Senior Subordinated Credit Agreement dated as of November 3, 2016, by and among
Exhibit 10.1
Execution Version
dated as of November 3, 2016,
by and among
QUADRANT 4 SYSTEM CORPORATION, as Borrower
BIP LENDER, LLC, as Collateral Agent
and
BIP QUADRANT 4 DEBT FUND I, LLC, as Lender
Table of Contents
SECTION 1. DEFINITIONS; INTERPRETATION
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1
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Section 1.1
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Definitions
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1
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Section 1.2
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Interpretation
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19
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Section 1.3
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Change in Accounting Principles
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19
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SECTION 2. THE CREDIT FACILITY
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20
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Section 2.1
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Purchase and Sale of the Term Note and BIP Warrant
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20
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Section 2.2
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Interest
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20
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Section 2.3
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Maturity of Term Loan
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20
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Section 2.4
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Prepayments
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20
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Section 2.5
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Default Rate
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23
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Section 2.6
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Evidence of Indebtedness
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23
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Section 2.7
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Fees and Expenses
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23
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Section 2.8
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Pro Rata Treatment
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24
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Section 2.9
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Place and Application of Payments
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24
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Section 2.10
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Allocation of Purchase Price
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25
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SECTION 3. CHANGE IN CIRCUMSTANCES
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25
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Section 3.1
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Withholding Taxes
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25
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Section 3.2
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Documentary Taxes
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25
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SECTION 4. CONDITIONS PRECEDENT
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26
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Section 4.1
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Initial Credit Event
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26
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Section 4.2
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All Credit Events
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28
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER
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29
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Section 5.1
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Organization and Qualification
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29
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Section 5.2
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Subsidiaries; Warrants
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29
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Section 5.3
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Authority and Validity of Obligations
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30
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Section 5.4
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Use of Proceeds; Margin Stock
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30
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Section 5.5
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Financial Reports
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31
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Section 5.6
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No Material Adverse Change
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32
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Section 5.7
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Full Disclosure
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32
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Section 5.8
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Trademarks, Franchises, and Licenses
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32
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Section 5.9
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Governmental Authority and Licensing
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32
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Section 5.10
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Good Title
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32
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Section 5.11
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Litigation and Other Controversies
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32
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Section 5.12
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Taxes
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32
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Section 5.13
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Approvals
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33
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Section 5.14
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Affiliate Transactions
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33
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Section 5.15
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Investment Company
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33
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Section 5.16
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ERISA
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33
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Section 5.17
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Compliance with Laws
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33
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Section 5.18
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OFAC
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34
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Section 5.19
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Other Agreements
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34
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Section 5.20
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Solvency
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34
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Section 5.21
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No Default
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34
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Section 5.22
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No Broker Fees
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35
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Section 5.23
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Proprietary Rights
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35
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Section 5.24
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Private Offering
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37
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Section 5.25
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Labor Relations
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37
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Section 5.26
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Potential Conflicts of Interests
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37
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Section 5.27
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SEC Reports
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37
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Section 5.28
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Listing and Maintenance Requirements
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38
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Section 5.29
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Related Agreements
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38
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Section 5.30
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Collective Enterprise
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39
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Section 5.31
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Amended SEC Reports
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39
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SECTION 6. AFFIRMATIVE COVENANTS
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39
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Section 6.1
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Maintenance of Business
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40
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Section 6.2
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Maintenance of Properties
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40
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Section 6.3
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Taxes and Assessments
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40
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Section 6.4
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Insurance
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40
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Section 6.5
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Financial Reports
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41
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Section 6.6
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Inspection
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44
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Section 6.7
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ERISA
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44
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Section 6.8
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Compliance with Laws
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44
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Section 6.9
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Compliance with OFAC Sanctions Programs
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45
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Section 6.10
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Formation of Subsidiaries
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45
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Section 6.11
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Use of Proceeds; Margin Stock
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46
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Section 6.12
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Guaranties and Collateral
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46
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Section 6.13
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Accounts
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47
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Section 6.14
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Reserved
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47
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Section 6.15
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Maintenance of Proprietary Rights
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47
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Section 6.16
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Post Closing Covenants
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49
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Section 6.17
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Reserved
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49
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Section 6.18
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Warrants
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49
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Section 6.19
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Board Observer
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49
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Section 6.20
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Reporting
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50
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SECTION 7. NEGATIVE COVENANTS
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50
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Section 7.1
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Borrowings and Guaranties
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50
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Section 7.2
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Liens
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51
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Section 7.3
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Investments, Acquisitions, Loans and Advances
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52
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Section 7.4
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Mergers, Consolidations and Sales
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53
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Section 7.5
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Maintenance of Subsidiaries
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54
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Section 7.6
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Dividends and Certain Other Restricted Payments
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54
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Section 7.7
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Burdensome Contracts With Affiliates
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55
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Section 7.8
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No Changes in Fiscal Year
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56
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Section 7.9
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Change in the Nature of Business
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56
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Section 7.10
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No Restrictions
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56
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Section 7.11
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Constituent Documents and Subordinated Debt
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56
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Section 7.12
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Financial Covenants
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57
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Section 7.13
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Rate Management Arrangements
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58
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Section 7.14
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Real Property
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58
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Section 7.15
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Use of Collateral Agent’s or any Lender’s Name
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58
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Section 7.16
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Material Impairment
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58
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SECTION 8. EVENTS OF DEFAULT AND REMEDIES
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58
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Section 8.1
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Events of Default
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58
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Section 8.2
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Non Bankruptcy Defaults
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61
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Section 8.3
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Bankruptcy Defaults
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61
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SECTION 9. COLLATERAL AGENT
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61
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Section 9.1
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Appointment and Authorization of Collateral Agent
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61
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Section 9.2
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Collateral Matters
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61
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Section 9.3
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Delegation of Duties
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62
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Section 9.4
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Liability of Collateral Agent
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62
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Section 9.5
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Reliance by Collateral Agent
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62
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Section 9.6
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Notice of Default
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63
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Section 9.7
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Investment Decision; Disclosure of Information by Collateral Agent
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63
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Section 9.8
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Indemnification of Collateral Agent
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64
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Section 9.9
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Successor Collateral Agent
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64
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Section 9.10
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Reliance on Collateral Agent
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65
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SECTION 10. REPRESENTATIONS AND WARRANTIES OF LENDER
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65
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Section 10.1
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Securities Laws
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65
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SECTION 11. MISCELLANEOUS
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66
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Section 11.1
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No Waiver, Cumulative Remedies
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66
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Section 11.2
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Non-Business Days
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66
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Section 11.3
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Survival of Representations
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66
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Section 11.4
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Survival of Indemnity and Certain Other Provisions
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66
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Section 11.5
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Notices
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67
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Section 11.6
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Counterparts
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67
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Section 11.7
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Successors and Assigns
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67
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Section 11.8
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Amendments, etc
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68
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Section 11.9
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Headings
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68
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Section 11.10
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Costs and Expenses; Indemnification
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68
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Section 11.11
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Set off
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70
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Section 11.12
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Entire Agreement
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70
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Section 11.13
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Governing Law
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70
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Section 11.14
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Severability of Provisions
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70
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Section 11.15
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Excess Interest
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70
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Section 11.16
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Construction
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71
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Section 11.17
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Submission to Jurisdiction; Waiver of Venue; Service of Process
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71
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Section 11.18
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Waiver of Jury Trial
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72
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Section 11.19
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Intercreditor Agreement
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73
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Section 11.20
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Time is of the Essence
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73
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Section 11.21
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Confidentiality
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73
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Section 11.22
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Further Assurances
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74
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This Senior Subordinated Credit Agreement is entered into as of November 3, 2016, by and among QUADRANT 4 SYSTEM CORPORATION, an Illinois corporation (“Borrower”), BIP LENDER, LLC, a Delaware limited liability company (“Collateral Agent”) and BIP QUADRANT 4 DEBT FUND I, LLC, a Delaware limited liability company (“Lender” and together with the other lenders from time to time party hereto, collectively the “Lenders”). All capitalized terms used herein without definition shall have the meanings ascribed thereto in Section 1.1.
A. Borrower has requested, and Lender has agreed to extend, a term loan on the terms and conditions of this Agreement.
B. Borrower wishes to sell to Lender a warrant to purchase 3,000,000 shares of common stock of Borrower substantially in the form of Exhibit A attached hereto (the “BIP Warrant”) on the terms and conditions set forth therein and in this Agreement.
“Acquired Business” means the entity or assets acquired by the Borrower or a Wholly-owned Subsidiary in an Acquisition, whether before or after the date hereof.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the equity securities of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person.
“Affiliate” means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, another Person. A Person shall be deemed to control another Person for purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that, in any event for purposes of this definition, any Person that owns, directly or indirectly, 10% or more of the securities having the ordinary voting power for the election of directors or governing body of a corporation or 10% or more of the partnership or other ownership interest of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.
“Agama Acquisition” means the Acquisition by Stratitude of all or substantially all of the assets of Agama Solutions Inc. pursuant to the terms and conditions of the Agama Purchase Agreement.
“Agama Purchase Agreement” means that certain Asset Purchase Agreement, dated as of the date hereof, by and among Stratitude, as purchaser, and Agama Solutions Inc., as seller.
“Agama Purchase Documents” means, collectively, (a) the Agama Purchase Agreement and (b) all other agreements, instruments and documents executed and delivered in connection therewith.
“Agreement” means this Senior Subordinated Credit Agreement, as the same may be amended, restated, supplemented, or otherwise modified from time to time pursuant to the terms hereof.
“Authorized Representative” means those persons shown on the list of officers provided by Borrower pursuant to Section 4.1 or on any update of any such list provided by Borrower to Collateral Agent, or any further or different officers of Borrower so named by any Authorized Representative of Borrower in a written notice to Collateral Agent.
“BIP Warrant” has the meaning set forth in the Preliminary Statement, as the same may be amended, supplemented or modified from time to time.
“Borrower” is defined in the introductory paragraph of this Agreement.
“Brainchild Earn-Out” means the “Earn Out” payable to the Brainchild Seller pursuant to Section 1.2.3 of the Brainchild Purchase Agreement.
“Brainchild Put Right” means the put right payable to the Brainchild Seller pursuant to Section 1.2.2 of the Brainchild Purchase Agreement.
“Brainchild Purchase Agreement” means that certain Stock Purchase Agreement, by and between Borrower and Brainchild Seller, dated as of January 1, 2015.
“Brainchild Seller” means Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx, former stockholders of Brainchild Corporation.
“Business Day” means any day (other than a Saturday or Sunday) on which banks are not authorized or required to close in Atlanta, GA.
“California Acquisition” means the Acquisition by Borrower of all or substantially all of the capital stock of Stratitude Inc. pursuant to the terms and conditions of the California Purchase Agreement (it being understood that Stratitude will be consummating the Agama Acquisition immediately prior to the California Acquisition).
“California Acquisition Subordination Agreement” means that certain Subordination Agreement dated as of the date hereof by and among Borrower, Collateral Agent and the California Purchase Agreement Seller.
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“California Purchase Agreement” means that certain Stock Purchase Agreement, dated as of the date hereof, by and among Borrower, Stratitude Inc., a California corporation, and the California Purchase Agreement Seller.
“California Purchase Agreement Earn-Out” means the “Earnout Consideration” payable to the California Purchase Agreement Seller pursuant to Section 1.5 and Exhibit B of the California Purchase Agreement.
“California Purchase Agreement Seller” means, individually and collectively, the shareholders listed on Exhibit A to the California Purchase Agreement.
“California Purchase Documents” means, collectively, (a) the California Purchase Agreement and (b) all other agreements, instruments and documents executed and delivered in connection therewith.
“Capital Expenditures” means, with respect to any Person for any period, the aggregate amount of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period for the acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to property, plant, or equipment (including replacements, capitalized repairs, and improvements) which should be capitalized on the balance sheet of such Person in accordance with GAAP but excluding (a) expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (i) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (ii) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, (b) expenditures to the extent such expenditures constitute a reinvestment of proceeds from a Disposition to the extent permitted under this Agreement, and (c) expenditures acquired in connection with a Permitted Acquisition to the extent that there is no cash outlay other than the purchase price that was paid and such expenditures were not created in connection with, or in anticipation of, such Permitted Acquisition.
“Capital Lease” means any lease of Property which in accordance with GAAP is required to be capitalized on the balance sheet of the lessee.
“Capitalized Lease Obligation” means, for any Person, the amount of the liability shown on the balance sheet of such Person in respect of a Capital Lease determined in accordance with GAAP.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq., and any future amendments.
“Change of Control” means any of (a) the acquisition by any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Exchange Act) at any time of beneficial ownership of 20% or more of the outstanding capital stock or other equity interests of Borrower on a fully diluted basis, (b) the failure of individuals who are members of the board of directors (or similar governing body) of Borrower on the Closing Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the
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directors who were either directors on the Closing Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of Borrower, (c) any “Change of Control” (or words of like import), as defined in any agreement or indenture relating to any issue of Indebtedness for Borrowed Money of Borrower or any Subsidiary shall occur, including, without limitation, the Senior Debt, (d) a sale, assignment, lease, conveyance, exchange, transfer, sale-leaseback or other disposition of more than 30% of the assets of Borrower and its Subsidiaries, taken as a whole, whether in one or a series of related transactions (excluding normal inventory sales and financing arrangements associated with inventory or receivables), (e) Borrower ceases to own and control 100% of the capital stock of each Guarantor, (f) approval by the board of directors (or equivalent governing body) of Borrower or any Subsidiary of a liquidation or dissolution of Borrower or such Subsidiary other than, as it relates to any such Subsidiary, the liquidation or dissolution of such Subsidiary shall not be deemed a Change of Control if the assets of such Subsidiary are transferred to Borrower or another Guarantor prior to, or concurrently with, such dissolution or liquidation or (g) a transaction or series of transaction with a controlling stockholder or other affiliated person(s) or third parties that terminates Borrower’s public company status and related reporting obligations under the Exchange Act (for the avoidance of doubt, any event, circumstance or change that results in Borrower’s cessation of reporting under the Exchange Act without also terminating Borrower’s public company status shall not be deemed a Change of Control).
“Closing Date” means the date of this Agreement or such later Business Day upon which each condition described in Section 4.1 shall be satisfied or waived in a manner acceptable to Lender in its discretion.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto.
“Collateral” means all properties, rights, interests, and privileges from time to time subject to the Liens granted to Lender, or any security trustee therefor, by the Collateral Documents.
“Collateral Documents” means the Mortgages, the Security Agreement, the Pledge Agreements, and all other mortgages, deeds of trust, security agreements, pledge agreements, assignments, control agreements, financing statements and other documents as shall from time to time secure or relate to the Obligations or any part thereof.
“Commercial Software” means packaged commercially available software programs generally available to the public which have been licensed to Borrower or any Subsidiary pursuant to an end user license.
“Constituent Documents” is defined in the Security Agreement.
“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Borrower, are treated as a single employer under Section 414 of the Code.
“Credit Event” means the advancing of the Term Loan.
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“Default” means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.
