EXHIBIT 4.2
SENIOR BRIDGE LOAN AGREEMENT
among
ACTIVANT SOLUTIONS HOLDINGS INC.,
as Parent Guarantor,
ACTIVANT SOLUTIONS INC.,
as Borrower,
The Several Lenders from Time to Time Party Hereto,
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
as Administrative Agent,
and
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH and
JPMORGAN CHASE BANK, N.A.,
as Initial Lenders,
and
DEUTSCHE BANK SECURITIES INC. and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Joint Lead Arrangers and Joint Book Runners
Dated as of
September 13, 2005
Table of Contents
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SECTION 1. Definitions and Accounting Terms..............................................................3
1.1. Defined Terms.................................................................................3
1.2. Terms Generally...............................................................................3
1.3. Accounting Terms; GAAP........................................................................3
1.4. Resolution of Drafting Ambiguities............................................................3
SECTION 2. Amount and Terms of Credit....................................................................3
2.1. Commitment....................................................................................3
2.2. Notice of Borrowing...........................................................................3
2.3. Disbursement of Funds.........................................................................3
2.4. Initial Maturity Date; Final Maturity Date; Evidence of Debt..................................3
2.5. Pro Rata Borrowing............................................................................3
2.6. Interest......................................................................................3
2.7. Interest Periods..............................................................................3
2.8. Increased Costs, Illegality, etc..............................................................3
2.9. Compensation..................................................................................3
2.10. Change of Lending Office......................................................................3
2.11. Notice of Certain Costs.......................................................................3
SECTION 3. Fees; Voluntary Reduction of Initial Loan Commitments; Mandatory Termination of
Commitments.................................................................................3
3.1. Fees 3
3.2. Voluntary Reduction of Commitments............................................................3
3.3. Mandatory Termination of Commitments..........................................................3
SECTION 4. Payments......................................................................................3
4.1. Voluntary Prepayments.........................................................................3
4.2. Mandatory Prepayments and Commitment Reductions...............................................3
4.3. Method and Place of Payment...................................................................3
4.4. Net Payments; Tax Gross-Up....................................................................3
4.5. Computations of Interest and Fees.............................................................3
4.6. Pro Rata Treatment............................................................................3
4.7. Use of Proceeds...............................................................................3
SECTION 5. Conditions....................................................................................3
5.1. Conditions Precedent to Borrowing of Initial Loans............................................3
5.2. Conditions Precedent to Borrowing of Term Loans...............................................3
SECTION 6. Representations and Warranties................................................................3
6.1. Existence, Qualification and Power; Compliance with Laws......................................3
6.2. Authorization; No Contravention...............................................................3
6.3. Governmental Authorization; Other Consents....................................................3
6.4. Binding Effect................................................................................3
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6.5. Financial Statements; No Closing Date MAE.....................................................3
6.6. Litigation....................................................................................3
6.7. No Default....................................................................................3
6.8. Ownership of Property; Liens..................................................................3
6.9. Environmental Compliance......................................................................3
6.10. Taxes.........................................................................................3
6.11. ERISA Compliance..............................................................................3
6.12. Labor Relations...............................................................................3
6.13. Subsidiaries; Equity Interests................................................................3
6.14. Margin Regulations; Investment Company Act; Public Utility Holding Company Act................3
6.15. Internal Accounting Controls..................................................................3
6.16. Insurance.....................................................................................3
6.17. Licenses; Intellectual Property, Etc..........................................................3
6.18. Solvency......................................................................................3
6.19. Disclosure....................................................................................3
6.20. Exchange and Registration Rights..............................................................3
6.21. Indebtedness..................................................................................3
SECTION 7. Affirmative Covenants.........................................................................3
7.1. Use of Proceeds...............................................................................3
7.2. Use of Proceeds of the Permanent Securities...................................................3
7.3. Exchange Notes................................................................................3
7.4. Change of Control.............................................................................3
7.5. Financial Statements..........................................................................3
7.6. Certificates; Other Information...............................................................3
7.7. Notices.......................................................................................3
7.8. Existence.....................................................................................3
7.9. Payment of Obligations........................................................................3
7.10. Maintenance of Properties.....................................................................3
7.11. Insurance.....................................................................................3
7.12. Compliance with Laws..........................................................................3
7.13. Further Assurances............................................................................3
7.14. Books and Records.............................................................................3
7.15. Compliance with Environmental Laws............................................................3
7.16. Reports.......................................................................................3
7.17. Compliance Certificate........................................................................3
SECTION 8. Negative Covenants............................................................................3
8.1. Limitation on Asset Sales.....................................................................3
8.2. Limitation on Restricted Payments.............................................................3
8.3. Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock..................3
8.4. Liens.........................................................................................3
8.5. Merger, Consolidation or Sale of Assets.......................................................3
8.6. Transactions with Affiliates..................................................................3
8.7. Dividend and Other Payment Restrictions Affecting Subsidiaries................................3
8.8. Amendments or Waivers of Certain Documents....................................................3
8.9. Limitation on Guarantees by Subsidiaries......................................................3
8.10. Limitation on Investment Company Status.......................................................3
8.11. Limitation on Asset Swaps.....................................................................3
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SECTION 9. Events of Default.............................................................................3
SECTION 10. The Agents....................................................................................3
10.1. Appointment...................................................................................3
10.2. Delegation of Duties..........................................................................3
10.3. Exculpatory Provisions........................................................................3
10.4. Reliance by Administrative Agent..............................................................3
10.5. Notice of Default.............................................................................3
10.6. Non-Reliance on Agents and Other Lenders......................................................3
10.7. Indemnification...............................................................................3
10.8. Agents in Their Individual Capacities.........................................................3
10.9. Successor Administrative Agent................................................................3
SECTION 11. Miscellaneous.................................................................................3
11.1. Amendments and Waivers........................................................................3
11.2. Notices.......................................................................................3
11.3. No Waiver; Cumulative Remedies................................................................3
11.4. Survival of Representations and Warranties....................................................3
11.5. Payment of Expenses and Taxes.................................................................3
11.6. Successors and Assigns; Participations and Assignments........................................3
11.7. Replacements of Lenders Under Certain Circumstances...........................................3
11.8. Adjustments; Set-off..........................................................................3
11.9. Counterparts..................................................................................3
11.10. Severability and Integration..................................................................3
11.11. Governing Law.................................................................................3
11.12. Submission to Jurisdiction; Waivers...........................................................3
11.13. Acknowledgments...............................................................................3
11.14. Waivers of Jury Trial.........................................................................3
11.15. Confidentiality...............................................................................3
11.16. Release of Guarantor..........................................................................3
11.17. U.S.A. Patriot Act............................................................................3
SCHEDULES
Schedule 2.1(a) Commitments of Lenders and Addresses for Notices
Schedule 6.13 Subsidiaries and Other Equity Investments
Schedule 7.18 Post-Closing Matters
Schedule 8.4 Existing Liens
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EXHIBITS
Exhibit A-1 Form of Initial Note
Exhibit A-2 Form of Term Note
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Confidentiality Agreement
Exhibit D Form of Legal Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
Exhibit E Form of Guarantee Agreement
Exhibit F Closing Date Certificate
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SENIOR BRIDGE LOAN AGREEMENT dated as of September 13, 2005, among
ACTIVANT SOLUTIONS HOLDINGS INC., a Delaware corporation, as parent guarantor
("Holdings"), ACTIVANT SOLUTIONS INC., a Delaware corporation (the "Borrower"),
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH ("DBCI") and JPMORGAN CHASE BANK, N.A.
("JPMCB"), as initial lenders (the "Initial Lenders"), the other Lenders (as
defined below), DEUTSCHE BANK SECURITIES INC. ("DBSI") and ▇.▇. ▇▇▇▇▇▇
SECURITIES INC. ("JPMSI"), as joint lead arrangers (in such capacities, the
"Joint Lead Arrangers") and joint book runners (in such capacities, the "Joint
Book Runners"), and DBCI, as administrative agent (in such capacity, the
"Administrative Agent").
RECITALS:
Pursuant to the Agreement and Plan of Merger Agreement dated August
15, 2005 (the "Acquisition Agreement"), between Prophet 21, Inc. (the "Acquired
Business"), the Borrower, P21 Merger Corporation and, for certain limited
purposes, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Equity Partners, Inc., the Borrower has agreed to
acquire all of the outstanding capital stock of the Acquired Business (the
"Acquisition"). The Borrower is a direct wholly owned subsidiary of Holdings.
The funding requirements for the Acquisition (including related fees and
expenses) and the refinancing of outstanding indebtedness of the Acquired
Business (the "Refinancing") will be approximately $220.0 million and such
amount will be provided solely from the Loans (as defined below) or the issuance
and sale of Permanent Securities (as defined below), the Holdings Financing (as
defined below) and cash on hand at the Borrower. The parties hereto hereby agree
as follows:
SECTION 1. Definitions and Accounting Terms
As used herein, the following terms shall have the meanings specified
in this Section 1 unless the context otherwise requires (it being understood
that defined terms in this Agreement shall include in the singular number the
plural and in the plural the singular):
1.1. Defined Terms
"Acceleration Notice" is defined is Section 9.
"Acquired Business" is defined in the recitals.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Borrower or at the time it merges or consolidates with the Borrower or any of
its Subsidiaries or assumed in connection with the acquisition of assets from
such Person and not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of the
Borrower or such acquisition, merger or consolidation.
"Acquired Preferred Stock" means Preferred Stock of any Person at the
time such Person becomes a Subsidiary of the Borrower or at the time it merges
or consolidates with the Borrower or any of its Subsidiaries and not issued by
such Person in connection with, or in anticipation or contemplation of, such
acquisition, merger or consolidation.
"Acquisition" is defined in the recitals.
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"Acquisition Agreement" is defined in the recitals.
"Act" is defined in Section 11.17.
"Adjusted LIBOR" means, with respect to the Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the product of (a) LIBOR in effect for such
Interest Period and (b) Statutory Reserves.
"Administrative Agent" means DBCI as the administrative agent for the
Lenders under this Agreement and the other Credit Documents.
"Administrative Agent's Office" means the office of the
Administrative Agent located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such
other office in New York City as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Affiliate" means, as to any Person, any other Person who, directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the first referred to Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" is defined in Section 8.6.
"Agents" means the Administrative Agent the Joint Lead Arrangers and
the Joint Book Runners.
"Agreement" means this senior bridge loan agreement.
"Approved Fund" means any Fund that is administered, advised or
managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an
Affiliate of an entity that administers, advises or manages a Lender.
"ARISB Acquisition" means the acquisition of certain assets of ADP
Claims Solutions, Group, Inc. ("ADP") pursuant to the Asset Purchase Agreement
dated November 20, 1997 between the Borrower and ADP.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Borrower or any of
its Subsidiaries (excluding any Sale and Leaseback Transaction or any pledge of
assets or stock by the Borrower or any of its Subsidiaries) to any Person other
than the Borrower or a Wholly Owned Subsidiary of the Borrower of (i) any
Capital Stock of any Subsidiary of the Borrower or (ii) any other property or
assets of the Borrower or any Subsidiary of the Borrower other than in the
ordinary course of business; provided, however, that for purposes of Section
8.1, Asset Sales shall not include (a) a transaction or series of related
transactions in which the Borrower or its Subsidiaries receive aggregate
consideration of less than $1.0 million, (b) transactions covered by Section 8.5
or permitted by Section 8.11, (c) a Restricted Payment that otherwise qualifies
under Section 8.2, (d) any disposition of obsolete or worn out equipment or
equipment that is no longer useful in the conduct of the business of the
Borrower and its Subsidiaries and that is disposed of, in each case, in the
ordinary course of business or (e) sales of receivables and leases in connection
with the lease financing activities described in clause (xii) of the definition
of "Permitted Indebtedness."
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"Asset Swap" means the execution of a definitive agreement, subject
only to approval of the United States Federal Trade Commission, if applicable,
and other customary closing conditions, that the Borrower in good faith believes
will be satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Borrower or any of its Subsidiaries
and another Person or group of affiliated Persons; provided that any amendment
to or waiver of any closing condition that individually or in the aggregate is
material to the Asset Swap shall be deemed to be a new Asset Swap; it being
understood that an Asset Swap may include a cash equalization payment made in
connection therewith; provided that such cash payment, if received by the
Borrower or its Subsidiaries, shall be deemed to be proceeds received from an
Asset Sale and applied in accordance with Section 8.1.
"Assignment and Acceptance" is defined in Section 11.6(c).
"Assignor" is defined in Section 11.6(c).
"Bankruptcy Law" is defined in Section 9.
"benefited Lender" is defined is Section 11.8(a).
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Board of Directors" means the Board of Directors or other governing
body charged with the ultimate management of any Person, or any duly authorized
committee thereof.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person or a duly authorized
committee of such Board of Directors.
"Borrower" is defined in the preamble hereto.
"Borrowing" means the incurrence of Loans.
"Bridge Commitment Letter" means the acquisition financing commitment
letter dated as of August 15, 2005 among the Borrower, Holdings and the Initial
Lenders.
"Bridge Obligations" means the obligations of the Borrower under or
in connection with this Agreement and the other Credit Documents.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York or the city in which the
Administrative Agent is located are not required to be open.
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"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease to which
such Person is a party that is required to be classified and accounted for as a
capital lease obligation under GAAP, and for purposes of this definition, the
amount of such obligation at any date shall be the capitalized amount of such
obligation at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia or any United States branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $500.0
million; (v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iv) above; and
(vi) investments in money market funds that invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group") (whether or not
otherwise in compliance with the provisions of this Agreement), other than to a
Permitted Holder; (ii) a majority of the Board of Directors of the Borrower or
Holdings shall consist of Persons who are not Continuing Directors; or (iii) the
acquisition by any Person or Group of related Persons (other than the Permitted
Holders or any direct or indirect Subsidiary of any Permitted Holder, including
without limitation, Holdings) of the power, directly or indirectly, to vote or
direct the voting of securities having more than 50% of the ordinary voting
power for the election of directors of the Borrower or Holdings.
"Closing Date" means the date on which the conditions precedent set
forth in Section 5 shall have been satisfied, which date shall be no later than
September 30, 2005.
"Closing Date MAE" means any change, effect, event, occurrence, state
of facts or development that, individually or in the aggregate with any other
change, effect, event, occurrence, state of facts or development, is or is
reasonably likely to be materially adverse to the assets, properties, financial
condition or results of operations of the Acquired Business and its subsidiaries
taken as a whole or the ability of a party to the Acquisition Agreement to
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consummate the transactions contemplated thereby; provided that none of the
following shall be deemed in itself, or in any combination, to constitute, and
none of the following shall be taken into account in determining whether there
has been or will be, a "Closing Date MAE": (a) any adverse change, effect,
event, occurrence, state of facts or development attributable to the
announcement or pendency of the transactions contemplated by the Acquisition
Agreement; (b) any adverse change, effect, event, occurrence, state of facts or
development attributable to conditions affecting the industry in which the
Acquired Business and its subsidiaries participate, the U.S. economy as a whole
or the capital markets in general, other than any adverse change, effect, event,
occurrence, state of facts or development which disproportionately affects the
Acquired Business and its subsidiaries; (c) any adverse change, effect, event,
occurrence, state of facts or development resulting from or relating to
compliance with the terms of, or the taking of any action required by, the
Acquisition Agreement; (d) any adverse change, effect, event, occurrence, state
of facts or development arising from or relating to any change in accounting
requirements or principles or any change in applicable laws, rules or
regulations or the interpretation thereof; (e) any matter set forth on any
disclosure schedule attached to the Acquisition Agreement; or (f) any adverse
change, effect, event, occurrence, state of facts or development arising from or
relating to the commencement, continuation or escalation of a war, material
armed hostilities or other material international or national calamity or act of
terrorism directly or indirectly involving the United States of America.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code as in effect at the
date of this Agreement and any subsequent provisions of the Code amendatory
thereof, supplemental thereto or substituted therefor.
"Commitment Papers" means (a) the Bridge Commitment Letter and (b)
the Engagement Letter.
"Commitments" means, as to any Lender, its obligation to make an
Original Initial Loan to the Borrower pursuant to Section 2.1(a) in an aggregate
amount not to exceed the amount set forth under such Lender's name in Schedule
2.1(a) opposite the caption "Commitment Amount" or in the Assignment and
Acceptance pursuant to which a Lender acquires its Commitment, as the same may
be adjusted pursuant to Section 11.6 and to convert its Initial Loans into Term
Loans as provided in Section 2.1(b).
"Commodity Agreement" means any commodity futures contract, commodity
option or other similar agreement or arrangement entered into by the Borrower or
any of its Subsidiaries designed to protect the Borrower or any of its
Subsidiaries against fluctuations in the price of commodities actually used in
the ordinary course of business of the Borrower and its Subsidiaries.
"Confidential Information" is defined in Section 11.15.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of Consolidated EBITDA for the four
quarter period of the most recent four consecutive fiscal quarters ending prior
to the date of such determination (the "Four Quarter Period") to (ii)
Consolidated Fixed Charges for such Four Quarter Period; provided, however, that
(1) if the Borrower or any Subsidiary of the Borrower has incurred any
Indebtedness or issued any Preferred Stock since the beginning of such Four
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Quarter Period that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an incurrence of Indebtedness or issuance of Preferred Stock, Consolidated
EBITDA and Consolidated Fixed Charges for such Four Quarter Period shall be
calculated after giving effect on a pro forma basis to the incurrence of such
Indebtedness or issuance of Preferred Stock as if such Indebtedness had been
incurred or such Preferred Stock had been issued on the first day of such Four
Quarter Period and the discharge of any other Indebtedness or Preferred Stock
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness or Preferred Stock as if such discharge had occurred on the
first day of such Four Quarter Period, (2) if since the beginning of such Four
Quarter Period the Borrower or any Subsidiary of the Borrower shall have made
any Asset Sale, the Consolidated EBITDA for such Four Quarter Period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets that are the subject of such Asset Sale for such Four
Quarter Period or increased by an amount equal to the Consolidated EBITDA (if
negative) directly attributable thereto for such Four Quarter Period and
Consolidated Fixed Charges for such Four Quarter Period shall be reduced by an
amount equal to the Consolidated Fixed Charges directly attributable to any
Indebtedness or Preferred Stock of the Borrower or any Subsidiary of the
Borrower repaid, repurchased, defeased or otherwise discharged with respect to
the Borrower and its continuing Subsidiaries in connection with such Asset Sale
for such Four Quarter Period (or, if the Capital Stock of any Subsidiary of the
Borrower is sold, the Consolidated Fixed Charges for such Four Quarter Period
directly attributable to the Indebtedness of such Subsidiary to the extent the
Borrower and its continuing Subsidiaries are no longer liable for such
Indebtedness after such sale), (3) if since the beginning of such Four Quarter
Period the Borrower or any Subsidiary of the Borrower (by merger or otherwise)
shall have made an Investment in any Subsidiary of the Borrower (or any Person
that becomes a Subsidiary of the Borrower) or an acquisition of assets,
including any acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, Consolidated EBITDA and
Consolidated Fixed Charges for such Four Quarter Period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any
Indebtedness or the issuance of any Preferred Stock) as if such Investment or
acquisition occurred on the first day of such Four Quarter Period and (4) if
since the beginning of such Four Quarter Period any Person (that subsequently
became a Subsidiary or was merged with or into the Borrower or any Subsidiary of
the Borrower since the beginning of such Four Quarter Period) shall have made
any Asset Sale or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (2) or (3) above if made by the
Borrower or a Subsidiary of the Borrower during such Four Quarter Period,
Consolidated EBITDA and Consolidated Fixed Charges for such Four Quarter Period
shall be calculated after giving pro forma effect thereto as if such Asset Sale,
Investment or acquisition of assets occurred on, with respect to any Investment
or acquisition, the first day of such Four Quarter Period and, with respect to
any Asset Sale, the day prior to the first day of such Four Quarter Period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Fixed Charges associated with any Indebtedness incurred
or the issuance of any Preferred Stock in connection therewith, the pro forma
calculations shall be determined reasonably and in good faith by a responsible
financial or accounting officer of the Borrower. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
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expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any agreement under which Interest Swap Obligations are outstanding
applicable to such Indebtedness if such agreement under which such Interest Swap
Obligations are outstanding has a remaining term as at the date of determination
in excess of 12 months); provided, however, that the Consolidated Interest
Expense of the Borrower attributable to interest on any Indebtedness incurred
under a revolving credit facility computed on a pro forma basis shall be
computed based upon the average daily balance of such Indebtedness during the
Four Quarter Period.
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income for such period, plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Income Tax Expense for such
period; (ii) Consolidated Fixed Charges for such period; and (iii) Consolidated
Non-Cash Charges for such period less all non-cash items increasing Consolidated
Net Income for such period.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
and (ii) the amount of all cash dividend payments or payments in Disqualified
Capital Stock on Preferred Stock of Subsidiaries of such Person or on
Disqualified Capital Stock of such Person held by Persons other than the
Borrower or any Wholly Owned Subsidiaries paid, accrued or scheduled to be paid
or accrued during such period.
