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connecti on herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Loan Document or the financial
condition of the Borrowers or any Subsidiary or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Loan Document, or the financial
condition of the Borrowers or any Subsidiary or the existence or possible
existence of any Default or Event of Default.
12.9 Indemnification. To the extent the Agent is not reimbursed and
indemnified by the Borrowers, the Lenders will reimburse and indemnify the Agent
in proportion to their respective "percentage" as used in determining the
Required Lenders for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature (including fees and disbursements of any counsel or
financial advisor engaged by the Agent) which may be imposed on, asserted
against or incurred by the Agent in performing its duties hereunder or under any
other Loan Document or in any way relating to or arising out of this Agreement
or any other Loan Document; provided, however, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct. If the indemnity furnished to an
y Agent by any Lender for any purpose shall, in the opinion of such Agent be
insufficient or become impaired, such Agent may call for additional indemnity
from such Lender (but not any other Lender) and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished. The
agreements in this Section 12.9 shall survive the payment of all Obligations.
12.10 Lenders. The Agent may deem and treat the payee of any Loan as the
Lender thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
recorded in the register maintained by the Borrowers in accordance with Section
13.3. Any request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is the Lender of any portion
of the Loans shall be conclusive and binding on any subsequent Lender,
transferee, assignee or endorsee, as the case may be, of such portion of the
Loans and of any Note evidencing such portion of the Loans.
12.11 Action by Agent. The Agent may take any action on behalf of the
Required Lenders that has been approved by the Required Lenders and any action
that has otherwise been specified herein or in any of the other Loan Documents.
For the avoidance of doubt, the Agent may, with the prior consent of the
Required Lenders (but not otherwise) consent to any amendment, restatement,
supplement, waiver or other modification under any of the Loan Documents.
Article 13
MISCELLANEOUS
13.1 Survival of Representations and Warranties.
All of the representations and warranties made herein shall survive
the execution and delivery of this Agreement, any investigation by or on behalf
of the Agent or the Lenders, or termination of this Agreement until the earlier
of (a) the date on which none of the Obligation remain outstanding and the
Commitment shall have terminated or (b) expiration of the applicable statute of
limitations.
13.2 Notices.
All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier (with receipt
confirmed), courier service or personal delivery:
(a) if to the Agent:
Obsidian, LLC
c/o Tennenbaum Capital Partners, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel and ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Borrowers:
Vitesse Semiconductor Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) (c) if to any Lender to the address specified below such Lender's name on
the signature pages hereof.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; if mailed, five
Business Days after being deposited in the mail, postage prepaid; or if
telecopied, when receipt is acknowledged.
13.3 Successors and Assigns; Register
This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of the parties hereto. Subject to the
transfer restrictions set forth in the Loan Documents, (a) any Lender may assign
any of its rights under any of the Loan Documents to any Person provided that
such assignment shall be in a minimum amount of $1,000,000 except in the cases
of either (i) an assignment to an Affiliate of a Lender, or (ii) an assignment
which has the effect of reducing the participation of the exiting Lender in the
Loans to zero. No Borrower may assign any of its rights, or delegate any of its
obligations, under this Agreement without the prior written consent of the
Required Lenders, and any such purported assignment by the Borrowers without the
written consent of the Required Lenders shall be void and of no effect. Except
as provided in Article 7, no Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of any of the
Loan Documents.
The Borrowers shall keep at their principal executive offices a
register for the registration and registration of transfers of the Loans and the
Notes evidencing such Loans. The name and address of each Lender of any portion
of the Loans, each transfer thereof and the name and address of each transferee
of any portion of the Loans shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any portion
of the Loans shall be registered shall be deemed and treated as the Lender of
such portion of the Loans and the holder of the Notes evidencing such Loans for
all purposes hereof, and the Borrowers shall not be affected by any notice or
knowledge to the contrary. The Borrowers shall give to any Lender or the Agent
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered Lenders.
13.4 Amendment and Waiver.
(a) No failure or delay on the part of any of the parties hereto in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for in this Agreement are
cumulative and are not exclusive of any remedies that may be available to the
parties hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by all of the Borrowers and the Required Lenders (or the Agent acting
at the direction of the Required Lenders), and (ii) only in the specific
instance and for the specific purpose for which made or given. Except where
notice is specifically required by this Agreement, no notice to or demand on the
Borrowers in any case shall entitle the Borrowers to any other or further notice
or demand in similar or other circumstances.
13.5 Signatures; Counterparts.
Telefacsimile transmissions of any executed original document
and/or retransmission of any executed telefacsimile transmission shall be deemed
to be the same as the delivery of an executed original. At the request of any
party hereto, the other parties hereto shall confirm telefacsimile transmissions
by executing duplicate original documents and delivering the same to the
requesting party or parties. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
13.6 Headings.
The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
13.7 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH,
AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
13.8 Jurisdiction, Jury Trial Waiver, Etc.
(a) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT THE
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE SECURITY AGREEMENT, THE NOTES OR ANY AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE
COURTS OF THE STATE OF EITHER DELAWARE OR NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR EITHER THE DISTRICT OF DELAWARE OR NEW YORK
AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE
OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY
CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN
INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH IN SECTION 13.2, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS
AFTER SUCH MAILING. EACH OF THE BORROWERS AND THEIR SUBSIDIARIES
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION
OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EACH OF THE BORROWERS AND THEIR
SUBSIDIARIES (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT OR SUCH LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II)
ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS TO WHICH
THEY ARE PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
13.9 Severability.
If any one or more of the provisions contained in this Agreement,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions of this Agreement. The parties hereto further agree to
replace such invalid, illegal or unenforceable provision of this Agreement with
a valid, legal and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid, illegal or
unenforceable provision.
