CENTIGRAM
COMMUNICATIONS
CORPORATION
AMENDED AND RESTATED
LOAN AGREEMENT
(UNSECURED)
TABLE OF CONTENTS
Page
1. DEFINITIONS AND CONSTRUCTION 1
1.1 Definitions 1
1.2 Accounting Terms 8
2. LOAN AND TERMS OF PAYMENT 8
2.1 Advances 8
2.2 Overadvances 12
2.3 Interest Rates, Payments, and Calculations 12
2.4 Crediting Payments 13
2.5 Fees 13
2.6 Additional Costs 13
2.7 Conversion/Continuation of Advances 14
2.8 Additional Requirements/Provisions Regarding LIBOR
Rate Advances. 15
2.9 Term 16
3. CONDITIONS OF LOANS 17
3.1 Conditions Precedent to Initial Advance 17
3.2 Conditions Precedent to all Advances 17
4. REPRESENTATIONS AND WARRANTIES 17
4.1 Due Organization and Qualification 17
4.2 Due Authorization; No Conflict 17
4.3 No Prior Encumbrances 18
4.4 Name; Location of Chief Executive Office 18
4.5 Litigation 18
4.6 No Material Adverse Change in Financial Statements 18
4.7 Solvency 18
4.8 Regulatory Compliance 18
4.9 Environmental Condition 18
4.10 Taxes 19
4.11 Subsidiaries 19
4.12 Government Consents 19
4.13 Full Disclosure 19
5. AFFIRMATIVE COVENANTS 19
5.1 Good Standing 19
5.2 Government Compliance 19
5.3 Financial Statements, Reports, Certificates 19
5.4 Inventory; Returns 20
5.5 Taxes 20
5.6 Insurance 20
5.7 Principal Depository 20
5.8 Quick Ratio 20
5.9 Debt-Tangible Net Worth Ratio 20
5.10 Tangible Net Worth 20
5.11 Out-of-Debt 20
5.12 Further Assurances 21
6. NEGATIVE COVENANTS 21
6.1 Dispositions 21
6.2 Change in Business 21
6.3 Mergers or Acquisitions 21
6.4 Indebtedness 21
6.5 Encumbrances 21
6.6 Distributions 21
6.7 Investments 22
6.8 Transactions with Affiliates 22
6.9 Subordinated Debt 22
6.10 Compliance 22
7. EVENTS OF DEFAULT 22
7.1 Payment Default 22
7.2 Covenant Default 22
7.3 Material Adverse Change 23
7.4 Attachment 23
7.5 Insolvency 23
7.6 Other Agreements 23
7.7 Subordinated Debt 23
7.8 Judgments 23
7.9 Misrepresentations 23
8. BANK'S RIGHTS AND REMEDIES 23
8.1 Rights and Remedies 23
8.2 Bank Expenses 24
8.3 Remedies Cumulative 24
8.4 Demand; Protest 24
9. NOTICES 24
10. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER 25
11. INTERCREDITOR PROVISIONS 25
11.1 Proportionate Interests 25
11.2 Designation of Service Agent 26
11.3 No Agency 26
11.4 No Reliance 26
12. GENERAL PROVISIONS 26
12.1 Successors and Assigns 26
12.2 Indemnification 26
12.3 Time of Essence 26
12.4 Severability of Provisions 26
12.5 Amendments in Writing, Integration 26
12.6 Effect of Amendment and Restatement 27
12.7 Counterparts 27
12.8 Survival 27
12.9 Confidentiality 27
This AMENDED AND RESTATED LOAN AGREEMENT is entered into as of
April 30, 1997 by and among SILICON VALLEY BANK ("SVB") as Servicing
Agent and a Bank and BANK OF HAWAII ("BofH;" SVB and BofH are referred
to individually herein as a "Bank," and collectively as the "Banks") and
CENTIGRAM COMMUNICATIONS CORPORATION, a Delaware corporation
("Borrower"). SVB will act as Agent for the Banks pursuant to the terms
of the Master Agreement between SVB and BofH dated as of August 30,
1996.
RECITALS
A. Borrower and Bank are parties to that certain Credit
Agreement dated as of March 28, 1994 (the "Credit Agreement"), that
certain Foreign Exchange Letter Agreement dated as of April 1, 1994 (the
"F/X Letter") and a Note dated March 28, 1994 by Borrower to Bank (the
"Note") (the Credit Agreement, the F/X Letter and the Note, each as
amended by Loan Modification Agreements dated March 1, 1995, April 21,
1995, September 12, 1995, February 16, 1996, and May 1, 1996,
respectively and as may have been further amended, the "Original Loan
Documents").
B. Borrower and Bank wish to amend and restate the terms of the
Original Loan Documents as stated herein. This Agreement sets forth the
terms on which Bank will loan money to Borrower and Borrower will repay
the amounts owing to Bank.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION1. DEFINITIONS AND
CONSTRUCTION
1.1 Definitions1.1 Definitions. As used in this
Agreement, the following terms shall have the following definitions:
"Advance" or "Advances" means a cash advance or cash
advances under the Revolving Facility.
"Affiliate" means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any
Person that controls or is controlled by or is under common control with
such Person, and each of such Person's senior executive officers,
directors, and partners.
"Bank Expenses" means all: reasonable costs or
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the preparation, negotiation, administration, and
enforcement of the Loan Documents; and each Bank's reasonable attorneys'
fees and expenses incurred in amending, enforcing or defending the Loan
Documents, whether or not suit is brought.
"Borrower's Books" means all of Borrower's books and
records relating to its property.
"Business Day" means a day of the year (a) that is not
a Saturday, Sunday or other day on which banks in the States of
California or Hawaii or the City of London are authorized or required to
close and (b) on which dealings are carried on in the interbank market
in which Banks customarily participate.
"Cash Management Services" has the meaning set forth
in Section 2.1.3.
"Closing Date" means the date of this Agreement.
"Code" means the California Uniform Commercial Code.
"Committed Line" means Twenty Million Dollars
($20,000,000).
"Contingent Obligation" means, as applied to any
Person, any direct or indirect liability, contingent or otherwise, of
that Person with respect to (i) any indebtedness, lease, dividend,
letter of credit or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or
in respect of which that Person is otherwise directly or indirectly
liable; (ii) any obligations with respect to undrawn letters of credit
issued for the account of that Person; and (iii) all obligations arising
under any interest rate, currency or commodity swap agreement, interest
rate cap agreement, interest rate collar agreement, or other agreement
or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided,
however, that the term "Contingent Obligation" shall not include
endorsements for collection or deposit in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by such Person in good faith; provided,
however, that such amount shall not in any event exceed the maximum
amount of the obligations under the guarantee or other support
arrangement.
"Current Liabilities" means, as of any applicable
date, all amounts that should, in accordance with GAAP, be included as
current liabilities on the consolidated balance sheet of Borrower and
its Subsidiaries, excluding all outstanding Advances made under
Section 2.1 hereof, but including all other Indebtedness that is payable
upon demand or within one year from the date of determination thereof
unless such Indebtedness is renewable or extendable at the option of
Borrower or any Subsidiary to a date more than one year from the date of
determination.
"Daily Balance" means the amount of the Obligations
owed at the end of a given day.
"Equipment" means machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and
attachments.
"Equivalent Amount" means the equivalent in United
States Dollars of an Optional Currency, calculated at the spot rate for
the purchase of such Optional Currency by BofH.
"Exchange Contracts" means the foreign exchange
contracts entered into pursuant to Section 2.1.2.
"ERISA" means the Employment Retirement Income
Security Act of 1974, as amended, and the regulations thereunder.
"GAAP" means generally accepted accounting principles
as in effect from time to time.
"Indebtedness" means (a) all indebtedness for borrowed
money or the deferred purchase price of property or services, including
without limitation reimbursement and other obligations with respect to
surety bonds and letters of credit, (b) all obligations evidenced by
notes, bonds, debentures or similar instruments, (c) all capital lease
obligations and (d) all Contingent Obligations.
"Insolvency Proceeding" means any proceeding commenced
by or against any person or entity under any provision of the United
States Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency law, including assignments for the benefit of creditors,
extension generally with all or substantially all creditors, or
proceedings seeking general reorganization, arrangement, or other
relief.
"Interest Period" means for each LIBOR Rate Advance, a
period of approximately one, three or six months as Borrower may elect,
provided that the last day of an Interest Period for a LIBOR Rate
Advance shall be determined in accordance with the practices, of the
LIBOR interbank market as from time to time in effect, provided,
further, in all cases such period shall expire not later than the
applicable Maturity Date.
"Inventory" means all present and future inventory in
which Borrower has any interest, including merchandise, raw materials,
parts, supplies, packing and shipping materials, work in process and
finished products intended for sale or lease or to be furnished under a
contract of service, of every kind and description now or at any time
hereafter owned by or in the custody or possession, actual or
constructive, of Borrower, including such inventory as is temporarily
out of its custody or possession or in transit and including any returns
upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above, and Borrower's Books
relating to any of the foregoing.
"Investment" means any beneficial ownership of
(including stock, partnership interest or other securities) any Person,
or any loan, advance or capital contribution to any Person.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"Issuing Bank" means the Bank issuing a Letter of
Credit pursuant to Section 2.1.1. SVB shall be the Issuing Bank, except
that BofH shall be the Issuing Bank if (i) SVB is unable to issue a
Letter of Credit or (ii) a Letter of Credit issued by SVB would require
confirmation by another bank under circumstances in which a Letter of
Credit issued by BofH would not require confirmation.
"LIBOR Base Rate" means, for any Interest Period for a
LIBOR Rate Advance, the rate of interest per annum determined by SVB to
be the per annum rate of interest at which deposits in United States
Dollars are offered to SVB in the London interbank market in which SVB
customarily participates at 11:00 A.M. (local time in such interbank
market) three (3) Business Days before the first day of such Interest
Period for a period approximately equal to such Interest Period and in
an amount approximately equal to the amount of such Advance.
"LIBOR Rate" shall mean, for any Interest Period for a
LIBOR Rate Advance, a rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) equal to (i) the LIBOR Base Rate for such
Interest Period divided by (ii) 1 minus the Reserve Requirement for such
Interest Period.
"LIBOR Rate Advance" means an Advance bearing interest
at a rate equal to the LIBOR Rate plus one and one-half percent (1 1/2%)
and made pursuant to Section 2.1.
"Lien" means any mortgage, lien, deed of trust,
security interest or other encumbrance.
"Loan Documents" means, collectively, this Agreement,
any note or notes executed by Borrower, and any other agreement entered
into between Borrower and Banks in connection with this Agreement, all
as amended or extended from time to time.
