Document:

exv10w2

 

GUARANTEE

     FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in connection with
that certain funding agreement (the “Funding Agreement”), entered into by and between Principal
Life Insurance Company, an Iowa insurance company (“Principal Life”), and Principal Life Income
Fundings Trust 2007-25, a New York common law trust (the “Trust”), relating to the notes (the
“Notes”) issued by the Trust, Principal Financial Group, Inc., a Delaware corporation and the
indirect parent company of Principal Life (the “Guarantor”), hereby furnishes to the Trust its full
and unconditional guarantee of the Guaranteed Amounts (as hereinafter defined) as follows:

     1. Guarantee.

          (a) The Guarantor hereby fully, irrevocably, absolutely and unconditionally guarantees, as a
guarantee of payment and not merely as a guarantee of collection, immediate payment when due to the
Trust any payments required to be made by Principal Life to the Trust under the Funding Agreement
which shall become due and payable regardless of whether such payment is due at maturity, on an
interest payment date or as a result of redemption or otherwise (the “Scheduled Payments”) but
shall be unpaid by Principal Life (the “Guaranteed Amounts”). Notwithstanding anything to the
contrary contained herein, in no event shall the Guaranteed Amounts exceed the Deposit (as defined
in the Funding Agreement) of the Funding Agreement, plus accrued but unpaid interest and any other
amounts due and owing under the Funding Agreement, less any amounts paid by Principal Life to the
Trust.

          (b) In the event that Principal Life fails to make a Scheduled Payment in full when due (the
“Payment Notice Date”), then the Trust or Citibank, N.A., as indenture trustee for the benefit of
the holders of the Notes (the “Indenture Trustee”), pursuant to the indenture (the “Indenture”)
between the Trust and the Indenture Trustee, may present the Guarantor with notice (each, a
“Payment Notice”) of such failure in writing on or after the Payment Notice Date. The Payment
Notice shall identify (1) the Funding Agreement, (2) the Trust, (3) the Payment Notice Date and (4)
the amount of the Scheduled Payments not paid by Principal Life to the Trust as of the Payment
Notice Date. Upon receipt of such Payment Notice, the Guarantor will immediately pay the
Guaranteed Amounts pursuant to Section 7.

          (c) In the event that, after receipt of a Payment Notice from the Trust, the Guarantor fails
to make immediate payment to the Trust or the Indenture Trustee of the Guaranteed Amounts, then
the Trust and the Indenture Trustee may enforce the obligations of the Guarantor under this
Guarantee, including by immediately bringing suit directly against the Guarantor (without first
bringing suit against Principal Life) for the Guaranteed Amounts not paid to the Trust as of the
Payment Notice Date.

          (d) This Guarantee is an unsecured, unsubordinated and contingent obligation of the Guarantor
and ranks equally with all other unsecured and unsubordinated obligations of the Guarantor.

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     2. Termination. This Guarantee is a continuing and irrevocable guarantee of the
Guaranteed Amounts now or hereafter existing and shall terminate and be of no further force and
effect with respect to the Funding Agreement and the Notes upon the full payment of the Scheduled
Payments or upon the earlier extinguishment of the obligations of Principal Life under the Funding
Agreement.

     3. Amendments. Subject to the trust agreement relating to the Trust and the Indenture, no
provision of this Guarantee may be waived, amended, supplemented or modified, except by a written
instrument executed by the Trust and the Guarantor.

     4. Assignment; Governing Law. This Guarantee shall inure to the benefit of the Trust and its
successors, assigns and pledgees. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to conflict of law principles.

     5. Notices. All notices given pursuant to this Guarantee shall be in writing, and shall
either be delivered, mailed or telecopied to the locations listed below or at such other address or
to the attention of such other persons as such party shall have designated for such purpose in a
written notice complying as to delivery with the terms of this Section 5. Each such notice shall
be effective (i) if given by telecopy, when transmitted to the applicable number so specified in
this Section 5 (such notice shall also be sent by mail, with first class postage prepaid), (ii) if
given by mail, three days after deposit in the mails with first class postage prepaid, or (iii) if
given by any other means, when actually delivered at such address.

If to the Guarantor:

Principal Financial Group, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

If to the Trust:

Principal Life Income Fundings Trust (followed by the number of the Trust specified in this Guarantee)

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c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, New York 10005

Attention: Thomas E. Tabor

Telephone: (212) 361-6184

Facsimile: (212) 809-5459

With a copy to:

Citibank, N.A.

