Document:

Execution

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of June 30, 2006

among

WESTELL TECHNOLOGIES, INC.,

WESTELL, INC.,

TELTREND LLC,

and

CONFERENCE PLUS, INC.

as the Companies

WESTELL TECHNOLOGIES, INC.,

as the Company Representative

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

and

LASALLE BANK NATIONAL ASSOCIATION,

as the Administrative Agent

 

 

 

 

TABLE OF CONTENTS

                                                        Page

	
            SECTION 1.
 	
            DEFINITIONS.
 	
            2
 
	
             
 	
            1.1
 	
            Definitions
 	
            2
 
	
             
 	
            1.2
 	
            Other Interpretive Provisions
 	
            22
 
					

	
            SECTION 2.
 	
            COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND
 LETTER OF CREDIT PROCEDURES.                                                    
                                               22
 

	
             
 	
            2.1
 	
            Commitments
 	
            22
 
	
             
 	
            2.1.1
 	
            Revolving Loan Commitment
 	
            23
 
	
             
 	
            2.1.2
 	
            L/C Commitment
 	
            23
 
	
             
 	
            2.2
 	
            Loan Procedures.
 	
            23
 
	
             
 	
            2.2.1
 	
            Various Types of Loans
 	
            23
 
	
             
 	
            2.2.2
 	
            Borrowing Procedures
 	
            23
 
	
             
 	
            2.2.3
 	
            Conversion and Continuation Procedures.
 	
            24
 
	
             
 	
            2.2.4
 	
            Reliance on Notices; Appointment of Company Representative
 	
            25
 
	
             
 	
            2.3
 	
            Letter of Credit Procedures.
 	
            25
 
	
             
 	
            2.3.1
 	
            L/C Applications
 	
            25
 
	
             
 	
            2.3.2
 	
            Participations in Letters of Credit
 	
            26
 
	
             
 	
            2.3.3
 	
            Reimbursement Obligations.
 	
            27
 
	
             
 	
            2.3.4
 	
            Funding by Lenders to Issuing Lender
 	
            27
 
	
             
 	
            2.4
 	
            Commitments Several
 	
            28
 
	
             
 	
            2.5
 	
            Certain Conditions
 	
            28
 
	
            SECTION 3.
 	
            EVIDENCING OF LOANS.
 	
            28
 
	
             
 	
            3.1
 	
            Notes
 	
            28
 
	
             
 	
            3.2
 	
            Recordkeeping
 	
            29
 
	
            SECTION 4.
 	
            INTEREST.
 	
            29
 
	
             
 	
            4.1
 	
            Interest Rates
 	
            29
 
	
             
 	
            4.2
 	
            Interest Payment Dates
 	
            29
 
	
             
 	
            4.3
 	
            Setting and Notice of LIBOR Rates
 	
            29
 
	
             
 	
            4.4
 	
            Computation of Interest
 	
            30
 
	
            SECTION 5.
 	
            FEES.
 	
            30
 
	
             
 	
            5.1
 	
            Non-Use Fee
 	
            30
 
	
             
 	
            5.2
 	
            Letter of Credit Fees.
 	
            30
 
	
             
 	
            5.3
 	
            Administrative Agent’s Fees
 	
            31
 

	
            SECTION 6.
 	
            REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT;
 PREPAYMENTS.                                                                                    
                                          
     31
 

	
             
 	
            6.1
 	
            Reduction, Increases or Termination of the Revolving Commitment.
 	
            31
 

6.1.1         Voluntary Reduction, Increases or Termination of the Revolving Commitment        31

	
             
 	
            6.1.2
 	
            All Reductions of the Revolving Commitment
 	
            31
 

 

 

i

 

 

 

	
             
 	
            6.2
 	
            Prepayments.
 	
            31
 
	
             
 	
            6.2.1
 	
            Voluntary Prepayments
 	
            31
 
	
             
 	
            6.2.2
 	
            Mandatory Prepayments.
 	
            31
 
	
             
 	
            6.3
 	
            Manner of Prepayments.
 	
            32
 
	
             
 	
            6.3.1
 	
            All Prepayments
 	
            32
 
	
             
 	
            6.4
 	
            Repayments.
 	
            32
 
	
             
 	
            6.4.1
 	
            Revolving Loans
 	
            32
 
	
            SECTION 7.
 	
            MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
 	
            32
 
	
             
 	
            7.1
 	
            Making of Payments
 	
            32
 
	
             
 	
            7.2
 	
            Application of Certain Payments
 	
            32
 
	
             
 	
            7.3
 	
            Due Date Extension
 	
            33
 
	
             
 	
            7.4
 	
            Setoff
 	
            33
 
	
             
 	
            7.5
 	
            Proration of Payments
 	
            33
 
	
             
 	
            7.6
 	
            Taxes.
 	
            33
 
	
            SECTION 8.
 	
            INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.
 	
            35
 
	
             
 	
            8.1
 	
            Increased Costs.
 	
            35
 
	
             
 	
            8.2
 	
            Basis for Determining Interest Rate Inadequate or Unfair
 	
            36
 
	
             
 	
            8.3
 	
            Changes in Law Rendering LIBOR Loans Unlawful
 	
            37
 
	
             
 	
            8.4
 	
            Funding Losses
 	
            37
 
	
             
 	
            8.5
 	
            Right of Lenders to Fund through Other Offices
 	
            38
 
	
             
 	
            8.6
 	
            Discretion of Lenders as to Manner of Funding
 	
            38
 
	
             
 	
            8.7
 	
            Mitigation of Circumstances; Replacement of Lenders.
 	
            38
 
	
             
 	
            8.8
 	
            Conclusiveness of Statements; Survival of Provisions
 	
            39
 
	
            SECTION 9.
 	
            REPRESENTATIONS AND WARRANTIES.
 	
            39
 
	
             
 	
            9.1
 	
            Organization
 	
            39
 
	
             
 	
            9.2
 	
            Authorization; No Conflict
 	
            39
 
	
             
 	
            9.3
 	
            Validity and Binding Nature
 	
            39
 
	
             
 	
            9.4
 	
            Financial Condition
 	
            40
 
	
             
 	
            9.5
 	
            No Material Adverse Change
 	
            40
 
	
             
 	
            9.6
 	
            Litigation and Contingent Liabilities
 	
            40
 
	
             
 	
            9.7
 	
            Ownership of Properties; Liens
 	
            40
 
	
             
 	
            9.8
 	
            Equity Ownership; Subsidiaries
 	
            40
 
	
             
 	
            9.9
 	
            Pension Plans.
 	
            41
 
	
             
 	
            9.10
 	
            Investment Company Act
 	
            41
 
	
             
 	
            9.11
 	
            Public Utility Holding Company Act
 	
            42
 
	
             
 	
            9.12
 	
            Regulation U
 	
            42
 
	
             
 	
            9.13
 	
            Taxes
 	
            42
 
	
             
 	
            9.14
 	
            Solvency, etc.
 	
            42
 
	
             
 	
            9.15
 	
            Environmental Matters
 	
            42
 
	
             
 	
            9.16
 	
            Insurance
 	
            43
 
	
             
 	
            9.17
 	
            Real Property
 	
            43
 
	
             
 	
            9.18
 	
            Information
 	
            43
 
	
             
 	
            9.19
 	
            Intellectual Property
 	
            44
 
	
             
 	
            9.20
 	
            Burdensome Obligations
 	
            44
 

 

 

ii

 

 

 

	
             
 	
            9.21
 	
            Labor Matters
 	
            44
 
	
             
 	
            9.22
 	
            No Default
 	
            44
 
	
            SECTION 10.
 	
            AFFIRMATIVE COVENANTS.
 	
            44
 
	
             
 	
            10.1
 	
            Reports, Certificates and Other Information
 	
            44
 
	
             
 	
            10.1.1
 	
            Annual Report
 	
            44
 
	
             
 	
            10.1.2
 	
            Interim Reports
 	
            45
 
	
             
 	
            10.1.3
 	
            Compliance Certificates
 	
            45
 
	
             
 	
            10.1.4
 	
            Reports to the SEC and to Shareholders
 	
            46
 
	
             
 	
            10.1.5
 	
            Notice of Default, Litigation and ERISA Matters
 	
            46
 
	
             
 	
            10.1.6
 	
            Borrowing Base Certificates
 	
            47
 
	
             
 	
            10.1.7
 	
            Management Reports
 	
            47
 
	
             
 	
            10.1.8
 	
            Projections
 	
            47
 
	
             
 	
            10.1.9
 	
            Intentionally Omitted.
 	
            47
 
	
             
 	
            10.1.10
 	
            Other Information
 	
            47
 
	
             
 	
            10.2
 	
            Books, Records and Inspections
 	
            48
 
	
             
 	
            10.3
 	
            Maintenance of Property; Insurance.
 	
            48
 
	
             
 	
            10.4
 	
            Compliance with Laws; Payment of Taxes and Liabilities
 	
            49
 
	
             
 	
            10.5
 	
            Maintenance of Existence, etc.
 	
            50
 
	
             
 	
            10.6
 	
            Use of Proceeds
 	
            50
 
	
             
 	
            10.7
 	
            Employee Benefit Plans.
 	
            50
 
	
             
 	
            10.8
 	
            Environmental Matters
 	
            50
 
	
             
 	
            10.9
 	
            Further Assurances
 	
            51
 
	
             
 	
            10.10
 	
            Deposit Accounts
 	
            51
 
	
             
 	
            10.11
 	
            New Subsidiaries
 	
            52
 
	
             
 	
            10.12
 	
            SEC Filings
 	
            52
 
	
             
 	
            10.13
 	
            Post-Closing Covenants
 	
            52
 
	
            SECTION 11.
 	
            NEGATIVE COVENANTS
 	
            53
 
	
             
 	
            11.1
 	
            Debt
 	
            53
 
	
             
 	
            11.2
 	
            Liens
 	
            54
 
	
             
 	
            11.3
 	
            Operating Leases
 	
            55
 
	
             
 	
            11.4
 	
            Restricted Payments
 	
            55
 
	
             
 	
            11.5
 	
            Mergers, Consolidations, Sales
 	
            55
 
	
             
 	
            11.6
 	
            Modification of Organizational Documents
 	
            57
 
	
             
 	
            11.7
 	
            Transactions with Affiliates
 	
            57
 
	
             
 	
            11.8
 	
            Unconditional Purchase Obligations
 	
            58
 
	
             
 	
            11.9
 	
            Inconsistent Agreements
 	
            58
 
	
             
 	
            11.10
 	
            Business Activities; Issuance of Equity
 	
            58
 
	
             
 	
            11.11
 	
            Investments
 	
            58
 
	
             
 	
            11.12
 	
            Restriction of Amendments to Certain Documents
 	
            59
 
	
             
 	
            11.13
 	
            Fiscal Year
 	
            59
 
	
             
 	
            11.14
 	
            Financial Covenants.
 	
            59
 
	
             
 	
            11.14.1
 	
            Fixed Charge Coverage Ratio
 	
            59
 
	
             
 	
            11.14.2
 	
            Minimum Tangible Net Worth
 	
            60
 
	
             
 	
            11.14.3
 	
            Total Debt to EBITDA Ratio
 	
            60
 
	
             
 	
            11.14.4
 	
            Capital Expenditures
 	
            60
 

 

 

iii

 

 

 

	
             
 	
            11.15
 	
            Cancellation of Debt
 	
            60
 
	
             
 	
            11.16
 	
            Asset Dispositions
 	
            60
 
	
            SECTION 12.
 	
            EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
 	
            60
 
	
             
 	
            12.1
 	
            Initial Credit Extension
 	
            61
 
	
             
 	
            12.1.1
 	
            List of Closing Documents
 	
            61
 
	
             
 	
            12.1.2
 	
            Authorization Documents
 	
            61
 
	
             
 	
            12.1.3
 	
            Consents, etc.
 	
            61
 
	
             
 	
            12.1.4
 	
            Perfection Certificate
 	
            61
 
	
             
 	
            12.1.5
 	
            Opinions of Counsel
 	
            61
 
	
             
 	
            12.1.6
 	
            Compliance Certificate
 	
            62
 
	
             
 	
            12.1.7
 	
            Insurance.
 	
            62
 
	
             
 	
            12.1.8
 	
            Payment of Fees
 	
            62
 
	
             
 	
            12.1.9
 	
            Search Results; Lien Terminations
 	
            62
 
	
             
 	
            12.1.10
 	
            Filings, Registrations and Recordings
 	
            62
 
	
             
 	
            12.1.11
 	
            Material Adverse Effect
 	
            62
 
	
             
 	
            12.1.12
 	
            Projections
 	
            62
 
	
             
 	
            12.1.13
 	
            Other
 	
            63
 
	
             
 	
            12.2
 	
            Conditions
 	
            63
 
	
             
 	
            12.2.1
 	
            Compliance with Warranties, No Default, etc.
 	
            63
 
	
             
 	
            12.2.2
 	
            Confirmatory Certificate
 	
            63
 
	
            SECTION 13.
 	
            EVENTS OF DEFAULT AND THEIR EFFECT.
 	
            63
 
	
             
 	
            13.1
 	
            Events of Default
 	
            63
 
	
             
 	
            13.1.1
 	
            Non-Payment of the Loans, etc.
 	
            63
 
	
             
 	
            13.1.2
 	
            Non-Payment of Other Debt
 	
            64
 
	
             
 	
            13.1.3
 	
            Other Material Obligations
 	
            64
 
	
             
 	
            13.1.4
 	
            Bankruptcy, Insolvency, etc.
 	
            64
 
	
             
 	
            13.1.5
 	
            Non-Compliance with Loan Documents
 	
            64
 
	
             
 	
            13.1.6
 	
            Representations; Warranties
 	
            64
 
	
             
 	
            13.1.7
 	
            Pension Plans
 	
            65
 
	
             
 	
            13.1.8
 	
            Judgments
 	
            65
 
	
             
 	
            13.1.9
 	
            Invalidity of Collateral Documents, etc.
 	
            65
 
	
             
 	
            13.1.10
 	
            Intentionally Omitted.
 	
            65
 
	
             
 	
            13.1.11
 	
            Change of Control
 	
            65
 
	
             
 	
            13.2
 	
            Effect of Event of Default
 	
            65
 
	
            SECTION 14.
 	
            THE AGENT.
 	
            66
 
	
             
 	
            14.1
 	
            Appointment and Authorization
 	
            66
 
	
             
 	
            14.2
 	
            Issuing Lender
 	
            66
 
	
             
 	
            14.3
 	
            Delegation of Duties
 	
            66
 
	
             
 	
            14.4
 	
            Exculpation of Administrative Agent
 	
            67
 
	
             
 	
            14.5
 	
            Reliance by Administrative Agent
 	
            67
 
	
             
 	
            14.6
 	
            Notice of Default
 	
            68
 
	
             
 	
            14.7
 	
            Credit Decision
 	
            68
 
	
             
 	
            14.8
 	
            Indemnification
 	
            68
 
	
             
 	
            14.9
 	
            Administrative Agent in Individual Capacity
 	
            69
 

 

 

iv

 

 

 

	
             
 	
            14.10
 	
            Successor Administrative Agent
 	
            69
 
	
             
 	
            14.11
 	
            Collateral Matters
 	
            70
 
	
             
 	
            14.12
 	
            Administrative Agent May File Proofs of Claim
 	
            70
 
	
             
 	
            14.13
 	
            Other Agents; Arrangers and Managers
 	
            71
 
	
            SECTION 15.
 	
            GENERAL.
 	
            71
 
	
             
 	
            15.1
 	
            Waiver; Amendments
 	
            71
 
	
             
 	
            15.2
 	
            Confirmations
 	
            72
 
	
             
 	
            15.3
 	
            Notices
 	
            72
 
	
             
 	
            15.4
 	
            Computations
 	
            72
 
	
             
 	
            15.5
 	
            Costs, Expenses and Taxes
 	
            73
 
	
             
 	
            15.6
 	
            Assignments; Participations.
 	
            73
 
	
             
 	
            15.6.1
 	
            Assignments.
 	
            73
 
	
             
 	
            15.6.2
 	
            Participations
 	
            74
 
	
             
 	
            15.7
 	
            Register
 	
            75
 
	
             
 	
            15.8
 	
            GOVERNING LAW
 	
            75
 
	
             
 	
            15.9
 	
            Confidentiality
 	
            75
 
	
             
 	
            15.10
 	
            Severability
 	
            76
 
	
             
 	
            15.11
 	
            Nature of Remedies
 	
            76
 
	
             
 	
            15.12
 	
            Entire Agreement
 	
            76
 
	
             
 	
            15.13
 	
            Counterparts
 	
            77
 
	
             
 	
            15.14
 	
            Successors and Assigns
 	
            77
 
	
             
 	
            15.15
 	
            Captions
 	
            77
 
	
             
 	
            15.16
 	
            Customer Identification - USA Patriot Act Notice
 	
            77
 
	
             
 	
            15.17
 	
            INDEMNIFICATION BY THE COMPANIES
 	
            77
 
	
             
 	
            15.18
 	
            Nonliability of Lenders
 	
            78
 
	
             
 	
            15.19
 	
            FORUM SELECTION AND CONSENT TO JURISDICTION
 	
            79
 
	
             
 	
            15.20
 	
            WAIVER OF JURY TRIAL
 	
            79
 
	
             
 	
            15.21
 	
            JOINT AND SEVERAL LIABILITY
 	
            80
 
	
             
 	
            15.22
 	
            Effect on Existing Credit Agreement; No Novation
 	
            81
 
	
             
 	
            15.23
 	
            Publicity
 	
            82
 

 

 

v

 

 

 

ANNEXES

 

	
            ANNEX A
 	
            Lenders and Pro Rata Shares
 
	
            ANNEX B
 	
            Addresses for Notices
 

 

SCHEDULES

	
            SCHEDULE 9.6
 	
            Litigation and Contingent Liabilities
 
	
            SCHEDULE 9.8 
 	
            Subsidiaries
 
	
            SCHEDULE 9.16
 	
            Insurance
 
	
            SCHEDULE 9.17
 	
            Real Property
 
	
            SCHEDULE 9.21
 	
            Labor Matters
 
	
            SCHEDULE 11.1
 	
            Existing Debt
 
	
            SCHEDULE 11.2
 	
            Existing Liens
 
	
            SCHEDULE 11.11
 	
            Investments
 
	
            SCHEDULE 12.1.1
 	
            List of Closing Documents
 

 

EXHIBITS

 

	
            EXHIBIT A
 	
            Form of Revolving Loan Note (Section 3.1)
 
	
            EXHIBIT B
 	
            Form of Compliance Certificate (Section 10.1.3)
 
	
            EXHIBIT C
 	
            Form of Borrowing Base Certificate (Section 1.1)
 
	
            EXHIBIT D
 	
            Form of Assignment Agreement (Section 15.6.1)
 
	
            EXHIBIT E
 	
            Form of Notice of Borrowing (Section 2.2.2)
 
	
            EXHIBIT F
 	
            Form of Notice of Conversion/Continuation (Section 2.2.3)
 
	
            EXHIBIT G
 	
            Form of Joinder Agreement (Section 10.11)
 

 

 

vi

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 30, 2006 (this “Agreement”), is entered into among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), amends and restates the Existing Credit Agreement (as defined below).

WHEREAS, the Administrative Agent, the Lenders and the Companies are party to that certain Amended and Restated Loan and Security Agreement dated as of August 31, 2000 (as the same has been amended, restated, supplemented or otherwise modified as of the date hereof, the “Existing Credit Agreement”), pursuant to which the Lenders have made certain loans, advances and other financial accommodations to the Companies and the Companies have granted to the Administrative Agent, for the benefit of the Lenders and any other lenders who from time to time may become party to the Existing Credit Agreement, a lien on and a security interest in all of the Companies’ real, personal and intellectual property to secure the Companies’ “Obligations” under the Existing Credit Agreement (as defined therein) (collectively, the
“Existing Obligations”);

WHEREAS, as of the date hereof, the Companies have “Revolving Loans” (as defined in the Existing Credit Agreement) outstanding in an aggregate principal amount of $0 (which amount does not include the Existing Letters of Credit (as defined below) and, for avoidance of doubt, which amount does not reflect the application of any repayment of such Revolving Loans or the borrowing of such Revolving Loans which are made on the Closing Date) under a secured revolving credit facility extended to the Companies by the Lenders under the Existing Credit Agreement;

WHEREAS, as of the date hereof, the Companies have “Letters of Credit” (as defined in the Existing Credit Agreement) outstanding in an aggregate principal amount of $0 (the “Existing Letters of Credit”) under a secured revolving credit facility extended to the Companies by the Lenders under the Existing Credit Agreement;

WHEREAS the Companies have requested that the Administrative Agent and the Lenders amend and restate the Existing Credit Agreement in its entirety to, among other things, (i) modify the termination date and increase the amount of the revolving credit facility (which includes letters of credit), (ii) modify certain financial covenants, and (iii) otherwise amend and restate the Existing Credit Agreement in its entirety, in each case, upon the terms and conditions set forth herein; and

 

 

 

 

WHEREAS, it is the intention of the Companies, the Lenders and the Administrative Agent that the amendment and restatement of the Existing Credit Agreement pursuant to this Agreement shall not effect a refinancing or novation of the Existing Obligations which shall remain outstanding under this Agreement (the “Restructured Obligations”), but rather a modification of the terms governing repayment of such Restructured Obligations, which Restructured Obligations shall remain outstanding as of the date hereof and shall remain secured by the “Collateral” (as defined in the Existing Credit Agreement).

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

	
            
  	
            SECTION 1.
 	
            DEFINITIONS.
 

1.1          Definitions.  When used herein the following terms shall have the following meanings:

Account Debtor is defined in the Guaranty and Collateral Agreement.

Account or Accounts is defined in the UCC.

Acquired Debt means mortgage Indebtedness, purchase money indebtedness or Debt with respect to Capital Leases of a Person existing at the time such Person became a domestic Wholly-Owned Subsidiary of a Company or assumed by a Company or a domestic Wholly-Owned Subsidiary of a Company pursuant to a Permitted Acquisition (and not created or incurred in connection with or in anticipation of such Permitted Acquisition).

Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (i) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (ii) the acquisition of all of the outstanding equity interests (including the acquisition or termination of any rights, warrants or options to acquire the equity interests) of a Person, or otherwise causing a Person to become a domestic Wholly-Owned Subsidiary of a Company, or (iii) a merger or consolidation or any other combination with another Person.

Administrative Agent means LaSalle in its capacity as administrative agent for the Lenders hereunder and any successor thereto in such capacity.

Affected Loan – see Section 8.3.

Affiliate of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person, (b) any officer or director of such Person and (c) with respect to any Lender, any entity administered or managed by such Lender or an Affiliate or investment advisor thereof and which is engaged in making, purchasing, holding or otherwise investing in commercial loans.  A Person shall be deemed to be “controlled by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.  Unless expressly stated otherwise 

 

 

herein, neither the Administrative Agent nor any Lender shall be deemed an Affiliate of any Loan Party.

Agreement – see the Preamble.

Applicable Margin means, for any day, the rate per annum set forth below opposite the level (the “Level”) then in effect, it being understood that the Applicable Margin for (i) Revolving Loans which are LIBOR Loans shall be the percentage set forth under the column “Revolver LIBOR Margin,” (ii) Revolving Loans which are Base Rate Loans shall be the percentage set forth under the column “Revolver Base Rate Margin,” (iii) the Non-Use Fee Rate shall be the percentage set forth under the column “Non-Use Fee Rate,” (iv) the Standby Letters of Credit shall be the percentage set forth under the column “Standby L/C Fees”, and (v) the Trade Letters of Credit shall be the percentage set forth under the column “Trade L/C Fees”:

	
             

 

Level
  	
             

Total Debt

to EBITDA Ratio
  	
            Revolver LIBOR

Margin
  	
            Revolver Base Rate

Margin
  	
             

Non-Use

Fee Rate
  	
             

Standby L/C Fees
  	
             

Trade

L/C Fees
  
	
            III
 	
            Greater than 2.00:1 but equal to or less than 2.50:1
 	
            2.00%
 	
            0.00%
 	
            0.375%
 	
            2.00%
 	
            1.00%
 
	
            II
 	
            Greater than 1.50:1 but equal to or less than 2.00:1
 	
            1.75%
 	
            0.00%
 	
            0.250%
 	
            1.75%
 	
            0.875%
 
	
            I
 	
            Equal to or less than 1.50:1
 	
            1.50%
 	
            0.00%
 	
            0.200%
 	
            1.50%
 	
            0.75%
 

 

The Revolver LIBOR Margin, the Revolver Base Rate Margin, the Non-Use Fee Rate, the Standby L/C Fee and the Trade L/C Fee shall be adjusted, to the extent applicable, on the fifth (5th) Business Day after the Companies provides or are required to provide the annual and quarterly financial statements and other information pursuant to Sections 10.1.1 or 10.1.2, as applicable, and the related Compliance Certificate, pursuant to Section 10.1.3.  Notwithstanding anything contained in this paragraph to the contrary, (a) if the Companies fail to deliver the financial statements and Compliance Certificate in accordance with the provisions of Sections 10.1.1, 10.1.2 and 10.1.3, the Revolver LIBOR Margin, the Revolver Base Rate Margin, the Non-Use Fee Rate, the Standby L/C Fee and the Trade L/C Fee shall be based upon Level III above beginning on the date such financial statements and Compliance Certificate were required to be delivered until the fifth (5th) Business Day after such financial statements and Compliance Certificate are actually delivered, whereupon the Applicable Margin shall be determined by the then current Level; (b) no reduction to any Applicable Margin shall become effective at any time when an Event of Default or Unmatured Event of Default has occurred and is continuing; and (c) the initial Applicable Margin on the Closing Date shall be based on Level I.

Asset Disposition means the sale, lease, assignment or other transfer for value (each, a “Disposition”) by any Loan Party to any Person (other than a Loan Party) of any asset or right of such Loan Party (including, the loss, destruction or damage of any thereof or any actual or threatened (in writing to any Loan Party) condemnation, confiscation, requisition, seizure or taking thereof) other than (a) the Disposition of any asset which is to be replaced, and is in fact replaced, within 180 days with another asset performing the same or a similar function, (b) the sale or lease of inventory in the ordinary course of business and (c) other Dispositions in any 

 

 

Fiscal Year the Net Proceeds of which do not in the aggregate exceed $5,000,000 (inclusive of any dispositions of product lines permitted pursuant to Section 11.16(d)).

Assignee – see Section 15.6.1.

Assignment Agreement – see Section 15.6.1.

Attorney Costs means, with respect to any Person, all reasonable fees and charges of any counsel to such Person, the reasonable allocable cost of internal legal services of such Person, all reasonable disbursements of such internal counsel and all court costs and similar legal expenses.

Bank Product Agreements means those certain cash management service agreements entered into from time to time between any Loan Party and a Lender or its Affiliates in connection with any of the Bank Products.

Bank Product Obligations means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Loan Parties to any Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that a Loan Party is obligated to reimburse to the Administrative Agent or any Lender as a result of the Administrative Agent or such Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to the Loan Parties pursuant to the Bank Product Agreements.

Bank Products means any service or facility extended to any Loan Party by any Lender or its Affiliates including:  (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) Hedging Agreements.

Base Rate means at any time the greater of (a) the Federal Funds Rate plus 0.5% and (b) the Prime Rate.

Base Rate Loan means any Loan which bears interest at or by reference to the Base Rate.

Base Rate Margin means the Revolver Base Rate Margin.

Board of Directors means the board of directors of Technologies or any committee thereof duly authorized to act on behalf of the board of directors.

Borrowing Base means an amount equal to the total of (a) 80% of the unpaid amount (net of such reserves and allowances as the Administrative Agent deems necessary in its reasonable discretion) of all Eligible Accounts plus (b) the lesser of (i) 50% of the value of all Eligible Inventory valued at the lower of cost or market in the aggregate and (ii) $7,500,000, in each case, net of such reserves and allowances as the Administrative Agent deems necessary in its reasonable discretion (which reserves may include a rent reserve based on three-months rent with respect to each the following leased real properties: (i) 750 North Commons Drive, Aurora, Illinois, (ii) 1051 Woodfield Road, Schaumburg, Illinois, and (iii) 880 Enterprise Drive, Aurora, 

 

 

Illinois to the extent the Companies do not deliver the Collateral Access Agreements with each landlord as required pursuant to Section 10.13).

Borrowing Base Certificate means a certificate substantially in the form of Exhibit C.

Borrowing Base Reporting Period – see Section 10.1.6.

Borrowing Base Reporting Termination Date – see Section 10.1.6.

Borrowing Base Reporting Trigger – see Section 10.1.6.

BSA – see Section 10.4.

Business Day means any day on which LaSalle is open for commercial banking business in Chicago, Illinois and, in the case of a Business Day which relates to a LIBOR Loan, on which dealings are carried on in the London interbank eurodollar market.

Capital Expenditures means all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of the Companies and their respective Subsidiaries, including expenditures in respect of Capital Leases, but excluding expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (a) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (b) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced.

Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.

Capital Securities means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after the Closing Date, including common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership, interests in a Trust, interests in other unincorporated organizations or any other equivalent of such ownership interest.

Cash Collateralize means to deliver cash collateral to the Administrative Agent, to be held as cash collateral for outstanding Letters of Credit, pursuant to documentation reasonably satisfactory to the Administrative Agent.  Derivatives of such term have corresponding meanings.

Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case (unless issued by a Lender or its holding company) rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal 

 

 

Funds transaction that is issued or sold by any Lender or its holding company (or by a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000), (d) any repurchase agreement entered into with any Lender (or commercial banking institution of the nature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) above and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Lender (or other commercial banking institution) thereunder and (e) money market accounts or mutual
funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by the Administrative Agent.

Change of Control means each occurrence of any of the following:

(a)          any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than any Permitted Holder, becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of 50% or more of the Capital Securities of the Company having the right to vote for the election of members of the Board of Directors,

(b)          a majority of the members of the Board of Directors do not constitute Continuing Directors,

(c)          (i) Technologies ceases to own and control, directly or indirectly, 90% of the shares of the Capital Securities of CPI, and (ii) Technologies ceases to own and control, directly or indirectly, 100% of the shares of the Capital Securities of each of the other Loan Parties, in each case, unless otherwise permitted hereunder, 

(d)          (i) Technologies consolidates with or merges with or into another entity and is not the surviving entity or (ii) conveys, transfers or leases all or substantially all of its property and assets to any Person; or

(e)          the Permitted Holders cease to hold legal title to the common stock of Technologies entitling the Voting Trust to at least 40% of the voting power of all shares of Capital Stock of Technologies entitled to vote.

Closing Date – see Section 12.1.

Code means the Internal Revenue Code of 1986, as amended from time to time.

Collateral as defined in the Guaranty and Collateral Agreement of even date herewith executed by the Loan Parties.

Collateral Access Agreement means an agreement in form and substance reasonably satisfactory to the Administrative Agent pursuant to which a mortgagee or lessor of real property on which collateral is stored or otherwise located, or a warehouseman, processor or other bailee of Inventory or other property owned by any Loan Party, acknowledges the Liens of the Administrative Agent under the Collateral Documents and waives any Liens held by such Person 

 

 

on such property, and, in the case of any such agreement with a mortgagee or lessor, permits the Administrative Agent reasonable access to and use of such real property following the occurrence and during the continuance of an Event of Default to assemble, complete and sell any Collateral stored or otherwise located thereon.

