EXHIBIT 10.16
BLACKBAUD, INC.
BLACKBAUD, LLC
THIRD AMENDMENT
TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of May 16, 2001 and entered into by and among Blackbaud, Inc., a South
Carolina corporation ("BLACKBAUD"), Blackbaud, LLC, a South Carolina limited
liability company ("BLACKBAUD LLC"), the financial institutions listed on the
signature pages hereof ("LENDERS"), Bankers Trust Company, as administrative
agent for Lenders ("ADMINISTRATIVE AGENT"), Fleet Boston Corporation (formerly
known as Fleet National Bank), as documentation agent for Lenders (in such
capacity, "DOCUMENTATION AGENT"), and First Union Securities, Inc., as
syndication agent for Lenders (in such capacity, "SYNDICATION AGENT"), and is
made in reference to that certain Credit Agreement dated as of October 13, 1999,
as amended by that certain First Amendment dated as of December 6, 1999 and that
certain Second Amendment dated as of December 19, 2000 (said Credit Agreement as
so amended being the "CREDIT AGREEMENT"), by and among Blackbaud, Lenders,
Administrative Agent, Documentation Agent and Syndication Agent. Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Credit Agreement.
RECITALS
WHEREAS, Blackbaud desires to give Lenders the benefit of a
pledge of all of the outstanding shares of a company which owns substantially
all of the operating assets and businesses currently owned and operated by
Blackbaud and to effect such pledge proposes to form a wholly-owned subsidiary,
Blackbaud, LLC, a South Carolina limited liability company ("Blackbaud LLC"),
and to transfer (the "Asset Transfer") to Blackbaud LLC substantially all of the
assets and businesses currently owned and operated by Blackbaud other than
Blackbaud's employees and related employee benefit plans and liabilities;
WHEREAS, concurrently with the effectiveness of the Asset
Transfer, Blackbaud will pledge all of the outstanding shares of Blackbaud LLC
to Administrative Agent for the benefit of Lenders, and Blackbaud LLC will
become a co-borrower under the Credit Agreement, jointly and severally liable
with Blackbaud for all of the Obligations under the Credit Agreement and the
other Loan Documents and will grant to Lenders a security interest in all or
substantially all of its real and personal property;
WHEREAS, Blackbaud owns all of the outstanding shares of
Blackbaud Pacific (Australia) Pty. Ltd. (the "Australian Subsidiary") and
Blackbaud Europe Ltd. (the "UK Subsidiary") and in compliance with subsection
6.8B of the Credit Agreement desires to pledge 66% of the outstanding shares of
the Australian Subsidiary and the UK Subsidiary to Administrative Agent for the
benefit of Lenders;
WHEREAS, certain shareholders of Blackbaud desire to
contribute an additional $10,000,000 in cash common equity to Blackbaud, the
proceeds of which will be used to make mandatory prepayments on the Loans
pursuant to subsection 2.4B(iii)(c) of the Credit Agreement;
WHEREAS, Blackbaud desires to make an aggregate of
approximately $2,500,000 in Expansion Expenditures (as hereinafter defined);
WHEREAS, Blackbaud, Administrative Agent and Lenders desire to
amend the Credit Agreement to (i) provide for Blackbaud LLC to become a borrower
under the Credit Agreement, jointly and severally liable with Blackbaud
thereunder, (ii) provide for the contribution of up to $10,000,000 in cash
common equity by certain shareholders of Blackbaud and to make certain changes
to the acquisition covenant related thereto; and (iii) to make certain other
changes to the Credit Agreement, all as more specifically provided for herein;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO INTRODUCTION AND RECITALS
A. The introduction to the Credit Agreement is
hereby amended by deleting the phrase "Blackbaud, Inc., a South Carolina
corporation (the `Company')" therefrom in its entirety and by substituting
therefor the phrase "Blackbaud, Inc., a South Carolina corporation
(`Blackbaud')".
B. The recitals to the Credit Agreement are
hereby amended by deleting the word "Company" each place it appears in such
recitals and by substituting therefor the word "Blackbaud".
1.2 AMENDMENTS TO SECTION 1: DEFINITIONS.
A. Subsection 1.1 of the Credit Agreement is
hereby amended by deleting the definition of "Company" therefrom and by
substituting the following therefor:
"`Company' means Blackbaud and Blackbaud LLC, on a
joint and several basis, as borrowers under this
Agreement."
B. Subsection 1.1 of the Credit Agreement is
hereby further amended by adding to the definition of "Consolidated Adjusted
EBITDA" contained in the Credit Agreement a new clause (viii) to be added
immediately after the existing clause (vii) as follows:
"and (viii) an amount not to exceed $2,500,000 in the
aggregate for Expansion Expenditures made prior to
June 30, 2002."
C. Subsection 1.1 of the Credit Agreement is
hereby further amended by adding at the end of the definition of "Loan
Documents" the following:
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"and the Joinder Agreement."
D. Subsection 1.1 of the Credit Agreement is
hereby further amended by adding the following definitions thereto in
appropriate alphabetical order:
"`Blackbaud' has the meaning assigned to that term in
the introduction to this Agreement.
`Blackbaud LLC' means Blackbaud, LLC, a South
Carolina limited liability company, and a
wholly-owned subsidiary of Blackbaud.
`Expansion Expenditures' means those sales and
marketing expenditures, product development
expenditures and certain shortfalls in Consolidated
Adjusted EBITDA attributable to Permitted
Acquisitions, in each case as more specifically
described in Schedule 1.1 annexed hereto.
`Joinder Agreement' means the Joinder Agreement
executed and delivered by Blackbaud LLC in connection
with the Third Amendment, substantially in the form
of Annex K attached to the Third Amendment, as such
Joinder Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
`Third Amendment' means that Third Amendment dated as
of May 16, 2001, by and among Blackbaud, Blackbaud
LLC, Lenders and Administrative Agent."
1.3 AMENDMENTS TO SECTION 2: AMOUNT AND TERMS OF
COMMITMENTS AND LOANS.
A. Subsection 2.4B(iii)(c) of the Credit
Agreement is hereby amended by adding at the end of the proviso contained
therein a new clause (iii) as follows:
"and (iii) Net Equity Securities Proceeds contributed
to Company in connection with the Third Amendment
shall be used to prepay the Loans pursuant to this
subsection 2.4B(iii)(c) but shall not reduce the
$15,000,000 referred to in the immediately preceding
clause."
B. Section 2 of the Credit Agreement is hereby
further amended by adding at the end thereof the following new subsections:
"2.9 BORROWERS.
The Administrative Agent and the Lenders may rely,
and shall be fully protected in relying, on any
Notice of Borrowing, Notice of
Conversion/Continuation, Request for Issuance of
Letter of Credit, disbursement instruction, report,
information or any other notice or communication made
or given by either of Blackbaud or Blackbaud LLC,
whether in its own name, on behalf of the other
borrower or on behalf of
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"the Company," and neither the Administrative Agent
nor any Lender shall have any obligation to make any
inquiry or request any confirmation from or on behalf
of any other Person as to the binding effect on it of
any such notice, request, instruction, report,
information, other notice or communications, nor
shall the joint and several character of Blackbaud's
and Blackbaud LLC's liability for the Obligations be
affected, provided that the provisions of this
subsection 2.9 shall not be construed so as to
preclude any of Blackbaud or Blackbaud LLC from
taking other actions permitted to be taken by Company
hereunder. The Administrative Agent and each Lender
intend to maintain a single loan account in the name
of "Blackbaud, Inc." hereunder and each of Blackbaud
and Blackbaud LLC expressly agrees to such
arrangement and confirms that such arrangement shall
have no effect on the joint and several character of
its liability for the Obligations.
2.10 JOINT AND SEVERAL LIABILITY
A. JOINT AND SEVERAL LIABILITY. The
Obligations shall constitute one joint and several
direct and general obligation of Blackbaud and
Blackbaud LLC. Notwithstanding anything to the
contrary contained herein, each of Blackbaud and
Blackbaud LLC shall be jointly and severally, with
each other, directly and unconditionally liable to
the Administrative Agent and the Lenders for all
Obligations and shall have the obligations of
co-maker with respect to the Loans, the Notes and the
Obligations, it being agreed that the advances to
either of Blackbaud or Blackbaud LLC inure to the
benefit of both, and that the Administrative Agent
and the Lenders are relying on the joint and several
liability of Blackbaud and Blackbaud LLC as co-makers
in extending the Loans hereunder and arranging for
the issuance of Letters of Credit. Blackbaud and
Blackbaud LLC hereby unconditionally and irrevocably
agree that upon default in the payment when due
(whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest on, any
Loan or other Obligation payable to the
Administrative Agent or any Lender, it will forthwith
pay the same, without notice or demand.
B. NO REDUCTION IN OBLIGATIONS. No
payment or payments made by any of Blackbaud or
Blackbaud LLC or any other Person or received or
collected by the Administrative Agent or any Lender
from any of Blackbaud or Blackbaud LLC or any other
Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or
from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of
Blackbaud or Blackbaud LLC under this Agreement, and
each of Blackbaud and Blackbaud LLC shall remain
liable for the Obligations until the Obligations are
paid in full and this Agreement is terminated.
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2.11 OBLIGATIONS ABSOLUTE.
Each of Blackbaud and Blackbaud LLC agrees that the
Obligations will be paid strictly in accordance with
the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or
the rights of the Administrative Agent or any Lender
with respect thereto. All Obligations shall be
conclusively presumed to have been created in
reliance hereon. The liabilities under this Agreement
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
Loan Document or any other agreement or instrument
relating thereto; (b) any change in the time, manner
or place of payments of, or in any other term of, all
or any part of the Obligations, or any other
amendment or waiver thereof or any consent to
departure therefrom, including any increase in the
Obligations resulting from the extension of
additional credit to either Blackbaud or Blackbaud
LLC or otherwise; (c) any taking, exchange, release
or non-perfection of any collateral, or any release
or amendment or waiver of or consent to departure
from any guaranty for all or any of the Obligations;
(d) any change, restructuring or termination of the
corporate structure or existence of either Blackbaud
or Blackbaud LLC; or (e) any other circumstance which
might otherwise constitute a defense available to, or
a discharge of, either Blackbaud or Blackbaud LLC.
This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any
payment of any of the Obligations is rescinded or
must otherwise be returned by the Administrative
Agent or any Lender upon the insolvency, bankruptcy
or reorganization of either Blackbaud or Blackbaud
LLC or otherwise, all as though such payment had not
been made.
2.12 WAIVER OF SURETY DEFENSES.
Each of Blackbaud and Blackbaud LLC agrees that the
joint and several liability of each of Blackbaud and
Blackbaud LLC provided for in subsection 2.10 shall
not be impaired or affected by any modification,
supplement, extension or amendment of any contract or
agreement to which such other Person may hereafter
agree (other than an agreement signed by the
Administrative Agent and the Lenders specifically
releasing such liability), nor by any delay,
extension of time, renewal, compromise or other
indulgence granted by the Administrative Agent or any
Lender with respect to any of the Obligations, nor by
any other agreements or arrangements whatever with
such other Person or with anyone else, each of
Blackbaud and Blackbaud LLC hereby waiving all notice
of such delay, extension, release, substitution,
renewal, compromise or other indulgence, and hereby
consenting to be bound thereby as fully and
effectually as if it had expressly agreed thereto in
advance. The liability of each of Blackbaud and
Blackbaud LLC is direct and unconditional as to all
of the Obligations, and may be enforced without
requiring the Administrative Agent or any Lender
first to resort to any other right, remedy or
security. Each of Blackbaud and
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Blackbaud LLC hereby expressly waives promptness,
diligence, notice of acceptance and any other notice
(except to the extent expressly provided for herein
or in another Loan Document) with respect to any of
the Obligations, the Notes, this Agreement or any
other Loan Document and any requirement that the
Administrative Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action
against either of Blackbaud or Blackbaud LLC or any
other Person or any collateral.
2.13 CONTRIBUTION AND INDEMNIFICATION
Each of Blackbaud and Blackbaud LLC is obligated to
repay the Obligations as joint and several obligors
under this Agreement. To the extent that either of
Blackbaud or Blackbaud LLC shall, under this
Agreement as a joint and several obligor, repay any
of the Obligations constituting Loans made to the
other hereunder or other Obligations incurred
directly and primarily by the other (an
"Accommodation Payment"), then the Person making such
Accommodation Payment shall be entitled to
contribution and indemnification from, and be
reimbursed by, the other in an amount equal to such
Accommodation Payment. All rights and claims of
contribution, indemnification and reimbursement under
this subsection 2.13 shall be subordinate in right of
payment to the prior payment in full of the
Obligations."
1.4 AMENDMENTS TO SECTION 7: COMPANY'S NEGATIVE
COVENANTS.
A. Subsection 7.3(vi)(b) of the Credit
Agreement is hereby amended by deleting the first proviso contained therein in
its entirety and by substituting therefor the following:
"provided that (A) the amount of such other consideration (the
"Acquisition Expenditures") so paid shall not exceed in the
aggregate from January 1, 2000 (i) through March 31, 2001,
$2,500,000, (ii) through June 30, 2001, $5,000,000, (iii)
through September 30, 2001, $7,500,000, (iv) through December
31, 2001, $10,000,000, and (v) in any Fiscal Year, including
the Fiscal Year ending December 31, 2001, $12,500,000, plus
for any Fiscal Year thereafter an amount equal to the
difference between the Acquisition Expenditures permitted to
be made in such preceding Fiscal Year over the actual amount
of Acquisition Expenditures made in such preceding Fiscal Year
(the "Carryforward Amount"); (B) to the extent Company has
included any Expansion Expenditures in Consolidated Adjusted
EBITDA pursuant to clause (viii) of the definition of
Consolidated Adjusted EBITDA, the Acquisition Expenditures
permitted pursuant to clauses (A)(i) through (A)(v) of the
immediately preceding proviso shall be reduced by an amount
equal to the amount of such Expansion Expenditures multiplied
by two, such reductions to be made first to the extent of any
unexpended Acquisition Expenditures in the Fiscal Quarter in
which such Expansion Expenditures are made (with equal
reductions to be made in the amount of Acquisition
Expenditures
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permitted in each subsequent fiscal period as set forth in the
immediately preceding clause (A)) and second to reduce any
such Acquisition Expenditures in the immediately succeeding
fiscal quarters (with equal reductions to be made in the
amount of Acquisition Expenditures permitted in each
subsequent fiscal period as set forth in the immediately
preceding clause (A)); and (C) in the event that Company's
Consolidated Leverage Ratio is less than or equal to
2.00:1.00, the amount of the Acquisition Expenditures in any
fiscal period shall not exceed in the aggregate an amount
equal to twice the amounts set forth in the foregoing clauses
(A)(i) to (A)(v) (other than any Carryforward Amount)as
reduced by any reductions required pursuant to the foregoing
clause (B); provided, further, that the Acquisition
Expenditures provided for herein may be increased with respect
to earnout payments made in any Fiscal Year (the "Additional
Earnout Payments") up to an amount which does not exceed the
Acquisition Expenditures available for the next succeeding
Fiscal Year and that the Acquisition Expenditures available in
such next succeeding Fiscal Year shall be reduced by the
amount of such Additional Earnout Payments;"
B. Section 7 of the Credit Agreement is hereby
further amended by adding at the end thereof a new subsection 7.17 as follows:
"7.17. TRANSFER OF EMPLOYEES.
Upon the occurrence and during the continuance of an Event of
Default, upon the request of Administrative Agent, Blackbaud
will transfer to Blackbaud LLC all or any portion of
Blackbaud's employees and any related employee benefit plans
or liabilities as may be requested by Administrative Agent."
C. Section 7 of the Credit Agreement is hereby
further amended by adding at the end thereof a new subsection 7.18 as follows:
"7.18. TRANSFER OF AUSTRALIAN AND UK SUBSIDIARIES.
Upon the occurrence and during the continuance of an Event of
Default, upon the request of Administrative Agent, Blackbaud
will transfer to Blackbaud LLC all of Blackbaud's ownership
interest in Blackbaud Pacific (Australia) Pty. Ltd. and
Blackbaud Europe Ltd."
1.5 AMENDMENTS TO EXHIBITS AND SCHEDULES.
A. Exhibits I, II, III, X and XI to the Credit
Agreement are hereby amended (i) by adding a reference to "Blackbaud, LLC, a
South Carolina limited liability company (`Blackbaud LLC')" as a party to the
Credit Agreement each place that the parties to the Credit Agreement are so
described, (ii) by adding "Blackbaud, LLC" immediately after "Blackbaud, Inc."
on each signature block for the Company and (iii) by deleting the reference to
"Blackbaud" each place it appears in the text of such exhibits and by
substituting therefor a reference to "Company."
