EXHIBIT 4.1
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EXECUTION COPY
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
among
ACTIVANT SOLUTIONS INC.,
as Borrower,
ACTIVANT SOLUTIONS HOLDINGS INC.,
as Guarantor,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
AND
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
DATED AS OF SEPTEMBER 13, 2005
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X.X. XXXXXX SECURITIES INC.
and
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arrangers and Bookrunners
XXXXXX XXXXXX & XXXXXXX LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
1.1 Defined Terms............................................................................2
1.2 Other Definitional Provisions...........................................................21
ARTICLE 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments.............................................................................22
2.2 Notes...................................................................................22
2.3 Procedure for Borrowing.................................................................23
2.4 Commitment Fee; Administrative Agent Fees...............................................23
2.5 Termination or Reduction of Commitments.................................................23
2.6 [Reserved]..............................................................................24
2.7 [Reserved]..............................................................................24
2.8 Repayment of Loans......................................................................24
2.9 Optional Prepayments....................................................................25
2.10 Mandatory Prepayments and Commitment Reductions.........................................25
2.11 Conversion and Continuation Options.....................................................26
2.12 Minimum Amounts of Tranches.............................................................26
ARTICLE 3
LETTERS OF CREDIT
3.1 The L/C Commitment......................................................................26
3.2 Procedure for Issuance of Letters of Credit.............................................27
3.3 Fees, Commissions and Other Charges.....................................................27
3.4 L/C Participations......................................................................28
3.5 Reimbursement Obligation of the Borrower................................................29
3.6 Obligations Absolute....................................................................29
3.7 Letter of Credit Payments...............................................................29
3.8 Letter of Credit Applications...........................................................30
ARTICLE 4
GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates........................................................30
4.2 Computation of Interest and Fees........................................................30
4.3 Inability to Determine Interest Rate....................................................30
4.4 Pro Rata Treatment and Payments.........................................................31
4.5 Illegality..............................................................................33
4.6 Requirements of Law.....................................................................33
4.7 Taxes...................................................................................34
4.8 Indemnity...............................................................................37
4.9 Replacement of Lender...................................................................38
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Financial Condition.....................................................................39
5.2 No Change...............................................................................39
5.3 Corporate Existence; Compliance with Law................................................39
5.4 Corporate Power; Authorization; Enforceable Obligations.................................40
5.5 No Legal Bar............................................................................40
5.6 No Material Litigation..................................................................40
5.7 No Default..............................................................................40
5.8 Ownership of Property; Liens............................................................40
5.9 Intellectual Property...................................................................41
5.10 Taxes...................................................................................41
5.11 Federal Regulations.....................................................................41
5.12 ERISA...................................................................................41
5.13 Investment Company Act; Other Regulations...............................................42
5.14 Subsidiaries, Etc.......................................................................42
5.15 Purpose of Loans........................................................................42
5.16 Environmental Matters...................................................................42
5.17 Disclosure..............................................................................43
5.18 Guarantee and Collateral Agreement......................................................44
5.19 Solvency................................................................................44
5.20 No Fees.................................................................................44
5.21 Insurance...............................................................................44
5.22 Labor Matters...........................................................................44
5.23 Senior Indebtedness.....................................................................44
5.24 Provision of License Products; Non-Competition, Etc.....................................45
5.25 Lease Transactions; Lease Transaction Obligations.......................................45
5.26 Status of Accounts Receivables and Other Collateral.....................................45
5.27 Transaction Documents...................................................................45
ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans.............................................................45
6.2 Conditions to Each Loan.................................................................48
ARTICLE 7
AFFIRMATIVE COVENANTS
7.1 Financial Statements....................................................................49
7.2 Certificates; Other Information.........................................................50
7.3 Payment of Obligations..................................................................51
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7.4 Conduct of Business and Maintenance of Existence........................................51
7.5 Maintenance of Property; Insurance......................................................51
7.6 Inspection of Property; Books and Records; Discussions..................................52
7.7 Notices.................................................................................52
7.8 Environmental Laws......................................................................53
7.9 Pledge of After Acquired Property.......................................................53
7.10 Pledge During Event of Default..........................................................54
7.11 Additional Subsidiaries.................................................................54
7.12 Substantive Consolidation...............................................................54
7.13 Intellectual Property...................................................................54
7.14 Covenants Relating to Collateral........................................................55
7.15 Post-Closing Obligations................................................................55
ARTICLE 8
NEGATIVE COVENANTS
8.1 Financial Condition Covenants...........................................................56
8.2 Limitation on Indebtedness..............................................................57
8.3 Limitation on Liens.....................................................................58
8.4 Limitation on Guarantee Obligations.....................................................59
8.5 Limitation on Fundamental Changes.......................................................60
8.6 Limitation on Sale of Assets............................................................61
8.7 Limitation on Dividends.................................................................61
8.8 [Reserved]..............................................................................63
8.9 Limitation on Investments, Loans and Advances...........................................63
8.10 Modifications of Lease Transaction Obligations..........................................65
8.11 Limitation on Transactions with Affiliates..............................................65
8.12 Limitation on Sales and Leasebacks......................................................65
8.13 Limitation on Changes in Fiscal Year....................................................65
8.14 Restrictions Affecting Subsidiaries.....................................................65
8.15 Limitation on Lines of Business.........................................................66
8.16 Holding Company Status; Ownership of Borrower...........................................66
8.17 Amendments to Corporate Documents; Licenses.............................................66
8.18 Limitation on Optional Payments, Purchases and Modifications
of Debt Instruments, Etc...............................................................66
8.19 Limitation on Provision of License Products.............................................68
ARTICLE 9
EVENTS OF DEFAULT
ARTICLE 10
THE ADMINISTRATIVE AGENT
10.1 Appointment.............................................................................................71
10.2 Delegation of Duties....................................................................................71
10.3 Exculpatory Provisions..................................................................................71
10.4 Reliance by Administrative Agent........................................................................71
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10.5 Notice of Default.......................................................................................72
10.6 Non-Reliance on Administrative Agent and Other Lenders..................................................72
10.7 Indemnification.........................................................................................73
10.8 Administrative Agent in Its Individual Capacity.........................................................73
10.9 Successor Administrative Agent..........................................................................73
10.10 Additional Ministerial Powers of Administrative Agent...................................................73
ARTICLE 11
GUARANTEE
11.1 Guarantee...............................................................................................74
11.2 Waiver of Subrogation...................................................................................74
11.3 Modification of Obligations.............................................................................74
11.4 Waiver by Holdings......................................................................................75
11.5 Reinstatement...........................................................................................75
11.6 Negative Covenants......................................................................................75
ARTICLE 12
MISCELLANEOUS
12.1 Amendments and Waivers..................................................................................77
12.2 Notices.................................................................................................77
12.3 No Waiver; Cumulative Remedies..........................................................................78
12.4 Survival of Representations and Warranties..............................................................78
12.5 Payment of Expenses and Taxes...........................................................................79
12.6 Successors and Assigns; Participations and Assignments..................................................79
12.7 Adjustments; Set-off....................................................................................82
12.8 Counterparts............................................................................................82
12.9 Severability............................................................................................82
12.10 Integration.............................................................................................82
12.11 GOVERNING LAW...........................................................................................83
12.12 Submission to Jurisdiction; Waivers.....................................................................83
12.13 Acknowledgments.........................................................................................83
12.14 WAIVERS OF JURY TRIAL...................................................................................84
12.15 Confidentiality.........................................................................................84
12.16 USA PATRIOT ACT.........................................................................................84
12.17 Waiver..................................................................................................84
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EXHIBITS
A Form of Note
B Form of L/C Participation Certificate
C Form of Assignment and Acceptance
D-1 Form of Legal Opinion of Weil, Gotshal & Xxxxxx LLP
D-2 Form of Legal Opinion of Xxxxxx, Xxxxx & Bockius LLP
E Form of Borrowing Certificate For New Loans
F Form of Third Amended and Restated Guarantee and Collateral Agreement
G Form of Interest Option Conversion/Continuation Certificate
H Form of Monthly Operating Report
SCHEDULES
1.1 Commitments
3.1 Existing Letters of Credit
5.2 Dividends and Other Distributions
5.3 Good Standing; Corporate Existence
5.4 Required Consents
5.6 Litigation
5.8 Fee Properties and Leased Properties
5.9 Intellectual Property
5.10 Taxes
5.14 Subsidiaries, Joint Ventures, etc.
5.18 Filing Locations
5.25 Lease Transaction Obligations
8.2 Existing Indebtedness
8.3 Existing Liens
8.4 Existing Guarantee Obligations
8.9 Existing Investments
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
September13, 2005, among ACTIVANT SOLUTIONS INC. (f/k/a Cooperative Computing,
Inc.), a Delaware corporation (the "Borrower"), ACTIVANT SOLUTIONS HOLDINGS INC.
(f/k/a Cooperative Computing Holding Company, Inc.), a Delaware corporation
("Holdings"), the several banks and other financial institutions from time to
time parties hereto (the "Lenders"), JPMORGAN CHASE BANK, N.A., as
administrative agent for the Lenders hereunder (in such capacity, together with
its successors in such capacity, the "Administrative Agent"), and X.X. XXXXXX
SECURITIES INC. and DEUTSCHE BANK SECURITIES INC., as joint lead arrangers and
bookrunners (in such capacities, together with their respective successors in
such capacities, the "Joint Lead Arrangers").
W I T N E S S E T H :
WHEREAS, the Borrower, Holdings, certain lenders (the "Existing
Lenders") and the Administrative Agent are parties to the Third Amended and
Restated Credit Agreement dated as of June 27, 2003 (as in effect immediately
prior to the effectiveness of this Agreement, the "Existing Credit Agreement");
WHEREAS, 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, Xxxxx Xxxxxxx Equity Partners, Inc., a Delaware corporation,
the Borrower has agreed to acquire all of the outstanding capital stock of
Prophet 21, Inc. (the "Acquisition");
WHEREAS, the funding requirements for the Acquisition (including
related fees and expenses) and the refinancing of outstanding indebtedness of
the Acquired Business (the "Acquired Business Refinancing") will be
approximately $220.0 million and such amount will be provided solely from the
Bridge Financing (as defined below), the Holdings Financing (as defined below)
(which amount will be contributed as common equity to Borrower) and cash on
hand;
WHEREAS, in order to refinance and replace a portion of the
Borrower's commitments and indebtedness under the Existing Credit Agreement, and
for other purposes described herein, the Borrower has requested that the
commitments under the Existing Credit Agreement be increased by $5,000,000 and,
as a result, that the Lenders establish a $20,000,000 revolving credit facility
(the "Facility") pursuant to which revolving credit loans may be made to the
Borrower and letters of credit may be issued under the Facility for the account
of the Borrower; and
WHEREAS, (i) the Existing Credit Agreement is being amended and
restated pursuant to this Agreement, (ii) any Revolving Credit Loans (as defined
in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement will be repaid, and (iii) all obligations (including the Existing
Letters of Credit) of the Credit Parties under the Loan Documents (as such terms
are defined herein) and all liens and security interests created under the Loan
Documents will be continued, amended and restated as provided herein and therein
and will not be cancelled or discharged.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
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ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Administrative Questionnaire": an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Accounts": as defined in Section 9-102 of the Uniform Commercial
Code of the State of New York.
"Accounts Receivable": all of the Accounts, Chattel Paper, General
Intangibles, Instruments and Documents of the Borrower, whether secured or
unsecured, and whether now existing or hereafter created or arising.
"Acquired Business": as defined in the recitals to this Agreement.
"Acquired Business Refinancing": as defined in the recitals to this
Agreement.
"Acquisition": as defined in the recitals to this Agreement.
"Acquisition Agreement": as defined in the recitals to this
Agreement.
"Administrative Agent": as defined in the recitals to this Agreement.
"Affected Eurodollar Loans": as defined in Section 2.10(h).
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (i)
vote 51% or more of the securities having ordinary voting power for the election
of directors of such Person or (ii) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Agreement": this Fourth Amended and Restated Credit Agreement, as
further amended, amended and restated, supplemented or otherwise modified from
time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by JPMCB as its prime rate in effect
at its principal office in New York City; "Base CD Rate" shall mean the sum of
(a) the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction,
the numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage, and (b) the C/D Assessment Rate; "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System (the "Board") through the public
2
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if such
rate shall not be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Administrative Agent
from three New York City negotiable certificate of deposit dealers of recognized
standing selected by it; and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective Rate, or
both, for any reason, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms hereof, the
Alternate Base Rate shall be determined without regard to clause (b) or (c), or
both, of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Three-Month Secondary
CD Rate or the Federal Funds Effective Rate shall be effective on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Alternate Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Alternate Base Rate.
"Applicable Margin": with respect to any Alternate Base Rate Loan,
2.50%; and with respect to any Eurodollar Loan, 3.50%; provided that in the
event that the ratio of Consolidated Total Debt of the Borrower and its
Subsidiaries to Consolidated EBITDA of the Borrower and its Subsidiaries, as
most recently determined in accordance with Section 8.1(c) (or its similar
provision in the Existing Credit Agreement), is as set forth in the relevant
column heading below for any quarterly period, any such Applicable Margin shall
be as provided in the relevant column heading below:
Relevant Ratio of Applicable Margin for
Consolidated Total Debt to Applicable Margin for Alternate Base Rate
Consolidated EBITDA Eurodollar Loans Loans
---------------------------- ---------------------- ---------------------
Equal to or above 3.00x 3.50% 2.50%
2.00x to but excluding 3.00x 3.00% 2.00%
Below 2.00x 2.50% 1.50%
If the financial statements required to be delivered pursuant to Section 7.1(a)
or 7.1(b), as applicable, and the related compliance certificate required to be
delivered pursuant to Section 7.2(b), are delivered on or prior to the date when
due (or, in the case of the fourth quarterly period of each fiscal year of the
Borrower, if financial statements which satisfy the requirements of, and are
delivered within the time period specified in, Section 7.l(b) and a related
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compliance certificate which satisfies the requirements of, and is delivered
within the time period specified in, Section 7.2(b), with respect to any such
quarterly period are so delivered within such time periods), then the Applicable
Margin during the period from the date upon which such financial statements were
delivered shall be the Applicable Margin as set forth in the relevant column
heading above; provided, however, that in the event that the financial
statements delivered pursuant to Section 7.1(a) or 7.1(b), as applicable, and
the related compliance certificate required to be delivered pursuant to Section
7.2(b), are not delivered when due, then:
(i) if such financial statements and certificate are delivered
after the date such financial statements and certificate were required
to be delivered (without giving effect to any applicable cure period)
and the Applicable Margin increases from that previously in effect as
a result of the delivery of such financial statements and certificate,
then the Applicable Margin during the period from the date upon which
such financial statements and certificate were required to be
delivered (without giving effect to any applicable cure period) until
the date upon which they actually are delivered shall, except as
otherwise provided in clause (iii) below, be the Applicable Margin as
so increased;
(ii) if such financial statements and certificate are delivered
after the date such financial statements and certificate were required
to be delivered (without giving effect to any applicable cure period)
and the Applicable Margin decreases from that previously in effect as
a result of the delivery of such financial statements and certificate,
then such decrease in the Applicable Margin shall not become
applicable until the date upon which such financial statements and
certificate actually are delivered; and
(iii) if such financial statements and certificate are not
delivered prior to the expiration of the applicable cure period, then,
effective upon such expiration, for the period from the date upon
which such financial statements and certificate were required to be
delivered (after the expiration of the applicable cure period) until
two Business Days following the date upon which they actually are
delivered, the Applicable Margin shall be determined as if the
relevant ratio of Consolidated Total Debt to Consolidated EBITDA was
above 3.00x (it being understood that the foregoing shall not limit
the rights of the Administrative Agent and the Lenders set forth in
Article 9).
"Assignee": as defined in Section 12.6(c).
"Assignment and Acceptance": an assignment and acceptance entered
into by a Lender or an assignee, substantially in the form of Exhibit C.
"Available Commitment": as to any Lender at any time, an amount equal
to the excess, if any, of (a) the amount of such Lender's Commitment over (b)
the aggregate of (i) the aggregate unpaid principal amount at such time of all
Loans made by such Lender, and (ii) an amount equal to such Lender's Commitment
Percentage of the Letter of Credit Outstandings at such time; collectively, as
to all the Lenders, the "Available Commitments."
"Borrower": as defined in the preamble to this Agreement.
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.3 or 3.2 as a date on which the Borrower requests Lenders to make
Loans hereunder or the Issuing Lender to issue a Letter of Credit hereunder.
"Bridge Facility ": the Bridge Financing and any Permitted
Refinancing thereof.
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"Bridge Financing ": the borrowing by the Borrower of up to $140.0
million in the form of senior unsecured loans made on the Closing Date pursuant
to the terms of the Bridge Loan Agreement.
"Bridge Loan Agreement": the Senior Bridge Loan Agreement, dated as
of September 13, 2005, among the Borrower, Holdings, Deutsche Bank AG Cayman
Islands Branch and JPMCB, as initial lenders thereunder, the other lenders party
thereto, DBSI and JPMSI, as joint lead arrangers and joint book runners, and
Deutsche Bank AG Cayman Islands Branch, as administrative agent.
"Business": the collective reference to the businesses of Holdings
and the Borrower and their respective Subsidiaries, as conducted on the date
hereof.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close; provided that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which commercial banks are not open
for dealing in Dollar deposits in the London interbank market.
"Capital Expenditures": expenditures (including, without limitation,
(i) obligations created under Financing Leases but excluding payments made
thereon, (ii) capitalized software and database expenditures, (iii) capitalized
investments in service parts and (iv) purchase money Indebtedness in the year in
which created but excluding payments made thereon) of the Borrower and its
Subsidiaries in respect of the purchase or other acquisition of fixed or capital
assets (excluding any such asset acquired (x) in connection with normal
replacement and maintenance programs properly expensed in accordance with GAAP,
(y) with the proceeds of any casualty insurance or condemnation award, or (z)
with the cash proceeds of any asset sale made pursuant to Section 8.6(d) applied
or contractually committed to be applied within 180 days from receipt of such
proceeds).
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit,
time deposits, overnight bank deposits, bankers acceptances and repurchase
agreements of any commercial bank which has capital and surplus in excess of
$100,000,000 having maturities of one year or less from the date of acquisition,
(c) commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Group or P-2 by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments, (d) money market
accounts or funds with or issued by Qualified Issuers, (e) repurchase
obligations with a term of not more than 90 days for underlying securities of
the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above and (f) demand deposit accounts
maintained in the ordinary course of business with any bank that is not a Lender
not in excess of $100,000 in the aggregate on deposit with any such bank or any
Lender.
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"C/D Assessment Rate": for any day as applied to the Base CD Rate,
the net annual assessment rate (rounded upward to the nearest 1/100th of 1%)
determined by JPMCB to be payable on such day to the Federal Deposit Insurance
Corporation or any successor ("FDIC") for FDIC's insuring time deposits made in
Dollars at offices of JPMCB in the United States.
"C/D Reserve Percentage": for any day as applied to the CD Base Rate,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding one billion
Dollars in respect of new non-personal time deposits in Dollars in New York City
having a three month maturity and in an amount of $100,000 or more.
"Change of Control": (a) HMTF, its principals and Affiliates and
management ("HMTFS") shall cease to have the power, directly or indirectly, to
vote or direct the voting of securities having a majority of the ordinary voting
power for the election of directors of Holdings; provided that the occurrence of
the foregoing events shall not be deemed a Change of Control if (i) at any time
prior to the consummation of an Initial Public Offering, and for any reason
whatever, (A) HMTFS otherwise has the right to designate (and does so designate)
a majority of the board of directors of Holdings or (B) HMTFS and its employees,
directors and officers (the "HMTFS Group") own of record and beneficially an
amount of common stock of Holdings equal to at least 50% of the amount of common
stock of Holdings (adjusted for stock splits, stock dividends and other similar
events on an equitable basis) owned by the HMTFS Group of record and
beneficially as of the Closing Date and such ownership by the HMTFS Group
represents the largest single block of voting securities of Holdings held by any
Person or related group for purposes of Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or (ii) at any time after the
consummation of an Initial Public Offering, and for any reason whatever, (A) no
"Person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), excluding the HMTFS Group, shall become the "beneficial owner"
(as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than the greater of (x) 15% of the voting shares then
outstanding and (y) the percentage of the then outstanding voting stock of
Holdings owned by the HMTFS Group and (B) the board of directors of Holdings
shall consist of a majority of Continuing Directors, or (b) Holdings shall cease
to have the power, directly or indirectly, to vote or direct the voting of
securities having all of the ordinary voting power for the election of directors
of the Borrower or any Subsidiary of the Borrower, except as otherwise permitted
under this Agreement.
"Chattel Paper: as defined in Section 9-102 of the Uniform Commercial
Code of the State of New York.
"Closing Date": the date on which this Agreement becomes effective in
accordance with Section 6.1.
"Code": the U.S. Internal Revenue Code of 1986, as amended from time
to time.
"Collateral": the collective reference to all collateral in which the
Administrative Agent purports to have a security interest pursuant to the
Security Documents.
"Commitment": as to any Lender, its obligation to make Loans to the
Borrower pursuant to Section 2.1 and to participate in Letters of Credit in an
aggregate amount not to exceed at any one time outstanding the amount set forth
opposite such Lender's name in Schedule 1.1 under the heading "Commitment," as
such amount may be reduced from time to time as provided herein; collectively,
as to all the Lenders, the "Commitments."
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"Commitment Letter": the commitment letter dated August 15, 2005,
relating, among other things, to the Loans made hereunder, addressed to Holdings
and the Borrower from JPMCB, JPMorgan, DBTCA and DBSI and all exhibits thereto,
as each of the same may be amended, supplemented or otherwise modified from time
to time.
"Commitment Percentage": as to any Lender, the percentage of the
aggregate Commitments constituted by its Commitment.
"Commitment Period": the period from and including the Closing Date
to but not including the Termination Date.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Assets": at any date, the amount which, in conformity
with GAAP, would be set forth opposite the caption "Total Assets" (or any like
caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at
such date, except that there shall be excluded therefrom cash and Cash
Equivalents and equipment and other fixed assets held for sale.
"Consolidated EBITDA": for any period, with respect to any Person,
Consolidated Net Income of such Person for such period (A) plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (i) total income and
franchise tax expense, (ii) interest expense, amortization or write-off of debt
discount and debt issuance costs and commissions and discounts and other fees
and charges associated with Indebtedness, (iii) depreciation and amortization
expense, (iv) amortization of intangibles including, but not limited to,
goodwill and organization costs, (v) other extraordinary non-cash charges (in
accordance with GAAP) (including non-cash currency exchange losses), (vi) any
extraordinary and unusual losses (including losses on sales of assets other than
inventory sold in the ordinary course of business), (vii) any non-cash losses
resulting from the Borrower's investment in Internet Autoparts and XX Xxxx,
(viii) one time cash expenses since the date of the consummation of the
acquisition of Speedware related to (a) severance payments, (b) transactions
fees and expenses and (c) pro forma synergies agreed to between the Borrower and
the Administrative Agent, in each case in connection with the acquisition of the
Capital Stock of Speedware, so long as the aggregate amount of all such cash
expenses does not exceed $5,000,000, and (ix) one time cash expenses since the
date of the consummation of the Acquisition related to (a) severance payments,
(b) transactions fees and expenses and (c) pro forma synergies agreed to between
the Borrower and the Administrative Agent, in each case in connection with the
Acquisition, so long as the aggregate amount of all such cash expenses does not
exceed $10,000,000; and (B) minus, without duplication and to the extent
reflected as a credit or gain in the statement of such Consolidated Net Income
for such period, the sum of (i) any extraordinary and unusual gains (including
gains on the sales of assets, other than inventory sold in the ordinary course
of business), (ii) other extraordinary non-cash credits or gains (in accordance
with GAAP) (including non-cash currency exchange gains) and (iii) any non-cash
gains resulting from the Borrower's investment in Internet Autoparts and XX
Xxxx; provided, however, that for the purposes of calculating Consolidated
EBITDA for any period of four consecutive fiscal quarters (each, a "Reference
Period") for purposes of Section 8.1(c), (i) if at any time during such
Reference Period the Borrower or any Subsidiary shall consummate an acquisition
pursuant to Section 8.9(k) or 8.9(l) or the Acquisition (including giving pro
forma effect to any acquisition consummated during the Reference Period by any
7
Person that was (A) acquired by Borrower or any then existing Subsidiary of the
Borrower and (B) became a Subsidiary of the Borrower at the time of such
acquisition by Borrower or such existing Subsidiary), the Consolidated EBITDA
for such Reference Period shall be calculated on a pro forma basis (assuming the
consummation of such acquisition and the incurrence or assumption of any
Indebtedness in connection therewith occurred on the first day of such Reference
Period) and (ii) if at any time during such Reference Period the Borrower or any
Subsidiary shall consummate the Designated Asset Sale or the sale of any line of
business or product line, the Consolidated EBITDA for such Reference Period
shall be reduced on a pro forma basis by an amount equal to the Consolidated
EBITDA (if positive) attributable to the property that is the subject of the
Designated Asset Sale or the sale of any line of business or product line.
