GUARANTEE AGREEMENT dated as of May 2, 2006 among LONE STAR MERGER CORP. (to be merged with, and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into, Activant Solutions Inc.), LONE STAR HOLDING CORP., CERTAIN OTHER...
Exhibit 10.2
EXECUTION COPY
EXECUTION COPY
dated as of
May 2, 2006
among
LONE STAR MERGER CORP. (to be merged with,
and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into,
Activant Solutions Inc.),
and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into,
Activant Solutions Inc.),
LONE STAR HOLDING CORP.,
CERTAIN OTHER SUBSIDIARIES OF LONE STAR MERGER CORP.
IDENTIFIED HEREIN
IDENTIFIED HEREIN
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent
Table of Contents
| Page | ||||||
| ARTICLE I Definitions | 2 | |||||
| Section 1.01. Credit Agreement | 2 | |||||
| Section 1.02. Other Defined Terms | 3 | |||||
| ARTICLE II Guarantee | 3 | |||||
| Section 2.01. Guarantee | 3 | |||||
| Section 2.02. Guarantee of Payment | 4 | |||||
| Section 2.03. No Limitations | 4 | |||||
| Section 2.04. Reinstatement | 5 | |||||
| Section 2.05. Agreement To Pay; Subrogation | 5 | |||||
| Section 2.06. Information | 5 | |||||
| ARTICLE III Indemnity, Subrogation and Subordination | 5 | |||||
| Section 3.01. Indemnity and Subrogation | 5 | |||||
| Section 3.02. Contribution and Subrogation | 6 | |||||
| Section 3.03. Subrogation | 7 | |||||
| ARTICLE IV Miscellaneous | 7 | |||||
| Section 4.01. Notices | 7 | |||||
| Section 4.02. Waivers; Amendment | 7 | |||||
| Section 4.03. Administrative Agent’s Fees and Expenses; Indemnification | 8 | |||||
| Section 4.04. Successors and Assigns | 8 | |||||
| Section 4.05. Survival of Agreement | 8 | |||||
| Section 4.06. Counterparts; Effectiveness; Several Agreement | 9 | |||||
| Section 4.07. Severability | 9 | |||||
| Section 4.08. Right of Set-Off | 9 | |||||
| Section 4.09. Governing Law; Jurisdiction; Consent to Service of Process | 10 | |||||
| Section 4.10. WAIVER OF JURY TRIAL | 10 | |||||
| Section 4.11. Headings | 11 | |||||
| Section 4.12. Obligations Absolute | 11 | |||||
| Section 4.13. Termination or Release | 11 | |||||
| Section 4.14. Additional Restricted Subsidiaries | 12 | |||||
| Section 4.15. Effectiveness of the Merger and the Secondary Merger | 12 | |||||
| Section 4.16. Recourse | 12 | |||||
| Section 4.17. Limitation on Guaranteed Obligations | 12 | |||||
SCHEDULES |
||
Schedule I
|
Subsidiary Parties | |
EXHIBITS |
||
Exhibit I
|
Form of Guarantee Agreement Supplement |
(i)
GUARANTEE AGREEMENT, dated as of May 2, 2006, among LONE STAR MERGER CORP., a Delaware
corporation (to be merged with,
and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into,
Activant Solutions Inc., “Merger Sub”), LONE STAR HOLDING CORP., a Delaware corporation
(“Holdings”), the Subsidiaries of the Borrower identified herein and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Administrative Agent.
Reference is made to the Credit Agreement, dated as of May 2, 2006 (as amended, restated,
supplemented and/or otherwise modified from time to time, the “Credit Agreement”), among
the Borrower, Holdings, Deutsche Bank Trust Company Americas, as Administrative Agent, Swing Line
Lender and an L/C Issuer, each Lender from time to time party thereto, JPMorgan Chase Bank, N.A.,
as Syndication Agent, and Xxxxxx Commercial Paper Inc. as Documentation Agent.
The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions
set forth in the Credit Agreement, the Hedge Banks have agreed to enter into and/or maintain one or
more Secured Hedge Agreements on the terms and conditions set forth therein and the Cash Management
Banks have agreed to provide and/or maintain Cash Management Services on the terms and conditions
agreed upon by the Borrower or the respective Restricted Subsidiary and such Cash Management Bank.