“DialedIn Earn-Out” means the “General Revenue Earnout” (as defined in the DialedIn Merger Agreement) and the “HP Earnout” (as defined in the DialedIn Merger Agreement) payable to the Shareholders (as defined in the DialedIn Merger Agreement) pursuant to Section 2.4(ii) and (iii) of the DialedIn Merger Agreement.
“DialedIn EO Recipients” means Shareholders and officers and employees of DialedIn, Inc. receiving payments of the DialedIn Earn-Out.
“DialedIn General Sales Commission” means the “General Sales Commission” (as defined in the DialedIn Sales Commission Agreement) payable to the former shareholders of DialedIn Inc. pursuant to the DialedIn Sales Commission Agreement.
“DialedIn HP Sales Commission” means the “HP Sales Commission” (as defined in the DialedIn Sales Commission Agreement) payable to the former shareholders of DialedIn Inc. pursuant to the DialedIn Sales Commission Agreement.
“DialedIn Merger Agreement” means that certain Agreement and Plan of Merger, by and among DialedIn, Inc., Q-Dial Corp. and Borrower, dated as of November __, 2015.
“DialedIn Sales Commission Agreement” means that certain Sales Commission Agreement between Borrower and the former shareholders of DialedIn Inc. dated effective as of the later of January 8, 2016 or the date fully executed by both parties.
“Disposition” means the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly permitted under Sections 7.4(a) and (b).
“Distributions” by a Person means (a) dividends or other distributions on any now or hereafter outstanding capital stock of such Person; (b) the redemption, repurchase, defeasance or acquisition of such capital stock or of warrants, rights or other options to purchase such capital stock; and (c) any loans or advances (other than salaries or reimbursement of employee expenses in the ordinary course of business), to any stockholder(s), partner(s) or member(s) of such Person.
“Domestic Subsidiary” means a Subsidiary that is not a Foreign Subsidiary.
“Earn Out Obligations” means and includes any earn out obligations, performance payments or similar obligations of the Borrower or any Subsidiary arising out of or in connection with a Permitted Acquisition or otherwise, including, without limitation, the Brainchild Earn-Out, the DialedIn Earn-Out and the California Purchase Agreement Earn-Out.
“EBITDA” means, with reference to any period for any Person, Net Income of such Person for such period plus all amounts deducted in arriving at such Net Income amount in respect of (a) Interest Expense for such period, (b) federal, state, and local income taxes for such period, (c) depreciation of fixed assets and amortization of intangible assets for such period, (d) other one-time, non-recurring costs and expenses approved by the Collateral Agent in its sole
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discretion and in an amount satisfactory to the Collateral Agent, (e) any fees, costs, charges or other amounts incurred in such period in connection with the negotiation, execution and closing of this Agreement, the other Loan Documents and the Senior Debt in an aggregate amount not to exceed $750,000, (f) transaction fees, costs and expenses incurred during such period in connection with a Permitted Acquisition, whether or not consummated; provided that, (i) in respect of consummated Permitted Acquisitions, such transaction fees, costs and expenses shall not exceed an aggregate amount of $250,000 for any one (1) such Permitted Acquisition and (ii) in respect of unconsummated Permitted Acquisitions, such transaction fees, costs and expenses shall not exceed an aggregate amount of $100,000 for any one (1) such Permitted Acquisition, and (g) transaction fees and amendment fees incurred after the Closing Date which are paid to or on behalf of the Lenders or the Collateral Agent or, to the extent permitted under the Senor Lender Intercreditor Agreement, the Senior Lender in an aggregate amount not to exceed $100,000 per fiscal year.
Notwithstanding the foregoing, solely for purposes of the computation of the financial covenants set forth in Section 7.12 for any period during which a Permitted Acquisition is made by the Borrower or any Wholly-owned Subsidiary, (i) the pro forma EBITDA of any Acquired Business to the extent approved by the Required Lenders in connection with such Permitted Acquisition shall be included therein as if such purchase or other Permitted Acquisition was consummated on the first day of such period, and (ii) any Indebtedness for Borrowed Money incurred or assumed in connection therewith as permitted under this Agreement, shall be included therein as if it had been incurred at the beginning of such period.
Notwithstanding the foregoing, “EBITDA” shall be calculated as follows solely for each of the following fiscal quarters:
Fiscal Quarter Ending
|
EBITDA
|
|||
March 31, 2016
|
$
|
1,076,202
|
||
June 30, 2016
|
$
|
3,180,975
|
||
September 30, 2016
|
$
|
2,250,000
|
“Embedded Products” means all intellectual property that is subject to licenses, sublicenses and other agreements as to which Borrower or any Subsidiary is a party and pursuant to which Borrower or any Subsidiary is authorized to use any third party patents, patent rights, trademarks, service marks, trade secrets or copyrights, including all open source software listed in Schedule 5.23(c) and all third party proprietary software listed in Schedule 5.23(b).
“Environmental Claim” means any investigation, notice, violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding or claim (whether administrative, judicial or private in nature) arising (a) pursuant to, or in connection with an actual or alleged violation of, any Environmental Law, (b) in connection with any
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Hazardous Material, (c) from any abatement, removal, remedial, corrective or response action in connection with a Hazardous Material, Environmental Law or order of a Governmental Authority or (d) from any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.
“Environmental Law” means any current or future Legal Requirement pertaining to (a) the protection of health, safety and the indoor or outdoor environment, (b) the conservation, management or use of natural resources and wildlife, (c) the protection or use of surface water or groundwater, (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation or handling of, or exposure to, any Hazardous Material or (e) pollution (including any Release to air, land, surface water or groundwater), and any amendment, rule, regulation, order or directive issued thereunder.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.
“Event of Default” means any event or condition identified as such in Section 8.1.
“Event of Loss” means, with respect to any Property, any of the following: (a) any loss, destruction or damage of such Property or (b) any condemnation, seizure, or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.
“Excess Interest” is defined in Section 11.15.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
“Fixed Charges” means, with reference to any period for any Person, the sum of (a) all payments of principal due within 12 calendar months on and after the last day of such period with respect to Indebtedness for Borrowed Money of such Person (including, without limitation, any and all payments anticipated to be made (whether contingent or non-contingent at the time) in respect of Earn Out Obligations), (b) Interest Expense of such Person for such period, (c) federal, state, and local income taxes paid or payable by such Person during such period and (d) any Distributions made in cash during such period. Notwithstanding the foregoing, clause (b) set forth above (the “Applicable Item”) shall be calculated as follows solely for each of the following fiscal quarters then ended:
(i) for the fiscal quarter ending on September 30, 2016, the Applicable Item shall be calculated as: actual Applicable Item for the period beginning on July 1, 2016 and ending on September 30, 2016 multiplied by four (4);
(ii) for the fiscal quarter ending on December 31, 2016, the Applicable Item shall be calculated as: actual Applicable Item for the period beginning on July 1, 2016 and ending on December 31, 2016 multiplied by two (2);
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(iii) for the fiscal quarter ending on March 31, 2017, the Applicable Item shall be calculated as: actual Applicable Item for the period beginning on July 1, 2016 and ending on March 31, 2017 multiplied by one and one-third (1 1/3).
“Foreign Subsidiary” means each Subsidiary which (a) is organized under the laws of a jurisdiction other than the United States of America or any state thereof or the District of Columbia, (b) conducts substantially all of its business outside of the United States of America, and (c) has substantially all of its assets outside of the United States of America.
“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“GPA Learn Acquisition” means the Acquisition by Borrower of the “Purchased Assets” (as such term is defined in the GPA Learn Purchase Agreement) pursuant to the GPA Learn Purchase Agreement.
“GPA Learn Purchase Agreement” means that certain Asset Purchase Agreement, dated as of the date hereof, by and between Borrower, as purchaser, and the GPA Learn Seller.
“GPA Learn Purchase Documents” means, collectively, (a) the GPA Learn Purchase Agreement and (b) all other agreements, instruments and documents executed and delivered in connection therewith.
“GPA Learn Royalties” means, collectively, the “Royalty Payments” (as defined in the GPA Learn Royalty Agreement) payable to the GPA Learn Seller.
“GPA Learn Royalty Agreement” means that certain Royalty Agreement dated as of the date hereof by and between the GPA Learn Seller and Borrower.
“GPA Learn Seller” means Great Parents Academy, LLC, a Georgia limited liability company.
“Guarantor” and “Guarantors” each is defined in Section 6.12(a), and includes, without limitation, Stratitude.
“Guaranty” and “Guaranties” each is defined in Section 6.12(a).
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“Hazardous Material” means any substance, chemical, compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which is hazardous or toxic, and includes (a) asbestos, polychlorinated biphenyls and petroleum (including crude oil or any fraction thereof) and (b) any material classified or regulated as “hazardous” or “toxic” or words of like import pursuant to an Environmental Law.
“Hazardous Material Activity” means any activity, event or occurrence involving a Hazardous Material, including the manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation, handling of or corrective or response action to any Hazardous Material.
“Indebtedness for Borrowed Money” means for any Person (without duplication) (a) all indebtedness created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt securities), (b) all indebtedness for the deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business which are not more than one hundred twenty (120) days past due), (c) all indebtedness secured by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (d) all Capitalized Lease Obligations of such Person, (e) all obligations of such Person on or with respect to letters of credit, bankers’ acceptances and other extensions of credit whether or not representing obligations for borrowed money, (f) all Rate Management Obligations of such Person, (g) all earn-outs and similar obligations including, without limitation, any and all contingent and non-contingent Earn Out Obligations, (h) all indebtedness evidenced by bonds, debentures, notes or similar instruments, and (i) any equity securities or other equity instrument, whether or not mandatorily redeemable, that under GAAP is characterized as debt, whether pursuant to financial accounting standards board issuance No. 150 or otherwise.
“Indemnitee” is defined in Section 11.10(a).
“Interest Expense” means, with reference to any period, the sum of all interest charges (including imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense) of Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.
“Interest Period” means, for any date of determination, a period beginning on the first day of any month, or, in the case of the initial Interest Period, if the Term Loan is made on a day other than the first day of the month, the Closing Date, and in each case ending on the last day of such month.
“Interest Rate” means, for any Interest Period, ten percent (10%).
“Knowledge of the Loan Parties”, or any similar phrases, means the actual knowledge of any officer of any Loan Party, or knowledge that would be expected to be obtained by a prudent business person under substantially similar circumstances after a reasonably comprehensive investigation concerning the matter at issue.
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“Legal Requirement” means any treaty, convention, statute, law, regulation, ordinance, license, permit, governmental approval, injunction, judgment, order, consent decree or other requirement of any Governmental Authority, whether federal, state, or local.
“Lender” or “Lenders” is defined in the introductory paragraph of this Agreement. In addition to the foregoing, for the purpose of identifying the Persons entitled to share in the Collateral and the proceeds thereof under, and in accordance with the provisions of, this Agreement and the Collateral Documents.
“Lien” means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of any Property, including the interests of a vendor or lessor under any conditional sale, Capital Lease or other title retention arrangement.
“Loan Documents” means this Agreement, the Notes, the Collateral Documents, the Guaranties, the BIP Warrant, the Information Certificate and each other instrument or document to be delivered hereunder or thereunder or otherwise in connection therewith.
“Loan Party” means (a) Borrower; (b) each Subsidiary of Borrower that becomes a party to this Agreement, a Guaranty Agreement or the Security Agreement; and (c) any other Guarantor.
“Material Adverse Effect” means (a) a material adverse change in, or material adverse effect upon, the operations, business, Property, condition (financial or otherwise), performance or prospects of Borrower or of Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the ability of Borrower or any Subsidiary to perform its material obligations under any Loan Document or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability against Borrower or any Subsidiary of any Loan Document or the rights and remedies of Collateral Agent and the Lenders thereunder or (ii) the perfection or priority of any Lien granted under any Collateral Document.
“Material Plan” is defined in Section 8.1(h).
“Maximum Rate” is defined in Section 11.15.
“MGL Seller Note” means the Amended and Restated Promissory Note dated as of April 18, 2011 issued by Borrower in favor of MGL Americas, Inc. in the original aggregate principal amount of $3,117,538, as modified by that certain Loan Modification Agreement dated as of October 1, 2014.
“Moody’s” means Xxxxx’x Investors Service, Inc.
“Mortgages” means, collectively, each mortgage, deeds of trust, leasehold mortgage or similar instrument delivered to Collateral Agent pursuant to Section 6.12(c), as the same may be amended, restated, supplemented, or otherwise modified from time to time.
“Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) reasonable direct costs relating to such Disposition (including, without limitation, any
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underwriting, brokerage or other customary commissions payable to third parties unrelated to Borrower and its Subsidiaries and legal, advisory and other fees and expenses associated therewith), (ii) sale, use or other transactional taxes paid or payable by such Person as a direct result of such Disposition and (iii) until released to the Borrower or any Subsidiary, all reasonable amounts that are set aside as a reserve established in accordance with GAAP for (1) adjustments in respect of the sale price of such assets or (2) for the payment of liabilities under any indemnification obligations (other than taxes deducted pursuant to the foregoing clause (ii)) relating to the assets sold or otherwise disposed of, (b) with respect to any Event of Loss of a Person, cash and cash equivalent proceeds received by or for such Person’s account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of reasonable direct costs incurred in connection with the collection of such proceeds, awards or other payments, and (c) with respect to any offering of equity securities of a Person or the issuance of any Indebtedness for Borrowed Money by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of reasonable legal, underwriting, commissions payable to third parties unrelated to Borrower and its Subsidiaries and other fees and expenses incurred as a direct result thereof.
“Net Income” means, with reference to any period for any Person, the net income (or net loss) of such Person for such period computed on a consolidated basis in accordance with GAAP; provided that there shall be excluded from Net Income (a) the net income (or net loss) of such Person accrued prior to the date it becomes a Subsidiary of, or has merged into or consolidated with, Borrower or another Subsidiary, and (b) the net income (or net loss) of such Person (other than a Subsidiary) in which Borrower or any of its Subsidiaries has an equity interest in, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries during such period.
“Notes” means the Term Note and any notes issued in connection with any assignment of all or a portion thereof.
“Obligations” means all obligations of Borrower to pay principal and interest on the Term Loan, all fees and charges payable hereunder, and all other payment obligations of Borrower or any of its Subsidiaries arising under or in relation to any Loan Document, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.
“OFAC” means the United States Department of Treasury Office of Foreign Assets Control.
“OFAC Event” means the event specified in Section 6.9(c).
“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders administered by OFAC, including the Bank Secrecy Act, anti-money laundering laws (including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA Patriot Act)), and all economic and trade sanction programs administered by OFAC, any and all similar United States
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federal laws, regulations or Executive Orders, and any similar laws, regulations or orders adopted by any State within the United States.
“OFAC SDN List” means the list of the Specially Designated Nationals and Blocked Persons maintained by OFAC.
“Open Source Software” is defined in Section 5.23(c).
“OSS Agreements” is defined in Section 5.23(c).
“PBGC” means the Pension Benefit Guaranty Corporation or any Person succeeding to any or all of its functions under ERISA.