"Material Adverse Effect" means a material adverse
effect on (i) the business operations or financial condition of Borrower
and its Subsidiaries taken as a whole or (ii) the ability of Borrower,
taken as a whole, to repay the Obligations.
"Maturity Date" means the date immediately preceding
the first anniversary of the Closing Date.
"Obligations" means all debt, principal, interest,
Bank Expenses and other amounts owed to the Banks by Borrower pursuant
to this Agreement, whether absolute or contingent, due or to become due
(including any interest accruing after the commencement of an Insolvency
Proceeding and any interest that would have accrued but for the
commencement of an Insolvency Proceeding), now existing or hereafter
arising.
"Original Loan Documents" has the meaning set forth in
the recital paragraph above.
"Percentage Share" means, as to each Bank, the
percentage calculated in accordance with Section 11.1 hereof.
"Periodic Payments" means all installments or similar
recurring payments that Borrower may now or hereafter become obligated
to pay to either Bank pursuant to the terms and provisions of any
instrument, or agreement now or hereafter in existence between Borrower
and such Bank.
"Permitted Indebtedness" means:
(a) Indebtedness of Borrower in favor of Bank
arising under this Agreement or any other Loan Document;
(b) Indebtedness existing on the Closing Date and
disclosed in the Schedule;
(c) Indebtedness to trade creditors and with
respect to surety bonds and similar obligations incurred in the ordinary
cause of business;
(d) Subordinated Debt;
(e) Indebtedness of Borrower to any Subsidiary and
Contingent Obligations of any Subsidiary with respect to obligations of
Borrower (provided that the primary obligations are not prohibited
hereby), and Indebtedness of any Subsidiary to any other Subsidiary and
Contingent Obligations of any Subsidiary with respect to obligations of
any other Subsidiary (provided that the primary obligations are not
prohibited hereby);
(f) Indebtedness secured by Permitted Liens;
(g) Capital leases or indebtedness incurred solely
to purchase equipment which is secured in accordance with clause (c) of
"Permitted Liens" below and is not in excess of the lesser of the
purchase price of such equipment or the fair market value of such
equipment on the date of acquisition; and
(h) Extensions, refinancings, modifications,
amendments and restatements of any of items of Permitted Indebtedness
(a) through (g) above, provided that the principal amount thereof is not
increased or the terms thereof are not modified to impose more
burdensome terms upon Borrower or its Subsidiary, as the case may be.
"Permitted Investment" means:
(a) Investments existing on the Closing Date
disclosed in the Schedule; and
(b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency
or any State thereof maturing within one (1) year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one (1)
year from the date of creation thereof and currently having the highest
rating obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc., and (iii) certificates of deposit maturing no
more than one (1) year from the date of investment therein issued by
Bank, and (iv) any Investments permitted by Borrower's investment
policy, as amended from time to time, provided that such investment
policy (any such amendment thereto) has been approved by Bank;
(c) Investments consisting of the endorsement of
negotiable instrument for deposit or collection or similar transaction
in the ordinary course of business;
(d) Investments accepted in connection with
Transfers permitted by Section 5.1;
(e) Investments (whether consisting of the purchase
or securities, loans, capital contribution, or otherwise) of
Subsidiaries in or to other Subsidiaries or in Borrower;
(f) Investments consisting of (i) compensation of
employees, officers and directors of Borrower or its Subsidiaries so
long as the Board of Directors of Borrower determines that such
compensation is in the best interests of Borrower, (ii) travel advances,
employee relocation loans and other employee loans and advances in the
ordinary course of business, and (iii) loans to employees, officers or
directors relating to the purchase of equity securities of Borrower or
its Subsidiaries pursuant to employee stock purchase plans or agreements
approved by Borrower's Board of Directors;
(g) Investments (including debt obligations)
received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of,
and other disputes with, customers or suppliers arising in the ordinary
course of business;
(h) Investments pursuant to or arising under
currency agreements or interest rate agreements entered into in the
ordinary course of business;
(i) Investments consisting of notes receivable of,
or prepaid royalties and other credit extensions, to customers and
suppliers who are not Affiliates, in the ordinary course of business;
provided that this paragraph (i) shall not apply to Investments by
Borrower in any Subsidiary;
(j) Investments constituting acquisitions permitted
under Section 7.3;
(k) Deposit accounts of Borrower in which Banks
have a Lien prior to any other Lien; and
(l) Investments made in accordance with Borrower's
investment policy, as reviewed by Banks and approved from time to time
by Borrower's board of directors.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and
disclosed in the Schedule;
(b) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested
in good faith by appropriate proceedings;
(c) Liens (i) upon or in any Equipment acquired or
held by Borrower or any of its Subsidiaries to secure the purchase price
of such Equipment or indebtedness incurred solely for the purpose of
financing the acquisition of such Equipment, or (ii) existing on such
Equipment at the time of its acquisition, provided that the Lien is
confined solely to the property so acquired and improvements thereon,
and the proceeds of such Equipment;
(d) Liens on Equipment leased by Borrower or any
Subsidiary pursuant to an operating or capital lease in the ordinary
course of business (including proceeds thereof and accessions thereto)
incurred solely for the purpose of financing the lease of such Equipment
(including Liens pursuant to leases permitted pursuant to Section 6.1
and Liens arising from UCC financing statements regarding leases
permitted by this Agreement);
(e) Leases or subleases and license and sublicenses
granted to others in the ordinary course of Borrower's business not
interfering in any material respect with the business of Borrower and
its Subsidiaries taken as a whole, and any interest or title of a
lessor, licensor or under any lease or license;
(f) Liens on assets (including the proceeds thereof
and accessions thereto) that existed at the time such assets were
acquired by Borrower or any Subsidiary (including Liens on assets of any
corporation that existed at the time it became or becomes a Subsidiary);
provided such Liens are not granted in contemplation of or in connection
with the acquisition of such asset by Borrower or a Subsidiary;
(g) Liens arising from judgments, decrees or
attachments in circumstances not constituting an Event of Default under
Section 7.8;
(h) Easements, reservations, rights-of-way,
restrictions, minor defects or irregularities in title and other similar
charges or encumbrances affecting real property not constituting a
Material Adverse Effect;
(i) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payments of customs
duties in connection with the importation of goods;
(j) Liens which constitute rights of set-off of a
customary nature or banker's Liens with respect to amounts on deposit,
whether arising by operation of law or by contract, in connection with
arrangement entered in to with banks in the ordinary course of business;
(k) Earn-out and royalty obligations existing
on the date hereof or entered into in connection with an acquisition
permitted by Section 6.3;
(l) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of
the type described in clauses (a), (c), (d), (e), (f) and (k) above,
provided that any extension, renewal or replacement Lien shall be limited
to the property encumbered by the existing Lien and the principal amount
of the indebtedness being extended, renewed or refinanced does not
increase; and
(m) Liens on insurance proceeds in favor of
insurance companies granted solely as security for financed premiums.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust,
unincorporated organization, association, corporation, institution,
public benefit corporation, firm, joint stock company, estate, entity or
governmental agency.
"Prime Rate" means the variable rate of interest, per
annum, most recently announced by SVB as its "prime rate," or by BofH as
its "base rate," as applicable to the Advances made hereunder by each
Bank, whether or not such announced rate is the lowest rate available
from such Bank.
"Prime Rate Advance" means an Advance bearing interest
at a rate equal to the Prime Rate and made pursuant to Section 2.1.
"Quick Assets" means, at any date as of which the
amount thereof shall be determined, the unrestricted cash and
cash-equivalents; net, billed accounts receivable; and investments with
maturities not to exceed twelve (12) months of Borrower determined in
accordance with GAAP.
"Reserve Requirement" means, for any Interest Period,
the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during
such Interest Period under Regulation D against "Eurocurrency
liabilities" (as such term is used in Regulation D) by member banks of
the Federal Reserve System. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by Banks by reason of any Regulatory Change
against (i) any category of liabilities which includes deposits by
reference to which the LIBOR Rate is to be determined as provided in the
definition of "LIBOR Base Rate" or (ii) any category of extensions of
credit or other assets which include Advances.
"Responsible Officer" means each of the Chief
Executive Officer, the Chief Financial Officer and the Corporate
Controller of Borrower.
"Revolving Facility" means the facility under which
Borrower may request Bank to issue cash advances, as specified in
Section 2.1 hereof.
"Schedule" means the schedule of exceptions, if any,
attached hereto.
"Subordinated Debt" means any debt incurred by
Borrower that is subordinated to the debt owing by Borrower to Bank on
terms acceptable to Bank (and identified as being such by Borrower and
Bank).
"Subsidiary" means any corporation or partnership in
which (i) any general partnership interest or (ii) more than 50% of the
stock of which by the terms thereof ordinary voting power to elect the
Board of Directors, managers or trustees of the entity shall, at the
time as of which any determination is being made, be owned by Borrower,
either directly or through an Affiliate.
"Tangible Net Worth" means at any date as of which the
amount thereof shall be determined, the consolidated total assets of
Borrower and its Subsidiaries minus, without duplication, (i) the sum of
any amounts attributable to (a) goodwill, (b) intangible items such as
unamortized debt discount and expense, patents, trade and service marks
and names, copyrights and research and development expenses except
prepaid expenses, and (ii) Total Liabilities.
"Total Liabilities" means at any date as of which the
amount thereof shall be determined, all obligations that should, in
accordance with GAAP be classified as liabilities on the consolidated
balance sheet of Borrower, including in any event all Indebtedness, but
specifically excluding Subordinated Debt.
1.2 Accounting Terms1.2 Accounting Terms. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP and all calculations made hereunder shall be made in
accordance with GAAP. When used herein, the terms "financial statements"
shall include the notes and schedules thereto.
2. LOAN AND TERMS OF PAYMENT2. LOAN AND TERMS OF PAYMENT
2.1 Advances2.1 Advances.
(a) Advances. Subject to and upon the terms and
conditions of this Agreement, each Bank agrees to make Advances to Borrower
in an aggregate amount not to exceed such Bank's Percentage Share of the
Committed Line minus the face amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) minus the outstanding
amount of the Foreign Exchange Reserve minus any amounts owed from Borrower
to Bank pursuant to Cash Management Services. Subject to the terms and
conditions of this Agreement, amounts borrowed pursuant to this Section 2.1
may be repaid and reborrowed at any time during the term of this Agreement.