Citibank Agency and Trust

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Nancy Forte

Telephone: (212) 816-5685

Facsimile: (212) 816-5527

     6. Representations and Warranties. The Guarantor represents and warrants that: (i) it is duly
organized and in good standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guarantee, and all necessary authority has been
obtained; (ii) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors’ rights and general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; (iii) the making and performance of this
Guarantee does not and will not violate the provisions of any applicable law, regulation or order,
and does not and will not result in the breach of, or constitute a default under, any material
agreement, instrument or document to which it is a party or by which it or any of its property may
be bound or affected, except to the extent disclosed in the registration statement registering the
issuance of this Guarantee and the Funding Agreement, as amended, supplemented or modified from
time to time (the “Registration Statement”), and to the extent that any such violation, breach or
default does not result in a material adverse effect on the Guarantor; and (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with, any governmental
authority required under applicable law and regulations for the making and performance of this
Guarantee have been obtained or made and are in full force and effect, except to the extent
disclosed in the Registration Statement and to the extent that the failure to acquire any such
consent, approval, license, authorization, filing or registration does not result in a material
adverse effect on the Guarantor.

     7. Notice of, and Consent to, Security Interest. The Trust hereby notifies the Guarantor that
it has granted to the Indenture Trustee, on behalf of the holders of the Notes, a security interest
in the Collateral (as defined in the Indenture), including, but not limited to, any and all payment
to be made by the Guarantor to the Trust under this Guarantee. The Trust hereby notifies the
Guarantor that it has collaterally assigned to the Indenture Trustee, for the benefit of the
holders of the Notes, this Guarantee. The Guarantor, by executing this Guarantee, hereby (i)
affirms that it has made or simultaneously will make changes to its books and records to reflect
such security interest and collateral assignment, (ii) consents to the security interest

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granted, and collateral assignment made, by the Trust to the Indenture Trustee of this
Guarantee, (iii) agrees to make all payments due under this Guarantee to the Collection Account (as
defined in the Indenture) or any other account designated in writing to the Guarantor by the
Indenture Trustee and (iv) agrees to comply with all orders of the Indenture Trustee with respect
to this Guarantee without any further consent from the Trust.

     8. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
GUARANTOR WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING
OUT OF THIS GUARANTEE. THIS GUARANTEE REPRESENTS THE FINAL AGREEMENT BETWEEN THE GUARANTOR AND THE
TRUST AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

	 	 	 	 	 
	 	 	PRINCIPAL FINANCIAL GROUP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Elizabeth D. Swanson
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Elizabeth D. Swanson
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Counsel
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:
	 	The Effective Date (as defined in the Funding Agreement)

Acknowledged and Agreed:

THE PRINCIPAL LIFE INCOME FUNDINGS

TRUST DESIGNATED IN THIS GUARANTEE

	 	 	 	 	 
	By:	 	U.S. Bank Trust National Association,
	 	 	not in its individual capacity, but solely in its
	 	 	capacity as trustee
	 
	 	 	 	 
	By:	 	Bankers Trust Company, N.A.,
	 	 	under Limited Power of Attorney, dated February 16, 2006
	 
	 	 	 	 
	By:

	 	/s/ Diana L. Cook
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name:

	 	Diana L. Cook	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	Vice President	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:	 	The Effective Date (as defined in the Funding Agreement)

4exv10w1

 

Exhibit 10.1

SECOND AMENDMENT AGREEMENT

     This SECOND AMENDMENT AGREEMENT (this “Amendment”) is made as of the 16th day of
March, 2007 among:

     (a) AGILYSYS, INC., an Ohio corporation (“Agilysys”);

     (b) each other US Borrower, as defined in the Credit Agreement;

     (c) each Foreign Borrower, as defined in the Credit Agreement, (each such Foreign
Borrower, together with each US Borrower shall be referred to herein, collectively, as
“Borrowers” and, individually, each a “Borrower”);

     (d) the Lenders, as defined in the Credit Agreement, as hereinafter defined;

     (e) LASALLE BANK NATIONAL ASSOCIATION, as lead arranger, book runner and administrative
agent for the Lenders under this Agreement (“Agent”);

     (f) NATIONAL CITY BANK, as syndication agent;

     (g) HARRIS N.A., as co-documentation agent;

     (h) CHARTER ONE BANK, N.A., as co-documentation agent; and

     (i) U.S. BANK NATIONAL ASSOCIATION, as managing agent.