The obligations of the Lenders to extend such credit, the obligation of the Hedge Banks to enter
into and/or maintain such Secured Hedge Agreements and the obligation of the Cash Management Banks
to provide and/or maintain Cash Management Services are, in each case, conditioned upon, among
other things, the execution and delivery of this Agreement by each Guarantor. Holdings, the
Borrower and the Subsidiary Parties are affiliates of one another, will derive substantial benefits
from (i) the extensions of credit to the Borrower pursuant to the Credit Agreement, (ii) the
entering into and/or maintaining by the Hedge Banks of Secured Hedge Agreements with the Borrower
and/or one or more of its Restricted Subsidiaries and (iii) the providing and/or maintaining of
Cash Management Services by the Cash Management Banks to the Borrower and/or one or more of its
Restricted Subsidiaries, and are willing to execute and deliver this Agreement in order to induce
the Lenders to extend such credit, the Hedge Banks to enter into and/or maintain such Secured Hedge
Agreements and the Cash Management Banks to provide and/or maintain such Cash Management Services.
Accordingly, in consideration of the foregoing and other benefits accruing to each Guarantor,
the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the
following representations and warranties to the Administrative Agent for the benefit of the Secured
Parties and hereby covenants and agrees with each other Guarantor and the Administrative Agent for
the benefit of the Secured Parties as follows:
ARTICLE I
Definitions
Section 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings
specified in the Credit Agreement.
(b) The rules of construction specified in Article I of the Credit Agreement also apply to
this Agreement.
Section 1.02. Other Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:
“Agreement” means this Guarantee Agreement.
“Credit Agreement” has the meaning assigned to such term in the preliminary statement
of this Agreement.
“Guarantee Agreement Supplement” means an instrument substantially in the form of
Exhibit I hereto.
“Guaranteed Obligations” mean the “Obligations” as defined in the Credit Agreement.
“Guaranteed Party” means Holdings, the Borrower, each Subsidiary Guarantor and each
Restricted Subsidiary of the Borrower party to any Secured Hedge Agreement.
“Guarantor” means each of Holdings, the Borrower and each Subsidiary Party.
“Secured Credit Document” shall mean each Loan Document, each Secured Hedge Agreement
and any agreement evidencing any Cash Management Obligation.
“Secured Parties” has the meaning provided in the Security Agreement.
“Subsidiary Parties” means (a) the Restricted Subsidiaries identified on Schedule I
and (b) each other Restricted Subsidiary that becomes a party to this Agreement as a Subsidiary
Party after the Closing Date.
ARTICLE II
Guarantee
Section 2.01. Guarantee. Each Guarantor irrevocably, absolutely and unconditionally
guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Guaranteed Obligations, in each case,
whether such Guaranteed Obligations are now existing or hereafter incurred under, arising out of or
in connection with any Secured Credit Document, and whether at maturity, by acceleration or
otherwise. Each of the Guarantors further agrees that the Guaranteed Obligations may be extended,
increased or renewed, in whole or in part, without notice to, or further assent from, such
Guarantor and that
such Guarantor will remain bound upon its guarantee notwithstanding any extension, increase or
renewal of any Guaranteed Obligation. Each of the Guarantors waives presentment to, demand of
payment from, and protest to, the applicable Guaranteed Party or any other Loan Party of any of the
Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest
for nonpayment.
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Section 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Administrative Agent or any other Secured Party
to any security held for the payment of the Guaranteed Obligations, or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other Secured Party in
favor of any Guaranteed Party or any other Person.