13.10 Rules of Construction.
Unless the context otherwise requires, "or" is not exclusive, and
references to sections or subsections refer to sections or subsections of this
Agreement.
13.11 Timing.
Time is of the essence in this Agreement.
13.12 Entire Agreement.
This Agreement, together with the exhibits and schedules hereto and
the other Loan Documents, is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein or
therein. Except as expressly provided herein, this Agreement, together with the
exhibits and schedules hereto, and the other Loan Documents supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
13.13 Certain Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, the Borrowers agree to pay promptly (a) all the actual and
reasonable costs and expenses of negotiation, preparation and execution of the
Loan Documents and any consents, amendments, waivers or other modifications
thereto (whether or not any such amendment, waiver or consents become
effective); (b) all the costs of furnishing all opinions by counsel for the
Borrowers (including any opinions requested by the Collateral Agent, Agent or
the Lenders as to any legal matters arising hereunder) and of any Borrower's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (c) the reasonable fees, expenses and disbursements
of counsel to the Lenders party to this Agreement on the Closing Date and the
Agent (including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents and
any consents, amendments, waivers or other modifications thereto (whether or not
any such amendment, waiver or consents become effective) and any other documents
or matters requested by any Loan Party; (d) all the actual costs and reasonable
expenses of creating and perfecting Liens in favor of the Collateral Agent on
behalf of the Secured Parties (as defined in the Security Agreement) pursuant to
any Loan Document, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to the Collateral Agent
and of counsel providing any opinions that the Collateral Agent or the Lenders
may request in respect of the Collateral Documents or the Liens created pursuant
thereto; (e) the costs incurred by the Collateral Agent in connection with the
custody or preservation o f any of the Collateral; (f) all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by the Collateral Agent and the
Lenders in enforcing any Obligations of or in collecting any payments due from
any Loan Party hereunder or under the other Loan Documents (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of any Subsidiary Guaranty) or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings; and (g) all costs and expenses incurred by the Lenders
in obtaining periodic appraisals and market valuations of the Loans from time to
time as required or otherwise desirable (as determined by the applicable Lender
at its sole discretion) pursuant to any Funding Source Agreement or other
Contractual Obligation of a Lender. The Borrowers will pay, and will save each
Lender and the Agent harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by a Lender
or the Agent).
13.14 Publicity.
Except as may be required by Requirements of Law, none of the
parties hereto shall issue a publicity release or announcement or otherwise make
any public disclosure concerning this Agreement or the transactions contemplated
hereby, without prior approval by the other party hereto. If any announcement is
required by law to be made by any party hereto, prior to making such
announcement such party will deliver a draft of such announcement to the other
parties and shall give the other parties an opportunity to comment thereon.
13.15 Further Assurances.
Each of the parties shall execute such documents and perform such
further acts (including, without limitation, obtaining any consents, exemptions,
authorizations, or other actions by, or giving any notices to, or making any
filings with, any Governmental Authority or any other Person) as may be
reasonably required or desirable to carry out or to perform the provisions of
this Agreement, including without limitation, any post-closing assignment(s) by
any Lender of a portion of the Loans to a Person not currently a party hereto.
13.16 No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement and the other Loan Documents. In the event an
ambiguity or question of intent or interpretation arises under any provision of
this Agreement or any other Loan Documents, this Agreement or such other Loan
Documents shall be construed as if drafted jointly by the parties thereto, and
no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement or any
other Loan Documents. No knowledge of, or investigation, including without
limitation, due diligence investigation, conducted by, or on behalf of, the
Agent or the Lenders shall limit, modify or affect the representations set forth
in Article 5 or the right of the Agent and the Lenders to rely thereon.
13.17 Confidentiality.
The Agent and the Lenders, together with their employees, lenders,
prospective lenders or representatives who have a reasonable need to know such
information, agree to treat confidentially all information concerning the
Borrowers, and each of their Subsidiaries or their assets and operations
obtained by the Agent and the Lenders, or by any of their authorized
representatives or lenders, which information is not (i) contained in a report
or other document filed with the Commission or other regulatory authority, (ii)
distributed by the Borrowers and their Subsidiaries to all of their
shareholders, or (iii) otherwise available to the public generally (other than
by breach of these confidentiality obligations by the Agent or the Lenders);
provided, however, that the foregoing confidentiality restrictions shall not
apply where the Agent or the Lenders are required to disclose information due to
a valid subpoena or court order or other external bank regulatory reporting
requirements. These confidenti ality obligations shall survive the term of this
Agreement by two years.