     WHEREAS, Borrowers, Agent and the Lenders are parties to that certain Credit Agreement, dated
as of October 18, 2005, that provides, among other things, for loans and letters of credit
aggregating Two Hundred Million Dollars ($200,000,000), all upon certain terms and conditions (as
amended and as the same may from time to time be further amended, restated or otherwise modified,
the “Credit Agreement”);

     WHEREAS, Borrowers, Agent and the Lenders desire to amend the Credit Agreement to modify
certain provisions thereof and add certain provisions thereto;

     WHEREAS, each capitalized term used herein and defined in the Credit Agreement, but not
otherwise defined herein, shall have the meaning given such term in the Credit Agreement; and

     WHEREAS, unless otherwise specifically provided herein, the provisions of the Credit Agreement
revised herein are amended effective as of the date of this Amendment;

 

 

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein and for
other valuable consideration, Borrowers, Agent and the Lenders agree as follows:

     1. Amendment to Replace Definitions. Section 1.1 of the Credit Agreement is hereby
amended to delete the definitions of “Consolidated EBITDA”, “Consolidated Fixed Charges”,
“Consolidated Funded Indebtedness” and “Permitted Foreign Subsidiary Loans and Investments”
therefrom and to insert in place thereof, respectively, the following:

     “Consolidated EBITDA” shall mean, for any period, as determined on a Consolidated basis
and in accordance with GAAP, Consolidated Net Earnings from continuing operations of
Agilysys, as reported in Agilysys’ Consolidated income statement for such period, as
reflected in Agilysys’ Quarterly Report on Form 10-Q or Agilysys’ Annual Report on Form 10-K
filed with the SEC for such period, as applicable, plus the aggregate amounts deducted in
determining such Consolidated Net Earnings from continuing operations in respect of:

     (a) Consolidated Income Tax Expense;

     (b) Consolidated Interest Expense (including, to the extent deducted from
Consolidated Net Earnings from continuing operations of Agilysys, the amortization
of deferred financing costs, interest expense on deferred compensation arrangements,
if any, and payments made to obtain Hedge Agreements);

     (c) Consolidated Depreciation and Amortization Charges;

     (d) Consolidated restructuring charges for the KeyLink Disposition as reported
in Agilysys’ Consolidated financial statements for any such period during the fiscal
year of Agilysys ending either on March 31, 2007 or March 31, 2008, in each case as
reflected in Agilysys’ Quarterly Report on Form 10-Q or Agilysys’ Annual Report on
Form 10-K filed with the SEC for such period, as applicable, in an aggregate amount
not to exceed (i) Five Million Dollars ($5,000,000) for all such periods during the
fiscal year ending on March 31, 2007, and (ii) Five Million Dollars ($5,000,000) for
all such periods during the fiscal year ending on March 31, 2008;

     (e) (i) extraordinary non-cash losses not incurred in the ordinary course of
business, minus (ii) extraordinary non-cash gains not incurred in the ordinary
course of business; and

     (f) Consolidated one-time restructuring charges for each Acquisition completed
on or after the KeyLink Disposition Date, in each case as approved by Agent, in its
sole discretion, in an amount not to exceed Two Million Five Hundred Thousand
Dollars ($2,500,000) for each such Acquisition;

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provided that (A) the one-time tax payment of up to One Hundred Fifty Million Dollars
($150,000,000) in connection with the KeyLink Disposition shall be excluded from the
calculation of Consolidated EBITDA; (B) for the period in which the KeyLink Disposition
occurs, all operations of the “KeyLink Systems” business shall be deemed to be continuing
operations for purposes of the calculation of Consolidated EBITDA; and (C) Consolidated
EBITDA shall be calculated on a pro forma basis giving effect to positive earnings of any
acquired entity pursuant to an Acquisition permitted under this Agreement, for the most
recently completed four fiscal quarters of Agilysys, using, for such Acquisition, as
applicable, historical financial statements containing such adjustments as are approved by
Agent for inclusion in such calculation, which adjustments shall be satisfactory to Agent,
in the good-faith exercise of its reasonable credit judgment. The aforementioned
adjustments referenced in subpart (C) of the foregoing proviso may be broken down by fiscal
quarter in Agilysys’ reasonable judgment.

     “Consolidated Fixed Charges” shall mean, at any date, as determined on a Consolidated
basis and in accordance with GAAP, without duplication, the aggregate of (a) Consolidated
Interest Expense (including, without limitation, the “imputed interest” portion of capital
leases, synthetic leases and asset securitizations, if any), (b) rent expenses, (c)
principal payments on Consolidated Funded Indebtedness (other than optional prepayments of
the Loans or any other Indebtedness), (d) Consolidated Income Tax Expense paid in cash, and
(e) cash expenditures relating to Capital Distributions (other than the 2007 Redemption);
provided that (i) the one-time tax payment of up to One Hundred Fifty Million Dollars
($150,000,000) in connection with the KeyLink Disposition shall be excluded from the
calculation of Consolidated Fixed Charges, and (ii) with respect to any Acquisition, such
acquired entity’s historical financial information (as appropriate, in the sole discretion
of Agent) shall be included in the calculation of Consolidated Fixed Charges.