“Permitted Acquisitions” means (x) the Related Transactions and (y) any Acquisition by Borrower or any domestic Wholly-owned Subsidiary thereof where:
(a) the business, division or assets acquired are for use, or the Person acquired is engaged, in the businesses engaged in by Borrower on the Closing Date or related, ancillary or complimentary businesses and activities;
(b) immediately before and after giving effect to such Acquisition, no Default or Event of Default shall exist;
(c) the aggregate consideration (cash and non-cash) to be paid by Borrower or any Subsidiary (including, without limitation, any indebtedness assumed in connection therewith, the amount thereof to be calculated in accordance with GAAP and the value of any equity securities of Borrower and/or any Subsidiary issued to the seller in connection with such Acquisition) in connection with (i) such Acquisition (or any series of related Acquisitions) is less than $1,500,000, and (ii) all Acquisitions is less than $4,500,000, in each case without the prior written consent of the Required Lenders;
(d) immediately after giving effect to such Acquisition, Borrower is in pro forma compliance with all the financial covenants set forth in Section 7.12;
(e) in the case of the Acquisition of any Person, the board of directors or similar governing body of such Person has approved such Acquisition;
(f) not less than twenty (20) Business Days prior to such Acquisition (or such later date approved by Collateral Agent in its sole discretion), Collateral Agent shall have received an acquisition summary with respect to the Person and/or business, division or assets to be acquired, such summary to include a reasonably detailed description thereof (including financial information) and operating results (including financial statements for the most recent 12 month period for which they are available and as otherwise available), the terms and conditions, including economic terms, of the proposed Acquisition, and Borrower’s calculation of pro forma EBITDA relating thereto;
(g) Collateral Agent shall have approved Borrower’s computation of pro forma EBITDA;
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(h) not less than fifteen (15) Business Days prior to such Acquisition (or such later date approved by Collateral Agent in its sole discretion), Collateral Agent shall have received drafts of each material document, instrument and agreement to be executed in connection with such Acquisition together with all lien search reports and lien release letters and other documents as Collateral Agent may require to evidence the termination of all Liens on the assets, business or division to be acquired;
(i) reasonably prior to such Acquisition (or such later date approved by Collateral Agent in its sole discretion), Collateral Agent shall have received complete executed or conformed copies of each material document, instrument and agreement to be executed in connection with such Acquisition together with all lien search reports and lien release letters and other documents as Collateral Agent may require to evidence the termination of Liens on the assets, business or division to be acquired;
(j) the business, division, assets or Person acquired shall have generated positive EBITDA (calculated in a manner acceptable to Collateral Agent) for each of the twelve calendar months immediately preceding the Acquisition;
(k) consents shall have been obtained in favor of Collateral Agent to the collateral assignment of rights and indemnities under the related acquisition documents (or the acquisition documents shall permit the collateral assignment of the same to the Collateral Agent) and opinions of counsel for Borrower and its Subsidiaries and (if delivered to Borrower or any Subsidiary) the selling party in favor of Collateral Agent and the Lenders shall have been delivered;
(l) Borrower shall have provided Collateral Agent with pro forma forecasted balance sheets, profit and loss statements, and cash flow statements of Borrower and its Subsidiaries, all prepared on a basis consistent with Borrower’s historical financial statements, subject to adjustments to reflect projected consolidated operations following the Acquisition, together with appropriate supporting details and a statement of underlying assumptions for the one year period following the date of the proposed Acquisition, on a month by month basis;
(m) Borrower shall have provided Collateral Agent with reasonable calculations evidencing that on a pro forma basis created by adding the historical combined financial statements of Borrower and its Subsidiaries (including the combined financial statements of any other Person or assets that were the subject of a prior Permitted Acquisition during the relevant period) to the historical consolidated financial statements of the entity to be acquired (or the historical financial statements related to the division, business or assets to be acquired) pursuant to the Acquisition, subject to adjustments to reflect projected consolidated operations following the Acquisition, Borrower and its Subsidiaries are projected to be in compliance with the financial covenants for each of the twelve months ended one year after the proposed date of consummation of such Acquisition;
(n) the Person acquired shall be a domestic Person and any assets, business or division acquired shall be located within the United States of America;
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(o) the provisions of Section 6.12 shall have been satisfied, including, without limitation, simultaneously with the closing of such Acquisition, the target company (if such Acquisition is structured as a purchase of equity securities) or Borrower or the domestic Wholly-owned Subsidiary (if such Acquisition is structured as a purchase of assets or a merger and Borrower or the domestic Wholly-owned Subsidiary is the surviving entity) executes and delivers to Collateral Agent (a) such documents necessary to grant to Collateral Agent, on behalf of the Lenders, a Lien in all of the assets of such target company or surviving company, and their respective Subsidiaries, each in form and substance reasonably satisfactory to Collateral Agent and (b) an unlimited Guaranty of the Obligations, or at the option of Collateral Agent in Collateral Agent’s absolute discretion, a joinder agreement satisfactory to Collateral Agent in which such target company or surviving company, and their respective Subsidiaries becomes a borrower under this Agreement and assumes primary, joint and several liability for the Obligations;
(p) if the Acquisition is structured as a merger, Borrower or one of Borrower’s domestic Wholly-owned Subsidiaries that is a Borrower or Guarantor is the surviving entity;
(q) Borrower and its Subsidiaries shall not assume or acquire any Indebtedness for Borrowed Money in connection with such Acquisition to the extent such Indebtedness would not be permitted under Section 7.1 hereof; and
(r) to the extent readily available to Borrower or any domestic Wholly-owned Subsidiary, Borrower or such Subsidiary shall have provided Collateral Agent with such other information with respect to such Acquisition as reasonably requested by Collateral Agent.
“Permitted Lien” means a Lien expressly permitted hereunder pursuant to Section 7.2.
“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof.
“Plan” means any employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code that either (a) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group or (b) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
“Pledge Agreements” means each pledge agreement or similar agreement delivered to Collateral Agent in connection with this Agreement or any other Loan Document, as the same may be amended, modified, supplemented or restated from time to time.
“Premises” means the real property owned or leased by Borrower or any Subsidiary, including the real property and improvements thereon owned by Borrower or any Subsidiary subject to the Lien of the Mortgages or any other Collateral Documents.
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“Property” means, as to any Person, all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent balance sheet of such Person and its subsidiaries under GAAP.
“Proprietary Rights” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including source code and related documentation), (g) all other proprietary rights, and (h) all copies and tangible embodiments thereof (in whatever form or medium), in each case excluding any Embedded Products and Commercial Software.
“Purchased Securities” means the Term Note and the Warrant Securities issued hereunder.
“Rate Management Agreement” means any agreement, device or arrangement providing for payments which are related to fluctuations of interest rates, exchange rates, forward rates, or equity prices, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and any agreement pertaining to equity derivative transactions (e.g., equity or equity index swaps, options, caps, floors, collars and forwards), including without limitation any ISDA Master Agreement, or foreign exchange risk, currency risk, or risk with respect to commodities prices, and any schedules, confirmations and documents and other confirming evidence between the parties confirming transactions thereunder, all whether now existing or hereafter arising, and in each case as amended, modified or supplemented from time to time.
“Rate Management Obligations” means any and all obligations of Borrower or any Subsidiary, whether absolute, contingent or otherwise and howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under or in connection with (i) any and all Rate Management Agreements, and (ii) any and all cancellations, buy-backs, reversals, terminations or assignments of any Rate Management Agreement.
“RCRA” means the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq., and any future amendments.
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“Receivables” means all rights to the payment of a monetary obligation, now or hereafter owing to Borrower or any Subsidiary, evidenced by accounts, instruments, chattel paper, or general intangibles.
“Related Agreements” means, collectively, (a) the Agama Purchase Documents, (b) the GPA Learn Purchase Documents and (c) the California Purchase Documents.
“Related Transactions” means, collectively, (a) the Agama Acquisition, (b) the GPA Learn Acquisition and (c) the California Acquisition.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migration, dumping, or disposing into the indoor or outdoor environment, including the abandonment or discarding of barrels, drums, containers, tanks or other receptacles containing or previously containing any Hazardous Material.
“Reporting Company” means a Person that has a class of securities registered under the Exchange Act or is otherwise required to file reports with the SEC under the Exchange Act.
“Required Lenders” means the Lenders holding greater than 50% of the outstanding principal amount of the Term Loan.
“Restricted Payments” is defined in Section 7.6.
“S&P” means Standard & Poor’s Ratings Services Group, a division of The McGraw Hill Companies, Inc.
“Sandton” means Sandton Credit Opportunities Fund I, LP, together with any of its Affiliates and their respective successors and assigns.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall be in effect at the time.
“Security Agreement” means each general security agreement or similar agreement delivered to Collateral Agent in connection with this Agreement or any other Loan Document, including, without limitation, (a) that certain General Security Agreement dated as of the date hereof between Borrower and Collateral Agent, and (b) that certain General Security Agreement dated as of the date hereof between Stratitude and Collateral Agent, in each case as the same may be amended, restated, supplemented, or otherwise modified from time to time.
“Senior Debt” means the First Lien Obligations (as defined in the Senor Lender Intercreditor Agreement).
“Senior Debt Agreement” means the Credit Agreement, dated as of July 1, 2016, by and between the Loan Parties and the Senior Lender.
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“Senior Debt Documents” means the Senior Debt Agreement and all agreements, instruments and documents executed in connection therewith.
“Senior Lender” means BMO Xxxxxx Bank N.A.
“Senior Lender Intercreditor Agreement” means the Intercreditor and Subordination Agreement, dated as of the date hereof, by and among the Senior Lender, Collateral Agent, Lender and the Loan Parties.
“Services” is defined in Section 5.23(g).
“Software Development Costs” means, with respect to any Person for any period, costs incurred to produce the finished product of licensed software programs after technological feasibility has been established and after all research and development activities for any other components of the product or process have been completed.
“Specified Contractual Obligations” is defined in Section 5.23(c).
“Stratitude” means Stratitude Inc., a California corporation, and Wholly-owned Subsidiary of Borrower and a Guarantor.
“Subordinated Debt” means, collectively, any Indebtedness for Borrowed Money which is subordinated in right of payment to the prior payment of the Obligations pursuant to subordination provisions approved in writing by Collateral Agent and is otherwise pursuant to documentation that is, which is in an amount that is, and which contains interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies and other material terms that are, in each case, in form and substance satisfactory to Collateral Agent.
“Subordination Agreements” means, collectively, (a) the California Acquisition Subordination Agreement and (b) all other subordination agreements executed by a holder of Subordinated Debt in favor of Collateral Agent and the Lenders from time to time on or after the Closing Date in form and substance and on terms and conditions satisfactory to Collateral Agent.
“Subsidiary” means, as to any particular parent corporation or organization, any other corporation or organization more than 50% of the outstanding Voting Stock of which is at the time directly or indirectly owned by such parent corporation or organization or by any one or more other entities which are themselves subsidiaries of such parent corporation or organization. Unless otherwise expressly noted herein, the term “Subsidiary” means a Subsidiary of Borrower or of any of its direct or indirect Subsidiaries.
“Term Loan” is defined in Section 2.1(a).
“Term Note” is defined in Section 2.1(a)
“Third Party IP” is defined in Section 5.23(b).
“Total Funded Debt” means, at any time the same is to be determined for any Person, the sum (but without duplication) of (a) all Indebtedness for Borrowed Money of such Person at
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such time (it being understood and agreed that Indebtedness for Borrowed Money constituting Earn Out Obligations shall be included to the extent that under GAAP such obligations are characterized as debt), and (b) all Indebtedness for Borrowed Money of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which such Person has otherwise assured a creditor against loss.
“Total Funded Debt/EBITDA Ratio” means, as of any date, the ratio of Total Funded Debt of Borrower and its Subsidiaries as of such date to EBITDA of Borrower and its Subsidiaries for the period of four fiscal quarters then ended.
“TPI Agreements” is defined in Section 5.23(b).
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board, OTCQB, or OTCQX (or any successors to any of the foregoing).
“Transaction Documents” means, collectively, the Loan Documents, the Senior Debt Documents, the Asset Purchase Documents and the Stock Purchase Documents.
“UCC” is defined in the Security Agreement.
“Unfinanced Capital Expenditures” means the aggregate amount of Capital Expenditures made by Borrower and its Subsidiaries during such period to the extent permitted by this Agreement and not financed with proceeds of Indebtedness for Borrowed Money (but excluding revolving credit extended under the Senior Debt Agreement as in effect on the date hereof).
“Unfinanced Software Development Costs” means the aggregate amount of Software Development Costs made by Borrower and its Subsidiaries during such period to the extent permitted by this Agreement and not financed with proceeds of Indebtedness for Borrowed Money (but excluding revolving credit extended under the Senior Debt Agreement as in effect on the date hereof).
“Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.
“U.S. Dollars” and “$” each means the lawful currency of the United States of America.
“Voting Stock” of any Person means capital stock or other equity interests of any class or classes (however designated) having ordinary power for the election of directors or other similar governing body of such Person, other than stock or other equity interests having such power only by reason of the happening of a contingency.
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“Warrant Securities” means the BIP Warrant and the Warrant Shares.
“Warrant Shares” means the shares of common stock of Borrower issued or issuable upon exercise of the BIP Warrant, together with any securities issued as (or issuable upon the conversion, exchange or exercise of any warrant, right, or other security that is issued as) a distribution with respect thereto, or in exchange for or in replacement thereof.
“Warrants” means, collectively, any and all warrants of any kind issued by Borrower at any time and from time to time.
“Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.
“Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares as required by law) or other equity interests are owned by Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of this definition.
Section 1.2 Interpretation. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof”, “herein”, and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references to time of day herein are references to Atlanta, Georgia, time unless otherwise specifically provided. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement.
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(a) Borrower shall issue and sell to Lender, and Lender shall acquire from Borrower, on the Closing Date a term loan note (the “Term Note”) and make an advance thereunder in the amount of $5,075,000 (the “Term Loan”), and Borrower shall sell to Lender, on the Closing Date, the BIP Warrant, for an aggregate, combined purchase price of $5,075,000. Lender directs Borrower to issue the BIP Warrant to Collateral Agent on behalf of Lender.
(i) Interest on the outstanding principal amount of the Notes shall accrue from and including the date of issuance through and until full and final repayment of the principal amount of the Notes and payment of all interest in full at the Interest Rate, and shall be computed on the basis of the actual number of days elapsed and a 360-day year.
(ii) On the first day of each month in which the Notes are outstanding commencing on December 1, 2016, Borrower shall, pay in arrears in cash, by wire transfer to an account designated in writing by Lender, all accrued but unpaid interest; provided, that if any day on which interest is to be paid is not a Business Day, such interest shall be paid on the next succeeding Business Day to occur after such date.
Date of Prepayment
|
Premium Percentage
|
Before the first anniversary of the Closing Date
|
8%
|
On or after the first anniversary of the Closing Date, but prior to the second anniversary of the Closing Date
|
6%
|
On or after the second anniversary of the Closing Date
|
0%
|
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Borrower acknowledges that the foregoing prepayment premiums represent a reasonable and fair estimate for the loss that Lender may sustain from the prepayment of the Notes, and further acknowledge that except as specifically provided herein Borrower has no right to optionally prepay the Notes in whole or in part without paying the foregoing prepayment premiums.
