Exhibit 10.10
AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT
This Amendment Number Seven to Credit Agreement (“Amendment”) is entered into as
of May 13, 2011, by and among WELLS FARGO CAPITAL FINANCE, INC., a California
corporation, formerly known as Wells Fargo Foothill, Inc., as Agent (the
“Agent”) for the Lenders set forth in the signature pages hereof (the “Lenders”)
and the Lenders, on the one hand, and OCLARO, INC., a Delaware corporation,
formerly known as Bookham, Inc. (“Parent”), and each of Parent’s Subsidiaries
identified on the signature pages hereof (such Subsidiaries, together with
Parent, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as the “Borrowers”), on
the other hand, with reference to the following facts:
A. Agent, Lenders and Borrowers have previously entered into that certain Credit
Agreement, dated as of August 2, 2006 (as amended, supplemented, amended and
restated, or otherwise modified, the “Credit Agreement”).
B. Borrowers, Agent and Lenders desire to amend the Credit Agreement as provided
for and on the conditions herein.
NOW, THEREFORE, Borrowers, Agent and Lenders hereby amend and supplement the
Credit Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment shall
have the meanings given to them in the Credit Agreement unless specifically
defined herein.
2. AMENDMENTS TO THE CREDIT AGREEMENT.
(a) Sections 2.4(b)(ii)(H) and (I) of the Credit Agreement are hereby amended in
its entirety to reads as follows:
(H) eighth, ratably (i) to pay the principal of all Swing Loans until paid in
full, (ii) to pay the principal of all Advances until paid in full, (iii) to
Agent, to be held by Agent, for the ratable benefit of Issuing Lender and those
Lenders having a Revolver Commitment, as cash collateral in an amount up to 105%
of the Letter of Credit Usage, and (iv) to pay Bank Product Obligations to the
Bank Product Providers based upon amounts then certified by the applicable Bank
Product Provider to Agent (in form and substance satisfactory to Agent) to be
due and payable to such Bank Product Providers,
(I) ninth, to pay any other Obligations, and
(b) Section 2.6(b) of the Credit Agreement is hereby amended in its entirety to
reads as follows:
(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment, subject to any agreements between Agent
and individual Lenders), a Letter of Credit fee (in addition to the charges,
commissions, fees, and costs set forth in Section 2.12(e)) which shall accrue at
a rate equal to the LIBOR Rate Margin per annum times the Daily Balance of the
undrawn amount of all outstanding Letters of Credit.
(c) Section 2.7 of the Credit Agreement is hereby amended in its entirety to
reads as follows:
2.7 Cash Management.
(a) Parent shall and shall cause each Obligor to (i) establish and maintain cash
management services of a type and on terms reasonably satisfactory to Agent at
one or more of the banks set forth on Schedule 2.7(a) (each a “Cash Management
Bank”), and shall take steps to ensure that all of its and its Subsidiaries’
Account Debtors forward payment of the amounts owed by them directly to such
Cash Management Bank, and (ii) deposit or cause to be deposited promptly, and in
any event no later than the first Business Day after the date of receipt
thereof, all of their Collections (including those sent directly by their
Account Debtors to an Obligor) into a bank account of such Obligor (each, a
“Cash Management Account”) at one of the Cash Management Banks.
Confidential treatment is being requested for portions of this document. This
copy of the document filed as an exhibit omits the confidential information
subject to the confidentiality request. Omissions are designated by the symbol
[***]. A complete version of this document has been filed separately with the
Securities and Exchange Commission.

 

 