Collateral Documents means, collectively, the Guaranty and Collateral Agreement, each Mortgage, each Collateral Access Agreement, the Perfection Certificate, each control agreement and any other agreement or instrument pursuant to which any Loan Party or any other Person grants or purports to grant collateral to the Administrative Agent for the benefit of the Lenders or otherwise relates to such collateral.

Commitment means, as to any Lender, such Lender’s commitment to make Loans, and to issue or participate in Letters of Credit, under this Agreement.  The initial amount of each Lender’s commitment to make Loans is set forth on Annex A.

Company and Companies – see the Preamble.

Company Representative – see Section 2.2.4.

Compliance Certificate means a Compliance Certificate in substantially the form of Exhibit B.

Computation Period means each period of four consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter.

Consolidated Current Assets means, with respect to the Companies and their respective Subsidiaries for any date, all amounts (other than cash and Cash Equivalent) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Companies and their respective Subsidiaries at such date.

Consolidated Current Liabilities means, with respect to the Companies and their respective Subsidiaries for any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Companies and their respective Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of the Companies and their respective Subsidiaries and (b) without duplication of clause (a) above, all debt consisting of Revolving Loans to the extent otherwise included therein.

Consolidated Net Income means, with respect to the Companies and their respective Subsidiaries for any period, the net income (or loss) of the Companies and their respective Subsidiaries for such period, excluding any gains from Asset Dispositions, any extraordinary gains and any gains from discontinued operations.

Consolidated Working Capital means, for any date, the remainder of (a) Consolidated Current Assets, minus (b) Consolidated Current Liabilities.

 

 

 

 

Contingent Liability means, with respect to any Person, each obligation and liability of such Person and all such obligations and liabilities of such Person incurred pursuant to any agreement, undertaking or arrangement by which such Person:  (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including any indebtedness, dividend or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends or other distributions upon the Capital
Securities of any other Person; (c) undertakes or agrees (whether contingently or otherwise):  (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received; (d) agrees to lease property or to purchase securities, property or services from such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person to make payment of the indebtedness or obligation; (e) to induce the issuance of, or in
connection with the issuance of, any letter of credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to assure a creditor against loss.  The amount of any Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby.

Continuing Director means (a) any member of the Board of Directors who was a director (or comparable manager) of Technologies on the Closing Date, and (b) any individual who becomes a member of the Board of Directors after the Closing Date if such individual was appointed, elected or nominated for election to the Board of Directors by (1) a majority of the Continuing Directors or (2)  by the Permitted Holders.

Controlled Group means all members of a controlled group of corporations, all members of a controlled group of trades or businesses (whether or not incorporated) under common control and all members of an affiliated service group which, together with the Companies or any of their respective Subsidiaries, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

CPI – see the Preamble.

Debt of any Person means, without duplication, (a) all indebtedness of such Person, (b) all borrowed money of such Person, whether or not evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person as lessee under Capital Leases which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (d) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the ordinary course of business), (e) all indebtedness secured by a Lien on the property of such Person, whether or not such indebtedness shall have been assumed by such Person; provided that if such Person has not assumed or 

 

 

otherwise become liable for such indebtedness, such indebtedness shall be measured at the fair market value of such property securing such indebtedness at the time of determination, (f) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or not drawn), bankers’ acceptances and similar obligations issued for the account of such Person (including the Letters of Credit), (g) all Hedging Obligations of such Person, (h) all Contingent Liabilities of such Person, (i) all Debt of any partnership of which such Person is a general partner and (j) any Capital Securities or other equity instrument, whether or not mandatorily redeemable, that under GAAP is characterized as debt, whether pursuant to financial accounting standards board issuance No. 150 or otherwise.

Dollar and the sign “$” mean lawful money of the United States of America.

EBITDA means, for any period, Consolidated Net Income for such period plus, to the extent deducted in determining such Consolidated Net Income, Interest Expense, income tax expense, depreciation and amortization for such period.

Eligible Account means an Account owing to any Company which meets each of the following requirements:

(a)          it arises from the final, bona fide sale or lease of goods or the rendering of services which have been fully performed by such Company; and if it arises from the sale or lease of goods, (i) such goods comply with such Account Debtor’s specifications (if any) and have been delivered to such Account Debtor and (ii) such Loan Party has possession of, or if requested by the Administrative Agent has delivered to the Administrative Agent, delivery receipts evidencing such delivery;

(b)          it (i) is owned by such Company, (ii) is subject to a perfected, first priority Lien in favor of the Administrative Agent and (iii) is not subject to any other assignment, claim or Lien;

(c)          it (i) is a valid, legally enforceable and unconditional obligation of the Account Debtor with respect thereto, (ii) is not subject to (x) the fulfillment of any condition whatsoever, (y) any counterclaim, credit, allowance, discount, rebate or adjustment by the Account Debtor with respect thereto or (z) to any claim by such Account Debtor denying liability thereunder in whole or in part and (iii) the Account Debtor has not refused to accept and/or has not returned or offered to return any of the goods or services which are the subject of such Account; provided that only such portion of any such Account not satisfying the criteria in subclause (c)(ii) above will be deemed
ineligible pursuant to this clause (c);

(d)          there is no bankruptcy, insolvency or liquidation proceeding pending by or against the Account Debtor with respect thereto;

(e)          the Account Debtor with respect thereto is a resident or citizen of, and is located within, the United States and such Account is denominated in Dollars, unless the sale of goods or services giving rise to such Account is on letter of credit, banker’s acceptance or other credit support terms reasonably satisfactory to the Administrative Agent;

 

 

 

 

(f)           it is not (i) an Account arising from a “sale on approval,” “sale or return,” “consignment” or “bill and hold” or subject to any other repurchase or return agreement or (ii) subject to a reserve or contra-account established by such Company for potential returns or refunds; provided that only such portion of any such Account in the amount of such reserve or contra account shall be deemed ineligible pursuant to this clause (f);

(g)          it is not an Account with respect to which possession and/or control of the goods sold giving rise thereto is held, maintained or retained by any Loan Party (or by any agent or custodian of any Loan Party) for the account of or subject to further and/or future direction from the Account Debtor with respect thereto;

	
             
  	
            (h)
 	
            it arises in the ordinary course of business of such Loan Party;
 

(i)           if the Account Debtor is the United States or any department, agency or instrumentality thereof, such Loan Party has assigned its right to payment of such Account to the Administrative Agent pursuant to the Assignment of Claims Act of 1940, and evidence (reasonably satisfactory to the Administrative Agent) of such assignment has been delivered to the Administrative Agent;

(j)           if such Company maintains a credit limit for an Account Debtor, the aggregate dollar amount of Accounts due from such Account Debtor, including such Account, does not exceed such credit limit;

(k)          if the Account is evidenced by chattel paper or an instrument, the originals of such chattel paper or instrument shall have been endorsed and/or assigned and delivered to the Administrative Agent or, in the case of electronic chattel paper, shall be in the control of the Administrative Agent, in each case  in a manner satisfactory to the Administrative Agent;

(l)           such Account is evidenced by an invoice delivered to the related Account Debtor and is not more than (i) 60 days past the due date thereof or (ii) 90 days past the original invoice date thereof, in each case according to the original terms of sale;

(m)         it is not an Account with respect to an Account Debtor that is located in any jurisdiction which has adopted a statute or other requirement with respect to which any Person that obtains business from within such jurisdiction must file a notice of business activities report or make any other required filings in a timely manner in order to enforce its claims in such jurisdiction’s courts unless (i) such notice of business activities report has been duly and timely filed or such Company is exempt from filing such report and has provided the Administrative Agent with reasonably satisfactory evidence of such exemption or (ii) the failure to make such filings may be cured retroactively by such Company for a nominal fee;

(n)          the Account Debtor with respect thereto is not (i) a Loan Party or an Affiliate of a Loan Party or (ii) a director, officer, employee or agent of a Loan Party or an Affiliate of a Loan Party;

 

 

 

 

(o)          it is not owing by an Account Debtor with respect to which 25% or more of the aggregate amount of outstanding Accounts owed at such time by such Account Debtor is classified as ineligible under clause (l) of this definition; 

(p)          if the aggregate amount of all Accounts owed by the Account Debtor thereon exceeds 25% of the aggregate amount of all Accounts at such time, then all Accounts owed by such Account Debtor in excess of such amount shall be deemed ineligible;

(q)          it is not an Account (i) with respect to which any representation or warranty contained in any Loan Document is untrue, (ii) which violates any of the covenants contained in any Loan Document or the agreement or contract under which it arises or (iii) which arises out of a contract or order which fails in any material respect to comply with the requirements of applicable law; and

(r)           it is not an Account for which such Loan Party has received any prepayment or a deposit in respect of such Account.

An Account which is at any time an Eligible Account, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be an Eligible Account.  Further, with respect to any Account (and without duplication of any reserves set by the Administrative Agent), if the Administrative Agent or the Required Lenders at any time hereafter determine in its or their reasonable credit judgment that the prospect of payment or performance by the Account Debtor with respect thereto is materially impaired for any reason whatsoever, such Account shall cease to be an Eligible Account after notice of such determination is given to the Company Representative and applicable Company.  The foregoing notwithstanding, the Administrative Agent reserves the right to modify the criteria for “Eligible Accounts” after the occurrence and during the continuance of an Event of Default.

Eligible Inventory means Inventory of any Company which meets each of the following requirements:

(a)          it (i) is owned by such Company, (ii) is subject to a perfected, first priority Lien in favor of the Administrative Agent and (iii) is not subject to any other assignment, claim or Lien;

(b)          it is salable and not slow-moving, obsolete or discontinued; provided that any Inventory which has been held for 18 months or more shall be deemed ineligible;

(c)          it is in the possession and control of such Company and it is stored and held in facilities owned by such Company or, if such facilities are not so owned, the Administrative Agent is in possession of a Collateral Access Agreement with respect thereto;

(d)          it is not Inventory produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provisions contained in Title 29 U.S.C. §215;

 

 

 

 

(e)          it is not subject to any agreement or license which would restrict the Administrative Agent’s ability to sell or otherwise dispose of such Inventory;

(f)           it is located in the United States or in any territory or possession of the United States that has adopted Article 9 of the Uniform Commercial Code;

(g)          it is not “in transit” to such Loan Party or held by such Loan Party on consignment; 

	
             
  	
            (h)
 	
            it is not “work-in-progress” Inventory;
 	
             

	
             
  	
            (i)
 	
            it is not supply items, packaging or other, similar materials;
 

(j)           it is not identified to any purchase order or contract to the extent progress or advance payments are received with respect to such Inventory; 

(k)          it does not breach any of the representations, warranties or covenants pertaining to Inventory set forth in the Loan Documents; and

	
             
  	
            (l)
 	
            it is Inventory recorded on such Company’s inventory system.
 

Inventory which is at any time Eligible Inventory but which subsequently fails to meet any of the foregoing requirements shall forthwith cease to be Eligible Inventory.  The foregoing notwithstanding, the Administrative Agent reserves the right to modify the criteria for “Eligible Inventory” after the occurrence and during the continuance of an Event of Default.

Enginuity means Enginuity Communications Corporation, an Illinois corporation.

Enginuity Asset Purchase Agreement means that certain Asset Purchase Agreement dated as of July 1, 2004 pursuant to which Westell sold certain assets to Enginuity in exchange for $200,000, as the same may be amended in accordance with the terms hereof.  

Enginuity Guarantee means that certain Unconditional Guarantee to the United States Small Business Administration dated as of July 1, 2004 entered into in connection with Enginuity Asset Purchase Agreement and pursuant to which Westell guaranteed the small business loan application of Enginuity up to a maximum dollar limitation of $1,650,000 in principal plus interest and other amounts owed on the note as the same may be amended in accordance with the terms hereof.

Enginuity Transaction Documents means, collectively, the Enginuity Asset Purchase Agreement and the Enginuity Guarantee.

Environmental Claims means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.  

Environmental Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative or 

 

 

judicial orders, consent agreements, directed duties, requests, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case relating to any matter arising out of or relating to public health and safety, or pollution or protection of the environment or workplace, including any of the foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, emission, release, threatened release, control or cleanup of any Hazardous Substance.  

ERISA means the Employee Retirement Income Security Act of 1974, as amended. 

Event of Default means any of the events described in Section 13.1.

Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.

Excluded Taxes means taxes based upon, or measured by, any Lender’s or Administrative Agent’s (or a branch of the Lender’s or Administrative Agent’s) overall net income, overall net receipts, or overall net profits (including franchise taxes imposed in lieu of such taxes), but only to the extent such taxes are imposed by a taxing authority (a) in a jurisdiction in which such Lender or Administrative Agent is organized, (b) in a jurisdiction which such Lender’s or Administrative Agent’s principal office is located, or (c) in a jurisdiction in which such Lender’s or Administrative Agent’s lending office (or branch) in respect of which payments under this Agreement are made is located.

Existing Credit Agreement – see the Preamble.

Existing Letters of Credit – see the Preamble.

Existing Obligations – see the Preamble.

Federal Funds Rate means, for any day, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent.  The Administrative Agent’s determination of such rate shall be binding and conclusive absent manifest error.

Fiscal Quarter means a fiscal quarter of a Fiscal Year.

Fiscal Year means the fiscal year of the Companies and their respective Subsidiaries, which period shall be the 12-month period ending on March 31st of each year.  References to a Fiscal Year with a number corresponding to any calendar year (e.g., “Fiscal Year 2006”) refer to the Fiscal Year ending on March 31st of such year.

Fixed Charge Coverage Ratio means, for any Computation Period, the ratio of (a) the total of (i) EBITDA for such period minus (ii) the sum of (A) income taxes paid in cash by the 

 

 

Loan Parties for such period plus (B) all unfinanced Capital Expenditures for such period plus (c) cash dividends issued by the Companies and their respective Subsidiaries for such period plus (d) other cash distributions utilized to repurchase stock of the Companies and their respective Subsidiaries for such period to (b) the sum of (i) cash Interest Expense for such period plus (ii) required payments of principal of Funded Debt (excluding the Revolving Loans if no equivalent reduction in the Revolving Commitment is made) for such period. 

FRB means the Board of Governors of the Federal Reserve System or any successor thereto.

Funded Debt means, as to any Person, all Debt of such Person that matures more than one year from the date of its creation (or is renewable or extendible, at the option of such Person, to a date more than one year from such date). 

GAAP means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) and the Securities and Exchange Commission, which are applicable to the circumstances as of the date of determination.

Group – see Section 2.2.1.

Guarantor means each domestic Wholly-Owned Subsidiary of a Company which is not a borrower hereunder.

Guaranty and Collateral Agreement means the Amended and Restated Guaranty and Collateral Agreement dated as of the date hereof executed and delivered by the Loan Parties, together with any joinders thereto and any other guaranty and collateral agreement executed by a Loan Party, in each case in form and substance reasonably satisfactory to the Administrative Agent.

Hazardous Substances means (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, dielectric fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any chemicals, materials, pollutant or substances defined as or included in the definition of “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous substances”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants” or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, the exposure to, or release of which is prohibited, limited or regulated by any
governmental authority or for which any duty or standard of care is imposed pursuant to, any Environmental Law.

Hedging Agreement means any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.

 

 

 

 

Hedging Obligation means, with respect to any Person, any liability of such Person under any Hedging Agreement.  The amount of any Person’s obligation in respect of any Hedging Obligation shall be deemed to be the incremental obligation that would be reflected in the financial statements of such Person in accordance with GAAP.

Indemnified Liabilities – see Section 15.16.

Interest Expense means for any period the consolidated interest expense of the Companies and their respective Subsidiaries for such period (including all imputed interest on Capital Leases).

Interest Period means, as to any LIBOR Loan, the period commencing on the date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one, two, or three months thereafter as selected by the Company Representative pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided that:

(a)          if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;

(b)          any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c)          the Company Representative may not select any Interest Period for a Revolving  Loan which would extend beyond the scheduled Termination Date.

International – see the Preamble.

Inventory is defined in the Guaranty and Collateral Agreement.

Investment means, with respect to any Person, any investment in another Person, whether by acquisition of any debt or Capital Security, by making any loan or advance, or by becoming obligated with respect to a Contingent Liability in respect of obligations of such other Person (other than travel and similar advances to employees in the ordinary course of business).

Issuing Lender means LaSalle, in its capacity as the issuer of Letters of Credit hereunder, or any Affiliate of LaSalle that may from time to time issue Letters of Credit, and their successors and assigns in such capacity.

LaSalle – see the Preamble.

L/C Application means, with respect to any request for the issuance of a Letter of Credit, a letter of credit application in the form being used by the Issuing Lender at the time of such request for the type of letter of credit requested.

L/C Fee Rate – see the definition of Applicable Margin.

 

 

 

 

Lender – see the Preamble.  References to the “Lenders” herein shall include the Issuing Lender; for purposes of clarification only, to the extent that LaSalle (or any successor Issuing Lender) may have any rights or obligations in addition to those of the other Lenders due to its status as Issuing Lender, its status as such will be specifically referenced.  In addition to the foregoing, for the purpose of identifying the Persons entitled to share in the Collateral and the proceeds thereof under, and in accordance with the provisions of, this Agreement and the Collateral Documents, the term “Lender” shall include Affiliates of a Lender providing a Bank Product.

Lender Party – see Section 15.17.

Letter of Credit - see Section 2.1.2.

LIBOR Loan means any Loan which bears interest at a rate determined by reference to the LIBOR Rate.

LIBOR Margin means the Revolver LIBOR Margin.

LIBOR Office means with respect to any Lender the office or offices of such Lender which shall be making or maintaining the LIBOR Loans of such Lender hereunder.  A LIBOR Office of any Lender may be, at the option of such Lender, either a domestic or foreign office.

LIBOR Rate means a rate of interest equal to (a) the per annum rate of interest at which United States dollar deposits in an amount comparable to the amount of the relevant LIBOR Loan and for a period equal to the relevant Interest Period are offered in the London Interbank Eurodollar market at 11:00 A.M. (London time) two (2) Business Days prior to the commencement of such Interest Period (or three (3) Business Days prior to the commencement of such Interest Period if banks in London, England were not open and dealing in offshore United States dollars on such second preceding Business Day), as displayed in the Bloomberg Financial Markets system (or other authoritative source selected by the Administrative Agent in its reasonable discretion) or, if the Bloomberg Financial
Markets system or another authoritative source is not available, as the LIBOR Rate is otherwise determined by the Administrative Agent in its reasonable discretion, divided by (b) a number determined by subtracting from 1.00 the then stated maximum reserve percentage for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D), such rate to remain fixed for such Interest Period.  The Administrative Agent’s determination of the LIBOR Rate shall be conclusive, absent manifest error.

Lien means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person (including an interest in respect of a Capital Lease) which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.

 

 

 

 

Loan Documents means this Agreement, the Notes, the Letters of Credit, the Master Letter of Credit Agreement, the L/C Applications, the Collateral Documents and all documents, instruments and agreements delivered in connection with the foregoing.

Loan Party means the Companies and each Guarantor.  

Loan or Loans means, as the context may require, Revolving Loans.

Margin Stock means any “margin stock” as defined in Regulation U.

Master Letter of Credit Agreement means, at any time, with respect to the issuance of Letters of Credit, a master letter of credit agreement or reimbursement agreement in the form, if any, being used by the Issuing Lender at such time.

Material Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the financial condition, operations, assets, business or properties of the Loan Parties taken as a whole, (b) a material impairment of the ability of any Loan Party to perform any of the Obligations under any Loan Document or (c) a material adverse effect upon any substantial portion of the collateral under the Collateral Documents or upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document.

Mortgage means a mortgage, deed of trust, leasehold mortgage or similar instrument granting the Administrative Agent a Lien on real property of any Loan Party.

Multiemployer Pension Plan means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Company, any Subsidiary or any other member of the Controlled Group may have any liability.

Net Cash Proceeds means:

a.            with respect to any Asset Disposition, the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance or by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by any Loan Party pursuant to such Asset Disposition net of (i) the direct costs relating to such sale, transfer or other disposition (including sales commissions and legal, accounting and investment banking fees), (ii) taxes paid or reasonably estimated by the Company Representative to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (iii) amounts required to be applied to the repayment of any Debt
secured by a Lien on the asset subject to such Asset Disposition (other than the Loans);

b.            with respect to any issuance of Capital Securities, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the direct costs relating to such issuance (including sales and underwriters’ commissions); and

c.            with respect to any issuance of Debt, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the direct costs of such issuance (including up-front, underwriters’ and placement fees).

 

 

 

 

Non-U.S. Participant – see Section 7.6(d).

Non-Use Fee Rate – see the definition of Applicable Margin.

Note – see Section 3.1.

Notice of Borrowing – see Section 2.2.2.

Notice of Conversion/Continuation – see Section 2.2.3.

Obligations means all obligations (monetary (including post-petition interest, allowed or not) or otherwise) of any Loan Party under this Agreement and any other Loan Document including the Restructured Obligations, Attorney Costs and any reimbursement obligations of each Loan Party in respect of Letters of Credit and surety bonds, all Hedging Obligations permitted hereunder which are owed to any Lender or Administrative Agent, and all Bank Products Obligations, all in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.

OFAC – see Section 10.4.

Operating Lease means any lease of (or other agreement conveying the right to use) any real or personal property by any Loan Party, as lessee, other than any Capital Lease.

PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

Participant – see Section 15.6.2.

Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA or the minimum funding standards of ERISA (other than a Multiemployer Pension Plan), and as to which any Company, any Subsidiary or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

Perfection Certificate means the perfection certificate executed and delivered to the Administrative Agent by the Loan Parties.

Permitted Acquisition - see Section 11.5.

Permitted Holders means the Voting Trust, any beneficiary of the Voting Trust, the voting trustee of the Voting Trust and Robert C. Penny III (individually and as a trustee of any other trust.)

Permitted Lien means a Lien expressly permitted hereunder pursuant to Section 11.2.

 

 

 

 

Person means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

Prime Rate means, for any day, the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its prime rate (whether or not such rate is actually charged by the Administrative Agent), which is not intended to be the Administrative Agent’s lowest or most favorable rate of interest at any one time.  Any change in the Prime Rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change; provided that the Administrative Agent shall not be obligated to give notice of any change in the Prime Rate.

Pro Rata Share means with respect to all matters as to a particular Lender, (x) prior to the Revolving Commitment being terminated or reduced to zero, the percentage obtained by dividing (i) such Lender’s Revolving Commitment, by (ii) the aggregate Revolving Commitment of all Lenders and (y) from and after the time the Revolving Commitment has been terminated or reduced to zero, the percentage obtained by dividing (i) the aggregate unpaid principal amount of such Lender’s Revolving Outstandings by (ii) the aggregate unpaid principal amount of all Revolving Outstandings.

Regulation D means Regulation D of the FRB.

Regulation U means Regulation U of the FRB.

Replacement Lender – see Section 8.7(b).

Reportable Event means a reportable event as defined in Section 4043 of ERISA and the regulations issued thereunder as to which the PBGC has not waived the notification requirement  of Section 4043(a), or the failure of a Pension Plan to meet the minimum funding standards of Section 412 of the Code (without regard to whether the Pension Plan is a plan described in Section 4021(a)(2) of ERISA) or under Section 302 of ERISA.

Required Lenders means, at any time, Lenders whose Pro Rata Shares exceed 66?% as determined pursuant to the definition of “Pro Rata Share”.

Restructured Obligations – see the Preamble.

Revolver Base Rate Margin – see the definition of Applicable Margin.

Revolver LIBOR Margin – see the definition of Applicable Margin.

Revolving Commitment means $40,000,000, as such amount may be reduced from time to time in accordance with Section 6.1.  

Revolving Loan – see Section 2.1.1.

 

 

 

 

Revolving Loan Availability means (a) during a Borrowing Base Reporting Period, the lesser of (i) the Revolving Commitment and (ii) the Borrowing Base, and (b) at all other times, the Revolving Commitment.

Revolving Outstandings means, at any time, the sum of (a) the aggregate principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount of all Letters of Credit.

SEC means the Securities and Exchange Commission or any other governmental authority succeeding to any of the principal functions thereof.

Senior Officer means, with respect to any Loan Party, any of the chief executive officer, president, the chief financial officer, the chief operating officer, controller or the treasurer of such Loan Party.

Standby Letter of Credit – see Section 2.1.2.

Standby L/C Fee - see the definition of Applicable Margin.

Stated Amount means, with respect to any Letter of Credit at any date of determination, (a) the maximum aggregate amount available for drawing thereunder under any and all circumstances plus (b) the aggregate amount of all unreimbursed payments and disbursements under such Letter of Credit.

Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns, directly or indirectly, such number of outstanding Capital Securities as have more than 25% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity.  Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of a Company.

Tangible Net Worth means, with respect to the Companies and their respective Subsidiaries as of any date, the sum of the capital stock and additional paid-in capital plus retained earnings (or minus accumulated deficit) less goodwill, general intangibles, deferred income taxes and prepaid expenses, in each case, calculated in conformity with GAAP.

Taxes means any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges or withholdings, and any and all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing, but excluding Excluded Taxes.

Technologies – see the Preamble.

Teltrend – see the Preamble.

Termination Date means the earlier to occur of (a) June 30, 2009 or (b) such other date on which the Commitments terminate pursuant to Section 6 or Section 13.

Termination Event means, with respect to a Pension Plan that is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of any Company, any Subsidiary or any other 

 

 

member of the Controlled Group from such Pension Plan during a plan year in which Company or any other member of the Controlled Group was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Pension Plan, the filing of a notice of intent to terminate the Pension Plan or the treatment of an amendment of such Pension Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Pension Plan or (e) any event or condition that might constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee to administer, such Pension Plan.

Total Debt means all Debt of the Companies and their respective Subsidiaries, determined on a consolidated basis, excluding (a) contingent obligations in respect of Contingent Liabilities (except to the extent constituting Contingent Liabilities in respect of Debt of a Person other than any Loan Party), (b) Hedging Obligations, and (c) Debt of any Company to its Subsidiaries and Debt of Subsidiaries of a Company to such Company or to Subsidiaries of other Companies.

Total Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the ratio of (a) Total Debt as of such day to (b) EBITDA for the Computation Period ending on such day.

Total Plan Liability means, at any time, the present value of all vested and unvested accrued benefits under all Pension Plans, determined as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.

Trade Letter of Credit – see Section 2.1.2.

Trade L/C Fee – see the definition of Applicable Margin.

type – see Section 2.2.1.

UCC is defined in the Guaranty and Collateral Agreement.  

Unfunded Liability means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Pension Plans exceeds the fair market value of all assets allocable to those benefits, all determined as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.

Unmatured Event of Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.

Voting Trust means the Westell Technologies, Inc., f/k/a Electronic Information Technologies, Inc., Voting Trust Agreement dated February 23, 1994, as amended.

Westell – see the Preamble.

Withholding Certificate – see Section 7.6(d).

 

 

 

 

Wholly-Owned Subsidiary means, as to any Person, a Subsidiary all of the Capital Securities of which (except directors’ qualifying Capital Securities) are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.

1.2          Other Interpretive Provisions.  (a)  The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b)          Section, Annex, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c)          The term “including” is not limiting and means “including without limitation.”

(d)          In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.”

(e)          Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement and the other Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.

(f)           This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters.  All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.

(g)          This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent, the Loan Parties, the Lenders and the other parties thereto and are the products of all parties.  Accordingly, they shall not be construed against the Administrative Agent or the Lenders merely because of the Administrative Agent’s or Lenders’ involvement in their preparation.

 

	
             
  	
            SECTION 2.
 	
            COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.
 

2.1          Commitments.  On and subject to the terms and conditions of this Agreement, each of the Lenders, severally and for itself alone, agrees to make loans to, and to issue or participate in letters of credit for the account of, the Companies as follows:

2.1.1    Revolving Loan Commitment.  Each Lender agrees to make loans on a revolving basis (“Revolving Loans”) from time to time until the Termination Date in such Lender’s Pro Rata Share of such aggregate amounts as the Company Representative may 

 

 

request from all Lenders; provided that the Revolving Outstandings will not at any time exceed Revolving Loan Availability.

2.1.2    L/C Commitment.  Subject to Section 2.3.1, the Issuing Lender agrees to issue standby letters of credit (each, a “Standby Letter of Credit”) or trade letters of credit (each a “Trade Letter of Credit”), in each case containing such terms and conditions as are permitted by this Agreement and are reasonably satisfactory to the Issuing Lender (each of the Trade Letters of Credit and the Standby Letters of Credit, a “Letter of Credit”), at the request of the Company Representative and for the account of a Company specified thereby from time to
time before the scheduled Termination Date and, as more fully set forth in Section 2.3.2, each Lender agrees to purchase a participation in each such Letter of Credit; provided that (a) the aggregate Stated Amount of all Letters of Credit shall not at any time exceed $3,000,000 and (b) the Revolving Outstandings shall not at any time exceed Revolving Loan Availability.

	
            
  	
            2.2
 	
            Loan Procedures.
 

2.2.1    Various Types of Loans.  Each Revolving Loan shall be divided into tranches which are, either a Base Rate Loan or a LIBOR Loan (each a “type” of Loan), as the Company Representative shall specify in the related notice of borrowing or conversion pursuant to Section 2.2.2 or 2.2.3.  LIBOR Loans having the same Interest Period which expire on the same day are sometimes called a “Group” or collectively “Groups”.  Base Rate Loans and LIBOR Loans may be outstanding at the same time,
provided that not more than five (5) different LIBOR Loans shall be outstanding at any one time.  All borrowings, conversions and repayments of Revolving Loans shall be effected so that each Lender will have a ratable share (according to its Pro Rata Share) of all types and Groups of Loans.  

2.2.2    Borrowing Procedures.  The Company Representative shall give written notice (each such written notice, a “Notice of Borrowing”) substantially in the form of Exhibit E or telephonic notice (followed immediately by a Notice of Borrowing) to the Administrative Agent of each proposed borrowing not later than (a) in the case of a Base Rate borrowing, 11:00 A.M., Chicago time, on the proposed date of such borrowing, and (b) in the case of a LIBOR borrowing, 11:00 A.M., Chicago time, at least two (2) Business Days prior to the proposed date of such borrowing.  Each such notice shall be effective upon receipt by the Administrative Agent,
shall be irrevocable, and shall specify the date, amount and type of borrowing and, in the case of a LIBOR borrowing, the initial Interest Period therefor.  Promptly upon receipt of such notice, the Administrative Agent shall advise each Lender thereof.  Not later than 1:00 P.M., Chicago time, on the date of a proposed borrowing, each Lender shall provide the Administrative Agent at the office specified by the Administrative Agent with immediately available funds covering such Lender’s Pro Rata Share of such borrowing and, so long as the Administrative Agent has not received written notice that the conditions precedent set forth in Section 11 with respect to such borrowing have not been satisfied, the Administrative Agent shall pay over the funds received by the Administrative Agent to the Company on the requested borrowing date.  Each borrowing shall be on a Business Day.  Each Base Rate borrowing shall be in an aggregate
amount of at least $100,000 and an integral multiple of $100,000 and each LIBOR borrowing shall be in an aggregate amount of at least $1,000,000 and an integral multiple of at least $500,000.