(b) Requests for Advances. Whenever Borrower desires
an Advance, Borrower will notify Servicing Agent by facsimile transmission
or telephone no later than 3:00 p.m. California time on the Business Day
that a Prime Rate Advance is to be made and 3:00 p.m. California time on
the Business Day that is three (3) Business Days prior to the Business Day
on which a LIBOR Rate Advance is to be made. Servicing Agent shall
promptly deliver such notice to the Banks. Each Bank may make Advances
under this Agreement, based upon instructions received by Servicing Agent
from a Responsible Officer, or without instructions if in Servicing Agent's
discretion such Advances are necessary to meet Obligations under this
Agreement which have become due and remain unpaid. Each Bank shall be
entitled to rely on any notice by telephone or otherwise given by a person
who Servicing Agent reasonably believes to be a Responsible Officer, and
Borrower shall indemnify and hold such Bank harmless for any damages or
loss suffered by such Bank as a result of such reliance. Such Bank will
wire or credit, as appropriate, the amount of Advances in United States
Dollars made under this Section 2.1 to Borrower's deposit account held by
Servicing Agent.
Each such notice shall specify:
(i) the date such Advance is to be
made, which shall be a Business Day;
(ii) the amount of such Advance;
(iii) whether such Advance is to be a
Prime Rate Advance or a LIBOR Rate Advance;
(iv) if the Advance is to be a LIBOR
Rate Advance, the Interest Period for such Advance.
Each written request for an Advance, and each confirmation of a telephone
request for such an Advance, shall be in the form of an Advance Request
Form in the form of Exhibit A for a Prime Rate Advance, and an Advance
Request Form in the form of Exhibit B-1 for a LIBOR Rate Advance, in each
case executed by Borrower.
(c) Prime Rate Advances. Each Prime Rate Advance
shall be in an amount not less than Twenty Five Thousand Dollars
($25,000). The outstanding principal balance of each Prime Rate
Receivables Advance shall bear interest (computed daily on the basis of
a 360 day year and actual days elapsed), at a rate per annum equal to
the Prime Rate. Borrower shall pay the entire outstanding principal
amount of each Prime Rate Advance on the Maturity Date.
(d) LIBOR Rate Advances. Each LIBOR Rate Advance
shall be in an amount of not less than Five Hundred Thousand Dollars
($500,000). The outstanding principal balance of each LIBOR Rate
Advance shall bear interest until principal is due (computed daily on
the basis of a 360 day year and actual days elapsed) at a rate per annum
equal to the LIBOR Rate plus 150 basis points for such LIBOR Rate
Advance. The entire outstanding principal amount of each LIBOR Rate
Advance shall be due and payable on the last day of the LIBOR Rate
Interest Period for such LIBOR Rate Advance. Not more than ten (10)
LIBOR Rate Advances shall be outstanding at any time.
(e) Prepayment of the Advances. Borrower may
at any time prepay any Prime Rate Advance or any LIBOR Rate Advance, in
full or in part. Each partial prepayment for a LIBOR Rate Advance shall
be in an amount not less than Two Hundred Fifty Thousand Dollars
($250,000). Each prepayment shall be made upon the irrevocable written or
telephone notice of Borrower received by Servicing Agent not later than
10:00 a.m. California time on the date of the prepayment of a Prime Rate
Advance, and not less than three (3) Business Days prior to the date of
the prepayment of a LIBOR Rate Advance. The notice of prepayment shall
specify the date of the prepayment, the amount of the prepayment, and the
Advance or Advances to be prepaid. Each prepayment of a LIBOR Rate
Advance shall be accompanied by the payment of accrued interest on the
amount prepaid and any amount required by Section 2.8.
(f) Maturity. The Revolving Facility shall
terminate on the Maturity Date, at which time all Advances under this
Section 2.1 and other amounts due under this Agreement shall be
immediately due and payable.
2.1.1 Letters of Credit.
(a) At Borrower's written request, Issuing
Bank shall issue Letters of Credit for Borrower's account. Each Bank
severally agrees to participate in Letters of Credit, in accordance with
such Bank's Percentage Share.
(b) Issuing Bank shall issue the Letter of
Credit upon receipt of a Borrower's written request and Issuing Bank's
standard form of application, stating (a) the date such Borrower wishes
to receive the Letter of Credit (which shall be a Business Day); (b) the
requested amount of such Letter of Credit; (c) the aggregate amount of
all Advances and Letters of Credit then outstanding; (d) if appropriate,
the conditions requested by Borrower under which the Letter of Credit
may be drawn upon; and (e) any other information Issuing Bank might need
to issue the Letter of Credit. Issuing Bank shall promptly notify the
other Bank upon receipt of a request for a Letter of Credit.
(c) The maximum aggregate obligation at
any one time for undrawn and drawn but unreimbursed Letters of Credit shall
not exceed the Committed Line minus the outstanding amount of the
Foreign Exchange Reserve minus any amounts owed from Borrower to Bank
pursuant to Cash Management Services, provided that the aggregate face
amount of outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit) shall not in any case exceed Two Million
Dollars ($2,000,000). Each Letter of Credit shall be issued pursuant to
the terms and conditions of this Agreement and of the Issuing Bank's
standard form of application and security agreement for letters of
credit. Each Letter of Credit shall (a) expire no later than the
Maturity Date, and (b) be otherwise in form and substance satisfactory
to Issuing Bank, provided that a Letter of Credit may expire after the
Maturity Date for so long as Borrower's reimbursement obligation in
connection therewith is secured by cash on terms acceptable to Banks.
Upon issuing a Letter of Credit, the Issuing Bank shall immediately
notify the other Bank of such issuance and shall, on a continuing basis,
keep the other Bank informed of the drawn and undrawn but unreimbursed
amount of each Letter of Credit for so long as such Letter of Credit is
outstanding. With respect to standby Letters of Credit, Borrower shall
pay to Issuing Bank a nonrefundable issuance fee of at least one and
one-half percent (1 1/2%) of the face amount of the Letter of Credit at the
time Borrower requests the Letter of Credit. The Issuing Bank shall
retain a fee equal to one-eighth of one percent (0.125%) of the face
amount of the Letter of Credit, and shall share the balance of such
issuance fee equally with the other Bank. With respect to commercial
Letters of Credit, Borrower shall pay to Issuing Bank a nonrefundable
issuance fee equal to one-eighth of one percent (0.125%) of the face
amount of the Letter of Credit at the time Borrower requests the Letter of
Credit and a negotiation fee equal to one-eighth of one percent (0.125%)
of the face amount of the Letter of Credit at the time a draw is made on
the Letter of Credit. The Issuing Bank shall retain an issuance fee of
One Hundred Dollars ($100) and a negotiation fee of One Hundred Dollar
($100), and shall share the balance of such issuing fee and negotiation
fee equally with the other Bank. On the day on which Issuing Bank honors
any drawing made by the beneficiary of a Letter of Credit, Borrower shall
pay to Issuing Bank the full amount of the drawing so honored, or at
Borrower's option, shall treat the amount of such drawing as an Advance
under Section 2.1. The obligation to reimburse Issuing Bank for the
amount of such drawing is absolute, unconditional, and irrevocable.
(d) Borrower may request that Issuing Bank
issue a Letter of Credit payable in a currency other than United States
Dollars. If a demand for payment is made under any such Letter of
Credit, Issuing Bank shall treat such demand as an Advance to Borrower
of the Equivalent Amount thereof. Upon the issuance of any Letter of
Credit payable in a currency other than United States Dollars, Banks
shall create a reserve under the Committed Line for letters of credit
against fluctuations in currency exchange rates, in an amount equal to
twenty percent (20%) of the face amount of such Letter of Credit. The
amount of such reserve may be amended by Banks from time to time to
account for fluctuations in the exchange rate. The availability of
funds under the Committed Line shall be reduced by the amount of such
reserve for so long as such Letter of Credit remains outstanding.
2.1.2 Foreign Exchange Contract; Foreign Exchange
Settlements.
(a) Subject to the terms of this
Agreement, Borrower may enter into foreign exchange contracts, in
currencies acceptable to the Banks, (the "Exchange Contracts") not to
exceed an aggregate amount of Two Million Dollars ($2,000,000) (the
"Contract Limit"), pursuant to which a Bank shall sell to or purchase from
Borrower foreign currency on a spot or future basis. Borrower shall not
request any Exchange Contracts at any time it is out of compliance with
any of the provisions of this Agreement. All Exchange Contracts must
provide for delivery of settlement on or before the Maturity Date. The
amount available under the Committed Line at any time shall be reduced by
the following amounts (the "Foreign Exchange Reserve") on any given day
(the "Determination Date"): (i) on all outstanding Exchange Contracts on
which delivery is to be effected or settlement allowed more than two
business days after the Determination Date, ten percent (10%) of the gross
amount of the Exchange Contracts; plus (ii) on all outstanding Exchange
Contracts on which delivery is to be effected or settlement allowed within
two business days after the Determination Date, one hundred percent (100%)
of the gross amount of the Exchange Contracts.
(b) Either Bank may, in its discretion,
terminate the Exchange Contracts at any time (a) that an Event of
Default occurs or (b) that there is no sufficient availability under the
Committed Line and Borrower does not have available funds in its bank
account to satisfy the Foreign Exchange Reserve. If a Bank terminates
the Exchange Contracts, and without limitation of any applicable
indemnities, Borrower agrees to reimburse Bank for any and all fees,
costs and expenses relating thereto or arising in connection therewith.
(c) Borrower shall not permit the total
gross amount of all Exchange Contracts on which delivery is to be effected
and settlement allowed in any two business day period to be more than Two
Million Dollars ($2,000,000) (the "Settlement Limit"), nor shall Borrower
permit the total gross amount of all Exchange Contracts to which Borrower
is a party, outstanding at any one time, to exceed the Contract Limit.
Notwithstanding the above, however, the amount which may be settled in any
two (2) business day period may be increased above the Settlement Limit up
to, but in no event to exceed, the amount of the Contract Limit under
either of the following circumstances:
(i) if there is sufficient
availability under the Committed Line in the amount of the Foreign
Exchange Reserve as of each Determination Date, provided that Bank in
advance shall reserve the full amount of the Foreign Exchange Reserve
against the Committed Line; or
(ii) if there is insufficient
availability under the Committed Line, as to settlements within any two
(2) business day period, provided that a Bank, in its sole discretion,
may: (A) verify good funds overseas prior to crediting Borrower's
deposit account with such Bank (in the case of Borrower's sale of
foreign currency); or (B) debit Borrower's deposit account with such
Bank prior to delivering foreign currency overseas (in the case of
Borrower's purchase of foreign currency).