"Consolidated Interest Expense": for any period, for any Person on a
consolidated basis, the sum of (a) the amount of interest expense for such
Person during such period on the aggregate principal amount of its Indebtedness,
which amount shall include any such interest expense in respect of Indebtedness
under Financing Leases and purchase money Indebtedness permitted under Section
8.2(e) of such Person (such consolidated interest expense to include fees
payable on account of letters of credit but to exclude amortization of debt
discount (including discount of liabilities and reserves established under
Accounting Principles Board Opinion No. 16 as in effect on the date hereof) and
costs of debt issuance) and (b) the amount of Restricted Payments made by the
Borrower to Holdings pursuant to Section 8.7(a)(vi) during such period;
provided, however, that, "Consolidated Interest Expense" shall not include any
interest that can, by the terms of the relevant instrument, be, and during the
relevant period was, paid in kind or through accretion.
"Consolidated Net Income": for any period, with respect to any
Person, the amount which, in conformity with GAAP, would be set forth opposite
the caption "Net Income/(Loss)" (or any like caption) on a consolidated
statement of operations of such Person and its Subsidiaries for such period.
"Consolidated Total Debt": at a particular date, with respect to the
Borrower, the aggregate principal amount of Indebtedness outstanding under this
Agreement, Financing Leases, purchase money Indebtedness and any other
Indebtedness for borrowed money of the Borrower and its Subsidiaries at such
date other than Lease Transaction Obligations.
"Continuing Directors": the directors of Holdings on the Closing Date
and each other director, if, in each case, such other director's nomination for
election to the board of directors of Holdings is recommended by a majority of
the then Continuing Directors or such other director receives the vote of HMTFS
in his or her election by the shareholders.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Parties": the collective reference to Holdings, the Borrower
and each of their respective Subsidiaries which from time to time is a party to
any Loan Document.
"Customary License Terms": as defined in Section 5.24.
"Customer Partnerships": certain partnerships with customers of the
Borrower, in existence on the date hereof or, if created after the date hereof,
which engage in substantially the same business as is engaged in by such
partnerships in existence on the date hereof and entered into subject to the
provisions hereof, of which Holdings or one of its Subsidiaries is a general
partner.
8
"Default": any of the events specified in Article 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Departing Lender": as defined in Section 6.1(b)(ii).
"Designated Asset Sale": as defined in Section 8.6(k).
"DBSI": Deutsche Bank Securities Inc., in its individual capacity,
and any successor thereto by merger, consolidation or otherwise.
"DBTCA": Deutsche Bank Trust Company Americas, in its individual
capacity, and any successor thereto by merger, consolidation or otherwise.
"Documents": as defined in Section 9-102 of the Uniform Commercial
Code of the State of New York.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower or Holdings
other than a Foreign Subsidiary; provided that none of FinanceCo, XX Xxxx or
Internet Autoparts (if Internet Autoparts hereafter becomes a Subsidiary of the
Borrower) shall be deemed to be a Domestic Subsidiary for purposes of this
Agreement or any other Loan Document unless and until FinanceCo, XX Xxxx or
Internet Autoparts (if Internet Autoparts hereafter becomes a Subsidiary of the
Borrower), as applicable, becomes a guarantor of the Obligations under the
Guarantee and Collateral Agreement.
"Environmental Laws": any applicable foreign, federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, legally binding requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which JPMCB is offered Dollar deposits at or about 10:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Loan to be outstanding during such Interest Period.
9
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Article 9;
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Existing Acquired Business Credit Facility": that certain Credit
Agreement, dated as of March 8, 2005, as amended, among the Acquired Business,
the several banks and other financial institutions party thereto and PNC Bank,
National Association, as agent.
"Existing Credit Agreement": as defined in the recitals to this
Agreement.
"Existing Lenders": as defined in the recitals to this Agreement.
"Existing Letters of Credit": as defined in Section 3.1(d).
"Facility": as defined in the recitals to this Agreement.
"Fee Properties": the collective reference to the real properties
owned in fee by the Borrower described on Part I of Schedule 5.8, including all
buildings, improvements, structures and fixtures now or subsequently located
thereon.
"FinanceCo": CCI/Triad Financial Holding Corporation, a California
corporation.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Lease Subsidiaries": Tridex Leasing Limited, a United
Kingdom company, and TSC Leasing, a division of Triad Systems Canada Ltd., an
Ontario corporation.
"Foreign Subsidiary": any Subsidiary of the Borrower or Holdings
which is organized under the laws of any jurisdiction outside of the United
States of America.
"GAAP": the generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board and the rules and regulations of the
Securities and Exchange Commission, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances of the Borrower as of the
date of determination except that for purposes of Section 8.1, GAAP shall be
10
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited financial
statements referred to in Section 5.1. In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then the Borrower and the Administrative Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for evaluating
the Borrower's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
means changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission (or successors thereto or agencies with
similar functions).
"General Intangibles": as defined in Section 9-102 of the Uniform
Commercial Code of the State of New York.
"Governmental Authority": 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 and Collateral Agreement": the Third Amended and Restated
Guarantee and Collateral Agreement made by Holdings, the Borrower, XX Xxxx and
each of the Domestic Subsidiaries in favor of the Administrative Agent for the
ratable benefit of the Lenders, in the form of Exhibit F, as the same hereafter
may be amended, amended and restated, supplemented or otherwise modified from
time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
"Guarantee Obligation" shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the board of directors of such Person in good
faith.
11
"XX Xxxx": XX Xxxx LLC, a Delaware limited liability company.
"HMTF": Hicks, Muse, Xxxx & Xxxxx Incorporated, a Texas corporation.
"HMTFS": as defined in the definition of "Change of Control."
"HMTFS Group": as defined in the definition of "Change of Control."
"Holdings": as defined in the preamble to this Agreement.
"Holdings Bridge Loan Agreement": the Senior Bridge Loan Agreement,
dated as of September 13, 2005, among Holdings, Deutsche Bank AG Cayman Islands
Branch and JPMCB, as initial lenders thereunder, the other lenders party
thereto, DBSI and JPMorgan, as joint lead arrangers and joint book runners, and
Deutsche Bank AG Cayman Islands Branch, as administrative agent.
"Holdings Financing": the borrowing by Holdings of up to $40.0
million in the form of a senior bridge loan pursuant to the Holdings Bridge Loan
Agreement.
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices and accrued
expenses incurred in the ordinary course of business) or which is evidenced by a
note, bond, debenture or similar instrument, (b) all obligations under Interest
Rate Agreements, (c) all obligations of such Person under Financing Leases, (d)
all obligations of such Person in respect of bankers' acceptances or similar
instruments issued or created for the account of such Person, and (e) all
liabilities secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof;
provided, however, that the amount of such Indebtedness of any Person described
in this clause (e) shall, for purposes of this Agreement, be deemed to be equal
to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii)
the fair market value of the property or asset encumbered, as determined by such
Person in good faith; provided, further, that solely for purposes of Sections
8.2(k) and 8.2(l), Lease Transaction Obligations shall be deemed to be
Indebtedness of the Borrower and its Subsidiaries.
"Initial Public Offering": an underwritten public offering of Capital
Stock of Holdings pursuant to a registration statement filed with the Securities
and Exchange Commission in accordance with the Securities Exchange Act of 1933,
as amended.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Instrument": as defined in Section 9-102 of the Uniform Commercial
Code of the State of New York.
12
"Intellectual Property": as defined in Section 5.9.
"Interest Payment Date": (a) with respect to any Alternate Base Rate
Loan, the fifth day of each September, December, March and June, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to such Loan and, in the case of a Eurodollar Loan with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period as to any Loan.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or, to the extent available to
all Lenders, nine or twelve months, thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six or, to the extent available to
all Lenders, nine or twelve months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(2) no Interest Period shall extend beyond the Termination Date;
and
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"Interest Rate Agreement": any interest rate protection agreement,
interest rate future, interest rate option, interest rate cap or other interest
rate hedge arrangement, to or under which the Borrower is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary after the
date hereof, which is entered into in the ordinary course of business and which
is not entered into for speculative purposes.
"Internet Autoparts": Internet Autoparts, Inc., a Delaware
corporation.
"Investments": as defined in Section 8.9.
"Issuer": as defined in the Guarantee and Collateral Agreement.
13
"Issuing Lender": JPMCB or any of its Affiliates, each in its
capacity as issuer of each Letter of Credit.
"JPMCB": JPMorgan Chase Bank, N.A., in its individual capacity, and
any successor thereto by merger, consolidation or otherwise.
"JPMorgan": X.X. Xxxxxx Securities Inc., in its individual capacity,
and any successor thereto by merger, consolidation or otherwise.
"Joint Lead Arrangers": as defined in the preamble to this Agreement.
"L/C Commitment": the Issuing Lender's obligation to open Letters of
Credit pursuant to Article 3 of this Agreement.
"L/C Obligation": the obligation of the Borrower to reimburse the
Issuing Lender in accordance with the terms of this Agreement and the related
Letter of Credit Application for any payment made by the Issuing Lender under
any Letter of Credit.
"L/C Participating Interest": with respect to any Letter of Credit
(a) in the case of the Issuing Lender with respect thereto, its interest in such
Letter of Credit and any Letter of Credit Application relating thereto after
giving effect to the granting of participating interests therein, if any,
pursuant hereto and (b) in the case of each Participating Lender, its undivided
participating interest in such Letter of Credit and any Letter of Credit
Application relating thereto.
"L/C Participation Certificate": a certificate in substantially the
form of Exhibit B.
"Lease Accounting Change": as defined in Section 1.2(b).
"Leased Equipment": computer systems, software, accessories, upgrades
and support, maintenance and data software subscriptions and third party
equipment and/or trade fixtures owned by Triad Financial and the Foreign Lease
Subsidiaries.
"Lease Transaction": leases of Leased Equipment by Triad Financial
and the Foreign Lease Subsidiaries as lessors to third party customers in the
ordinary course of business and the sale of the lease payments thereon to
FinanceCo in exchange for a security interest in the lease payments, the Chattel
Paper and the Leased Equipment; together, the "Lease Transactions."
"Lease Transaction Obligations": obligations of Triad Financial, the
Foreign Lease Subsidiaries and FinanceCo incurred to finance Lease Transactions
(a) the principal amount of which is computed based upon a discount of the lease
payments due under such Lease Transactions, (b) which are unsecured or secured
solely by Leased Equipment, Chattel Paper and/or lease payments due under such
Lease Transactions that are not presented on Holdings's consolidated balance
sheet and (c) which are treated as "off-balance sheet financing" under GAAP;
provided that obligations of FinanceCo shall be deemed to be Lease Transaction
Obligations only to the extent that the proceeds of such obligations are used to
purchase from Triad Financial lease payments arising in Lease Transactions;
provided further that up to $1,000,000 may be presented on Holdings's
consolidated balance sheet as set forth on Schedule 5.25. It is the intention of
the parties that a Lease Transaction Obligation may be created by FinanceCo only
to the extent that it is created on a back-to-back basis with a corresponding
Lease Transaction Obligation created by Triad Financial and that any such Lease
Transaction Obligation created by FinanceCo is recourse to FinanceCo only to the
extent that the corresponding Lease Transaction Obligation created by Triad
Financial is recourse to Triad Financial.
14
"Leased Properties": the collective reference to the real properties
leased by the Borrower and its Subsidiaries described on Part II of Schedule 5.8
including all buildings, improvements, structures and fixtures now or
subsequently located thereon and owned or leased by the Borrower.
"Lenders": as defined in the recitals to this Agreement.
"Letter of Credit": any Standby L/C or Trade L/C and shall include
any Existing Letter of Credit; collectively, the "Letters of Credit".
"Letter of Credit Application": with respect to (a) a Standby L/C, a
Standby L/C Application and (b) a Trade L/C, a Trade L/C Application;
collectively, the "Letter of Credit Applications."
"Letter of Credit Outstandings": at any date, the sum of (a) the
aggregate amount then available to be drawn under all outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"License Products": as defined in Section 5.24.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": the collective reference to this Agreement, any
Notes, the Letters of Credit, the Letter of Credit Applications, the Guarantee
and Collateral Agreement, and all other agreements, instruments or certificates
executed and delivered in connection herewith or therewith, as the same may be
amended, supplemented or otherwise modified.
"Material Adverse Effect": any event, development or circumstance
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, operations, assets, property, condition (financial or
otherwise) or prospects of Holdings, the Borrower and their Subsidiaries taken
as a whole, (b) the ability of Holdings, the Borrower and their Subsidiaries
taken as a whole to perform their respective obligations under any of the Loan
Documents or (c) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Administrative Agent or
the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, friable
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
15
"Mortgages": the collective reference to each of the mortgages and
deeds of trust to be executed and delivered by the Borrower and its Subsidiaries
pursuant to Sections 7.9 and 7.10, in a form determined by Administrative Agent
as necessary or desirable to create a valid and enforceable first mortgage Lien
securing the obligations and liabilities of the Borrower or any guarantor under
the Loan Documents, as the same may be amended, supplemented, replaced,
restated, or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Nonconsenting Lender": as defined in Section 4.9.
"Non-Excluded Taxes": as defined in Section 4.7(a).
"Non-Funding Lender": as defined in Section 4.4(c).
"Non-U.S. Lender": any Lender, any Issuing Lender, any Participant or
any Administrative Agent that is not a United States person as defined in
Section 7701(a)(30) of the Code.
"Note" and "Notes": as defined in Section 2.2.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any Notes, any other Loan Documents or any Interest Rate
Agreement entered into with a Lender and any other document made, delivered or
given in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by the
Borrower pursuant to the terms of this Agreement) or otherwise.
"Participant": as defined in Section 12.6(b).
"Participating Lender": any Lender (other than the Issuing Lender)
with respect to its L/C Participating Interest in a Letter of Credit.
"Payment Office" shall mean the principal office of Administrative
Agent, located on the Closing Date at 0000 Xxxxxx, 00xx Xxxxx, Xxxxxxx, XX
00000, or such other office as may be designated by Administrative Agent.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": the acquisition by the Borrower and/or any
of its Subsidiaries of businesses (whether pursuant to the acquisition of
Capital Stock or assets constituting a business unit of any Person) related to
their respective Businesses, as approved by the board of directors of the
Borrower.
16
"Permitted Issuance": (a) the issuance by Holdings of shares of
Capital Stock as dividends on issued and outstanding Capital Stock of the same
class of Holdings or pursuant to any dividend reinvestment plan, (b) the
issuance by Holdings of options or other equity securities of Holdings to
outside directors, members of management or employees of Holdings, the Borrower
or any Subsidiary of the Borrower, (c) the issuance of securities as interest or
dividends on pay-in-kind debt or preferred equity securities permitted hereunder
and under the Security Documents, (d) the issuance by Holdings of shares of
Capital Stock in connection with Permitted Acquisitions permitted under either
Section 8.9(k) or Section 8.9(l), (e) the issuance to Holdings by the Borrower
of its Capital Stock or the issuance to the Borrower or any Subsidiary (or any
director, with respect to directors' qualifying shares) by any Subsidiary of the
Borrower of any of their respective Capital Stock, in each case with respect to
this clause (e) to the extent such Capital Stock is pledged to the
Administrative Agent pursuant to the Guarantee and Collateral Agreement
(provided that only 65% of the Capital Stock of a Foreign Subsidiary is required
to be so pledged), (f) cash payments made in lieu of issuing fractional shares
of Holdings Capital Stock in an aggregate amount not to exceed $100,000, and (g)
the issuance by Holdings of shares of Capital Stock of Holdings to infuse
additional capital into Holdings in an aggregate amount not to exceed
$10,000,000.
"Permitted Refinancing": with respect to any Person, any
modification, refinancing, refunding, renewal or extension of any Indebtedness
of such Person; provided that: (a) the principal amount (or accreted value, if
applicable) thereof does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so modified, refinanced, refunded, renewed or
extended (except in connection with a refinancing of the Holdings Financing
through a Permitted Refinancing of the Bridge Financing; provided that such
Permitted Refinancing satisfies all the requirements set forth in clauses (b)
through and including (f) of this definition) plus, in connection with any
Permitted Refinancing of the Bridge Financing and/or the Holdings Financing, the
amount of any original issue discount permitted to be incurred in connection
such Permitted Refinancing as contemplated by the Bridge Loan Agreement or the
Holdings Bridge Loan Agreement, as applicable, as in effect as of the date
hereof, except by an amount equal to a reasonable premium or other reasonable
amount paid, and fees and expenses reasonably incurred, in connection with such
modification, refinancing, refunding, renewal or extension; (b) such
modification, refinancing, refunding, renewal or extension has a final maturity
date that is no sooner than 91 days after the Stated Maturity Date, and has no
scheduled amortization payments prior to 91 days after the Stated Maturity Date;
(c) if the Indebtedness being modified, refinanced, refunded, renewed or
extended is subordinated in right of payment to the Obligations, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms at least as favorable to the
Lenders as those contained in the documentation governing the Indebtedness being
modified, refinanced, refunded, renewed or extended; (d) the prepayment terms,
events of defaults, covenants, conditions (including, without limitation,
conditions regarding collateral), rights or remedies of any such modified,
refinanced, refunded, renewed or extended Indebtedness are not materially less
favorable to the Credit Parties or the Lenders than the prepayment terms, events
of defaults, covenants, conditions (including, without limitation, conditions
regarding collateral), rights or remedies of the Indebtedness being modified,
refinanced, refunded, renewed or extended; provided, however, that any Permitted
Refinancing of the Bridge Financing and/or the Holdings Financing may have
customary prepayment terms as contemplated by the Bridge Loan Agreement or the
Holdings Bridge Loan Agreement, as applicable, as in effect as of the date
hereof; (e) such modification, refinancing, refunding, renewal or extension is
incurred and/or guaranteed by only the Persons who are the obligors on the
Indebtedness being modified, refinanced, refunded, renewed or extended, except
in connection with any Permitted Refinancing of the Bridge Financing to the
extent permitted in Section 8.4(l); and (f) at the time thereof and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing, and after giving pro forma effect thereto the Borrower would have
been in compliance with Section 8.1 as of the last Test Date.
17
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledged Notes": as defined in the Guarantee and Collateral
Agreement.
"Pledged Stock": as defined in the Guarantee and Collateral
Agreement.
"Prelude Systems": Prelude Systems, Inc., a Texas corporation.
"Pro Forma Balance Sheet": as defined in Section 5.1(b).
"Pro Forma Statement of Operations": as defined in Section 5.1(b).
"Properties": as defined in Section 5.16(a).
"Qualified Issuer": any commercial bank (a) which has capital and
surplus in excess of $100,000,000 and (b) the outstanding long-term debt
securities of which are rated at least A-2 by Standard & Poor's Ratings Group or
at least P-2 by Xxxxx'x Investors Service, Inc., or carry an equivalent rating
by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments.
"Reference Period": as defined in the definition of "Consolidated
EBITDA".
"Register": as defined in Section 12.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA and the regulations thereunder, other than those events as to which the
thirty day notice period is waived under subsection .13, .14, .16, .18, .19 or
..20 of PBGC Reg. Section 2615.
"Required Lenders": at any time, Lenders the Total Credit Percentages
of which aggregate at least 66-2/3%; provided, however, that if there are only
two (2) Lenders, then "Required Lenders" shall mean both of such Lenders.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
18
"Responsible Officer": as to any Person, the chief executive officer,
the president, the chief financial officer, any vice president-finance, the
treasurer, any assistant treasurer, the secretary or any assistant secretary of
such Person.
"Restricted Payments": as defined in Section 8.7.
"Revenue Recognition Change": as defined in Section 1.2(b).
"SDI": as defined in Section 7.15(e).
"Security Documents": the Guarantee and Collateral Agreement and any
other collateral security document delivered to the Administrative Agent
pursuant to Section 7.9, 7.10 or 7.11; individually a "Security Document."
"Senior Fixed Rate Notes Indenture": the Indenture dated as of June
27, 2003 entered into by the Borrower in connection with the issuance of the
Senior Fixed Rate Notes, together with all instruments and other agreements
entered into by the Borrower or such Subsidiaries in connection therewith, by
the First Supplemental Indenture, dated as of April 20, 2005 and the Second
Supplemental Indenture, dated as of September 13, 2005 and as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with Section 8.18.
"Senior Fixed Rate Notes": the unsecured senior notes of Borrower due
June 27, 2011 issued by the Borrower effective June 27, 2003 in the aggregate
principal amount of $157,000,000 pursuant to the Senior Fixed Rate Notes
Indenture.
"Senior Floating Rate Notes Indenture": the Indenture dated as of
March 30, 2005 entered into by the Borrower in connection with the issuance of
the Senior Floating Rate Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in connection
therewith, as supplemented by the First Supplemental Indenture, dated as of
April 20, 2005 and the Second Supplemental Indenture, dated as of September 13,
2005 and as the same may be further amended, supplemented or otherwise modified
from time to time in accordance with Section 8.18.
"Senior Floating Rate Notes": the unsecured senior notes of Borrower
due March 30, 2010 issued by the Borrower effective March 30, 2005 in the
aggregate principal amount of $120,000,000 pursuant to the Senior Floating Rate
Notes Indenture.
"Senior Unsecured Notes Indentures": collectively, the Senior Fixed
Rate Notes Indenture and the Senior Floating Rate Notes Indenture.
"Senior Unsecured Notes": collectively, (a) the Senior Fixed Rate
Notes and (b) the Senior Floating Rate Notes.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
19
"Solvent" and "Solvency": with respect to any Person on a particular
date, that on such date, (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small capital.
"Speedware": Speedware Corporation Inc. (now known as Activant
Solutions Acquisitionco Ltd.), a Canadian corporation
"Standby L/C": an irrevocable letter of credit issued by the Issuing
Lender pursuant to this Agreement for the account of the Borrower in respect of
obligations of the type described in Section 3.1.
"Standby L/C Application": as defined in Section 3.2.
"Stated Maturity Date": the date that is the third anniversary of the
Closing Date.
"Subordinated Indebtedness": unsecured senior subordinated
Indebtedness or unsecured subordinated Indebtedness of the Borrower; provided
that such indebtedness has (i) no maturity, amortization, mandatory redemption
or purchase option (other than with asset sale proceeds, subject to the
provisions of this Agreement, or following a change of control) or sinking fund
payment prior to the fourth anniversary of the Closing Date, (ii) no financial
maintenance covenants, and (iii) such other terms and conditions (including,
without limitation, interest rate, events of default, subordination and
covenants) as shall be satisfactory to the Administrative Agent in its
discretion.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person; provided that the Customer Partnerships shall be deemed
Subsidiaries of the Borrower solely for purposes of Sections 8.2, 8.4 and 8.9
only; provided further that Internet Autoparts (if it hereafter becomes a
Subsidiary of the Borrower) shall not be deemed a Subsidiary of the Borrower for
purposes of Article 8 hereof. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.
"Termination Date": the earliest of (a) the Stated Maturity Date and
(b) the date upon which the Commitments shall be terminated pursuant hereto
(including any termination pursuant to Article 9).
"Test Date": with respect to the covenants set forth in Sections
8.1(a) and 8.1(b), each date of determination in accordance with such covenants.
"Total Credit Percentage": as to any Lender at any time, the
percentage of the aggregate Commitments then constituted by its Commitment (or,
if the Commitments have terminated or expired, the percentage of the aggregate
outstanding Loans and risk interests in the Letter of Credit Outstandings then
constituted by its outstanding Loans and risk interest in Letter of Credit
Outstandings).