"Consolidated Income Tax Expense" means, with respect to the Borrower
for any period, the provision for Federal, state, local and foreign income taxes
payable by the Borrower and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, the sum of (i) the interest expense of such
Person and its Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Swap Obligations
(including any amortization of discounts), (c) the interest portion of any
deferred payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance financing or
similar facilities, and (e) all accrued or capitalized interest and (ii) the
interest component of Capitalized Lease Obligations paid or accrued by such
Person and its Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its Subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP; provided,
however, that there shall be excluded therefrom, without duplication, (a) gains
and losses from Asset Sales (without regard to the $1.0 million limitation set
forth in the definition thereof) or abandonments or reserves relating thereto
and the related tax effects, (b) items classified as extraordinary or
nonrecurring gains and losses, and the related tax effects according to GAAP,
(c) the net income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Subsidiary of such first
referred to Person or is merged or consolidated with it or any of its
Subsidiaries, (d) the net income of any Subsidiary to the extent that the
7
declaration of dividends or similar distributions by that Subsidiary of that
income is restricted by contract, operation of law or otherwise, (e) the net
income of any Person, other than the Borrower or a Subsidiary of the Borrower or
other than an Unrestricted Subsidiary, except to the extent of the lesser of (x)
dividends or distributions paid to such first referred to Person or its
Subsidiary by such Person and (y) the net income of such Person (but in no event
less than zero), and the net loss of such Person shall be included only to the
extent of the aggregate Investment of the first referred to Person or a
consolidated Subsidiary of such Person and any non-cash expenses attributable to
grants or exercises of employee stock options, (f) charges relating to the
amortization or write-off of intangibles or other goodwill arising from the
ARISB Acquisition, the Triad Acquisition, the Speedware Acquisition and the
Acquisition and (g) the cumulative effect of changes in accounting principles.
"Consolidated Net Tangible Assets" of any Person means, as of any
date of determination, the sum of the assets of such Person after eliminating
intercompany items, determined on a consolidated basis in accordance with GAAP,
including appropriate deductions for any minority interest in tangible assets of
such Person's Subsidiaries, less (without duplication) (i) the net book value of
all of its goodwill and other like intangibles, (ii) unamortized Indebtedness
discount and expenses, (iii) all reserves for depreciation, obsolescence,
depletion and amortization of its properties and (iv) all other proper reserves
which in accordance with GAAP should be provided in connection with the business
conducted by such Person, in each case as calculated at the end of the fiscal
quarter preceding the date of determination (and, if calculated in connection
with a transaction, after giving pro forma effect to such transaction).
"Consolidated Non-Cash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Subsidiaries (excluding any such charges constituting an
extraordinary or nonrecurring item) reducing Consolidated Net Income of such
Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
"Continuing Director" means, as of the date of determination, any
Person who (i) was a member of the Board of Directors of the Borrower or
Holdings on the Closing Date, (ii) was nominated for election or elected to the
Board of Directors of the Borrower or Holdings, as the case may be, with the
affirmative vote of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election or (iii) is a
representative of a Permitted Holder.
"Contractual Obligation" means, as applied to any Person, any
provision of any security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Conversion Date" means the date the Initial Loans are converted into
Term Loans pursuant to Section 2.1(b).
"Credit Agreement" means (i) the Fourth Amended and Restated Credit
Agreement of the Borrower, dated as of the Closing Date, together with the other
documents related thereto (including, without limitation, any guarantee
agreements and security documents) as the same may be further amended,
supplemented, restated, restored or otherwise modified from time to time,
8
including amendments, supplements or modifications relating to the addition or
elimination of Subsidiaries of the Borrower as borrowers or guarantors or other
credit parties thereunder and (ii) any renewal, extension, refunding,
restructuring, restatement, replacement or refinancing thereof (whether with the
original administrative agent and lenders or another administrative agent or
agents or one or more other lenders and whether provided under the original
Credit Agreement or one or more other credit or other agreements).
"Credit Documents" means this Agreement, the Guarantee Agreement and
the Letter Agreement.
"Credit Party" means the Borrower and each Guarantor.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Borrower or any of its Subsidiaries against fluctuations in currency values.
"Custodian" is defined in Section 9.
"Debt Incurrence Prepayment Event" means any issuance or incurrence
by the Borrower or any Subsidiary of the Borrower (other than any Unrestricted
Subsidiary) of any Indebtedness of the type described in clauses (i) and (ii) of
the definition thereof incurred by such party in the form of debt securities
issued in a public offering or private placement after the Closing Date and
prior to the Initial Maturity Date (including, but not limited to Permanent
Securities, but not including Indebtedness incurred pursuant to (a) the Credit
Agreement as in effect on the Closing Date and (b) clauses (vi) and (xii) of the
definition of Permitted Indebtedness).
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Determination Date", with respect to an Interest Period, will be the
second London Banking Day preceding the first day of the Interest Period.
"Disqualified Capital Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable on or before April 1, 2010, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (except, in each case, upon the occurrence of a Change of Control), in
whole or in part, on or prior to April 1, 2010; provided that only the portion
of Capital Stock which so matures or is mandatorily redeemable or is so
redeemable at the sole option of the holder thereof prior to April 1, 2010 shall
be deemed to be Disqualified Capital Stock.
"Dollar", "dollar" or "$" means lawful currency of the United States.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund and (d) any other Person (other than a natural person or
the Borrower or an Affiliate of the Borrower) approved by the Administrative
Agent.
9
"Engagement Letter" means the engagement letter dated as of August
15, 2005, among the Borrower, Holdings and the Joint Book Runners.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Issuance Prepayment Event" means the receipt by Holdings or
the Borrower of cash proceeds from the issuance of their respective Equity
Interests (other than Equity Interests issued pursuant to stock or stock option
plans existing on the Closing Date) prior to the Initial Maturity Date.
"Equity Offering" means a private sale or an underwritten public
offering of Capital Stock (other than Disqualified Capital Stock) of the
Borrower or Holdings (to the extent, in the case of Holdings, that the net cash
proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Borrower).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"Event of Default" is defined in Section 9.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exchange and Registration Rights Agreement" means an Exchange and
Registration Rights Agreement substantially identical to the exchange and
registration rights agreement entered into by the Borrower in connection with
the Existing Floating Rate Notes (with such changes as may be required in
connection with the Transactions).
"Exchange Documents" means the Exchange Note Indenture and the
Exchange Notes.
"Exchange Note Indenture" means the indenture to be entered into
relating to the Exchange Notes, having terms and conditions substantially
similar to the Existing Floating Rate Notes Indenture (with such changes to cure
any ambiguity, omission, defect or inconsistency or as are otherwise required to
conform to the interest rate provisions and optional redemption provisions
hereof or as otherwise required in connection with the Transactions as the Joint
Lead Arrangers and the Borrower shall approve) as in effect on the Closing Date.
"Exchange Note Trustee" means the trustee under the Exchange Note
Indenture.
"Exchange Notes" means the debt securities issued under the Exchange
Note Indenture.
"Exchange Request" is defined in Section 7.3(b).
"Existing Fixed Rate Notes" means $157.0 million aggregate principal
amount of 10 1/2% Senior Notes due 2011 issued pursuant to the Existing Fixed
Rate Notes Indenture.
10
"Existing Fixed Rate Notes Guarantee" means the guarantee of the
Existing Fixed Rate Notes by each of the Existing Fixed Rate Notes Guarantors.
"Existing Fixed Rate Notes Guarantor" means the issuer at any time of
an Existing Fixed Rate Notes Guarantee (so long as such Existing Fixed Rate
Notes Guarantee remains outstanding).
"Existing Fixed Rate Notes Indenture" means the indenture dated June
27, 2003 between the Company, the Existing Fixed Rate Notes Guarantors named
therein and ▇▇▇▇▇ Fargo Bank, National Association, as successor by merger to
▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee, pursuant to which the Existing
Fixed Rate Notes were issued, as the same may be amended, supplemented,
exchanged or restated from time to time.
"Existing Fixed Rate Notes Issue Date" means June 27, 2003.
"Existing Floating Rate Notes" means $120.0 million aggregate
principal amount of Floating Rate Notes due 2010 issued pursuant to the Existing
Floating Rate Notes Indenture.
"Existing Floating Rate Notes Guarantee" means the guarantee of the
Existing Floating Rate Notes by each of the Existing Floating Rate Notes
Guarantors.
"Existing Floating Rate Notes Guarantor" means the issuer at any time
of an Existing Floating Rate Notes Guarantee (so long as such Existing Floating
Rate Notes Guarantee remains outstanding).
"Existing Floating Rate Notes Indenture" means the indenture dated
March 30, 2005 between the Company, the Existing Floating Rate Notes Guarantors
named therein and ▇▇▇▇▇ Fargo Bank, National Association, as trustee, pursuant
to which the Existing Floating Rate Notes were issued, as the same may be
amended, supplemented, exchanged or restated from time to time.
"Existing Notes" means the Existing Fixed Rate Notes and the Existing
Floating Rate Notes.
"Existing Notes Guarantee" means the guarantee of the Existing Notes
by each of the Existing Notes Guarantors.
"Existing Notes Guarantor" means the issuer at any time of an
Existing Floating Rate Notes Guarantee or an Existing Fixed Rate Notes Guarantee
(so long as such Existing Floating Rate Notes Guarantee or such Existing Fixed
Rate Notes Guarantee remains outstanding).
"Existing Notes Indentures" means the Existing Fixed Rate Notes
Indenture and the Existing Floating Rate Notes Indenture.
"Fees" means all amounts payable pursuant to, or referred to in,
Section 3.1.
"Final Maturity Date" means April 1, 2010.
11
"Financial Monitoring and Oversight Agreements" means the Monitoring
and Oversight Agreement among the Borrower, Holdings and ▇▇▇▇▇ Muse & Co.
Partners, L.P. ("▇▇▇▇▇ Muse Partners") and the Financial Advisory Agreement
among the Borrower, Holdings and ▇▇▇▇▇ Muse Partners, each as in effect on the
Existing Fixed Rate Notes Issue Date or as may be subsequently amended in a way
not materially adverse to the Lenders or the Borrower.
"Fund" means any Person (other than a natural person) that is engaged
in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.
"GAAP", unless otherwise indicated, means generally accepted
accounting principles in the United States of America as in effect as of the
date of this Agreement, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or the Commission or in such other statements by such
other entity as approved by a significant segment of the accounting profession.
All ratios and computations based on GAAP contained in this Agreement shall be
computed in conformity with GAAP.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantee" means any guarantee of the Bridge Obligations by a
Guarantor in accordance with the provisions of this Agreement and pursuant to
the Guarantee Agreement. When used as a verb, "Guarantee" shall have a
corresponding meaning.
"Guarantee Agreement" means a Guarantee Agreement substantially in
the form of Exhibit E, including any Guarantee Supplement.
"Guarantee Supplement" means a Guarantee Supplement, substantially in
the form of Annex A to the Guarantee Agreement, entered into pursuant to the
terms hereof and thereof.
"Guaranteed Indebtedness" has the meaning provided in Section 8.9.
"Guarantor" means any Person that incurs a Guarantee on the Closing
Date or following the Closing Date as required pursuant to Section 8.9; provided
that upon the release and discharge of such Person from its Guarantee in
accordance with this Agreement, such Person shall cease to be a Guarantor.
"▇▇▇▇▇ Muse" means Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, a Texas
corporation.
"Holdings" is defined in the preamble hereto.
12
"Holdings Financing" means the borrowing by Holdings of up to $40.0
million in the form of a senior bridge loan or from proceeds the issuance of
debt securities substantially on the terms described in the Bridge Commitment
Letter.
"incur" has the meaning set forth in Section 8.3(a).
"Indebtedness" means with respect to any Person, without duplication,
any liability of such Person (i) for borrowed money, (ii) evidenced by bonds,
debentures, notes or other similar instruments, (iii) constituting Capitalized
Lease Obligations, (iv) incurred or assumed as the deferred purchase price of
property, or pursuant to conditional sale obligations and title retention
agreements (but excluding trade accounts payable arising in the ordinary course
of business), (v) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (vi) for Indebtedness of
others guaranteed by such Person, (vii) for Interest Swap Obligations, Commodity
Agreements and Currency Agreements and (viii) for Indebtedness of any other
Person of the type referred to in clauses (i) through (vii) which is secured by
any Lien on any property or asset of such first referred to Person, the amount
of such Indebtedness being deemed to be the lesser of the value of such property
or asset or the amount of the Indebtedness so secured. The amount of
Indebtedness of any Person at any date shall be the outstanding principal amount
of all unconditional obligations described above, as such amount would be
reflected on a balance sheet prepared in accordance with GAAP, and the maximum
liability at such date of such Person for any contingent obligations described
above.
"indemnified liabilities" is defined in Section 11.5(a).
"Initial Lenders" is defined in the preamble.
"Initial Loans" means, as of any date of determination, the Original
Initial Loans together with any PIK Interest Amounts which have been added
thereto.
"Initial Maturity Date" means the date that is one year after the
Closing Date.
"Initial Notes" is defined in Section 11.6(d).
"Interest Payment Date" is defined in Section 2.6(d).
"Interest Period" means the interest period applicable to any Loan,
as set forth in Section 2.7.
"Interest Swap Obligations" means the obligations of any Person under
any interest rate protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other interest rate hedge or
arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (in each case, including by way of Guarantee or
similar arrangement) or capital contribution to any Person, but excluding any
debt or extension of credit represented by a bank deposit other than a time
deposit. For purposes of Section 8.2, (A) "Investment" shall include the portion
(proportionate to the Borrower's equity interest in a Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of the net
assets of such Subsidiary of the Borrower at the time that such Subsidiary is
13
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Unrestricted Subsidiary as a Subsidiary, the Borrower
shall be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (1) the Borrower's "Investment"
in such Subsidiary at the time of such redesignation less (2) the portion
(proportionate to the Borrower's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is so redesignated from an Unrestricted Subsidiary to a Subsidiary;
and (B) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer, in each case as
determined in good faith by the Board of Directors.
"Investment Company Act" means the United States Investment Company
Act of 1940, as amended.
"Joint Book Runners" is defined in the preamble.
"Joint Lead Arrangers" is defined in the preamble.
"Laws" means, collectively, all applicable international, foreign,
federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or binding judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, licenses, authorizations and permits of, and binding agreements with,
any Governmental Authority, in each case whether or not having the force of law.
"Lenders" means (a) the financial institutions listed on the
signature pages of this Agreement (other than any such financial institution
that has ceased to be a party hereto pursuant to an Assignment and Acceptance)
and (b) any financial institution that has become a party hereto pursuant to an
Assignment and Acceptance.
"Letter Agreement" means the letter agreement dated as of the Closing
Date among Borrower, Holdings and the Joint Lead Arrangers.
"LIBOR" with respect to an Interest Period, will be the rate
(expressed as a percentage per annum) for deposits in United States dollars for
three-month periods beginning on the first day of such Interest Period that
appears on either Telerate Page 3750 or Bloomberg page BBAM1 as of 11:00 a.m.,
London time, on the Determination Date. If Telerate Page 3750 and Bloomberg page
BBAM1 do not include such a rate or are unavailable on a Determination Date, the
Administrative Agent will request the principal London office of each of four
major banks in the London interbank market, as selected by the Administrative
Agent, to provide such bank's offered quotation (expressed as a percentage per
annum), as of approximately 11:00 a.m., London time, on such Determination Date,
to prime banks in the London interbank market for deposits in a Representative
Amount in United States dollars for a three-month period beginning on the first
day of such Interest Period. If at least two such offered quotations are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, the
Administrative Agent will request each of three major banks in New York City, as
selected by the Administrative Agent, to provide such bank's rate (expressed as
a percentage per annum), as of approximately 11:00 a.m., New York City time, on
14
such Determination Date, for loans in a Representative Amount in United States
dollars to leading European banks for a three-month period beginning on the
first day of such Interest Period. If at least two such rates are so provided,
LIBOR for the Interest Period will be the arithmetic mean of such rates. If
fewer than two such rates are so provided, then LIBOR for the Interest Period
will be LIBOR in effect with respect to the immediately preceding Interest
Period.
"LIBOR Spread" means:
(i) during the period beginning on the Closing Date through
December 12, 2005, 650 basis points,
(ii) during the period beginning on December 13, 2005 through
March 12, 2006, 700 basis points,
(iii) during the period beginning on March 13, 2006 through June
12, 2006, 750 basis points, and
(iv) during the period beginning on June 13, 2006 through
September 12, 2006, 800 basis points.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Loans" means the Initial Loans and the Term Loans.
"London Banking Day" is any day on which dealings in United States
dollars are transacted or, with respect to any future date, are expected to be
transacted in the London interbank market.
"Material Adverse Effect" means (i) a material adverse effect on the
business, operations, assets, liabilities (actual or contingent) or condition
(financial or otherwise) of Holdings, the Borrower and its Subsidiaries
(including the Acquired Business), taken as a whole, (ii) a material adverse
effect on the ability of the Borrower or the Credit Parties (taken as a whole)
to perform their respective obligations under any Credit Document to which the
Borrower or any of the Credit Parties is a party or (iii) a material adverse
effect on the rights and remedies of the Lenders under any Credit Document.
"Maximum Rate" is defined in Section 2.6(f).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Proceeds" means, with respect to (a) any Asset Sale, (b)
any Debt Incurrence Prepayment Event or (c) any Equity Issuance Prepayment Event
the proceeds in the form of cash or Cash Equivalents (including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents) received by the Borrower or any of its Subsidiaries from any
event described in clauses (a) through (c) above net of (i) reasonable
out-of-pocket expenses and fees relating to such transaction (including, without
limitation, legal, accounting and investment banking fees and sales commissions,
15
recording fees, relocation costs, title insurance premiums, appraisers, fees and
costs reasonably incurred in preparation of any asset or property for sale),
(ii) taxes paid or reasonably estimated to be payable (calculated based on the
combined state, federal and foreign statutory tax rates applicable to the
Borrower or the Subsidiary engaged in such transaction), (iii) in the case of an
Asset Sale, all distributions and other payments required to be made to any
Person owning a beneficial interest in the assets subject to sale or minority
interest holders in Subsidiaries or joint ventures as a result of such
transaction, (iv) any reserves established in accordance with GAAP for
adjustment in respect of the sales price of such asset or assets or for any
liabilities associated with such transaction and (v) repayment of Indebtedness
secured by assets subject to such transaction; provided, however, that if the
instrument or agreement governing such transaction requires the transferor to
maintain a portion of the purchase price in escrow (whether as a reserve for
adjustment of the purchase price or otherwise) or to indemnify the transferee
for specified liabilities in a maximum specified amount, the portion of the cash
or Cash Equivalents that is actually placed in escrow or segregated and set
aside by the transferor for such indemnification obligation shall not be deemed
to be Net Cash Proceeds until the escrow terminates or the transferor ceases to
segregate and set aside such funds, in whole or in part, and then only to the
extent of the proceeds released from escrow to the transferor or that are no
longer segregated and set aside by the transferor.
"Net Proceeds Offer" is defined in Section 8.1.
"Non-Excluded Taxes" is defined in Section 4.4(a).
"Non-U.S. Lender" is defined in Section 4.4(a).
"Notes" means the Initial Notes and the Term Notes, in each case, as
originally executed or as they may from time to time be amended pursuant to the
applicable provisions hereof.
"Notice of Borrowing" is defined in Section 2.2(a).
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing, or otherwise relating to, any
Indebtedness.
"Officers' Certificate" means a certificate signed on behalf of the
Borrower by two Responsible Officers of the Borrower, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Borrower.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Administrative Agent. The counsel may be an
employee of or counsel to the Borrower.
"Organizational Documents" means (i) with respect to any corporation,
its certificate or articles of incorporation or organization, as amended, and
its by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability company,
its certificate or articles of formation or organization, as amended, and its
operating agreement, as amended.
16
"Original Initial Loans" is defined in Section 2.1(a).
"Original Initial Notes" is defined in Section 11.6(d).
"Original Term Loans" is defined in Section 2.1(b).
"Original Term Notes" is defined in Section 11.6(d).
"Other Indebtedness" is defined in Section 8.1.
"Participant" is defined in Section 11.6(b).
"Payment Sharing Notice" means a notice from any Lender to the
Administrative Agent stating that an Event of Default has occurred and that such
Lender requires that all payments received by the Administrative Agent under
this Agreement or any Credit Document be distributed in accordance with Section
4.6(b)(ii).
"Permanent Securities" means any debt or high yield-like preferred
stock issued by the Borrower as permanent financing to refinance the Loans,
Notes or Exchange Notes.