     “Consolidated Funded Indebtedness” shall mean, for any period, as determined on a
Consolidated basis, the sum of (a) all Indebtedness for borrowed money, as determined in
accordance with GAAP, (b) all obligations (contingent or otherwise) under any letter of
credit or banker’s acceptance, and (c) Capitalized Lease Obligations and Indebtedness
pursuant to synthetic leases, as determined in accordance with GAAP; provided that, during
the period from the KeyLink Disposition Date until the Financial Covenant Effective Date,
Consolidated Funded Indebtedness shall exclude all contingent obligations under undrawn
letters of credit.

     “Permitted Foreign Subsidiary Loans and Investments” shall mean:

     (a) the investments by Agilysys or a Domestic Subsidiary in a Foreign
Subsidiary (that is not a Credit Party), in such amounts existing as of the Closing
Date and set forth on Schedule 5.11 hereto;

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     (b) the loans by Agilysys or a Domestic Subsidiary to a Foreign Subsidiary
(that is not a Credit Party), in such amounts existing as of the Closing Date and
set forth on Schedule 5.11 hereto;

     (c) any investment by a Foreign Subsidiary in, or loan from a Foreign
Subsidiary to, or guaranty from a Foreign Subsidiary of Indebtedness of, a Credit
Party or any other Foreign Subsidiary; and

     (d) any Non-Credit Party Exposure, so long as the Non-Credit Party Exposure
does not exceed the aggregate amount of Thirty Million Dollars ($30,000,000) at any
time outstanding.

     2. Amendment to Revise Definitions.

     (a) Amendment to Revise the Definition of Applicable Facility Fee Rate.
Section 1.1 of the Credit Agreement is hereby amended to add the following new provision to
the end of the definition of “Applicable Facility Fee Rate”:

Anything in this Agreement to the contrary notwithstanding, for the period from the
KeyLink Disposition Date through the Applicable Margin Reset Date, the Applicable
Facility Fee Rate shall be twenty-two and one-half (22.50) basis points; provided
that, if for any fiscal quarter during such period the Leverage Ratio exceeds or
equals 1.50 to 1.00, then the Applicable Facility Fee Rate shall be as set forth in
the above grid, as appropriate.

     (b) Amendment to Revise the Definition of Applicable Margin. Section 1.1 of
the Credit Agreement is hereby amended to add the following new provision to the end of the
definition of “Applicable Margin”:

Anything in this Agreement to the contrary notwithstanding, for the period from the
KeyLink Disposition Date through the Applicable Margin Reset Date, the Applicable
Margin shall be (i) one hundred two and one-half (102.50) basis points for LIBOR
Fixed Rate Loans, and (ii) zero (0.00) basis points for Base Rate Loans; provided
that, if for any fiscal quarter during such period the Leverage Ratio exceeds or
equals 1.50 to 1.00, then the Applicable Margin shall be as set forth in the above
grid, as appropriate.

     3. Addition to Definitions. Section 1.1 of the Credit Agreement is hereby amended to
add the following new definitions thereto:

     “2007 Required Net Worth Amount” shall mean the Consolidated Net Worth of Agilysys as
of the KeyLink Disposition Date, after giving effect to the KeyLink Disposition.

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     “2007 Redemption” shall mean the repurchase by Agilysys, prior to December 31, 2007, of
up to six million (6,000,000) shares of the capital stock of Agilysys with a portion of the
proceeds from the KeyLink Disposition.

     “2007 Redemption Date” shall mean the date that the 2007 Redemption is completed.

     “Agilysys Canada” shall mean Agilysys Canada, Inc., a company organized under the laws
of Ontario, Canada.

     “Applicable Margin Reset Date” shall mean the first date after the KeyLink Disposition
Date that Consolidated EBITDA for the most recently completed twelve (12) calendar months,
equals or exceeds Twenty-Five Million Dollars ($25,000,000).

     “Available Cash Liquidity” shall mean, at any date, the aggregate amount of all
unrestricted cash-on-hand of Agilysys held at financial institutions located in the United
States.