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B. Exhibits IV, V, VI, VII, XIII, XIV and XV to
the Credit Agreement are hereby deleted in their entirety and new Exhibits IV,
V, VI, VII, XIII, XIV and XV substantially in the forms of Annexes A, B, C, D,
E, F and G, respectively, attached hereto are hereby substituted therefor.
C. Schedules 4.1C and 5.1 to the Credit
Agreement are hereby deleted in their entirety and new Schedules 4.1C and 5.1
substantially in the forms of Annexes H and I, respectively, attached hereto are
hereby substituted therefor.
D. A new Schedule 1.1 substantially in the form
of Annex J attached hereto is hereby added to the Credit Agreement.
SECTION 2. CONDITIONS TO EFFECTIVENESS
A. This Third Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "THIRD AMENDMENT
EFFECTIVE DATE"):
On or before the Third Amendment Effective Date, Company shall
deliver to Lenders (or to Administrative Agent for Lenders) the following, each,
unless otherwise noted, dated the Third Amendment Effective Date:
1. Signature and incumbency certificates of its officers
executing this Third Amendment and the other Loan Documents
provided for herein;
2. Copies of this Third Amendment and the other Loan Documents
provided for herein executed by each Loan Party party thereto;
3. Certified copies of the organizational documents of
Blackbaud LLC, together with a good standing certificate from
the Secretary of State of its jurisdiction of organization and
each other state in which Blackbaud LLC is qualified to do
business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate
taxing authority of each of such jurisdictions, each dated a
recent date prior to the Closing Date;
4. Copies of the Bylaws or other organizational documents of
Blackbaud LLC, certified as of the Closing Date by Blackbaud
LLC's corporate secretary or an assistant secretary or other
appropriate officer or member;
5. Resolutions of the Board of Directors or other governing
body of Blackbaud LLC approving and authorizing the execution,
delivery and performance of the Loan Documents to which
Blackbaud LLC is a party, certified as of the Third Amendment
Effective Date by the corporate secretary or an assistant
secretary or other appropriate officer or member of Blackbaud
LLC as being in full force and effect without modification or
amendment;
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6. A Joinder Agreement executed by Blackbaud LLC adding
Blackbaud LLC as a borrower to the Credit Agreement on a joint
and several basis, amended and restated Notes executed by
Blackbaud and Blackbaud LLC making Blackbaud LLC a co-maker on
a joint and several basis, an amended and restated Collateral
Account Agreement, Company Pledge Agreement and Company
Security Agreement executed by Blackbaud and Blackbaud LLC;
7. Company shall have delivered to Administrative Agent
certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Administrative
Agent) representing all capital stock or other equity
interests of Blackbaud LLC and representing two-thirds of the
equity interests of the UK Subsidiary and the Australian
Subsidiary.
8. Administrative Agent shall have received evidence
satisfactory to it that Blackbaud LLC shall have taken or
caused to be taken all such actions, executed and delivered or
caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all
such filings and recordings that may be necessary or, in the
opinion of Administrative Agent, desirable in order to create
in favor of Administrative Agent, for the benefit of Lenders,
a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed
property Collateral, including without limitation the delivery
of UCC financing statements and PTO cover sheets.
9. The Administrative Agent shall have received evidence
satisfactory to it that the Asset Transfer and $10,000,000
equity contribution have occurred and shall have received
copies of the Asset Transfer documents, which documents shall
be satisfactory in form and substance to the Administrative
Agent.
10. Lenders shall have received originally executed copies of
one or more favorable written opinions of Xxxxxx Xxxxxxx Xxxxx
& Scarborough, L.L.P. and Wachtell Lipton Xxxxx & Xxxx,
counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as
of the Third Amendment Effective Date and setting forth
substantially the matters in the opinions designated in Annex
K annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may
reasonably request.
B. Requisite Lenders shall have executed this Third
Amendment.
C. On or before the Third Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby, including without limitation the Asset
Transfer and $10,000,000 equity contribution, and all documents incidental
thereto not previously found acceptable by Administrative Agent, acting on
behalf of Lenders, and its counsel shall be satisfactory in form and substance
to Administrative Agent and such counsel, and Administrative Agent and such
counsel shall have received all such counterpart originals or certified copies
of such documents as Administrative Agent may reasonably request.
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SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Third Amendment
and to amend the Credit Agreement in the manner provided herein, Company
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. Company has all
requisite corporate power and authority to enter into this Third Amendment and
the other Loan Documents to be executed in connection with this Third Amendment
and to carry out the transactions contemplated by, and perform its obligations
under, the Credit Agreement as amended by this Third Amendment (the "AMENDED
AGREEMENT") and such other Loan Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and
delivery of this Third Amendment and such other Loan Documents and the
performance of the Amended Agreement and such other Loan Documents have been
duly authorized by all necessary corporate action on the part of Company.
C. NO CONFLICT. The execution and delivery by Company of
this Third Amendment and such other Loan Documents and the performance by
Company of the Amended Agreement and such other Loan Documents do not and will
not (i) violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Company or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on Company
or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than Liens created under any
of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries
other than any approvals or consents which will be obtained prior to the Third
Amendment Effective Date.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
Company of this Third Amendment and such other Loan Documents and the
performance by Company of the Amended Agreement and such other Loan Documents do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Third Amendment and such
other Loan Documents and the Amended Agreement have been duly executed and
delivered by Company and are the legally valid and binding obligations of
Company, enforceable against Company in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM
CREDIT AGREEMENT. The representations and warranties contained in Section 5 of
the Credit Agreement
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are and will be true, correct and complete in all material respects on and as of
the Third Amendment Effective Date to the same extent as though made on and as
of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is
continuing or will result from the consummation of the transactions contemplated
by this Third Amendment that would constitute an Event of Default or a Potential
Event of Default.
SECTION 4. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
(i) On and after the Third Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Third
Amendment, the Credit Agreement and the other Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Third
Amendment and such other Loan Documents shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as
a waiver of any right, power or remedy of Administrative Agent or any
Lender under, the Credit Agreement or any of the other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all
costs, fees and expenses as described in subsection 10.2 of the Credit Agreement
incurred by Administrative Agent and its counsel with respect to this Third
Amendment and such other Loan Documents and the documents and transactions
contemplated hereby shall be for the account of Company.
C. HEADINGS. Section and subsection headings in this
Third Amendment are included herein for convenience of reference only and shall
not constitute a part of this Third Amendment for any other purpose or be given
any substantive effect.
D. APPLICABLE LAW. THIS THIRD AMENDMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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E. COUNTERPARTS. This Third Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKBAUD, INC.
By: /s/ Xxx Xxxxxxxx
----------------------------------------
Title: Vice President & Chief Financial Officer
BLACKBAUD, LLC
By: /s/ Xxx Xxxxxxxx
----------------------------------------
Title: Vice President & Chief Financial Officer
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BANKERS TRUST COMPANY,
individually and as Administrative Agent
By: /s/ Xxxx Xx Xxxxx
----------------------------------
Title: Assistant Vice President
A-1
XXXXXX FINANCIAL, INC.,
as a Lender
By: /s/ Xxxxx Zlemke
----------------------------------
Title: Vice President
A-1
FIRST UNION NATIONAL BANK,
as a Lender
By: /s/ signature illegible
----------------------------------
Title: Vice President
A-1
FIRST UNION SECURITIES, INC.,
as Syndication Agent
By: /s/ signature illegible
----------------------------------
Title: Vice President
A-1
FIRST SOURCE LOAN OBLIGATIONS TRUST,
By: First Source Financial, Inc., its
Servicer and Administrator
as a Lender
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Kathis X. Xxxxxx
Title: Senior Vice President
A-1
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Title: Vice President
By: /s/ X. X. Xxxxxx
----------------------------------
Senior Vice President
A-1
ANNEX A
EXHIBIT IV
[FORM OF AMENDED AND RESTATED TERM NOTE]
BLACKBAUD, INC.
BLACKBAUD, LLC
PROMISSORY NOTE DUE SEPTEMBER 30, 2005
$ New York, New York
May _____, 2001
FOR VALUE RECEIVED, BLACKBAUD, INC., a South Carolina corporation
("BLACKBAUD") and BLACKBAUD, LLC, a South Carolina limited liability company
("BLACKBAUD LLC") (Blackbaud and Blackbaud LLC being hereinafter referred to
individually as "BORROWER" and collectively as the "BORROWERS"), promise, joint
and severally, to pay to the order of ______________ ("PAYEE") or its registered
assigns the principal amount of ________ ($_________) in the installments
referred to below.
Borrowers also promise, joint and severally, to pay interest on the
unpaid principal amount hereof, from the last Interest Payment Date on which
interest was paid under the Credit Agreement until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions of
that certain Credit Agreement dated as of October 13, 1999 by and among
Borrowers, the financial institutions listed therein as Lenders, Bankers Trust
Company, as administrative agent for Lenders (in such capacity, "ADMINISTRATIVE
AGENT"), Fleet National Bank, as Documentation Agent and First Union Securities,
Inc., as Syndication Agent (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
Borrowers shall make principal payments on this Note in installments as
provided in the Credit Agreement. Each such installment shall be due on the date
specified in the Credit Agreement and in an amount determined in accordance with
the provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrowers' "Term Notes" in the aggregate original
principal amount of up to $115,000,000 and is issued pursuant to and entitled to
the benefits of the Credit Agreement, to which reference is hereby made for a
more complete statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office
A-1
or at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment Agreement effecting the assignment or transfer of this Note shall
have been accepted by Administrative Agent and recorded in the Register as
provided in subsection 10.1B(ii) of the Credit Agreement, Borrowers and
Administrative Agent shall be entitled to deem and treat Payee as the owner and
holder of this Note and the Loan evidenced hereby. Payee hereby agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligations of Borrowers hereunder with respect to payments
of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Borrowers
as provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWERS AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Borrowers,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Borrowers promise, joint and severally, to pay all costs and expenses,
including reasonable attorneys' fees, all as provided in subsection 10.2 of the
Credit Agreement, incurred in the collection and enforcement of this Note.
Borrowers, and any endorsers of this
A-2
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
THIS AMENDED AND RESTATED TERM NOTE SUPERCEDES, REPLACES AND
RE-EVIDENCES, AS OF THE DATE SET FORTH ABOVE, THAT CERTAIN TERM NOTE, DATED
OCTOBER 13, 1999, DELIVERED BY BLACKBAUD, INC. IN FAVOR OF THE PAYEE HEREOF. THE
EXECUTION AND DELIVERY HEREOF DOES NOT CONSTITUTE A SATISFACTION OR A NOVATION
OF ANY OBLIGATION OF THE UNDERSIGNED HEREUNDER TO THE HOLDER HEREOF.
[Remainder of page intentionally left blank]
A-3
IN WITNESS WHEREOF, Blackbaud and Blackbaud LLC have caused this Note
to be duly executed and delivered by an officer thereunto duly authorized as of
the date and at the place first written above.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
----------------------------
Title:
-------------------------
A-S-1
ANNEX B
EXHIBIT V
[FORM OF AMENDED AND RESTATED REVOLVING NOTE]
BLACKBAUD, INC.
BLACKBAUD, LLC
PROMISSORY NOTE DUE SEPTEMBER 30, 2005
$ New York, New York
May ____, 2001
FOR VALUE RECEIVED, BLACKBAUD, INC., a South Carolina corporation
("BLACKBAUD") and BLACKBAUD, LLC, a South Carolina limited liability company
("BLACKBAUD LLC") (Blackbaud and Blackbaud LLC being hereinafter referred to
individually as the "BORROWER" and collectively as "BORROWERS"), promise, joint
and severally, to pay to the order of ______________ ("PAYEE") or its registered
assigns, on or before September 30, 2005, the lesser of (x) ____________ Dollars
($________) and (y) the unpaid principal amount of all advances made by Payee to
Borrowers as Revolving Loans under the Credit Agreement referred to below.
Borrowers also promise, joint and severally, to pay interest on the
unpaid principal amount hereof, from the last Interest Payment Date on which
interest was paid under the Credit Agreement until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions of
that certain Credit Agreement dated as of October 13, 1999 by and among
Borrowers, the financial institutions listed therein as Lenders, Bankers Trust
Company, as administrative agent for Lenders (in such capacity, "ADMINISTRATIVE
AGENT"), Fleet National Bank, as Documentation Agent and First Union Securities,
Inc., as Syndication Agent (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
This Note is one of Borrowers' "Revolving Notes" in the aggregate
original principal amount of $15,000,000 and is issued pursuant to and entitled
to the benefits of the Credit Agreement, to which reference is hereby made for a
more complete statement of the terms and conditions under which the Revolving
Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement,
B-1
Borrowers and Administrative Agent shall be entitled to deem and treat Payee as
the owner and holder of this Note and the Loans evidenced hereby. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligations of Borrowers hereunder with
respect to payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Borrowers
as provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWERS AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Borrowers,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Borrowers promise, joint and severally, to pay all costs and expenses,
including reasonable attorneys' fees, all as provided in subsection 10.2 of the
Credit Agreement, incurred in the collection and enforcement of this Note.
Borrowers and any endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind and, to
the full extent permitted by law, the right to plead any statute of limitations
as a defense to any demand hereunder.
B-2
THIS AMENDED AND RESTATED REVOLVING NOTE SUPERCEDES, REPLACES AND
RE-EVIDENCES, AS OF THE DATE SET FORTH ABOVE, THAT CERTAIN REVOLVING NOTE, DATED
OCTOBER 13, 1999, DELIVERED BY BLACKBAUD, INC. IN FAVOR OF THE PAYEE HEREOF. THE
EXECUTION AND DELIVERY HEREOF DOES NOT CONSTITUTE A SATISFACTION OR A NOVATION
OF ANY OBLIGATION OF THE UNDERSIGNED HEREUNDER TO THE HOLDER HEREOF.
[Remainder of page intentionally left blank]
B-3
IN WITNESS WHEREOF, Blackbaud and Blackbaud LLC have caused this Note
to be duly executed and delivered by an officer thereunto duly authorized as of
the date and at the place first written above.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
-----------------------
Title:
--------------------
B-S-1
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- -------------- ------------ -------
B-Transactions-1
ANNEX C
EXHIBIT VI
[FORM OF AMENDED AND RESTATED SWING LINE NOTE]
BLACKBAUD, INC.
BLACKBAUD, LLC
PROMISSORY NOTE DUE SEPTEMBER 30, 2005
$3,500,000 New York, New York
May ____, 2001
FOR VALUE RECEIVED, BLACKBAUD, INC., a South Carolina corporation
("BLACKBAUD") and BLACKBAUD, LLC, a South Carolina limited liability company
("BLACKBAUD LLC") (Blackbaud and Blackbaud LLC being hereinafter referred to
individually as the "BORROWER" and collectively as "BORROWERS"), promise, joint
and severally, to pay to BANKERS TRUST COMPANY ("PAYEE"), on or before September
30, 2005, the lesser of (x) Three Million Five Hundred Thousand Dollars
($3,500,000) and (y) the unpaid principal amount of all advances made by Payee
to Borrowers as Swing Line Loans under the Credit Agreement referred to below.
Borrowers also promise, joint and severally, to pay interest on the
unpaid principal amount hereof, from the last Interest Payment Date on which
interest was paid under the Credit Agreement until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions of
that certain Credit Agreement dated as of October 13, 1999 by and among
Borrowers, the financial institutions listed therein as Lenders, Bankers Trust
Company, as administrative agent for Lenders (in such capacity, "ADMINISTRATIVE
AGENT"), Fleet National Bank, as Documentation Agent and First Union Securities,
Inc., as Syndication Agent (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
This Note is Borrowers' "Swing Line Note" and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
C-1
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Borrowers
as provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWERS AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Borrowers,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Borrowers promise, joint and severally, to pay all costs and expenses,
including reasonable attorneys' fees, all as provided in subsection 10.2 of the
Credit Agreement, incurred in the collection and enforcement of this Note.
Borrowers and any endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind and, to
the full extent permitted by law, the right to plead any statute of limitations
as a defense to any demand hereunder.