"Permitted Holders" means ▇▇▇▇▇ Muse and any of its Affiliates,
officers and directors.
"Permitted Indebtedness" means, without duplication, (i) Indebtedness
outstanding on the Closing Date (other than the indebtedness described in clause
(iv) below); (ii) Indebtedness of the Borrower or a Subsidiary incurred pursuant
to the Credit Agreement (including guarantees thereof) in an aggregate principal
amount at any time outstanding not to exceed (x) prior to the Conversion Date,
$20.0 million and (y) thereafter, $30.0 million; (iii) Indebtedness evidenced by
or arising under the Loans or Exchange Notes and the Credit Documents; (iv) the
Existing Notes and the Existing Notes Guarantee; (v) Interest Swap Obligations;
provided, however, that such Interest Swap Obligations are entered into to
protect the Borrower and its Subsidiaries from fluctuations in currencies or
interest rates of its Indebtedness; (vi) additional Indebtedness of the Borrower
or any of its Subsidiaries not to exceed (x) prior to the Conversion Date, $15.0
million and (y) thereafter, $20.0 million in principal amount outstanding at any
time (which amount may, but need not, be incurred under the Credit Agreement);
(vii) Refinancing Indebtedness; (viii) Indebtedness owed by the Borrower to any
Wholly Owned Subsidiary of the Borrower or by any Subsidiary of the Borrower to
the Borrower or any Wholly Owned Subsidiary of the Borrower; (ix) guarantees by
the Borrower or Subsidiaries of any Indebtedness permitted to be incurred by the
Borrower or its Subsidiaries pursuant to this Agreement; (x) Indebtedness in
respect of performance bonds, bankers' acceptances and surety or appeal bonds
provided by the Borrower or any of its Subsidiaries to their customers in the
ordinary course of their business; (xi) Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Borrower or any of its
Subsidiaries pursuant to such agreements, in each case incurred in connection
with the disposition of any business assets or Subsidiaries of the Borrower
(other than guarantees of Indebtedness or other obligations incurred by any
17
Person acquiring all or any portion of such business assets or Subsidiaries of
the Borrower for the purpose of financing such acquisition) in a principal
amount not to exceed the gross proceeds actually received by the Borrower or any
of its Subsidiaries in connection with such disposition; provided, however, that
the principal amount of any Indebtedness incurred pursuant to this clause (xi),
when taken together with all Indebtedness incurred pursuant to this clause (xi)
and then outstanding, shall not exceed $15.0 million; (xii) Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, or Indebtedness incurred for the purposes of financing the
acquisition of Productive Assets (whether by acquisition of assets or stock, by
way of merger, consolidation or otherwise), in each case incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property used in a related business or incurred
to refinance any such purchase price or cost of construction or improvement, in
each case incurred no later than 365 days after the date of such acquisition or
the date of completion of such construction or improvement; provided, however,
that the principal amount of any Indebtedness incurred pursuant to this clause
(xii) shall not exceed $5.0 million at any time outstanding; and (xiii)
Indebtedness and other Obligations of the Borrower and its Subsidiaries related
to lease financing activities which are not required to be treated as
indebtedness on a balance sheet, as determined in accordance with GAAP as in
effect on the date such Indebtedness or other Obligation is incurred.
"Permitted Investments" means (i) Investments by the Borrower or any
Subsidiary of the Borrower to acquire the stock or assets of any Person (or
Acquired Indebtedness or Acquired Preferred Stock acquired in connection with a
transaction in which such Person becomes a Subsidiary of the Borrower);
provided, however, that the primary business of such person is in the good faith
judgment of management of the Borrower a business reasonably related, ancillary
or complementary to the business of the Borrower; provided, further, however,
that if any such Investment or series of related Investments involves an
Investment by the Borrower in excess of $3.0 million, Borrower's Consolidated
Coverage Ratio, calculated after giving effect to such transaction, must be
greater than 2.00 to 1.00, (ii) Investments received by the Borrower or its
Subsidiaries as consideration for a sale of assets, (iii) Investments by the
Borrower or any Wholly Owned Subsidiary of the Borrower in any Wholly Owned
Subsidiary of the Borrower (whether existing on the Closing Date or created
thereafter) or any Person that after such Investments, and as a result thereof,
becomes a Wholly Owned Subsidiary of the Borrower and Investments in the
Borrower by any Wholly Owned Subsidiary of the Borrower, (iv) Investments in
cash and Cash Equivalents, (v) Investments in securities of trade creditors,
wholesalers or customers received pursuant to any plan of reorganization or
similar arrangement, (vi) loans or advances to employees of the Borrower or any
Subsidiary thereof for purposes of purchasing the Borrower's Capital Stock and
other loans and advances to employees made in the ordinary course of business
consistent with past practices of the Borrower or such Subsidiary and (vii)
additional Investments in an aggregate amount not to exceed $1.0 million at any
time outstanding.
"Permitted Liens" means, with respect to any Person:
(i) Pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person
is a party, or deposits as security for contested taxes or import
duties or for the payment of rent, in each case incurred in the
ordinary course of business;
18
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet delinquent or being
contested in good faith by appropriate proceedings;
(iii) Liens for taxes, assessments or other governmental charges
not yet delinquent or which are being contested in good faith by
appropriate proceedings;
(iv) Liens in favor of issuers of performance and surety bonds or
bid bonds or with respect to other regulatory requirements or letters
of credit issued pursuant to the request of and for the account of
such Person in the ordinary course of its business;
(v) Minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of
real properties or Liens incidental to the conduct of the business of
such Person or to the ownership of its properties which were not
incurred in connection with Indebtedness and which do not in the
aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such
Person;
(vi) Liens securing Indebtedness permitted to be incurred
pursuant to clauses (ii), (iv), (v) and (xi) of the definition of
"Permitted Indebtedness"; (vii) Liens existing on the Closing Date and
described on Schedule 8.4;
(viii) Liens on property or shares of stock of a Person at the
time such Person becomes a Subsidiary of the Borrower; provided,
however, such Liens are not created or incurred in connection with, or
in contemplation of, such other Person becoming such a Subsidiary of
the Borrower; provided, further, however, that such Liens may not
extend to any other property owned by the Borrower or any of its
Subsidiaries;
(ix) Liens on property at the time the Borrower or one of its
Subsidiaries acquired the property, including any acquisition by means
of a merger or consolidation with or into the Borrower or any of its
Subsidiaries; provided, however, that such Liens are not created or
incurred in connection with, or in contemplation of, such acquisition;
provided, further, however, that the Liens may not extend to any other
property owned by the Borrower or any of its Subsidiaries;
(x) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect
of bankers' acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such
inventory or other goods;
19
(xi) Leases, subleases and licenses of real property which do not
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(xii) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by the
Borrower and its Subsidiaries in the ordinary course of business;
(xiii) Liens in favor of the Borrower or its Subsidiaries;
(xiv) Liens on equipment of the Borrower or its Subsidiaries
granted in the ordinary course of business to the Borrower's or such
Subsidiaries' client at which such equipment is located;
(xv) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in clause (vi), (vii),
(viii), (ix) or (xx) of this definition; provided, however, that (A)
such new Lien shall be limited to all or part of the same property
that secured the original Lien (plus improvements on such property),
and (B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (A) the outstanding
principal amount of or, if greater, committed amount of the
Indebtedness described under clause (vi), (vii), (viii) or (ix) at the
time the original Lien became a Permitted Lien under this Agreement,
and (B) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal
or replacement;
(xvi) Judgment and attachment Liens not giving rise to an Event
of Default;
(xvii) Liens in favor of the Administrative Agent securing the
Obligations under the Credit Documents;
(xviii) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including right of set-off)
held by such banking institutions incurred in the ordinary course of
business and which are within the general parameters customary in the
banking industry;
(xix) Liens on assets of a Subsidiary (other than a Significant
Subsidiary) that is a non-United States Person and is not a Guarantor;
and
(xx) after the Conversion Date, in addition to the Liens referred
to in clauses (i) through (xix) above, Liens securing Indebtedness
(other than Indebtedness that is subordinated to the Loans and Notes)
in an aggregate principal amount at the time of the incurrence of such
Liens not to exceed 10% of the Borrower's Consolidated Net Tangible
Assets.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
20
"PIK Interest Amount" means the amount of interest accrued on an
Initial Loan or a Term Loan that, in accordance with Section 2.6(e), increases
the principal amount of the Initial Loans or Term Loans, as applicable.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Prepayment Event" means any Debt Incurrence Prepayment Event or any
Equity Issuance Prepayment Event.
"Productive Assets" means assets of a kind used or usable by the
Borrower and its Subsidiaries in its business; provided, however, that
productive assets to be acquired by the Borrower or its Subsidiaries shall be,
in the good faith judgment of management of the Borrower, assets which are
reasonably related, ancillary or complementary to the business of the Borrower
and its Subsidiaries as conducted on the Closing Date.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Refinancing Indebtedness" means any refinancing of Indebtedness of
the Borrower or any of its Subsidiaries existing as of the Closing Date or
incurred in accordance with Section 8.3 (other than pursuant to clause (v) of
the definition of Permitted Indebtedness) that does not (i) result in an
increase in the aggregate principal amount of Indebtedness (such principal
amount to include, for purposes of this definition, any premiums, penalties or
accrued interest paid with the proceeds of the Refinancing Indebtedness) of such
Person or (ii) create Indebtedness with (A) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being refinanced.
"Register" is defined in Section 11.6(e).
"Regulation T" means Regulation T of the Board as from time to time
in effect and any successor to all or a portion thereof establishing margin
requirements.
"Regulation U" means Regulation U of the Board as from time to time
in effect and any successor to all or a portion thereof establishing margin
requirements.
"Regulation X" means Regulation X of the Board as from time to time
in effect and any successor to all or a portion thereof establishing margin
requirements.
"Reimbursable Legal Expenses" means, as to each Joint Lead Arranger,
the reasonable fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP in
connection with the Transactions or otherwise arising out of such Joint Lead
Arranger's Commitments.
"Related Agreements" means the Acquisition Agreement, the documents
governing the Holdings' Financing and the documents governing the Credit
Agreement.
21
"Representative Amount" means a principal amount of not less than
$1.0 million for a single transaction in the relevant market at the relevant
time.
"Required Lenders" means, at any date, Lenders having or holding
Loans and Commitments representing more than 50% of the sum of Loans and
Commitments outstanding at such date.
"Responsible Officer" means the chief executive officer, president,
vice president-finance, chief financial officer, treasurer or assistant
treasurer or other similar officer of a Credit Party and, as to any document
delivered on the Closing Date, any vice president, secretary or assistant
secretary. Any document delivered hereunder that is signed by a Responsible
Officer of a Credit Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Credit Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Credit Party.
"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any other distribution (other than dividends or
distributions payable in Qualified Capital Stock or in options, rights or
warrants to acquire Qualified Capital Stock) on shares of the Borrower's Capital
Stock, (ii) the purchase, redemption, retirement or other acquisition for value
of any Capital Stock of the Borrower, or any warrants, rights or options to
acquire shares of Capital Stock of the Borrower, other than through the exchange
of such Capital Stock or any warrants, rights or options to acquire shares of
any class of such Capital Stock for Qualified Capital Stock or warrants, rights
or options to acquire Qualified Capital Stock, (iii) the making of any principal
payment on, or the purchase, defeasance, redemption, prepayment, decrease or
other acquisition or retirement for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, of, any
Indebtedness of the Borrower or its Subsidiaries that is subordinated or junior
in right of payment to the Loans and Notes, (iv) the making of any Investment
(other than a Permitted Investment) or (v) prior to the Conversion Date, the
repurchase or retirement for value of any Indebtedness (other than the pro rata
repayment of Loans) that is pari passu with the Loans or the Guarantees, other
than the repayment of revolving indebtedness under the Credit Agreement,
redemptions of the Existing Notes in connection with an Net Proceeds Offer (as
defined in the Existing Notes Indentures) or a Change of Control Offer (as
defined in the Existing Notes Indentures) or the repayment of Indebtedness with
the proceeds of an Asset Sale, to the extent such Indebtedness was secured by
the assets or property subject to such Asset Sale.
"S&P" means Standard and Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Sale and Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Borrower or a Subsidiary
transfers such property to a Person and the Borrower or a Subsidiary leases it
from such Person.
"SEC" or "Commission" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
22
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Agreement.
"Solvent" means, with respect to a particular date, that on such date
(i) the present fair market value (or present fair saleable value) of the assets
of Holdings and its Subsidiaries is not less than the total amount of the
liabilities of Holdings and its Subsidiaries on their total existing debts and
liabilities (including contingent liabilities); (ii) Holdings and its
Subsidiaries are able to realize upon their assets and pay their debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business; (iii) assuming consummation of the
Transactions contemplated by the Credit Documents and the Acquisition Agreement,
Holdings and its Subsidiaries are not incurring debts or liabilities beyond
their ability to pay as such debts and liabilities mature; (iv) Holdings and its
Subsidiaries are not engaged in any business or transaction, and do not propose
to engage in any business or transaction, for which their property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which Holdings is engaged; and (v)
Holdings and its Subsidiaries are not otherwise insolvent under applicable
federal or state laws.
"Speedware" means Speedware Corporation Inc.
"Speedware Acquisition" means the acquisition of shares of Capital
Stock of Speedware pursuant to the Speedware Tender Offer, an amalgamation, a
statutory arrangement, a share consolidating, purchasing additional shares in
the open market or in privately negotiated transactions, or initiating another
takeover bid.
"Speedware Tender Offer" means the cash tender offer to purchase all
of the outstanding shares of Capital Stock of Speedware.
"▇▇▇▇▇▇ Repurchase Agreement" means the Securities Repurchase
Agreement, dated June 5, 2003, among ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Holdings, the
Borrower, ▇▇▇▇▇ Muse and certain other parties thereto, as the same may be
amended in a manner which does not adversely affect the Lenders.
"Stated Maturity" means, with respect to any Loan, the Final Maturity
Date (unless the Loans are not converted pursuant to Section 2.1(b), in which
case all references shall mean the Initial Maturity Date).
"Statutory Reserves" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject with
respect to LIBOR, for Eurocurrency Liabilities (as defined in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Loans shall be deemed to constitute Eurocurrency Liabilities
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
23
"Subsequent Initial Note" is defined in Section 11.6(d)
"Subsequent Term Note" is defined in Section 11.6(d).
"Subsidiary" with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly through one or more
intermediaries, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, through one or more intermediaries, owned by such
Person. Notwithstanding anything in this Agreement to the contrary, all
references to the Borrower and its consolidated Subsidiaries or to financial
information prepared on a consolidated basis in accordance with GAAP shall be
deemed to include the Borrower and its Subsidiaries as to which financial
statements are prepared on a combined basis in accordance with GAAP and to
financial information prepared on such a combined basis. Notwithstanding
anything in this Agreement to the contrary, an Unrestricted Subsidiary shall not
be deemed to be a Subsidiary for purposes of Section 8 of this Agreement.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Moneyline Telerate service (or such other page as may replace Page 3750 on
that service) or a successor service.
"Term Loans" means, as of any date of determination, the Original
Term Loans together with any PIK Interest Amounts which have been added thereto.
"Term Notes" means the Initial Term Notes and any Subsequent Term
Notes.
"Total Commitments" means $140.0 million.
"Total Credit Exposure" means, at any date, the sum of the
outstanding principal amount of all Loans and Commitments at such date.
"Transactions" means the Acquisition, the Refinancing, entering into
this Agreement and the Credit Agreement and making of the Loans, the Holdings
Financing and the issuance and sale of the Permanent Securities, if any.
"Transferee" is defined in Section 11.6(g).
"Triad Acquisition" means the acquisition of Triad Systems
Corporation on February 27, 1997.
"United States" means the United States of America.
24
"Unrestricted Subsidiary" means (x) a Subsidiary of the Borrower
created after the Closing Date or (y) Internet Auto Parts, Inc. ("IAP") if it
becomes a Subsidiary of the Borrower, in each case so designated (together with
its Subsidiaries) by a resolution adopted by the Board of Directors of the
Borrower; provided, however, that (a) neither the Borrower nor any of its other
Subsidiaries (other than Unrestricted Subsidiaries) (1) provides any credit
support for any Indebtedness of such Unrestricted Subsidiary or its Subsidiaries
(including any undertaking, agreement or instrument evidencing such
Indebtedness) or (2) is directly or indirectly liable for any Indebtedness of
such Unrestricted Subsidiary or its Subsidiaries and (b) except for IAP, such
Subsidiary and its Subsidiaries has no property or assets (other than de minimis
assets resulting from the initial capitalization of such Subsidiary). The Board
of Directors may designate any Unrestricted Subsidiary to be a Subsidiary;
provided, however, that immediately after giving effect to such designation (x)
Borrower's Consolidated Coverage Ratio must be greater than 2.00 to 1.00 and (y)
no Default or Event of Default shall have occurred or be continuing. Any
designation pursuant to this definition by the Board of Directors of the
Borrower shall be evidenced to the Administrative Agent by the filing with the
Administrative Agent of a certified copy of the resolution of the Borrower's
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than directors'
qualifying shares) which normally have the right to vote in the election of
directors are owned by such Person or any Wholly Owned Subsidiary of such
Person.
1.2. Terms Generally
The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The word "will" shall be construed to have
the same meaning and effect as the word "shall." Unless the context requires
otherwise (a) any definition of or reference to any Credit Document, agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) any reference
to any law or regulation herein shall refer to such law or regulation as
amended, modified or supplemented from time to time.
25
1.3. Accounting Terms; GAAP
Except as otherwise expressly provided herein, all financial
statements to be delivered pursuant to this Agreement shall be prepared in
accordance with GAAP and all terms of an accounting or financial nature shall be
construed and interpreted in accordance with GAAP as in effect from time to
time.
1.4. Resolution of Drafting Ambiguities
Each Credit Party acknowledges and agrees that it was represented by
counsel in connection with the execution and delivery of the Credit Documents to
which it is a party, that it and its counsel reviewed and participated in the
preparation and negotiation hereof and thereof and that any rule of construction
to the effect that ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation hereof or thereof.
SECTION 2. Amount and Terms of Credit
2.1. Commitment
(a) Initial Loans. Subject to and upon the terms and conditions
herein set forth, each Lender agrees, severally and not jointly, to make a loan
(collectively, the "Original Initial Loans") to the Borrower, which Original
Initial Loan (i) shall be made on the Closing Date, (ii) may be repaid in
accordance with the provisions hereof, but once repaid, may not be reborrowed,
(iii) shall not exceed for any such Lender that aggregate principal amount that
equals the Commitment of such Lender at such time and (iv) shall not exceed for
all Lenders at any time outstanding the aggregate principal amount that equals
the Total Commitments then in effect.
(b) Term Loans. (i) Subject to the terms and conditions hereof and in
reliance upon the representations and warranties of the Borrower herein set
forth, the Borrower and each Lender severally agrees, if the Initial Loans have
not been repaid in full, that the then outstanding principal amount of its
Initial Loans shall, upon satisfaction of the conditions set forth in Section
5.2, be converted into a loan (individually, an "Original Term Loan" and
collectively, the "Original Term Loans") by the Borrower on the Initial Maturity
Date in an aggregate principal amount equal to the then outstanding principal
amount of its Initial Loans.
(ii) Upon the conversion of the Initial Loans into Term Loans, each
Lender shall cancel on its records a principal amount of the Initial Loans held
by such Lender corresponding to the principal amount of Term Loans issued by
such Lender, which corresponding principal amount of the Initial Loans shall be
satisfied by the conversion of such Initial Loans into Term Loans in accordance
with this Section 2.1(b). Amounts repaid in respect of Term Loans may not be
reborrowed.
2.2. Notice of Borrowing
(a) The Borrower shall give the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) at the Administrative
Agent's Office at least one (1) Business Day prior to the Borrowing of Initial
Loans. Such notice (a "Notice of Borrowing") shall be irrevocable and shall
specify (i) the date of such Borrowing (which shall be a Business Day and the
Closing Date) and (ii) the amount of such Borrowing. The Administrative Agent
shall promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of the Borrowing of Initial Loans, of such Lender's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing.
26
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from a Responsible Officer of the
Borrower. In each such case the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of any such telephonic notice.
2.3. Disbursement of Funds
(a) Subject to and upon the terms and conditions herein set forth,
each Initial Lender agrees, severally and not jointly, no later than 12:00 noon
(New York time) on the date specified in the Notice of Borrowing, to make
available its pro rata portion of the Borrowing requested to be made on such
date in the manner provided below.
