Document:

EXHIBIT 10.3

 

 

COLLATERAL TRUST AGREEMENT 

 

dated as of December 23, 2009

 

	
among

	
GXS WORLDWIDE, INC.,

 

the other Grantors from time to time party hereto,

 

 

WELLS FARGO FOOTHILL, INC., 

as Administrative Agent under the Revolving Credit Agreement,

 

 

U.S. BANK NATIONAL ASSOCIATION, 

as Trustee under the Indenture

 

	
and

	
WILMINGTON TRUST FSB,

as Collateral Trustee

 

  

  

  

  

 

	
TABLE OF CONTENTS

 

	  	  	
PAGE

	
ARTICLE 1.

	
DEFINITIONS; PRINCIPLES OF CONSTRUCTION

	
1

	
SECTION 1.1

	
Defined Terms

	
1

	
SECTION 1.2

	
Rules of Interpretation

	
18

	 	 	 
	
ARTICLE 2.

	
THE TRUST ESTATES

	
19

	
SECTION 2.1

	
Declaration of Senior Trust

	
19

	
SECTION 2.2

	
Declaration of Junior Trust

	
20

	
SECTION 2.3

	
Priority of Liens

	
20

	
SECTION 2.4

	
Restrictions on Enforcement of Junior Liens

	
21

	
SECTION 2.5

	
Waiver of Right of Marshalling.

	
23

	
SECTION 2.6

	
Discretion in Enforcement of Priority Liens.

	
23

	
SECTION 2.7

	
Amendments to Priority Lien Documents and Discretion in Enforcement of Priority Lien Obligations.

	
24

	
SECTION 2.8

	
Insolvency or Liquidation Proceedings

	
25

	
SECTION 2.9

	
Collateral Shared Equally and Ratably within Class

	
26

	
SECTION 2.10

	
Sharing of Collateral by Holders of Priority Lien Obligations

	
26

	
SECTION 2.11

	
Equal and Ratable Sharing of Collateral by Holders of Junior Lien Obligations

	
27

	
SECTION 2.12

	
Ranking of Junior Liens

	
27

	 	 	 
	
ARTICLE 3.

	
OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

	
28

	
SECTION 3.1

	
Undertaking of the Collateral Trustee

	
28

	
SECTION 3.2

	
Release or Subordination of Liens

	
29

	
SECTION 3.3

	
Enforcement of Liens

	
29

	
SECTION 3.4

	
Application of Proceeds

	
30

	
SECTION 3.5

	
Powers of the Collateral Trustee

	
32

	
SECTION 3.6

	
Documents and Communications

	
32

	
SECTION 3.7

	
For Sole and Exclusive Benefit of Holders of Secured Debt Obligations

	
33

	
SECTION 3.8

	
Additional Secured Debt

	
33

	 	 	 
	
ARTICLE 4.

	
OBLIGATIONS ENFORCEABLE BY GXS AND THE OTHER GRANTORS

	
34

	
SECTION 4.1

	
Release of Liens on Collateral

	
34

	
SECTION 4.2

	
Delivery of Copies to Secured Debt Representatives

	
37

	
SECTION 4.3

	
Collateral Trustee not Required to Serve, File or Record

	
37

	
SECTION 4.4

	
Release of Liens in Respect of Notes

	
37

	 	 	 
	
ARTICLE 5.

	
IMMUNITIES OF THE COLLATERAL TRUSTEE

	
38

	
SECTION 5.1

	
No Implied Duty

	
38

	
SECTION 5.2

	
Appointment of Agents and Advisors

	
38

	
SECTION 5.3

	
Other Agreements

	
38

	
SECTION 5.4

	
Solicitation of Instructions

	
38

	
SECTION 5.5

	
Limitation of Liability

	
38

	
SECTION 5.6

	
Documents in Satisfactory Form

	
38

 

 

  

i

  

 

	
SECTION 5.7

	
Entitled to Rely

	
39

	
SECTION 5.8

	
Secured Debt Default

	
39

	
SECTION 5.9

	
Actions by Collateral Trustee

	
39

	
SECTION 5.10

	
Security or Indemnity in favor of the Collateral Trustee

	
39

	
SECTION 5.11

	
Rights of the Collateral Trustee

	
39

	
SECTION 5.12

	
Limitations on Duty of Collateral Trustee in Respect of Collateral

	
40

	
SECTION 5.13

	
Assumption of Rights, Not Assumption of Duties

	
40

	
SECTION 5.14

	
No Liability for Clean Up of Hazardous Materials

	
41

	 	 	 
	
ARTICLE 6.

	
RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE

	
41

	
SECTION 6.1

	
Resignation or Removal of Collateral Trustee

	
41

	
SECTION 6.2

	
Appointment of Successor Collateral Trustee

	
41

	
SECTION 6.3

	
Succession

	
42

	
SECTION 6.4

	
Merger, Conversion or Consolidation of Collateral Trustee

	
42

	 	 	 
	
ARTICLE 7.

	
MISCELLANEOUS PROVISIONS

	
42

	
SECTION 7.1

	
Amendment.

	
42

	
SECTION 7.2

	
Voting

	
45

	
SECTION 7.3

	
Further Assurances; Insurance

	
45

	
SECTION 7.4

	
Perfection of Junior Trust Estate

	
46

	
SECTION 7.5

	
Successors and Assigns

	
46

	
SECTION 7.6

	
Delay and Waiver

	
47

	
SECTION 7.7

	
Notices

	
47

	
SECTION 7.8

	
Notice Following Discharge of Priority Lien Obligations

	
49

	
SECTION 7.9

	
Entire Agreement

	
49

	
SECTION 7.10

	
Compensation; Expenses

	
49

	
SECTION 7.11

	
Indemnity

	
50

	
SECTION 7.12

	
Severability

	
51

	
SECTION 7.13

	
Headings

	
51

	
SECTION 7.14

	
Obligations Secured

	
51

	
SECTION 7.15

	
Governing Law

	
51

	
SECTION 7.16

	
Consent to Jurisdiction

	
51

	
SECTION 7.17

	
Waiver of Jury Trial

	
51

	
SECTION 7.18

	
Counterparts

	
52

	
SECTION 7.19

	
Effectiveness

	
52

	
SECTION 7.20

	
Grantors and Additional Grantors

	
52

	
SECTION 7.21

	
Continuing Nature of this Agreement

	
52

	
SECTION 7.22

	
Insolvency

	
53

	
SECTION 7.23

	
Rights and Immunities of Secured Debt Representatives

	
53

 

	
EXHIBIT A – Addition Secured Debt Designation

	
EXHIBIT B -- Form of Collateral Trust Joinder—Additional Secured Debt

	
EXHIBIT C -- Form of Collateral Trust Joinder—Additional Grantors

  

ii

  

 

This Collateral Trust Agreement (this “ Agreement”) is dated as of December 23, 20 09 and is by and among GXS Worldwide, Inc., a Delaware corporation (together with its successors, “GXS”), the Grantors from time to time party hereto, Wells Fargo Foothill, Inc., as Administrative Agent (as defined below), U.S. Bank National Association, as Trustee (as defined below), and Wilmington Trust FSB, as Collateral Trustee (in such capacity and together with its successors in such capacity, the “ Collateral Trustee”).

 

RECITALS

 

GXS intends to enter into a Revolving Credit Agreement, dated as of the date hereof, among GXS, the guarantors party thereto, Wells Fargo Foothill, Inc., as administrative agent (in such capacity and together with its successors and assigns, the “ Administrative Agent”), and the lenders party thereto, which will provide for up to $ 50,000,000 of revolving credit borrowings.

 

GXS intends to issue 93⁄4% Senior Secured Notes (the “ Notes”) in an aggregate principal amount of $ 785,000,000 pursuant to an Indenture dated as of the date hereof (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Indenture”) among GXS , the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity and together with its successors in such capacity, the “ Trustee”).

 

Capitalized terms used in this Agreement have the meanings assigned to them above or in Article 1 below.

 

GXS and the other Grantors intend to secure the obligations under the Revolving Credit Agreement, the Notes and any future Priority Lien Obligations on a first priority basis and, subject to such priority, intend to secure any future Junior Lien Obligations, with Liens on all current and future Collateral to the extent that such Liens have been provided for in the applicable Security Documents.

 

This Agreement sets forth the terms on which each Secured Party has appointed the Collateral Trustee to act as the collateral trustee for the current and future holders of the Secured Debt Obligations to receive, hold, maintain, administer and distribute the Collateral at any time delivered to the Collateral Trustee or the subject of the Security Documents, and to enforce the Security Documents and all interests, rights, powers and remedies of the Collateral Trustee with respect thereto or thereunder and the proceeds thereof.

 

AGREEMENT

 

In consideration of the premises and the mutual agreements herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

ARTICLE 1.  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

SECTION 1.1  Defined Terms.  The following terms will have the following meanings:

 

“ Act of Required Debtholders” means, as to any matter at any time:

 

  

 

  

(1)           prior to the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of more than 50% of the sum of:

 

(a)           the aggregate outstanding principal amount of Priority Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and

 

(b)           the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt;

 

provided, however, that after (1) the termination or expiration of all commitments to extend credit that would, when funded, constitute Priority Lien Debt, (2) the payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit), (3) the discharge or cash collateralization (at the lower of (a) 105% of the aggregate undrawn amount or (b) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt, and (4) the payment in full in cash of all other Priority Lien Obligations other than any Priority Lien Obligations consisting of Banking Product Obligations, Hedging Obligations and Contingent Liabilities, the term “Act of Required Debtholders” will mean the holders of more than 50% of the sum of the aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Priority Lien Obligations consisting of a Hedging Obligation) or, with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Priority Lien Obligations consisting of Hedging Obligations; provided that the “settlement amount” (or similar term) as of the last business day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request; provided further, that any Hedging Obligation with a “settlement amount” (or similar term) that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of the Required Debtholders; and

 

(2)           at any time after the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of more than 50% of the sum of:

 

(a)           the aggregate outstanding principal amount of Junior Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and

 

(b)           the aggregate unfunded commitments to extend credit which, when funded, would constitute Junior Lien Debt;

 

provided, however, that after (1) the termination or expiration of all commitments to extend credit that, when funded, would constitute Junior Lien Debt, (2) the payment in full in cash of the principal of and interest and premium (if any) on all Junior Lien Debt (other than any undrawn 

 

  

2

  

 

letters of credit), (3) the discharge or cash collateralization (at the lower of (a) 105% of the aggregate undrawn amount or (b) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Junior Lien Document) of all outstanding letters of credit constituting Junior Lien Debt, and (4) the payment in full in cash of all other Junior Lien Obligations other than any Junior Lien Obligations consisting of Hedging Obligations and Contingent Liabilities, the term “Act of Required Debtholders” will mean the holders of more than 50% of the sum of the aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Junior Lien Obligations consisting of a Hedging Obligation) or, with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Junior Lien Obligations consisting of Hedging Obligations; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request; provided further, that any Hedging Obligation with a “settlement amount” (or similar term) that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of the Required Debtholders.”

 

For purposes of this definition, (a)  Secured Debt registered in the name of, or beneficially owned by, GXS or any Affiliate of GXS will be deemed not to be outstanding and (b) votes will be determined in accordance with Section 7.2.

 

“Acquisition” means the acquisition of Inovis International, Inc. in a stock purchase pursuant to the Acquisition Agreement.

 

“Acquisition Agreement” means the Agreement and Plan of Merger, dated as of December 7, 2009, among GXS Holdings, Inc., a Delaware corporation, Inovis International, Inc., a Delaware corporation, Grirus Holding Company, Inc., a Delaware corporation, Greyhound Merger Sub, Inc., a Delaware corporation, Iris Merger Sub, Inc., a Delaware corporation, and CCG Investment Fund, L.P., a Delaware limited partnership, and Cerberus Institutional Partners, L.P., a Delaware limited partnership, as the Iris stockholder representatives.

 

“ Additional Secured Debt” has the meaning set forth in Section 3.8.

 

“Additional Secured Debt Designation” means a notice in substantially the form of Exhibit A.

 

“ Administrative Agent” has the meaning set forth in the recitals.

 

“ Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control,” when used with respect to any Person means, the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“ Agreement” has the meaning set forth in the preamble .

 

  

3

  

“Banking Product Obligations” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of any treasury, depository and cash management services and automated clearing house transfers of funds services provided by a Lender under the Revolving Credit Agreement or any of its banking affiliates, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith, in each case designated by GXS as Banking Product Obligations from time to time by written notice to the Administrative Agent.

 

“ Board of Directors” means the Board of Directors of GXS or any committee thereof.

 

“ Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

 

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

 

“ Capital Stock” means:

 

(1)  in the case of a corporation, corporate stock;

 

(2)  in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)  in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)  any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Class” means, (1) in the case of Priority Lien Debt, every Series of Priority Lien Debt, taken together, and (2) in the case of Junior Lien Debt, every Series of Junior Lien Debt, taken together.

 

“Closing Date” means the earlier of (i) the date when the Notes are issued or (ii) the date when all conditions in Section 3.01 of the Revolving Credit Agreement are satisfied.

 

“Closing Date Hedge” has the meaning ascribed to such term in the Revolving Credit Agreement.

 

“ Collateral” means all properties and assets at any time owned or acquired by GXS or any of the other Grantors, except,

 

(1)           Excluded Assets;

 

(2)           any properties and assets in which the Collateral Trustee is required to release its Liens pursuant to the provisions of Section 4.1 hereof; and

 

  

4

  

 

(3)           with respect to the Notes, any properties and assets that no longer secure the Notes or any Obligations in respect thereof pursuant to the provisions of Section 4.4 hereof;

 

provided that, in the case of clauses (2) and (3), if such Liens are required to be released as a result of the sale, transfer or other disposition of any properties or assets of GXS or any other Grantor, such assets or properties will cease to be excluded from the Collateral if GXS or any other Grantor thereafter acquires or reacquires such assets or properties.

 

“Collateral Trust Joinder” means (i) with respect to the provisions of this Agreement relating to any Additional Secured Debt, an agreement substantially in the form of Exhibit B and (ii) with respect to the provisions of this Agreement relating to the addition of additional Grantors, an agreement substantially in the form of Exhibit C.

 

“ Collateral Trustee” has the meaning set forth in the preamble.

 

“Contingent Liabilities” means, at any time, any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time.

 

“Credit Facility” or “Credit Facilities” means, one or more debt facilities (including, without limitation, the Revolving Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating or otherwise restructuring (including adding subsidiaries of GXS as additional guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group and whether or not increasing the amount of Indebtedness that may be incurred thereunder.

 

 “ Discharge of Priority Lien Obligations” means the occurrence of all of the following:

 

(1)           termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt;

 

(2)           payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit);

 

(3)           discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (B) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt or such letters of credit being backstopped by one or more standby letters of credit reasonably acceptable to the letter of credit issuer; and

 

  

5

  

(4)           payment in full in cash of all other Priority Lien Obligations that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any Contingent Liabilities).

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Excluded Accounts” shall mean (i) zero balance accounts, (ii) accounts used solely to fund current due payroll requirements, (iii) other accounts the balance of which is transferred, pursuant to instructions from the account owner that are not revocable, unless the Obligations have been paid in full or the collateral trustee has consented, at the end of each business day to a Deposit Account (as defined under the UCC) or Securities Account (as defined under the UCC) that is subject to the collateral trustee’s control and (iv) other accounts the maximum daily balance of which does not exceed $50,000 in the aggregate for all domestic accounts.

 

“Excluded Assets” means, collectively:

 

	
  

	
(1)

	
any agreement held by any Grantor that validly prohibits or requires the consent of any Person as a condition to the creation by such Grantor of a Lien thereon, or any agreement held by any Grantor to the extent that any requirement of law applicable thereto prohibits the creation of a Lien thereon, but only, in each case, to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC (including Sections 9-406(a), 9-407(a), 9-408(a) and 9-409 of the UCC) or any other applicable requirement of law;

 

	
  

	
(2)

	
equipment owned by any Grantor that is subject to a purchase money Lien or a capital lease if the agreement in which such Lien is granted (or in the documentation providing for such capital lease) prohibits or requires the consent of any Person as a condition to the creation of any other Lien on such equipment; provided that such Lien and such Indebtedness secured by such Lien is permitted by the Priority Lien Documents;

 

	
  

	
(3)

	
any joint venture interests;

 

	
  

	
(4)

	
Excluded Accounts;

 

	
  

	
(5)

	
any voting stock of First Tier Foreign Subsidiaries in excess of 65% and any Equity Interests in any Foreign Subsidiary that is not at such time a First Tier Foreign Subsidiary;

 

	
  

	
(6)

	
any properties and assets of any Foreign Subsidiaries;

 

	
  

	
(7)

	
any “intent-to-use” application for registration of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with 

 

 

  

6

  

 

respect thereto, solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable federal law; and

 

	
  

	
(8)

	
in the event that Rule 3-16 of Regulation S-X under the Securities Act requires (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any governmental agency) of separate audited financial statements of any Affiliate of GXS (other than GXS, Inc. or its successors) due to the fact that such Affiliate’s Capital Stock or other securities secure the Notes, and this Agreement requires the release of the Security Interests in such Collateral, the Capital Stock or other securities of such affiliate but only to the extent necessary to not be subject to such requirement; provided that such assets shall cease to be Excluded Assets under this paragraph (8), if, and for so long as, the provisions of Rule 3-16 of Regulation S-X no longer apply to the Indenture and the Notes or in respect thereof and, in such event, the Collateral Trustee shall be granted a perfected security interest therein,

 

provided, however, that “Excluded Assets” shall not include any proceeds, substitutions or replacements of Excluded Assets (unless such proceeds, substitutions or replacements would constitute Excluded Assets); provided, further, however, that Excluded Assets shall not include, and the security interest granted by GXS and each Grantor shall attach to, such property or asset referred to in clauses (1) through (8) above to the extent that any Grantor grants or permits any Lien on such property or asset to secure any Junior Lien Obligation.

 

“Event of Default” means any “Event of Default” pursuant to and as defined in any Secured Debt Document.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, which, to the extent that any sale, transfer or disposition of assets (or series of related sales, transfers or dispositions) permitted under the Secured Debt Documents results in proceeds in excess of $5.0 million, is determined in good faith by the Board of Directors (unless otherwise provided in the indenture).

 

“First Out Cap” means, as of any date of incurrence, the greater of (1) $35.0 million prior to the consummation of the Acquisition and increasing to $50.0 million following the consummation of the Acquisition or (2) 20% of EBITDA of GXS and its Restricted Subsidiaries for the most recently ended four-quarter period for which internal financial statements are available (calculated on a pro forma basis, with such adjustments as are consistent with the adjustment provisions set forth in the Indenture under the definition of “Consolidated Coverage Ratio”).

 

“First Out Obligations” means First Out Revolver Debt Obligations and Banking Product Obligations and Hedging Obligations incurred in the ordinary course of business that are secured or are intended to be secured pursuant to the Revolving Credit Agreement (including for the avoidance of doubt, the Closing Date Hedge).

 

  

7

  

 

“First Out Representative” means the Administrative Agent under the Revolving Credit Agreement, together with its successors in such capacity.

 

“First Out Revolver Debt” means Priority Lien Debt outstanding under the Revolving Credit Agreement; provided that:

 

	
  

	
(1)

	
on or before the date on which such Priority Lien Debt is incurred by GXS or such Guarantor, as applicable, such additional Indebtedness is designated by GXS, in an Officers’ Certificate delivered to the Collateral Trustee and the Administrative Agent, as “First Out Revolver Debt” for purposes of the Secured Debt Documents (provided that any Priority Lien Debt incurred under the Revolving Credit Facility will be deemed to have been designated as First Out Revolver Debt pursuant to this clause (1) without the requirement of such Officers’ Certificate (or any other notice), if at the time of such incurrence, and including such incurrence, the aggregate Priority Lien Debt outstanding under the Revolving Credit Agreement is less than or equal to $35.0 million prior to the consummation of the Acquisition and increasing to $50.0 million following the consummation of the Acquisition); and

 

	
  

	
(2)

	
the aggregate principal amount of such Priority Lien Debt being designated at such time as First Out Revolver Debt pursuant to clause (1) above, together with all other Priority Lien Debt that is at the time outstanding that has previously been designated (or deemed designated) as First Out Revolver Debt pursuant to clause (1) above, does not exceed the First Out Cap (calculated as of the time of such incurrence).

 

For purposes of this definition, letters of credit and the related reimbursement obligations with respect thereto will be deemed to be incurred on the date the letter of credit is issued and will be deemed to be outstanding and to have an aggregate principal amount equal to the maximum potential liability of GXS and its Subsidiaries thereunder.

 

“First Out Revolver Debt Obligations” means First Out Revolver Debt and all other Obligations in respect thereof.

 

“First Tier Foreign Subsidiaries” means any Restricted Subsidiary organized outside the United States that (1) is directly owned by GXS or a Guarantor and (2) generated revenue of greater than $25.0 million in the most recently completed fiscal year ending prior to the date of determination for which financial statements are available.

 

“Foreign Subsidiary” means any Restricted Subsidiary of GXS that is not organized under the laws of the United States or any state thereof or the District of Columbia.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the Indenture without giving 

 

  

8

  

 

effect to any potential application of push down accounting as set forth under the caption “Review by the Securities and Exchange Commission” in the Offering Memorandum.

 

“Grantors” means GXS, each Guarantor and any other Person (if any) that pledges any Collateral under the Security Documents to secure any Secured Debt Obligation, together in each case with their respective successors.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

 

	
  

	
(1)

	
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or

 

	
  

	
(2)

	
entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part ); provided, however, that the term “Guarantee” will not include endorsements of negotiable instruments for collection or deposit in the ordinary course of business.

 

The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantor” means, with respect to any Priority Lien Obligations, each Person, and their successors and assigns, who has Guaranteed payment of any Priority Lien Obligations and, with respect to any Junior Lien Obligations, each person, and their successors and assigns, who has Guaranteed payment of any Junior Lien Obligations, which, as of the Closing Date, in the case of the Priority Lien Obligations under the Indenture and the Revolving Credit Agreement, shall be GXS’s wholly-owned domestic subsidiaries that have executed and delivered this Agreement on the date hereof.

 

“Hedge Agreement” means any agreement evidencing Hedging Obligations.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

 

(1)           interest rate swap agreements, interest rate cap agreements and interest rate collar agreements (including, for the avoidance of doubt, obligations under the Closing Date Hedge); and

 

(2)           other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, commodity prices or interest rates.

 

“ Indebtedness” means, with respect to any Person on any date of determination (without duplication) the following items if and to the extent that any of them (other than items specified 

 

  

9

  

 

 

under clause (7) below) would appear as a liability on the balance sheet of such Person, prepared in accordance with GAAP:

 

	
  

	
(1)

	
the principal amount of indebtedness of such Person for borrowed money;

 

	
  

	
(2)

	
the principal amount of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

	
  

	
(3)

	
all obligations of such Person in respect of letters of credit, bankers’ acceptances, or other similar instruments (including reimbursement obligations with respect thereto but excluding obligations in respect of letters of credit issued in respect of Trade Payables);

 

	
  

	
(4)

	
all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except Trade Payables), which purchase price is due more than 12 months after the date of placing such property in service or taking delivery and title thereto or the completion of such services;

 

	
  

	
(5)

	
all Capital Lease Obligations of such Person;

 

	
  

	
(6)

	
all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of Indebtedness of such Person will be the lesser of:

 

(i)           the Fair Market Value of such asset at such date of determination and

 

(ii)           the amount of such Indebtedness of such other Persons;

 

	
  

	
(7)

	
Hedging Obligations of such Person; and

 

	
  

	
(8)

	
all obligations of the type referred to in clauses (1) through (7) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee.

 

The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations described above, at such date; provided, however, that the amount outstanding at any time of any Indebtedness issued with original issue discount will be deemed to be the face amount of such Indebtedness less the remaining unaccreted portion of the original issue discount of such Indebtedness at such time, as determined in accordance with GAAP.

 

For the avoidance of doubt, Banking Product Obligations do not constitute Indebtedness.

 

“ Indemnified Liabilities” means any and all liabilities (including all environmental liabilities), obligations, losses, damages, penalties, actions, judgments, suits, costs, taxes, 

 

  

10

  

 

expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, performance, administration or enforcement of this Agreement or any of the other Security Documents, including any of the foregoing relating to the use of proceeds of any Secured Debt or the violation of, noncompliance with or liability under any law (including environmental laws) applicable to or enforceable against GXS, any of its Subsidiaries or any other Grantor or any of the Collateral, and all reasonable costs and expenses (including reasonable fees and expenses of legal counsel selected by the Indemnitee) incurred by any Indemnitee in connection with any claim, action, investigation or proceeding in any respect relating to any of the foregoing, whether or not suit is brought.

 

“ Indemnitee” has the meaning set forth in Section  7.11(a).

 

“ Indenture” has the meaning set forth in the recitals.

 

“ Insolvency or Liquidation Proceeding” means:

 

(1)           any case commenced by or against any Grantor under Title 11, U.S. Code or any similar federal or state law for the relief of debtors, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of any Grantor, any receivership or assignment for the benefit of creditors relating to any Grantor or any similar case or proceeding relative to any Grantor or its creditors, as such, in each case whether or not voluntary;

 

(2)           any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to any Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

 

(3)           any other proceeding of any type or nature in which substantially all claims of creditors of any Grantor are determined and any payment or distribution is or may be made on account of such claims.

 

“Junior Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of any Grantor to secure Junior Lien Obligations.

 

“Junior Lien Debt” means any Indebtedness (including letters of credit and reimbursement obligations with respect thereto) but excluding Hedging Obligations of GXS that is secured on a junior basis to the Priority Lien Debt by a Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document (including any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace or defease other Junior Lien Debt); provided that:

 

	
  

	
(a)

	
on or before the date on which such Indebtedness is incurred by GXS, such Indebtedness is designated by GXS, in an Officers’ Certificate delivered to each Junior Lien Representative, each Priority Lien Representative and the Collateral Trustee, as “Junior Lien Debt” for the purposes of the Indenture, the Revolving Credit Agreement and this Agreement; provided that no Series of Secured Debt may be designated as both Junior Lien Debt and Priority Lien Debt;

 

 

  

11

  

 

	
  

	
(b)

	
such Indebtedness is governed by an indenture, credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and

 

	
  

	
(c)

	
all requirements set forth in this Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (c) will be conclusively established if GXS delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Junior Lien Debt”).