 

 

 

 

	
             
  	
            2.2.3
 	
            Conversion and Continuation Procedures.
 

(a)          Subject to Section 2.2.1, the Company may, upon irrevocable written notice to the Administrative Agent in accordance with clause (b) below:

(i)           elect, as of any Business Day, to convert any Loans (or any part thereof in an aggregate amount not less than $500,000 or a higher integral multiple of $100,000) into Loans of the other type; or

(ii)          elect, as of the last day of the applicable Interest Period, to continue any LIBOR Loans having Interest Periods expiring on such day (or any part thereof in an aggregate amount not less than $1,000,000 or a higher integral multiple of $500,000) for a new Interest Period;

provided that after giving effect to any prepayment, conversion or continuation, the aggregate principal amount of each Group of LIBOR Loans shall be at least $1,000,000 and an integral multiple of at least $500,000.

(b)          The Company Representative shall give written notice (each such written notice, a “Notice of Conversion/Continuation”) substantially in the form of Exhibit F or telephonic notice (followed immediately by a Notice of Conversion/Continuation) to the Administrative Agent of each proposed conversion or continuation not later than (i) in the case of conversion into Base Rate Loans, 11:00 A.M., Chicago time, on the proposed date of such conversion and (ii) in the case of conversion into or continuation of LIBOR Loans, 11:00 A.M., Chicago time, at least two (2) Business Days prior to the proposed date of such conversion or continuation, specifying in each case:

	
             
  	
            (i)
 	
            the proposed date of conversion or continuation;
 	
             

	
             
  	
            (ii)
 	
            the aggregate amount of Loans to be converted or continued;
 

(iii)        the type of Loans resulting from the proposed conversion or continuation; and

(iv)         in the case of conversion into, or continuation of, LIBOR Loans, the duration of the requested Interest Period therefor.

(c)          If upon the expiration of any Interest Period applicable to LIBOR Loans, the Company Representative has failed to select timely a new Interest Period to be applicable to such LIBOR Loans, the Company Representative shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans effective on the last day of such Interest Period.

(d)          The Administrative Agent will promptly notify each Lender of its receipt of a notice of conversion or continuation pursuant to this Section 2.2.3 or, if no timely notice is provided by the Company Representative, of the details of any automatic conversion.

 

 

 

 

(e)          Any conversion of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall be subject to Section 8.4.

2.2.4    Reliance on Notices; Appointment of Company Representative.  Each of the Administrative Agent and the Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any Notice of Borrowing, Notice of Conversion/Continuation or similar notice believed by it to be genuine.  Each of the Administrative Agent and the Lenders may assume that each Person executing and delivering any notice in accordance herewith was duly authorized, unless the responsible individual acting thereon for the Administrative Agent or such Lender (as the case may be) has actual knowledge to the contrary.  Each of the Companies, on behalf of itself and the other Loan Parties, hereby designates Technologies as its representative and agent on its behalf  (in such
capacity, the “Company Representative”) for the purposes of issuing Notices of Borrowing, Notices of Conversion/Continuation, giving instructions with respect to the disbursement of the proceeds of the Revolving Loans, selecting interest rate options, requesting Letters of Credit, giving and receiving all other notices and consents hereunder or under any of the other Loan Documents and taking all other actions (including in respect of compliance with covenants) on behalf of itself, any other Company or any other Loan Party under the Loan Documents.  Technologies hereby accepts such appointment.  The Administrative Agent and each Lender may regard any notice or other communication pursuant to any Loan Document from the Company Representative as a notice or communication from each Company or other Loan Party, as applicable, and may give any notice or communication required or permitted to be given to any Loan Party hereunder to
the Company Representative on behalf of such Loan Party.  Each Company agrees, on behalf of itself and the other Loan Parties, that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by the Company Representative shall be deemed for all purposes to have been made by such Loan Party and shall be binding upon and enforceable against such Loan Party to the same extent as if the same had been made directly by such Loan Party.

	
            
  	
            2.3
 	
            Letter of Credit Procedures.  
 

2.3.1    L/C Applications.  Each Company shall execute and deliver to the Issuing Lender the Master Letter of Credit Agreement from time to time in effect.  The Company Representative shall give notice to the Administrative Agent and the Issuing Lender of the proposed issuance of each Letter of Credit on a Business Day which is at least three Business Days (or such lesser number of days as the Administrative Agent and the Issuing Lender shall agree in any particular instance in their reasonable discretion) prior to the proposed date of issuance of such Letter of Credit.  Each such notice shall be accompanied by an L/C Application, duly executed by the applicable Company and in all respects satisfactory to the Administrative Agent and the Issuing Lender, together
with such other documentation as the Administrative Agent or the Issuing Lender may request in support thereof, it being understood that each L/C Application shall specify, among other things, the date on which the proposed Letter of Credit is to be issued, the expiration date of such Letter of Credit (which shall not be later than the scheduled Termination Date (unless such Letter of Credit is Cash Collateralized, in which case, such Letter of Credit expiration date may occur up to one year after the scheduled Termination Date)), whether such Letter of Credit is to be transferable in whole or in part, and whether such Letter of Credit is to be a Standby Letter of Credit or a Trade Letter of 

 

 

Credit.  Any Letter of Credit outstanding after the scheduled Termination Date which is Cash Collateralized for the benefit of the Issuing Lender shall be the sole responsibility of the Issuing Lender.  So long as the Issuing Lender has not received written notice that the conditions precedent set forth in Section 12 with respect to the issuance of such Letter of Credit have not been satisfied, the Issuing Lender shall issue such Letter of Credit on the requested issuance date.  The Issuing Lender shall promptly advise the Administrative Agent of the issuance of each Letter of Credit and of any amendment thereto, extension thereof or event or circumstance changing the amount available for drawing thereunder.  In the event of any inconsistency between the terms of the Master Letter of Credit Agreement, any L/C Application and the terms of
this Agreement, the terms of this Agreement shall control.

2.3.2    Participations in Letters of Credit.  Concurrently with the issuance of each Letter of Credit, the Issuing Lender shall be deemed to have sold and transferred to each Lender, and each such Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Pro Rata Share, in such Letter of Credit and the Companies’ reimbursement obligations with respect thereto.  If the Companies does not pay any reimbursement obligation when due, the Company Representative shall be deemed to have immediately requested that the Lenders make a Revolving Loan which is a Base Rate Loan in a principal amount equal to such
reimbursement obligations.  The Administrative Agent shall promptly notify such Lenders of such deemed request and, without the necessity of compliance with the requirements of Section 2.2.2, Section 12.2 or otherwise such Lender shall make available to the Administrative Agent its Pro Rata Share of such Loan.  The proceeds of such Loan shall be paid over by the Administrative Agent to the Issuing Lender for the account of the Companies in satisfaction of such reimbursement obligations.  For the purposes of this Agreement, the unparticipated portion of each Letter of Credit shall be deemed to be the Issuing Lender’s “participation” therein.  The Issuing Lender hereby agrees, upon request of the Administrative Agent or any Lender, to deliver to the Administrative Agent or such Lender a list of all outstanding Letters of Credit issued by the Issuing Lender, together
with such information related thereto as the Administrative Agent or such Lender may reasonably request.

	
            
  	
            2.3.3
 	
            Reimbursement Obligations.
 

(a)          The Companies, jointly and severally, hereby unconditionally and irrevocably agree to reimburse the Issuing Lender for each payment or disbursement made by the Issuing Lender under any Letter of Credit honoring any demand for payment made by the beneficiary thereunder, in each case on the date that such payment or disbursement is made.  Any amount not reimbursed on the date of such payment or disbursement shall bear interest from the date of such payment or disbursement to the date that the Issuing Lender is reimbursed by the Companies therefor, payable on demand, at a rate per annum equal to the Base Rate from time to time in effect plus the Revolver Base Rate Margin from time to time in effect plus, beginning on the third Business Day after receipt of notice from the Issuing Lender of such payment or disbursement, 2%.  The Issuing Lender shall notify the Company Representative and the Administrative Agent whenever any demand for payment is made under any Letter of Credit by the beneficiary thereunder; provided that the failure of the Issuing Lender to so 

 

 

notify the Company Representative or the Administrative Agent shall not affect the rights of the Issuing Lender or the Lenders in any manner whatsoever.

(b)          The Companies’ joint and several reimbursement obligations hereunder shall be irrevocable and unconditional under all circumstances, including (a) any lack of validity or enforceability of any Letter of Credit, this Agreement or any other Loan Document, (b) the existence of any claim, set-off, defense or other right which any Loan Party may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Issuing Lender, any Lender or any other Person, whether in connection with any Letter of Credit, this Agreement, any other Loan Document, the transactions contemplated herein or any unrelated transactions (including any
underlying transaction between any Loan Party and the beneficiary named in any Letter of Credit), (c) the validity, sufficiency or genuineness of any document which the Issuing Lender has determined complies on its face with the terms of the applicable Letter of Credit, even if such document should later prove to have been forged, fraudulent, invalid or insufficient in any respect or any statement therein shall have been untrue or inaccurate in any respect, or (d) the surrender or impairment of any security for the performance or observance of any of the terms hereof.  Without limiting the foregoing, no action or omission whatsoever by the Administrative Agent or any Lender (excluding any Lender in its capacity as the Issuing Lender) under or in connection with any Letter of Credit or any related matters shall result in any liability of the Administrative Agent or any Lender to the Companies (or any of them), or relieve the Companies of any of their obligations hereunder to any such
Person.

2.3.4    Funding by Lenders to Issuing Lender.  If the Issuing Lender makes any payment or disbursement under any Letter of Credit and (a) the Companies have not reimbursed the Issuing Lender in full for such payment or disbursement by 11:00 A.M., Chicago time, on the date of such payment or disbursement, (b) a Revolving Loan may not be made in accordance with Section 2.3.2 or (c) any reimbursement received by the Issuing Lender from the Companies is or must be returned or rescinded upon or during any bankruptcy or reorganization of any Company or otherwise, each other Lender with a Revolving Loan Commitment shall be obligated to pay to the Administrative Agent for the account of the Issuing Lender, in full or partial
payment of the purchase price of its participation in such Letter of Credit, its Pro Rata Share of such payment or disbursement (but no such payment shall diminish the joint and several obligations of the Companies under Section 2.3.3), and, upon notice from the Issuing Lender, the Administrative Agent shall promptly notify each other Lender thereof.  Each other Lender irrevocably and unconditionally agrees to so pay to the Administrative Agent in immediately available funds for the Issuing Lender’s account the amount of such other Lender’s Pro Rata Share of such payment or disbursement.  If and to the extent any Lender shall not have made such amount available to the Administrative Agent by 2:00 P.M., Chicago time, on the Business Day on which such Lender receives notice from the Administrative Agent of such payment or disbursement (it being understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following Business Day), such Lender agrees to pay interest on such amount to the Administrative Agent for the Issuing Lender’s account forthwith on demand, for each day from the date such amount was to have been delivered to the Administrative Agent to 

 

 

the date such amount is paid, at a rate per annum equal to (a) for the first three days after demand, the Federal Funds Rate from time to time in effect and (b) thereafter, the Base Rate from time to time in effect.  Any Lender’s failure to make available to the Administrative Agent its Pro Rata Share of any such payment or disbursement shall not relieve any other Lender of its obligation hereunder to make available to the Administrative Agent such other Lender’s Pro Rata Share of such payment, but no Lender shall be responsible for the failure of any other Lender to make available to the Administrative Agent such other Lender’s Pro Rata Share of any such payment or disbursement.

2.4          Commitments Several.  The failure of any Lender to make a requested Loan on any date shall not relieve any other Lender of its obligation (if any) to make a Loan on such date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender.

2.5          Certain Conditions.  Except as otherwise provided in Sections 2.2.4 and 2.3.4 of this Agreement, no Lender shall have an obligation to make any Loan, or to permit the continuation of or any conversion into any LIBOR Loan, and the Issuing Lender shall not have any obligation to issue any Letter of Credit, if an Event of Default or Unmatured Event of Default exists.

	
            
  	
            SECTION 3.
 	
            EVIDENCING OF LOANS.
 

3.1          Notes.  The Loans of each Lender shall be evidenced by (a) a note in the form set forth as Exhibit A (the “Notes”). Each such Note shall have appropriate insertions and shall be payable to the order of such Lender in a face principal amount equal to such Lender’s Revolving Commitment.

3.2          Recordkeeping.  The Administrative Agent, on behalf of each Lender, shall record in its records, the date and amount of each Loan made by each Lender, each repayment or conversion thereof and, in the case of each LIBOR Loan, the dates on which each Interest Period for such Loan shall begin and end.  The aggregate unpaid principal amount so recorded shall be rebuttably presumptive evidence of the principal amount of the Loans owing and unpaid.  The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of the Companies hereunder or under any Note to repay the principal amount of the Loans hereunder, together with all interest accruing thereon.

	
            
  	
            SECTION 4.
 	
            INTEREST.
 

4.1          Interest Rates.  Each of the Companies hereby jointly and severally promises to pay interest on the unpaid principal amount of each Loan for the period commencing on the date of such Loan until such Loan is paid in full, in cash, as follows:

(a)          at all times while such Loan is a Base Rate Loan, at a rate per annum equal to the sum of the Base Rate from time to time in effect plus the applicable Base Rate Margin from time to time in effect; and

 

 

 

 

(b)          at all times while such Loan is a LIBOR Loan, at a rate per annum equal to the sum of the LIBOR Rate applicable to each Interest Period for such Loan plus the applicable LIBOR Margin from time to time in effect;

provided that at any time an Event of Default exists, unless the Required Lenders otherwise consent, the interest rate applicable to each Loan shall be increased by 2% (and, in the case of Obligations not bearing interest, such Obligations shall bear interest at the Base Rate applicable to Revolving Loans plus 2%), provided further that such increase may thereafter be rescinded by the Required Lenders, notwithstanding Section 15.1.  Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default under Sections 13.1.1 or 13.1.4, such increase shall occur automatically.

4.2          Interest Payment Dates.  Accrued interest on each Base Rate Loan shall be payable in arrears on the last day of each calendar month and at maturity.  Accrued interest on each LIBOR Loan shall be payable on the last day of each Interest Period relating to such Loan, upon a prepayment of such Loan, and at maturity.  After maturity, and at any time an Event of Default exists, accrued interest on all Loans shall be payable on demand.

4.3          Setting and Notice of LIBOR Rates.  The applicable LIBOR Rate for each Interest Period shall be determined by the Administrative Agent, and notice thereof shall be given by the Administrative Agent promptly to the Company Representative and each Lender.  Each determination of the applicable LIBOR Rate by the Administrative Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error.  The Administrative Agent shall, upon written request of the Company Representative or any Lender, deliver to the Company Representative or such Lender a statement showing the computations used by the Administrative Agent in determining any applicable LIBOR Rate hereunder.

4.4          Computation of Interest.  Interest shall be computed for the actual number of days elapsed on the basis of a year of 360 days.  The applicable interest rate for each Base Rate Loan shall change simultaneously with each change in the Base Rate.

	
            
  	
            SECTION 5.
 	
            FEES.
 

5.1          Non-Use Fee.  Each of the Companies hereby jointly and severally agrees to pay to the Administrative Agent for the account of each Lender a non-use fee, for the period from the Closing Date to the Termination Date, at the Non-Use Fee Rate in effect from time to time of such Lender’s Pro Rata Share (as adjusted from time to time) of the unused amount of the Revolving Commitment.  For purposes of calculating usage under this Section, the Revolving Commitment shall be deemed used to the extent of Revolving Outstandings.  Such non-use fee shall be payable in arrears on the last day of each calendar quarter and on the Termination Date for any period then ending for which such non-use fee shall not have previously been paid.  The non-use fee
shall be computed for the actual number of days elapsed on the basis of a year of 360 days.

	
            
  	
            5.2
 	
            Letter of Credit Fees.
 

(a)          Each of the Companies hereby jointly and severally agrees to pay to the Administrative Agent for the account of each Lender a letter of credit fee (x) for each 

 

 

Standby Letter of Credit equal to the Standby L/C Fee, and (y) for each Trade Letter of Credit equal to the L/C Fee Rate, in each case as in effect from time to time of such Lender’s Pro Rata Share (as adjusted from time to time) of the undrawn amount of such Letter of Credit (computed for the actual number of days elapsed on the basis of a year of 360 days); provided that, unless the Required Lenders otherwise consent, the rate applicable to each Letter of Credit shall be increased by 2% at any time that an Event of Default exists.  Such letter of credit fee shall be payable in arrears on the last day of each calendar quarter and on the Termination Date (or such later date on which such Letter of Credit expires or is terminated) for the period from the date of the issuance of each Letter of Credit (or the last day on which the letter
of credit fee was paid with respect thereto) to the date such payment is due or, if earlier, the date on which such Letter of Credit expired or was terminated.  

(b)          In addition, with respect to each Letter of Credit, each of the Companies hereby jointly and severally agrees to pay to the Issuing Lender, for its own account, (i) such reasonable fees and expenses as the Issuing Lender customarily requires in connection with the issuance, negotiation, processing and/or administration of letters of credit in similar situations and (ii) a letter of credit fronting fee in the amount and at the times agreed to by the Companies and the Issuing Lender.

5.3          Administrative Agent’s Fees.  Each of the Companies hereby jointly and severally agrees to pay to the Administrative Agent such agent’s fees as are mutually agreed to from time to time in writing and signed by the Companies and the Administrative Agent including an upfront fee equal to Forty Thousand Dollars ($40,000) which is payable on the Closing Date, shall be nonrefundable when paid, and shall be deemed fully earned on the Closing Date.

 

	
             
  	
            SECTION 6.
 	
            REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS.
 

	
            
  	
            6.1
 	
            Reduction, Increases or Termination of the Revolving Commitment.  
 

6.1.1    Voluntary Reduction, Increases or Termination of the Revolving Commitment.  The Companies may from time to time on at least five Business Days’ prior written notice received by the Administrative Agent (which shall promptly advise each Lender thereof) from the Company Representative permanently reduce the Revolving Commitment to an amount not less than the Revolving Outstandings.  Any such reduction shall be in an amount not less than $500,000 or a higher integral multiple of $100,000.  Concurrently with any reduction of the Revolving Commitment to zero, the Companies shall pay all interest on the Revolving Loans, all non-use fees and all letter of credit fees and shall Cash Collateralize in full all obligations arising with respect to the Letters of Credit.

6.1.2    All Reductions of the Revolving Commitment.  All reductions of the Revolving Commitment shall reduce the Commitments ratably among the Lenders according to their respective Pro Rata Shares.

 

 

 

 

	
             
  	
            6.2
 	
            Prepayments.  
 

6.2.1    Voluntary Prepayments.  The Companies may from time to time prepay the Loans in whole or in part; provided that the Company Representative shall give the Administrative Agent (which shall promptly advise each Lender) notice thereof not later than 11:00 A.M., Chicago time, on the day of such prepayment (which shall be a Business Day), specifying the Loans to be prepaid and the date and amount of prepayment.  Any such partial prepayment shall be in an amount equal to $500,000 or higher integral multiple of $100,000.

	
            
  	
            6.2.2
 	
            Mandatory Prepayments.
 

(a)          If on any day the Revolving Outstandings exceeds the Borrowing Base, the Companies shall promptly prepay Revolving Loans and/or Cash Collateralize the outstanding Letters of Credit, or do a combination of the foregoing, in an amount sufficient to eliminate such excess.

(b)          If on any day on which the Revolving Commitment is reduced pursuant to Section 6.1.2 the Revolving Outstandings exceeds the Revolving Commitment, the Companies shall promptly prepay Revolving Loans or Cash Collateralize the outstanding Letters of Credit, or do a combination of the foregoing, in an amount sufficient to eliminate such excess.

	
            
  	
            6.3
 	
            Manner of Prepayments.  
 

6.3.1    All Prepayments.  Each voluntary partial prepayment shall be in a principal amount of $500,000 or a higher integral multiple of $100,000.  Any partial prepayment of a LIBOR Loan shall be subject to the proviso to Section 2.2.3(a).  Any prepayment of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall include interest on the principal amount being repaid and shall be subject to Section 8.4.  Except as otherwise provided by this Agreement, all principal payments in respect of the Loans shall be applied first, to repay outstanding Base Rate Loans and then to repay outstanding LIBOR Rate Loans in direct order of Interest Period maturities.

	
            
  	
            6.4
 	
            Repayments.
 

6.4.1    Revolving Loans.  The Revolving Loans of each Lender shall be paid in full and the Revolving Commitment shall terminate on the Termination Date.

	
            
  	
            SECTION 7.
 	
            MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
 

7.1          Making of Payments.  All payments of principal or interest on the Notes, and of all fees, shall be made by the Companies to the Administrative Agent in immediately available funds at the office specified by the Administrative Agent not later than noon, Chicago time, on the date due; and funds received after that hour shall be deemed to have been received by the Administrative Agent on the following Business Day.  The Administrative Agent shall promptly remit to each Lender its share of all such payments received in collected funds by the Administrative Agent for the account of such Lender.  All payments under Section 8.1 shall be 

 

 

made by the Companies directly to the Lender entitled thereto without setoff, counterclaim or other defense.

7.2          Application of Certain Payments.  So long as no Unmatured Event of Default  or Event of Default has occurred and is continuing, (a) payments matching specific scheduled payments then due shall be applied to those scheduled payments and (b) voluntary and mandatory prepayments shall be applied as set forth in Sections 6.2 and 6.3.  After the occurrence and during the continuance of an Unmatured Event of Default or Event of Default, all amounts collected or received by the Administrative Agent or any Lender as proceeds from the sale of, or other realization upon, all or any part of the Collateral shall be applied as the Administrative Agent shall
determine in its discretion or, in the absence of a specific determination by the Administrative Agent, as set forth in the Guaranty and Collateral Agreement.  Concurrently with each remittance to any Lender of its share of any such payment, the Administrative Agent shall advise such Lender as to the application of such payment.  

7.3          Due Date Extension.  If any payment of principal or interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day (unless, in the case of a LIBOR Loan, such immediately following Business Day is the first Business Day of a calendar month, in which case such due date shall be the immediately preceding Business Day) and, in the case of principal, additional interest shall accrue and be payable for the period of any such extension.

7.4          Setoff.  Each Company, for itself and each other Loan Party, agrees that the Administrative Agent and each Lender have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each Company, for itself and each other Loan Party, agrees that at any time any Event of Default exists, the Administrative Agent and each Lender may apply to the payment of any Obligations of such Company and each other Loan Party hereunder, whether or not then due, any and all balances, credits, deposits, accounts or moneys of such Company and each other Loan Party then or thereafter with the Administrative Agent or such Lender.

7.5          Proration of Payments.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise, on account of (a) principal of or interest on any Loan, but excluding (i) any payment pursuant to Section 8.7 or 15.6 and (ii) payments of interest on any Affected Loan) or (b) its participation in any Letter of Credit) in excess of its applicable Pro Rata Share of payments and other recoveries obtained by all Lenders on account of principal of and interest on the Loans (or such participation) then held by them, then such Lender shall purchase from the other Lenders such participations in the
Loans (or sub-participations in Letters of Credit) held by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery.

 

 

 

 

	
             
  	
            7.6
 	
            Taxes.  
 

(a)          All payments made by the Companies hereunder or under any Loan Documents shall be made without setoff, counterclaim, or other defense.  To the extent permitted by applicable law, all payments hereunder or under the Loan Documents (including any payment of principal, interest, or fees) to, or for the benefit, of any person shall be made by the Companies free and clear of and without deduction or withholding for, or account of, any Taxes now or hereinafter imposed by any taxing authority.

(b)          If the Companies (or any one of them) makes any payment hereunder or under any Loan Document in respect of which it is required by applicable law to deduct or withhold any Taxes, the Companies shall increase the payment hereunder or under any such Loan Document such that after the reduction for the amount of Taxes withheld (and any taxes withheld or imposed with respect to the additional payments required under this Section 7.6(b)), the amount paid to the Lenders or the Administrative Agent equals the amount that was payable hereunder or under any such Loan Document without regard to this Section 7.6(b).  To the extent the Companies (or any one of them) withholds any
Taxes on payments hereunder or under any Loan Document, the Companies shall pay the full amount deducted to the relevant taxing authority within the time allowed for payment under applicable law and shall deliver to the Administrative Agent within 30 days after they have made payment to such authority a receipt issued by such authority (or other evidence reasonably satisfactory to the Administrative Agent) evidencing the payment of all amounts so required to be deducted or withheld from such payment. 

(c)          If any Lender or the Administrative Agent is required by law to make any payments of any Taxes on or in relation to any amounts received or receivable hereunder or under any other Loan Document, or any Tax is assessed against a Lender or the Administrative Agent with respect to amounts received or receivable hereunder or under any other Loan Document, the Companies hereby jointly and severally agree to indemnify such person against (i) such Tax (and any reasonable counsel fees and expenses associated with such Tax) and (ii) any taxes imposed as a result of the receipt of the payment under this Section 7.6(c).  A certificate prepared in good faith as to the amount of such payment by such Lender or the Administrative Agent
shall, absent manifest error, be final, conclusive, and binding on all parties.

(d)          (i)          To the extent permitted by applicable law, each Lender that is not a United States person within the meaning of Code Section 7701(a)(30) (a “Non-U.S. Participant”) shall deliver to the Company Representative and the Administrative Agent on or prior to the Closing Date (or in the case of a Lender that is an Assignee, on the date of such assignment to such Lender) two accurate and complete original signed copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable form prescribed by the IRS) certifying to such Lender’s entitlement to a complete exemption from, or a reduced rate in,
United States withholding tax on interest payments to be made hereunder or any Loan.  If a Lender that is a Non-U.S. Participant is claiming a complete exemption from withholding on interest pursuant to Code Sections 871(h) or 881(c), the Lender shall deliver (along with two accurate and complete original signed copies of IRS Form W-8BEN) a certificate in form and substance reasonably acceptable to 

 

 

Administrative Agent (any such certificate, a “Withholding Certificate”).  In addition, each Lender that is a Non-U.S. Participant  agrees that from time to time after the Closing Date, (or in the case of a Lender that is an Assignee, after the date of the assignment to such Lender), when a lapse in time (or change in circumstances occurs) renders the prior certificates hereunder obsolete or inaccurate in any material respect, such Lender shall, to the extent permitted under applicable law, deliver to the Company Representative and the Administrative Agent two new and accurate and complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable forms prescribed by the IRS), and if applicable, a new Withholding Certificate, to confirm or establish the entitlement of such Lender or the
Administrative Agent to an exemption from, or reduction in, United States withholding tax on interest payments to be made hereunder or any Loan.

(ii)          Each Lender that is not a Non-U.S. Participant (other than any such Lender which is taxed as a corporation for U.S. federal income tax purposes) shall provide two properly completed and duly executed copies of IRS Form W-9 (or any successor or other applicable form) to the Company Representative and the Administrative Agent certifying that such Lender is exempt from United States backup withholding tax.  To the extent that a form provided pursuant to this Section 7.6(d)(ii) is rendered obsolete or inaccurate in any material respects as result of change in circumstances with respect to the status of a Lender, such Lender shall, to the extent permitted by applicable law, deliver to the Company Representative and the
Administrative Agent revised forms necessary to confirm or establish the entitlement to such Lender’s or Agent’s exemption from United States backup withholding tax.

(iii)         No Company shall be required to pay additional amounts to a Lender, or indemnify any Lender, under this Section 7.6 to the extent that such obligations would not have arisen but for the failure of such Lender to comply with Section 7.6(d).

(iv)         Each Lender agrees to indemnify the Administrative Agent and hold the Administrative Agent harmless for the full amount of any and all present or future Taxes and related liabilities (including penalties, interest, additions to tax and expenses, and any Taxes imposed by any jurisdiction on amounts payable to the Administrative Agent under this Section 7.6) which are imposed on or with respect to principal, interest or fees payable to such Lender hereunder and which are not paid by the Companies pursuant to this Section 7.6, whether or not such Taxes or related liabilities were correctly or legally asserted.  This indemnification shall be made within 30 days from the date the
Administrative Agent makes written demand therefor.

 

 

 

 

	
             
  	
            SECTION 8.
 	
            INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.
 

	
            
  	
            8.1
 	
            Increased Costs.
 

(a)          If, after the date hereof, the adoption of, or any change in, any applicable law, rule or regulation, or any change in the interpretation or administration of any applicable law, rule or regulation by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:  (i) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB, but excluding any reserve included in the determination of the LIBOR Rate pursuant to Section 4), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by any Lender; or (ii) shall impose on any Lender any other condition affecting its LIBOR Loans, its Note or its obligation to make LIBOR Loans; and the result of anything described in clauses (i) and (ii) above is to increase the cost to (or to impose a cost on) such Lender (or any LIBOR Office of such Lender) of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by such Lender (or its LIBOR Office) under this Agreement or under its Note with respect thereto, then upon demand by such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Administrative Agent), the Companies shall jointly and severally agree to pay directly to such Lender such additional amount as will compensate such Lender for such increased cost or such reduction, so
long as such amounts have accrued on or after the day which is 180 days prior to the date on which such Lender first made demand therefor.

(b)          If any Lender shall reasonably determine that any change in, or the adoption or phase-in of, any applicable law, rule or regulation regarding capital adequacy, 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 the compliance by any Lender or any Person controlling such Lender with any request 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 such Lender’s or such controlling Person’s capital as a consequence of such Lender’s obligations hereunder or under any Letter
of Credit to a level below that which such Lender or such controlling Person could have achieved but for such change, adoption, phase-in or compliance (taking into consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy) by an amount deemed by such Lender or such controlling Person to be material, then from time to time, upon demand by such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Administrative Agent), the Companies shall jointly and severally agree to pay to such Lender such additional amount as will compensate such Lender or such controlling Person for such reduction so long as such amounts have 

 

 

accrued on or after the day which is 180 days prior to the date on which such Lender first made demand therefor.  

	
            
 	
            8.2
 	
            Basis for Determining Interest Rate Inadequate or Unfair".  If:
 

(a)          the Administrative Agent reasonably determines (which determination shall be binding and conclusive on the Companies) that by reason of circumstances affecting the interbank LIBOR market adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or

(b)          the Required Lenders advise the Administrative Agent that the LIBOR Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Lenders of maintaining or funding LIBOR Loans for such Interest Period (taking into account any amount to which such Lenders may be entitled under Section 8.1) or that the making or funding of LIBOR Loans has become impracticable as a result of an event occurring after the date of this Agreement which in the opinion of such Lenders materially affects such Loans;

then the Administrative Agent shall promptly notify the other parties thereof and, so long as such circumstances shall continue, (i) no Lender shall be under any obligation to make or convert any Base Rate Loans into LIBOR Loans and (ii) on the last day of the current Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan.

8.3          Changes in Law Rendering LIBOR Loans Unlawful.  If after the date of this Agreement, any change in, or the adoption of any new, law or regulation, or any change in the interpretation of any applicable law or regulation by any governmental or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of any Lender cause a substantial question as to whether it is) unlawful for any Lender to make, maintain or fund LIBOR Loans, then such Lender shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, (a) such Lender shall have no obligation to make or convert any Base Rate Loan into a LIBOR Loan (but shall make Base Rate Loans concurrently with
the making of or conversion of Base Rate Loans into LIBOR Loans by the Lenders which are not so affected, in each case in an amount equal to the amount of LIBOR Loans which would be made or converted into by such Lender at such time in the absence of such circumstances) and (b) on the last day of the current Interest Period for each LIBOR Loan of such Lender (or, in any event,  on such earlier date as may be required by the relevant law, regulation or interpretation), such LIBOR Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan.  Each Base Rate Loan made by a Lender which, but for the circumstances described in the foregoing sentence, would be a LIBOR Loan (an “Affected Loan”) shall remain outstanding for the period corresponding to the Group of LIBOR Loans of which such Affected Loan would be a part absent such circumstances.

