AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of September
16, 2011 (the “Effective Date”) by and among SILICON VALLEY BANK, a California corporation (“SVB”),
as collateral agent (the “Collateral Agent”) for the Lenders and administrative agent (the
“Administrative Agent”) for the Lenders (Collateral Agent and Administrative Agent are collectively
the “Agent”), and the Lenders listed on Schedule 1.1 and otherwise party hereto, including, without
limitation, SVB and JPMORGAN CHASE BANK, N.A. (“JPMorgan”) (SVB and JPMorgan are, collectively, the
“Joint Bookrunners”) and GAIN CAPITAL HOLDINGS, INC., a Delaware corporation (“Borrower”), provides
the terms on which Lenders shall lend to Borrower and Borrower shall repay Lenders. This Agreement
amends and restates, in its entirety, the terms of that certain Loan and Security Agreement among
Borrower and Lenders dated as of March 29, 2006, as amended from time to time (the “Original Loan
Agreement”). The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in Section 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the
Code to the extent such terms are defined therein.
2 LOAN AND TERMS OF PAYMENT
2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Lenders the outstanding
principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due
in accordance with this Agreement.
2.1.1 Term Loan.
(a) Availability. Lenders, jointly and not severally and according to the respective
Commitment Percentage of each Lender, have previously made a term loan to Borrower in an amount
equal to the Term Loan Amount (the “Term Loan”), which Borrower has been repaying pursuant to the
terms of the Original Loan Agreement. As of the Effective Date, the outstanding principal balance
of the Term Loan is Ten Million Five Hundred Thousand Dollars ($10,500,000.00). Borrower
acknowledges that there is no further availability or borrowings permitted with respect to the Term
Loan.
(b) Repayment. Borrower shall continue to repay the Term Loan pursuant to the terms
set forth in the Original Loan Agreement which, as of the Effective Date, shall require Borrower to
pay (i) monthly payments of interest on the first calendar day of each month at the rate set forth
in Section 2.3(b)(i) and (ii) twenty (20) equal quarterly installments of principal, which
previously commenced on October 1, 2007 and which continue on the first calendar day of each
calendar quarter thereafter (each, a “Term Loan Payment”). Borrower’s final Term Loan Payment, due
on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid
interest under the Term Loan. Without limiting any fees or amounts to be paid by Borrower upon a
prepayment as contemplated hereunder (if any), Borrower may, by giving at least five (5) Business
Days’ notice to Agent, prepay the Term Loan in whole or in part (any such partial prepayment being
applied to the installments of the Term Loan in the inverse order of maturity thereof).
2.1.2 Revolving Advances.
(a) Availability. Subject to the terms and conditions of this Agreement, Lenders
shall make Advances not exceeding the Availability Amount, up to and in accordance with each
Lender’s pro rata share of the Revolving Line (based upon the respective Commitment Percentage of
each Lender). Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving
Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.
(b) Intentionally omitted.
(c) Termination; Repayment. The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all
other Obligations relating to the Revolving Line shall be immediately due and payable.
2.2 General Provisions Relating to the Credit Extensions. Each Credit Extension shall, at
Borrower’s option in accordance with the terms of this Agreement, be either in the form of a Prime
Rate Credit Extension or a LIBOR Credit Extension. Borrower shall pay interest accrued on the
Credit Extensions at the rates and in the manner set forth in Section 2.3.
2.3 Payment of Interest on the Credit Extensions.
(a) Computation of Interest. Interest on the Credit Extensions and all fees payable
hereunder shall be computed on the basis of a 360-day year and the actual number of days elapsed in
the period during which such interest accrues. In computing interest on any Credit Extension, the
date of the making of such Credit Extension shall be included and the date of payment shall be
excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is
made, such day shall be included in computing interest on such Credit Extension.
(b) Interest Rate.
(i) Term Loan. Subject to Section 2.3(c), the principal amount
outstanding under the Term Loan shall accrue interest at a floating per annum rate
equal to the Prime Rate plus the Prime Rate Margin or the LIBOR Rate plus the LIBOR
Rate Margin, as the case may be.
(ii) Advances. Subject to Section 2.3(c), the principal amount
outstanding under the Revolving Line shall accrue interest at a floating per annum
rate equal to the Prime Rate plus the Prime Rate Margin or the LIBOR Rate plus the
LIBOR Rate Margin, as the case may be.
(iii) General Provisions. On and after the expiration of any Interest
Period applicable to any LIBOR Credit Extension outstanding on the date of
occurrence of an Event of Default or acceleration of the Obligations, the Effective
Amount of such LIBOR Credit Extension shall, during the continuance of such Event of
Default or after acceleration, bear interest at a rate per annum equal to the
Default Rate (as defined below). Pursuant to the terms hereof, interest on each
Credit Extension shall be paid in arrears on each Interest Payment Date. Interest
shall also be paid on the date of any prepayment of any Credit Extension pursuant to
this Agreement for the portion of any Credit Extension (so prepaid and upon payment
(including prepayment) in full thereof.
(c) Default Rate. Except as otherwise provided in Section 2.3(b), after an Event of
Default, Obligations shall bear interest three and one-half of one percent (3.50%) above the Prime
Rate (the “Default Rate”). Payment or acceptance of the increased interest provided in this
Section 2.3(c) is not a permitted alternative to timely payment and shall not constitute a waiver
of any Event of Default or otherwise prejudice or limit any rights or remedies of Agent or Lenders.
(d) Prime Rate Credit Extensions. Each change in the interest rate of the Prime Rate
Credit Extensions based on changes in the Prime Rate shall be effective on the effective date of
such change and to the extent of such change. Agent shall use its best efforts to give Borrower
prompt notice of any such change in the Prime Rate; provided, however, that any failure by Agent to
provide Borrower with notice hereunder shall not affect Agent’s right to make changes in the
interest rate of the Prime Rate Credit Extensions based on changes in the Prime Rate.
(e) LIBOR Credit Extensions. The interest rate applicable to each LIBOR Credit
Extension shall be determined in accordance with Section 3.6(a) hereunder. Subject to Sections 3.6
and 3.7, such rate shall apply during the entire Interest Period applicable to such LIBOR Credit
Extension, and interest calculated thereon shall be payable on the Interest Payment Date applicable
to such LIBOR Credit Extension.
(f) Debit of Accounts. Agent may debit any of Borrower’s deposit accounts, including
the Designated Deposit Account, for principal and interest payments when due, or any other amounts
Borrower owes Lenders, when due. These debits shall not constitute a set-off.
(g) Payments. Unless otherwise provided, interest is payable on the Interest Payment
Date.
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2.4 Fees. Borrower shall pay to Agent:
(a) Commitment Fee. A fully earned, non-refundable commitment fee of One Hundred
Fifty Thousand Dollars ($150,000.00) (to be shared between Lenders pursuant to their respective
Commitment Percentages), on the Effective Date;
(b) Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line Facility
Fee”), payable quarterly on the first calendar day of each quarter, in arrears, on a calendar year
basis, in an amount equal to three-tenths of one percent (0.30%) per annum of the average unused
portion of the Revolving Line, as determined by Agent. The unused portion of the Revolving Line,
for purposes of this calculation, shall equal the difference between (i) the Revolving Line and
(ii) the average for the period of the daily closing balance of the Advances outstanding. Borrower
shall not be entitled to any credit, rebate or repayment of any Unused Revolving Line Facility Fee
previously earned by Lenders pursuant to this Section 2.4(b) notwithstanding any termination of
this Agreement or the suspension or termination of Lenders’ obligation to make loans and advances
hereunder. Notwithstanding the foregoing, the Unused Revolving Line Facility Fee shall be Zero
Dollars ($0.00) for any quarter during which Borrower and/or its Subsidiaries maintained at all
times during such quarter at least (A) Twenty Million Dollars ($20,000,000.00) in a non-interest
bearing account or accounts with SVB and (B) Twenty Million Dollars ($20,000,000.00) in a
non-interest bearing account or accounts with JPMorgan; and
(c) Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’ fees
and expenses, plus expenses, for documentation and negotiation of this Agreement) incurred through
and after the Effective Date, when due.
2.5 Payments. All payments (including prepayments) to be made by Borrower under any Loan
Document shall be made in immediately available funds in U.S. Dollars, without setoff or
counterclaim, before 12:00 p.m. Eastern time on the date when due. Payments of principal and/or
interest received after 12:00 p.m. Eastern time are considered received at the opening of business
on the next Business Day. When a payment is due on a day that is not a Business Day, the payment
shall be due the next Business Day, and additional fees or interest, as applicable, shall continue
to accrue until paid.
3 CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension. The Lenders’ obligation to make the
initial Credit Extension is subject to the condition precedent that Agent shall have received, in
form and substance satisfactory to Agent, such documents, and completion of such other matters, as
Agent may reasonably deem necessary or appropriate, including, without limitation:
(a) duly executed original signatures to the Loan Documents;
(b) duly executed original signatures by each Lender to each Loan Document to which it is a
party;
(c) Borrower and Gain Holdings, LLC shall have delivered their Operating Documents and long
form good standing certificates certified by the Secretary of State of the State of Delaware as of
a date no earlier than thirty (30) days prior to the Effective Date;
(d) a duly executed Amended and Restated Intercreditor Agreement by and between JPMorgan and
Agent;
(e) duly executed original signature to the First Amendment to Guaranty of Gain Holdings, LLC;
(f) Secretary’s Certificate with completed Borrowing Resolutions for Borrower;
(g) consent of the members and managers of Gain Holdings, LLC;
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(h) Agent shall have received certified copies, dated as of a recent date, of financing
statement searches, as Agent shall request, accompanied by written evidence (including any UCC
termination statements) that the Liens indicated in any such financing statements either constitute
Permitted Liens or have been or, in connection with the initial Credit Extension, will be
terminated or released, together with any other searches that either Lender may require;
(i) Borrower shall have delivered a legal opinion of Borrower’s and Guarantor’s counsel dated
as of the Effective Date together with the duly executed original signatures thereto; and
(j) Borrower shall have paid the fees and Lenders’ Expenses then due as specified in Section
2.4 hereof.
3.2 Conditions Precedent to all Credit Extensions. The obligations of Lenders to make each
Credit Extension, including the initial Credit Extension, is subject to the following:
(a) timely receipt of a Notice of Borrowing and Payment/Advance Form by each Lender;
(b) the representations and warranties in Section 5 shall be true in all material respects on
the date of the Payment/Advance Form and/or Notice of Borrowing and on the Funding Date of each
Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date, and no
Default or Event of Default shall have occurred and be continuing or result from the Credit
Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the
representations and warranties in Section 5 remain true in all material respects; provided,
however, that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the
text thereof; and provided, further that those representations and warranties expressly
referring to a specific date shall be true, accurate and complete in all material respects as of
such date; and
(c) there has not been any material impairment in the general affairs, management, results of
operation, financial condition or the prospect of repayment of the Obligations, in each case with
respect to Borrower and/or any Guarantor.
3.3 Covenant to Deliver.
Borrower agrees to deliver to Agent each item required to be delivered to Agent under this
Agreement as a condition to any Credit Extension. Borrower expressly agrees that the extension of
a Credit Extension prior to the receipt by Agent of any such item shall not constitute a waiver by
Agent of Borrower’s obligation to deliver such item, and any such extension in the absence of a
required item shall be in Agent’s sole discretion.
3.4 Procedure for the Borrowing of Credit Extensions.
(a) Subject to the prior satisfaction of all other applicable conditions to the making of a
Credit Extension set forth in this Agreement, each Credit Extension shall be made upon Borrower’s
irrevocable written notice delivered to Agent in the form of a Notice of Borrowing, each executed
by a Responsible Officer of Borrower or his or her designee or without instructions if the Credit
Extensions are necessary to meet Obligations which have become due. Agent may rely on any
telephone notice given by a person whom Agent believes is a Responsible Officer or designee.
