Exhibit 10.6
FIFTH AMENDMENT AND WAIVER
FIFTH AMENDMENT AND WAIVER, dated as of December 22, 2000 (this
"AMENDMENT"), to the Credit Agreement, dated as of February 27, 1997, as
amended and restated as of February 10, 1998 and as further amended by the
First Amendment, dated as of June 30, 1998, the Second Amendment, dated as
of February 12, 1999, the Third Amendment, dated as of May 25, 1999, and
the Fourth Amendment, dated as of December 21, 1999 (as further amended,
supplemented or modified from time to time, the "CREDIT AGREEMENT"), among
Cooperative Computing, Inc., a Delaware corporation (the "BORROWER"),
Cooperative Computing Holding Company, Inc., a Texas corporation, as
guarantor ("CCI"), the several banks and other financial institutions
parties thereto (the "LENDERS") and The Chase Manhattan Bank, as the
administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT").
W I T N E S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower;
WHEREAS, the Borrower has requested that the Administrative Agent,
with the consent of the Required Lenders, amend certain provisions of the
Credit Agreement; and
WHEREAS, the Administrative Agent and the Lenders are willing to agree
to the requested amendments on the terms and conditions contained herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. DEFINED TERMS. Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement, as
amended hereby.
II. AMENDMENTS TO CREDIT AGREEMENT.
1. AMENDMENTS TO SECTION 1.1. (a) Section 1.1 of the Credit
Agreement is hereby amended by (1) deleting therefrom the definition of
"Asset Sale" in its entirety and substituting in lieu thereof the
following:
"ASSET SALE": any sale, transfer or other disposition (including
any sale and leaseback of assets and any sale of accounts receivable
in connection with a receivable financing transaction) by the Borrower
or any of its Subsidiaries of any property of the Borrower or any such
Subsidiary (including property subject to any Lien under any Security
Document), other than as permitted pursuant to paragraphs (a) through
(c) and (e) through (j) of Section 8.6 (PROVIDED that, except with
respect to the loss or condemnation of all or substantially all of the
assets of the Borrower and its Subsidiaries, the proceeds from such
casualty or condemnation (including insurance) are used to replace or
rebuild the lost or condemned assets within the time period specified
in Section 2.10(f)).
,(2) deleting therefrom the definition of "Consolidated EBITDA" in its
entirety and substituting in lieu thereof the following:
"CONSOLIDATED EBITDA": for any period, with respect to any
Person, Consolidated Net Income of such Person for such period (A)
Plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum
of (i) total income and franchise tax expense, (ii) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions and discounts and other fees and charges associated with
Indebtedness, (iii) depreciation and amortization expense, (iv)
amortization of intangibles including, but not limited to, goodwill
and organization costs (including, with respect to the Borrower, costs
associated with the Offer to Purchase dated October 23, 1996 made by a
subsidiary of CCI to purchase the common stock of the Borrower);
(v) other extraordinary noncash charges (in accordance with GAAP)
(including non-cash currency exchange losses); (vi) any extraordinary
and unusual losses (including losses on sales of assets other than
inventory sold in the ordinary course of business); (vii) (x) any cash
restructuring charges substantially consistent with those
restructuring charges previously disclosed to the Administrative Agent
and the Lenders by the Borrower up to a maximum aggregate amount in
the case of such charges of $2,500,000 during the term of this
Agreement and (y) additional cash restructuring charges not to exceed
$1,000,000 in the aggregate during the term of this Agreement; and
(viii) any non-cash restructuring charges; and (B) MINUS, without
duplication and to the extent reflected as a credit or gain in the
statement of such Consolidated Net Income for such period, the sum of
(i) any extraordinary and unusual gains (including gains on the sales
of assets, other than inventory sold in the ordinary course of
business) and (ii) other extraordinary noncash credits or gains (in
accordance with GAAP) (including non-cash currency exchange gains);
PROVIDED that for the purposes of calculating Consolidated EBITDA for
any period of four consecutive fiscal quarters (each, a "Reference
Period") for purposes of Section 8.1, (i) if at any time during such
Reference Period the Borrower or any Subsidiary shall consummate an
acquisition pursuant to Sections 8.9(k) or 8.9(l), the Consolidated
EBITDA for such Reference Period shall be calculated on a PRO FORMA
basis (assuming the consummation of such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith
occurred on the first day of such Reference Period) and (ii) if at any
time during such Reference Period the Borrower or any Subsidiary shall
consummate the Designated Asset Sale or the sale of any line of
business or product line, the Consolidated EBITDA for such Reference
Period shall be reduced on a PRO FORMA basis by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is
the subject of the Designated Asset Sale or the sale of any line of
business or product line (the "REDUCED EBITDA").
and (3) adding thereto the following definitions in their appropriate
alphabetical order:
"CUSTOMARY LICENSE TERMS": as defined in Section 5.28.
