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EXHIBIT 10.5
FOURTH AMENDMENT
FOURTH AMENDMENT, dated as of December 21, 1999 (this "Amendment"), to
the Credit Agreement, dated as of February 27, 1997, as amended and restated as
of February 10, 1998 and as further amended by the First Amendment, dated as of
June 30, 1998, the Second Amendment, dated as of February 12, 1999, and the
Third Amendment, dated as of May 25, 1999 (as further amended, supplemented or
modified from time to time, the "Credit Agreement"), among Cooperative
Computing, Inc., a Delaware corporation (the "Borrower"), Cooperative Computing
Holding Company, Inc., a Texas corporation, as guarantor ("CCI"), the several
banks and other financial institutions parties thereto (the "Lenders") and The
Chase Manhattan Bank, as the administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
W I T N E S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower;
WHEREAS, the Borrower has requested that the Administrative Agent, with
the consent of the Required Lenders, amend certain provisions of the Credit
Agreement; and
WHEREAS, the Administrative Agent and the Lenders are willing to agree
to the requested amendments on the terms and conditions contained herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Defined Terms. Terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement, as amended
hereby.
II. Amendments to Credit Agreement.
1. Amendments to Section 1. (a) Section 1.1 of the Credit Agreement is
hereby amended by deleting therefrom the definition of "Consolidated EBITDA" in
its entirety and substituting in lieu thereof the following:
"Consolidated EBITDA": for any period, with respect
to any Person, Consolidated Net Income of such Person for such period
(A) plus, without duplication and to the extent reflected as a charge
in the statement of such Consolidated Net Income for such period, the
sum of (i) total income and franchise tax expense, (ii) interest
expense, amortization or writeoff of debt discount and debt issuance
costs and commissions and discounts and other fees and charges
associated with Indebtedness, (iii) depreciation and amortization
expense, (iv) amortization of intangibles including, but not limited
to, goodwill and organization costs (including, with respect to the
Borrower, costs associated with the Offer to Purchase dated October 23,
1996 made by a subsidiary of CCI to
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purchase the common stock of the Borrower); (v) other extraordinary
noncash charges (in accordance with GAAP) (including non-cash currency
exchange losses); (vi) any extraordinary and unusual losses (including
losses on sales of assets other than inventory sold in the ordinary
course of business); (vii) any write-offs of accounts receivable booked
prior to October 1, 1999 (in accordance with GAAP) taken through the
period ending on September 30, 2000; (viii) any write-offs of accounts
receivable booked on or after October 1, 1999 (in accordance with GAAP)
taken through the period ending on September 30, 2000, provided that
the aggregate amount of all write-offs taken under this clause (viii),
minus any amounts recovered and applied in accordance with clause (iv)
below, shall not exceed $10,000,000; (ix) any cash restructuring
charges, provided that the aggregate amount of all charges taken under
this clause (ix) shall not exceed $10,000,000; and (x) any non-cash
restructuring charges taken through the period ending on September 30,
2000 and (B) minus, without duplication and to the extent reflected as
a credit or gain in the statement of such Consolidated Net Income for
such period, the sum of (i) any extraordinary and unusual gains
(including gains on the sales of assets, other than inventory sold in
the ordinary course of business), (ii) other extraordinary noncash
credits or gains (in accordance with GAAP) (including non-cash currency
exchange gains), (iii) any amounts recovered in respect of any
write-offs taken under clause (vii) above and (iv) any amounts
recovered in respect of any write-offs taken under clause (viii) above;
provided that for the purposes of calculating Consolidated EBITDA for
any period of four consecutive fiscal quarters (each, a "Reference
Period") for purposes of Section 8.1, (i) if at any time during such
Reference Period the Borrower or any Subsidiary shall consummate an
acquisition pursuant to Sections 8.9(k) or 8.9(l), the Consolidated
EBITDA for such Reference Period shall be calculated on a pro forma
basis (assuming the consummation of such acquisition and the incurrence
or assumption of any Indebtedness in connection therewith occurred on
the first day of such Reference Period) and (ii) if at any time during
such Reference Period the Borrower or any Subsidiary shall consummate
the Designated Asset Sale, the Consolidated EBITDA for such Reference
Period shall be reduced on a pro forma basis by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is
the subject of the Designated Asset Sale (the "Reduced EBITDA").