Borrower will indemnify Lenders for any loss Lenders suffer due to such reliance by Agent. Such
Notice of Borrowing must be received by Agent prior to 11:00 a.m. Eastern time, (i) at least three
(3) Business Days prior to the requested Funding Date, in the case of LIBOR Credit Extensions, and
(ii) at least one (1) Business Day prior to the requested Funding Date, in the case of Prime Rate
Credit Extensions, specifying:
(i) the amount of the Credit Extension, which, if a LIBOR Credit Extension is requested, shall
be in an aggregate minimum principal amount of One Million Dollars ($1,000,000.00) or in any
integral multiple of One Million Dollars ($1,000,000.00) in excess thereof;
(ii) the requested Funding Date; and
(iii) whether the Credit Extension is to be comprised of LIBOR Credit Extensions or Prime Rate
Credit Extensions.
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(b) The proceeds of all such Credit Extensions will then be made available to Borrower on the
Funding Date by Lenders by transfer to the Designated Deposit Account and, subsequently, by wire
transfer to such other account as Borrower may instruct in the Notice of Borrowing. No Credit
Extensions shall be deemed made to Borrower, and no interest shall accrue on any such Credit
Extension, until the related funds have been deposited in the Designated Deposit Account.
3.5 Conversion and Continuation Elections.
(a) So long as (i) no Event of Default or Default exists; (ii) Borrower shall not have sent
any notice of termination of this Agreement; and (iii) Borrower shall have complied with such
customary procedures as Lenders have established from time to time for Borrower’s requests for
LIBOR Credit Extensions, Borrower may, upon irrevocable written notice to Agent:
(i) elect to convert on any Business Day, Prime Rate Credit Extensions in an amount equal to
One Million Dollars ($1,000,000.00) or any integral multiple of One Million Dollars ($1,000,000.00)
in excess thereof into LIBOR Credit Extensions;
(ii) elect to continue on any Interest Payment Date any LIBOR Credit Extensions maturing on
such Interest Payment Date (or any part thereof in an amount equal to One Million Dollars
($1,000,000.00) or any integral multiple of One Million Dollars ($1,000,000.00) in excess thereof);
provided, that if the aggregate amount of LIBOR Credit Extensions shall have been reduced, by
payment, prepayment, or conversion of part thereof, to be less than One Million Dollars
($1,000,000.00), such LIBOR Credit Extensions shall automatically convert into Prime Rate Credit
Extensions, and on and after such date the right of Borrower to continue such Credit Extensions as,
and convert such Credit Extensions into, LIBOR Credit Extensions shall terminate; or
(iii) elect to convert on any Interest Payment Date any LIBOR Credit Extensions maturing on
such Interest Payment Date (or any part thereof in an amount equal to One Million Dollars
($1,000,000.00) or any integral multiple of One Million Dollars ($1,000,000.00) in excess thereof)
into Prime Rate Credit Extensions.
(b) Borrower shall deliver a Notice of Conversion/Continuation in accordance with Section 10
to be received by Agent prior to 11:00 a.m. Eastern time at least (i) three (3) Business Days in
advance of the Conversion Date or Continuation Date, if any Credit Extensions are to be converted
into or continued as LIBOR Credit Extensions; and (ii) one (1) Business Day in advance of the
Conversion Date, if any Credit Extensions are to be converted into Prime Rate Credit Extensions, in
each case specifying the:
(i) proposed Conversion Date or Continuation Date;
(ii) aggregate amount of the Credit Extensions to be converted or continued which, if any
Credit Extensions are to be converted into or continued as LIBOR Credit Extensions, shall be in an
aggregate minimum principal amount of One Million Dollars ($1,000,000.00) or in any integral
multiple of One Million Dollars ($1,000,000.00) in excess thereof; and
(iii) nature of the proposed conversion or continuation.
(c) If upon the expiration of any Interest Period applicable to any LIBOR Credit Extensions,
Borrower shall have failed to timely select a new Interest Period to be applicable to such LIBOR
Credit Extensions, Borrower shall be deemed to have elected to convert such LIBOR Credit Extensions
into Prime Rate Credit Extensions.
(d) Any LIBOR Credit Extensions shall, at Agent’s option, convert into Prime Rate Credit
Extensions in the event that (i) an Event of Default or Default shall exist, or (ii) the aggregate
principal amount of the Prime Rate Credit Extensions which have been previously converted to LIBOR
Credit Extensions, or the aggregate principal amount of existing LIBOR Credit Extensions continued,
as the case may be, at the beginning of an Interest Period shall at any time during such Interest
Period exceed (A) the Term Loan Amount with respect to Credit Extensions made pursuant to Section
2.1.1, or (B) the Revolving Line with respect to Credit Extensions made pursuant to Section 2.1.2.
Borrower agrees to pay Agent, upon demand by Agent (or Agent or Lenders may, at their option,
charge the Designated Deposit Account or any other account Borrower maintains with Lenders) any
amounts required to compensate Agent and Lenders for any loss (including loss of anticipated
profits), cost, or expense incurred by Agent or Lenders, as a result of the conversion of LIBOR
Credit Extensions to Prime Rate Credit Extensions pursuant to any of the foregoing.
(e) Notwithstanding anything to the contrary contained herein, Lenders shall not be required
to purchase United States Dollar deposits in the London interbank market or other applicable LIBOR
market to fund any LIBOR Credit Extensions, but the provisions hereof
shall be deemed to apply as if Lenders had purchased such deposits to fund the LIBOR Credit
Extensions.
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3.6 Special Provisions Governing LIBOR Credit Extensions.
Notwithstanding any other provision of this Agreement to the contrary, the following
provisions shall govern with respect to LIBOR Credit Extensions as to the matters covered:
(a) Determination of Applicable Interest Rate. As soon as practicable on each
Interest Rate Determination Date, Agent shall determine (which determination shall, absent manifest
error in calculation, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the LIBOR Credit Extensions for which an interest rate is then being determined for
the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Borrower.
(b) Inability to Determine Applicable Interest Rate. In the event that Agent shall
have determined (which determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any LIBOR Credit Extension, that
by reason of circumstances affecting the London interbank market adequate and fair means do not
exist for ascertaining the interest rate applicable to such Credit Extension on the basis provided
for in the definition of LIBOR, Agent shall on such date give notice (by facsimile or by telephone
confirmed in writing) to Borrower of such determination, whereupon (i) no Credit Extensions may be
made as, or converted to, LIBOR Credit Extensions until such time as Agent notifies Borrower that
the circumstances giving rise to such notice no longer exist, and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrower with respect to Credit Extensions in respect of
which such determination was made shall be deemed to be rescinded by Borrower.
(c) Compensation for Breakage or Non-Commencement of Interest Periods. Borrower shall
compensate Agent and Lenders, upon written request by Agent and/or Lenders (which request shall set
forth the manner and method of computing such compensation), for all reasonable losses, expenses
and liabilities, if any (including any interest paid by Agent and/or Lenders to lenders of funds
borrowed by it to make or carry its LIBOR Credit Extensions and any loss, expense or liability
incurred by Agent and/or Lenders in connection with the liquidation or re-employment of such funds)
such that Agent and/or Lenders may incur: (i) if for any reason (other than a default by Agent
and/or Lenders or due to any failure of Lenders to fund LIBOR Credit Extensions due to
impracticability or illegality under Sections 3.7(d) and 3.7(e)) a borrowing or a conversion to or
continuation of any LIBOR Credit Extension does not occur on a date specified in a Notice of
Borrowing or a Notice of Conversion/Continuation, as the case may be, or (ii) if any conversion of
any of its LIBOR Credit Extensions to Prime Rate Credit Extensions occurs on a date prior to the
last day of an Interest Period applicable to that Credit Extension.
(d) Assumptions Concerning Funding of LIBOR Credit Extensions. Calculation of all
amounts payable to Lenders under this Section 3.6 and under Section 3.4 shall be made as though
Lenders had actually funded each of its relevant LIBOR Credit Extensions through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to the definition of LIBOR Rate
in an amount equal to the amount of such LIBOR Credit Extension and having a maturity comparable to
the relevant Interest Period; provided, however, that Lenders may fund each of their LIBOR Credit
Extensions in any manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 3.6 and under Section 3.4.
(e) LIBOR Credit Extensions After Default. After the occurrence and during the
continuance of an Event of Default, (i) Borrower may not elect to have a Credit Extension be made
or continued as, or converted to, a LIBOR Credit Extension after the expiration of any
Interest Period then in effect for such Credit Extension and (ii) subject to the provisions of
Section 3.6(c), any Notice of Conversion/Continuation given by Borrower with respect to a requested
conversion/continuation that has not yet occurred shall be deemed to be rescinded by Borrower and
be deemed a request to convert or continue Credit Extensions referred to therein as Prime Rate
Credit Extensions.
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3.7 Additional Requirements/Provisions Regarding LIBOR Credit Extensions.
(a) If for any reason (including voluntary prepayment or acceleration), any Lender receives
all or part of the principal amount of a LIBOR Credit Extension prior to the last day of the
Interest Period for such Credit Extension, Borrower shall immediately notify Borrower’s account
officer at Agent and, on demand by Agent, pay Lenders the amount (if any) by which (i) the
additional interest which would have been payable on the amount so received had it not been
received until the last day of such Interest Period exceeds (ii) the interest which would have been
recoverable by Lenders by placing the amount so received on deposit in the certificate of deposit
markets, the offshore currency markets, or United States Treasury investment products, as the case
may be, for a period starting on the date on which it was so received and ending on the last day of
such Interest Period at the interest rate determined by each Lender in such Lender’s reasonable
discretion. Lenders’ determination as to such amount shall be conclusive absent manifest error.
(b) Borrower shall pay Lenders, upon demand by Agent, from time to time such amounts as
Lenders may determine to be necessary to compensate it for any costs incurred by Lenders that
Lenders determine are attributable to its making or maintaining of any amount receivable by Lenders
hereunder in respect of any Credit Extensions relating thereto (such increases in costs and
reductions in amounts receivable being herein called “Additional Costs”), in each case resulting
from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to Lenders under this Agreement in
respect of any Credit Extensions (other than changes which affect taxes measured by or imposed on
the overall net income of Lenders by the jurisdiction in which Lenders have their respective
principal offices);
(ii) imposes or modifies any reserve, special deposit or similar requirements relating to any
extensions of credit or other assets of, or any deposits with, or other liabilities of Lenders
(including any Credit Extensions or any deposits referred to in the definition of LIBOR); or
(iii) imposes any other condition affecting this Agreement (or any of such extensions of
credit or liabilities).
Agent will notify Borrower of any event occurring after the Closing Date which will entitle
Lenders to compensation pursuant to this Section 3.7 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation. Agent will furnish Borrower with a
statement setting forth the basis and amount of each request by Lenders for compensation under this
Section 3.7. Determinations and allocations by Lenders for purposes of this Section 3.7 of the
effect of any Regulatory Change on its costs of maintaining its obligations to make Credit
Extensions, of making or maintaining Credit Extensions, or on amounts receivable by it in respect
of Credit Extensions, and of the additional amounts required to compensate Lenders in respect of
any Additional Costs, shall be conclusive absent manifest error.
(c) If Lenders shall determine that the adoption or implementation of any applicable law,
rule, regulation, or treaty regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central bank, or comparable
agency charged with the interpretation or administration thereof, or compliance by Lenders (or
their applicable respective lending offices) with any respect or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank, or comparable agency, has or would have the effect of reducing the
rate of return on capital of Lenders or any person or entity controlling any Lender (a “Parent”) as
a consequence of its obligations hereunder to a level below that which any Lender (or its Parent)
could have achieved but for such adoption, change, or compliance (taking into consideration
policies with respect to capital adequacy) by an amount deemed by any Lender to be material, then
from time to time, within fifteen (15) days after demand by Agent, Borrower shall pay to Lenders
such additional amount or amounts as will compensate Lenders for such reduction. A statement of
Agent claiming compensation under this Section 3.7(c) and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive absent manifest error.