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(b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and the applicable Obligor, in form and substance
reasonably acceptable to Agent. Each such Cash Management Agreement shall
provide, among other things, that (a) the Cash Management Bank will comply with
any instructions originated by Agent directing the disposition of the funds in
such Cash Management without further consent by the applicable Obligor, (b) the
Cash Management Bank has no rights of setoff or recoupment or any other claim
against the applicable Cash Management Account other than for payment of its
service fees and other charges directly related to the administration of such
Cash Management Account and for returned checks or other items of payment, and
(c) upon the instruction of the Agent (an “Activation Instruction”), the Cash
Management Bank will forward by daily sweep all amounts in the applicable Cash
Management Account to the Agent’s Account. Agent agrees not to issue an
Activation Instruction with respect to the Cash Management Accounts unless a
Triggering Event has occurred and is continuing at the time such Activation
Instruction is issued. Agent agrees to use commercially reasonable efforts to
promptly rescind an Activation Instruction (the “Rescission”) if: (x) the
Triggering Event upon which such Activation Instruction was issued has been
waived in writing in accordance with the terms of this Agreement, and (y) no
additional Triggering Event has occurred and is continuing prior to the date of
the Rescission.
(c) So long as no Default or Event of Default has occurred and is continuing,
Borrower may amend Schedule 2.7(a) to add or replace a Cash Management Bank or
Cash Management Account; provided, however, that (i) such prospective Cash
Management Bank shall be reasonably satisfactory to Agent, and (ii) prior to the
time of the opening of such Cash Management Account, the applicable Obligor and
such prospective Cash Management Bank shall have executed and delivered to Agent
a Cash Management Agreement, in form and substance reasonably acceptable to
Agent. Parent shall and shall cause each Obligor to close any of its Cash
Management Accounts (and establish replacement Cash Management Account accounts
in accordance with the foregoing sentence) as promptly as practicable and in any
event within 60 days of notice from Agent that the operating performance, funds
transfer, or availability procedures or performance of the Cash Management
Account Bank with respect to Cash Management Accounts or Agent’s liability under
any Cash Management Agreement with such Cash Management Bank is no longer
acceptable in Agent’s reasonable judgment; and
(d) Each Cash Management Account shall be a cash collateral account subject to a
Control Agreement.
(d) Section 6.16(b) of the Credit Agreement is hereby amended in its entirety to
reads as follows:
(b) [Reserved]
(e) The following definitions in Schedule 1.1 of the Agreement are hereby
amended to read as follows:
“Base Rate” means, the greatest of: (i) the LIBOR Rate for a 90 day Interest
Period as determined on the date of determination, plus 1.0%, and (ii) the rate
of interest announced, from time to time, within Wells Fargo at its principal
office in San Francisco as its “prime rate”, with the understanding that the
“prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of
such rates) and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto and is evidenced by the
recording thereof after its announcement in such internal publications as Wells
Fargo may designate.
Confidential treatment is being requested for portions of this document. This
copy of the document filed as an exhibit omits the confidential information
subject to the confidentiality request. Omissions are designated by the symbol
[***]. A complete version of this document has been filed separately with the
Securities and Exchange Commission.

 

 

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“Base Rate Margin” means 1.75 percentage points.
“Lender Group Expenses” means, subject to the terms and provisions of the Fee
Letter, all (a) costs or expenses (including taxes, and insurance premiums)
required to be paid by Parent or any of its Subsidiaries under any of the Loan
Documents that are paid, advanced, or incurred by the Lender Group, (b) fees or
charges paid or incurred by Agent in connection with the Lender Group’s
transactions with Parent or its Subsidiaries, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation, and UCC searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication, appraisal
(including periodic collateral appraisals or business valuations), real estate
surveys, real estate title policies and endorsements, and environmental audits,
(c) costs and expenses incurred by Agent in the disbursement of funds to
Borrowers or other members of the Lender Group (by wire transfer or otherwise),
(d) charges paid or incurred by Agent resulting from the dishonor of checks,
(e) reasonable costs and expenses paid or incurred by the Lender Group to
correct any default or enforce any provision of the Loan Documents, or after the
occurrence of any Default or Event of Default in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses of
Agent related to any inspections or audits to the extent of the fees and charges
(and up to the amount of any limitation) contained in the Agreement or the Fee
Letter, (g) reasonable costs and expenses of third party claims or any other
suit paid or incurred by the Lender Group in enforcing or defending the Loan
Documents or third party claims or any other suit in connection with the
transactions contemplated by the Loan Documents or the Lender Group’s
relationship with Parent or any Subsidiary of Parent, (h) Agent’s reasonable
costs and expenses (including attorneys fees) incurred in advising, structuring,
drafting, reviewing, administering, syndicating, or amending the Loan Documents,
(i) Agent’s and each Lender’s reasonable costs and expenses (including
attorneys, accountants, consultants, and other advisors fees and expenses)
incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
“workout,” a “restructuring,” or an Insolvency Proceeding concerning Parent or
any Subsidiary of Parent or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is
brought, or in taking any Remedial Action concerning the Collateral, and
(j) customary and standard usage charges, charges, fees, costs and expenses for
amendments, renewals, extensions, transfers, or drawings from time to time
imposed by Underlying Issuer or incurred by the Issuing Lender in respect of
Letters of Credit and out-of-pocket charges, fees, costs and expenses paid or
incurred by the Underlying Issuer or Issuing Lender in connection with the
issuance, amendment, renewal, extension, or transfer of, or drawing under, any
Letter of Credit or any demand for payment thereunder.
“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate
per annum determined by Agent by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
“LIBOR Rate Margin” means 2.75 percentage points.
Confidential treatment is being requested for portions of this document. This
copy of the document filed as an exhibit omits the confidential information
subject to the confidentiality request. Omissions are designated by the symbol
[***]. A complete version of this document has been filed separately with the
Securities and Exchange Commission.