THIS AMENDED AND RESTATED SWING LINE NOTE SUPERCEDES, REPLACES AND
RE-EVIDENCES, AS OF THE DATE SET FORTH ABOVE, THAT CERTAIN SWING LINE NOTE,
DATED OCTOBER 13, 1999, DELIVERED BY BLACKBAUD, INC. IN FAVOR OF THE PAYEE
HEREOF. THE EXECUTION AND DELIVERY HEREOF DOES NOT CONSTITUTE A SATISFACTION OR
A NOVATION OF ANY OBLIGATION OF THE UNDERSIGNED HEREUNDER TO THE HOLDER HEREOF.
[Remainder of page intentionally left blank]
C-2
IN WITNESS WHEREOF, Blackbaud and Blackbaud LLC have caused this Note
to be duly executed and delivered by an officer thereunto duly authorized as of
the date and at the place first written above.
BLACKBAUD, INC.
BLACKBAUD, LLC.
By:
---------------------------
Title:
------------------------
C-S-1
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
---- --------- --------------- ---------- -------
C-Transactions-1
ANNEX D
EXHIBIT VII
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are the duly elected [Title] and [Title] of Blackbaud,
Inc, a Delaware corporation and Blackbaud LLC, a South
Carolina limited liability company (collectively "COMPANY");
(2) We have reviewed the terms of that certain Credit
Agreement dated as of October 13, 1999 as amended,
supplemented or otherwise modified to the date hereof (said
Credit Agreement, as so amended, supplemented or otherwise
modified, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined in this Certificate
(including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), by
and among Company, the financial institutions listed therein
as Lenders, Bankers Trust Company, as administrative agent for
Lenders (in such capacity, "ADMINISTRATIVE AGENT"), Fleet
National Bank, as Documentation Agent and First Union
Securities, Inc., as Syndication Agent, and the terms of the
other Loan Documents, and we have made, or have caused to be
made under our supervision, a review in reasonable detail of
the transactions and condition of Company and its Subsidiaries
during the accounting period covered by the attached financial
statements; and
(3) The examination described in paragraph (2) above did not
disclose, and we have no knowledge of, the existence of any
condition or event which constitutes an Event of Default or
Potential Event of Default during or at the end of the
accounting period covered by the attached financial statements
or as of the date of this Certificate[, except as set forth
below].
[Set forth [below] [in a separate attachment to this Certificate] are
all exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Company has taken, is taking, or proposes to take with respect to each such
condition or event:]
D-1
The foregoing certifications, together with the computations set forth
in Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this __________ day of _____________, ____ pursuant to subsection
6.1(iv)(b) of the Credit Agreement.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
-----------------------------
Title:
-------------------------
D-2
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of __________ __, ____ and pertains to the period from
__________ __, ____ to ___________ __, ____. Subsection references herein relate
to subsections of the Credit Agreement.
A. INDEBTEDNESS
1. Acquired Indebtedness permitted under
subsection 7.1(vi): $
-----------
2. Maximum Acquired Indebtedness permitted under
subsection 7.1(vi): $ 1,000,000
-----------
3. Indebtedness permitted under subsection 7.1(ix): $
-----------
4. Maximum permitted under subsection 7.1(ix): $ 5,000,000
-----------
5. Other Indebtedness permitted under subsection 7.1(x): $
-----------
6. Maximum permitted under subsection 7.1(x): $ 2,500,000
-----------
B. LIENS
1. Indebtedness secured by Liens permitted under
subsection 7.2A(iv): $
-----------
2. Maximum permitted under subsection 7.2A(iv): $ 1,000,000
-----------
3. Liens permitted under subsection 7.2A(vi): $
-----------
4. Maximum Liens permitted under subsection 7.2A(vi): $ 2,500,000
-----------
C. INVESTMENTS
1. Investments permitted under subsection 7.3(v): $
-----------
2. Maximum permitted under subsection 7.3(v): $ 1,000,000
-----------
3. Aggregate Permitted amount of Cash (not proceeds
of common stock issuance, earnouts or deferred
compensation) used for Permitted Acquisitions for
Fiscal Year-to-date under subsection 7.3(vi): $
------------
4. Acquisition Expenditures included as Expansion
Expenditures during period multiplied by two: $
------------
D-3
5. Cumulative amount of Acquisition Expenditures
included as Expansion Expenditures in
prior period multiplied by two: $
------------
6. Maximum Permitted Cash (not proceeds
of common stock issuance, earnouts or deferred
compensation) used for Permitted Acquisitions for
Fiscal Year-to-date under subsection 7.3(vi) (without
regard to reduction for Expansion Expenditures):
a. Consolidated Leverage Ratio is greater than
2.00:1.00 $
b. Consolidated Leverage Ratio is less than or ------------
equal to 2.00:1.00 $
------------
(plus in the case of a and b, Earnout payments made in such Fiscal Year
(not to exceed Annual Amount available for next succeeding Fiscal Year)
7. Maximum Permitted Cash acquisition expenditures under 7.3(vi):
a. Consolidated Leverage Ratio is greater than
2.00:1.00 (6a - 4 + 5): $
------------
b. Consolidated Leverage Ratio is less than
or equal to 2.00:1.00 (6b - 4 + 5): $
------------
8. Investments in Foreign Subsidiaries permitted
under subsection 7.3(vii): $
------------
9. Maximum Investments in Foreign Subsidiaries
permitted under subsection 7.3(vii): $ 2,000,000
------------
10. Investments in Joint Ventures permitted
under subsection 7.3(viii): $
------------
11. Maximum Investments in Joint Ventures
permitted under subsection 7.3(viii): $ 1,000,000
------------
D-4
D. CONTINGENT OBLIGATIONS
1. Contingent Obligations permitted under subsection
7.4(iv): $
-----------
2. Maximum permitted under subsection 7.4(iv): $ 1,000,000
-----------
E. RESTRICTED JUNIOR PAYMENTS
1. Deferred compensation permitted under subsection
7.5(i) for previous Fiscal Years-to-date: $
-----------
2. Maximum aggregate deferred compensation permitted
under subsection 7.5(i): $ 7,500,000
-----------
3. Repurchases for Cash of common stock from
Company's management for Fiscal Year-to-date
permitted under subsection 7.5(ii): $
-----------
4. Maximum Repurchases for Cash of common stock from
Company's management for Fiscal Year-to-date
permitted under subsection 7.5(ii)(A) (Consolidated
Leverage Ratio exceeds 2.50:1.00): $ 1,000,000
-----------
5. Maximum Repurchases for Cash of common stock from
Company's management for Fiscal Year-to-date permitted
under subsection 7.5(ii)(B) (Consolidated Leverage Ratio
is less than or equal to 2.50:1.00): $ 2,000,000
-----------
6. Maximum amount of Repurchases for Cash of common stock from
Company's management permitted under subsection 7.5(ii)(B) for
the previous Fiscal Year minus actual Repurchases for Cash of
common stock from Company's management for previous Fiscal Year
(up to $2,000,000): $
-----------
7. Repurchases for Cash of common stock from
Company's management for Fiscal Year-to-date
and previous Fiscal Years, and payments on related
promissory notes, permitted under subsection 7.5(ii): $
-----------
8. Maximum aggregate Repurchases for Cash of common
stock from Company's management permitted under
subsection 7.5(ii): $ 10,000,000
-----------
F. MINIMUM INTEREST COVERAGE RATIO (for the four-Fiscal Quarter
period ending _____________, ____)
D-5
1. Consolidated Net Income: $
------------
2. Consolidated Interest Expense: $
------------
3. Provisions for taxes based on income: $
------------
4. Total depreciation expense: $
------------
5. Total amortization expense: $
------------
6. Other non-cash items reducing Consolidated
Net Income: $
------------
7. For Fiscal Years ending December 31, 1999,
2000, 2001 and 2002, bonuses paid to
members of Company's management (not to
exceed $10,000,000 (plus related payroll taxes)
in the aggregate for all such Fiscal Years) $
------------
8. Expansion Expenditures (not to exceed
$2,500,000) for period 7/1/01 - 6/30/02:
a. Sales and Marketing: $
------------
b. Product Development: $
------------
c. Acquisition Shortfalls (describe briefly): $
------------
d. Total Expansion Expenditures (8a + 8b + 8c): $
------------
9. Other non-cash items increasing Consolidated
Net Income: $
------------
10. Consolidated Adjusted EBITDA (1+2+3+4+5+6+7+8-9): $
------------
11. Interest Coverage Ratio (9):(2): :1.00
-----
12. Minimum ratio required under subsection 7.6A: :1.00
-----
G. MAXIMUM LEVERAGE RATIO (as of _____________, ____)
1. Consolidated Total Debt: $
------------
2. Consolidated Adjusted EBITDA (F.10 above): $
------------
3. Leverage Ratio (1):(2): :1.00
-----
D-6
4. Maximum ratio permitted under subsection
7.6B: :1.00
-----
H. MINIMUM CONSOLIDATED ADJUSTED EBITDA (for the four-
Fiscal Quarter period ending ____________, ____)
1. Consolidated Adjusted EBITDA (F.10 above): $
----------
2. Minimum required under subsection 7.6C: $
----------
D-7
I. FUNDAMENTAL CHANGES
1. Aggregate fair market value of assets sold in any
one or more Asset Sales after Closing Date in one
or more transactions permitted under subsection
7.7(v): $
-----------
2. Maximum permitted under subsection 7.7(v): $ 2,500,000
-----------
J. CONSOLIDATED CAPITAL EXPENDITURES
1. Consolidated Capital Expenditures for Fiscal
Year-to-date: $
-----------
2. Maximum amount of Consolidated Capital
Expenditures permitted under subsection 7.8 for
the previous Fiscal Year minus actual Consolidated
Capital Expenditures for previous Fiscal Year-to-date
(up to $2,000,000): $
-----------
3. Maximum amount of Consolidated Capital
Expenditures permitted under subsection 7.8 for
Fiscal Year: 2000 $ 5,000,000
-----------
2001 $ 6,000,000
-----------
2002 $ 6,500,000
-----------
2003 $ 7,000,000
-----------
2004 $ 7,500,000
-----------
2005 $ 6,000,000
-----------
ANNEX E
EXHIBIT XIII
[FORM OF AMENDED AND RESTATED COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This AMENDED AND RESTATED COLLATERAL ACCOUNT AGREEMENT (this
"AGREEMENT") is dated as of May ____, 2001 and entered into by and between
BLACKBAUD, INC., a South Carolina corporation ("BLACKBAUD") and BLACKBAUD, LLC,
a South Carolina limited liability company ("BLACKBAUD LLC") (each of Blackbaud
and Blackbaud LLC being a "PLEDGOR" and collectively "PLEDGORS") and BANKERS
TRUST COMPANY, as administrative agent for and representative of (in such
capacity herein called "SECURED PARTY") the financial institutions ("LENDERS")
party to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Secured Party, Fleet National Bank, as Documentation Agent and First
Union Securities, Inc., as Syndication Agent, and Lenders have entered into a
Credit Agreement dated as of October 13, 1999 (said Credit Agreement, as it may
be amended, supplemented or otherwise modified from time to time, being the
"CREDIT AGREEMENT", the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Pledgors, pursuant to which Lenders
have made certain commitments, subject to the terms and conditions set forth in
the Credit Agreement, to extend certain credit facilities to Pledgors.
B. It is a condition precedent to the extensions of credit by Lenders
under the Credit Agreement that each Pledgor shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and issue Letters of Credit under the Credit Agreement and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each Pledgor hereby agrees with Secured Party as follows:
SECTION 1. CERTAIN DEFINITIONS. The following terms used in this
Agreement shall have the following meanings:
"COLLATERAL" means (i) the Collateral Account, (ii) all amounts on
deposit from time to time in the Collateral Account, (iii) all interest, cash,
instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Collateral, and (iv) to the extent not covered by clauses (i) through
(iii) above, all proceeds of any or all of the foregoing Collateral.
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"COLLATERAL ACCOUNT" means the restricted deposit account established
and maintained by Secured Party pursuant to Section 2(a).
"SECURED OBLIGATIONS" means all obligations and liabilities of every
nature of each Pledgor now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and all
extensions or renewals thereof, whether for principal, interest (including
interest that, but for the filing of a petition in bankruptcy with respect to
such Pledgor, would accrue on such obligations), reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of each
Pledgor now or hereafter existing under this Agreement.
SECTION 2. ESTABLISHMENT AND OPERATION OF COLLATERAL ACCOUNT.
(a) Secured Party is hereby authorized to establish and maintain at the
Funding and Payment Office, as a blocked account in the name of Secured Party
and under the sole dominion and control of Secured Party, a restricted deposit
account designated as "Blackbaud Inc. Collateral Account".
(b) The Collateral Account shall be operated in accordance with the
terms of this Agreement.
(c) All amounts at any time held in the Collateral Account shall be
beneficially owned by Pledgors but shall be held in the name of Secured Party
hereunder, for the benefit of Lenders, as collateral security for the Secured
Obligations upon the terms and conditions set forth herein. Pledgors shall have
no right to withdraw, transfer or, except as expressly set forth herein,
otherwise receive any funds deposited into the Collateral Account.
(d) Anything contained herein to the contrary notwithstanding, the
Collateral Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.
SECTION 3. DEPOSITS OF CASH COLLATERAL.
(a) All deposits of funds in the Collateral Account shall be made by
wire transfer (or, if applicable, by intra-bank transfer from another account of
any Pledgor) of immediately available funds. Pledgors shall, promptly after
initiating a transfer of funds to the Collateral Account, give notice to Secured
Party by telefacsimile of the date, amount and method of delivery of such
deposit.
(b) If an Event of Default has occurred and is continuing and, in
accordance with Section 8 of the Credit Agreement, Pledgors are required to pay
to Secured Party an amount (the
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"AGGREGATE AVAILABLE AMOUNT") equal to the maximum amount that may at any time
be drawn under all Letters of Credit then outstanding under the Credit
Agreement, Pledgors shall deliver funds in such an amount for deposit in the
Collateral Account in accordance with Section 3(a). If for any reason the
aggregate amount delivered by Pledgors for deposit in the Collateral Account as
aforesaid is less than the Aggregate Available Amount, the aggregate amount so
delivered by Pledgors shall be apportioned among all outstanding Letters of
Credit for purposes of this Section 3(b) in accordance with the ratio of the
maximum amount available for drawing under each such Letter of Credit (as to
such Letter of Credit, the "MAXIMUM AVAILABLE AMOUNT") to the Aggregate
Available Amount. Upon any drawing under any outstanding Letter of Credit in
respect of which Pledgors have deposited in the Collateral Account any amounts
described above, Secured Party shall apply such amounts to reimburse the Issuing
Lender for the amount of such drawing. In the event of cancellation or
expiration of any Letter of Credit in respect of which Pledgors have deposited
in the Collateral Account any amounts described above, or in the event of any
reduction in the Maximum Available Amount under such Letter of Credit, Secured
Party shall apply the amount then on deposit in the Collateral Account in
respect of such Letter of Credit (less, in the case of such a reduction, the
Maximum Available Amount under such Letter of Credit immediately after such
reduction) first, to the payment of any amounts payable to Secured Party
pursuant to Section 13, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Letters of Credit in respect of which Pledgors have failed to pay all or a
portion of the amounts described above (such cash collateralization to be
apportioned among all such Letters of Credit in the manner described above),
third, to the extent of any further excess, to the payment of any other
outstanding Secured Obligations in such order as Secured Party shall elect, and
fourth, to the extent of any further excess, to the payment to whomsoever shall
be lawfully entitled to receive such funds.
SECTION 4. PLEDGE OF SECURITY FOR SECURED OBLIGATIONS. Each Pledgor
hereby pledges and assigns to Secured Party, and hereby grants to Secured Party
a security interest in, all of such Pledgor's right, title and interest in and
to the Collateral as collateral security for the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured Obligations.
SECTION 5. NO INVESTMENT OF AMOUNTS IN THE COLLATERAL ACCOUNT; INTEREST
ON AMOUNTS IN THE COLLATERAL ACCOUNT.
(a) Cash held by Secured Party in the Collateral Account shall not be
invested by Secured Party but instead shall be maintained as a cash deposit in
the Collateral Account pending application thereof as elsewhere provided in this
Agreement.
(b) To the extent permitted under Regulation Q of the Board of
Governors of the Federal Reserve System, any cash held in the Collateral Account
shall bear interest at the standard rate paid by Secured Party to its customers
for deposits of like amounts and terms.
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(c) Subject to Secured Party's rights under Section 12, any interest
earned on deposits of cash in the Collateral Account in accordance with Section
5(b) shall be deposited directly in, and held in the Collateral Account.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Pledgor represents and
warrants as follows:
(a) Ownership of Collateral. Each Pledgor is (or at the time of
transfer thereof to Secured Party will be) the legal and beneficial owner of the
Collateral from time to time transferred by such Pledgor to Secured Party, free
and clear of any Lien except for the security interest created by this
Agreement.