(d) If, at any time, any Lender, in its sole and absolute discretion, determines that (i) the
amount of LIBOR Credit Extensions for periods equal to the corresponding Interest Periods are not
available to such Lender in the offshore currency interbank markets, or (ii) LIBOR does not
accurately reflect the cost to Lenders of lending the LIBOR Credit Extensions, then Agent shall
promptly give notice thereof to Borrower. Upon the giving of such notice, each Lender’s obligation
to make the LIBOR Credit Extensions shall terminate; provided, however, Credit Extensions shall not
terminate if Agent, each Lender and Borrower agree in writing to a different interest rate
applicable to LIBOR Credit Extensions.
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(e) If it shall become unlawful for Agent or Lenders to continue to fund or maintain any LIBOR
Credit Extensions, or to perform its obligations hereunder, upon demand by Agent, Borrower shall
prepay the Credit Extensions in full with accrued interest thereon and all other amounts payable by
Borrower hereunder (including, without limitation, any amount payable in connection with such
prepayment pursuant to Section 3.7(a)). Notwithstanding the foregoing, to the extent a
determination by Agent as described above relates to a LIBOR Credit Extension then being requested
by Borrower pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, Borrower
shall have the option, subject to the provisions of Section 3.6(c), to (i) rescind such Notice of
Borrowing or Notice of Conversion/Continuation by giving notice (by facsimile or by telephone
confirmed in writing) to Agent of such rescission on the date on which Agent gives notice of its
determination as described above, or (ii) modify such Notice of Borrowing or Notice of
Conversion/Continuation to obtain a Prime Rate Credit Extension or to have outstanding Credit
Extensions converted into or continued as Prime Rate Credit Extensions by giving notice (by
facsimile or by telephone confirmed in writing) to Agent of such modification on the date on which
Agent gives notice of its determination as described above.
3.8 Notices. Any information delivered to Agent pursuant to this Section 3 shall promptly be
delivered by Agent to each Lender in order to satisfy each Lender’s obligations hereunder.
3.9 Termination. Borrower may terminate this Agreement by providing written notice thereof to
Agent and paying all outstanding Obligations (including, without limitation, any amounts that
become due as a result of a LIBOR Credit Extension being paid prior to the expiration of the
applicable Interest Period).
4 CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest. Borrower hereby grants Agent, for the ratable benefit of the
Lenders, and to each Lender, to secure the payment and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Agent, for the ratable benefit of
the Lenders, and to each Lender, the Collateral, wherever located, whether now owned or hereafter
acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and
covenants that the security interest granted herein is and shall at all times continue to be a
first priority perfected security interest in the Collateral (subject only to Permitted Liens that
may have superior priority to Lenders’ Lien under this Agreement). If Borrower shall acquire a
commercial tort claim (the acquisition of which shall be determined based upon the commencement of
litigation with respect thereto) with a reasonably anticipated value equal to Five Hundred Thousand
Dollars ($500,000.00) or more, Borrower shall promptly notify Agent in a writing signed by Borrower
of the general details thereof and grant to Agent and Lenders in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to Agent.
If this Agreement is terminated, Lenders’ Lien in the Collateral shall continue until the
Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment
in full in cash of the Obligations and at such time as Lenders’ obligation to make Credit
Extensions has terminated, Lenders shall, at Borrower’s sole cost and expense, release its Liens in
the Collateral and all rights therein shall revert to Borrower.
4.2 Authorization to File Financing Statements. Borrower hereby authorizes Agent to file
financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or
protect Agent’s and Lenders’ interest or rights hereunder, including a notice that any disposition
of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of
the Lenders under the Code. Such financing statements may indicate the Collateral as “all assets of
the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with greater
detail, all in Agent’s discretion.
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5 REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants, with respect to itself, and its Subsidiaries:
5.1 Due Organization and Authorization; Power and Authority. Borrower and each of its
Subsidiaries are duly existing and in good standing, as Registered Organizations in their
respective jurisdictions of formation and are qualified and licensed to do business and are in good
standing in any jurisdiction in which the conduct of their business or their ownership of property
requires that they be qualified except where the failure to do so could not reasonably be expected
to have a material adverse effect on Borrower’s business. Borrower has previously delivered to
Agent and Lenders the Perfection Certificate. Borrower represents and warrants to Agent and each
Lender that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on
the signature page hereof; (b) Borrower is an organization of the type and is organized in the
jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately
sets forth Borrower’s organizational identification number or accurately states that Borrower has
none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if
more than one, its chief executive office as well as Borrower’s mailing address (if different than
its chief executive office); (e) except to the extent set forth in the Perfection Certificate,
Borrower (and each of its predecessors) has not, in the past five (5) years, changed its
jurisdiction of formation, organizational structure or type, or any organizational number assigned
by its jurisdiction; and (f) all other information set forth on the Perfection Certificate
pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood
and agreed that Borrower may from time to time update certain information in the Perfection
Certificate after the Effective Date to the extent permitted by one or more specific provisions in
this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower
shall promptly notify Agent of such occurrence and provide Agent with Borrower’s organizational
identification number.
The execution, delivery and performance of the Loan Documents have been duly authorized, and
do not (i) conflict with Borrower’s or its Subsidiaries’ organizational documents, (ii) contravene,
conflict with, constitute a default under or violate any material Requirement of Law, (iii)
contravene, conflict or violate any applicable order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries
or any of their property or assets may be bound or affected, (iv) require any action by, filing,
registration, or qualification with, or Governmental Approval from, any Governmental Authority
(except such Governmental Approvals which have already been obtained and are in full force and
effect) or (v) constitute an event of default under any material agreement by which Borrower or any
one of its Subsidiaries is bound. Neither Borrower nor any of its Subsidiaries is in default under
any agreement to which it is a party or by which it is bound in which the default would have (A) a
material adverse effect on the business of Borrower and its Subsidiaries (taken as a whole) or (B)
any material adverse impact on the ability of Borrower to satisfy the Obligations when due
hereunder.
5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each
item of the Collateral upon which it purports to xxxxx x Xxxx hereunder, free and clear of any and
all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts
with Lenders, the deposit accounts, if any, described in the Perfection Certificate delivered to
Agent and Lenders in connection herewith, or of which Borrower has given Agent notice and taken
such actions as are necessary to give Agent and Lenders a perfected security interest therein. The
Accounts are bona fide, existing obligations of the Account Debtors.
The Collateral is not in the possession of any third party bailee (such as a warehouse) except
as otherwise provided in the Perfection Certificate. None of the components of the Collateral
shall be maintained at locations other than as provided in the Perfection Certificate or as
Borrower has given Agent notice pursuant to Section 7.2. In the event that Borrower, after the
date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then
Borrower will first receive the written consent of Lenders and such bailee must execute and deliver
a bailee agreement in form and substance satisfactory to Lenders in their sole discretion.
All Inventory is in all material respects of good and marketable quality, free from material
defects.
Borrower is the sole owner of the intellectual property which it owns or purports to own
except for (a) non-exclusive licenses granted to its customers in the ordinary course of business,
(b) over-the-counter software that is commercially available to the public, and (c) material
intellectual property licensed to Borrower and noted on the Perfection Certificate. Each patent
which it owns or purports to own and which is material to Borrower’s business is valid and
enforceable, and no part of the intellectual property which Borrower owns or purports to own and
which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in
part. To the best of Borrower’s knowledge, no claim has been made that any part of the
intellectual property violates the rights of any third party except to the extent such claim would
not reasonably be expected to have a material adverse effect on Borrower’s business.
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Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by,
any Restricted License.
5.3 Litigation. Except as set forth in the Perfection Certificate or as disclosed in writing
to Agent after the Effective Date, there are no actions or proceedings pending or, to the knowledge
of the Responsible Officers, threatened in writing by or against Borrower or any of its
Subsidiaries that would reasonably be expected to result in damages or costs to Borrower or any of
its Subsidiaries of One Hundred Thousand Dollars ($100,000.00) or more.
5.4 Financial Statements; Financial Condition. All consolidated financial statements for
Borrower and any of its Subsidiaries delivered to Agent fairly present in all material respects
Borrower’s consolidated financial condition and Borrower’s consolidated results of operations.
There has not been any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Agent.
5.5 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities and will continue to exceed the fair
value of its liabilities; Borrower is not left with unreasonably small capital after the
transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature.
5.6 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled”
by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not
engaged as one of its important activities in extending credit for margin stock (under Regulations
X, T and U of the Federal Reserve Board of Governors). Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances
or rules, the violation of which would reasonably be expected to have a material adverse effect on
its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance other than
legally. Except to the extent that the failure to do so would not have (a) a material adverse
effect on the business of Borrower and its Subsidiaries (taken as a whole) or (b) any material
adverse impact on the ability of Borrower to satisfy the Obligations when due hereunder, Borrower
and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Government Authorities that are
necessary to continue their respective businesses as currently conducted.
5.7 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.
5.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required
tax returns and reports, and Borrower and its Subsidiaries have timely paid all foreign, federal,
state and local taxes, assessments, deposits and contributions owed by Borrower. Borrower and its
Subsidiaries may defer payment of any contested taxes, provided that Borrower or such Subsidiaries,
as appropriate (a) in good faith contests its obligation to pay the taxes by appropriate
proceedings promptly and diligently instituted and conducted, (b) notifies Agent in writing of the
commencement of, and any material development in, the proceedings, and (c) posts bonds or takes any
other steps required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is
unaware of any claims or adjustments proposed for any of Borrower’s or its Subsidiaries’ prior tax
years which could result in additional taxes becoming due and payable by Borrower or such
Subsidiaries. Borrower or its Subsidiaries have paid all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with their terms, and
Borrower and its Subsidiaries have not withdrawn from participation in, and has not permitted
partial or complete termination of, or permitted the occurrence of any other event with respect to,
any such plan which would reasonably be expected to result in any liability of Borrower or such
Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors
or any other governmental agency.
5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as
working capital and to fund Permitted Acquisitions, and not for personal, family, household or
agricultural purposes.
5.10 Source of Repayment. If the Borrower does not, at any time, have sufficient funds to pay
any Obligations when due, it will be able to obtain funds from its subsidiaries in such amounts,
and at such times, to enable it to pay such Obligations.
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5.11 Organizational Structure. The organizational and capital structure of Borrower and its
Subsidiaries, as detailed on Schedule 5.11, will not change without the prior written
consent of the Lenders, except for (a) the Proposed Reorganization and (b) any other change that
(i) would not have a material adverse effect on the business of Borrower and its Subsidiaries
(taken as a whole) and (ii) does not have any material adverse impact on the ability of Borrower to
satisfy the Obligations when due hereunder.
5.12 Full Disclosure. No written representation, warranty or other statement of Borrower or
its Subsidiaries in any certificate or written statement given to Agent or any Lender, as of the
date such representations, warranties, or other statements were made, taken together with all such
written certificates and written statements given to Agent or any Lender, contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements
contained in the certificates or statements not misleading (it being recognized by Agent that the
projections and forecasts provided by Borrower (with respect to the Borrower or its Subsidiaries)
in good faith and based upon reasonable assumptions are not viewed as facts and that actual results
during the period or periods covered by such projections and forecasts may differ from the
projected or forecasted results).