 

“Junior Lien Documents” means, collectively any indenture, credit agreement or other agreement governing each Series of Junior Lien Debt and the security documents related thereto.

 

“Junior Lien Obligations” means Junior Lien Debt and all other Obligations in respect thereof, together with Hedging Obligations that are secured, or intended to be secured, under the Junior Lien Documents if the provider of such Hedging Obligations has agreed to be bound by the terms of this Agreement as a holder of Junior Lien Obligations or such provider’s interest in the Collateral is subject to the terms of this Agreement as a holder of Junior Lien Obligations and if such Hedging Obligations are permitted to be incurred and so secured under each applicable Secured Debt Document.

 

“Junior Lien Representative” means the trustee, agent or representative of the holders of any Series of Junior Lien Debt who maintains the transfer register for such Series of Junior Lien Debt and (a) is appointed as a Junior Lien Representative (for purposes related to the administration of the security documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Junior Lien Debt, together with its successors in such capacity, and (b) has executed a Collateral Trust Joinder.

 

“ Junior Trust Estate” has the meaning set forth in Section  2.2.

 

“Lender” has the meaning set forth in the Revolving Credit Agreement.

 

“ Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease or sale/leaseback transaction be deemed to constitute a Lien.

 

“Lien Sharing and Priority Confirmation” means:

 

	
  

	
(1)

	
as to any future Series of Priority Lien Debt, the written agreement of the Priority Lien Representative of such Series of Priority Lien Debt, as set forth in the Indenture, Revolving Credit Agreement or other agreement governing such Series of Priority Lien Debt, for the benefit of all holders of Secured Debt and each future Secured Debt Representative:

 

 

  

12

  

 

	
  

	
(a)

	
that all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by any Grantor to secure any Obligations in respect of such Series of Priority Lien Debt and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Priority Lien Obligations;

 

	
  

	
(b)

	
that the holders of Obligations in respect of such Series of Priority Lien Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from enforcement of Priority Liens; and

 

	
  

	
(c)

	
consenting to the terms of this Agreement and the Collateral Trustee’s performance of, and directing the Collateral Trustee to perform its obligations under, this Agreement and the other Security Documents; and

 

	
  

	
(2)

	
as to any Series of Junior Lien Debt, the written agreement of the holders of such Series of Junior Lien Debt, as set forth in the indenture, credit agreement or other agreement governing such Series of Junior Lien Debt, for the benefit of all holders of Secured Debt and each Secured Debt Representative:

 

	
  

	
(a)

	
that all Junior Lien Obligations will be and are secured equally and ratably by all Junior Liens at any time granted by any Grantor to secure any Obligations in respect of such Series of Junior Lien Debt and that all such Junior Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Junior Lien Obligations;

 

	
  

	
(b)

	
that the holders of Obligations in respect of such Series of Junior Lien Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Junior Liens and the order of application of proceeds from the enforcement of Junior Liens; and

 

	
  

	
(c)

	
consenting to the terms of this Agreement and the Collateral Trustee’s performance of, and directing the Collateral Trustee to perform its obligations under, this Agreement and the other Security Documents.

 

“ Notes” has the meaning set forth in the recitals.

 

“Note Documents” means the Indenture, the Notes and the Security Documents.

 

“ Obligations” means all principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable (including post-petition interest whether or not allowable as a claim in any such proceeding) under the documentation governing any Indebtedness.

 

“Offering Memorandum” means the Offering Memorandum for the Notes dated as of December 17, 2009.

 

  

13

  

 

“ Officers’ Certificate” means a certificate with respect to compliance with a condition or covenant provided for in this Agreement, signed on behalf of GXS by two officers of GXS, one of whom must be the principal executive officer, the principal financial officer, the treasurer, the assistant treasurer, controller or the principal accounting officer of GXS, including:

 

(a)           a statement that the Person making such certificate has read such covenant or condition;

 

(b)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based;

 

(c)           a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(d)           a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

 

“ Permitted Liens” means those Liens which, under each of the Priority Lien Documents, are permitted to be incurred.

 

“ Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“ Priority Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of any Grantor to secure Priority Lien Obligations.

 

“ Priority Lien Debt” means:

 

(1)           the Notes initially issued by GXS under the Indenture;

 

(2)            Indebtedness (other than Banking Product Obligations and Hedging Obligations) of GXS under the Revolving Credit Agreement (including, without duplication, letters of credit and reimbursement obligations with respect thereto) that is permitted to be incurred and secured under each applicable Secured Debt Document (or as to which the lenders under the Revolving Credit Agreement obtained an Officer’s Certificate at the time of incurrence to the effect that such Indebtedness was permitted to be incurred and secured by all applicable Secured Debt Documents); and

 

(3)           additional notes issued under any indenture or other Indebtedness (including, without duplication, letters of credit and reimbursement obligations with respect thereto but excluding Hedging Obligations) of GXS or any other Grantor that is secured equally and ratably with the Notes and the Revolving Credit Agreement in accordance with the terms hereof by a Lien that is permitted to be incurred and so secured under each applicable Secured Debt Document; provided, in the case of any Indebtedness referred to in this clause (3), that:

 

 

  

14

  

 

(a)           on or before the date on which such Indebtedness is incurred by GXS, such Indebtedness is designated by GXS or any other Grantor, in an Officers’ Certificate delivered to each Priority Lien Representative and the Collateral Trustee, as “Priority Lien Debt” for the purposes of the Secured Debt Documents; provided that no Series of Secured Debt may be designated as both Junior Lien Debt and Priority Lien Debt;

 

(b)           the Priority Lien Representative for such Indebtedness executes and delivers a Collateral Trust Joinder in accordance with Section 3.8(b) and such Indebtedness is governed by a credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and

 

(c)           all other requirements set forth in Section 3.8 have been complied with (and the satisfaction of such requirements and the other provisions of this clause (c) will be conclusively established if GXS delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Priority Lien Debt”).

 

For the avoidance of doubt, Banking Product Obligations and Hedging Obligations do not constitute Priority Lien Debt, but may constitute Priority Lien Obligations.

 

“ Priority Lien Documents” means the Indenture, the Revolving Credit Agreement and any other indenture, credit agreement or other agreement governing each Series of Priority Lien Debt and the Security Documents relating to the Priority Lien Debt.

 

“ Priority Lien Obligations” means (i) the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt, (ii) Hedging Obligations permitted to be incurred under the Indenture and secured or intended to be secured pursuant to the Priority Lien Documents(including for the avoidance of doubt, the Closing Date Hedge), (iii) Banking Product Obligations incurred in the ordinary course of business that are secured or intended to be secured pursuant to the Priority Lien Documents and (iv) each Guarantee by any Grantor of the obligations described in clauses (i), (ii) or (iii) of this definition that is secured equally and ratably with the Notes and the Revolving Credit Agreement by a Priority Lien that is permitted to be incurred and so secured under each applicable Secured Debt Document.

 

 “ Priority Lien Representative” means:

 

(a)           in the case of the Indenture, the Trustee;

 

(b)           in the case of the Revolving Credit Agreement, the Administrative Agent; or

 

(c)           in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority Lien Debt (for purposes related to the administration of the Security Documents) pursuant to the credit agreement or other agreement governing such Series of Priority Lien Debt, and who has executed a Collateral Trust Joinder.

 

  

15

  

 

“Priority Lien Secured Parties” means the holders of Priority Lien Obligations and the Priority Lien Representatives.

 

“Restricted Subsidiary” has the meaning set forth in the Indenture.

 

“ Revolving Credit Agreement” means the Credit and Guaranty Agreement, to be dated the same date as the closing of this offering, among GXS, the Guarantors, the Administrative Agent, and the Lenders party thereto, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating or otherwise restructuring (including adding subsidiaries of GXS as additional guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group and whether or not increasing the amount of Indebtedness that may be incurred thereunder.

 

“ Secured Debt” means Priority Lien Debt and Junior Lien Debt.

 

“ Secured Debt Default” means any event or condition which, under the terms of any credit agreement, indenture or other agreement governing any Secured Debt Obligations causes, or permits holders of Secured Debt outstanding thereunder (with or without the giving of notice or lapse of time, or both, and whether or not notice has been given or time has lapsed) to cause, the Secured Debt outstanding thereunder to become immediately due and payable.

 

“ Secured Debt Documents” means the Priority Lien Documents and the Junior Lien Documents.

 

“Secured Debt Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of GXS or any Guarantor to secure Secured Debt Obligations.

 

“ Secured Debt Obligations” means Priority Lien Obligations and Junior Lien Obligations.

 

“ Secured Debt Representative” means each Priority Lien Representative and each Junior Lien Representative.

 

“ Secured Parties” means the holders of Secured Debt Obligations and the Secured Debt Representatives.

 

“ Security Documents” means this Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by any Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Trustee, for the benefit of any of the Secured Parties, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 7.1.

 

  

16

  

 

“ Senior Trust Estate” has the meaning set forth in Section  2.1.

 

“ Series of Junior Lien Debt” means, severally, each issue or series of Junior Lien Debt for which a single transfer register is maintained.

 

“ Series of Priority Lien Debt” means, severally, the Notes, the Indebtedness under the Revolving Credit Agreement and any additional notes or other Indebtedness under any other indenture or agreement that constitutes Priority Lien Obligations.

 

“ Series of Secured Debt” means, severally, each Series of Priority Lien Debt and each Series of Junior Lien Debt.

 

“Subsidiary” means, with respect to any specified Person:

 

	
  

	
(1)

	
any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

	
  

	
(2)

	
any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

 

 “Subsidiary Guarantee” means the Guarantee by each Guarantor of GXS’s obligations under the Indenture and the Notes, executed pursuant to the provisions of the Indenture.

 

“Trade Payables” means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services.

 

“ Trustee” has the meaning set forth in the recitals.

 

“ Trust Estates” has the meaning set forth in Section  2.2.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien under the Security Documents on any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for the purposes of the provisions hereof or of any Secured Debt Document relating to such perfection, effect of perfection or non-perfection or priority.

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.

 

  

17

  

 

“Unrestricted Subsidiary” has the meaning set forth in the Indenture.

 

SECTION 1.2   Rules of Interpretation.

 

(a)           All terms used in this Agreement that are defined in Article 9 of the UCC and not otherwise defined herein have the meanings assigned to them in Article 9 of the UCC.

 

(b)           Unless otherwise indicated, any reference to any agreement or instrument will be deemed to include a reference to that agreement or instrument as assigned, amended, supplemented, amended and restated, or otherwise modified and in effect from time to time or replaced in accordance with the terms of this Agreement.

 

(c)           The use in this Agreement or any of the other Security Documents of the word “include” or “including,” when following any general statement, term or matter, will not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “ without limitation” or “ but not limited to” or words of similar import) is used with reference thereto, but will be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.  The word “ will” shall be construed to have the same meaning and effect as the word “shall.”

 

(d)           References to “Sections,” “clauses,” “recitals” and the “preamble” will be to Sections, clauses, recitals and the preamble, respectively, of this Agreement unless otherwise specifically provided.  References to “Articles” will be to Articles of this Agreement unless otherwise specifically provided.  References to “Exhibits” and “Schedules” will be to Exhibits and Schedules, respectively, to this Agreement unless otherwise specifically provided.

 

(e)           Notwithstanding anything to the contrary in this Agreement, any references contained herein to any section, clause, paragraph, definition or other provision of any Priority Lien Document (including any definition contained therein) shall be deemed to be a reference to such section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided, that any reference to any such section, clause, paragraph or other provision shall refer to such section, clause, paragraph or other provision of the applicable Priority Lien Document (including any definition contained therein) as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the applicable Priority Lien Document and (2) prior to the Discharge of Priority Lien Obligations, approved in a writing delivered to the applicable Priority Lien Representative and the Collateral Trustee by, or on behalf of, the requisite holders of Priority Lien Obligations as are needed (if any) under the terms of the applicable Priority Lien Documents to approve such amendment or modification.

 

This Agreement and the other Security Documents will be construed without regard to the identity of the party who drafted it and as though the parties participated equally in drafting it.  Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party will not be applicable either to this Agreement or the other Security Documents.

 

  

18

  

ARTICLE 2.  THE TRUST ESTATES

 

SECTION 2.1   Declaration of Senior Trust.

 

To secure the payment of the Priority Lien Obligations and in consideration of the mutual premises and the agreements set forth in this Agreement, each of the Grantors hereby grants to the Collateral Trustee, and the Collateral Trustee hereby accepts and agrees to hold, in trust under this Agreement for the benefit of all current and future holders of Priority Lien Obligations, all of such Grantor’s right, title and interest in, to and under all Collateral granted to the Collateral Trustee under any Security Document for the benefit of the holders of Priority Lien Obligations, together with all of the Collateral Trustee’s right, title and interest in, to and under such Security Documents, and all interests, rights, powers and remedies of the Collateral Trustee thereunder or in respect thereof and all cash and non-cash proceeds thereof (collectively, the “ Senior Trust Estate”).

 

The Collateral Trustee and its successors and assigns under this Agreement will hold the Senior Trust Estate in trust for the benefit solely and exclusively of all current and future holders of Priority Lien Obligations as security for the payment of all current and future Priority Lien Obligations.

 

Notwithstanding the foregoing, if at any time:

 

(1)           all Liens securing the Priority Lien Obligations have been released as provided in Section  4.1;

 

(2)           the Collateral Trustee holds no other property in trust as part of the Senior Trust Estate;

 

(3)           no monetary obligation (other than indemnification and other contingent obligations not then due and payable and letters of credit that have been cash collateralized as provided in clause (3) of the definition of “ Discharge of Priority Lien Obligations”) is outstanding and payable under this Agreement to the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity); and

 

(4)           GXS delivers to the Collateral Trustee an Officers’ Certificate stating that all Priority Liens of the Collateral Trustee have been released in compliance with all applicable provisions of the Priority Lien Documents and that the Grantors are not required by any Priority Lien Document to grant any Priority Lien upon any property,

 

then the senior trust arising hereunder will terminate, except that all provisions set forth in Sections  7.10 and 7.11 that are enforceable by the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity) will remain enforceable in accordance with their terms.

 

The parties further declare and covenant that the Senior Trust Estate will be held and distributed by the Collateral Trustee subject to the further agreements herein.

 

  

19

  

 

SECTION 2.2   Declaration of Junior Trust.

 

To secure the payment of the Junior Lien Obligations and in consideration of the premises and the mutual agreements set forth herein, each of the Grantors hereby grants to the Collateral Trustee, and the Collateral Trustee hereby accepts and agrees to hold, in trust under this Agreement for the benefit of all current and future holders of Junior Lien Obligations, all of such Grantor’s right, title and interest in, to and under all Collateral granted to the Collateral Trustee under any Security Document for the benefit of the holders of Junior Lien Obligations, together with all of the Collateral Trustee’s right, title and interest in, to and under such Security Documents, and all interests, rights, powers and remedies of the Collateral Trustee thereunder or in respect thereof and all cash and non-cash proceeds thereof (collectively, the “ Junior Trust Estate,” and together with the Senior Trust Estate, the “ Trust Estates”).

 

The Collateral Trustee and its successors and assigns under this Agreement will hold the Junior Trust Estate in trust for the benefit solely and exclusively of all current and future holders of Junior Lien Obligations as security for the payment of all current and future Junior Lien Obligations.

 

Notwithstanding the foregoing, if at any time:

 

(1)           all Liens securing the Junior Lien Obligations have been released as provided in Section  4.1;

 

(2)           the Collateral Trustee holds no other property in trust as part of the Junior Trust Estate;

 

(3)           no monetary obligation (other than indemnification and other contingent obligations not then due and payable and letters of credit that have been cash collateralized as provided in clause (3) of the definition of “ Discharge of Priority Lien Obligations”), mutatis mutandis, is outstanding and payable under this Agreement to the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity); and

 

(4)           GXS delivers to the Collateral Trustee an Officers’ Certificate stating that all Junior Liens of the Collateral Trustee have been released in compliance with all applicable provisions of the Junior Lien Documents and that the Grantors are not required by any Junior Lien Document to grant any Junior Lien upon any property,

 

then the junior trust arising hereunder will terminate, except that all provisions set forth in Sections  7.10 and 7.11 that are enforceable by the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity) will remain enforceable in accordance with their terms.

 

The parties further declare and covenant that the Junior Trust Estate will be held and distributed by the Collateral Trustee subject to the further agreements herein.

 

SECTION 2.3   Priority of Liens.   Notwithstanding anything else contained herein or in any other Security Document, and notwithstanding the date, time, method, manner or order of 

 

  

20

  

 

grant, attachment or perfection of any Liens securing the Junior Lien Obligations granted on the Collateral or of any Liens securing the Priority Lien Obligations granted on the Collateral and notwithstanding any provision of the UCC, the time of incurrence of any Series of Priority Lien Debt or Junior Lien Debt or any other applicable law or the Junior Lien Documents or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing the Priority Lien Obligations or any other circumstance whatsoever, it is the intent of the parties that, and the parties hereby agree that:

 

(1)           this Agreement and the other Security Documents create two separate and distinct Trust Estates and Liens: (A) the Senior Trust Estate and Priority Lien securing the payment and performance of the Priority Lien Obligations; and (B) the Junior Trust Estate and Junior Lien securing the payment and performance of the Junior Lien Obligations; and

 

(2)           the Liens securing the Junior Lien Obligations are subject and subordinate to the Liens securing the Priority Lien Obligations in accordance with Section 2.12.

 

SECTION 2.4   Restrictions on Enforcement of Junior Liens   Until the Discharge of Priority Lien Obligations, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against GXS or any other Grantor, the holders of Priority Lien Obligations will have, subject to the exceptions set forth below in clauses (1) through (3), the exclusive right to authorize and direct the Collateral Trustee with respect to the Security Documents and the Collateral including, without limitation, the exclusive right to authorize or direct the Collateral Trustee to enforce, collect or realize on any Collateral or exercise any other right or remedy with respect to the Collateral (including, without limitation, the exercise of any right of setoff or any right under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement) and neither the Junior Lien Representatives nor any holder of Junior Lien Obligations may authorize or direct the Collateral Trustee with respect to such matters.  Notwithstanding the foregoing, the Junior Lien Representatives and the holders of Junior Lien Obligations may direct the Collateral Trustee:

 

(1)           without any condition or restriction whatsoever, at any time after the Discharge of Priority Lien Obligations;

 

(2)           as necessary to perfect or establish the priority (subject to Priority Liens and other Permitted Liens) of the Junior Liens upon any Collateral; provided that, unless otherwise agreed to by the Collateral Trustee in the Security Documents, the Junior Lien Representatives and the holders of Junior Lien Obligations may not require the Collateral Trustee to take any action to perfect any Collateral through possession or control except that the Collateral Trustee may act as agent and as bailee for the benefit of the Junior Lien holders as specified in Section 7.4; or

 

(3)           as necessary to create, prove, preserve or protect (but not enforce) the Junior Liens upon any Collateral.

 

  

21

  

 

 

(b)           Until the Discharge of Priority Lien Obligations, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against GXS or any other Grantor, none of the Junior Lien Representatives nor the holders of Junior Lien Obligations will:

 

(1)           request judicial relief, in an Insolvency or Liquidation Proceeding or in any other court, or take any other action that would hinder, delay, limit or prohibit the lawful exercise or enforcement of any right or remedy otherwise available to the holders of Priority Lien Obligations in respect of the Priority Liens or that would limit, invalidate, avoid or set aside any Priority Lien or subordinate the Priority Liens to the Junior Liens or grant the Junior Liens equal ranking to the Priority Liens;

 

(2)           oppose or otherwise contest any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement of Priority Liens made by any holder of Priority Lien Obligations or any Priority Lien Representative in any Insolvency or Liquidation Proceedings;

 

(3)           oppose or otherwise contest any lawful exercise by any holder of Priority Lien Obligations or any Priority Lien Representative of the right to credit bid Priority Lien Debt at any sale of Collateral in foreclosure of Priority Liens;

 

(4)           oppose or otherwise contest any other request for judicial relief made in any court by any holder of Priority Lien Obligations or any Priority Lien Representative relating to the lawful enforcement of any Priority Lien;

 

(5)           contest, protest or object to any foreclosure proceeding or action brought by the Collateral Trustee, any Priority Lien Representative or any holder of Priority Lien Obligations or any other exercise by the Collateral Trustee, any Priority Lien Representative or any holder of Priority Lien Obligations of any rights and remedies relating to the Collateral under the Priority Lien Documents or otherwise, or object to the time or manner in which the Collateral Trustee, any Priority Lien Representative or any holder of Priority Lien Obligations seeks to enforce the Priority Lien Obligations or the Priority Liens; or

 

(6)           challenge the validity, enforceability, perfection or priority of the Priority Liens.

 

Notwithstanding the foregoing, both prior to and after the commencement of an Insolvency or Liquidation Proceeding, the Junior Lien Representatives and the holders of Junior Lien Obligations may take any actions and exercise any and all rights that would be available to a holder of unsecured claims, including, without limitation, the commencement of an Insolvency or Liquidation Proceeding against any Grantor in accordance with applicable law; provided that, each holder of Junior Lien Obligations and each Junior Lien Representative agrees not to take any of the actions prohibited under clauses (1) through (6) of this Section 2.4(b) or oppose or contest any order that it has agreed not to oppose or contest under Section 2.8.

(c)           At any time prior to the Discharge of Priority Lien Obligations and after (a) the commencement of any Insolvency or Liquidation Proceeding in respect of any Grantor or 

 

  

22

  

 

(b) the Collateral Trustee and each Junior Lien Representative have received written notice from any Priority Lien Representative stating that (i) any Series of Priority Lien Debt has become due and payable in full (whether at maturity, upon acceleration or otherwise) or (ii) the holders of Priority Liens securing one or more Series of Priority Lien Debt have become entitled under any Priority Lien Documents to and desire to enforce any or all of the Priority Liens by reason of a default under such Priority Lien Documents, no payment of money (or the equivalent of money) will be made from the proceeds of Collateral by any Grantor to any Junior Lien Representative or any other holder of Junior Lien Obligations (including, without limitation, payments and prepayments made for application to Junior Lien Obligations and all other payments and deposits made pursuant to any provision of any Junior Lien Document in respect of Junior Lien Debt). 

 

(d)           All proceeds of Collateral received by any Junior Lien Representative or any holder of Junior Lien Obligations in violation of Section 2.4(c) will be held in trust by the applicable Junior Lien Representative or the applicable holder of Junior Lien Obligations for the account of the holders of Priority Liens and remitted to the Collateral Trustee for distribution pursuant to the terms of this Agreement.  The Junior Liens will remain attached to and, subject to Section 2.12, enforceable against all proceeds so held or remitted.  All proceeds of Collateral received by any Junior Lien Representative or any holder of Junior Lien Obligations not in violation of Section 2.4(c) will be received by such Junior Lien Representative or such holder of Junior Lien Obligations free from the Priority Liens and all other Liens except the Junior Liens and Permitted Liens.

 

SECTION 2.5   Waiver of Right of Marshalling.

 

(a)           Prior to the Discharge of Priority Lien Obligations, holders of Junior Lien Obligations and each Junior Lien Representative may not assert or enforce any right of marshalling accorded to a junior lienholder, as against the holders of Priority Lien Obligations (in their capacity as priority lienholders).

 

(b)           Following the Discharge of Priority Lien Obligations, the holders of Junior Lien Obligations and any Junior Lien Representative may assert their right under the UCC or otherwise to any proceeds remaining following a sale or other disposition of Collateral by, or on behalf of, the holders of Priority Lien Obligations.

 

SECTION 2.6   Discretion in Enforcement of Priority Liens.

 

(a)           Subject to the application of proceeds set forth in Section 3.4, in exercising rights and remedies with respect to the Collateral, the Priority Lien Representatives may instruct the Collateral Trustee to enforce (or refrain from enforcing) the provisions of the Priority Lien Documents and exercise (or refrain from exercising) remedies thereunder or any such rights and remedies, all in such order and in such manner as they may determine in accordance with the applicable Priority Lien Documents, including:

 

(1)           the exercise or forbearance from exercise of all rights and remedies in respect of the Collateral and/or the Priority Lien Obligations;

 

  

23

  

 

(2)           the enforcement or forbearance from enforcement of any Priority Lien in respect of the Collateral;

 

(3)           the exercise or forbearance from exercise of rights and powers of a holder of shares of stock included in the Senior Trust Estate to the extent provided in the Security Documents;

 

(4)           the acceptance of the Collateral in full or partial satisfaction of the Priority Lien Obligations; and

 

(5)           the exercise or forbearance from exercise of all rights and remedies of a secured lender under the UCC or any similar law of any applicable jurisdiction or in equity.

 

SECTION 2.7    Amendments to Priority Lien Documents and Discretion in Enforcement of Priority Lien Obligations.

 

(a)           Without in any way limiting the generality of Section 2.6, the holders of Priority Lien Obligations and the Priority Lien Representatives may at any time and from time to time, without the consent of or notice to holders of Junior Lien Obligations or the Junior Lien Representatives, without incurring responsibility to holders of Junior Lien Obligations and the Junior Lien Representatives and without impairing or releasing the subordination provided in this Agreement or the obligations hereunder of holders of Junior Lien Obligations and the Junior Lien Representatives, do any one or more of the following:

 

(1)           change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the Priority Lien Obligations, or otherwise amend or supplement in any manner the Priority Lien Obligations, or any instrument evidencing the Priority Lien Obligations or any agreement under which the Priority Lien Obligations are outstanding including, without limitation increasing the principal amount thereof and/or the applicable margin or similar component of interest rate;

 

(2)           release any Person or entity liable in any manner for the collection of the Priority Lien Obligations;

 

(3)           release the Priority Lien on any Collateral; and

 

(4)           exercise or refrain from exercising any rights against any Grantor.