(i) If Borrower or any Subsidiary shall at any time or from time to time make or agree to make a Disposition or shall suffer an Event of Loss with respect to any Property and the Senior Debt has been paid in full, then Borrower shall promptly notify Collateral Agent of such proposed Disposition or Event of Loss (including the amount of the estimated Net Cash Proceeds to be received by Borrower or such Subsidiary in respect thereof) and, promptly (and in any event within five (5) Business Days) upon receipt by Borrower or such Subsidiary of the Net Cash Proceeds of such Disposition or Event of Loss, Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of all such Net Cash Proceeds; provided that (x) so long as no Event of Default then exists, this subsection shall not require any such prepayment with respect to Net Cash Proceeds received on account of an Event of Loss so long as such Net Cash Proceeds are applied to replace or restore the relevant Property in accordance with the relevant Collateral Documents, and (y) this subsection shall not require any such prepayment with respect to Net Cash Proceeds received on account of Dispositions during any fiscal year of Borrower not exceeding $250,000.00 in the aggregate so long as no Event of Default then exists. The Premium Percentage shall be due and payable in connection with any application of Net Cash Proceeds in accordance with this Section 2.4(b)(i). All such Net Cash Proceeds payable to the Lender shall be applied in accordance with the provisions of Section 2.9.
(ii) If after the Closing Date, the Senior Debt has been paid in full and Borrower or any Subsidiary shall (x) issue new equity securities (whether common or preferred stock or otherwise, including, for the avoidance of doubt, any equity raise of any kind), other than common equity securities issued made after obtaining the prior written consent of Collateral Agent, or (y) sell equity securities (whether common or preferred stock or otherwise), other than (i) common equity securities of the Borrower issued to management, directors, and employees of the Borrower or any Subsidiary pursuant to any management, director and/or employee benefit plan or compensation plan, (ii) common equity securities issued by any Subsidiary of the Borrower to the Borrower so long as such issuance complies with the relevant provisions of the Security Agreement or (iii) equity securities sold after obtaining the prior written consent of Collateral Agent, Borrower shall promptly notify Collateral Agent of the estimated Net Cash Proceeds of such issuance or sale, as applicable, to be received by or for the account of Borrower or such Subsidiary in respect thereof. Promptly (and in any event within three (3) Business Days) upon receipt by Borrower or such Subsidiary of Net Cash Proceeds of such issuance or sale, as applicable, Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds. The Premium Percentage shall be due and payable in connection with any application of Net Cash Proceeds in accordance with this Section 2.4(b)(ii).
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All such Net Cash Proceeds payable to the Lenders shall be applied in accordance with the provisions of Section 2.9. Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of Collateral Agent or Lenders for any breach of Section 7.(5) (Maintenance of Subsidiaries) or Section 8.1(i) (Change of Control) hereof or any other terms of the Loan Documents.
(iii) If after the Closing Date, the Senior Debt has been paid in full and Borrower or any Subsidiary shall (x) issue any Indebtedness for Borrowed Money, other than Indebtedness for Borrowed Money permitted by Section 7.1 hereof, or (y) sell any Indebtedness for Borrowed Money, other than Indebtedness for Borrowed Money sold after obtaining the prior written consent of Collateral Agent, Borrower shall promptly notify Collateral Agent of the estimated Net Cash Proceeds of such issuance or sale, as applicable, to be received by or for the account of Borrower or such Subsidiary in respect thereof. Promptly (and in any event within three (3) Business Days) upon receipt by Borrower or such Subsidiary of Net Cash Proceeds of such issuance or sale, as applicable, Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds. The Premium Percentage shall be due and payable in connection with any application of Net Cash Proceeds in accordance with this Section 2.4(b)(iii). All such Net Cash Proceeds payable to the Lenders shall be applied in accordance with the provisions of Section 2.9. Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of Collateral Agent and Lenders for any breach of Section 7.1 or any other terms of the Loan Documents.
(iv) If after the Closing Date, Borrower or any Subsidiary shall issue any Subordinated Debt or sell any Subordinated Debt, Borrower shall promptly notify Collateral Agent of the estimated Net Cash Proceeds of such issuance or sale, as applicable, to be received by or for the account of Borrower or such Subsidiary in respect thereof. If the Senior Debt has been paid in full then promptly (and in any event within three (3) Business Days) upon receipt by Borrower or such Subsidiary of Net Cash Proceeds of such issuance or sale, as applicable, Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds. The Premium Percentage shall be due and payable in connection with any application of Net Cash Proceeds in accordance with this Section 2.4(b)(iv). All such Net Cash Proceeds payable to the Lenders shall be applied in accordance with the provisions of Section 2.9. Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of Collateral Agent and Lenders for any breach of Section 7.1 or any other terms of the Loan Documents.
(v) Intentionally Omitted.
(vii) Upon the occurrence of (A) a Change of Control or (B) an Event of Default, at the election of the Required Lenders, Borrower shall be required to redeem the Notes and any other outstanding Obligations in full by payment of an amount equal to the unpaid principal balance thereof, plus all unpaid interest accrued thereon through the date of redemption, plus all outstanding and unpaid fees and expenses payable to the Lenders and the Collateral Agent under the Loan Documents through the date of redemption, plus (x) the principal amount of the Notes being redeemed multiplied by (y) the applicable Premium Percentage.
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(ix) In addition, the Notes shall be subject to acceleration as set forth in Sections 8.2 and 8.3 below. The Premium Percentage shall be due and payable in connection with any application of amounts received in respect of the Notes following any such acceleration.
(a) Collateral Agent shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrower hereunder, including the amounts of principal and interest payable and paid to Lenders from time to time hereunder.
(b) The entries maintained in the account(s) maintained pursuant to paragraph (a) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, that the failure of Collateral Agent to maintain such account(s) or any error therein shall not in any manner affect the obligation of Borrower to repay the Obligations in accordance with their terms.
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and the Loan Documents, (ii) Collateral Agent’s and the Lenders’ due diligence investigation, and (iii) the other transactions contemplated by this Agreement and the Loan Documents (including filings or other actions required to perfect the Liens granted under the Collateral Documents).
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other amounts, including attorney fees, payable to Collateral Agent and Lenders, (b) second, to the payment of that portion of the Obligations constituting accrued and unpaid interest on the Notes and (c) third, to the payment of that portion of the Obligations constituting unpaid principal of the Notes (including any Premium Percentage). All payments made by Borrower upon the Notes (including, without limitation, payments of principal if prepaid or upon earlier acceleration) or in respect of the Obligations shall be paid to Collateral Agent to be distributed proportionally among Lenders (if more than one) based upon the outstanding principal amounts of the Notes held by each Lender.
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(a) Collateral Agent shall have received each of the following, in each case (i) duly executed by all applicable parties, (ii) dated a date satisfactory to Collateral Agent and (iii) in form and substance satisfactory to Collateral Agent:
(i) this Agreement duly executed by Borrower, Lender and Collateral Agent;
(ii) the duly executed Term Note in the form attached hereto as Exhibit B evidencing the Term Loan;
(iii) the Security Agreement and each of the other Collateral Documents required by Collateral Agent, together with (i) UCC financing statements to be filed against Borrower and each Subsidiary, as debtor, in favor of Collateral Agent, as secured party on behalf of Lenders, and (ii) patent, trademark, and copyright collateral agreements to the extent requested by Collateral Agent;
(iv) evidence of all insurance required to be maintained under the Loan Documents;
(v) copies of each Loan Party's articles of incorporation and bylaws (or comparable organizational documents) and any amendments thereto, certified in each instance by its Secretary or Assistant Secretary;
(vi) copies of resolutions of each Loan Party's Board of Directors (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, together with specimen signatures of the persons authorized to execute such documents on such Loan Party's behalf, as applicable, all certified in each instance by its Secretary or Assistant Secretary;
(vii) such documents and certifications as Collateral Agent may reasonably require to evidence that each Loan Party is validly existing, in good standing, and qualified to engage in business in its jurisdiction of organization and in any other jurisdiction in which the nature of Borrower’s or such Subsidiary’s business requires such qualification;
(viii) a list of Borrower’s Authorized Representatives;
(ix) evidence in form and substance acceptable to Collateral Agent that no less than $400,000 of principal of the MGL Seller Note will be paid from the proceeds of the Term Loan;
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(x) financing statement, tax, and judgment lien search results against the Property of Borrower and each Subsidiary evidencing the absence of Liens on its Property except as permitted by Section 7.2;
(xi) pay off and lien release letters from secured creditors of Borrower and each Subsidiary (other than the Senior Lender) setting forth, among other things, the total amount of indebtedness outstanding and owing to them (or outstanding letters of credit issued for the account of Borrower or any Subsidiary) and containing an undertaking to cause to be delivered to Collateral Agent, UCC termination statements and any other lien release instruments necessary to release their Liens on the assets of Borrower and each Subsidiary;
(xii) evidence reasonably satisfactory to Collateral Agent that all indebtedness to creditors referenced in the preceding paragraph has been (or concurrently with the making of the Term Loan will be) paid in full, and that all agreements and instruments governing indebtedness and that all Liens securing such indebtedness have been (or concurrently with the making of the Term Loan will be) terminated;
(xiii) favorable written opinions of counsel to Borrower and each Subsidiary;
(xiv) a fully executed Internal Revenue Service Form W-9 for Borrower;
(xv) a certified copy of the Transaction Documents (other than the Loan Documents) and evidence, in form and substance satisfactory to Collateral Agent, that the transactions contemplated thereby have been, or contemporaneously with the closing hereof will be, consummated;
(xvi) evidence, reasonably satisfactory to Collateral Agent, that Borrower has completed the Related Transactions in accordance with the terms of the Related Agreements (without any amendment thereto or waiver thereunder unless consented to by Collateral Agent);
(xvii) a Guaranty executed by Stratitude Inc.; and
(xviii) such other agreements, instruments, documents, certificates, and opinions as Collateral Agent may reasonably request.
(b) Collateral Agent shall have received the initial fees called for by Section 2.7, together with all other fees, costs and expenses required to be paid by Borrower at or before closing;
(c) the capital and organizational structure of Borrower and its Subsidiaries shall be satisfactory to Collateral Agent, including, without limitation, the structure and terms of any preferred equity securities of Collateral Agent shall be satisfactory to Collateral Agent;
(d) completion of all due diligence with respect to Borrower and its Subsidiaries which shall be satisfactory to Collateral Agent, including, without limitation, satisfactory discussions with Borrower’s accountants and an insurance review;
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(e) all legal, tax and regulatory matters relating to the Term Loan and any transactions financed with the proceeds thereof shall be satisfactory to Collateral Agent;
(f) Collateral Agent shall have received each document (including UCC financing statements) required by the Collateral Documents or under law or reasonably requested by Collateral Agent to be filed, registered or recorded in order to create in favor of Collateral Agent a perfected Lien on the collateral described therein, prior to any other Liens (subject only to Liens permitted pursuant to Section 7.2), in proper form for filing, registration or recording;
(g) there shall not have occurred since December 31, 2015, any developments or events which individually or in the aggregate with other such circumstances has had or could reasonably be expected to have a Material Adverse Effect;
(h) Collateral Agent shall have received a completed third party verification for the Trizetto platform implementation, together with auditor confirmation that licensing fee revenues of $3,100,000 will be recognized in financial statements of Borrower and its Subsidiaries for the period ending as of June 30, 2016;
(i) the acquisition of and payment for the Term Note to be acquired by Lender hereunder and the consummation of the transactions contemplated hereby, including the issuance of the BIP Warrant, (i) shall not be prohibited by any law, treaty, code, rule, regulation, right, privilege, qualification, license or franchise, or any determination of an arbitrator or a court or other Governmental Authority, and (ii) shall not subject Collateral Agent or Lender to any penalty or other onerous condition under or pursuant to any law, treaty, code, rule, regulation, right, privilege, qualification, license or franchise, or any determination of an arbitrator or a court or other Governmental Authority;
(j) there shall not be on the Closing Date any judgment, injunction or order of a court of competent jurisdiction or any ruling of any Governmental Authority which, in the reasonable judgment of Collateral Agent, would prohibit the transactions contemplated hereby or subject Collateral Agent or Lender to any penalty or other onerous condition under or pursuant to any requirement of law; and
(k) no action, suit or proceeding by or before any court or any Governmental Authority shall have been commenced or threatened, and no investigation by any Governmental Authority shall have been commenced, against Collateral Agent, Lender, Borrower or any other Loan Party, in each case, to the extent such action, suit, proceeding or investigation seeks to restrain, prevent or change the transactions contemplated hereby or questions the validity or legality of any of such transactions.
(a) with respect to any initial Credit Event made on the Closing Date, each of the representations and warranties set forth herein and in the other Loan Documents shall be and remain true and correct in all respects as of said time, except to the extent the same expressly
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relate to an earlier date, in which case such representations and warranties shall be and remain true and correct in all respects as of such earlier date; and
(b) no Default or Event of Default shall have occurred and be continuing or would occur as a result of such Credit Event.
Borrower represents and warrants to Collateral Agent and the Lenders as follows:
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equity interests of any Subsidiary of Borrower. Borrower has specifically authorized and set aside the number of shares of common capital stock needed in respect of all outstanding Warrants so that the total number of authorized shares of common capital stock of Borrower is no less than the sum of (x) the number of shares needed if all outstanding Warrants are exercised, plus (y) the number of issued and outstanding shares of common capital stock of the Company. On the Closing Date, except pursuant to the BIP Warrant or as set forth on Schedule 5.2 no Loan Party has any obligation, whether mandatory or at the option of any other Person, at any time to redeem or repurchase the capital stock of any Loan Party, pursuant to the terms of its Constituent Documents or otherwise.
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purchasing or carrying any such margin stock. Margin stock (as hereinabove defined) constitutes less than 25% of the assets of Borrower and its Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder.
(b) The balance sheet of each of Agama Solutions Inc. and Stratitude as at December 31, 2014 and December 31, 2015, and the related statements of income, retained earnings and cash flows of each of Agama Solutions Inc. and Stratitude for the fiscal years then ended, and accompanying notes thereto, which financial statements are accompanied by a quality of earnings report, the unaudited interim income statement of each of Agama Solutions Inc. and Stratitude for each of the calendar months ending as of July 31, 2016 and August 31, 2016, and the unaudited interim consolidated income statement of Borrower and its Subsidiaries as at August 31, 2016, in each case heretofore furnished to the Agent, fairly present the consolidated financial condition of Agama Solutions Inc., Stratitude and/or Borrower and its Subsidiaries, as applicable, as at said dates and the consolidated results of their operations and cash flows for the periods then ended in conformity with GAAP applied on a consistent basis. Neither Borrower nor any Subsidiary has any contingent liabilities which are material to it other than as indicated on such financial statements and, with respect to future periods, neither Borrower nor any Subsidiary has any contingent liabilities which are material to it other than as indicated on the financial statements furnished pursuant to Section 6.5.
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which are shown to be due and payable in such returns, have been paid, except such taxes, assessments, fees and governmental charges, if any, as are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and as to which adequate reserves established in accordance with GAAP have been provided. Borrower does not know of any proposed additional tax assessment against it or its Subsidiaries for which adequate provisions in accordance with GAAP have not been made on their accounts. Adequate provisions in accordance with GAAP for taxes on the books of Borrower and each Subsidiary have been made for all open years, and for its current fiscal period (subject to year end adjustments).