6 AFFIRMATIVE COVENANTS
Borrower shall do all of the following, with respect to itself, and (other than with respect
to Section 6.6) its Subsidiaries:
6.1 Government Compliance.
Maintain its and all its Subsidiaries’ legal existence and good standing in their respective
jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to
so qualify would reasonably be expected to have a material adverse effect on the business or
operations of either (i) Borrower or (ii) its Subsidiaries (taken as a whole). Borrower shall
comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, the noncompliance with which would have (a) a material adverse effect on the business of
Borrower and its Subsidiaries (taken as a whole), or (b) any material adverse impact on the ability
of Borrower to satisfy the Obligations when due hereunder.
6.2 Financial Statements, Reports, Certificates.
(a) Deliver to Agent: (i) as soon as available, but no later than forty-five (45) days after
the last day of each month, a company prepared consolidated balance sheet and income statement
covering Borrower’s consolidated operations during the period certified by a Responsible Officer
and in a form acceptable to Agent; (ii) as soon as available, but no later than one hundred fifty
(150) days after the last day of Borrower’s fiscal year, audited consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion on the financial
statements from an independent certified public accounting firm acceptable to Agent in its
reasonable discretion; (iii) within five (5) days of delivery, copies of all financial statements
and reports made available to Borrower’s security holders or to any holders of Subordinated Debt;
(iv) within five (5) days of filing, copies of all periodic and other reports, proxy statements and
other materials filed by Borrower with the SEC, any Governmental Authority succeeding to any or all
of the functions of the SEC or with any national securities exchange, or distributed to its
shareholders, as the case may be (documents required to be delivered pursuant to the terms hereof
(to the extent any such documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been delivered on the date on
which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the
internet at Borrower’s website address); (v) contemporaneously with the submission of such filings
or the delivery of such reports, copies of (A) the monthly reports delivered to the Commodity
Futures Trading Commission and (B) all monthly reports delivered to, and the annual examination
conducted by, the National Futures Association; (vi) a prompt report of any legal actions pending or, to
the knowledge of the Borrower, threatened against Borrower or any of its Subsidiaries that would
reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of One
Hundred Thousand Dollars ($100,000.00) or more; and (vii) budgets, sales projections, operating
plans and other financial information reasonably requested by Agent.
(b) Within forty-five (45) days after the last day of each month, deliver to Agent with the
monthly financial statements, a duly completed Compliance Certificate signed by a Responsible
Officer setting forth calculations showing compliance with the financial covenants set forth in
this Agreement.
(c) Commencing with the month ending July 31, 2011, within forty-five (45) days after the last
day of each month, deliver to Agent a summary of Borrower’s Unrestricted Cash in form and detail
reasonably acceptable to Agent (such period to be the sixty (60) days for the summary required to
be delivered to Agent in respect of the month ending July 31, 2011).
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6.3 Intentionally omitted.
6.4 Taxes; Pensions. Make, and cause each of its Subsidiaries to make, timely payment of all
foreign, federal, state, and local taxes or assessments (other than taxes and assessments which
Borrower or its Subsidiaries are contesting pursuant to the terms of Section 5.8 hereof) and shall
deliver to Agent, on demand, appropriate certificates attesting to such payments, and pay all
amounts necessary to fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms.
6.5 Insurance. (a) Keep its business and the Collateral insured for risks and in amounts
standard for companies in Borrower’s and each Subsidiary’s industry and location; and (b) not
change the types of insurance, or the respective levels of insurance coverage for such types of
insurance, currently maintained by Borrower and its Subsidiaries if such change would be reasonably
likely to adversely affect the interests of the Lenders under this Agreement.
6.6 Operating Accounts.
(a) Maintain an operating account with Agent.
(b) Provide Agent five (5) days prior written notice before establishing any Collateral
Account at or with any bank or financial institution other than Agent or its Affiliates. In
addition, for each Collateral Account that Borrower at any time maintains, Borrower shall cause the
applicable bank or financial institution (other than Agent) at or with which any Collateral Account
is maintained to execute and deliver a Control Agreement or other appropriate instrument with
respect to such Collateral Account to perfect Lenders’ Lien in such Collateral Account in
accordance with the terms hereunder which Control Agreement may not be terminated without the prior
written consent of Lenders. The provisions of the previous sentence shall not apply to deposit
accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments
to or for the benefit of Borrower’s employees and identified to Agent by Borrower as such.
6.7 Financial Covenants.
Borrower and its Subsidiaries shall maintain at all times, to be tested as of the last day of
each quarter, on a consolidated basis, unless otherwise noted:
(a) Debt Service Coverage Ratio. A ratio of EBITDA for the twelve-month period ending
on the last day of such quarter to the aggregate amount of Borrower’s scheduled principal and
interest payments for borrowed money during such twelve-month period of at
least 3.0 to 1.0 as of the quarter ending March 31, 2011 and as of the last day of each
subsequent quarter.
(b) Total Funded Debt/EBITDA. A Total Funded Debt Ratio (with respect to the
immediately preceding twelve (12) month period) of a maximum of 1.50 to 1.0 as of the quarter
ending March 31, 2011 and as of the last day of each quarter thereafter.
6.8 Protection of Intellectual Property Rights.
(a) (i) Protect, defend and maintain the validity and enforceability of its intellectual
property; (ii) promptly advise Agent in writing of material infringements of its intellectual
property; and (iii) not allow any intellectual property material to Borrower’s business to be
abandoned, forfeited or dedicated to the public without Agent’s written consent.
(b) Provide written notice to Agent within thirty (30) days of entering or becoming bound by
any Restricted License (other than over-the-counter software that is commercially available to the
public). Borrower shall take such steps as Lenders reasonably request to obtain the consent of, or
waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be
deemed “Collateral” and for Lenders to have a security interest in it that might otherwise be
restricted or prohibited by law or by the terms of any such Restricted License, whether now
existing or entered into in the future, and (ii) Lenders to have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with Lenders’ rights and
remedies under this Agreement and the other Loan Documents.
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6.9 Litigation Cooperation. From the date hereof and continuing through the termination of
this Agreement, make available to Agent, without expense to Agent, Borrower and its Subsidiaries,
and each of their officers, employees and agents and books and records, to the extent that Agent
may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Agent or any Lender with respect to any Collateral or relating to Borrower
or its Subsidiaries.
6.10 Intentionally omitted.
6.11 Intentionally omitted.
6.12 Further Assurances. Borrower shall execute any further instruments and take further
action as Agent and/or Lenders reasonably request to perfect or continue Agent’s and Lenders’ Lien
in the Collateral or to effect the purposes of this Agreement.
7 NEGATIVE COVENANTS
Borrower and (other than with respect to Section 7.6) its Subsidiaries shall not do any of the
following without Agent’s prior written consent:
7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively,
“Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out
or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; (d) of
property by Foreign Subsidiaries to Borrower or any Subsidiary in connection with the Proposed
Reorganization; (e) of stock in a Foreign Subsidiary by Borrower or any Subsidiary to Borrower or
any Subsidiary in connection with the Proposed Reorganization; and (f) of non-exclusive licenses
for the use of the property of Borrower or its Subsidiaries in the ordinary course of business and
licenses that could not result in a legal transfer of title of the licensed property but that may
be exclusive in respects other than territory and that may be exclusive as to territory only as to
discreet geographical areas outside of the United States. Borrower shall not enter into an
agreement with any Person other than Lenders which restricts the subsequent granting of a
security interest in the intellectual property.
7.2 Changes in Business, Management, Ownership, Control, or Business Locations. (a) Engage in
or permit any of its Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b)
liquidate or dissolve; or (c) in addition to and subject to Section 5.11, enter into any
transaction or series of related transactions in which the stockholders of Borrower immediately
prior to the first such transaction own less than 50% of the voting stock of Borrower immediately
after giving effect to such transaction or related series of such transactions (other than by the
sale of Borrower’s equity securities in a public offering or to venture capital investors so long
as Borrower identifies to Agent the venture capital investors prior to the closing of the
transaction).
Borrower shall not, without at least thirty (30) days prior written notice to Agent: (1) add
any new offices or business locations, including warehouses (unless such new offices or business
locations contain less than Ten Thousand Dollars ($10,000.00) in Borrower’s assets or property),
(2) change its jurisdiction of organization, (3) change its organizational structure or type, (4)
change its legal name, or (5) change any organizational number (if any) assigned by its
jurisdiction of organization.
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7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person, except where (a)
immediately after such transaction and after paying the purchase price and related transaction
expenses, closing costs and fees therefor, Borrower would have Eighty-Five Million Dollars
($85,000,000.00) in Unrestricted Cash; (b) no Default or Event of Default has occurred and is
continuing or would exist after giving effect to the transactions; (c) Borrower is the surviving
legal entity; and (d) either (i) Borrower provides to Lenders calculations demonstrating that both
(A) had any Advances requested or contemplated to finance such proposed transaction (the
“Acquisition Debt”) been outstanding as of the end of the most recent month for which Borrower has
provided financial statements to Lenders (the “Last Reporting Date”), and assuming the Total Funded
Debt/EBITDA covenant in Section 6.7(b) is tested as of the last day of each month rather than each
quarter, Borrower would have been in compliance with the Total Funded Debt/EBITDA covenant set
forth in Section 6.7(b) as of the Last Reporting Date for the twelve (12) month period ending on
the Last Reporting Date and (B) if estimated debt service on the Acquisition Debt for the first
twelve (12) months after the closing of the transaction (based on LIBOR as in effect during the
twelve (12) months prior to the Last Reporting Date) is added to the actual debt service for the
twelve (12) month period ending on the Last Reporting Date, and assuming that the Debt Service
Coverage Ratio covenant set forth in Section 6.7(a) is tested as of the last day of each month
rather than each quarter, Borrower would have been in compliance with the Debt Service Coverage
Ratio covenant set forth in Section 6.7(a) as of the Last Reporting Date for the twelve (12) month
period ending on the Last Reporting Date, (ii) the total cash consideration for such transaction is
less than Five Million Dollars ($5,000,000.00), or (iii) Borrower provides to Lenders evidence
satisfactory to Lenders in their reasonable discretion of Borrower’s compliance with the provisions
of this Agreement (including, without limitation, pro forma compliance with the financial covenants
set forth in Section 6.7 after giving effect to such transaction for the then current quarter)
(each, a “Permitted Acquisition”). A Subsidiary may merge or consolidate into another Subsidiary
or into Borrower; provided, however, that if the applicable Subsidiary is a Guarantor, such
Subsidiary must be the surviving legal entity.
7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.
7.5 Encumbrance. Create, incur, or allow any Lien on any of its property, or assign or convey
any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries
to do so, except for Permitted Liens, permit any Collateral not to be subject to the
first priority security interest granted herein, or enter into any agreement, document,
instrument or other arrangement (except with or in favor of Agent and Lenders) with any Person
which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary
from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any
of Borrower’s or any Subsidiary’s intellectual property, except as is otherwise permitted in
Section 7.1 hereof and the definition of “Permitted Lien” herein.
7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.6(b) hereof.
7.7 Distributions; Investments; Bonuses. (a) Directly or indirectly make any Investment other
than Permitted Investments, or permit any of its Subsidiaries to do so; or (b) pay any dividends or
make any distribution or payment or redeem, retire or purchase any
capital stock, provided,
however, Borrower may make a dividend, distribution or payment or otherwise redeem, retire, or
purchase any stock so long as immediately after such dividend, redemption or repurchase, Borrower
would have Eighty-Five Million Dollars ($85,000,000.00) in
Unrestricted Cash, and provided
further no Event of Default has occurred or would result; or (c) allow Gain Holdings, LLC to
transfer any of its stock or beneficial ownership of Gain Capital Group, Inc. without the prior
written consent of the Agent.
7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.
7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under
the terms of the subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination
thereof to Obligations owed to Lenders.