 

(b)           Except as otherwise provided in this Agreement, holders of Priority Lien Obligations may at any time and from time to time, without consent of or notice to the holders of other Secured Debt Obligations or the Secured Debt Representatives, amend their respective Priority Lien Documents in accordance with the terms of such Priority Lien Documents.

 

  

24

  

 

SECTION 2.8   Insolvency or Liquidation Proceedings.

 

(a)           If in any Insolvency or Liquidation Proceeding and prior to the Discharge of Priority Lien Obligations, the holders of Priority Lien Obligations by an Act of Required Debtholders consent to any order:

 

(1)           for use of cash collateral;

 

(2)           approving a debtor-in-possession financing secured by a Lien that is senior to or on a parity with all Priority Liens upon any property of the estate in such Insolvency or Liquidation Proceeding;

 

(3)           granting any relief on account of Priority Lien Obligations as adequate protection (or its equivalent) for the benefit of the holders of Priority Lien Obligations in the Collateral subject to Priority Liens; or

 

(4)           relating to a sale of assets of any Grantor that provides, to the extent the assets sold are to be free and clear of Liens, that all Priority Liens and Junior Liens will attach to the proceeds of the sale;

 

then, the holders of Junior Lien Obligations, in their capacity as holders of secured claims, and each Junior Lien Representative will not oppose or otherwise contest the entry of such order, so long as none of the holders of Priority Lien Obligations or any Priority Lien Representative in any respect opposes or otherwise contests any request made by the holders of Junior Lien Obligations or a Junior Lien Representative for the grant to the Collateral Trustee, for the benefit of the holders of Junior Lien Obligations, of a junior Lien upon any property on which a Lien is (or is to be) granted under such order to secure the Priority Lien Obligations, co-extensive in all respects with, but subordinated (as set forth in Section 2.12) to, such Lien and all Priority Liens on such property.

 

Notwithstanding the foregoing, both before and during an Insolvency or Liquidation Proceeding, the holders of Junior Lien Obligations and the Junior Lien Representatives may take any actions and exercise any and all rights that would be available to a holder of unsecured claims, including, without limitation, the commencement of Insolvency or Liquidation Proceedings against any Grantor in accordance with applicable law; provided that, each Junior Lien Representative and each holder of Junior Lien Obligations shall not take any of the actions prohibited under Section  2.4(b) nor oppose or contest any order that it has agreed not to oppose or contest under Section 2.8(a).

 

(b)           The holders of Junior Lien Obligations and Junior Lien Representatives will not file or prosecute in any Insolvency or Liquidation Proceeding any motion for adequate protection (or any comparable request for relief) based upon their interest in the Collateral under the Junior Liens, except that:

 

(1)           they may freely seek and obtain relief: (A) granting a junior Lien co-extensive in all respects with, but subordinated (as set forth in Section 2.12) to, all Liens granted in such Insolvency or Liquidation Proceeding to, or for the benefit of, any Priority Lien Representative and the holders of Priority Lien Obligations; or (B) in 

 

  

25

  

 

 

connection with the confirmation of any plan of reorganization or similar dispositive restructuring plan; and

 

(2)           they may freely seek and obtain any relief upon a motion for adequate protection (or any comparable relief), without any condition or restriction whatsoever, at any time after the Discharge of Priority Lien Obligations.

 

SECTION 2.9   Collateral Shared Equally and Ratably within Class.  The parties to this Agreement agree that the payment and satisfaction of all of the Secured Debt Obligations within each Class will be secured, subject to the distribution provisions herein relating to Priority Liens, equally and ratably by the Liens established in favor of the Collateral Trustee for the benefit of the Secured Parties belonging to such Class.  It is understood and agreed that nothing in this Section  2.9 is intended to alter the priorities among Secured Parties belonging to different Classes as provided in Section  2.3.

 

SECTION 2.10   Sharing of Collateral by Holders of Priority Lien Obligations.  The Collateral Trustee and each Priority Lien Representative (on behalf of each holder of Priority Lien Obligations) agree that, notwithstanding:

 

(a)           anything to the contrary contained in the Security Documents;

 

(b)           the time of incurrence of any Priority Lien Obligations;

 

(c)           the order or method of attachment or perfection of any Liens securing any Priority Lien Obligations;

 

(d)           the time or order of filing of financing statements or other documents filed or recorded to perfect any Lien upon any Collateral;

 

(e)           the time of taking possession or control over any Collateral;

 

(f)           that any Priority Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other Lien; and

 

(g)           the rules for determining priority under any law governing relative priorities of Liens,

 

(1) all Priority Liens granted at any time by any Grantor will secure, subject to the distribution provisions herein, equally and ratably, all current and future Priority Lien Obligations, and (2) all proceeds of all Priority Liens granted at any time by any Grantor will be allocated and distributed on account of the Priority Lien Debt and all other Priority Lien Obligations in accordance with this Agreement.

 

This Section 2.10 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each current and future holder of Priority Lien Obligations, each current and future Priority Lien Representative, and the Collateral Trustee as holder of Priority Liens.

 

  

26

  

 

 

SECTION 2.11   Equal and Ratable Sharing of Collateral by Holders of Junior Lien Obligations.  The Collateral Trustee and each Junior Lien Representative (on behalf of each holder of Junior Lien Obligations) agree that, notwithstanding:

 

(a)           anything to the contrary contained in the Security Documents;

 

(b)           the time of incurrence of any Junior Lien Obligations;

 

(c)           the order or method of attachment or perfection of any Liens securing any Junior Lien Obligations;

 

(d)           the time or order of filing of financing statements or other documents filed or recorded to perfect any Lien upon any Collateral;

 

(e)           the time of taking possession or control over any Collateral;

 

(f)           that any Junior Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other Lien; and

 

(g)           the rules for determining priority under any law governing relative priorities of Liens, and

 

(1) all Junior Liens granted at any time by any Grantor will secure, equally and ratably, all current and future Junior Lien Obligations and (2) all proceeds of all Junior Liens granted at any time by any Grantor will be allocated and distributed equally and ratably on account of the Junior Lien Debt and all other Junior Lien Obligations in accordance with this Agreement.

 

This Section 2.11 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each current and future holder of Junior Lien Obligations, each current and future Junior Lien Representative, and the Collateral Trustee as holder of Junior Liens.

 

SECTION 2.12   Ranking of Junior Liens.

 

(a)             The parties to this Agreement agree that, notwithstanding:

 

(1)           anything to the contrary contained in the Security Documents;

 

(2)           the time of incurrence of any Secured Debt Obligations;

 

(3)           the order or method of attachment or perfection of any Liens securing any Secured Debt Obligations;

 

(4)           the time or order of filing of financing statements or other documents filed to perfect any Lien upon any Collateral;

 

(5)           the time of taking possession or control over any Collateral;

 

(6)           that any Priority Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other Lien; or

 

  

27

  

 

(7)           the rules for determining priority under any law governing relative priorities of Liens,

 

all Junior Liens at any time granted by GXS or any Guarantor will be subject and subordinate to all Priority Liens securing Priority Lien Obligations.

 

(b)             This Section 2.12 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Priority Lien Obligations, each present and future Priority Lien Representative and the Collateral Trustee as holder of Priority Liens.  No other Person will be entitled to rely on, have the benefit of or enforce those provisions.

 

(c)             In addition, this Section 2.12 is intended solely to set forth the relative ranking, as Liens, of the Liens securing Junior Lien Obligations as against the Priority Liens.  Neither the Priority Lien Obligations nor any other Junior Lien Obligations nor the exercise or enforcement of any right or remedy for the payment or collection thereof are intended to be, or will ever be by reason of the foregoing provision, in any respect subordinated, deferred, postponed, restricted or prejudiced.

 

ARTICLE 3.   OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

 

SECTION 3.1   Undertaking of the Collateral Trustee.

 

(a)           Each Secured Party acting through its Priority Lien Representative or Junior Lien Representative, as applicable, hereby appoints the Collateral Trustee to serve as Collateral Trustee hereunder on the terms and conditions set forth herein.  Subject to, and in accordance with, this Agreement, the Collateral Trustee will, as collateral trustee, for the benefit solely and exclusively of the present and future Secured Parties:

 

(1)           accept, enter into, hold, maintain, administer and enforce all Security Documents, including all Collateral subject thereto, and all Liens created thereunder, perform its obligations under the Security Documents and protect, exercise and enforce the interests, rights, powers and remedies granted or available to it under, pursuant to or in connection with the Security Documents;

 

(2)           take all lawful and commercially reasonable actions permitted under the Security Documents that it may deem necessary or advisable to protect or preserve its interest in the Collateral subject thereto and such interests, rights, powers and remedies;

 

(3)           deliver and receive notices pursuant to the Security Documents;

 

(4)           sell, assign, collect, assemble, foreclose on, institute legal proceedings with respect to, or otherwise exercise or enforce the rights and remedies of a secured party (including a mortgagee, trust deed beneficiary and insurance beneficiary or loss payee) with respect to the Collateral under the Security Documents and its other interests, rights, powers and remedies;

 

  

28

  

 

(5)           remit as provided in Section  3.4 all cash proceeds received by the Collateral Trustee from the collection, foreclosure or enforcement of its interest in the Collateral under the Security Documents or any of its other interests, rights, powers or remedies;

 

(6)           execute and deliver amendments to the Security Documents as from time to time authorized pursuant to Section 7.1 accompanied by an Officers’ Certificate to the effect that the amendment was permitted under Section 7.1; and

 

(7)           release any Lien granted to it by any Security Document upon any Collateral if and as required by and subject to satisfaction of the conditions set forth in Section  4.1(b).

 

(b)           Each party to this Agreement acknowledges and consents to the undertaking of the Collateral Trustee set forth in Section  3.1(a) and agrees to each of the other provisions of this Agreement applicable to the Collateral Trustee.

 

(c)           Notwithstanding anything to the contrary contained in this Agreement, the Collateral Trustee will not commence any exercise of remedies or any foreclosure actions or otherwise take any action or proceeding against any of the Collateral (other than actions as necessary to prove, protect or preserve the Liens securing the Secured Debt Obligations) unless and until it shall have been directed by written notice of an Act of Required Debtholders and then only in accordance with the provisions of this Agreement.

 

(d)           Notwithstanding anything to the contrary contained in this Agreement, no Junior Lien Representative or Priority Lien Representative may serve as Collateral Trustee.

 

SECTION 3.2   Release or Subordination of Liens.  The Collateral Trustee will not release or subordinate any Lien of the Collateral Trustee or consent to the release or subordination of any Lien of the Collateral Trustee, except:

 

(a)           as directed by an Act of Required Debtholders accompanied by an Officers’ Certificate to the effect that the release or subordination was permitted by each applicable Secured Debt Document;

 

(b)           as required by Article  4;

 

(c)           as ordered pursuant to applicable law under a final and nonappealable order or judgment of a court of competent jurisdiction; or

 

(d)           for the subordination of the Junior Trust Estate and the Junior Liens to the Senior Trust Estate and the Priority Liens as provided for herein.

 

SECTION 3.3   Enforcement of Liens.  If the Collateral Trustee at any time receives written notice that any event has occurred that constitutes a default under any Secured Debt Document entitling the Collateral Trustee to foreclose upon, collect or otherwise enforce any of its Liens under the Security Documents, the Collateral Trustee will promptly deliver written notice thereof to each Secured Debt Representative.  Thereafter, the Collateral Trustee may await 

 

  

29

  

 

direction by an Act of Required Debtholders and will act, or decline to act, as directed by an Act of Required Debtholders, in the exercise and enforcement of the Collateral Trustee’s interests, rights, powers and remedies in respect of the Collateral or under the Security Documents or applicable law and, following the initiation of such exercise of remedies, the Collateral Trustee will act, or decline to act, with respect to the manner of such exercise of remedies as directed by an Act of Required Debtholders.  Unless it has been directed to the contrary by an Act of Required Debtholders, the Collateral Trustee in any event may (but will not be obligated to) take or refrain from taking such action with respect to any default under any Secured Debt Document as it may deem advisable and in the best interest of the holders of Secured Debt Obligations.

 

SECTION 3.4   Application of Proceeds.

 

(a)           If any Collateral is sold or otherwise realized upon by the Collateral Trustee in connection with any foreclosure, collection, sale or other enforcement of Liens granted to the Collateral Trustee in the Security Documents, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against GXS or any other Grantor, the proceeds (cash and non cash) received by the Collateral Trustee from such foreclosure, collection, sale or other enforcement will be distributed by the Collateral Trustee in the following order of application; provided that, this order of application shall in no event apply to any amount held in the Escrow Account (as defined in the Indenture):

 

FIRST, to the payment of all amounts payable under this Agreement on account of the Collateral Trustee’s fees and expenses and any reasonable legal fees, costs and expenses or other liabilities of any kind incurred by the Collateral Trustee or any co-trustee or agent of the Collateral Trustee in connection with any Security Document (including, but not limited, to indemnification payments and reimbursements);

 

SECOND, to the repayment of Indebtedness and other Obligations, other than Secured Debt Obligations, secured by a Permitted Lien on the Collateral sold or realized upon to the extent that such other Indebtedness or Obligation is required to be discharged in connection with such sale; 

 

THIRD, to the Priority Lien Representative under the Revolving Credit Agreement for application to the payment of all outstanding First Out Revolver Debt and any other First Out Obligations that are then due and payable, in such order as may be provided in the Revolving Credit Agreement in an amount sufficient to pay in full in cash all outstanding First Out Revolver Debt and all other First Out Obligations that are then due and payable, including all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in the Revolving Credit Agreement, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding, and including the discharge or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the Revolving Credit Agreement) of all outstanding letters of credit constituting First Out Revolver Debt;

 

  

30

  

 

FOURTH, ratably, to the respective Priority Lien Representatives for application to the payment of all other outstanding Priority Lien Debt and all other Priority Lien Obligations that are then due and payable, in such order as may be provided in the Priority Lien Documents in an amount sufficient to pay in full in cash all such Priority Lien Debt and all such other Priority Lien Obligations that are then due and payable, including all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in the Priority Lien Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding, and including the discharge or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting such other Priority Lien Debt; 

 

FIFTH, to the respective Junior Lien Representatives for application to the payment of all outstanding Junior Lien Debt and any other Junior Lien Obligations that are then due and payable in such order as may be provided in the Junior Lien Documents in an amount sufficient to pay in full in cash all outstanding Junior Lien Debt and all other Junior Lien Obligations that are then due and payable (including all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in the Junior Lien Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding, and including the discharge or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Junior Lien Document) of all outstanding letters of credit, if any, constituting Junior Lien Debt); and 

 

SIXTH, any surplus remaining after the payment in full in cash of the amounts described in the preceding clauses will be paid to the applicable Grantor, as the case may be, its successors or assigns, or as a court of competent jurisdiction may direct. 

 

(b)           If any Priority Lien Representative (other than the First Out Representative) or any holder of Priority Lien Obligations (other than the First Out Obligations) or any Junior Lien Representative or any holder of Junior Lien Obligations collects or receives any proceeds of such foreclosure, collection or other enforcement that should have been applied to the payment of the First Out Obligations or other Priority Lien Obligations, as applicable, in accordance with Section 3.4(a) above, whether prior to or after the commencement of an Insolvency or Liquidation Proceeding or otherwise, in each case, such Priority Lien Representative or such holder of Priority Lien Obligations or such Junior Lien Representative or such holder of Junior Lien Obligations, as the case may be, will forthwith deliver the same to the Collateral Trustee, for the account of the holders of the First Out Obligations or the  Priority Lien Obligations, as applicable, to be applied in accordance with Section 3.4(a).  Until so delivered, such proceeds will be held in trust by that Priority Lien Representative or that holder of Priority Lien Obligations or that Junior Lien Representative or that holder of Junior Lien Obligations, as the case may be, for the benefit of the holders of the First Out Obligations or other Priority Lien Obligations, as applicable.

 

  

31

  

 

(c)           This Section 3.4 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Secured Debt Obligations, each present and future Secured Debt Representative and the Collateral Trustee as holder of Secured Debt Liens.  The Secured Debt Representative of each future Series of Secured Debt will be required to deliver a Lien Sharing and Priority Confirmation as provided in Section 3.8 at the time of incurrence of such Series of Secured Debt.

 

(d)           In connection with the application of proceeds pursuant to Section 3.4(a), except as otherwise directed by an Act of Required Debtholders, the Collateral Trustee may sell any non-cash proceeds for cash prior to the application of the proceeds thereof.

 

(e)           In making the determinations and allocations in accordance with Section 3.4(a), the Collateral Trustee may conclusively rely upon information supplied by the relevant Priority Lien Representative as to the amounts of unpaid principal and interest and other amounts outstanding with respect to its respective Priority Lien Debt and any other Priority Lien Obligations and information supplied by the relevant Junior Lien Representative as to the amounts of unpaid principal and interest and other amounts outstanding with respect to its respective Junior Lien Debt and any other Junior Lien Obligations, and the Collateral Trustee shall have no liability to any of the Secured Parties for actions taken in reliance on such information, provided that nothing in this sentence shall prevent any Grantor from contesting any amounts claimed by any Secured Party in any information so supplied but in the event of any such contest, the information delivered by any Secured Debt Representative shall be conclusive, for purposes of the Collateral Trustee’s reliance, absent manifest error.  Upon the reasonable request of the Collateral Trustee, the applicable Secured Debt Representative shall deliver to the Collateral Trustee a certificate setting forth the information specified in this Section 3.4(e).  All distributions made by the Collateral Trustee pursuant to Section 3.4(a) shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Trustee shall have no duty to inquire as to the application by any Secured Debt Representative in respect of any amounts distributed to such Secured Debt Representative.

 

SECTION 3.5   Powers of the Collateral Trustee.

 

(a)           The Collateral Trustee is irrevocably authorized and empowered to enter into and perform its obligations and protect, perfect, exercise and enforce its interest, rights, powers and remedies under the Security Documents and applicable law and in equity and to act as set forth in this Article  3 or as requested in any lawful directions given to it from time to time in respect of any matter by an Act of Required Debtholders.

 

(b)           No Secured Debt Representative or holder of Secured Debt Obligations will have any liability whatsoever for any act or omission of the Collateral Trustee.

 

SECTION 3.6    Documents and Communications.  The Collateral Trustee will permit each Secured Debt Representative and each holder of Secured Debt Obligations upon reasonable written notice from time to time during regular business hours to inspect and copy, at the cost and expense of the party requesting such copies, any and all Security Documents and other documents, notices, certificates, instructions or communications received by the Collateral Trustee in its capacity as such.

 

  

32

  

 

SECTION 3.7   For Sole and Exclusive Benefit of Holders of Secured Debt Obligations.  The Collateral Trustee will accept, hold, administer and enforce all Liens on the Collateral at any time transferred or delivered to it and all other interests, rights, powers and remedies at any time granted to or enforceable by the Collateral Trustee and all other property of the Trust Estates solely and exclusively for the benefit of the present and future holders of present and future Secured Debt Obligations, and will distribute all proceeds received by it in realization thereon or from enforcement thereof solely and exclusively pursuant to the provisions of Section  3.4.

 

SECTION 3.8   Additional Secured Debt.

 

(a)           The Collateral Trustee will, as trustee hereunder, perform its undertakings set forth in Section  3.1(a) with respect to each holder of Secured Debt Obligations of a Series of Secured Debt that is issued or incurred after the date hereof that:

 

(1)           holds Secured Debt Obligations that are identified as Junior Lien Debt or Priority Lien Debt in accordance with the procedures set forth in Section  3.8(b); and

 

(2)           signs, through its designated Secured Debt Representative identified pursuant to Section  3.8(b), a Collateral Trust Joinder and delivers the same to the Collateral Trustee.

 

(b)           GXS will be permitted to designate as an additional holder of Secured Debt Obligations hereunder each Person who is, or who becomes, the registered holder of Junior Lien Debt or the registered holder of Priority Lien Debt incurred by GXS or any other Grantor after the date of this Agreement in accordance with the terms of all applicable Secured Debt Documents.  GXS may only effect such designation by delivering to the Collateral Trustee an Additional Secured Debt Designation stating that:

 

(1)           GXS or such other Grantor intends to incur additional Secured Debt (“ Additional Secured Debt”) which will either be (i) Priority Lien Debt permitted by each applicable Secured Debt Document, and permitted to be secured by a Priority Lien equally and ratably with all previously existing and future Priority Lien Debt or (ii) Junior Lien Debt permitted by each applicable Secured Debt Document, and permitted to be secured with a Junior Lien equally and ratably with all previously existing and future Junior Lien Debt;

 

(2)           specifying the name and address of the Secured Debt Representative for such series of Additional Secured Debt (if any) for purposes of Section  7.7.

 

(3)           GXS and each other Grantor has duly authorized, executed (if applicable) and recorded (or caused to be recorded) in each appropriate governmental office all relevant filings and recordations to ensure that the Additional Secured Debt is secured by the Collateral in accordance with the Security Documents;

 

  

33

  

 

 

(4)           attaching as Exhibit 1 to such Additional Secured Debt Designation a Reaffirmation Agreement duly executed by GXS, each other Grantor and each Guarantor, which Reaffirmation Agreement shall be substantially in the form of Exhibit 1 to Exhibit A hereto; and

 

(5)           GXS has caused a copy of the Additional Secured Debt Designation and the related Collateral Trust Joinder to be delivered to each then existing Secured Debt Representative.

 

Although GXS shall be required to deliver a copy of each Additional Secured Debt Designation and each Collateral Trust Joinder to each then existing Secured Debt Representative, the failure to so deliver a copy of the Additional Secured Debt Designation and/or Lien Sharing and Priority Confirmation to any then existing Secured Debt Representative shall not affect the status of such debt as Additional Secured Debt if the other requirements of this Section 3.8 are complied with. Notwithstanding the foregoing, nothing in this Agreement will be construed to allow GXS or any other Grantor to incur additional Indebtedness or Liens unless otherwise permitted by the terms of all applicable Secured Debt Documents.

 

ARTICLE 4.   OBLIGATIONS ENFORCEABLE BY GXS AND THE OTHER GRANTORS

 

SECTION 4.1   Release of Liens on Collateral.

 

(a)           The Collateral Trustee’s Liens upon the Collateral will be released:

 

(1)           in whole, upon (A) payment in full and discharge of all outstanding Secured Debt and all other Secured Debt Obligations that are due and payable at the time all of the Secured Debt is paid in full and discharged (other than Hedging Obligations and Banking Product Obligations) and (B) termination or expiration of all commitments to extend credit under all Secured Debt Documents and the cancellation or termination or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Secured Debt Documents) of all outstanding letters of credit issued pursuant to any Secured Debt Documents, or such letters of credit are backstopped by one or more standby letters of credit reasonably acceptable to the letter of credit issuer;

 

(2)           as to any Collateral that is sold, transferred or otherwise disposed of by any Grantor to a Person that is not (either before or after such sale, transfer or disposition) GXS or a Restricted Subsidiary of GXS in either (A) a foreclosure sale or other similar transaction approved by an Act of Required Debtholders or (B) a transaction or other circumstance that is permitted under the Indenture and is permitted by all of the other Secured Debt Documents, at the time of such sale, transfer or other disposition or to the extent of the interest sold, transferred or otherwise disposed of; provided, that the Collateral Trustee’s Liens upon the Collateral will not be released if the sale or disposition is subject to Article 5 of the Indenture or is subject to any covenant in the 

 

  

34

  

 

Revolving Credit Agreement prohibiting the release of such Liens in connection with such sale or disposition;

 

(3)           as to a release of less than all or substantially all of the Collateral, if (a) consent to the release of all Priority Liens (or, at any time after the Discharge of Priority Lien Obligations, the Junior Liens) on such Collateral has been given by an Act of Required Debtholders and is permitted by all Secured Debt Documents and (b) the Grantors have delivered an Officers’ Certificate to the Collateral Trustee certifying that all such necessary consents have been obtained;

 

(4)           as to a release of all or substantially all of the Collateral, if (A) consent to the release of that Collateral has been given by the requisite percentage or number of holders of each Series of Secured Debt at the time outstanding as provided for in the applicable Secured Debt Documents, and (B) the Grantors have delivered an Officers’ Certificate to the Collateral Trustee certifying that all such necessary consents have been obtained; and

 

(5)           automatically as to any Equity Interests or other securities of any Affiliate of GXS (other than GXS, Inc. and its successors), if at any time Rule 3-16 of Regulation S-X under the Securities Act or any other law, rule or regulation requires or is interpreted by the SEC to require the filing with the SEC (or any other U.S. federal governmental agency) of separate financial statements of such Affiliate due to the fact that such Subsidiary’s Equity Interests or other securities are pledged to secure the Notes or any Subsidiary Guarantee, but only to the extent necessary to not be subject to such requirement.

 

In addition, in the case of a Guarantor that is released from its Guarantee with respect a Series of Secured Debt, the Liens on the assets and property of such Guarantor securing such Series of Secured Debt will be released.

 

(b)           The Collateral Trustee agrees for the benefit of GXS and the other Grantors that, if the Collateral Trustee at any time receives:

 

(1)           an Officers’ Certificate (a copy of which shall also be provided to each Secured Debt Representative) stating that (A) the signing officer has read Article 4 of this Agreement and understands the provisions and the definitions relating hereto, (B) such officer has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not the conditions precedent in this Agreement and all other Secured Debt Documents, if any, relating to the release of the Collateral have been complied with, and (C) in the opinion of such officer, such conditions precedent, if any, have been complied with; and

 

(2)           the proposed instrument or instruments evidencing the release of such Lien as to such property in recordable form, if applicable; and

 

(3)           prior to the Discharge of Priority Lien Obligations, the written acknowledgement of each Priority Lien Representative (or, at any time after the Discharge of Priority Lien Obligations, each Junior Lien Representative) that it has 

 

  

35

  

 

 

received an Officers’ Certificate described in clause (1) above, which Officers’ Certificate certifies that such release is permitted by Section 4.1(a) and the respective Secured Debt Documents governing the Secured Debt Obligations the holders of which such Secured Debt Representative represents; then the Collateral Trustee will execute (with such acknowledgements and/or notarizations as are required) and deliver to GXS or other applicable Grantor such documents evidencing the release of the Collateral Trustee’s Liens on the applicable Collateral as GXS shall reasonably request on or before the fifth Business Day after the date of receipt (or deemed receipt) of the items required by this Section  4.1(b) by the Collateral Trustee.