(b) Each Initial Lender shall make available all amounts it is to
fund under the Borrowing in immediately available funds in Dollars to the
Administrative Agent at the Administrative Agent's Office and the Administrative
Agent will make available to the Borrower by depositing to the Borrower's
account at the Administrative Agent's Office or such other account as may be
agreed between the Administrative Agent and the Borrower the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Initial Lender prior to the
date of the Borrowing that such Initial Lender does not intend to make available
to the Administrative Agent its portion of the Borrowing or Borrowings to be
made on such date, the Administrative Agent may assume that such Initial Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Initial Lender and the
Administrative Agent has made available same to the Borrower, the Administrative
Agent shall be entitled to recover such corresponding amount from such Initial
Lender and the Borrower. If such Initial Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Initial Lender
or the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to the Borrower to the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
the then-applicable rate of interest, calculated in accordance with Section 2.6,
for the Loans.
(c) Nothing in this Section 2.3 shall be deemed to relieve any
Initial Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights that the Borrower may have against any Initial Lender as a
result of any default by such Initial Lender hereunder (it being understood,
however, that no Initial Lender shall be responsible for the failure of any
other Initial Lender or the Administrative Agent to fulfill its commitments
hereunder).
27
2.4. Initial Maturity Date; Final Maturity Date; Evidence of Debt
(a) Subject to Section 2.1(b), the Initial Loans will mature on the
Initial Maturity Date and, to the extent then unpaid, will, upon satisfaction of
the conditions set forth in Section 5.2, be converted into Term Loans or become
due and payable pursuant to Section 2.1(b).
(b) The Term Loans will mature on the Final Maturity Date. Any Term
Loan shall bear interest as described in Section 2.6 from the Conversion Date
until such Loan shall be paid in full or exchanged for an Exchange Note pursuant
to Section 7.3.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to the
appropriate lending office of such Lender resulting from each Loan made by such
lending office of such Lender from time to time, including the amounts of
principal and interest payable and paid to such lending office of such Lender
from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
Section 11.6(e), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each Loan made
hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable (including, without limitation, any PIK Interest Amount
and any interest payable thereon) from the Borrower to each Lender and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(e) The entries made in the Register and accounts and subaccounts
maintained pursuant to paragraphs (c) and (d) of this Section 2.4 shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligations of the Borrower hereunder,
including obligations to repay (with applicable interest) the Loans made to the
Borrower by such Lender in accordance with the terms of this Agreement.
(f) Subject to the requirements set forth in Section 7.3, each Lender
will have the option at any time or from time to time after the Conversion Date
to receive Exchange Notes in exchange for the Term Loans of such Lender then
outstanding. The principal amount of the Exchange Notes will equal 100% of the
aggregate principal amount (including any accrued PIK Interest Amount) of the
Term Loans for which they are exchanged. If an Event of Default shall have
occurred and be continuing on the date of such exchange, any notices given or
cure periods commenced while the Initial Loans or Term Loans were outstanding
shall be deemed given or commenced (as of the actual dates thereof) for all
purposes with respect to the Exchange Notes (with the same effect as if the
Exchange Notes had been outstanding as of the actual dates thereof).
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2.5. Pro Rata Borrowing
The Borrowing of Loans under this Agreement and any reduction of
Commitments shall be made by or in favor of the Lenders pro rata on the basis of
their Commitments. 2.6. Interest
(a) Except as provided in clauses (b) and (f) below, the unpaid
principal amount of each Initial Loan shall bear interest from the date of the
Borrowing thereof (or, in the case of any PIK Interest Amount that is added to
the Initial Loans, from the date such PIK Interest Amount increases the
principal amount of the Initial Loans as contemplated by clause (e) below) until
the date of repayment or conversion to a Term Loan at a rate per annum equal to
the lesser of (i) the Maximum Rate and (ii) Adjusted LIBOR plus the LIBOR Spread
as determined by the Administrative Agent.
(b) If any event set forth in Section 2.8(a) shall have occurred,
then (i) within 15 days after any notice given to the Borrower by the affected
Lender or Lenders in accordance with Section 2.8, the Agents and the Borrower
shall enter into negotiations in good faith with a view to agreeing to an
alternative interest rate acceptable to the Borrower to make, fund or maintain
affected Loans and (ii) if, at the expiration of 30 days from the giving of such
notice by the Agents, the Agents and the Borrower shall not have reached an
agreement, such Loans will bear interest at a rate per annum specified by each
such Lender to represent its cost of funds therefor plus the LIBOR Spread.
(c) Except as provided in clause (f) below, the unpaid principal
amount of each Term Loan shall bear interest for the period from and including
the Conversion Date (or, in the case of any PIK Interest Amount that is added to
the Term Loans, from the date such PIK Interest Amount increases the principal
amount of the Term Loans as contemplated by clause (e) below) to, but excluding,
the earlier of (i) the date of repayment thereof and (ii) the date of exchange
for an Exchange Note, at a rate equal to the lesser of (x) the Maximum Rate and
(y) (A) for the Interest Period commencing on the Conversion Date, the interest
rate, determined in accordance with Section 2.6(a) in effect on the day
immediately preceding the Conversion Date plus 50 basis points and (B) for each
Interest Period thereafter, the interest rate in effect for the immediately
preceding Interest Period plus 50 basis points.
(d) Interest on each Loan shall be payable (i) in respect of each
Initial Loan, quarterly in arrears on the last day of each Interest Period
applicable thereto and on the Initial Maturity Date, (ii) in respect of each
Term Loan, quarterly in arrears on the last day of each Interest Period
applicable thereto and on the Final Maturity Date, (iii) on the date of any
prepayment (on the amount prepaid) including through the issuance of Exchange
Notes, (iv) at maturity (whether by acceleration or otherwise), and (v) after
maturity (except to the extent the Initial Loans have been converted), on demand
(each such date referred to in clauses (i), (ii), (iii), (iv) and (v) being an
"Interest Payment Date").
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(e) Notwithstanding the foregoing clauses, the interest rate borne by
the Loans shall not exceed 12.75% per annum (the "Maximum Rate"); provided that,
the interest rates applicable to the Loans, including the Maximum Rate, shall
increase by 0.75% if, at any time, the Loans or other unsecured senior long-term
debt obligations of the Borrower (that do not have any credit support by any
party other than the Borrower and its Subsidiaries) have not received a rating
of better than CCC+ by Standard & Poor's and a rating of better than Caa1 by
▇▇▇▇▇'▇; provided further that if at any time following such increase the
ratings are better than CCC+ and better than Caa1, then such interest rates
shall decrease by 0.75%. To the extent the interest on any Loan exceeds a rate
of 11.75% per annum, such excess amount of interest shall automatically be paid
through an increase of the principal amount of the Initial Loans or Term Loans,
as applicable, on the applicable Interest Payment Date unless the Borrower has
notified the Administrative Agent on or prior to the applicable Interest Payment
Date that it has elected to pay such excess amount of interest in cash.
(f) Notwithstanding the provisions of clauses (a) and (c) above, if
all or a portion of (i) the principal amount of any Loan or (ii) any interest
payable thereon shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum that is (x) in the case of overdue principal, the rate described in
Section 2.6(a) plus 2% or (y) in the case of any overdue interest, to the extent
permitted by applicable law, the rate described in Section 2.6(a) plus 2% from
and including the date of such non-payment to but excluding the date on which
such amount is paid in full (after as well as before judgment).
(g) All computations of interest hereunder shall be made in
accordance with Section 4.5.
(h) The Administrative Agent, upon determining the interest rate for
the Borrowing, shall promptly notify the Borrower and the Lenders thereof and of
any PIK Interest Amount. Each such determination shall, absent clearly
demonstrable error, be final and conclusive and binding on all parties hereto.
2.7. Interest Periods
The Interest Period applicable to the Initial Loans and the Term
Loans shall have a duration of three months. Notwithstanding anything to the
contrary contained above:
(a) the initial Interest Period for the Initial Loans shall
commence on the date of such Borrowing, and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on
the day on which the preceding Interest Period expires;
(b) if any Interest Period relating to a Borrowing begins on the
last Business Day of a calendar month or begins on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the
last Business Day of the calendar month at the end of such Interest
Period;
(c) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the preceding Business Day; and
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(d) the last Interest Period applicable to Initial Loans shall
end on the Initial Maturity Date and the last Interest Period
applicable to Term Loans shall end on the earlier of (i) the
conversion of such Term Loan into an Exchange Note and (ii) the Final
Maturity Date.
2.8. Increased Costs, Illegality, etc.
(a) In the event that (x) in the case of clauses (i)(x) and (y)
below, the Administrative Agent or (y) in the case of clauses (ii) and (iii)
below, any Lender shall have reasonably determined (which determination shall,
absent clearly demonstrable error, be final and conclusive and binding upon all
parties hereto) that:
(i) on any date for determining the Adjusted LIBOR for any
Interest Period prior to the Initial Maturity Date, (x) deposits in
the principal amounts of the Loans are not generally available in the
relevant market or (y) by reason of any changes arising on or after
the date hereof affecting the interbank eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Adjusted LIBOR; or
(ii) at any time, such Lender shall incur increased costs or
taxes or reductions in the amounts received or receivable hereunder
with respect to any Loans (other than any such increase or reduction
attributable to taxes indemnifiabe under Section 4.4(a) or taxes
described in Section 4.4(a)(i)) because of (x) any change since the
date hereof in any Law, such as, for example, but not limited to, a
change in official reserve requirements, and/or (y) other
circumstances affecting the interbank eurodollar market or the
position of such Lender in such market; or
(iii) at any time, the making or continuance of any Loan has
become unlawful by compliance by such Lender in good faith with any
Law, or has become impracticable as a result of a contingency
occurring after the date hereof that materially and adversely affects
the interbank eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clauses (i)(x) and (y) above) shall within a reasonable time thereafter
give notice (if by telephone, confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders) and in the case of
each of clauses (i) and (ii) above, enter into negotiations with the Borrower
pursuant to Section 2.6(c).
(b) If, after the date hereof, the adoption of any Law regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, the National Association
of Insurance Commissioners, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender or its
parent with any request or directive made or adopted after the date hereof
regarding capital adequacy (whether or not having the force of Law) of any such
authority, association, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or its parent's capital
or assets as a consequence of such Lender's commitments or obligations hereunder
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to a level below that which such Lender or its parent could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's or its parent's policies with respect to capital
adequacy), then from time to time, promptly after demand by such Lender (with a
copy to the Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or its parent for
such reduction, it being understood and agreed, however, that a Lender shall not
be entitled to such compensation as a result of such Lender's compliance with,
or pursuant to any request or directive to comply with, any such Law as in
effect on the date hereof. Each Lender, upon determining in good faith that any
additional amounts will be payable pursuant to this Section 2.8(b), will give
prompt written notice thereof to the Borrower, which notice shall set forth in
reasonable detail the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish any
of the Borrower's obligations to pay additional amounts pursuant to this Section
2.8(b) upon receipt of such notice.
2.9. Compensation
If (a) any payment of principal of any Loan is made by the Borrower
to or for the account of a Lender other than on the last day of the Interest
Period for such Loan as a result of a payment pursuant to Section 2.4, 2.8, 4.1,
4.2 or 11.7, as a result of acceleration of the maturity of the Loans pursuant
to Section 9 or for any other reason, (b) the Borrowing is not made as a result
of a withdrawn Notice of Borrowing or (c) any prepayment of principal of any
Loan is not made as a result of a withdrawn notice of prepayment pursuant to
Section 4.1 or 4.2, the Borrower shall, after receipt of a written request by
such Lender (which request shall set forth in reasonable detail the basis for
requesting such amount), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that such Lender may reasonably incur as a result of such
payment, failure to borrow, failure to continue or failure to prepay, including,
without limitation, any loss, cost or expense (excluding loss of anticipated
profits) actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Loan.
2.10. Change of Lending Office
Each Lender agrees that, upon the occurrence of any event giving rise
to the operation of Section 2.8(a)(ii), 2.8(a)(iii), 2.8(b) or 4.4 with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event, with the object of avoiding
the consequence of the event giving rise to the operation of any such Section;
provided that such designation is made on such terms that such Lender and its
lending office suffer no economic, legal or regulatory disadvantage. Nothing in
this Section 2.10 shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Section 2.8 or 4.4.
2.11. Notice of Certain Costs
Notwithstanding anything in this Agreement to the contrary, to the
extent any notice required by Section 2.8, 2.9 or 4.4 is given by any Lender
more than 180 days after such Lender has knowledge (or should have had
knowledge) of the occurrence of the event giving rise to the additional cost,
reduction in amounts, loss, tax or other additional amounts described in such
Sections, such Lender shall not be entitled to compensation under Section 2.8,
2.9 or 4.4, as the case may be, for any such amounts incurred or accruing prior
to the giving of such notice to the Borrower.
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SECTION 3. Fees; Voluntary Reduction of Initial Loan Commitments; Mandatory
Termination of Commitments
3.1. Fees
The Borrower agrees to pay to the Administrative Agent and/or the
Joint Lead Arrangers the fees in the amounts and on the dates previously agreed
to in the Bridge Commitment Letter and, without duplication, the Letter
Agreement.
3.2. Voluntary Reduction of Commitments
Upon at least three (3) Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative Agent at
the Administrative Agent's Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
without premium or penalty, on any day, permanently to terminate or reduce the
Commitments in whole or in part; provided that (a) any such reduction shall
apply proportionately and permanently to reduce the Commitments of each of the
Lenders and (b) any partial reduction pursuant to this Section 3.2 shall be in
the amount of at least $1.0 million.
3.3. Mandatory Termination of Commitments
The Commitment shall terminate on the earliest of (i) the date on
which the Acquisition Agreement is terminated in accordance with its terms, (ii)
the Closing Date if no Loans are outstanding as of such date and (iii) 5:00 p.m.
(New York time) on September 30, 2005 if the Original Initial Loans are not made
on or before such date.
SECTION 4. Payments
4.1. Voluntary Prepayments
The Borrower shall have the right to prepay the Loans, without
premium or penalty, in whole or in part from time to time on the following terms
and conditions: (a) the Borrower shall give the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) stating (i) its
intent to make such prepayment and (ii) the amount of such prepayment, which
notice shall be given by the Borrower no later than 10:00 a.m. (New York time)
three (3) Business Days prior to the date of such prepayment; (b) as promptly as
practicable after receipt of such notice, the Administrative Agent shall give
notice to each Lender of (i) the pro rata amount payable to such Lender in
respect of its Loans and (ii) the expected date of such payment; (c) the
Borrower shall pay to the Administrative Agent for application pursuant to
Section 4.2(b) an amount equal to 100% of the aggregate principal amount of the
Loans to be prepaid, plus accrued and unpaid interest thereon to the prepayment
date; (d) each partial prepayment of any Loans shall be in an amount that is a
multiple of $1.0 million and in an aggregate principal amount of at least $1.0
million; and (e) any prepayment of Loans pursuant to this Section 4.1 on any day
other than the last day of an Interest Period applicable thereto shall be
subject to compliance by the Borrower with the applicable provisions of Section
2.9.
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4.2. Mandatory Prepayments and Commitment Reductions
(a) Sources of Prepayments and Commitment Reductions. On each
occasion that a Prepayment Event occurs, the Borrower shall, within five (5)
Business Days after the occurrence of such Prepayment Event, notify the
Administrative Agent of a pending prepayment of the Loans in an aggregate amount
equal to 100% of the Net Cash Proceeds therefrom. As promptly as practicable
after receipt of such notice, (x) the Administrative Agent shall give notice to
each Lender of (i) the pro rata amount that would be payable to such Lender in
respect of its Loans and any pro rata amount by which such Lender's Commitments
would be reduced and (ii) the expected date of such payment or reduction and (y)
in the case of a prepayment, the Borrower shall pay to the Administrative Agent
for application pursuant to Section 4.2(b) the pro rata amount payable to each
Lender in respect of its Loans.
(b) Application to Loans. Upon receipt of the amount payable to the
Lenders pursuant to Section 4.1 or 4.2(a), the Administrative Agent shall
distribute such amount in the following order: First, to the payment of all
expenses due and payable to the Agents under Section 11.5; Second, to the
payment of all expenses due and payable to the Lenders under Section 11.5,
ratably among the Lenders in accordance with the aggregate amount of such
payments owed to each such Lender; Third, to the payment of interest (other than
any PIK Interest Amount) then due and payable on the Loans, ratably among the
Lenders in accordance with the aggregate amount of interest owed to each such
Lenders; and Fourth, to the payment of the principal amount of the Loans,
ratably among such Lenders in accordance with the aggregate principal amount
owed to each such Lender.
(c) Temporary Investment. Pending the final application of any Net
Cash Proceeds pursuant to this Section 4.2, the Borrower or the applicable
Subsidiary may apply such Net Cash Proceeds temporarily to reduce Indebtedness
outstanding under a revolving credit facility or otherwise invest such Net Cash
Proceeds in Cash Equivalents.
4.3. Method and Place of Payment
(a) Except as otherwise specifically provided herein, all payments
under this Agreement shall be made, without set-off, counterclaim or deduction
of any kind, to the Administrative Agent for the ratable account of the Lenders
entitled thereto not later than 12:00 noon (New York time), on the date when due
and shall be made in immediately available funds at the Administrative Agent's
Office, it being understood that written or telecopy notice by the Borrower to
the Administrative Agent to make a payment from the funds in the Borrower's
account at the Administrative Agent's Office shall constitute the making of such
payment to the extent of such funds held in such account. All payments under
each Credit Document (whether of principal, interest or otherwise) shall be made
in Dollars. The Administrative Agent will thereafter cause to be distributed on
the same day (if payment was actually received by the Administrative Agent prior
to 2:00 p.m. (New York time) on such day) like funds relating to the payment of
principal or interest or Fees ratably to the Lenders entitled thereto.
34
(b) Any payments under this Agreement that are made later than 2:00
p.m. (New York time), shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day that is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.4. Net Payments; Tax Gross-Up
(a) Subject to the further provisions of this Section 4.4, all
payments made by any Credit Party to the Administrative Agent or any lender
under any Credit Document shall be made free and clear of, and without deduction
or withholding for or on account of, any current or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding (i) net income taxes, branch profits taxes and
franchise taxes (imposed in lieu of net income taxes), however denominated,
imposed on the Administrative Agent or any Lender by a jurisdiction (or
political subdivision thereof) in which the Administrative Agent or any Lender,
as the case may be, is organized, maintains a lending office, does business or
has a current or former connection (other than a business or a connection
arising from the transactions contemplated by this Agreement), and (ii) any and
all liabilities, penalties and interest with respect to any of the taxes
described in the foregoing clause (i). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) (including deductions applicable to additional sums payable
under this Section) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement; provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender that is not created or organized under the laws of the United States or a
state thereof (a "Non-U.S. Lender") if such Lender fails to comply with the
requirements of paragraph (b) of this Section 4.4. Whenever any Non-Excluded
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by Borrower showing payment thereof. Borrower shall
timely pay all present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies arising from any payment made
hereunder or under any other Credit Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Credit
Document ("Other Taxes") to the relevant Governmental Authority in accordance
with applicable requirements of law. Borrower shall indemnify the Administrative
Agent and each Lender, within 10 days after demand therefor, for the full amount
of any Non-Excluded Taxes or Other Taxes (including Non-Excluded Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable by the Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error. The agreements in this Section 4.4(a) shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
35
(b) Each Non-U.S. Lender shall:
(i) on or before becoming a party to this Agreement, deliver to
the Borrower and the Administrative Agent two copies of either (x) in
the case of any Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest," United States Internal
Revenue Service Form W-8BEN, (together with a certificate representing
that such Non-U.S. Lender is not a bank for purposes of Section 881(c)
of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code)), or (y) Internal Revenue
Service Form W-8BEN or W-8ECI, in each case properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, U.S. federal withholding tax on payments by
the Borrower under this Agreement;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification (or any applicable
successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of
a change in the Lender's circumstances requiring a change in the most
recent form previously delivered by it to the Borrower; and
(iii) complete such other forms or certifications as may
reasonably be requested in writing by the Borrower or the
Administrative Agent to establish an exemption from or entitlement to
a reduced rate of U.S. federal withholding tax;
unless, in any such case, any change in treaty, law or regulation, or any
administrative or judicial interpretation thereof has occurred prior to the date
on which any such delivery would otherwise be required that renders any such
form inapplicable or would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Each Person that shall become a
Participant pursuant to Section 11.6 or a Lender pursuant to Section 11.6 shall,
upon the effectiveness of the related transfer, be required to provide all the
forms and statements required pursuant to this Section 4.4(b); provided that in
the case of a Participant, such Participant shall furnish all such required
forms and statements to the Lender from which the related participation shall
have been purchased, and such Lender shall deliver to the Borrower and the
Administrative Agent such forms and statements, as well as two duly signed
completed copies of Internal Revenue Service Form W-8IMY (or any successor
thereto), together with any information such Lender chooses to transmit with
such form, and any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its own account with
respect to a portion of any such sums payable to such Lender.