7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended, or undertake as one of its
important activities extending credit to purchase or carry margin stock (as defined in Regulation U
of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit
Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act, or any other law or regulation, if such failure would reasonably
be expected to have (a) a material adverse effect on the business of Borrower and its Subsidiaries
(taken as a whole) or (b) any material adverse impact on the ability of Borrower to satisfy the
Obligations when due hereunder, or permit any of its Subsidiaries to do so; withdraw or permit any
Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit
the occurrence of any other event with respect to, any present pension, profit sharing and deferred
compensation plan which would reasonably be expected to result in any material liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency.
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8 EVENTS OF DEFAULT
Any one of the following shall constitute an event of default (an “Event of Default”) under
this Agreement:
8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any
Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days
after such Obligations are due and payable (which three (3) Business Day cure period will not apply
to payments due on the Maturity Date). During the cure period, the failure to cure the
payment default is not an Event of Default (but no Credit Extension will be made during the
cure period);
8.2 Covenant Default.
(a) Borrower or its Subsidiaries fails or neglects to perform any obligation in Sections 6.2,
6.6, 6.7, or 6.8, or violates any covenant in Section 7; or
(b) Borrower or its Subsidiaries fails or neglects to perform, keep, or observe any other
term, provision, condition, covenant or agreement contained in this Agreement or any Loan
Documents, and as to any default (other than those specified in this Section 8 below) under such
other term, provision, condition, covenant or agreement that can be cured, has failed to cure the
default within ten (10) days after the occurrence thereof; provided, however, that if the default
cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by
Borrower or such Subsidiary be cured within such ten (10) day period, and such default is likely to
be cured within a reasonable time, then Borrower or such Subsidiary shall have an additional period
(which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within
such reasonable time period the failure to cure the default shall not be deemed an Event of Default
(but no Credit Extensions shall be made during such cure period). Grace periods provided under
this section shall not apply, among other things, to financial covenants or any other covenants set
forth in subsection (a) above;
8.3 Intentionally omitted.
8.4 Attachment. (a) Any material portion of Borrower’s and/or its Subsidiaries’ assets is
attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in ten (10) days; (b) the service of process upon Lenders and/or
Agent (or an Affiliate of Agent or any Lender) seeking to attach, by trustee or similar process,
any funds of, or of any entity under control of Borrower (including a Subsidiary) on deposit with
the Lenders and/or Agent; (c) Borrower and/or its Subsidiaries is enjoined, restrained, or
prevented by court order from conducting a material part of its business; (d) a judgment or other
claim in excess of One Million Dollars ($1,000,000.00) becomes a Lien on any of Borrower’s and/or
its Subsidiaries’ assets; or (e) a notice of lien, levy, or assessment is filed against any of
Borrower’s and/or its Subsidiaries’ assets by any government agency and not paid within ten (10)
days after Borrower receives notice. These are not Events of Default if stayed or if a bond is
posted pending contest by Borrower (but no Credit Extensions shall be made during the cure period);
8.5 Insolvency (a) Borrower and/or its Subsidiaries are unable to pay their debts (including
trade debts) as they become due or otherwise becomes insolvent; (b) Borrower and/or its
Subsidiaries begin an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against
Borrower and/or its Subsidiaries and not dismissed or stayed within thirty (30) days (but no Credit
Extensions shall be made while of any of the conditions described in clause (a) exist and/or until
any Insolvency Proceeding is dismissed);
8.6 Other Agreements. There is a default in any agreement to which Borrower, its
Subsidiaries, or any Guarantor is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the maturity of any
Indebtedness in an amount in excess of One Million Dollars ($1,000,000.00) or that would have (a) a
material adverse effect on the business of Borrower and its Subsidiaries (taken as a whole) or (b)
any material adverse impact on the ability of Borrower to satisfy the Obligations when due
hereunder;
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8.7 Judgments. A judgment or judgments for the payment of money in an amount, individually or
in the aggregate, of at least One Million Dollars ($1,000,000.00) (not covered by independent
third-party insurance) shall be rendered against Borrower and/or its Subsidiaries, and shall remain
unsatisfied and unstayed for a period of ten (10) days after the entry thereof
(provided that no Credit Extensions will be made prior to the satisfaction or stay of such
judgment);
8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to Agent and/or Lenders or to induce Agent and/or Lenders to enter this Agreement or any
Loan Document, and such representation, warranty, or other statement is incorrect in any material
respect when made;
8.9 Subordinated Debt. A default or breach occurs under any agreement between Borrower and
any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement
with Lenders, or any creditor that has signed such an agreement with Lenders breaches any terms of
such agreement that pertain to lien subordination, payment restrictions and/or enforcement
restrictions; or
8.10 Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be
in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any
guaranty of the Obligations; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8.
occurs with respect to any Guarantor, (d) the death, liquidation, winding up, or termination of
existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of
Lenders’ Lien in the collateral provided by Guarantor or in the value of such collateral or (ii) a
material adverse change in the general affairs, management, results of operation, condition
(financial or otherwise) or the prospect of repayment of the Obligations occurs with respect to any
Guarantor.
9 RIGHTS AND REMEDIES
9.1 Rights and Remedies. While an Event of Default occurs and continues Agent may, without
notice or demand, do any or all of the following:
(a) declare all Obligations immediately due and payable (but if an Event of Default described
in Section 8.5 occurs all Obligations are immediately due and payable without any action by Agent
and/or Lenders);
(b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or
under any other agreement between Borrower and Agent and/or Lenders;
(c) settle or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Agent considers advisable, notify any Person owing Borrower money of Agent’s
and Lenders’ security interest in such funds, and verify the amount of such account;
(d) make any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral
if Agent requests and make it available as Agent designates. Agent may enter premises where the
Collateral is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Agent for the benefit of Lenders a license
to enter and occupy any of its premises, without charge, to exercise any of Agent’s and/or Lenders’
rights or remedies;
(e) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Agent or Lenders owing to or for the credit or the account of Borrower;
(f) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell the Collateral. Agent is hereby granted a non-exclusive, royalty-free license or
other right to use, without charge, Borrower’s labels, patents, copyrights, mask works, rights of
use of any name, trade secrets, trade names, trademarks, service marks and advertising matter, or
any similar property as it pertains to the Collateral, in completing production of, advertising for
sale, and selling any Collateral and, in connection with Agent’s exercise of its rights under this
Section, Borrower’s rights under all licenses and all franchise agreements inure to Agent for
benefit of Lenders;
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(g) place a “hold” on any account maintained with Agent or Lenders and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions pursuant to any
Control Agreement or similar agreements providing control of any Collateral;
(h) demand and receive possession of Borrower’s Books; and
(i) exercise all rights and remedies available to Agent and/or Lenders under the Loan
Documents or at law or equity, including all remedies provided under the Code (including disposal
of the Collateral pursuant to the terms thereof).
9.2 Power of Attorney. Borrower hereby irrevocably appoints Agent as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b)
sign Borrower’s name on any invoice or xxxx of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Agent determines reasonable; (d) make, settle, and adjust all
claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Agent for the benefit of Lenders or a third party as the Code permits.
Borrower hereby appoints Agent as its lawful attorney-in-fact to sign Borrower’s name on any
documents necessary to perfect or continue the perfection of any security interest regardless of
whether an Event of Default has occurred until all Obligations have been satisfied in full and
Agent and Lenders are under no further obligation to make Credit Extensions hereunder. Agent’s
foregoing appointment as Borrower’s attorney in fact, and all of Agent’s rights and powers, coupled
with an interest, are irrevocable until all Obligations have been fully repaid and performed and
Agent’s and Lenders’ obligation to provide Credit Extensions terminates.
9.3 Accounts Verification; Collection. Whether or not an Event of Default has occurred and is
continuing, Agent may notify any Person owing Borrower money of Agent’s and Lenders’ security
interest in such funds and verify the amount of such account. After the occurrence of an Event of
Default, any amounts received by Borrower shall be held in trust by Borrower for Agent and Lenders,
and, if requested by Agent, Borrower shall immediately deliver such receipts to Agent in the form
received from the Account Debtor, with proper endorsements for deposit.
9.4 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5
or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Agent and/or Lenders may obtain such insurance
or make such payment, and all amounts so paid by Agent and/or Lenders are Lenders’ Expenses and
immediately due and payable, bearing interest at the Default Rate, and secured by the Collateral.
Agent will make reasonable efforts to provide Borrower with notice of Agent and/or Lenders
obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No
payments by Agent or Lenders are deemed an agreement to make similar payments in the future or
Agent’s or Lenders’ waiver of any Event of Default.
9.5 Application of Payments and Proceeds. Unless an Event of Default has occurred and is
continuing, Agent shall apply any funds in its possession, whether from Borrower account balances,
payments, or proceeds realized as the result of any collection of Accounts or other disposition of
the Collateral, first, to Lenders’ Expenses, including without limitation, the reasonable costs,
expenses, liabilities, obligations and attorneys’ fees incurred by Agent and/or Lenders in the
exercise of its rights under this Agreement; second, to the interest due upon any of the
Obligations; and third, to the principal of the Obligations and any applicable fees and other
charges, in such order as Agent shall determine in its sole discretion. Any surplus shall be paid
to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Agent and
Lenders for any deficiency. If an Event of Default has occurred and is continuing, Agent may apply
any funds in its possession, whether from Borrower account balances, payments, proceeds realized as
the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to
the Obligations in such order as Agent shall determine in its sole discretion. Any surplus shall
be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to
Agent and Lenders for any deficiency. If Agent, in its good faith business judgment, directly or
indirectly enters into a deferred payment or other credit transaction with any purchaser at any
sale of Collateral, Agent shall have the option, exercisable at any time, of either reducing the
Obligations by the principal amount of the purchase price or deferring the reduction of the
Obligations until the actual receipt by Agent of cash therefor.
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9.6 Agent’s and Lenders’ Liability for Collateral. So long as Agent and Lenders comply with
reasonable banking practices regarding the safekeeping of the Collateral in the possession or under
the control of Agent and/or Lenders, Agent and Lenders shall not be liable or responsible for: (a)
the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in
the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.
9.7 No Waiver; Remedies Cumulative. Agent’s failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not
waive, affect, or diminish any right of Agent or Lenders thereafter to demand strict performance
and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by
Agent and each Lender and then is only effective for the specific instance and purpose for which it
is given. Agent’s rights and remedies under this Agreement and the other Loan Documents are
cumulative. Agent has all rights and remedies provided under the Code, by law, or in equity.
Agent’s exercise of one right or remedy is not an election and shall not preclude Agent from
exercising any other remedy under this Agreement or other remedy available at law or in equity, and
Agent’s waiver of any Event of Default is not a continuing waiver. Agent’s delay in exercising any
remedy is not a waiver, election, or acquiescence.
9.8 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by
Agent on which Borrower is liable.
10 NOTICES
All notices, consents, requests, approvals, demands, or other communication (collectively,
“Communication”) by any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or
certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when
sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent to the address,
facsimile number, or email address indicated below. Either Lender,
Agent, or Borrower may change its mailing or electronic mail address or facsimile number by giving
the other party written notice thereof in accordance with the terms of this Section 10.
| If to Borrower: | Gain Capital Holdings, Inc. Bedminster One, Suite 11 000 XX Xxxxxxx 000/000 Xxxxxxxxxx, Xxx Xxxxxx 00000 Attention: Chief Financial Officer Fax: (000) 000-0000 Email: xxxxxx@xxxxxxxxxxx.xxx |
|||
| with a copy to: | Attention: General Counsel Fax: (000) 000-0000 Email: xxxxxxxxxx@xxxxxxxxxxx.xxx |
|||
| If to Agent: | Silicon Valley Bank 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attn: Mr. Xxxxxxx Xxxxxxx Fax: (000) 000-0000 Email: xxxxxxxx@xxx.xxx |
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| with a copy to: | Xxxxxx & Xxxxxxxxxx LLP Xxxxx Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 Attn: Xxxxx X. Xxxxxxx, Esquire Fax: (000) 000-0000 Email: XXxxxxxx@xxxxxxxxx.xxx |
|||
| If to JPMorgan: | JPMorgan Chase Bank, N.A. 000 Xxxxx 00 Xxxx Xxxxx 000 Xxxxxxxxx, Xxx Xxxxxx 00000-0000 Attn: Xxxxxxx Xxxxxx Fax: 000-000-0000 Email: xxxxxxx.xxxxxx@xxxxx.xxx |
11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
The law of the State of New York governs the Loan Documents without regard to principles of
conflicts of law. Borrower, Lenders and Agent each submit to the exclusive
jurisdiction of the State and Federal courts in the City of New York; provided, however, that
nothing in this Agreement shall be deemed to operate to preclude Agent or any Lender from bringing
suit or taking other legal action in any other jurisdiction to realize on the Collateral or any
other security for the Obligations, or to enforce a judgment or other court order in favor of Agent
or any Lender. Borrower expressly submits and consents in advance to such jurisdiction in any
action or suit commenced in any such court, and Borrower hereby waives any objection that it may
have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed appropriate by such court.