(a) Borrower and its Subsidiaries are in compliance with the requirements of all federal, state and local laws, rules and regulations applicable to or pertaining to their Property or business operations (including the Occupational Safety and Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and regulations establishing quality criteria and standards for air, water, land and toxic or hazardous wastes and substances), except for any such noncompliance that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
(b) Without limiting the representations and warranties set forth in Section 5.17(a) above, except for such matters, individually or in the aggregate, which could not reasonably be expected to result in a Material Adverse Effect, Borrower represents and warrants that:
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(i) Borrower and its Subsidiaries, and each of the Premises, comply in all material respects with all applicable Environmental Laws; (ii) Borrower and its Subsidiaries have obtained all governmental approvals required for their operations and each of the Premises by any applicable Environmental Law; (iii) Borrower and its Subsidiaries have not, and Borrower has no knowledge of any other Person who has, caused any Release, threatened Release or disposal of any Hazardous Material at, on, about, or off any of the Premises in any material quantity and, to the knowledge of Borrower, none of the Premises are adversely affected by any Release, threatened Release or disposal of a Hazardous Material originating or emanating from any other property; (iv) none of the Premises contain and have contained any: (1) underground storage tank, (2) material amounts of asbestos containing building material, (3) landfills or dumps, (4) hazardous waste management facility as defined pursuant to RCRA or any comparable state law, or (5) site on or nominated for the National Priority List promulgated pursuant to CERCLA or any state remedial priority list promulgated or published pursuant to any comparable state law; (v) Borrower and its Subsidiaries have not used a material quantity of any Hazardous Material and have conducted no Hazardous Material Activity at any of the Premises; (vi) Borrower and its Subsidiaries have no material liability for response or corrective action, natural resource damage or other harm pursuant to CERCLA, RCRA or any comparable state law; (vii) Borrower and its Subsidiaries are not subject to, have no notice or knowledge of and are not required to give any notice of any Environmental Claim involving Borrower or any Subsidiary or any of the Premises, and there are no conditions or occurrences at any of the Premises which could reasonably be anticipated to form the basis for an Environmental Claim against Borrower or any Subsidiary or such Premises; (viii) none of the Premises are subject to any, and Borrower has no knowledge of any imminent restriction on the ownership, occupancy, use or transferability of the Premises in connection with any (1) Environmental Law or (2) Release, threatened Release or disposal of a Hazardous Material; and (ix) there are no conditions or circumstances at any of the Premises which pose an unreasonable risk to the environment or the health or safety of Persons.
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(a) Borrower and each Subsidiary is the sole and exclusive owner of the Proprietary Rights (free and clear of any Liens other than Permitted Liens) used by it, and has sole and exclusive rights to use, sell or license, as applicable, all such Proprietary Rights (other than licenses granted to customers in the ordinary course of business and licenses and rights granted to certain resellers and distribution partners in the ordinary course of business). Schedule 5.23(a) (as updated concurrent with the delivery of the quarterly financial statements pursuant to Section 6.5(d)) contains a complete and correct list of all of Borrower’s and each Subsidiary’s issued patents and patent applications; trademark registrations and applications for registrations thereof and service xxxx registrations and applications for registration thereof; domain names; and copyright registrations and applications for registration thereof; and a general description of service as software platforms owned by Borrower and each Subsidiary.
(b) Schedule 5.23(b) (as updated concurrent with the delivery of the quarterly financial statements pursuant to Section 6.5(d)) sets forth a complete list of all Embedded Products, which are specific to the development in Borrower or any Subsidiary’s platform and/or software-based service offerings, excluding any Open Source Software (as defined below) and including but not limited to third party proprietary software, that are used by Borrower or any Subsidiary and reasonably necessary for the operation of their respective businesses after reasonable investigation by Borrower or such Subsidiary (collectively “Third Party IP”), and all licenses, sublicenses and other agreements related to the use of such Third Party IP pursuant to which Borrower or any Subsidiary is a licensee (collectively “TPI Agreements”). Neither Borrower nor any Subsidiary is in violation of any such TPI Agreements, except for violations that could not reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 5.23(c)(1) (as updated concurrent with the delivery of the quarterly financial statements pursuant to Section 6.5(d)) sets forth a complete list of all open source software used by Borrower or any Subsidiary and used in the development of Borrower’s or such Subsidiary’s platform and/or software-based service offerings for the operation of their respective businesses (collectively, “Open Source Software”) and the corresponding URLs identifying the location of any license agreements, if any, related to the use of such Open Source Software (collectively, “OSS Agreements”). Neither Borrower nor any Subsidiary is in violation of any OSS Agreement that could reasonably be expected to result in a Material Adverse Effect. Neither Borrower nor any Subsidiary is contractually obligated to license and/or disclose the source code for any non-Open Source Software aspects of Borrower’s or such Subsidiary’s software products or services to third parties as a result of Borrower’s or such Subsidiary’s use of such Open Source Software. Neither Borrower nor any Subsidiary is otherwise contractually obligated to pay in excess of $100,000, in the aggregate, compensation to any third party with
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respect to any Proprietary Rights (collectively, “Specified Contractual Obligations”). Schedule 5.23(c)(2) (as updated concurrent with the delivery of the quarterly financial statements pursuant to Section 6.5(d)) sets forth a complete list of Borrower and any Subsidiary’s Specified Contractual Obligations in excess of $20,000.
(d) (i) Neither Borrower or any Subsidiary has infringed on any intellectual property rights of any third party and (ii) none of the Proprietary Rights infringes on any intellectual property rights of any third party.
(e) Except for those claims which could reasonably be expected to result in a Material Adverse Effect as disclosed on Schedule 5.23(e), no claims with respect to the Proprietary Rights are pending or, to the knowledge of Borrower or any Subsidiary, threatened against Borrower or any Subsidiary (i) alleging that the manufacture, sale, licensing or use of any Proprietary Rights as now manufactured, sold, licensed or used by Borrower or any Subsidiary infringes on any intellectual property rights of any third party, or (ii) challenging the ownership by Borrower or any Subsidiary, or the validity, of any such Proprietary Rights.
(f) Except as disclosed on Schedule 5.23(f), neither Borrower or any Subsidiary is restricted (i) from selling, licensing or otherwise distributing any of their products or services to any class or type of customers or through any type of channel in any geographic area or during any period of time, or (ii) from combining, incorporating, embedding or bundling or allowing others to combine, incorporate, embed or bundle any of its products with those of another party. Borrower has delivered, and has caused each Subsidiary to deliver, to Collateral Agent correct and complete copies of all such agreements (as amended to date).
(g) Borrower and each Subsidiary has taken all security measures necessary in its reasonable discretion to safeguard and maintain its property rights in all Proprietary Rights owned by Borrower or such Subsidiary and used by it. All officers, employees and consultants of Borrower and each Subsidiary who have access to proprietary information for the purpose of developing or overseeing the development of new Proprietary Rights (“Services”) have executed and delivered to Borrower or such Subsidiary, as applicable, an agreement regarding the protection of proprietary information, and the assignment to or ownership by Borrower or such Subsidiary of all Proprietary Rights arising from the Services performed for Borrower or such Subsidiary by such Persons. No current or prior officer, employee or consultant of Borrower or any Subsidiary claims, and neither Borrower nor any Subsidiary is aware of any grounds to assert a claim to, or any ownership interest in, any Proprietary Right as a result of having been involved in the development of such property while employed by or consulting to Borrower, any Subsidiary or otherwise. Except as disclosed on Schedule 5.23(g), all of the computer software products within the Proprietary Rights owned by Borrower or any Subsidiary have been developed by employees of Borrower or such Subsidiary within the scope of their employment, as a “work made for hire”, or by consultants who have assigned all rights to such products to Borrower or such Subsidiary or have otherwise been assigned by such employees or consultants to Borrower or such Subsidiary.
(h) Except as described in Schedule 5.23(h) and except for any payments received from customers for products and services provided in the ordinary course of business no
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government funding or university or college resources or facilities were used in the development of the Proprietary Rights.
(i) Notwithstanding anything in this Agreement to the contrary, neither Borrower nor any Subsidiary shall be in breach of this Section 5.23 for any unintentional omission from Schedule 5.23(a), (b), (c)(1) or (f) or the delivery requirement in Section 5.23(f), provided that any such omission is disclosed within thirty (30) days of Borrower’s or any Subsidiary’s discovery of such omission.
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documents required to be filed by Borrower under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as Borrower was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. Borrower has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of Borrower included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.
(a) Borrower has heretofore furnished Collateral Agent a true and correct copy of the Related Agreements.
(b) Borrower and each of its Subsidiaries and, to Borrower’s knowledge, each other party to the Related Agreements, has duly taken all necessary corporate, partnership or other organizational action to authorize the execution, delivery and performance of the Related Agreements and the consummation of transactions contemplated thereby.
(c) The Related Transactions will comply in all material respects with all applicable legal requirements, and all necessary governmental, regulatory, creditor, shareholder, partner and other material consents, approvals and exemptions required to be obtained by Borrower and each of its Subsidiaries and, to Borrower’s knowledge, each other party to the Related Agreements in connection with the Related Transactions will be, prior to consummation of the Related Transactions, duly obtained and will be in full force and effect. As of the date of the Related Agreements, all applicable waiting periods with respect to the Related Transactions will have expired without any action being taken by any competent governmental authority which restrains, prevents or imposes material adverse conditions upon the consummation of the Related Transactions.
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(d) The execution and delivery of the Related Agreements did not, and the consummation of the Related Transactions will not, violate any statute or regulation of the United States (including any securities law) or of any state or other applicable jurisdiction, or any order, judgment or decree of any court or governmental body binding on Borrower and/or any of its Subsidiaries or, to Borrower’s knowledge, any other party to the Related Agreements, or result in a breach of, or constitute a default under, any material agreement, indenture, material instrument or other material document, or any judgment, order or decree, to which Borrower and/or any of its Subsidiaries is a party or by which Borrower and/or any of its Subsidiaries is bound or, to Borrower’s knowledge, to which any other party to the Related Agreements is a party or by which any such party is bound.
(e) No statement or representation made in the Related Agreements by Borrower and/or any of its Subsidiaries or, to Borrower’s knowledge, any other Person, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading.
So long as any Obligations hereunder remain outstanding (other than contingent indemnification obligations for which no claim for payment has yet been asserted), Borrower agrees that:
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evidencing the maintenance of insurance required hereunder, (b) prior to the termination of any such policies, certificates evidencing the renewal thereof, and (c) promptly following request by Collateral Agent, copies of all insurance policies of Borrower and its Subsidiaries. Borrower also agrees to deliver to Collateral Agent, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies.
(a) if requested by Collateral Agent, as soon as available, and in any event no later than three (3) days after the last day of each calendar week of Borrower (other than the calendar week ending on the last day of the fiscal year of Borrower), a copy of a report of the revenue of Borrower and its Subsidiaries attributable to the GPA Learn software platform for such calendar week and the fiscal year-to-date period then ended, each in reasonable detail showing in comparative form the figures for the corresponding date and period in the previous fiscal year, prepared by Borrower in accordance with GAAP and certified to by its chief financial officer or such other officer acceptable to Collateral Agent;
(b) as soon as available, and in any event no later than fifteen (15) days after the last day of each calendar month, a Borrowing Base Certificate delivered to Senior Lender showing the computation of the Borrowing Base (as defined in the Senior Debt Agreement) in reasonable detail as of the close of business on the last day of such month, together with an accounts receivable and accounts payable aging, prepared by Borrower and certified to by its chief financial officer or another officer of Borrower acceptable to Collateral Agent;
(c) as soon as available, and in any event no later than thirty (30) days after the last day of each calendar month of Borrower (other than the calendar month ending on the last day of the fiscal year of Borrower), a copy of a report of the revenue of Borrower and its Subsidiaries attributable to the GPA Learn software platform for such calendar month and the fiscal year-to-date period then ended, each in reasonable detail showing in comparative form the figures for the corresponding date and period in the previous fiscal year, prepared by Borrower in accordance with GAAP and certified to by its chief financial officer or such other officer acceptable to Collateral Agent;
(d) as soon as available, and in any event no later than the earlier of (i) the date Borrower files such documents with the SEC (if Borrower is then a Reporting Company) or (ii) forty-five (45) days after the last day of each fiscal quarter of Borrower, including the fiscal quarter ending on the last day of the fiscal year of Borrower, (i) a copy of the consolidated and consolidating balance sheet of Borrower and its Subsidiaries as of the last day of such period and the consolidated and consolidating statements of income, retained earnings, and cash flows of Borrower and its Subsidiaries for such fiscal quarter and the fiscal year-to-date period then ended, each in reasonable detail showing in comparative form the figures for the corresponding date and period in the previous fiscal year, prepared by Borrower in accordance with GAAP, reviewed pursuant to Statement on Auditing Standards No. 116 (or any successor statement) and
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certified to by Borrower’s chief financial officer or such other officer acceptable to Collateral Agent, together with a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” covering the periods referred to above and, if Borrower is then a Reporting Company, the disclosures required by Item 307 and 308 of Regulation S-K under the Exchange Act (all of the foregoing financial information to be prepared on a basis consistent with applicable SEC requirements if Borrower then has a class of securities registered under the Exchange Act) and (ii) a company prepared income statement showing the performance in respect of the assets acquired pursuant to the Asset Purchase;
(e) as soon as available, and in any event no later than the earlier of (i) the date Borrower files such documents with the SEC for each Fiscal Year (if Borrower is then a Reporting Company) or (ii) than ninety (90) days after the last day of each fiscal year of Borrower, (1) a copy of the consolidated balance sheet of Borrower and its Subsidiaries as of the close of such period and the consolidated statements of income, retained earnings, and cash flows of Borrower and its Subsidiaries for such period, and accompanying notes thereto, each in reasonable detail showing in comparative form the figures for the previous fiscal year, accompanied by an unqualified opinion thereon of XX Xxxxxxxxx Associates, LLC or another firm of independent public accountants of recognized national standing, selected by Borrower and satisfactory to Collateral Agent, to the effect that the financial statements have been prepared in accordance with GAAP and present fairly in accordance with GAAP the consolidated financial condition of Borrower and its Subsidiaries as of the close of such fiscal year and the results of their operations and cash flows for the fiscal year then ended and that an examination of such accounts in connection with such financial statements has been made in accordance with generally accepted auditing standards and, accordingly, such examination included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances, together with a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” covering the periods referred to above and, if Borrower is then a Reporting Company, the disclosures required by Item 307 and 308 of Regulation S-K under the Exchange Act (all of the foregoing financial information to be prepared on a basis consistent with applicable SEC requirements if Borrower then has a class of securities registered under the Exchange Act), and (2) a copy of the company prepared consolidating balance sheet of Borrower and its Subsidiaries as of the close of such period and the consolidating statements of income, retained earnings, and cash flows of Borrower and its Subsidiaries for such period, and accompanying notes thereto, each in reasonable detail showing in comparative form the figures for the previous fiscal year;
(f) with each of the financial statements delivered pursuant to subsections (d) and (e) above, (i) if Borrower is then a Reporting Company, certifications of each of Borrower’s chief executive officer and chief financial officer in the form required by 601(b)(31) of Regulation S-K under the Exchange Act and (ii) a written certificate in the form attached hereto as Exhibit C signed by the chief financial officer of Borrower or another officer of Borrower acceptable to Collateral Agent to the effect that to the best of such officer’s knowledge and belief no Default or Event of Default has occurred during the period covered by such statements or, if any such Default or Event of Default has occurred during such period, setting forth a description of such Default or Event of Default and specifying the action, if any, taken by Borrower or any Subsidiary to remedy the same. Such certificate shall also set forth the calculations supporting such statements in respect of Section 7.12 (Financial Covenants);
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(g) with each of the financial statements delivered pursuant to subsection (e) above, the written statement of the accountants who certified the audit report thereby required that in the course of their audit they have obtained no knowledge of any Default or Event of Default, or, if such accountants have obtained knowledge of any such Default or Event of Default, they shall disclose in such statement the nature and period of the existence thereof;
(h) as soon as available, and in any event no later than ninety (90) days after the end of each fiscal year of Borrower, a copy of Borrower’s consolidated and consolidating business plan for the following fiscal year, such business plan to show Borrower’s projected consolidated and consolidating revenues, expenses and balance sheet on a quarter by quarter/month by month basis, such business plan to be in reasonable detail prepared by Borrower and in form satisfactory to Collateral Agent (which shall include a summary of all assumptions made in preparing such business plan);
(i) promptly after receipt thereof, any additional written reports, management letters or other detailed information contained in writing concerning significant aspects of Borrower’s or any Subsidiary’s operations and financial affairs given to it by its independent public accountants;
(j) promptly after the sending or filing thereof, copies of each financial statement, report, notice or proxy statement sent by Borrower or any Subsidiary to its stockholders or other equity holders, and copies of each regular, periodic or special report, registration statement or prospectus (including all Form 10-K, Form 10-Q and Form 8-K reports) filed by Borrower or any Subsidiary with any securities exchange or the SEC or any successor agency;
(k) promptly after receipt thereof, a copy of each audit made by any regulatory agency of the books and records of Borrower or any Subsidiary or of notice of any material noncompliance with any applicable law, regulation or guideline relating to Borrower or any Subsidiary, or its business;
(l) promptly after knowledge thereof shall have come to the attention of any responsible officer of Borrower or any Subsidiary, written notice of (i) any threat, notice, development or action of any kind received from, or taken by, Sandton in respect of any claimed Lien of any kind on or with respect to the assets or other Property of Borrower or any Subsidiary, (ii) any investigation by any Governmental Authority or any material development with respect thereto, (iii) any threatened or pending litigation or governmental or arbitration proceeding or labor controversy against Borrower or any Subsidiary or any of their Property or any other event which, if adversely determined, could reasonably be expected to have a Material Adverse Effect or (iv) (x) the occurrence of any Default or Event of Default hereunder and what action Borrower is taking (and proposed to take) with respect thereto and (y) any development or other information outside the ordinary course of business of the Borrower and its Subsidiaries which could reasonably be expected to have a Material Adverse Effect;
(m) promptly upon receipt by Borrower or any Subsidiary, written notice of any default notice given to any such Person in writing by any creditor to which any Loan Party has material debt or other obligations; and
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(n) such other information (including non‑financial information) as Collateral Agent or any Lender may from time to time reasonably request.