(b) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the grant by any Pledgor of the
security interest granted hereby, (ii) the execution, delivery or performance of
this Agreement by any Pledgor, or (iii) the perfection of or the exercise by
Secured Party of its rights and remedies hereunder (except as may have been
taken by or at the direction of any Pledgor).
(c) Perfection. The pledge and assignment of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
the Collateral, securing the payment of the Secured Obligations.
(d) Other Information. All information heretofore, herein or hereafter
supplied to Secured Party by or on behalf of any Pledgor with respect to the
Collateral is accurate and complete in all respects.
SECTION 7. FURTHER ASSURANCES. Each Pledgor agrees that from time to
time, at the expense of Pledgors, such Pledgor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Pledgor will: (a) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby and (b) at Secured Party's request, appear in and defend any
action or proceeding that may affect each Pledgor's beneficial title to or
Secured Party's security interest in all or any part of the Collateral.
SECTION 8. TRANSFERS AND OTHER LIENS. Each Pledgor agrees that it will
not (a) sell, assign (by operation of law or otherwise) or otherwise dispose of
any of the Collateral or (b) create or suffer to exist any Lien upon or with
respect to any of the Collateral, except for the security interest under this
Agreement.
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SECTION 9. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Each Pledgor
hereby irrevocably appoints Secured Party as such Pledgor's attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name of
such Pledgor, Secured Party or otherwise, from time to time in Secured Party's
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Collateral without the
signature of any Pledgor.
SECTION 10. SECURED PARTY MAY PERFORM. If any Pledgor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgors under Section 13.
SECTION 11. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral, it being understood that Secured Party shall
have no responsibility for (a) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Collateral) to preserve rights against any parties with
respect to any Collateral or (b) taking any necessary steps to collect or
realize upon the Secured Obligations or any guarantee therefor, or any part
thereof, or any of the Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property of like kind.
SECTION 12. REMEDIES. Subject to the provisions of Section 3(b),
Secured Party may exercise in respect of the Collateral, in addition to all
other rights and remedies otherwise available to it, all the rights and remedies
of a secured party on default under the Uniform Commercial Code as in effect in
any relevant jurisdiction (the "CODE") (whether or not the Code applies to the
affected Collateral).
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgors agree, joint and severally, to indemnify Secured Party and
each Lender from and against any and all claims, losses and liabilities in any
way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including enforcement of this Agreement),
except to the extent such claims, losses or liabilities result solely from
Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Pledgors agree, joint and severally, to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
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enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Pledgor to perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon each Pledgor and its successors and assigns, and (c) inure, together with
the rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgors. Upon any such termination Secured Party shall, at Pledgors'
expense, execute and deliver to Pledgors such documents as Pledgors shall
reasonably request to evidence such termination and Pledgors shall be entitled
to the return, upon their request and at their expense, against receipt and
without recourse to Secured Party, of such of the Collateral as shall not have
been otherwise applied pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums held by Secured Party hereunder (which
shall be deposited in a new Collateral Account established and maintained by
such successor Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Secured Party under this Agreement, and (ii) execute and deliver to
such successor
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Secured Party such amendments to financing statements, and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Secured Party of the security interests created hereunder,
whereupon such retiring or removed Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
any Pledgor therefrom, shall in any event be effective unless the same shall be
in writing and signed by Secured Party and, in the case of any such amendment or
modification, by each Pledgor. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
SECTION 17. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed. For the purposes hereof, the address of
each party hereto shall be as provided in subsection 10.8 of the Credit
Agreement.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 19. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE CODE
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PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Each Pledgor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to each Pledgor at its address provided in Section 17, such
service being hereby acknowledged by each Pledgor to be sufficient for personal
jurisdiction in any action against such Pledgor in any such court and to be
otherwise effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of Secured Party to bring proceedings against any Pledgor in the
courts of any other jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. EACH PLEDGOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Each Pledgor and Secured Party each acknowledge that this
waiver is a material inducement for each Pledgor and Secured Party to enter into
a business relationship, that each Pledgor and Secured Party have already relied
on this waiver in entering into this Agreement and that each will continue to
rely on this waiver in their related future dealings. Each Pledgor and Secured
Party further warrant and represent that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 23 AND EXECUTED BY
EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so
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executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
-------------------------------
Title:
----------------------------
BANKERS TRUST COMPANY,
as Secured Party
By:
-------------------------------
Title:
----------------------------
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ANNEX F
EXHIBIT XIV
[FORM OF AMENDED AND RESTATED COMPANY PLEDGE AGREEMENT]
COMPANY PLEDGE AGREEMENT
This AMENDED AND RESTATED COMPANY PLEDGE AGREEMENT (this "AGREEMENT")
is dated as of May __, 2001 and entered into by and between BLACKBAUD, INC., a
South Carolina corporation ("BLACKBAUD") and BLACKBAUD, LLC, a South Carolina
limited liability company ("BLACKBAUD LLC") (each of Blackbaud and Blackbaud LLC
being a "PLEDGOR" and collectively "PLEDGORS") and BANKERS TRUST COMPANY, as
administrative agent for and representative of (in such capacity herein called
"SECURED PARTY"), the financial institutions ("LENDERS") party to the Credit
Agreement referred to below and any Interest Rate Exchangers (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Pledgors are the legal and beneficial owner of (i) the membership
interests and shares of stock or other ownership interests (the "PLEDGED
INTERESTS") described in Part A of Schedule I annexed hereto and issued by the
limited liability companies and corporations named therein and (ii) the
indebtedness (the "PLEDGED DEBT") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Secured Party, Fleet National Bank, as Documentation Agent and First
Union Securities, Inc., as Syndication Agent, and Lenders have entered into a
Credit Agreement dated as of October 13, 1999 (said Credit Agreement, as it may
be amended, supplemented or otherwise modified from time to time, being the
"CREDIT AGREEMENT", the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Pledgors, pursuant to which Lenders
have made certain commitments, subject to the terms and conditions set forth in
the Credit Agreement, to extend certain credit facilities to Pledgors.
C. Each Pledgor may from time to time enter into one or more Interest
Rate Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS") with one
or more Lenders (in such capacity, collectively, "INTEREST RATE EXCHANGERS") in
accordance with the terms of the Credit Agreement, and it is desired that the
obligations of each Pledgor under the Lender Interest Rate Agreements, including
the obligation of each Pledgor to make payments thereunder in the event of early
termination thereof, together with all obligations of Pledgors under the Credit
Agreement and the other Loan Documents, be secured hereunder.
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D. It is a condition precedent to the extensions of credit by Lenders
under the Credit Agreement that each Pledgor shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. PLEDGE OF SECURITY. Each Pledgor hereby pledges and assigns
to Secured Party, and hereby grants to Secured Party a security interest in, all
of such Pledgor's right, title and interest in and to the following (the
"PLEDGED COLLATERAL"):
(a) the Pledged Interests and the certificates representing the Pledged
Interests and any interest of Pledgors in the entries on the books of any
financial intermediary pertaining to the Pledged Interests, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Interests;
(b) the Pledged Debt and the instruments evidencing the Pledged Debt,
and all interest, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Debt;
(c) all additional membership interests and shares of stock or other
ownership interests, and all securities convertible into and warrants, options
and other rights to purchase or otherwise acquire, membership interests and
shares of stock or other ownership interests of any issuer of the Pledged
Interests from time to time acquired by Pledgors in any manner (which membership
interests and shares of stock or other ownership interests shall be deemed to be
part of the Pledged Interests), the certificates or other instruments
representing such additional membership interests, shares, securities, warrants,
options or other rights and any interest of each Pledgor in the entries on the
books of any financial intermediary pertaining to such additional shares, and
all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional membership
interests, shares, securities, warrants, options or other rights; provided,
however, that Pledgors shall not be required to pledge any additional membership
interests or shares of, or any securities convertible into and warrants, options
and other rights to purchase or otherwise acquire, membership interests or stock
of any Foreign Subsidiary issuer of the Pledged Interests pursuant to this
Section 1(d) to the extent that such pledges would constitute an investment of
earnings in United States property under Section 956 (or a successor provision)
of the Internal Revenue Code (the "IRC") that would trigger an increase in the
gross income of a United States owner of any Pledgor pursuant to Section 951 (or
a successor provision) of the IRC;
(d) all additional indebtedness from time to time owed to Pledgors by
any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash,
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instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness;
(e) all membership interests and shares of stock or other ownership
interests, and all securities convertible into and warrants, options and other
rights to purchase or otherwise acquire, membership interests and shares of
stock or other ownership interests of any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct Subsidiary of
Pledgors (which membership interests and shares or other ownership interests
shall be deemed to be part of the Pledged Interests), the certificates or other
instruments representing such shares, securities, warrants, options or other
rights and any interest of Pledgors in the entries on the books of any financial
intermediary pertaining to such membership interests, shares or other interests,
and all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such membership interests, shares,
securities, warrants, options or other rights; provided, however, that Pledgors
shall not be required to pledge the membership interests, shares or other equity
interests of, or any securities convertible into and warrants, options and other
rights to purchase or otherwise acquire, membership interests or stock of any
Foreign Subsidiary otherwise required to be pledged pursuant to this Section
1(e) to the extent that such pledge would constitute an investment of earnings
in United States property under Section 956 (or a successor provision) of the
IRC that would trigger an increase in the gross income of a United States owner
of any Pledgor pursuant to Section 951 (or a successor provision) of the IRC;
(f) all indebtedness from time to time owed to Pledgors by any Person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct or indirect Subsidiary of Pledgors, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness; and
(g) to the extent not covered by clauses (a) through (f) above, all
proceeds of any or all of the foregoing Pledged Collateral. For purposes of this
Agreement, the term "PROCEEDS" includes whatever is receivable or received when
Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guaranty payable to Pledgors or Secured Party from
time to time with respect to any of the Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Pledged Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and
liabilities of every nature of each Pledgor now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other Loan
Documents and the Lender Interest Rate Agreements and all extensions or renewals
thereof, whether for principal, interest (including interest that, but for the
filing of a petition in bankruptcy with respect to Pledgors, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Lender Interest Rate Agreements, fees,
expenses, indemnities or otherwise,
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whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender or Interest Rate
Exchanger as a preference, fraudulent transfer or otherwise, and all obligations
of every nature of Pledgors now or hereafter existing under this Agreement (all
such obligations of Pledgors being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgors' endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Secured Party. Upon the occurrence and during the continuance of an Event of
Default (as defined in the Credit Agreement) or the occurrence of an Early
Termination Date (as defined in a Master Agreement or an Interest Rate Swap
Agreement or Interest Rate and Currency Exchange Agreement each in the standard
form prepared by the International Swap and Derivatives Association Inc. or a
similar event under any similar swap agreement) under any Lender Interest Rate
Agreement (either such occurrence being an "Event of Default" for purposes of
this Agreement), Secured Party shall have the right, without notice to Pledgors,
to transfer to or to register in the name of Secured Party or any of its
nominees any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 7(a). In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgors, joint and
severally, represent and warrant as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the Pledged
Interests have been duly authorized and validly issued and are fully paid and
non-assessable. All of the Pledged Debt has been duly authorized, authenticated
or issued, and delivered and is the legal, valid and binding obligation of the
issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged Interests constitute
the percent of the issued and outstanding membership interests, shares of stock,
or other ownership interest of each issuer thereof as set forth on Schedule 1,
and there are no outstanding warrants, options or other rights to purchase, or
other agreements outstanding with respect to, or property that is now or
hereafter convertible into, or that requires the issuance or sale of, any
Pledged Interests. The Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness evidenced by a promissory note of the
respective issuers thereof owing to Pledgors.
(c) Ownership of Pledged Collateral. Each Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any Lien except
for the security interest created by this Agreement.
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SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL;
ETC. Each Pledgor shall:
(a) not, except as expressly permitted by the Credit Agreement, (i)
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Pledged Collateral, (ii) create or
suffer to exist any Lien upon or with respect to any of the Pledged Collateral,
except for the security interest under this Agreement, or (iii) permit any
issuer of Pledged Interests to merge or consolidate unless all the outstanding
membership interests, capital stock, or other ownership interest of the
surviving or resulting Person is, upon such merger or consolidation, pledged
hereunder and no cash, securities or other property is distributed in respect of
the outstanding membership interests or shares of any other constituent Person;
provided that in the event any Pledgor makes an Asset Sale permitted by the
Credit Agreement and the assets subject to such Asset Sale are Pledged
Interests, Secured Party shall release the Pledged Interests that are the
subject of such Asset Sale to such Pledgor free and clear of the lien and
security interest under this Agreement concurrently with the consummation of
such Asset Sale; provided, further that, as a condition precedent to such
release, Secured Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Secured Party of
the Net Asset Sale Proceeds of such Asset Sale to the extent required under the
Credit Agreement;
(b) (i) cause each issuer of Pledged Interests not to issue any
membership interests, stock or other securities in addition to or in
substitution for the Pledged Interests issued by such issuer, except to
Pledgors, (ii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional membership interests, shares of
stock or other securities of each issuer of Pledged Interests, and (iii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all membership interests, shares of stock, or other ownership interests
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance, any and all
instruments or other evidences of additional indebtedness from time to time owed
to Pledgors by any obligor on the Pledged Debt, and (ii) pledge hereunder,
immediately upon their issuance, any and all instruments or other evidences of
indebtedness from time to time owed to any Pledgor by any Person that after the
date of this Agreement becomes, as a result of any occurrence, a direct or
indirect Subsidiary of any Pledgor;
(d) promptly notify Secured Party of any event of which any Pledgor
becomes aware causing material loss or depreciation in the value of the Pledged
Collateral;
(e) promptly deliver to Secured Party all written notices received by
it with respect to the Pledged Collateral; and
(f) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged Collateral,
except to the extent the validity thereof is being contested in good faith and
adequate reserves have been set aside therefor; provided that Pledgors shall in
any event pay such taxes, assessments, charges, levies or claims
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not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against Pledgors or any
of the Pledged Collateral as a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Each Pledgor agrees that from time to time, at the expense of such
Pledgor, each Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, Pledgors
will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby and (ii) at
Secured Party's request, appear in and defend any action or proceeding that may
affect Pledgors' title to or Secured Party's security interest in all or any
part of the Pledged Collateral.
(b) Each Pledgor further agrees that it will, upon obtaining any
additional membership interests, shares of stock or other securities required to
be pledged hereunder as provided in Section 5(b) or (c), promptly (and in any
event within five Business Days) deliver to Secured Party a Pledge Amendment,
duly executed by such Pledgor, in substantially the form of Schedule II annexed
hereto (a "PLEDGE AMENDMENT"), in respect of the additional Pledged Interests or
Pledged Debt to be pledged pursuant to this Agreement. Each Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Interests or Pledged Debt listed on any Pledge Amendment
delivered to Secured Party shall for all purposes hereunder be considered
Pledged Collateral; provided that the failure of Pledgors to execute a Pledge
Amendment with respect to any additional Pledged Interests or Pledged Debt
pledged pursuant to this Agreement shall not impair the security interest of
Secured Party therein or otherwise adversely affect the rights and remedies of
Secured Party hereunder with respect thereto; provided further, that Pledgors
shall not be required to pledge any additional membership interests or shares
of, or any securities convertible into and warrants, options and other rights to
purchase or otherwise acquire, membership interests or stock of any Foreign
Subsidiary issuer of the Pledged Interests pursuant to this Section 6(b) to the
extent that such pledges would constitute an investment of earnings in United
States property under Section 956 (or a successor provision) of the Internal
Revenue Code (the "IRC") that would trigger an increase in the gross income of a
United States owner of any Pledgor pursuant to Section 951 (or a successor
provision) of the IRC.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit
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Agreement; provided, however, that each Pledgor shall not
exercise or refrain from exercising any such right if Secured
Party shall have notified such Pledgor that, in Secured
Party's judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part
thereof; and provided, further, that such Pledgor shall give
Secured Party at least five Business Days' prior written
notice of the manner in which it intends to exercise, or the
reasons for refraining from exercising, any such right. It is
understood, however, that neither (A) the voting by Pledgors
of any Pledged Interests for or Pledgors' consent to the
election of managers or directors at a regularly scheduled
annual or other meeting of members or stockholders or with
respect to incidental matters at any such meeting nor (B)
Pledgors' consent to or approval of any action otherwise
permitted under this Agreement and the Credit Agreement shall
be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section 7(a)(i),
and no notice of any such voting or consent need be given to
Secured Party;
(ii) Each Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any
and all dividends and interest paid in respect of the Pledged
Collateral; provided, however, that any and all
(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for
any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by any Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the other
property or funds of any Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary indorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to any Pledgor all such
proxies, dividend payment orders and other instruments as such
Pledgor may from time to time reasonably request for the
purpose of enabling such Pledgor to exercise the voting and
other consensual rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends,
principal or interest payments which it is authorized to
receive and retain pursuant to paragraph (ii) above.