20
"Total Debt Ratio": the ratio of Consolidated Total Debt of the
Borrower and its Subsidiaries to Consolidated EBITDA of the Borrower and its
Subsidiaries for a period of four consecutive fiscal quarters.
"Trade L/C": a commercial documentary letter of credit issued by the
Issuing Lender pursuant to Section 3.1 for the account of the Borrower for the
purchase of goods in the ordinary course of business.
"Trade L/C Application": as defined in Section 3.2.
"Tranche": the reference to Eurodollar Loans the Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the same
day); Tranches may be identified as "Eurodollar Tranches."
"Transactions": the Acquisition, the Acquired Business Refinancing,
entering into this Agreement, the Bridge Financing and the Holdings Financing.
"Transferee": as defined in Section 12.6(f).
"Triad Financial": Triad Systems Financial Corporation, a California
corporation.
"Type": as to any Loan, its nature as an Alternate Base Rate Loan or
a Eurodollar Loan.
"U.S. Lender": any Lender, any Issuing Lender, any Participant or any
Administrative Agent that is a United States person as defined in Section
7701(a)(30) of the Code.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
and any revisions thereof.
"United States": United States of America.
"U.S. Tax Compliance Certificate": as defined in Section 4.7(b)(ii).
"Wholly Owned Subsidiary": as to any Person, any Subsidiary of which
such Person owns, directly or indirectly, all of the Capital Stock other than
directors' qualifying shares or any shares held by nominees.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any Note or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Note, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to
Holdings and its Subsidiaries not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP. In the event that any change shall
occur in (i) the method by which Lease Transaction Obligations and the related
21
obligations of the Borrower permitted pursuant to the terms of Section 8.4(h) of
this Agreement are accounted for in the financial statements of Holdings and its
Subsidiaries (a "Lease Accounting Change") or (ii) accounting principles
relating to the recognition of revenue required by the promulgation of any rule,
regulation, pronouncement or opinion by applicable authorities including,
without limitation the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (a "Revenue Recognition Change"), such
Lease Accounting Changes and Revenue Recognition Changes shall be treated as
Accounting Changes as described in the definition of "GAAP".
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments.
(a) Subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans (each, a "Loan", collectively, "Loans") to
the Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding, when added to such Lender's
Commitment Percentage of all Letter of Credit Outstandings, not to exceed the
amount of such Lender's Commitment. Notwithstanding the foregoing, the sum of
all Letter of Credit Outstandings and the aggregate principal amount of the
Loans outstanding at any time shall not exceed the Commitments. During the
Commitment Period, the Borrower may use the Commitments by borrowing, prepaying
the Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii)
Alternate Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.3 and 2.11.
(c) The Borrower shall not be permitted to make any request for a
borrowing, extension of credit or issuance of a Letter of Credit (other than
with respect to the "rollover" of the Existing Letters of Credit to this
Agreement) hereunder or otherwise borrow any funds or obtain Letters of Credit
(other than with respect to the "rollover" of the Existing Letters of Credit to
this Agreement) until the Business Day next succeeding the Closing Date.
2.2 Notes. The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, in order to evidence such Lender's Loans the
Borrower will execute and deliver to such Lender a promissory note substantially
in the form of Exhibit A, with appropriate insertions as to payee, date and
principal amount (each, as amended, supplemented, replaced or otherwise modified
from time to time, a "Note"), payable to the order of such Lender, or its valid
and registered assigns, and in a principal amount equal to the amount of the
initial Commitment of such Lender. Each Lender is hereby authorized to record
22
the date, Type and amount of each Loan made by such Lender, each continuation
thereof, each conversion of all or a portion thereof to another Type, the date
and amount of each payment or prepayment of principal thereof and, in the case
of Eurodollar Loans, the length of each Interest Period with respect thereto, on
the schedules annexed to and constituting a part of its Note, and any such
recordation shall, in the absence of manifest error and to the extent permitted
by applicable law, constitute prima facie evidence of the accuracy of the
information so recorded; provided that the failure by any Lender to make any
such recordation, or any error therein, shall not affect any of the obligations
of the Borrower under such Note or this Agreement. Any Note shall (x) be dated
the Closing Date, (y) be stated to mature on the Termination Date and (z)
provide for the payment of interest in accordance with Section 4.1.
2.3 Procedure for Borrowing. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day; provided that the
Borrower shall give the Administrative Agent irrevocable notice (which notice
may be telephonic and must be received by the Administrative Agent prior to
12:00 Noon, New York City time, (a) three (3) Business Days prior to the
requested Borrowing Date, if all or any part of the requested Loans are to be
Eurodollar Loans, or (b) one (1) Business Day prior to the requested Borrowing
Date), specifying (i) the amount to be borrowed, (ii) the requested Borrowing
Date, (iii) whether the borrowing is to be of Eurodollar Loans, Alternate Base
Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Periods therefor. Any such
telephonic borrowing notice shall be confirmed promptly by a written borrowing
notice to the Administrative Agent, delivered by hand or by telecopy. Each
borrowing under the Commitments shall be in an amount equal to (A) in the case
of Alternate Base Rate Loans, $500,000 or a whole multiple of $100,000 in excess
thereof (or, if the then Available Commitments are less than $500,000, such
lesser amount) and (B) in the case of Eurodollar Loans, $1,000,000 or a whole
multiple of $250,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in Section 12.2 prior to 12:30
P.M., New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Administrative Agent. Such borrowing will
then be made available to the Borrower by the Administrative Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.
2.4 Commitment Fee; Administrative Agent Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee for the period from and including the
first day of the Commitment Period to the Termination Date, computed at the rate
of 0.50% per annum on the average daily Available Commitment of such Lender
during the period for which payment is made, payable in arrears on (i) the last
day of each September, December, March and June and (ii) the Termination Date.
(b) The Borrower shall pay to JPMCB, for its account, such fees as
have been agreed to in writing by the Borrower and JPMCB, in the amounts and on
the dates set forth in such writing.
2.5 Termination or Reduction of Commitments.
(a) The Borrower shall have the right, upon not less than five (5)
Business Days' notice to the Administrative Agent, to terminate the Commitments
or, from time to time, reduce the unutilized portion of the amount of the
Commitments; provided that (i) the Commitments shall not be terminated if any
Letters of Credit are outstanding and (ii) any such termination of the
Commitments shall be accompanied by prepayment in full of the Loans and L/C
Obligations then outstanding, together with accrued interest thereon to the date
23
of such prepayment, cancellation of all Letters of Credit (unless cash
collateralized in accordance with the last sentence of this paragraph) and the
payment of any unpaid commitment fee then accrued hereunder. Any such partial
reduction shall be in an amount of $500,000, or a whole multiple of $100,000 in
excess thereof, and shall reduce permanently the amount of the Commitments then
in effect and shall further include any amounts due in respect thereof under
Section 4.8. Upon termination of the Commitments, any Letter of Credit then
outstanding which has been fully cash collateralized upon terms reasonably
satisfactory to the Administrative Agent and the Issuing Lender shall no longer
be considered a "Letter of Credit" as defined in Section 1.1, and any L/C
Participating Interest heretofore granted by the Issuing Lender to the Lenders
in such Letter of Credit shall, at the election of the Issuing Lender, be deemed
terminated but the letter of credit fees payable under Section 3.3 shall
continue to accrue to the Issuing Lender with respect to such Letter of Credit
until the expiry thereof.
(b) In the case of any reduction of the Commitments hereunder, to the
extent, if any, that the sum of the Loans and the Letter of Credit Outstandings
exceeds the Commitments as so reduced, the Borrower shall make a prepayment
equal to such excess amount, the proceeds of which shall be applied first, to
payment of the Loans then outstanding, second, to payment of any L/C Obligations
then outstanding and last, to cash collateralize any outstanding Letter of
Credit on terms reasonably satisfactory to the Administrative Agent and the
Issuing Lender.
(c) The Commitments once terminated or reduced may not be reinstated.
2.6 [Reserved].
2.7 [Reserved].
2.8 Repayment of Loans.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender, the then unpaid principal
amount of each Loan of such Lender, on the Termination Date. The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in Section 4.1.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
Section 12.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period, if any, applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, in the absence of manifest error
and 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 the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.
24
2.9 Optional Prepayments. The Borrower may, at any time and from time
to time, prepay the Loans, in whole or in part, without premium or penalty, upon
at least three (3) Business Days' (or one Business Day in the case of the
payment of Alternate Base Rate Loans) irrevocable notice (no later than 12:00
noon, New York City time, on such day) to the Administrative Agent, specifying
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans, Alternate Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein. Partial prepayments shall be in an
aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof and shall include any amounts due in respect thereof under Section 4.8.
2.10 Mandatory Prepayments and Commitment Reductions.
(a) If at any time the sum of the Loans and the Letter of Credit
Outstandings exceeds the Commitments (including at any time after any reduction
of the Commitments pursuant to Section 2.5), the Borrower shall make a payment
in the amount of such excess which payment shall be applied in the order set
forth in Section 2.5(b). To the extent that after giving effect to any
prepayment of the Loans required by the preceding sentence, the sum of the Loans
and Letter of Credit Outstandings exceed the Commitments, the Borrower shall,
without notice or demand, immediately cash collateralize the then outstanding
L/C Obligations in an amount equal to such excess upon terms reasonably
satisfactory to the Administrative Agent.
(b) If at any time the Borrower or any Subsidiary shall receive any
cash proceeds of any casualty or condemnation in excess of $2,000,000 permitted
by Section 8.6(c), such proceeds shall be deposited with the Administrative
Agent who shall hold such proceeds in a cash collateral account reasonably
satisfactory to it. From time to time upon request, the Administrative Agent
will release such proceeds to the Borrower or such Subsidiary, as necessary, to
pay for replacement or rebuilding of the assets lost or condemned. If such
assets are not replaced or rebuilt within one year (subject to reasonable
extension for force majeure or weather delays) following the condemnation or
casualty or if the Borrower fails to notify the Administrative Agent in writing
on or before 180 days after such casualty or condemnation that the Borrower
shall commence the replacement or rebuilding of such asset, then, in either
case, the Administrative Agent may apply any amounts in the cash collateral
account to the repayment of the Loans.
(c) If the daily balance of cash and Cash Equivalents of the Borrower
and its Domestic Subsidiaries for each day in any 179 consecutive day period is
in excess of $30,000,000 in the aggregate, the Borrower shall immediately prepay
in full all Loans, if any, then outstanding, and the Borrower agrees that
immediately after such prepayment and immediately after any repurchase or
redemption of the Senior Unsecured Notes permitted under Section 8.18(b)(iv),
the Borrower and its Domestic Subsidiaries shall have at least $5,000,000 in the
aggregate of unrestricted cash and Cash Equivalents.
(d) The provisions of this Section 2.10 shall not be in derogation of
any other covenant or obligation of the Credit Parties and their Subsidiaries
under the Loan Documents and shall not be construed as a waiver of, or a consent
to depart from, any such covenant or obligation.
25
2.11 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to convert Eurodollar
Loans to Alternate Base Rate Loans, by giving the Administrative Agent at least
two (2) Business Days' prior irrevocable notice of such election in the form of
the continuation or conversion certificate attached hereto as Exhibit G;
provided that, unless the Borrower elects to deposit with the Administrative
Agent the amount of any breakage costs and other Eurodollar Loan related costs
to be incurred by the Borrower under this Agreement with respect to the
prepayment or conversion of such Eurodollar Loan prior to the end of an Interest
Period, any such conversion of Eurodollar Loans may only be made on the last day
of an Interest Period with respect thereto. The Borrower may elect from time to
time to convert Alternate Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three (3) Business Days' prior irrevocable notice
of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender. All or any part of outstanding Eurodollar Loans and Alternate Base
Rate Loans may be converted as provided herein; provided that (i) no Alternate
Base Rate Loan may be converted into a Eurodollar Loan when any Default or Event
of Default has occurred and is continuing and the Administrative Agent has or
the Required Lenders have determined that such a conversion is not appropriate
and (ii) any such conversion may only be made if, after giving effect thereto,
Section 2.12 shall not have been contravened.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in Section 1.1, of the length of the
next Interest Period to be applicable to such Loans; provided that no Eurodollar
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a continuation is not appropriate or (ii) if, after giving
effect thereto, Section 2.12 would be contravened; provided, further, that if
the Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso, such Eurodollar Loans shall be automatically converted to Alternate
Base Rate Loans on the last day of such then expiring Interest Period.
2.12 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $250,000 in excess thereof and so that there shall not be more than
10 Eurodollar Tranches at any one time outstanding.
ARTICLE 3
LETTERS OF CREDIT
3.1 The L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender,
in reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue Letters of Credit for the account of the Borrower on any
Business Day during the Commitment Period in such form as may be approved from
time to time by the Issuing Lender; provided that no Issuing Lender shall issue
any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed $5,000,000 or (ii) the sum of the Loans and Letter of
Credit Outstandings of all the Lenders would exceed the Commitments of all of
the Lenders. Each Letter of Credit shall (i) be either (x) a Standby L/C issued
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to provide credit support for insurance and other general corporate requirements
of the Borrower and its Subsidiaries, or (y) a Trade L/C in respect of the
purchase of goods or services by the Borrower and its Subsidiaries in the
ordinary course of business and (ii) expire no later than the Termination Date.
No Standby L/C shall have an expiry date more than 360 days after its date of
issuance, and no Trade L/C shall have an expiry date more than 120 days after
its issuance and no later than five (5) Business Days prior to the Termination
Date; provided that Standby L/Cs may provide for the renewal thereof for
additional periods not to exceed one year, but in any event no later than the
Termination Date. Each Letter of Credit shall be denominated in Dollars.
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any Participating Lender to exceed any limits imposed by,
any applicable Requirement of Law.
(d) The outstanding Letters of Credit listed on Schedule 3.1 (the
"Existing Letters of Credit") issued and outstanding as of the Closing Date
pursuant to the Existing Credit Agreement shall be deemed to be a Letter of
Credit issued under this Agreement on the Closing Date (and all obligations in
respect of such letter of credit shall be deemed Obligations hereunder).
3.2 Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein a commercial letter of credit
application in the Issuing Lender's then customary form (a "Trade L/C
Application") or a standby letter of credit application in the Issuing Lender's
then customary form (a "Standby L/C Application"), as the case may be, in each
case completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as may be customary for
letters of credit of the kind being requested and as the Issuing Lender may
reasonably request. Upon receipt of any Letter of Credit Application, the
Issuing Lender will process such Letter of Credit Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and, upon
receipt by the Issuing Lender of confirmation from the Administrative Agent that
issuance of such Letter of Credit will not contravene Section 3.1, the Issuing
Lender shall promptly issue the Letter of Credit requested thereby (but in no
event shall the Issuing Lender be required to issue any Letter of Credit earlier
than three (3) Business Days after its receipt of the Letter of Credit
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter
of Credit to the Borrower and the Administrative Agent promptly following the
issuance thereof and to each Lender promptly following the end of each month.
3.3 Fees, Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the
account of the Issuing Lender and the Participating Lenders, a letter of credit
commission, commencing on the Closing Date, with respect to each Letter of
Credit for each day at a per annum rate equal to the Applicable Margin
applicable to Loans bearing interest at the Eurodollar Rate of the daily face
amount of such Letter of Credit, payable monthly in arrears on the last day of
each month and on the Termination Date. A portion of such commission equal to
1/4 of 1% of the average daily face amount of such Letter of Credit shall be
payable as a fronting fee to the Issuing Lender for its own account, and the
remaining portion of such commission shall be payable to the Issuing Lender and
the Lenders to be shared ratably among them in accordance with their respective
Commitment Percentages. Such commissions shall be nonrefundable.
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(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the Participating Lenders all fees
and commissions received by the Administrative Agent for their respective
accounts pursuant to this Section 3.3.
3.4 L/C Participations.
(a) Effective on the date of issuance of each Letter of Credit (and
on the Closing Date with respect to the Existing Letters of Credit), the Issuing
Lender irrevocably agrees to grant and hereby grants to each Participating
Lender, and each Participating Lender irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such Participating Lender's own account and
risk an undivided interest equal to such Participating Lender's Commitment
Percentage in the Issuing Lender's obligations and rights under each Letter of
Credit issued by the Issuing Lender (including the Existing Letters of Credit)
and the amount of each draft paid by the Issuing Lender thereunder. Each
Participating Lender unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which such
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such Participating Lender shall pay to the
Administrative Agent, for the account of the Issuing Lender, upon demand at the
Administrative Agent's address specified in Section 12.2, an amount equal to
such Participating Lender's Commitment Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed. On the date that any Assignee
becomes a Lender party to this Agreement in accordance with Section 12.6,
participating interests in any outstanding Letters of Credit held by the
transferor Lender from which such Assignee acquired its interest hereunder shall
be proportionately reallotted between such Assignee and such transferor Lender.
Each Participating Lender hereby agrees that its obligation to participate in
each Letter of Credit, and to pay or to reimburse the Issuing Lender for its
participating share of the drafts drawn or amounts otherwise paid thereunder, is
absolute, irrevocable and unconditional and shall not be affected by any
circumstances whatsoever (including, without limitation, the occurrence or
continuance of any Default or Event of Default), and that each such payment
shall be made without offset, abatement, withholding or other reduction
whatsoever.
(b) If any amount required to be paid by any Participating Lender to
the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any draft paid by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three (3) Business Days after the date such
payment is due, such Participating Lender shall pay to the Administrative Agent,
for the account of the Issuing Lender, on demand, an amount equal to the product
of (i) such amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any Participating Lender pursuant to Section 3.4(a) is not in fact
made available to the Administrative Agent, for the account of the Issuing
Lender, by such Participating Lender within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
Participating Lender, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Alternate Base Rate Loans
hereunder. An L/C Participation Certificate of the Issuing Lender submitted to
any Participating Lender with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error.
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(c) Whenever, at any time after the Issuing Lender has paid a draft
under any Letter of Credit and has received from any Participating Lender its
pro rata share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any reimbursement on account of such unreimbursed portion, or
any payment of interest on account thereof, the Issuing Lender will pay to the
Administrative Agent, for the account of such Participating Lender, its pro rata
share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such Participating Lender shall return to the Administrative Agent for
the account of the Issuing Lender, the portion thereof previously distributed to
it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in Dollars and
in immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section 3.5 from the date such
amounts become payable in accordance with the first sentence of this Section 3.5
until payment in full, at the rate which would be payable on Alternate Base Rate
Loans at such time.
3.6 Obligations Absolute. The Borrower's Obligations under this
Article 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower or any other Person may have or have had against the Issuing Lender or
any other Lender or any beneficiary of a Letter of Credit. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall not be responsible
for, and the Borrower's obligations under Section 3.5 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct.
The Borrower agrees that any action taken or omitted by the Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of New York, including, without limitation, Article 5 thereof,
shall be binding on the Borrower and shall not result in any liability of such
Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower and the Administrative Agent of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
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3.8 Letter of Credit Applications. To the extent that any provision
of any Letter of Credit Application, including any reimbursement provisions
contained therein, related to any Letter of Credit is inconsistent with the
provisions of this Article 3, the provisions of this Article 3 shall prevail.
ARTICLE 4
GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates.
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such day plus the Applicable Margin.
(b) Each Alternate Base Rate Loan shall bear interest at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin.
(c) Upon the occurrence and during the continuance of any Event of
Default specified in Section 9(a), the Loans and any overdue amounts hereunder
shall bear interest at a rate per annum which is (x) in the case of the Loans,
the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section 4.1 plus 2% or (y) in the case of overdue interest,
commitment fee or other amount, the rate described in Section 4.1(b) plus 2%.
(d) Interest shall be payable in arrears on each Interest Payment
Date; provided that interest accruing pursuant to Section 4.1(c) shall be
payable from time to time on demand.
4.2 Computation of Interest and Fees.
(a) Interest on Alternate Base Rate Loans, Eurodollar Loans,
commitment fees, interest on overdue interest and other amounts payable
hereunder shall be calculated on the basis of a 360-day year except interest on
Alternate Base Rate Loans (when based on the Prime Rate) shall be calculated on
the basis of a year of 365/366, in either case for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 4.1(a), (b) or (c).
4.3 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination, absent manifest error, shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or
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(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Alternate Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be converted to or continued as Alternate Base Rate Loans
and (z) any outstanding Eurodollar Loans shall be converted, on the first day of
such Interest Period, to Alternate Base Rate Loans. Until such notice has been
withdrawn by the Administrative Agent (which the Administrative Agent agrees to
do when the circumstances that prompted the delivery of such notice no longer
exist), no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Loans to Eurodollar Loans.
4.4 Pro Rata Treatment and Payments.
(a) Each borrowing and each conversion or continuation pursuant to
Section 2.11 of Loans by the Borrower from the Lenders and any reduction of the
Commitments of the Lenders hereunder shall be made pro rata according to the
respective principal amounts of such Loans held by the Lenders or the respective
Commitment Percentages of the Lenders, as the case may be.
(b) Whenever (i) any payment received by the Administrative Agent
under this Agreement or any Note or (ii) any other amounts received by the
Administrative Agent for or on behalf of the Borrower (including, without
limitation, proceeds of collateral or payments under any guarantee) is
insufficient to pay in full all amounts then due and payable to the
Administrative Agent and the Lenders under this Agreement and any Note, 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 fees and expenses due and payable to the Administrative Agent under
and in connection with this Agreement; Second, to the payment of all expenses
due and payable under Section 12.5, ratably among the Administrative Agent and
the Lenders in accordance with the aggregate amount of such payments owed to the
Administrative Agent and each such Lender; Third, to the payment of fees due and
payable under Sections 2.4 and 3.3(a), ratably among the Lenders in accordance
with the Commitment Percentage of each Lender and, in the case of the Issuing
Lender, the amount retained by the Issuing Lender for its own account pursuant
to Section 3.3(a); Fourth, to the payment of interest then due and payable under
the Loans, ratably in accordance with the aggregate amount of interest owed to
each such Lender; and Fifth, to the payment of the principal amount of the Loans
and the L/C Obligations then due and payable and, in the case of proceeds of
collateral or payments under any guarantee, to the payment of any other
obligations to any Lender not covered in First through Fourth above ratably
secured by such collateral or ratably guaranteed under any such guarantee,
ratably among the Lenders in accordance with the aggregate principal amount and,
in the case of proceeds of collateral or payments under any guarantee, the
obligations secured or guaranteed thereby owed to each such Lender.
(c) If any Lender (a "Non-Funding Lender") has (x) failed to make a
Loan required to be made by it hereunder, and the Administrative Agent has
determined that such Lender is not likely to make such Loan or (y) given notice
to the Borrower or the Administrative Agent that it will not make, or that it
has disaffirmed or repudiated any obligation to make, any Loans, in each case by
reason of the provisions of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended, or otherwise, any payment made on account
of the principal of the Loans outstanding shall be made as follows:
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(i) in the case of any such payment made on any date when and to
the extent that, in the determination of the Administrative Agent, the
Borrower would be able, under the terms and conditions hereof, to
reborrow the amount of such payment under the Commitments and to
satisfy any applicable conditions precedent set forth in Section 6.2
to such reborrowing, such payment shall be made on account of the
outstanding Loans held by the Lenders other than the Non-Funding
Lender pro rata according to the respective outstanding principal
amounts of the Loans of such Lenders;
(ii) otherwise, such payment shall be made on account of the
outstanding Loans held by the Lenders pro rata according to the
respective outstanding principal amounts of such Loans; and
(iii) any payment made on account of interest on the Loans shall
be made pro rata according to the respective amounts of accrued and
unpaid interest due and payable on the Loans with respect to which
such payment is being made.
The Borrower agrees to give the Administrative Agent such assistance in making
any determination pursuant to this paragraph as the Administrative Agent may
reasonably request. Any such determination by the Administrative Agent shall be
conclusive and binding on the Lenders.