(a) Borrower shall, and shall cause each Subsidiary to, comply in all respects with the requirements of all federal, state, and local laws, rules, regulations, ordinances and orders applicable to or pertaining to its Property or business operations, except where any such non- compliance, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect or result in a Lien upon any of its Property.
(b) Without limiting the agreements set forth in Section 6.8(a) above, Borrower shall, and shall cause each Subsidiary to, at all times, do the following to the extent the failure to do so, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect: (i) comply in all material respects with, and maintain each of the Premises in compliance in all material respects with, all applicable Environmental Laws; (ii) require that each tenant and subtenant, if any, of any of the Premises or any part thereof comply in all material respects with all applicable Environmental Laws; (iii) obtain and maintain in full force and effect all material governmental approvals required by any applicable Environmental Law for operations at each of the Premises; (iv) cure any material violation by it or at any of the Premises of applicable Environmental Laws; (v) not allow the presence or operation at any of the Premises of any (1) landfill or dump or (2) hazardous waste management facility or solid waste disposal facility as defined pursuant to RCRA or any comparable state law; or (vi) not manufacture, use, generate, transport, treat, store, release, dispose or handle any Hazardous Material at any of the Premises except in the ordinary course of its business and in de minimis amounts.
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(c) Borrower shall, and shall cause each Subsidiary to, (i) within ten (10) Business Days notify Collateral Agent in writing of and provide any reasonably requested documents upon learning of any of the following in connection with Borrower or any Subsidiary or any of the Premises: (1) any material liability for response or corrective action, natural resource damage or other harm pursuant to CERCLA, RCRA or any comparable state law; (2) any material Environmental Claim; (3) any material violation of an Environmental Law or material Release, threatened Release or disposal of a Hazardous Material; (4) any restriction on the ownership, occupancy, use or transferability arising pursuant to any (x) Release, threatened Release or disposal of a Hazardous Material or (y) Environmental Law; or (5) any environmental, natural resource, health or safety condition, which could reasonably be expected to have a Material Adverse Effect; (ii) conduct at its expense any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or xxxxx any material Release, threatened Release or disposal of a Hazardous Material as required by any applicable Environmental Law; (iii) abide by and observe any restrictions on the use of the Premises imposed by any Governmental Authority as set forth in a deed or other instrument affecting Borrower’s or any Subsidiary’s interest therein; (iv) promptly provide or otherwise make available to Collateral Agent any reasonably requested environmental record concerning the Premises which Borrower or any Subsidiary possesses or can reasonably obtain; and (v) perform, satisfy, and implement any operation or maintenance actions required by any Governmental Authority or Environmental Law, or included in any no further action letter or covenant not to xxx issued by any Governmental Authority under any Environmental Law.
(a) Borrower shall at all times comply with the requirements of all OFAC Sanctions Programs applicable to Borrower and shall cause each of its Subsidiaries to comply with the requirements of all OFAC Sanctions Programs applicable to such Subsidiary.
(b) Borrower shall provide Collateral Agent any information regarding Borrower, its Affiliates, and its Subsidiaries necessary for Collateral Agent to comply with all applicable OFAC Sanctions Programs; subject however, in the case of Affiliates, to Borrower’s ability to provide information applicable to them.
(c) If Borrower obtains actual knowledge or receives any written notice that Borrower, any Affiliate or any Subsidiary is named on the then current OFAC SDN List (such occurrence, an “OFAC Event”), Borrower shall promptly (i) give written notice to Collateral Agent of such OFAC Event, and (ii) comply with all applicable laws with respect to such OFAC Event (regardless of whether the party included on the OFAC SDN List is located within the jurisdiction of the United States of America), including the OFAC Sanctions Programs, and Borrower hereby authorizes and consents to Collateral Agent taking any and all steps Collateral Agent deems necessary, in its sole discretion, to avoid violation of all applicable laws with respect to any such OFAC Event, including the requirements of the OFAC Sanctions Programs (including the freezing and/or blocking of assets and reporting such action to OFAC).
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include reference to such Subsidiary). Borrower shall not, nor shall it permit any Subsidiary to, form or acquire any Foreign Subsidiary.
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status as a first Lien (subject to Liens expressly permitted by this Agreement) on the real property encumbered thereby and such other instrument, documents, certificates, and opinions reasonably required by Collateral Agent in connection therewith; provided, however, that Borrower and its Subsidiaries shall not be required to xxxxx x Xxxx to Collateral Agent on real properties owned by Borrower and its Subsidiaries having a value of less than $100,000 in the aggregate for all such real properties owned by Borrower and its Subsidiaries.
(a) Continue to own, or be licensed, or otherwise possess legally enforceable rights, to use, sell or license, as applicable, all Proprietary Rights used by it (in each case, free and clear of any Liens other than Permitted Liens) (other than licenses granted to customers in the ordinary course of business and licenses and rights granted to certain resellers and distribution partners in the ordinary course of business), without any obligation to pay fees, royalties or other amounts in excess of $100,000, in the aggregate, with respect thereto (except in connection with the sale by any Borrower of its products in the ordinary course of its business).
(b) Not violate any TPI Agreements or any OSS Agreements in any respect that could reasonably be expected to result in a Material Adverse Effect, and each such TPI Agreement and OSS Agreement will continue to be legal, valid, binding, enforceable and in full force and effect following the Closing Date (except for such licenses, sublicenses or agreements that are replaced or do not affect the value of Borrower’s or any Subsidiary’s Proprietary Rights and subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally).
(c) Continue to be the sole and exclusive owner of the Proprietary Rights used by it (free and clear of any Liens except Permitted Liens) and continue to have the sole and exclusive rights to the use, license, sell and distribute all material covered thereby in connection with the services or products in respect of which such Proprietary Rights are currently being used, sold,
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licensed or distributed (other than licenses granted to customers in the ordinary course of business and licenses and rights granted to certain resellers and distribution partners in the ordinary course of business). Neither Borrower nor any Subsidiary shall become contractually obligated to license and/or disclose the source code for any non-Open Source Software aspects of Borrower’s or such Subsidiary’s software products or services to third parties as a result of Borrower’s or such Subsidiary’s use of such Open Source Software.
(d) Except as could not reasonably be expected to result in a Material Adverse Effect, not infringe any intellectual property rights of any third party.
(e) Except for those claims which could not reasonably be expected to result in a Material Adverse Effect, promptly notify Collateral Agent of any claims with respect to the Proprietary Rights made or, to the knowledge of Borrower or any Subsidiary, threatened against Borrower or any Subsidiary, (i) alleging that the manufacture, sale, licensing or use of any Proprietary Rights as then manufactured, sold, licensed or used by Borrower or any Subsidiary infringes on any intellectual property rights of any third party or (ii) challenging the ownership by Borrower or any Subsidiary, or the validity, of any such Proprietary Rights.
(f) Except as disclosed on Schedule 5.23(f), not enter into or be bound by any agreement under which Borrower or any Subsidiary is restricted, (i) from selling, licensing or otherwise distributing any of its products or services to any class or type of customers or through any type of channel in any geographic area or during any period of time, or (ii) from combining, incorporating, embedding or bundling or allowing others to combine, incorporate, embed or bundle any of its products with those of another party.
(g) Take all security measures necessary in Borrower’s reasonable discretion to safeguard and maintain its property rights in all Proprietary Rights owned by Borrower or such Subsidiary and used by it. Borrower shall, and shall cause each Subsidiary to, cause all officers, employees and consultants of Borrower or any Subsidiary who have access to proprietary information for the purpose of developing or overseeing the development of new Proprietary Rights for the purpose of Services to execute and deliver to Borrower or such Subsidiary an agreement regarding the protection of proprietary information, and assignment to or ownership by Borrower or such Subsidiary of all Proprietary Rights arising from the Services performed for Borrower or such Subsidiary by such Persons. Borrower shall promptly notify Collateral Agent if Borrower or any Subsidiary becomes aware of any officer, employee or consultant of Borrower or any Subsidiary having grounds to assert a claim to, or any ownership interest in, any Proprietary Rights as a result of having been involved in the development of such property while employed by or consulting to Borrower or any Subsidiary or otherwise. Except as disclosed on Schedule 5.23(g), all of the computer software products within the Proprietary Rights owned by Borrower or any Subsidiary shall be developed by employees of such Subsidiary within the scope of their employment, as a “work made for hire”, or by consultants who assign all rights to such products to Borrower or such Subsidiary or have otherwise been assigned by such employees or consultants to Borrower or such Subsidiary.
(h) Except for any payments received from customers for products and services provided in the ordinary course of business, not use government funding or university or college resources or facilities in the development of Proprietary Rights.
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(i) Give fifteen (15) days’ advance notice to Collateral Agent of before filing any applications for registration of any copyrights with the United States Copyright Office.
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The Observer shall not be entitled to vote on any matters submitted to the board of directors or any committee. The appointment of the Observer to the board of directors shall not limit the ability of the board of directors to take action without a meeting so long as such action is permissible under applicable law and this Agreement and prompt notice of such action is provided to the Collateral Agent.
So long as all or any portion of the Obligations hereunder remain outstanding (other than contingent indemnification obligations for which no claim for payment has yet been asserted), Borrower agrees that:
(a) the Obligations of Borrower and its Subsidiaries owing to Collateral Agent and the Lenders under the Loan Documents and other indebtedness and obligations of such Persons owing to Collateral Agent and the Lenders;
(b) purchase money indebtedness and Capitalized Lease Obligations of Borrower and its Subsidiaries in an amount not to exceed $460,000.00 in the aggregate at any one time outstanding;
(c) [reserved];
(d) Senior Debt under the Senior Debt Agreement in an aggregate principal amount not to exceed the Maximum First Lien Principal Amount (under and as defined in the Senor Lender Intercreditor Agreement) outstanding at any time;
(e) indebtedness in the form of seller notes and earn-out obligations incurred in connection with Permitted Acquisitions; provided, however, that (i) such indebtedness shall at all times be subordinated to the Obligations pursuant to a Subordination Agreement in form and substance satisfactory to Collateral Agent, (ii) the aggregate outstanding principal amount of any and all such seller notes and earn-out obligations shall not at any time exceed $5,750,000, and (iii) such indebtedness shall at all times be unsecured;
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(f) indebtedness of Borrower to any Wholly-owned Subsidiary or indebtedness of any Wholly-owned Subsidiary to Borrower or another Wholly-owned Subsidiary; provided that such indebtedness shall be evidenced by a demand note in form and substance reasonably satisfactory to Collateral Agent and pledged and delivered to Collateral Agent pursuant to the Collateral Documents as additional collateral security for the Obligations, and the obligations under such demand note shall be subordinated to the Obligations of Borrower hereunder in a manner reasonably satisfactory to Collateral Agent;
(g) unsecured indebtedness of Borrower and its Subsidiaries not otherwise permitted by this Section in an amount not to exceed $143,750.00 in the aggregate at any one time outstanding;
(h) the MGL Seller Note; provided, however, that (i) such indebtedness shall either (x) upon the prior written consent of Collateral Agent, be paid in full (it being understood and agreed that any such prior written consent of Collateral Agent shall require at a minimum that the Senior Lender shall have consented to such payment) or (y) no later than 60 days following the date hereof and at all times thereafter be subordinated to the Obligations pursuant to a Subordination Agreement, (ii) the aggregate outstanding principal amount of the MGL Seller Note shall not at any time exceed $1,600,000, and (iii) such indebtedness shall at all times be unsecured;
(i) the Brainchild Earn-Out; provided, however, that (i) the maximum amount payable in respect of such indebtedness shall not exceed $201,250 and (ii) such indebtedness shall at all times be unsecured;
(j) the Brainchild Put Right; provided, however, that (i) the maximum amount payable in respect of such indebtedness shall not exceed $575,000 and (ii) such indebtedness shall at all times be unsecured;
(k) the DialedIn Earn-Out; provided, however, that (i) the maximum amount payable in respect of such indebtedness shall not exceed $57,500.