Borrower hereby waives personal service of the summons, complaints, and other process issued in
such action or suit and agrees that service of such summons, complaints, and other process may be
made by registered or certified mail addressed to Borrower at the address set forth in Section 10
of this Agreement and that service so made shall be deemed completed upon the earlier to occur of
Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage
prepaid.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, AGENT AND LENDERS EACH WAIVE THEIR RIGHT
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12 GENERAL PROVISIONS
12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors
and permitted assigns of each party. Borrower may not assign this Agreement or any rights or
obligations under it without prior written consent of each Lender (which may be granted or withheld
in each Lender’s discretion). Lenders and Agent have the right, without the consent of or notice
to Borrower, to sell, transfer, negotiate, or grant participation in all or any part of, or any
interest in, Lenders’ obligations, rights, and benefits under this Agreement and the other Loan
Documents.
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12.2 Indemnification. Borrower agrees to indemnify, defend and hold Agent and Lenders and
their respective directors, officers, employees, agents, attorneys, or any other Person affiliated
with or representing Agent or any Lender harmless against: (a) all obligations, demands, claims,
and liabilities (collectively, “Claims”) asserted by any party other than Borrower against Agent
and/or any Lender in connection with the transactions contemplated by the Loan Documents; and (b)
all losses or Lenders’ Expenses incurred, or paid by Lenders and/or Agent from, following, or
arising from transactions between Lenders and Borrower (including reasonable attorneys’ fees and
expenses), except for (i) Claims and/or losses directly caused by Lenders’ or Agent’s gross
negligence or willful misconduct, or (ii) liabilities of Agent or any Lender to Borrower directly
resulting from claims by Borrower against Agent or such Lender.
12.3 Limitation of Actions. Any claim or cause of action by Borrower against Agent and/or any
Lender, their respective directors, officers, employees, agents, accountants, attorneys, or any
other Person affiliated with or representing Agent and/or such Lender based upon, arising from, or
relating to this Loan Agreement or any other Loan Document, or any other transaction contemplated
hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever,
occurred, done, omitted or suffered to be done by Agent and/or any Lender, their respective
directors, officers, employees, agents, accountants or attorneys, shall be barred unless asserted
by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by
(a) the filing of a complaint within one year from the earlier of (i) the date any of Borrower’s
officer or directors had knowledge of the first act, the occurrence or omission upon which such
claim or cause of action, or any part thereof, is based, or (ii) the date this Agreement is
terminated, and (b) the service of a summons and complaint on an officer of Agent and/or Lenders,
or on any other person authorized to accept service on
behalf of Agent and/or Lenders, within thirty (30) days thereafter. Borrower agrees that such
one-year period is a reasonable and sufficient time for Borrower to investigate and act upon any
such claim or cause of action. The one-year period provided herein shall not be waived, tolled, or
extended except by the written consent of Agent and Lenders in their sole discretion. This
provision shall survive any termination of this Loan Agreement or any other Loan Document.
12.4 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.
12.5 Severability of Provisions. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.
12.6 Amendments in Writing; Integration. All amendments to this Agreement must be in writing
signed by Agent, each Lender and Borrower. This Agreement and the Loan Documents represent the
entire agreement about this subject matter and supersede prior negotiations or agreements. All
prior agreements, understandings, representations, warranties, and negotiations between the parties
about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the
Loan Documents
12.7 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one Agreement.
12.8 Survival. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been paid satisfied. The obligation of Borrower in Section
12.2 to indemnify Agent and Lenders shall survive until the statute of limitations with respect to
such claim or cause of action shall have run.
12.9 Confidentiality. In handling any confidential information, Lenders and Agent shall
exercise the same degree of care that it exercises for its own proprietary information, but
disclosure of information may be made: (a) to Lenders’ and Agent’s Subsidiaries or Affiliates (such
Subsidiaries and Affiliates, together with Lenders and Agent, collectively “Lender Entities”); (b)
to prospective transferees or purchasers of any interest in the Credit Extensions (provided,
however, Lenders and Agent shall obtain such prospective transferee’s or purchaser’s agreement to
the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to
Lenders’ and Agent’s regulators or as otherwise required in connection with Lenders’ and/or Agent’s
examination or audit; (e) as Agent considers appropriate in exercising remedies under the Loan
Documents; and (f) to third-party service providers of Lenders’ and Agent so long as such service
providers have executed a confidentiality agreement with a Lender or Agent, as applicable, with
terms no less restrictive than those contained herein. Confidential information does not include
information that either: (i) is in the public domain or in Lenders’ and/or Agent’s possession when
disclosed to Lenders and/or Agent, or becomes part of the public domain after disclosure to Lenders
and/or Agent; or (ii) is disclosed to Lenders and/or Agent by a third party, if Lenders and/or
Agent do not know that the third party is prohibited from disclosing the information.
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Lender Entities may use the confidential information for reporting purposes and the
development and distribution of databases and market analyses so long as such confidential
information is aggregated and anonymized prior to distribution unless otherwise expressly permitted
by Borrower. The provisions of the immediately preceding sentence shall survive the termination of
this Agreement.
12.10 Right of Set Off. Borrower hereby grants to Agent for the ratable benefit of Lenders,
and to each Lender, a lien, security interest and right of set off as security for all Obligations
to Agent and each Lender, whether now existing or hereafter arising upon and
against all deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Agent or any entity under the control of Agent (including an
Agent subsidiary) or in transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Agent or Lenders, as appropriate, may
set off the same or any part thereof and apply the same to any liability or obligation of Borrower
even though unmatured and regardless of the adequacy of any other collateral securing the
Obligations. ANY AND ALL RIGHTS TO REQUIRE AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY
AND IRREVOCABLY WAIVED.
12.11 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
Joint Bookrunners listed herein shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, Collateral Agent, or a Lender.
12.12 Ratification of Certain Loan Documents.
(a) Perfection Certificate. Borrower hereby ratifies, confirms and reaffirms, all and
singular, the terms and disclosures contained in the Perfection Certificate and acknowledges,
confirms and agrees the disclosures and information that Borrower provided to Agent in the
Perfection Certificate have not changed, as of the date hereof.
(b) Pledge Agreement. Borrower hereby ratifies, confirms and reaffirms, all and
singular, the terms and conditions in the Pledge Agreement and acknowledges, confirms and agrees
that the Pledge Agreement shall remain in full force and effect and shall in no way be limited by
the execution of this Agreement, or any other documents, instruments and/or agreements executed
and/or delivered in connection herewith. In addition, Borrower and Lenders hereby agree that the
Pledge Agreement shall be amended by deleting “Loan and Security Agreement dated as of March 29,
2006 (the “Loan Agreement”)” where it appears in the recitals thereto and inserting in lieu thereof
“Amended and Restated Loan and Security Agreement dated as of September 16, 2011 (as amended,
restated, modified, or supplemented from time to time, the “Loan Agreement”)”.
13 DEFINITIONS
13.1 Definitions. As used in this Agreement, the following terms have the following meanings:
“Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.
“Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.
“Acquisition Debt” is defined in Section 7.3.
“Additional Costs” is defined in Section 3.7(b).
“Administrative Agent” is defined in the preamble hereof.
“Advance” or “Advances” means an advance (or advances) under the Revolving Line.
“Affiliate” is, with respect to any Person, each other Person that owns or controls directly
or indirectly the Person, any Person that controls or is controlled by or is under common control
with the Person, and each of that Person’s senior executive officers, directors, partners and, for
any Person that is a limited liability company, that Person’s managers and members.
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“Agent” means, SVB, not in its individual capacity, but solely in its capacity as agent on
behalf of and for the benefit of the Lenders.
“Agreement” is defined in the preamble hereof.
“Availability Amount” is (a) the Revolving Line minus (b) the outstanding principal balance of
any Advances.
“Borrower” is defined in the preamble hereof
“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state
tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment containing
such information.
“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such
Person’s Board of Directors and delivered by such Person to Agent approving the Loan Documents to
which such Person is a party and the transactions contemplated thereby, together with a certificate
executed by its secretary on behalf of such Person certifying that (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the Loan Documents to
which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and
complete copy of the resolutions then in full force and effect authorizing and ratifying the
execution, delivery, and performance by such Person of the Loan Documents to which it is a party,
(c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of such Person,
together with a sample of the true signature(s) of such Person(s), and (d) that Agent may
conclusively rely on such certificate unless and until such Person shall have delivered to Agent a
further certificate canceling or amending such prior certificate.
“Business Day” is any day other than a Saturday, Sunday or other day on which banking
institutions in the State of New York are authorized or required by law or other governmental
action to close, except that if any determination of a “Business Day” shall relate to a LIBOR
Credit Extension, the term “Business Day” shall also mean a day on which dealings are carried on
in the London interbank market.
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency or any State thereof having maturities of not more
than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1)
year after its creation and having the highest rating from either Standard & Poor’s Ratings Group
or Xxxxx’x Investors Service, Inc.; and (c) Agent’s certificates of deposit issued maturing no more
than one (1) year after issue.
“Claims” is defined in Section 12.2.
“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of New York; provided, that, to the extent that the Code is used to define any
term herein or in any Loan Document and such term is defined differently in different Articles or
Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, or priority of, or remedies with respect to, Agent’s and Lenders’ Lien
on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes on the provisions thereof relating to such
attachment, perfection, priority, or remedies and for purposes of definitions relating to such
provisions.
“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit
A.
“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account
maintained by Borrower.
“Collateral Agent” is defined in the preamble hereof.
22
“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.
“Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.
“Communication” is defined in Section 10.
“Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit B.
“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed,
co-made, discounted or sold with recourse by that Person, or for which that Person is directly or
indirectly liable; (b) any obligations for undrawn letters of credit for the account of that
Person; and (c) all obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or commodity prices; but
“Contingent Obligation” does not include endorsements in the ordinary course of business. The
amount of a Contingent Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not exceed the maximum
of the obligations under any guarantee or other support arrangement.
“Continuation Date” means any date on which Borrower elects to continue a LIBOR Credit
Extension into another Interest Period.
“Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity account, Borrower, and Agent
pursuant to which Agent obtains control (within the meaning of the Code) for the benefit of Lenders
over such Deposit Account, Securities Account, or Commodity Account.
“Conversion Date” means any date on which Borrower elects to convert a Prime Rate Credit
Extension to a LIBOR Credit Extension or a LIBOR Credit Extension to a Prime Rate Credit Extension.
“Credit Extension” is any Advance, Term Loan, or any other extension of credit by any Lender
for Borrower’s benefit.
“Default” means any event which with notice or passage of time or both, would constitute an
Event of Default.
“Default Rate” is defined in Section 2.3(c).
“Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.
“Designated Deposit Account” is Borrower’s deposit account, account number 3300513593,
maintained with Agent.