(d) In the case of Borrower's purchase of
foreign currency, Borrower in advance shall instruct a Bank upon
settlement either to treat the settlement amount as an advance under the
Committed Line, or to debit Borrower's account for the amount settled.
(e) Borrower shall execute all standard
form applications and agreements of Banks in connection with the Exchange
Contracts and, without limiting any of the terms of such applications and
agreements, Borrower will pay all standard fees and charges of Banks in
connection with the Exchange Contracts.
(f) Without limiting any of the other
terms of this Agreement or any such standard form applications and
agreements of Banks, Borrower agrees to indemnify Banks and hold them
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, costs and expenses (including, without limitation,
attorneys' fees of counsel of Banks' choice), of every nature and
description which it may sustain or incur, based upon, arising out of, or
in any way relating to any of the Exchange Contracts or any transactions
relating thereto or contemplated thereby.
2.1.3 PC-ACH Sublimit. Subject to the terms and
conditions of this Agreement, Borrower may utilize, subject to
availability under the Committed Line, up to an aggregate amount not to
exceed Five Hundred Thousand Dollars ($500,000) for PC-ACH services as
defined in that certain Cash Management Services Agreement provided to
Borrower in connection herewith (a "Cash Management Service", or the
"Cash Management Services"). Any amounts actually paid by Bank in
respect of a Cash Management Service or Cash Management Services shall,
when paid, constitute an Advance under this Agreement.
2.2 Overadvances2.2 Overadvances. If, at any time or
for any reason, the sum of (i) Advances owed by Borrower to Banks
pursuant to Section 2.1(a) of this Agreement plus (ii) the face amount
of Letters of Credit issued under Section 2.1.1 (including undrawn and
drawn but unreimbursed Letters of Credit) plus (iii) the reserve, if
any, taken under Section 2.1.1(d) plus (iv) the Foreign Exchange Reserve
plus (v) any Advances owed by Borrower to Banks pursuant to
Section 2.1.3 is greater than the Committed Line, Borrower shall
immediately pay to Servicing Agent, in cash, the amount of such excess,
for payment to the Banks according to their respective Percentage
Shares.
2.3 Interest Rates, Payments, and Calculations2.3
Interest Rates, Payments, and Calculations.
(a) Interest Rate. Except as set forth in
Section 2.3(b), any Advances of each Bank shall bear interest, on the
average Daily Balance, at the rates specified in Sections 2.1(c), and
2.1(d), respectively.
(b) Default Rate. All Obligations shall bear
interest, from and after the occurrence of an Event of Default, at a
rate equal to five (5) percentage points above the interest rate
applicable immediately prior to the occurrence of the Event of Default.
(c) Payments. Accrued interest shall be due and
payable in arrears upon the earlier of (i) with respect to any LIBOR
Advance, the end of the Interest Period or (ii) any payment of principal or
(iii) on the twenty-ninth (29th) day of each calendar month (except for the
month of February for which the date shall be the twenty-eighth (28th)
day). Servicing Agent shall, at the option of Servicing Agent, charge such
interest, all Bank Expenses, and all Periodic Payments against Borrower's
deposit account held at SVB or against the Committed Line, in which case
those amounts shall thereafter accrue interest at the rate then applicable
hereunder. Any interest not paid when due shall be compounded by becoming
a part of the Obligations, and such interest shall thereafter accrue
interest at the rate then applicable hereunder.
(d) Computation. In the event the Prime Rate is
changed from time to time hereafter, the applicable rate of interest
hereunder shall be increased or decreased effective as of 12:01 a.m. on the
day the Prime Rate is changed, by an amount equal to such change in the
Prime Rate. All interest chargeable under the Loan Documents shall be
computed on the basis of a three hundred sixty (360) day year for the
actual number of days elapsed.
2.4 Crediting Payments2.4 Crediting Payments. Prior
to the occurrence of an Event of Default, each Bank shall credit a wire
transfer of funds, check, or other item of payment to such deposit account
or Obligation as Borrower specifies. After the occurrence and during the
continuation of an Event of Default, the receipt by a Bank of any wire
transfer of funds, check, or other item of payment shall be immediately
applied to conditionally reduce Obligations, but shall not be considered a
payment on account unless such payment is of immediately available federal
funds or unless and until such check or other item of payment is honored
when presented for payment. Notwithstanding anything to the contrary
contained herein, any wire transfer or payment received by a Bank after
noon California time shall be deemed to have been received by such Bank as
of the opening of business on the immediately following Business Day.
Whenever any payment to a Bank under the Loan Documents would otherwise be
due (except by reason of acceleration) on a date that is not a Business
Day, such payment shall instead be due on the next Business Day, and
additional fees or interest, as the case may be, shall accrue and be
payable for the period of such extension.
2.5 Fees2.5 Fees. Borrower shall pay to Banks the
following:
(a) Facility Fee. A facility fee equal to
Twenty-Seven Thousand Five Hundred Dollars ($27,500) which fee shall be
due and payable on the Closing Date and shall be fully earned and
non-refundable as of such date;
(b) Financial Examination and Appraisal Fees. Each
Bank's customary fees and out-of-pocket expenses for such Bank's financial
analysis and examination of Borrower performed from time to time by such
Bank or its agents; and
(c) Bank Expenses. Upon the date hereof, all Bank
Expenses incurred through the date hereof, including reasonable attorneys'
fees and expenses, and, within thirty (30) days of demand, other Bank
Expenses as they become due from time to time hereunder.
2.6 Additional Costs2.6 Additional Costs. In case any
law, regulation, treaty or official directive or the written interpretation
or application thereof by any court or any governmental authority charged
with the administration thereof or the compliance with any guideline or
request of any central bank or other governmental authority (whether or not
having the force of law):
(a) subjects any Bank to any tax with respect to
payments of principal or interest or any other amounts payable hereunder
by Borrower or otherwise with respect to the
transactions contemplated hereby (except for taxes on the overall net
income of such Bank imposed by the United States of America or any
political subdivision thereof);
(b) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of, or loans
by, any Bank; or
(c) imposes upon any Bank any other material
condition with respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to such
Bank, reduce the income receivable by such Bank or impose any expense
upon such Bank with respect to any loans, such Bank shall notify
Borrower thereof in writing. Borrower shall pay to such Bank the amount
of such increase in cost, reduction in income or additional expense as
and when such cost, reduction or expense is incurred or determined, upon
presentation by such Bank of a statement of the amount and setting forth
such Bank's calculation thereof, all in reasonable detail, which
statement shall be deemed true and correct absent manifest error;
provided, however, that Borrower shall not be liable for any such amount
attributable to any period prior to 180 days prior to the date of such
certificate.
2.7 Conversion/Continuation of Advances2.7
Conversion/Continuation of Advances.
(a) Borrower may from time to time submit in
writing a request that Prime Rate Advances be converted to LIBOR Rate
Advances or that any existing LIBOR Rate Advances continue for an additional
Interest Period. Such request shall specify the amount of the Prime
Rate Advances that will constitute LIBOR Rate Advances (subject to the
limits set forth below) and the Interest Period to be applicable to such
LIBOR Rate Advances. Each written request for a conversion to a LIBOR
Rate Advance or a continuation of a LIBOR Rate Advance shall be
substantially in the form of a LIBOR Rate Conversion/Continuation
Certificate as set forth on Exhibit B-2, which shall be duly executed by
a Responsible Officer. Subject to the terms and conditions contained
herein, three (3) Business Days after Servicing Agent's receipt of such
a request from Borrower, such Prime Rate Advances shall be converted to
LIBOR Rate Advances or such LIBOR Rate Advances shall continue, as the
case may be provided that:
(i) no Event of Default or
event which with notice or passage of time or both would constitute an
Event of Default exists;
(ii) no party hereto shall have
sent any notice of termination of the Agreement;
(iii) Borrower shall have
complied with such customary procedures as Banks have established from time
to time for Borrower's requests for LIBOR Rate Advances;
(iv) the amount of a Prime Rate
Advance shall be Twenty-Five Thousand Dollars ($25,000) or more, and the
amount of a LIBOR Rate Advance shall be Five Hundred Thousand Dollars
($500,000) or such greater amount which is an integral multiple of Fifty
Thousand Dollars ($50,000); and
(v) Servicing Agent shall have
determined that the Interest Period or LIBOR Rate is available to Banks
as of the date of the request for such LIBOR Rate Advance.
Any request by Borrower to convert Prime Rate Advances to LIBOR
Rate Advances or continue any existing LIBOR Rate Advances shall be
irrevocable. Notwithstanding anything to the contrary contained herein,
Banks shall not be required to purchase United States Dollar deposits in
the London interbank market or other applicable LIBOR Rate market to
fund any LIBOR Rate Advances, but the provisions hereof shall be deemed
to apply as if Banks had purchased such deposits to fund the LIBOR Rate
Advances.
(b) Any LIBOR Rate Advances shall automatically
convert to Prime Rate Advances upon the last day of the applicable
Interest Period, unless Banks have received and approved a complete and
proper request to continue such LIBOR Rate Advance at least three (3)
Business Days prior to such last day in accordance with the terms
hereof. Any LIBOR Rate Advances shall, at Banks' option, convert to
Prime Rate Advances in the event that an Event of Default shall exist.
Borrower shall pay to Banks, upon demand by Banks (or Servicing Agent
may, at its option, charge Borrower's deposit account) any amounts
required to compensate Banks for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the
conversion of LIBOR Rate Advances to Prime Rate Advances pursuant to any
of the foregoing.
2.8 Additional Requirements/Provisions Regarding LIBOR
Rate Advances.2.8 Additional Requirements/Provisions Regarding LIBOR
Rate Advances.
(a) If for any reason (including voluntary or
mandatory prepayment or acceleration), Banks receive all or part of the
principal amount of a LIBOR Rate Advance prior to the last day of the
Interest Period for such LIBOR Rate Advance Borrower shall on demand by
Servicing Agent, pay Servicing Agent the amount (if any) by which
(i) the additional interest which would have been payable on the amount
so received had it not been received until the last day of such Interest
Period or term exceeds (ii) the interest which would have been
recoverable by Banks by placing the amount so received on deposit in the
certificate of deposit markets or the offshore currency interbank
markets or United States Treasury investment products, as the case may
be, for a period starting on the date on which it was so received and
ending on the last day of such Interest Period or term at the interest
rate determined by Servicing Agent in its reasonable discretion.
Servicing Agent's determination as to such amount shall be conclusive
absent manifest error.