(d) All payments (including prepayments) to be made by the Borrower
on account of principal, interest and fees shall be made without set-off or
counterclaim and shall be made to the Administrative Agent, for the account of
the Lenders at the Administrative Agent's Payment Office, in Dollars and in
immediately available funds. The Administrative Agent shall promptly distribute
such payments in accordance with the provisions of Section 4.4(b) promptly upon
receipt in like funds as received. If any payment hereunder would become due and
payable on a day other than a Business Day, such payment shall become due and
payable on the next succeeding Business Day (except, in the case of Eurodollar
Loans, as otherwise provided in clause (1) of the proviso to the definition of
"Interest Period") and, with respect to payments of principal, interest thereon
shall be payable at the applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount that would constitute its relevant Commitment Percentage of the
borrowing on such date available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such Borrowing Date, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is made available to the Administrative Agent on a date
after such Borrowing Date, such Lender shall pay to the Administrative Agent on
demand an amount equal to the product of (i) the daily average Federal Funds
Effective Rate during such period, times (ii) the amount of such Lender's
relevant Commitment Percentage of such borrowing, times (iii) a fraction the
numerator of which is the number of days that elapse from and including such
Borrowing Date to the date on which such Lender's relevant Commitment Percentage
of such borrowing shall have become immediately available to the Administrative
Agent and the denominator of which is 360. A certificate of the Administrative
Agent submitted to any Lender with respect to any amounts owing under this
Section 4.4(e) shall be conclusive in the absence of manifest error. If such
Lender's relevant Commitment Percentage of such borrowing is not in fact made
available to the Administrative Agent by such Lender within three (3) Business
Days of such Borrowing Date, the Administrative Agent shall be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Alternate Base Rate Loans hereunder, on demand, from the Borrower. The failure
of any Lender to make any Loan to be made by it shall not relieve any other
Lender of its obligation, if any, hereunder to make its Loan on such Borrowing
Date, but no Lender shall be responsible for the failure of any other Lender to
make the Loan to be made by such other Lender on such Borrowing Date.
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4.5 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Alternate Base Rate Loans to Eurodollar Loans shall forthwith be
cancelled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Alternate Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law; provided that before
making any such demand, each Lender agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions and so long as
such efforts would not be disadvantageous to it, in its reasonable discretion,
in any legal, economic or regulatory manner) to designate a different lending
office if the making of such a designation would allow the Lender or its lending
office to continue to perform its obligations to make Eurodollar Loans and avoid
the need for, or materially reduce the amount of, such increased cost. If any
such conversion of a Eurodollar Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section 4.8.
If circumstances subsequently change so that any affected Lender shall determine
that it is no longer so affected, such Lender will promptly notify the Borrower
and the Administrative Agent, and upon receipt of such notice, the obligations
of such Lender to make or continue Eurodollar Loans or to convert Alternate Base
Rate Loans into Eurodollar Loans shall be reinstated.
4.6 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Loan, any Note, any Letter of
Credit or any Letter of Credit Application or change the basis of
taxation of payments to such Lender in respect thereof (except for
taxes covered by Section 4.7 and the establishment of a tax based on
the net income of such Lender or changes in the rate of tax on the net
income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit (including, without limitation,
letters of credit) by, or any other acquisition of funds by, any
office of such Lender; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to increase the cost to such
Lender, by an amount which such Lender deems to be material, of issuing or
maintaining any Letter of Credit or participation therein or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable; provided that before making any such demand, each Lender agrees to
33
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, in its reasonable discretion, in any legal, economic or regulatory
manner) to designate a different Eurodollar lending office if the making of such
designation would allow the Lender or its Eurodollar lending office to continue
to perform its obligations to make Eurodollar Loans or to continue to fund or
maintain Eurodollar Loans and avoid the need for, or materially reduce the
amount of, such increased cost. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 4.6, it shall promptly notify (in
any event no later than 90 days after such Lender becomes entitled to make such
claim) the Borrower, through the Administrative Agent, of the event by reason of
which it has become so entitled. If the Borrower so notifies the Administrative
Agent within five (5) Business Days after any Lender notifies the Borrower of
any increased cost pursuant to the foregoing provisions of this Section 4.6, the
Borrower may convert all Eurodollar Loans of such Lender then outstanding into
Alternate Base Rate Loans in accordance with Section 2.11 and, additionally,
reimburse such Lender for any cost in accordance with Section 4.8. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder for nine months following such termination
and repayment.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a prompt
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction; provided
that the Borrower shall not be required to compensate a Lender pursuant to this
paragraph for any amounts incurred more than ninety days prior to the date that
such lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and provided, further that, if the circumstances giving
rise to such claim have a retroactive effect, then such ninety day period shall
be extended to include the period of such retroactive effect. This covenant
shall survive the termination of this Agreement and the payment of any Notes and
all other amounts payable hereunder for nine months following such termination
and repayment.
(c) A certificate as to any additional amounts payable pursuant to
this Section 4.6 showing in reasonable detail the calculation thereof and
certifying that the applicable Lender is generally charging such costs to other
similarly situated borrowers under similar credit facilities, submitted by such
Lender, through the Administrative Agent, to the Borrower shall be conclusive in
the absence of manifest error.
4.7 Taxes.
(a) Except as provided below in this Section, all payments made by
the Borrower under this Agreement and any Notes shall be made free and clear of,
and without deduction or withholding for or on account of, any present 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 and
franchise taxes imposed in lieu of net income taxes and (ii) any United States
withholding taxes payable with respect to payments under this Agreement or the
Notes under laws (including any governing statute, treaty or regulation) in
effect on the Closing Date (or (x) in the case of an Assignee, the date of the
34
Assignment and Acceptance and (y) in the case of a Participant, the date of the
related purchase) applicable to any Lender, the Issuing Lender, the
Administrative Agent, or any Participant, as the case may be. 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, any Lender or the Issuing Lender hereunder
or under any Notes, the amounts so payable to the Administrative Agent, such
Lender or the Issuing Lender shall be increased to the extent necessary to yield
to the Administrative Agent, such Lender or the Issuing Lender (after payment of
all Non-Excluded Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and any Notes; provided,
however, that the Borrower shall be entitled to deduct and withhold any
Non-Excluded Taxes and shall not be required to increase any such amounts
payable to the Administrative Agent, any Lender or the Issuing Lender if the
Administrative Agent, such Lender or the Issuing Lender fails or is unable to
comply with the requirements of Section 4.7(b) or (c). 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 or the Issuing Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent, the Lenders and the Issuing Lender, as the
case may be, for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent, any Lender or the Issuing Lender as a
result of any such failure. The agreements in this Section 4.7 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder for a period of nine months thereafter.
(b) Each Non-U.S. Lender and each U.S. Lender shall:
(i) (x) (A) in the case of a Non-U.S. Lender (other than an
Existing Lender that has previously delivered to the Borrower and the
Administrative Agent a form or certification described in this Section
4.7(b)) on or before the date of any payment by the Borrower under
this Agreement or any Notes to such Non-U.S. Lender, deliver to the
Borrower and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN (certifying to its
entitlement to treaty benefits and, if applicable, certifying that it
is entitled to an exemption from United States backup withholding tax)
or W-8ECI (certifying that the income received is effectively
connected with a U.S. trade or business and, if applicable, certifying
that it is entitled to an exemption from United States backup
withholding tax), or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this
Agreement, any Notes and any Loan Document without any deduction or
withholding of any United States federal income taxes, or (B) in the
case of a U.S. Lender, on or before the date of any payment under this
Agreement to such Lender, deliver to the Borrower and the
Administrative Agent two properly completed copies of United States
Internal Revenue Service Form W-9 or successor applicable form, as the
case may be, certifying that such U.S. Lender is entitled to an
exemption from United States backup withholding tax (for purposes of
this Section 4.7(b), a U.S. Lender shall not include (x) a U.S. Lender
that may be treated as an exempt recipient based on the indicators
described in Treas. Reg. Section 1.6049-4(c)(1)(ii)) or (y) a U.S.
Lender that is an Existing Lender);
(y) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete, after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower and at any other time or
times reasonably requested by the Borrower; and
35
(z) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Administrative Agent; or
(ii) in the case of any Non-U.S. Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and that does
not comply with Section 4.7(b)(i), (x) represent to the Borrower (for
the benefit of the Borrower and the Administrative Agent) that it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code, (y)
deliver to the Borrower on or before the date of any payment by the
Borrower, with a copy to the Administrative Agent, (A) a certificate
stating that such Lender (1) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated
as a bank for purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application made to
a rating agency or qualification for any exemption from tax,
securities law or other legal requirements, (2) is not a "10-percent
shareholder" within the meaning of Sections 881(c)(3)(B) and
871(h)(3)(B) of the Code and (3) is not a "controlled foreign
corporation" receiving interest from a related person within the
meaning of Section 881(c)(3)(C) of the Code (any such certificate a
"U.S. Tax Compliance Certificate") and (B) two duly completed copies
of Internal Revenue Service Form W-8BEN, or successor applicable form,
certifying to such Non-U.S. Lender's legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax under the
provisions of Section 881(c) or 871(h) of the Code with respect to
payments to be made under this Agreement, any Notes and any Loan
Document (and to deliver to the Borrower and the Administrative Agent
two (2) further copies of Form W-8BEN on or before the date it expires
or becomes obsolete, after the occurrence of any event requiring a
change in the most recently provided form and at any other time or
times reasonably requested by the Borrower and, if necessary, obtain
any extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms), and (z)
agree, to the extent legally entitled to do so, upon reasonable
request by the Borrower, to provide to the Borrower and the
Administrative Agent such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments under this
Agreement, any Notes and any Loan Document;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender, the Issuing Lender or the
Administrative Agent, as the case may be, hereunder which renders any such forms
and certificates previously delivered by such Lender, the Issuing Lender or the
Administrative Agent, as the case may be, inapplicable or which would prevent
such Lender, the Issuing Lender or the Administrative Agent, as the case may be,
from duly completing and delivering such form or certificate with respect to it
and such Lender, the Issuing Lender or the Administrative Agent, as the case may
be, so advises the Borrower and the Administrative Agent. Each Person that shall
become a Lender, the Issuing Lender or the Administrative Agent or a Participant
pursuant to Section 12.6 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements required
pursuant to this Section; provided that in the case of a Participant the
obligations of such Participant pursuant to this Section 4.7(b) shall be
determined as if such Participant were a Lender except that such Participant
shall furnish all such required forms, certifications and statements to the
Lender from which the related participation shall have been purchased.
(c) Each Lender, the Issuing Lender or the Administrative Agent, as
the case may be, shall, upon request by the Borrower, deliver to the Borrower or
the applicable Governmental Authority, as the case may be, any form or
certificate required in order that any payment by the Borrower under this
Agreement, any Notes or any Loan Document may be made free and clear of, and
36
without deduction or withholding for or on account of, any Non-Excluded Taxes
(or to allow any such deduction or withholding to be at a reduced rate) imposed
on such payment under the laws of any jurisdiction; provided that such Lender,
the Issuing Lender or the Administrative Agent, as the case may be, is legally
entitled to complete, execute and deliver such form or certificate and such
completion, execution or submission would not materially prejudice the legal
position of such Lender.
(d) Each Lender, the Issuing Lender and the Administrative Agent
agrees that, upon the occurrence of any event giving rise to an obligation of
the Borrower under this Section 4.7 with respect to such Lender, the Issuing
Lender or the Administrative Agent, it will, if requested by the Borrower, use
reasonable efforts (subject to overall internal policy, legal and regulatory
considerations) to designate another lending office for any Loans affected by
such event with the object of avoiding the consequences of such event; provided
that such designation is made on terms that, in the reasonable judgment of such
Lender, Issuing Lender or Administrative Agent, causes it or its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section 4.7(d) shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender, Issuing Lender or
Administrative Agent pursuant to this Agreement.
(e) In the event that the Administrative Agent, any Lender or the
Issuing Lender determines, in its sole good-faith discretion, that it has
received a refund of any Non-Excluded Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower has paid additional
amounts pursuant to this Section 4.7, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 4.7 with respect to
Non-Excluded Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, Issuing Lender or such Lender, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that the Borrower, upon the request of
the Administrative Agent, Issuing Lender or such Lender agrees to repay the
amount paid over to the Borrower (plus any penalties, interest, or other charges
imposed by the relevant Governmental Authority solely with respect to such
refund of Non-Excluded Taxes as determined in the sole good-faith discretion of
the Lender) to the Administrative Agent, Issuing Lender or such Lender in the
event the Administrative Agent, Issuing Lender or such Lender is required to pay
such refund to such Governmental Authority. Nothing contained in this paragraph
shall interfere with the right of the Administrative Agent, the Issuing Lender
or such Lender to arrange its tax affairs in whatever manner it thinks fit, nor
require any to disclose any information relating to its tax affairs or any
computations in respect thereof or to do anything that would prejudice its
ability to benefit from other credits, relief, remissions or repayments to which
it may be entitled.
4.8 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss (excluding loss of profit) or expense
which such Lender may sustain or incur as a consequence of (a) default by the
Borrower in payment when due of the principal amount of or interest on any
Eurodollar Loan, (b) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (d) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto, including,
without limitation, in each case, any such loss or expense (but excluding loss
of margin) arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained.
Calculation of all amounts payable to a Lender under this Section 4.8 shall be
made as though such Lender had actually funded its relevant Eurodollar Loan
through the purchase of a deposit bearing interest at the Eurodollar Rate in an
37
amount equal to the amount of such Eurodollar Loan and having a maturity
comparable to the relevant Interest Period; provided, however, that each Lender
may fund each of its Eurodollar Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 4.8. This covenant shall survive the termination of
this Agreement and the payment of any Notes and all other amounts payable
hereunder for a period of nine (9) months thereafter.
4.9 Replacement of Lender. If at any time (a) the Borrower becomes
obligated to pay additional amounts described in Section 4.5, 4.6 or 4.7 as a
result of any condition described in such Section or any Lender ceases to make
Eurodollar Loans pursuant to Section 4.5, (b) any Lender becomes insolvent and
its assets become subject to a receiver, liquidator, trustee, custodian or other
Person having similar powers, (c) any Lender becomes a "Nonconsenting Lender" or
(d) any Lender becomes a "Non-Funding Lender," then the Borrower may, on ten
(10) Business Days' prior written notice to the Administrative Agent and such
Lender, replace such Lender by causing such Lender to assign (and, if all
applicable provisions of this Section 4.9 are satisfied, such Lender hereby
does), pursuant to Section 12.6(c), all of its rights and obligations under this
Agreement to a Lender or other entity selected by the Borrower and acceptable to
the Administrative Agent for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued interest and fees and other
amounts payable hereunder (including amounts payable under Section 4.8 as though
such Loans were being paid instead of being purchased); provided that (i) the
Borrower shall have no right to replace the Administrative Agent, (ii) neither
the Administrative Agent nor any Lender shall have any obligation to the
Borrower to find a replacement Lender or other such entity, (iii) in the event
of a replacement of a Nonconsenting Lender or a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to clause (a) of this
Section 4.9, in order for the Borrower to be entitled to replace such a Lender,
such replacement must take place no later than 180 days after (A) the date the
Nonconsenting Lender shall have notified the Borrower and the Administrative
Agent of its failure to agree to any requested consent, waiver or amendment or
(B) the Lender shall have demanded payment of additional amounts under one of
the Sections described in clause (a) of this Section 4.9, as the case may be,
and (iv) in no event shall the Lender hereby replaced be required to pay or
surrender to such replacement Lender or other entity any of the fees received by
such Lender hereby replaced pursuant to this Agreement. In the case of a
replacement of a Lender to which the Borrower becomes obligated to pay
additional amounts pursuant to clause (a) of this Section 4.9, the Borrower
shall pay such additional amounts to such Lender prior to such Lender being
replaced and the payment of such additional amounts shall be a condition to the
replacement of such 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 Loan Documents or to agree to any amendment
thereto, (y) the consent, waiver or amendment in question requires the agreement
of all Lenders in accordance with the terms of Section 12.1 and (z) 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
"Nonconsenting Lender." The Borrower's right to replace a Non-Funding Lender
pursuant to this Section 4.9 is, and shall be, in addition to, and not in lieu
of, all other rights and remedies available to the Borrower against such
Non-Funding Lender under this Agreement, at law, in equity or by statute.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and to issue and participate in Letters of
Credit, Holdings and the Borrower hereby represent and warrant to the
Administrative Agent and each Lender that:
38
5.1 Financial Condition.
(a) The audited consolidated financial statements of Holdings and the
Borrower for the fiscal years ended September 30, 2002, 2003 and 2004, reported
on by Ernst & Young, LLP, copies of which have heretofore been furnished to each
Lender, present fairly in all material respects the consolidated financial
position of Holdings or the Borrower, as applicable, as at such dates, and the
consolidated results of Holdings's or the Borrower's operations, as applicable,
and Holdings's or the Borrower's cash flows, as applicable, for the fiscal
periods then ended. The unaudited consolidated financial statements of the
Borrower for the fiscal quarters ending December 31, 2004, March 31, 2005 and
June 30, 2005, certified by a Responsible Officer of the Borrower, copies of
which have heretofore been furnished to each Lender, present fairly in all
material respects the consolidated financial position of the Borrower as of such
date, and the consolidated results of the Borrower's operations and the
Borrower's cash flow for the calendar quarter and year-to-date periods then
ended. All such financial statements and the related schedules and notes thereto
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Neither Holdings nor any of its
Subsidiaries had as at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or in
the notes thereto and which has any reasonable likelihood of resulting in a
material cost or loss.
(b) The pro forma balance sheet of the Borrower and its Subsidiaries
(the "Pro Forma Balance Sheet") and the pro forma condensed consolidated
statement of operations of the Borrower and its Subsidiaries (the "Pro Forma
Statement of Operations"), certified by a Responsible Officer of Holdings and
the Borrower, copies of which have been heretofore furnished to each Lender, are
the pro forma unaudited balance sheet of the Borrower and its consolidated
Subsidiaries as at June 30, 2005, and the pro forma unaudited condensed
consolidated statement of operations of the Borrower and its consolidated
Subsidiaries for the twelve months ended June 30, 2005, adjusted to give effect
(as if such events had occurred on June 30, 2005) to (i) the consummation and
funding of the Bridge Financing and the contemplated disbursement and use of the
proceeds thereof (including without limitation, the payment of all obligations
then outstanding under the Existing Credit Agreement as required under Section
6.1(b)(i)), (ii) the payment of fees, expenses and financing costs related to
the Transactions, and (iii) the consummation of the other Transactions in
accordance with the Loan Documents and the other related documents governing
such Transactions. The Pro Forma Balance Sheet and the Pro Forma Statement of
Operations, together with the notes thereto, were prepared based on good faith
assumptions as of the date of delivery thereof, and reflect on a pro forma basis
the financial position of the Borrower and its Subsidiaries as at June 30, 2005
and for the twelve-month period ending June 30, 2005, as adjusted, as described
above, assuming that the events specified in the preceding sentence had actually
occurred at June 30, 2005.
5.2 No Change. Since September 30, 2004 (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) no dividends or other distributions have been
declared, paid or made upon the Capital Stock of Holdings or the Borrower except
as listed on Schedule 5.2 or otherwise permitted hereby nor has any of the
Capital Stock of Holdings or the Borrower been redeemed, retired, purchased or
otherwise acquired for value by Holdings or the Borrower or any of their
Subsidiaries.
5.3 Corporate Existence; Compliance with Law. Holdings and each of
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, except as set forth on
Schedule 5.3 (but subject to the provisions of Section 7.15), (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
39
business in which it is currently engaged, except as set forth on Schedule 5.3
(but subject to the provisions of Section 7.15), (c) is duly qualified as a
foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that the failure to
so qualify could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations. Each
Credit Party has the corporate power and authority, and the legal right, to
make, deliver and perform this Agreement, any of the Notes and the other Loan
Documents to which it is a party and, with respect to the Borrower, to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of, or the granting of any security
interests under, this Agreement, any of the Notes and the other Loan Documents
and to authorize the execution, delivery and performance of this Agreement, any
of the Notes and the other Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of, or the granting of any security interests under, this
Agreement, any of the Notes or the other Loan Documents to which any Credit
Party is a party, except for (i) those set forth on Schedule 5.4, each of which
has been made or taken and is in full force and effect, (ii) consents under
immaterial Contractual Obligations and (iii) those referred to in Section 5.18.
This Agreement, any Note and each of the other Loan Documents has been duly
executed and delivered on behalf of each Credit Party thereto. This Agreement,
any Note and each of the other Loan Documents constitutes a legal, valid and
binding obligation of each Credit Party thereto enforceable against such Credit
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
5.5 No Legal Bar. The execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
material Contractual Obligation of any Credit Party or of any of its
Subsidiaries.
5.6 No Material Litigation. Except as set forth in Schedule 5.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Holdings and the
Borrower, threatened by or against any of the Credit Parties or any of their
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to this Agreement, any Notes, the other Loan Documents or any
of the transactions contemplated hereby or thereby or (b) which could reasonably
be expected to have a Material Adverse Effect.
5.7 No Default. None of the Credit Parties or any of their
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Credit Parties and
their Subsidiaries has good record and indefeasible title in fee simple to, or a
valid leasehold interest in, all its material real property, and good title to,
or a valid leasehold interest in, all its other material property, and none of
such property is subject to any Lien except as permitted by Section 8.3. Such
real and other properties comprise all of the properties the use of which is
necessary for the conduct of such Credit Party's or such Subsidiaries' business
40
as presently conducted and as proposed to be conducted by it. As of the date
hereof, the Fee Properties listed on Part I of Schedule 5.8 constitute all the
real properties owned in fee by the Borrower or its Subsidiaries and the Leased
Properties listed on Part II of Schedule 5.8 constitute all of the real
properties leased by the Borrower or its Subsidiaries. As of the date hereof,
each of the leases with respect to material Leased Properties listed on Part II
of Schedule 5.8 is in full force and effect.
5.9 Intellectual Property. Each of the Credit Parties and their
Subsidiaries owns, or is validly licensed to use, all trademarks, trade names,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). To the knowledge of Holdings and the Borrower, and
except as set forth on Schedule 5.9, no claim has been asserted and is pending
by any Person challenging or questioning the use of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property, nor
does Holdings or the Borrower know of any valid basis for any such claim which
could reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Credit Parties and their Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
5.10 Taxes. Except as set forth on Schedule 5.10, each of the Credit
Parties and their Subsidiaries has filed or caused to be filed all federal and
all other material tax returns which, to the knowledge of Holdings and the
Borrower, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other material taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than (i) any such
taxes, assessments, fees or other charges the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Credit Parties or their Subsidiaries, as the case may be, and (ii)
taxes, assessments, fees or other charges imposed by any Governmental Authority,
other than income taxes imposed by the United States of America, with respect to
which the failure to make payments could not, by reason of the amount thereof or
of remedies available to such Governmental Authorities, reasonably be expected
to have a Material Adverse Effect); no tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
5.11 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates the provisions of the Regulations of
such Board of Governors. If requested by any Lender or the Administrative Agent,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.
5.12 ERISA. Except where the liability, individually or in the
aggregate, which could reasonably be expected to result has not had or could not
reasonably be expected to have a Material Adverse Effect: (i) neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan; (ii) each Plan (other than
a Multiemployer Plan) has complied in all material respects with the applicable
provisions of ERISA and the Code; (iii) no termination of a Single Employer Plan
has occurred, and no Lien in favor of the PBGC or a Single Employer Plan has
arisen and remains outstanding, during such five-year period; (iv) the present
41
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by an amount which could reasonably be expected to have a Material Adverse
Effect; (v) none of the Credit Parties nor any Commonly Controlled Entity has
had a complete or partial withdrawal from any Multiemployer Plan, and, to the
best knowledge of the Credit Parties, none of the Credit Parties nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Credit Parties or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made; (vi) no
such Multiemployer Plan is in Reorganization or Insolvent; and (vii) the present
value (determined using actuarial and other assumptions which are reasonable in
respect of the benefits provided and the employees participating) of the
liability of the Borrower and each Commonly Controlled Entity for
post-retirement benefits to be provided to their current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) does not, in the aggregate, exceed the assets under all such Plans
allocable to such benefits.
5.13 Investment Company Act; Other Regulations. Neither Holdings nor
any of its Subsidiaries is an "investment company," or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended. Neither Holdings nor any of its Subsidiaries is subject to
regulation under any Requirement of Law which limits its ability to incur
Indebtedness.