(l) the DialedIn General Sales Commission; provided, however, that (i) the maximum amount payable in respect of such indebtedness shall not exceed $57,500 and (ii) such indebtedness shall at all times be unsecured; and
(m) the DialedIn HP Sales Commission; provided, however, that (i) the maximum amount payable in respect of such indebtedness shall not exceed $57,500 and (ii) such indebtedness shall at all times be unsecured.
(a) Liens arising by statute in connection with worker’s compensation, unemployment insurance, old age benefits, social security obligations, taxes, assessments, statutory obligations or other similar charges (other than Liens arising under ERISA), good faith cash deposits in connection with tenders, contracts or leases to which Borrower or any
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Subsidiary is a party or other cash deposits required to be made in the ordinary course of business; provided in each case that the obligation is not for borrowed money and that the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves have been established therefor;
(b) mechanics’, workmen’s, materialmen’s, landlords’, carriers’ or other similar Liens arising in the ordinary course of business as a matter of law with respect to obligations which are not due or which are being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest;
(c) judgment liens and judicial attachment liens not constituting an Event of Default under Section 8.1(g) and the pledge of assets for the purpose of securing an appeal, stay or discharge in the course of any legal proceeding;
(d) Liens on equipment of Borrower or any Subsidiary created solely for the purpose of securing indebtedness permitted by Section 7.1(b), representing or incurred to finance the purchase price of such Property; provided that no such Lien shall extend to or cover other Property of Borrower or such Subsidiary other than the respective Property so acquired, and the principal amount of indebtedness secured by any such Lien shall at no time exceed the purchase price of such Property, as reduced by repayments of principal thereon;
(e) any interest or title of a lessor or sublessor under any operating lease;
(f) easements, rights of way, restrictions, zoning restrictions and other similar encumbrances or minor defects or other irregularities in title against real property incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of Borrower or any Subsidiary;
(g) Liens granted in favor of Collateral Agent pursuant to the Collateral Documents; and
(h) Liens granted in favor of Senior Lender pursuant to the Senior Debt Documents so long as such Lien is subject to the provisions of the Senior Lender Intercreditor Agreement.
(a) subject to Section 6.13, investments in direct obligations of the United States of America or of any agency or instrumentality thereof whose obligations constitute full faith and credit obligations of the United States of America, provided that any such obligations shall mature within one year of the date of issuance thereof;
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(b) subject to Section 6.13, investments in commercial paper rated at least P-1 by Moody’s and at least A-1 by S&P maturing within one year of the date of issuance thereof;
(c) subject to Section 6.13, investments in certificates of deposit issued by the Senior Lender and by any United States commercial bank having capital and surplus of not less than $100,000,000 which have a maturity of one year or less;
(d) subject to Section 6.13, investments in repurchase obligations with a term of not more than 7 days for underlying securities of the types described in subsection (a) above entered into with any bank meeting the qualifications specified in subsection (c) above, provided all such agreements require physical delivery of the securities securing such repurchase agreement, except those delivered through the Federal Reserve Book Entry System;
(e) subject to Section 6.13, investments in money market funds that invest solely, and which are restricted by their respective charters to invest solely, in investments of the type described in the immediately preceding subsections (a), (b), (c), and (d) above;
(f) investments constituting Permitted Acquisitions; and
(g) other investments, loans, and advances in addition to those otherwise permitted by this Section in an amount not to exceed $143,750.00 in the aggregate at any one time outstanding.
In determining the amount of investments, acquisitions, loans, and advances permitted under this Section, investments and acquisitions shall always be taken at the original cost thereof (regardless of any subsequent appreciation or depreciation therein), and loans and advances shall be taken at the principal amount thereof then remaining unpaid.
(a) the sale or lease of inventory or platform and/or software-based service offerings in the ordinary course of business;
(b) non-exclusive licensing of software in the ordinary course of business;
(c) the sale, transfer or other disposition of any tangible personal property that, in the reasonable business judgment of Borrower or its Subsidiary, has become obsolete or worn out, and which is disposed of in the ordinary course of business;
(d) upon at least five (5) Business Days prior written notice to Collateral Agent, any merger of or by any Wholly-owned Subsidiary into Borrower or into any other Wholly-owned Subsidiary;
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(e) the sale, transfer, lease or other disposition of Property (other than Receivables, software and intellectual property) of Borrower or any Subsidiary (including any disposition of Property as part of a sale and leaseback transaction) aggregating for Borrower and its Subsidiaries not more than $287,500.00 during any fiscal year of Borrower; and
(f) mergers or consolidations constituting Permitted Acquisitions.
(i) Borrower may pay to the Brainchild Seller the Brainchild Earn-Out, in accordance with the terms and conditions of Section 1.2.3 of the Brainchild Purchase Agreement in effect on the date hereof, so long as with respect to any proposed payment prior to and after giving effect to such proposed payment, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) Borrower shall be in pro forma compliance with the financial covenants contained in Section 7.12 hereof as of the most recent fiscal quarter for which Borrower has delivered financial statements pursuant to Section 6.5(d) hereof;
(ii) Borrower may pay to the Brainchild Seller the Brainchild Put Right, in accordance with the terms and conditions of Section 1.2.2 of the Brainchild Purchase Agreement in effect on the date hereof, so long as with respect to any proposed payment prior to and after giving effect to such proposed payment, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (B) Borrower shall be in pro forma compliance with the financial covenants contained in Section 7.12 hereof as of the most recent fiscal quarter for which Borrower has delivered financial statements pursuant
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to Section 6.5(d) hereof and (C) Borrower shall have Minimum Availability of no less than $1,000,000;
(iii) Borrower may pay to the DialedIn EO Recipients the DialedIn Earn-Out, in accordance with the terms and conditions of Section 2.4 of the DialedIn Merger Agreement as in effect on the date hereof, so long as with respect to any proposed payment prior to and after giving effect to such proposed payment, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) Borrower shall be in pro forma compliance with the financial covenants contained in Section 7.12 hereof as of the most recent fiscal quarter for which Borrower has delivered financial statements pursuant to Section 6.5(d) hereof;
(iv) Borrower may pay to the DialedIn EO Recipients the DialedIn General Sales Commission, in accordance with the terms and conditions of the DialedIn Sales Commission Agreement as in effect on the date hereof, so long as with respect to any proposed payment prior to and after giving effect to such proposed payment, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) Borrower shall be in pro forma compliance with the financial covenants contained in Section 7.12 hereof as of the most recent fiscal quarter for which Borrower has delivered financial statements pursuant to Section 6.5(d) hereof;
(v) Borrower may pay to the DialedIn EO Recipients the DialedIn HP Sales Commission, in accordance with the terms and conditions of the DialedIn Sales Commission Agreement as in effect on the date hereof, so long as with respect to any proposed payment prior to and after giving effect to such proposed payment, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) Borrower shall be in pro forma compliance with the financial covenants contained in Section 7.12 hereof as of the most recent fiscal quarter for which Borrower has delivered financial statements pursuant to Section 6.5(d) hereof; and
(vi) Borrower may pay to the GPA Learn Seller the GPA Learn Royalty (including, but not limited to, any payments of the GPA Learn Royalties previously prohibited by the terms hereof), in accordance with the terms and conditions of the GPA Learn Royalty Agreement as in effect on the date hereof, so long as with respect to any proposed payment prior to and after giving effect to such proposed payment, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) Borrower shall be in pro forma compliance with the financial covenants contained in Section 7.12 hereof as of the most recent fiscal quarter for which Borrower has delivered financial statements pursuant to Section 6.5(d) hereof.
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Period(s) Ending
|
Total Funded Debt/EBITDA Ratio
shall not be greater than: |
Fiscal quarter ending on or about 9/30/2016
|
3.45 to 1.00
|
Fiscal quarter ending on or about 12/31/2016
|
3.45 to 1.00
|
Fiscal quarter ending on or about 3/31/2017
|
3.45 to 1.00
|
Fiscal quarter ending on or about 6/30/2017
|
3.45 to 1.00
|
Fiscal quarter ending on or about 9/30/2017
|
3.45 to 1.00
|
Fiscal quarter ending on or about 12/31/2017 and at all times thereafter
|
3.45 to 1.00
|
Period(s) Ending
|
Ratio shall not be less than:
|
Fiscal quarter ending on or about 9/30/2016
|
1.00 to 1.00
|
Fiscal quarter ending on or about 12/31/2016
|
1.00 to 1.00
|
Fiscal quarter ending on or about 3/31/2017
|
1.00 to 1.00
|
Fiscal quarter ending on or about 6/30/2017 and at all times thereafter
|
1.00 to 1.00
|
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(a) default in the payment when due of all or any part of the principal or interest of the Term Loan (whether at the stated maturity thereof or at any other time provided for in this Agreement), or default for a period of three (3) days shall occur in the payment when due of any fee or other Obligation payable hereunder or under any other Loan Document;
(b) default in the observance or performance of any covenant set forth in Sections 6.1, 6.4, 6.5, 6.6, 6.11, 6.13, 6.15, 6.16, 6.18, 6.19, 6.20, 6.21 and Section 7 or of any provision in any Loan Document dealing with the use, disposition or remittance of the proceeds of Collateral or requiring the maintenance of insurance thereon;
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(c) default in the observance or performance of any other provision hereof or of any other Loan Document which is not remedied within 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of Borrower or (ii) written notice thereof is given to Borrower by Collateral Agent;
(d) any representation or warranty made herein or in any other Loan Document or in any certificate furnished to Collateral Agent or the Lenders pursuant hereto or thereto or in connection with any transaction contemplated hereby or thereby proves untrue in any respect (or in any material respect if such representation, warranty, certification or statement is not by its terms already qualified as to materiality) as of the date of the issuance or making or deemed making thereof;
(e) any event occurs or condition exists (other than those described in subsections (a) through (d) above) which is specified as an event of default under any of the other Loan Documents, or any of the Loan Documents shall for any reason not be or shall cease to be in full force and effect or is declared to be null and void, or any of the Collateral Documents shall for any reason fail to create a valid and perfected Lien in favor of Collateral Agent on behalf of the Lenders in any Collateral purported to be covered thereby except as expressly permitted by the terms thereof, or any Subsidiary takes any action for the purpose of terminating, repudiating or rescinding any Loan Document executed by it or any of its obligations thereunder;
(f) default shall occur under any Indebtedness for Borrowed Money (other than the Senior Debt) issued, assumed or guaranteed by Borrower or any Subsidiary aggregating in excess of $115,000.00, or under any indenture, agreement or other instrument under which the same may be issued, and such default shall continue for a period of time sufficient to permit the acceleration of the maturity of any such Indebtedness for Borrowed Money (whether or not such maturity is in fact accelerated), or any such Indebtedness for Borrowed Money shall not be paid when due (whether by demand, lapse of time, acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, shall be entered or filed against Borrower or any Subsidiary, or against any of its Property, in an aggregate amount in excess of $115,000.00 (except to the extent fully covered by insurance as to which the insurer has been notified of such judgment and has not denied coverage), and which remains undischarged, unvacated, unbonded or unstayed for a period of 30 days;
(h) Borrower or any Subsidiary, or any member of its Controlled Group, shall fail to pay when due an amount or amounts aggregating in excess of $115,000.00 which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities in excess of $115,000.00 (collectively, a “Material Plan”) shall be filed under Title IV of ERISA by Borrower or any Subsidiary, or any other member of its Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be instituted by a fiduciary of any Material Plan against Borrower or any Subsidiary, or any member of its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; or a condition shall exist by
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reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated;
(i) any Change of Control shall occur;
(j) Borrower or any Subsidiary shall (i) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) not pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 8.1(k);
(k) a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for Borrower or any Subsidiary, or any substantial part of any of its Property, or a proceeding described in Section 8.1(j)(v) shall be instituted against Borrower or any Subsidiary, and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 days;
(l) (i) the occurrence of an “Event of Default” under Section 8.1(a) of the Senior Debt Agreement as in effect on the date hereof with respect to principal and/or interest in an aggregate amount in excess of $406,250 or (ii) the occurrence of any other breach or default, or the occurrence of any condition or event, with respect to the Senior Debt if the effect of such breach, default or occurrence is to cause the Senior Debt to become or be declared due and payable prior to its stated maturity;
(m) any subordination provision in any document or instrument governing Subordinated Debt, or any subordination provision in any subordination agreement that relates to any Subordinated Debt, or any subordination provision in any guaranty by Borrower or any Subsidiary of any Subordinated Debt, shall cease to be in full force and effect or enforceable; or Borrower, any Subsidiary or any other Person (including the holder of any applicable Subordinated Debt) shall contest in any manner the validity, binding nature or enforceability of any such provision or breach any provision in any such subordination agreement;
(n) any court, government or Governmental Authority shall condemn, seize or otherwise appropriate, or take custody or control of, all or any material portion of the Property of any Loan Party; or
(o) any investigation or proceeding before or by any Governmental Authority could reasonably be expected to have a Material Adverse Effect.
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(a) Each Lender hereby irrevocably authorizes and directs Collateral Agent to enter into the Collateral Documents for the benefit of the Lenders. Each Lender hereby authorizes the Collateral Agent to act as the agent of such Person for purposes of acquiring, holding and enforcing any and all Liens on Collateral to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. Each Lender by the acceptance thereof will be deemed to agree, that, except as otherwise set forth in Section 11.8, any action taken or directed by the Collateral Agent, in accordance with the provisions of this Agreement or the Collateral Documents, and the exercise by Collateral Agent of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders.
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(b) Each Lender hereby irrevocably authorizes the Collateral Agent to release any Lien on any property granted to or held by the Collateral Agent under any Loan Document (i) upon the payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder, (iii) subject to Section 11.8, if approved, authorized or ratified in writing by the Required Lenders, or (iv) in connection with any foreclosure sale or other disposition of Collateral after the occurrence of an Event of Default if approved, authorized or ratified in writing by the Required Lenders.
(c) Each Lender hereby appoints each other Lender as agent for the purpose of perfecting Liens in assets which, in accordance with Article 9 of the UCC can be perfected only by possession. Should any Lender (other than the Collateral Agent) obtain possession of any such Collateral, such Lender shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agent’s request therefor deliver such Collateral to the Collateral Agent or in accordance with the Collateral Agent’s instructions.
(a) The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrower), independent accountants and other experts selected by the
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(b) For purposes of determining compliance with the conditions specified in Section 4.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either sent by the Collateral Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to such Lender.
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other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower. Except for notices, reports and other documents expressly required to be furnished to Lenders by the Collateral Agent herein, the Collateral Agent shall not have any duty or responsibility to provide any Lender with any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower which may come into the possession of the Collateral Agent or its Affiliates (other than Borrower).
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agent hereunder, such successor collateral agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent and the term “Collateral Agent” shall mean such successor collateral agent and the retiring Collateral Agent’s appointment, powers and duties as Collateral Agent shall be terminated. After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement. If no successor collateral agent has accepted appointment as Collateral Agent by the date which is 45 days following a retiring Collateral Agent’s notice of resignation, the retiring Collateral Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Collateral Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
Lender represents and warrants to Borrower as follows:
(a) The Purchased Securities are being or will be acquired by Lender and Collateral Agent hereunder for their own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof in any transaction which would be in violation of state or federal securities laws.