 

(c)           The Collateral Trustee hereby agrees that:

 

(1)           in the case of any release pursuant to clause  (2) of Section  4.1(a), if the terms of any such sale, transfer or other disposition require the payment of the purchase price to be contemporaneous with the delivery of the applicable release, then, at the written request of and at the expense of GXS or other applicable Grantor, the Collateral Trustee will either (A) be present at and deliver the release at the closing of such transaction or (B) deliver the release under customary escrow arrangements that permit such contemporaneous payment and delivery of the release; and

 

(2)           at any time when a Secured Debt Default under a Series of Secured Debt that constitutes Junior Lien Debt has occurred and is continuing, within two Business Days of the receipt by it of any Act of Required Debtholders pursuant to Section  4.1(a)(3), the Collateral Trustee will deliver a copy of such Act of Required Debtholders to each Secured Debt Representative.

 

(d)           The Collateral Trustee hereby further agrees that:

 

(1)           if any Priority Lien Representative notifies the Collateral Trustee that it requests GXS or any other Grantor to make any necessary filings, registrations and recordings to create, preserve, protect and perfect the security interests granted by such Grantor to the Collateral Trustee for the benefit of the applicable Priority Lien Secured Parties under the Security Documents in respect of the Collateral, the Collateral Trustee shall promptly notify GXS thereof and direct GXS or such other Grantor to take all such actions requested by such Priority Lien Representative; and

 

(2)           upon receipt by the Collateral Trustee of any notice or document delivered by GXS or any other Grantor under the Security Documents, the Collateral Trustee shall promptly forward a copy of such notice or document to each Priority Lien Representative.

 

(e)           Each Secured Debt Representative hereby agrees that :

 

(1)           as soon as reasonably practicable after receipt of an Officers’ Certificate from GXS pursuant to Section 4.1(b)(1), it will, to the extent required by such Section, either provide to the Collateral Trustee (A) the written acknowledgment of receipt of such Officers’ Certificate required by Section 4.1(b)(3) or (B) a written 

 

  

36

  

 

statement that such release is not permitted by Section 4.1(a); provided that the failure of any Secured Debt Representative to take either of the preceding actions within five (5) Business Days after receipt of such Officers’ Certificate shall be deemed to be the provision by such Secured Debt Representative of the written acknowledgment required by Section 4.1(b)(3); and

 

(2)           within three (3) Business Days of the receipt by it of any notice from the Collateral Trustee pursuant to Section  4.1(c)(2), such Secured Debt Representative will deliver a copy of such notice to each registered holder of the Series of Priority Lien Debt or Series of Junior Lien Debt for which it acts as Secured Debt Representative.

 

SECTION 4.2   Delivery of Copies to Secured Debt Representatives.   GXS will deliver to each Secured Debt Representative a copy of each Officers’ Certificate delivered to the Collateral Trustee pursuant to Section  4.1(b), together with copies of all documents delivered to the Collateral Trustee with such Officers’ Certificate.  The Secured Debt Representatives will not be obligated to take notice thereof or to act thereon, subject to Section  4.1(e).

 

SECTION 4.3   Collateral Trustee not Required to Serve, File or Record.  The Collateral Trustee is not required to serve, file, register or record any instrument releasing or subordinating its Liens on any Collateral; provided, however, that if GXS or any other Grantor shall make a written demand for a termination statement under Section 9-513(c) of the UCC, the Collateral Trustee shall comply with the written request of GXS or such Grantor to comply with the requirements of such UCC provision; provided, further, that the Collateral Trustee must first confirm with the Secured Debt Representatives that the requirements of such UCC provisions have been satisfied.

 

SECTION 4.4   Release of Liens in Respect of Notes.  The Collateral Trustee’s Liens upon the Collateral will no longer secure the Notes outstanding under the Indenture, any Guarantor’s obligations under the Guarantees or any other Obligations under the Indenture, and the right of the holders of the Notes, including the Guarantees, and such Obligations to the benefits and proceeds of the Collateral Trustee’s Liens on the Collateral will terminate and be discharged:

 

(1)           upon satisfaction and discharge of the Indenture as set forth under Article 11 of the Indenture;

 

(2)           upon a Legal Defeasance or Covenant Defeasance (each as defined under the Indenture) of the Notes as set forth under Article 8 of the Indenture;

 

(3)           upon payment in full and discharge of all Notes outstanding under the Indenture and all Obligations that are outstanding, due and payable under the Indenture at the time the Notes are paid in full and discharged; or

 

(4)           in whole or in part, with the consent of the holders of the requisite percentage of Notes in accordance with Article 9 of the Indenture.

 

  

37

  

ARTICLE 5.   IMMUNITIES OF THE COLLATERAL TRUSTEE

 

SECTION 5.1   No Implied Duty.  The Collateral Trustee will not have any fiduciary duties nor will it have responsibilities or obligations other than those expressly assumed by it in this Agreement and the other Security Documents.  The Collateral Trustee will not be required to take any action that is contrary to applicable law or any provision of this Agreement or the other Security Documents.

 

SECTION 5.2   Appointment of Agents and Advisors.  The Collateral Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, accountants, appraisers or other experts or advisors selected by it in good faith as it may reasonably require and will not be responsible for any misconduct or negligence on the part of any of them.

 

SECTION 5.3   Other Agreements.  The Collateral Trustee has accepted and is bound by the Security Documents executed by the Collateral Trustee as of the date of this Agreement and, as directed by an Act of Required Debtholders, the Collateral Trustee shall execute additional Security Documents delivered to it after the date of this Agreement; provided, however, that such additional Security Documents do not adversely affect the rights, privileges, benefits and immunities of the Collateral Trustee.  The Collateral Trustee will not otherwise be bound by, or be held obligated by, the provisions of any credit agreement, indenture or other agreement governing Secured Debt (other than this Agreement and the other Security Documents to which it is a party).

 

SECTION 5.4   Solicitation of Instructions.

 

(a)           The Collateral Trustee may at any time solicit written confirmatory instructions, in the form of an Act of Required Debtholders, an Officers’ Certificate or an order of a court of competent jurisdiction, as to any action that it may be requested or required to take, or that it may propose to take, in the performance of any of its obligations under this Agreement or the other Security Documents.

 

(b)           No written direction given to the Collateral Trustee by an Act of Required Debtholders that in the sole judgment of the Collateral Trustee imposes, purports to impose or might reasonably be expected to impose upon the Collateral Trustee any obligation or liability not set forth in or arising under this Agreement and the other Security Documents will be binding upon the Collateral Trustee unless the Collateral Trustee elects, at its sole option, to accept such direction.

 

SECTION 5.5   Limitation of Liability.  Except as expressly set forth herein (including Section 5.12), the Collateral Trustee will not be responsible or liable for any action taken or omitted to be taken by it hereunder or under any other Security Document, except for its own gross negligence, bad faith or willful misconduct as determined by a final judgment of a court of competent jurisdiction.

 

SECTION 5.6   Documents in Satisfactory Form.  The Collateral Trustee will be entitled to require that all agreements, certificates, opinions, instruments and other documents at 

 

  

38

  

 

any time submitted to it, including those expressly provided for in this Agreement, be delivered to it in a form and with substantive provisions reasonably satisfactory to it.

 

SECTION 5.7   Entitled to Rely.  The Collateral Trustee may seek and rely upon, and shall be fully protected in relying upon, any judicial order or judgment, upon any advice, opinion or statement of legal counsel, independent consultants and other experts selected by it in good faith and upon any certification, instruction, notice or other writing delivered to it by GXS or any other Grantor in compliance with the provisions of this Agreement or delivered to it by any Secured Debt Representative as to the holders of Secured Debt Obligations for whom it acts, without being required to determine the authenticity thereof or the correctness of any fact stated therein or the propriety or validity of service thereof.  The Collateral Trustee may act in reliance upon any instrument comporting with the provisions of this Agreement or any signature reasonably believed by it to be genuine and may assume that any Person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof or the other Security Documents has been duly authorized to do so. To the extent an Officers’ Certificate or opinion of counsel is required or permitted under this Agreement to be delivered to the Collateral Trustee in respect of any matter, the Collateral Trustee may rely conclusively on the Officers’ Certificate or opinion of counsel as to such matter and such Officers’ Certificate or opinion of counsel shall be full warranty and protection to the Collateral Trustee for any action taken, suffered or omitted by it under the provisions of this Agreement and the other Security Documents.

 

SECTION 5.8   Secured Debt Default.  The Collateral Trustee will not be required to inquire as to the occurrence or absence of any Secured Debt Default and will not be affected by or required to act upon any notice or knowledge as to the occurrence of any Secured Debt Default unless and until it is directed by an Act of Required Debtholders.

 

SECTION 5.9   Actions by Collateral Trustee.  As to any matter not expressly provided for by this Agreement or the other Security Documents, the Collateral Trustee will act or refrain from acting as directed by an Act of Required Debtholders and will be fully protected if it does so, and any action taken, suffered or omitted pursuant to hereto or thereto shall be binding on the holders of Secured Debt Obligations.

 

SECTION 5.10   Security or Indemnity in favor of the Collateral Trustee.  The Collateral Trustee will not be required to advance or expend any funds or otherwise incur any financial liability in the performance of its duties or the exercise of its powers or rights hereunder unless it has been provided with security or indemnity reasonably satisfactory to it against any and all liability or expense which may be incurred by it by reason of taking or continuing to take such action.

 

SECTION 5.11  Rights of the Collateral Trustee.   In the event of any conflict between any terms and provisions set forth in this Agreement and those set forth in any other Security Document, the terms and provisions of this Agreement shall supersede and control the terms and provisions of such other Security Document.  In the event there is any bona fide, good faith disagreement between the other parties to this Agreement or any of the other Security Documents resulting in adverse claims being made in connection with Collateral held by the Collateral Trustee and the terms of this Agreement or any of the other Security Documents do 

 

  

39

  

 

not unambiguously mandate the action the Collateral Trustee is to take or not to take in connection therewith under the circumstances then existing, or the Collateral Trustee is in doubt as to what action it is required to take or not to take hereunder or under the other Security Documents, it will be entitled to refrain from taking any action (and will incur no liability for doing so) until directed otherwise in writing by a request signed jointly by the parties hereto entitled to give such direction or by order of a court of competent jurisdiction.

 

SECTION 5.12   Limitations on Duty of Collateral Trustee in Respect of Collateral.

 

(a)           Beyond the exercise of reasonable care in the custody of Collateral in its possession, and to account to the Secured Parties and the Grantors for moneys and other property received by it hereunder or under any Security Document and any other duties expressly set forth in the Security Documents, the Collateral Trustee will have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Trustee will not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Liens on the Collateral.  The Collateral Trustee will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Collateral Trustee will not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Collateral Trustee in good faith.

 

(b)           The Collateral Trustee will not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of the Collateral Trustee, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of any Grantor to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.  The Collateral Trustee hereby disclaims any representation or warranty to the present and future holders of the Secured Debt Obligations concerning the perfection of the Liens granted hereunder or in the value of any of the Collateral.

 

SECTION 5.13   Assumption of Rights, Not Assumption of Duties.  Notwithstanding anything to the contrary contained herein:

 

(1)           each of the parties thereto will remain liable under each of the Security Documents (other than this Agreement) to the extent set forth therein to perform all of their respective duties and obligations thereunder to the same extent as if this Agreement had not be executed;

 

(2)           the exercise by the Collateral Trustee of any of its rights, remedies or powers hereunder will not release such parties from any of their respective duties or obligations under the other Security Documents; and

 

  

40

  

 

(3)           the Collateral Trustee will not be obligated to perform any of the obligations or duties of any of the parties thereunder other than those of the Collateral Trustee.

 

SECTION 5.14   No Liability for Clean Up of Hazardous Materials.  In the event that the Collateral Trustee is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Collateral Trustee’s sole discretion may cause the Collateral Trustee to be considered an “ owner or operator” under any environmental laws or otherwise cause the Collateral Trustee to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, the Collateral Trustee reserves the right, instead of taking such action, either to resign as Collateral Trustee or to arrange for the transfer of the title or control of the asset to a court appointed receiver.  The Collateral Trustee will not be liable to any Person for any environmental liability or any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of the Collateral Trustee’s actions and conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.

 

ARTICLE 6.   RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE

 

SECTION 6.1   Resignation or Removal of Collateral Trustee.  Subject to the appointment of a successor Collateral Trustee as provided in Section  6.2 and the acceptance of such appointment by the successor Collateral Trustee:

 

(a)           the Collateral Trustee may resign at any time by giving not less than 30 days’ notice of resignation to each Secured Debt Representative and GXS; and

 

(b)           the Collateral Trustee may be removed at any time, with or without cause, by an Act of Required Debtholders.

 

SECTION 6.2   Appointment of Successor Collateral Trustee.  Upon any such resignation or removal, a successor Collateral Trustee may be appointed by an Act of Required Debtholders.  If no successor Collateral Trustee has been so appointed and accepted such appointment within 30 days after the predecessor Collateral Trustee gave notice of resignation or was removed, the retiring Collateral Trustee may (at the expense of GXS), at its option, appoint a successor Collateral Trustee (or, in the event the retiring Collateral Trustee chooses not to appoint, GXS will appoint a successor Collateral Trustee), or petition a court of competent jurisdiction for appointment of a successor Collateral Trustee, which must be a bank or trust company:

 

(1)           authorized to exercise corporate trust powers;

 

(2)           having a combined capital and surplus of at least $500,000,000;

 

(3)           maintaining an office in New York, New York;

 

(4)           that is not a Secured Debt Representative ;

 

  

41

  

 

(5)           that is not an Affiliate of GXS or a Guarantor.

 

The Collateral Trustee will fulfill its obligations hereunder until a successor Collateral Trustee meeting the requirements of this Section  6.2 has accepted its appointment as Collateral Trustee and the provisions of Section 6.3 have been satisfied.

 

SECTION 6.3   Succession.  When the Person so appointed as successor Collateral Trustee accepts such appointment by executing a joinder to this Agreement:

 

(1)          such Person will succeed to and become vested with all the rights, powers, privileges and duties of the predecessor Collateral Trustee, and the predecessor Collateral Trustee will be discharged from its duties and obligations hereunder; and

 

(2)          the predecessor Collateral Trustee will (at the expense of GXS) promptly transfer all Liens and collateral security and other property of the Trust Estates within its possession or control to the possession or control of the successor Collateral Trustee and will execute instruments and assignments as may be necessary or desirable or reasonably requested by the successor Collateral Trustee to transfer to the successor Collateral Trustee all Liens, interests, rights, powers and remedies of the predecessor Collateral Trustee in respect of the Security Documents or the Trust Estates.

 

Thereafter the predecessor Collateral Trustee will remain entitled to enforce the immunities granted to it in Article  5 and the provisions of Sections  7.10 and 7.11.

 

SECTION 6.4   Merger, Conversion or Consolidation of Collateral Trustee.  Any Person into which the Collateral Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Collateral Trustee shall be a party, or any Person succeeding to the business of the Collateral Trustee shall be the successor of the Collateral Trustee pursuant to Section 6.3, provided that (i) without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto, except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding, such Person satisfies the eligibility requirements specified in clauses (1) through (4) of Section 6.2 and (ii) within 30 days of any such merger, conversion or consolidation becoming effective, the Collateral Trustee shall have notified GXS, each Priority Lien Representative and each Junior Lien Representative thereof in writing.

 

ARTICLE 7.   MISCELLANEOUS PROVISIONS

 

SECTION 7.1   Amendment.

 

(a)           No amendment or supplement to the provisions of any Security Document will be effective without the approval of the Collateral Trustee acting as directed by an Act of Required Debtholders, except that:

 

(1)           any amendment or supplement that has the effect solely of:

 

  

42

  

 

 

(A)           adding or maintaining Collateral, securing additional Secured Debt that was otherwise permitted by the terms of the Secured Debt Documents to be secured by the Collateral or preserving, perfecting or establishing the priority of the Secured Debt Liens therein,

 

(B)           curing any ambiguity, omission, mistake, defect or inconsistency,

 

(C)           providing for the assumption of any Grantor’s obligations under any Secured Debt Document in the case of a merger or consolidation or sale of all or substantially all of the assets of such Grantor to the extent permitted by the terms of the Indenture, the Revolving Credit Agreement and the other Secured Debt Documents, as applicable,

 

(D)           making any change that would provide any additional rights or benefits to the Secured Parties or the Collateral Trustee or that does not adversely affect the rights under the Indenture, the Revolving Credit Agreement or any other Secured Debt Document of any Secured Party or the Collateral Trustee, or

 

(E)           conforming the text of this Agreement to any provision of the description of the notes set forth in the Offering Memorandum to the extent that such provision in the description of the notes set forth in the Offering Memorandum was intended to be a verbatim recitation of a provision of this Agreement, will, in each case become effective when executed and delivered by the applicable Grantor party thereto and the Collateral Trustee;

 

(2)           no amendment or supplement that reduces, impairs or adversely affects the right of any holder of Secured Debt Obligations:

 

(A)           to vote its outstanding Secured Debt as to any matter described as subject to an Act of Required Debtholders (or amends the provisions of this clause  (2) or the definition of “ Act of Required Debtholders”),

 

(B)           to share in the order of application described in Section 3.4 in the proceeds of enforcement of or realization on any Collateral that has not been released in accordance with the provisions described in Section  4.1,

 

(C)           to require that Liens securing Secured Debt Obligations be released only as set forth in the provisions described in Section  4.1 or

 

(D)           to amend Section 2.9 or Section 2.10.

 

  

43

  

 

will become effective without the consent of the requisite percentage or number of holders of each Series of Secured Debt so affected under the applicable Secured Debt Documents;

(3)           no amendment or supplement that affects or involves the “first out” provisions hereunder (including, without limitation, the definitions of First Out Cap, “First Out Representative”, “First Out Revolver Debt”, “First Out Obligations”, “First Out Revolver Debt Obligations” and the applicable provisions of Section 3.4 hereof) will become effective without the consent of the Priority Lien Representative with respect to the Revolving Credit Agreement; and

 

(4)           no amendment or supplement that imposes any obligation upon the Collateral Trustee or any Secured Debt Representative or adversely affects the rights of the Collateral Trustee or any Secured Debt Representative, respectively, in its capacity as such will become effective without the consent of the Collateral Trustee or such Secured Debt Representative, respectively.

 

(b)           Notwithstanding Section 7.1(a) but subject to Sections 7.1(a)(1), 7.1(a)(2) and 7.1(a)(3) , any amendment or waiver of, or any consent under, any provision of this Agreement or any other Security Document that secures Priority Lien Obligations will apply automatically to any comparable provision of any comparable Junior Lien Document without the consent of or notice to any holder of Junior Lien Obligations and without any action by any Grantor or any holder of Junior Lien Obligations.

 

(c)           The Collateral Trustee will not enter into any amendment or supplement unless it has received an Officers’ Certificate to the effect that such amendment or supplement will not result in a breach of any provision or covenant contained in any of the Secured Debt Documents.  Prior to executing any amendment or supplement pursuant to this Section 7.1, the Collateral Trustee will be entitled to receive an opinion of counsel of GXS to the effect that the execution of such document is authorized or permitted hereunder, and with respect to amendments adding Collateral, an opinion of counsel of GXS addressing customary creation and perfection, and if such additional Collateral consists of equity interests of any Person, priority matters with respect to such additional Collateral (which opinion may be subject to customary assumptions and qualifications).

 

(d)           Any amendment or supplement to the provisions of the Security Documents that releases Collateral will be effective only in accordance with the requirements set forth in the applicable Secured Debt Document referenced above under Section 4.1 of this Agreement.  Any amendment or supplement that results in all of the Collateral Trustee’s Secured Debt Liens upon the Collateral no longer securing the Notes and the other Obligations under the Indenture may only be effected in accordance with Section 4.4 of this Agreement.

 

(e)           The holders of Junior Lien Obligations and the Junior Lien Representatives agree that each Security Document that secures Junior Lien Obligations (but not also securing Priority Lien Obligations) will include the following language:

 

“ Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Trustee pursuant to this Agreement and the exercise of any right or remedy by

 

  

44

  

 

such Collateral Trustee hereunder are subject to the provisions of the Collateral Trust Agreement, dated as of December 23, 2009, among GXS Worldwide, Inc., the Grantors from time to time party thereto, Wells Fargo Foothill, Inc., as Administrative Agent under the Revolving Credit Agreement (as defined therein), U.S. Bank National Association, as Trustee under the Indenture (as defined therein), and Wilmington Trust FSB, as Collateral Trustee (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Collateral Trust Agreement”).  In the event of any conflict between the terms of the Collateral Trust Agreement and this Agreement, the terms of the Collateral Trust Agreement will govern.”

 

; provided, however, that if the jurisdiction in which any such Junior Lien Document will be filed prohibits the inclusion of the language above or would prevent a document containing such language from being recorded, the Junior Lien Representatives and the Priority Lien Representatives agree, prior to such Junior Lien Document being entered into, to negotiate in good faith replacement language stating that the lien and security interest granted under such Junior Lien Document is subject to the provisions of this Agreement.

SECTION 7.2   Voting.  In connection with any matter under this Agreement requiring a vote of holders of Secured Debt, each Series of Secured Debt will cast its votes in accordance with the Secured Debt Documents governing such Series of Secured Debt.  Hedging Obligations and Banking Product Obligations will not be considered for purposes of voting by holders of Priority Lien Debt under this Agreement unless there are no Series of Priority Lien Debt outstanding (excluding Hedging Obligations), and Hedging Obligations will not be considered for purposes of voting by holders of Junior Lien Debt under this Agreement unless there are no Series of Junior Lien Debt outstanding, each as determined under the definition of Act of Required Debtholders.  The amount of Secured Debt to be voted by a Series of Secured Debt will equal (1) the aggregate principal amount of Secured Debt held by such Series of Secured Debt (including the face amount of outstanding letters of credit whether or not then available or drawn), plus (2) the aggregate unfunded commitments to extend credit which, when funded, would constitute Indebtedness of such Series of Secured Debt.  Following and in accordance with the outcome of the applicable vote under its Secured Debt Documents, the Secured Debt Representative of each Series of Secured Debt will cast all of its votes under that Series of Secured Debt as a block in respect of any vote under this Agreement.

 

The Collateral Trustee has no obligation or duty to determine whether the vote of the requisite holders of the applicable Series of Secured Debt was obtained as required in this Section 7.2 or is required by or any purpose hereof.

 

SECTION 7.3   Further Assurances; Insurance.

 

(a)           Each of the Grantors will do or cause to be done all acts and things that may be required, or that the Collateral Trustee from time to time may reasonably request, to assure and confirm that the Collateral Trustee holds, for the benefit of the holders of Secured Debt Obligations, duly created and enforceable and perfected Liens upon the Collateral (including any property or assets that are acquired or otherwise become Collateral after the date of this Agreement), in each case, as contemplated by, and with the Lien priority required under, the Secured Debt Documents.

 

  

45

  

(b)           Upon the reasonable request of the Collateral Trustee or any Secured Debt Representative at any time and from time to time, each of the Grantors will promptly execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents, and take such other actions as shall be reasonably required, or that the Collateral Trustee may reasonably request, to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by the Secured Debt Documents for the benefit of the holders of Secured Debt Obligations.

 

(c)           Without limiting the foregoing, substantially concurrently with the acquisition by any Grantor of any asset that would constitute Collateral as to which perfection does not occur automatically and as to which perfection is required under the Secured Debt Documents, each such Grantor will execute and deliver to the Collateral Trustee for the benefit of the holders of Secured Debt Obligations such Uniform Commercial Code financing statements or take such other actions, in each case, as required under the Secured Debt Documents. 

 

(d)           Upon the request of the Collateral Trustee, GXS and the other Grantors will permit the Collateral Trustee or any of its agents or representatives (x), at reasonable times and intervals (but in any event, so long as no Event of Default (as defined in any Secured Debt Document) has occurred and is continuing, no more than one time per year) upon reasonable prior notice, to examine and make copies of and abstracts from the books and records relating to the Collateral (subject to requirements under any confidentiality agreements, if applicable), all at GXS’s expense and (y) to discuss matters relating to the Collateral with their respective representatives and advisors (provided that GXS shall be given the right to participate in such discussions with such representatives).

 

SECTION 7.4   Perfection of Junior Trust Estate.

 

Solely for purposes of perfecting the Liens of the Collateral Trustee in its capacity as agent of the holders of Junior Lien Obligations and the Junior Lien Representatives in any portion of the Junior Trust Estate in the possession or control of the Collateral Trustee (or its agents or bailees) as part of the Senior Trust Estate including, without limitation, any instruments, goods, negotiable documents, tangible chattel paper, certificated securities, securities accounts or money, the Collateral Trustee, the holders of Priority Lien Obligations and the Priority Lien Representatives hereby acknowledge that the Collateral Trustee also holds such property as gratuitous bailee for the benefit of the Collateral Trustee for the benefit of the holders of Junior Lien Obligations and the Junior Lien Representatives (such bailment being intended, among other things, to satisfy the requirements of Sections 8-106(d)(d), 8-301(a)(2) and 9-313(c) of the UCC).  Solely with respect to any deposit accounts under the control (within the meaning of Section 9-104 of the UCC) of the Collateral Trustee in its capacity as agent of the holders of the Priority Lien Obligations agrees to also hold control over such deposit accounts as gratuitous agent for the benefit of the Collateral Trustee for the benefit of the holders of Junior Lien Obligations and the Junior Lien Representatives.