(b) Borrower shall pay to a Bank, upon demand
by a Bank, from time to time such amounts as such Bank may reasonably
determine to be necessary to compensate it for any costs incurred by
such Bank that such Bank determines are attributable to its making or
maintaining of any amount receivable by such Bank hereunder in respect
of any Advances relating thereto (such increases in costs and reductions
in amounts receivable being herein called "Additional Costs"), in each
case resulting from any Regulatory Change which:
(i) changes the basis of taxation of any
amounts payable to such Bank under this Agreement in respect of any
Advances (other than changes which affect taxes measured by or imposed
on the overall net income of such Bank by the jurisdiction in which such
Bank has its principal office); or
(ii) imposes or modifies any reserve,
special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of
such Bank (including any Advances or any deposits referred to in the
definition of "LIBOR Base Rate"); or
(iii) imposes any other material condition
affecting this Agreement (or any of such extensions of credit or
liabilities).
Such Bank will notify Borrower of any event occurring after the date of
the Agreement which will entitle such Bank to compensation pursuant to
this section as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Such Bank will
furnish Borrower with a statement setting forth the basis and amount of
each request by such Bank for compensation under this Section 2.8.
Determinations and allocations by a Bank for purposes of this
Section 2.8 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Advances or of making or maintaining
Advances or on amounts receivable by it in respect of Advances, and of
the additional amounts required to compensate such Bank in respect of
any Additional Costs, shall be conclusive absent manifest error.
(c) Borrower shall pay to a Bank, upon the request
of such Bank, such amount or amounts as shall be sufficient (in the sole
good faith opinion of such Bank) to compensate it for any reasonable
loss, costs or expense incurred by it as a result of any failure by
Borrower to borrow a LIBOR Rate Advance on the date for such borrowing
specified in the relevant notice of borrowing hereunder.
(d) If a Bank shall determine that the adoption or
implementation of any applicable law, rule, regulation or treaty
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Bank (or its applicable lending
office) with any respect or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank or any person or entity
controlling Bank (a "Parent") as a consequence of its obligations
hereunder to a level below that which Bank (or its Parent) could have
achieved but for such adoption, change or compliance (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by Bank to be material, then from time to time, within
fifteen (15) days after demand by such Bank, Borrower shall pay to Bank
such additional amount or amounts as will compensate such Bank for such
reduction. A statement of such Bank claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive absent manifest error.
(e) If at any time a Bank, in its sole and absolute
discretion, determines that: (i) the amount of the LIBOR Rate Advances
for periods equal to the corresponding Interest Periods or any other
period are not available to such Bank in the offshore currency interbank
markets, or (ii) the LIBOR Rate does not accurately reflect the cost to
Bank of lending the LIBOR Rate Advance, then such Bank shall promptly
give notice thereof to Borrower, and upon the giving of such notice such
Bank's obligation to make the LIBOR Rate Advances shall terminate,
unless Banks and Borrower agree in writing to a different interest rate
applicable to LIBOR Rate Advances. If it shall become unlawful for a
Bank to continue to fund or maintain any Advances, or to perform its
obligations hereunder, upon demand by such Bank, Borrower shall prepay
the Advances in full with accrued interest thereon and all other amounts
payable by Borrower hereunder (including, without limitation, any amount
payable in connection with such prepayment pursuant to Section 2.8(a)).
2.9 Term2.9 Term. This Agreement shall become
effective upon the date hereof and shall continue in full force and
effect for a term ending on the Maturity Date. Notwithstanding the
foregoing, Banks shall have the right to terminate any obligation to
make Advances under this Agreement immediately and without notice upon
the earlier of (i) the occurrence and during the continuance of an Event
of Default or (ii) the Maturity Date. On the date of termination, all
Obligations shall become immediately due and payable in cash or by wire
transfer.
3. CONDITIONS OF LOANS3. CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Advance3.1
Conditions Precedent to Initial Advance. The obligation of either
Bank to make the initial Advance is subject to the condition precedent
that such Bank shall have received, in form and substance satisfactory
to such Bank, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with
respect to incumbency and resolutions authorizing the execution and
delivery of this Agreement;
(c) payment of the fees and Bank Expenses then due
specified in Section 2.5 hereof, provided reasonably detailed invoices
are received; and
(d) such other documents, and completion of such
other matters, as Banks may reasonably deem necessary or appropriate.
3.2 Conditions Precedent to all Advances3.2 Conditions
Precedent to all Advances. The obligation of any Bank to make each
Advance, including the initial Advance, is further subject to the
following conditions:
(a) timely receipt by Servicing Agent of the Loan
Payment/Advance Request Form or LIBOR Rate Advance Request Form, as
applicable, as provided in Section 2.1; and
(b) the representations and warranties contained in
Section 4 shall be true and correct in all material respects on and as
of the date of such Loan Payment/Advance Request Form or LIBOR Rate
Advance Request Form, as applicable, and on the effective date of each
Advance as though made at and as of each such date (except to the extent
they relate specifically to an earlier date, in which case such
representations and warranties shall continue to have been true and
accurate as of such date), and no Event of Default shall have occurred
and be continuing, or would result from such Advance.
The making of each Advance shall be deemed to be a representation
and warranty by Borrower on the date of such Advance or Inventory
Advance as to the accuracy of the facts referred to in this
Section 3.2(b).
4. REPRESENTATIONS AND WARRANTIES4. REPRESENTATIONS AND
WARRANTIES
Borrower represents and warrants as follows:
4.1 Due Organization and Qualification4.1 Due
Organization and Qualification. Borrower and each Subsidiary is a
corporation duly existing and in good standing under the laws of its
state of incorporation and qualified and licensed to do business in, and
is in good standing in, any state in which the conduct of its business
or its ownership of property requires that it be so qualified.
4.2 Due Authorization; No Conflict4.2 Due
Authorization; No Conflict. The execution, delivery, and performance of
the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Certificate of Incorporation or Bylaws,
nor will they constitute an event of default under any material agreement
to which Borrower is a party or by which Borrower is bound. Borrower is
not in default under any agreement to which it is a party or by which it
is bound, which default could have a Material Adverse Effect.
4.3 No Prior Encumbrances4.3 No Prior Encumbrances.
Borrower has good and indefeasible title to its property, free and clear
of Liens, except for Permitted Liens.
4.4 Name; Location of Chief Executive Office4.4 Name;
Location of Chief Executive Office. Borrower has not done business
under any name other than that specified on the signature page hereof.
The chief executive office of Borrower is located at the address
indicated in Section 9 hereof.
4.5 Litigation4.5 Litigation. There are no actions or
proceedings pending by or against Borrower or any Subsidiary before any
court or administrative agency in which an adverse decision could have a
Material Adverse Effect. Borrower does not have knowledge of any such
pending or threatened actions or proceedings.
4.6 No Material Adverse Change in Financial Statements4.6
No Material Adverse Change in Financial Statements. All
consolidated financial statements related to Borrower and any Subsidiary
that have been delivered by Borrower to Bank fairly present in all
material respects Borrower's consolidated financial condition as of the
date thereof and Borrower's consolidated results of operations for the
period then ended. There has not been a material adverse change in the
consolidated financial condition of Borrower since the date of the most
recent of such financial statements submitted to Bank.
4.7 Solvency4.7 Solvency. The fair saleable value of
Borrower's assets (including good will minus disposition costs) exceeds
the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions contemplated by this
Agreement; and Borrower is able to pay its debts (including trade debts)
as they mature.
4.8 Regulatory Compliance4.8 Regulatory Compliance.
Borrower and each Subsidiary has met the minimum funding requirements of
ERISA with respect to any employee benefit plans subject to ERISA. No
event has occurred resulting from Borrower's failure to comply with
ERISA that is reasonably likely to result in Borrower's incurring any
liability that could have a Material Adverse Effect. Borrower is not an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940.
Borrower is not engaged principally, or as one of the important
activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of
Regulations G, T and U of the Board of Governors of the Federal Reserve
System). Borrower has complied with all the provisions of the Federal
Fair Labor Standards Act. Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a
Material Adverse Effect.
4.9 Environmental Condition4.9 Environmental
Condition. None of Borrower's or any Subsidiary's properties or assets
has ever been used by Borrower or any Subsidiary or, to the best of
Borrower's knowledge, by previous owners or operators, in the disposal of,
or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in accordance with applicable law;
to the best of Borrower's knowledge, none of Borrower's properties or
assets has ever been designated or identified in any manner pursuant to
any environmental protection statute as a hazardous waste or hazardous
substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous
waste or hazardous substances into the environment.
4.10 Taxes4.10 Taxes. Borrower and each
Subsidiary have filed or caused to be filed all tax returns required to be
filed, and have paid, or have made adequate provision for the payment of,
all taxes reflected therein.
4.11 Subsidiaries4.11 Subsidiaries. Borrower
does not own any stock, partnership interest or other equity securities of
any Person, except for Permitted Investments.
4.12 Government Consents4.12 Government Consents. Borrower
and each Subsidiary have obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all
notices to, all governmental authorities that are necessary for the
continued operation of their respective businesses as currently
conducted.
4.13 Full Disclosure4.13 Full Disclosure. No
representation, warranty or other statement made by Borrower in any
certificate or written statement furnished to Bank contains any untrue
statement of a material fact or omits to state a material fact necessary
in order to make the statements contained in such certificates or
statements not misleading (it being recognized by Bank, except as
provided in Section 4.12, that the projections and forecasts provided by
Borrower are not viewed as facts and that the actual results during the
period or periods covered by any such projections or forecasts may
differ from the projected or forecasted results).
5. AFFIRMATIVE COVENANTS5. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of
all outstanding Obligations, and for so long as a Bank may have any
commitment to make an Advance hereunder, Borrower shall do all of the
following:
5.1 Good Standing5.1 Good Standing. Borrower shall
maintain its and each of its Subsidiaries' corporate existence and good
standing in its jurisdiction of incorporation and maintain qualification
in each jurisdiction in which the failure to so qualify could have a
Material Adverse Effect. Borrower shall maintain, and shall cause each
of its Subsidiaries to maintain, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.
5.2 Government Compliance5.2 Government Compliance.
Borrower shall meet, and shall cause each Subsidiary to meet, the
minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. Borrower shall comply, and shall cause
each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance
with which could have a Material Adverse Effect.
5.3 Financial Statements, Reports, Certificates5.3
Financial Statements, Reports, Certificates. Borrower shall
deliver to Banks: (a) within five (5) days upon becoming available or,
if earlier, to the extent applicable, forty-five (45) days after the end
of each fiscal quarter, copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or
to any holders of Subordinated Debt and all reports on Form 10-K and 10-
Q filed with the Securities and Exchange Commission; (b) as soon as
available, but in any event within one hundred and twenty (120) days
after the end of Borrower's fiscal year, audited consolidated financial
statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial
statements of an independent certified public accounting firm reasonably
acceptable to Bank; (c) promptly upon receipt of notice thereof, a
report of any legal actions pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any
Subsidiary of Five Hundred Thousand Dollars ($500,000) or more; and
(d) such budgets, sales projections, operating plans or other financial
information as Bank may reasonably request from time to time.