(b) Each of Lender and Collateral Agent is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
(c) Each of Lender and Collateral Agent understands that (i) the Purchased Securities constitute “restricted securities” under the Securities Act, (ii) the offer and sale of the Purchased Securities hereunder is not registered under the Securities Act or under any “blue sky” laws in reliance upon certain exemptions from such registration and that Borrower is relying on the representations made herein by Lender and Collateral Agent in its determination of whether such specific exemptions are available, and (iii) the Purchased Securities may not be transferred except pursuant to an effective registration statement under the Securities Act, or under an exemption from such registration available under the Securities Act and under applicable “blue sky” laws or in a transaction exempt from such registration. Each of Lender and Collateral Agent acknowledges that: (1) it has no right to require registration thereof under the Securities Act or any “blue sky” laws, and (2) there is not now and is not contemplated to be any public market therefor. As a result, Lender and Collateral Agent are prepared to bear the economic risk of an investment in the Purchased Securities for an indefinite period of time.
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(d) Each of Lender and Collateral Agent (i) has been given an opportunity to have access to all material books and records of the Loan Parties and all of their respective material contracts, agreements and documents and (ii) has had an opportunity to ask questions of, and receive answers from, representatives of the Loan Parties and which representatives have made available to Lender and Collateral Agent such information regarding the Loan Parties and their current respective businesses, operations, assets, finances, financial results, financial condition and prospects in order for Lender and Collateral Agent to make a fully informed decision to purchase and acquire the Purchased Securities. Each of Lender and Collateral Agent has generally such knowledge and experience in business and financial matters, and with respect to investments in securities of privately held companies, as to enable it to understand and evaluate the risks of an investment in the Purchased Securities and form an investment decision with respect thereto. The foregoing, however, does not limit or modify the representations and warranties set forth in Section 5 hereof or in any other Loan Document or the right of Lender or Collateral Agent to rely thereon.
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to Borrower:
Quadrant 4 System Corporation 0000 X. Xxxxxxxxx Xxxx, Xxxxx 000X Xxxxxxxxxx, XX 00000 Attention: Xxxxx Thonadvadi Telephone: (000) 000-0000 Telecopy: N/A With a copy to:
Xxxxx Xxxxxxx LLP
00 X. Xxxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxxx 00000 Attn: Xxxx X. Xxxxxxxxxx, Esq. Telecopier No.: (000) 000-0000 |
to Collateral Agent:
BIP Lender, LLC 0000 Xxxxxxxx Xxxx XX Xxxxxxxx 00, Xxxxx 000 Xxxxxxx, XX 00000 Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000 Telecopy: N/A With a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP
000 00xx Xxxxxx, X.X. Xxxxxxx, Xxxxxxx 00000 Facsimile: (000) 000-0000 Attention: Xxxxxxx X. Xxxxx |
Each such notice, request or other communication shall be effective (i) if given by telecopier, when such telecopy is transmitted to the telecopier number specified in this Section and a confirmation of such telecopy has been received by the sender, (ii) if given by mail, 5 days after such communication is deposited in the mail, certified or registered with return receipt requested, addressed as aforesaid or (iii) if given by any other means, when delivered at the addresses specified in this Section; provided that any notice given pursuant to Section 2 shall be effective only upon receipt.
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without the consent of, or notice to, any Loan Party sell participations to any Person (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement and the other Loan Documents; provided that such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, and the Loan Parties shall continue to deal solely and directly with such Lender, as the case may be, in connection with the provisions of this Agreement and the other Loan Documents.
(a) Borrower agrees to pay all reasonable costs and expenses of Collateral Agent and the Lenders in connection with the preparation, negotiation, execution, delivery, and administration of the Loan Documents, including the fees and disbursements of counsel to Collateral Agent, in connection with (i) the preparation and execution of the Loan Documents and in connection with the transactions contemplated hereby or thereby, (ii) any amendment, waiver or consent related thereto, whether or not the transactions contemplated herein are consummated, (iii) any Change of Control and (iv) any redemption of the Notes or the BIP Warrant, in each case together with any fees and charges suffered or incurred by Collateral Agent and the Lenders in connection with periodic environmental audits, fixed asset appraisals, title insurance policies, collateral filing fees and lien searches. Borrower agrees to pay to Collateral Agent and the Lenders all costs and expenses incurred or paid by Collateral Agent or the Lenders, including attorneys’ fees and disbursements and court costs, in connection with any Default or Event of Default hereunder or in connection with the enforcement of any of the Loan Documents (including all such costs and expenses incurred in connection with any proceeding under the United States Bankruptcy Code involving Borrower or any Subsidiary as a debtor
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thereunder). Borrower further agrees to indemnify Collateral Agent and the Lenders, and any security trustee therefor, their respective Affiliates, and each of their respective directors, officers, employees, agents, advisors, and consultants (each such Person being called an “Indemnitee”) against all losses, claims, damages, penalties, judgments, liabilities and expenses (including all reasonable fees and disbursements of counsel for any such Indemnitee and all reasonable expenses of litigation or preparation therefor, whether or not the Indemnitee is a party thereto, or any settlement arrangement arising from or relating to any such litigation) which any of them may pay or incur arising out of or relating to any Loan Document or any of the transactions contemplated thereby or the direct or indirect application or proposed application of the proceeds of the Term Loan, other than those which arise from the gross negligence or willful misconduct of the party claiming indemnification as determined by a final, non-appealable judgment by a court of competent jurisdiction. Borrower, upon demand by Collateral Agent at any time, shall reimburse Collateral Agent and the Lenders for any legal or other expenses (including all fees and disbursements of counsel for any such Indemnitee) incurred in connection with investigating or defending against any of the foregoing (including any settlement costs relating to the foregoing) except if the same is directly due to the gross negligence or willful misconduct of the party to be indemnified as determined by a final, non-appealable judgment by a court of competent jurisdiction. To the extent permitted by applicable law, Borrower shall not assert or cause any Subsidiary to assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or the other Loan Documents or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, the Term Loan or the use of the proceeds thereof. Borrower for itself and all endorsers, guarantors and sureties and their heirs, legal representatives, successors and assigns, hereby further specifically waives any rights that it may have under Section 1542 of the California Civil Code (to the extent applicable), which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR,” and further waives any similar rights under applicable laws.
(b) Borrower unconditionally agrees to forever indemnify, defend and hold harmless, and covenants not to xxx for any claim for contribution against, each Indemnitee for any damages, costs, loss or expense, including, response, remedial or removal costs and all fees and disbursements of counsel for any such Indemnitee, arising out of any of the following: (i) any presence, release, threatened release or disposal of any hazardous or toxic substance or petroleum by Borrower or any Subsidiary or otherwise occurring on or with respect to its Property (whether owned or leased), (ii) the operation or violation of any Environmental Law, whether federal, state, or local, and any regulations promulgated thereunder, by Borrower or any Subsidiary or otherwise occurring on or with respect to its Property (whether owned or leased), (iii) any claim for personal injury or property damage in connection with Borrower or any Subsidiary or otherwise occurring on or with respect to its Property (whether owned or leased), and (iv) the inaccuracy or breach of any environmental representation, warranty or covenant by Borrower or any Subsidiary made herein or in any other Loan Document evidencing or securing any Obligations or setting forth terms and conditions applicable thereto or otherwise relating thereto, except for damages, costs, loss or expense arising from the willful misconduct or gross
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negligence of the relevant Indemnitee as determined by a final, non-appealable judgment by a court of competent jurisdiction.
Section 11.13 Governing Law. This Agreement and the other Loan Documents (except as otherwise specified therein), and any claim, controversy, dispute or cause of action (whether in contract, tort or otherwise) based upon, arising out of or relating to this Agreement or any Loan Document, and the rights and duties of the parties hereto, shall be governed by and construed and determined in accordance with the internal laws of the State of Georgia.
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other Loan Document (“Excess Interest”). If any Excess Interest is provided for, or is adjudicated to be provided for, herein or in any other Loan Document, then in such event (a) the provisions of this Section shall govern and control, (b) neither Borrower nor any guarantor or endorser shall be obligated to pay any Excess Interest, (c) any Excess Interest that the Lenders may have received hereunder shall, at the option of the Required Lenders, be (i) applied as a credit against the then outstanding principal amount of Obligations hereunder and accrued and unpaid interest thereon (not to exceed the maximum amount permitted by applicable law), (ii) refunded to Borrower, or (iii) any combination of the foregoing, (d) the interest rate payable hereunder or under any other Loan Document shall be automatically subject to reduction to the maximum lawful contract rate allowed under applicable usury laws (the “Maximum Rate”), and this Agreement and the other Loan Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction in the relevant interest rate, and (e) neither Borrower nor any guarantor or endorser shall have any action against Collateral Agent or the Lenders for any damages whatsoever arising out of the payment or collection of any Excess Interest. Notwithstanding the foregoing, if for any period of time interest on any of the Obligations is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest payable on the Obligations shall remain at the Maximum Rate until the Lenders shall have received the amount of interest which the Lenders would have received during such period on the Obligations had the rate of interest not been limited to the Maximum Rate during such period.
(a) BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF GEORGIA SITTING IN XXXXXX COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
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JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT COLLATERAL AGENT OR THE LENDERS MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
(b) BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.5. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
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APPLICABLE TO SUCH PROCEEDING. IN THE EVENT ANY ACTIONS OR PROCEEDINGS ARE TO BE RESOLVED BY JUDICIAL REFERENCE, ANY PARTY MAY SEEK FROM ANY COURT HAVING JURISDICTION THEREOVER ANY PREJUDGMENT ORDER, WRIT OR OTHER RELIEF AND HAVE SUCH PREJUDGMENT ORDER, WRIT OR OTHER RELIEF ENFORCED TO THE FULLEST EXTENT PERMITTED BY LAW NOTWITHSTANDING THAT ALL ACTIONS OR PROCEEDINGS ARE OTHERWISE SUBJECT TO RESOLUTION BY JUDICIAL REFERENCE.
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agencies if requested or required by such agencies in connection with a rating relating to the Term Loan; provided that only basic information about the pricing and structure of the transaction evidenced hereby may be disclosed pursuant to this subsection (i). For purposes of this Section, “Information” means all information received from Borrower or any of the Subsidiaries or from any other Person on behalf of Borrower or any Subsidiary relating to Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to Collateral Agent or the Lenders on a non-confidential basis prior to disclosure by Borrower or any of its Subsidiaries or from any other Person on behalf of Borrower or any of the Subsidiaries; provided that, in the case of information received from Borrower or any Subsidiary, or on behalf of Borrower or any Subsidiary, after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
[Signature Pages to Follow]
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This Senior Subordinated Credit Agreement is entered into between us for the uses and purposes hereinabove set forth as of the date first above written.
“Borrower”
QUADRANT 4 SYSTEM CORPORATION By: /s/ Xxxxx Xxxxxxxxxx Name: Xxxxx Xxxxxxxxxx Title: President and Chief Executive Officer |
“Collateral Agent”
BIP LENDER, LLC By:/s/ Xxxx Xxxxxxxxxx Name: Xxxx Xxxxxxxxxx Title: Manager |
|
“Lender”
BIP QUADRANT 4 DEBT FUND I, LLC By: /s/ Xxxx Xxxxxxxxxx Name: Xxxx Xxxxxxxxxx Title: Manager |
Exhibit A
BIP Warrant
(see attached)
Exhibit B
Term Note
(see attached)
Exhibit C
Quadrant 4 System Corporation
Compliance Certificate
To: |
BIP LENDER, LLC
|
This Compliance Certificate is furnished to BIP Lender, LLC (“Collateral Agent”) pursuant to that certain Senior Subordinated Credit Agreement dated as of November 3, 2016, by and among Quadrant 4 System Corporation, Collateral Agent and BIP Quadrant 4 Debt Fund I, LLC (the “Credit Agreement”). Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit Agreement.
The Undersigned hereby certifies, that:
1. I am the duly elected _____________________________________ of Borrower;
2. I have reviewed the terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or 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;
4. The financial statements required by Section 6.5 of the Credit Agreement and being furnished to you concurrently with this certificate are, to the best of my knowledge, true, correct and complete as of the dates and for the periods covered thereby; and
5. The Attachment hereto sets forth financial data and computations evidencing Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Borrower has taken, is taking, or proposes to take with respect to each such condition or event:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The foregoing certifications, together with the computations set forth in the Attachment hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this _________ day of __________________, ___.
QUADRANT 4 SYSTEM CORPORATION
By
Name
Title
Title
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Schedule I
to Compliance Certificate
to Compliance Certificate
Quadrant 4 System Corporation
Compliance Calculations
for Senior Subordinated Credit Agreement dated as of November 3, 2016
for Senior Subordinated Credit Agreement dated as of November 3, 2016
Calculations as of _____________, _______
A. Total Funded Debt/EBITDA Ratio (Section 7.12(a))
|
|
1. Total Funded Debt
|
$___________
|
2. Net Income for past 4 quarters
|
___________
|
3. Interest Expense for past 4 quarters
|
___________
|
4. Income taxes for past 4 quarters
|
___________
|
5. Depreciation and Amortization Expense for past 4 quarters
|
___________
|
6. Add-Backs Specified in the definition of EBITDA
|
___________
|
7. Sum of Lines A2, A3, A4, A5 and A6 (“EBITDA”)
|
___________
|
8. Ratio of Line A1 to A7
|
____:1.0
|
9. Line A8 ratio must not exceed
|
3.45:1.0
|
10. Borrower is in compliance (circle yes or no)
|
yes/no
|
B. Fixed Charge Coverage Ratio (Section 7.12(b))
|
|
1. Sum of lines A2, A3, A4, A5, and A6 (“EBITDA”)
|
$___________
|
2. Unfinanced Capital Expenditures for past 4 quarters
|
$___________
|
3. Unfinanced Software Development Costs for past 4 quarters
|
$___________
|
4. Lines B1 minus the sum of B2 and B3 (“EBITDA”)
|
$___________
|
5. Principal payments due within next 4 quarters, including anticipated Earn Out Obligations that could become due within the next 4 quarters
|
$___________
|
6. Interest Expense for past 4 quarters (or as annualized)
|
$___________
|
7. Income taxes for past 4 quarters
|
$___________
|
8. Distributions for past 4 quarters
|
$___________
|
9. Sum of Lines B5, B6, B7 and B8
|
$___________
|
10. Ratio of Line B4 to Line B9
|
____:1.0
|
11. Line B10 ratio must not be less than
|
1.0:1.0
|
12. Borrower is in compliance (circle yes or no)
|
yes/no
|
C. Software Development Costs (Section 7.12(c))
|
|
1. Software Development Costs to date for the applicable twelve (12) month period
|
$___________
|
2. Maximum permitted amount
|
$___________
|
3. Borrower is in compliance (circle yes or no)
|
yes/no
|
D. Operating Leases (Section 7.12(d))
|
|
1. Year-to-date Operating Leases
|
$___________
|
2. Maximum permitted amount
|
$___________
|
3. Borrower is in compliance (circle yes or no)
|
yes/no
|
-2-
Schedule 5.2
Subsidiaries
Name
|
Jurisdiction of Organization
|
Percentage Ownership
|
Owner
|
____________________
|
____________
|
________
|
____________
|
____________________
|
____________
|
________
|
____________
|
____________________
|
____________
|
________
|
____________
|