5.14 Subsidiaries, Etc. As of the date hereof, the only Subsidiaries
of Holdings, and the only partnerships or joint ventures in which Holdings or
any of its Subsidiaries has an interest, are those listed on Schedule 5.14. As
of the date hereof, Holdings owns the percentage of the Capital Stock or other
evidences of the ownership of each Subsidiary, partnership or joint venture
listed on Schedule 5.14 as set forth on such Schedule. As of the date hereof, no
such Subsidiary, partnership or joint venture has issued any securities
convertible into shares of its Capital Stock, and the outstanding stock and
securities (or other evidence of ownership) of such Subsidiaries, partnerships
or joint ventures owned by the Borrower and its Subsidiaries are so owned free
and clear of all Liens, warrants, options or rights of others of any kind except
as set forth in Schedule 5.14.
5.15 Purpose of Loans. The proceeds of the Loans shall be used for
working capital purposes and other general corporate purposes of the Borrower
and the Subsidiaries (it being understood that the Loans may not be used,
directly or indirectly, to refinance any Indebtedness described in Section
8.2(c) or 8.2(n) or Section 11.6(a)(i)).
5.16 Environmental Matters.
(a) The facilities and properties owned, leased or operated by
Holdings or any of its Subsidiaries (the "Properties") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations or under such conditions which (i) constitute or constituted a
violation of, or could reasonably be expected to give rise to liability under,
any Environmental Law in effect at the time of the making of this
representation, or (ii) could materially and adversely interfere with the
continued operation of the Properties, or (iii) materially impair the fair
saleable value thereof except in each case insofar as such violation, liability,
interference or reduction in fair market value, or any aggregation thereof, is
not reasonably likely to result in a Material Adverse Effect.
(b) The Business, Properties and all operations at the Properties
are, and to the knowledge of Holdings and the Borrower have been, in compliance
in all material respects with all applicable Environmental Laws except for
noncompliance which is not reasonably likely to result in a Material Adverse
Effect.
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(c) Neither Holdings nor any of its Subsidiaries has received any
written notice of violation, alleged violation, noncompliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does Holdings or the Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that is or are reasonably likely to result in a Material Adverse Effect.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability under, any
Environmental Law in effect at the time of the making of this representation,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law in effect at the time of the making of this
representation except insofar as any such violation or liability referred to in
this paragraph (d), or any aggregation thereof, is not reasonably likely to
result in a Material Adverse Effect.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of Holdings or the Borrower, threatened, under
any Environmental Law to which Holdings or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in a Material Adverse
Effect.
(f) There has been no release or, to the best knowledge of Holdings
or the Borrower, threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of Holdings or
any Subsidiary in connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that could reasonably
give rise to liability under Environmental Laws in effect at the time of making
this representation except insofar as any such violation or liability referred
to in this paragraph (f), or any aggregation thereof, is not reasonably likely
to result in a Material Adverse Effect.
5.17 Disclosure. No information, financial statement, report,
certificate or other document prepared or furnished by or on behalf of any
Credit Party to the Administrative Agent or any Lender in connection with this
Agreement or any other Loan Document (but excluding all projections and pro
forma financial statements covered by the next succeeding sentence) contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading. The
projections and pro forma financial information and other estimates and opinions
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of Holdings and the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the Closing Date, there is no fact known to any Credit
Party (other than general economic conditions, which conditions are commonly
known and affect businesses generally) which has, or which could reasonably be
expected to have, in the reasonable judgment of such Credit Party, a Material
Adverse Effect.
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5.18 Guarantee and Collateral Agreement.
(a) The Guarantee and Collateral Agreement is effective to create in
favor of the Administrative Agent, for the ratable benefit of the Lenders, a
legal, valid and enforceable security interest in the Pledged Stock or the
Pledged Notes, as the case may be, described therein and proceeds thereof and
all actions have been taken to cause the Guarantee and Collateral Agreement to
constitute a fully perfected first Lien on, and security interest in, all right,
title and interest of each Credit Party party thereto in such Pledged Stock or
Pledged Notes, as the case may be, described therein and in proceeds thereof
superior in right to any other Person.
(b) The Guarantee and Collateral Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in the respective collateral described
therein and proceeds thereof, and when financing statements in appropriate form
are filed in the offices specified on Schedule 5.18 or in the Guarantee and
Collateral Agreement, and the other actions required to be taken by the
Guarantee and Collateral Agreement have been taken, the Guarantee and Collateral
Agreement shall constitute fully perfected, first priority Liens on, and
security interests in, all right, title and interest of each Credit Party party
thereto in such collateral and the proceeds thereof superior in right to any
other Person other than Liens permitted hereby.
5.19 Solvency. Each of Holdings and the Borrower is, individually and
together with its Subsidiaries, Solvent.
5.20 No Fees. None of the Credit Parties nor any of their
Subsidiaries is under any obligation to pay any broker's fees, finder's fee,
commission, transaction fee or expenses in connection with the transactions
contemplated by this Agreement or the other Loan Documents.
5.21 Insurance. The insurance maintained by or reserved against on
the books of Holdings, the Borrower and their Subsidiaries is sufficient to
protect Holdings, the Borrower and their Subsidiaries against such risks as are
usually insured against in the same general area by companies engaged in the
same or similar business. None of Holdings, the Borrower or any of their
Subsidiaries is in default under any provisions of any such policy of insurance
or has received notice of cancellation of any such insurance (other than in
connection with the replacement of any such policy). None of Holdings, the
Borrower or any of their Subsidiaries has made any material claims under any
policy of insurance with respect to which the insurance carrier has denied
liability.
5.22 Labor Matters. There are no strikes pending or, to the knowledge
of Holdings or the Borrower, threatened against Holdings or any of its
Subsidiaries which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. The hours worked and payments made
to employees of Holdings and each of its Subsidiaries have not been in violation
of any applicable United States labor laws, rules or regulations or any other
applicable laws, rules or regulations, except where such violations could not
reasonably be expected to have a Material Adverse Effect. The consummation of
the Transactions will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Holdings or any of its Subsidiaries (or any predecessor) is a party or
by which Holdings or any of its Subsidiaries (or any predecessor) is bound.
5.23 Senior Indebtedness. The Obligations constitute Indebtedness
senior in right to any and all Subordinated Indebtedness now or hereafter
existing pursuant to the terms of any document evidencing, governing or related
to any Subordinated Indebtedness or guarantees thereof. The obligations of each
Subsidiary which is a Guarantor under the Guarantee and Collateral Agreement
constitute obligations senior in right to any and all guarantees, if any, by
such Subsidiary of any Subordinated Indebtedness now or hereafter existing
pursuant to the terms of any document evidencing, governing or related to the
applicable Subordinated Indebtedness or guarantees thereof.
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5.24 Provision of License Products; Non-Competition, Etc. No Credit
Party is party to any agreement, whether written or oral, providing for (i) the
grant by Holdings or any of its Subsidiaries of any right or license to use any
Intellectual Property (as defined in the Guarantee and Collateral Agreement) of
Holdings or any of its Subsidiaries (including, without limitation, the use of
any electronic catalog products) or (ii) the rendering of any related service in
connection with such grant (collectively, "License Products") to any Person
(other than an Affiliate), except for any such agreement (or a related agreement
or agreements) that contains such confidentiality, non-solicitation and
non-competition provisions as are customary in the Borrower's line of business
and in the ordinary course of business (as determined reasonably and in good
faith by the Borrower) ("Customary License Terms").
5.25 Lease Transactions; Lease Transaction Obligations. As of the
Closing Date, none of the Credit Parties nor any of their Subsidiaries is a
party to any Lease Transaction Obligations other than as listed on Schedule 5.25
hereto.
5.26 Status of Accounts Receivables and Other Collateral. The
Borrower shall not redate any invoice or sale or make or allow to be made sales
on extended dating beyond what is customary in the industry.
5.27 Transaction Documents. Each of the Loan Documents constitutes
the valid and binding obligation of each of the parties thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy laws and other laws affecting creditors' rights generally
and by general principles of equity. The Borrower has no knowledge that any of
the representations and warranties contained in any of the Loan Documents, the
Bridge Loan Agreement, the Holdings Bridge Loan Agreement or any other documents
entered into in connection therewith were untrue or incorrect in any material
respect on and as of the date given or, in the case of the Bridge Loan
Agreement, the Holdings Bridge Loan Agreement, the Acquisition Agreement or any
other documents entered into in connection therewith, except as disclosed in
writing to the Administrative Agent prior to the Closing Date, that any of the
material terms thereof have been modified, amended or waived.
ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans. The effectiveness of this Agreement
is subject to the satisfaction (which shall in no event occur later than
September 30, 2005) of each of the following conditions precedent (except for
the satisfaction of the items identified in Section 7.15):
(a) Agreement; Notes. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized Responsible
Officer of each of Holdings and the Borrower with a counterpart for each Lender
and (ii) for the account of each of the Lenders which has requested a Note
pursuant to Section 2.2, a Note conforming to the requirements hereof and
executed and delivered by a duly authorized Responsible Officer of the Borrower
and (iii) the Guarantee and Collateral Agreement, executed and delivered by a
duly authorized Responsible Officer of each Credit Party.
(b) Existing Credit Agreement.
(i) All Revolving Credit Loans (as defined in the Existing Credit
Agreement) outstanding under the Existing Credit Agreement, together
with all accrued unpaid interest, fees (including commitment fees
through the Closing Date), commissions and other amounts owing under
the Existing Credit Agreement, shall have been paid.
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(ii) Each Existing Lender which will not continue as a Lender
hereunder (a "Departing Lender") shall deliver to the Administrative
Agent an acknowledgment that its Revolving Credit Commitment (as
defined in the Existing Credit Agreement) under the Existing Credit
Agreement is being assigned and reallocated as set forth herein.
(c) Corporate Proceedings of the Credit Parties. The Administrative
Agent shall have received, with a copy for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the Administrative
Agent, of the board of directors or duly authorized committee of each of Credit
Party authorizing, as applicable, (i) the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, (ii) the
borrowings contemplated hereunder, and (iii) the transactions contemplated by
the Loan Documents (to the extent applicable to such Person), certified by the
Secretary or an Assistant Secretary (or authorized member) of each of the Credit
Parties as of the Closing Date, which certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded and shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(d) Incumbency Certificates. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of the Secretary or an
Assistant Secretary (or authorized member) of each of the Credit Parties, dated
the Closing Date, as to the incumbency and signature of the Responsible Officers
of such Person executing each Loan Document to which it is a party and any
certificate or other document to be delivered by it pursuant hereto and thereto,
together with evidence of the incumbency of such Secretary or Assistant
Secretary (or authorized member).
(e) Organization Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws of each of the Credit Parties that is a
corporation or of the certificate of organization and operating agreement of
each of the Credit Parties that is a limited liability company, certified as of
the Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary (or authorized member) of each of the Credit Parties.
(f) Fees. JPMCB shall have received the fees referred to in Section
2.4 to be received on the Closing Date. (g) Indebtedness for Borrowed Money.
Other than the Senior Unsecured Notes, the Bridge Financing and the Holdings
Financing, in the amounts outstanding as of the date hereof or as contemplated
hereby and other indebtedness reasonably satisfactory to the Joint Lead
Arrangers, Holdings and its Subsidiaries and Borrower and its Subsidiaries,
after giving effect to, and upon consummation of, the Transaction, shall have no
material outstanding Indebtedness for money borrowed.
(h) No Defaults. There shall exist no Default or Event of Default
under this Agreement.
(i) Legal Opinions. The Lenders shall have received, with a copy for
each Lender, the following legal opinions, each dated the Closing Date: (i) a
legal opinion from Weil, Gotshal & Xxxxxx LLP, special counsel to the Credit
Parties, in the form of Exhibit D-1; and (b) a legal opinion from Xxxxxx, Xxxxx
& Bockius LLP, special counsel to Trade Services Systems, Inc., a Pennsylvania
corporation, in the form of Exhibit D-2.
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(j) Perfection. The Administrative Agent shall have received: (i)
except as set forth in Section 7.15, all certificates, agreements or instruments
representing or evidencing the Pledged Stock and Pledged Notes, accompanied by
instruments of transfer and stock powers undated and endorsed in blank; (ii) all
other certificates, agreements, or instruments necessary to perfect the
Administrative Agent's security interest in all Chattel Paper, all Instruments
and all Investment Property of each Credit Party (to the extent required by the
Guarantee and Collateral Agreement); and (iii) UCC financing statements in
appropriate form for filing under the UCC and such other documents under
applicable Requirements of Law in each jurisdiction as may be necessary or
appropriate or, in the opinion of the Administrative Agent, desirable to perfect
the Liens created, or purported to be created, by the Security Documents. The
security interest granted in the Collateral in favor of the Administrative Agent
pursuant to the Security Documents shall be free and clear of all Liens except
as permitted hereby. Subject to Section 7.15, the Administrative Agent shall
have received evidence satisfactory to it that UCC-3 termination statements and
other Lien release documentation shall have been duly executed (to the extent
required), and all other necessary actions shall have been duly taken, to the
extent necessary to effect the complete and irrevocable release of all Liens, if
any, other than those permitted pursuant to Section 8.3 on the assets of
Holdings and its Subsidiaries.
(k) Consummation of the Acquisition. The Administrative Agent shall
have received reasonably satisfactory evidence that the Borrower has
consummated, or simultaneously in connection with the effectiveness of this
Agreement shall consummate, the Acquisition, without modification, amendment or
waiver of any material provisions of any of the terms of the Acquisition
Agreement, to the extent such modification, amendment or waiver is material and
adverse to the Lenders (except for such modifications, amendments or waivers as
shall have been approved in writing by the Required Lenders), all in accordance
with the terms, conditions and provisions of the Acquisition Agreement.
(l) Consummation and Funding of Bridge Financing and Holdings
Financing. The Administrative Agent shall have received reasonably satisfactory
evidence that each of the Bridge Financing and the Holdings Financing have been
funded and the transactions related thereto (including the contribution as
common equity of the net proceeds from the Holdings Financing to the Borrower)
have been duly and validly consummated, and the Borrower or Holdings, as
applicable, has received all of the net proceeds from such facilities, without
modification, amendment or waiver of any material provisions of any of the
Bridge Loan Agreement or the Holdings Bridge Loan Agreement (except for such
modifications, amendments or waivers as shall have been approved in writing by
the Required Lenders), all in accordance with the terms, conditions and
provisions of the Bridge Loan Agreement or the Holdings Bridge Loan Agreement.
(m) Repayment of Indebtedness. The Borrower and its Subsidiaries
shall have effected (or will, on the Closing Date, effect) the repayment in full
of all obligations and indebtedness of Borrower and its Subsidiaries in respect
of the Existing Acquired Business Credit Facility, including, without
limitation, the termination of all outstanding commitments in effect under the
Existing Acquired Business Credit Facility, on terms and conditions and pursuant
to documentation reasonably satisfactory to the Joint Lead Arrangers. All Liens
and guarantees in respect of such obligations shall have been terminated and
released (or will, on the Closing Date, be terminated and released) and the
Joint Lead Arrangers shall have received (or will, on the Closing Date, receive)
evidence thereof reasonably satisfactory to the Joint Lead Arrangers and a
"pay-off" letter or letters reasonably satisfactory to the Joint Lead Arrangers
with respect to such obligations and such UCC termination statements, mortgage
releases and other instruments, in each case in proper form for recording, as
the Joint Lead Arrangers shall have reasonably requested to release and
terminate of record the Liens securing such obligations (or arrangements for
such release and termination reasonably satisfactory to the Joint Lead Arrangers
shall have been made).
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(n) Financial Statements. The Lenders shall have received the
financial statements referred to in Section 5.1(b).
(o) Guarantee and Collateral Agreement. The Administrative Agent
shall have received the Pledged Stock pledged pursuant to the Guarantee and
Collateral Agreement), together with undated stock powers endorsed in blank for
each stock certificate representing such Pledged Stock, or, as applicable, such
other documents or modifications required by the Guarantee and Collateral
Agreement. The Administrative Agent shall have received, on behalf of the
Lenders, each Pledged Note pledged pursuant to the Guarantee and Collateral
Agreement, endorsed as required by the Guarantee and Collateral Agreement, and
the acknowledgment and consent of the maker of each such Pledged Note.
(p) Representations and Warranties. Each of the representations and
warranties of each Credit Party in or pursuant to the Loan Documents (other than
the representation and warranty contained in Section 5.2(a)) shall be true and
correct in all material respects.
(q) No Adverse Change or Development, Etc. Nothing shall have
occurred since May 31, 2005 which has caused or could reasonably be expected to
cause a Material Adverse Change (as defined). "Material Adverse Change" 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 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 Material
Adverse Change: (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 affect 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.
6.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan), or of the Issuing Lender to issue any Letter of Credit or to
amend, renew or extend any Letter of Credit, in each case is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Credit Parties and their Subsidiaries in or pursuant to
the Loan Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date, except for any representation
and warranty which is expressly made as of an earlier date, which representation
and warranty shall have been true and correct in all material respects as of
such earlier date.
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(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans requested to
be made, or Letters of Credit requested to be issued, on such date.
(c) Borrowing Certificate. The Administrative Agent shall have
received, with a copy for each Lender, a borrowing certificate substantially in
the form of Exhibit E hereto and dated such date, executed by a Responsible
Officer of each of the Borrower and the Guarantor.
(d) Letter of Credit Application. With respect to the issuance of any
Letter of Credit, the Issuing Lender shall have received a Letter of Credit
Application, completed to its reasonable satisfaction and duly executed by a
Responsible Officer of the Borrower; provided that if such Letter of Credit is
being issued to support the repayment of any Indebtedness of any Subsidiary of
the Borrower, such Subsidiary shall also execute such Letter of Credit
Application and shall agree to be jointly and severally liable with the Borrower
for any and all obligations arising under or in connection with such Letter of
Credit or the Letter of Credit Application related thereto. Each borrowing by
the Borrower hereunder and issuance of any Letter of Credit shall constitute a
representation and warranty by the Credit Parties as of the date of such Loan or
issuance, as the case may be, that the conditions contained in this Section 6.2
have been satisfied.
ARTICLE 7
AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower hereby agrees that, so long as the
Commitments remain in effect, any Note remains outstanding and unpaid, any
Letter of Credit is outstanding or any other Obligations are owing to any Lender
or the Administrative Agent hereunder, Holdings and the Borrower shall and
(except in the case of delivery of financial information, reports and notices)
shall cause each of their Subsidiaries to:
7.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 110 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
year and the consolidated statements of income and retained earnings and
consolidated statement of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by independent certified public accountants of
nationally recognized standing; provided that if Holdings hereafter acquires or
creates any Subsidiary other than the Borrower or otherwise acquires any
material property other than the Capital Stock in the Borrower, then the
Borrower shall also cause to be delivered unaudited consolidated financial
statements of Holdings and its Subsidiaries in accordance with the terms of this
Section 7.1(a);
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, commencing with the quarter ending December 31, 2005, the
unaudited consolidating and consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidating and consolidated statements of income and retained
earnings and consolidated statement of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
(i) the figures for the previous year and (ii) the figures set forth in the
relevant budgets required to be delivered in accordance with Section 7.2(d),
49
certified by a Responsible Officer as being fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its consolidated Subsidiaries (subject to normal year-end audit
adjustments); provided that if Holdings hereafter acquires or creates any
Subsidiary other than the Borrower or otherwise acquires any material property
other than the Capital Stock in the Borrower, then the Borrower shall also cause
to be delivered unaudited consolidating and consolidated financial statements of
Holdings and its Subsidiaries in accordance with the terms of this Section
7.1(b);
(c) as soon as available, but in any event not later than 30 days
after the end of each month, commencing with the month ending October 31, 2005
(other than a month the last day of which coincides with the last day of any
fiscal quarter) of each fiscal year of the Borrower, monthly operating reports
of the Borrower and its consolidated Subsidiaries in the form of Exhibit H as at
the end of such month, setting forth in each case in comparative form (i) the
figures for the previous year commencing with the 2004 fiscal year and (ii) the
figures set forth in the relevant budgets required to be delivered in accordance
with Section 7.2(d); provided that the provisions of this Section 7.1(c) shall
be inapplicable for so long as the ratio of Consolidated Total Debt of the
Borrower and its Subsidiaries to Consolidated EBITDA of the Borrower and its
Subsidiaries is below 2.00 to 1.00, as most recently determined in accordance
with Section 8.1(c);
all such financial statements shall fairly present in all material respects the
consolidated financial position or the consolidating financial position, as the
case may be, of the Borrower and its Subsidiaries and of Holdings and its
Subsidiaries, as applicable, as of such date and shall be prepared in reasonable
detail and, except with respect to financial statements delivered pursuant to
Section 7.1(c), in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default relating to the covenants contained in Section 8.1, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and 7.1(b), a certificate of a Responsible
Officer of the Borrower (i) stating that, to the best of such Responsible
Officer's knowledge, the Credit Parties during such period have observed or
performed all of their covenants and other agreements, and satisfied every
condition, contained in this Agreement and in the Notes and the other Loan
Documents to which they are parties to be observed, performed or satisfied by
it, in all material respects, and that such Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate, (ii)
stating that all such financial statements fairly present in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and have been prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein (except as
disclosed therein) and (iii) showing in detail the calculations supporting such
statement in respect of Sections 8.1;
(c) [Reserved]
(d) as soon as available but not later than 45 days subsequent to the
end of each fiscal year of the Borrower, a copy of the projections by the
Borrower of the operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year (showing the operating budget and
cash flow budget for each quarter within such fiscal year), such projections to
be accompanied by a certificate of a Responsible Officer of the Borrower to the
effect that such projections have been prepared in good faith and based upon
reasonable assumptions;
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(e) within five (5) days after the same are filed, copies of all
financial statements and reports which Holdings, the Borrower or any of their
Subsidiaries may make to, or file with, the Securities and Exchange Commission
or any successor or analogous Governmental Authority;
(f) concurrently with the delivery of the financial statements
referred to Section 7.1(a), a description by the Borrower of each Customer
Partnership then existing, such description to include the following information
with respect to each Customer Partnership: (i) the identity of each customer of
the Borrower that is a partner in such Customer Partnership; (ii) the business
or businesses engaged in by such Customer Partnership; and (iii) the amount of
Indebtedness permitted by Section 8.2(m) that is then outstanding to such
Customer Partnership;
(g) as soon as available but not later than 30 days after creation of
any new Customer Partnership, a description by the Borrower of such newly
created Customer Partnership including the following information: (i) the
identity of each customer of the Borrower that is a partner in such Customer
Partnership; (ii) the business or businesses engaged in by such Customer
Partnership; and (iii) the amount of Indebtedness permitted by Section 8.2(m)
that is then outstanding to such Customer Partnership, and
(h) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings or its Subsidiaries, as the case may be; provided that,
notwithstanding the foregoing, Holdings and each of its Subsidiaries shall have
the right to pay any such obligation and in good faith contest, by proper legal
actions or proceedings, the validity or amount of such claims.
7.4 Conduct of Business and Maintenance of Existence. Except as
provided in Section 8.5, continue to engage in business of the same general type
as now conducted by it and businesses reasonably related thereto and to
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except if (i) in
the reasonable business judgment of Holdings or such Subsidiary, as the case may
be, it is in its best economic interest not to preserve and maintain such rights
or franchises, except as provided on Schedule 5.3 (but subject to the provisions
of Section 7.15), and (ii) such failure to preserve and maintain such
privileges, rights or franchises would not materially adversely affect the
rights of the Lenders hereunder or the value of the collateral security for the
Loans, and as otherwise permitted pursuant to Section 8.5 and comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business or as otherwise reasonably requested by the
Administrative Agent; and furnish to each Lender, upon written request, full
information as to the insurance carried except to the extent that the failure to
do any of the foregoing with respect to any such property could not reasonably
be expected to materially adversely affect the value or usefulness of such
property.
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7.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of any Lender (including field examiners
who may be employees of any Lender or independent contractors) to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records upon reasonable advance notice at any reasonable time on any
Business Day and as often as may reasonably be desired and to discuss the
business, operations, properties and financial or other condition of Holdings
and its Subsidiaries with officers and employees of Holdings and its
Subsidiaries and with its independent certified public accountants; provided
that the Administrative Agent or such Lender shall notify the Borrower prior to
any contact with such accountants and give the Borrower the opportunity to
participate in such discussions. Upon the request of the Administrative Agent or
any Lender, the Borrower shall enter into (or in the case of any other necessary
party to such a confidentiality agreement, Holdings and its Subsidiaries shall
use their best efforts to cause such party to enter into) a confidentiality
agreement with the Administrative Agent and the Lenders in form and substance
mutually satisfactory to the Administrative Agent and the Borrower to permit the
examination by the Administrative Agent and the Lenders in accordance with the
terms of this Section 7.6 of the books and records of certain entities in which
Holdings or any of its Subsidiaries has an equity investment as previously
disclosed to the Administrative Agent and the Lenders by the Borrower.