8.4          Funding Losses.  Each of the Companies hereby agrees that upon demand by any Lender (which demand shall be accompanied by a statement setting forth the basis for the amount being claimed, a copy of which shall be furnished to the Administrative Agent), they will jointly and severally indemnify such Lender against any net loss or expense which such Lender 

 

 

may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain any LIBOR Loan), as reasonably determined by such Lender, as a result of (a) any payment, prepayment or conversion of any LIBOR Loan of such Lender on a date other than the last day of an Interest Period for such Loan (including any conversion pursuant to Section 8.3) or (b) any failure of the Companies (or any of them) to borrow, convert or continue any Loan on a date specified therefor in a notice of borrowing, conversion or continuation pursuant to this Agreement.  For this purpose, all notices to the Administrative Agent pursuant to this Agreement shall be deemed to be irrevocable.

8.5          Right of Lenders to Fund through Other Offices.  Each Lender may, if it so elects, fulfill its commitment as to any LIBOR Loan by causing a foreign branch or Affiliate of such Lender to make such Loan; provided that in such event for the purposes of this Agreement such Loan shall be deemed to have been made by such Lender and the obligation of the Companies to repay such Loan shall nevertheless be to such Lender and shall be deemed held by it, to the extent of such Loan, for the account of such branch or Affiliate.

8.6          Discretion of Lenders as to Manner of Funding.  Notwithstanding any provision of this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Lender had actually funded and maintained each LIBOR Loan during each Interest Period for such Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the LIBOR Rate for such Interest Period.

	
            
  	
            8.7
 	
            Mitigation of Circumstances; Replacement of Lenders.
 

(a)          Each Lender shall promptly notify the Company Representative and the Administrative Agent of any event of which it has knowledge which will result in, and will use reasonable commercial efforts available to it (and not, in such Lender’s sole judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by the Companies to pay any amount pursuant to Sections 7.6 or 8.1 or (ii) the occurrence of any circumstances described in Sections 8.2 or 8.3 (and, if any Lender has given notice of any such event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Lender shall promptly so notify the Company Representative and the Administrative Agent).  Without limiting the foregoing, each Lender will designate a different funding office if such designation will avoid (or reduce the cost to the Companies of) any event described in clause (i) or (ii) above and such designation will not, in such Lender’s sole judgment, be otherwise disadvantageous to such Lender.

(b)          If the Companies becomes obligated to pay additional amounts to any Lender pursuant to Sections 7.6 or 8.1, or any Lender gives notice of the occurrence of any circumstances described in Sections 8.2 or 8.3, the Company Representative may designate another bank which is acceptable to the Administrative Agent and the Issuing Lender in their reasonable discretion (such other bank being called a “Replacement Lender”) to purchase the Loans of such Lender and such Lender’s rights hereunder, without recourse to or
warranty by, or expense to, such Lender, for a purchase price equal 

 

 

to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid interest on such Loans and all accrued but unpaid fees owed to such Lender and any other amounts payable to such Lender under this Agreement, and to assume all the obligations of such Lender hereunder, and, upon such purchase and assumption (pursuant to an Assignment Agreement), such Lender shall no longer be a party hereto or have any rights hereunder (other than rights with respect to indemnities and similar rights applicable to such Lender prior to the date of such purchase and assumption) and shall be relieved from all obligations to the Companies hereunder, and the Replacement Lender shall succeed to the rights and obligations of such Lender hereunder.

8.8          Conclusiveness of Statements; Survival of Provisions.  Determinations and statements of any Lender pursuant to Sections 8.1, 8.2, 8.3 or 8.4 shall be conclusive absent demonstrable error.  Lenders may use reasonable averaging and attribution methods in determining compensation under Sections 8.1 and 8.4, and the provisions of such Sections shall survive repayment of the Obligations, cancellation of any Notes, expiration or termination of the Letters of
Credit and termination of this Agreement.

	
            
  	
            SECTION 9.
 	
            REPRESENTATIONS AND WARRANTIES.
 

To induce the Administrative Agent and the Lenders to enter into this Agreement and to induce the Lenders to make Loans and issue and participate in Letters of Credit hereunder, each Company represents and warrants to the Administrative Agent and the Lenders that:

9.1          Organization.  Each Loan Party is validly existing and in good standing under the laws of its jurisdiction of organization; and each Loan Party is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify would not have a Material Adverse Effect.

9.2          Authorization; No Conflict.  Each Loan Party is duly authorized to execute and deliver each Loan Document to which it is a party, each Company is duly authorized to borrow monies hereunder and each Loan Party is duly authorized to perform its Obligations under each Loan Document to which it is a party.  The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party, and the borrowings by the Companies hereunder, do not and will not (a) require any consent or approval of any governmental agency or authority (other than any consent or approval which has been obtained and is in full force and effect), (b) conflict with (i) any provision of law, (ii) the charter, by-laws or other organizational
documents of any Loan Party or (iii) any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon any Loan Party or any of their respective properties or (c) require, or result in, the creation or imposition of any Lien on any asset or property of any Loan Party (other than Liens in favor of the Administrative Agent created pursuant to the Collateral Documents).

9.3          Validity and Binding Nature.  Each of this Agreement and each other Loan Document to which any Loan Party is a party is the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy, 

 

 

insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

9.4          Financial Condition.  The audited consolidated financial statements of the Companies and their respective Subsidiaries as at March 31, 2006 and the unaudited consolidated financial statements of the Companies and their respective Subsidiaries as at March 31, 2006, copies of each of which have been delivered to each Lender, were prepared in accordance with GAAP (subject, in the case of such unaudited statements, to the absence of footnotes and to normal year-end adjustments) and present fairly the consolidated financial condition of the Companies and their respective Subsidiaries as at such dates and the results of their operations for the periods then ended.

9.5          No Material Adverse Change.  Since March 31, 2006 there has been no material adverse change in the financial condition, operations, assets, business or properties of the Loan Parties taken as a whole.

9.6          Litigation and Contingent Liabilities.  No litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to such Company’s knowledge, threatened against any Loan Party which could reasonably be expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.  Other than any liability incident to such litigation or proceedings, no Loan Party has any material contingent liabilities not listed on Schedule 9.6 or permitted by Section 11.1.

9.7          Ownership of Properties; Liens.  Each Loan Party owns good and, in the case of real property, marketable title to all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks, service marks, copyrights and the like) except for Permitted Liens.

9.8          Equity Ownership; Subsidiaries.  All issued and outstanding Capital Securities of each Loan Party are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than those in favor of the Administrative Agent, and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities.  Schedule 9.8 sets forth the authorized Capital Securities of each Loan Party as of the Closing Date.  All of the issued and outstanding Capital Securities of each Wholly-Owned Subsidiary of a Company is, directly or indirectly, owned by such Company.  As of the Closing Date, except as set forth on Schedule 9.8, there are no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the purchase or acquisition of any Capital Securities of any Loan Party.

 

	
             
  	
            9.9
 	
            Pension Plans.
 

(a)          The Unfunded Liability of all Pension Plans does not in the aggregate exceed twenty percent of the Total Plan Liability for all such Pension Plans.  Each ension Plan complies in all material respects with all applicable requirements of law and regulations.  No contribution failure under Section 412 of the Code, Section 302 of 

 

 

ERISA or the terms of any Pension Plan has occurred with respect to any Pension Plan, sufficient to give rise to a Lien under Section 302(f) of ERISA, or otherwise to have a Material Adverse Effect.  There are no pending or, to the knowledge of such Company, threatened, claims, actions, investigations or lawsuits against any Pension Plan, any fiduciary of any Pension Plan, any Company, any Subsidiary of a Company or other any member of the Controlled Group with respect to a Pension Plan or a Multiemployer Pension Plan which could reasonably be expected to have a Material Adverse Effect.  No Company, Subsidiary of a Company or any other member of the Controlled Group has engaged in any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in connection with any Pension Plan or Multiemployer Pension Plan which would subject that Person to any material
liability.  Within the past five years, no Company, or Subsidiary of a Company or any other member of the Controlled Group has engaged in a transaction which resulted in a Pension Plan with an Unfunded Liability being transferred out of the Controlled Group, which could reasonably be expected to have a Material Adverse Effect.  No Termination Event has occurred or is reasonably expected to occur with respect to any Pension Plan, which could reasonably be expected to have a Material Adverse Effect.

(b)          All contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by the Companies, any Subsidiary of a Company or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; no Company, or any Subsidiary of any Company or any other member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan; and no Company, or any
Subsidiary of a Company or any other member of the Controlled Group has received any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.

9.10       Investment Company Act.  No Loan Party is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company,” within the meaning of the Investment Company Act of 1940.

9.11       Public Utility Holding Company Act.  No Loan Party is a “holding company”, or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935.

9.12       Regulation U.  No Company is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock.

 

 

 

 

9.13       Taxes.  Each Loan Party has timely filed all tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges due and payable with respect to such return, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.  The Loan Parties have made adequate reserves on their books and records in accordance with GAAP for all taxes that have accrued but which are not yet due and payable.  No Loan Party has participated in any transaction that relates to a year of the taxpayer (which is still open under the applicable statute of limitations) which is a “reportable transaction” within
the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective of the date when the transaction was entered into).

9.14       Solvency, etc.  On the Closing Date, and immediately prior to and after giving effect to the issuance of each Letter of Credit and each borrowing hereunder and the use of the proceeds thereof, with respect to each Loan Party, individually, (a) the fair value of its assets is greater than the amount of its liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated in accordance with GAAP, (b) the present fair saleable value of its assets is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, (c) it is able to realize upon its assets and pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business, (d) it does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature and (e) it is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would constitute unreasonably small capital.

9.15       Environmental Matters.  The on-going operations of each Loan Party comply in all respects with all Environmental Laws, except such non-compliance which could not (if enforced in accordance with applicable law) reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.  Each Loan Party has obtained, and maintained in good standing, all licenses, permits, authorizations, registrations and other approvals required under any applicable Environmental Law and required for their respective ordinary course operations, and for their reasonably anticipated future operations, and each Loan Party is in compliance with all terms and conditions thereof, except where the failure to do so could not reasonably be expected to
result in material liability to any Loan Party and could not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.  No Loan Party or any of its properties or operations is subject to, or reasonably anticipates the issuance of, any written order from or agreement with any Federal, state or local governmental authority, nor subject to any judicial or docketed administrative or other proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Substance.  There are no Hazardous Substances or other conditions or circumstances existing with respect to any property, arising from operations prior to the Closing Date, or relating to any waste disposal, of any Loan Party that would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.  To the Companies' knowledge after diligent inquiry, no Loan Party has any underground storage tanks that are not properly registered or
permitted under applicable Environmental Laws or that at any time have released, leaked, disposed of or otherwise discharged Hazardous Substances.

 

 

 

 

9.16       Insurance.  Set forth on Schedule 9.16 is a complete and accurate summary of the property and casualty insurance program of the Loan Parties as of the Closing Date (including the names of all insurers, policy numbers, expiration dates, amounts and types of coverage, annual premiums, exclusions, deductibles, self-insured retention, and a description in reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or other risk assumption arrangement involving any Loan Party).  Each Loan Party and its properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Loan Parties, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Loan Parties operate.  

9.17       Real Property.  Set forth on Schedule 9.17 is a complete and accurate list, as of the Closing Date, of the address of all real property owned or leased by any Loan Party, together with, in the case of leased property, the name and mailing address of the lessor of such property.

9.18       Information.  All information heretofore or contemporaneously herewith furnished in writing by any Loan Party to the Administrative Agent or any Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby is, and all written information hereafter furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender pursuant hereto or in connection herewith will be, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by the Administrative
Agent and the Lenders that any projections and forecasts provided by the Companies are based on good faith estimates and assumptions believed by the Companies and/or any Subsidiaries of the Company (or any of them) to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

9.19       Intellectual Property.  Each Loan Party owns and possesses or has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights as are necessary for the conduct of the businesses of the Loan Parties, without any infringement upon rights of others which could reasonably be expected to have a Material Adverse Effect.

9.20       Burdensome Obligations.  No Loan Party is a party to any agreement or contract or subject to any restriction contained in its organizational documents which could reasonably be expected to have a Material Adverse Effect.

9.21       Labor Matters.  Except as set forth on Schedule 9.21, no Loan Party is subject to any labor or  collective bargaining agreement.  There are no existing or threatened strikes, lockouts or other labor disputes involving any Loan Party that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect.  Hours worked by and payment made to employees of the Loan Parties are not in violation of the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such matters.

 

 

 

 

9.22       No Default.  No Event of Default or Unmatured Event of Default exists or would result from the incurrence by any Loan Party of any Debt hereunder or under any other Loan Document.

	
            
  	
            SECTION 10.
 	
            AFFIRMATIVE COVENANTS.
 

Until the expiration or termination of the Commitments and thereafter until all Obligations hereunder and under the other Loan Documents are paid in full in cash and all Letters of Credit have been terminated, each Company agrees that, unless at any time the Required Lenders shall otherwise expressly consent in writing, it will:

10.1       Reports, Certificates and Other Information.  Furnish to the Administrative Agent and each Lender:

10.1.1  Annual Report.  Promptly when available and in any event within 90 days after the close of each Fiscal Year: (a) a copy of the annual audit report of the Companies and their respective Subsidiaries for such Fiscal Year, including therein consolidated balance sheets and statements of earnings and cash flows of the Companies and their respective Subsidiaries as at the end of such Fiscal Year, certified without adverse reference to going concern value and without qualification by independent auditors of recognized standing selected by the Companies and reasonably acceptable to the Administrative Agent, together with (i) a written statement from such accountants to the effect that in making the examination necessary for the signing of such annual audit report by such
accountants, nothing came to their attention that caused them to believe that any Loan Party was not in compliance with any provision of Sections 11.1, 11.3, 11.4 or 11.14 of this Agreement insofar as such provision relates to accounting matters or, if something has come to their attention that caused them to believe that a Loan Party was not in compliance with any such provision, describing such non-compliance in reasonable detail, (ii) a comparison with the budget for such Fiscal Year and a comparison with the previous Fiscal Year; and (b) a consolidating balance sheet of the Companies and their respective Subsidiaries as of the end of such Fiscal Year and consolidating statement of earnings and cash flows for the Companies and their respective Subsidiaries for such Fiscal Year, certified
by a Senior Officer of the Company Representative on behalf of the Companies, and (iii) together with a copy of Technologies' annual report on Form 10-K, as filed with the Securities and Exchange Commission; which, to the extent Technologies' annual report on Form 10-K shall satisfy the requirements of this Section 10.1.1, the Administrative Agent shall accept such Form 10-K in lieu of such item.

10.1.2  Interim Reports.  Promptly when available and in any event within 45 days after the end of each Fiscal Quarter, consolidated balance sheets of the Companies and their respective Subsidiaries as of the end of such Fiscal Quarter, together with consolidated statements of earnings and a consolidated statement of cash flows for such Fiscal Quarter and for the period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal Quarter, together with a comparison with the corresponding period of the previous Fiscal Year and a comparison with the budget for such period of the current Fiscal Year, certified by a Senior Officer of the Company Representative on behalf of the Companies, together with a copy of Technologies' quarterly report on
Form 10-Q, as filed with the Securities and Exchange Commission; which, to the extent Technologies' quarterly report on 

 

 

Form 10-Q shall satisfy the requirements of this Section 10.1.2, the Administrative Agent shall accept such Form 10-Q in lieu of such item.

10.1.3  Compliance Certificates.  Contemporaneously with the furnishing of a copy of each annual audit report pursuant to Section 10.1.1 and within 45 days after the end of each Fiscal Quarter a duly completed compliance certificate in the form of Exhibit B, with appropriate insertions, dated the date of such annual report or such Fiscal Quarter and signed by a Senior Officer of the Company Representative on behalf of the Companies, containing (i) a computation of each of the financial ratios and restrictions set forth in Section 11.14 and to the effect that such officer has not become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing or, if there is any such event, describing it and the steps, if any, being taken to cure it.

10.1.4  Reports to the SEC and to Shareholders.  Promptly upon the filing or sending thereof, copies of all regular, periodic or special reports of any Loan Party filed with the SEC; copies of all registration statements of any Loan Party filed with the SEC (other than on Form S-8); and copies of all proxy statements or other communications made to security holders generally.

10.1.5  Notice of Default, Litigation and ERISA Matters.  Promptly upon becoming aware of any of the following, written notice describing the same and the steps being taken by any Loan Party affected thereby with respect thereto:

	
             
  	
            (a)
 	
            the occurrence of an Event of Default or an Unmatured Event of Default;
 

(b)          any litigation, arbitration or governmental investigation or proceeding not previously disclosed by the Companies to the Lenders which has been instituted or, to the knowledge of the Company, is threatened against any Loan Party or to which any of the properties of any thereof is subject which could reasonably be expected to have a Material Adverse Effect;

(c)          the institution of any steps by any member of the Controlled Group or any other Person to terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with respect to a Pension Plan which could result in the requirement that a Company or any Subsidiary of a Company furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan or Multiemployer Pension Plan which could result in the incurrence by any member of the Controlled Group of any material liability, fine or penalty (including
any claim or demand for withdrawal liability or partial withdrawal from any Multiemployer Pension Plan), or any material increase in the contingent liability of any Company or any Subsidiary of a Company with respect to any post-retirement welfare benefit plan or other employee benefit plan of any Company, any Subsidiary of a Company or another member of the Controlled Group, or any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, that any 

 

 

such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent;

(d)          any cancellation or material change in any insurance maintained by any Loan Party;

(e)          any Account or Inventory identified by any Company to the Administrative Agent as an Eligible Account or Eligible Inventory becomes ineligible for any reason; or

(f)           any other event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim or (ii) the enactment or effectiveness of any law, rule or regulation) which might reasonably be expected to have a Material Adverse Effect.

10.1.6  Borrowing Base Certificates.  If as of the last day of any Computation Period the Total Debt to EBITDA Ratio is equal to or exceeds 2.00:1.00 (the occurrence of such event, a “Borrowing Base Reporting Trigger”), within 30 days of the end of each calendar month, a Borrowing Base Certificate dated as of the end of such calendar month and executed by a Senior Officer of the Company Representative on behalf of the Companies (provided that at any time an Event of Default exists, the Administrative Agent may require the Companies to deliver Borrowing Base Certificates more frequently).  The requirement to provide monthly Borrowing Base Certificates pursuant to this
Section 10.1.6 shall cease following the delivery to the Administrative Agent of a compliance Certificate pursuant to Section 10.1.3 containing a computation of the Total Debt to EBITDA Ration that is less than 2:00:1:00 (the occurrence of such an event, the “Borrowing Base Reporting Termination Date”).  The time period commencing on the occurrence of a Borrowing Base Reporting Trigger and ending on the Borrowing Base Reporting Termination Date is referred to herein as the “Borrowing Base Reporting Period.”

10.1.7  Management Reports.  Promptly upon receipt thereof, copies of all detailed financial and management reports submitted to the Companies by independent auditors in connection with each annual or interim audit made by such auditors of the books of the Companies and their respective Subsidiaries.

10.1.8  Projections.  As soon as practicable, and in any event not later than thirty days after the commencement of each Fiscal Year, financial projections for the Companies and their respective Subsidiaries for such Fiscal Year (including monthly operating and cash flow budgets) prepared in a manner consistent with the projections delivered by the Companies to the Lenders prior to the Closing Date or otherwise in a manner reasonably satisfactory to the Administrative Agent, accompanied by a certificate of a Senior Officer of the Company Representative on behalf of the Companies to the effect that (a) such projections were prepared by the Companies and their respective Subsidiaries in good faith, (b) the Companies and their respective Subsidiaries had a reasonable basis for
the assumptions contained in such projections and (c) such projections have been prepared in accordance with such assumptions.

 

 

 

 

10.1.9  Intentionally Omitted.10.1.10              Other Information.  Promptly from time to time, such other information concerning the Loan Parties as any Lender or the Administrative Agent may reasonably request.

10.2       Books, Records and Inspections.  Keep, and cause each other Loan Party to keep, its books and records in accordance with sound business practices sufficient to allow the preparation of financial statements in accordance with GAAP; subject to the last sentence of this Section 10.2, permit, and cause each other Loan Party to permit, any Lender or the Administrative Agent or any representative thereof to inspect the properties and operations of the Loan Parties; and permit, and cause each other Loan Party to permit, during normal business hours and with reasonable notice (or at any time without notice if an Event of Default exists), any Lender or the Administrative Agent or any representative thereof to visit
any or all of its offices, to discuss its financial matters with its officers and its independent auditors (and each Company, on behalf of itself and the other Loan Parties) hereby authorizes such independent auditors to discuss such financial matters with any Lender or the Administrative Agent or any representative thereof), and to examine (and, at the expense of the Loan Parties, photocopy extracts from) any of its books or other records; and, subject to the last sentence of this Section 10.2, permit, and cause each other Loan Party to permit, the Administrative Agent and its representatives to inspect the Inventory and other tangible assets of the Loan Parties, to perform appraisals of the equipment of the Loan Parties, and to inspect, audit, check and make copies of and extracts from the books, records, computer data, computer programs, journals, orders, receipts, correspondence and other data relating to Inventory, Accounts and
any other collateral.  All such inspections or audits by the Administrative Agent shall be at the Companies’ expense.  The Administrative Agent shall be entitled to perform one audit and two inspections during each Fiscal Year; provided, that, following the occurrence of and during the continuance of an Event of Default, additional audits and inspections may be performed at any time at the election of the Administrative Agent.

	
            
  	
            10.3
 	
            Maintenance of Property; Insurance.
 

(a)          Keep, and cause each other Loan Party to keep, all property useful and necessary in the business of the Loan Parties in good working order and condition, ordinary wear and tear excepted.

(b)          (1) Maintain, and cause each other Loan Party to maintain, with responsible insurance companies, such insurance coverage as may be required by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent and against such hazards and liabilities, as is customarily maintained by companies similarly situated, but which shall insure against all risks and liabilities of the type identified on Schedule 9.16 and shall have insured amounts no less than, and deductibles no higher than, those set forth on such schedule; and, upon request of the Administrative Agent, furnish to the Administrative Agent a certificate setting forth in reasonable detail the nature and extent of
all insurance maintained by the Loan Parties.  (2) Each Company shall cause each issuer of an insurance policy to provide the Administrative Agent with an endorsement (i) showing the Administrative Agent as loss payee with respect to each policy of property or casualty insurance and naming the Administrative Agent as an additional insured with respect to each policy of liability 

 

 

insurance, (ii) providing that 30 days’ notice will be given to the Administrative Agent prior to any cancellation of, material reduction or change in coverage provided by or other material modification to such policy and (iii) reasonably acceptable in all other respects to the Administrative Agent.  (3) Each Company shall execute and deliver to the Administrative Agent a collateral assignment, in form and substance reasonably satisfactory to the Administrative Agent, of each business interruption insurance policy maintained by any Loan Party.

(c)          UNLESS THE COMPANIES PROVIDE THE ADMINISTRATIVE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE ADMINISTRATIVE AGENT MAY PURCHASE INSURANCE AT THE COMPANIES’ EXPENSE TO PROTECT THE ADMINISTRATIVE AGENT’S AND THE LENDERS’ INTERESTS IN THE COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY LOAN PARTY’S INTERESTS.  THE COVERAGE THAT THE ADMINISTRATIVE AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN CONNECTION WITH THE COLLATERAL.  THE COMPANIES MAY LATER CANCEL ANY INSURANCE PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER PROVIDING THE ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE APPLICABLE LOAN PARTY HAS OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT.  IF THE ADMINISTRATIVE
AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE COMPANIES WILL JOINTLY AND SEVERALLY BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER.  THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE LOAN PARTIES MAY BE ABLE TO OBTAIN ON THEIR OWN.

10.4       Compliance with Laws; Payment of Taxes and Liabilities.  (a)  Comply, and cause each other Loan Party to comply, in all material respects with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply could not reasonably be expected to have a Material Adverse Effect; (b) without limiting clause (a) above, ensure, and cause each other Loan Party to ensure, that no person who owns a controlling interest in or otherwise controls a Loan Party is or shall be (i) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”),
Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (ii) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders, (c) without limiting clause (a) above, comply, and cause each other Loan Party to comply, with all applicable Bank Secrecy Act (“BSA”) and anti-money laundering laws and regulations and (d) pay, and cause each other Loan Party to pay, prior to delinquency, all taxes and other governmental charges against it or 

 

 

any collateral, as well as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require any Loan Party to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a claim which could become a Lien on any collateral, such contest proceedings shall stay the foreclosure of such Lien or the sale of any portion of the collateral to satisfy such claim.

10.5       Maintenance of Existence, etc.  Maintain and preserve, and (subject to Section 11.5) cause each other Loan Party to maintain and preserve, (a) its existence and good standing in the jurisdiction of its organization and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect).

10.6       Use of Proceeds.  Use the proceeds of the Loans, and the Letters of Credit,  solely for working capital purposes, to refinance existing Debt and for other general business purposes; and not use or permit any proceeds of any Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock.

	
            
  	
            10.7
 	
            Employee Benefit Plans.  
 

(a)          Maintain, and cause each other member of the Controlled Group to maintain, each Pension Plan in substantial compliance with all applicable requirements of law and regulations.

(b)          Make, and cause each other member of the Controlled Group to make, on a timely basis, all required contributions to any Multiemployer Pension Plan.

(c)          Not, and not permit any other member of the Controlled Group to (i) seek a waiver of the minimum funding standards of ERISA, (ii) terminate or withdraw from any Pension Plan or Multiemployer Pension Plan or (iii) take any other action with respect to any Pension Plan that would reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, or cause a trustee to be appointed to administer, any Pension Plan, unless the actions or events described in clauses (i), (ii) and (iii) individually or in the aggregate would not have a Material Adverse Effect.

10.8       Environmental Matters.  If any release or threatened release or other disposal of Hazardous Substances shall occur or shall have occurred on any real property or any other assets of any Loan Party, each Company shall, or shall cause the applicable Loan Party to, cause the prompt containment and removal of such Hazardous Substances and the remediation of such real property or other assets as necessary to comply with all applicable Environmental Laws and to preserve the value of such real property or other assets.  Without limiting the generality of the foregoing, each Company shall, and shall cause each other Loan Party to, comply with any Federal or state judicial or administrative order requiring the performance at any real property of any Loan Party of
activities in response to the release or threatened release of a Hazardous 

 

 

Substance.  To the extent that the transportation of Hazardous Substances is permitted by this Agreement, each Company shall, and shall cause its Subsidiaries to, dispose of such Hazardous Substances, or of any other wastes, only at licensed disposal facilities operating in compliance with Environmental Laws.

10.9       Further Assurances.  Take, and cause each other Loan Party to take, such actions as are necessary or as the Administrative Agent or the Required Lenders may reasonably request from time to time to ensure that the Obligations of each Loan Party under the Loan Documents are secured by substantially all of the assets of the Loan Parties and each domestic Subsidiary of a Loan Party (as well as all Capital Securities of each domestic Subsidiary of a Loan Party and 65% of all Capital Securities of each direct foreign Subsidiary of a Loan Party) and guaranteed by each domestic Subsidiary of a Loan Party (including, upon the acquisition or creation thereof, any Subsidiary acquired or created after the Closing Date), in each case as the Administrative Agent may
reasonably determine, including (a) the execution and delivery of guaranties, security agreements, pledge agreements, mortgages, deeds of trust, financing statements and other documents, and the filing or recording of any of the foregoing and (b) the delivery of certificated securities (if such securities are represented by certificates) and other Collateral with respect to which perfection is obtained by possession.

10.10     Deposit Accounts.  In order to facilitate the Administrative Agent’s and the Lenders’ maintenance and monitoring of their security interests in the collateral, maintain all of their deposit accounts (the "Depositary Accounts"), lockboxes (the "Lockboxes"), all other primary accounts and all other operating services with the Administrative Agent. Every invoice issued by the Companies shall direct all Account Debtors to send their payments directly to the Lockbox maintained at the Administrative Agent. Such Lockbox and Depository Account arrangements will provide that the Depository Accounts shall be pledged to Administrative Agent as Collateral. Upon the occurrence
of an Event of Default, the Administrative Agent may require all Depository Accounts to be in the name of Administrative Agent and under its sole control and direction, and shall apply all proceeds therefrom to the Obligations.  Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, upon request of the Companies, Administrative Agent may, in its sole discretion, cease to exercise such control over the Depository Accounts.  The Companies agree that the bank accounts at the Administrative Agent shall contain sufficient funds to make each payment under the Loan Documents when due after applying any applicable cure periods.  Notwithstanding the foregoing, the Loan Parties may maintain Depositary Accounts and Lockboxes with financial institutions other than the Administrative Agent in an amount not to exceed $1,000,000 in the aggregate provided such Depository Accounts and Lockboxes are subject to the control of the Administrative Agent.

10.11     New Subsidiaries.  If, after the Closing Date, any Company creates or acquires, either directly or indirectly, any domestic Wholly-Owned Subsidiary in accordance with Section 11.5, such Company shall upon such creation or acquisition thereof: 

(a)          (i) cause such Subsidiary to become either a Company or a Guarantor; provided, that such Subsidiary may become a Company hereunder only with the prior written approval of Administrative Agent (upon its review of such Subsidiary including, without limitation, its review of such field examinations, audits, appraisals and other due diligence as Administrative Agent shall require in its reasonable discretion in good faith) 

 

 

and, if such approval is not provided, such Subsidiary shall become a Guarantor, and (ii) cause such Subsidiary to execute and deliver to Administrative Agent (1) a Joinder Agreement in the form of Exhibit G hereto, in its capacity as a Company or a Guarantor, as applicable, and (2) any further documents, instruments or agreements as Administrative Agent may reasonably require in order to grant Administrative Agent a perfected first priority security interest in substantially all of the assets of such Subsidiary; and

(b)          (i) deliver to Administrative Agent (1) revised schedules to the Loan Documents reflecting such Company's ownership interest in such Subsidiary and (2) the certificates, if any, representing the equity interests of such Subsidiary required to be pledged hereunder, together with undated stock powers and an irrevocable proxy (or equivalent instruments, as applicable), or if such interest is uncertificated, evidence of the registration of Administrative Agent's lien on and security interest in such interest on the books and records of such entity and (ii) execute and deliver all such other instruments, documents and agreements and take such other actions, and cause all Subsidiaries to execute and deliver all such other instruments, documents and agreements and to take
such other actions, as in either case, the Administrative Agent may reasonably request or require to fully evidence and consummate the transactions contemplated in clause (a) above and to ensure the enforceability, perfection and first-priority of the interests and undertakings thereunder, including, without limitation, (x) the execution and delivery of guaranties, security agreements, pledge agreements, mortgages, deeds of trust, financing statements and other documents, and the filing or recording of any of the foregoing, (y) the delivery of certificated securities and other documents or instruments with respect to which perfection is obtained by possession and (z) legal opinions in form and substance and from such counsel reasonably satisfactory to Administrative Agent to be addressed to (or permit reliance upon by) Administrative Agent and Lenders.