Section 2.03. No Limitations. (a) Except for termination of a Guarantor’s obligations
hereunder as expressly provided in Section 4.13, the obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations, or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or
impaired or otherwise affected by (i) the failure of the Administrative Agent or any other Secured
Party to assert any claim or demand or to enforce any right or remedy under the provisions of any
Secured Credit Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any Secured Credit Document or any other
agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of
any security held by the Collateral Agent (as defined in the Security Agreement) or any other
Secured Party for the Guaranteed Obligations; (iv) any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations; or (v) any other act or omission that
may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as
a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in
full in cash of all the Guaranteed Obligations, or the termination of this Agreement pursuant to
Section 4.13). Each Guarantor expressly authorizes the applicable Secured Parties to take and hold
security for the payment and performance of the Guaranteed Obligations, to exchange, waive or
release any or all such security (with or without consideration), to enforce or apply such security
and direct the order and manner of any sale thereof in their sole discretion or to release or
substitute any one or more other guarantors or obligors upon or in respect of the Guaranteed
Obligations all without affecting the obligations of any Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based
on or arising out of any defense of the Borrower or any other Guaranteed Party or the
unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower or any other Guaranteed Party, other than the
indefeasible payment in full in cash of all the Guaranteed Obligations (or the
termination of this Agreement pursuant to Section 4.13). The Administrative Agent and the
other Secured Parties may in accordance with the terms of the Collateral Documents, at their
election, foreclose on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or
adjust any part of the Guaranteed Obligations make any other accommodation with the Borrower or any
other Guaranteed Party or exercise any other right or remedy available to them against Guaranteed
Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to
the extent the Guaranteed Obligations have been fully and indefeasibly paid in full in cash (or the
termination of this Agreement pursuant to Section 4.13).
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To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any
other Guaranteed Party, as the case may be, or any security.
Section 2.04. Reinstatement. Notwithstanding anything to contrary contained in this
Agreement, each of the Guarantors agrees that (i) its guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any
Guaranteed Obligation is rescinded or must otherwise be restored by the Administrative Agent or any
other Secured Party upon the bankruptcy or reorganization of the Borrower or any other Guaranteed
Party or otherwise and (ii) the provisions of this Section 2.04 shall survive the termination of
this Agreement.
Section 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in
limitation of any other right that the Administrative Agent or any other Secured Party has at law
or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other
Guaranteed Party to pay any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises
to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the
applicable Secured Parties in cash the amount of such unpaid Guaranteed Obligation. Upon payment
by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such
Guarantor against the Borrower or any other Guaranteed Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article III.
Section 2.06. Information. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower’s and each other Guaranteed Party’s financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Administrative Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such circumstances or
risks.
ARTICLE III
Indemnity, Subrogation and Subordination
Section 3.01. Indemnity and Subrogation. In addition to all such rights of indemnity and
subrogation as the Guarantors may have under applicable law (but subject to Section 3.03), each
Guaranteed Party agrees that in the event a payment shall be made by any Guarantor under this
Agreement on account of any Obligation owed directly by such Guaranteed Party (i.e., other
than any obligation arising under this Agreement), such Guaranteed Party shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights
of the Person to whom such payment shall have been made to the extent of such payment.
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Section 3.02. Contribution and Subrogation. At any time a payment by any Subsidiary Party
in respect of the Guaranteed Obligations is made under this Agreement that shall not have been
fully indemnified as provided in Section 3.01, the right of contribution of each Subsidiary Party
against each other Subsidiary Party shall be determined as provided in the immediately succeeding
sentence, with the right of contribution of each Subsidiary Party to be revised and restated as of
each date on which an unreimbursed payment (a “Relevant Payment”) is made on the Guaranteed
Obligations under this Agreement. At any time that a Relevant Payment is made by a Subsidiary
Party that results in the aggregate payments made by such Subsidiary Party in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Subsidiary
Party’s Contribution Percentage (as defined below) of the aggregate payments made by all Subsidiary
Parties in respect of the Guaranteed Obligations to and including the date of the Relevant Payment
(such excess, the “Aggregate Excess Amount”), each such Subsidiary Party shall have a right
of contribution against each other Subsidiary Party who has made payments in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount
less than such other Subsidiary Party’s Contribution Percentage of the aggregate payments made to
and including the date of the Relevant Payment by all Subsidiary Parties in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate Deficit
Amount”) in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess
Amount of such Subsidiary Party and the denominator of which is the Aggregate Excess Amount of all
Subsidiary Parties multiplied by (y) the Aggregate Deficit Amount of such other Subsidiary Party.
A Subsidiary Party’s right of contribution pursuant to the preceding sentences shall arise at the
time of each computation, subject to adjustment to the time of each computation; provided
that all contribution rights of such Subsidiary Party shall be subject to Section 3.03. As used in
this Section 3.02: (i) each Subsidiary Party’s “Contribution Percentage” shall mean the
percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Subsidiary
Party by (y) the aggregate Adjusted Net Worth of all Subsidiary Parties; (ii) the “Adjusted Net
Worth” of each Subsidiary Party shall mean the greater of (x) the Net Worth (as defined below)
of such Subsidiary Party and (y) zero; and (iii) the “Net Worth” of each Subsidiary Party
shall mean the amount by which the fair saleable value of such Subsidiary Party’s assets on the
date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed
Obligations arising under this Agreement or any guaranteed obligations arising under any guaranty
of the Senior Subordinated Notes or any Permitted Refinancing thereof) on such date.