(b) Section 1.1 of the Credit Agreement is hereby amended by
deleting therefrom the definition of "Asset Sale" in its entirety and
substituting in lieu thereof the following:
"Asset Sale": any sale, transfer or other disposition
(including any sale and leaseback of assets and any sale of accounts
receivable in connection with a receivable financing transaction) by
the Borrower or any of its Subsidiaries of any property of the Borrower
or any such Subsidiary (including property subject to any Lien under
any Security Document), other than as permitted pursuant to paragraphs
(a) through (k) of Section 8.6 (provided that, except with respect to
the loss or condemnation of all or substantially all of the assets of
the Borrower and its Subsidiaries, the proceeds from such casualty or
condemnation (including insurance) are used to replace or rebuild the
lost or condemned assets within the time period specified in Section
2.10(f)).
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(c) Section 1.1. of the Credit Agreement is hereby amended by
deleting the definition of "Interest Payment Date" in its entirety and
substituting in lieu thereof the following:
"Interest Payment Date": as to any Loan, the last day of each
month to occur while such Loan is outstanding and, if such Loan is a
Term Loan, the date of each payment of principal thereof.
(d) Section 1.1 of the Credit Agreement is hereby amended by
(i) deleting the word "and" appearing immediately before clause (i) of the
definition of "Permitted Issuance" and substituting in lieu thereof a ","; (ii)
deleting the "." at the end of clause (i) of such definition and substituting in
lieu thereof the word "and"; and (iii) adding the following new clause (j) to
the end of such definition:
(j) the issuance by CCI of the Additional Common Stock;
provided that the net proceeds thereof shall be contributed to the
Borrower and used for general corporate purposes or to repay the
Revolving Credit Loans (but not reduce the Revolving Credit
Commitments).
(e) Section 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions in their proper alphabetical order:
"Additional Common Stock": the Class A Common Stock, par value
$.000125, issued by CCI to Xxxxx Muse in connection with the Additional
Xxxxx Muse Equity Investment.
"Additional Xxxxx Muse Equity Investment": the common stock
investment of up to $10,000,000 in CCI made by Xxxxx Muse by its
purchase of the Additional Common Stock.
"Designated Asset Sale": as defined in Section 8.6(l).
"Reduced EBITDA": as defined in the definition of
"Consolidated EBITDA."
2. Amendments to Section 2. (a) Section 2.4(a) of the Credit Agreement
is hereby amended by (i) deleting the word "quarterly" and substituting in lieu
thereof the word "monthly" and (ii) deleting the words "March, June, September
and December" and substituting in lieu thereof the word "month".
(b) Section 2.10(b) of the Credit Agreement is hereby amended
by deleting such Section 2.10(b) in its entirety and substituting in lieu
thereof the following:
(b) Unless the Required Lenders and the Borrower shall
otherwise agree, if CCI or any of its Subsidiaries (including the
Borrower) shall receive Net Cash Proceeds from any Asset Sale
(including the sale and leaseback of assets) 100% of such Net Cash
Proceeds (or, in the case of the Designated Asset Sale, 75% of such Net
Cash Proceeds)
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shall, on the first Business Day after receipt, be applied toward the
prepayment of the Loans and reduction of Commitments as set forth in
paragraph (d) of this Section 2.10.
(c) Section 2.10(d) of the Credit Agreement is hereby amended
by deleting such Section 2.10(d) in its entirety and substituting in lieu
thereof the following:
(d) (i) All mandatory prepayments shall be applied first to
the Tranche A Term Loans and the Tranche B Term Loans, pro rata based
on the respective outstanding principal amounts thereof, and second to
the permanent reduction of the Revolving Credit Commitments. The
application of prepayments referred to in the preceding sentence shall
be made first to Alternate Base Rate Loans and second to Eurodollar
Loans. The amount of each principal prepayment of Term Loans shall be
applied to reduce the then remaining installments of the Tranche A Term
Loans and the Tranche B Term Loans, as the case may be, pro rata based
upon the then remaining number of installments of Tranche A Term Loans
and Tranche B Term Loans, respectively, after giving effect to all
prior reductions thereto (i.e., each then remaining installment of such
Term Loans shall be reduced by an amount equal to the aggregate amount
to be applied to such Term Loans divided by the number of the then
remaining installments for such Term Loans); provided, that if the
amount to be applied to any installment as required by this Agreement
would exceed the then remaining amount of such installment, then an
amount equal to such excess shall be applied to the next succeeding
installment after giving effect to all prior reductions thereof
(including the amount of prepayments theretofore allocated pursuant to
the preceding portion of this sentence); and provided, further, that,
(1) with respect to any prepayment in connection with the Designated
Asset Sale, 37.5% of the Net Cash Proceeds from such Asset Sale shall
be applied to reduce the then remaining installments of the Tranche A
Term Loans and the Tranche B Term Loans, as the case may be, in direct
order of maturity, and (2) with respect to any prepayment made from
Excess Cash Flow for the fiscal year ending September 30, 2000 pursuant
to Section 2.10(c), in an aggregate amount not to exceed $7,500,000,
such prepayment shall be applied to reduce the then remaining
installments of the Tranche A Term Loans and the Tranche B Term Loans,
as the case may be, in direct order of maturity. Amounts prepaid on
account of the Term Loans may not be reborrowed.