 

SECTION 7.5   Successors and Assigns.

 

(a)           Except as provided in Section  5.2, the Collateral Trustee may not, in its capacity as such, delegate any of its duties or assign any of its rights hereunder, and any attempted 

 

  

46

  

 

delegation or assignment of any such duties or rights will be null and void.  All obligations of the Collateral Trustee hereunder will inure to the sole and exclusive benefit of, and be enforceable by, each Secured Debt Representative and each present and future holder of Secured Debt Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective successors and assigns.

 

(b)           Neither GXS nor any other Grantor may delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights will be null and void.  All obligations of GXS and the other Grantors hereunder will inure to the sole and exclusive benefit of, and be enforceable by, the Collateral Trustee, each Secured Debt Representative and each present and future holder of Secured Debt Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective successors and assigns.

 

SECTION 7.6   Delay and Waiver.  No failure to exercise, no course of dealing with respect to the exercise of, and no delay in exercising, any right, power or remedy arising under this Agreement or any of the other Security Documents will impair any such right, power or remedy or operate as a waiver thereof.  No single or partial exercise of any such right, power or remedy will preclude any other or future exercise thereof or the exercise of any other right, power or remedy.  The remedies herein are cumulative and are not exclusive of any remedies provided by law.

 

SECTION 7.7   Notices.  Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given may be given to the following addresses:

 

	
If to the Collateral Trustee:

	
Wilmington Trust FSB

	  	
Corporate Client Services

	  	
Suite 1290

	  	
50 South Sixth Street

	  	
Minneapolis, MN 55402

	  	
Facsimile No.: 612-217-5651

	  	
Attention: Peter Finkel

	  	  
	
With a copy to:

	
Salans LLP

	  	
Rockefeller Center

	  	
620 Fifth Avenue

	  	
New York, NY 10020

	  	
Facsimile No.: 212-632-5555

	  	
Attention: Anthony Carroll

 

 

  

47

  

 

	  	  
	
If to GXS or any other

	  
	
Grantor:

	
GXS Worldwide, Inc.

	  	
100 Edison Park Drive

	  	
5th Floor

	  	
Gaithersburg, Maryland 20878

	  	
Attention: General Counsel

	  	
Facsimile No.: (301) 340-4251

	  	  
	
With a copy to:

	
Davis Polk & Wardwell LLP

	  	
450 Lexington Avenue

	  	
New York, New York 10017

	  	  
	
If to the Administrative Agent:

	
Wells Fargo Foothill, Inc..

	  	
2450 Colorado Avenue

	  	
Suite 3000 West

	  	
Santa Monica, California 90404

	  	
Attention: Technology Finance Division

	  	
Manager

	  	  
	
With copy to:

	
Paul, Hastings, Janofsky & Walker LLP

	  	
515 South Flower Street

	  	
Twenty-fifth Floor

	  	
Los Angeles, California 90071

	  	
Attention: John Francis Hilson, Esq.

	  	  
	
If to the Trustee:

	
U.S. Bank National Association

	  	
Corporate Trust Services

	  	
150 Fourth Avenue North, 2nd Floor

	  	
Nashville, Tennessee  37219

	  	
Facsimile No.: (615) 251-0737

	  	
Attention:  Wally Jones

	  	  
	
With a copy to:

	
Adams and Reese LLP

	  	
424 Church Street, Suite 2800

	  	
Nashville, Tennessee 37219

	  	
Facsimile No.:  (615) 259-1470

	  	
Attention:  Kolin B. Holladay

 

and, if to any other Secured Debt Representative, to such address as it may specify by written notice to the parties named above.

 

Unless otherwise specified herein, all notices, requests, demands or other communications given to any of the Grantors, the Collateral Trustee and any Secured Debt  Representative shall be given in writing (including, but not limited to, facsimile transmission followed by telephonic confirmation or similar writing) and shall be effective (i) if given by facsimile transmission, when such facsimile is transmitted to the facsimile number specified in 

 

  

48

  

 

this Section 7.7 and the appropriate facsimile confirmation is received, (ii) if given by certified registered mail, return receipt requested, with first class postage prepaid, addressed as aforesaid, upon receipt or refusal to accept delivery, (iii) if given by a nationally recognized overnight carrier, 24 hours after such communication is deposited with such carrier with postage prepaid for next day delivery, or (iv) if given by any other means, when delivered at the address specified in this Section 7.7; provided that any notice, request or demand to the Collateral Trustee shall not be effective until received by the Collateral Trustee in writing or by facsimile transmission in the Corporate Client Services division at the office designated by it pursuant to this Section 7.7.

 

SECTION 7.8   Notice Following Discharge of Priority Lien Obligations.  Promptly following the Discharge of Priority Lien Obligations with respect to one or more Series of Priority Lien Debt, each Priority Lien Representative with respect to each applicable Series of Priority Lien Debt that is so discharged will provide written notice of such discharge to the Collateral Trustee and to each other Secured Debt Representative.

 

SECTION 7.9   Entire Agreement.  This Agreement states the complete agreement of the parties relating to the undertaking of the Collateral Trustee set forth herein and supersedes all oral negotiations and prior writings in respect of such undertaking.

 

SECTION 7.10   Compensation; Expenses.  The Grantors jointly and severally agree to pay, promptly upon demand:

 

(1)           such compensation to the Collateral Trustee and its agents as GXS and the Collateral Trustee may agree in writing from time to time;

 

(2)           all the actual costs and reasonable out of pocket expenses incurred by the Collateral Trustee and its agents in the preparation, execution, delivery, filing, recordation, administration or enforcement of this Agreement or any other Security Document or any consent, amendment, waiver or other modification relating hereto or thereto;

 

(3)           all reasonable fees, out of pocket expenses and reasonable disbursements of legal counsel and any auditors, accountants, consultants or appraisers or other professional advisors and agents engaged by the Collateral Trustee or any Secured Debt Representative incurred in connection with the negotiation, preparation, closing, administration, performance or enforcement of this Agreement and the other Security Documents or any consent, amendment, waiver or other modification relating hereto or thereto and any other document or matter requested by GXS or any other Grantor;

 

(4)           all the actual costs and reasonable out of pocket expenses incurred by the Collateral Trustee and its agents in creating, perfecting, preserving, releasing or enforcing the Collateral Trustee’s Liens on the Collateral, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, and title insurance premiums;

 

(5)           all other actual costs and reasonable out of pocket expenses incurred by the Collateral Trustee and its agents in connection with the negotiation, preparation and execution of the Security Documents and any consents, amendments, waivers or other 

 

  

49

  

 

modifications thereto and the transactions contemplated thereby or the exercise of rights or performance of obligations by the Collateral Trustee thereunder; and

 

(6)           after the occurrence of any Secured Debt Default, all costs and out of pocket expenses incurred by the Collateral Trustee, its agents, any Secured Debt Representative and any holder of Secured Debt Obligations in connection with the preservation, collection, foreclosure or enforcement of the Collateral subject to the Security Documents or any interest, right, power or remedy of the Collateral Trustee or in connection with the collection or enforcement of any of the Secured Debt Obligations or the proof, protection, administration or resolution of any claim based upon the Secured Debt Obligations in any Insolvency or Liquidation Proceeding, including all reasonable fees and disbursements of attorneys, accountants, auditors, consultants, appraisers and other professionals engaged by the Collateral Trustee, its agents or the Secured Debt Representatives.

 

The agreements in this Section  7.10 will survive repayment of all other Secured Debt Obligations and the removal or resignation of the Collateral Trustee.

 

SECTION 7.11   Indemnity.

 

(a)           The Grantors jointly and severally agree to defend, indemnify, pay and hold harmless the Collateral Trustee and each of its Affiliates and each of its directors, officers, partners, trustees, employees, attorneys and agents, and (in each case) their respective heirs, representatives, successors and assigns (each of the foregoing, an “ Indemnitee”) from and against any and all Indemnified Liabilities; provided, no Indemnitee will be entitled to indemnification hereunder with respect to any Indemnified Liability to the extent such Indemnified Liability is 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 Indemnitee.

 

(b)           All amounts due under this Section  7.11 will be payable upon demand.

 

(c)           To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in Section  7.11(a) may be unenforceable in whole or in part because they violate any law or public policy, each of the Grantors will contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

 

(d)           No Grantor will ever assert any claim against any Indemnitee, on any theory of liability, for any lost profits or special, indirect or consequential damages or (to the fullest extent a claim for punitive damages may lawfully be waived) any punitive damages arising out of, in connection with, or as a result of, this Agreement or any other Secured Debt Document or any agreement or instrument or transaction contemplated hereby or relating in any respect to any Indemnified Liability, and each of the Grantors hereby forever waives, releases and agrees not to sue upon any claim for any such lost profits or special, indirect, consequential or (to the fullest extent lawful) punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

  

50

  

 

(e)           The agreements in this Section  7.11 will survive repayment of all other Secured Debt Obligations and the removal or resignation of the Collateral Trustee.

 

SECTION 7.12   Severability.  If any provision of this Agreement is invalid, illegal or unenforceable in any respect or in any jurisdiction, the validity, legality and enforceability of such provision in all other respects and of all remaining provisions, and of such provision in all other jurisdictions, will not in any way be affected or impaired thereby.

 

SECTION 7.13   Headings.  Section headings herein have been inserted for convenience of reference only, are not to be considered a part of this Agreement and will in no way modify or restrict any of the terms or provisions hereof.

 

SECTION 7.14   Obligations Secured.  All obligations of the Grantors set forth in or arising under this Agreement will be Secured Debt Obligations and are secured by all Liens granted by the Security Documents.

 

SECTION 7.15   Governing Law.  THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS AGREEMENT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 7.16   Consent to Jurisdiction.  All judicial proceedings brought against any party hereto arising out of or relating to this Agreement or any of the other Security Documents shall be brought in any state or federal court of competent jurisdiction in the State, County and City of New York.  By executing and delivering this Agreement, each Grantor, for itself and in connection with its properties irrevocably:

 

(1)           accepts generally and unconditionally the exclusive jurisdiction and venue of such courts;

 

(2)           waives any defense of forum non conveniens to extent permitted by applicable law;

 

(3)           agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to such party at its address provided in accordance with Section  7.7;

 

(4)           agrees that service as provided in clause  (3) above is sufficient to confer personal jurisdiction over such party in any such proceeding in any such court and otherwise constitutes effective and binding service in every respect; and

 

(5)           agrees each party hereto retains the right to serve process in any other manner permitted by law or to bring proceedings against any party in the courts of any other jurisdiction.

 

SECTION 7.17   Waiver of Jury Trial.  Each party to this Agreement waives its rights to a jury trial of any claim or cause of action based upon or arising under this Agreement or any of 

 

  

51

  

 

the other Security Documents or any dealings between them relating to the subject matter of this Agreement or the intents and purposes of the other Security Documents.  The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement and the other Security Documents, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims.  Each party to this Agreement acknowledges that this waiver is a material inducement to enter into a business relationship, that each party hereto has already relied on this waiver in entering into this Agreement, and that each party hereto will continue to rely on this waiver in its related future dealings.  Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel.  This waiver is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section  7.17 and executed by each of the parties hereto), and this waiver will apply to any subsequent amendments, renewals, supplements or modifications of or to this Agreement or any of the other Security Documents or to any other documents or agreements relating thereto.  In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

 

SECTION 7.18   Counterparts.  This Agreement may be executed in any number of counterparts (including by facsimile), each of which when so executed and delivered will be deemed an original, but all such counterparts together will constitute but one and the same instrument.

 

SECTION 7.19   Effectiveness.  This Agreement will become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by each party of written notification of such execution and written or telephonic authorization of delivery thereof.

 

SECTION 7.20   Grantors and Additional Grantors.  GXS represents and warrants that each Person who is a Grantor on the date hereof has duly executed this Agreement.  GXS will cause each Person that hereafter becomes a Grantor or is required by any Secured Debt Document to become a party to this Agreement to become a party to this Agreement, for all purposes of this Agreement, by causing such Person to execute and deliver to the Collateral Trustee a Collateral Trust Joinder, whereupon such Person will be bound by the terms hereof to the same extent as if it had executed and delivered this Agreement as of the date hereof.  GXS shall promptly provide each Secured Debt Representative with a copy of each Collateral Trust Joinder executed and delivered pursuant to this Section 7.20; provided, however, that the failure to so deliver a copy of the Collateral Trust Joinder to any then existing Secured Debt Representative shall not affect the inclusion of such Person as a Grantor if the other requirements of this Section 7.20 are complied with.

 

SECTION 7.21   Continuing Nature of this Agreement.  This Agreement, including the subordination provisions hereof, will be reinstated if at any time any payment or distribution in respect of any of the Priority Lien Obligations is rescinded or must otherwise be returned in an Insolvency or Liquidation Proceeding  or otherwise by any holder of Priority Lien Obligations or Priority Lien Representative or any representative of any such party (whether by demand, settlement, litigation or otherwise).  In the event that all or any part of a payment or distribution made with respect to the Priority Lien Obligations is recovered from any holder of Priority Lien 

 

  

52

  

 

Obligations or any Priority Lien Representative in an Insolvency or Liquidation Proceeding or otherwise, such payment or distribution received by any holder of Junior Lien Obligations or Junior Lien Representative with respect to the Junior Lien Obligations from the proceeds of any Collateral or any title insurance policy required by any real property mortgage at any time after the date of the payment or distribution that is so recovered, whether pursuant to a right of subrogation or otherwise, that Junior Lien Representative or that holder of a Junior Lien Obligation, as the case may be, will forthwith deliver the same to the Collateral Trustee, for the account of the holders of the Priority Lien Obligations and other Obligations secured by a Permitted Prior Lien, to be applied in accordance with Section 3.4.  Until so delivered, such proceeds will be held by that Junior Lien Representative or that holder of a Junior Lien Obligation, as the case may be, for the benefit of the holders of the Priority Lien Obligations and other Obligations secured by a Permitted Prior Lien.

 

SECTION 7.22   Insolvency.  This Agreement will be applicable both before and after the commencement of any Insolvency or Liquidation Proceeding by or against any Grantor.  The relative rights, as provided for in this Agreement, will continue after the commencement of any such Insolvency or Liquidation Proceeding on the same basis as prior to the date of the commencement of any such case, as provided in this Agreement.

 

SECTION 7.23   Rights and Immunities of Secured Debt Representatives.  The Administrative Agent will be entitled to all of the rights, protections, immunities and indemnities set forth in the Revolving Credit Agreement, the Trustee will be entitled to all of the rights, protections, immunities and indemnities set forth in the Indenture and any future Secured Debt Representative will be entitled to all of the rights, protections, immunities and indemnities set forth in the Revolving Credit Agreement, Indenture or other agreement governing the applicable Secured Debt with respect to which such Person will act as representative, in each case as if specifically set forth herein.  In no event will any Secured Debt Representative be liable for any act or omission on the part of the Grantors or the Collateral Trustee hereunder.

 

  

53

  

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Agreement to be executed by their respective officers or representatives as of the day and year first above written.

 

	 	GXS WORLDWIDE, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ John Duvall	 
	 	 	 	 

	 	GXS, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ John Duvall	 
	 	 	 	 

	 	GXS INTERNATIONAL, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ John Duvall	 
	 	 	 	 

	 	GXS INVESTMENTS, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ John Duvall	 
	 	 	 	 

	 	HAHT COMMERCE INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ John Duvall	 
	 	 	 	 

 

 

  

S-1

  

 

	  	
WELLS FARGO FOOTHILL, INC.,

as Administrative Agent

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	/s/ John O’ Leary Nocita	  
	  	  	
Name:

	John O’ Leary Nocita	  
	  	  	
Title:

	Senior Vice president	  

 

	  	
U.S. BANK NATIONAL ASSOCIATION,

as Trustee under the Indenture

	  
	  	  	  	  	  
	 	 	 	 	 
	  	
By:

	/s/ Wally Jones	  
	  	  	
Name:

	Wally Jones	  
	  	  	
Title:

	Vice President	  

 

	  	
WILMINGTON TRUST FSB,

as Collateral Trustee

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	/s/ Peter Finkel	  
	  	  	
Name:

	Peter Finkel	  
	  	  	
Title:

	Vice President	  

 

  

S-2

  

[EXHIBIT A

to Collateral Trust Agreement]

 

[FORM OF]

ADDITIONAL SECURED DEBT DESIGNATION

 

Reference is made to the Collateral Trust Agreement dated as of December 23, 2009 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among GXS Worldwide, Inc. (“GXS”), the Grantors from time to time party thereto, Wells Fargo Foothill, Inc., as Administrative Agent under the Revolving Credit Agreement (as defined therein), U.S. Bank National Association, as Trustee under the Indenture (as defined therein) and Wilmington Trust FSB, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Collateral Trust Agreement.  This Additional Secured Debt Designation is being executed and delivered in order to designate additional secured debt as either Priority Lien Debt or Junior Lien Debt entitled to the benefit of the Collateral Trust Agreement.

 

The undersigned, the duly appointed [specify title] of GXS hereby certifies on behalf of the GXS that:

 

(A) [insert name of GXS or other Grantor] intends to incur additional Secured Debt (“Additional Secured Debt”) which will be [select appropriate alternative] [Priority Lien Debt permitted by each applicable Secured Debt Document to be secured by a Priority Lien, subject to the distribution provisions of the Collateral Trust Agreement, equally and ratably with all previously existing and future Priority Lien Debt] or [Junior Lien Debt permitted by each applicable Secured Debt Document to be secured with a Junior Lien equally and ratably with all previously existing and future Junior Lien Debt];

 

(B) the name and address of the Secured Debt Representative for the Additional Secured Debt for purposes of Section 7.7 of the Collateral Trust Agreement is:

 

	
 

	  	  
	
 

 

	  	  
	
Telephone:  

	
 

 

	  
	
Fax:

	
 

	
  

 

 

(C) Each of GXS and each other Grantor has duly authorized, executed (if applicable) and recorded (or caused to be recorded) in each appropriate governmental office all relevant filings and recordations to ensure that the Additional Secured Debt is secured by the Collateral in accordance with the Security Documents;

 

  

 

  

 

EXHIBIT A

 

(D) Attached as Exhibit 1 hereto is a Reaffirmation Agreement duly executed by GXS and each other Grantor and Guarantor, and

 

(E) GXS has caused a copy of this Additional Secured Debt Designation and the related Collateral Trust Joinder to be delivered to each existing Secured Debt Representative.

 

IN WITNESS WHEREOF, GXS has caused this Additional Secured Debt Designation to be duly executed by the undersigned officer as of ___________________, 20____.

 

 

	  	
[insert name of borrower]

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

ACKNOWLEDGEMENT OF RECEIPT

 

The undersigned, the duly appointed Collateral Trustee under the Collateral Trust Agreement, hereby acknowledges receipt of an executed copy of this Additional Secured Debt Designation.

 

	  	
[insert name of Collateral Trustee]

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

  

S-2

  

 

 

	
  

	
EXHIBIT 1 TO ADDITIONAL SECURED DEBT DESIGNATION

 

 

[FORM OF]

REAFFIRMATION AGREEMENT

 

Reference is made to the Collateral Trust Agreement dated as of December 23, 2009 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among GXS Worldwide, Inc. (“GXS”), the Grantors from time to time party thereto, Wells Fargo Foothill, Inc., as Administrative Agent under the Revolving Credit Agreement (as defined therein), U.S. Bank National Association, as Trustee under the Indenture (as defined therein) and Wilmington Trust FSB, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Collateral Trust Agreement.  This Reaffirmation Agreement is being executed and delivered as of ____, 20__ in connection with an Additional Secured Debt Designation of even date herewith which Additional Secured Debt Designation has designated  additional secured debt as either Priority Lien Debt or Junior Lien Debt (as described therein) entitled to the benefit of the Collateral Trust Agreement.

 

Each of the undersigned hereby consents to the designation of additional secured debt as  [Priority/Junior] Lien Debt as set forth in the Additional Secured Debt Designation of even date herewith and hereby confirms its respective guarantees, pledges, grants of security interests and other obligations, as applicable, under and subject to the terms of each of the [Priority/Junior] Lien Documents to which it is party, and agrees that, notwithstanding the designation of such additional indebtedness or any of the transactions contemplated thereby, such guarantees, pledges, grants of security interests and other obligations, and the terms of each [Priority/Junior] Lien Document to which it is a party, are not impaired or adversely affected in any manner whatsoever and shall continue to be in full force and effect and such additional secured debt shall be entitled to all of the benefits of such [Priority/Junior] Lien Documents.

 

Governing Law and Miscellaneous Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will apply with like effect to this Reaffirmation Agreement.

IN WITNESS WHEREOF, each of the undersigned has caused this Reaffirmation Agreement to be duly executed as of the date written above.

 

	  	
[names of pledgors and guarantors]

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

  

S-3

  

 

[EXHIBIT B

to Collateral Trust Agreement]

 

[FORM OF]

COLLATERAL TRUST JOINDER – ADDITIONAL DEBT

 

Reference is made to the Collateral Trust Agreement dated as of December 23, 2009 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among GXS Worldwide, Inc. (“GXS”), the Grantors from time to time party thereto, Wells Fargo Foothill, Inc., as Administrative Agent under the Revolving Credit Agreement (as defined therein), U.S. Bank National Association, as Trustee under the Indenture (as defined therein) and Wilmington Trust FSB, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Collateral Trust Agreement.  This Collateral Trust Joinder is being executed and delivered pursuant to Section 3.8 of the Collateral Trust Agreement as a condition precedent to the debt for which the undersigned is acting as agent being entitled to the benefits of being additional secured debt under the Collateral Trust Agreement.

 

1. Joinder.  The undersigned, _____________________, a _______________, (the “New Representative”) as [trustee, administrative agent] under that certain [described applicable indenture, credit agreement or other document governing the additional secured debt] hereby agrees to become party as [a Junior Lien Representative] [a Priority Lien Representative] under the Collateral Trust Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Collateral Trust Agreement as fully as if the undersigned had executed and delivered the Collateral Trust Agreement as of the date thereof.

 

2. Lien Sharing and Priority Confirmation.

[Option A: to be used if Additional Debt is Junior Lien Debt]  The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Junior Lien Debt for which the undersigned is acting as Junior Lien Representative hereby agrees, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt and Junior Lien Debt, each existing and future Priority Lien Representative, each other existing and future Junior Lien Representative and each existing and future holder of Permitted Prior Liens and as a condition to being treated as Secured Debt under the Collateral Trust Agreement that:

(a)           all Junior Lien Obligations will be and are secured equally and ratably by all Junior Liens at any time granted by GXS or any other Grantor to the Collateral Trustee to secure any Obligations in respect of any Series of Junior Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Junior Lien Debt, and that all such Junior Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Junior Lien Obligations equally and ratably;

 

  

S-4

  

 

 

(b)           the New Representative and each holder of Obligations in respect of the Series of Junior Lien Debt for which the undersigned is acting as Junior Lien Representative are bound by the provisions of this Agreement, including the provisions relating to the ranking of Junior Liens and the order of application of proceeds from the enforcement of Junior Liens; and

 

(c)           the Collateral Trustee shall perform its obligations under the Collateral Trust Agreement and the other Security Documents.  [or]

 

[Option B: to be used if Additional Debt is Priority Lien Debt]  The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Priority Lien Debt for which the undersigned is acting as Priority Lien Representative hereby agrees, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt and Junior Lien Debt, each existing and future Junior Lien Representative, each other existing and future Priority Lien Representative and each existing and future holder of Permitted Prior Liens and as a condition to being treated as Secured Debt under the Collateral Trust Agreement that:

(a)           all Priority Lien Obligations will be and are secured, subject to the distribution provisions of the Collateral Trust Agreement, equally and ratably by all Priority Liens at any time granted by GXS or any other Grantor to the Collateral Trustee to secure any Obligations in respect of any Series of Priority Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Priority Lien Debt, and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Priority Lien Obligations equally and ratably;

 

(b)           the New Representative and each holder of Obligations in respect of the Series of Priority Lien Debt for which the undersigned is acting as Priority Lien Representative are bound by the provisions of this Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from the enforcement of Priority Liens; and

 

(c)           the Collateral Trustee shall perform its obligations under the Collateral Trust Agreement and the other Security Documents. 

 

3.  Governing Law and Miscellaneous Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will apply with like effect to this Collateral Trust Joinder.

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Joinder to be executed by their respective officers or representatives as of ___________________, 20____.

 

 

	  	
[insert name of the new representative]

 

	  

 

  

S-5

  

 

 

	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

The Collateral Trustee hereby acknowledges receipt of this Collateral Trust Joinder and agrees to act as Collateral Trustee for the New Representative and the holders of the Obligations represented thereby:

 

	  	
_______________, as Collateral Trustee

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

  

S-6

  

 

[EXHIBIT C

to Collateral Trust Agreement]

 

 

[FORM OF]

COLLATERAL TRUST JOINDER – ADDITIONAL GRANTOR

 

Reference is made to the Collateral Trust Agreement dated as of December 23, 2009 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among GXS Worldwide, Inc. (“GXS”), the Grantors from time to time party thereto, Wells Fargo Foothill, Inc., as Administrative Agent under the Revolving Credit Agreement (as defined therein), U.S. Bank National Association, as Trustee under the Indenture (as defined therein) and Wilmington Trust FSB, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Collateral Trust Agreement.  This Collateral Trust Joinder is being executed and delivered pursuant to Section 7.20 of the Collateral Trust Agreement.

 

1.  Joinder.  The undersigned, _____________________, a _______________, hereby agrees to become party as a Grantor under the Collateral Trust Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Collateral Trust Agreement as fully as if the undersigned had executed and delivered the Collateral Trust Agreement as of the date thereof.

 

2.  Governing Law and Miscellaneous Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will apply with like effect to this Collateral Trust Joinder.

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Joinder to be executed by their respective officers or representatives as of ___________________, 20____.