Borrower shall deliver to Banks with the quarterly financial
statements a Compliance Certificate signed by a Responsible Officer in
substantially the form of Exhibit C hereto.
5.4 Inventory; Returns5.4 Inventory; Returns. Borrower
shall keep all Inventory in good and marketable condition, free from all
material defects. Returns and allowances, if any, as between Borrower
and its account debtors shall be on the same basis and in accordance
with the usual customary practices of Borrower, as they exist at the
time of the execution and delivery of this Agreement. Borrower shall
promptly notify Servicing Agent of all returns and recoveries and of all
disputes and claims, where the return, recovery, dispute or claim
involves more than Two Million Dollars ($2,000,000).
5.5 Taxes5.5 Taxes. Borrower shall make, and shall
cause each Subsidiary to make, due and timely payment or deposit of all
material federal, state, and local taxes, assessments, or contributions
required of it by law, and will execute and deliver to Banks, on demand,
appropriate certificates attesting to the payment or deposit thereof;
and Borrower will make, and will cause each Subsidiary to make, timely
payment or deposit of all material tax payments and withholding taxes
required of it by applicable laws, including, but not limited to, those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Banks with
proof satisfactory to Banks indicating that Borrower or a Subsidiary has
made such payments or deposits; provided that Borrower or a Subsidiary
need not make any payment if the amount or validity of such payment is
contested in good faith by appropriate proceedings and is reserved
against (to the extent required by GAAP) by Borrower.
5.6 Insurance5.6 Insurance. Borrower, at its
expense, shall keep its business insured against loss or damage by fire,
theft, explosion, sprinklers, and all other hazards and risks, and in
such amounts, as ordinarily insured against by other owners in similar
businesses conducted in the locations where Borrower's business is
conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower's ownership and use of its assets in amounts and of
a type that are customary to businesses similar to Borrower's.
5.7 Principal Depository5.7 Principal Depository.
Borrower shall maintain its principal depository and operating accounts
with SVB.
5.8 Quick Ratio5.8 Quick Ratio. Borrower shall
maintain, as of the last day of each fiscal quarter, a ratio of Quick
Assets to Current Liabilities of at least 2.00 to 1.00.
5.9 Debt-Tangible Net Worth Ratio5.9
Debt-Tangible Net Worth Ratio. Borrower shall maintain, as of the last
day of each fiscal quarter, a ratio of Total Liabilities less Subordinated
Debt to Tangible Net Worth plus Subordinated Debt of not more than 1.00 to
1.00.
5.10 Tangible Net Worth5.10 Tangible Net Worth. Borrower
shall maintain, as of the last day of each fiscal quarter, a Tangible
Net Worth of not less than Seventy Million Dollars ($70,000,000), minus
up to an aggregate amount of Fifteen Million Dollars (15,000,000)
provided such amount is used to repurchase Borrower's capital stock in
accordance with Section 6.6.
5.11 Out-of-Debt5.11 Out-of-Debt. Borrower shall,
between the time of the date of the initial Advance hereunder and the
Maturity Date, have repaid all outstanding Obligations hereunder for a
period of thirty (30) consecutive days.
5.12 Further Assurances5.12 Further Assurances. At any
time and from time to time Borrower shall execute and deliver such
further instruments and take such further action as may reasonably be
requested by Bank to effect the purposes of this Agreement.
6. NEGATIVE COVENANTS6. NEGATIVE COVENANTS
Borrower covenants and agrees that, without the prior
written consent of Banks, which may be withheld in Banks' sole
discretion, so long as any credit hereunder shall be available and until
payment in full of the outstanding Obligations or for so long as a Bank
may have any commitment to make any Advances, Borrower will not do any
of the following:
6.1 Dispositions6.1 Dispositions. Convey, sell, lease,
transfer or otherwise dispose of (collectively, a "Transfer"), or permit
any of its Subsidiaries to Transfer, all or any part of its business or
property, other than: (i) Transfers of Inventory in the ordinary course
of business; (ii) Transfers of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its
Subsidiaries; (iii) Transfers of worn-out or obsolete Equipment, or
Equipment financed by other vendors; (iv) Transfers which constitute
liquidation of Investments permitted under Section 6.7; and (v) other
Transfers not otherwise permitted by this Section 6.1 not exceeding One
Million Dollars ($1,000,000) in the aggregate in any fiscal year.
6.2 Change in Business6.2 Change in Business. Engage in
any business, or permit any of its Subsidiaries to engage in any
business, other than the businesses currently engaged in by Borrower and
any business substantially similar or related thereto (or incidental
thereto), or suffer a material change in Borrower's ownership other than
the sale of additional Common Stock of the Company. Borrower will not,
without thirty (30) days prior written notification to Banks, relocate
its chief executive office.
6.3 Mergers or Acquisitions6.3 Mergers or
Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to
merge or consolidate, with or into any other business organization, or
acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person where
the aggregate consideration paid in any fiscal year with respect to such
mergers, consolidations and acquisitions exceeds One Million Dollars
($1,000,000); provided that this Section 6.3 shall not apply to (i) the
purchase of inventory, equipment or intellectual property rights in any
transaction valued at less than One Hundred Thousand Dollars ($100,000) in
the ordinary course of business or (ii) transactions among Subsidiaries or
among Borrower and its Subsidiaries in which Borrower is the surviving
entity.
6.4 Indebtedness6.4 Indebtedness. Create, incur, assume
or be or remain liable with respect to any Indebtedness, or permit any
Subsidiary so to do, other than Permitted Indebtedness.
6.5 Encumbrances6.5 Encumbrances. Create, incur, assume
or suffer to exist any Lien with respect to any of its property, or
assign or otherwise convey any right to receive income, including the
sale of any accounts receivable, or permit any of its Subsidiaries so to
do, except for Permitted Liens.
6.6 Distributions6.6 Distributions. Pay any
dividends or make any other distribution or payment on account of or in
redemption, retirement or purchase of any capital stock; provided, that
(i) Borrower may declare and make any dividend payment or other
distribution payable in its equity securities, (ii) Borrower may convert
any of its convertible securities into other securities pursuant to the
terms of such convertible securities or otherwise in exchange therefor,
and (iii) Borrower may repurchase stock in an aggregate amount not to
exceed Fifteen Million Dollars ($15,000,000) for so long as an Event of
Default has not occurred and will not exist after giving effect to such
repurchase.
6.7 Investments6.7 Investments. Directly or indirectly
acquire or own, or make any Investment in or to any Person, or permit
any of its Subsidiaries so to do, other than Permitted Investments.
6.8 Transactions with Affiliates6.8 Transactions with
Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower except for
transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower
than would be obtained in an arm's length transaction with a non-
affiliated Person except for transactions with a Subsidiary that are
upon fair and reasonable terms and transactions constituting Permitted
Investments.
6.9 Subordinated Debt6.9 Subordinated Debt. Make any
payment in respect of any Subordinated Debt, or permit any of its
Subsidiaries to make any such payment, except in compliance with the
terms of such Subordinated Debt, or amend any provision contained in any
documentation relating to the Subordinated Debt without Banks' prior
written consent.
6.10 Compliance6.10 Compliance. Become an "investment
company" controlled by an "investment company," within the meaning of
the Investment Company Act of 1940, or become principally engaged in, or
undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use
the proceeds of any Advance for such purpose. Fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur, fail to comply with the
Federal Fair Labor Standards Act or violate any law or regulation, which
violation could have a Material Adverse Effect, or permit any of its
Subsidiaries to do any of the foregoing.
7. EVENTS OF DEFAULT7. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an
Event of Default by Borrower under this Agreement:
7.1 Payment Default7.1 Payment Default. If Borrower
fails to pay the principal of, or any interest on, any Advances when due
and payable; or fails to pay any portion of any other Obligations not
constituting such principal or interest, including without limitation
Bank Expenses, within thirty (30) days of receipt by Borrower of an
invoice for such other Obligations;
7.2 Covenant Default7.2 Covenant Default. If Borrower
fails to perform any obligation under Sections 5.7, 5.8, 5.9, 5.10 or
5.11 or violates any of the covenants contained in Article 6 of this
Agreement, or fails or neglects to perform, keep, or observe any other
material term, provision, condition, covenant, or agreement contained in
this Agreement, in any of the Loan Documents, or in any other present or
future agreement between Borrower and a Bank and as to any default under
such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure such default within ten (10) days after
Borrower receives notice thereof or any officer of Borrower becomes
aware thereof; provided, however, that if the default cannot by its
nature be cured within the ten (10) day period or cannot after diligent
attempts by Borrower be cured within such ten (10) day period, and such
default is likely to be cured within a reasonable time, then Borrower
shall have an additional reasonable period (which shall not in any case
exceed thirty (30) days) to attempt to cure such default, and within
such reasonable time period the failure to have cured such default shall
not be deemed an Event of Default (provided that no Advances will be
required to be made during such cure period);
7.3 Material Adverse Change7.3 Material Adverse
Change. If there occurs a material adverse change in Borrower's business
or financial condition, or if there is a material impairment of the
prospect of repayment of any portion of the Obligations;
7.4 Attachment7.4 Attachment. If any material portion
of Borrower's assets is attached, seized, subjected to a writ or
distress warrant, or is levied upon, or comes into the possession of any
trustee, receiver or person acting in a similar capacity and such
attachment, seizure, writ or distress warrant or levy has not been
removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from
continuing to conduct all or any material part of its business affairs,
or if a judgment or other claim becomes a lien or encumbrance upon any
material portion of Borrower's assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower's assets
by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or
governmental agency, and the same is not paid within ten (10) days after
Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is
stayed or an adequate bond has been posted pending a good faith contest
by Borrower (provided that no Advances will be required to be made
during such cure period);
7.5 Insolvency7.5 Insolvency. If Borrower becomes
insolvent, or if an Insolvency Proceeding is commenced by Borrower, or
if an Insolvency Proceeding is commenced against Borrower and is not
dismissed or stayed within thirty (30) days (provided that no Advances
will be made prior to the dismissal of such Insolvency Proceeding);
7.6 Other Agreements7.6 Other Agreements. If there is
a default in any agreement to which Borrower is a party with a third
party or parties resulting in a right by such third party or parties,
whether or not exercised, to accelerate the maturity of any Indebtedness
in an amount in excess of Five Hundred Thousand Dollars ($500,000) or
that could have a Material Adverse Effect;
7.7 Subordinated Debt7.7 Subordinated Debt. If
Borrower makes any payment on account of Subordinated Debt, except to
the extent such payment is allowed under any subordination agreement
entered into with Bank;
7.8 Judgments7.8 Judgments. If a judgment or
judgments for the payment of money in an amount, individually or in the
aggregate, of at least Five Hundred Thousand Dollars ($500,000) shall be
rendered against Borrower and shall remain unsatisfied and unstayed for
a period of ten (10) days (provided that no Advances will be made prior
to the satisfaction or stay of such judgment); or
7.9 Misrepresentations7.9 Misrepresentations. If any
material misrepresentation or material misstatement exists now or
hereafter in any warranty or representation set forth herein or in any
certificate delivered to Bank by any Responsible Officer pursuant to
this Agreement or to induce Bank to enter into this Agreement or any
other Loan Document.