Notwithstanding anything to the contrary contained above, any Subsidiary Party that is released
from this Agreement pursuant to Section 4.13 hereof shall thereafter have no contribution
obligations, or rights, pursuant to this Section 3.02, and at the time of any such release, if the
released Subsidiary Party had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall
be deemed reduced to $0, and the contribution rights and obligations of the remaining Subsidiary
Parties shall be recalculated on the respective date of release (as otherwise provided above) based
on the payments made hereunder by the remaining Subsidiary Parties. Each of the Subsidiary Parties
recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an
asset in favor of the party entitled to such contribution. In this connection, each Subsidiary
Party has the right to waive its contribution right against any other Subsidiary Party to the
extent that after giving effect to such waiver such Subsidiary Party would remain solvent, in the
determination of the Required Lenders.
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Section 3.03. Subordination. Notwithstanding any provision of this Agreement to the
contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Guaranteed Obligations (or the
termination of this Agreement pursuant to Section 4.13); provided, that if any amount shall be paid
to such Guarantor on account of such subrogation rights at any time prior to the irrevocable
payment in full in cash of all the Guaranteed Obligations (or the termination of this Agreement
pursuant to Section 4.13), such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be paid to the Administrative Agent to be credited and applied against
the Guaranteed Obligations, whether matured or unmatured, in accordance with Section 4.02(a) of the
Security Agreement or Section 8.04 of the Credit Agreement, as applicable. No failure on the part
of the Borrower or any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any
other payments required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each
Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.
ARTICLE IV
Miscellaneous
Section 4.01. Notices. All communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Party shall be given to it
in care of the Borrower as provided in Section 10.02 of the Credit Agreement.
Section 4.02. Waivers; Amendment. (a) No failure or delay by the Administrative Agent, any L/C Issuer or any Lender in exercising
any right or power hereunder or under any other Secured Credit Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Secured
Parties hereunder and under the other Secured Credit Documents are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section 4.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or any L/C Issuer may have had notice or knowledge of such Default at the time.
No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the
Loan Party or Loan Parties with respect to which such waiver,
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amendment or modification is to
apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.
Section 4.03. Administrative Agent’s Fees and Expenses; Indemnification. (a) The parties
hereto agree that the Administrative Agent shall be entitled to reimbursement of its expenses
incurred hereunder as provided in Section 10.04 of the Credit Agreement.
(b) Without limitation of its indemnification obligations under the other Secured Credit
Documents, each Guarantor jointly and severally agrees to indemnify the Administrative Agent and
the other Indemnitees (as defined in Section 10.05 of the Credit Agreement) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses,
including all Attorney Costs of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, the execution, delivery,
performance or enforcement of this Agreement or any claim, litigation, investigation or proceeding
relating to any of the foregoing agreements or instruments contemplated hereby, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses have resulted from the gross negligence or willful misconduct of such Indemnitee or of any
Affiliate, director, officer, employee, counsel, agent, trustee, investment advisor or
attorney-in-fact of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional Guaranteed Obligations
secured by the Collateral Documents. The provisions of this Section 4.03 shall remain operative
and in full force and effect regardless of the termination of this Agreement or any other Secured
Credit Document, the consummation of the transactions contemplated hereby, the repayment of any of
the Guaranteed Obligations, the invalidity or unenforceability of any term or provision of this
Agreement or any other Secured Credit
Document, or any investigation made by or on behalf of the Administrative Agent or any other
Secured Party. All amounts due under this Section 4.03 shall be payable within 10 days of written
demand therefor.