10.12     SEC Filings.  Technologies shall make all filings required by the SEC no later than the due date of each such required filing unless the time for such filing date has been extended pursuant to any applicable SEC rules, regulations or correspondence between Technologies and the SEC.

10.13     Post-Closing Covenants.  Each Company agrees that, unless at any time the Administrative Agent shall otherwise expressly consent in writing, it will: (a) on or prior to August 30, 2006, (i) deliver or cause to be delivered to Administrative Agent proof that the following deposit accounts with M&I Bank have been closed: Account #1497815 and Account #24296459 or (ii) cause M&I Bank to enter into a bank agency or other similar agreement with the Administrative Agent in form and substance satisfactory to Administrative Agent, in order to give the Administrative Agent "control" (as defined in the UCC) of such accounts, (b) on or prior to September 30, 2006, use its commercially reasonable efforts to deliver or cause to be
delivered to Administrative Agent, a Collateral Access Agreement with each landlord in respect of the following leased real properties: (i) 750 North Commons Drive, Aurora, Illinois, (ii) 1051 Woodfield Road, Schaumburg, Illinois, and (iii) 880 Enterprise Drive, Aurora, Illinois, (3) on or prior to August 14, 2006, use its commercially reasonable efforts to deliver or cause to be delivered to Administrative Agent proof that the lien filed against Westell, Inc. in favor of Solectron Corporation with the Secretary of the State of Illinois (UCC financing 

 

 

statement number 5362679) has been terminated, and (4) on or prior to July 7, 2006, deliver or cause to be delivered to Administrative Agent an opinion of McDermott Will & Emery, counsel for each Loan Party, in form and substance reasonably satisfactory to Administrative Agent. 

	
            
  	
            SECTION 11.
 	
            NEGATIVE COVENANTS
 

Until the expiration or termination of the Commitments and thereafter until all Obligations hereunder and under the other Loan Documents are paid in full and all Letters of Credit have been terminated, each Company agrees that, unless at any time the Required Lenders shall otherwise expressly consent in writing, it will:

11.1       Debt.  Not, and not permit any other Loan Party to, create, incur, assume or suffer to exist any Debt, except:

	
             
  	
            (a)
 	
            Obligations under this Agreement and the other Loan Documents;
 

(b)          Debt secured by Liens permitted by Section 11.2(d), and extensions, renewals and refinancings thereof; provided that the aggregate amount of all such Debt at any time outstanding shall not exceed $5,000,000;

(c)          Debt of any Company to any Company or any domestic Wholly-Owned Subsidiary of a Company or Debt of any domestic Wholly-Owned Subsidiary of a Company to any Company or another domestic Wholly-Owned Subsidiary of a Company; provided that such Debt shall be evidenced by a demand note in form and substance reasonably satisfactory to the Administrative Agent and pledged and delivered to the Administrative Agent pursuant to the Collateral Documents as additional collateral security for the Obligations, and the obligations under such demand note shall be subordinated to the Obligations of the Companies hereunder in a manner reasonably satisfactory to the Administrative Agent;

	
             
  	
            (d)
 	
            Intentionally Omitted;
 

(e)          Hedging Obligations incurred in favor of a Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation;

(f)           Debt described on Schedule 11.1 and any extension, renewal or refinancing thereof so long as the principal amount thereof is not increased;

(g)          Contingent Liabilities arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions permitted under Section 11.5; 

(h)          up to $7,500,000 at any time outstanding of Acquired Debt assumed in Permitted Acquisitions provided that such Debt is (i) on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) is subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent; and

 

 

 

 

(i)           Westell’s obligations under the Enginuity Guarantee, provided that the aggregate principal amount of such Debt shall not exceed $1,620,000.

11.2       Liens.  Not, and not permit any other Loan Party to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

(a)          Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves;

(b)          Liens arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by law and (ii) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and other types of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids, performance bonds and similar obligations) for sums not overdue or being contested in good faith by appropriate proceedings and not involving any advances or borrowed money or the deferred purchase price of property or services and, in each case, for which it maintains adequate reserves;

	
             
  	
            (c)
 	
            Liens described on Schedule 11.2 as of the Closing Date;
 

(d)          subject to the limitation set forth in Section 11.1(b), (i) Liens arising in connection with Capital Leases (and attaching only to the property being leased), (ii) Liens existing on property at the time of the acquisition thereof by any Loan Party (and not created in contemplation of such acquisition) and (iii) Liens that constitute purchase money security interests on any property securing debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such Lien attaches to such property within 20 days of the acquisition thereof and attaches solely to the property so acquired;

(e)          attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding $500,000 arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings;

(f)           easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens not interfering in any material respect with the ordinary conduct of the business of any Loan Party; 

	
             
  	
            (g)
 	
            Liens arising under the Loan Documents; and
 

(h)          the replacement, extension or renewal of any Lien permitted by clause (c) above upon or in the same property subject thereto arising out of the extension, renewal or replacement of the Debt secured thereby (without increase in the amount thereof).

 

 

 

 

11.3       Operating Leases.  Not permit the aggregate amount of all rental payments under Operating Leases made (or scheduled to be made) by the Loan Parties (on a consolidated basis) to exceed $5,000,000 in the aggregate in any Fiscal Year.

11.4       Restricted Payments.  Not, and not permit any other Loan Party to, (a) make any distribution to any holders of its Capital Securities, (b) purchase or redeem any of its Capital Securities, (c) pay any management fees or similar fees to any of its equityholders or any Affiliate thereof, (d) make any redemption, prepayment, defeasance, repurchase or any other payment in respect of any unsecured Debt, if any or (e) set aside funds for any of the foregoing.  Notwithstanding the foregoing, any Subsidiary may pay dividends or make other distributions to a Company or to a domestic Wholly-Owned Subsidiary of a Company. 

11.5       Mergers, Consolidations, Sales.  Not, and not permit any other Loan Party to, (a) be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any Capital Securities of any class of, or any partnership or joint venture interest in, any other Person, (b) sell, transfer, convey or lease all or any substantial part of its assets or Capital Securities (including the sale of Capital Securities of any Subsidiary), or (c) sell or assign with or without recourse any receivables, except for (i) any such merger, consolidation, sale, transfer, conveyance, lease or assignment of or by any Company or Wholly-Owned Subsidiary of a Company into a Company (other than Technologies) or into any other domestic
Wholly-Owned Subsidiary of a Company; (ii) any such purchase or other acquisition by a Company or any domestic Wholly-Owned Subsidiary of a Company of the assets or Capital Securities of any Company (other than Technologies) or any Wholly-Owned Subsidiary of a Company; or (iii) any Acquisition by a Company in respect of which the requirements of Section 10.9 and Section 10.11 have been satisfied, where:

(A)         the business, divisions or operating units acquired are for use, or the Person acquired is engaged or reasonably related or complementary thereto, in the businesses engaged in by Loan Parties on the Closing Date;

(B)         immediately before and after giving effect to such Acquisition, no Event of Default on an actual or pro forma basis shall exist or would result therefrom;

(C)         the aggregate consideration to be paid by the Companies (including Acquired Debt assumed or issued in connection therewith, the amount thereof to be calculated in accordance with GAAP, and the fair market value of any non-cash consideration) in connection with (1) such Acquisition (or any series of related Acquisitions) is less than $10,000,000 in any given transaction (or series of related transactions) and (2) all Acquisitions after the Closing Date is less than $30,000,000 in the aggregate;

(D)         immediately after giving effect to such Acquisition the Companies and their respective Subsidiaries are in pro forma compliance with the financial ratios set forth in Section 11.14;

(E)         in the case of the Acquisition of any Person, the governing body of such Person has approved such Acquisition;

 

 

 

 

(F)          in connection with such Acquisition, the Administrative Agent shall have received complete executed copies of each material document, instrument and agreement to be executed in connection with such Acquisition together with all lien search reports and lien release letters and other documents as the Administrative Agent may require to evidence the termination of liens on the assets or business to be acquired;

(G)         reasonably prior to such Acquisition, the Administrative Agent shall have received an acquisition summary with respect to the Person and/or business or division to be acquired, such summary to include a reasonably detailed description thereof (including financial information) and operating results (including financial statements for the most recent twelve (12) month period for which they are available and as otherwise available), the terms and conditions, including economic terms, of the proposed Acquisition, and the calculation of pro forma compliance with the financial ratios set forth in Section 11.14;

(H)         Administrative Agent shall have approved the computation of pro forma compliance with the financial ratios and restrictions set forth in Section 11.14;

(I)           consents, if necessary, have been obtained in favor of Administrative Agent and the Lenders to the granting of a security interest and/or the collateral assignment of rights and indemnities under the related acquisition documents and opinions of counsel for the Loan Parties and/or relevant Subsidiaries and, if delivered to the Loan Parties or any such Subsidiary, of the selling party allowing reliance thereon by the Administrative Agent and the Lenders have been delivered and the applicable Company shall have executed an agreement providing for the granting of a security interest in, and the collateral assignment to the Administrative Agent of, such Company's rights and indemnities under the related acquisition documents;

(J)          if such Acquisition is structured as an acquisition of equity interests of a Person, (i) such Person which is organized under the laws of the United States of America or any state (or the District of Columbia) thereof, or Canada or any province thereof, (ii) such Acquisition is of one hundred percent of the equity interests of a Person (and in respect of which the provisions of Section 10.11 will be complied with), or is made through a domestic Wholly-Owned Subsidiary which acquires one hundred percent of the equity interests of such Person, and (iii) the provisions of Section 10.11 have been satisfied with respect to all such Persons and its Subsidiaries or such newly-formed
Subsidiary concurrently with or prior to such Acquisition;

(K)         if such Acquisition is structured as an acquisition of assets, such assets are located in the United States of America or Canada;

(L)         if the assets acquired in such Acquisition are intended to be included in the Borrowing Base, the Administrative Agent must provide its prior written approval, upon its review of such assets including, without limitation, its review 

 

 

of such field examinations, audits, appraisals and other due diligence as the Administrative Agent shall require in its reasonable discretion in good faith; it being acknowledged and agreed that (i) the Administrative Agent may require that the acquired assets be held in a separate domestic Wholly-Owned Subsidiary which shall be deemed a Guarantor and (ii) such additional assets, if any, included in the Borrowing Base may be subject to different advance rates or may require the imposition of additional reserves with respect thereto; and

(M)        if the Acquisition is structured as a merger, the Company party thereto is the surviving entity.

(any such Acquisition described in this clause (iii), being a "Permitted Acquisition").

11.6       Modification of Organizational Documents.  Not permit the charter, by-laws or other organizational documents of any Loan Party to be amended or modified in any way which could reasonably be expected to materially adversely affect the interests of the Lenders; not change, or allow any Loan Party to change, its state of formation or its organizational form.

11.7       Transactions with Affiliates.  Not, and not permit any other Loan Party to, enter into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its other Affiliates (other than the Loan Parties) which is on terms which are less favorable than are obtainable from any Person which is not one of its Affiliates (except for existing intercompany Debt).

11.8       Unconditional Purchase Obligations.  Not, and not permit any other Loan Party to, enter into or be a party to any contract for the purchase of materials, supplies or other property or services if such contract requires that payment be made by it regardless of whether delivery is ever made of such materials, supplies or other property or services.

11.9       Inconsistent Agreements.  Not, and not permit any other Loan Party to, enter into any agreement containing any provision which would (a) be violated or breached by any borrowing by the Companies hereunder or by the performance by any Loan Party of any of its Obligations hereunder or under any other Loan Document, (b) prohibit any Loan Party from granting to the Administrative Agent and the Lenders, a Lien on any of its assets or (c) create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary of a Company to (i) pay dividends or make other distributions to any Company or any other Subsidiary of a Company, or pay any Debt owed to a Company or any other Subsidiary of a Company, (ii) make loans or
advances to any Loan Party or (iii) transfer any of its assets or properties to any Loan Party, other than (A) customary restrictions and conditions contained in agreements relating to the sale of all or a substantial part of the assets of any Subsidiary of a Company pending such sale, provided that such restrictions and conditions apply only to the Person to be sold and such sale is permitted hereunder, (B) restrictions or conditions imposed by any agreement relating to purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and (C) customary provisions in leases and other contracts restricting the assignment thereof.

 

 

 

 

11.10     Business Activities; Issuance of Equity.  Not, and not permit any other Loan Party to, engage in any line of business other than the businesses engaged in on the date hereof and businesses reasonably related and complementary thereto.  Not, and not permit any other Loan Party to, issue any Capital Securities other than (a) any issuance of shares of Technologies’ Capital Securities consisting of common stock pursuant to any employee or director option program, benefit plan or compensation program or (b) any issuance by a Subsidiary to a Company or a Subsidiary of a Company in accordance with Section 11.4.

11.11     Investments.  Not, and not permit any other Loan Party to, make or permit to exist any Investment in any other Person, except the following:

(a)          contributions by any Loan Party to the capital of any Wholly-Owned Subsidiary of any Company, so long as the recipient of any such capital contribution has guaranteed the Obligations and such guaranty is secured by a pledge of all of its Capital Securities and substantially all of its real and personal property, in each case in accordance with Section 10.10;

	
             
  	
            (b)
 	
            Investments constituting Debt permitted by Section 11.1;
 

(c)          Contingent Liabilities constituting Debt permitted by Section 11.1 or Liens permitted by Section 11.2;

	
             
  	
            (d)
 	
            Cash Equivalent Investments;
 

(e)          bank deposits in the ordinary course of business; provided that the aggregate amount of all such deposits (excluding amounts in payroll accounts or for accounts payable, in each case to the extent that checks have been issued by third parties) which are maintained with any bank other than the Administrative Agent shall not at any time exceed $1,000,000;

(f)           Investments in securities of Account Debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;

	
             
  	
            (g)
 	
            Investments listed on Schedule 11.11 as of the Closing Date;
 

(h)          Investments constituting Permitted Acquisitions so long as the provisions of Section 10.11 have been satisfied; and

(i)           the purchase by Westell Technologies, Inc., from time to time during the term of this Agreement, of shares of CPI in transactions having an aggregate purchase price not to exceed $500,000 for all such transactions, from departing employees of CPI who owned such shares as of the date of this Agreement.

provided that (x) any Investment which when made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; (y) no 

 

 

Investment otherwise permitted by clause (b) or (c) shall be permitted to be made if, immediately before or after giving effect thereto, any Event of Default or Unmatured Event of Default exists.

11.12     Restriction of Amendments to Certain Documents.  Not amend or otherwise modify, or waive any rights under, the Enginuity Transaction Documents if, in any case, such amendment, modification or waiver could be adverse to the interests of the Lenders.

	
            
 	
            11.13
 	
            Fiscal Year".  Not change its Fiscal Year.
 
	
            
  	
            11.14
 	
            Financial Covenants.  
 	
             

11.14.1              Fixed Charge Coverage Ratio.  Not permit the Fixed Charge Coverage Ratio as of the last day of any Computation Period to be less than 1.50:1.00.

11.14.2              Minimum Tangible Net Worth.  Not permit Tangible Net Worth as of the end of any Fiscal Quarter in any Fiscal Year to be less the sum of $60,000,000 plus fifty percent (50%) of the Companies’ positive Consolidated Net Income for each Fiscal Quarter ending on and after June 30, 2006 (on a cumulative basis).

11.14.3              Total Debt to EBITDA Ratio.  Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation Period to exceed 2.50:1.00. 

11.14.4               Capital Expenditures.  Not permit the aggregate amount of all Capital Expenditures made by the Loan Parties in the Fiscal Year ending on March 31, 2007 to exceed $10,000,000 and in any Fiscal Year ending on or after March 31, 2008 to exceed $7,500,000; provided however, that if the full amount of Capital Expenditures available under this Section 11.14.4 is not expended in any particular Fiscal Year, fifty percent (50%) of such remainder amount shall be available to be expended as a Capital Expenditure in the next succeeding Fiscal Year.

11.15   Cancellation of Debt.  Not, and not permit any other Loan Party to, cancel any claim or debt owing to it, except for reasonable consideration or in the ordinary course of business, and except for the cancellation of debts or claims not to exceed $500,000 in any Fiscal Year. 

11.16     Asset Dispositions.  Not, and not permit any other Loan Party to, dispose of any of its property, whether now owned or hereafter acquired, except:

(a)          the disposition of obsolete or worn out property in the ordinary course of business;

	
             
  	
            (b)
 	
            the sale of inventory in the ordinary course of business;
 
	
             
  	
            (c)
 	
            dispositions permitted under Section 11.5; and
 	
             

(d)          the disposition of product lines, which management reasonably believes is in the best interests of the Loan Parties, in each instance in an amount not to exceed 

 

 

$5,000,000 (inclusive of any Dispositions permitted pursuant to clause (c) of the definition of "Asset Dispositions").

	
            
  	
            SECTION 12.
 	
            EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
 

The obligation of each Lender to make its Loans and of the Issuing Lender to issue Letters of Credit is subject to the following conditions precedent:

12.1       Initial Credit Extension.  The obligation of the Lenders to make the initial Loans and the obligation of the Issuing Lender to issue its initial Letter of Credit (whichever first occurs) is, in addition to the conditions precedent specified in Section 12.2, subject to the conditions precedent that the Administrative Agent shall have received all of the following, each duly executed and dated the Closing Date (or such earlier date as shall be satisfactory to the Administrative Agent), in form and substance satisfactory to the Administrative Agent (and the date on which all such conditions precedent have been satisfied or waived in writing by the Administrative Agent and the Lenders is called the
“Closing Date”):

12.1.1  List of Closing Documents.  All instruments, documents, certificates and agreements, set forth on the list of closing documents attached hereto as Schedule 12.1.1  and such other instruments, documents, agreements, reports, opinions and certificates as the Administrative Agent and/or any Lender may reasonably request, in each case, fully executed by all parties thereto and inform and substance reasonably satisfactory to the Administrative Agent.

12.1.2  Authorization Documents.  For each Loan Party, such Person’s (a) charter (or similar formation document), certified by the appropriate governmental authority; (b) good standing certificates in its state of incorporation (or formation) and in each other state reasonably requested by the Administrative Agent; (c) bylaws (or similar governing document); (d) resolutions of its board of directors (or similar governing body) approving and authorizing such Person’s execution, delivery and performance of the Loan Documents to which it is party and the transactions contemplated thereby; and (e) signature and incumbency certificates of its officers executing any of the Loan Documents (it being understood that the Administrative Agent and each Lender
may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein), all certified by its secretary or an assistant secretary (or similar officer) as being in full force and effect without modification.

12.1.3  Consents, etc.  Certified copies of all documents evidencing any necessary corporate or partnership action, consents and governmental approvals (if any) required for the execution, delivery and performance by the Loan Parties of the documents referred to in this Section 12.

12.1.4  Perfection Certificate.  A Perfection Certificate completed and executed by each Loan Party.

12.1.5  Opinions of Counsel.  Opinions of counsel for each Loan Party, including local counsel reasonably requested by the Administrative Agent.

 

 

 

 

12.1.6  Compliance Certificate.  Compliance Certificate for the Fiscal Quarter ending March 31, 2006.

12.1.7  Insurance.  Evidence of the existence of insurance required to be maintained pursuant to Section 10.3(b), together with evidence that the Administrative Agent has been named as a lender’s loss payee, an additional insured on all related insurance policies and received an assignment of all business interruption insurance.

12.1.8  Payment of Fees.  Evidence of payment by the Companies of all accrued and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date, together with all Attorney Costs of the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional amounts of Attorney Costs as shall constitute the Administrative Agent’s reasonable estimate of Attorney Costs incurred or to be incurred by the Administrative Agent through the closing proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Companies and the Administrative Agent).

12.1.9  Search Results; Lien Terminations.  Certified copies of Uniform Commercial Code search reports dated a date reasonably near to the Closing Date, listing all effective financing statements which name any Loan Party (under their present names and any previous names) as debtors, together with (a) copies of such financing statements, and (b) such other Uniform Commercial Code termination statements as the Administrative Agent may reasonably request.

12.1.10              Filings, Registrations and Recordings.  The Administrative Agent shall have received each document (including Uniform Commercial Code financing statements) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the collateral described therein, prior to any other Liens (subject only to Liens permitted pursuant to Section 11.2), in proper form for filing, registration or recording.

12.1.11              Material Adverse Effect.  The Administrative Agent shall be satisfied that, since March 31, 2006, there has been no material adverse change in, or material adverse effect upon the financial condition, operations, assets, business or properties of the Loan Parties, taken as a whole; provided, however, that such condition shall only apply to Loans made or Letters of Credit advanced on the Closing Date.

12.1.12              Projections.  Projected income statements, balance sheets and statements of cash flow of the Companies and their respective Subsidiaries on a consolidated basis after giving effect to the making of the initial Loans and the issuance of the initial Letters of Credit for Fiscal Year 2007.

12.1.13              Other.  Such other documents as the Administrative Agent or any Lender may reasonably request.

 

 

 

 

12.2       Conditions.  The obligation (a) of each Lender to make each Loan and (b) of the Issuing Lender to issue each Letter of Credit is subject to the following further conditions precedent that:

12.2.1  Compliance with Warranties, No Default, etc.  Both before and after giving effect to any borrowing and the issuance of any Letter of Credit, the following statements shall be true and correct:

(a)          the representations and warranties of each Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct in all respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and 

(b)          no Event of Default or Unmatured Event of Default shall have then occurred and be continuing.

12.2.2  Confirmatory Certificate.  If requested by the Administrative Agent or any Lender, the Administrative Agent shall have received (in sufficient counterparts to provide one to each Lender) a certificate dated the date of such requested Loan or Letter of Credit and signed by a duly authorized representative of the Company Representative as to the matters set out in Section 12.2.1 (it being understood that each request by the Companies for the making of a Loan or the issuance of a Letter of Credit shall be deemed to constitute a representation and warranty by the Companies that the conditions precedent set forth in Section 12.2.1 will be satisfied at the time of the making
of such Loan or the issuance of such Letter of Credit), together with such other documents as the Administrative Agent or any Lender may reasonably request in support thereof.

	
            
  	
            SECTION 13.
 	
            EVENTS OF DEFAULT AND THEIR EFFECT.
 

13.1       Events of Default.  Each of the following shall constitute an Event of Default under this Agreement:

13.1.1  Non-Payment of the Loans, etc.  Default in the payment when due of the principal of any Loan; or default, and continuance thereof for five days, in the payment when due of any interest, fee, reimbursement obligation with respect to any Letter of Credit or other amount payable by the Companies hereunder or under any other Loan Document.

13.1.2  Non-Payment of Other Debt.  Any default shall occur under the terms applicable to any Debt of any Loan Party in an aggregate amount (for all such Debt so affected and including undrawn committed or available amounts and amounts owing to all creditors under any combined or syndicated credit arrangement) exceeding $500,000 and such default shall (a) consist of the failure to pay such Debt when due, whether by acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit the holder or holders thereof, or any trustee or agent for such holder or holders, to cause such Debt to become due and payable (or require any Loan Party to purchase or redeem such Debt or post cash collateral in respect thereof) prior to its expressed maturity.

 

 

 

 

13.1.3  Other Material Obligations.  Default in the payment when due, or in the performance or observance of, any material obligation of, or condition agreed to by, any Loan Party with respect to any material purchase or lease of goods or services where such default, singly or in the aggregate with all other such defaults, could reasonably be expected to have a Material Adverse Effect.

13.1.4  Bankruptcy, Insolvency, etc.  Any Loan Party becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or any Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan Party or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for any Loan Party or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding, is commenced in respect of any Loan Party, and if such case or proceeding is not commenced by such Loan Party, it is consented to or acquiesced in by such Loan Party, or remains for 60 days undismissed; or any Loan Party takes any action to authorize, or in furtherance of, any of the foregoing.

13.1.5  Non-Compliance with Loan Documents.  (a) Failure by any Loan Party to comply with or to perform any covenant set forth in Sections 10.1.5, 10.3(b)(1) or 10.5 or Section 11; or (b) failure by any Loan Party to comply with or to perform any other provision of this Agreement or any other Loan Document (and not constituting an Event of Default under any other provision of this Section 13) and continuance of such failure described in this clause (b) for 30 days.

13.1.6  Representations; Warranties.  Any representation or warranty made by any Loan Party herein or any other Loan Document is breached or is false or misleading in any material respect, or any schedule, certificate, financial statement, report, notice or other writing furnished by any Loan Party to the Administrative Agent or any Lender in connection herewith is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified.

13.1.7  Pension Plans.  (a) Any Person institutes steps to terminate a Pension Plan if as a result of such termination a Company or any Subsidiary of any Company or any member of the Controlled Group could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in excess of $500,000; (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (c) the Unfunded Liability exceeds twenty percent of the Total Plan Liability, or (d) there shall occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans as a result of such
withdrawal (including any outstanding withdrawal liability that a Company, or any Subsidiary of a Company or any member of the Controlled Group have incurred on the date of such withdrawal) exceeds $500,000.

 

 

 

 

13.1.8  Judgments.  Final judgments which exceed an aggregate of $250,000 shall be rendered against any Loan Party and shall not have been paid, discharged or vacated or had execution thereof stayed pending appeal within 30 days after entry or filing of such judgments.

13.1.9  Invalidity of Collateral Documents, etc.  Any Collateral Document shall cease to be in full force and effect; or any Loan Party (or any Person by, through or on behalf of any Loan Party) shall contest in any manner the validity, binding nature or enforceability of any Collateral Document.

	
            
  	
            13.1.10
 	
            Intentionally Omitted.
 	
             

	
            
 	
            13.1.11
 	
            Change of Control".  A Change of Control shall occur.
 
					

13.2       Effect of Event of Default.  If any Event of Default described in Section 13.1.4 shall occur in respect of any Loan Party, the Commitments shall immediately terminate and the Loans and all other Obligations hereunder shall become immediately due and payable and the Companies shall become immediately obligated to Cash Collateralize all Letters of Credit, all without presentment, demand, protest or notice of any kind; and, if any other Event of Default shall occur and be continuing, the Administrative Agent may (and, upon the written request of the Required Lenders shall) declare the Commitments to be terminated in whole or in part and/or declare all or any part of the Loans and all other Obligations hereunder
to be due and payable and/or demand that the Companies immediately Cash Collateralize all or any Letters of Credit, whereupon the Commitments shall immediately terminate (or be reduced, as applicable) and/or the Loans and other Obligations hereunder shall become immediately due and payable (in whole or in part, as applicable) and/or the Companies shall immediately become obligated to Cash Collateralize the Letters of Credit (all or any, as applicable), all without presentment, demand, protest or notice of any kind.  The Administrative Agent shall promptly advise the Company Representative of any such declaration, but failure to do so shall not impair the effect of such declaration.  Any cash collateral delivered hereunder shall be held by the Administrative Agent (without liability for interest thereon) and applied to the Obligations arising in connection with any drawing under a Letter of Credit.  After the expiration or termination of all Letters of Credit, such cash collateral
shall be applied by the Administrative Agent to any remaining Obligations hereunder and any excess shall be delivered to the Companies or as a court of competent jurisdiction may elect.

	
            
  	
            SECTION 14.
 	
            THE AGENT.
 

14.1       Appointment and Authorization.  Each Lender hereby irrevocably (subject to Section 14.10) appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Administrative Agent shall not have any duty or responsibility except those expressly set forth herein, nor shall the Administrative Agent
have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or 

 

 

any other Loan Document or otherwise exist against the Administrative Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

14.2       Issuing Lender.  The Issuing Lender shall act on behalf of the Lenders (according to their Pro Rata Shares) with respect to any Letters of Credit issued by it and the documents associated therewith.  The Issuing Lender shall have all of the benefits and immunities (a) provided to the Administrative Agent in this Section 14 with respect to any acts taken or omissions suffered by the Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent”, as used in this Section 14,
included the Issuing Lender with respect to such acts or omissions and (b) as additionally provided in this Agreement with respect to the Issuing Lender.

14.3       Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

14.4       Exculpation of Administrative Agent.  None of the Administrative Agent nor any of its directors, officers, employees or agents shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except to the extent resulting from its own gross negligence or willful misconduct in connection with its duties expressly set forth herein as determined by a final, nonappealable judgment by a court of competent jurisdiction), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or Affiliate of any Company, or any officer thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (or the creation, perfection or priority of any Lien or security interest therein), or for any failure of the Companies or any other party to any Loan Document to perform their Obligations hereunder or thereunder.  The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any of their Subsidiaries or Affiliates.

14.5       Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, electronic mail message, affidavit, letter, 

 

 

telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Loan Parties), independent accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, confirmation from the Lenders of their obligation to indemnify the Administrative Agent against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon each Lender.  For purposes of determining compliance with the conditions specified in Section 12, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

14.6       Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Company Representative referring to this Agreement, describing such Event of Default or Unmatured Event of Default and stating that such notice is a “notice of default”.  The Administrative Agent will notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such action with respect to such Event of Default or
Unmatured Event of Default as may be requested by the Required Lenders in accordance with Section 13; provided that unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default or Unmatured Event of Default as it shall deem advisable or in the best interest of the Lenders.

14.7       Credit Decision.  Each Lender acknowledges that the Administrative Agent has not made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent and acceptance of any assignment or review of the affairs of the Loan Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender as to any matter, including whether the Administrative Agent has disclosed material information in its possession.  Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties, and made its own decision to enter into this Agreement and to extend credit to the Companies hereunder.  Each Lender also represents that it will, independently and without reliance upon the Administrative Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and 

 

 

 

the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Companies.  Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial or other condition or creditworthiness of the Companies which may come into the possession of the Administrative Agent.

14.8       Indemnification.  Whether or not the transactions contemplated hereby are consummated, each Lender shall indemnify upon demand the Administrative Agent and its directors, officers, employees and agents (to the extent not reimbursed by or on behalf of the Companies and without limiting the obligation of the Companies to do so), according to its applicable Pro Rata Share, from and against any and all Indemnified Liabilities (as hereinafter defined); provided that no Lender shall be liable for any payment to any such Person of any portion of the Indemnified Liabilities to the extent determined by a final, nonappealable judgment by a court of competent jurisdiction to have resulted from the applicable
Person’s own gross negligence or willful misconduct.  No action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section.  Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs and Taxes) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Companies.  The undertaking in this Section shall survive repayment of the Loans,
cancellation of the Notes, expiration or termination of the Letters of Credit, any foreclosure under, or modification, release or discharge of, any or all of the Collateral Documents, termination of this Agreement and the resignation or replacement of the Administrative Agent.

14.9       Administrative Agent in Individual Capacity.  LaSalle and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Loan Parties and Affiliates as though LaSalle were not the Administrative Agent hereunder and without notice to or consent of any Lender.  Each Lender acknowledges that, pursuant to such activities, LaSalle or its Affiliates may receive information regarding the Companies or their Affiliates (including information that may be subject to confidentiality obligations in favor of such Company or such Affiliate) and acknowledges that the Administrative Agent shall be
under no obligation to provide such information to them.  With respect to their Loans (if any),  LaSalle and its Affiliates shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though LaSalle were not the Administrative Agent, and the terms “Lender” and “Lenders” include LaSalle and its Affiliates, to the extent applicable, in their individual capacities.