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(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) upon written notice from Secured Party to any Pledgor, all
rights of such Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant to Section 7(a)(i) shall cease, and all such
rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to exercise such voting
and other consensual rights;
(ii) all rights of such Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to Section 7(a)(ii) shall cease,
and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to receive and
hold as Pledged Collateral such dividends and interest
payments; and
(iii) all dividends, principal and interest payments which are
received by such Pledgor contrary to the provisions of
paragraph (ii) of this Section 7(b) shall be received in trust
for the benefit of Secured Party, shall be segregated from
other funds of Pledgors and shall forthwith be paid over to
Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsements).
(c) In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to Section
7(b)(i) and to receive all dividends and other distributions which it may be
entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) each Pledgor
shall promptly execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request and (ii) without limiting
the effect of the immediately preceding clause (i), each Pledgor hereby grants
to Secured Party an irrevocable proxy to vote the Pledged Interests and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Interests would be entitled (including giving or withholding written
consents of shareholders, calling special meetings of shareholders and voting at
such meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Interests on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Interests or any officer or agent thereof), upon the occurrence of
an Event of Default and which proxy shall only terminate upon the payment in
full of the Secured Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgors hereby
irrevocably appoint Secured Party as Pledgors' attorney-in-fact, with full
authority in the place and stead of Pledgors and in the name of Pledgors,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgors;
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(b) to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any instruments made payable to
Pledgors representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same; and
(d) to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any of
the Pledged Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Pledged Collateral.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgors fail to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgors under Section 13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Pledged Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Pledged Collateral, it being understood that
Secured Party shall have no responsibility for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not Secured Party has or
is deemed to have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth above
to maintain possession of the Pledged Collateral) to preserve rights against any
parties with respect to any Pledged Collateral, (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Pledged Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Pledged Collateral), and Secured Party
may also in its sole discretion, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange or broker's board or at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem
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commercially reasonable, irrespective of the impact of any such sales on the
market price of the Pledged Collateral. Secured Party or any Lender or Interest
Rate Exchanger may be the purchaser of any or all of the Pledged Collateral at
any such sale and Secured Party, as agent for and representative of Lenders and
Interest Rate Exchangers (but not any Lender or Lenders or Interest Rate
Exchanger or Interest Rate Exchangers in its or their respective individual
capacities unless Requisite Obligees (as defined in Section 15(a)) shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of any Pledgor, and each Pledgor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Pledged Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Pledged Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Pledged Collateral are
insufficient to pay all the Secured Obligations, each Pledgor shall be liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities laws,
to limit purchasers to those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions (including a public offering
made pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, each Pledgor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, Pledgors shall and shall
cause each issuer of any Pledged
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Interests to be sold hereunder from time to time to furnish to Secured Party all
such information as Secured Party may request in order to determine the number
of shares and other instruments included in the Pledged Collateral which may be
sold by Secured Party in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.
SECTION 12. APPLICATION OF PROCEEDS. All proceeds received by Secured
Party in respect of any sale of, collection from, or other realization upon all
or any part of the Pledged Collateral shall be applied as provided in subsection
2.4D of the Credit Agreement.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Each Pledgor agrees to indemnify and hold harmless Secured Party,
each Lender and each Interest Rate Exchanger and each of their respective
directors, officers, employees and agents from and against any and all claims,
losses and liabilities, joint or several, in any way relating to, growing out of
or resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities are directly attributable to Secured
Party's or such Lender's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Each Pledgor shall pay to Secured Party upon demand the amount of
any and all costs and expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that Secured Party may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of Secured Party hereunder, or (iv) the failure by any Pledgor
to perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon Pledgors, their successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans held
by it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or otherwise.
Upon the payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, the security interest granted hereby shall
terminate and all rights to the Pledged Collateral shall revert to Pledgors.
Upon any such termination Secured Party will, at Pledgors' expense, execute and
deliver to Pledgors such documents as Pledgors shall reasonably request to
evidence such termination and Pledgor shall be entitled to the return, upon its
request and at its expense, against receipt and without recourse to Secured
Party, of such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof.
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SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders and, by their acceptance of the benefits hereof, Interest Rate
Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
the release or substitution of Pledged Collateral), solely in accordance with
this Agreement and the Credit Agreement; provided that Secured Party shall
exercise, or refrain from exercising, any remedies provided for in Section 11 in
accordance with the instructions of (i) Requisite Lenders or (ii) after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the holders of a majority of the aggregate notional amount (or, with
respect to any Lender Interest Rate Agreement that has been terminated in
accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 15(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Pledged Collateral hereunder, it being understood and agreed by such
Interest Rate Exchanger that all rights and remedies hereunder may be exercised
solely by Secured Party for the benefit of Lenders and Interest Rate Exchangers
in accordance with the terms of this Section 15(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
F-12
SECTION 16. AMENDMENTS; ETC. No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
any Pledgor therefrom, shall in any event be effective unless the same shall be
in writing and signed by Secured Party and, in the case of any such amendment or
modification, by such Pledgor. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
SECTION 17. NOTICES. Any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement.
SECTION 18. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 19. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 20. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless
otherwise defined herein or in the Credit Agreement, terms used in Articles 8
and 9 of the Uniform Commercial Code in the State of New York are used herein as
therein defined.
SECTION 21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
F-13
IN WITNESS WHEREOF, Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
-------------------------------
Title:
----------------------------
BANKERS TRUST COMPANY,
as Secured Party
By:
-------------------------------
Title:
----------------------------
F-S-1
SCHEDULE I
Attached to and forming a part of the Amended and Restated Pledge
Agreement dated as of May __, 2001 between Blackbaud, Inc. and Blackbaud LLC, as
Pledgors, and Bankers Trust Company, as Secured Party.
Part A
Pledged Interests
Pledgor: Blackbaud, Inc.
-------
Number of Percentage
Issuer Class Certificate Nos. Interests/Shares of Interests/Shares
------ ----- ---------------- ---------------- -------------------
Pledgor: Blackbaud, LLC
-------
Number of Percentage
Issuer Class Certificate Nos. Interests/Shares of Interests/Shares
------ ----- ---------------- ---------------- -------------------
Part B
Pledged Debt
Pledgor: Blackbaud, Inc. and Blackbaud, LLC
-------
Debt Issuer Amount of Indebtedness
----------- ----------------------
F-Schedule-I
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated __________ __, ____, is delivered pursuant
to Section 6(b) of the Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Amendment may be attached to the Amended and
Restated Pledge Agreement dated May __, 2001, between the undersigned and
Bankers Trust Company, as Secured Party (the "PLEDGE AGREEMENT," capitalized
terms defined therein being used herein as therein defined), and that the
[Pledged Interests] [Pledged Debt] listed on this Pledge Amendment shall be
deemed to be part of the [Pledged Interests] [Pledged Debt] and shall become
part of the Pledged Collateral and shall secure all Secured Obligations.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
------------------------------
Title:
----------------------------
Part A
Pledged Interests
Pledgor: Blackbaud, Inc.
-------
Number of Percentage
Issuer Class Certificate Nos. Interests/Shares of Interests/Shares
------ ----- ---------------- ---------------- -------------------
Pledgor: Blackbaud, LLC
--------
Number of Percentage
Issuer Class Certificate Nos. Interests/Shares of Interests/Shares
------ ----- ---------------- ---------------- -------------------
F-Schedule-II
Part B
Pledged Debt
Pledgor: Blackbaud, Inc. and Blackbaud, LLC
-------
Debt Issuer Amount of Indebtedness
----------- ----------------------
F-Schedule-II
ANNEX G
EXHIBIT XV
[FORM OF AMENDED AND RESTATED COMPANY SECURITY AGREEMENT]
COMPANY SECURITY AGREEMENT
This AMENDED AND RESTATED COMPANY SECURITY AGREEMENT (this "AGREEMENT")
is dated as of May ____, 2001 and entered into by and among BLACKBAUD, INC., a
South Carolina corporation ("BLACKBAUD") and BLACKBAUD, LLC, a South Carolina
limited liability company ("BLACKBAUD LLC") (Blackbaud and Blackbaud LLC being
hereinafter referred to individually as "GRANTOR" and collectively as the
"GRANTORS") and BANKERS TRUST COMPANY, as Administrative Agent for and
representative of (in such capacity herein called "SECURED PARTY") the financial
institutions ("LENDERS") party to the Credit Agreement referred to below and any
Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party, Fleet National Bank, as Documentation Agent and First
Union Securities, Inc., as Syndication Agent, as Syndication Agent, and Lenders
have entered into a Credit Agreement dated as of October 13, 1999 (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined) with
Grantors, pursuant to which Lenders have made certain commitments, subject to
the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities to Grantors.
B. Each Grantor may from time to time enter into one or more Interest
Rate Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS") with one
or more Lenders (in such capacity, collectively, "INTEREST RATE EXCHANGERS") in
accordance with the terms of the Credit Agreement and it is desired that the
obligations of any Grantor under the Lender Interest Rate Agreements, including
the obligation of such Grantor to make payments thereunder in the event of early
termination thereof, together with all obligations of each Grantor under the
Credit Agreement and the other Loan Documents, be secured hereunder.
C. It is a condition precedent to the extensions of credit by Lenders
under the Credit Agreement that each Grantor shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Grantor hereby agrees with
Secured Party as follows:
G-1
SECTION 1. GRANT OF SECURITY.
Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which such Grantor now has or hereafter acquires an interest and wherever
the same may be located (the "COLLATERAL"):
(a) all equipment in all of its forms (including, but not
limited to, all computers, office furniture, and other office
equipment), all parts thereof and all accessions thereto (any
and all such equipment, parts and accessions being the
"EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantors for sale or lease
or to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture,
packing, shipping, advertising, selling, leasing, furnishing
or production of such inventory or otherwise used or consumed
in Grantors' business, (iii) all goods in which Grantors have
an interest in mass or a joint or other interest or right of
any kind, and (iv) all goods which are returned to or
repossessed by Grantors and all accessions thereto and
products thereof (all such inventory, accessions and products
being the "INVENTORY"); provided that inventory considered to
be work product held for or acquired on behalf of customers of
Grantors or required to be delivered to customers of Grantors
shall not be deemed Inventory, and all negotiable and
non-negotiable documents of title (including without
limitation warehouse receipts, dock receipts and bills of
lading) issued by any Person covering any Inventory (any such
negotiable document of title being a "NEGOTIABLE DOCUMENT OF
TITLE");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and
obligations of any kind owned by or owing to any Grantor and
all rights in, to and under all security agreements, leases
and other contracts securing or otherwise relating to any such
accounts, contract rights, chattel paper, documents,
instruments, general intangibles or other obligations, it
being understood that contracts with clients of such Grantor
are not considered to be Collateral (any and all such
accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other obligations being
the "ACCOUNTS", and any and all such security agreements,
leases and other contracts being the "RELATED CONTRACTS");
(d) all deposit accounts, including without limitation demand,
time, savings, passbooks or similar accounts maintained with
Lenders or other banks, savings and loan associations or other
financial institutions;
(e) the "INTELLECTUAL PROPERTY COLLATERAL", which term means:
G-2
(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise but only
to the extent permitted by agreements governing such
license or other use) in and to all trademarks,
service marks, designs, logos, indicia, tradenames,
trade dress, corporate names, company names, business
names, fictitious business names, trade styles and/or
other source and/or business identifiers and
applications pertaining thereto, owned by any
Grantor, or hereafter adopted and used, in its
business (including, without limitation, the
trademarks specifically identified in Schedule 1(b),
as the same may be amended pursuant hereto from time
to time) (collectively, the "TRADEMARKS"); provided
that trademarks, servicemarks, designs, logos,
indicia, tradenames, trade dress, corporate names,
company names, business names, fictitious business
names, trade styles and/or other sources and/or
business identifiers and applications pertaining
thereto considered to be work product performed for
or acquired on behalf of customers of any Grantor or
which have been assigned or are required to be
assigned to such customer shall not be deemed
Trademarks or Intellectual Property Collateral; all
registrations that have been or may hereafter be
issued or applied for thereon in the United States
and any state thereof and in foreign countries
(including, without limitation, the registrations and
applications specifically identified in Schedule
1(b), as the same may be amended pursuant hereto from
time to time) (the "TRADEMARK REGISTRATIONS");
provided that registrations that have been made or
may hereafter be issued or applied for thereon in the
United States and any state thereof and in foreign
countries on behalf of or acquired on behalf of
customers of any Grantor or which have been assigned
or are required to be assigned to such customer shall
not be deemed Trademark Registrations or Intellectual
Property Collateral; all common law and other rights
(but in no event any of the obligations) in and to
the Trademarks in the United States and any state
thereof and in foreign countries (the "TRADEMARK
RIGHTS"); and all goodwill of either Grantor's
business symbolized by the Trademarks and associated
therewith (the "ASSOCIATED GOODWILL");
(ii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise but only
to the extent permitted by agreements governing such
license or other use) in and to all patents and
patent applications and rights and interests in
patents and patent applications under any domestic or
foreign law that are presently, or in the future may
be, owned or held by any Grantor and all patents and
patent applications and rights, title and interests
in patents and patent applications under any domestic
or foreign law that are presently, or in the future
may be, owned by any Grantor in whole or in part
(including, without limitation, the patents and
patent applications listed in Schedule 1(c), as the
same may be amended pursuant hereto from time
G-3
to time), all rights (but not obligations)
corresponding thereto (including, without limitation,
the right (but not the obligation), exercisable only
upon the occurrence and during the continuation of an
Event of Default, to xxx for past, present and future
infringements in the name of any Grantor or in the
name of Secured Party or Lenders), and all re-issues,
divisions, continuations, renewals, extensions and
continuations-in-part thereof (all of the foregoing
being collectively referred to as the "PATENTS"); it
being understood that the rights and interests
included in the Intellectual Property Collateral
hereby shall include, without limitation, all rights
and interests pursuant to licensing or other
contracts in favor of Grantors pertaining to patent
applications and patents presently or in the future
owned or used by third parties but, in the case of
third parties which are not Affiliates of any
Grantor, only to the extent permitted by such
licensing or other contracts and, if not so
permitted, only with the consent of such third
parties; provided that patents and patent
applications and rights and interests in patents and
patent applications considered to be work product
performed for or acquired on behalf of customers of
Grantors or which have been assigned or are required
to be assigned to such customer shall not be deemed
Patents or Intellectual Property Collateral; and
(iii) all rights, title and interest (including
rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements
governing such license or other use) under copyright
in various published and unpublished works of
authorship including, without limitation, computer
programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs,
writings, and formulas owned by Grantors (including,
without limitation, the works listed on Schedule
1(d), as the same may be amended pursuant hereto from
time to time) (collectively, the "COPYRIGHTS");
provided that rights, title and interest under
copyright in various published and unpublished works
of authorship including, without limitation, computer
programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs,
writings, formulas, copyright registrations and
applications for copyright registrations considered
to be work product performed for or acquired on
behalf of customers of Grantors or which have been
assigned or are required to be assigned to such
customer shall not be deemed Copyrights or
Intellectual Property Collateral; all copyright
registrations issued to Grantors and applications for
copyright registration that have been or may
hereafter be issued or applied for thereon by
Grantors in the United States and any state thereof
and in foreign countries (including, without
limitation, the registrations listed on Schedule
1(d), as the same may be amended pursuant hereto from
time to time) (collectively, the "COPYRIGHT
REGISTRATIONS"); provided that copyright
registrations issued to Grantors and applications for
copyright registration that have been or
G-4
may hereafter be issued or applied for thereon by
Grantors in the United States and any state thereof
and in foreign countries on behalf of or acquired on
behalf of customers of Grantors or which have been
assigned or are required to be assigned to such
customer shall not be deemed Copyright Registrations
or Intellectual Property Collateral; all common law
and other rights in and to the Copyrights in the
United States and any state thereof and in foreign
countries including all copyright licenses (but with
respect to such copyright licenses, only to the
extent permitted by such licensing arrangements) (the
"COPYRIGHT RIGHTS"), including, without limitation,
each of the Copyrights, rights, titles and interests
in and to the Copyrights and works protectable by
copyright, which are presently, or in the future may
be, owned, created (as a work for hire for the
benefit of Grantors), authored (as a work for hire
for the benefit of any Grantors), or acquired by
Grantors, in whole or in part, and all Copyright
Rights with respect thereto and all Copyright
Registrations therefor, heretofore or hereafter
granted or applied for, and all renewals and
extensions thereof, throughout the world, including
all proceeds thereof (such as, by way of example and
not by limitation, license royalties and proceeds of
infringement suits), the right (but not the
obligation) to renew and extend such Copyright
Registrations and Copyright Rights and to register
works protectable by copyright and the right (but not
the obligation) to xxx for past, present and future
infringements of the Copyrights and Copyright Rights;
(f) all information used or useful or arising from the
business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production,
ideas, confidential business information, techniques,
processes, formulas, and all other proprietary information;
provided that information used or useful or arising from the
business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production,
ideas, confidential business information, techniques,
processes, formulas, and all other proprietary information
considered to be work product performed for or acquired on
behalf of customers of any Grantor which have been assigned or
are required to be assigned to such customer shall not be
deemed Collateral;
(g) to the extent not covered in any other paragraph of this
Section 1, all other general intangibles (including without
limitation tax refunds, rights to payment or performance,
choses in action and judgments taken on any rights or claims
included in the Collateral) provided that general intangibles
considered to be work product performed for or acquired on
behalf of customers of any Grantor or which have been assigned
or are required to be assigned to such customer shall not be
deemed Collateral;
G-5
(h) all plant fixtures, business fixtures and other fixtures
and storage and office facilities, and all accessions thereto
and products thereof;
(i) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing
software that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary
or helpful in the collection thereof or realization thereupon;
and
(j) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not
otherwise included, all payments under insurance (whether or
not Secured Party is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term
"PROCEEDS" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary
or involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including without limitation the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. ss.362(a)), of all obligations and liabilities of every nature
of Grantors now or hereafter existing under or arising out of or in connection
with the Credit Agreement and the other Loan Documents and the Lender Interest
Rate Agreements, and all extensions or renewals thereof, whether for principal,
interest (including without limitation interest that, but for the filing of a
petition in bankruptcy with respect to any Grantor, would accrue on such
obligations), reimbursement of amounts drawn under Letters of Credit, payments
for early termination of Lender Interest Rate Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender or
Interest Rate Exchanger as a preference, fraudulent transfer or otherwise (all
such obligations and liabilities being the "Underlying Debt"), and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement (all such obligations of Grantors, together with the Underlying Debt,
being the "Secured Obligations").