8. BANK'S RIGHTS AND ▇▇▇▇▇▇▇▇▇. BANK'S RIGHTS AND REMEDIES
8.1 Rights and Remedies8.1 Rights and Remedies. Upon the
occurrence and during the continuance of an Event of Default, Bank may,
at its election, without notice of its election and without demand, do
any one or more of the following, all of which are authorized by
Borrower:
(a) Declare all Obligations, whether evidenced by
this Agreement, by any of the other Loan Documents, or otherwise,
immediately due and payable (provided that upon the occurrence of an
Event of Default described in Section 7.5 all Obligations shall become
immediately due and payable without any action by Bank);
(b) Cease advancing money or extending credit to or
for the benefit of Borrower under this Agreement or under any other
agreement between Borrower and Bank; and
(c) Demand that Borrower (i) deposit cash with Bank
in an amount equal to the amount of any Letters of Credit remaining
undrawn, as collateral security for the repayment of any future drawings
under such Letters of Credit, and Borrower shall forthwith deposit and
pay such amounts, and (ii) pay in advance all Letters of Credit fees
scheduled to be paid or payable over the remaining term of the Letters
of Credit;
(d) Settle or adjust disputes and claims directly
with account debtors for amounts, upon terms and in whatever order that
Bank reasonably considers advisable;
(e) Without notice to Borrower set off and apply to
the Obligations any and all (i) balances and deposits of Borrower held
by Bank, or (ii) indebtedness at any time owing to or for the credit or
the account of Borrower held by Bank.
8.2 Bank Expenses8.2 Bank Expenses. If Borrower
fails to pay any amounts or furnish any required proof of payment due to
third persons or entities, as required under the terms of this Agreement,
then a Bank may do any or all of the following: (a) make a payment of the
same or any parts thereof; (b) set up such reserves under the Revolving
Facility as Banks deem necessary to protect Banks from the exposure
created by such failure; or (c) obtain and maintain insurance policies of
the type discussed in Section 6.6 of this Agreement, and take any action
with respect to such policies as Bank deems prudent. Any amounts so paid
or deposited by a Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then
applicable rate hereinabove provided. Any payments made by a Bank shall
not constitute an agreement by a Bank to make similar payments in the
future or a waiver by a Bank of any Event of Default under this Agreement.
8.3 Remedies Cumulative8.3 Remedies Cumulative. Banks'
rights and remedies under this Agreement, the Loan Documents, and all
other agreements shall be cumulative. A Bank shall have all other
rights and remedies not inconsistent herewith as provided under
applicable law. No exercise by a Bank of one right or remedy shall be
deemed an election, and no waiver by a Bank of any Event of Default on
Borrower's part shall be deemed a continuing waiver. No delay by a Bank
shall constitute a waiver, election, or acquiescence by it. No waiver
by a Bank shall be effective unless made in a written document signed on
behalf of a Bank and then shall be effective only in the specific
instance and for the specific purpose for which it was given.
8.4 Demand; Protest8.4 Demand; Protest. Subject to
any requirement under other sections of this Agreement, Borrower waives
demand, protest, notice of protest, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guarantees at any
time held by a Bank on which Borrower may in any way be liable.
9. NOTICES9. NOTICES
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement
entered into in connection herewith shall be in writing and (except for
financial statements and other informational documents which may be sent
by first-class mail, postage prepaid) shall be personally delivered or
sent by a recognized overnight delivery service, certified mail, postage
prepaid, return receipt requested, or by telefacsimile to Borrower or to
a Bank, as the case may be, at its addresses set forth below:
If to Borrower: Centigram Communications Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Servicing Agent Silicon Valley Bank
or SVB: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to BofH: Bank of Hawaii
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner
given to the other.
10. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER10. CHOICE OF
LAW AND VENUE; JURY TRIAL WAIVER
This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without
regard to principles of conflicts of law. Each of Borrower and Bank
hereby submits to the exclusive jurisdiction of the state and Federal
courts located in the County of Santa ▇▇▇▇▇, State of California.
BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES
THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO
ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT
HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL.
11. INTERCREDITOR PROVISIONS11. INTERCREDITOR PROVISIONS
11.1 Proportionate Interests11.1 Proportionate
Interests. Except as otherwise provided in this Agreement, the rights,
interests, and obligations of each Bank under this Agreement and the Loan
Documents at any time shall be shared in the ratio of (a) the maximum
amount the Bank has committed to advance as set forth on the signature
page signed by the Bank to (b) the Committed Line. Any reference in this
Agreement or the Loan Documents to an allocation between or sharing by the
Banks of any right, interest, or duty "ratably," "proportionally," "pro
rata," or in similar terms shall refer to this ratio. No Bank is
obligated to advance any funds in lieu of or for the account of the other
Bank if the latter Bank fails to make such Advance.
11.2 Designation of Service Agent11.2 Designation of
Service Agent. To facilitate the administration of this Agreement, SVB
shall act as "Servicing Agent" for itself and BofH. Servicing Agent
shall have only such duties as are expressly set forth in this
Agreement, or as otherwise agreed in writing by the Banks. Servicing
Agent shall be deemed to act on behalf of both Banks whenever Servicing
Agent acts under this Agreement.
11.3 No Agency11.3 No Agency. EXCEPT AS SPECIFIED
HEREIN, NEITHER BANK IS AN AGENT OF THE OTHER. NEITHER BANK HAS ANY
AUTHORITY TO ACT OR FAIL TO ACT FOR THE OTHER. THE OBLIGATIONS OF EACH
BANK HEREUNDER ARE SEVERAL. NO BANK SHALL BE LIABLE FOR THE FAILURE OF
ANY OTHER BANK TO PERFORM ITS OBLIGATIONS HEREUNDER.
11.4 No Reliance11.4 No Reliance. The provisions of this
Article 11 are solely for the benefit of Banks in specifying their
rights and obligations with respect to each other, and not for the
benefit of any Borrower or its assigns or successors.
12. GENERAL PROVISIONS12. GENERAL PROVISIONS
12.1 Successors and Assigns12.1 Successors and Assigns.
This Agreement shall bind and inure to the benefit of the respective
successors and permitted assigns of each of the parties; provided,
however, that neither this Agreement nor any rights hereunder may be
assigned by Borrower without Banks' prior written consent, which consent
may be granted or withheld in Bank's sole discretion. Banks shall have
the right without the consent of or notice to Borrower to sell,
transfer, negotiate, or grant participation in all or any part of, or
any interest in, Banks' obligations, rights and benefits hereunder.
12.2 Indemnification12.2 Indemnification. Borrower
shall defend, indemnify and hold harmless each Bank and its officers,
employees, and agents against (a) all obligations, demands, claims, and
liabilities claimed or asserted by any other party in connection with
the transactions contemplated by this Agreement, and (b) all losses or
Bank Expenses in any way suffered, incurred, or paid by a Bank as a
result of, or in any way arising out of, following, or consequential to,
transactions between such Bank and Borrower, whether under this
Agreement or otherwise, (including without limitation reasonable
attorneys fees and expenses), except for losses caused by such Bank's
gross negligence or willful misconduct.
12.3 Time of Essence12.3 Time of Essence. Time is of
the essence for the performance of all obligations set forth in this
Agreement.
12.4 Severability of Provisions12.4 Severability of
Provisions. Each provision of this Agreement shall be severable from
every other provision of this Agreement for the purpose of determining
the legal enforceability of any specific provision.
12.5 Amendments in Writing, Integration12.5 Amendments
in Writing, Integration. This Agreement cannot be amended or terminated
orally. All prior agreements, understandings, representations,
warranties, and negotiations between the parties hereto with respect to
the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.
12.6 Effect of Amendment and Restatement12.6 Effect of
Amendment and Restatement. This Agreement is intended to and does
completely amend and restate, without novation, the Original Loan
Documents.
12.7 Counterparts12.7 Counterparts. This
Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement.
12.8 Survival12.8 Survival. All covenants,
representations and warranties made in this Agreement shall continue in
full force and effect so long as any Obligations (excluding Obligations
under Section 2.6 and 12.2 to the extent they remain inchoate at the
time the outstanding payment Obligations are paid in full) remain
outstanding. The obligations of Borrower to indemnify a Bank with
respect to the expenses, damages, losses, costs and liabilities
described in Section 12.2 shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against
such Bank have run.
