Exhibit 10(r)
FIFTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
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FIFTH AMENDMENT dated as of July ___, 2002 (this "AMENDMENT")
to the LOAN AND SECURITY AGREEMENT dated as of July 17, 2001, as amended by the
First Amendment dated as of November 15, 2001, the Second Amendment dated as of
February 14, 2002, the Third Amendment dated as of May 13, 2002 and the Fourth
Amendment dated as of July 9, 2002 (the "LOAN AGREEMENT"), between and among, on
the one hand, the lenders identified on the signature pages thereof (such
lenders, together with their respective successors and assigns, are referred to
hereinafter each individually as a "LENDER" and collectively as the "LENDERS"),
FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders ("AGENT"), and, on the other hand,
FRONTSTEP, INC., an Ohio corporation ("PARENT"), and each of the Parent's
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as a
"BORROWER", and individually and collectively, jointly and severally, as
"BORROWERS").
WHEREAS, the Borrowers have requested the Agent to amend the
Loan Agreement to provide for, among other things, an extension of the
overadvance limit through and including August 15, 2002, and the Agent, on
behalf of the Lenders, has agreed to such request.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, agreements and conditions hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. CAPITALIZED TERMS. All capitalized terms used in this
Amendment (including, without limitation, in the recitals hereto) and not
otherwise defined shall have their respective meanings set forth in the Loan
Agreement.
2. DEFINITIONS IN THE LOAN AGREEMENT. Section 1.1 of the Loan
Agreement is hereby amended as follows:
(a) A definition of the term "Maximum Amount" is hereby
amended in its entirety to read as follows:
"'MAXIMUM AMOUNT' means $15,650,000, from July 15, 2002
to and including August 15, 2002."
(b) The definition of the term "Maximum Revolver Amount" is
hereby amended in its entirety to read as follows:
"'MAXIMUM REVOLVER AMOUNT' means (a) from January 1,
2002 to and including August 15, 2002, the applicable Overadvance
Amount, and (b) after August 15, 2002, $25,000,000 minus the Term Loan
A Amount."
(c) The definition of the term "Overadvance Amount" is hereby
amended in its entirety to read as follows:
"'OVERADVANCE AMOUNT' means (a) $1,000,000, from July
15, 2002 to and including August 15, 2002; and (b) $0.00, after August
15, 2002."
3. REVOLVER ADVANCES; MAXIMUM AMOUNT. (a) The first sentence
of Section 2.1(a) of the Loan Agreement is hereby amended by deleting the
reference to "July 15, 2002" set forth therein and inserting "August 15, 2002"
in lieu thereof.
(b) Paragraphs (f) and (g) of Section 2.1 of the Loan
Agreement are hereby amended by deleting each reference to "July 15, 2002" set
forth therein and inserting "August 15, 2002" in lieu thereof.
4. CONVERTIBLE LOANS. Section 7.1(i) of the Loan Agreement is
hereby amended in its entirety to read as follows:
"(i) the Convertible Loans, PROVIDED that (i) the
proceeds of such Convertible Loans are remitted by the makers of such
loans directly to the Agent and applied by the Agent to repay the
Advances then outstanding and (ii) unless otherwise consented to by
Agent, from July 15, 2002 to and including August 15, 2002, Parent
shall maintain at least $1,000,000 of unutilized borrowing availability
under the Securities Purchase Agreement (as referenced in the
definition of the term "Convertible Loans")."
5. CONDITIONS. This Amendment shall become effective only upon
satisfaction in full of the following conditions precedent (the first date upon
which all such conditions have been satisfied being herein called the "AMENDMENT
EFFECTIVE DATE"):
(a) REPRESENTATIONS AND WARRANTIES; NO EVENT OF DEFAULT.
The representations and warranties contained herein, in Section 5 of the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Agent and the Lenders pursuant hereto on or prior to the
Amendment Effective Date shall be correct in all material respects on and as of
the Amendment Effective Date as though made on and as of such date (except to
the extent that such representations and warranties expressly relate solely to
an earlier date in which case such representations and warranties shall be true
and correct on and as of such date), and no Default or Event of Default shall
have occurred and be continuing on the Amendment Effective Date or would result
from this Amendment becoming effective in accordance with its terms, unless any
such Event of Default has previously been waived in accordance with Section 15
of the Loan Agreement.
(b) DELIVERY OF DOCUMENTS. The Agent shall have received on
or before the Amendment Effective Date the following, each in form and substance
reasonably satisfactory to the Agent and, unless indicated otherwise, dated the
Amendment Effective Date:
(i) counterparts of this Amendment, duly executed by
the Borrowers and the Agent; and
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(ii) such other agreements, instruments, approvals,
opinions and other documents as the Agent may reasonably
request.