SECTION 3. GRANTORS REMAINS LIABLE.
Anything contained herein to the contrary notwithstanding, (a) Each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights
G-6
hereunder shall not release Grantors from any of their duties or obligations
under the contracts and agreements included in the Collateral, and (c) Secured
Party shall not have any obligation or liability under any contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of
Grantors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and warrants
as follows:
(a) OWNERSHIP OF COLLATERAL. Except for the interests
disclosed in Schedule 4(a) annexed hereto and for the security
interest created by this Agreement, each Grantor owns the
Collateral owned by such Grantor free and clear of any Lien.
Except with respect to the interests disclosed in
Schedule 4(a) annexed hereto and such as may have been filed
in favor of Secured Party relating to this Agreement, no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any filing or recording office.
(b) LOCATIONS OF EQUIPMENT AND INVENTORY. All of the Equipment
and Inventory is, as of the date hereof, located at the places
specified in Schedule 4(b) annexed hereto.
(c) NEGOTIABLE DOCUMENTS OF TITLE. No Negotiable Documents of
Title are outstanding with respect to any of the Inventory.
(d) OFFICE LOCATIONS. The chief place of business, the chief
executive office and the office where each Grantor keeps its
records regarding the Accounts and all originals of all
chattel paper that evidence Accounts is and has been for the
four month period preceding the date hereof, located at the
locations set forth on Schedule 4(d) annexed hereto.
(e) NAMES. Each Grantor has not in the past done, and each
Grantor now does not, conduct business under any other name
(including any trade-name or fictitious business name) except
the names listed in Schedule 4(e) annexed hereto.
(f) DELIVERY OF CERTAIN COLLATERAL. All chattel paper and all
notes and other instruments (excluding checks) comprising any
and all items of Collateral have been delivered to Secured
Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(g) INTELLECTUAL PROPERTY COLLATERAL.
G-7
(i) a true and complete list of all Trademark
Registrations and Trademark applications owned, held
(whether pursuant to a license or otherwise) or used
by Grantors, in whole or in part, is set forth in
Schedule 1(b);
(ii) a true and complete list of all Patents owned,
held (whether pursuant to a license or otherwise) or
used by Grantors, in whole or in part, is set forth
in Schedule 1(c);
(iii) a true and complete list of all Copyright
Registrations and applications for Copyright
Registrations held (whether pursuant to a license or
otherwise) by Grantors, in whole or in part, is set
forth in Schedule 1(d);
(iv) after reasonable inquiry, Grantors are not aware
of any pending or threatened claim by any third party
that any of the Intellectual Property Collateral
owned, held or used by Grantors is invalid or
unenforceable; and
(v) no effective security interest or other Lien
covering all or any part of the Intellectual Property
Collateral is on file in the United States Patent and
Trademark Office or the United States Copyright
Office.
(h) PERFECTION. The security interests in the Collateral
granted to Secured Party hereunder constitute valid security
interests in the Collateral. Upon the filing of UCC financing
statements naming Grantors as "debtor", naming Secured Party
as "secured party" and describing the Collateral in the filing
offices set forth on Schedule 4(h) annexed hereto, and in the
case of the Intellectual Property Collateral, in addition the
filing of a Grant of Trademark Security Interest,
substantially in the form of Exhibit I and a Grant of Patent
Security Interest, substantially in the form of Exhibit II,
with the United States Patent and Trademark Office and the
filing of a Grant of Copyright Security Interest,
substantially in the form of Exhibit III, with the United
States Copyright Office, the security interests in the
Collateral granted to Secured Party will, to the extent a
security interest in the Collateral may be perfected by filing
UCC financing statements and, in the case of the Intellectual
Property Collateral, in addition to the filing of such UCC
Financing Statements, by the filing of a Grant of Trademark
Security Interest and Grant of Patent Security Interest with
the United States Patent and Trademark Office and a Grant of
Copyright Security Interest with the United States Copyright
Office, constitute perfected security interests therein prior
to all other Liens except for the interests disclosed in
Schedule 4(a) annexed hereto.
SECTION 5. FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the expense
of such Grantor, such Grantor will promptly execute and
deliver all further instruments
G-8
and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in
order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of
the foregoing, Grantors will: (i) xxxx conspicuously each item
of chattel paper included in the Accounts, each Related
Contract and, at the request of Secured Party, each of its
records pertaining to the Collateral, with a legend, in form
and substance satisfactory to Secured Party, indicating that
such Collateral is subject to the security interest granted
hereby, (ii) at the request of Secured Party, deliver and
pledge to Secured Party hereunder all promissory notes and
other instruments (including checks) and all original
counterparts of chattel paper constituting Collateral, duly
endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory
to Secured Party, (iii) use commercially reasonable efforts to
obtain any necessary consents of third parties to the
assignment and perfection of a security interest to Secured
Party with respect to any Collateral, (iv) execute and file
such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted
or purported to be granted hereby, (v) at the request of
Secured Party after the acquisition by any Grantor of any item
of Equipment which is covered by a certificate of title under
a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is
required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other
document requesting the notation or other indication of the
security interest created hereunder on such certificate of
title, (vi) at the request of Secured Party deliver to Secured
Party copies of all such applications or other documents filed
during such calendar quarter and copies of all such
certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the
items of Equipment covered thereby, (vii) at any reasonable
time, upon request by Secured Party, exhibit the Collateral to
and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (viii) at Secured
Party's request, appear in and defend any action or proceeding
that may affect any Grantor's title to or Secured Party's
security interest in all or any part of the Collateral.
(b) Without limiting the generality of the foregoing clause
(a), if any Grantor shall hereafter obtain rights to any new
Intellectual Property Collateral or become entitled to the
benefit of (i) any patent application or patent or any
reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any
Patent; or (ii) any Copyright Registration, application for
Registration or renewals or extension of any Copyright, then
in any such case, the provisions of this Agreement shall
automatically apply thereto. Each Grantor shall promptly
notify Secured Party
G-9
in writing of any of the foregoing rights acquired by such
Grantor after the date hereof and of (i) any Trademark
Registrations issued or application for a Trademark
Registration or application for a Patent made, and (ii) any
Copyright Registrations issued or applications for Copyright
Registration made, in any such case, after the date hereof.
Promptly after the filing of an application for any (1)
Trademark Registration; (2) Patent; and (3) Copyright
Registration, Grantors shall execute and deliver to Secured
Party and record in all places where this Agreement is
recorded a Security Agreement Supplement, substantially in the
form of Exhibit IV, pursuant to which Grantors shall grant to
Secured Party a security interest to the extent of its
interest in such Intellectual Property Collateral; provided,
if, in the reasonable judgment of such Grantor, after due
inquiry, granting such interest would result in the grant of a
Trademark Registration or Copyright Registration in the name
of Secured Party, such Grantor shall give written notice to
Secured Party as soon as reasonably practicable and the filing
shall instead be undertaken as soon as practicable but in no
case later than immediately following the grant of the
applicable Trademark Registration or Copyright Registration,
as the case may be.
(c) Each Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without
the signature of such Grantor. Each Grantor agrees that a
carbon, photographic or other reproduction of this Agreement
or of a financing statement signed by such Grantor shall be
sufficient as a financing statement and may be filed as a
financing statement in any and all jurisdictions.
(d) Each Grantor hereby authorizes Secured Party to modify
this Agreement without obtaining such Grantor's approval of or
signature to such modification by amending Schedules 1(b),
1(c), and 1(d), as applicable, to include reference to any
right, title or interest in any existing Intellectual Property
Collateral or any Intellectual Property Collateral acquired or
developed by Grantors after the execution hereof or to delete
any reference to any right, title or interest in any
Intellectual Property Collateral in which Grantors no longer
have or claim any right, title or interest.
(e) Each Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and
describing the Collateral and such other reports in connection
with the Collateral as Secured Party may reasonably request,
all in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTORS. Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of
insurance covering the Collateral;
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(b) notify Secured Party of any change in any Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change in any Grantor's chief place of business, chief
executive office or residence or the office where such Grantor
keeps its records regarding the Accounts and all originals of
all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable any Grantor to
acquire rights in or the use of any Collateral, use such value
for such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and
supplies) against, the Collateral, except to the extent the
validity thereof is being contested in good faith and adequate
reserves have been set aside therefor; provided that such
Grantor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgment, writ or
warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such
payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
Each Grantor shall:
(a) keep the Equipment and Inventory at the places therefor
specified on Schedule 4(b) annexed hereto or, upon 30 days'
prior written notice to Secured Party, at such other places in
jurisdictions where all action that may be necessary or
desirable, or that Secured Party may request, in order to
perfect and protect any security interest granted or purported
to be granted hereby, or to enable Secured Party to exercise
and enforce its rights and remedies hereunder, with respect to
such Equipment and Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with each Grantor's
past practices, and shall forthwith make or cause to be made
all repairs, replacements and other improvements in connection
therewith that are necessary or desirable to such end. Each
Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to any of the
Equipment;
(c) keep correct and accurate records of Inventory owned by
each Grantor, itemizing and describing the kind, type and
quantity of such Inventory, such Grantor's cost therefor and
(where applicable) the current list prices for such Inventory;
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(d) if any Inventory is in possession or control of any of
Grantors' agents or processors, if the aggregate book value of
all such Inventory exceeds $100,000, and in any event upon the
occurrence of an Event of Default or the occurrence of an
Early Termination Date (as defined in a Master Agreement or an
Interest Rate Swap Agreement or Interest Rate and Currency
Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under
any similar swap agreement) under any Lender Interest Rate
Agreement (either such occurrence being an "Event of Default"
for purposes of this Agreement), instruct such agent or
processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured
Party; and
(e) promptly upon the issuance and delivery to any Grantor of
any Negotiable Document of Title, deliver such Negotiable
Document of Title to Secured Party.
SECTION 8. INSURANCE. Each Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED
CONTRACTS.
(a) Each Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its
records concerning the Accounts and Related Contracts, and all
originals of all chattel paper that evidence Accounts, at the
location therefor specified in Section 4 or, upon 30 days'
prior written notice to Secured Party, at such other location
in a jurisdiction where all action that may be necessary or
desirable, or that Secured Party may request, in order to
perfect and protect any security interest granted or purported
to be granted hereby, or to enable Secured Party to exercise
and enforce its rights and remedies hereunder, with respect to
such Accounts and Related Contracts shall have been taken.
Each Grantor will hold and preserve such records and chattel
paper and will permit representatives of Secured Party at any
time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each
Grantor agrees to render to Secured Party, at such Grantor's
cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. Promptly upon the
request of Secured Party, each Grantor shall deliver to
Secured Party complete and correct copies of each Related
Contract.
(b) Each Grantor shall, for not less than five (5) years from
the date on which such Account arose, maintain (i) complete
records of each Account of such Grantor, including records of
all payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto.
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(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all
amounts due or to become due to such Grantor under the
Accounts and Related Contracts. In connection with such
collections, each Grantor may take (and, at Secured Party's
direction, shall take) such action as such Grantor or Secured
Party may deem necessary or advisable to enforce collection of
amounts due or to become due under the Accounts; provided,
however, that Secured Party shall have the right at any time,
upon the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its
intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to
Secured Party and to direct such account debtors or obligors
to make payment of all amounts due or to become due to such
Grantor thereunder directly to Secured Party, to notify each
Person maintaining a lockbox or similar arrangement to which
account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing
collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement
directly to Secured Party and, upon such notification and at
the expense of such Grantor, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as
such Grantor might have done. After receipt by such Grantor of
the notice from Secured Party referred to in the proviso to
the preceding sentence, (i) all amounts and proceeds
(including checks and other instruments) received by such
Grantor in respect of the Accounts and the Related Contracts
shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to
Secured Party in the same form as so received (with any
necessary endorsement) to be held as cash Collateral and
applied as provided by Section 19, and (ii) such Grantor shall
not adjust, settle or compromise the amount or payment of any
Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
SECTION 10. DEPOSIT ACCOUNTS. Upon the occurrence and during the continuation of
an Event of Default, Secured Party may exercise dominion and control over, and
refuse to permit further withdrawals (whether of money, securities, instruments
or other property) from any deposit accounts maintained with Secured Party
constituting part of the Collateral.
SECTION 11. SPECIAL PROVISIONS WITH RESPECT TO THE INTELLECTUAL PROPERTY
COLLATERAL.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times
keep at least one complete set of its
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records concerning such Collateral at its chief
executive office or principal place of business;
(ii) hereafter use best efforts so as not to permit
the inclusion in any contract to which it hereafter
becomes a party of any provision that could or might
in any way impair or prevent the creation of a
security interest in, or the assignment of, any
Grantor's rights and interests in any property
included within the definitions of any Intellectual
Property Collateral acquired under such contracts;
(iii) take any and all steps to protect the secrecy
of all trade secrets relating to the products and
services sold or delivered under or in connection
with the Intellectual Property Collateral, including,
without limitation, where appropriate entering into
confidentiality agreements with employees and
labeling and restricting access to secret information
and documents;
(iv) use proper statutory notice in connection with
its use of any of the Intellectual Property
Collateral;
(v) use a commercially appropriate standard of
quality (which may be consistent with each Grantor's
past practices) in the manufacture, sale and delivery
of products and services sold or delivered under or
in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at
Secured Party's reasonable request statements and
schedules further identifying and describing any
Intellectual Property Collateral and such other
reports in connection with such Collateral, all in
reasonable detail.
(b) Except as otherwise provided in this Section 11, each
Grantor shall continue to collect, at its own expense, all
amounts due or to become due to such Grantor in respect of the
Intellectual Property Collateral or any portion thereof. In
connection with such collections, such Grantor may take (and,
at Secured Party's reasonable direction, shall take) such
action as such Grantor or Secured Party may deem reasonably
necessary or advisable to enforce collection of such amounts;
provided, Secured Party shall have the right at any time, upon
the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its
intention to do so, to notify the obligors with respect to any
such amounts of the existence of the security interest created
hereby and to direct such obligors to make payment of all such
amounts directly to Secured Party, and, upon such notification
and at the expense of such Grantor, to enforce collection of
any such amounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by such
Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence and during the continuation
of any Event of Default,
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(i) all amounts and proceeds (including checks and other
instruments) received by such Grantor in respect of amounts
due to such Grantor in respect of the Intellectual Property
Collateral or any portion thereof shall be received in trust
for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to Secured Party in the same
form as so received (with any necessary endorsement) to be
held as cash Collateral and applied as provided by Section 18,
and (ii) such Grantor shall not adjust, settle or compromise
the amount or payment of any such amount or release wholly or
partly any obligor with respect thereto or allow any credit or
discount thereon.