"LEASE ACCOUNTING CHANGE": as defined in Section 1.2.
"LICENSE PRODUCTS": as defined in Section 5.28.
"REVENUE RECOGNITION CHANGE": as defined in Section 1.2.
2. AMENDMENTS TO SECTION 1.2. Section 1.2 of the Credit Agreement is
hereby amended by adding at the end of paragraph (b) thereof the following:
In the event that any change shall occur in (i) the method by which
Lease Transaction Obligations and the related obligations of the
Borrower permitted pursuant to the terms of Section 8.4(h) of this
Agreement are accounted for in the financial statements of CCI and its
Subsidiaries (a "LEASE ACCOUNTING CHANGE") or (ii) accounting
principles relating to the recognition of revenue required by the
promulgation of any rule, regulation, pronouncement or opinion by
applicable authorities including, without limitation the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants (a "REVENUE RECOGNITION CHANGE"), all financial
covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Lease Accounting Change or Revenue
Recognition Change, as the case may be, had not occurred.
3. AMENDMENTS TO SECTION 5. Section 5 of the Credit Agreement is
hereby amended by adding thereto the following new Section 5.28:
5.28 PROVISION OF LICENSE PRODUCTS; NON-COMPETITION, ETC.. No
Credit Party is party to any agreement, whether written or oral,
providing for (i) the grant by CCI or any of its Subsidiaries of any
right or license to use any Intellectual Property (as defined in the
Guarantee and Collateral Agreement) of CCI or any of its Subsidiaries
(including, without limitation, the use of any electronic catalog
products) or (ii) the rendering of any related service in connection
with such grant (collectively, "LICENSE PRODUCTS") to any Person
(other than an Affiliate), except for any such agreement (or a related
agreement or agreements) that contains such confidentiality, non-
solicitation and non-competition provisions as are customary in the
Borrower's line of business and in the ordinary course of business (as
determined reasonably and in good faith by the Borrower) ("CUSTOMARY
LICENSE TERMS").
4. AMENDMENTS TO SECTION 7. Section 7.6 of the Credit Agreement is
hereby amended by deleting said Section in its entirety and substituting in
lieu thereof the following:
7.6 INSPECTION OF PROPERTY: BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its
business and activities; and permit representatives of any Lender
(including field examiners who may be employees of any Lender or
independent contractors) to visit and inspect any of its properties
and examine and make abstracts from any of its books and records upon
reasonable advance notice at any reasonable time on any Business Day
and as often as may reasonably be desired and to discuss the business,
operations, properties and financial or other condition of CCI and its
Subsidiaries with officers and employees of CCI and its Subsidiaries
and with its independent certified public accountants; PROVIDED that
the Administrative Agent or such Lender shall notify the Borrower
prior to any contact with such accountants and give the Borrower the
opportunity to participate in such discussions. Upon the request of
the Administrative Agent or any Lender, the Borrower shall enter into
(or in the case of any other necessary party to such a confidentiality
agreement, CCI and its Subsidiaries shall use their best efforts to
cause such party to enter into) a confidentiality agreement with the
Administrative Agent and the Lenders in form and substance mutually
satisfactory to the Administrative Agent and the Borrower to permit
the examination by the Administrative Agent and the Lenders in
accordance with the terms of this Section 7.6 of the books and records
of certain entities in which CCI or any of its Subsidiaries has an
equity investment as previously disclosed to the Administrative Agent
and the Lenders by the Borrower. The Borrower hereby agrees to
reimburse the Administrative Agent for (i) costs and expenses (other
than travel costs and expenses) up to a maximum of $20,000 and (ii)
reasonable travel costs and expenses, in each case incurred in
connection with each field examination contemplated by this Section
7.6, PROVIDED that, unless an Event of Default shall have occurred and
be continuing, the Borrower shall pay for no more than one such
examination in each fiscal year of the Borrower.