(c) AMENDMENT FEE. The Borrowers shall have paid to the
Agent, for the benefit of the Lenders, in immediately available funds, a fully
earned and nonrefundable amendment fee equal to $75,000, the payment of which
shall be effected by Agent charging such fee to Borrowers' Loan Account pursuant
to Section 2.6(d) of the Loan Agreement.
(d) PROCEEDINGS. All proceedings in connection with the
transactions contemplated by this Amendment, and all documents incidental
thereto, shall be reasonably satisfactory to the Agent and its special counsel,
and the Agent and such special counsel shall have received all such information
and such counterpart originals or certified copies of documents, and such other
agreements, instruments, approvals, opinions and other documents, as the Agent
or such special counsel may reasonably request.
6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers
represent and warrant as follows:
(a) Except as previously disclosed in writing to the Agent:
(i) the representations and warranties made by such Borrower herein, in the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Lenders on or prior to the Amendment Effective Date shall be
correct and accurate on and as of the Amendment Effective Date as though made on
and as of such date (except to the extent that such representations and
warranties expressly relate solely to an earlier date in which case such
representations and warranties shall be true and correct on and as of such
date); and (ii) no Default or Event of Default shall have occurred and be
continuing on the Amendment Effective Date or would result from this Amendment
becoming effective in accordance with its terms.
(b) Each of the Borrowers (i) is a corporation, duly
organized, validly existing and in good standing under the laws of its state of
organization, (ii) has all requisite power and authority to execute, deliver and
perform this Amendment, and to perform the Loan Agreement, as amended hereby,
and (iii) is duly qualified to do business and is in good standing in each
jurisdiction where the failure to be so qualified and in good standing
reasonably could be expected to have a Material Adverse Change.
(c) The execution, delivery and performance by each
Borrower of this Amendment, and the performance by each such Borrower of the
Loan Agreement, as amended hereby, (i) have been duly authorized by all
necessary action, (ii) do not and will not contravene such Borrower's charter or
by-laws, any applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any lien or other encumbrance (other than
pursuant to any Loan Documents) upon or with respect to any of its properties,
and (iv) do not and will not result in any suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to its operations or any of its properties.
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(d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or agency or other
regulatory body is required in connection with the due execution, delivery and
performance by such Borrower of this Amendment, or for the performance of the
Loan Agreement, as amended hereby.
(e) This Amendment, the Loan Agreement, as amended hereby,
and each other Loan Document to which such Borrower is a party is a legal, valid
and binding obligation of such Borrower, enforceable against such Borrower in
accordance with its terms, except as such enforceability may be limited by
equitable principles or by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally.
7. CONTINUED EFFECTIVENESS OF THE LOAN AGREEMENT. (a) Except
as otherwise expressly provided herein, the Loan Agreement and the other Loan
Documents are, and shall continue to be, in full force and effect and are hereby
ratified and confirmed in all respects, except that on and after the Amendment
Effective Date (i) all references in the Loan Agreement to "this Agreement",
"hereto", "hereof", "hereunder" or words of like import referring to the Loan
Agreement shall mean the Loan Agreement as amended by this Amendment and (ii)
all references in the other Loan Documents to the "Loan Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended by this Amendment.
(b) The Borrowers hereby acknowledge and agree that this
Amendment constitutes a "Loan Document" under the Loan Agreement. Accordingly,
it shall be an Event of Default under the Loan Agreement if any representation
or warranty made by the Borrowers under or in connection with this Amendment
shall have been untrue, false or misleading in any material respect when made.
8. COSTS AND EXPENSES. The Borrowers shall pay all reasonable
out-of-pocket costs and expenses of the Lender Group (including, without
limitation, the reasonable fees and charges of counsel to any member of the
Lender Group) in connection with this Amendment.
9. MISCELLANEOUS. (a) This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Amendment by telefacsimile shall be equally as effective as delivery of
an original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
(b) Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
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(c) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York except to the extent governed
by the Bankruptcy Code.
10. THE BORROWERS, LENDERS AND THE AGENT EACH HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AMENDMENT OR THE ACTIONS OF THE LENDER GROUP IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
FRONTSTEP, INC.
an Ohio corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Chief Financial
Officer
FRONTSTEP SOLUTIONS GROUP, INC.
an Ohio corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Chief Financial
Officer
FRONTSTEP CANADA, INC.
an Ontario corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Chief Financial
Officer
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By: /s/ Xxxxx X. Smart
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Name: Xxxxx X. Smart
Title: Vice President
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