“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and
not any other currency, regardless of whether that currency uses the “$” sign to denote its
currency or may be readily converted into lawful money of the United States.
“EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted
in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income
tax expense; provided, however EBITDA shall exclude non-cash expenses and gains relating solely to
Borrower’s preferred stock embedded derivative.
“Effective Amount” means with respect to any Credit Extensions on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowing and prepayments or
repayments thereof occurring on such date.
23
“Effective Date” is defined in the preamble of this Agreement.
“Equipment” is all “equipment” as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.
“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.
“Event of Default” is defined in Section 8.
“Foreign Subsidiary” means any Subsidiary which is not organized under the laws of the United
States or any state or territory thereof or the District of Columbia.
“Funding Date” is any date on which a Credit Extension is made to or on account of Borrower
which shall be a Business Day.
“GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date of determination.
“General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work, whether published or unpublished, any
patents, trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise
agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims,
income and other tax refunds, security and other deposits, payment intangibles, contract rights,
options to purchase or sell real or personal property, rights in all litigation presently or
hereafter pending (whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance), payments of insurance
and rights to payment of any kind.
“Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.
“Governmental Authority” is any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory organization.
“Guarantor” is any present or future guarantor of the Obligations, including, without
limitation, Gain Holdings, LLC.
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.
“Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower,
including, without limitation or duplication, all commissions, discounts, or related amortization
and other fees and charges with respect to letters of credit and bankers’ acceptance financing and
the net costs associated with interest rate swap, cap, and similar arrangements, and the interest
portion of any deferred payment obligation (including leases of all types).
24
“Interest Payment Date” means, with respect to any LIBOR Credit Extension, the last day of
each Interest Period applicable to such LIBOR Credit Extension and, with respect to Prime Rate
Credit Extensions, the first (1st) calendar day of each month, and each date a Prime
Rate Credit Extension is converted into a LIBOR Credit Extension to the extent of the amount
converted to a LIBOR Credit Extension.
“Interest Period” means, as to any LIBOR Credit Extension, the period commencing on the date
of such LIBOR Credit Extension, or on the conversion/continuation date on which the LIBOR Credit
Extension is converted into or continued as a LIBOR Credit Extension, and ending on the date that
is three (3) months thereafter, in each case as Borrower may elect in the applicable Notice of
Borrowing or Notice of Conversion/Continuation; provided, however, that (a) no Interest Period with
respect to any LIBOR Credit Extension shall end later than the Term Loan Maturity Date with respect
to Credit Extensions made pursuant to Section 2.1.1. or the Revolving Line Maturity Date with
respect to Credit Extensions made pursuant to Section 2.1.2, (b) the last day of an Interest Period
shall be determined in accordance with the practices of the LIBOR interbank market as from time to
time in effect, (c) if any Interest Period would otherwise end on a day that is not a Business Day,
that Interest Period shall be extended to the following Business Day unless, in the case of a LIBOR
Credit Extension, the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding Business Day, (d)
any Interest Period pertaining to a LIBOR Credit Extension 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 the calendar month
at the end of such Interest Period, and (e) interest shall accrue from and include the first
Business Day of an Interest Period but exclude the last Business Day of such Interest Period.
“Interest Rate Determination Date” means each date for calculating the LIBOR for purposes of
determining the interest rate in respect of an Interest Period. The Interest Rate
Determination Date shall be the second Business Day prior to the first day of the related
Interest Period for a LIBOR Credit Extension.
“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process and finished
products, including without limitation such inventory as is temporarily out of Borrower’s custody
or possession or in transit and including any returned goods and any documents of title
representing any of the above.
“Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.
“Joint Bookrunners” is defined in the preamble hereof.
“Last Reporting Date” is defined in Section 7.3.
“Lender” is any one of the Lenders.
“Lender Entities” is defined in Section 12.9.
“Lenders” shall mean the Persons identified on Schedule 1.1 hereto and each assignee that
becomes a party to this Agreement pursuant to Section 12.1.
“Lenders’ Expenses” are all audit fees and expenses, costs, and expenses (including reasonable
attorneys’ fees and expenses) of Lenders for preparing, negotiating, defending and enforcing the
Loan Documents (including, without limitation, those incurred in connection with appeals or
Insolvency Proceedings).
“LIBOR” means, for any Interest Rate Determination Date with respect to an Interest Period for
any LIBOR Credit Extension to be made, continued as or converted into a LIBOR Credit Extension, the
rate of interest per annum determined by Agent to be the per annum rate of interest at which
deposits in United States Dollars are offered to Agent in the London interbank market (rounded
upward, if necessary, to the nearest 1/100th of one percent (0.01%)) in which Agent customarily
participates at 11:00 a.m. (local time in such interbank market) two (2) Business Days prior to the
first day of such Interest Period for a period approximately equal to such Interest Period and in
an amount approximately equal to the amount of such LIBOR Credit Extension.
25
“LIBOR Credit Extension” means a Credit Extension that bears interest based at the LIBOR Rate
plus the LIBOR Rate Margin.
“LIBOR Rate” means, for each Interest Period in respect of LIBOR Credit Extensions comprising
part of the same Credit Extensions, an interest rate per annum (rounded upward to the nearest
1/16th of one percent (0.0625%)) equal to LIBOR for such Interest Period divided by one (1) minus
the Reserve Requirement for such Interest Period.
“LIBOR Rate Margin” is (a) with respect to Credit Extensions made pursuant to Section 2.1.1,
three and one-quarter of one percent (3.25%), and (b) with respect to Credit Extensions made
pursuant to Section 2.1.2, two and one-half of one percent (2.50%).
“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.
“Loan Documents” are, collectively, this Agreement, the Perfection Certificate, the Pledge
Agreement, any Control Agreement, any note, or notes or guaranties executed by Borrower or any
Guarantor, and any other present or future agreement between Borrower and/or any Guarantor and/or
for the benefit of Lenders and Agent in connection with this Agreement, all as amended, restated,
or otherwise modified.
“Maturity Date” is, as applicable, the Term Loan Maturity Date or the Revolving Line Maturity
Date.
“Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries
for any period as at any date of determination, the net profit (or loss), after provision for
taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.
“Notice of Borrowing” means a notice given by Borrower to Agent in accordance with Section
3.2(a), substantially in the form of Exhibit C, with appropriate insertions.
“Notice of Conversion/Continuation” means a notice given by Borrower to Agent in accordance
with Section 3.5, substantially in the form of Exhibit D, with appropriate insertions.
“Obligations” are Borrower’s obligation to pay when due any debts, principal, interest,
Lenders’ Expenses and other amounts Borrower owes Lenders and/or Agent now or later, whether under
this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations
relating to letters of credit, cash management services, and foreign exchange contracts, if any,
and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Lenders and/or Agent, and the performance of Borrower’s duties
under the Loan Documents.
“Operating Documents” are, for any Person, such Person’s formation documents, as certified
with the Secretary of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in
current form, (b) if such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or
modifications thereto.
“Payment/Advance Form” is that certain form attached hereto as Exhibit E.
“Perfection Certificate” is that certain Perfection Certificate dated as of June 16, 2011
delivered by Borrower to Agent.
“Permitted Acquisition” is defined in Section 7.3.
26
“Permitted Indebtedness” is:
(a) Borrower’s Indebtedness to Lenders and Agent under this Agreement and the other Loan
Documents;
(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;
(e) Indebtedness for capital lease obligations and Indebtedness secured by purchase money
Liens not to exceed Three Million Dollars ($3,000,000.00) in the aggregate;
(f)
Indebtedness for unsecured Indebtedness not to exceed Three Million Dollars
($3,000,000.00) in the aggregate; and
(g) extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (f) above, provided that the principal amount thereof is not
increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or
its Subsidiary, as the case may be.
“Permitted Investments” are:
(a) Investments shown on the Perfection Certificate and existing on the Effective Date;
(b) Investments consisting of Permitted Acquisitions;
(c) Investments by Borrower in its Subsidiaries and by Subsidiaries of Borrower in Borrower
and other Subsidiaries of Borrower; and
(d) Cash Equivalents.
“Permitted Liens” are:
(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising
under this Agreement and the other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains adequate reserves on
its Books, if they have no priority over any of Agents or Lenders’ Liens;
(c) purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment securing no more than One Million Dollars ($1,000,000.00)
in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if
the Lien is confined to the property and improvements and the proceeds of the Equipment;
(d) Liens in the ordinary course of business on deposit, securities and other accounts
maintained by any Subsidiary of Borrower with a financial institution that secure obligations of
such Subsidiary to such financial institution; and
(e) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (c), but any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness may not increase.
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.
“Pledge Agreement” is that certain Pledge and Security Agreement dated as of March 29, 2006
among Borrower and Lenders.
27
“Prime Rate” is the “Prime Rate” as quoted in the Wall Street Journal print edition on such
day (or, if such day is not a day on which the Wall Street Journal is published, the immediately
preceding day on which the Wall Street Journal was published), even if it is not the lowest or
best available rate.
“Prime Rate Credit Extension” means a Credit Extension that bears interest based at the Prime
Rate plus the Prime Rate Margin.
“Prime Rate Margin” (a) with respect to Credit Extensions made pursuant to Section 2.1.1,
one-half of one percent (0.50%), and (b) with respect to Credit Extensions made pursuant to Section
2.1.2, zero percent (0.00%).”
“Proposed Reorganization” means the change in the organizational structure with respect to
Foreign Subsidiaries (for sake of clarity, the Proposed Reorganization shall not involve any
entities other than Foreign Subsidiaries except with respect to transfers of property contemplated
by Sections 7.1(d) and 7.1(e)).
“Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made
“Regulatory Change” means, with respect to any Lender, any change on or after the date of this
Agreement in United States federal, state, or foreign laws or regulations, including Regulation D,
or the adoption or making on or after such date of any interpretations, directives, or requests
applying to a class of lenders including any Lender, of or under any United States federal or
state, or any foreign laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or administration thereof.
“Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), 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.
“Reserve Requirement” means, for any Interest Period, the average maximum rate at which
reserves (including any marginal, supplemental, or emergency reserves) are required to be
maintained during such Interest Period under Regulation D against “Eurocurrency liabilities” (as
such term is used in Regulation D) by member banks of the Federal Reserve System. Without limiting
the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by Agent by reason of any Regulatory Change against (a) any category of liabilities
which includes deposits by reference to which the LIBOR Rate is to be determined as provided in the
definition of LIBOR or (b) any category of extensions of credit or other assets which include
Credit Extensions.
“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial
Officer and Controller of Borrower.
“Restricted License” is any material license or other material agreement with respect to which
Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a
security interest in Borrower’s interest in such license or agreement or any other property, or (b)
for which a default under or termination of could interfere with the Lenders’ right to sell any
Collateral.
“Revolving Line” Fifty Million Dollars ($50,000,000.00).
“Revolving Line Maturity Date” is September 16, 2014.
“Schedule” is any attached schedule of exceptions.
“Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made.
“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now
or hereafter indebtedness to Lenders (pursuant to a subordination, intercreditor, or other similar
agreement in form and substance satisfactory to Agent and Lenders entered into between Agent and
the other creditor), on terms acceptable to Agent and Lenders.
28
“Subsidiary” means, with respect to any Person, any Person of which more than 50% of the
voting stock or other equity interests is owned or controlled, directly or indirectly, by such
Person or one or more Affiliates of such Person.
“Term Loan” is defined in Section 2.1.1(a).
“Term Loan Amount” Fifty Two Million Five Hundred Thousand Dollars ( $52,500,000.00).
“Term Loan Maturity Date” is July 1, 2012.
“Term Loan Payment” is defined in Section 2.1.1(b).
“Total Funded Debt” is the aggregate amount of all outstanding principal, interest, fees and
other costs arising out of any indebtedness of Borrower for borrowed money.