 

	  	
[___________________________________]

	  
	 	 	 	 	 
	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

The Collateral Trustee hereby acknowledges receipt of this Collateral Trust Joinder and agrees to act as Collateral Trustee with respect to the Collateral pledged by the new Grantor:

 

	  	
_______________, as Collateral Trustee

	  
	 	 	 
	  	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

  

S-7

  

 

 

	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

  

S-8EXHIBIT 10.4

EXECUTION COPY

 

 

AGREEMENT AND PLAN OF MERGER

 

among

 

GXS HOLDINGS, INC.,

 

INOVIS INTERNATIONAL, INC.,

 

GRIRIS HOLDING COMPANY, INC.

 

IRIS MERGER SUB, INC.

 

GREYHOUND MERGER SUB, INC.

 

And with respect to Articles II, IX and X only,

 

CCG INVESTMENT FUND, L.P.

 

and

 

CERBERUS INSTITUTIONAL PARTNERS, L.P.,

 

AS IRIS STOCKHOLDER REPRESENTATIVE

 

 

 

Dated as of December 7, 2009

 

  

  

  

TABLE OF CONTENTS

 

Page      

	
ARTICLE I

	 
	
THE MERGERS

	 
	
SECTION 1.01. The Greyhound Merger

	
3

	
SECTION 1.02. The Iris Merger

	
3

	
SECTION 1.03. Closing

	
4

	
SECTION 1.04. Certificates of Incorporation; By-laws

	
4

	
SECTION 1.05. Directors and Officers of the Surviving Corporation

	
5

	 	 
	 
	
ARTICLE II

	 
	
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

	 
	
SECTION 2.01. Greyhound and Greyhound Merger Sub

	
5

	
SECTION 2.02. Iris and Iris Merger Sub

	
6

	
SECTION 2.03. Exchange of Certificates

	
6

	
SECTION 2.04. Stock Transfer Books

	
10

	
SECTION 2.05. Stock Options

	
10

	
SECTION 2.06. Merger Consideration Adjustments

	
12

	
SECTION 2.07. Certain Adjustments; Aggregate Limits

	
15

	
SECTION 2.08. Dissenting Shares

	
16

	
SECTION 2.09. Escrow

	
17

	
ARTICLE III

	 
	
REPRESENTATIONS AND WARRANTIES OF IRIS AND PARENT

	 
	
SECTION 3.01. Corporate Organization

	
18

	
SECTION 3.02. Certificate of Incorporation and By-laws

	
19

	
SECTION 3.03. Capitalization

	
19

	
SECTION 3.04. Authority Relative to This Agreement

	
20

	
SECTION 3.05. No Conflict; Required Filings and Consents

	
20

	
SECTION 3.06. Permits; Compliance

	
21

	
SECTION 3.07. Financial Statements

	
21

	
SECTION 3.08. Absence of Certain Changes or Events

	
22

	
SECTION 3.09. Absence of Litigation

	
22

	
SECTION 3.10. Employee Benefit Plans

	
22

	
SECTION 3.11. Labor and Employment Matters

	
25

	
SECTION 3.12. Real Property; Title to Assets

	
25

	
SECTION 3.13. Intellectual Property

	
25

	
SECTION 3.14. Taxes

	
27

	
SECTION 3.15. Environmental Matters

	
28

 

 

i

  

  

 

	
SECTION 3.16. Iris Board Approval; Iris Stockholder Approval

	
28

	
SECTION 3.17. Material Contracts

	
28

	
SECTION 3.18. Insurance

	
30

	
SECTION 3.19. Certain Business Practices

	
30

	
SECTION 3.20. Interested Party Transactions

	
31

	
SECTION 3.21. Brokers

	
31

	
SECTION 3.22. Operations of Parent, Greyhound Merger Sub and Iris Merger Sub

	
31

	
SECTION 3.23. Disclosure Documents

	
32

	
SECTION 3.24. No Other Representations

	
32

	
ARTICLE IV

	 
	
REPRESENTATIONS AND WARRANTIES OF GREYHOUND

	 
	
SECTION 4.01. Corporate Organization

	
33

	
SECTION 4.02. Certificate of Incorporation and By-Laws

	
34

	
SECTION 4.03. Capitalization

	
34

	
SECTION 4.04. Authority Relative to This Agreement

	
35

	
SECTION 4.05. No Conflict; Required Filings and Consents

	
35

	
SECTION 4.06. Permits; Compliance

	
36

	
SECTION 4.07. Financial Statements

	
36

	
SECTION 4.08. Absence of Certain Changes or Events

	
37

	
SECTION 4.09. Absence of Litigation

	
37

	
SECTION 4.10. Employee Benefit Plans

	
37

	
SECTION 4.11. Labor and Employment Matters

	
40

	
SECTION 4.12. Real Property; Title to Assets

	
40

	
SECTION 4.13. Intellectual Property

	
41

	
SECTION 4.14. Taxes

	
43

	
SECTION 4.15. Environmental Matters

	
43

	
SECTION 4.16. Greyhound Board Approval; Greyhound Stockholder Approval

	
44

	
SECTION 4.17. Material Contracts

	
44

	
SECTION 4.18. Insurance

	
46

	
SECTION 4.19. Certain Business Practices

	
46

	
SECTION 4.20. Interested Party Transactions

	
47

	
SECTION 4.21. Brokers

	
47

	
SECTION 4.22. No Other Representations

	
47

	 	 
	
ARTICLE V

	 
	
CONDUCT OF BUSINESS PENDING THE MERGER

	 
	
SECTION 5.01. Conduct of Business by Iris Pending the Mergers

	
47

	
SECTION 5.02. Conduct of Business by Greyhound Pending the Merger

	
50

 

 

ii

  

  

 

	
ARTICLE VI

	 
	
ADDITIONAL AGREEMENTS

	 
	
SECTION 6.01. Stockholder Approval

	
52

	
SECTION 6.02. Access to Information; Confidentiality

	
54

	
SECTION 6.03. No Solicitation of Transactions

	
54

	
SECTION 6.04. Employee Benefits Matters

	
55

	
SECTION 6.05. Directors’ and Officers’ Indemnification and Insurance

	
56

	
SECTION 6.06. Notification of Certain Matters

	
57

	
SECTION 6.07. Further Action; Reasonable Best Efforts

	
57

	
SECTION 6.08. Tax Treatment

	
58

	
SECTION 6.09. Conduct of Business by Parent, Greyhound Merger Sub and Iris Merger Sub

	
58

	
SECTION 6.10. Press Releases

	
58

	
SECTION 6.11. Board of Directors and Officers of Parent

	
59

	
SECTION 6.12. Stockholders Agreement; Certificate of Designation; Related Party Agreements

	
59

	
SECTION 6.13. Financing

	
59

	
SECTION 6.14. Allocation Schedule

	
60

	 	 
	
ARTICLE VII

	 
	
CONDITIONS TO THE MERGER

	 
	
SECTION 7.01. Conditions to the Obligations of Each Party

	
60

	
SECTION 7.02. Conditions to the Obligations of Iris

	
61

	
SECTION 7.03. Conditions to the Obligations of Greyhound

	
62

	 	 
	
ARTICLE VIII

	 
	
TERMINATION, AMENDMENT AND WAIVER

	 
	
SECTION 8.01. Termination

	
63

	
SECTION 8.02. Effect of Termination

	
64

	
SECTION 8.03. Fees and Expenses; Termination Fees

	
64

	
SECTION 8.04. Amendment

	
67

	
SECTION 8.05. Waiver

	
67

	 	 
	
ARTICLE IX

	 
	
INDEMNIFICATION

	 
	
SECTION 9.01. Survival of Representations and Warranties

	
67

	
SECTION 9.02. Indemnification by Iris Stockholders

	
67

	
SECTION 9.03. Indemnification by Parent

	
68

	
SECTION 9.04. Indemnification Procedures

	
68

 

 

iii

  

  

 

	
SECTION 9.05. Notice of Loss; Third Party Claims

	
70

	
SECTION 9.06. Remedies

	
70

	
SECTION 9.07. Iris Stockholder Representative

	
71

	 	 
	
ARTICLE X

	 
	
GENERAL PROVISIONS

	
SECTION 10.01. Notices

	
72

	
SECTION 10.02. Certain Definitions

	
74

	
SECTION 10.03. Severability

	
88

	
SECTION 10.04. Entire Agreement; Assignment

	
88

	
SECTION 10.05. Parties in Interest

	
88

	
SECTION 10.06. Governing Law

	
88

	
SECTION 10.07. Headings

	
88

	
SECTION 10.08. Counterparts

	
89

	
SECTION 10.09. No Strict Construction

	
89

	
SECTION 10.10. WAIVER OF JURY TRIAL

	
89

	
SECTION 10.11. No Specific Performance

	
89

 

EXHIBITS

	
Exhibit A-1

	
-

	
Iris Written Consent

	 	 	 
	
Exhibit A-2  

	
-

	
Greyhound Written Consent

	 	 	 
	
Exhibit B-1

	
-

	
Iris Form of Support Agreements

	 	 	 
	
Exhibit B-2

	
-

	
Greyhound Form of Support Agreements

	 	 	 
	
Exhibit C

	
-

	
Form of Escrow Agreement

	 	 	 
	
Exhibit D

	
-

	
Form of Stockholders Agreement

	 	 	 
	
Exhibit E

	
-

	
Form of Certificate of Designation

SCHEDULES

 

	
Schedule I

	
-

	
Iris Principal Stockholders

	 	 	 
	
Schedule II

	
-

	
Greyhound Principal Stockholders

 

 

iv

  

  

 

AGREEMENT AND PLAN OF MERGER, dated as of December 7, 2009 (this “Agreement”), among GXS Holdings, Inc., a Delaware corporation (“Greyhound” or “GXS”), Inovis International, Inc., a Delaware corporation (“Iris” or “Inovis”), Grirus Holding Company, Inc., a Delaware corporation (“Parent”), Greyhound Merger Sub, Inc., a Delaware corporation (“Greyhound Merger Sub”), Iris Merger Sub, Inc., a Delaware corporation (“Iris Merger Sub”), and CCG Investment Fund, L.P., a Delaware limited partnership, and Cerberus Institutional Partners, L.P., a Delaware limited partnership, as the Iris stockholder representative (the “Iris Stockholder Representative”).

 

WHEREAS, Parent is a wholly-owned subsidiary of Iris, and each of Greyhound Merger Sub and Iris Merger Sub is a wholly-owned subsidiary of Parent;

 

WHEREAS, the Boards of Directors of Greyhound, Iris, Parent, Iris Merger Sub and Greyhound Merger Sub (each, a “Party” and collectively, the “Parties”) have approved, and deem it advisable and in the best interests of their respective companies and stockholders, to consummate the business combination and other transactions contemplated hereby (collectively, the “Transactions”) provided for herein, pursuant to which Greyhound and Iris will each become a wholly-owned direct subsidiary of Parent through simultaneous mergers of (i) Greyhound Merger Sub with and into Greyhound (the “Greyhound Merger”) and (ii) Iris Merger Sub with and into Iris (the “Iris Merger” and together with the Greyhound Merger, the “Mergers”), each in accordance with the General Corporation Law of the State of Delaware (the “DGCL”);

 

WHEREAS, upon completion of the Mergers: (i) an aggregate of 71.7% (“Greyhound Common Percentage”) of the sum of (A) the outstanding common stock of Parent, par value $0.001 (“Parent Common Stock” and, together with the Parent Preferred Stock, the “Parent Capital Stock”) and (B) the Parent Common Stock issuable upon outstanding options, warrants and other rights exercisable therefor (excluding the Greyhound Substitute SAR), and 71.7% (“Greyhound Preferred Percentage”) of the sum of (x) the outstanding Parent Preferred Stock (as hereinafter defined) and (y) the Parent Preferred Stock issuable upon outstanding options, warrants and other rights exercisable therefor (excluding the Greyhound Substitute SAR) will be owned collectively by the holders of Greyhound Capital Stock (as hereinafter defined) immediately prior to the Effective Time (as hereinafter defined) and the holders of Greyhound Stock Options (as hereinafter defined) immediately prior to the Effective Time; and (ii) an aggregate of 28.3% (“Iris Common Percentage”) of the sum of (A) the outstanding Parent Common Stock and (B) the Parent Common Stock issuable upon outstanding options, warrants and other rights exercisable therefor (excluding the Greyhound Substitute SAR), and 28.3% (“Iris Preferred Percentage”) of the sum of (x) the outstanding Parent Preferred Stock (as hereinafter defined) and (y) the Parent Preferred Stock issuable upon outstanding options, warrants and other rights exercisable therefor (excluding the Greyhound Substitute SAR) will be owned collectively by the holders of Iris Capital Stock outstanding immediately prior to the Initial Effective Time (as hereinafter defined) and the Reinvestment Holders (as hereinafter defined);

 

WHEREAS, the Board of Directors of Greyhound (the “Greyhound Board”) has (i) determined that it is in the best interests of Greyhound and its stockholders, and declared it advisable, to enter into this Agreement; (ii) approved and adopted this Agreement and approved the execution, delivery and performance by Greyhound of this Agreement and the consummation 

 

  

  

  

 

of the Transactions, including the Greyhound Merger, and (iii) resolved to recommend to Greyhound’s stockholders that they approve and adopt this Agreement;

 

WHEREAS, the Board of Directors of Iris (the “Iris Board”) has (i) determined that it is in the best interests of Iris and its stockholders, and declared it advisable, to enter into this Agreement; (ii) approved and adopted this Agreement and approved the execution, delivery and performance by Iris of this Agreement and the consummation of the Transactions, including the Iris Merger; and (iii) resolved to recommend to Iris’ stockholders that they approve and adopt this Agreement;

 

WHEREAS, the Board of Directors of Parent (the “Parent Board”) has (i) determined that it is in the best interests of Parent and its stockholders, and declared it advisable, to enter into this Agreement; (ii) approved and adopted this Agreement and approved the execution, delivery and performance by Parent of this Agreement and the consummation of the Transactions, including the Mergers, and (iii) authorized the proper officers of Parent to vote the shares of Greyhound Merger Sub and Iris Merger Sub held by Parent to approve and adopt this Agreement;

 

WHEREAS, the Board of Directors of Greyhound Merger Sub has (i) determined that it is in the best interests of Greyhound Merger Sub and its sole stockholder, and declared it advisable, to enter into this Agreement, (ii) approved and adopted this Agreement and approved the execution, delivery and performance by Greyhound Merger Sub of this Agreement and the consummation of the Transactions, including the Greyhound Merger, and (iii) resolved to recommend to its sole stockholder that it approve the Greyhound Merger and approve and adopt this Agreement;

 

WHEREAS, the Board of Directors of Iris Merger Sub has (i) determined that it is in the best interests of Iris Merger Sub and its sole stockholder, and declared it advisable, to enter into this Agreement, (ii) approved and adopted this Agreement and approved the execution, delivery and performance by Iris Merger Sub of this Agreement and the consummation of the Transactions, including the Iris Merger, and (iii) resolved to recommend to its sole stockholder that it approve the Iris Merger and approve and adopt this Agreement;

 

WHEREAS, immediately following the execution of this Agreement, (i) as a condition and inducement to Greyhound’s willingness to enter into this Agreement, Iris shall obtain the irrevocable approval of this Agreement and the consummation of the Transactions, including the Mergers and the Transactions, pursuant to an Action by Written Consent, in the form attached as Exhibit A-1 (the “Iris Written Consent”), signed by each of the principal stockholders of Iris listed on Schedule I (the “Iris Principal Stockholders”) and by each officer or director of Iris that is a record owner of Iris Capital Stock, (ii) as a condition and inducement to Iris’ willingness to enter into this Agreement, Greyhound shall obtain the irrevocable approval of this Agreement and the consummation of the Transactions, including the Mergers, pursuant to an Action by Written Consent, in the form attached as Exhibit A-2 (the “Greyhound Written Consent”), signed by each of the principal stockholders of Iris listed on Schedule II (the “Greyhound Principal Stockholders”) and by each officer or director of Greyhound that is a record owner of Greyhound Capital Stock, and (iii) Parent, in its capacity as sole stockholder of 

 

  

2

  

 

Greyhound Merger Sub and Iris Merger Sub shall approve this Agreement and the consummation of the Transactions, including the Mergers;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, (i) as a condition and inducement to Greyhound’s willingness to enter into this Agreement, each of the Iris Principal Stockholders and the officers and directors of Iris who hold outstanding shares of Iris Capital Stock are entering into an agreement  (the “Iris Support Agreements”), in substantially the form attached as Exhibit B-1 hereto, and (ii) as a condition and inducement to Iris’ willingness to enter into this Agreement, the Greyhound Principal Stockholders and the officers and directors of Greyhound who hold outstanding shares of Greyhound Capital Stock are entering into an agreement (the “Greyhound Support Agreements” and, together with the Iris Support Agreements, the “Support Agreements”), in substantially the form attached as Exhibit B-2 hereto; and

 

WHEREAS, for United States federal income tax purposes, the exchange of Greyhound Shares and Iris Shares for Parent Shares and other consideration pursuant to the Mergers, taken together (collectively, the “Exchanges”), is intended to qualify as exchanges under the provisions of Section 351 of the United States Internal Revenue Code of 1986, as amended (the “Code”);

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Greyhound, Iris, Parent, Greyhound Merger Sub and Iris Merger Sub hereby agree as follows:

 

ARTICLE I

 

THE MERGERS

 

SECTION 1.01.   The Iris Merger.  a)  Upon the terms and subject to the conditions set forth in Article VII, and in accordance with the DGCL, at the Initial Effective Time, Iris Merger Sub shall be merged with and into Iris.  As a result of the Iris Merger, the separate corporate existence of Iris Merger Sub shall cease and Iris shall continue as the surviving corporation of the Iris Merger (the “Iris Surviving Corporation”).

 

(b)           As promptly as practicable after the satisfaction or, if permissible, waiver of the conditions set forth in Article VII, other than conditions that by their nature are to be satisfied at the Closing and will in fact be satisfied or waived at the Closing (and in any event no later than ten (10) Business Days following such satisfaction or waiver, unless the Parties otherwise agree), the Parties shall cause the Iris Merger to be consummated by filing a certificate of merger (the “Iris Certificate of Merger”) with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time of such filing of the Iris Certificate of Merger (or such later time as may be agreed by each of the Parties and specified in the Iris Certificate of Merger) being the “Initial Effective Time”).

 

(c)           At the Initial Effective Time, the effect of the Iris Merger shall be as provided in the applicable provisions of the DGCL.  Without limiting the generality of the 

 

  

3

  

 

foregoing, and subject thereto, at the Initial Effective Time, all the property, rights, privileges, powers and franchises of Iris and Iris Merger Sub shall vest in the Iris Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of each of Iris and Iris Merger Sub shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Iris Surviving Corporation.

 

SECTION 1.02.   The Greyhound Merger.  (a)  Upon the terms and subject to the conditions set forth in Article VII, and in accordance with the DGCL, at the Effective Time, Greyhound Merger Sub shall be merged with and into Greyhound.  As a result of the Greyhound Merger, the separate corporate existence of Greyhound Merger Sub shall cease and Greyhound shall continue as the surviving corporation of the Greyhound Merger (the “Greyhound Surviving Corporation” and, together with the Iris Surviving Corporation, the “Surviving Corporations”).

 

(b)           Immediately after the filing of the Iris Certificate of Merger, the Parties shall cause the Greyhound Merger to be consummated by filing a certificate of merger (the “Greyhound Certificate of Merger” and, together with the Iris Certificate of Merger, the “Certificates of Merger”) with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time of such filing of the Greyhound Certificate of Merger (or such later time as may be agreed by each of the Parties and specified in the Greyhound Certificate of Merger) being the “Effective Time”).

 

(c)           At the Effective Time, the effect of the Greyhound Merger shall be as provided in the applicable provisions of the DGCL.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of Greyhound and Greyhound Merger Sub shall vest in the Greyhound Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of each of Greyhound and Greyhound Merger Sub shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Greyhound Surviving Corporation.

 

SECTION 1.03.   Closing.  Immediately prior to such filing of the Certificates of Merger, a closing (the “Closing”) shall be held at the offices of Shearman & Sterling LLP, 525 Market Street, San Francisco, California 94105, or such other place as the Parties shall agree, for the purpose of confirming the satisfaction or waiver, as the case may be, of the conditions set forth in Article VII.

 

SECTION 1.04.   Certificates of Incorporation; By-laws.  (a)  At the Effective Time, the Certificate of Incorporation of the Greyhound Surviving Corporation shall be amended as a result of the Greyhound Merger to be identical to the Certificate of Incorporation of Greyhound Merger Sub, as in effect immediately prior to the Effective Time, until thereafter amended as provided by law and such Certificate of Incorporation; provided, however, that, at the Effective Time, Article I of the Certificate of Incorporation of the Greyhound Surviving Corporation shall be amended to read as follows:  “The name of the corporation is GXS Holdings, Inc.”.

 

(b)           At the Initial Effective Time, the Certificate of Incorporation of the Iris Surviving Corporation shall be amended as a result of the Iris Merger to be identical to the 

 

  

4

  

 

Certificate of Incorporation of Iris Merger Sub, as in effect immediately prior to the Initial Effective Time, until thereafter amended as provided by law and such Certificate of Incorporation; provided, however, that, at the Initial Effective Time, Article I of the Certificate of Incorporation of the Iris Surviving Corporation shall be amended to read as follows:  “The name of the corporation is Inovis International, Inc.”.

 

(c)           (i) At the Effective Time, the By-laws of the Greyhound Surviving Corporation shall be amended as a result of the Greyhound Merger to be identical to the By-laws of Greyhound Merger Sub, as in effect immediately prior to the Effective Time, until thereafter amended as provided by law, the Certificate of Incorporation of the Greyhound Surviving Corporation and such By-laws, and at the Initial Effective Time, the By-laws of the Iris Surviving Corporation shall be amended as a result of the Iris Merger to be identical to the By-laws of Iris Merger Sub, as in effect immediately prior to the Effective Time,  until thereafter amended as provided by law, the Certificate of Incorporation of the Iris Surviving Corporation and such By-laws.

 

SECTION 1.05.   Directors and Officers of the Surviving Corporation.  From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable law, (a) the Designated Directors (as hereinafter defined) shall be the directors and (b) the Designated Officers (as hereinafter defined) shall be the officers of the Greyhound Surviving Corporation.  From and after the Initial Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable law, (a) the Designated Directors shall be the directors and (b) Designated Officers shall be the officers of the Iris Surviving Corporation.

 

ARTICLE II

 

CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

 

SECTION 2.01.   Greyhound and Greyhound Merger Sub.  At the Effective Time, by virtue of the Greyhound Merger and without any action on the part of Greyhound, Greyhound Merger Sub, Parent or the holders of any of the following securities:

 

(a)           each share of Greyhound Common Stock (all issued and outstanding shares of Greyhound Common Stock being hereinafter collectively referred to as the “Greyhound Common Shares”) issued and outstanding immediately prior to the Effective Time (other than any Greyhound Common Shares to be canceled pursuant to Section 2.01(d) and any Dissenting Shares (as hereinafter defined)) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive 0.056 shares of Parent Common Stock (or such other number of shares of Parent Common Stock selected by Greyhound so long as notice thereof is provided by Greyhound to Iris at least eight (8) Business Days prior to the Effective Date, the “Greyhound Common Merger Consideration”), payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Greyhound Common Share;

 

  

5

  

 

 

(b)           each share of Greyhound Series A Preferred Stock (all issued and outstanding shares of Greyhound Series A Preferred Stock being hereinafter collectively referred to as the “Greyhound Series A Preferred Shares”) issued and outstanding immediately prior to the Effective Time (other than any Greyhound Series A Preferred Shares to be canceled pursuant to Section 2.01(d) and any Dissenting Shares) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive 0.328 shares of Parent Preferred Stock and 15.894 shares of Parent Common Stock (or such other number of shares of Parent Common Stock and/or Parent Preferred Stock selected by Greyhound so long as notice thereof is provided by Greyhound to Iris at least eight (8) Business Days prior to the Effective Date, the “Greyhound Series A Preferred Merger Consideration”), payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Greyhound Series A Preferred Share;

 

(c)           each share of Greyhound Series B Preferred Stock (all issued and outstanding shares of Greyhound Series B Preferred Stock being hereinafter collectively referred to as the “Greyhound Series B Preferred Shares” and, together with the Greyhound Common Shares and Greyhound Series A Preferred Shares, “Greyhound Shares”) issued and outstanding immediately prior to the Effective Time (other than any Greyhound Series B Preferred Shares to be canceled pursuant to Section 2.01(d) and any Dissenting Shares) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive 0.227 shares of Parent Preferred Stock and 11.015 shares of Parent Common Stock (or such other number of shares of Parent Common Stock and/or Parent Preferred Stock selected by Greyhound so long as notice thereof is provided by Greyhound to Iris at least eight (8) Business Days prior to the Effective Date, the “Greyhound Series B Preferred Merger Consideration” and, together with the Greyhound Common Consideration and Greyhound Series A Preferred Consideration, the “Greyhound Merger Consideration”), payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Greyhound Series B Preferred Share;

 

(d)           each Greyhound Share held in the treasury of Greyhound and each Greyhound Share owned by Greyhound or Greyhound Merger Sub, or any direct or indirect wholly owned subsidiary of Greyhound immediately prior to the Effective Time shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto; and

 

(e)           each share of common stock, par value $0.001 per share, of Greyhound Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Greyhound Surviving Corporation.