(ii) Any Lender holding Tranche B Term Loans may, to the
extent Tranche A Term Loans are outstanding, elect on not less than one
Business Day's prior written notice to the Administrative Agent with
respect to any mandatory prepayment made pursuant to this Section 2.10,
not to have such prepayment applied to such Lender's Tranche B Term
Loans until all Tranche A Term Loans shall have been paid in full, in
which case the amount not so applied shall be applied to prepay Tranche
A Term Loans and shall reduce the then remaining installments of the
Tranche A Term Loans ratably based on the number of such installments.
3. Amendment to Section 3. Section 3.3(a) of the Credit Agreement is
hereby amended by (i) deleting the word "quarterly" and substituting in lieu
thereof the word "monthly"
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and (ii) deleting the words "March, June, September and December" and
substituting in lieu thereof the word "month".
4. Amendments to Section 8. (a) Section 8.1(a) of the Credit Agreement
is hereby amended by deleting the columns captioned "Quarter Ending" and "Ratio"
from Section 8.1(a) and substituting in lieu thereof the following:
Quarter Ending Ratio
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2000 December 31 2.25 to 1.00
2001 March 31 2.25 to 1.00
June 30 2.50 to 1.00
September 30 2.50 to 1.00
December 31 2.75 to 1.00
2002 March 31 2.75 to 1.00
June 30 3.00 to 1.00
and each
quarter
thereafter
(b) (i) Section 8.1(c) of the Credit Agreement is hereby
amended by deleting the columns captioned "Quarter Ending" and "Amount" from
Section 8.1(c) and substituting in lieu thereof the following:
Quarter Ending Amount
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1998 December 31 $32,500,000
1999 March 31 32,500,000
June 30 32,500,000
September 30 32,500,000
December 31 25,000,000
2000 March 31 23,500,000
June 30 27,000,000
September 30 27,500,000
December 31 37,500,000
2001 March 31 40,000,000
June 30 42,500,000
September 30 45,000,000
December 31 45,000,000
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Quarter Ending Amount
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2002 March 31 47,500,000
June 30 47,500,000
September 30 50,000,000
December 31 52,500,000
2003 March 31 55,000,000
June 30 57,500,000
September 30 60,000,000
and each
quarter
thereafter
(ii) Section 8.1(c) is hereby further amended by adding the
following sentence to the end of such Section 8.1(c):
Notwithstanding anything to the contrary above, the amount set
forth opposite the immediately succeeding four consecutive fiscal
quarters above following the consummation of the Designated Asset Sale
(or, if the Designated Asset Sale is consummated on the last day of a
fiscal quarter, the amount set forth opposite such fiscal quarter and
the immediately succeeding three consecutive fiscal quarters) shall be
reduced in each case by an amount equal to the Reduced EBITDA.