12.9 Confidentiality12.9 Confidentiality. In handling
any confidential information each Bank shall exercise the same degree of
care that it exercises with respect to its own proprietary information
of the same types to maintain the confidentiality of any non-public
information thereby received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the
subsidiaries or affiliates of Bank in connection with their present or
prospective business relations with Borrower, (ii) to prospective
transferees or purchasers of any interest in the Advances, provided that
they have entered into a comparable confidentiality agreement in favor
of Borrower and have delivered a copy to Borrower, (iii) as required by
law, regulations, rule or order, subpoena, judicial order or similar
order (iv) as may be required in connection with the examination, audit
or similar investigation of Bank and (v) as Bank may deem appropriate in
the exercise of its remedies under this Agreement. Confidential
information hereunder shall not include information that either: (a) is
in the public domain or in the knowledge or possession of Bank when
disclosed to Bank, or becomes part of the public domain after disclosure
to Bank through no fault of Bank; or (b) is disclosed to Bank by a third
party, provided Bank does not have actual knowledge that such third
party is prohibited from disclosing such information. Notwithstanding
any provision of this Agreement to the contrary, neither Borrower nor
any of its Subsidiaries will be required to disclose, permit the
inspection, examination, copying or making extracts of, or discussions
of: any document, information or other matter (i) prior to the
occurrence of an Event of Default that constitutes non-financial trade
secrets or non-financial proprietary information (provided that the
terms of agreements that generate Accounts shall not be deemed to be
"non-financial trade secrets or non-financial proprietary information"),
or (ii) in respect to which disclosure to Bank (or designated
representative) is then prohibited by (a) law, or (b) an agreement
binding upon Borrower or any Subsidiary that was not entered into by
Borrower or such Subsidiary for the primary purpose of concealing
information from Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
CENTIGRAM COMMUNICATIONS CORPORATION
By:
Title:
SILICON VALLEY BANK
By:
Title:
Maximum Commitment Amount: $10,000,000
BANK OF HAWAII
By:
Title:
Maximum Commitment Amount: $10,000,000
EXHIBIT A
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M. PACIFIC TIME
TO: CENTRAL CLIENT SERVICE DIVISION DATE:
FAX#: (▇▇▇) ▇▇▇-▇▇▇▇ TIME:
FROM: Centigram Communications Corporation
CLIENT NAME (BORROWER)
REQUESTED BY:
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE:
PHONE NUMBER:
FROM ACCOUNT # TO ACCOUNT #
REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT
PRINCIPAL INCREASE (ADVANCE) $
PRINCIPAL PAYMENT (ONLY) $
INTEREST PAYMENT (ONLY) $
PRINCIPAL AND INTEREST (PAYMENT) $
OTHER INSTRUCTIONS:
All representations and warranties of Borrower stated in the Amended and
Restated Loan Agreement are true, correct and complete in all material
respects as of the date of the telephone request for an Advance confirmed
by this Loan Payment/Advance Form; provided, however, that those
representations and warranties expressly referring to another date shall
be true, correct and complete in all material respects as of such date.
BANK USE ONLY
TELEPHONE REQUEST:
The following person is authorized to request the loan payment
transfer/loan advance on the advance designated account and is known to
me.
Authorized Requester Phone #
Received By (Bank) Phone #
Authorized Signature (Bank)
EXHIBIT B-1
LIBOR RATE ADVANCE REQUEST FORM
The undersigned hereby certifies as follows:
I, , am the duly elected and acting
of Centigram Communications Corporation
("Borrower").
This certificate is delivered to Silicon Valley Bank, as Servicing
Agent, pursuant to Section 2 of that certain Amended and Restated Loan
Agreement by and between Borrower and Banks (the "Agreement"). The
terms used in this LIBOR Rate Advance Request Form that are defined in
the Agreement have the same meaning herein as ascribed to them therein.
Borrower hereby requests a LIBOR Rate Advance as follows:
(a) The date on which the Advance is to be made is
, 19 .
(b) The amount of the Advance is to be
($ ), in the form of a LIBOR
Rate Advance for an Interest Period of months.
All representations and warranties of Borrower stated in the
Agreement are true, correct and complete in all material respects as of
the date of this request for a loan; provided, however, that those
representations and warranties expressly referring to another date shall
be true, correct and complete in all material respects as of such date.
IN WITNESS WHEREOF, this LIBOR Rate Advance Request Form is
executed by the undersigned as of this day of
, 19 .
CENTIGRAM COMMUNICATIONS
CORPORATION
By:
Title:
For Internal Bank Use Only
LIBOR Pricing
Date
LIBOR Rate
LIBOR Rate
Variance
Maturity Date
%
EXHIBIT B-2
LIBOR RATE CONVERSION/CONTINUATION CERTIFICATE
The undersigned hereby certifies as follows:
I, , am the duly elected and acting
of Centigram Communications Corporation
("Borrower").
This certificate is delivered to Silicon Valley Bank, as Servicing
Agent, pursuant to Section 2 of that certain Amended and Restated Loan
Agreement by and between Borrower and Banks (the "Agreement"). The
terms used in this LIBOR Rate Conversion/Continuation Certificate that
are defined in the Agreement have the same meaning herein as ascribed to
them therein.
Borrower hereby requests on , 19 a
LIBOR Rate Advance (the "Advance") as follows:
(a) (i) A rate conversion of an existing Prime Rate
Advance from a Prime Rate Advance to a LIBOR
Rate Advance; or
(ii) A continuation of an existing LIBOR Rate
Advance as a LIBOR Rate Advance.
[Check (i) or (ii) above]
(b) The date on which the Advance is to be made is
, 19 .
(c) The amount of the Advance is to be
($ ), for an Interest Period
of month(s).
All representations and warranties of Borrower stated in the
Agreement are true, correct and complete in all material respects as of
the date of this request for a loan; provided, however, that those
representations and warranties expressly referring to another date shall
be true, correct and complete in all material respects as of such date.
IN WITNESS WHEREOF, this LIBOR Rate Conversion/Continuation
Certificate is executed by the undersigned as of this day
of , 19 .
CENTIGRAM COMMUNICATIONS
CORPORATION
By:
Title:
For Internal Bank Use Only
LIBOR Pricing
Date
LIBOR Rate
LIBOR Rate
Variance
Maturity Date
%
EXHIBIT C
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK, BANK OF HAWAII
FROM: CENTIGRAM COMMUNICATIONS CORPORATION
The undersigned authorized officer of Centigram Communications
Corporation hereby certifies that in accordance with the terms and
conditions of the Amended and Restated Loan Agreement between Borrower
and Banks (the "Agreement"), (i) Borrower is in complete compliance for
the period ending with all required covenants except as
noted below and (ii) all representations and warranties of Borrower
stated in the Agreement are true and correct in all material respects as
of the date hereof. Attached herewith are the required documents
supporting the above certification. The Officer further certifies that
these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies"
column.
Reporting Covenant Required Complies
Quarterly financial statements Quarterly within 45 days Yes No
Annual (CPA Audited) FYE within 120 days Yes No
Financial Covenant Required Actual Complies
Maintain on a Quarterly Basis:
Minimum Quick Ratio 2.00:1.00 _____:1.0 Yes No
Minimum Tangible Net Worth $70,000,000* $_______ Yes No
Maximum Debt/Tangible Net Worth 1.00:1.00 ____:1.0 Yes No
30 consecutive days during
term
Out of Debt after first Advance _________ Yes No
* Minus up to aggregate of $15,000,000 utilized for stock repurchases.
BANK USE ONLY
Received by:
AUTHORIZED SIGNER
Date:
Verified:
AUTHORIZED SIGNER
Date:
Compliance Status: Yes No
Comments Regarding Exceptions: See Attached.
Sincerely,
SIGNATURE
TITLE
DATE
DISBURSEMENT REQUEST AND AUTHORIZATION
Borrower: Centigram
Communications Corporation Banks:
Silicon Valley Bank
Bank
of Hawaii
LOAN TYPE. This is a variable rate, revolving line of credit of a
principal amount up to $20,000,000.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for
business.
SPECIFIC PURPOSE. The specific purpose of this loan is: Short Term
Working Capital.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds
will be disbursed until all of Bank's conditions for making the loan
have been satisfied. Please disburse the loan proceeds as follows:
Revolving Line
Amount paid to Borrower directly: $
Undisbursed Funds $
Principal $
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed
the following charges:
Charges Paid in Cash:
$27,500 Loan Fee
$TBD Outside Counsel Fees and Expenses (Estimate)
$TBD UCC Search Fee
$TBD UCC Filing Fee
Total Charges Paid in Cash $
AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to
deduct from Borrower's account numbered the amount of any
loan payment. If the funds in the account are insufficient to cover any
payment, Bank shall not be obligated to advance funds to cover the
payment.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS
AND WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND
CORRECT AND THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S
FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL
STATEMENT TO BANK. THIS AUTHORIZATION IS DATED AS OF APRIL 30, 1997.
BORROWER:
CENTIGRAM COMMUNICATIONS CORPORATION
Authorized Officer
CORPORATE RESOLUTIONS TO BORROW
Borrower: CENTIGRAM COMMUNICATIONS CORPORATION
I, the undersigned Secretary or Assistant Secretary of Centigram
Communications Corporation (the "Corporation"), HEREBY CERTIFY that the
Corporation is organized and existing under and by virtue of the laws of
the State of Delaware.
I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are
true and complete copies of the Certificate of Incorporation and Bylaws
of the Corporation, each of which is in full force and effect on the
date hereof.
I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation duly called and held, at which a quorum was present and
voting (or by other duly authorized corporate action in lieu of a
meeting), the following resolutions were adopted.
BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are
shown below:
NAMES POSITIONS ACTUAL
SIGNATURES
acting for an on behalf of this Corporation and as its act and deed be,
and they hereby are, authorized and empowered:
Borrow Money. To borrow from time to time from Silicon Valley
Bank and Bank of Hawaii ("Banks"), on such terms as may be agreed upon
between the officers, employees, or agents and Banks, such sum or sums
of money as in their judgment should be borrowed, without limitation,
including such sums as are specified in that certain Amended and
Restated Loan Agreement dated as of April 30, 1997 (the "Loan
Agreement").
Execute Notes. To execute and deliver to Banks the Loan
Agreement and extensions, modifications, refinancings, consolidations,
or substitutions for the Loan Agreement.
Negotiate Items. To draw, endorse, and discount with Banks all
drafts, trade acceptances, promissory notes, or other evidences of
indebtedness payable to or belonging to the Corporation or in which the
Corporation may have an interest, and either to receive cash for the
same or to cause such proceeds to be credited to the account of the
Corporation with Banks, or to cause such other disposition of the
proceeds derived therefrom as they may deem advisable.
Letters of Credit; Foreign Exchange. To execute letters of
credit applications, foreign exchange agreements and other related
documents pertaining to Banks' issuance of letters of credit and foreign
exchange contracts.
Further Acts. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to request
advances thereunder, and in all cases, to do and perform such other acts
and things, to pay any and all fees and costs, and to execute and
deliver such other documents and agreements as they may in their
discretion deem reasonably necessary or proper in order to carry into
effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these
resolutions are hereby ratified and approved, that these Resolutions
shall remain in full force and effect and Banks may rely on these
Resolutions until written notice of their revocation shall have been
delivered to and received by Banks. Any such notice shall not affect
any of the Corporation's agreements or commitments in effect at the time
notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named
above are duly elected, appointed, or employed by or for the
Corporation, as the case may be, and occupy the positions set forth
opposite their respective names; that the foregoing Resolutions now
stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on April 30, 1997
and attest that the signatures set opposite the names listed above are
their genuine signatures.
CERTIFIED TO AND
ATTESTED BY:
X
Attachment 1 - Certificate of Incorporation
Attachment 2 - ByLaws