 

 

 

 

14.10     Successor Administrative Agent.  The Administrative Agent may resign as the Administrative Agent upon 30 days’ notice to the Lenders.  If the Administrative Agent resigns under this Agreement, the Required Lenders shall, with (so long as no Event of Default exists) the consent of the Company (which shall not be unreasonably withheld or delayed), appoint from among the Lenders a successor agent for the Lenders.  If no successor agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Company Representative, a successor agent from among the Lenders.  Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor agent, and the retiring Administrative Agent’s appointment, powers and duties as the Administrative Agent shall be terminated. After any retiring Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of this Section 14 and Sections 15.5 and 15.16 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.  If no successor agent has accepted appointment as the Administrative Agent by the date which is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders
shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.

14.11     Collateral Matters.  The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, (a) to release any Lien granted to or held by the Administrative Agent under any Collateral Document (i) upon termination of the Commitments and payment in full of all Loans and all other obligations of the Companies hereunder and the expiration or termination of all Letters of Credit; (ii) constituting property sold or to be sold or disposed of as part of or in connection with any disposition permitted hereunder; or (iii) subject to Section 15.1, if approved, authorized or ratified in writing by the Required Lenders; or (b) to subordinate its interest in any Collateral to any holder of a Lien on such
Collateral which is permitted by Section 11.2(d)(i) or (d)(iii)  (it being understood that the Administrative Agent may conclusively rely on a certificate from the Company Representative in determining whether the Debt secured by any such Lien is permitted by Section 11.1(b)).  Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release, or subordinate its interest in, particular types or items of Collateral pursuant to this Section 14.11.  

14.12     Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Companies) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a)          to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to 

 

 

have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 5, 15.5 and 15.17) allowed in such judicial proceedings; and 

(b)          to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 5, 15.5 and 15.17.

Nothing contained herein shall be deemed to authorize the Administrative Agent  to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

14.13     Other Agents; Arrangers and Managers.  None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger”, if any, shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely,
on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

	
            
  	
            SECTION 15.
 	
            GENERAL.
 

15.1       Waiver; Amendments.  No delay on the part of the Administrative Agent or any Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy.  No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by Lenders having an aggregate Pro Rata Shares of not less than the aggregate Pro Rata Shares expressly designated herein with respect thereto or, in the absence of such designation as to any provision
of this Agreement, by the Required Lenders, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  No amendment, modification, waiver or consent shall 

 

 

(a) extend or increase the Commitment of any Lender without the written consent of such Lender, (b) extend the date scheduled for payment of any principal (excluding mandatory prepayments) of or interest on the Loans or any fees payable hereunder without the written consent of each Lender directly affected thereby, (c) reduce the principal amount of any Loan, the rate of interest thereon or any fees payable hereunder, without the consent of each Lender directly affected thereby (except for periodic adjustments of interest rates and fees resulting from a change in the Applicable Margin as provided for in this Agreement); or (d) release any party from its obligations under the Guaranty or all or any substantial part of the Collateral granted under the Collateral Documents, change the definition of Required Lenders, any provision of this Section 15.1 or reduce
the aggregate Pro Rata Share required to effect an amendment, modification, waiver or consent, without, in each case, the written consent of all Lenders (other than in connection with any permitted increase to the Revolving Commitment pursuant to Section 6.1.1).  No provision of Sections 6.2.2 or 6.3 with respect to the timing or application of mandatory prepayments of the Loans shall be amended, modified or waived without the consent of Lenders having a majority of the aggregate Pro Rata Shares of the Revolving Loans affected thereby.  No provision of Section 14 or other provision of this Agreement affecting the Administrative Agent in its capacity as such shall be amended, modified or waived without the consent of the Administrative Agent.  No provision of this Agreement relating to
the rights or duties of the Issuing Lender in its capacity as such shall be amended, modified or waived without the consent of the Issuing Lender.  

15.2       Confirmations.  Each Company and each holder of a Note agree from time to time, upon written request received by it from the other, to confirm to the other in writing (with a copy of each such confirmation to the Administrative Agent) the aggregate unpaid principal amount of the Loans then outstanding under such Note.

15.3       Notices.  Except as otherwise provided in Sections 2.2.2 and 2.2.3, all notices hereunder shall be in writing (including facsimile transmission) and shall be sent to the applicable party at its address shown on Annex B or at such other address as such party may, by written notice received by the other parties, have designated as its address for such purpose.  Notices sent by facsimile transmission shall be deemed to have been given when sent; notices sent by mail shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by
hand delivery or overnight courier service shall be deemed to have been given when received.  For purposes of Sections 2.2.2 and 2.2.3, the Administrative Agent shall be entitled to rely on telephonic instructions from any person that the Administrative Agent in good faith believes is an authorized officer or employee of the Company Representative, and the Companies shall hold the Administrative Agent and each other Lender harmless from any loss, cost or expense resulting from any such reliance.

15.4       Computations.  Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently applied; provided that if the Company Representative notifies the Administrative Agent that the Companies wish to amend any covenant in Sections 10 or 11.14 (or any related definition) to eliminate or to take into account 

 

 

the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Company Representative that the Required Lenders wish to amend Sections 10 or 11.14 (or any related definition) for such purpose), then the Companies’ compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant (or related definition) is amended in a manner satisfactory to the Companies and the Required Lenders.

15.5       Costs, Expenses and Taxes.  The Companies agrees jointly and severally to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent (including Attorney Costs and any Taxes) in connection with the preparation, execution, delivery and administration (including perfection and protection of any Collateral and the costs of Intralinks (or other similar service), if applicable) of this Agreement, the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any amendment, supplement or waiver to any Loan Document), whether or not the transactions contemplated hereby or thereby shall be consummated, and all reasonable out-of-pocket costs and
expenses (including Attorney Costs and any Taxes) incurred by the Administrative Agent and each Lender after an Event of Default in connection with the collection of the Obligations or the enforcement of this Agreement the other Loan Documents or any such other documents or during any workout, restructuring or negotiations in respect thereof.  In addition, the Companies agree jointly and severally to pay, and to save the Administrative Agent and the Lenders harmless from all liability for, any reasonable fees of the Companies’ auditors in connection with any reasonable exercise by the Administrative Agent and the Lenders of their rights pursuant to Section 10.2.  All Obligations provided for in this Section 15.5 shall survive repayment of the Loans, cancellation of the Notes, expiration or termination of the Letters of Credit and termination of this Agreement.

	
            
  	
            15.6
 	
            Assignments; Participations.  
 

 

	
             
  	
            15.6.1
 	
            Assignments.
 

(a)          Any Lender may at any time assign to one or more Persons (any such Person, an “Assignee”) all or any portion of such Lender’s Loans and Commitments, with the prior written consent of the Administrative Agent, the Issuing Lender (for an ssignment of the Revolving Loans and the Revolving Commitment) and, so long as no Event of Default exists, the Company Representative (which consents shall not be unreasonably withheld or delayed and shall not be required for an assignment by a Lender to a Lender or an Affiliate of a Lender).  Except as the Administrative Agent may otherwise agree, any such assignment shall be in a minimum aggregate amount equal to $5,000,000 or, if less, the remaining Commitment and Loans
held by the assigning Lender.  The Companies, the Company Representative and the Administrative Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned to an Assignee until the Administrative Agent shall have received and accepted an effective assignment agreement in substantially the form of Exhibit D hereto (an “Assignment Agreement”) executed, delivered and fully completed by the applicable parties thereto and a processing fee of $3,500.  No assignment may be made to any Person if at the time of such assignment the Companies would be obligated 

 

 

to pay any greater amount under Sections 7.6 or 8 to the Assignee than the Companies are then obligated to pay to the assigning Lender under such Sections (and if any assignment is made in violation of the foregoing, the Companies will not be required to pay such greater amounts).  Any attempted assignment not made in accordance with this Section 15.6.1 shall be treated as the sale of a participation under Section 15.6.2.  The Company Representative shall be deemed to have granted their consent to any assignment requiring its consent hereunder unless the Company Representative has expressly objected to such assignment within three Business Days after notice thereof.  

(b)          From and after the date on which the conditions described above have been met, (i) such Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned to such Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (ii) the assigning Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights (other than its indemnification rights) and obligations hereunder.  Upon the request of the Assignee (and, as applicable, the assigning Lender) pursuant to an effective Assignment Agreement, the Companies shall execute and deliver to the
Administrative Agent for delivery to the Assignee (and, as applicable, the assigning Lender) a Note in the principal amount of the Assignee’s Pro Rata Share of the Revolving Commitment (and, as applicable, a Note in the principal amount of the Pro Rata Share of the Revolving Commitment retained by the assigning Lender).  Each such Note shall be dated the effective date of such assignment.  Upon receipt by the assigning Lender of such Note, the assigning Lender shall return to the Company Representative any prior Note held by it.

(c)          Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

15.6.2  Participations.  Any Lender may at any time sell to one or more Persons participating interests in its Loans, Commitments or other interests hereunder (any such Person, a “Participant”).  In the event of a sale by a Lender of a participating interest to a Participant, (a) such Lender’s obligations hereunder shall remain unchanged for all purposes, (b) the Companies, the Company Representative and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder and (c) all amounts payable by the Companies shall be determined as if such Lender had not sold such participation and shall be paid directly to
such Lender.  No Participant shall have any direct or indirect voting rights hereunder except with respect to any event described in Section 15.1 expressly requiring the unanimous vote of all Lenders or, as applicable, all affected Lenders.  Each Lender agrees to incorporate the requirements of the preceding sentence into each participation agreement which such Lender enters into with any Participant.  The Companies agree that if amounts outstanding under this Agreement are due and payable (as a 

 

 

result of acceleration or otherwise), each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement and with respect to any Letter of Credit to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that such right of set-off shall be subject to the obligation of each Participant to share with the Lenders, and the Lenders agree to share with each Participant, as provided in Section 7.5.  The Companies also agree that each Participant shall be entitled to the benefits of Section 7.6 or 8 as if it were a Lender (provided that on the date of the participation no Participant shall be entitled to any greater compensation pursuant to Section 7.6 or 8 than would have been paid to the participating Lender on such date if no participation had been sold and that each Participant complies with Section 7.6(d) as if it were an Assignee).

15.7       Register.  The Administrative Agent shall maintain a copy of each Assignment Agreement delivered and accepted by it and register (the “Register”) for the recordation of names and addresses of the Lenders and the Commitment of each Lender from time to time and whether such Lender is the original Lender or the Assignee.  No assignment shall be effective unless and until the Assignment Agreement is accepted and registered in the Register. All records of transfer of a Lender’s interest in the Register shall be conclusive, absent manifest error, as to the ownership of the interests in the Loans. The Administrative Agent shall not incur any liability of any kind with respect to any Lender with respect
to the maintenance of the Register.  

15.8       GOVERNING LAW.  THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

15.9       Confidentiality.  As required by federal law and the Administrative Agent’s policies and practices, the Administrative Agent may need to obtain, verify, and record certain customer identification information and documentation in connection with opening or maintaining accounts, or establishing or continuing to provide services.  The Administrative Agent and each Lender agree to use commercially reasonable efforts (equivalent to the efforts the Administrative Agent or such Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all information provided to them by any Loan Party and designated as confidential, except that the Administrative Agent and
each Lender may disclose such information (a) to Persons employed or engaged by the Administrative Agent or such Lender in evaluating, approving, structuring or administering the Loans and the Commitments; (b) to any assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this Section 15.9 (and any such assignee or participant or potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably believed by the Administrative Agent or such Lender to be compelled by any court decree, subpoena or legal or administrative order or process; (d) as, on the advice of the Administrative Agent’s or such Lender’s counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with any litigation to 

 

 

which the Administrative Agent or such Lender is a party; (f) to any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender; (g) to any Affiliate of the Administrative Agent, the Issuing Lender or any other Lender who may provide Bank Products to the Loan Parties; or (h) that ceases to be confidential through no fault of the Administrative Agent or any Lender.  Notwithstanding the foregoing, the Companies consent to the publication by the Administrative Agent or any Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement, and the Administrative Agent reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements.

15.10     Severability.  Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.  All obligations of the Companies and rights of the Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law.

15.11     Nature of Remedies.  All Obligations of the Companies and rights of the Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

15.12     Entire Agreement.  This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof (except as relates to the fees described in Section 5.3) and any prior arrangements made with respect to the payment by the Companies of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the Administrative Agent or the Lenders.

15.13     Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement.  Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective delivery thereof.  Electronic records of executed Loan Documents maintained by the Lenders shall deemed to be originals.

15.14     Successors and Assigns.  This Agreement shall be binding upon the Companies, the Lenders and the Administrative Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Lenders and the Administrative Agent and the successors and assigns of the Lenders and the Administrative Agent.  No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in 

 

 

connection with, this Agreement or any of the other Loan Documents.  No Company may not assign or transfer any of its rights or Obligations under this Agreement without the prior written consent of the Administrative Agent and each Lender.

15.15     Captions.  Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

15.16     Customer Identification - USA Patriot Act Notice. Each Lender and LaSalle (for itself and not on behalf of any other party) hereby notifies the Loan Parties that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow such Lender or LaSalle, as applicable, to identify the Loan Parties in accordance with the Act.

15.17     INDEMNIFICATION BY THE COMPANIES.  IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE ADMINISTRATIVE AGENT AND THE LENDERS AND THE AGREEMENT TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, EACH COMPANY HEREBY JOINTLY AND SEVERALLY AGREES TO INDEMNIFY, EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE ADMINISTRATIVE AGENT AND EACH LENDER (EACH A “LENDER PARTY”) FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES AND EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”), INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF,
OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF CAPITAL SECURITIES, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION.  IF AND TO THE EXTENT THAT THE FOREGOING 

 

 

UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH COMPANY HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW.  ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.17 SHALL SURVIVE REPAYMENT OF THE LOANS, CANCELLATION OF THE NOTES, EXPIRATION OR TERMINATION OF THE LETTERS OF CREDIT, ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.

15.18     Nonliability of Lenders.  The relationship between the Companies on the one hand and the Lenders and the Administrative Agent on the other hand shall be solely that of borrower and lender.  Neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Loan Parties, on the one hand, and the Administrative Agent and the Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor.  Neither the Administrative Agent nor any Lender undertakes any responsibility to any Loan Party to review or inform any Loan Party of any matter in connection with any phase of any
Loan Party’s business or operations.  Each Company agrees, on behalf of itself and each other Loan Party, that neither the Administrative Agent nor any Lender shall have liability to any Loan Party (whether sounding in tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought.  NO LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY LENDER PARTY
HAVE ANY LIABILITY WITH RESPECT TO, AND EACH COMPANY ON BEHALF OF ITSELF AND EACH OTHER LOAN PARTY, HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE).  Each Company acknowledges that it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party.  No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Loan Parties and the Lenders

15.19     FORUM SELECTION AND CONSENT TO JURISDICTION.  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR 

 

 

THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.  EACH COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.  EACH COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS.  EACH COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

15.20     WAIVER OF JURY TRIAL.  EACH OF THE COMPANIES, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

15.21   JOINT AND SEVERAL LIABILITY.  Notwithstanding anything to the contrary contained herein, all Obligations of each Company hereunder shall be joint and several obligations of the Companies.

Notwithstanding any provisions of this Agreement to the contrary, it is intended that the joint and several nature of the Obligations of the Companies and the liens and security interests granted by the Companies to secure the Obligations, not constitute a “Fraudulent Conveyance” (as defined below).  Consequently, the Administrative Agent, the Lenders and the Companies agree that if the Obligations of a Company, or any liens or security interests granted by such Company securing the Obligations would, but for the application of this sentence, constitute a Fraudulent Conveyance, the Obligations of such Company and the liens and security interests securing such Obligations shall be valid and enforceable only to the maximum extent that would not cause such Obligations or such lien or security interest to constitute a Fraudulent Conveyance, and the Obligations of
such Company and this Agreement shall automatically be deemed to have been amended accordingly.  For purposes hereof, “Fraudulent Conveyance” means a fraudulent conveyance under Section 548 of Chapter 11 of Title II of the United States Code (11 U.S.C. § 101, et seq.), as amended (the “Bankruptcy Code”) or a fraudulent conveyance or fraudulent transfer under the applicable provisions of any fraudulent 

 

 

conveyance or fraudulent transfer law or similar law of any state, nation or other governmental unit, as in effect from time to time.

Each Company assumes responsibility for keeping itself informed of the financial condition of each other Company, and any and all endorsers and/or guarantors of any instrument or document evidencing all or any part of such other Company’s Obligations and of all other circumstances bearing upon the risk of nonpayment by such other Companies of their Obligations and each Company agrees that neither the Administrative Agent nor any Lender shall have any duty to advise such Company of information known to the Administrative Agent or any Lender regarding such condition or any such circumstances or to undertake any investigation not a part of its regular business routine.  If the Administrative Agent or any Lender, in its sole discretion, undertakes at any time or from time to time to provide any such information to a Company, neither the Administrative Agent nor such
Lender shall be under any obligation to update any such information or to provide any such information to such Company on any subsequent occasion.

The Administrative Agent and the Lenders are hereby authorized, without notice or demand and without affecting the liability of a Company hereunder or impairing the obligations of such Company, to, at any time and from time to time, (i) renew, extend, accelerate or otherwise change the time for payment of, or other terms relating to any other Company’s Obligations or otherwise modify, amend or change the terms of any promissory note or other agreement, document or instrument now or hereafter executed by a Company and delivered to the Administrative Agent; (ii) accept partial payments on any other Company’s Obligations; (iii) take and hold security or collateral for the payment of any other Company’s Obligations hereunder or for the payment of any guaranties of any other Company’s Obligations or other liabilities of any other Company and exchange,
enforce, waive and release any such security or collateral; (iv) apply such security or collateral and direct the order or manner of sale thereof as the Administrative Agent, in its sole discretion, may determine; and (v) settle, release, compromise, collect or otherwise liquidate any other Company’s Obligations and any security or collateral therefore in any manner.  The Administrative Agent shall have the exclusive right to determine the time and manner of application of any payments or credits, whether received from a Company or any other source, and such determination shall be binding on such Company.  All such payments and credits may be applied in whole or in part, to any of a Company’s Obligations as the Administrative Agent shall determine in its sole discretion without affecting the validity or enforceability of the Obligations of the other Companies.

Each Company hereby agrees that, except as hereinafter provided, its obligations hereunder shall be unconditional, irrespective of (i) the absence of any attempt to collect a Company’s Obligations from any Company or any guarantor or other action to enforce the same; (ii) the waiver or consent by the Administrative Agent or any Lender with respect to any provision of any instrument evidencing Company’s Obligations, or any part thereof, or any other agreement heretofore, now or hereafter executed by a Company and delivered to the Administrative Agent or any Lender; (iii) failure by the Administrative Agent to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for the Companies’ Obligations; (iv) the institution of any proceeding under the Bankruptcy Code or any similar proceeding, by or
against a Company or Administrative Agent’s election in any such proceeding of the application of Section 1111(b)(2) of the 

 

 

Bankruptcy Code; (v) any borrowing or grant of a security interest by any Company as debtor-in-possession, under Section 364 of the Bankruptcy Code; (vi) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of the Administrative Agent’s or any Lender’s claim(s) for repayment of any of Company’s Obligations; or (vii) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

No payment made by or for the account of a Company including, without limitation, (i) a payment made by such Borrower on behalf of another Company’s Obligations or (ii) a payment made by any other person under any guaranty, shall entitle such Company, by subrogation or otherwise, to any payment from such other Company or from or out of such other Company’s property and such Company shall not exercise any right or remedy against such other Company or any property of such other Company by reason of any performance of such Company of its joint and several obligations. 

15.22     Effect on Existing Credit Agreement; No Novation.  The Borrowers, the Lenders and the Administrative Agent hereby agree that as of the Closing Date: (i) the terms and provisions of the Existing Credit Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement; (ii) the Lenders and the Administrative Agent shall not have any obligations under the Existing Credit Agreement, except to the extent that any such obligations may be restated in this Agreement or in the other Loan Documents, and (iii) the execution and delivery of this Agreement shall not constitute or effect, or be deemed to constitute or effect a novation, refinancing, discharge, extinguishment or refunding of any of the
“Obligations” (as defined in the Existing Credit Agreement) or that portion of the existing Obligations which remain outstanding under this Agreement.

15.23     Publicity.  The Companies hereby consent to the issuance or dissemination by the Lenders to the public of information generally describing the credit accommodations entered into pursuant to this Agreement (as it may be amended, modified and supplemented from time to time) including without limitation the names and addresses of the Companies, a general description of the Companies’ businesses and the use of the Companies’ names and logos in connection therewith.

[signature pages follow]

 

 

 

The parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first set forth above.

 

	
            COMPANIES:
 	
            WESTELL TECHNOLOGIES, INC., as a Company and as the Company Representative
 

 

	
             
 	
            By:
 	
            ____________________________________
 
	
             
 	
            Title:
 	
            ____________________________________
 
	
             
 	
            Address:
 	
            750 North Commons Drive
 	
             

					

Aurora, Illinois 60504

 

 

WESTELL, INC., as a Company 

	
             
 	
            By:
 	
            ____________________________________
 
	
             
 	
            Title:
 	
            ____________________________________
 
	
             
 	
            Address:
 	
            750 North Commons Drive
 	
             

	
             
 	
            Aurora, Illinois 60504
 	
             

						

 

 

CONFERENCE PLUS, INC., as a Company

 

	
             
 	
            By:
 	
            ____________________________________
 
	
             
 	
            Title:
 	
            ____________________________________
 
	
             
 	
            Address:
 	
            750 North Commons Drive
 	
             

	
             
 	
            Aurora, Illinois 60504
 	
             

						

 

 

TELTREND LLC, as a Company

 

	
             
 	
            By:
 	
            ___________________________________
 	
             

	
             
 	
            Title:
 	
            ____________________________________
 
	
             
 	
            Address:
 	
            750 North Commons Drive
 	
             

	
             
 	
            Aurora, Illinois 60504
 	
             

							

 

 

Signature Page to Credit Agreement

 

 

 

ADMINISTRATIVE AGENT, 

ISSUING LENDER 

	
            AND A LENDER:
 	
            LASALLE BANK NATIONAL ASSOCIATION
 

 

	
             
 	
            By:
 	
            ____________________________________
 
	
            Revolving Loan Commitment:
 	
            Title:
 	
            ____________________________________
 
	
            $40,000,000
 	
            Address:
 	
            135 South LaSalle Street
 	
             

	
            Percentage:  100%
 	
            Chicago, Illinois 60603
 	
             

	
             
 	
            Attn:
 	
            Mark Mital
 	
             

								

 

 

Signature Page to Credit Agreement

 

 

 

ANNEX A

LENDERS AND PRO RATA SHARES

 

	
            Lender
  	
            Revolving Commitment Amount
  	
            Pro Rata  Share
  
	
            LaSalle Bank National Association 

 
 	
            $40,000,000
 	
            100%
 

 

 

Annex A

 

 

 

ANNEX B

ADDRESSES FOR NOTICES

COMPANIES:

c/o Westell Technologies, Inc.

750 North Commons Drive

Aurora, Illinois 60504

 

Attention: Ms. Amy Forster

Telephone: (630) 375-4271

Facsimile: (630)375-4940

LASALLE BANK NATIONAL ASSOCIATION, 

as the Administrative Agent, Issuing Lender and a Lender

Notices of Borrowing , Conversion, Continuation and Letter of Credit Issuance

135 South LaSalle Street

Chicago, Illinois 60603

Attention:  Mr. Mark Mital

Telephone: (312) 904-2747

Facsimile:  (312) 904-6546

All Other Notices

135 South LaSalle Street

Chicago, Illinois 60603

Attention:  Mr. Mark Mital

Telephone: (312) 904-2747

Facsimile:  (312) 904-6546

 

Annex B

 

 

 

EXHIBIT A

FORM OF AMENDED AND RESTATED 

REVOLVING LOAN NOTE

_______, 2006

	
            $__________________
 	
            Chicago, Illinois
 

Each of the undersigned, for value received, hereby jointly and severally promises to pay to the order of ______________ (the “Lender”) at the principal office of LaSalle Bank National Association (the “Administrative Agent”) in Chicago, Illinois, the aggregate unpaid amount of all Revolving Loans made to the undersigned by the Lender pursuant to the Credit Agreement referred to below (as shown on the schedule attached hereto (and any continuation thereof) or in the records of the Lender), such principal amount to be payable on the dates set forth in the Credit Agreement.

Each of the undersigned hereby jointly and severally further promises to pay interest on the unpaid principal amount of each Loan from the date of such Revolving Loan until such Revolving Loan is paid in full, payable at the rate(s) and at the time(s) set forth in the Credit Agreement.  Payments of both principal and interest are to be made in lawful money of the United States of America.

This Note evidences indebtedness incurred under, and is subject to the terms and provisions of, the Second Amended and Restated Credit Agreement, dated as of June 30, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement” terms not otherwise defined herein are used herein as defined in the Credit Agreement), among each of the undersigned, certain financial institutions (including the Lender) and the Administrative Agent, to which Credit Agreement reference is hereby made for a statement of the terms and provisions under which this Note may or must be paid prior to its due date or its due date accelerated.

This Note shall be in replacement of and in substitution for that certain Revolving Loan Note dated June 30, 2003, in the original principal amount of $30,000,000, made by Westell Technologies, Inc., Westell, Inc., Westell International, Inc., Conference Plus, Inc., and Teltrend LLC and payable to the order of the Lender (the “Original Note”). The indebtedness evidenced by the Original Note is continuing indebtedness, and nothing herein shall be deemed to constitute a payment, settlement or novation of the Original Note, or to release or otherwise adversely affect any lien, mortgage or security interest securing such indebtedness or any rights of the Lender against any guarantor, surety or other party primarily or secondarily liable for such indebtedness.

 

Exhibit A

 

 

 

This Note is made under and governed by the laws of the State of Illinois applicable to contracts made and to be performed entirely within such State.

WESTELL TECHNOLOGIES, INC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

WESTELL, INC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

TELTREND LLC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

CONFERENCE PLUS, INC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

 

Exhibit A

 

 

 

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

	
            To:
 	
            LaSalle Bank National Association, as the Administrative Agent
 

Please refer to the Second Amended and Restated Credit Agreement dated as of June 30, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), and CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell, and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.

 

	
            I.
 	
            Reports.  Enclosed herewith is a copy of the [annual audited/quarterly] report of the Companies and their respective Subsidiaries as at _____________, ____ (the “Computation Date”), which report fairly presents in all material respects the financial condition and results of operations [(subject to the absence of footnotes and to normal year-end adjustments)] of the Companies and their respective Subsidiaries as of the Computation Date and has been prepared in accordance with GAAP consistently applied.
 

 
 

	
            II.
 	
            Financial Tests.  The Company Representative hereby certifies and warrants to you that the following is a true and correct computation as at the Computation Date of the following ratios and/or financial restrictions contained in the Credit Agreement:
 

 

	
            A.
 	
            Section 11.14.1 - Minimum Fixed Charge Coverage Ratio
 	
             

	
             
 	
            1.
 	
            Consolidated Net Income
 	
            $________
 
	
             
 	
            2.
 	
            Plus:  Interest Expense
 	
            $________
 
	
             
 	
            income tax expense
 	
            $________
 
	
             
 	
            depreciation
 	
            $________
 
	
             
 	
            amortization
 	
            $________
 
	
             
 	
            3.
 	
            Total (EBITDA)
 	
            $________
 
	
             
 	
            4.
 	
            Income taxes paid
 	
            $________
 
	
             
 	
            5.
 	
            Unfinanced Capital Expenditures
 	
            $________
 
	
             
 	
            6.
 	
            Cash dividends
 	
            $________
 
						

 

 

Exhibit B - Page 1

 

 

 

	
             
 	
            7.
 	
            Other cash distributions
 	
            $________
 
	
             
 	
            8.
 	
            Stock purchases
 	
            $________
 
	
             
 	
            9.
 	
            Sum of (4), (5), (6), (7) and (8)
 	
            $________
 
	
             
 	
            10.
 	
            Remainder of (3) minus (9)
 	
            $________
 
	
             
 	
            11.
 	
            Cash Interest Expense
 	
            $________
 
	
             
 	
            12.
 	
            Required payments of
 	
             

					

principal of Funded Debt

	
             
 	
            (excluding Revolving Loans)
 	
            $________
 
	
             
 	
            13.
 	
            Sum of (11) and (12)
 	
            $________
 
	
             
 	
            14.
 	
            Ratio of (10) to (13)
 	
            ____ to 1
 	
             

	
             
 	
            15.
 	
            Minimum Required
 	
            1.50 to 1
 	
             

	
            B.
 	
            Section 11.14.2 - Minimum Tangible Net Worth
 	
             

	
             
 	
            1.
 	
            Capital Stock
 	
            $________
 
	
             
 	
            2.
 	
            Additional Paid In Capital
 	
            $________
 
	
             
 	
            3.
 	
            Retained Earnings
 	
            $________
 
	
             
 	
            4.
 	
            Sum of (1), (2) and (3)
 	
            $________
 
	
             
 	
            5.
 	
            Accumulated Deficit
 	
            $________
 
	
             
 	
            6.
 	
            Remainder of (4) minus (5)
 	
            $________
 
	
             
 	
            7.
 	
            Goodwill
 	
            $________
 
	
             
 	
            8.
 	
            General Intangibles
 	
            $________
 
	
             
 	
            9.
 	
            Deferred Income Taxes
 	
            $________
 
	
             
 	
            10.
 	
            Pre-paid Expenses
 	
            $________
 
	
             
 	
            11.
 	
            Sum of (7), (8), (9) and (10)
 	
            $________
 
	
             
 	
            12.
 	
            Tangible Net Worth
 	
             

	
             
 	
            (Remainder of (6) minus (11)
 	
            $________
 
								

 

	
             
 	
            13.
 	
            Minimum required
 	
            $________
 

 

 

Exhibit B - Page 2

 

 

 

	
            C.
 	
            Section 11.14.3 - Maximum Total Debt to EBITDA Ratio
 	
             

	
             
 	
            1.
 	
            Total Debt
 	
            $________
 
	
             
 	
            2.
 	
            EBITDA
 	
            $________
 
					

(from Item A(3) above)

	
             
 	
            3.
 	
            Ratio of (1) to (2)
 	
            ____ to 1
 	
             

	
             
 	
            4.
 	
            Maximum allowed
 	
            2.50 to 1
 	
             

	
            D.
 	
            Section 11.14.4 – Capital Expenditures
 	
             

	
             
 	
            1.
 	
            Capital Expenditures for the Fiscal Year
 	
            $________
 
	
             
 	
            2.
 	
            Maximum Permitted Capital Expenditures
 	
            $________
 
							

The Company Representative further certifies to you that no Event of Default or Unmatured Event of Default has occurred and is continuing.

The Company Representative has caused this Certificate to be executed and delivered by its duly authorized officer on _________, ____.