Section 4.04. Successors and Assigns. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any Guarantor or the
Administrative Agent that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
Section 4.05. Survival of Agreement. All covenants, agreements, representations and
warranties made by the Guaranteed Parties in the Secured Credit Documents and in the certificates
or other instruments prepared or delivered in connection with or pursuant to this Agreement or any
other Secured Credit Document shall be considered to have been relied upon by the relevant Secured
Parties, and shall survive the execution and delivery of the relevant Secured Credit Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made
by any Secured Party or on its behalf and notwithstanding that the Administrative Agent, any L/C
Issuer, any Lender or any other Secured Party may have had notice or knowledge of any Default or
default under any other Secured Credit Document or any incorrect representation or warranty at the
time any credit is extended under any Secured
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Credit Document, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any fee or any other
amount payable under any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.
Section 4.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be
executed in counterparts, each of which shall constitute an original but all of which when taken
together shall constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement. This Agreement shall become effective as to any Loan Party when a
counterpart hereof executed on behalf of such Loan Party shall have been delivered to the
Administrative Agent and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Loan Party and the Administrative
Agent and their respective permitted successors and assigns, and shall inure to the benefit of such
Loan Party, the Administrative Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein (and any such assignment or transfer shall be void)
except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall
be construed as a separate agreement with respect to each Loan Party and may be amended, restated,
modified, supplemented, waived or released with respect to any Loan Party without the approval of
any other Loan Party and without affecting the obligations of any other Loan Party hereunder.
Section 4.07. Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
Section 4.08. Right of Set-Off. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of Default, each
Lender and its Affiliates is authorized at any time and from time to time, without prior notice to
the Borrower or any other Guaranteed Party, any such notice being waived by the Borrower or any
other Guaranteed Party to the fullest extent permitted by applicable Law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender and its Affiliates to or for the credit or
the account of the respective Loan Parties against any and all obligations owing to such Lender and
its Affiliates hereunder, now or hereafter existing, irrespective of whether or not such Lender or
Affiliate shall have made demand under this Agreement and although such obligations may be
contingent or unmatured or denominated in a currency different from that of the applicable deposit
or Indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set off and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such
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setoff and application. The rights of each Lender
under this Section 4.08 are in addition to other rights and remedies (including other rights of
setoff) that such Lender may have.
Section 4.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York City and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement or any other Loan Document shall affect any right that the Administrative Agent, any
L/C Issuer, any Lender or any other Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or any other Loan Document
against any Guarantor, or its properties in the courts of any jurisdiction.
(c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section 4.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 4.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.
Section 4.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY,
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AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 4.10.
Section 4.11. Headings. Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this Agreement.
Section 4.12. Obligations Absolute. All rights of the Administrative Agent hereunder and
all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any
Secured Hedge Agreement, any agreement with respect to any of the Guaranteed Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to any departure from the Credit Agreement, any other
Loan Document, any other Secured Hedge Agreement or any other agreement or instrument, (c) any
release or amendment or waiver of or consent under or departure from any
guarantee guaranteeing all or any portion of the Guaranteed Obligations or (d) any other
circumstance that might otherwise constitute a defense available to, or a discharge of, any
Guarantor in respect of the Guaranteed Obligations or this Agreement.
Section 4.13. Termination or Release. (a) This Agreement and the Guarantees made herein
shall terminate with respect to all Guaranteed Obligations when all the outstanding Guaranteed
Obligations have been indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement, the L/C Obligations have been reduced to zero and the L/C Issuers have
no further obligations to issue Letters of Credit under the Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its obligations hereunder upon the
consummation of any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Party ceases to be a Subsidiary of the Borrower; provided that the Required
Lenders shall have consented to such transaction (to the extent required by the Credit Agreement)
and the terms of such consent did not provide otherwise.
(c) In connection with any termination or release pursuant to paragraph (a) or (b), the
Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense, all
documents that such Guarantor shall reasonably request to evidence such termination or release.
Any execution and delivery of documents pursuant to this Section 4.13 shall be without recourse to
or warranty by the Administrative Agent.
(d) At any time that the Borrower desires that the Administrative Agent take any of the
actions described in immediately preceding clause (c), it shall, upon request of the Administrative
Agent, deliver to the Administrative Agent an officer’s certificate certifying that the release of
the respective Subsidiary Party is permitted pursuant to paragraph (a) or (b). The Administrative
Agent shall have no liability whatsoever to any Secured Party as the result of any release of any
Subsidiary Party by it as permitted (or which the Administrative Agent in good faith believes to be
permitted) by this Section 4.13.