“Total Funded Debt Ratio” is, for the relevant testing period, a ratio of Total Funded Debt to
EBITDA.
“Transfer” is defined in Section 7.1.
“Unrestricted Cash” is (a) Borrower’s unrestricted cash and Cash Equivalents plus (b)
receivables due from brokers (net of required collateral as determined by Bank) and minus (c)
payables due to customers.
“Unused Revolving Line Facility Fee” is defined in Section 2.4(b).
[Signature page follows.]
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.
| BORROWER: | ||||||
| GAIN CAPITAL HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxx Xxxxx | |||||
| Name: | Xxxxx Xxxxx | |||||
| Title: | Chief Financial Officer | |||||
| SILICON VALLEY BANK, as Agent and as a LENDER | ||||||
| By: | /s/ A. Xxxxxx Xxxx | |||||
| Name: | A. Xxxxxx Xxxx | |||||
| Title: | Vice President | |||||
| JPMorgan Chase Bank, N.A., as LENDER | ||||||
| By: | /s/ Xxxxxxxx Xxxxxxx | |||||
| Name: | Xxxxxxxx Xxxxxxx | |||||
| Title: | Vice President | |||||
Schedule 1.1
Lenders and Commitments
| Term Loan Commitment | ||||||||
| Lender | Term Loan Commitment | Percentage | ||||||
Silicon Valley Bank |
$ | 26,250,000.00 | 50.00 | % | ||||
JPMorgan Chase Bank, N.A. |
$ | 26,250,000.00 | 50.00 | % | ||||
TOTAL |
$ | 52,500,000.00 | 100.00 | % | ||||
| Revolving | Revolving Line Commitment | |||||||
| Lender | Line Commitment | Percentage | ||||||
Silicon Valley Bank |
$ | 25,000,000.00 | 50.00 | % | ||||
JPMorgan Chase Bank, N.A. |
$ | 25,000,000.00 | 50.00 | % | ||||
TOTAL |
$ | 50,000,000.00 | 100.00 | % | ||||
EXHIBIT A
The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing),
securities, and all other investment property, supporting obligations, and financial assets,
whether now owned or hereafter acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.
Notwithstanding the foregoing, the Collateral does not include any of the following, whether
now owned or hereafter acquired: any copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative work, whether
published or unpublished, any patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part
of the same, trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, and the goodwill of the business of Borrower
connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to
unpatented inventions, and any claims for damage by way of any past, present, or future
infringement of any of the foregoing; provided, however, the Collateral shall include all Accounts,
license and royalty fees and other revenues, proceeds, or income arising out of or relating to any
of the foregoing.
Pursuant to the terms of a certain negative pledge arrangement with Agent and Lenders,
Borrower has agreed not to encumber any of its copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative work, whether
published or unpublished, any patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part
of the same, trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, and the goodwill of the business of Borrower
connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to
unpatented inventions, and any claims for damage by way of any past, present, or future
infringement of any of the foregoing, without Agent’s and each Lender’s prior written consent.
2
EXHIBIT B
COMPLIANCE CERTIFICATE
TO:
|
SILICON VALLEY BANK, AS AGENT | Date: | ||
FROM:
|
GAIN CAPITAL HOLDINGS, INC. |
The undersigned authorized officer of Gain Capital Holdings, Inc. (“Borrower”) certifies that
under the terms and conditions of the Amended and Restated Loan and Security Agreement between
Borrower, Lenders and Agent (as amended, the “Agreement”), (1) Borrower is in complete compliance
for the period ending with all required covenants except as noted below, (2) there
are no Events of Default, (3) all representations and warranties in the Agreement are true and
correct in all material respects on this date except as noted below; provided, however, that such
materiality qualifier shall not be applicable to any representations and warranties that already
are qualified or modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be true, accurate and
complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has
timely filed all required tax returns and reports, and Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as
otherwise permitted pursuant to the terms of Section 5.8 of the Agreement, and (5) no Liens have
been levied or claims made against Borrower or any of its Subsidiaries relating to any material
amount of unpaid employee payroll or benefits of which Borrower has not previously provided written
notification to Agent. Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with generally GAAP consistently
applied from one period to the next except as explained in an accompanying letter or footnotes.
The undersigned acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered. Capitalized terms
used but not otherwise defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.
| Reporting Covenant | Required | Complies | ||||
Monthly financial statements with
Compliance Certificate
|
Monthly within 45 days | Yes | No | |||
Annual financial statement (CPA Audited)
|
FYE within 150 days | Yes | No | |||
10-Q, 10-K and 8-K
|
Within 5 days after filing with SEC* | Yes | No | |||
Regulatory filings (including CFTC reports)
|
As filed/submitted | Yes | No | |||
NFA Audit
|
Annually, as filed/submitted | Yes | No | |||
Unrestricted Cash Summary
|
Monthly within 45 days | Yes | No | |||
3
| Financial Covenant | Required | Actual | Complies | |||||
Maintain on a Quarterly Basis: |
||||||||
Minimum Debt Service Coverage Ratio**
|
> _____:1.0 | _____:1.0 | Yes | No | ||||
Maximum Total Funded Debt/EBITDA***
|
< _____:1.0 | _____:1.0 | Yes | No | ||||
| * | Unless available electronically as set forth in Section 6.2(a) of the Agreement | |
| ** | As set forth in Section 6.7(a) of the Agreement | |
| *** | As set forth in Section 6.7(b) of the Agreement |
4
The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)
| Gain Capital Holdings, Inc. | AGENT USE ONLY | |||||||||
| By: | Received by: | |||||||||
| authorized signer | ||||||||||
Name:
|
Date: | |||||||||
| Title: | Verified: | |||||||||
| authorized signer | ||||||||||
| Date: | ||||||||||
| Compliance Status: Yes No | ||||||||||
5
EXHIBIT C
FORM OF NOTICE OF BORROWING
Date:
To:
|
Silicon Valley Bank | |
| 0000 Xxxxxx Xxxxx | ||
| Xxxxx Xxxxx, XX 00000 | ||
| Attention: Corporate Services Department | ||
Re:
|
Amended and Restated Loan and Security Agreement dated as of , 2011 (as amended, modified,
supplemented or restated from time to time, the “Loan Agreement”), by and among Gain Capital Holdings, Inc.
(“Borrower”), Silicon Valley Bank (“SVB”), as agent (the “Agent”), and JPMorgan Chase Bank, N.A. (“JPMorgan”)
(SVB and JPMorgan and collectively referred to as the “Lenders”) |
Ladies and Gentlemen:
The undersigned refers to the Loan Agreement, the terms defined therein and used herein as so
defined, and hereby gives you notice irrevocably, pursuant to Section 3.4(a) of the Loan Agreement,
of the borrowing of a Credit Extension.
1.
The Funding Date, which shall be a Business Day, of the requested borrowing is .
2.
The aggregate amount of the requested borrowing is $ .
3.
The requested Credit Extension shall consist of $ of Prime Rate Credit Extensions
and $ of LIBOR Credit Extensions.
4.
The duration of the Interest Period for the LIBOR Credit Extensions included in the requested
Credit Extension shall be three (3) months.
The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the proposed Credit Extension before and after giving effect
thereto, and to the application of the proceeds therefrom, as applicable:
(a) all representations and warranties of Borrower contained in the Loan Agreement are
true, accurate and complete in all material respects as of the date hereof;
(b) no Default or Event of Default has occurred and is continuing, or would result from
such proposed Credit Extension; and
6
(c) the requested Credit Extension will not cause the aggregate principal amount of the
outstanding Credit Extensions to exceed, as of the designated Funding Date, the Term Loan
Amount or the Revolving Line, as applicable.
| Borrower |
GAIN CAPITAL HOLDINGS, INC. |
|||
| By: | ||||
| Name: | ||||
| Title: | ||||
For internal Agent use only
| LIBOR Pricing Date | LIBOR | LIBOR Variance | Maturity Date | |||||||||
| % | ||||||||||||
EXHIBIT D
FORM OF NOTICE OF CONVERSION/CONTINUATION
| Date: | ||
To:
|
Silicon Valley Bank | |
| 0000 Xxxxxx Xxxxx | ||
| Xxxxx Xxxxx, XX 00000 | ||
| Attention: | ||
Re:
|
Amended and Restated Loan and Security Agreement dated as of , 2011 (as amended, modified,
supplemented or restated from time to time, the “Loan Agreement”), by and among Gain Capital Holdings, Inc.
(“Borrower”), Silicon Valley Bank (“SVB”), as agent (the “Agent”), and JPMorgan Chase Bank, N.A. (“JPMorgan”)
(SVB and JPMorgan and collectively referred to as the “Lenders”) |
Ladies and Gentlemen:
The undersigned refers to the Loan Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to Section 3.5 of the Loan
Agreement, of the [conversion] [continuation] of the Credit Extensions specified herein, that:
1. The date of the [conversion] [continuation] is , 20 .
2. The type of Credit Extensions to be converted or continued are
(Advances or Term Loan)
3. The aggregate amount of the proposed Credit Extensions to be [converted] is
$
or [continued] is $ .
4. The Credit Extensions are to be [converted into] [continued as] [LIBOR] [Prime Rate] Credit
Extensions.
5. The duration of the Interest Period for the LIBOR Credit Extensions included in the
[conversion] [continuation] shall be three (3) months.
The undersigned, on behalf of Borrower, hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed [conversion] [continuation], before and
after giving effect thereto and to the application of the proceeds therefrom:
(a) all representations and warranties of Borrower stated in the Loan Agreement are
true, accurate and complete in all material respects as of the date hereof; and
(b) no Default or Event of Default has occurred and is continuing, or would result from
such proposed [conversion] [continuation].
[Signature page follows.]
2
| Borrower | GAIN CAPITAL HOLDINGS, INC. |
|||
| By: | ||||
| Name: | ||||
| Title: | ||||
For internal Agent use only
| LIBOR Pricing Date | LIBOR | LIBOR Variance | Maturity Date | |||||||||
| % | ||||||||||||
EXHIBIT E
Loan Payment/Advance Request Form
Deadline for same day processing is Noon E.S.T.
Fax To:
Date:
LOAN PAYMENT:
Gain Capital Holdings, Inc.
From Account #
|
To Account # | |||||||
| (Deposit Account #) | (Loan Account #) | |||||||
Principal $
|
and/or Interest $ | |||||||
Authorized Signature:
|
Phone Number: |
Print Name/Title:
Loan Advance:
Complete Outgoing Wire Request section below if all or a portion of the funds from this loan
advance are for an outgoing wire.
From Account #
|
To Account # | ||||||
| (Loan Account #) | (Deposit Account #) | ||||||
Amount of Advance $
All Borrower’s representations and warranties in the Amended and Restated Loan and Security
Agreement are true, correct and complete in all material respects on the date of the request for an
advance; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date:
Authorized Signature:
|
Phone Number: | |
Print Name/Title: |
Unless otherwise provided for an Advance bearing interest at LIBOR. |
||
Outgoing Wire Request:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, E.S.T.
Beneficiary Name:
|
Amount of Wire: $ | |||
Beneficiary Bank:
|
Account Number: | |||
| City and State: | ||||
| Beneficiary Bank Transit (ABA) #: | Beneficiary Bank Code (Swift, Sort, Chip, etc.): | |||
| (For International Wire Only) | ||||
| Intermediary Bank: | Transit (ABA) #: | |||
| For Further Credit to: | ||||
| Special Instruction: | ||||
By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the terms and conditions set forth in the agreements(s)
covering funds transfer service(s), which agreements(s) were previously received and executed by me
(us).
Authorized Signature:
|
2nd Signature (if required): | |||||||
Print Name/Title:
|
Print Name/Title: | |||||||
Telephone #:
|
Telephone: | |||||||