     “Financial Covenant Effective Date” shall mean the earliest of (a) the date that any
Revolving Credit Exposure exists (other than any Letter of Credit Exposure not in excess of
the aggregate amount of Five Million Dollars ($5,000,000) at any time), (b) the date of the
first request for a Credit Event after the KeyLink Disposition Date, (c) the date that
Agilysys delivers to Agent a Compliance Certificate evidencing compliance with the covenants
set forth in Section 5.7(a) through Section 5.7(d) hereof, or (d) December 31, 2007.

     “KeyLink Asset Purchase Agreement” shall mean that certain Asset Purchase Agreement,
dated as of January 2, 2007, among Agilysys, Agilysys Canada, Arrow Electronics, Inc., a New
York corporation, Support Net, Inc., an Indiana corporation, and Arrow Electronics Canada
Ltd., a corporation organized under the laws of Canada.

     “KeyLink Disposition” shall mean the sale by Agilysys and Agilysys Canada of certain of
their respective assets relating to the operation of their “KeyLink Systems” business,
pursuant to the KeyLink Asset Purchase Agreement.

     “KeyLink Disposition Date” shall mean the date that the KeyLink Disposition is
consummated, pursuant to the KeyLink Asset Purchase Agreement.

     4. Amendment to Financial Reporting Provisions. Section 5.3 of the Credit Agreement
is hereby amended to delete subsection (c) therefrom and to insert in place thereof the following:

     (c) Compliance Certificate. Agilysys shall deliver to Agent and the Lenders,
concurrently with the delivery of the financial statements set forth in subsections (a) and
(b) above, (i) from the period commencing with the KeyLink Disposition Date through

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the day prior to the Financial Covenant Effective Date, a certificate from the
President or Chief Financial Officer of Agilysys calculating the Leverage Ratio as of the
end of the immediately preceding fiscal quarter of Agilysys, and (ii) at all times other
than the period commencing with the KeyLink Disposition Date through the day prior to the
Financial Covenant Effective Date, a Compliance Certificate.

     5. Amendment to Change in Business Covenant. Section 5.5 of the Credit Agreement is
hereby amended to delete subsection (b) therefrom and to insert in place thereof the following:

     (b) No Company shall engage in any business if, as a result thereof, the general nature
of the business of the Companies taken as a whole would be substantially changed from the
general nature of the business the Companies are engaged in on the Closing Date (other than
any change in the general nature of the business of the Companies by virtue of the KeyLink
Disposition).

     6. Amendment to Financial Covenants. Article V of the Credit Agreement is hereby
amended to delete Section 5.7 therefrom and to insert in place thereof the following:

     Section 5.7. Financial Covenants.

     (a) Leverage Ratio. Agilysys shall not suffer or permit at any time the
Leverage Ratio to exceed 3.00 to 1.00; provided that Borrowers shall not be required to be
in compliance with this Section 5.7(a) for the period from the KeyLink Disposition Date
through the day prior to the Financial Covenant Effective Date (it being understood that
effective on the Financial Covenant Effective Date, Borrowers shall be required to be in
compliance with this Section 5.7(a) as of the last day of the most recently completed fiscal
quarter of Agilysys).

     (b) Fixed Charge Coverage Ratio. Agilysys shall not suffer or permit at any
time the Fixed Charge Coverage Ratio to be less than 1.20 to 1.00; provided that Borrowers
shall not be required to be in compliance with this Section 5.7(b) for the period from the
KeyLink Disposition Date through the day prior to the Financial Covenant Effective Date (it
being understood that effective on the Financial Covenant Effective Date, Borrowers shall be
required to be in compliance with this Section 5.7(b) as of the last day of the most
recently completed fiscal quarter of Agilysys).

     (c) Liquidity Ratio. During the period from the Closing Date through the date
that is ninety (90) days after the KeyLink Disposition Date, for any fiscal quarter of
Agilysys in which the Leverage Ratio equals or exceeds 2.00 to 1.00, Agilysys shall not
suffer or permit the Liquidity Ratio, for such fiscal quarter, to be less than 1.00 to 1.00;
provided that Borrowers shall not be required to be in compliance with this Section 5.7(c)
for the period from the KeyLink Disposition Date through the day prior to the Financial
Covenant Effective Date (it being understood that effective on the Financial Covenant

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Effective Date, Borrowers shall be required to be in compliance with this Section 5.7(c) as
of the last day of the most recently completed fiscal quarter of Agilysys).