7.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Holdings or any
of its Subsidiaries and any Governmental Authority, which in either case, if not
cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any of the Credit Parties
or any of their Subsidiaries in which the amount involved is $1,000,000 or more
and not covered by insurance or in which injunctive or similar relief is sought;
(d) the following events: (i) the occurrence or expected occurrence
of any Reportable Event with respect to any Plan (other than a Multiemployer
Plan), a failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Plan;
(e) any development or event which has had, or could reasonably be
expected to have, a Material Adverse Effect; and
52
(f) the receipt by Holdings or any Subsidiary of any complaint,
order, citation, notice or other written communication from any Person with
respect to the existence or alleged existence of a violation of any
Environmental Laws or Materials of Environmental Concern or any other
environmental, health or safety matter, including, without limitation, the
occurrence of any spill, discharge or release in a quantity that is reportable
under any Environmental Law on property owned, leased or utilized by Holdings or
any Subsidiary of Holdings but only to the extent that such complaint, order,
citation, notice or written communication individually or in the aggregate could
reasonably be expected to result in material liability or a material obligation
under any Environmental Law.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower, Holdings or the
applicable Commonly Controlled Entity proposes to take with respect thereto.
7.8 Environmental Laws.
(a) Comply in all material respects with, and use reasonable best
efforts to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws;
(b) conduct and complete (or cause to be conducted and completed) all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and in a timely fashion comply
in all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to the extent that
the same are being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not be reasonably expected to have a Material
Adverse Effect; and
(c) defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers, directors and
controlling persons, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of Holdings or its Subsidiaries
or the Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of or relate to the gross negligence or willful misconduct
of, or any post-foreclosure actions not taken in accordance with the Asset
Conservation, Lender Liability and Deposit Insurance Protection Act of 1996 and
analogous lender liability laws. The agreements in this paragraph shall survive
repayment of all Loans and all other amounts payable hereunder.
7.9 Pledge of After Acquired Property. If at any time following the
Closing Date the aggregate monetary value (as determined by aggregating the
monetary value of each item or items of property so acquired on the date of the
acquisition thereof) of all property (to the extent not already secured) of any
nature whatsoever acquired by Holdings, any Domestic Subsidiary and/or XX Xxxx
after the Closing Date is in excess of $1,000,000 (including for this purpose
fee owned real estate having a monetary value in excess of $1,000,000),
Holdings, any such Domestic Subsidiary or XX Xxxx, as applicable, shall grant to
the Administrative Agent for the ratable benefit of the Lenders a first priority
Lien on and security interest in such property, as collateral security for the
Obligations, pursuant to documentation reasonably satisfactory to the
Administrative Agent and take such actions as the Administrative Agent shall
reasonably require to ensure the priority and perfection of such Lien; provided
that (i) only 65% of the voting Capital Stock of any Foreign Subsidiary need be
so pledged, (ii) with respect to real property, only fee owned real estate with
a value in excess of $1,000,000 need be mortgaged, (iii) property to the extent
subject to a Lien permitted by Section 8.3(h) or to the extent that creating
53
such Lien on any item of property is prohibited by any agreement of the type
described in clause (ii) or (iii) of Section 8.14 to which such property is
subject need not be so pledged and (iv) Chattel Paper owned by Holdings or any
Subsidiary (A) need not be so pledged to the extent that it is used to secure
Lease Transaction Obligations and (B) shall not be required to be delivered to
the Administrative Agent prior to 180 days after the creation thereof unless an
Event of Default exists, in which case such Chattel Paper shall be delivered to
the Administrative Agent promptly following its request.
7.10 Pledge During Event of Default. At any time during the
continuance of an Event of Default, upon the request of the Administrative Agent
or the Required Lenders, grant to the Administrative Agent for the ratable
benefit of the Lenders a first priority Lien on and security interest in any
unencumbered property of Holdings and its Domestic Subsidiaries of any nature
whatsoever, as collateral security for the Obligations, pursuant to
documentation reasonably satisfactory to the Administrative Agent and take such
actions as the Administrative Agent shall reasonably require to ensure the
priority and perfection of such Lien; provided, however, that if the grant of
such Lien would be reasonably likely to result in Holdings incurring income tax
liability (as determined by the Borrower and agreed to by the Administrative
Agent) pursuant to Subpart F of the Code, the property pledged pursuant hereto
will be that property which can be pledged without incurring such liability;
provided, further, that (i) only 65% of the voting Capital Stock of any Foreign
Subsidiary need be so pledged, (ii) no Foreign Subsidiary shall be required to
pledge its assets, (iii) assets to the extent subject to Liens permitted by
Section 8.3(g) or (h) or to the extent that creating such Lien on any item of
property is prohibited by any agreement of the type described in clause (ii) or
(iii) of Section 8.14 need not be so pledged and (iv) Chattel Paper owned by
Holdings or any Subsidiary (A) need not be so pledged to the extent that it is
used to secure Lease Transaction Obligations and (B) shall not be required to be
delivered to the Administrative Agent unless an Event of Default lasts, in which
case such Chattel Paper shall be delivered to the Administrative Agent promptly
following its request.
7.11 Additional Subsidiaries. If, at any time, either the Borrower,
any of its Domestic Subsidiaries or XX Xxxx shall form or acquire any new
Subsidiary after the date of this Agreement (this Section 7.11 not constituting
authority to form or acquire a new Subsidiary), the Borrower, such Domestic
Subsidiary or XX Xxxx, as the case may be, shall (i) cause such new Subsidiary
(other than a Foreign Subsidiary) to execute and deliver a supplement to the
Guarantee and Collateral Agreement and become a party thereto, and (ii) cause
each holder of any Capital Stock of such Subsidiary to pledge 100% of such
Capital Stock to the Administrative Agent pursuant to a supplement to the
Guarantee and Collateral Agreement; provided that in the event such Subsidiary
is a Foreign Subsidiary only 65% of the voting Capital Stock of such Foreign
Subsidiary need be pledged to the Administrative Agent; provided, further, that
each such supplement shall be accompanied by such resolutions, incumbency
certificates and legal opinions as are reasonably requested by the
Administrative Agent.
7.12 Substantive Consolidation. The Borrower shall maintain a
separate and distinct existence from Holdings and cause each of its Subsidiaries
to maintain a separate and distinct existence from Holdings, the Borrower and
each other Subsidiary of the Borrower in order to avoid substantive
consolidation of the assets and liabilities of Holdings, the Borrower and each
Subsidiary of the Borrower under title 11 of the United States Bankruptcy Code,
as amended, through the honoring of all formalities which shall include, without
limitation, no commingling of assets, sufficient and independent capitalization,
and separate books and records.
7.13 Intellectual Property. Whenever any Credit Party, either by
itself or through any agent, employee, licensee or designee, shall file an
application for the registration of any Copyright, Patent or Trademark with the
United States Patent and Trademark Office or any similar office or agency in any
other country or any political subdivision thereof, cause such Credit Party to
report such filing to the Administrative Agent within five (5) Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon
54
request of the Administrative Agent, such Credit Party shall execute and deliver
any and all agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent's security
interest in any Copyright, Patent or Trademark of such Intellectual Property and
the goodwill and general intangibles of such Credit Party relating thereto or
represented thereby.
7.14 Covenants Relating to Collateral.
(a) Whenever any Credit Party shall receive any Instrument or Chattel
Paper which is intended to be Collateral under the Guarantee and the Collateral
Agreement, Holdings shall cause such Credit Party to comply with the provisions
of Section 5.2 of the Guarantee and Collateral Agreement.
(b) Whenever any Credit Party shall change its name or its location
(within the meaning of the Uniform Commercial Code of the State of New York),
Holdings shall cause such Credit Party to comply with the provisions of Section
5.2 of the Guarantee and Collateral Agreement. Whenever any Credit Party
receives additional securities of any of its Subsidiaries, Holdings shall cause
such Credit Party to comply with the provisions of Section 5.7 of the Guarantee
and Collateral Agreement.
7.15 Post-Closing Obligations. The Borrower shall, as expeditiously
as possible, but in no event later than the number of days after the Closing
Date applicable to each item set forth below (or, in each case, such longer
period as the Administrative Agent shall agree) deliver:
(a) within 30 days after the Closing Date, (i) cause (A) the
termination of the UCC-1 financing statements naming Speedware USA, Inc., as
debtor, and Royal Bank of Canada, as secured party, on file with the New York
Secretary of State's Office as file number 200303200615112, (B) the termination
of the UCC-1 financing statement naming Enterprise Computer Systems, Inc., as
debtor, and Silicon Valley Bank, as secured party, filed with the South Carolina
Secretary of State's Office as file number 030227-1336172 and (C) the
termination of the UCC-1 financing statement naming CCI/Triad Financial Holding
Company, as debtor, and Sanwa Business Credit Corporation, as secured party, on
file with the California Secretary of State Office as file number 9903360983 and
(ii) deliver to the Administrative Agent evidence reasonably satisfactory to it
that the foregoing UCC-1 financing statements have been terminated;
(b) within 10 days after the Closing Date (i) cause the termination
of PNC Bank, National Association's Lien on any of the Credit Parties'
respective right, title and interest in any intellectual property, including,
without limitation, make filings of notice of terminations with United States
Patent and Trademark Office and the United States Copyright Office in respect
thereof and (ii) deliver to the Administrative Agent evidence reasonably
satisfactory to it that such Liens have been terminated and the foregoing
filings have been made;
(c) within 20 days after the Closing Date, a legal opinion of counsel
from a law firm whose lawyers are licensed to practice in the State of South
Carolina, which opinion shall be similar to the opinions set forth in Exhibit
D-1 but shall relate to Enterprise Computer Systems, Inc. and which shall be in
form and substance reasonably satisfactory to the Lenders;
(d) within 20 days after the Closing Date, deliver to the
Administrative Agent the charter of Enterprise Computer Systems, Inc., a South
Carolina corporation, certified by the Secretary of State of the State of South
Carolina, certified by the Borrower as being true and correct copies thereof;
55
(e) with 10 days after the Closing Date, deliver to the
Administrative Agent the following with respect to SDI Merger Corporation
(formerly known as Systems Design, Inc.) ("SDI"): (i) each document,
certificate, and financing statement which would have been required to be
delivered by SDI under clauses (c), (d), (e), (j) and (o) of Section 6.1 on the
Closing Date; (ii) an Assumption Agreement in the form attached as Exhibit A to
the Guarantee and Collateral Agreement duly executed by an authorized officer of
SDI; and (iii) a legal opinion of counsel from Weil, Gotshal & Xxxxxx LLP,
special counsel to SDI, with respect to enforceability and certain other matters
pertaining to SDI, including those opinions covering matters pertaining to
"Other Credit Parties" referred to in such Exhibit D-1 (other than corporate
matters and perfection of security interests), substantially in the form of
Exhibit D-1, and such legal opinon shall be reasonably satisfactory to the
Administrative Agent; and
(f) within 10 days after the Closing Date, a stock certificate of
Activant Solutions Acquisitionco Ltd. representing 65% of the issued and
outstanding Capital Stock thereof, together with a stock power with respect
thereto executed in blank by the Borrower and a collateral amendment in the form
attached as Exhibit B to the Guarantee and Collateral Agreement duly executed by
an authorized officer of the Borrower.
ARTICLE 8
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note remains outstanding and unpaid, any Letter of Credit remains
outstanding or any other Obligations are owing to any Lender or the
Administrative Agent hereunder, the Borrower shall not, and (except with respect
to Section 8.1) shall not permit any of its Subsidiaries to, directly or
indirectly:
8.1 Financial Condition Covenants.
(a) Maintenance of Consolidated EBITDA less Capital Expenditures of
the Borrower and its Subsidiaries to Consolidated Interest Expense. Permit the
ratio of (i) Consolidated EBITDA of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters ending on the last day of each fiscal
quarter (commencing with the fiscal quarter ending September 30, 2005) less
Capital Expenditures for such four fiscal quarters to (ii) Consolidated Interest
Expense of the Borrower and its Subsidiaries for such four fiscal quarters to be
less than 1.25 to 1.00.
(b) [Reserved]
(c) Maintenance of Consolidated Total Debt to Consolidated EBITDA.
Permit the ratio of (i) Consolidated Total Debt of the Borrower and its
Subsidiaries as of the last day of each of the fiscal quarters set forth below
less the aggregate amount of cash and Cash Equivalents shown on the consolidated
balance sheet of the Borrower as of the last day of the applicable fiscal
quarter to (ii) Consolidated EBITDA of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters ending on the last day of each of the
fiscal quarters set forth below to be greater than the ratio set forth opposite
such fiscal quarter below:
Quarter Ending Ratio
-------------- -----
September 30, 2005 5.25 to 1.00
December 31, 2005 5.25 to 1.00
March 31, 2006 5.25 to 1.00
June 30, 2006 5.25 to 1.00
September 30, 2006 5.25 to 1.00
December 31, 2006 5.25 to 1.00
March 31, 2007 5.00 to 1.00
June 30, 2007 5.00 to 1.00
September 30, 2007 5.00 to 1.00
December 31, 2007 5.00 to 1.00
March 31, 2008 4.75 to 1.00
June 30, 2008 4.75 to 1.00
September 30, 2008 4.75 to 1.00
56
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Credit Parties under the Loan Documents;
(b) Indebtedness of the Borrower or any Domestic Subsidiary,
including any new Domestic Subsidiary, to the Borrower or any Domestic
Subsidiary;
(c) Indebtedness outstanding on the Closing Date and listed on
Schedule 8.2 and any Permitted Refinancing thereof;
(d) Indebtedness resulting from the endorsement of negotiable
instruments in the ordinary course of business;
(e) Indebtedness in respect of obligations under Financing Leases and
purchase money Indebtedness not to exceed $5,000,000 in the aggregate at any one
time outstanding;
(f) Indebtedness in respect of Interest Rate Agreements;
(g) Indebtedness of any Domestic Subsidiary or the Borrower, as the
case may be, to the Borrower or another Domestic Subsidiary from intercompany
transfers of assets made in the ordinary course of business or to the extent
permitted under Sections 8.6 and 8.9;
(h) Guarantee Obligations permitted by Section 8.4;
(i) Indebtedness (i) of any Foreign Subsidiary of the Borrower to the
Borrower or any Domestic Subsidiary of the Borrower and (ii) of any Foreign
Subsidiary of the Borrower to local financial institutions for working capital
purposes having aggregate commitments not to exceed $2,000,000 at any one time;
provided that the aggregate principal amount of such Indebtedness described in
clause (i) above plus the aggregate commitments of all working capital
facilities described in clause (ii) above plus the aggregate amount of
investments made pursuant to Section 8.9(c)(iii) shall in no event exceed
$10,000,000 at any one time;
(j) Indebtedness subject to Liens permitted under Sections 8.3(b),
(c), (d), and (e);
(k) Lease Transaction Obligations of Triad Financial and the Foreign
Lease Subsidiaries in existence on the Closing Date and listed on Schedule 5.25;
(l) Lease Transaction Obligations of FinanceCo in existence on the
Closing Date and listed on Schedule 5.25;
57
(m) Indebtedness of Customer Partnerships in an aggregate principal
amount not to exceed $5,000,000;
(n) the Bridge Financing and any Permitted Refinancing thereof;
(o) any refinancing of the Holdings Bridge Financing; provided, that
the terms thereof would constitute a Permitted Refinancing, if such refinancing
was a refinancing of the Bridge Financing or any Permitted Refinancing thereof;
and provided further that before and after giving pro forma effect thereto the
Borrower would have been in compliance with Section 8.1 as of the last Test
Date;
(p) the existing "earn-out" obligation of Speedware payable to the
prior shareholder(s) of Prelude Systems in connection with Speedware's
acquisition of all Capital Stock in Prelude Systems; and
(q) Indebtedness of the Borrower constituting Subordinated
Indebtedness and any Permitted Refinancing thereof, provided that before and
after giving pro forma effect thereto the Borrower would have been in compliance
with Section 8.1 as of the last Test Date.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens created by the Security Documents in favor of the
Administrative Agent for the benefit of the Lenders and the Administrative
Agent;
(b) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings; provided that adequate reserves with respect
to contested taxes are maintained on the books of Holdings or the Borrower or
their respective Subsidiaries, as the case may be, in conformity with GAAP (or,
in the case of Foreign Subsidiaries, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of incorporation);
(c) carriers', landlord's, warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(d) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, Intellectual Property, statutory
obligations, insurance contracts, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(f) easements, rights-of-way, zoning restrictions, restrictions and
other similar encumbrances (i) previously or hereafter incurred in the ordinary
course of business which, in the aggregate, are not material in amount and, in
the case of such encumbrances on any property, do not materially interfere with
the ordinary conduct of the business of the Borrower or any Subsidiary or (ii)
which are set forth in any "marked up" commitments for title insurance delivered
to the Administrative Agent after the Closing Date;
58
(g) Liens in existence on the Closing Date listed on Schedule 8.3,
securing Indebtedness permitted by Section 8.2(c) (including extensions,
renewals and replacements of such Indebtedness as permitted under Section
8.2(c)); provided that no such Lien is spread to cover any additional property
(other than after acquired title in or on such property and proceeds of the
existing collateral in accordance with the instrument creating such Lien) after
the Closing Date and that the amount of Indebtedness secured thereby is not
increased except pursuant to the instrument creating such Lien (without any
modification thereof);
(h) purchase money Liens and Liens in respect of Financing Leases
upon or in any property acquired or held by the Borrower or any of its
Subsidiaries to secure Indebtedness permitted under Section 8.2(e) incurred
solely for the purpose of financing the acquisition of such property, and Liens
existing on such property at the time of its acquisition or existing on property
of any Person that becomes a Subsidiary after the date hereof at the time such
Person becomes a Subsidiary (other than any such Lien created in contemplation
of such acquisition);
(i) Liens on the property of the Borrower or any of its Subsidiaries
in favor of landlords securing licenses, subleases or leases permitted
hereunder;
(j) licenses, leases or subleases permitted hereunder granted to
others not interfering in any material respect in the business of the Borrower
or any of its Subsidiaries;
(k) attachment or judgment Liens (other than judgment Liens paid or
fully covered by insurance which are not outstanding for more than sixty (60)
days) in an aggregate amount outstanding at any one time not in excess of
$3,000,000;
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to operating leases or consignment
arrangements entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business;
(m) Liens in favor of a banking institution arising by operation of
law encumbering deposits (including the 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;
(n) Liens on Leased Equipment and Chattel Paper of Triad Financial,
FinanceCo and the Foreign Lease Subsidiaries securing Lease Transaction
Obligations in existence on the Closing Date and listed on Schedule 5.25; and
(o) Liens against the Capital Stock of Prelude Systems to secure the
"earn-out" obligations of Speedware permitted under Section 8.2(o).
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations pursuant to the Loan Documents;
(b) guarantees of Indebtedness permitted pursuant to Section 8.2(c)
in existence on the Closing Date and as otherwise set forth on Schedule 8.4 and
extensions, renewals and replacements thereof; provided, however, that no such
extension, renewal or replacement shall (i) amend or modify the subordination
provisions, if any, contained in the original guarantee, (ii) increase the
principal amount of such indebtedness guaranteed by the original guarantee, or
(iii) adversely affect the interests of the Lenders under this Agreement or any
other Loan Document in any material respect;
(c) the L/C Obligations;
59
(d) indemnities in favor of the companies issuing title insurance
policies insuring the title to any property;
(e) surety bonds issued in respect of the type of obligations
described in Section 8.3(e);
(f) indemnities made in the Commitment Letter and the Loan Documents
and in the monitoring and oversight agreement and the financial advisory
agreement described in Section 8.7(a)(iv) and in the corporate charter and/or
by-laws of the Borrower and its Subsidiaries;
(g) indemnities and guarantees of Indebtedness expressly permitted
hereunder made in the ordinary course of business; provided that such
indemnities or guarantees could not individually or in the aggregate have a
Material Adverse Effect;
(h) agreements by the Borrower (and Triad Financial, in the case of
FinanceCo) in existence on the Closing Date and listed on Schedule 5.25 hereto
to make equity contributions and or subordinated loans to Triad Financial,
FinanceCo and the Foreign Lease Subsidiaries to support payment of their
obligations in respect of Lease Transaction Obligations in existence on the
Closing Date and listed on Schedule 5.25 hereto;
(i) contingent obligations in respect of Indebtedness permitted under
Section 8.2(m) arising solely as a result of the status of the Borrower as a
general partner in Customer Partnerships;
(j) guarantees by the Borrower and its Domestic Subsidiaries of
Indebtedness of Foreign Subsidiaries permitted by clause (ii) of Section 8.2(i);
(k) Guarantee Obligations of any Subsidiary in respect of any
Subordinated Indebtedness; provided that such Subsidiary is a guarantor of the
Obligations under the Guarantee and Collateral Agreement; and provided, further,
that such Guarantee Obligations are subordinated to the obligations of such
Subsidiary under the Loan Documents to the same extent as are the obligations of
the Borrower in respect of the applicable Subordinated Indebtedness; and
(l) Guarantee Obligations of any Subsidiary in respect of the Senior
Unsecured Notes and Bridge Financing (and any Permitted Refinancing of such
Bridge Financing); provided that such Subsidiary is a guarantor of the
Obligations under the Guarantee and Collateral Agreement; and provided, further,
that such Guarantee Obligations are unsecured at all times.
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except (i) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more Wholly
Owned Subsidiaries of the Borrower (provided that any Domestic Subsidiary,
Finance Co. or XX Xxxx shall not be merged or consolidated with or into any
Foreign Subsidiary unless such Domestic Subsidiary, Finance Co. or XX Xxxx, as
applicable, shall be the surviving entity) and (ii) any Subsidiary of the
Borrower may liquidate or dissolve if in connection therewith all of its assets
are transferred to the Borrower or any Wholly Owned Subsidiary of the Borrower
(provided that no Domestic Subsidiary may transfer its assets to a Foreign
Subsidiary).
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8.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, Accounts Receivable and leasehold interests),
whether now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary course
of business or property that is no longer useful in the conduct of the
Borrower's business disposed of in the ordinary course of business;
(b) the sale, transfer or exchange of inventory in the ordinary
course of business;
(c) transfers resulting from any casualty or condemnation of property
or assets;
(d) any sale or other transfer of any property or assets constituting
fixed assets for at least 75% cash; provided that the aggregate net cash
proceeds of the sales and transfers made pursuant to this Section 8.6(d) in the
aggregate do not exceed $3,000,000 in any fiscal year;
(e) intercompany sales or transfers of assets made in the ordinary
course of business; provided that in no event may the Borrower or its Domestic
Subsidiaries transfer assets to any Foreign Subsidiaries having a value in
excess of $5,000,000;
(f) licenses or sublicenses of intellectual property and general
intangibles and licenses, leases or subleases of other property in the ordinary
course of business which do not materially interfere with the business of
Holdings and its Subsidiaries;
(g) any consignment arrangements or similar arrangements for the sale
of assets in the ordinary course of business;
(h) the sale or discount of overdue Accounts Receivable and lease
receivables arising in the ordinary course of business, but only in connection
with the compromise or collection thereof;
(i) leases and sales of Leased Equipment and Chattel Paper in
connection with any Lease Transaction and discounting programs and any
refinancings thereof;
(j) dispositions permitted by Section 8.5(ii); and
(k) the sale of a line of business; provided that the aggregate net
cash proceeds of the sale made pursuant to this Section 8.6(k) do not exceed
$10,000,000 (the "Designated Asset Sale").