 

SECTION 2.02.   Iris and Iris Merger Sub.  At the Initial Effective Time, by virtue of the Iris Merger and without any action on the part of Iris, Iris Merger Sub, Parent or the holders of any of the following securities:

 

 

  

6

  

 

(a)           each share of Iris Class A Stock (all issued and outstanding shares of Iris Class A Stock being hereinafter collectively referred to as the “Iris Class A Shares”) issued and outstanding immediately prior to the Initial Effective Time (other than any Iris Class A Shares to be canceled pursuant to Section 2.02(e) and any Dissenting Shares) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive the Iris Class A Merger Consideration, payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Iris Class A Share;

 

(b)           each share of Iris Class B Stock (all issued and outstanding shares of Iris Class B Stock being hereinafter collectively referred to as the “Iris Class B Shares”) issued and outstanding immediately prior to the Initial Effective Time (other than any Iris Class B Shares to be canceled pursuant to Section 2.02(e) and any Dissenting Shares) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive the Iris Class B Merger Consideration, payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Iris Class B Share;

 

(c)           each share of Iris Class C Stock (all issued and outstanding shares of Iris Class C Stock being hereinafter collectively referred to as the “Iris Class C Shares”) issued and outstanding immediately prior to the Initial Effective Time (other than any Iris Class C Shares to be canceled pursuant to Section 2.02(e) and any Dissenting Shares) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive the Iris Class C Merger Consideration, payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Iris Class C Share;

 

(d)           each share of Iris Class L Stock (all issued and outstanding shares of Iris Class L Stock being hereinafter collectively referred to as the “Iris Class L Shares” and, together with Iris Class A Shares, Iris Class B Shares and Iris Class C Shares, the “Iris Shares”) issued and outstanding immediately prior to the Initial Effective Time (other than any Iris Class L Shares to be canceled pursuant to Section 2.02(e) and any Dissenting Shares) shall be canceled and shall be converted automatically, subject to Section 2.03, Section 2.07 and Section 2.08, into the right to receive the Iris Class L Merger Consideration, payable upon surrender, in the manner provided in Section 2.03, of the certificate that formerly evidenced such Iris Class L Share;

 

(e)           each Iris Share held in the treasury of Iris and each Iris Share owned by Iris or Iris Merger Sub, or any direct or indirect wholly owned subsidiary of Iris immediately prior to the Initial Effective Time shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto; and

 

(f)           each share of common stock, par value $0.001 per share, of Iris Merger Sub issued and outstanding immediately prior to the Initial Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Iris Surviving Corporation.

 

  

7

  

 

SECTION 2.03.   Exchange of Certificates.  (a)  Exchange Agent.  As promptly as practicable after the Effective Time, Parent shall deposit, or shall cause to be deposited, with U.S. Bank National Association or such other bank or trust company that may be designated by Greyhound and is reasonably satisfactory to Iris (the “Exchange Agent”), for the benefit of the holders of Greyhound Shares and Iris Shares, for exchange in accordance with this Article II through the Exchange Agent, certificates representing the shares of Parent Common Stock and Parent Preferred Stock issuable pursuant to Section 2.01 as of the Effective Time, and cash, from time to time as required to make payments of the Aggregate Iris Cash Consideration (such cash and certificates for shares of Parent Common Stock and Parent Preferred Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the “Exchange Fund”).  The Exchange Agent shall deliver the shares of Parent Common Stock and Parent Preferred Stock contemplated to be issued pursuant to Section 2.01 and Section 2.02, and pay the Aggregate Iris Cash Merger Consideration, out of the Exchange Fund.

 

(b)           Exchange Procedures.  As promptly as practicable after the Effective Time, Parent shall cause the Exchange Agent to mail to each person who was, at the Effective Time, a holder of record of Greyhound Shares immediately prior to the Effective Time (each, a “Greyhound Stockholder”), and as promptly as practicable after the Initial Effective Time, Parent shall cause the Exchange Agent to mail to each person who as, at the Initial Effective Time, a holder of record of Iris Shares (each an “Iris Stockholder”):  (i) a letter of transmittal (which shall be in customary form and shall specify that delivery shall be effected, and risk of loss and title to the certificates evidencing such Greyhound Shares and Iris Shares (the “Certificates”) shall pass, only upon proper delivery of the Certificates to the Exchange Agent), and (ii) instructions for use in effecting the surrender of the Certificates pursuant to such letter of transmittal.  Upon surrender to the Exchange Agent of a Certificate for cancellation, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor (w) a certificate or certificate(s) representing that number of whole shares of Parent Common Stock or Parent Preferred Stock, as applicable, which such holder has the right to receive in respect of the Greyhound Shares or Iris Shares formerly represented by such Certificate, (y) in the case of Iris Shares, such portion of the Aggregate Iris Cash Merger Consideration such holder has a right to receive in respect of the Iris Shares formerly represented by such Certificate, and (z) any dividends or other distributions to which such holder is entitled pursuant to Section 2.03(c) (each after taking into account all such Greyhound Shares or Iris Shares then held by such holder), and the Certificate so surrendered shall forthwith be cancelled.  In the event of a transfer of ownership of Greyhound Shares or Iris Shares that is not registered in the transfer records of Greyhound or Iris, respectively, the Greyhound Merger Consideration or Iris Merger Consideration that the Greyhound Stockholder or Iris Stockholder, as applicable, is entitled to pursuant to Section 2.01 or Section 2.02, respectively, may be issued to a transferee if the Certificate representing such Greyhound Shares or Iris Shares, as applicable, is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid.  Until surrendered as contemplated by this Section 2.03, each Certificate shall be deemed at all times after the Effective Time to represent only the right to receive upon such surrender the Greyhound Merger Consideration or Iris Merger Consideration that the holder of such Greyhound Shares or Iris 

 

  

8

  

 

Shares is entitled to pursuant to Section 2.01 or Section 2.02, and any dividends or other distributions to which such holder is entitled pursuant to Section 2.03(c).

 

(c)           Distributions with Respect to Unexchanged Shares of Parent Common Stock and Parent Preferred Stock.  No dividends or other distributions declared or made after the Effective Time with respect to the Parent Common Stock and Parent Preferred Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Parent Common Stock and Parent Preferred Stock represented thereby until the holder of such Certificate shall surrender such Certificate.  Subject to the effect of escheat, tax or other applicable Laws, following surrender of any such Certificate, there shall be paid to the holder of the certificates representing shares of Parent Common Stock and Parent Preferred Stock issued in exchange therefor, without interest, (i) the amount of dividends or other distributions with a record date after the Effective Time and theretofore paid with respect to shares of Parent Common Stock and Parent Preferred Stock, and (ii) at the appropriate payment date, the amount of dividends or other distributions, with a record date after the Effective Time but prior to surrender and a payment date occurring after surrender, payable with respect to such shares of Parent Common Stock and Parent Preferred Stock.

 

(d)           No Further Rights in Greyhound Capital Stock and Iris Capital Stock.  All shares of Parent Common Stock and Parent Preferred Stock, as applicable, issued upon surrender of a Certificate in accordance with the terms of this Article II shall be deemed to have been issued in full satisfaction of all rights pertaining to the Greyhound Shares or Iris Shares formerly represented by such Certificate.

 

(e)           Termination of Exchange Fund.  Any portion of the Exchange Fund that remains undistributed to the holders of Greyhound Capital Stock and Iris Capital Stock at the end of six months after the Effective Time shall be delivered to Parent, upon demand, and any holders of the Greyhound Capital Stock and Iris Capital Stock who have not theretofore complied with this Article II shall thereafter look only to Parent for merger consideration and any dividends or other distributions with respect to the Parent Common Stock and Parent Preferred Stock to which they are entitled pursuant to this Article II.  Any portion of the Exchange Fund remaining unclaimed by holders of Greyhound Shares and Iris Shares as of a date which is immediately prior to such time as such portion would otherwise escheat to or become property of any government entity shall, to the extent permitted by applicable law, become the property of Parent free and clear of any claims or interest of any person previously entitled thereto.

 

(f)           No Liability.  None of the Exchange Agent, Parent or the Surviving Corporations shall be liable to any holder of Greyhound Shares or Iris Shares for any such Greyhound Shares and Iris Shares, merger consideration (or dividends or distributions with respect thereto), or cash delivered to a public official pursuant to any abandoned property, escheat or similar Law.

 

(g)           Withholding Rights.  Each of the Surviving Corporations and Parent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Greyhound Shares and Iris Shares or holder of a Greyhound Stock Option, Iris Stock Option or Greyhound SAR such amounts as it is required to deduct and 

 

  

9

  

 

withhold with respect to such consideration under the Code, or any provision of state, local or foreign tax law.  To the extent that amounts are so withheld by the Surviving Corporations or Parent, as the case may be, and paid to the applicable tax authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of such Greyhound Shares or Iris Shares in respect of which such deduction and withholding was made by the Surviving Corporations or Parent, as the case may be.

 

(h)           Lost Certificates.  If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such person of a bond, in such reasonable amount as Parent may direct and in form and substance satisfactory to Parent and Exchange Agent, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate merger consideration to which such person is entitled and any dividends or other distributions to which such person is entitled pursuant to this Article II.

 

SECTION 2.04.   Stock Transfer Books.  (a)  At the Effective Time, the stock transfer books of Greyhound shall be closed and there shall be no further registration of transfers of Greyhound Shares thereafter on the records of Greyhound.  From and after the Effective Time, the holders of Certificates representing Greyhound Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Greyhound Shares except as otherwise provided in this Agreement or by Law.  On or after the Effective Time, any Certificates representing shares of Greyhound Capital Stock presented to the Exchange Agent or Parent for any reason shall be converted into Greyhound Merger Consideration and any dividends or other distributions to which the holder thereof is entitled pursuant to this Article II.

 

(b)           At the Initial Effective Time, the stock transfer books of Iris shall be closed and there shall be no further registration of transfers of Iris Shares thereafter on the records of Iris.  From and after the Initial Effective Time, the holders of Certificates representing Iris Shares outstanding immediately prior to the Initial Effective Time shall cease to have any rights with respect to such Iris Shares except as otherwise provided in this Agreement or by Law.  On or after the Initial Effective Time, any Certificates representing shares of Iris Capital Stock presented to the Exchange Agent or Parent for any reason shall be converted into the Iris Merger Consideration and any dividends or other distributions to which the holder thereof is entitled pursuant to this Article II.

 

SECTION 2.05.   Stock Options.

 

(a)           Greyhound Stock Options.  At the Effective Time, all options (the “Greyhound Stock Options”) outstanding, whether or not exercisable and whether or not vested, under the Greyhound Stock Incentive Plan (the “Greyhound Stock Option Plan”), shall, by virtue of the Greyhound Merger and this Agreement, and without any further action on the part of Greyhound, Parent or the holder thereof, be assumed by Parent by virtue of this Agreement and without any further action on the part of Parent, and all references to Greyhound in the Greyhound Stock Option Plan and the applicable stock option agreements issued thereunder shall be deemed to refer to Parent.  Each Greyhound Stock Option assumed by Parent (each, a “Greyhound Substitute Option”) shall be exercisable upon the same terms and conditions as 

 

  

10

  

 

under the applicable Greyhound Stock Option Plan and the applicable option agreement issued thereunder, except that (A) each such Greyhound Substitute Option shall be exercisable for, and represent the right to acquire, that whole number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to the number of shares of Greyhound Common Stock subject to such Greyhound Stock Option multiplied by the Greyhound Option Exchange Ratio; and (B) the option price per share of Parent Common Stock shall be an amount equal to the option price per share of Greyhound Common Stock subject to such Greyhound Stock Option in effect immediately prior to the Effective Time divided by the Greyhound Option Exchange Ratio (the option price per share, as so determined, being rounded upward to the nearest full cent).

 

(b)           Iris Stock Options.  All options (the “Iris Stock Options”) outstanding, whether or not exercisable and whether or not vested, at the Initial Effective Time under the 2003 Stock Purchase and Option Plan and the 2004 Stock Purchase and Option Plan of Iris (collectively, the “Iris Stock Option Plans”), shall, if not exercised immediately prior to the Initial Effective Time, expire and be cancelled in their entirety as of the Initial Effective Time in accordance with the terms of the Iris Stock Option Plans.  Iris may offer the holders of exercisable and vested Iris Stock Options the opportunity to receive a cash payment in exchange therefor (such amount in the aggregate, the “Iris Option Payment Amount”).  In addition, certain recipients of the Iris Option Payment Amount (the “Reinvestment Holders”) may be afforded the opportunity to acquire for cash shares of Parent Capital Stock in amounts to be determined prior to the Initial Effective Time.  The amount paid to Parent in respect thereof is referred to herein as the “Reinvestment Proceeds” and the shares of Parent Capital Stock issued in respect thereof are referred to herein as the “Reinvestment Shares.”

 

(c)           Greyhound Stock Appreciation Right.  At the Effective Time, that certain stock appreciation right set forth on Section 4.03(a) of the Greyhound Disclosure Schedule (the “Greyhound SAR”), to the extent then outstanding, shall be assumed by Parent by virtue of the Greyhound Merger and this Agreement and without any further action on the part of Parent, Greyhound or the holder thereof; and all references to Greyhound in the agreement evidencing the Greyhound SAR (the “Greyhound SAR Agreement”) shall be deemed to refer to Parent.  The Greyhound SAR so assumed by Parent (the “Greyhound Substitute SAR”) shall be exercisable upon the same terms and conditions as under the Greyhound SAR Agreement, except that (A) each such Greyhound Substitute SAR shall be exercisable for, and represent the right to receive the appreciation in that whole number of shares of Parent Common Stock and Parent Preferred Stock (in each case, rounded down to the nearest whole share) equal to the number of shares of Greyhound Common Stock and Greyhound Class B Preferred Stock multiplied by the Greyhound SAR Common Exchange Ratio and the Greyhound SAR Preferred Exchange Ratio, as applicable; and (B) the base price of the Greyhound Substitute SAR shall be an amount equal to the base price per share of Greyhound Common Stock and Greyhound Class B Preferred Stock subject to such Greyhound SAR in effect immediately prior to the Effective Time divided by the Greyhound SAR Common Exchange Ratio and the Greyhound SAR Preferred Exchange Ratio, as applicable (the base price per share, as so determined, being rounded upward to the nearest full cent).

 

(d)           As soon as practicable after the Effective Time, Parent shall deliver, or cause to be delivered, to each holder of a Greyhound Substitute Option and the Greyhound Substitute SAR an appropriate notice setting forth such holder’s rights pursuant thereto and such 

 

  

11

  

 

Greyhound Substitute Option and the Greyhound Substitute SAR shall continue in effect on the same terms and conditions (including any antidilution provisions, and subject to the adjustments required by this Section 2.05 after giving effect to the Mergers).  Parent shall comply with the terms of all such Greyhound Substitute Options and the Greyhound Substitute SAR and ensure, to the extent required by, and subject to the provisions of the Greyhound Stock Option Plan that the assumption of the Greyhound Substitute Options and the Greyhound Substitute SAR pursuant to this Section 2.05 is effected in a manner consistent with the requirements of Section 409A, 424 and, to the extent applicable, 422 of the Code.  Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Greyhound Substitute Options and Greyhound Substitute SAR pursuant to the terms set forth in this Section 2.05.

 

SECTION 2.06.   Merger Consideration Adjustments.  (a)  Estimated Statements.  The Parties contemplate that Iris will have Working Capital on the Closing Date (the “Iris Closing Working Capital”), as calculated in accordance with this Agreement and in accordance with and as set forth on the Form Working Capital Statement attached hereto as Schedule 2.06(a) (the “Iris Form Working Capital Statement”), of negative Fourteen Million Seven Hundred Fifty Thousand Dollars (($14,750,000)) (the “Iris Working Capital Target”).  The Parties contemplate that Iris will have Net Debt on the Closing Date (the “Closing Net Debt Balance”) of $144,800,000 (the “Net Debt Target”).  At least two (2) Business Days prior to the Closing, Iris shall deliver to Greyhound a written statement (the “Estimated Statement”) setting forth (a) Iris’s good faith estimate of the amount of the Closing Working Capital (the “Estimated Working Capital”) and (b) Iris’s good faith estimate of the amount of the Closing Net Debt Balance (the “Estimated Net Debt Balance”), together with such schedules and data with respect to the determination thereof as may be reasonably necessary to support such Estimated Statement.  The Estimated Statement shall be signed by the Chief Financial Officer of Iris.  Following delivery of the Estimated Statement, Iris shall provide Greyhound and its Representatives with reasonable access to the employees, agreements and books and records of Iris to verify the accuracy of such amounts, all to the extent deemed reasonably necessary by Greyhound and in a manner not unreasonably disruptive to Iris’s business.  In the event that Greyhound does not agree with Iris’s calculations of Estimated Working Capital or Estimated Net Debt Balance, Iris and Greyhound shall negotiate in good faith to mutually agree on acceptable estimates, and Iris shall consider in good faith any proposed comments or changes that Greyhound may reasonably suggest; provided, however, that Iris’s failure to include any changes proposed by Greyhound, or the acceptance by Greyhound of the Estimated Statement, shall not limit or otherwise affect Greyhound’s remedies under this Agreement, including Greyhound’s right to include such changes or other changes in the Closing Statement, or constitute an acknowledgment by Greyhound of the accuracy of the Estimated Statement.  The Aggregate Iris Cash Merger Consideration shall be (i) decreased on a dollar for dollar basis by the amount, if any, by which the Estimated Working Capital is less than the Iris Working Capital Target (but only if the amount of such shortfall is greater than One Million Dollars ($1,000,000), (ii) increased on a dollar for dollar basis by the amount, if any, by which the Estimated Working Capital is greater than Iris Working Capital Target (but only if the amount of such excess is greater than One Million Dollars ($1,000,000), (iii) decreased on a dollar for dollar basis by the amount, if any, by which the Estimated Net Debt Balance is greater than the Net Debt Target, and/or (iv) increased on a dollar for dollar basis by the amount, if any, by which the Estimated Net Debt Balance is 

 

  

12

  

 

less than the Net Debt Target.  Schedule 2.06(a) to this Agreement contains hypothetical examples of the calculations of the Closing Working Capital and Closing Net Debt Balance.

 

(b)           Closing Statement.  Parent shall cause to be prepared and, as soon as practical, but in no event later than forty five (45) days after the Closing Date, shall cause to be delivered to the Stockholder Representative, a calculation of the Iris Closing Working Capital and the Closing Net Debt Balance (the “Closing Statement”) together with such schedules and data with respect to the determination thereof as may be appropriate to support such Closing Statement.  Following delivery of the Closing Statement, Parent shall provide the Stockholder Representative and its representatives with reasonable access to the records and personnel of Iris, solely for the purpose of reviewing the Closing Statement in accordance with this Agreement, all to the extent deemed reasonably necessary by the Stockholder Representative and in a manner not unreasonably disruptive to Parent’s business.  For purposes of this Agreement, Working Capital shall be calculated in accordance with this Agreement (including Schedule 2.06(a) to this Agreement and Section 2.06(e)) and with GAAP applied using the same accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in the preparation of the 2008 audited financial statements constituting part of the Iris Financial Statements.

 

(c)           Dispute Resolution.

 

(i)           If the Stockholder Representative disagrees in whole or in part with the Closing Statement, then within thirty (30) days after its receipt of the Closing Statement, it shall notify Parent of such disagreement in writing (the “Notice of Disagreement”), setting forth in reasonable detail the particulars of any such disagreement.  Parent shall provide access to the Stockholder Representative and its representatives to all of its working papers, schedules, personnel and calculations used in the preparation of the Closing Statement and the determination of the Closing Working Capital and the Closing Net Debt Balance.  To be effective, any such Notice of Disagreement shall include a copy of the Closing Statement marked to indicate those specific line items that are in dispute (the “Disputed Line Items”) and shall be accompanied by the Stockholder Representative’s calculation of each of the Disputed Line Items and the Stockholder Representative’s revised Closing Statement setting forth its determination of the Closing Working Capital and the Closing Net Debt Balance.  To the extent the Stockholder Representative provides a Notice of Disagreement within such thirty (30) day period, all items that are not Disputed Line Items shall be final, binding and conclusive for all purposes hereunder.  In the event that the Stockholder Representative does not provide a Notice of Disagreement within such thirty (30) day period, the Stockholder Representative shall be deemed to have accepted in full the Closing Statement as prepared by Parent, which shall be final, binding and conclusive for all purposes hereunder.

 

(ii)           In the event any Notice of Disagreement is timely provided and contains the proper information as aforesaid, Parent and the Stockholder Representative shall use commercially reasonable efforts for a period of twenty (20) days (or such longer period as they may mutually agree) to resolve any Disputed Line Items.  During such twenty (20) day period, Parent and the Stockholder Representative and their 

 

  

13

  

 

representatives shall have access to the working papers, schedules, calculations and personnel of the other used in the preparation of the Closing Statement and the Notice of Disagreement and the determination of the Closing Working Capital, the Closing Net Debt Balance and Disputed Line Items.  If, at the end of such period, Parent and the Stockholder Representative are unable to resolve such Disputed Line Items, then such Disputed Line Items shall be referred to Deloitte & Touche LLP or, if Deloitte & Touche LLP declines to serve, such other firm selected by the mutual agreement of Parent and Stockholder Representative (the “Settlement Accountants”).  Parent and the Stockholder Representative will enter into reasonable and customary arrangements for the services to be rendered by the Settlement Accountants under this Section 2.06(c).  The Settlement Accountants shall be directed to determine as promptly as practicable (and in any event within thirty (30) days from the date that the dispute is submitted to it), whether the Closing Statement was prepared in accordance with the standards set forth in this Section 2.06 and whether and to what extent (if any) the Closing Working Capital and/or the Closing Net Debt Balance require adjustment, limiting its review, however, only to the Disputed Line Items not previously resolved.  The Settlement Accountants shall resolve each Disputed Line Item by calculating such Disputed Line Item in accordance with this Agreement (for each such Disputed Line Item, the amount so calculated is referred to as the “SA Determined Amount”) and establishing as the final amount of such Disputed Line Item the applicable SA Determined Amount, and the Settlement Accountants shall prepare the definitive Closing Statement reflecting the SA Determined Amount for each Disputed Line Item.  Parent and the Stockholder Representative shall each furnish to the Settlement Accountants such work papers and other documents and information relating to the disputed issues, and shall provide interviews and answer questions, as such Settlement Accountants may reasonably request.  The determination of the Settlement Accountants shall be final, conclusive and binding on the Parties.  The amounts determined to be the Closing Working Capital and the Closing Net Debt Balance pursuant to this Section 2.06(c) shall constitute the “Final Working Capital,” and the “Final Net Debt Balance,” respectively.

 

(iii)           The fees and expenses of the Settlement Accountants shall be allocated between Parent and the Iris Indemnifying Parties in such manner that the Iris Indemnifying Parties shall be responsible for that portion of the fees and expenses equal to such fees and expenses multiplied by a fraction the numerator of which is the aggregate dollar value of Disputed Line Items submitted to the Settlement Accountants that are resolved in a manner further from the position submitted to the Settlement Accountants by the Stockholder Representative and closer to the position submitted to the Settlement Accountants by Parent (as finally determined by the Settlement Accountants), and the denominator of which is the total aggregate dollar value of the Disputed Line Items so submitted, and Parent shall be responsible for the remainder of such fees and expenses.

 

(d)           Post Closing Adjustment Amounts.

 

(i)           Within three (3) Business Days after determination of the Final Working Capital and the Final Net Debt Balance, the Aggregate Iris Cash Merger Consideration shall be, if necessary, further adjusted so that, after taking into account any adjustments 

 

  

14

  

 

under Section 2.06(a), the former holders of Iris Capital Stock and options (in accordance with their Pro Rata Portions) shall have received or made payments in an amount exactly equal to the amount that would have been made under Section 2.06(a) if the Estimated Working Capital had equaled the Final Working Capital and the Estimated Net Debt Balance had equaled the Final Net Debt Balance.  All payments to be made under this Section 2.06(d)(i) shall be made on a net basis taking into account any adjustments under Section 2.06(a).

 

(ii)           If a net payment is required to be made by Parent pursuant to Section 2.06(d)(i), then Parent, Greyhound and/or Iris shall pay (and shall be jointly and severally obligated to pay), or cause to be paid, an amount equal to such net payment to the former holders of Iris Capital Stock and Iris Stock Options in accordance with their Pro Rata Portions.  Each such amount shall be delivered by wire transfer of immediately available funds pursuant to instructions delivered to Parent by the Stockholder Representative prior to the Closing Date.

 

(iii)           If a net payment is required to be made to Parent pursuant to Section 2.06(d)(i), then each former holder of Iris Capital Stock and options shall pay an amount equal to such net payment to Parent in accordance with each such holder’s Pro Rata Portion.  Each such amount shall be delivered by wire transfer of immediately available funds to an account designated in writing by Parent at least two (2) days prior to such payment.  At Parent’s election, such payment obligation of the Iris Minority Holders may also be satisfied by Parent instructing the Escrow Agent to release a corresponding amount from the Escrow Account.

 

(iv)           If Parent is ever required to issue any shares of Parent Capital Stock pursuant to the Greyhound Substitute SAR or to pay any cash pursuant to the Greyhound Substitute SAR or the Greyhound Management Incentive Award Program, then Parent shall take one of the actions specified in Schedule 2.06(d)(IV).

 

(e)           Calculations.  Except as otherwise expressly provided in this Agreement, including Schedule 2.06(a), the Parties agree that no amount shall be (or is intended to be) included, in whole or in part (either as an increase or a reduction), more than once in the calculation of (including any component of) the Final Working Capital or the Final Net Debt Balance or any other calculated amount pursuant to this Agreement if the effect of such additional inclusion (either as an increase or a reduction) would be to cause such amount to be over- or under-counted for purposes of such calculation.  The Parties further agree that if any provision of this Agreement requires an amount or calculation to be “determined in accordance with this Agreement and GAAP” (or words of similar import), then to the extent that the terms of this Agreement (including Schedule 2.06(a)) expressly conflict with, or are expressly inconsistent with, GAAP in connection with such determination, the terms of this Agreement (including Schedule 2.06(a)) shall control.

 

SECTION 2.07.   Certain Adjustments; Aggregate Limits.

 

(a)           If, between the date of this Agreement and the Effective Time, there is a reclassification, recapitalization, stock split, split-up, stock dividend, combination or exchange of 

 

  

15

  

 

shares with respect to, or rights issued in respect of, Greyhound Stock or Iris Stock, the Greyhound Merger Consideration and Iris Merger Consideration shall be adjusted accordingly to provide to the holders of Greyhound Stock and Iris Stock the same economic effect as contemplated by this Agreement prior to such event.