36
(c) Upon the reasonable request of the Administrative Agent, each
Lender that is a "United States person" within the meaning of Section
7701(a)(30) of the Code , other than a Lender that may be treated as an exempt
recipient based on the indicators described in Treasury Regulation Section
1.6049-4(c)(1)(ii), shall, to the extent it may lawfully do so, deliver to the
Administrative Agent two duly signed completed copies of IRS Form W-9. If such
Lender fails to deliver such forms, then the Administrative Agent may withhold
from any interest payment to such Lender an amount equivalent to the applicable
back-up withholding tax imposed by the Code, without reduction.
(d) The Borrower shall not be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States federal withholding tax pursuant to paragraph (a) above to the
extent that (i) the obligation to withhold amounts with respect to United States
federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Agreement (or, in the case of a Participant who is not an entity created
or organized under the laws of the United States or a state thereof, on the date
such Participant became a Participant hereunder); provided, however, that this
clause (i) shall not apply to the extent that (x) the indemnity payments or
additional amounts any Lender (or Participant) would be entitled to receive
(without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the person making the assignment, participation or
transfer to such Lender (or Participant) would have been entitled to receive in
the absence of such assignment, participation or transfer, or (y) such
assignment, participation or transfer had been requested by the Borrower, (ii)
the obligation to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Lender or Participant to comply with the provisions of
paragraph (b) above or (iii) any of the representations or certifications made
by a Non-U.S. Lender or Participant pursuant to paragraph (b) above are
incorrect at the time a payment hereunder is made, other than by reason of any
change in circumstances of the Lender or Participant, or any change in treaty,
law or regulation or any administrative or judicial interpretation thereof
having effect after the date such representations or certifications were made.
(e) If the Borrower determines in good faith that a reasonable basis
exists for contesting any taxes for which indemnification has been demanded
hereunder, the relevant Lender or the Administrative Agent, as applicable, shall
use reasonable efforts to cooperate with the Borrower in challenging such taxes
at the Borrower's expense if so requested by the Borrower. If any Lender or the
Administrative Agent, as applicable, receives a refund of a tax for which a
payment has been made by the Borrower pursuant to this Agreement, which refund
in the good faith judgment of such Lender or Administrative Agent, as the case
may be, is attributable to such payment made by the Borrower, then the Lender or
the Administrative Agent, as the case may be, shall reimburse Borrower for such
amount (together with any interest received thereon) as the Lender or
Administrative Agent, as the case may be, determines to be the proportion of the
refund as will leave it, after such reimbursement and taking into account the
Lender's out-of-pocket expenses, in no better or worse position than it would
have been in if the payment had not been required; provided that Borrower, upon
the request of the Administrative Agent, or such Lender, agrees to repay the
amount paid over to Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority. Neither the Lender nor the
Administrative Agent shall be obliged to disclose any information regarding its
tax affairs or computations to the Borrower in connection with this paragraph
(d) or any other provision of this Section 4.4.
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4.5. Computations of Interest and Fees
(a) Interest on the Loans shall be computed on the basis of a 365-
(or 366-, as the case may be) day year. In computing interest on the Loans, the
date of the making of the Loans shall be included and the date of payment shall
be excluded; provided that if a Loan is repaid on the same day on which it is
made, one day's interest shall be paid on that Loan.
(b) Fees shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed.
4.6. Pro Rata Treatment
(a) Except as required under Section 2.8 or Section 2.9, each
Borrowing, each payment or prepayment of principal of any Loan and each payment
of interest on the Loans shall be allocated pro rata among the Lenders in
accordance with the respective principal amounts of their outstanding Loans.
Each Lender agrees that in computing such Lender's portion of the Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole Dollar.
(b) Whenever any payment received by the Administrative Agent from
any Credit Party under this Agreement or any Credit Document is insufficient to
pay in full all amounts then due and payable to the Administrative Agent and the
Lenders under this Agreement:
(i) if the Administrative Agent has not received a Payment
Sharing Notice (or, if the Administrative Agent has received a Payment
Sharing Notice but the Event of Default specified in such Payment
Sharing Notice has been cured or waived in accordance with the
provisions of this Agreement), such payment shall be distributed by
the Administrative Agent and applied by the Administrative Agent and
the Lenders in the following order: First, to the payment of all
expenses due and payable to the Agents under Section 11.5; Second, to
the payment of all expenses due and payable to the Lenders under
Section 11.5, ratably among the Lenders in accordance with the
aggregate amount of such payments owed to each such Lender; Third, to
the payment of interest (other than any PIK Interest Amount) then due
and payable on the Loans ratably among the Lenders in accordance with
the aggregate amount of interest owed to each such Lender; and Fourth,
to the payment of the principal amount of the Loans that is then due
and payable, ratably among the Lenders in accordance with the
aggregate principal amount owed to each such Lender; or
(ii) if the Administrative Agent has received a Payment Sharing
Notice that remains in effect, all payments received by the
Administrative Agent under this Agreement or any Note shall, be
distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order: First, to
the payment of all expenses due and payable to the Agents under
Section 11.5; Second, to the payment of all expenses due and payable
to the Lenders under Section 11.5, ratably among the Lenders in
accordance with the aggregate amount of such payments owed to each
such Lender; Third, to the payment of the interest (other than PIK
Interest Amount) accrued on all Loans, regardless of whether any such
amount is then due and payable, ratably among the Lenders in
accordance with the aggregate accrued interest plus the aggregate
principal amount owed to such Lender; and Fourth, to the payment of
the principal amount of all Loans, regardless of whether any such
amount is then due and payable, ratably among the Lenders in
accordance with the aggregate principal amount owed to such Lender.
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4.7. Use of Proceeds
(a) The proceeds of the Initial Loans shall be available, and the
Borrower agrees that it shall use such proceeds, solely to finance the
Acquisition and to pay related fees, costs and expenses.
(b) Upon the extension of a Term Loan by a Lender, the Administrative
Agent and each Lender shall reflect a corresponding reduction of the principal
amount of Initial Loans held by each Lender.
SECTION 5. Conditions
5.1. Conditions Precedent to Borrowing of Initial Loans
(a) Guarantee Agreement. Holdings and each of the Borrower's Domestic
Subsidiaries (other than ▇▇ ▇▇▇▇ LLC and CCI/Triad Financial Holdings
Corporation) shall have entered into the Guarantee Agreement.
(b) Credit Documents and Credit Agreement. The Borrower and the
Guarantors shall have duly executed and delivered each Credit Document to which
they are a party. The Borrower and Holdings shall have entered into definitive
documentation with terms and conditions and in form and substance reasonably
satisfactory to the Initial Lenders with respect to the Credit Agreement with a
commercial lender or lenders or a syndicate of commercial lenders. Each of the
Credit Documents and the Credit Agreement shall be in full force and effect and
the parties thereto shall be in compliance with all material agreements
thereunder.
(c) Organizational Documents; Incumbency. The Joint Lead Arrangers
shall have received (i) such documents and certifications as the Joint Lead
Arrangers may reasonably require to evidence that each Credit Party is duly
organized or formed, and is validly existing, in good standing and qualified to
engage in business in the jurisdiction of its organization or formation; and
(ii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Credit Party as the
Joint Lead Arrangers may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Credit
Documents to which such Credit Party is a party or is to be a party.
(d) Indebtedness for Borrowed Money. Other than the Original Initial
Loans and the Existing Notes and the Holdings Financing, in each case in the
amounts outstanding as of the date hereof, and other Indebtedness reasonably
satisfactory to the Lenders, Holdings and its Subsidiaries and Borrower and its
Subsidiaries, after giving effect to, and upon consummation of, the
Transactions, shall have no material outstanding Indebtedness for money
borrowed.
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(e) No Adverse Change or Development. Nothing shall have occurred
since May 31, 2005 which has had or could reasonably be expected to have a
Closing Date MAE.
(f) Consummation of Related Transactions. The Acquisition shall be
consummated in accordance with the terms of the Acquisition Agreement, which
Acquisition Agreement shall not have been amended, and all conditions precedent
to the Acquisition contained in the Acquisition Agreement shall have been
performed or complied with substantially on the terms set forth therein and not
waived without, to the extent such amendment or waiver is material and adverse
to the Lenders' interest, the Lenders' consent, which consent shall not be
unreasonably withheld. The Initial Lenders and the Joint Lead Arrangers shall be
reasonably satisfied with all material agreements, instruments and documents
relating to the Transactions and Holdings shall have borrowed not more than
$40.0 million pursuant to the Holdings Financing.
(g) Opinions of Counsel to Credit Parties. The Lenders shall have
received an opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP, special counsel for the
Credit Parties, substantially in the form of Exhibit D.
(h) Take-Out Banks. The Borrower shall have engaged the Take-Out
Banks to publicly offer or privately place the Permanent Securities, the
proceeds of which will be used either to fund the Acquisition and the
Refinancing or to prepay in whole or in part the Initial Loans. The Borrower
shall have delivered audited, unaudited and pro forma financial statements
meeting the requirements of Regulation S-X under the Securities Act of Holdings,
the Borrower and the Acquired Business for the periods required of a registrant
on Form S-1 to be included in an offering memorandum relating to the Permanent
Securities.
(i) Fees. The Borrower shall have paid (or contemporaneously with the
Borrowing hereunder will pay) in cash the Fees payable on the Closing Date.
(j) Solvency Certificate. On the Closing Date, the Joint Lead
Arrangers shall have received a certificate attesting to the Solvency of the
Credit Parties (taken as a whole) after giving effect to the Transactions from
the Chief Financial Officer of the Borrower.
(k) Notice of Borrowing. The Administrative Agent shall have received
a fully executed Notice of Borrowing in accordance with the requirements of
Section 2.2(a).
Each Lender, by delivering its signature page to this Agreement and
funding the Borrowing on the Closing Date shall be deemed to have acknowledged
receipt of, and consented to and approved, each Credit Document and each other
document required to be approved by any Agent or Lender, as applicable on the
Closing Date.
5.2. Conditions Precedent to Borrowing of Term Loans
The Conversion Date shall occur subject to the conditions that (a) no
Default of Event of Default with respect to the Borrower or any Significant
Subsidiary under Section 9(g) or 9(h) having occurred and be continuing, (b) no
payment default (whether or not matured) under this Agreement or with respect to
the Conversion Fee (as defined in the Bridge Commitment Letter) being in
existence and (c) no default in the payment when due at final maturity of any
Indebtedness of the Borrower or any of its Subsidiaries in excess of $10.0
million or the maturity of such Indebtedness shall have been accelerated being
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in existence; provided, however, that if an event described in clause (b) or (c)
is continuing at the scheduled Conversion Date but the applicable grace period,
if any, set forth in the events of default provision of this Agreement has not
expired, the Conversion Date shall, subject to the rights of the Lenders and the
Administrative Agent under Section 9, be deferred until the cure of such event.
SECTION 6. Representations and Warranties
In order to induce the Lenders to enter into this Agreement and to
make the Loans to be made hereby, each of Holdings and the Borrower represents
and warrants on the Closing Date to each Lender that the following statements
are true and correct (it being understood and agreed that the representations
and warranties made herein are deemed to be made concurrently with the
consummation of the transactions contemplated by the Related Agreements;
provided that for purposes of Sections 6.5(a), 6.6, 6.7, 6.8, 6.9, 6.10, 6.15
and 6.17, the term "Subsidiaries" shall not include the Acquired Business):
6.1. Existence, Qualification and Power; Compliance with Laws
Except as contemplated by Schedule 7.18, Holdings and each of its
Subsidiaries (a) has been duly organized and is validly existing as and in good
standing under the laws of its respective jurisdiction of incorporation, is duly
qualified to do business and is in good standing as a foreign entity in each
jurisdiction in which its respective ownership or lease of property or the
conduct of its respective businesses requires such qualification, and has all
power and authority necessary to own or hold its respective properties and to
conduct the businesses in which it is engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a Material Adverse Effect; (b) has all requisite corporate (or
similar) power and authority to execute and deliver, to the extent each is a
party thereto, the Credit Documents and the Related Agreements and to perform
its obligations hereunder and thereunder; and (c) is not (i) in violation of its
Organizational Documents or (ii) in violation of any applicable law, ordinance,
court decree, governmental rule or regulation to which it or its material
property or assets may be subject which could reasonably be expected to have a
Material Adverse Effect.
6.2. Authorization; No Contravention
The execution, delivery and performance by each Credit Party of each
of the Credit Documents and the Related Agreements, to the extent each is a
party thereto, and the consummation by each Credit Party, as applicable, of the
transactions contemplated by the Credit Documents and the Related Agreements do
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or, except as permitted by Section
8.4, result in the creation or imposition of any Lien upon any property or
assets of any Credit Party pursuant to, any Contractual Obligation, except for
any such conflict, breach, violation, default or Lien that has been waived and
except for any such conflict, breach, violation, default or Lien that could not,
singly or in the aggregate, reasonably be expected to have a Material Adverse
Effect or any material adverse effect on the ability of each Credit Party to
perform its obligations under the Credit Documents and the Related Agreements;
nor will such actions result in any violation of the provisions of any
Organizational Document of any Credit Party or result in any violation of any
Law except such violation of any Law that could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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6.3. Governmental Authorization; Other Consents
No material consent, approval, authorization or order of, or filing
or registration with, any Governmental Authority is required for the execution,
delivery and performance by any Credit Party of the Credit Documents and the
Related Agreements (other than the Acquisition Agreement) to which it is a party
and compliance by each Credit Party with the terms thereof and the consummation
by the Credit Parties of the transactions contemplated by the Credit Documents
and the Related Agreements (other than the Acquisition Agreement).
6.4. Binding Effect
The execution and delivery of this Agreement and each other Credit
Document has been duly authorized by each Credit Party which is a party thereto
and, when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding agreement of
each Credit Party, enforceable against each Credit Party in accordance with its
terms, except (i) to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and (ii) to the extent
that the enforceability of rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or regulations or the public
policy underlying such laws or regulations.
6.5. Financial Statements; No Closing Date MAE
(a) Borrower's and Holdings' audited financial statements for the
fiscal year ended September 30, 2004 fairly present in all material respects the
financial condition of the Borrower and Holdings, respectively, as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein. Other than the Acquisition, the
Speedware Acquisition and acquisition of Systems House Inc., during the period
from September 30, 2004 to and including the Closing Date, there has been (i) no
sale, transfer or other disposition by the Borrower of any material part of the
business or property of the Borrower and its Subsidiaries, taken as a whole, and
(ii) no purchase or other acquisition by the Borrower of any business or
property (including any Equity Interests of any other Person) material in
relation to the consolidated financial condition of Borrower and its
Subsidiaries, taken as a whole, in each case, which is not reflected in the
foregoing financial statements or in the notes thereto or has not otherwise been
disclosed in writing to the Initial Lenders prior to the Closing Date (including
pursuant to public filings made with the SEC).
(b) Ernst & Young LLP are independent public accountants with respect
to the Credit Parties and their Subsidiaries within the meaning of Rule 101 of
the Code of Professional Conduct of the American Institute of Certified Public
Accountants and its interpretations and rulings thereunder.
(c) Since May 31, 2005, no Closing Date MAE has occurred.
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6.6. Litigation
There are no legal or governmental proceedings pending to which
Holdings or any of its Subsidiaries or, to the best of Borrower's knowledge, the
Acquired Business, is a party or of which any property or assets of Holdings or
any of its Subsidiaries or affiliates or, to the best of Borrower's knowledge,
the Acquired Business, is the subject which, singularly or in the aggregate, if
determined adversely to Holdings or any of its Subsidiaries or affiliates or the
Acquired Business, could reasonably be expected to have a Material Adverse
Effect; and to the best knowledge of the Borrower no such proceedings are
threatened or contemplated by Governmental Authorities or threatened by others
against the Borrower, any of its Subsidiaries or the Acquired Business.
6.7. No Default
Neither Holdings nor any of its Subsidiaries or, to the best of
Borrower's knowledge, the Acquired Business is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any of its Contractual Obligations which could reasonably be
expected to have a Material Adverse Effect.
6.8. Ownership of Property; Liens
Holdings and each of its Subsidiaries and, to the best of Borrower's
knowledge, the Acquired Business has good and marketable title in fee simple to,
or have valid rights to lease or otherwise use, all items of real and personal
property which are material to the business of Holdings and each of its
Subsidiaries, taken as a whole, in each case free and clear of all Liens other
than Permitted Liens.
6.9. Environmental Compliance
There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release or threatened release
of any kind of toxic or other hazardous wastes or other hazardous substances by,
due to or caused by Holdings or any of its Subsidiaries (or, to the best
knowledge of the Borrower, the Acquired Business or any other entity (including
any predecessor) for whose acts or omissions Holdings or any of its Subsidiaries
are or could reasonably be expected to be liable) upon any property now or
previously owned or leased by Holdings or any of its Subsidiaries, or upon any
other property, in violation of any environmental statute or any ordinance,
rule, regulation, order, judgment, decree or permit or which would, under any
statute or any ordinance, rule (including rule of common law), regulation,
order, judgment, decree or permit, give rise to any liability except for any
violation or liability which would not have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Effect; and there has
been no disposal, discharge, emission or other release of any kind onto such
property or into the environment surrounding such property of any toxic or other
hazardous wastes or other hazardous substances with respect to which the
Borrower has knowledge, except for any such disposal, discharge, emission or
other release of any kind which would not have, singularly or in the aggregate
with all such disposal, discharge, emission and other release, a Material
Adverse Effect.
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6.10. Taxes
Holdings and each of its Subsidiaries and, to the best of Borrower's
knowledge, the Acquired Business, has filed all Federal and material state and
other tax returns and reports required to be filed, and has paid all Federal and
material state and other taxes, assessments, fees and other governmental charges
levied or imposed upon it or its properties, income or assets otherwise due and
payable, except those (a) which are not overdue by more than thirty (30) days,
(b) which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP or (c) with respect to which the failure to make such
filing or payment could not reasonably be expected to cause a Material Adverse
Effect. Holdings and each of its Subsidiaries has made adequate provision in
accordance with GAAP for all Taxes not yet due and payable, except where the
failure to do so could not be reasonably expected to result in a Material
Adverse Effect.
6.11. ERISA Compliance
No "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) or "accumulated funding deficiency" (as defined in
Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to any employee
benefit plan of Holdings or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect; each such employee benefit plan is
in compliance in all material respects with applicable law, including ERISA and
the Code; Holdings and each of its Subsidiaries has not incurred and does not
expect to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any pension plan for which Holdings or any
of its Subsidiaries would have any liability; and each such pension plan that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which could reasonably be expected to cause the loss of such qualification.
6.12. Labor Relations
No labor disturbance by or dispute with the employees of Holdings or
any of its Subsidiaries exists or, to the best knowledge of the Borrower is
imminent, which could reasonably be expected to have a Material Adverse Effect.
6.13. Subsidiaries; Equity Interests
Holdings does not have any Subsidiaries other than those specifically
disclosed in Schedule 6.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by Holdings and its Subsidiaries free and clear of all Liens except Liens
under the Credit Agreement, the pledge of the stock of Prelude Systems, Inc. and
any nonconsensual Lien that is permitted under Section 8.4. Schedule 6.13 (a)
sets forth the name and jurisdiction of each Subsidiary and (b) sets forth the
ownership interest of each Credit Party and any other Subsidiary in each
Subsidiary, including the percentage of such ownership.
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6.14. Margin Regulations; Investment Company Act; Public Utility
Holding Company Act
(a) None of the proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Loans to be considered a "purpose credit" within the
meanings of Regulation T, U or X.
(b) None of Holdings, any of its Subsidiaries and any Person
controlling a Credit Party or any Subsidiary (i) 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, or (ii) is an open-end
investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the Investment
Company Act, nor are any of them a closed-end investment company required to be
registered, but not registered, thereunder. Neither Holdings of the Credit
Parties nor any of its Subsidiaries is an "investment company" as defined in the
Investment Company Act.
6.15. Internal Accounting Controls
Holdings and each of its Subsidiaries maintain, and to the best of
Borrower's knowledge, the Acquired Business maintains, a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
6.16. Insurance
Holdings and each of its Subsidiaries has insurance covering its
respective properties, operations, personnel and businesses, which insurance is
in amounts and insures against such losses and risks as are in the Borrower's
opinion adequate to protect Holdings and its Subsidiaries and their respective
businesses. Neither Holdings nor any of its Subsidiaries have received notice
from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance.
6.17. Licenses; Intellectual Property, Etc.
(a) Holdings and each of its Subsidiaries and, to the best of the
Borrower's knowledge, the Acquired Business, possess all licenses, orders,
certificates, authorizations, approvals and permits issued by, and have made all
declarations, applications, reports, instruments, information and filings with,
the appropriate Federal, state or foreign regulatory agencies or bodies that are
necessary or desirable for the ownership of their respective properties or the
conduct of their respective businesses and such declarations, applications,
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reports, instruments, information and filings are true, correct and complete in
all material respects, except where the failure to possess or make the same
would not, singularly or in the aggregate, have a Material Adverse Effect, and
neither Holdings nor any of its Subsidiaries has received notification of any
revocation or modification of any such license, certificate, authorization or
permit that is generally renewable in the ordinary course or has any reason to
believe that any such license, certificate, authorization or permit will not be
renewed in the ordinary course.