(c) Each Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute,
file and/or make (i) any application relating to any of the
Intellectual Property Collateral owned, held or used by each
Grantor and identified on Schedules 1(b), 1(c) or 1(d), as
applicable, that is pending as of the date of this Agreement,
(ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of
nominal commercial value), (iii) application on any future
patentable but unpatented innovation or invention comprising
Intellectual Property Collateral, and (iv) any Trademark
opposition and cancellation proceedings, renew Trademark
Registrations and Copyright Registrations and do any and all
acts which are necessary or desirable to preserve and maintain
all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne
solely by Grantors. Subject to the foregoing, Grantors shall
give Secured Party prior written notice of any abandonment of
any Intellectual Property Collateral or any pending patent
application or any Patent.
(d) Except as provided herein, each Grantor shall have the
right to commence and prosecute in its own name, as real party
in interest, for its own benefit and at its own expense, such
suits, proceedings or other actions for infringement, unfair
competition, dilution, misappropriation or other damage, or
reexamination or reissue proceedings as are necessary to
protect the Intellectual Property Collateral. Secured Party
shall provide, at Grantors' expense, all reasonable and
necessary cooperation in connection with any such suit,
proceeding or action including, without limitation, joining as
a necessary party. Each Grantor shall promptly, following its
becoming aware thereof, notify Secured Party of the
institution of, or of any adverse determination in, any
proceeding (whether in the United States Patent and Trademark
Office, the United States Copyright Office or any federal,
state, local or foreign court) or regarding such Grantor's
ownership, right to use, or interest in any Intellectual
Property Collateral. Such Grantor shall provide to Secured
Party any information with respect thereto requested by
Secured Party.
(e) In addition to, and not by way of limitation of, the
granting of a security interest in the Collateral pursuant
hereto, each Grantor, effective upon
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the occurrence and during the continuation of an Event of
Default and upon written notice from Secured Party, shall
grant, sell, convey, transfer, assign and set over to Secured
Party, all of such Grantor's right, title and interest in and
to the Intellectual Property Collateral to the extent
necessary to enable Secured Party to use, possess and realize
on the Intellectual Property Collateral and to enable any
successor or assign to enjoy the benefits of the Intellectual
Property Collateral. This right shall inure to the benefit of
all successors, assigns and transferees of Secured Party and
its successors, assigns and transferees, whether by voluntary
conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such
right and license shall be granted free of charge, without
requirement that any monetary payment whatsoever be made to
such Grantor. In addition, each Grantor hereby grants to
Secured Party and its employees, representatives and agents
the right to visit such Grantor's and any of its Affiliate's
or subcontractor's plants, facilities and other places of
business that are utilized in connection with the manufacture,
production, inspection, storage or sale of products and
services sold or delivered under any of the Intellectual
Property Collateral (or which were so utilized during the
prior six month period), and to inspect the quality control
and all other records relating thereto upon reasonable advance
written notice to such Grantor and at reasonable dates and
times and as often as may be reasonably requested. If and to
the extent that Grantors are permitted to license the
Intellectual Property Collateral, Secured Party shall promptly
enter into a non-disturbance agreement or other similar
arrangement, at such Grantor's request and expense, with such
Grantor and any licensee of any Intellectual Property
Collateral permitted hereunder in form and substance
reasonably satisfactory to Secured Party pursuant to which (i)
Secured Party shall agree not to disturb or interfere with
such licensee's rights under its license agreement with such
Grantor so long as such licensee is not in default thereunder,
and (ii) such licensee shall acknowledge and agree that the
Intellectual Property Collateral licensed to it is subject to
the security interest created in favor of Secured Party and
the other terms of this Agreement.
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SECTION 12. TRANSFERS AND OTHER LIENS. Grantors shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral,
except as permitted by the Credit Agreement; or, except for the interests
disclosed on Schedule 4(a) annexed hereto and the security interest created by
this Agreement, create or suffer to exist any Lien upon or with respect to any
of the Collateral to secure the indebtedness or other obligations of any Person,
provided that in the event Grantors make an asset sale permitted by the Credit
Agreement and the assets subject to such asset sale are Collateral, Secured
Party shall release the Collateral that is the subject of such asset sale to
such Grantor free and clear of the lien and security interest under this
Agreement concurrently with the consummation of such asset sale; provided,
further that, as a condition precedent to such release, Secured Party shall have
received evidence satisfactory to it that arrangements satisfactory to it have
been made for delivery to Secured Party of the Net Asset Sale Proceeds of such
asset sale to the extent required under the Credit Agreement.
SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Each Grantor hereby
irrevocably appoints Secured Party as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such
Grantor, Secured Party or otherwise, from time to time in Secured Party's
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including without limitation:
(a) to obtain and adjust insurance required to be maintained
by such Grantor or paid to Secured Party pursuant to Section
8;
(b) to ask for, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with
clauses (a) and (b) above;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable
for the collection of any of the Collateral or otherwise to
enforce the rights of Secured Party with respect to any of the
Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied
or placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to
become obligations of Grantors to Secured Party, due and
payable immediately without demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in
connection with Accounts and other documents relating to the
Collateral; and
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(g) upon the occurrence and during the continuance of an Event
of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though Secured Party
were the absolute owner thereof for all purposes, and to do,
at Secured Party's option and Grantors' expense, at any time
or from time to time, all acts and things that Secured Party
deems necessary to protect, preserve or realize upon the
Collateral and Secured Party's security interest therein in
order to effect the intent of this Agreement, all as fully and
effectively as Grantors might do.
SECTION 14. SECURED PARTY MAY PERFORM. If any Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by such Grantor under subsection 10.2 of
the Credit Agreement.
SECTION 15. STANDARD OF CARE. The powers conferred on Secured Party hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the exercise of reasonable
care in the custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. Secured
Party shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
SECTION 16. REMEDIES. If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Collateral), and also may (a) require
Grantors to, and Grantors hereby agree that they will at their expense and upon
request of Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a place to
be designated by Secured Party that is reasonably convenient to both parties,
(b) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process, (c) prior to the disposition of the
Collateral, store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Secured Party
deems appropriate, (d) take possession of Grantors' premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of Grantors' equipment for the purpose of completing any work in process, taking
any actions described in the preceding clause (c) and collecting any Secured
Obligation, and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party or
any Lender or Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and
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Secured Party, as agent for and representative of Lenders and Interest Rate
Exchangers (but not any Lender or Lenders or Interest Rate Exchanger or Interest
Rate Exchangers in its or their respective individual capacities unless
Requisite Obligees (as defined in Section 21(a)) shall otherwise agree in
writing), shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantors, and Grantors
hereby waive (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, such Grantor shall be
liable for the deficiency and the fees of any attorneys employed by Secured
Party to collect such deficiency.
SECTION 17. ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.
(a) Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of an Event of
Default, (i) Secured Party shall have the right (but not the
obligation) to bring suit, in the name of any Grantor, Secured
Party or otherwise, to enforce any Intellectual Property
Collateral, in which event such Grantor shall, at the request
of Secured Party, do any and all lawful acts and execute any
and all documents required by Secured Party in aid of such
enforcement and such Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in
subsections 10.2 and 10.3 of the Credit Agreement and Section
19 hereof, in connection with the exercise of its rights under
this Section, and, to the extent that Secured Party shall
elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, such Grantor agrees to
use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of
the Intellectual Property Collateral by others and for that
purpose agrees to use its commercially reasonable judgment in
maintaining any action, suit or proceeding against any Person
so infringing reasonably necessary to prevent such
infringement; (ii) upon written demand from Secured Party,
Grantors shall execute and deliver to Secured Party an
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assignment or assignments of the Intellectual Property
Collateral and such other documents as are necessary or
appropriate to carry out the intent and purposes of this
Agreement; (iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party
(or any Lender) receives cash proceeds in respect of the sale
of, or other realization upon, the Intellectual Property
Collateral; and (iv) within five Business Days after written
notice from Secured Party, such Grantor shall make available
to Secured Party, to the extent within such Grantor's power
and authority, such personnel in such Grantor's employ on the
date of such Event of Default as Secured Party may reasonably
designate, by name, title or job responsibility, to permit
such Grantor to continue, directly or indirectly, to produce,
advertise and sell the products and services sold or delivered
by such Grantor under or in connection with the Trademarks,
Trademark Registrations and Trademark Rights, such persons to
be available to perform their prior functions on Secured
Party's behalf and to be compensated by Secured Party at such
Grantor's expense on a per diem, pro-rata basis consistent
with the salary and benefit structure applicable to each as of
the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by
reason of cure, waiver, modification, amendment or otherwise,
no longer be continuing, (ii) no other Event of Default shall
have occurred and be continuing, (iii) an assignment to
Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously
made, and (iv) the Secured Obligations shall not have become
immediately due and payable, upon the written request of such
Grantor, Secured Party shall promptly execute and deliver to
such Grantor such assignments as may be necessary to reassign
to such Grantor any such rights, title and interests as may
have been assigned to Secured Party as aforesaid, subject to
any disposition thereof that may have been made by Secured
Party; provided, after giving effect to such reassignment,
Secured Party's security interest granted pursuant hereto, as
well as all other rights and remedies of Secured Party granted
hereunder, shall continue to be in full force and effect; and
provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than
Liens (if any) encumbering such rights, title and interest at
the time of their assignment to Secured Party and Permitted
Encumbrances.
SECTION 18. APPLICATION OF PROCEEDS. Except as expressly provided elsewhere in
this Agreement, all proceeds received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party, be held by Secured Party as Collateral
for, and/or then, or at any other time thereafter, applied in full or in part by
Secured Party against, the Secured Obligations as provided in subsection 2.4D of
the Credit Agreement.
SECTION 19. INDEMNITY AND EXPENSES.
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(a) Each Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and
liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions
contemplated hereby (including, without limitation,
enforcement of this Agreement), except to the extent such
claims, losses or liabilities result solely from Secured
Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent
jurisdiction.
(b) Each Grantor agrees to pay to Secured Party upon demand
the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts
and agents, that Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii)
the exercise or enforcement of any of the rights of Secured
Party hereunder, or (iv) the failure by such Grantor to
perform or observe any of the provisions hereof.
(c) The obligations of each Grantor in this Section 19 shall
survive the termination of this Agreement and the discharge of
such Grantor's other obligations under this Agreement.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This Agreement
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until the payment in full of the Secured
Obligations, the cancellation or termination of the Commitments, and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon any Grantor and its successors and assigns, and (c) inure, together with
the rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to such Grantor. Upon any such termination Secured Party will, at such
Grantor's expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits
hereof, Interest Rate Exchangers. Secured Party shall be
obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any
action (including without limitation the release or
substitution of Collateral), solely in
G-21
accordance with this Agreement and the Credit Agreement;
provided that Secured Party shall exercise, or refrain from
exercising, any remedies provided for in Section 16 in
accordance with the instructions of (i) Requisite Lenders or
(ii) after payment in full of all Obligations under the Credit
Agreement and the other Loan Documents, the holders of a
majority of the aggregate notional amount (or, with respect to
any Lender Interest Rate Agreement that has been terminated in
accordance with its terms, the amount then due and payable
(exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender
Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders
being referred to herein as "Requisite Obligees"). In
furtherance of the foregoing provisions of this Section 21(a),
each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder,
it being understood and agreed by such Interest Rate Exchanger
that all rights and remedies hereunder may be exercised solely
by Secured Party for the benefit of Lenders and Interest Rate
Exchangers in accordance with the terms of this Section 21(a).
(b) Secured Party shall at all times be the same Person that
is Administrative Agent under the Credit Agreement. Written
notice of resignation by Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of
the Credit Agreement shall also constitute removal as Secured
Party under this Agreement; and appointment of a successor
Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute appointment of a successor
Secured Party under this Agreement. Upon the acceptance of any
appointment as Administrative Agent under subsection 9.5 of
the Credit Agreement by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and
duties of the retiring or removed Secured Party under this
Agreement, and the retiring or removed Secured Party under
this Agreement shall promptly (i) transfer to such successor
Secured Party all sums, securities and other items of
Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under
this Agreement, and (ii) execute and deliver to such successor
Secured Party such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Secured Party
of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its
duties and obligations under this Agreement. After any
retiring or removed Administrative Agent's resignation or
removal hereunder as Secured Party, the provisions of this
Agreement shall inure to its benefit as to any actions taken
G-22
or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 22. AMENDMENTS; ETC. No amendment, modification, termination or waiver
of any provision of this Agreement, and no consent to any departure by any
Grantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by such Grantor. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
SECTION 23. NOTICES. Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed; provided that
notices to Secured Party shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of Secured Party in the exercise of any power, right or
privilege hereunder shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude any other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 25. SEVERABILITY. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 27. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
G-23
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code
in the State of New York are used herein as therein defined. The rules of
construction set forth in subsection 1.3 of the Credit Agreement shall be
applicable to this Agreement mutatis mutandis.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GRANTORS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 23; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST GRANTORS IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 28 RELATING TO JURISDICTION AND
VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER
NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 29. WAIVER OF JURY TRIAL. GRANTORS AND SECURED PARTY HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Each Grantor and Secured Party
acknowledge that this waiver is a material inducement for such Grantor and
Secured Party to enter into a business relationship, that Grantors and Secured
Party have already relied on this waiver in entering into this Agreement and
that each will continue to rely on this waiver in their related future dealings.
Each Grantor and Secured Party further warrant and represent that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF
G-24
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 30. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
G-25
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BLACKBAUD, INC.
BLACKBAUD, LLC
By:
---------------------------------
Name:
Title:
Address: 0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
BANKERS TRUST COMPANY,
as Secured Party
By:
---------------------------------
Name:
Title:
Address: One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
G-S-1
SCHEDULE 1(a) TO
SECURITY AGREEMENT
TRADEMARKS:
G-Schedule 1(a)
SCHEDULE 1(b) TO
SECURITY AGREEMENT
PATENTS ISSUED:
Patent No. Issue Date Invention Inventor
PATENTS PENDING:
Applicant's Date Application
Name Filed Number Invention Inventor
G-Schedule 1(b)
SCHEDULE 1(c) TO
SECURITY AGREEMENT
U.S. COPYRIGHTS:
Title Registration No. Date of Issue Registered Owner
FOREIGN COPYRIGHT REGISTRATIONS:
Country Title Registration No. Date of Issue
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
Title Reference No. Date of Application Copyright Claimant
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
Country Title Registration No. Date of Issue
G-Schedule 1(c)
SCHEDULE 4(a)
TO
SECURITY AGREEMENT
INTERESTS IN COLLATERAL
G-Schedule 4(a)
SCHEDULE 4(b)
TO
SECURITY AGREEMENT
LOCATIONS OF EQUIPMENT AND INVENTORY
Name of Company Locations of Equipment and Inventory
G-Schedule 4(b)
SCHEDULE 4(D)
TO
SECURITY AGREEMENT
Office Locations
Name of Company Office Locations
G-Schedule 4(d)
SCHEDULE 4(E)
TO
SECURITY AGREEMENT
Other Names
NAME OF COMPANY OTHER NAMES
G-Schedule 4(e)
SCHEDULE 4(H)
TO
SECURITY AGREEMENT
FILING OFFICES
G-Schedule 4(h)
EXHIBIT I TO
SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [BLACKBAUD, INC., a South Carolina corporation] [BLACKBAUD,
LLC, a South Carolina limited liability company] ("GRANTOR") owns and uses in
its business, and will in the future adopt and so use, various intangible
assets, including the Trademark Collateral (as defined below); and
WHEREAS, Grantor has, together with [Blackbaud Inc.][Blackbaud LLC]
joint and severally, as borrowers (the "Borrowers") entered into a Credit
Agreement dated as of October 13, 1999 (said Credit Agreement, as so amended,
restated, supplemented or otherwise modified, being the "CREDIT AGREEMENT"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the financial institutions named therein (collectively,
together with their respective successors and assigns party to the Credit
Agreement from time to time, the "Lenders"), Fleet National Bank, as
Documentation Agent and First Union Securities, Inc., as Syndication Agent, and
Bankers Trust Company, as Administrative Agent (in such capacity, "SECURED
PARTY");
WHEREAS, Under the Credit Agreement the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Grantors and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
October 13, 1999 (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT"), among Borrower and Secured Party, Grantor has
agreed to create in favor of Secured Party a secured and protected interest in,
and Secured Party has agreed to become a secured creditor with respect to, the
Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Credit Agreement and the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "TRADEMARK COLLATERAL"):
(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise but only to the extent
permitted by agreements governing such license or other use) in and to
all trademarks, service marks, designs, logos, indicia, tradenames,
trade dress, corporate names, company names, business names,
fictitious business names, trade styles and/or other source and/or
business identifiers and applications pertaining thereto, owned by
Grantor, or hereafter adopted and used, in
G-Exhibit I-S-1
its business (including, without limitation, the trademarks
specifically identified in Schedule A) (collectively, the
"TRADEMARKS"); provided that trademarks, servicemarks, designs, logos,
indicia, tradenames, trade dress, corporate names, company names,
business names, fictitious business names, trade styles and/or other
sources and/or business identifiers and applications pertaining
thereto considered to be work product performed for or acquired on
behalf of customers of Grantor which have been assigned or are
required to be assigned to such customer shall not be deemed
Trademarks or Trademark Collateral; all registrations that have been
or may hereafter be issued or applied for thereon in the United States
and any state thereof and in foreign countries (including, without
limitation, the registrations and applications specifically identified
in Schedule A) (the "TRADEMARK REGISTRATIONS"); provided that
registrations that have been or may hereafter be issued or applied for
thereon in the United States and any state thereof and in foreign
countries on behalf of or acquired on behalf of customers of Grantor
or which have been assigned or are required to be assigned to such
customer shall not be deemed Trademark Registrations or Trademark
Collateral; all common law and other rights (but in no event any of
the obligations) in and to the Trademarks in the United States and any
state thereof and in foreign countries (the "TRADEMARK RIGHTS"), and
all goodwill of Grantor's business symbolized by the Trademarks and
associated therewith (the "ASSOCIATED GOODWILL"); and
(ii) all proceeds, products, rents and profits of or from
any and all of the foregoing Trademark Collateral and, to the extent
not otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty
or guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Trademark Collateral. For purposes of
this Grant of Trademark Security Interest, the term "PROCEEDS"
includes whatever is receivable or received when Trademark Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
G-Exhibit II-2
[The remainder of this page is intentionally left blank.]