13.18 Joint and Several Liability; Binding Obligations.
Borrowers is defined collectively to include each of the Borrowers;
provided, however, that any references herein to "any Borrower", "each Borrower"
or similar references, shall be construed as a reference to each individual
Borrower comprising the Borrowers. Each Person comprising the Borrowers shall be
jointly and severally liable for all of the obligations of the Borrowers under
this Agreement, regardless of which of the Borrowers actually receives the
proceeds of the Loans or the manner in which the Borrowers and the Lenders
account therefor in their respective books and records.
(a) To the extent that Applicable Law otherwise would render the
full amount of the joint and several obligations of any Borrower hereunder and
under the other Loan Documents invalid or unenforceable, such Borrower's
obligations hereunder and under the other Loan Documents shall be limited to the
maximum amount which does not result in such invalidity or unenforceability;
provided, however, that each Borrower's obligations hereunder and under the
other Loan Documents shall be presumptively valid and enforceable to their
fullest extent in accordance with the terms hereof or thereof, as if this
Section were not a part of this Agreement.
(b) Each Borrower hereby agrees that, except as hereinafter
provided, its obligations hereunder shall be unconditional, irrespective of (i)
the absence of any attempt to collect the Obligations from any Borrower or other
action to enforce the same; (ii) the waiver or consent by the Agent or the
Lenders with respect to any provision of any instrument evidencing the
Obligations, or any part thereof, or any other agreement heretofore, now or
hereafter executed by a Borrower and delivered to the Agent or any Lender; (iii)
the institution of any proceeding under the United States Bankruptcy Code, or
any similar proceeding, by or against a Borrower's or the Agent's or a Lender's
election in any such proceeding of the application of Section 1111(b)(2) of the
United States Bankruptcy Code; (iv) any borrowing or grant of a security
interest by a Borrower as debtor-in-possession, under Section 364 of the United
States Bankruptcy Code; (v) the disallowance, under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Bankruptcy Code, of all or any portion of the Agent's or a Lender's
claim(s) for repayment of any of the Obligations; or (vi) any other circumstance
other than payment in full of the Obligations which might otherwise constitute a
legal or equitable discharge or defense of a guarantor or surety.
(c) This Section is intended only to define the relative rights of
the Borrowers and nothing set forth in this Section is intended to or shall
impair the obligations of the Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement or any other Loan Documents. Nothing contained in this
Section shall limit the liability of any Borrower to pay the loans made directly
or indirectly to any Borrower and accrued interest, fees and expenses with
respect thereto for which all Borrowers shall be primarily liable.
13.19 Marshalling; Payments Set Aside.
No Lender shall be under any obligation to marshal any assets in
favor of any Borrower or any other Person or against or in payment of any or all
of the Obligations. To the extent that any Borrower makes a payment or payments
to the Agent, the Collateral Agent or any Lender or the Agent, Collateral Agent
or any Lender enforces any security interests or exercise their rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, any other state or federal
law, common law or any equitable cause, then, to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments had not been
made or s uch enforcement or setoff had not occurred.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered by their respective officers hereunto duly
authorized as of the date first above written.
"Borrowers"
VITESSE SEMICONDUCTOR CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ C. A. ▇▇▇▇▇▇
Title: Chief Financial Officer
VITESSE INTERNATIONAL, INC.,
a Barbados corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ C. A. ▇▇▇▇▇▇
Title: Chief Financial Officer
VITESSE MANUFACTURING &
DEVELOPMENT CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ C. A. ▇▇▇▇▇▇
Title: Chief Financial Officer
VITESSE SEMICONDUCTOR SALES CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ C. A. ▇▇▇▇▇▇
Title: Chief Financial Officer
"Lenders"
SPECIAL VALUE EXPANSION FUND, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Address for Notices:
c/o Tennenbaum Capital Partners, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel and ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SPECIAL VALUE OPPORTUNITIES FUND, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Address for Notices:
c/o Tennenbaum Capital Partners, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel and ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
"Agent"
OBSIDIAN, LLC, a Delaware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
ANNEX A
Term Loan A Allocations
Lender Principal Amount of Principal Amount Amount of Term Loan A Total Principal
Term Loan A of Term Loan A Representing Funded in Cash at 100% of Amount of Term Loan A
Representing Conversion of Interest the Principal Amount thereof
Conversion of Advances
Special Value
Expansion Fund, LLC $1,483,679.52 $3,461.92 $5,038,044.46 $6,525,185.90
Special Value
Opportunities
Fund, LLC $3,516,320.48 $8,204.74 $11,940,165.35 $15,464,690.57
Total: $5,000,000.00 $11,666.66 $16,978,209.81 $21,989,876.47
ANNEX B
Term Loan B Allocations
Lender Amount of Term Loan B Funded in Cash at Total Principal Amount of Term Loan B
100% of the Principal Amount thereof
Special Value Expansion
Fund, LLC $8,905,081.17 $8,905,081.17
Special Value Opportunities
Fund, LLC $21,105,042.36 $21,105,042.36
Total: $30,010,123.53 $30,010,123.53