(b) Holdings and each of its Subsidiaries and, to the best of
Borrower's knowledge, the Acquired Business, own or possess adequate rights to
use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses
and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) necessary for
the conduct of their respective businesses; and the conduct of their respective
businesses does not conflict in any material respect with, and Holdings and each
of its Subsidiaries and, to the best of Borrower's knowledge, the Acquired
Business, have not received any notice of any claim of conflict with, any such
rights of others.
6.18. Solvency
On the Closing Date, Holdings and its Subsidiaries (including the
Acquired Business) taken as a whole (after giving effect to the Transactions),
will be Solvent.
6.19. Disclosure
As of the Closing Date, no report, financial statement, certificate
or other written information furnished by or on behalf of any Credit Party to
any Agent or any Lender in connection with the transactions contemplated hereby
and the negotiation of this Agreement or delivered hereunder or any other Credit
Document (as modified or supplemented by other information so furnished) when
taken as a whole contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time of preparation; it being understood that
such projections may vary from actual results and that such variances may be
material.
6.20. Exchange and Registration Rights
No holder of securities of Holdings or any of its Subsidiaries will
be entitled to have such securities registered under the registration statements
required to be filed by the Borrower pursuant to the Exchange and Registration
Rights Agreement, to the extent each is a party thereto, other than as expressly
permitted thereby or that has been waived.
6.21. Indebtedness
Other than the Loans, the Holdings Financing and as set forth on
Holdings' consolidated balance sheet dated as of June 30, 2005, neither Holdings
nor any of its Subsidiaries has outstanding any material Indebtedness. For
purposes of this Section 6.21, the phrase "material Indebtedness" shall include
any Indebtedness equal to or in excess of $5.0 million in aggregate principal
amount.
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SECTION 7. Affirmative Covenants
The Borrower hereby covenants and agrees that on the Closing Date and
thereafter, for so long as this Agreement is in effect and until the Commitments
have terminated and the Loans, together with interest, Fees and all other Bridge
Obligations incurred hereunder (other than the Exchange Notes or the Exchange
Note Indenture), are paid in full:
7.1. Use of Proceeds
The Borrower will use the proceeds of all Loans for the purposes set
forth in Section 4.7.
7.2. Use of Proceeds of the Permanent Securities
The Borrower shall use the Net Cash Proceeds received by it from the
sale of any Permanent Securities to repay the Loans to the extent required by
Section 4.2(a).
7.3. Exchange Notes
(a) The Borrower shall, as promptly as practicable after being
requested to do so by the Initial Lenders at any time on or after the Initial
Maturity Date (unless the Borrower has given the Administrative Agent notice of
repayment of the Loans pursuant to Section 4.1), (i) select a bank or trust
company reasonably acceptable to the Lenders to act as Exchange Note Trustee,
(ii) enter into the Exchange Documents and (iii) cause counsel to the Borrower
to deliver to the Administrative Agent an executed legal opinion in form and
substance customary for a transaction of that type to be mutually agreed upon by
the Borrower and the Administrative Agent (including, without limitation, with
respect to due authorization, execution and delivery; validity; and
enforceability of the Exchange Documents and the Exchange and Registration
Rights Agreement referred to in clause (ii) above).
(b) The Borrower will, on or prior to the fifth (5th) Business Day
following the written request (the "Exchange Request") of the holder of any Loan
(or beneficial owner of a portion thereof) on or after the Initial Maturity
Date:
(i) execute and deliver, cause each other Credit Party to execute
and deliver, and cause the Exchange Note Trustee to execute and
deliver, the Exchange Note Indenture if such Exchange Note Indenture
has not previously been executed and delivered; and
(ii) execute and deliver to such holder or beneficial owner in
accordance with the Exchange Note Indenture an Exchange Note bearing
interest as set forth therein in exchange for such Loan dated the date
of the issuance of such Exchange Note, payable to the order of such
holder or owner, as the case may be, in the same principal amount as
such Loan (or portion thereof) being exchanged.
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The Exchange Request shall specify the principal amount of the Loans
to be exchanged pursuant to this Section 7.3, which in the case of the initial
request hereunder shall be in an aggregate of at least $30.0 million of Loans
for all requesting holders; provided, that each holder who holds a Loan, or
portion thereof, which is included in the Exchange Request must request an
exchange of all the Loans held by such holder. Loans exchanged for Exchange
Notes under this Section 7.3 shall be deemed repaid and the Exchange Notes shall
be governed by and construed in accordance with the terms of the Exchange Note
Indenture.
The Exchange Note Trustee shall at all times be a corporation
organized and doing business under the laws of the United States or the State of
New York, in good standing and having its principal offices in the Borough of
Manhattan, in The City of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has a combined capital and surplus of not
less than $500.0 million.
7.4. Change of Control
(a) Upon a Change of Control, the Borrower shall offer to repay all
of the outstanding Loans, without any premium, plus accrued and unpaid interest,
if any, in a manner substantially consistent with the Change of Control Offer
(as defined in the Existing Notes Indentures) procedures set forth in the
Existing Notes Indentures.
(b) Prior to complying with the provisions of this Section 7.4, but
in any event within 30 days following a Change of Control, the Borrower shall
either repay all outstanding Indebtedness under the Credit Agreement or obtain
the requisite consents, if any, under the Credit Agreement necessary to permit
the prepayment of the Loans required by this Section 7.4; provided that the
failure to repay such Indebtedness or obtain such consent shall not affect the
obligation of the Borrower pursuant to Section 7.4(a).
7.5. Financial Statements
The Borrower shall deliver to the Administrative Agent for further
distribution to each Lender:
(a) as soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Borrower beginning with
the 2005 fiscal year, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of Ernst & Young LLP or any other
independent certified public accountant of nationally recognized
standing, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to
any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit;
48
(b) as soon as available, but in any event within forty-five (45)
days after the end of each of the first three (3) fiscal quarters of
each fiscal year of the Borrower (commencing with the fiscal quarter
ended December 31, 2005), a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal quarter and for the portion of
the fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous
fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the
Borrower as fairly presenting in all material respects the financial
condition, results of operations, shareholders' equity and cash flows
of the Borrower and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of
footnotes;
(c) as soon as available, but in any event no later than
forty-five (45) days after the end of each fiscal year, forecasts
prepared by management of the Borrower, in form reasonably
satisfactory to the Administrative Agent, of consolidated balance
sheets, income statements and cash flow statements of the Borrower and
its Subsidiaries for the fiscal year following such fiscal year then
ended; and
(d) simultaneously with the delivery of each set of consolidated
financial statements referred to in Sections 7.5(a) and 7.5(b) above,
the related consolidating financial statements reflecting the
adjustments necessary to eliminate the accounts of Unrestricted
Subsidiaries (if any) from such consolidated financial statements.
Documents required to be delivered pursuant to Section 7.5(a) or (b)
(to the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date on which the Borrower posts such documents, or
provides a link thereto on the Borrower's website on the Internet at
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇; provided that (i) if requested by the Administrative Agent,
the Borrower shall deliver paper copies of such documents to the Administrative
Agent for further distribution to each Lender until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify (which may be by facsimile or electronic mail)
the Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. The Administrative Agent shall have no obligation to request
the delivery or to maintain copies of the documents referred to above, and in
any event shall have no responsibility to monitor compliance by the Borrower
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.
7.6. Certificates; Other Information
The Borrower will deliver to the Administrative Agent for further
distribution to each Lender:
(a) no later than five (5) days after the delivery of the
financial statements referred to in Section 7.5(a), a certificate of
its independent certified public accountants certifying such financial
statements;
49
(b) promptly after the same are publicly available, copies of
each annual report, proxy or financial statement or other report or
communication sent to all of the stockholders of the Borrower, and
copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to
file, copies of any report, filing or communication with the SEC under
Section 13 or 15(d) of the Exchange Act, or with any Governmental
Authority that may be substituted therefor, or with any national
securities exchange, and in any case not otherwise required to be
delivered to the Administrative Agent pursuant hereto;
(c) promptly after the receipt thereof by any Credit Party or any
of its Subsidiaries, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any material investigation or other material
inquiry by such agency regarding financial or other operational
results of any Credit Party or any of its Subsidiaries;
(d) promptly after the Borrower has notified the Administrative
Agent of any intention by the Borrower to treat the Loans and related
transactions as being a "reportable transaction" (within the meaning
of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS
Form 8886 or any successor form; and
(e) promptly, such additional information regarding the business,
legal, financial or corporate affairs of Holdings or any of its
Subsidiaries, or compliance with the terms of the Credit Documents, as
the Administrative Agent or any Lender through the Administrative
Agent may from time to time reasonably request.
7.7. Notices
Promptly notify the Administrative Agent: (a) of the occurrence of
any Default; or (b) of any matter that has had or could reasonably be expected
to have a Material Adverse Effect, including any Material Adverse Effect arising
out of or resulting from (i) breach or non-performance of, or any default under,
a Contractual Obligation of Holdings or any of its Subsidiaries, (ii) any
dispute, litigation, investigation, proceeding or suspension between Holdings or
any of its Subsidiaries and any Governmental Authority, (iii) the commencement
of, or any material development in, any litigation or proceeding affecting
Holdings or any of its Subsidiaries, including those described in Section 6.9 or
(iv) the occurrence of an event described in Section 6.11.
7.8. Existence
Subject to Section 8.5 and Section 11.16 and except as contemplated
by Schedule 7.18, Holdings and the Borrower will, and will cause each of their
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect their respective corporate existence and the corporate, partnership or
other existence of each Subsidiary in accordance with the respective
Organizational Documents of each such Subsidiary and the rights (charter and
statutory) and material franchises of Holdings, the Borrower and the
Subsidiaries; provided, however, that Holdings and the Borrower shall not be
required to preserve any such right or franchise, or the corporate existence of
any Subsidiary, if the respective Board of Directors of Holdings and the
50
Borrower shall determine that the preservation thereof is no longer desirable in
the conduct of the business of Holdings or the Borrower, as the case may be, and
the Subsidiaries, taken as a whole; provided, further, however, that a
determination of the Board of Directors of Holdings or the Borrower, as the case
may be, shall not be required in the event of a merger of one or more Wholly
Owned Subsidiaries of Holdings or the Borrower, as the case may be, with or into
another Wholly Owned Subsidiary of Holdings or the Borrower, as the case may be,
or another Person, if the surviving Person is a Wholly Owned Subsidiary of
Holdings or the Borrower, as the case may be, organized under the laws of the
United States or a State thereof or of the District of Columbia. This Section
7.8 shall not prohibit Holdings, the Borrower or any of their Subsidiaries from
taking any other action otherwise permitted by, and made in accordance with, the
provisions of this Agreement.
7.9. Payment of Obligations
The Borrower will, and will cause each of its Subsidiaries to, pay,
discharge or otherwise satisfy as the same shall become due and payable, all its
obligations and liabilities (including, without limitation, Taxes) except, in
each case to the extent the failure to pay or discharge the same could not
reasonably be expected to have a Material Adverse Effect.
7.10. Maintenance of Properties
Except if the failure to do so could not reasonably be expected to
have a Material Adverse Effect, the Borrower will, and will cause each of its
Subsidiaries to, (a) maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good
working order, repair and condition, ordinary wear and tear excepted and
casualty or condemnation excepted, and (b) make all necessary renewals,
replacements, modifications, improvements, upgrades, extensions and additions
thereof or thereto in accordance with prudent industry practice.
7.11. Insurance
The Borrower will, and will cause each of its Subsidiaries to,
maintain insurance covering their respective properties, operations, personnel
and businesses, which insurance is in amounts and insures against such losses
and risks as are in the Borrower's opinion adequate to protect the Borrower and
each of its Subsidiaries and their respective businesses.
7.12. Compliance with Laws
The Borrower will comply, and shall cause each of its Subsidiaries to
comply, in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its business or
properties except if the failure to comply therewith could not reasonably be
expected to cause a Material Adverse Effect.
7.13. Further Assurances
At any time or from time to time upon the request of the
Administrative Agent, the Borrower will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as the Administrative Agent may reasonably request in order to effect fully the
purposes of the Credit Documents. In furtherance and not in limitation of the
foregoing, the Borrower shall take such actions as the Administrative Agent may
reasonably request from time to time to ensure that the Bridge Obligations are
guaranteed by the Guarantors.
51
7.14. Books and Records
The Borrower and its Subsidiaries will maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all material financial transactions
and matters involving the assets and business of the Borrower or such
Subsidiary, as the case may be.
7.15. Compliance with Environmental Laws
Except, in each case, to the extent that the failure to do so could
not reasonably be expected to cause a Material Adverse Effect, the Borrower will
comply, and take all reasonable actions to cause all lessees and other Persons
operating or occupying its properties to comply, in all material respects, with
all applicable statutes, ordinances, rules, regulations, orders, judgments,
decrees and permits described in Section 6.9; obtain and renew all applicable
permits referred to in Section 6.9 necessary for its operations and properties;
and, in each case to the extent required by the Laws referred to in Section 6.9,
conduct any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
hazardous materials from any of its properties, in accordance with the
requirements of all such Laws.
7.16. Reports
So long as any of the Loans are outstanding, the Borrower will
provide to the Lenders and the Administrative Agent, copies of the annual
reports and of the information, documents and other reports that the Borrower
would have been required to file with the SEC pursuant to Sections 13 or 15(d)
of the Exchange Act, at or prior to the dates such reports would otherwise be
required to be filed, regardless of whether the Borrower is then obligated to
file such reports, commencing for the fiscal year ended September 30, 2005.
7.17. Compliance Certificate
The Borrower shall deliver to the Administrative Agent within 120
days after the close of each fiscal year a certificate signed by a Responsible
Officer stating that a review of the activities of Holdings and its Subsidiaries
has been made under the supervision of the signing officer with a view to
determining whether a Default or Event of Default has occurred and whether or
not the signer knows of any failure of any Credit Party to comply with any of
its obligations under this Agreement or any Default or Event of Default that
occurred during such fiscal year and, if such a Default or Event of Default has
occurred, its status and the action Borrower is taking or proposes to take with
respect thereto. The first certificate to be delivered by the Borrower pursuant
to this Section 7.17 shall be for the fiscal year ended September 30, 2005.
52
7.18. Post-Closing Covenants
The Borrower shall deliver to the Administrative Agent within the
time periods specified on Schedule 7.18 (unless extended by the Administrative
Agent in its sole discretion) each of the items referred to on Schedule 7.18.
SECTION 8. Negative Covenants
The Borrower hereby covenants and agrees that on the Closing Date and
thereafter, for so long as this Agreement is in effect and until the Commitments
have terminated and the Loans, together with interest, Fees and all other Bridge
Obligations incurred hereunder (other than the Exchange Notes or the Exchange
Note Indenture), are paid in full:
8.1. Limitation on Asset Sales
(a) Neither the Borrower nor any of its Subsidiaries will consummate
an Asset Sale unless (i) the Borrower or the applicable Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least equal to
the fair market value of the assets sold or otherwise disposed of (as determined
in good faith by management of the Borrower or, if such Asset Sale involves
consideration in excess of $5.0 million, by a Board Resolution of the Borrower),
(ii) at least 75% of the consideration received by the Borrower or such
Subsidiary, as the case may be, from such Asset Sale is in the form of cash or
Cash Equivalents and is received at the time of such disposition and (iii) upon
the consummation of an Asset Sale, the Borrower applies, or causes such
Subsidiary to apply, such Net Cash Proceeds within 180 days of receipt thereof
either (A) to repay Indebtedness outstanding under the Credit Agreement or any
Indebtedness of a Subsidiary of the Borrower that is not a Guarantor (and, to
the extent such Indebtedness relates to principal under a revolving credit or
similar facility, to obtain a corresponding reduction in the commitments
thereunder, except that the Borrower may temporarily repay such Indebtedness
using the consideration from such Asset Sale and thereafter, to the extent
permitted, use such funds to reinvest pursuant to clause (B) below within the
period set forth therein without having to obtain a corresponding reduction in
the commitments under such revolving credit or similar facility), (B) after the
Conversion Date, to reinvest, or to be contractually committed to reinvest
pursuant to a binding agreement, in Productive Assets and, in the latter case,
to have so reinvested within 360 days of the date of receipt of such Net Cash
Proceeds or (C) to purchase Loans, Existing Notes and other Indebtedness of the
Borrower that is not, by its terms, expressly subordinated in right of payment
to the Loans and Notes and the terms of which require an offer to purchase such
other Indebtedness with the proceeds from the Asset Sale ("Other Indebtedness"),
pro rata tendered to the Borrower for purchase at a price equal to 100% of the
principal amount thereof (or the accreted value of such Other Indebtedness, if
such Other Indebtedness is issued at a discount) as of the date of such purchase
plus accrued interest thereon, if any, to the date of purchase pursuant to an
offer to purchase made by the Borrower as set forth below (a "Net Proceeds
Offer"); provided, however, that the Borrower may defer making a Net Proceeds
Offer until the aggregate Net Cash Proceeds from Asset Sales not otherwise
applied in accordance with this covenant equal or exceed $5.0 million.
53
Subject to the deferral right set forth in the final proviso of the
preceding paragraph, each notice of a Net Proceeds Offer will be mailed, by
first-class mail, to Lenders not more than 180 days after the relevant Asset
Sale or, in the event the Borrower or a Subsidiary has entered into a binding
agreement as provided in (B) above, within 180 days following the termination of
such agreement but in no event later than 360 days after the relevant Asset
Sale. Such notice will specify, among other things, the purchase date (which
will be no earlier than 30 days nor later than 45 days from the date such notice
is mailed, except as otherwise required by law) and will otherwise comply with
the procedures set forth in this Agreement. Upon receiving notice of the Net
Proceeds Offer, Lenders may elect to tender their Loans in whole or in part in
integral multiples of $1,000. To the extent Lenders properly tender Loans in an
amount which, together with all Other Indebtedness so tendered, exceeds the Net
Proceeds Offer, Loans of tendering Lenders and such Other Indebtedness will be
repurchased on a pro rata basis (based upon the aggregate principal amount
tendered). To the extent that the aggregate principal amount of Loans tendered
pursuant to any Net Proceeds Offer, which, together with the aggregate principal
amount or aggregate accreted value, as the case may be, of all Other
Indebtedness so tendered, is less than the amount of Net Cash Proceeds subject
to such Net Proceeds Offer, the Borrower may use any remaining portion of such
Net Cash Proceeds not required to fund the repurchase of tendered Loans and such
Other Indebtedness for any purposes otherwise permitted by this Agreement. Upon
the consummation of any Net Proceeds Offer, the amount of Net Cash Proceeds
subject to any future Net Proceeds Offer from the Asset Sales giving rise to
such Net Cash Proceeds shall be deemed to be zero.
The Borrower will comply with the requirements of Rule 14e-1 under
the Exchange Act to the extent applicable in connection with the repurchase of
Other Indebtedness pursuant to a Net Proceeds Offer. To the extent the
provisions of any such rule conflict with the provisions of this Section 8.1,
the Borrower shall comply with the provisions of such rule and be deemed not to
have breached its obligations described in this Section 8.1 by virtue thereof.
8.2. Limitation on Restricted Payments
(a) Prior to the Conversion Date, neither the Borrower nor any of its
Subsidiaries will, directly or indirectly, make any Restricted Payment.