8.7 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for the purchase, redemption, defeasance, retirement or other acquisition of,
any class of Capital Stock of the Borrower or any Subsidiary or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property, obligations of the Borrower or any
Subsidiary or otherwise (such declarations, payments, setting apart, purchases,
redemptions, defeasances, retirements, acquisitions and distributions being
herein called "Restricted Payments"), except that:
(a) the Borrower may make Restricted Payments to Holdings, so long as
(except with respect to clause (iii) below) no Event of Default (or, in the case
of clause (iv) below an Event of Default which relates to a payment default
under Section 9(a)) has occurred and is continuing or would occur and be
continuing after giving effect to any such Restricted Payment:
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(i) the proceeds of which shall be used to repurchase the Capital
Stock or other securities of Holdings from outside directors,
employees or members of the management of Holdings, the Borrower or
any Subsidiary, in an aggregate amount not in excess of $5,000,000,
net of the proceeds received by Holdings as a result of any resales of
any such Capital Stock or other securities (and subject to the proviso
set forth in clause (v) below);
(ii) the proceeds of which shall be applied by Holdings directly
to pay out of pocket expenses for administrative, legal and accounting
services provided by third parties which are reasonable and customary
and incurred in the ordinary course of business, to pay outside
directors' fees and to pay franchise fees and similar costs; provided,
however, that any such administrative expenses shall not exceed an
aggregate amount of $1,000,000 in each fiscal year;
(iii) the proceeds of which shall be used to pay taxes which are
due and payable of Holdings and the Borrower as part of a consolidated
group;
(iv) the proceeds of which shall be used to pay usual and
customary management fees to HMTF and its Affiliates in accordance
with the terms of its monitoring and oversight agreement and financial
advisory agreement;
(v) if such Restricted Payment is a purchase by Holdings of its
Capital Stock or a distribution to Holdings to permit Holdings to
purchase its Capital Stock, in either case, made in order to fulfill
the obligations of Holdings, the Borrower or any of its Subsidiaries
under an employee stock purchase plan or similar plan covering
employees of Holdings or any Subsidiary as from time to time in effect
in an aggregate net amount not to exceed $2,000,000;
(vi) the proceeds of which shall be applied by Holdings directly
to pay any required cash interest due in respect of the Holdings
Financing and any Permitted Refinancing thereof, so long as the
Borrower is in pro forma compliance with Section 8.1 after giving
effect to any Restricted Payments made pursuant to this Section
8.7(a)(vi) as of the last Test Date; or
(vii) the proceeds of which were obtained from a Permitted
Refinancing of the Bridge Financing and all or any part of the Holding
Financing and will be applied by Holdings to repay all or any part of
the Holdings Financing so refinanced, so long as such Indebtedness
incurred in connection therewith is permitted to be incurred pursuant
to Sections 8.2(n) and/or 8.2(o);
(b) any Subsidiary of the Borrower may make Restricted Payments to
the Borrower or any Subsidiary that is a "Grantor" under the Guarantee and
Collateral Agreement;
(c) Permitted Issuances may be made; and
(d) the Borrower may make Restricted Payments to Holdings, and
Holdings may simultaneously make corresponding Restricted Payments to HMTF (in
addition to management fees paid under Section 8.7(a)(iv)); provided that (i) on
the date the applicable Restricted Payment is made and immediately after giving
effect thereto, no Loans are outstanding and the Borrower and its Domestic
Subsidiaries have at least $5,000,000 of unrestricted cash and Cash Equivalents,
(ii) no Permitted Acquisitions (excluding ordinary course acquisitions of goods
used in the operation of the business of the Borrower and its Subsidiaries) of
more than $3,000,000 of total consideration have been consummated within the 12
months preceding the applicable Restricted Payment, and (iii) all such
Restricted Payments, together with all payments made pursuant to Section
8.18(b)(iii), shall not exceed $15,000,000 in the aggregate through the
Termination Date.
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8.8 [Reserved].
8.9 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person ("Investments"),
except:
(a) extensions of trade credit and investments in leases in the
ordinary course of business;
(b) Investments in Cash Equivalents;
(c) (i) Investments by the Borrower in any Domestic Subsidiary,
including any new Subsidiary, but only to the extent permitted by either Section
8.9(k) or Section 8.9(l) if such Investment is the result of any Permitted
Acquisition, (ii) intercompany loans to the extent permitted by Section 8.2 and
(iii) Investments by the Borrower in any Foreign Subsidiary (it being agreed for
purposes of this clause (iii) that Accounts Receivable arising solely from
actual bona fide intercompany transactions entered into in the ordinary course
of business shall not constitute Investments) in an amount not to exceed
$10,000,000 minus the amount of any Indebtedness of Foreign Subsidiaries
permitted by Section 8.2(i);
(d) loans and advances by the Borrower or its Subsidiaries to their
respective directors, officers and employees in an aggregate principal amount
not exceeding $2,000,000 at any one time outstanding;
(e) loans, advances or Investments in existence on the Closing Date
and listed on Schedule 8.9, and extensions, renewals, modifications or
restatements or replacements thereof; provided that no such extension, renewal,
modification or restatement shall (i) increase the amount of the original loan,
advance or investment, or (ii) adversely affect the interests of the Lenders
with respect to such original loan, advance or investment or the interests of
the Lenders under this Agreement or any other Loan Document in any material
respect;
(f) Investments permitted by Sections 8.2(b), 8.4(a), (b), (g), (i),
(j) and (k) and 8.18(b);
(g) promissory notes and other similar non-cash consideration
received by the Borrower and its Subsidiaries in connection with the
dispositions permitted by Section 8.6;
(h) Investments consisting of Interest Rate Agreements;
(i) Investments (including debt obligations and Capital Stock)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;
(j) in addition to the foregoing, Investments after the Closing Date
by the Borrower or its Subsidiaries in an aggregate amount (at cost, without
regard to any write-down or write-up thereof) at any one time outstanding not to
exceed $7,500,000; provided that cash Investments at any one time outstanding
shall not exceed $1,000,000 in Persons other than Subsidiaries or Affiliates of
Holdings;
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(k) so long as after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, Investments by the Borrower and
its Subsidiaries resulting from Permitted Acquisitions after the Closing Date
where not more than $20,000,000 of total consideration is paid by the Borrower
and/or its Subsidiaries under each such Permitted Acquisition or series of
related Permitted Acquisitions; provided that (i) the Administrative Agent shall
have received, with copies for each Lender, not later than the date of
consummation of the applicable Permitted Acquisition where total consideration
is in excess of $3,000,000, (I) the definitive documents evidencing and
governing such Permitted Acquisition, together with such opinions (including
with respect to environmental matters), certificates and copies of other
agreements as it shall reasonably request, and (II) a certificate of a
Responsible Officer of the Borrower confirming the total consideration paid by
the Borrower and/or its Subsidiaries, as applicable, for such Permitted
Acquisition, (ii) such actions as may be required or reasonably requested to
ensure that the Administrative Agent, for the ratable benefit of the Lenders,
has a perfected first priority security interest in any assets (including any
Capital Stock) acquired, subject to Liens permitted by Section 8.3, shall have
been taken, (iii) (I) on a pro forma basis for the period of four consecutive
fiscal quarters most recently ended (assuming the consummation of such Permitted
Acquisition and the incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period of four consecutive fiscal
quarters), the Borrower shall be in compliance with the covenant contained in
Section 8.1(c), assuming for purposes of this pro forma test that the then
applicable threshold requirement for such ratio of Consolidated Total Debt to
Consolidated EBITDA has been reduced by .50x (i.e., if the threshold ratio is
4.00 to 1.00 for the applicable period under the terms of Section 8.1(c), the
threshold ratio for such period under such pro forma test shall be 3.50 to
1.00), and (II) the Administrative Agent shall have received calculations in
reasonable detail reasonably satisfactory to it showing compliance with the
requirements of this clause (iii) certified by a Responsible Officer of the
Borrower, and (iv) the Available Commitments are at least $5,000,000 on the date
such Permitted Acquisition is made and immediately after giving effect thereto;
(l) so long as after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, Investments by the Borrower and
its Subsidiaries resulting from Permitted Acquisitions after the Closing Date
where not more than $50,000,000 of total consideration is paid by the Borrower
and/or its Subsidiaries under each such Permitted Acquisition or series of
related Permitted Acquisitions; provided that (i) the Administrative Agent shall
have received, with copies for each Lender, not later than the date of
consummation of the applicable Permitted Acquisition where total consideration
is in excess of $3,000,000, (I) the definitive documents evidencing and
governing such Permitted Acquisition, together with such opinions (including
with respect to environmental matters), certificates and copies of other
agreements as it shall reasonably request, and (II) a certificate of a
Responsible Officer of the Borrower confirming the total consideration paid by
the Borrower and/or its Subsidiaries, as applicable, for such Permitted
Acquisition, (ii) such actions as may be required or reasonably requested to
ensure that the Administrative Agent, for the ratable benefit of the Lenders,
has a perfected first priority security interest in any assets (including any
Capital Stock) acquired, subject to Liens permitted by Section 8.3, shall have
been taken, (iii) (I) on a pro forma basis for the period of four consecutive
fiscal quarters most recently ended (assuming the consummation of such Permitted
Acquisition and the incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period of four consecutive fiscal
quarters), the Borrower shall be in compliance with the covenant contained in
Section 8.1(c), assuming for purposes of this pro forma test that the then
applicable threshold requirement for such ratio of Consolidated Total Debt to
Consolidated EBITDA has been reduced by .50x (i.e., if the threshold ratio is
4.00 to 1.00 for the applicable period under the terms of Section 8.1(c), the
threshold ratio for such period under such pro forma test shall be 3.50 to
1.00), and (II) the Administrative Agent shall have received calculations in
reasonable detail reasonably satisfactory to it showing compliance with the
requirements of this clause (iii) certified by a Responsible Officer of the
Borrower, and (iv) on the date such Permitted Acquisition is made and
immediately after giving effect thereto, no Loans are outstanding and the
Borrower and its Domestic Subsidiaries own unrestricted cash and Cash
Equivalents in an aggregate amount of not less than $5,000,000; and
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(m) the Acquisition.
8.10 Modifications of Lease Transaction Obligations. Amend,
supplement or otherwise modify any of the provisions of any Lease Transaction
Obligations in a manner that adversely affects the interests of the Lenders
under this Agreement or any other Loan Document in any material respect.
8.11 Limitation on Transactions with Affiliates.
(a) Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate or any Subsidiary (other than a wholly owned Subsidiary)
unless such transaction is (i) otherwise permitted under this Agreement, or (ii)
(x) in the ordinary course of the Borrower's or such Subsidiary's business and
(y) upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
(b) In addition, notwithstanding the foregoing, the Borrower and its
Subsidiaries shall be entitled to make the following payments and/or to enter
into the following transactions:
(i) the payment of reasonable and customary fees and
reimbursement of expenses payable to directors of the Borrower;
(ii) the payment to HMTF and its Affiliates of fees and expenses
pursuant to a monitoring and oversight agreement and financial
advisory agreement approved by the board of directors of the Borrower;
and
(iii) the employment arrangements with respect to the procurement
of services of directors, officers and employees in the ordinary
course of business and the payment of reasonable fees in connection
therewith.
8.12 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
8.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than September 30; provided that the Borrower
may change such fiscal year upon the approval of the Administrative Agent.
8.14 Restrictions Affecting Subsidiaries. Enter into with any Person,
or suffer to exist, any agreement which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to (a) create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, other than (i) this Agreement, (ii) any industrial
revenue bonds, purchase money mortgages or Financing Leases or any other
agreement or transaction permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby), (iii) as required pursuant to financing arrangements entered into by
Triad Systems Ireland Limited with the Industrial Development Authority of
Ireland as in effect on the date hereof or such other similar financing
arrangements entered into in furtherance of the development of Holdings and its
Subsidiaries' business outside of the United States; provided that the aggregate
amount of assets of Holdings or any Subsidiary of Holdings subject to such
restrictions shall not exceed 5% of Consolidated Assets, (iv) restrictions with
65
respect to maintaining the special purpose entity treatment of FinanceCo, and
(v) the Bridge Financing and any Permitted Refinancing thereof and the Holdings
Financing and any Permitted Refinancing thereof, or (b) pay dividends or make
other distributions or pay any Indebtedness owed to the Borrower or any of its
Subsidiaries except as permitted by this Agreement and the other Loan Documents
or as required pursuant to financing arrangements entered into by Triad Systems
Ireland Limited with the Industrial Development Authority of Ireland as in
effect on the date hereof or such other similar financing arrangements entered
into in furtherance of the development of Holdings and its Subsidiaries'
business outside of the United States; provided that the aggregate amount of
assets of Holdings or any Subsidiary of Holdings subject to such restrictions
shall not exceed 5% of Consolidated Assets, and pursuant to restrictions imposed
with respect to maintaining the special purpose entity treatment of FinanceCo.
8.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are reasonably related thereto.
8.16 Holding Company Status; Ownership of Borrower. Suffer to exist
any change in the passive holding company status of Holdings except as otherwise
permitted by Section 11.6.
8.17 Amendments to Corporate Documents; Licenses. (a) Amend its
certificate of incorporation or by-laws unless such amendment does not adversely
affect the interests of any Lender in any material respect, or (b) amend,
supplement or otherwise modify the terms and conditions of the indemnities and
licenses furnished to the Borrower or any of its Subsidiaries pursuant to any of
the Loan Documents such that after giving effect thereto such indemnities or
licenses shall be materially less favorable to the interests of the Credit
Parties or the Lenders with respect thereto.
8.18 Limitation on Optional Payments, Purchases and Modifications of
Debt Instruments, Etc. (a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with respect
to (i) any Subordinated Indebtedness or any guarantee thereof (except mandatory
payments of interest, fees and expenses required by the terms of the agreement
governing or instruments evidencing such indebtedness, but only to the extent
permitted under the subordination provisions applicable thereto) or (ii) the
Holdings Financing or any Permitted Refinancing thereof, except to the extent
permitted by Section 8.2(o);
(b) Make or offer to make any payment, prepayment, repurchase or
redemption of or otherwise defease or segregate funds with respect to (A) any of
the Senior Unsecured Notes or any guarantee thereof or (B) the Bridge Facility,
except as follows: (i) regularly scheduled payments of interest, fees and
expenses may be made when the same are otherwise due and payable under the terms
of the Senior Unsecured Notes Indenture or the Bridge Facility; (ii) "open
market" purchases of the Senior Unsecured Notes and/or voluntary purchases or
retirement of the Bridge Facility in each case at a price not greater than 101%
of par value plus accrued and unpaid interest on said Senior Unsecured Notes or
Bridge Facility, as the case may be, being purchased or retired, as the case may
be, (in addition to purchases of Senior Unsecured Notes and/or voluntary
purchases or retirements of the Bridge Facility described in Section
8.18(b)(iii) below); provided that (A) the daily balance of cash and Cash
Equivalents of the Borrower and its Domestic Subsidiaries for each day in the 60
consecutive day period immediately prior to the date of such purchase is in
excess of $30,000,000 in the aggregate, and (B) on the date the applicable
purchase of Senior Unsecured Notes and/or voluntary purchase or retirement of
the Bridge Facility, as the case may be, is made and immediately after giving
effect thereto, the Borrower and its Domestic Subsidiaries have at least
$15,000,000 of unrestricted cash and Cash Equivalents in the aggregate; (iii)
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"open market" purchases of the Senior Unsecured Notes and/or voluntary purchases
or retirement of the Bridge Facility in each case at a price not greater than
101% of par value plus accrued and unpaid interest on said Senior Unsecured
Notes or Bridge Facility, as the case may be, being purchased or retired, as the
case may be, (in addition to purchases of Senior Unsecured Notes and/or
voluntary purchases or retirement of the Bridge Facility described in Section
8.18(b)(ii) above); provided that (A) on the date the applicable purchase of
Senior Unsecured Notes and/or voluntary purchase or retirement of the Bridge
Facility, as the case may be, is made and immediately after giving effect
thereto, no Loans are outstanding and the Borrower and its Domestic Subsidiaries
have at least $5,000,000 of unrestricted cash and Cash Equivalents in the
aggregate, (B) no Permitted Acquisitions (excluding ordinary course acquisitions
of goods used in the operation of the business of the Borrower and its
Subsidiaries) of more than $3,000,000 of total consideration have been
consummated within the 12 months preceding the applicable purchase of Senior
Unsecured Notes and/or voluntary purchase or retirement of the Bridge Facility,
as the case may be, and (C) all such purchases of Senior Unsecured Notes and
voluntary purchases or retirement of the Bridge Facility, together with
Restricted Payments made pursuant to Section 8.7(d), shall not exceed
$15,000,000 in the aggregate through the Termination Date; (iv) repurchases or
redemptions of the Senior Unsecured Notes and/or voluntary purchases or
retirement of the Bridge Facility, as the case may be, in an amount equal to the
applicable "Excess Cash Flow Offer Amount" (as defined in the Senior Fixed Rate
Note Indenture) may be made when the same are otherwise required under the terms
of the Senior Fixed Rate Note Indenture or the Bridge Facility, as the case may
be; and (v) repayment of the Bridge Financing with proceeds from any Permitted
Refinancing thereof;
(c) Amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of (A)
the Senior Unsecured Notes or any guarantee thereof, (B), the Bridge Financing
or any Permitted Refinancing of the Bridge Financing, or any guarantee thereof,
(C) the Senior Unsecured Notes Indenture or any other agreement governing or
otherwise related to the Senior Unsecured Notes or any guarantee thereof, or (D)
the Bridge Loan Agreement, any document governing the Permitted Refinancing of
the Bridge Financing or any other agreement governing or otherwise related to
the Bridge Financing or any Permitted Refinancing thereof, or any guarantee
thereof:
(i) which shortens the fixed maturity, or shortens the time of
payment of interest on, or increases the amount or shortens the time
of payment of any principal or premium payable whether at maturity, at
a date fixed for prepayment or by acceleration or otherwise of such
Indebtedness, or increases the amount of, or accelerates the time of
payment of, any fees payable in connection therewith;
(ii) which relates to the affirmative or negative covenants,
events of default or remedies under the documents or instruments
evidencing such Indebtedness and the effect of which is to subject the
Borrower or any of its Subsidiaries to any more onerous or more
restrictive provisions; or
(iii) which otherwise adversely affects the interests of the
Lenders as senior creditors or the interests of the Lenders under this
Agreement or any other Loan Document in any respect; or
(d) Amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of any
Subordinated Indebtedness or any guarantee thereof or any agreement evidencing,
governing or otherwise related to any Subordinated Indebtedness or any guarantee
thereof:
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(i) which amends or modifies the subordination provisions
contained therein;
(ii) which shortens the fixed maturity or shortens the time of
payment of interest on, or increases the amount or shortens the time
of payment of any principal or premium payable whether at maturity, at
a date fixed for prepayment or by acceleration or otherwise of such
Indebtedness, or increases the amount of, or accelerates the time of
payment of, any fees payable in connection therewith;
(iii) which relates to the affirmative or negative covenants,
events of default or remedies under the documents or instruments
evidencing such Indebtedness and the effect of which is to subject the
Borrower or any of its Subsidiaries to any more onerous or more
restrictive provisions; or
(iv) which otherwise adversely affects the interests of the
Lenders as senior creditors or the interests of the Lenders under this
Agreement or any other Loan Document in any respect; or
(e) Make any payment in cash on any equity security that may be made
under the terms thereof by the issuance of any security of the same nature; or
(f) Designate any Indebtedness (other than the Obligations, the
Senior Unsecured Notes, the Bridge Financing and any Permitted Refinancings of
any of foregoing in this parenthetical) as Indebtedness senior in right to any
or all Subordinated Indebtedness now or hereafter existing.
8.19 Limitation on Provision of License Products. Enter into any
agreement, whether written or oral, to provide License Products to any Person
(other than an Affiliate), unless such agreement contains Customary License
Terms.
ARTICLE 9
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan and/or
Note or any L/C Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan and/or Note,
or any other amount payable hereunder, within five (5) days after any such
interest or other amount becomes due in accordance with the terms thereof or
hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower, Holdings or any of their Subsidiaries herein or in any other Loan
Document or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this Agreement
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Borrower, Holdings or any of their Subsidiaries shall default
in the performance or observance of any agreement contained in Article 8 or 11;
or
(d) The Borrower, Holdings or any of their Subsidiaries shall default
in the observance or performance of any other agreement contained in this
Agreement or in any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Article 9), and such default shall continue unremedied
for a period of 30 days; or
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(e) The Borrower, Holdings or any of their Subsidiaries shall (i)
default (x) in any payment of principal of or interest on any Indebtedness
(other than the Loans), or (y) in the payment of any Guarantee Obligation (other
than Guarantee Obligations pursuant to the Loan Documents), having an
outstanding principal amount individually or in the aggregate for both of
clauses (x) and (y) in excess of $3,000,000 beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become payable; or
(f) (i) The Borrower, Holdings or any of their Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any of the Borrower, Holdings or any of their Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower, Holdings or any of their Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against the Borrower, Holdings or any
of their Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the
Borrower, Holdings or any of their Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower, Holdings or any of their Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts (other than
intercompany debts) as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to result in a Material Adverse Effect; or
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(h) One or more judgments or decrees shall be entered against the
Borrower, Holdings or any of their Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $3,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) The Borrower, Holdings or any of their Subsidiaries shall incur
any liability (not paid or fully covered by insurance) under any Environmental
Law in an amount which would result in a Material Adverse Effect; or
(j) Any Loan Document shall, at any time, cease to be in full force
and effect (unless released by the Administrative Agent at the direction of the
Required Lenders or as otherwise permitted under this Agreement or the other
Loan Documents) or shall be declared null and void (and, if such invalidity is
such so as to be amenable to cure without materially disadvantaging the position
of the Administrative Agent and the Lenders thereunder, the applicable Credit
Party shall have failed to cure such invalidity within 15 days after notice from
the Administrative Agent or such shorter time period as is specified by the
Administrative Agent in such notice and is reasonable in the circumstances), or
the validity or enforceability thereof shall be contested by any Credit Party,
or any of the Liens intended to be created by any Security Document shall cease
to be or shall not be a valid and perfected Lien having the priority
contemplated thereby (and, if such invalidity is such so as to be amenable to
cure without materially disadvantaging the position of the Administrative Agent
and the Lenders, as secured parties thereunder, the applicable Credit Party
shall have failed to cure such invalidity within 15 days after notice from the
Administrative Agent or such shorter time period as specified by the
Administrative Agent in such notice and is reasonable in the circumstances); or
(k) A Change of Control shall occur; or
(l) Any Subordinated Indebtedness or any guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiaries which are Guarantors under the Guarantee and
Collateral Agreement, as the case may be, as provided in the applicable
agreements evidencing, governing or otherwise related to such Subordinated
Indebtedness, or any Credit Party, or any Affiliate of any Credit Party, shall
so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon), the maximum amount available to be
drawn under all outstanding Letters of Credit and all other amounts owing under
this Agreement and any Notes shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon), the maximum amount available to be drawn under all outstanding Letters
of Credit and all other amounts owing under this Agreement and any Notes to be
due and payable forthwith, whereupon the same shall immediately become due and
payable. All payments under this Article 9 on account of undrawn Letters of
Credit shall be made by the Borrower directly to a cash collateral account
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established for such purpose for application to the Borrower's obligations with
respect thereto as drafts are presented under the Letters of Credit. Any
remaining amounts paid by the Borrower in respect of such undrawn Letters of
Credit shall be returned to the Borrower after the last expiry date of the
Letters of Credit and after the Obligations have been paid in full. Except as
expressly provided above in this Article 9, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
ARTICLE 10
THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates and
appoints JPMCB as the Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes JPMCB,
as the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan 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 Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent 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 Loan Document or
otherwise exist against the Administrative Agent. 10.2 Delegation of Duties. The
Administrative Agent may execute any of its duties under this Agreement and the
other Loan 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 Administrative Agent nor any
Joint Lead Arranger nor any of their respective officers, directors, controlling
persons, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable
for any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement or any other Loan Document (except for its
or such Person's own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Notes or any other Loan
Document or for any failure of any Credit Party to perform its obligations
hereunder or thereunder. Neither the Administrative Agent nor any Joint Lead
Arranger shall 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, any Notes or any other Loan Document, or to
inspect the properties, books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative Agent and
the Joint Lead Arrangers shall be entitled to rely, and shall be fully protected
in relying, upon any Note, 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
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Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note 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. Each of the Administrative Agent and each Joint Lead
Arranger shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each of the Administrative Agent and each
Joint Lead Arranger shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and any Notes and the other Loan
Documents in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
10.5 Notice of Default. Neither the Administrative Agent nor the
Joint Lead Arrangers shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written 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 Required 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.