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(e) Notwithstanding anything to contrary set forth in this Agreement, each Cash Management
Bank and each Hedge Bank by the acceptance of the benefits under this Agreement hereby acknowledge
and agree that (i) the guarantees made under this Agreement of the Guaranteed Obligations of the
Borrower or any Subsidiary under any Secured Hedge Agreement and the Cash Management Obligations
shall be automatically released upon termination of the Aggregate Commitments and payment in full
of all other Guaranteed Obligations, in each case, unless such Guaranteed Obligations under the
Secured Hedge Agreement or the Cash Management Obligations are due and payable at such time (it
being understood and agreed that this Agreement and the guarantees made herein shall survive solely
as to such due and payable Guaranteed Obligations and until such time as such due and payable
Guaranteed Obligations have been paid in full) and (ii) any release of a Guarantor effected in the
manner permitted by this Agreement shall not require the consent of any Hedge Bank or Cash
Management Bank.
Section 4.14. Additional Restricted Subsidiaries. Pursuant to (and to the extent required by) Section 6.11 of the Credit Agreement, certain
Restricted Subsidiaries of the Loan Parties that were not in existence or not Restricted
Subsidiaries on the date of the Credit Agreement are required to enter in this Agreement as
Subsidiary Parties upon becoming a Restricted Subsidiary. Upon execution and delivery by the
Administrative Agent and a Restricted Subsidiary of a Guarantee Agreement Supplement, such
Restricted Subsidiary shall become a Subsidiary Party hereunder with the same force and effect as
if originally named as a Subsidiary Party herein. The execution and delivery of any such
instrument shall not require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the
addition of any new Loan Party as a party to this Agreement.
Section 4.15. Effectiveness of the Merger and the Secondary Merger. (a) Target and its
Subsidiaries shall have no rights or obligations hereunder until the consummation of the Merger and
any representations and warranties of Target or any of its Subsidiaries hereunder shall not become
effective until such time. Upon consummation of the Merger, Target shall succeed to all the rights
and obligations of Merger Sub under this Agreement and all rights, obligations, representations and
warranties of Target and its Subsidiaries shall become effective as of the date hereof, without any
further action by any Person.
(b) Upon consummation of the Secondary Merger, Opco shall succeed to all the rights and obligations
of Target under this Agreement and all rights, obligations, representations and warranties of Opco
and its Subsidiaries shall become effective as of the date hereof, without any further action by
any Person.
Section 4.16. Recourse. This Agreement is made with full recourse to each Guarantor and
pursuant to and upon all the warranties, representations, covenants and agreements on the part of
such Guarantor contained herein, in the Loan Documents and the other Secured Credit Documents and
otherwise in writing in connection herewith or therewith, with respect to the Obligations of each
applicable Secured Party.
Section 4.17. Limitation on Guaranteed Obligations. Each Guarantor that is a Subsidiary
Party and each Secured Party (by its acceptance of the benefits of this Agreement) hereby confirms
that it is its intention that this Agreement not constitute a fraudulent transfer or
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conveyance for
purposes of any Debtor Relief Laws (including the Bankruptcy Code, the Uniform Fraudulent
Conveyance Act or any similar Federal or state law). To effectuate the foregoing intention, each
Guarantor that is a Subsidiary Party and each Secured Party (by its acceptance of the benefits of
this Agreement) hereby irrevocably agrees that the Guaranteed Obligations owing by such Guarantor
under this Agreement shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant
under such Debtor Relief Laws (it being understood that it is the intention of the parties to this
Agreement and the parties to any guaranty of the Senior Subordinated Notes that, to the maximum
extent permitted under applicable laws,
the liabilities in respect of the guarantees of the Senior Subordinated Notes shall not be included
for the foregoing purposes and that, if any reduction is required to the amount guaranteed by any
Guarantor hereunder and with respect to the Senior Subordinated Notes that its guarantee of amounts
owing in respect of the Senior Subordinated Notes shall first be reduced) and after giving effect
to any rights to contribution and/or subrogation pursuant to any agreement providing for an
equitable contribution and/or subrogation among such Guarantor and the other Guarantors, result in
the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a
fraudulent transfer or conveyance.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.