     (d) Consolidated Net Worth. Agilysys shall not suffer or permit at any time
the Consolidated Net Worth, for the most recently completed fiscal year of Agilysys, to be
less than the current minimum amount required, which current minimum amount required shall
be:

     (i) on the Closing Date through March 30, 2006, the Closing Date Required Net
Worth Amount;

     (ii) on March 31, 2006 through March 30, 2007, the Closing Date Required Net
Worth Amount plus the Increase Amount for March 31, 2006;

     (iii) on March 31, 2007 (unless such date is the KeyLink Disposition Date, and
in such case, this subpart (iii) shall have no effect) through the day prior to the
KeyLink Disposition Date, the Closing Date Required Net Worth Amount plus the
Increase Amount for March 31, 2006 and the Increase Amount for March 31, 2007; and

     (iv) on the KeyLink Disposition Date through March 30, 2008, the 2007 Required
Net Worth Amount, with such current minimum amount required to be positively
increased by the Increase Amount on March 31, 2008, and by an additional Increase
Amount on the last day of each succeeding fiscal year of Agilysys thereafter.

As used herein, the term “Increase Amount” shall mean an amount equal to (A) fifty percent
(50%) of positive Consolidated Net Earnings for the fiscal year then ended (with no
deduction for losses), plus (B) one hundred percent (100%) of the proceeds of any equity
offering by the Companies, or any debt offering of the Companies, to the extent converted
into equity; provided that (1) Borrowers shall not be required to be in compliance with this
Section 5.7(d) for the period from the KeyLink Disposition Date through the day prior to the
Financial Covenant Effective Date (it being understood that effective on the Financial
Covenant Effective Date, Borrowers shall be required to be in compliance with this Section
5.7(d) as of the last day of the most recently completed fiscal quarter of Agilysys); (2) on
and after the 2007 Redemption Date, the current minimum amount required for the Consolidated
Net Worth requirement shall be decreased by the aggregate amount paid by Agilysys for the
repurchase of the capital stock of Agilysys pursuant to the 2007 Redemption; and (3) if the
KeyLink Disposition does not take place, then Consolidated Net Worth shall be increased as
set forth in subpart (iii) above on March 31, 2007, and by an additional Increase Amount on
the last day of each succeeding fiscal year of Agilysys thereafter.

     (e) Minimum Available Cash Liquidity. Agilysys shall not suffer or permit at
any time the Available Cash Liquidity to be less than One Hundred Million Dollars

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($100,000,000) on the KeyLink Disposition Date through the Financial Covenant Effective
Date.

     7. Amendment to Permitted Borrowing Covenant. Section 5.8 of the Credit Agreement is
hereby amended to delete subsection (i) therefrom and to insert in place thereof the following new
subsection (i):

     (i) for the period from the Closing Date through the date that is ninety (90) days
after the KeyLink Disposition Date, unsecured obligations owing with respect to the
Agreement for Inventory Financing (or, if the Agreement for Inventory Financing has been
terminated, any other agreement or arrangement with IBM Credit LLC or any of its affiliates
with respect to the purchase of Inventory); provided that (i) effective on the KeyLink
Disposition Date through the date that is ninety (90) days after the KeyLink Disposition
Date, the aggregate amount of all such obligations shall not exceed Thirty Million Dollars
($30,000,000), and (ii) effective on the date that is ninety-one (91) days after the KeyLink
Disposition Date and thereafter, the aggregate amount of all such obligations shall not
exceed Ten Million Dollars ($10,000,000);

     8. Additions to Merger and Sale of Assets Covenant. Section 5.12 of the Credit
Agreement is hereby amended to add the following new subsection (m) at the end thereto:

     (m) Agilysys and Agilysys Canada may sell their respective assets pursuant to the
KeyLink Disposition;

     9. Amendment to Pledge of Stock Provisions. Section 5.20 of the Credit Agreement is
hereby amended to delete subsection (b) therefrom and to insert in place thereof the following:

     (b) Pledge of Stock or Other Ownership Interest. If, as of the last day of any
fiscal quarter, the Obligor Asset Ratio or the Obligor EBITDA Ratio shall be less than 0.80
to 1.00, then Administrative Borrower shall provide prompt written notice to Agent and the
Lenders and shall pledge, or cause a Domestic Subsidiary to pledge, within sixty (60) days
of such notice, sixty-five percent (65%) of the outstanding shares or other ownership
interests of first-tier Foreign Subsidiaries that would cause, with the addition of such
Foreign Subsidiaries as Pledged Foreign Subsidiaries, the Obligor Asset Ratio and the
Obligor EBITDA Ratio to be equal to or greater than 0.80 to 1.00; provided that Borrowers
shall not be required to be in compliance with this Section 5.20(b) for the period from the
KeyLink Disposition Date through the day prior to the Financial Covenant Effective Date.
Any pledge by a Credit Party pursuant to this subsection (b) shall be evidenced by a pledge
agreement, in form and substance reasonably satisfactory to Agent, executed by the
appropriate Credit Party, with the requisite share certificates or other evidence of equity,
if any, to be delivered to Agent, for the benefit of the Lenders.