(b) From and after the Conversion Date, neither the Borrower nor any
of its Subsidiaries will, directly or indirectly, make any Restricted Payment,
if at the time of such Restricted Payment and immediately after giving effect
thereto:
(i) a Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment; or
(ii) the Borrower's Consolidated Coverage Ratio is less than or
equal to 2.00 to 1.00; or
(iii) the aggregate amount of Restricted Payments made since the
Existing Fixed Rate Notes Issue Date (the amount expended for such
purposes, if other than in cash, being the fair market value of such
property as determined by the Board of Directors of the Borrower in
good faith) exceeds the sum of
(1) 50% of Consolidated Net Income (or, in the case such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit) accruing during the period (treated as one accounting
period) from the Existing Fixed Rate Notes Issue Date to the end
of the most recent fiscal quarter ending prior to the date of
such Restricted Payment as to which financial results are
available plus
54
(2) 100% of the aggregate net proceeds, including the fair
market value of property other than cash as determined by the
Board of Directors of the Borrower in good faith, received since
the Existing Fixed Rate Notes Issue Date by the Borrower from any
Person (other than a Subsidiary of the Borrower) from the
issuance and sale since the Existing Fixed Rate Notes Issue Date
of Qualified Capital Stock of the Borrower (excluding (i) any net
proceeds from issuances and sales financed directly or indirectly
using funds borrowed from the Borrower or any Subsidiary of the
Borrower, until and to the extent such borrowing is repaid, but
including the proceeds from the issuance and sale of any
securities convertible into or exchangeable for Qualified Capital
Stock to the extent such securities are so converted or exchanged
and including any additional proceeds received by the Borrower
upon such conversion or exchange and (ii) any net proceeds
received from issuances and sales that are used to consummate a
transaction described in clauses (ii) and (iii) of paragraph (b)
below), plus
(3) without duplication of any amount included in clause
(iii)(2) above, 100% of the aggregate net proceeds, including the
fair market value of property other than cash (valued as provided
in clause (iii)(2) above), received by the Borrower as a capital
contribution after the Existing Fixed Rate Notes Issue Date, plus
(4) the amount equal to the net reduction in Investments
(other than Permitted Investments) made by the Borrower or any of
its Subsidiaries in any Person resulting from (i) repurchases or
redemptions of such Investments by such Person, proceeds realized
upon the sale of such Investment to an unaffiliated purchaser and
repayments of loans or advances or other transfers of assets by
such Person to the Borrower or any Subsidiary of the Borrower or
(ii) the redesignation of Unrestricted Subsidiaries as
Subsidiaries (valued in each case as provided in the definition
of "Investment") not to exceed, in the case of any Subsidiary,
the amount of Investments previously made by the Borrower or any
Subsidiary in such Unrestricted Subsidiary, which amount was
included in the calculation of Restricted Payments; provided,
however, that no amount shall be included under this clause (4)
to the extent it is already included in Consolidated Net Income,
plus
(5) the aggregate net cash proceeds received by a Person in
consideration for the issuance of such Person's Capital Stock
(other than Disqualified Capital Stock) that are held by such
Person at the time such Person is merged with and into the
Borrower in accordance with Section 8.5 on or since the Existing
Fixed Rate Notes Issue Date; provided, however, that concurrently
with or immediately following such merger the Borrower uses an
amount equal to such net cash proceeds to redeem or repurchase
the Borrower's Capital Stock, plus
(6) $25.0 million.
55
(c) Notwithstanding the foregoing, the provisions of clauses (a) and
(b) will not prohibit:
(i) after the Conversion Date, the payment of any dividend or the
making of any distribution within 60 days after the date of its
declaration if such dividend or distribution would have been permitted
on the date of declaration;
(ii) after the Conversion Date, the purchase, redemption or other
acquisition or retirement of any Capital Stock of the Borrower or any
warrants, options or other rights to acquire shares of any class of
such Capital Stock either (x) solely in exchange for shares of
Qualified Capital Stock or other rights to acquire Qualified Capital
Stock or (y) through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of
the Borrower) of shares of Qualified Capital Stock or warrants,
options or other rights to acquire Qualified Capital Stock or (z) in
the case of Disqualified Capital Stock, solely in exchange for, or
through the application of the net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Borrower)
of, Disqualified Capital Stock that has a redemption date no earlier
than, and requires the payment of current dividends or distributions
in cash no earlier than, in each case, the Disqualified Capital Stock
being purchased, redeemed or otherwise acquired or retired;
(iii) after the Conversion Date, the acquisition of Indebtedness
of the Borrower that is subordinate or junior in right of payment to
the Loans and Notes either (x) solely in exchange for shares of
Qualified Capital Stock (or warrants, options or other rights to
acquire Qualified Capital Stock), for shares of Disqualified Capital
Stock that have a redemption date no earlier than, and require the
payment of current dividends or distributions in cash no earlier than,
in each case, the maturity date and interest payments dates,
respectively, of the Indebtedness being acquired, or for Indebtedness
of the Borrower that is subordinate or junior in right of payment to
the Loans and Notes, at least to the extent that the Indebtedness
being acquired is subordinated to the Loans and Notes and has a
Weighted Average Life to Maturity no less than that of the
Indebtedness being acquired or (y) through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Borrower) of shares of Qualified Capital Stock (or
warrants, options or other rights to acquire Qualified Capital Stock),
shares of Disqualified Capital Stock that have a redemption date no
earlier than, and require the payment of current dividends or
distributions in cash no earlier than, in each case, the maturity date
and interest payments dates, respectively, of the Indebtedness being
refinanced, or Indebtedness of the Borrower that is subordinate or
junior in right of payment to the Loans and Notes at least to the
extent that the Indebtedness being acquired is subordinated to the
Loans and Notes and has a Weighted Average Life to Maturity no less
than that of the Indebtedness being refinanced;
56
(iv) after the Closing Date, payments by the Borrower to
repurchase or to enable Holdings (including for the purpose of this
clause (iv) and for the purposes of clauses (v) and (vi) below, any
corporation that, directly or indirectly, owns all of the Common Stock
of Holdings) to repurchase, Capital Stock of Holdings from employees
of Holdings or its Subsidiaries or such other corporation in an
aggregate amount not to exceed (x) prior to the Conversion Date, $2.5
million and (y) thereafter, $5.0 million;
(v) after the Closing Date, payments to enable Holdings to redeem
or repurchase stock purchase or similar rights granted by Holdings
with respect to its Capital Stock in an aggregate amount not to exceed
$1.0 million;
(vi) after the Closing Date, payments, not to exceed $200,000 in
the aggregate, to enable Holdings to make cash payments to holders of
its Capital Stock in lieu of the issuance of fractional shares of its
Capital Stock;
(vii) payments made pursuant to any merger, consolidation or sale
of assets effected in accordance with Section 8.5;
(viii) after the Conversion Date, payments to enable Holdings or
the Borrower to pay dividends on its Capital Stock (other than
Disqualified Capital Stock) after the first Equity Offering in an
annual amount not to exceed 6.00% of the gross proceeds (before
deducting underwriting discounts and commissions and other fees and
expenses of the offering) received from shares of Capital Stock (other
than Disqualified Capital Stock) sold for the account of the issuer
thereof (and not for the account of any stockholder) in such initial
Equity Offering and contributed to the Borrower;
(ix) payments by the Borrower to fund the payment by any direct
or indirect holding company thereof of audit, accounting, legal or
other similar expenses, to pay franchise or other similar taxes and to
pay other corporate overhead expenses, so long as such dividends are
paid as and when needed by its respective direct or indirect holding
company and so long as the aggregate amount of payments pursuant to
this clause (ix) does not exceed $1.0 million in any calendar year;
(x) payments by the Borrower to fund taxes of Holdings for a
given taxable year in an amount equal to the Borrower's "separate
return liability," as if the Borrower were the parent of a
consolidated group (for purposes of this clause (x) "separate return
liability" for a given taxable year shall mean the hypothetical United
States tax liability of the Borrower defined as if the Borrower had
filed its own United States federal tax return for such taxable year);
(xi) payments by the Borrower under the Financial Monitoring and
Oversight Agreements; and
(xii) payments or loans made to Holdings in an amount not to
exceed $30.0 million since the Existing Fixed Rate Notes Issue Date,
the proceeds of which amounts are used to make payments to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (or one or more of their respective
Affiliates) pursuant to the ▇▇▇▇▇▇ Purchase Agreement;
provided that (A) in the case of clauses (iii), (iv), (v), (vi), (vii) and
(viii), no Default or Event of Default shall have occurred or be continuing at
the time of such payment or as a result thereof, (B) in determining the
aggregate amount of Restricted Payments made since the Existing Fixed Rate Notes
Issue Date, amounts expended pursuant to clauses (i), (iv), (v), (vi), (vii) and
(viii) shall be included in such calculation and (C) that no payment may be made
pursuant to clause (vii) unless, after giving effect to such transaction (and
the incurrence of any Indebtedness in connection therewith and the use of the
proceeds thereof), Borrower's Consolidated Coverage Ratio would be greater than
2.00 to 1.00.
57
8.3. Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock
(a) Prior to the Conversion Date, the Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur"), any
Indebtedness (other than Permitted Indebtedness).
(b) After the Conversion Date, the Borrower will not, and will not
permit any of its Subsidiaries to incur any Indebtedness (other than Permitted
Indebtedness) and the Borrower will not issue any Disqualified Capital Stock and
will not permit its Subsidiaries to issue any Preferred Stock except Preferred
Stock of a Subsidiary issued to (and as long as it is held by) the Borrower or a
Wholly Owned Subsidiary of the Borrower; provided, however, that the Borrower
and its Subsidiaries may incur Indebtedness or issue shares of such Capital
Stock if, in either case, at the time of and immediately after giving pro forma
effect to such incurrence of Indebtedness or the issuance of such Capital Stock,
as the case may be, and the use of proceeds therefrom, the Borrower's
Consolidated Coverage Ratio is greater than 2.00 to 1.00.
(c) The Borrower will not incur or suffer to exist, or permit any of
its Subsidiaries to incur or suffer to exist, any Obligations with respect to an
Unrestricted Subsidiary that would violate the provisions set forth in the
definition of Unrestricted Subsidiary.
(d) Neither the Borrower nor any Guarantor will incur any
Indebtedness if such Indebtedness is by its terms (or by the terms of any
agreement governing such Indebtedness) subordinate or junior in ranking in any
respect to any of its Indebtedness unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) subordinated in
right of payment to the Bridge Obligations or the Guarantees, as applicable, to
the same extent as such Indebtedness is subordinated in right of payment to such
other Indebtedness.
8.4. Liens
The Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create, incur or suffer to exist any Lien on any
asset or property of the Borrower or such Subsidiary, or any income or profits
therefrom, or assign or convey any right to receive income therefrom, that
secures any obligations of the Borrower or any of its Subsidiaries unless the
Bridge Obligations are equally and ratably secured with (or on a senior basis
to, in the case of obligations subordinated in right of payment to the Bridge
Obligations) the obligations so secured or until such time as such obligations
are no longer secured by a Lien. The preceding sentence will not require the
Borrower or any Subsidiary to secure the Bridge Obligations if the Lien consists
of a Permitted Lien.
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8.5. Merger, Consolidation or Sale of Assets
(a) The Borrower may not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, another Person or adopt a plan of liquidation unless:
(i) either (1) the Borrower is the surviving or continuing Person
or (2) the Person (if other than the Borrower) formed by such
consolidation or into which the Borrower is merged or the Person that
acquires by conveyance, transfer or lease the properties and assets of
the Borrower substantially as an entirety or in the case of a plan of
liquidation, the Person to which assets of the Borrower have been
transferred, shall be a corporation, partnership, limited liability
company or trust organized and existing under the laws of the United
States or any State thereof or the District of Columbia;
(ii) such surviving Person shall assume all of the obligations of
the Borrower under the Notes and this Agreement in a form reasonably
satisfactory to the Administrative Agent;
(iii) immediately after giving effect to such transaction and the
use of the proceeds therefrom (on a pro forma basis, including giving
effect to any Indebtedness incurred or anticipated to be incurred in
connection with such transaction), the Consolidated Coverage Ratio of
the Borrower (in the case of clause (1) of the foregoing clause (i))
or such Person (in the case of clause (2) of the foregoing clause (i))
shall be greater than 2.00 to 1.00;
(iv) immediately after giving effect to such transactions, no
Default or Event of Default shall have occurred or be continuing; and
(v) the Borrower has delivered to the Administrative Agent prior
to the consummation of the proposed transaction an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this Agreement and
that all conditions precedent in this Agreement relating to such
transaction have been satisfied.
(b) For purposes of the foregoing paragraph (a), the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all of the properties and assets
of one or more Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties or assets of the Borrower, will be deemed to
be the transfer of all or substantially all of the properties and assets of the
Borrower.
(c) Notwithstanding clauses (ii) and (iii) in paragraph (a) above,
(1) any Subsidiary of the Borrower may consolidate with, merge into or transfer
all or part of its properties and assets to the Borrower and (2) the Borrower
may merge with a corporate Affiliate thereof incorporated solely for the purpose
of reincorporating the Borrower in another jurisdiction in the United States to
realize tax or other benefits.
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(d) In the event of any transaction (other than a lease) described in
and complying with the conditions listed in the foregoing paragraph (a) in which
the Borrower is not the surviving Person and the surviving Person is to assume
all the Bridge Obligations, such surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of, the Borrower under
this Agreement and the other Credit Documents to which the Borrower is a party
and the Borrower shall be discharged from the Bridge Obligations.
8.6. Transactions with Affiliates
Neither the Borrower nor any of its Subsidiaries will, directly or
indirectly, enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with or for the benefit of any of its Affiliates
(other than transactions between the Borrower and a Wholly Owned Subsidiary of
the Borrower or among Wholly Owned Subsidiaries of the Borrower) (an "Affiliate
Transaction"), other than Affiliate Transactions on terms that are no less
favorable than those that might reasonably have been obtained in a comparable
transaction on an arm's-length basis from a person that is not an Affiliate;
provided, however, that for a transaction or series of related transactions
involving value of $5.0 million or more, such determination will be made in good
faith by a majority of members of the Board of Directors of the Borrower and by
a majority of the disinterested members of the Board of Directors of the
Borrower, if any; provided, further, that for a transaction or series of related
transactions involving value of $15.0 million or more, the Board of Directors of
the Borrower has received an opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair, from a financial point of
view, to the Borrower or such Subsidiary. The foregoing restrictions will not
apply to (1) reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder, (2) any obligations of the
Borrower under the Financial Monitoring and Oversight Agreements, or any
employment agreement, noncompetition or confidentiality agreement with any
officer of the Borrower (provided that each amendment of any of the foregoing
agreements shall be subject to the limitations of this covenant), (3) reasonable
and customary investment banking, financial advisory, commercial banking and
similar fees and expenses paid to the Initial Purchasers and their Affiliates,
(4) any Restricted Payment permitted to be made pursuant to Section 8.2, (5) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors of the
Borrower, (6) loans or advances to employees in the ordinary course of business
of the Borrower or any of its Subsidiaries consistent with past practices and
(7) the issuance of Capital Stock of the Borrower (other than Disqualified
Capital Stock).
8.7. Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause to permit to exist or
become effective, by operation of the charter of such Subsidiary or by reason of
any agreement, instrument, judgment, decree, rule, order, statute or
governmental regulation, any encumbrance or restriction on the ability of any
Subsidiary to (a) pay dividends or make any other distributions on its Capital
Stock; (b) make loans or advances or pay any Indebtedness or other obligation
owed to the Borrower or any of its Subsidiaries; or (c) transfer any of its
property or assets to the Borrower, except for such encumbrances or restrictions
existing under or by reason of:
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(1) applicable law;
(2) this Agreement;
(3) customary non-assignment provisions of any lease governing a
leasehold interest of the Borrower or any Subsidiary;
(4) any instrument governing Acquired Indebtedness or Acquired
Preferred Stock, which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired;
(5) agreements existing on the Closing Date (including the Credit
Agreement and the Existing Notes Indentures) as such agreements are
from time to time in effect; provided, however, that any amendments or
modifications of such agreements that affect the encumbrances or
restrictions of the types subject to this covenant shall not result in
such encumbrances or restrictions being less favorable to the Borrower
in any material respect, as determined in good faith by the Board of
Directors of the Borrower, than the provisions as in effect before
giving effect to the respective amendment or modification;
(6) any restriction with respect to such a Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of
all or substantially all the Capital Stock or assets of such
Subsidiary pending the closing of such sale or disposition;
(7) an agreement effecting a refinancing, replacement or
substitution of Indebtedness issued, assumed or incurred pursuant to
an agreement referred to in clause (2), (4) or (5) above or any other
agreement evidencing Indebtedness permitted under this Agreement;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such refinancing, replacement or
substitution agreement or any such other agreement are no less
favorable to the Borrower in any material respect as determined in
good faith by the Board of Directors of the Borrower than the
provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4) or (5);
(8) restrictions on the transfer of the assets subject to any
Lien imposed by the holder of such Lien;
(9) a licensing agreement to the extent such restrictions or
encumbrances limit the transfer of property subject to such licensing
agreement;
(10) restrictions relating to Subsidiary preferred stock that
require that due and payable dividends thereon to be paid in full
prior to dividends on such Subsidiary's common stock; or
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(11) any agreement or charter provision evidencing Indebtedness
or Capital Stock permitted under this Agreement; provided, however,
that the provisions relating to such encumbrance or restriction
contained in such agreement or charter provision are not less
favorable to the Borrower in any material respect as determined in
good faith by the Board of Directors of the Borrower than the
provisions relating to such encumbrance or restriction contained in
this Agreement.
8.8. Amendments or Waivers of Certain Documents
Without the consent of the Required Lenders, the Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into any amendment, modification, supplement or waiver with respect to the
Credit Agreement as in effect on the Closing Date that would modify any of the
provisions thereof or any of the definitions relating to the provisions thereof
in respect of (i) the issuance of the Exchange Notes, (ii) the issuance or sale
of any preferred equity or debt securities or the incurrence of any Indebtedness
to repay or refinance the Loans or (iii) the application of Net Cash Proceeds
from a Prepayment Event to repay the Loans, in each case, in a manner adverse to
the Lenders.
8.9. Limitation on Guarantees by Subsidiaries
The Borrower shall not (a) permit any Subsidiary to guarantee any
Indebtedness of the Borrower other than the Bridge Obligations (the "Guaranteed
Indebtedness") or (b) pledge any intercompany Indebtedness representing
obligations of any of its Subsidiaries to secure the payment of Guaranteed
Indebtedness, in each case unless such Subsidiary and the Administrative Agent
execute and deliver a Guarantee Supplement causing such Subsidiary to guarantee
the Bridge Obligations to the same extent that such Subsidiary guaranteed the
Borrower's obligations under the Guaranteed Indebtedness (including waiver of
subrogation, if any). Thereafter, such Subsidiary shall be a Guarantor for all
purposes of this Agreement.
8.10. Limitation on Investment Company Status
The Borrower and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require the Borrower to
register as an "investment company" under the Investment Company Act.
8.11. Limitation on Asset Swaps
The Borrower will not, and will not permit any Subsidiary to, engage
in any Asset Swaps, unless: (i) at the time of entering into such Asset Swap,
and immediately after giving effect to such Asset Swap, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof; (ii) in the event such Asset Swap involves an aggregate amount in
excess of $2.0 million, the terms of such Asset Swap have been approved by a
majority of the members of the Board of Directors of the Borrower which
determination shall include a determination that the fair market value of the
assets being received in such swap is at least equal to the fair market value of
the assets being swapped; and (iii) in the event such Asset Swap involves an
aggregate amount in excess of $10.0 million, the Borrower has also received a
written opinion from an independent investment banking firm of nationally
recognized standing that such Asset Swap is fair to the Borrower or such
Subsidiary, as the case may be, from a financial point of view.
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SECTION 9. Events of Default
Each of the following shall be an "Event of Default" for purposes of
this Agreement:
(a) the failure to pay interest on the Loans when the same
becomes due and payable and the Default continues for a period of 30
days;
(b) the failure to pay principal of or premium, if any, on any
Loans when such principal or premium, if any, becomes due and payable,
at maturity, upon redemption or otherwise;
(c) (i) any representation or warranty made or deemed made in or
in connection with any Credit Document or the Borrowings, or any
representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Credit Document, shall prove to
have been false or misleading in any material respect when so made,
deemed made or furnished or (ii) any Credit Party defaults in the
performance of or breaches any covenant or other agreement contained
in this Agreement or any other Credit Document (other than a default
in the performance or breach of a covenant or agreement which is
specifically dealt with in clauses (a) or (b) of this Section 9) and
such default or breach continues for a period of 30 days after receipt
of written notice given by the Administrative Agent;
(d) the failure to pay at the final stated maturity (giving
effect to any extensions thereof) the principal amount of any
Indebtedness of the Borrower or any Subsidiary of the Borrower, or the
acceleration of the final stated maturity of any such Indebtedness, if
the aggregate principal amount of such Indebtedness, together with the
aggregate principal amount of any other such Indebtedness in default
for failure to pay principal at the final stated maturity (giving
effect to any extensions thereof) or which has been accelerated,
aggregates $10.0 million or more at any time in each case after a
10-day period during which such default shall not have been cured or
such acceleration rescinded;
(e) the Guarantee of any Significant Subsidiary, if any, ceases
to be in full force and effect except as otherwise permitted pursuant
to the terms of this Agreement or any Guarantee of any such
Significant Subsidiary is declared to be null and void and
unenforceable or any Guarantee of any such Significant Subsidiary is
found to be invalid or any Guarantor that is a Significant Subsidiary
denies its liability under its Guarantee (other than, in any such
case, by reason of release of Guarantor in accordance with the terms
of this Agreement);
(f) one or more judgments in an aggregate amount in excess of
$10.0 million (which are not covered by insurance as to which the
insurer has not disclaimed coverage) being rendered against the
Borrower or any of its Significant Subsidiaries and such judgment or
judgments remain undischarged or unstayed for a period of 60 days
after such judgment or judgments become final and nonappealable;
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(g) the Borrower or any of its Significant Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law: (i) commences a
voluntary case or proceeding under any Bankruptcy Law; (ii) consents
to the entry of an order for relief against it in an involuntary case
or proceeding under any Bankruptcy Law; (iii) consents or acquiesces
in the institution of a bankruptcy or insolvency proceeding against
it; (iv) consents to the appointment of a Custodian of it or for all
or substantially all of its property; or (v) makes a general
assignment for the benefit of its creditors, or any of them takes any
action to authorize or effect any of the foregoing; or
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Borrower
or any Significant Subsidiary of the Borrower in an involuntary case
or proceeding; (ii) appoints a Custodian of the Borrower or any
Significant Subsidiary of the Borrower for all or substantially all of
its property; or (iii) orders the liquidation of the Borrower or any
Significant Subsidiary of the Borrower; and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however,
that if the entry of such order or decree is appealed and dismissed on
appeal, then the Event of Default hereunder by reason of the entry of
such order or decree shall be deemed to have been cured.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) above) occurs and is continuing and has not been waived, the
Administrative Agent or Lenders holding at least 25% in aggregate principal
amount of the outstanding Loans, by notice in writing to the Borrower (and to
the Administrative Agent if given by the Holders) specifying the respective
Event of Default and that it is a "notice of acceleration" (an "Acceleration
Notice") may declare the unpaid principal of (and premium, if any) and accrued
interest to the date of acceleration on all outstanding Loans to be due and
payable immediately and, upon any such declaration, such principal amount (and
premium, if any) and accrued interest, notwithstanding anything contained in
this Agreement or the Notes to the contrary, shall become immediately due and
payable.