| LONE STAR MERGER CORP. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| LONE STAR HOLDINGS CORP. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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| ACTIVANT SOLUTIONS HOLDINGS INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| ACTIVANT SOLUTIONS INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| CCI/ARD, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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CCI/TRIAD FINANCIAL HOLDING CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| CCI/TRIAD GEM, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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DISTRIBUTOR INFORMATION SYSTEMS CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| ENTERPRISE COMPUTER SYSTEMS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| XX XXXX LLC |
||||
| By: Activant Solutions Inc., as its Sole Member | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| PROPHET 21 CANADA INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| PROPHET 21 INVESTMENT CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| PROPHET 21 (NEW JERSEY), INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| PROPHET 21, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| SDI MERGER CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| SPEEDWARE HOLDINGS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| SPEEDWARE USA INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| STANPAK SYSTEMS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| TRADE SERVICE SYSTEMS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| TRIAD DATA CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| TRIAD SYSTEMS CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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| TRIAD SYSTEMS FINANCIAL CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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EXHIBIT I to the
Guarantee Agreement
Guarantee Agreement
SUPPLEMENT
NO. ___ dated as of [ ], to the Guarantee Agreement dated as of May 2, 2006,
among LONE STAR HOLDING CORP., a Delaware corporation (“Holdings”), ACTIVANT SOLUTIONS INC.
(f/k/a Lone Star Merger Corp.), a Delaware Corporation (the “Borrower”) the Subsidiaries of
Holdings identified therein and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for the
Secured Parties (as defined below).
A. Reference is made to (i) the Credit Agreement dated as of May 2, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Holdings, the Borrower, Deutsche Bank Trust Company Americas, as Administrative Agent, Swing
Line Lender and an L/C Issuer, each Lender from time to time party thereto, JPMorgan Chase Bank,
N.A., as Syndication Agent and and Xxxxxx Commercial Paper Inc., as Documentation Agent, (ii) each
Secured Hedge Agreement (as defined in the Credit Agreement) and (iii) the Cash Management
Obligations (as defined in the Credit Agreement).
B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Guarantee Agreement referred to therein.
C. The Guarantors have entered into the Guarantee Agreement in order to induce (x) the Lenders
to make Loans and the L/C Issuers to issue Letters of Credit, (y) the Hedge Banks to enter into
and/or maintain Secured hedge Agreement and (z) the Cash Management Banks to provide Cash
Management Services. Section 4.14 of the Guarantee Agreement provides that additional Restricted
Subsidiaries of the Borrower may become Subsidiary Parties under the Guarantee Agreement by
execution and delivery of an instrument in the form of this Supplement. The undersigned Restricted
Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Party under the Guarantee Agreement in
order to induce the Lenders to make additional Loans and the L/C Issuers to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of Credit previously
issued.
Accordingly, the Administrative Agent and the New Subsidiary agree as follows:
Section 1. In accordance with Section 4.14 of the Guarantee Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party and Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a Subsidiary Party and
the New Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee Agreement
applicable to it as a Subsidiary Party and Guarantor thereunder and (b) represents and warrants
that the representations and warranties made by it as a Guarantor thereunder are true and correct
on and as of the date hereof, provided that, to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct in all respects as of such
earlier date Each reference to a “Guarantor” in the Guarantee Agreement shall be deemed to include
the New Subsidiary. The Guarantee Agreement is hereby incorporated herein by reference.
Exhibit I
Page 2
Page 2
Section 2. The New Subsidiary represents and warrants to the Administrative Agent and
the other Secured Parties that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to the effects of any applicable Debtor Relief Laws.
Section 3. This Supplement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Supplement shall become effective
when the Administrative Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Administrative Agent has executed a counterpart hereof.
Delivery of an executed signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement.
Section 4. Except as expressly supplemented hereby, the Guarantee Agreement shall
remain in full force and effect.
Section 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Section 6. In case any one or more of the provisions contained in this Supplement
should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and in the Guarantee Agreement shall
not in any way be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
Section 7. All communications and notices hereunder shall be in writing and given as
provided in Section 4.01 of the Guarantee Agreement.
Section 8. The New Subsidiary agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including all Attorney Costs
of counsel for the Administrative Agent.
EXHIBIT I to the
Guarantee Agreement
Guarantee Agreement
IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly executed this
Supplement to the Guarantee Agreement as of the day and year first above written.
| [NAME OF NEW SUBSIDIARY] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