10.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any
Joint Lead Arranger nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent or any Joint Lead
Arranger heretofore or hereinafter taken, including any review of the affairs of
any Credit Party, shall be deemed to constitute any representation or warranty
by the Administrative Agent or any Joint Lead Arranger to any Lender. Each
Lender represents to the Administrative Agent and the Joint Lead Arrangers that
it has, independently and without reliance upon the Administrative Agent, any
Joint Lead Arranger 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 has, and will, independently and without reliance upon the
Administrative Agent, any Joint Lead Arranger or any other Lender, and based on
such documents and information as it shall deem appropriate at the time, has
made, and will continue to make, its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the other Loan
Documents, and has made, and will continue 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 Administrative Agent hereunder, the Administrative Agent and
the Joint Lead Arrangers have not had, and shall not have, any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Credit Parties which may come
into the possession of the Administrative Agent, any Joint Lead Arranger or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
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10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and each Joint Lead Arranger in its
respective 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 Commitment Percentages in effect on the date on which
indemnification is sought under this Section 10.7, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which 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 Administrative Agent or any
Joint Lead Arranger in any way relating to or arising out of this Agreement, any
of the other Loan 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 Administrative Agent or any Joint Lead Arranger
under or in connection with any of the foregoing; provided that no Lender shall
be liable to the Administrative Agent or any Joint Lead Arranger for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or such Joint Lead Arranger's, as the case may be, gross
negligence or willful misconduct or, in the case of indemnified liabilities
arising under this Agreement, any Notes and the other Loan Documents, from
material breach by the Administrative Agent or such Joint Lead Arranger, as the
case may be, of this Agreement, any Notes or the other Loan Documents, as the
case may be. The agreements in this Section 10.7 shall survive the payment of
the Loans and all other amounts payable hereunder.
10.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Credit Parties as though
the Administrative Agent was not the Administrative Agent hereunder and under
the other Loan Documents. With respect to their Loans made or renewed by it and
any Note issued to it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
10.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower (which approval shall not be unreasonably withheld),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean 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
holders of the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 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 Loan Documents.
10.10 Additional Ministerial Powers of Administrative Agent. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
release any Lien covering any asset of Holdings or any of its Subsidiaries
(including, without limitation, any Properties, Accounts Receivable or
inventory) that is the subject of a disposition, sale or assignment which is
permitted under this Agreement or, subject to Section 12.1, which has been
consented to by the Required Lenders.
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ARTICLE 11
GUARANTEE
11.1 Guarantee. To induce the Lenders to execute and deliver this
Agreement to make Loans and to issue and participate in Letters of Credit for
the account of the Borrower, and in consideration thereof, Holdings hereby
unconditionally and irrevocably guarantees to the Administrative Agent, the
Lenders and their successors, indorsees, transferees and assigns the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and Holdings further agrees to
pay the expenses which may be paid or incurred by the Administrative Agent or
the Lenders in collecting any or all of the Obligations and/or enforcing any
rights under this Article 11 or under the Obligations in accordance with Section
12.5. The guarantee contained in this Article 11 shall remain in full force and
effect until the Obligations are paid in full and the Commitments are
terminated, notwithstanding that from time to time prior thereto the Borrower
may be free from any Obligations.
11.2 Waiver of Subrogation. Notwithstanding any payment or payments
made by Holdings in respect of the Obligations or any set-off or application of
funds of Holdings by the Administrative Agent or the Lenders, until payment in
full of the Obligations and the termination of the Commitments and the Letters
of Credit, Holdings shall not be entitled to be subrogated to any of the rights
of the Administrative Agent or the Lenders against the Borrower or any
collateral security or guarantee or right of offset held by the Administrative
Agent or the Lenders for the payment of the Obligations, nor shall Holdings seek
any reimbursement from the Borrower in respect of payments made by Holdings
hereunder until the Obligations are paid in full.
11.3 Modification of Obligations. Holdings hereby consents that,
without the necessity of any reservation of rights against Holdings and without
notice to or further assent by Holdings, any demand for payment of the
Obligations made by the Administrative Agent, the Issuing Lender or the Lenders
may be rescinded by the Administrative Agent, the Issuing Lender or the Lenders
and the Obligations continued, and the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent, the
Issuing Lender or the Lenders and that this Agreement, any Notes and the other
Loan Documents, including, without limitation, any Letter of Credit Application,
any collateral security document or other guarantee or document in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent, the Issuing Lender or the Lenders may deem
advisable from time to time, and, to the extent permitted by applicable law, any
collateral security or guarantee or right of offset at any time held by the
Administrative Agent, the Issuing Lender or the Lenders for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released, all without
the necessity of any reservation of rights against Holdings and without notice
to or further assent by Holdings which will remain bound hereunder
notwithstanding any such renewal, extension, modification, acceleration,
compromise, amendment, supplement, termination, sale, exchange, waiver,
surrender or release. The Administrative Agent, the Issuing Lender and the
Lenders shall not have any obligation to protect, secure, perfect or insure any
collateral security document or property subject thereto at any time held as
security for the Obligations. When making any demand hereunder against Holdings,
the Administrative Agent, the Issuing Lender or the Lenders may, but shall be
under no obligation to, make a similar demand on any other party or any other
guarantor, and any failure by the Administrative Agent, the Issuing Lender or
the Lenders to make any such demand or to collect any payments from the Borrower
or any such other guarantor shall not relieve Holdings of its obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Administrative Agent, the
Issuing Lender or the Lenders against Holdings. For the purposes of this Section
"demand" shall include the commencement and continuance of any legal
proceedings.
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11.4 Waiver by Holdings. Holdings waives any and all notice of the
creation, renewal, extension or accrual of the Obligations and notice of or
proof of reliance by the Administrative Agent, the Issuing Lender and the
Lenders upon the guarantee contained in this Article 11 or acceptance of the
guarantee contained in this Article 11, and the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted, continued or
incurred in reliance upon the guarantee contained in this Article 11, and all
dealings between Holdings and the Administrative Agent, the Issuing Lender or
the Lenders shall likewise be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Article 11.
Holdings waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or Holdings with respect to any
Obligations. This guarantee shall be construed as a continuing absolute and
unconditional guarantee of payment without regard to the validity, regularity or
enforceability of the Credit Agreement, any Note or any other Loan Document,
including, without limitation, any Letter of Credit Application or any
collateral security or guarantee therefor or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent, the
Issuing Lender or the Lenders and without regard to any defense, set-off or
counterclaim which may at any time be available to or be asserted by the
Borrower against the Administrative Agent, the Issuing Lender, the Lenders or
any other Person, or by any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or Holdings) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower for
any of its Obligations, or of Holdings under the guarantee contained in this
Article 11 in bankruptcy or in any other instance, and the obligations and
liabilities of Holdings hereunder shall not be conditioned or contingent upon
the pursuit by the Administrative Agent, the Issuing Lender or the Lenders or
any other Person at any time of any right or remedy against the Borrower or
against any other Person which may be or become liable in respect of any
Obligations or against any collateral security or guarantee therefor or right of
offset with respect thereto. The guarantee contained in this Article 11 shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon Holdings and the successors and assigns thereof, and
shall inure to the benefit of the Lenders and their successors, indorsees,
transferees and assigns, until the Obligations shall have been paid in full and
the Commitments shall be terminated, notwithstanding that from time to time
during the term of this Agreement the Borrower may be free from any Obligations.
11.5 Reinstatement. The guarantee contained in this Article 11 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligations is rescinded or must otherwise
be restored or returned by the Administrative Agent, the Issuing Lender or the
Lenders upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Holdings or the Borrower or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, Holdings, the Borrower or any substantial part of their respective
property, or otherwise, all as though such payments had not been made.
11.6 Negative Covenants(a) .
(a) Until the Obligations shall have been paid in full, the Letters
of Credit shall have expired or been terminated and the Commitments shall have
been terminated, Holdings hereby agrees that it shall not:
(i) assume or otherwise incur or suffer to exist any Indebtedness
(other than Indebtedness in the nature of Indebtedness specified in
Sections 8.2(a), 8.2(d) and 8.2 (j) and the Holdings Financing (and
any Permitted Refinancing of such Holdings Financing) or Guarantee
Obligation (other than (A) the Guarantee Obligations of Holdings
pursuant hereto and pursuant to the Guarantee and Security Agreement,
(B) Guarantee Obligations in the nature of the Guarantee Obligations
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specified in Sections 8.4(d), 8.4(e) and 8.4(f), (C) Guarantee
Obligations (1) of Holdings in respect of real property leases and/or
personal property operating leases of the Borrower and its
Subsidiaries in ordinary course of business, (2) in respect of an
equipment lease entered into by a Customer Partnership not in excess
of $300,000, but in any event not in excess of an aggregate amount of
$5,000,000 at any one time outstanding and (3) in respect of the
Bridge Financing and any Permitted Refinancing thereof, or (D)
indemnities in favor of officers, directors and employees of Holdings
in the ordinary course of business and in connection with the
ownership of the Borrower's capital stock);
(ii) create, incur, assume or suffer to exist any Lien upon any
of its assets (other than pursuant to the Security Documents and other
than Liens in the nature of the Liens specified in Section 8.3(b), (d)
or (e));
(iii) cease to own, directly or indirectly, 100% of the Capital
Stock of the Borrower;
(iv) amend its certificate of incorporation or by-laws or any of
the Loan Documents to which it is a party unless such amendment does
not adversely affect the interests of any Lender in any material
respect;
(v) engage in any activities other than (A) owning the stock of
the Borrower, (B) its activities incident to the performance of (x)
the Loan Documents and (y) the issuance and/or sale of its common
stock or options or warrants in respect of its Capital Stock, (C)
transactions pursuant to or in connection with the Transactions and
(D) activities contemplated by this Article 11;
(vi) make any Restricted Payment except as permitted by Sections
8.7(a)(i), 8.7(a)(v), 8.7(c) and 8.7(d);
(vii) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any
of the terms of the (A) Holdings Financing or any Permitted
Refinancing thereof, or any guarantee thereof or (B) the Holdings
Bridge Loan Agreement, any document governing the Permitted
Refinancing of the Holdings Financing or any other agreement governing
or otherwise related to the Holdings Financing or any Permitted
Refinancing thereof, or any guarantee thereof; or
(viii) designate any Indebtedness of Holdings (other than
Holdings' obligations under the Loan Documents, Holdings' guarantee
obligations under the Bridge Facility and the Holdings Financing and
any Permitted Refinancing thereof) as Indebtedness senior in right to
any or all subordinated Indebtedness of Holdings now or hereafter
existing.
(b) Holdings will cause all business arising after the Closing Date
(other than business existing on the Closing Date which it is not able to
transfer to the Borrower because of applicable Contractual Obligations) to be
conducted through the Borrower and its Subsidiaries.
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ARTICLE 12
MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement, any Note, any
other Loan Document nor any terms hereof or thereof may be waived, amended,
supplemented or otherwise modified except in accordance with the provisions of
this Section 12.1. 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 applicable Credit Parties written amendments, supplements or
modifications hereto and to any Notes and the other Loan Documents for the
purpose of adding any provisions to this Agreement or any Notes or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Borrower or Holdings or any other Person 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 any Notes or the other Loan Documents or any
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) reduce the aggregate
amount or extend the scheduled date of maturity of any Loan or of any
installment thereof or any L/C Obligation reimbursement obligation in respect of
any Letter of Credit, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
aggregate amount or extend the expiration date of any Lender's Commitment, in
each case without the consent of each Lender affected thereby, (ii) amend,
modify or waive any provision of this Section 12.1 or reduce the percentage
specified in the definition of Required Lenders or consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or substantially all of
the Collateral or release the Guarantee Obligations of Holdings under this
Agreement or the Guarantee Obligations of any other guarantors under the
Guarantee and Collateral Agreement, in each case, without the written consent of
all the Lenders, (iii) [intentionally omitted], (iv) amend, modify or waive any
provision of Article 10 without the written consent of the Administrative Agent,
(v) amend, modify or waive the provisions of Article 3 or any Letter of Credit
without the written consent of the applicable Issuing Lender or (vi) amend,
modify or waive any provision of any Security Document that provides for the
ratable sharing by the Lenders of the proceeds of any realization on the
security for the Loans to provide for a non-ratable sharing thereof, without the
written consent of each Lender adversely affected thereby. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and under the outstanding Loans
and the other Loan Documents, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
12.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or two 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 the Borrower, Holdings, the
Administrative Agent, the Issuing Lender and the Lenders, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Loans or any Notes:
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(a) if to the Borrower: Activant Solutions Inc.
000 Xxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxxxxxxxx Xxxxxx and
Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
with copies to: Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
(b) if to the Administrative JPMorgan Chase Bank, N.A.
Agent or the 1111 Xxxxxx, 10th Floor
Issuing Lender: Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
with a copies to: JPMorgan Chase Bank, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: 000-000-0000
(c) if to any Lender, to it at its address (or telecopy number) set
forth in the Administrative Questionnaire;
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.3, 2.5, 2.8, 2.10, 2.11, 3.2 or 4.4 shall
not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Articles 2 and 3 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent, the
Borrower or Holdings may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
12.3 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 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.
12.4 Survival of Representations and Warranties. All representations
and warranties made hereunder 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.
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12.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Joint Lead Arrangers for all of their
reasonable out-of-pocket costs and expenses incurred in connection with the
syndication of the Commitments and the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and any
Notes and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender, the Administrative Agent and the Joint Lead
Arrangers for all of their reasonable out-of-pocket costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, any Notes, the other Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent and, at any time after and during the continuance of
an Event of Default, of one counsel to all of the Lenders, (c) to pay,
indemnify, and hold each Lender, the Administrative Agent and each Joint Lead
Arranger harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise, documentary, property and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, any Notes, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender, the Agents and their respective officers, directors, employees, agents
and controlling persons and affiliates (each of the foregoing, an "indemnified
person") harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including, without limitation,
the reasonable fees and disbursements of counsel with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, any
Notes, the other Loan Documents, or the use of the proceeds of the Loans in
connection with the Transactions and any such other documents (all the foregoing
in this clause (d), collectively, the "indemnified liabilities"); provided that
the Borrower shall have no obligation hereunder to an indemnified person with
respect to indemnified liabilities that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such indemnified person, or, in the case of
indemnified liabilities arising under this Agreement, any Notes and the other
Loan Documents that are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from a material breach by such
indemnified person of this Agreement, any Notes or the other Loan Documents, as
the case may be. The agreements in this Section shall survive repayment of the
Loans and all other amounts payable hereunder.
12.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that 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 at any time sell to one or more banks, insurance
companies or other financial institutions ("Participants") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. 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 holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
79
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 Loan
Documents. No Lender shall permit any Participant to have the right to consent
to any amendment or waiver in respect of this Agreement or any of the other Loan
Documents, except that such Lender may grant such Participant the right to
consent to any amendment or waiver in respect of this Agreement or the other
Loan Documents that requires the consent of such Lender pursuant to the proviso
to the second sentence of Section 12.1. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of set-off
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any Note; 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 12.7(a) as fully as if it were a Lender hereunder. The Borrower also
agrees that each Participant shall be entitled to the benefits of Sections 4.5,
4.6 and 4.7 with respect to its participation in the Commitments and the Loans
and Letters of Credit outstanding from time to time as if it was a Lender;
provided that in the case of Section 4.6 or 4.7, such Participant shall have
complied with the requirements of such Section; provided, further, 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. In addition, each selling
Lender selling a participation to a Participant (i) shall keep a register,
meeting the requirements of Treasury Regulation Section 5f.103-1(c), of each
such Participant, specifying such Participant's entitlement to payments of
principal and interest with respect to such participation, and (ii) shall
collect, prior to the time such Participant receives payments with respect to
such participation, from each such Participant the appropriate forms,
certificates and statements described in Section 4.7 (and updated as required by
Section 4.7) as if such Participant were a Lender under Section 4.7.
(c) Any Lender may at any time and from time to time assign to any
Lender or any affiliate thereof and, with the consent of the Administrative
Agent, the Issuing Lenders and, so long as no Default or Event of Default
exists, the Borrower (each such consent of the Administrative Agent, the Issuing
Lenders and (if applicable) the Borrower not to be unreasonably withheld), to an
additional bank or financial or lending institution (an "Assignee") all or any
part of its rights and obligations under this Agreement and any Notes pursuant
to an Assignment and Acceptance, executed by such Assignee, such assigning
Lender, the Administrative Agent) and the Issuing Lender and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that (w) each such transfer (if such transfer relates to less than all of such
Lenders' rights and obligations under this Agreement and any Notes) shall be in
respect of a portion of its rights and obligations under this Agreement and any
Notes not less than $5,000,000 (or such other amount as may be agreed by both
the Borrower and the Administrative Agent) if such assignment is to a bank or
financial or lending institution or other entity that is not then a Lender or an
affiliate thereof, (x) such assigning Lender shall deliver to the Administrative
Agent or the Borrower any Note (if the assigning Lender's Loans are evidenced by
a Note) subject to such assignment, (y) the Assignee shall execute and deliver
to the Borrower and the Administrative Agent the appropriate forms, certificates
and statements described in Section 4.7 to satisfy the requirements of Section
4.7 and (z) no Assignee shall be entitled to receive, as of such date, any
greater amount pursuant to Sections 4.5, 4.6 and 4.7 than the assigning Lender
would have been entitled to receive, as of such date, in respect of the amount
of the assignment transferred by such assigning Lender to such Assignee had no
such transfer occurred. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the 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 Commitments as set forth therein, and (y)
the assigning Lender 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; provided that such assigning
Lender shall continue to have the benefit of Sections 4.5, 4.6, 4.7 and 12.5(a),
(b) and (c) (to the extent of rights accruing prior to the date of such
assignment only) and Section 12.5(d).
80
(d) The Administrative Agent, acting for this purpose as agent for
the Borrower, shall maintain at its address referred to in Section 12.2 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 and
the Issuing Lender and the Commitments of, and principal amount of the Loans,
L/C Obligation and amounts described in Sections 3.3, 3.4 and 3.5, owing to,
each Lender and the Issuing Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent, the Lenders, and the Issuing Lender shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender or the Issuing Lender, as the case may be, hereunder for all
purposes of this Agreement. No assignment or transfer of a Note and the
obligation(s) evidenced thereby shall be effective unless it has been recorded
in the Register as provided in this Section 12.6(d). 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.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Administrative Agent) together
with payment, by the Assignee, to the Administrative Agent of a registration and
processing fee of $4,000 if the Assignee is not a Lender or affiliate of a
Lender prior to the execution of the Assignment and Acceptance and $1,000
otherwise, 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. No assignment shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 12.6. On or prior to such effective date,
the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent (in exchange for any Note of the assigning Lender) a new
Note to the order of such Assignee in an amount equal to the Commitment assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment hereunder, a new Note to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Note replaced thereby.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all information in such Lender's possession concerning the Borrower and
its Affiliates which 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, under the condition such Transferee or prospective Transferee agrees
to comply with the provisions of Section 12.15.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
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(h) For purposes of this Section 12.6, with respect to each Letter of
Credit, (i) if such Letter of Credit is transferred, notice of such transfer
shall be given to the Administrative Agent for notation in the Register, (ii)
each such transfer may only be made upon notation of such transfer in the
Register, and (iii) no such transfer will be effective for purposes of this
Agreement unless it has been recorded in the Register.
12.7 Adjustments; Set-off.
(a) If any Lender (a "benefitted Lender") shall at any time receive
any payment of all or part of the Obligations owing to it 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(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such benefitted Lender shall purchase for cash from the other
Lenders an interest in such portion of the Obligations owing to each such other
Lender, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted 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
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) 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 or under any Notes (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 any such Lender or any branch or agency
of any such Lender 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.
12.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, 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.
12.9 Severability. Any provision of this Agreement which 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.
12.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Credit Parties, 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 the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
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12.11 GOVERNING LAW. THIS AGREEMENT AND ANY NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
12.12 Submission to Jurisdiction; Waivers. Each of the Credit Parties
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan 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 of America 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;
(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 the Credit Parties
at their respective addresses set forth in Section 12.2 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 xxx 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 12.12 any special, exemplary, punitive or consequential damages.
12.13 Acknowledgments. Each of the Credit Parties hereby acknowledge
that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and any Notes and the other Loan Documents;
(b) each of the Administrative Agent, each Joint Lead Arranger and
each Lender is acting solely pursuant to a contractual relationship on an arm's
length basis with respect to this Agreement (including in connection with
determining the terms of the Loans) and not as a financial advisor or a
fiduciary to any Credit Party or any other person. Additionally, each Credit
Party acknowledges that neither the Administrative Agent nor any Joint Lead
Arranger nor any Lender is advising any Credit Party or any other person as to
any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Credit Parties shall consult with their own advisors
concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions contemplated hereby,
and neither the Administrative Agent nor any Joint Lead Arranger nor any Lender
shall have any responsibility or liability to the Credit Parties with respect
thereto. The relationship between Administrative Agent and Lenders, on one hand,
and the Credit Parties, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor;
(c) no joint venture exists among the Lenders or among the Credit
Parties and the Lenders; and
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(d) the Credit Parties further acknowledge and agree that any review
by the Administrative Agent, any Joint Lead Arranger or any Lender of the Credit
Parties, this Agreement, the terms of the Loans and other matters relating
thereto will be performed solely for the benefit of the Administrative Agent,
the Joint Lead Arrangers and the Lenders and shall not be on behalf of any
Credit Party or any other Person.
12.14 WAIVERS OF JURY TRIAL. EACH CREDIT PARTY, THE ADMINISTRATIVE
AGENT, EACH JOINT LEAD ARRANGER AND EACH LENDER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
12.15 Confidentiality. Each Lender agrees to keep information
obtained by it pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and the other Loan Documents and not disclose any of such information other than
(a) to such Lender's employees, representatives, directors, attorneys, auditors,
agents or affiliates in connection with the transactions contemplated by this
Agreement and the other Loan Documents and who are advised of the confidential
nature of such information, (b) to the extent such information presently is or
hereafter becomes available to such Lender on a non-confidential basis from any
source or such information that is in the public domain at the time of
disclosure, (c) to the extent disclosure is required by law (including
applicable securities laws), regulation, subpoena or judicial order or process
(provided that notice of such requirement or order shall be promptly furnished
to the Borrower unless such notice is legally prohibited) or requested or
required by bank, securities or investment company regulations or auditors or
any administrative body or commission to whose jurisdiction such Lender may be
subject, (d) to assignees or participants or potential assignees or participants
or to professional advisors or direct or indirect contractual counterparties in
swap agreements provided in each case such Person agrees to be bound by the
provisions of this Section 12.15, (e) to the extent required in connection with
any litigation between any Credit Party and any Lender with respect to the Loans
or this Agreement and the other Loan Documents, (f) to rating agencies, their
employees, representatives, attorneys, agents or affiliates who are advised of
the confidential nature of such information and agree to be bound by provisions
of this Section 12.15, (g) to the National Association of Insurance
Commissioners and (h) with the Borrower's prior written consent. The agreements
in this Section shall survive repayment of the Loans and all other amounts
payable hereunder.
12.16 USA PATRIOT ACT. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (title III of Pub. L. 107-56
(signed into law on October 26, 2001)) (the "Patriot Act"), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the
Patriot Act.
12.17 Waiver. Each Lender hereby waives any Default or Event of
Default that may have occurred as a result of the Borrower's (a) failure to
comply with Section 7.14(c) of the Existing Credit Agreement and, with respect
to Activant Solutions Acquisitionco Ltd., Speedware USA Inc. and Speedware
Holdings, Inc, with Sections 7.10 and 7.11 of the Existing Credit Agreement, and
(b) failure to comply with Section 7.7(a) in respect of the foregoing in clause
(a) above in this Section 12.17.
[Remainder of page left intentionally blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ACTIVANT SOLUTIONS INC.
By /s/ Xxxx Xxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President and CFO
ACTIVANT SOLUTIONS HOLDINGS INC.,
By /s/ Xxxx Xxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President and CFO
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, a Lender
and Issuing Lender
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
X.X. XXXXXX SECURITIES INC.,
as Joint Lead Arranger and Bookrunner
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arranger and Bookrunner
By /s/ Xxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
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DEUTSCHE BANK TRUST COMPANY AMERICAS, as a
Lender
By /s/ Xxxx X'Xxxxx
--------------------------------------
Name: Xxxx X'Xxxxx
Title: Vice President
By /s/ Xxxxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxxxx Xxxxxx
Title: Director
86