(c) Section 8.1(d) of the Credit Agreement is hereby amended
by deleting the columns captioned "Quarter Ending" and "Ratio" from Section
8.1(d) and substituting in lieu thereof the following:
Quarter Ending Amount
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2000 December 31 5.00 to 1.00
2001 March 31 4.75 to 1.00
June 30 4.50 to 1.00
September 30 4.25 to 1.00
December 31 4.00 to 1.00
2002 March 31 3.75 to 1.00
June 30 3.50 to 1.00
September 30 3.25 to 1.00
December 31 3.25 to 1.00
2003 March 31 3.00 to 1.00
and each
quarter
thereafter
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(d) Section 8.1(e) of the Credit Agreement is hereby amended
by deleting the columns captioned "Quarter Ending" and "Ratio" from Section
8.1(e) and substituting in lieu thereof the following:
Quarter Ending Amount
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1998 December 31 2.75 to 1.00
1999 March 31 2.75 to 1.00
June 30 2.75 to 1.00
September 30 2.75 to 1.00
December 31 4.00 to 1.00
2000 March 31 4.00 to 1.00
June 30 4.00 to 1.00
September 30 3.25 to 1.00
December 31 2.25 to 1.00
2001 March 31 2.25 to 1.00
June 30 2.00 to 1.00
September 30 2.00 to 1.00
December 31 1.75 to 1.00
and each
quarter
thereafter
(e) Section 8.6(d) of the Credit Agreement is hereby amended
by deleting the "$1,000,000" therein and replacing it with "$1,500,000".
(f) Section 8.6 of the Credit Agreement is hereby amended by
(i) deleting the word "and" at the end of Section 8.6(j), (ii) deleting the "."
at the end of Section 8.6(k) and substituting in lieu thereof "; and" and (iii)
adding the following new Section 8.6(l) to the end of such Section 8.6:
(l) the sale of a line of business; provided that the
aggregate net cash proceeds of the sale made pursuant to this paragraph
(l) do not exceed $21,000,000 (the "Designated Asset Sale").
(g) Section 8.7(e) of the Credit Agreement is hereby amended
by deleting such Section 8.7(e) in its entirety and substituting in lieu thereof
the following:
(e) the Borrower may make Restricted Payments to CCI, and CCI
may simultaneously make corresponding Restricted Payments to Xxxxx Muse
or any other holder of the New Common Stock or the Additional Common
Stock, to allow CCI to redeem, in whole or in part, the New Common
Stock or the Additional Common Stock, as the case may be, in accordance
with its terms as long as (i) no Default or Event of Default
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has occurred or would result therefrom, (ii) the Total Debt Ratio on a
pro forma basis after giving effect to the amount of such redemption on
the date of making such Restricted Payments for the period ending on
the last day of each of the two immediately preceding fiscal quarters
(or, if the date of making such Restricted Payments is the last day of
a fiscal quarter, such fiscal quarter and the immediately preceding
fiscal quarter) is no greater than 4.00 to 1.00 and (iii) there shall
be at least $25,000,000 available under the Revolving Credit Facility
on the date of making such Restricted Payments and after giving effect
thereto.
III. Conditions to Effectiveness. This Amendment shall become effective
on the date (a) on which this Amendment shall have been (i) executed by the
Borrower, CCI, the Administrative Agent and the Required Lenders and (ii)
acknowledged and consented to by the other Credit Parties, each in accordance
with the terms of the Credit Agreement and (b) the Administrative Agent shall
have received, for the account of each Lender which executes and delivers this
Amendment by December 21, 1999, an amendment fee in an amount equal to12.5 basis
points of the sum of such Lender's (i) Revolving Credit Commitment and (ii)
outstanding Term Loans as of such date.
IV. General.
1. Representations and Warranties. The representations and warranties
made by the Borrower in the Loan Documents are true and correct in all material
respects on and as of the date hereof, after giving effect to the effectiveness
of this Amendment, as if made on and as of the date hereof, except for any
representation and warranty which is expressly made as of an earlier date which
representation and warranty shall have been true and correct in all material
respects as of such earlier date, and no Default or Event of Default has
occurred and is continuing.
2. Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable expenses
incurred in connection with this Amendment, any other documents prepared in
connection herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
3. No Other Amendments; Confirmation. Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement and the
Notes are and shall remain in full force and effect.
4. Affirmation of Guarantees. Each of the Guarantors hereby consents to
the execution and delivery of this Amendment and to the transactions
contemplated hereby or in any related document and reaffirms its obligations
under the Guarantee and Collateral Agreement executed by such Guarantor.
5. Governing Law; Counterparts. (a) This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
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(b) This Amendment may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the Borrower and the Administrative Agent. This Amendment
may be delivered by facsimile transmission of the relevant signature pages
hereof.
[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
COOPERATIVE COMPUTING, INC.
By: /s/ XXXXXXXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Vice President
COOPERATIVE COMPUTING HOLDING
COMPANY, INC.,
as a Guarantor
By: /s/ XXXX X. XXXXX
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Administrative Agent,
a Lender and Issuing Lender
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