G-Exhibit II-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the __this day of __________, 2001.
[BLACKBAUD, INC.]
[BLACKBAUD, LLC.]
By:
------------------------------------
Name:
Title:
G-Exhibit I-S-1
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
United States
Trademark Registration Registration
Registered Owner Description Number Date
G-Exhibit I-Schedule-A
EXHIBIT II TO
SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, [BLACKBAUD, INC., a South Carolina corporation] [BLACKBAUD,
LLC, a South Carolina limited liability company] ("GRANTOR") owns and uses in
its business, and will in the future adopt and so use, various intangible
assets, including the Patent Collateral (as defined below); and
WHEREAS, Grantor, together with [Blackbaud, Inc.][Blackbaud LLC], joint
and severally, as borrowers (the "Borrowers") has entered into a Credit
Agreement dated as of October 13, 1999 (said Credit Agreement, as so amended,
restated, supplemented or otherwise modified, being the "CREDIT AGREEMENT"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the financial institutions named therein (collectively,
together with their respective successors and assigns party to the Credit
Agreement from time to time, the "Lenders"), Fleet National Bank, as
Documentation Agent and First Union Securities, Inc., as Syndication Agent, and
Bankers Trust Company, as Administrative Agent (in such capacity, "SECURED
PARTY");
WHEREAS, under the Credit Agreement, the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Grantor; and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
October 13, 1999 (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT"), among Borrowers and Secured Party, Grantor has
agreed to create in favor of Secured Party a secured and protected interest in,
and Secured Party has agreed to become a secured creditor with respect to, the
Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Credit Agreement and the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "PATENT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all patents
and patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or
in the future may be, owned or held by Grantor and all patents and
patent applications and rights, title and interests in patents and
patent applications under any
G-Exhibit II-1
domestic or foreign law that are presently, or in the future may be,
owned by Grantor in whole or in part (including, without limitation,
the patents and patent applications listed in Schedule A), all rights
(but not obligations) corresponding thereto to xxx for past, present
and future infringements and all re-issues, divisions, continuations,
renewals, extensions and continuations-in-part thereof (all of the
foregoing being collectively referred to as the "PATENTS"); provided
that patents and patent applications and rights and interests in
patents and patent applications considered to be work product
performed for or acquired on behalf of customers of Grantor or which
have been assigned or are required to be assigned to such customer
shall not be deemed Patents or Patent Collateral; and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Patent Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Patent Collateral. For purposes of this Grant of
Patent Security Interest, the term "PROCEEDS" includes whatever is
receivable or received when Patent Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Patent Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[The remainder of this page intentionally left blank.]
G-Exhibit II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as
of the ___this day of __________, 2001.
[BLACKBAUD, INC.]
[BLACKBAUD, LLC]
By:
------------------------------------
Name:
Title:
G-Exhibit II-S-1
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
PATENTS ISSUED:
Patent No. Issue Date Invention Inventor
PATENTS PENDING:
Applicant's Date Application
Name Filed Number Invention Inventor
G-Exhibit II-Schedule I
EXHIBIT III TO
SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [BLACKBAUD, INC., a South Carolina corporation] [BLACKBAUD,
LLC, a South Carolina limited liability company] ("GRANTOR"), owns and uses in
its business, and will in the future adopt and so use, various intangible
assets, including the Copyright Collateral (as defined below); and
WHEREAS, Grantor has, together with [Blackbaud, Inc.][Blackbaud LLC],
joint and severally, as borrowers (the "Borrowers") entered into a Credit
Agreement dated as of October 13, 1999 (said Credit Agreement, as so amended,
restated, supplemented or otherwise modified, being the "CREDIT AGREEMENT"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the financial institutions named therein (collectively,
together with their respective successors and assigns party to the Credit
Agreement from time to time, the "Lenders"), Fleet National Bank, as
Documentation Agent and First Union Securities, Inc., as Syndication Agent, and
Bankers Trust Company, as Administrative Agent (in such capacity, "SECURED
PARTY");
WHEREAS, under the Credit Agreement, the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Grantor; and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
October 13, 1999 (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT"), among Borrowers and Secured Party, Grantor has
agreed to create in favor of Secured Party a secured and protected interest in,
and Secured Party has agreed to become a secured creditor with respect to, the
Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Credit Agreement and the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "COPYRIGHT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) under copyright in
various published and unpublished works of authorship including,
without limitation, computer programs, computer data bases, other
computer software layouts, trade dress, drawings, designs, writings,
and formulas (including, without limitation, the works listed on
Schedule A, as the same may be
G-Exhibit III-1
amended pursuant hereto from time to time) (collectively, the
"COPYRIGHTS"); provided that rights, title and interest under
copyright in various published and unpublished works of authorship
including, without limitation, computer programs, computer data bases,
other computer software, layouts, trade dress, drawings, designs,
writings, formulas, copyright registrations and applications for
copyright registrations considered to be work product performed for or
acquired on behalf of customers of Grantor or which have been assigned
or are required to be assigned to such customer shall not be deemed
Copyrights or Copyright Collateral; all copyright registrations issued
to Grantor and applications for copyright registration that have been
or may hereafter be issued or applied for thereon in the United States
and any state thereof and in foreign countries (including, without
limitation, the registrations listed on Schedule A, as the same may be
amended pursuant hereto from time to time) (collectively, the
"COPYRIGHT REGISTRATIONS"); provided that copyright registrations
issued to Grantor and applications for copyright registration that
have been or may hereafter be issued or applied for thereon in the
United States and any state thereof and in foreign countries on behalf
of or acquired on behalf of customers of Grantor or which have been
assigned or are required to be assigned to such customer shall not be
deemed Copyright Registrations or Copyright Collateral; all common law
and other rights in and to the Copyrights in the United States and any
state thereof and in foreign countries including all copyright
licenses (but with respect to such copyright licenses, only to the
extent permitted by such licensing arrangements) (the "COPYRIGHT
RIGHTS"), including, without limitation, each of the Copyrights,
rights, titles and interests in and to the Copyrights and works
protectable by copyright, which are presently, or in the future may
be, owned, created (as a work for hire for the benefit of Grantor),
authored (as a work for hire for the benefit of Grantor), or acquired
by Grantor, in whole or in part, and all Copyright Rights with respect
thereto and all Copyright Registrations therefor, heretofore or
hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world, including all proceeds thereof (such
as, by way of example and not by limitation, license royalties and
proceeds of infringement suits), the right (but not the obligation) to
renew and extend such Copyright Registrations and Copyright Rights and
to register works protectable by copyright and the right (but not the
obligation) to xxx in the name of Grantor or in the name of Secured
Party or Lenders for past, present and future infringements of the
Copyrights and Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and
all of the foregoing Copyright Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty
or guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Copyright Collateral. For purposes of
this Grant of Copyright Security Interest, the term "PROCEEDS"
includes whatever is receivable or received when Copyright Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
G-Exhibit II-2
Notwithstanding anything herein to the contrary, in no event shall the
Copyright Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Copyright Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[The remainder of this page intentionally left blank.]
G-Exhibit II-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___this day of __________, 2001.
[BLACKBAUD, INC.]
[BLACKBAUD, LLC]
By:
------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
One Bankers Trust Plaza as secured party
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx By:
------------------------------------
Name:
Title:
G-Exhibit III-S-1
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. COPYRIGHTS:
Title Registration No. Date of Issue Registered Owner
FOREIGN COPYRIGHT REGISTRATIONS:
Country Title Registration No. Date of Issue
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
Title Reference No. Date of Application Copyright Claimant
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
Country Title Registration No. Date of Issue
G-Exhibit III-Schedule A
EXHIBIT IV TO
SECURITY AGREEMENT
SECURITY AGREEMENT SUPPLEMENT
This SECURITY AGREEMENT SUPPLEMENT, dated _______, is delivered
pursuant to the Amended and Restated Security Agreement, dated as of May __,
2001 (as it may be from time to time amended, modified or supplemented, the
"SECURITY AGREEMENT"), among [Blackbaud, Inc, a South Carolina corporation]
[Blackbaud LLC, a South Carolina limited liability company] as Grantor, and
Bankers Trust Company, as Administrative Agent and as Secured Party. Capitalized
terms used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Security Agreement.
Subject to the terms and conditions of the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of Grantor's right,
title and interest in and to the Intellectual Property Collateral listed on
Supplemental Schedule [1(b)] [1(c)] [1(d)] attached hereto the following, in
each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located. All such
Intellectual Property Collateral shall be deemed to be part of the Collateral
and hereafter subject to each of the terms and conditions of the Security
Agreement.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
[BLACKBAUD, INC.]
[BLACKBAUD, LLC]
By:
------------------------------------
Name:
Title:
G-Exhibit IV-1
ANNEX H
Schedule 4.1C
[To come from Company]
H-1
ANNEX I
Schedule 5.1
[To come from Company]
I-1
ANNEX J
Schedule 1.1
Expansion Expenditures
A. Sales and Marketing Expenditures
- Costs of a remote sales office - this would include rent and
all other related expenses.
- Hiring a VP Human Resources - this would include the salary,
related benefits and costs to recruit and relocate.
- Hiring a VP Marketing - this would include the salary,
related benefits and costs to recruit and relocate.
- Overstaffing of sales function - this would include salaries
and benefits for the first 6 months for commissioned sales
staff above the head count in the 2001 budget (such 2001 head
count being 58 sales account executives). Also included would
be the costs to recruit and relocate these individuals.
B. Product Development Expenditures
- Enhancement of the existing QA function - this would include
the salaries and related benefits and costs to recruit and
relocate the necessary staff. The project will be identified
as the costs of personnel added above the current head count
working in QA (such 2001 head count being 37 QA employees).
This project would also include the costs of new software
testing tools and any third party professionals assisting in
the enhancement effort.
- Expansion of web-based product offerings - this would include
the salaries and related benefits and costs to recruit and
relocate the necessary staff. The project will be identified
as the costs of personnel added above the current headcount
working on these offerings (such 2001 head count being 7
web-based employees).
- Implementation of a "low-end" product - there are no staff
currently working on such an offering. Accordingly the
project would be defined as the salaries, related benefits of
the staff working on such a project as well as the costs to
recruit and relocate any new personnel.
C. Acquisitions
- Any losses, before D&A, associated with newly acquired
businesses (excluding the recent Core Data acquisition). The
carve-out may be used to help cover the
J-1
historical test required by the loan agreement as well as,
going forward, quarterly covenant tests.
J-2
ANNEX K
JOINDER AGREEMENT
This Joinder Agreement (the "Agreement") dated as of May _______, 2001
is by and between BLACKBAUD, LLC, a South Carolina limited liability company
(the "ADDITIONAL BORROWER"), BLACKBAUD, INC., a South Carolina corporation,
(the "EXISTING BORROWER" and together with the Additional Borrower, the
"Borrowers") and BANKERS TRUST COMPANY ("BANKERS TRUST"), as administrative
agent for the below referenced Lenders (the "ADMINISTRATIVE AGENT"), under that
certain Credit Agreement dated as of October 13, 1999, as amended by that
certain First Amendment dated as of December 6, 1999, that certain Second
Amendment dated as of December 19, 2000 and that certain Third Amendment dated
as of May ______, 2001 (as so amended and modified and as it may be further
amended or modified, the "CREDIT AGREEMENT"), by and among the Existing
Borrower, the Lenders and the Administrative Agent. All of the defined terms in
the Credit Agreement are incorporated herein by reference.
The Additional Borrower desires to become a Borrower pursuant to the
terms of the Credit Agreement.
Accordingly, the Additional Borrower hereby agrees as follows with the
Administrative Agent and the Lenders:
1. The Additional Borrower hereby acknowledges, agrees and
confirms that, by its execution of this Agreement, the Additional Borrower will
be deemed to be a party, on a joint and several basis, to the Credit Agreement
and a "Borrower" and "Company" for all purposes of the Credit Agreement and the
other Loan Documents and a co-maker of each of the Notes, and shall have all of
the obligations of a Borrower thereunder as fully as if it has executed the
Credit Agreement and the other Loan Documents. The Additional Borrower hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Agreement and in the Loan
Documents which are binding upon the Borrowers, including, without limitation
(a) all of the representations and warranties of the Borrowers set forth in
Section 5 of the Credit Agreement, as supplemented from time to time in
accordance with the terms thereof, and (b) all of the covenants set forth in
Sections 6 and 7 of the Credit Agreement.
2. Without limiting the generality of the foregoing terms of
paragraph 1, the Additional Borrower hereby grants to the Administrative Agent,
for the benefit of the Lenders, a continuing security interest in, and a right
of set off against any and all right, title and interest of the Additional
Borrower in and to, the Collateral (as such term is defined in
K-1
subsection 1.1 of the Credit Agreement) of the Additional Borrower, in each
case as provided in the Loan Documents.
3. The Additional Borrower acknowledges and confirms that it has
received a copy of the Credit Agreement and the Annexes, Schedules and Exhibits
thereto.
4. The Existing Borrower confirms that all of its obligations
under the Credit Agreement are, and upon the Additional Borrower becoming a
Borrower shall continue to be, in full force and effect. The Existing Borrower
further confirms that immediately upon execution of this Agreement by the
parties hereto, that the Additional Borrower shall become a Borrower under the
Credit Agreement, the term "Obligations", as used in the Credit Agreement,
shall include all Obligations of such Additional Borrower under the Credit
Agreement and under each other Loan Document.
5. Each of the Existing Borrower and the Additional Borrower
agrees that at any time and from time to time, upon the written request of the
Administrative Agent, it will execute and deliver such further documents and do
such further acts and things as the Administrative Agent may reasonably request
in order to effect the purposes of this Agreement.
6. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute one contract.
7. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
[Remainder of Page Intentionally Left Blank]
J-2
IN WITNESS WHEREOF, each of the Existing Borrower and the Additional
Borrower has caused this Agreement to be duly executed by its authorized
officers, and the Administrative Agent has caused the same to be accepted by
its authorized officer, as of the day and year first above written.
BLACKBAUD, LLC, as Additional Borrower
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BLACKBAUD, INC., as Existing Borrower
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY, as Administrative
Agent for itself and the other Lenders
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
K-S-1