If an Event of Default specified in clause (g) or (h) above occurs,
all unpaid principal of and accrued interest on all outstanding Loans shall ipso
facto become immediately due and payable without any declaration or other act on
the part of the Administrative Agent or any Lender.
Any such declaration with respect to the Loans may be rescinded and
annulled by the Lenders holding a majority in aggregate principal amount of
Loans then outstanding by written notice to the Administrative Agent if (i) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction, (ii) all existing Events of Default have been cured or
waived except nonpayment of principal of or interest on the Loans that has
become due solely by such declaration of acceleration, (iii) to the extent the
payment of such interest is lawful, interest (at the same rate specified in the
Loans) on overdue installments of interest and overdue payments of principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) the Borrower has paid the Administrative Agent its reasonable
compensation and reimbursed the Administrative Agent for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of a
Default or Event of Default of the type described in clause (g) or (h) above,
the Administrative Agent has received an Officers' Certificate and Opinion of
Counsel that such Default or Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
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SECTION 10. The Agents
10.1. Appointment
Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Credit Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agents shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Credit Document or otherwise exist
against the Agents.
10.2. Delegation of Duties
The Administrative Agent may execute any of its duties under this
Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
10.3. Exculpatory Provisions
Neither the Agents nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by them or such Person under or in
connection with this Agreement or any other Credit Document (except for their or
such Person's own gross negligence or willful misconduct) or (b) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by any Credit Party or any officer thereof contained in this
Agreement or any other Credit 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
Credit Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Credit Document or
for any failure of any Credit Party to perform its obligations hereunder or
thereunder. The Agents 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 Credit
Document, or to inspect the properties, books or records of the Borrower.
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10.4. Reliance by Administrative Agent
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order 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, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the Lender
specified in the Register with respect to any amount owing hereunder as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document unless it
shall first receive such advice or concurrence of the Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that 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 and the other Credit Documents in accordance with a request of
the Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all existing and future Lenders.
10.5. Notice of Default
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Lenders
(except to the extent that this Agreement requires that such action be taken
only with the approval of the Lenders).
10.6. Non-Reliance on Agents and Other Lenders
Each Lender expressly acknowledges that neither the Agents nor any of
their officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the Agents
hereafter taken, including any review of the affairs of Holdings or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agents to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Credit Parties and
made its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
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upon the Agents or any other Lender, 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 Credit Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Credit Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agents hereunder, the Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, assets, operations, properties, financial condition,
prospects or creditworthiness of the Credit Parties that may come into the
possession of the Agents or any of their officers, directors, employees, agents,
attorneys-in-fact or Affiliates. 10.7. Indemnification
The Lenders agree to indemnify the Agents in their capacity as such
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
portions of the Total Credit Exposure in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their respective portions of the Total
Credit Exposure in effect immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (including, without limitation, at any time following the
payment of the Loans) be imposed on, incurred by or asserted against the Agents,
or any of them, in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Credit Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agents, or any of them, under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of any Agent. The
agreements in this Section 10.7 shall survive the payment of the Loans and all
other amounts payable hereunder.
10.8. Agents in Their Individual Capacities
The Agents and their respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with any Credit Party
as though the Agents were not the Agents hereunder and under the other Credit
Documents. With respect to the Loans made by them, the Agents shall have the
same rights and powers under this Agreement and the other Credit Documents as
any Lender and may exercise the same as though they were not the Agents, and the
terms "Lender" and "Lenders" shall include the Agents in their individual
capacities.
10.9. Successor Administrative Agent
The Administrative Agent may resign as Administrative Agent upon 20
days' prior written notice to the Lenders and the Borrower. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Credit Documents, then the Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall, so long
as no Event of Default under clause (a), (b), (g) or (h) of Section 9 has
occurred and is continuing, be approved by the Borrower (which approval shall
not be unreasonably withheld), whereupon such successor agent shall succeed to
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the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" means such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any Lender. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 10
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 and the other Credit
Documents.
SECTION 11. Miscellaneous
11.1. Amendments and Waivers
Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be amended, supplemented or modified except in accordance
with the provisions of this Section 11.1.
The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with the relevant Credit Party or Credit Parties written amendments,
supplements or modifications hereto and to the other Credit Documents for the
purpose of adding any provisions to this Agreement or the other Credit Documents
or changing in any manner the rights of the Lenders or of the Borrower hereunder
or thereunder or (b) waive, on such terms and conditions as the Required Lenders
or the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Credit Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) forgive
any portion of any Loan or extend the final scheduled maturity date of any Loan
or reduce the stated rate, or forgive any portion, or extend the date for the
payment, of any interest or fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates) or
extend the final expiration date of any Lender's Commitment or increase the
aggregate amount of the Commitments of any Lender, in each case without the
written consent of each Lender directly and adversely affected thereby, or (ii)
amend, modify or waive any provision of this Section 11.1 or reduce the
percentage specified in the definition of "Required Lenders," in each case
without the consent of each Lender directly affected thereby, or (iii) except as
permitted in this Agreement, materially change or release a Guarantee without
the consent of each Lender directly affected thereby, or (iv) restrict the right
of any Lender to exchange Initial Loans for Term Loans on the Initial Maturity
Date, or Term Loans for Exchange Notes or amend the rate of such exchange, in
each case without the consent of each Lender directly affected thereby. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the affected Lenders and shall be binding upon the Borrower, such
Lenders, the Administrative Agent and all future Lenders. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be restored
to their former positions and rights hereunder and under the other Credit
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, it being understood that no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
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11.2. Notices
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy transmission),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered, or three (3) days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of Holdings, the Borrower and the
Administrative Agent, and as set forth on Schedule 2.1(a) in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto:
Holdings or the Borrower:
Activant Solutions Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent:
Deutsche Bank AG Cayman Islands Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
69
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Sections 2.3, 2.8, 3.2 and 4.1 shall not be effective
until received.
11.3. No Waiver; Cumulative Remedies
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 or under the other Credit Documents 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. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4. Survival of Representations and Warranties
All representations and warranties made hereunder, in the other
Credit Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the making of the Loans hereunder.
11.5. Payment of Expenses and Taxes
The Borrower agrees (a) if any Initial Loans have been funded, to pay
or reimburse the Administrative Agent and the Joint Lead Arrangers for all their
reasonable and documented out-of-pocket expenses incurred in connection with the
preparation, execution and completion of, and any amendment, supplement, waiver
or modification to, this Agreement and the other Credit Documents and any other
documents prepared in connection herewith or therewith (including the Commitment
Papers), and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the Reimbursable
Legal Expenses, (b) to pay or reimburse each Lender, the Administrative Agent
and the Joint Lead Arrangers for all their reasonable and documented
out-of-pocket expenses incurred in connection with the enforcement of any rights
under this Agreement, the other Credit Documents and any such other documents,
including, without limitation, the reasonable fees, disbursements and other
charges of one counsel to such Persons and (c) to indemnify and hold harmless
each Lender, the Administrative Agent and the Joint Lead Arrangers and their
respective directors, officers, employees, affiliates, controlling persons and
agents from and against all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits and reasonable out-of-pocket costs and
70
expenses (regardless of whether any such indemnified party is a party to any
such action, judgment or suit), including, without limitation, reasonable and
documented fees, disbursements and other charges of counsel (other than fees,
disbursements and other charges of outside counsel relating to any Permanent
Securities or any liabilities for taxes excluded under Section 4.4(a) hereof)
(and any value added tax or similar tax thereon), with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Credit Documents and the transactions contemplated thereunder and any such
other documents, including, without limitation, any of the foregoing relating to
the Acquisition or any transactions connected therewith, or the use of the Loans
and other proceeds received by the Borrower hereunder and thereunder, or to the
violation of, noncompliance with or liability under any Environmental Law
applicable to the operations of the Borrower, any of its Subsidiaries or any of
their respective property (all the foregoing in this clause (c), collectively,
the "indemnified liabilities"); provided that the Borrower shall have no
obligation hereunder to the Administrative Agent, the Joint Lead Arrangers or
any Lender or any of their respective directors, officers, employees and agents
with respect to indemnified liabilities arising from (i) the gross negligence,
bad faith or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable judgment) of the party to be
indemnified or (ii) disputes among the Administrative Agent, the Joint Lead
Arrangers, the Lenders and/or their transferees. The agreements in this Section
11.5 shall survive repayment of the Loans and all other amounts payable
hereunder.
11.6. Successors and Assigns; Participations and Assignments
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agents and their respective successors and
assigns, except that, unless the conditions set forth in Section 8.5 are
satisfied, the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Credit Documents (including to loan derivative
counterparts in respect of swaps or similar arrangements having the practical or
economic effect thereof). In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the Lender with respect to any such Loan for all purposes under
this Agreement and the other Credit Documents, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Credit Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Credit Document, or any consent to any departure by any Credit Party
therefrom, except to the extent that such amendment, waiver or consent would
directly forgive any principal of any Loan or reduce the stated rate, or forgive
any portion, or postpone the date for the payment, of any interest or fee
payable hereunder (other than as a result of waiving the applicability of any
post-default increase in interest rates), or increase the aggregate amount of
the Commitments of any Lender or postpone the date of the final scheduled
maturity of any Loan, in each case to the extent subject to such participation.
The Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
71
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement 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, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 11.8 as fully
as if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.8, 2.9 and 4.4 (subject to the
requirements of those Sections) with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it were a Lender;
provided that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been entitled
to receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred unless the
sale of the participations is made with Borrower's prior written consent (not to
be unreasonably withheld or delayed).
(c) Any Lender (an "Assignor") may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time, in consultation with the Borrower, assign to an Eligible Assignee all or
any part of its rights and obligations under this Agreement with respect to its
Commitments and Loans made pursuant to this Agreement and the other Credit
Documents and all rights related thereto, in each case pursuant to an Assignment
and Acceptance, substantially in the form of Exhibit B (an "Assignment and
Acceptance"), executed by such Eligible Assignee and such Assignor and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that, except in the case of an assignment of all of a Lender's
interests under this Agreement, no such assignment to an Eligible Assignee shall
be in an aggregate principal amount of less than $5.0 million. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Eligible Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth therein and (y) the Assignor thereunder shall, to
the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto).
(d) Nothing herein shall prohibit any Lender from pledging or
assigning all or any portion of its Loans to any Federal Reserve Bank in
accordance with applicable law. To the extent requested by any Lender, the
Borrower shall execute and deliver to such Lender an Initial Note dated the
Closing Date substantially in the form of Exhibit A-1 hereto to evidence the
portion of the Initial Loan made by such Lender and with appropriate insertions
("Original Initial Notes"). On each Interest Payment Date prior to the Final
Maturity Date on which the Borrower shall have elected to pay any interest
through the issuance of additional Notes pursuant to Section 2.6(e), to the
extent requested by any Lender, the Borrower shall execute and deliver to such
Lender on such Interest Payment Date a note dated such Interest Payment Date
substantially in the form of Exhibit A-1 hereto in a principal amount equal to
such Lender's pro rata portion of any PIK Interest Amount and with other
appropriate insertions (each a "Subsequent Initial Note" and, together with the
Original Initial Notes, the "Initial Notes"). Unless converted to an Exchange
72
Note and to the extent requested by any Lender, the Borrower shall execute and
deliver to such Lender a Term Note dated the Initial Maturity Date substantially
in the form of Exhibit A-2 hereto to evidence the Term Loan made on such date,
in the principal amount of the Initial Loans held by such Lender on such date
and with other appropriate insertions (collectively, the "Original Term Notes").
On or after the Initial Maturity Date, on each Interest Payment Date prior to
the Final Maturity Date on which the Borrower shall have elected to pay any
interest through the issuance of additional Loans pursuant to Section 2.6(e), to
the extent requested by any Lender, the Borrower shall execute and deliver to
such Lender on such Interest Payment Date a Term Note dated such Interest
Payment Date substantially in the form of Exhibit A-2 hereto in a principal
amount equal to such Lender's pro rata portion of any PIK Interest Amount and
with other appropriate insertions (each a "Subsequent Term Note").
(e) The Administrative Agent, on behalf of the Borrower, shall
maintain at the Administrative Agent's Office a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders, the Commitment of, and principal
amount and stated interest of the Loans owing to, each Lender from time to time
and the other information necessary to meet the requirements of Treasury
Regulation Section 5f.103-1(c). The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Credit Documents, notwithstanding any
notice to the contrary. Notwithstanding anything herein to the contrary, any
assignment of any Loan or other obligation hereunder shall be effective only
upon (i) appropriate entries with respect thereto being made in the Register and
(ii) surrender by the assigning Lender to the Administrative Agent of any Notes,
if any, representing such Loan or other obligation. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Eligible Assignee (and, in the case of an Eligible Assignee that
is not then a Lender or an Affiliate thereof and the Administrative Agent),
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
(g) Subject to Section 11.15, the Borrower authorizes each Lender to
disclose to any Participant or Eligible Assignee (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Borrower and its Affiliates that has been delivered to
such Lender by or on behalf of the Borrower pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of the Borrower in connection
with such Lender's credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement; provided that neither the Administrative
Agent nor any Lender shall provide to any Transferee or prospective Transferee
any of the Confidential Information unless such Person shall have previously
executed a Confidentiality Agreement in the form of Exhibit C.
73
11.7. Replacements of Lenders Under Certain Circumstances
The Borrower shall be permitted to replace any Lender that (a)
requests reimbursement for amounts owing pursuant to Section 2.8, 2.10 or 4.4,
(b) is affected in the manner described in Section 2.8(d) and as a result
thereof any of the actions described in such Section is required to be taken,
with a replacement bank or other financial institution or (c) is a
Non-Consenting Lender (as defined below); provided that (i) such replacement
does not conflict with any Law, (ii) no Event of Default shall have occurred and
be continuing at the time of such replacement, (iii) the Borrower shall repay
(or the replacement bank or institution shall purchase, at par) all Loans and
other amounts (other than any disputed amounts), pursuant to Section 2.8 or 4.4,
as the case may be, owing to such replaced Lender prior to the date of
replacement, (iv) the replacement bank or institution, if not already a Lender,
and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Agents, (v) the replaced Lender shall be obligated to assign
its Loans to the replacement Lender in accordance with the provisions of Section
11.6 (provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein) and (vi) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Lender shall have against the replaced Lender. In the event that
(x) the Borrower or the Administrative Agent has requested the Lenders to
consent to a departure or waiver of any provisions of the Credit Documents or to
agree to any amendment thereto, (ii) the consent, waiver or amendment in
question requires the agreement of all affected Lenders in accordance with the
terms of Section 11.1 and (iii) the Required Lenders have agreed to such
consent, waiver or amendment, then any Lender who does not agree to such
consent, waiver or amendment shall be deemed a "Non-Consenting Lender".
11.8. Adjustments; Set-off
(a) If any Lender (a "benefited Lender") shall at any time receive
any payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 9(g) or
(h), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, such benefited Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Loan, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) After the occurrence and during the continuance of an Event of
Default, in addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender; provided that the failure to give such notice shall not
affect the validity of such set-off and application.
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11.9. Counterparts
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
11.10. Severability and Integration
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement, the Commitment Papers and the other Credit
Documents represent the agreement of the Borrower, Holdings, the Administrative
Agent and the Lenders with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the Commitment Papers or the other Credit Documents.
11.11. Governing Law
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
11.12. Submission to Jurisdiction; Waivers
Each Credit Party, each Agent and each Lender hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
75
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Person at its address set forth in Section 11.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 11.12 any special, exemplary, punitive or consequential
damages.
11.13. Acknowledgments
The Borrower and Holdings each hereby acknowledge that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents;
(b) no Agent or Lender has any fiduciary relationship with or duty to
the Borrower or Holdings arising out of or in connection with this
Agreement or any of the other Credit Documents, and the relationship
between Agents and Lenders, on one hand, and the Borrower and Holdings, 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 Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
11.14. Waivers of Jury Trial
THE BORROWER, HOLDINGS, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
11.15. Confidentiality
The Agents and each Lender shall hold all non-public information
furnished by or on behalf of the Borrower in connection with such Lender's
evaluation of whether to become a Lender hereunder or obtained by such Lender or
any Agent pursuant to this Agreement ("Confidential Information"), in accordance
with its customary procedure for handling confidential information of this
nature and (in the case of a Lender that is a bank) in accordance with safe and
sound banking practices and in any event may make disclosure as required or
requested by any governmental agency or representative thereof having authority
over such Person or pursuant to legal process or to such Lender's or the
Administrative Agent's attorneys, professional advisors or independent auditors
76
or Affiliates (but solely in connection with the Transactions and on a
confidential basis), or 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; provided that unless specifically
prohibited by applicable law or court order, each Lender and the Administrative
Agent shall notify the Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information, and provided, further, that in no event shall any Lender or
the Administrative Agent be obligated or required to return any materials
furnished by the Borrower or any Subsidiary of the Borrower. Each Lender and the
Administrative Agent agrees that it will not provide to prospective Transferees
or to prospective direct or indirect contractual counterparties in swap
agreements to be entered into in connection with Loans made hereunder any of the
Confidential Information unless such Person shall have previously executed a
Confidentiality Agreement in the form of Exhibit C.
11.16. Release of Guarantor
Pursuant to the Guarantee Agreement, the Guarantors will jointly and
severally guarantee the Borrower's obligations under this Agreement and the
Loans on an unsubordinated basis.
Each Guarantor may consolidate with or merge into or sell its assets
to the Borrower or another Guarantor that is a Wholly Owned Subsidiary of the
Borrower without limitation, or with other Persons to the extent not prohibited
by this Agreement. The Guarantee of a Guarantor will be released without the
necessity of any further action by the Administrative Agent or any Lender in the
event that:
(1) (a) the sale, disposition or other transfer (including through
merger or consolidation) of all of the Capital Stock (or any sale,
disposition or other transfer of Capital Stock following which the
applicable Guarantor is no longer a Subsidiary), or all or substantially
all the assets, of the applicable Guarantor if such sale, disposition or
other transfer is made in compliance with the applicable provisions of this
Agreement,
(b) the Borrower designates any Subsidiary that is a Guarantor as an
Unrestricted Subsidiary in accordance with the provisions of this Agreement
set forth under Section 8.2 and the definition of "Unrestricted
Subsidiary," or
(c) in the case of any Subsidiary which after the Closing Date is
required to guarantee the Loans pursuant to Section 8.9, the release or
discharge of the guarantee by such Subsidiary of Indebtedness of the
Borrower or any Subsidiary of the Borrower or such Subsidiary or the
repayment of the Indebtedness, in each case, which resulted in the
obligation to guarantee the Loans; and
(2) in the case of clause (1)(a) above, such Guarantor is released
from its guarantee, if any, of, and all pledges and security, if any,
granted in connection with, the Credit Agreement and the Existing Notes.
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11.17. U.S.A. Patriot Act
Each Lender hereby notifies the Borrower that pursuant to the
requirements of the U.S.A. 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 Credit Parties, which information includes the
name and address of the Credit Party and other information that will allow such
Lender to identify such Credit Party in accordance with the Act.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
ACTIVANT SOLUTIONS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President and CFO
ACTIVANT SOLUTIONS HOLDINGS INC.,
as Parent Guarantor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President and CFO
79
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as
Administrative Agent
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
80
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as
Initial Lender
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇
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Name: ▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
81
JPMORGAN CHASE BANK, N.A., as Initial Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
82