WESTELL TECHNOLOGIES, INC.

as Company Representative

By:                                          
                                

Name:                                          
                          

Title:                                          
                            

 

Exhibit B - Page 3

 

 

 

EXHIBIT C

FORM OF BORROWING BASE CERTIFICATE

	
            To:
 	
            LaSalle Bank National Association, as the Administrative Agent
 

Please refer to the Second Amended and Restated Credit Agreement dated as of June 30, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), and CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell, and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  This certificate (this “Certificate”), together with supporting calculations attached
hereto, is delivered to you pursuant to the terms of the Credit Agreement.  Capitalized terms used but not otherwise defined herein shall have the same meanings herein as in the Credit Agreement.

The Company Representative hereby certifies and warrants to the Administrative Agent and the Lenders that at the close of business on ______________, ____ (the “Calculation Date”), the Borrowing Base was $_____________, computed as set forth on the schedule attached hereto.

The Company Representative has caused this Certificate to be executed and delivered by its officer thereunto duly authorized on ___________, ______.

WESTELL TECHNOLOGIES, INC.,

as Company Representative

By:                                          
                                

Name:                                          
                          

Title:                                          
                            

 

Exhibit C - Page 1

 

 

 

SCHEDULE TO BORROWING BASE CERTIFICATE

Dated as of [_________________]

	
            1.
 	
            Gross Accounts
 	
            $_________
 
	
            2.
 	
            Less Ineligibles
 	
             

	
             
 	
            -
 	
            Prior:  Over 60 days past due date
 	
            $_________
 	
             

	
             
 	
            -
 	
            Credits in prior
 	
            $_________
 	
             

	
             
 	
            -
 	
            25% rule
 	
            $_________
 	
             

	
             
 	
            -
 	
            Contra reserves
 	
            $_________
 	
             

	
             
 	
            -
 	
            Cash sales & COD ‹ 60 PD
 	
            $_________
 	
             

	
             
 	
            -
 	
            Foreign - A/R
 	
            $_________
 	
             

	
             
 	
            -
 	
            Government - A/R
 	
            $_________
 	
             

	
             
 	
            -
 	
            Customer Deposits
 	
            $_________
 	
             

	
             
 	
            -
 	
            Other*
 	
            $_________
 	
             

	
             
 	
            -
 	
            Total
 	
            $_________
 
	
            3.
 	
            Eligible Accounts [Item 1 minus Item 2]
 	
            $_________
 
							

 

	
            4.
 	
            Item 3 times 80%
 	
            $_________
 
	
            5.
 	
            Gross Inventory
 	
            $_________
 
	
            6.
 	
            Less Ineligibles
 	
             

	
             
 	
            -
 	
            WIP
 	
            $_________
 	
             

	
             
 	
            -
 	
            Damaged Inventory
 	
            $_________
 	
             

	
             
 	
            -
 	
            Out on consignment to customer
 	
            $_________
 	
             

	
             
 	
            -
 	
            Warranty scrapped/accrual (net)
 	
            $_________
 	
             

	
             
 	
            -
 	
            Inventory in transit from vendor
 	
            $_________
 	
             

	
             
 	
            -
 	
            Other in transit
 	
            $_________
 	
             

	
             
 	
            -
 	
            Direct shipped
 	
            $_________
 	
             

	
             
 	
            -
 	
            Inventory obsolescence reserve
 	
            $_________
 	
             

	
             
 	
            -
 	
            Surplus inventory reserve
 	
            $_________
 	
             

	
             
 	
            -
 	
            Inventory no demand 18 months
 	
             

	
             
 	
            -
 	
            Other*
 	
            $_________
 	
             

	
             
 	
            -
 	
            Total
 	
            $_________
 
	
            7.
 	
            Eligible Inventory [Item 5 minus Item 6]
 	
             

	
             
 	
            $_________
 	
             

	
            8.
 	
            Item 7 times 50%
 	
            $_________
 
	
            9.
 	
            Inventory Cap [Lesser of (a) Item 8 and (b) $7,500,000]
 	
            $_________
 
	
            10.
 	
            Borrowing Base
 	
             

	
             
 	
            [Item 4 plus Item 9]
 	
            $_________
 
											

 

 

Exhibit C - Page 2

 

 

 

	
            11.
 	
            Lesser of Item 10 and the Revolving Commitment
 	
            $_________
 

 

	
            12.
 	
            Revolving Outstandings (includes Stated Amount of Letters of Credit)
 	
            $_________
 
	
            13.
 	
            Revolving Loan Availability
 	
             

	
             
 	
            [Excess of Item 11 over Item 12]
 	
            $_________
 
				

 

	
            14.
 	
            Required Prepayment
 	
             

	
             
 	
            [Excess of Item 12 over Item 11]
 	
            $_________
 
				

*Include all other components of the definition of Eligible Account or Eligible Inventory, as applicable, which are not listed in the prior line items.

 

Exhibit C - Page 3

 

 

 

EXHIBIT D

 

FORM OF

ASSIGNMENT AGREEMENT

 

Date:_________________

 

	
            To:
 	
            Westell Technologies, Inc.,
 	
             

	
             
 	
            as Company Representative
 

 

and

 

LaSalle Bank National Association, as the Administrative Agent

 

	
            Re:
 	
            Assignment under the Credit Agreement referred to below
 

 

Gentlemen and Ladies:

Please refer to Section 15.6.1 of the Second Amended and Restated Credit Agreement dated as of June 30, 2006 (as amended or otherwise modified from time to time, the “Credit Agreement”) among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), and CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell, and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).. Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Credit Agreement.

 (the “Assignor”) hereby sells and assigns, without recourse, to (the “Assignee”), and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Credit Agreement as of the date hereof equal to     % of all of the Loans, of the participation interests in the Letters of Credit and of the Commitments, such sale, purchase, assignment and assumption to be effective as of               , ___, or such later date on which the Company and the Administrative Agent shall have consented hereto (the “Effective Date”).  After giving effect to such sale, purchase,
assignment and assumption, the Assignee’s and the Assignor’s respective Percentages for purposes of the Credit Agreement will be as set forth opposite their names on the signature pages hereof.

The Assignor hereby instructs the Administrative Agent to make all payments from and after the Effective Date in respect of the interest assigned hereby directly to the Assignee.  The Assignor and the Assignee agree that all interest and fees accrued up to, but not including, the Effective Date are the property of the Assignor, and not the Assignee.  The Assignee agrees that, 

 

Exhibit D - Page 1

 

 

upon receipt of any such interest or fees, the Assignee will promptly remit the same to the Assignor.

The Assignor represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim. 

The Assignee represents and warrants to the Company Representative, on behalf of the Companies, and the Administrative Agent that, as of the date hereof, the Companies will not be obligated to pay any greater amount under Section 7.6 or 8 of the Credit Agreement than the Companies are obligated to pay to the Assignor under such Section.  [The Assignee has delivered, or is delivering concurrently herewith, to the Company Representative and the Administrative Agent the forms required by Section 7.6 of the Credit Agreement.] [INSERT IF ASSIGNEE IS ORGANIZED UNDER THE LAWS OF A JURISDICTION OTHER THAN THE UNITED STATES OF AMERICA OR A STATE THEREOF.]  The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section 15.6.1.

The Assignee hereby confirms that it has received a copy of the Credit Agreement.  Except as otherwise provided in the Credit Agreement, effective as of the Effective Date:

	
             
 	
            (a)
 	
            the Assignee (i) shall be deemed automatically to have become a party to the Credit Agreement and to have all the rights and obligations of a “Lender” under the Credit Agreement as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement as if it were an original signatory thereto; and
 

 

	
             
 	
            (b)
 	
            the Assignor shall be released from its obligations under the Credit Agreement to the extent specified in the second paragraph hereof.
 

 

The Assignee hereby advises each of you of the following administrative details with respect to the assigned Loans and Commitment:

 

	
             
 	
            (A)
 	
            Institution Name:
 

 

Address:

 

Attention:

 

Telephone:

 

Facsimile:

 

	
             
 	
            (B)
 	
            Payment Instructions:
 

 

 

Exhibit D - Page 2

 

 

 

This Assignment shall be governed by and construed in accordance with the laws of the State of Illinois.

Please evidence your receipt hereof and your consent to the sale, assignment, purchase and assumption set forth herein by signing and returning counterparts hereof to the Assignor and the Assignee.

 

	
            Percentage =  
 	
            %
 	
            [ASSIGNEE]
 

 

	
             
 	
            By:
 	
            ______________________________
 

Name:                                          
                    

	
             
 	
            Title:
 	
            ______________________________
 

 

	
            Adjusted Percentage =  
 	
            %
 	
            [ASSIGNOR]
 

 

 

	
             
 	
            By:
 	
                                                      
                    
 
	
             
 	
            Name:                                          
                    
 	
             

	
             
 	
            Title:
 	
                                                      
                    
 
				

 

 

ACKNOWLEDGED AND CONSENTED TO

this ____ day of ________, ____

 

LASALLE BANK NATIONAL ASSOCIATION, as the Administrative Agent

 

 

	
            By:
 	
            ______________________________
 
	
            Name:
 	
            ______________________________
 
	
            Title:
 	
            ______________________________
 

 

 

ACKNOWLEDGED AND CONSENTED TO

	
            this  
 	
            day of  
 	
            ,  
 

 

WESTELL TECHNOLOGIES, INC.,

as Company Representative

 

 

	
            By:
 	
            ______________________________
 
	
            Name:
 	
            ______________________________
 

Title: ______________________________

 

Exhibit D - Page 3

 

 

 

EXHIBIT E

 

FORM OF NOTICE OF BORROWING

	
             
 	
            To:
 	
            LaSalle Bank National Association, as the Administrative Agent
 

Please refer to the Second Amended and Restated Credit Agreement dated as of June 30, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), and CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell, and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell, Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Terms used but not otherwise defined herein are used herein as defined in the Credit
Agreement.

The Company Representative hereby gives irrevocable notice, pursuant to Section 2.2.2 of the Credit Agreement, of a request hereby for a borrowing as follows:

(i)     The requested borrowing date for the proposed borrowing (which is a Business Day) is ______________, ____.

	
             
 	
            (ii)
 	
            The aggregate amount of the proposed borrowing is $______________.
 

(iii)   The type of Revolving Loans comprising the proposed borrowing are [Base Rate] [LIBOR] Loans.

(iv)   The duration of the Interest Period for each LIBOR Loan made as part of the proposed borrowing, if applicable, is ___________ months (which shall be 1, 2, or 3 months).

The Company Representative hereby certifies that on the date hereof and on the date of borrowing set forth above, and immediately after giving effect to the borrowing requested hereby: (i) there exists and there shall exist no Unmatured Event of Default or Event of Default under the Credit Agreement; and (ii) each of the representations and warranties contained in the Credit Agreement and the other Loan Documents is true and correct as of the date hereof, except to the extent that such representation or warranty expressly relates to another date and except for changes therein expressly permitted or expressly contemplated by the Credit Agreement.

 

Exhibit E

 

 

 

The Company Representative has caused this Notice of Borrowing to be executed and delivered by its officer thereunto duly authorized on ___________, ______.

WESTELL TECHNOLOGIES, INC.,

as Company Representative

 

By:                                          
                                

Name:                                          
                          

Title:                                          
                            

 

Exhibit E

 

 

 

EXHIBIT F

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

	
             
 	
            To:
 	
            LaSalle Bank National Association, as the Administrative Agent
 

Please refer to the Second Amended and Restated Credit Agreement dated as of June 30, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), and CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell, and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell, Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.

The Company Representative hereby gives irrevocable notice, pursuant to Section 2.2.3 of the Credit Agreement, of its request to:

(a)    on [    date    ] convert $[________] of the aggregate outstanding principal amount of the [_______] Loan, bearing interest at the [________] Rate, into a(n) [________] Loan [and, in the case of a LIBOR Loan, having an Interest Period of [_____] month(s)];*

[(b)  on [    date    ] continue $[________]of the aggregate outstanding principal amount of the [_______] Loan, bearing interest at the LIBOR Rate, as a LIBOR Loan having an Interest Period of [_____] month(s)].

 

The Company Representative hereby represents and warrants that all of the conditions contained in Section 12.2 of the Credit Agreement have been satisfied on and as of the date hereof, and will continue to be satisfied on and as of the date of the conversion/continuation requested hereby, before and after giving effect thereto.

_________________________

* 

 

 

Exhibit F

 

 

 

The Company Representative has caused this Notice of Conversion/Continuation to be executed and delivered by its officer thereunto duly authorized on ___________, ______.

WESTELL TECHNOLOGIES, INC.,

as Company Representative

By:                                          
                          

Name:                                          
                    

Title:                                          
                      

 

Exhibit F

 

 

 

EXHIBIT G - FORM OF JOINDER TO CREDIT AGREEMENT

This JOINDER AGREEMENT (this “Agreement”) dated as of [______] is executed by the undersigned for the benefit of LaSalle  Bank National Association (in its individual capacity (“LaSalle”), as the Administrative Agent (as defined below) in connection with that certain Second Amended and Restated Credit Agreement (as amended, modified or supplemented from time to time, the "Credit Agreement") dated as of June __, 2006 by and among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by
merger to Teltrend, Inc. (“Teltrend”), CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”), the financial institutions that are or may from time to time become parties thereto (together with their respective successors and assigns, the “Lenders”) and LaSalle, as the initial “Issuing Lender” and as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

The undersigned is required to execute this Agreement pursuant to Section 10.11 of the Credit Agreement.

In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each signatory hereby agrees as follows:

1.     The undersigned assumes (i) all the obligations of a [Company]/[Guarantor] under the Credit Agreement, the Master Letter of Credit Agreement and each other Loan Document to which the [Companies]/[Guarantors] are a party and agrees that such person or entity is a [Company]/[Guarantor] and bound as a [Company]/[Guarantor] under the terms of the Credit Agreement, the Master Letter of Credit Agreement and each other Loan Document to which the [Companies]/[Guarantors] are a party as if it had been an original signatory to such agreements.  In furtherance of the foregoing, the undersigned
hereby (i) collaterally assigns, and pledges and grants to Agent a security interest in all of its right, title and interest in and to the Collateral owned by it to sec-ure the Obligations and (ii) appoints the Company Representative as its representative and agent to act on its behalf in accordance with Section 2.2.4 of the Credit Agreement, which appointment Company Representative hereby accepts.

2.     Schedules [___________] of the Credit Agreement are hereby amended solely to add the information relating to the undersigned as set out on Schedules [__________] respectively, hereto. The undersigned hereby makes and affirms, for the benefit of the Administrative Agent, the representations and warranties set forth in the Credit Agreement applicable to the undersigned and confirms that such representations and warranties are true and correct in all material respects with respect to the undersigned on the date hereof after giving effect to such amendment to such Schedules.  The undersigned hereby makes and affirms, for the benefit of Administrative Agent, the representations and warranties set forth in the Credit Agreement and other Loan Documents applicable to the undersigned and the applicable Collateral and confirms
that such representations and warranties are true and correct in all 

 

 

material respects with respect to the undersigned on the date hereof after giving effect to such amendment to such Schedules.

3.     In furtherance of its obligations under Section 5 of the Guaranty and Collateral Agreement, the undersigned hereby authorizes the Administrative Agent to file UCC financing statements naming such person or entity as debtor and the Administrative Agent as secured party, and describing its Collateral and such other documentation as the Administrative Agent (or its successors or assigns) may reasonably require to evidence, protect and perfect the liens created by the Credit Agreement, as modified hereby.  The undersigned acknowledges the authorizations given to Agent under Section 5 of the Guaranty and Collateral Agreement and otherwise.

4.     The undersigned’s address for notices under the Credit Agreement shall be the address of the Company Representative set forth in the Credit Agreement and the undersigned hereby appoints the Company Representative as its agent to receive notices under the Credit Agreement.

5.     This Agreement shall be deemed to be part of, and a modification to, each of the Credit Agreement and each other Credit Agreement to which the undersigned has joined as a [Company]/[Guarantor] and shall be governed by all the terms and provisions of the Credit Agreement, with respect to the modifications intended to be made to the Credit Agreement and each other Credit Agreement to which the undersigned has joined as a [Company]/[Guarantor], which terms are incorporated herein by reference, are ratified and confirmed and shall continue in full force and effect as valid and binding agreements of each such person or entity enforceable against such person or entity (subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law)).  The undersigned hereby waives notice of the Administrative Agent’s acceptance of this Agreement.  The undersigned will deliver an executed original of this Agreement to the Administrative Agent.

[Signature Page Follows]

 

Exhibit G

 

 

 

[add signature block for each new [Company]/[Guarantor]]

 

 

Acknowledged and Agreed to:

WESTELL TECHNOLOGIES, INC., as the Company Representative

 

By:_________________________________

Name:  

	
            Title:  
 

The foregoing is accepted and agreed to as of the date set forth above:

 

LASALLE BANK NATIONAL ASSOCIATION,

as the Administrative Agent

 

By:_________________________________

Name: ______________________________

	
             
 	
            Title:  
 	
            ______________________________
 

 

 

 

 

Exhibit GExecution

 

 

 

AMENDED AND RESTATED GUARANTY AND COLLATERAL AGREEMENT

dated as of June 30, 2006

among

WESTELL TECHNOLOGIES, INC.,

WESTELL, INC.,

TELTREND LLC,

and

CONFERENCE PLUS, INC.

and

WESTELL TECHNOLOGIES, INC.,

as the Company Representative

and

THE OTHER PARTIES HERETO,

as Grantors,

and

LASALLE BANK NATIONAL ASSOCIATION,

as the Administrative Agent

 

 

 

 

 

AMENDED AND RESTATED GUARANTY AND COLLATERAL AGREEMENT

THIS AMENDED AND RESTATED GUARANTY AND COLLATERAL AGREEMENT dated as of June 30, 2006 (this “Agreement”) is entered into among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell, and Teltrend, collectively, the “Companies” and each, individually, a “Company”), Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”) and each other Person signatory hereto as a Grantor (together with any other Person that becomes a party hereto as provided herein, the “Grantors”) in favor of LASALLE BANK NATIONAL ASSOCIATION, as the Administrative Agent for all the Lenders party to the Credit Agreement (as hereafter defined).

The Administrative Agent, the Lenders and the Companies are party to that certain Amended and Restated Loan and Security Agreement dated as of August 31, 2000 (as the same has been amended, restated, supplemented or otherwise modified as of the date hereof, the “Existing Credit Agreement”), pursuant to which the Lenders have made certain loans, advances and other financial accommodations to the Companies and the Companies have granted to the Administrative Agent, for the benefit of the Lenders and any other lenders who from time to time may become party to the Existing Credit Agreement, a lien on and a security interest in all of the Companies’ real, personal and intellectual property to secure the Companies’ “Obligations” under the Existing Credit Agreement (as defined therein) (collectively, the
“Existing Obligations”).

Pursuant to the Credit Agreement, the Administrative Agent, the Companies and the Lenders amended and restated the Existing Credit Agreement in its entirety to, among other things, (i) modify the termination date and increase the amount of the revolving credit facility (which includes letters of credit), (ii) modify certain financial covenants, and (iii) otherwise amend and restate the Existing Credit Agreement.

It is the intention of the Companies, the Lenders and the Administrative Agent that the amendment and restatement of the Existing Credit Agreement shall not effect a refinancing or novation of the Existing Obligations which shall remain outstanding under Credit Agreement (the “Restructured Obligations”), but rather a modification of the terms governing repayment of such Restructured Obligations, which Restructured Obligations shall remain outstanding as of the date hereof and shall remain secured by the “Collateral” (as defined herein).

It is a condition precedent to each Lender’s obligation to extend credit under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of all the Lenders to amend and restate Section 4 of the Existing Credit Agreement and any pledge, guaranty or security agreement executed by or on behalf of the Companies in favor of the Administrative Agent in connection with the Existing Credit Agreement.

 

 

 

 

 

 

The Lenders have severally agreed to extend credit to the Companies pursuant to the Credit Agreement. The Companies are affiliated with each other Grantor. The proceeds of credit extended under the Credit Agreement will be used in part to enable the Companies to make valuable transfers to the Grantors in connection with the operation of their respective businesses. The Companies and the other Grantors are engaged in interrelated businesses, and each Grantor will derive substantial direct and indirect benefit from extensions of credit under the Credit Agreement. 

In consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to extend credit thereunder, each Grantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders, as follows:

SECTION 1  DEFINITIONS.

1.1          Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the UCC: Accounts, Certificated Security,  Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Goods, Health Care Insurance Receivables, Instruments, Inventory, Leases, Letter-of-Credit Rights, Money, Payment Intangibles, Supporting Obligations, and Tangible Chattel Paper.

	
             
  	
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            When used herein the following terms shall have the following meanings:
 

Agreement has the meaning set forth in the preamble hereto.

Chattel Paper means all “chattel paper” as such term is defined in Section 9-102(a)(11) of the UCC and, in any event, including with respect to any Grantor, all Electronic Chattel Paper and Tangible Chattel Paper.

Collateral means (a) all of the personal property now owned or at any time hereafter acquired by any Grantor or in which any Grantor now has or at any time in the future may acquire any right, title or interest, including all of each Grantor’s Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Health Care Insurance Receivables, Farm Products, Goods, Instruments, Intellectual Property, Inventory, Investment Property, Leases, Letter-of-Credit Rights, Money, Supporting Obligations and Identified Claims, (b) all books and records pertaining to any of the foregoing, (c) all Proceeds and products of any of the foregoing, and (d) all collateral security and guaranties given by any Person with respect to any of the foregoing. Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof. 

Company Obligations means all Obligations of the Companies.

Copyrights means all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, including those listed on Schedule 5, all registrations and recordings 

 

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thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office, and the right to obtain all renewals of any of the foregoing.

Copyright Licenses means all written agreements naming any Grantor as licensor or licensee, including those listed on Schedule 5, granting any right under any Copyright, including the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

Credit Agreement means the Second Amended and Restated Credit Agreement of even date herewith among the Companies, the Lenders and the Administrative Agent, as amended, supplemented, restated or otherwise modified from time to time.

Fixtures means all of the following, whether now owned or hereafter acquired by a Grantor: plant fixtures; business fixtures; other fixtures and storage facilities, wherever located; and all additions and accessories thereto and replacements therefor.

General Intangibles means all “general intangibles” as such term is defined in Section 9-102(a)(42) of the UCC and, in any event, including with respect to any Grantor, all Payment Intangibles and all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Grantor is a party or under which such Grantor has any right, title or interest or to which such Grantor or any property of such Grantor is subject, as the same from time to time may be amended, supplemented or otherwise modified, including, without limitation, (a) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of such Grantor to damages arising thereunder and (c) all rights of such Grantor to perform and to exercise all remedies thereunder; provided, that the foregoing limitation shall not affect, limit, restrict or impair the grant by such Grantor of a security interest pursuant to this Agreement in any Receivable or any money or other amounts due or to become due under any such Payment Intangible, contract, agreement, instrument or indenture.

Guarantor Obligations means, collectively, with respect to each Guarantor, all Obligations of such Guarantor.

Guarantors means the collective reference to each Grantor other than the Companies, if any.

Identified Claims means the Commercial Tort Claims described on Schedule 7 as such schedule shall be supplemented from time to time.

Intellectual Property means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

 

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Intercompany Note means any promissory note evidencing loans made by any Grantor to any other Grantor.

Investment Property means the collective reference to (a) all “investment property” as such term is defined in Section 9-102(a)(49) of the UCC (other than the equity interest of any foreign Subsidiary excluded from the definition of Pledged Equity), (b) all “financial assets” as such term is defined in Section 8-102(a)(9) of the UCC, and (c) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Equity.

Issuers means the collective reference to each issuer of any Investment Property.

Paid in Full means (a) the payment in full in cash and performance of all Secured Obligations, (b) the termination of all Commitments and (c) either (i) the expiration (so long as not giving rise to a right to), cancellation and return to the Administrative Agent of all Letters of Credit or (ii) the cash collateralization of all Letters of Credit in accordance with the Credit Agreement.

Patents means (a) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, including any of the foregoing referred to in Schedule 5, (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including any of the foregoing referred to in Schedule 5, and (c) all rights to obtain any reissues or extensions of the foregoing.

Patent Licenses means all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including any of the foregoing referred to in Schedule 5.

Pledged Equity means the equity interests listed on Schedule 1, together with any other equity interests, certificates, options or rights of any nature whatsoever in respect of the equity interests of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect.

Pledged Notes means all promissory notes listed on Schedule 1, all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by any Grantor (other than promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business.

Proceeds means all “proceeds” as such term is defined in Section 9-102(a)(64) of the UCC and, in any event, shall include all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

Receivable means any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including any Accounts).

Secured Obligations means, collectively, the Company Obligations and Guarantor Obligations.

 

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Securities Act means the Securities Act of 1933, as amended.

Trademarks means (a) all trademarks, trade names, corporate names, the company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, including any of the foregoing referred to in Schedule 5, and (b) the right to obtain all renewals thereof.

Trademark Licenses means, collectively, each agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including any of the foregoing referred to in Schedule 5.

UCC means the Uniform Commercial Code as in effect on the date hereof and from time to time in the State of Illinois, provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interests in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect on or after the date hereof in any other jurisdiction, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy.

SECTION 2  GUARANTY.

2.1          Guaranty. (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, as a primary obligor and not only a surety, guaranties to the Administrative Agent, for the ratable benefit of the Lenders and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Company when due (whether at the stated maturity, by acceleration or otherwise) of the Company Obligations.

(b)          Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guarantied by such Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

(c)          Each Guarantor agrees that the Secured Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guaranty contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

(d)          Subject to reinstatement pursuant to Section 8.19, the guaranty contained in this Section 2 shall remain in full force and effect until all of the Secured Obligations shall have been Paid in Full.

 

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(e)          No payment made by any of the Companies, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any Lender from any of the Companies, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Secured Obligations or any payment received or collected from such Guarantor in respect of the Secured Obligations), remain liable for the Secured
Obligations up to the maximum liability of such Guarantor hereunder until the Secured Obligations are Paid in Full, subject to reinstatement pursuant Section 8.19.

2.2          Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall remain liable to the Administrative Agent and the
Lenders for the full amount guarantied by such Guarantor hereunder.

2.3          No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Company or any other Guarantor or any collateral security or guaranty or right of offset held by the Administrative Agent or any Lender for the payment of the Secured Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Companies or any other Guarantor in respect of payments made by such Guarantor hereunder, until all of the Secured Obligations are Paid in Full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Secured Obligations shall not have been Paid in Full, such amount shall be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Secured Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

2.4          Amendments, etc. with respect to the Secured Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Secured Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender and any of the Secured Obligations continued, and the Secured Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guaranty therefor or right of offset with respect 

 

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thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all the Lenders, as the case may be) may deem advisable from time to time. Neither the Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for the guaranty contained in this Section 2 or any property subject thereto.

The Administrative Agent or any Lender may, from time to time, at its sole discretion and without notice to any Guarantor (or any of them), take any or all of the following actions without affecting any of the Secured Obligations:  (a) retain or obtain a security interest in any property to secure any of the Secured Obligations or any obligation hereunder, (b) retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to the Grantors, with respect to any of the Secured Obligations, (c) extend or renew any of the Secured Obligations for one or more periods (whether or not longer than the original period), alter or exchange any of the Secured Obligations, or release or compromise any obligation of any of the Grantors hereunder or any obligation of any nature of any other obligor with respect to any of the Secured Obligations, (d) release
any guaranty or right of offset or its security interest in, or surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Secured Obligations or any obligation hereunder, fail to perfect or keep perfected or impair any such security interest, or extend or renew for one or more periods (whether or not longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such property, and (e) resort to the Grantor (or any of them) for payment of any of the Secured Obligations when due, whether or not the Administrative Agent or such Lender shall have resorted to any property securing any of the Secured Obligations or any obligation hereunder or shall have proceeded against any other of the Grantor or any other obligor primarily or secondarily obligated with respect to any of the Secured Obligations.

2.5          Waivers. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guaranty contained in this Section 2 or acceptance of the guaranty contained in this Section 2; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guaranty contained in this Section 2, and all dealings between any of the Companies and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guaranty contained in this Section 2. Each Guarantor waives (a) diligence, presentment, protest, demand for payment and notice of default, dishonor or nonpayment and all other notices whatsoever to or upon the any of the Companies or any of the Guarantors with respect to the Secured Obligations, (b) notice of the existence or creation or non-payment of all or any of the Secured Obligations and (c) all diligence in collection or protection of or realization upon any Secured Obligations or any security for or guaranty of any Secured Obligations.

 

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2.6          Payments. Each Guarantor hereby guaranties that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent specified in the Credit Agreement.

 

SECTION 3  GRANT OF SECURITY INTEREST.

3.1          Grant. Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent, in each case, for the ratable benefit of the Lenders and (to the extent provided herein) their Affiliates, a continuing security interest in all of its Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Company Obligations or the Guarantor Obligations, as the case may be. Notwithstanding the foregoing, the Collateral shall not include:  any Intellectual Property to the extent (and only to the extent) the granting of a security interest pursuant to this Agreement would render such Intellectual Property unenforceable or is
prohibited by, or would result in a breach of the terms of, or constitute a default thereunder; provided that the foregoing exclusion shall not apply if: (A) such prohibition has been waived or a security interest with respect thereto has been consented to by the other party thereto or (B) such prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of Article 9 of the UCC, as applicable and as then in effect in any relevant jurisdiction, or pursuant to any other applicable law or principles of equity; provided, further, immediately upon the ineffectiveness, lapse or termination of any such provision, Grantors shall be deemed to have granted a security interest in, all of their right, title and interest in and to such personal property and fixtures of Grantors as if such provisions had never been in effect; and provided, further, the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Agent’s
unconditional, continuing security interest in and to all rights, title and interests of Grantors in or to any payment obligations or other rights to receive monies due or to become due under any such personal property and fixtures. Grantors hereby represent and warrant to the Agent that the property excluded from the Collateral pursuant to any of the provisions of this paragraph is not material to the business, operations or financial condition of Grantors or their Subsidiaries, taken as a whole. Upon the Administrative Agent’s request therefor, each Grantor shall provide the Administrative Agent with a schedule of the Intellectual Property that contain any such restrictions of the type set forth in this paragraph. Each Grantor shall give written notice to the Administrative Agent prior to entering into any material license, contract, agreement, Intellectual Property or General Intangible containing any such restriction on the grant of a security interest therein. At
Administrative Agent’s request, each Grantor hereby covenants to use its commercially reasonable efforts to obtain any such consents or approvals to the grant of a security interest therein.

 

SECTION 4  REPRESENTATIONS AND WARRANTIES.

To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Companies thereunder, each Grantor jointly and severally hereby represents and warrants to the Administrative Agent and each Lender that:

4.1          Title; No Other Liens. Each Grantor has good and marketable title to, or a valid leasehold interest in each item of Collateral, in each case, free and clear of any and all 

 

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Liens other than Permitted Liens. No financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except filings evidencing Permitted Liens and filings for which termination statements have been delivered to the Administrative Agent.

4.2          Perfected First Priority Liens. The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 2 (which, in the case of all filings and other documents referred to on Schedule 2, have been delivered to the Administrative Agent in completed and duly executed form, as applicable) will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Lenders, as collateral security for each Grantor’s Secured Obligations, enforceable in accordance with the terms hereof against all creditors of each Grantor and any Persons
purporting to purchase any Collateral from each Grantor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Permitted Liens for which priority is accorded under applicable law. The filings and other actions specified on Schedule 2 constitute all of the filings and other actions necessary to perfect all security interests granted hereunder. 