5. AMENDMENTS TO SECTION 8. (a) Section 8.1(a) of the Credit
Agreement is hereby amended by deleting the columns captioned "Quarter
Ending" and "Ratio" from paragraph (a) thereof and substituting in lieu
thereof the following:
QUARTER ENDING RATIO
2000 December 31 1.50 to 1.00
2001 March 31 1.50 to 1.00
June 30 1.60 to 1.00
September 30 1.70 to 1.00
December 31 2.75 to 1.00
2002 March 31 2.75 to 1.00
June 30 3.00 to 1.00
and each
quarter
thereafter
(b)Section 8.1(c) of the Credit Agreement is hereby amended by
deleting the columns captioned "Quarter Ending" and "Amount" from Section
8.1(c) and substituting in lieu thereof the following:
QUARTER ENDING AMOUNT
1998 December 31 $32,500,000
1999 March 31 32,500,000
June 30 32,500,000
September 30 32,500,000
December 31 25,000,000
2000 March 31 23,500,000
June 30 27,000,000
September 30 27,500,000
December 31 28,000,000
2001 March 31 29,000,000
June 30 30,000,000
September 30 31,000,000
December 31 45,000,000
2002 March 31 47,500,000
June 30 47,500,000
September 30 50,000,000
December 31 52,500,000
2003 March 31 55,000,000
June 30 57,500,000
September 30 60,000,000
and each
quarter
thereafter
(c) Section 8.1(e) of the Credit Agreement is hereby amended by
deleting the columns captioned "Quarter Ending" and "Ratio" from Section
8.1(e) and substituting in lieu thereof the following:
QUARTER ENDING RATIO
1998 December 31 2.75 to 1.00
1999 March 31 2.75 to 1.00
June 30 2.75 to 1.00
September 30 2.75 to 1.00
December 31 4.00 to 1.00
2000 March 31 4.00 to 1.00
June 30 4.00 to 1.00
September 30 3.25 to 1.00
December 31 3.20 to 1.00
2001 March 31 3.10 to 1.00
June 30 3.00 to 1.00
September 30 3.00 to 1.00
December 31 2.75 to 1.00
and each
quarter
thereafter
(d) Section 8.2 of the Credit Agreement is hereby amended by
deleting the references to "$35,000,000" from paragraphs (m) and (n)
thereof and substituting in lieu thereof the amount "$40,000,000".
(e) Section 8.3 of the Credit Agreement is hereby amended by (1)
deleting the reference to "$2,000,000" from paragraph (n) thereof and
substituting in lieu thereof the amount "$5,000,000" and (2) by adding
immediately prior to the semi-colon at the end of paragraph (n) thereof the
following:
,except, in the case of obligations incurred after December 31, 2000
and otherwise permitted hereunder, for any Lien on property, assets or
revenue the value of which exceeds twice the amount of the obligations
secured thereby
(f) Section 8.6 of the Credit Agreement is hereby amended by
deleting the reference to "$1,500,000" from paragraph (d) thereof and
substituting in lieu thereof the amount "$3,000,000".
(g) Section 8.9 of the Credit Agreement is hereby amended by (1)
deleting the reference to "$5,000,000" from paragraph (j) thereof and
substituting in lieu thereof the amount "$7,500,000" and (2) adding
immediately prior to the semi-colon at the end of paragraph (j) thereof the
following:
, PROVIDED that cash Investments at any one time outstanding shall not
exceed $1,000,000 in Persons other than Subsidiaries or Affiliates of
CCI
(h) Section 8 of the Credit Agreement is hereby amended by
adding thereto the following new Section 8.19:
8.19 LIMITATION ON PROVISION OF LICENSE PRODUCTS. Enter into
any agreement, whether written or oral, to provide License Products to
any Person (other than an Affiliate), unless such agreement contains
Customary License Terms.
III. WAIVER OF SECTION 8.1 OF THE CREDIT AGREEMENT. The
Administrative Agent and the Lenders hereby agree to waive (a) the
Borrower's compliance with the requirements of paragraph (d) of Section 8.1
for the four fiscal quarters ended September 30, 2001 and (b) any breach
resulting from any failure to comply with any such requirements.
IV. NOTICE OF REDUCTION IN REVOLVING CREDIT COMMITMENT. The Borrower
hereby gives notice pursuant to the terms of Section 2.5 of the Credit
Agreement of a permanent reduction in the amount of the Revolving Credit
Commitments from $50,000,000 to $47,500,000, such notice to take effect on
the Fifth Amendment Effective Date.
V. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date (the "FIFTH AMENDMENT EFFECTIVE DATE") (a) on which
this Amendment shall have been (i) executed by the Borrower, CCI, the
Administrative Agent and the Required Lenders and (ii) acknowledged and
consented to by the other Credit Parties, each in accordance with the terms
of the Credit Agreement, (b) the Administrative Agent shall have received,
for the account of each Lender executing this Amendment, an amendment fee
in an amount equal to 0.375% of the sum of such Lender's (i) Revolving
Credit Commitment and (ii) outstanding Term Loans as of such date and (c)
the Administrative Agent shall have received certificates representing 100%
of the ownership interests of the Borrower in [Internet Auto Parts] (to the
extent not previously provided), together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the
Borrower as provided by the terms of the Guarantee and Collateral
Agreement.
VI. GENERAL.
1. REPRESENTATIONS AND WARRANTIES. (a) The representations and
warranties made by the Borrower in the Loan Documents are true and correct
in all material respects on and as of the date hereof, after giving effect
to the effectiveness of this Amendment, as if made on and as of the date
hereof, except for any representation and warranty which is expressly made
as of an earlier date which representation and warranty shall have been
true and correct in all material respects as of such earlier date, and no
Default or Event of Default has occurred and is continuing.
(b) As of the date hereof, each of CCI and its Subsidiaries has
delivered all Collateral required to be delivered by it to the
Administrative Agent pursuant to the terms of any Security Document.
2. PAYMENT OF EXPENSES. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable
expenses incurred in connection with this Amendment, any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent.
3. NO OTHER AMENDMENTS; CONFIRMATION. Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement
and the Notes are and shall remain in full force and effect.
4. AFFIRMATION OF GUARANTEES. Each of the Guarantors hereby consents
to the execution and delivery of this Amendment and to the transactions
contemplated hereby or in any related document and reaffirms its
obligations under the Guarantee and Collateral Agreement executed by such
Guarantor.
5. GOVERNING LAW; COUNTERPARTS. (b) This Amendment and the rights
and obligations of the parties hereto shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the Borrower and the Administrative Agent. This
Amendment may be delivered by facsimile transmission of the relevant
signature pages hereof.
[The remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
COOPERATIVE COMPUTING, INC.
By: ---------------------------------------
Name:
Title:
COOPERATIVE COMPUTING HOLDING COMPANY, INC.,
as a Guarantor
By: ---------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent,
a Lender and Issuing Lender
By: ---------------------------------------
Name:
Title:
BANK UNITED
By: ---------------------------------------
Name:
Title:
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE,
INC.
By: ---------------------------------------
Name:
Title:
By: ----------------------------------------
Name:
Title:
NATIONSBANK, N.A., SUCCESSOR IN
INTEREST BY MERGER WITH
NATIONSBANK OF TEXAS N.A.
By: ---------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By: ---------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ CLO I, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ American Capital
Management, Inc., as Collateral Manager
By: ---------------------------------------
Name:
Title:
IMPERIAL BANK
By: ---------------------------------------
Name:
Title:
COMMERCIAL LOAN FUNDING TRUST I
By: ▇▇▇▇▇▇ Commercial Paper Inc., not in its
individual capacity but solely as
administrative agent
By: ---------------------------------------
Name:
Title:
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its investment adviser
By: ---------------------------------------
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By: ---------------------------------------
Name:
Title:
By: ---------------------------------------
Name:
Title:
ALLSTATE INSURANCE COMPANY
By: ---------------------------------------
Name:
Title:
By: ---------------------------------------
Name:
Title:
KZH CYPRESSTREE-1 LLC
By: ---------------------------------------
Name:
Title:
The undersigned Credit Parties do hereby consent and agree to the
foregoing Amendment and acknowledge and agree that (i) all obligations of
the Borrower under the Credit Agreement, as amended by the foregoing
Amendment, are Obligations which are secured and guaranteed by the Security
Documents to which it is a party, (ii) all references to the Credit
Agreement in the Security Documents refer to the Credit Agreement, as
amended from time to time (including pursuant to the foregoing Amendment),
and (iii) all references to Loans in the Security Documents refer to the
Loans under the Credit Agreement.
TRIAD SYSTEMS FINANCIAL CORPORATION
TRIAD DATA CORPORATION
TRIFARE, INC.
CCI/TRIADGEM, INC.
TRIAD SYSTEMS CORPORATION
By: --------------------------------------
Name:
Title: