exv10w1



 






Exhibit 10.1




FIRST AMENDMENT TO THIRD AMENDED AND 

RESTATED CREDIT AGREEMENT 



THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment”), dated
effective as of March 30, 2005, is made and entered into by and among ACTIVANT SOLUTIONS INC., a
Delaware corporation formerly known as Cooperative Computing, Inc. (the “Borrower”),
ACTIVANT SOLUTIONS HOLDINGS INC., a Delaware corporation formerly known as Cooperative Computing
Holding Company, Inc. (the “Guarantor”), THE FINANCIAL INSTITUTIONS WHICH ARE PARTIES TO
THE CREDIT AGREEMENT (as hereinafter defined), as amended by this Amendment (each, together with
its successors and assigns, a “Lender” and collectively, the “Lenders”), and
JPMORGAN CHASE BANK, N.A., a national banking association formerly known as JPMorgan Chase Bank, as
administrative agent for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).




RECITALS:




     WHEREAS, the Borrower, Guarantor, the Administrative Agent and certain Lenders are parties to
a Third Amended and Restated Credit Agreement dated as of July 27, 2003 (the “Credit
Agreement”); and



     WHEREAS, in connection with the Borrower’s contemplated acquisition of all or substantially
all of the issued and outstanding stock of Speedware Corporation Inc., a Canadian corporation
(“Speedware”), the Borrower, Guarantor, the Administrative Agent and the Lenders have agreed, on
the terms and conditions herein set forth, that the Credit Agreement be amended in certain
respects.



AGREEMENTS:




     NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations
and warranties herein set forth, and for other good and valuable consideration, the receipt and
sufficiency which are hereby acknowledged and confessed, the Borrower, the Guarantor, the
Administrative Agent and the Lenders do hereby agree as follows:



     Section 1. General Definitions. Capitalized terms used herein which are
defined in the Credit Agreement shall have the same meanings when used herein.



     Section 2. Amendment of Definitions.



     (a) The definitions of “Borrowing Base,” “Borrowing Base Certificate,” “Consolidated Net
Worth,” “Consolidated Net Worth Adjustment Amount” and “Eligible Accounts Receivable” in
Section 1.1 of the Credit Agreement are hereby deleted in their entirety, and any reference
to any of such deleted terms in the Credit Agreement shall no longer have any force or effect.



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     (b) The definition of “Consolidated EBITDA” in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to hereafter read as follows:




     “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, (v) other extraordinary noncash charges (in accordance with
GAAP) (including non-cash currency exchange losses), (vi) any extraordinary and unusual
losses (including losses on sales of assets other than inventory sold in the ordinary course
of business), (vii) any non-cash losses resulting from the Borrower’s investment in Internet
Autoparts and HM Coop, and (viii) one time cash expenses related to (a) severance payments,
(b) transactions fees and expenses and (c) pro forma synergies agreed to between the Company
and the Administrative Agent, in each case in connection with the acquisition of the Capital
Stock of Speedware Corporation Inc., a Canadian corporation (“Speedware”), so long
as the aggregate amount of all such cash expenses does not exceed $5,000,000; 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 non-cash credits or gains (in
accordance with GAAP) (including non-cash currency exchange gains) and (iii) any non-cash
gains resulting from the Borrower’s investment in Internet Autoparts and HM Coop;
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), 8.9(l) or 8.9(n), 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.



     Section 3. Deletion of Borrowing Base Related Facility Usage Restrictions.
Section 2.1(a), Section 2.10(a) and the first sentence of Section 3.1(a) of
the Credit Agreement are hereby amended and restated in their entirety to hereafter read as
follows:




     2.1 Commitments. (a) Subject to the terms and conditions hereof, each Lender
severally agrees to make revolving credit loans (each, a “Loan”, collectively,
“Loans”) to the Borrower from time to time during the Commitment Period in an
aggregate principal amount at any one time outstanding, when added to such Lender’s
Commitment Percentage of all Letter of Credit
Outstandings, not to exceed the amount of



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such Lender’s Commitment. Notwithstanding the
foregoing, the sum of all Letter of Credit Outstandings and the aggregate principal amount
of the Loans outstanding at any time shall not exceed the Commitments. During the Commitment
Period, the Borrower may use the Commitments by borrowing, prepaying the Loans in whole or
in part, and reborrowing, all in accordance with the terms and conditions hereof.




     2.10 Mandatory Prepayments and Commitment Reductions. (a) If at any time the sum of
the Loans and the Letter of Credit Outstandings exceeds the Commitments (including at any
time after any reduction of the Commitments pursuant to Section 2.5), the Borrower shall
make a payment in the amount of such excess which payment shall be applied in the order set
forth in Section 2.5(b). To the extent that after giving effect to any prepayment of the
Loans required by the preceding sentence, the sum of the Loans and Letter of Credit
Outstandings exceed the Commitments, the Borrower shall, without notice or demand,
immediately cash collateralize the then outstanding L/C Obligations in an amount equal to
such excess upon terms reasonably satisfactory to the Administrative Agent.




     3.1 The L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section
3.4(a), agrees to issue Letters of Credit for the account of the Borrower on any Business
Day during the Commitment Period in such form as may be approved from time to time by the
Issuing Lender; provided that no Issuing Lender shall issue any Letter of Credit if, after
giving effect to such issuance, (i) the L/C Obligations would exceed $5,000,000 or (ii) the
sum of the Loans and Letter of Credit Outstandings of all the Lenders would exceed the
Commitments of all of the Lenders.



     Section 4. Deletion of Borrowing Base Certificate Reporting Requirements and Other
Borrowing Base and Eligible Accounts Receivable References.



     (a) Sections 6.2(d) and 12.1(b)(vii) of the Credit Agreement, including
without limitation, the proviso following Section 12.1(b)(vii) of the Credit Agreement, are
hereby deleted in their entirety and shall no longer be of any force or effect and “[Reserved]”
shall be added in lieu thereof.



     (b) Section 5.26 of the Credit Agreement is hereby amended and restated in its
entirety to hereafter read as follows:




     5.26 Status of Accounts Receivables and Other Collateral. The Borrower shall
not redate any invoice or sale or make or allow to be made sales on extended dating beyond
what is customary in the industry.



     (c) Section 7.6 of the Credit Agreement is hereby amended to delete the last sentence
thereof in its entirety.



     Section 5. Amendment of Affirmative Covenants. Section 7.11 of the
Credit Agreement is hereby amended to add the following new sentence at the end thereof:



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     It is understood and agreed that in respect of the acquisition by the Borrower of 100%
of the Capital Stock of Speedware, so long as the Borrower and all of its applicable
Subsidiaries fully comply with the terms of this Section 7.11 within fifteen (15) days after
the consummation of such acquisition, the Borrower shall be deemed to have complied with the
terms of this Section 7.11; provided, however, that notwithstanding the
foregoing, the Capital Stock of Prelude Systems Inc. shall not be required to be pledged in
accordance with the terms of this Section 7.11 unless and until fifteen (15) days after the
Lien against such Capital Stock permitted under Section 8.3(o) is released by the holder of
such Lien.



     Section 6. Amendments of Financial Covenants.



     (a) Section 8.1(a) of the Credit Agreement is hereby amended and restated in its
entirety to hereafter read as follows:




     (a) Maintenance of Consolidated EBITDA less Capital Expenditures to Consolidated
Interest Expense. Permit the ratio of (i) Consolidated EBITDA of the Borrower and its
Subsidiaries for the period of four consecutive fiscal quarters ending on the last day of
each fiscal quarter (commencing with the fiscal quarter ending March 31, 2005) less Capital
Expenditures for such four fiscal quarters to (ii) Consolidated Interest Expense of the
Borrower and its Subsidiaries for such four fiscal quarters to be less than 1.25 to 1.0.



     (b) Section 8.1(b) of the Credit Agreement is hereby deleted in its entirety and shall
no longer be of any force or effect and “[Reserved]” shall be added in lieu thereof.



     (c) Section 8.1(c) of the Credit Agreement is hereby amended and restated in its
entirety to hereafter read as follows:




     (c) Maintenance of Consolidated Total Debt to Consolidated EBITDA. Permit the
ratio of (i) Consolidated Total Debt of the Borrower and its Subsidiaries as of the last day
of each of the fiscal quarters set forth below less the aggregate amount of cash and
Cash Equivalents shown on the consolidated balance sheet of the Borrower as of the last day
of the applicable fiscal quarter to (ii) Consolidated EBITDA of the Borrower and its
Subsidiaries for the period of four consecutive fiscal quarters ending on the last day of
each of the fiscal quarters set forth below to be greater than the ratio set forth opposite
such fiscal quarter below:



	 	 	 	 	 
	Quarter Ending	 	Amount	 
	March 31, 2005
	 	 	4.25 to 1.00	 
	June 30, 2005
	 	 	4.25 to 1.00	 
	September 30, 2005
	 	 	4.25 to 1.00	 
	December 31, 2005
	 	 	4.25 to 1.00	 
	March 31, 2006
	 	 	4.00 to 1.00	 






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     Section 7. Amendments of Other Negative Covenants.



     (a) New Sections 8.2(o) and 8.2(p) are hereby added to the Credit Agreement to
hereafter be and read as follows:




     (o) Indebtedness of the Borrower incurred solely for purposes of financing a portion of
the purchase price paid by the Borrower for the Borrower’s acquisition of the Capital Stock
in Speedware; provided that the original principal amount of such Indebtedness does
not exceed $120,000,000; and provided further that such Indebtedness is unsecured at
all times.




     (p) the existing “earn-out” obligation of Speedware payable to the prior shareholder(s)
of Prelude Systems Inc. in connection with Speedware’s acquisition of all Capital Stock in
Prelude Systems Inc.



     (b) A new Section 8.3(o) is hereby added to the Credit Agreement to hereafter be and
read as follows:




     (o) Liens against the Capital Stock of Prelude Systems Inc. to secure the “earn-out”
obligations of Speedware permitted under Section 8.2(p).



     (c) A new Section 8.4(m) is hereby added to the Credit Agreement to hereafter be
and read as follows:




     (m) Guarantee Obligations of any Subsidiary in respect of the Indebtedness of the
Borrower permitted under Section 8.2(o); provided that such Subsidiary is a
guarantor of the Obligations under the Guarantee and Collateral Agreement; and provided
further that such Guarantee Obligations are unsecured at all times.



     (d) A new Section 8.9(n) is hereby added to the Credit Agreement to hereafter be and
read as follows:




     (n) acquisition by the Borrower of all Capital Stock in Speedware for an aggregate
purchase price (net of proceeds of options or warrants or cash held by Speedware or fees and
expenses in connection with such acquisition) not to exceed $120,000,000.



     Section 8. Amendments to Indemnification Provisions. Section 12.5 of
the Credit Agreement is hereby amended and restated in its entirety to hereafter be and read as
follows:




     12.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse
the Administrative Agent and JPMSI for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Commitments and the development,
preparation and execution of, and any amendment, supplement or modification to, this
Agreement and any Notes and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including,



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without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or reimburse each
Lender, the Administrative Agent and JPMSI for all of their reasonable out-of-pocket costs
and expenses incurred in connection with the enforcement or preservation of any rights under
this Agreement, any Notes, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the Administrative
Agent and, at any time after and during the continuance of an Event of Default, of one
counsel to all of the Lenders, (c) to pay, indemnify, and hold each Lender, the
Administrative Agent and JPMSI harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying, stamp, excise,
documentary, property and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Agreement, any Notes,
the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender, the Administrative Agent and JPMSI and their respective officers, directors,
employees, agents and controlling persons (each of the foregoing, an “indemnified person”)
harmless from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including, without limitation, the reasonable fees and disbursements of counsel
with respect to the execution, delivery, enforcement, performance and administration of this
Agreement, any Notes, the other Loan Documents, or the use of the proceeds of the Loans in
connection with the Transactions and any such other documents (all the foregoing in this
clause (d), collectively, the “indemnified liabilities”), provided that the Borrower shall
have no obligation hereunder to an indemnified person with respect to indemnified
liabilities that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of such
indemnified person, or, in the case of indemnified liabilities arising under this Agreement,
any Notes and the other Loan Documents that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from a material breach by such
indemnified person of this Agreement, any Notes or the other Loan Documents, as the case may
be. The agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder



     Section 9. Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent and the Lenders that the representations and warranties
contained in Article 5 of the Credit Agreement and in all of the other Loan Documents are
true and correct in all material respects on and as of the effective date hereof as though made on
and as of such effective date, except to the extent any such representation or warranty is stated
to relate solely to an earlier date. The Borrower hereby certifies that no event has occurred and
is continuing which
constitutes a Default or an Event of Default under the Credit Agreement. Additionally, the
Borrower hereby represents and warrants to the Administrative Agent and the Lenders that the
following resolutions or authorizations remain in full force and effect as of the effective date
hereof and have not been modified, amended, superseded or revoked:



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     (a) The resolutions of the Offering Committee of the Board of Directors of the Borrower
adopted as of July 27, 2003 and as set forth in Exhibit II of that certain Borrowing
Certificate dated July 27, 2003, previously executed and delivered to the Administrative
Agent in connection with the Credit Agreement by the Senior Vice President of Finance and
Administration and the Secretary and General Counsel of the Borrower; and




     (b) The resolutions of the Board of Directors of the Guarantor adopted as of July 27, 2003
and as set forth in Exhibit II of that certain Borrowing Certificate dated July 27, 2003,
previously executed and delivered to the Administrative Agent in connection with the Credit
Agreement by the Senior Vice President of Finance and Administration and the Secretary and
General Counsel of the Guarantor.



     Section 10. Limitations. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver or modification of,
any other term or condition of the Credit Agreement or any of the other Loan Documents, or (b)
except as expressly set forth herein, prejudice any right or rights which the Lenders may now have
or may have in the future under or in connection with the Credit Agreement, the Loan Documents or
any of the other documents referred to therein. Except as expressly modified hereby or by express
written amendments thereof, the terms and provisions of the Credit Agreement, the Notes and any
other Loan Documents or any other documents or instruments executed in connection with any of the
foregoing are and shall remain in full force and effect. In the event of a conflict between this
Amendment and any of the foregoing documents, the terms of this Amendment shall be controlling.



     Section 11. Payment of Expenses. The Borrower agrees, whether or not the
transactions hereby contemplated shall be consummated, to reimburse and save the Administrative
Agent and each of the Lenders harmless from and against liability for the payment of all reasonable
substantiated out-of-pocket costs and expenses arising in connection with the preparation,
execution, delivery, amendment, modification, waiver and enforcement of, or the preservation of any
rights under this Amendment, including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent, in each case, as set forth in Section 12.5 of the
Credit Agreement. The provisions of this Section shall survive the termination of the Credit
Agreement and the repayment of the Obligations.



     Section 12. Descriptive Headings, etc. The descriptive headings of the
several Sections of this Amendment are inserted for convenience only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.



     Section 13. Entire Agreement. This Amendment and the documents referred to
herein represent the entire understanding of the parties hereto regarding the subject matter hereof
and supersede all prior and contemporaneous oral and written agreements of the parties hereto with
respect to the subject matter hereof, including, without limitation, any commitment letters
regarding the transactions contemplated by this Amendment.



     Section 14. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts and all of such counterparts shall



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together constitute one and the same instrument. Complete sets of counterparts shall be lodged
with the Borrower and the Administrative Agent.




     Section 15. References to Credit Agreement. As used in the Credit Agreement
(including all Exhibits thereto) and all other Loan Documents, on and subsequent to the effective
date hereof, the term “Agreement” shall mean the Credit Agreement, as amended by this Amendment.



     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their respective duly authorized officers as of the date first above written.



NOTICE PURSUANT TO TEX. BUS. & COMM. CODE §26.02



THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES BEFORE OR SUBSTANTIALLY
CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF TOGETHER CONSTITUTE A WRITTEN CREDIT AGREEMENT AND
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.




	 	 	 	 	 
	 	 	ACTIVANT SOLUTIONS, INC.,
	 	 	as Borrower
	 
	 	 	 	 
	

	 	By:	 	/s/ GREG PETERSEN 
	

	 	 	 	 
	

	 	Name:	 	Greg Petersen
	

	 	 	 	 
	

	 	Title:	 	Senior Vice President and Chief
Financial Officer
	

	 	 	 	 
	 
	 	 	 	 
	 	 	ACTIVANT SOLUTIONS HOLDING
	 	 	COMPANY, INC., as Guarantor
	 
	 	 	 	 
	

	 	By:	 	/s/ GREG PETERSEN
	

	 	 	 	 
	

	 	Name:	 	Greg Petersen
	

	 	 	 	 
	

	 	Title:	 	Senior Vice President and Chief
Financial Officer
	

	 	 	 	 
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,
	 	 	as Administrative Agent and as a Lender
	 
	 	 	 	 
	

	 	By:	 	/s/ EDMOND DEFOREST
	

	 	 	 	 
	

	 	Name:	 	Edmond DeForest
	

	 	 	 	 
	

	 	Title:	 	Vice President
	

	 	 	 	 






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	 	 	COMERICA BANK, as a Lender
	 
	 	 	 	 
	

	 	By:	 	/s/ PAUL GERLING
	

	 	 	 	 
	

	 	Name:	 	Paul Gerling
	

	 	 	 	 
	

	 	Title:	 	Senior Vice President
	

	 	 	 	 






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