4.3          Grantor Information. On the date hereof, Schedule 3 sets forth (a) each Grantor’s jurisdiction of organization, (b) the location of each Grantor’s chief executive office, (c) each Grantor’s exact legal name as it appears on its organizational documents and (d) each Grantor’s organizational identification number (to the extent a Grantor is organized in a jurisdiction which assigns such numbers) and federal employer identification number.

4.4          Collateral Locations. On the date hereof, Schedule 4 sets forth (a) each place of business of each Grantor (including its chief executive office), (b) all locations where all Inventory and the Equipment owned by each Grantor is kept, and (c) whether each such Collateral location and place of business (including each Grantor’s chief executive office) is owned or leased (and if leased, specifies the complete name and notice address of each lessor). No Collateral is located outside the United States or in the possession of any lessor, bailee, warehouseman or consignee, except as indicated on Schedule 4.

4.5          Certain Property. None of the Collateral constitutes, or is the Proceeds of, (a) Farm Products, (b) Health Care Insurance Receivables or (c) vessels, aircraft or any other property subject to any certificate of title or other registration statute of the United States, any State or other jurisdiction, except for personal vehicles owned by the Grantors and used by employees of the Grantors in the ordinary course of business. 

4.6          Investment Property. (a) The Pledged Equity pledged by each Grantor hereunder constitutes all the issued and outstanding equity interests of each Issuer owned by such Grantor.

(b)          To the extent applicable, all of the Pledged Equity has been duly and validly issued and is fully paid and nonassessable.

(c)          Each of the Pledged Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms (subject to 

 

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the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing). No obligor with respect to any Pledged Note has any defense, offset or counterclaim with respect to payment of such Pledged Note.

(d)          Schedule 1 lists all Investment Property owned by each Grantor. Each Grantor is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except Permitted Liens.

4.7          Receivables. (a) No material amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper which has not been delivered (and appropriately indorsed to) the Administrative Agent.

	
             
  	
            (b)
 	
            No obligor on any Eligible Receivable is a governmental authority.
 

(c)          The amounts represented by such Grantor to the Lenders from time to time as owing to such Grantor in respect of the Receivables (to the extent such representations are required by any of the Loan Documents) will at all such times be accurate.

4.8          Intellectual Property. (a) Schedule 5 lists all Copyrights, Patent and Trademark registrations and applications and all material unregistered Copyrights, Copyright Licenses, Patent Licenses, Trademarks and Trademark Licenses owned by such Grantor in its own name on the date hereof.

(b)          On the date hereof, all material Intellectual Property owned by any Guarantor is valid, subsisting, unexpired and enforceable and has not been abandoned.

(c)          Except as set forth in Schedule 5, none of the material Intellectual Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

(d)          Each Grantor owns and possesses or has a license or other right to use all Intellectual Property as is necessary for the conduct of the businesses of such Grantor, without any infringement upon rights of others which could reasonably be expected to have a Material Adverse Effect.

4.9          Depositary and Other Accounts. All depositary and other accounts maintained by each Grantor are described on Schedule 6 hereto, which description includes for each such account the name of the Grantor maintaining such account, the name, address, telephone and fax numbers of the financial institution at which such account is maintained, the account number and the account officer, if any, of such account.

 

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SECTION 5  COVENANTS.

Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and after the date of this Agreement until the Secured Obligations shall have been Paid in Full:

5.1          Delivery of Instruments, Certificated Securities and Chattel Paper. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly indorsed in a manner reasonably to the Administrative Agent, to be held as Collateral pursuant to this Agreement. 

5.2          Maintenance of Perfected Security Interest; Further Documentation. (a)Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest against the claims and demands of all Persons whomsoever.

(b)          Such Grantor will furnish to the Administrative Agent and the Lenders from time to time (but in any event no more than two times per year unless an Event of Default shall have occurred and is continuing) statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as the Administrative Agent may reasonably request, all in reasonable detail.

(c)          At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded or filed, as applicable, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including (i) filing any financing or continuation statements under the UCC (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby and (ii) in the case of Investment Property and any other relevant Collateral, taking any actions necessary to enable the Administrative
Agent to obtain “control” (within the meaning of the applicable UCC) with respect thereto.

5.3          Changes in Locations, Name, etc. Such Grantor shall not, except upon 30 days’ prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a) all additional financing statements, landlord waivers and other documents reasonably requested by the Administrative Agent as to the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 4 showing any additional location at which Inventory or Equipment shall be kept:

(i)           change its jurisdiction of organization or the location of its chief executive office from that specified on Schedule 3 or in any subsequent notice delivered pursuant to this Section 5.3; or

(ii)          change its name, organizational identification number or organizational type.

 

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5.4          Notices. Such Grantor will advise the Administrative Agent and the Lenders promptly, in reasonable detail, of:

(a)          any Lien (other than Permitted Liens) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and

(b)          the occurrence of any other event which could reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or on the Liens created hereby.

5.5          Investment Property. (a) If such Grantor shall become entitled to receive or shall receive any certificate, option or rights in respect of the equity interests of any Issuer, whether in addition to, in substitution for, as a conversion of, or in exchange for, any of the Pledged Equity, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and the Lenders and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated instrument of transfer covering such certificate duly executed in blank by such Grantor to be held by the
Administrative Agent, subject to the terms hereof, as additional Collateral for the Secured Obligations. Upon the occurrence and during the continuance of an Event of Default, (i) any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall be paid over to the Administrative Agent to be held by it hereunder as additional Collateral for the Secured Obligations, and (ii) in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected Lien in favor of the Administrative Agent, for the ratable benefit of the Lenders, be delivered to the Administrative Agent to be held by it hereunder as additional Collateral for the Secured
Obligations. Upon the occurrence and during the continuance of an Event of Default, if any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of such Grantor, as additional Collateral for the Secured Obligations.

(b)          Without the prior written consent of the Administrative Agent, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any equity interests of any nature or to issue any other securities or interests convertible into or granting the right to purchase or exchange for any equity interests of any nature of any Issuer, except, in each case, as permitted by the Credit Agreement, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement) other than, with respect to Investment Property not constituting Pledged Equity or Pledged Notes, any such action which is not prohibited by the Credit
Agreement, (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for Permitted Liens, or (iv) enter into 

 

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any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof, except, with respect to such Investment Property, shareholders’ agreements entered into by such Grantor with respect to Persons in which such Grantor maintains an ownership interest of 50% or less in accordance with the Credit Agreement.

(c)          In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 5.5(a) with respect to the Investment Property issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to such Grantor with respect to all actions that may be required of it pursuant to Section 6.3(c) or 6.7 regarding the Investment Property issued by it.

5.6          Receivables. (a) Other than in the ordinary course of business consistent with its past practice and in amounts which are not material to such Grantor, or at any time during the occurrence and continuance of an Event of Default, such Grantor will not (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could adversely affect the value thereof.

(b)          Such Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of more than 5% of the aggregate amount of the then outstanding Receivables for all Grantors.

5.7          Intellectual Property. (a) Such Grantor (either itself or through licensees) will (i) continue to use each Trademark material to its business in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable law, and (iv) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any way.

(b)          Such Grantor (either itself or through licensees) will not do any act, or omit to do any act, whereby any Patent material to its business may become forfeited, abandoned or dedicated to the public.

(c)          Such Grantor (either itself or through licensees) (i) will employ each Copyright material to its business and (ii) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material portion of such Copyrights may become invalidated or otherwise impaired. Such Grantor will not (either itself or through licensees) do any act whereby any material portion of such Copyrights may fall into the public domain.

 

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(d)          Such Grantor (either itself or through licensees) will not do any act that knowingly uses any Intellectual Property material to its business to infringe the intellectual property rights of any other Person.

(e)          Such Grantor will notify the Administrative Agent and the Lenders within 15 days if it knows, or has reason to know, that any application or registration relating to any material Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding, such Grantor’s ownership of, or the validity of, any material Intellectual Property or such Grantor’s right to register the same or to own and maintain the same.

(f)           Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such filing to the Administrative Agent concurrently with the next delivery of financial statements of the Company pursuant to Section 10.1 of the Credit Agreement. Upon the request of the Administrative Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Administrative Agent may request to
evidence the Administrative Agent’s and the Lenders’ security interest in any Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby.

(g)          Except as noted in Schedule 5 of this Agreement, such Grantor will take all reasonable and necessary steps to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of all material Intellectual Property owned by it.

(h)          In the event that any material Intellectual Property is infringed upon or misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify the Administrative Agent after it learns thereof and, to the extent, in its reasonable judgment, such Grantor determines it appropriate under the circumstances, sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution.

	
             
  	
            5.8
 	
            Intentionally omitted.
 

5.9          Depositary and Other Deposit Accounts. Each Grantor shall maintain all of its principal deposit accounts with the Administrative Agent. No Grantor shall open any depositary or other deposit accounts unless such Grantor shall have given the Administrative Agent 10 days’ prior written notice of its intention to open any such new deposit accounts. The Grantors shall deliver to the Administrative Agent a revised version of Schedule 6 showing any changes thereto within 30 days of any such change. Each Grantor hereby authorizes the financial 

 

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institutions at which such Grantor maintains a deposit account to provide the Administrative Agent with such information with respect to such deposit account as the Administrative Agent may from time to time reasonably request, and each Grantor hereby consents to such information being provided to the Administrative Agent. Subject to the terms of the Credit Agreement, each Grantor will, upon the Administrative Agent’s request, cause each financial institution at which such Grantor maintains a depositary or other deposit account to enter into a bank agency or other similar agreement with the Administrative Agent and such Grantor, in form and substance reasonably to the Administrative Agent, in order to give the Administrative Agent “control” (as defined in the UCC) of such account. 

	
             
  	
            5.10
 	
            Other Matters.
 

(a)          Each of the Grantors shall cause to be delivered to the Administrative Agent a Collateral Access Agreement with respect to (a) each bailee with which such Grantor keeps Inventory or other assets as of the Closing Date and (b) each landlord which leases real property (and the accompanying facilities) to any of the Grantors as of the Closing Date. If any Grantor shall cause to be delivered Inventory or other property to any bailee after the Closing Date, such Grantor shall use reasonable efforts to cause such bailee to sign a Collateral Access Agreement. Such requirement may be waived at the option of the Administrative Agent. If any Grantor shall lease any real property or facilities after the Closing Date, such Grantor shall use reasonable efforts to cause the landlord in respect of such
leased property or facilities to sign a Collateral Access Agreement. Such requirement may be waived at the option of the Administrative Agent.

(b)          Each Grantor authorizes the Administrative Agent to, at any time and from time to time, file financing statements, continuation statements, and amendments thereto that describe the Collateral as “all assets” of each Grantor, or words of similar effect, and which contain any other information required pursuant to the UCC for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, and each Grantor agrees to furnish any such information to the Administrative Agent promptly upon request. Any such financing statement, continuation statement, or amendment may be filed at any time in any jurisdiction as the Administrative Agent may reasonably deem necessary or desirable. 

(c)          Each Grantor shall, at any time and from time and to time, take such steps as the Administrative Agent may reasonably request for the Administrative Agent (i) to obtain an acknowledgement, in form and substance reasonably satisfactory to the Administrative Agent, of any bailee having possession of any of the Collateral, stating that such bailee holds such Collateral for the Administrative Agent, (ii) to obtain “control” of any letter-of-credit rights, or electronic chattel paper (as such terms are defined by the UCC with corresponding provisions thereof defining what constitutes “control” for such item of Collateral), with any agreements establishing control to be in form and substance reasonably satisfactory to the Administrative Agent, and
(iii) otherwise to insure the continued perfection and priority of the Administrative Agent’s security interest in any of the Collateral and of the preservation of its rights therein. If any Grantor shall at any time, acquire a “commercial tort claim” (as such term is defined in the UCC), such Grantor shall promptly notify the Administrative Agent thereof in writing and supplement Schedule 7, therein providing a reasonable description and summary thereof, and upon delivery thereof to the Administrative Agent, such Grantor shall be deemed to thereby 

 

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grant to the Administrative Agent (and such Grantor hereby grants to the Administrative Agent, in each case, for the ratable benefit of the Lenders) a security interest and lien in and to such commercial tort claim and all proceeds thereof, all upon the terms of and governed by this Agreement.

(d)          Without limiting the generality of the foregoing, if any Grantor at any time holds or acquires an interest in any electronic chattel paper or any “transferable record”, as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, such Grantor shall promptly notify the Administrative Agent thereof and, at the request of the Administrative Agent, shall take such action as the Administrative Agent may reasonably request to vest in the Administrative Agent “control” under Section 9-105 of the UCC of such electronic chattel paper or control under Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Administrative Agent agrees with the Grantors that the Administrative Agent will arrange, pursuant to procedures reasonably satisfactory to the Administrative Agent and so long as such procedures will not result in the Administrative Agent’s loss of control, for the Grantors to make alterations to the electronic chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the federal Electronic Signatures in Global and National Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by any Grantor with respect to such electronic chattel paper or transferable record.

SECTION 6  REMEDIAL PROVISIONS.

6.1          Certain Matters Relating to Receivables. (a) At any time and from time to time, the Administrative Agent in such Grantor’s name or, following the occurrence and during the continuance of an Event of Default, in its own name or in the name of others, shall have the right to make test verifications of the existence, amount and terms of any Receivables or otherwise communicate with the Account Debtors in any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications and other communications. At any time and from time to time during the existence of a Borrowing Base Reporting Period or following the
occurrence and during the continuance of an Event of Default upon the Administrative Agent’s request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, agings and test verifications of, and trial balances for, the Receivables.

(b)          The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s Receivables, and the Administrative Agent may curtail or terminate such authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Administrative Agent at any time during the occurrence and continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form 

 

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received, duly indorsed by such Grantor to the Administrative Agent if required, in a collateral account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Lenders only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

(c)          At any time and from time to time during the occurrence and continuance of an Event of Default, at the Administrative Agent’s request, each Grantor shall deliver to the Administrative Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including all original orders, invoices and shipping receipts.

	
             
  	
            6.2
 	
            Communications with Obligors; Grantors Remain Liable.
 

(a)          Upon the request of the Administrative Agent at any time during the occurrence and continuance of an Event of Default, each Grantor shall notify obligors on the Receivables that the Receivables have been assigned to the Administrative Agent for the ratable benefit of the Lenders and that payments in respect thereof shall be made directly to the Administrative Agent.

(b)          Anything herein to the contrary notwithstanding, each Grantor shall remain liable in respect of each of the Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Administrative Agent nor any Lender shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto, nor shall the Administrative Agent or any Lender be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

(c)          For the purpose of enabling the Administrative Agent to exercise rights and remedies under this Agreement, each Grantor hereby grants to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Grantor) to, at any time after the occurrence and during the continuance of an Event of Default, use, license or sublicense any Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

 

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6.3          Investment Property. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash dividends and distributions paid in respect of the Pledged Equity and all payments made in respect of the Pledged Notes, to the extent permitted in the Credit Agreement, and to exercise all voting and other rights with respect to the Investment Property; provided, that no vote shall be cast or other right exercised or action taken which could
reasonably be expected to impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

(b)          If an Event of Default shall occur and be continuing and the Administrative Agent shall give prior written notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends and distributions, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting and other rights pertaining to such Investment Property at any meeting of holders of the equity interests of the relevant
Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to
exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

(c)          Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividends, distributions or other payments with respect to the Investment Property directly to the Administrative Agent.

6.4          Proceeds to be Turned Over to Administrative Agent. In addition to the rights of the Administrative Agent and the Lenders specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other cash equivalent items shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other 

 

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funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a collateral account maintained under its sole dominion and control. All Proceeds, while held by the Administrative Agent in any collateral account (or by such Grantor in trust for the Administrative Agent and the Lenders) established pursuant hereto, shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

6.5          Application of Proceeds. At such intervals as may be agreed upon by the Company Representative and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent’s election, the Administrative Agent may apply all or any part of Proceeds from the sale of, or other realization upon, all or any part of the Collateral in payment of the Secured Obligations in such order as the Administrative Agent shall determine in its discretion. Any part of such funds which the Administrative Agent elects not so to apply and deems not required as collateral security for the Secured Obligations shall be paid over from time to time by the Administrative Agent to the applicable Grantor or to whomsoever may be
lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Secured Obligations shall have been Paid in Full shall be paid over to the applicable Grantor or to whomsoever may be lawfully entitled to receive the same. In the absence of a specific determination by the Administrative Agent, the Proceeds from the sale of, or other realization upon, all or any part of the Collateral in payment of the Secured Obligations shall be applied in the following order:

FIRST, to the payment of all fees, costs, expenses and indemnities of the Administrative Agent (in its capacity as such), including Attorney Costs, and any other Secured Obligations owing to the Administrative Agent in respect of sums advanced by the Administrative Agent to preserve the Collateral or to preserve its security interest in the Collateral, until paid in full;

SECOND, to the payment of all fees, costs, expenses and indemnities of the Lenders, pro-rata, until paid in full;

THIRD, to the payment of all of the Secured Obligations (other than Bank Product Obligations and Hedging Obligations) consisting of accrued and unpaid interest owing to any Lender, pro-rata, until paid in full;

FOURTH, to the payment of all Secured Obligations (other than Bank Product Obligations and Hedging Obligations) consisting of principal owing to any Lender, pro-rata, until paid in full;

FIFTH, to the payment of the Administrative Agent an amount equal to all Secured Obligations in respect of outstanding Letters of Credit to be held as cash collateral in respect of such obligations;

SIXTH, to the payment of all Bank Products Obligations and Hedging Obligations owing to any Lender or its Affiliates, pro-rata, until paid in full;

 

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SEVENTH, to the payment of all other Secured Obligations owing to each Lender, pro-rata, until paid in full; and

EIGHTH, to the payment of any remaining Proceeds, if any, to the applicable Grantor or to whomever may be lawfully entitled to receive such amounts.

6.6          Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each
Grantor further agrees, at the Administrative Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder, including Attorney Costs to the payment in whole or in part of the Secured Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

6.7          Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Equity pursuant to Section 6.6, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Equity, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or 

 

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cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Equity, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Equity, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

(b)          Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Equity, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Equity for the period of time necessary to permit the Issuer thereof to register such securities or other interests for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

(c)          Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Equity pursuant to this Section 6.7 valid and binding and in compliance with applicable law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred.

6.8          Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or privileges which it may acquire under Section 9-626 of the UCC. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Secured Obligations in full and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.

 

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SECTION 7  THE ADMINISTRATIVE AGENT.

7.1          Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of and
at the expense of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

(i)           in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed reasonably appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable or with respect to any other Collateral whenever payable;

(ii)          in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may request to evidence the Administrative Agent’s security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

(iii)         discharge Liens levied or placed on or threatened against the Collateral, and effect any repairs or insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

(iv)         execute, in connection with any sale provided for in Section 6.6 or 6.7, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

(v)          (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or 

 

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proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark, throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its reasonable discretion determine; (8) vote any right or interest with respect to any Investment Property; (9) order good standing certificates and conduct lien searches in respect of such jurisdictions or offices as the Administrative Agent may deem appropriate; and (10) generally sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent’s security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing.

(b)          If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

(c)          Each Grantor hereby ratifies all that such attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

7.2          Duty of Administrative Agent. The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent or any Lender nor any of their respective officers, directors, employees or agents shall be liable for any failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred
on the Administrative Agent and the Lenders hereunder are solely to protect the Administrative Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Lender to exercise any such powers. The Administrative Agent and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder.

7.3          Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative 

 

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Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 8  MISCELLANEOUS.

8.1          Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 15.1 of the Credit Agreement.

8.2          Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be addressed to the Company and effected in the manner provided for in Section 15.3 of the Credit Agreement and each Grantor hereby appoints the Company as its agent to receive notices hereunder.

8.3          Indemnification by Grantors. THE GRANTORS, JOINTLY AND SEVERALLY, HEREBY AGREE TO INDEMNIFY, EXONERATE AND HOLD EACH LENDER PARTY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES, INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF EQUITY INTERESTS, PURCHASE OF ASSETS (INCLUDING THE RELATED TRANSACTIONS) OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR, (C) ANY
VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR OR THE OPERATIONS CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH GRANTOR HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED 

 

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LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 8.3 SHALL SURVIVE REPAYMENT OF ALL (AND SHALL BE) SECURED OBLIGATIONS (AND TERMINATION OF ALL COMMITMENTS UNDER THE CREDIT AGREEMENT), ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.

8.4          Enforcement Expenses. (a) Each Grantor agrees, on a joint and several basis, to pay or reimburse on demand each Lender and the Administrative Agent for all reasonable out-of-pocket costs and expenses (including Attorney Costs) incurred in collecting against any Guarantor under the guaranty contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents.

(b)          Each Grantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

(c)          The agreements in this Section 8.4 shall survive repayment of all (and shall be) Secured Obligations (and termination of all commitments under the Credit Agreement), any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination of this Agreement.

8.5          Captions. Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

8.6          Nature of Remedies. All Secured Obligations of each Grantor and rights of the Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

8.7          Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt by telecopy of any executed signature page to this Agreement or any other Loan Document shall constitute effective delivery of such signature page.

8.8          Severability. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

 

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8.9          Entire Agreement. This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by any Grantor of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the Administrative Agent or the Lenders.

8.10       Successors; Assigns. This Agreement shall be binding upon Grantors, the Lenders and the Administrative Agent and their respective successors and assigns, and shall inure to the benefit of Grantors, Lenders and the Administrative Agent and the successors and assigns of the Lenders and the Administrative Agent. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. No Grantor may assign or transfer any of its rights or Obligations under this Agreement without the prior written consent of the Administrative Agent.

8.11       Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

8.12       Forum Selection; Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH GRANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

8.13       Waiver of Jury Trial. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN 

 

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CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

8.14       Set-off. Each Grantor agrees that the Administrative Agent and each Lender have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each Grantor agrees that at any time any Event of Default exists, the Administrative Agent and each Lender may apply to the payment of any Secured Obligations, whether or not then due, any and all balances, credits, deposits, accounts or moneys of such Grantor then or thereafter with the Administrative Agent or such Lender.

	
             
  	
            8.15
 	
            Acknowledgements. Each Grantor hereby acknowledges that:
 

(a)          it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(b)          neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c)          no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Grantors and the Lenders.

8.16       Additional Grantors. Each Loan Party that is required to become a party to this Agreement pursuant to Section 10.9 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Loan Party of a joinder agreement in the form of Annex I hereto.

8.17       Releases. (a) At such time as the Secured Obligations have been Paid in Full, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Administrative Agent shall promptly deliver to the Grantors any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Grantors such documents as the Grantors shall reasonably request to evidence such termination.

(b)          If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the request and sole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Companies, a Guarantor shall be released from its obligations hereunder in the event that all the equity interests of such Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Company Representative shall have delivered to the 

 

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Administrative Agent, with reasonable notice prior to the date of the proposed release, a written request for release identifying the relevant Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Company Representative stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

8.18       Obligations and Liens Absolute and Unconditional. Each Grantor understands and agrees that the obligations of each Grantor under this Agreement shall be construed as a continuing, absolute and unconditional without regard to (a) the validity or enforceability of any Loan Document, any of the Secured Obligations or any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Grantor or any other Person against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of any Grantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Grantor for the Secured Obligations, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Grantor, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any other Grantor or any other Person or against any collateral security or guaranty for the Secured Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from any other Grantor or any other Person or to realize upon any such collateral security or guaranty or to exercise any such right of offset, or any release of any other Grantor or any other Person or any
such collateral security, guaranty or right of offset, shall not relieve any Grantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against any Grantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

8.19       Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Grantor or any Issuer for liquidation or reorganization, should Grantor or any Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Grantor’s or any Issuer’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”,
“fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

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8.20       Effect on Existing Agreement; No Novation. The Companies, the Lenders and the Administrative Agent hereby agree that as of the Closing Date: (i) the terms and provisions of Section 4 the Existing Credit Agreement and any pledge, guaranty or security agreement executed by or on behalf of the Companies in favor of the Administrative Agent in connection with the Existing Credit Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement; (ii) the Lenders and the Administrative Agent shall not have any obligations under Section 4 of the Existing Credit Agreement or such pledge, guaranty or security agreements, except to the extent that any such obligations may be restated in this Agreement or in the other Loan
Documents, and (iii) the execution and delivery of this Agreement shall not constitute or effect, or be deemed to constitute or effect a novation, refinancing, discharge, extinguishment or refunding of any of the “Obligations” (as defined in the Existing Credit Agreement) or that portion of the existing Obligations which remain outstanding under this Agreement.

 

[signature page follows]

 

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Each of the undersigned has caused this Guaranty and Collateral Agreement to be duly executed and delivered as of the date first above written.

WESTELL TECHNOLOGIES, INC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

WESTELL, INC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

TELTREND LLC

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

CONFERENCE PLUS, INC.

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

				

 

 

[Signature Page to Guaranty and Collateral Agreement]

 

 

 

LASALLE BANK NATIONAL ASSOCIATION, as Administrative Agent

 

By:                                           
                        

Name:                                           
                    

Title:                                           
                      

 

 

 

 

 

[Signature Page to Guaranty and Collateral Agreement]

 

 

 

SCHEDULE 1

INVESTMENT PROPERTY

 

	
            A.
 	
            PLEDGED EQUITY
 

	
            Grantor (owner of Record of such Pledged Equity)
 	
            Issuer
 	
            Pledged Equity Description
 	
            Percentage of Issuer
 	
            Certificate (Indicate No.)
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

	
            B.
 	
            PLEDGED NOTES
 

	
            Grantor (owner of Record of such Pledged Notes)
 	
            Issuer
 	
            Pledged Notes Description
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

	
            C.
 	
            OTHER INVESTMENT PROPERTY
 

	
            Grantor
 	
            Investment Property Description
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
             
 

 

 

 

 

 

SCHEDULE 2

FILINGS AND PERFECTION

 

	
            GRANTOR
 	
            FILING REQUIREMENT

OR OTHER ACTION
 	
            FILING OFFICE
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

 

 

 

 

SCHEDULE 3

GRANTOR INFORMATION

 

	
            GRANTOR

(exact legal name)
 	
            STATE OF ORGANIZATION
 	
            FEDERAL EMPLOYER IDENTIFICATION NUMBER
 	
            ORG.
 ID #
 	
            CHIEF EXECUTIVE OFFICE
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

 

SCHEDULE 4

A.    COLLATERAL LOCATIONS

 

	
            GRANTOR
 	
            COLLATERAL
 	
            COLLATERAL

LOCATION

OR PLACE OF BUSINESS (INCLUDING CHIEF EXECUTIVE OFFICE)
 	
            OWNER/LESSOR

(IF LEASED)
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 

 

B.     COLLATERAL IN POSSESSION OF LESSOR,

                BAILEE, CONSIGNEE OR WAREHOUSEMAN

 

	
            GRANTOR
 	
            COLLATERAL
 	
            LESSOR/BAILEE/CONSIGNEE/WAREHOUSEMAN
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

 

 

 

SCHEDULE 5

INTELLECTUAL PROPERTY

Patents and Patent Licenses

	
            Grantor
 	
            Patent Number
 	
            Patent Application Number
 	
            Date Patent Issued
 	
            Date Patent Applied
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

Trademarks and Trademark Licenses

	
            Grantor
 	
            Trademark Number
 	
            Trademark Application Number
 	
            Trademark Registration Number
 	
            Date of Application
 	
            Date of Registration
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

Copyrights

	
            Grantor
 	
            Copyright Title
 	
            Copyright Application
 	
            Copyright Registration Number
 	
            Copyright Application Number
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

SCHEDULE 6

DEPOSITARY AND OTHER DEPOSIT ACCOUNTS

 

	
            GRANTOR
 	
            FINANCIAL INSTITUTION
 	
            ACCOUNT NUMBER
 	
            CONTACT INFORMATION
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 

 

 

 

 

 

SCHEDULE 7

COMMERCIAL TORT CLAIMS

 

 

 

 

ANNEX I

FORM OF JOINDER TO GUARANTY AND COLLATERAL AGREEMENT

 

This JOINDER AGREEMENT (this “Agreement”) dated as of [______] is executed by the undersigned for the benefit of LaSalle Bank National Association, as the Administrative Agent (the “Administrative Agent”) in connection with that certain Amended and Rested Guaranty and Collateral Agreement dated as of June 30, 2006 among WESTELL TECHNOLOGIES, INC., a Delaware corporation, WESTELL, INC., an Illinois corporation, TELTREND, LLC., a Delaware limited liability company and successor by merger to Teltrend, Inc., and CONFERENCE PLUS, INC., a Delaware corporation, and each of the other Grantors party thereto and the Administrative Agent (as amended, restated, supplemented or modified from time to time, the “Guaranty and Collateral Agreement”). Capitalized terms not otherwise defined herein are being used herein as defined in the Guaranty and Collateral Agreement.

Each Person signatory hereto is required to execute this Agreement pursuant to Section 8.16 of the Guaranty and Collateral Agreement.

In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each signatory hereby agrees as follows:

1.            Each such Person assumes all the obligations of a Grantor and a Guarantor under the Guaranty and Collateral Agreement and agrees that such person or entity is a Grantor and a Guarantor and bound as a Grantor and a Guarantor under the terms of the Guaranty and Collateral Agreement, as if it had been an original signatory to such agreement. In furtherance of the foregoing, such Person hereby assigns, pledges and grants to the Administrative Agent a security interest in all of its right, title and interest in and to the Collateral owned thereby to secure the Secured Obligations.

 

2.           Schedules 1, 2, 3, 4, 5, 6 and 7 of the Guaranty and Collateral Agreement are hereby amended to add the information relating to each such Person set out on Schedules 1, 2, 3, 4, 5, 6 and 7 respectively, hereof. Each such Person hereby makes to the Administrative Agent the representations and warranties set forth in the Guaranty and Collateral Agreement applicable to such Person and the applicable Collateral, except to the extent that such representations and warranties refer to an earlier date, and confirms that such representations and warranties are true and correct after giving effect to such amendment to such Schedules.

3.          In furtherance of its obligations under Section 5.2 of the Guaranty and Collateral Agreement, each such Person agrees to deliver to the Administrative Agent an appropriately complete UCC financing statement naming such person or entity as debtor and the Administrative Agent as secured party, and describing its Collateral and such other documentation as the Administrative Agent (or its successors or assigns) may require to evidence, protect and perfect the Liens created by the Guaranty and Collateral Agreement, as modified hereby. Each such Person acknowledges the authorizations given to the Administrative Agent under the Section 5.10(b) of the Guaranty and Collateral Agreement and otherwise.

 

 

 

 

4.          Each such Person’s address for notices under the Guaranty and Collateral Agreement shall be the address of the Company Representative set forth in the Credit Agreement and each such Person hereby appoints the Company Representative as its agent to receive notices hereunder.

5.            This Agreement shall be deemed to be part of, and a modification to, the Guaranty and Collateral Agreement and shall be governed by all the terms and provisions of the Guaranty and Collateral Agreement, with respect to the modifications intended to be made to such agreement, which terms are incorporated herein by reference, are ratified and confirmed and shall continue in full force and effect as valid and binding agreements of each such person or entity enforceable against such person or entity. Each such Person hereby waives notice of the Administrative Agent’s acceptance of this Agreement. Each such Person will deliver an executed original of this Agreement to the Administrative Agent.

[add signature block for each new Grantor]

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