 

 

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(f) The following definitions are hereby added to Schedule 1.1 of the Agreement:
“Minimum Liquidity Amount” means $30,000,000.
“Triggering Event” means, as of any date of determination, that (a) an Event of
Default has occurred and is continuing, or (b) the sum of Excess Availability
and Qualified Cash on the last day of any calendar month (and based upon an
average of the weekly Excess Availability and weekly Qualified Cash amouts for
weeks ending during such month, which amounts will be based upon availability
and cash balance reports delivered to Agent in accordance with the terms of this
Agreement) is less than the Minimum Liquidity Amount.
(g) Schedule 5.2 to the Agreement is hereby deleted and replaced with
Schedule 5.2 attached hereto.
3. [***]
4. REPRESENTATIONS AND WARRANTIES. Parent and each Borrower hereby affirms to
Agent and Lenders that, after giving effect to the consents and waivers herein,
all of such its representations and warranties set forth in the Credit Agreement
are true, complete and accurate in all respects as of the date hereof.
5. NO DEFAULTS. Parent and Borrowers hereby affirm to the Lender Group that no
Event of Default has occurred and is continuing as of the date hereof.
6. CONDITION PRECEDENT. The effectiveness of this Amendment is expressly
conditioned upon receipt by Agent of a fully executed copy of this Amendment.
7. COSTS AND EXPENSES. Borrowers shall pay to Agent all of Agent’s out-of-pocket
costs and reasonable expenses (including, without limitation, the fees and
expenses of its counsel, which counsel may include any local counsel deemed
necessary, search fees, filing and recording fees, documentation fees, appraisal
fees, travel expenses, and other fees) arising in connection with the
preparation, execution, and delivery of this Amendment and all related
documents.
8. LIMITED EFFECT. In the event of a conflict between the terms and provisions
of this Amendment and the terms and provisions of the Credit Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Credit Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
9. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of a counterpart of
this Amendment by each of the parties hereto.
[Signatures on next page]
Confidential treatment is being requested for portions of this document. This
copy of the document filed as an exhibit omits the confidential information
subject to the confidentiality request. Omissions are designated by the symbol
[***]. A complete version of this document has been filed separately with the
Securities and Exchange Commission.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first set forth above.

            WELLS FARGO CAPITAL FINANCE, INC.,
a California corporation, as Agent and a Lender
      By:           Title:        OCLARO, INC.,
a Delaware corporation, as Parent
      By:           Name:           Title:           OCLARO TECHNOLOGY LIMITED,
a limited liability company incorporated under the laws of England and Wales, as
a Borrower
      By:           Name:           Title:           By:           Name:        
  Title:           OCLARO PHOTONICS, INC.,
a Delaware corporation, as a Borrower
      By:           Name:           Title:           OCLARO TECHNOLOGY, INC.,
a Delaware corporation, as a Borrower
      By:           Name:           Title:      

Confidential treatment is being requested for portions of this document. This
copy of the document filed as an exhibit omits the confidential information
subject to the confidentiality request. Omissions are designated by the symbol
[***]. A complete version of this document has been filed separately with the
Securities and Exchange Commission.