     10. Amendment to Schedule 3. The Credit Agreement is hereby amended to delete
Schedule 3 (Guarantors of Payment) therefrom and to insert in place thereof the new
Schedule 3 attached hereto.

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     11. Closing Items. Concurrently with the execution of this Amendment, Agilysys shall:

     (a) cause Agilysys MD, Inc. to execute and deliver to Agent, for the benefit of the Lenders, a
Guaranty of Payment, in form and substance satisfactory to Agent, together with resolutions,
Organizational Documents and any other agreement or document required by Agent, in its reasonable
discretion;

     (b) cause each Guarantor of Payment to execute the attached Acknowledgement and Agreement;

     (c) pay an amendment fee in an amount equal to Two Hundred Thousand Dollars ($200,000) to
Agent, for the pro-rata benefit of each Lender that shall have executed and delivered this
Amendment to Agent on or before 5:00 P.M. (Eastern time) on March 15, 2007; and

     (d) pay all legal fees and expenses of Agent in connection with this Amendment.

     12. Representations and Warranties. (a) Each Borrower has the legal power and
authority to execute and deliver this Amendment; (b) the officers executing this Amendment have
been duly authorized to execute and deliver the same and bind each Borrower with respect to the
provisions hereof; (c) the execution and delivery hereof by each Borrower and the performance and
observance by each Borrower of the provisions hereof do not violate or conflict with the
organizational agreements of such Borrower or any law applicable to such Borrower or result in a
breach of any provision of or constitute a default under any other agreement, instrument or
document binding upon or enforceable against such Borrower; (d) no Default or Event of Default
exists under the Credit Agreement, nor will any occur immediately after the execution and delivery
of this Amendment or by the performance or observance of any provision hereof; (e) no Borrower is
aware of any claim or offset against, or defense or counterclaim to, such Borrower’s obligations or
liabilities under the Credit Agreement or any Related Writing; and (f) this Amendment constitutes a
valid and binding obligation of each Borrower in every respect, enforceable in accordance with its
terms.

     13. References to Credit Agreement. Each reference that is made in the Credit
Agreement or any Related Writing shall hereafter be construed as a reference to the Credit
Agreement as amended hereby. Except as herein otherwise specifically provided, all terms and
provisions of the Credit Agreement are confirmed and ratified and shall remain in full force and
effect and be unaffected hereby. This Amendment is a Related Writing.

     14. Waiver. Each Borrower, by signing below, hereby waives and releases Agent and the
Lenders and their respective directors, officers, employees, attorneys, affiliates and subsidiaries
from any and all claims, offsets, defenses and counterclaims of which such Borrower is aware, such
waiver and release being with full knowledge and understanding of the circumstances and effect
thereof and after having consulted legal counsel with respect thereto.

9

 

     15. Counterparts. This Amendment may be executed in any number of counterparts, by
different parties hereto in separate counterparts and by facsimile signature, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.

     16. Headings. The headings, captions and arrangements used in this Amendment are for
convenience only and shall not affect the interpretation of this Amendment.

     17. Severability. Any term or provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder
of this Amendment and the effect thereof shall be confined to the term or provision so held to be
invalid or unenforceable.

     18. Governing Law. The rights and obligations of all parties hereto shall be governed
by the laws of the State of Ohio, without regard to principles of conflicts of laws.

[Remainder of page intentionally left blank.]

11260511.6

10

 

     JURY TRIAL WAIVER. BORROWERS, THE LENDERS AND AGENT, TO THE EXTENT PERMITTED BY LAW,
EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWERS, THE LENDERS AND AGENT, OR ANY THEREOF, ARISING OUT
OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

     IN WITNESS WHEREOF, the parties have executed and delivered this Second Amendment Agreement as
of the date first set forth above.

	 	 	 
	AGILYSYS, INC.
	 
	 	 
	By:

	 	/s/ Martin F. Ellis
	 

	 	 
	 

	 	Martin F. Ellis

Executive Vice President, Treasurer and
Chief Financial Officer
	 
	 	 
	LASALLE BANK NATIONAL

     ASSOCIATION, as Agent and as a Lender
	 
	 	 
	By:

	 	/s/ Brian H. Gallagher
	 

	 	 
	 

	 	Brian H. Gallagher

Vice President

	 	 	 
	NATIONAL CITY BANK, as Syndication

     Agent and as a Lender
	 
	 	 
	By:

	 	/s/ Marguerite C. Burtzlaff
	 

	 	 
	Name:

	 	Marguerite C. Burtzlaff
	 

	 	 
	Title:

	 	Senior Vice President
	 

	 	 

 

Signature Page 1 of 3

to the Second Amendment Agreement

 

 

	 	 	 
	HARRIS N.A., as Co-Documentation Agent

     and as a Lender
	 
	 	 
	By:

	 	/s/ Christopher C. Cavaiani
	 

	 	 
	Name:

	 	Christopher C. Cavaiani
	 

	 	 
	Title:

	 	Vice President
	 

	 	 
	 
	 	 
	CHARTER ONE BANK, N.A.,

     as Co-Documentation Agent and as a Lender
	 
	 	 
	By:

	 	/s/ Michael Dolson
	 

	 	 
	Name:

	 	Michael Dolson
	 

	 	 
	Title:

	 	Vice President
	 

	 	 
	 
	 	 
	U.S. BANK NATIONAL ASSOCIATION,

     as Managing Agent and as a Lender
	 
	 	 
	By:
	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	Title:
	 	 
	 

	 	 
	 
	 	 
	JPMORGAN CHASE BANK, N.A.
	 
	 	 
	By:

	 	/s/ Peter M. Ling
	 

	 	 
	Name:

	 	Peter M. Ling
	 

	 	 
	Title:

	 	Managing Director
	 

	 	 
	 
	 	 
	PNC BANK, NATIONAL ASSOCIATION
	 
	 	 
	By:

	 	/s/ Joseph G. Moran
	 

	 	 
	Name:

	 	Joseph G. Moran
	 

	 	 
	Title:

	 	Managing Director
	 

	 	 

 

Signature Page 2 of 3

to the Second Amendment Agreement

 

 

	 	 	 
	FIFTH THIRD BANK
	 
	 	 
	By:

	 	/s/ Roy C. Lanctot
	 

	 	 
	Name:

	 	Roy C. Lanctot
	 

	 	 
	Title:

	 	Vice President
	 

	 	 
	 
	 	 
	FIRSTMERIT BANK, N.A.
	 
	 	 
	By:

	 	/s/ Robert G. Morlan
	 

	 	 
	Name:

	 	Robert G. Morlan
	 

	 	 
	Title:

	 	Senior Vice President
	 

	 	 
	 
	 	 
	HSBC BANK USA, NATIONAL ASSOCIATION
	 
	 	 
	By:

	 	/s/ Robert J. McArdle
	 

	 	 
	Name:

	 	Robert J. McArdle
	 

	 	 
	Title:

	 	Vice President, Commercial Banking
	 

	 	 

 

Signature Page 3 of 3

to the Second Amendment Agreement

 

 

ACKNOWLEDGMENT AND AGREEMENT

The undersigned consent and agree to and acknowledge the terms of the foregoing Second
Amendment Agreement dated as of March 16, 2007. The undersigned further agree that the obligations
of the undersigned pursuant to the Guaranty of Payment executed by the undersigned are hereby
ratified and shall remain in full force and effect and be unaffected hereby.

The undersigned hereby waive and release Agent and the Lenders and their respective directors,
officers, employees, attorneys, affiliates and subsidiaries from any and all claims, offsets,
defenses and counterclaims of any kind or nature, absolute and contingent, of which the undersigned
are aware or should be aware, such waiver and release being with full knowledge and understanding
of the circumstances and effect thereof and after having consulted legal counsel with respect
thereto.

JURY TRIAL WAIVER. THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG BORROWERS, AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF,
IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

	 	 	 	 	 	 	 
	AGILYSYS NV, LLC	 	AGILYSYS MD, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Tina Stehle
	 	By:
	 	/s/ Tina Stehle
	 

	 	 
	 	 	 	 
	Name:

	 	Tina Stehle
	 	Name:
	 	Tina Stehle
	 

	 	 
	 	 	 	 
	Title:

	 	Vice President & General Manager
	 	Title:
	 	President
	 

	 	 
	 	 	 	 

 

Signature Page to the

Acknowledgment and Agreement

 

 

SCHEDULE 3

GUARANTORS OF PAYMENT

Domestic Guarantors of Payment

Agilysys NV, LLC, a Delaware limited liability company

Agilysys MD, Inc., a Maryland corporation

Foreign Guarantors of Payment

None as of the Closing Date.

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