 

(b)           Notwithstanding anything to the contrary set forth in this Agreement, in no event shall: (i) the percentage obtained by dividing (A) the sum of (i) the shares of Parent Preferred Stock issued to the Iris Stockholders pursuant to this Article II and (ii) the Reinvestment Shares that are shares of Parent Preferred Stock, by (B) the sum of (i) the total number of shares of Parent Preferred Stock outstanding immediately following the Effective Time and (ii) the Parent Preferred Stock issuable upon outstanding options, warrants and other rights exercisable therefor (including the Greyhound Substitute Options and excluding the Greyhound Substitute SAR), assuming conversion or exercise thereof, outstanding immediately following the Effective Time exceed the Iris Preferred Percentage; (ii) the percentage obtained by dividing (A) the sum of (i) the shares of Parent Common Stock issued to the Iris Stockholders pursuant to this Article II and (ii) the Reinvestment Shares that are shares of Parent Common Stock,  by (B) the sum of (i) the total number of shares of Parent Common Stock outstanding immediately following the Effective Time and (ii) the Parent Common Stock issuable upon outstanding options, warrants and other rights exercisable therefor (including the Greyhound Substitute Options and excluding the Greyhound Substitute SAR), assuming conversion or exercise thereof, outstanding immediately following the Effective Time exceed the Iris Common Percentage; or (iii) the sum of the Iris Class A Cash Merger Consideration, Iris Class B Cash Merger Consideration,  Iris Class C Cash Merger Consideration and Iris Class L Cash Merger Consideration payable with respect to Iris Capital Stock pursuant to this Article II exceed the Aggregate Iris Cash Merger Consideration.

 

SECTION 2.08.   Dissenting Shares.   (c)  Notwithstanding any provision of this Agreement to the contrary and to the extent available under the DGCL, the Greyhound Shares and Iris Shares that are outstanding immediately prior to the Effective Time or Initial Effective Time, as applicable, and that are held by stockholders who shall have neither voted in favor of the Greyhound Merger or Iris Merger, as applicable, nor consented thereto in writing and who shall have demanded properly in writing appraisal for such Greyhound Shares or Iris Shares, as applicable, in accordance with Section 262 of the DGCL (collectively, the “Dissenting Shares”) shall not be converted into, or represent the right to receive, the applicable merger consideration set forth in Section 2.01 or Section 2.02.  Such stockholders shall be entitled to receive payment of the appraised value of such Greyhound Shares or Iris Shares, as applicable, held by them in accordance with the provisions of such Section 262, except that all Dissenting Shares held by stockholders who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to appraisal of such Greyhound Shares or Iris Shares, as applicable, under such Section 262 shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time or Initial Effective Time, as applicable, the right to receive the applicable merger consideration set forth in Section 2.01 or Section 2.02, without any interest thereon, upon surrender, in the manner provided in Section 2.03, of the certificate or certificates that formerly evidenced such Greyhound Shares or Iris Shares, as applicable.

 

(b)           Each Party shall give the other Parties prompt notice of any demands for appraisal received by such Party, withdrawals of such demands, and any other instruments 

 

  

16

  

 

served pursuant to the DGCL and received by such Party.  Iris shall give Greyhound the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the DGCL.  Iris shall not, except with the prior written consent of Greyhound, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

 

SECTION 2.09.   Escrow.  Notwithstanding Section 2.02, an amount of cash equal to the Escrow Amount shall be withheld from the Aggregate Iris Cash Merger Consideration payable to the Iris Minority Holders in respect of their Iris Capital Stock pursuant to Section 2.02 and the Iris Option Payment Amount payable to the holders of Iris Stock Options pursuant to Section 2.05(b).  Pursuant to an escrow agreement to be entered into on the Closing Date by and among Parent, the Iris Stockholder Representative and U.S. Bank National Association or another financial institution that is reasonably acceptable to Parent and the Iris Stockholder Representative, as escrow agent (including any successor in such capacity, the “Escrow Agent”), in the form attached hereto as Exhibit C, subject to any administrative changes as may be required by the Escrow Agent (the “Escrow Agreement”), Parent and the Iris Stockholder Representative shall appoint the Escrow Agent to hold and disburse the Escrow Funds as provided below.  As promptly as practicable after the Effective Time, Parent shall deposit, or shall cause to be deposited, with the Escrow Agent the Escrow Amount (together with any interest or other earnings thereon, the “Escrow Funds”) by wire transfer of immediately available funds.  The Escrow Funds shall be held by the Escrow Agent in segregated accounts to serve as a source of payment of (x) any obligation of the Iris Minority Holders under Section 2.06(d) and (y) any indemnification obligation of the Iris Minority Holders set forth in Section 9.02.  Parent and the Iris Stockholder Representative shall instruct the Escrow Agent to disburse the Escrow Funds as follows:

 

(i)           Promptly following the determination of the Final Working Capital and the satisfaction of any payment obligations under 2.06(d) (the "Working Capital Release Date"), Parent and the Iris Stockholder Representative shall direct the Escrow Agent to release to the Exchange Agent (for further distribution to the Iris Minority Holders) a portion of the Escrow Fund equal to the excess, if any, of the Working Capital Escrow Amount over the amount, if any, distributed or disbursed by the Escrow Agent in satisfaction of the obligations of the Iris Minority Holders under Section 2.06(d).

 

(ii)           On the twelve month anniversary of the Closing Date (the "Final Release Date"), Parent and the Iris Stockholder Representative shall direct the Escrow Agent to release to the Exchange Agent (for further distribution to the Iris Minority Holders) a portion of the Escrow Fund equal to the excess, if any, of the remaining amount of the Escrow Fund over the sum of (a) all amounts theretofore distributed or disbursed by the Escrow Agent (including any amounts distributed or disbursed by the Escrow Agent in satisfaction of the obligations of the Iris Minority Holders under Section 2.06(d)), and (b) the aggregate amount of Losses specified in any then unresolved good faith Claims made by Parent pursuant to Section 9.02.  To the extent that, on the Final Release Date, any amount has been reserved and withheld from distribution from the Escrow Fund on such date on account of an unresolved claim for indemnification and, subsequent to such Final Release Date, such Claim is resolved, the parties shall immediately direct the Escrow Agent to release (A) to Parent the amount of Losses, if any, due in respect of such Claim as finally determined, and (B) to the Exchange Agent (for further distribution to the Iris 

 

 

  

17

  

 

Minority Holders) an amount equal to the excess, if any, of the amount theretofore reserved and withheld from distribution in respect of such Claim over the payment, if any, made pursuant to the foregoing clause (A).

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF IRIS

 

Except as set forth in the Iris Disclosure Schedule that has been prepared by Iris and delivered by Iris to Greyhound in connection with the execution and delivery of this Agreement (the “Iris Disclosure Schedule”) (which Iris Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections of this Article III, and any information disclosed in any section of the Iris Disclosure Schedule shall be deemed to be disclosed only for purposes of the corresponding section of this Article III, unless it is readily apparent that the disclosure contained in such section of the Iris Disclosure Schedule contains enough information regarding the subject matter of other representations and warranties contained in this Article III as to reasonably qualify or otherwise reasonably apply to such other representations and warranties), Iris and Parent hereby represent and warrant to Greyhound that:

 

SECTION 3.01.   Corporate Organization.  (a)  Each of Iris and each subsidiary of Iris (each an “Iris Subsidiary”) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals could not reasonably be expected, individually or in the aggregate, to prevent or materially delay consummation of the Mergers and the Transactions, and could not reasonably be expected, individually or in the aggregate, to have an Iris Material Adverse Effect (as hereinafter defined).  Each of Iris and each Iris Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that could not reasonably be expected, individually or in the aggregate, to prevent or materially delay consummation of any of the Transactions or otherwise prevent or materially delay Iris from performing its obligations under this Agreement and could not reasonably be expected, individually or in the aggregate, to have an Iris Material Adverse Effect.

 

(b)           A true and complete list of all the Iris Subsidiaries, together with the jurisdiction of incorporation of each Iris Subsidiary and the percentage of the outstanding capital stock of each Iris Subsidiary owned by Iris and each other Iris Subsidiary, is set forth in Section 3.01(b) of the Iris Disclosure Schedule.  Iris does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any person.

 

  

18

  

 

SECTION 3.02.   Certificate of Incorporation and By-laws.  Iris has heretofore furnished to Greyhound a complete and correct copy of the certificate of incorporation and the by-laws or equivalent organizational documents, each as amended to date, of Iris and each Iris Subsidiary.  Such certificates of incorporation, by-laws or equivalent organizational documents are in full force and effect.  Neither Iris nor any Iris Subsidiary is in violation of any of the provisions of its certificate of incorporation, by-laws or equivalent organizational documents.

 

SECTION 3.03.   Capitalization.  (a)  The authorized capital stock of Iris consists of (i) 225,000,000 shares of Iris Class A Stock, (ii) 25,000,000 shares of Iris Class B Stock, (iii) 25,000,000 shares of Iris Class C Stock, and (iv) 25,000,000 shares of Iris Class L Stock.  As of the date of this Agreement, (i) 26,468,781 shares of Iris Class A Stock are issued and outstanding, 504,282 shares of Iris Class B Stock are issued and outstanding, 568,254 shares of Iris Class C Stock are issued and outstanding, and 2,815,318 shares of Iris Class L Stock are issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable, (ii) no shares of Iris Capital Stock are held in the treasury of Iris, (iii) no shares of Iris Capital Stock are held by any Iris Subsidiary, and (iv) 6,705,525 shares of Iris Class A Stock, 1,653,500 shares of Iris Class B Stock, 1,833,500 shares of Iris Class C Stock and 68,950 shares of Iris Class L Stock are reserved for future issuance pursuant to outstanding Iris Stock Options and other purchase rights (the “Iris Stock Awards”) granted pursuant to, and in accordance with the terms and conditions of, the Iris Stock Option Plans, of which 4,002,974 shares of Iris Class A Stock are issuable, as of the date hereof, upon the exercise of outstanding, unexercised Iris Stock Awards.  Except for the Iris Stock Option Plans, Iris has never adopted or maintained any stock option plan or other plan providing for equity compensation of any person.  Except as set forth in this Section 3.03, there are no options, warrants, calls or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of Iris or any Iris Subsidiary or obligating Iris or any Iris Subsidiary to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of capital stock of, or other equity interests in, Iris or any Iris Subsidiary, or obligating Iris to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call or other right, agreement, arrangement or commitment.  There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to Iris or any Iris Subsidiary.  Iris has made available to Greyhound accurate and complete copies of all Iris Plans pursuant to which Iris has granted the Iris Stock Awards that are currently outstanding and the form of all stock award agreements evidencing such Iris Stock Awards.  All shares of Iris Capital Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable.  There are no outstanding contractual obligations of Iris or any Iris Subsidiary to repurchase, redeem or otherwise acquire any shares of Iris Capital Stock or any capital stock of any Iris Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Iris Subsidiary or any other person.  There are no declared or accrued but unpaid dividends with respect to any shares of Iris Capital Stock, and Iris has no other capital stock authorized, issued or outstanding.  Except as contemplated hereby, there are no commitments or agreements of any character to which Iris is bound obligating Iris to accelerate the vesting of any Iris Stock Award as a result of the Mergers.  Except as contemplated hereby and except for any agreements to be terminated on or prior to the Effective Time, there are no voting trusts, proxies, or other agreements or understandings with respect to the Iris Capital Stock.  All outstanding shares of 

 

  

19

  

 

Iris Capital Stock, all outstanding Iris Stock Awards, and all outstanding shares of capital stock of each Iris Subsidiary have been issued and granted in compliance with (i) all applicable securities laws and other applicable Laws and (ii) all requirements set forth in applicable contracts.

 

(b)           Each outstanding share of capital stock of each Iris Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and each such share is owned by Iris or another Iris Subsidiary free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on Iris’ or any Iris Subsidiary’s voting rights, charges and other encumbrances of any nature whatsoever.

 

SECTION 3.04.   Authority Relative to This Agreement. Each of Iris, Parent, Greyhound Merger Sub and Iris Merger Sub has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions.  The execution and delivery of this Agreement by Iris, Parent, Greyhound Merger Sub and Iris Merger Sub and the consummation by Iris, Parent, Greyhound Merger Sub and Iris Merger Sub of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Iris, Parent, Greyhound Merger Sub or Iris Merger Sub are necessary to authorize this Agreement or to consummate the Transactions (other than, with respect to the Iris Merger, the approval and adoption of this Agreement by the holders of a majority of the then-outstanding shares of Iris Capital Stock, voting together as a single class, and the filing and recordation of appropriate merger documents as required by the DGCL).  This Agreement has been duly and validly executed and delivered by Iris, Parent, Greyhound Merger Sub and Iris Merger Sub and, assuming due authorization, execution and delivery by Greyhound, constitutes a legal, valid and binding obligation of each of Iris, Parent, Greyhound Merger Sub and Iris Merger Sub, enforceable against each of Iris, Parent, Greyhound Merger Sub and Iris Merger Sub in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

 

SECTION 3.05.   No Conflict; Required Filings and Consents.  (a)  The execution and delivery of this Agreement by Iris, Parent, Iris Merger Sub and Greyhound Merger Sub do not, and the performance of this Agreement by Iris will not, (i) conflict with or violate the certificate of incorporation or by-laws or any equivalent organizational documents of Iris or any Iris Subsidiary, (ii) assuming that all consents, approvals, authorizations and other actions described in Section 3.05(b) have been obtained and all filings and obligations described in Section 3.05(b) have been made, conflict with or violate any United States or non-United States statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order (“Law”) applicable to Iris or any Iris Subsidiary or by which any property or asset of Iris or any Iris Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien or other encumbrance on any property or asset of Iris or any Iris Subsidiary pursuant to, any Material Iris Contract.

 

  

20

  

 

 

(b)           The execution and delivery of this Agreement by Iris, Parent, Iris Merger Sub and Greyhound Merger Sub do not, and the performance of this Agreement by Iris will not, require any consent, approval, authorization or permit of, or filing with or notification to, any United States federal, state, county or local or non-United States government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body (a “Governmental Authority”), except for applicable requirements, if any, of Blue Sky Laws and state takeover laws, the pre merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) or other applicable foreign, federal or state antitrust, competition of fair trade Laws with respect to the Transactions, and filing and recordation of appropriate merger documents as required by the DGCL.

 

SECTION 3.06.   Permits; Compliance.  Each of Iris and the Iris Subsidiaries is in possession of all Material franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of Iris or the Iris Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the “Iris Permits”).  No suspension or cancellation of any of the Iris Permits is pending or, to the knowledge of Iris, threatened.  Neither Iris nor any Iris Subsidiary is in material conflict with, or in material default, breach or violation of, (a) any Law applicable to Iris or any Iris Subsidiary or by which any property or asset of Iris or any Iris Subsidiary is bound or affected, or (b) any Iris Permit.

 

SECTION 3.07.   Financial Statements.  (a)  Iris has delivered to Greyhound copies of consolidated financial statements (the “Iris Financial Statements”), as set forth in Section 3.07 of the Iris Disclosure Schedule, consisting of an audited balance sheet of Iris at December 31, 2007 and the related statements of income and cash flows for the year ended December 31, 2007, an audited balance sheet of Iris at December 31, 2008 and the related statements of income and cash flows for the year ended December 31, 2008, and an unaudited balance sheet of Iris at September 30, 2009 and the related statements of income and cash flows for the nine-month period ended September 30, 2009.  The Iris Financial Statements are true and correct in all material respects and were prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of Iris and the Iris Subsidiaries as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments and the absence of footnotes).  The unaudited balance sheet of Iris at September 30, 2009 is referred to herein as the “Most Recent Iris Balance Sheet”).

 

(b)           As of the date hereof, except as and to the extent set forth on the Most Recent Iris Balance Sheet, including the notes thereto, neither Iris nor any Iris Subsidiary has any material liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet prepared in accordance with GAAP or in the notes thereto, except for liabilities and obligations (i) under this Agreement or (ii) incurred in the ordinary course of business consistent with past practice since the date of the Most Recent Iris Balance Sheet.

 

  

21

  

 

(c)           Iris maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP.  Iris and the Iris Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, except, in the case of each of (i) through (iv), for any deficiencies that, individually or in the aggregate, are insignificant.

 

SECTION 3.08.   Absence of Certain Changes or Events.  Since the date of the Most Recent Iris Balance Sheet, (a) through the date hereof, Iris and the Iris Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice, (b) there has not been any event, circumstance, change or effect that, individually or in the aggregate, constitutes, or is reasonably likely to constitute, an Iris Material Adverse Effect, and (c) through the date hereof none of Iris or any Iris Subsidiary has taken any action that, if taken after the date of this Agreement, would constitute a breach of any of the covenants set forth in Section 5.01.

 

SECTION 3.09.   Absence of Litigation.  As of the date hereof, there is no litigation, suit, claim, action, proceeding or investigation (an “Action”) pending or, to the knowledge of Iris, threatened against Iris or any Iris Subsidiary, or any property or asset of Iris or any Iris Subsidiary, before any Governmental Authority.    Neither Iris nor any Iris Subsidiary nor any material property or asset of Iris or any Iris Subsidiary is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of Iris, continuing investigation by, any Governmental Authority, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority.

 

SECTION 3.10.   Employee Benefit Plans.  (a)  Section 3.10(a) of the Iris Disclosure Schedule lists (i) all stock option, stock purchase and restricted stock, or equity incentive plans, programs or arrangements, all material “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) (whether or not subject to ERISA) and all material bonus, incentive, deferred compensation, change of control, retention, retiree medical or life insurance, supplemental retirement, severance, redundancy, termination or other benefit plans, programs or arrangements to which Iris or any Iris Subsidiary is a party, with respect to which Iris or any Iris Subsidiary has any obligation or which are maintained, contributed to or sponsored by Iris or any Iris Subsidiary for the benefit of any current or former employee, officer or director of Iris or any Iris Subsidiary, (ii) each employment agreement that is a Material Iris Contract, (iii) each employee benefit plan for which Iris or any Iris Subsidiary could incur liability under Section 4069 of ERISA in the event such plan has been or were to be terminated, and (iv) any plan in respect of which Iris or any Iris Subsidiary could incur liability under Section 4212(c) of ERISA (collectively, the “Iris Plans”); provided that it is hereby agreed and understood that an Iris Plan that is not subject to United States Law (a “Non-U.S. Iris Plan”) shall not be deemed to be material for purposes of this Section 3.10 to the extent that Iris or any Iris Subsidiary employs or engages less than 50 individuals in the relevant national jurisdiction, unless such Iris Plan (x) provides for retirement, 

 

  

22

  

 

pension or termination benefits on a defined benefit basis or benefits in connection with a change of control or sale of Iris or any Iris Subsidiary or (y) is an employment agreement that is a Material Iris Contract.  Iris has made available to Greyhound a true and complete copy of (i) such Iris Plans, (ii) the most recently filed Internal Revenue Service (“IRS”) Form 5500, if any, (iii) the most recent summary plan description for each Iris Plan for which a summary plan description is required by applicable law, (iv) the most recently received IRS determination letter or opinion letter, if any, issued by the IRS with respect to any Iris Plan that is intended to qualify under Section 401(a) of the Code, and (v) the most recently prepared actuarial report or financial statement, if any, relating to a Iris Plan  Neither Iris nor any Iris Subsidiary has any express or implied commitment (i) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, (ii) to enter into any contract or agreement to provide compensation or benefits to any individual, or (iii) to modify, change or terminate any Iris Plan, other than with respect to a modification, change or termination (x) required by ERISA or the Code or (y) implemented in the ordinary course of business consistent with past practice  in connection with any plan year or cycle that commences on January 1, 2010.

 

(b)           Neither Iris nor any ERISA Affiliate of Iris maintains, sponsors, participates in or contributes or has any liability with respect to a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) (a “Multiemployer Plan”),  a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which Iris or any Iris Subsidiary could incur liability under Section 4063 or 4064 of ERISA (a “Multiple Employer Plan”), or an employee benefit plan subject to Title IV of ERISA .  None of the Iris Plans provides for or promises retiree medical, disability or life insurance benefits to any current or former employee, officer or director of Iris or any Iris Subsidiary (other than coverage mandated by applicable law).

 

(c)           Each Iris Plan is now and always has been operated in all material respects in accordance with its terms and the requirements of all applicable Laws, including, without limitation, ERISA and the Code.  Iris and the Iris Subsidiaries have, in all material respects, performed all obligations required to be performed by them under, are not in any material respect in default under or in violation of, and have no knowledge of any default or violation by any party to, any Iris Plan.  No Action is pending or, to the knowledge of Iris, threatened with respect to any Iris Plan (other than claims for benefits in the ordinary course) and, to the knowledge of Iris, no fact or event exists that could reasonably be expected to give rise to any such Action.

 

(d)           Each Iris Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has received, with respect to the cycle applicable to such Iris Plan pursuant to Revenue Procedure 2005-66 (as amended), a favorable determination letter from the IRS covering all of the provisions applicable to the Iris Plan for which determination letters are currently available or an IRS prototype opinion letter exists upon which Iris is permitted to rely, that the Iris Plan is so qualified.

 

(e)           All contributions, premiums or payments required to be made with respect to any Iris Plan have been made on or before their due dates. Iris and each Iris Subsidiary have made all social security contributions (including contributions to all mandatory provident fund schemes) in respect of or on behalf of all their current and former employees in accordance with applicable Law.

 

  

23

  

 

 

(f)           Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in connection with the termination of employment or service of any officer, employee, director, independent contractor or consultant following, or in connection with the transactions contemplated hereby) (i) entitle any current or former employee, independent contractor or consultant of Iris or any Iris Subsidiary to any increase in severance pay upon any termination of employment after the date of this Agreement, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other obligation pursuant to, any of the Iris Plans, or (iii) limit or restrict the right of Iris or any Iris Subsidiary or, after the consummation of the transactions contemplated hereby, Parent, to merge, amend or terminate any of the Iris Plans.  None of the Iris Plans in effect immediately prior to the Closing would result separately or in the aggregate (including, without limitation, as a result of this Agreement or the transactions contemplated hereby) in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

 

(g)           Each Iris Plan or any other arrangement of Iris that is, or was, subject to Section 409A of the Code was administered in reasonable, good faith compliance with the requirements of Section 409A of the Code through December 31, 2008, and all Iris Plans subject to Section 409A of the Code that provide payment after December 31, 2008 and were in existence on such date have been amended (if applicable) to comply with the requirements of the final regulations under Section 409A.  Neither Iris nor any Iris Subsidiary (i) has an obligation to gross-up, indemnify or otherwise reimburse any person for any tax incurred by such person pursuant to Section 409A of the Code, (ii) has elected to or is required to defer payment of amounts from a foreign entity which will be subject to the provisions of Section 457A of the Code, or (iii) has any obligation to gross-up, indemnify or otherwise reimburse any person for any tax incurred by such person pursuant to Section 409A or Section 280G of the Code.

 

(h)           All directors, officers and management employees of Iris and the Iris Subsidiaries are under written obligation to Iris and the Iris Subsidiaries to maintain in confidence all confidential or proprietary information acquired by them in the course of their employment and to assign to Iris and the Iris Subsidiaries all inventions made by them within the scope of their employment during such employment and for a reasonable period thereafter.

 

(i)           In addition to the foregoing, with respect to each Non-U.S. Iris Plan:

 

(i)           none of the Non-U.S. Iris Plans provide for retirement, pension or termination benefits on a defined benefit basis;

 

(ii)           there has been no amendment to, written interpretation of or announcement (whether or not written) by Iris or any Iris Subsidiary relating to, or change in employee participation or coverage under, any Non-U.S. Iris Plan that would materially increase the expense of maintaining such Non-U.S. Iris Plan above the level of expense incurred in respect thereof for the most recent fiscal year ended prior to the date hereof; and

 

(iii)           each Non-U.S. Iris Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities.

 

  

24

  

 

SECTION 3.11.   Labor and Employment Matters.  (a) Neither Iris nor any Iris Subsidiary is a party to any collective bargaining agreement, collective agreement, trade union, works council agreement or other labor union contract applicable to persons employed by Iris or any Iris Subsidiary, and, there are no organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit which could affect Iris or any Iris Subsidiary; (b) there are no unfair labor practice complaints pending or threatened against Iris or any Iris Subsidiary before the National Labor Relations Board or any other Governmental Authority; (c) Iris and each Iris Subsidiary are currently in compliance in all material respects with all Laws relating to the employment of labor, including those related to wages, hours, collective bargaining and the payment and withholding of Taxes; (d) there is no charge of discrimination in employment or employment practices, for any reason, including age, gender, race, religion or other legally protected category, which is now pending before the United States Equal Employment Opportunity Commission, or any other Governmental Authority in any jurisdiction in which the Iris or any Iris Subsidiary has employed or currently employs any Person; and (e) Iris has no Liability with respect to any misclassification of any person as an independent contractor, temporary employee, lease employee or any other servant or agent compensated other than through reportable wages (as an employee) paid by Iris or any Iris Subsidiary (each a “Contingent Worker”) and no Contingent Worker has been improperly excluded from any Iris Plan.

 

SECTION 3.12.   Real Property; Title to Assets.  (a)  Iris and the Iris Subsidiaries do not own any real property, nor have Iris and the Iris Subsidiaries ever owned any real property in the last 5 years.

 

(b)           Section 3.12(b) of the Iris Disclosure Schedule lists the common address of each parcel of real property currently leased or subleased by Iris or any Iris Subsidiary, with the name of the lessor and the date of the lease, sublease, assignment of the lease, and each amendment to any of the foregoing (collectively, the “Iris Lease Documents”).  All such current leases and subleases are in full force and effect, are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default (or event which, with notice or lapse of time, or both, would constitute such a default) by Iris or any Iris Subsidiary or, to Iris’ knowledge, by the other party to such lease or sublease.

 

(c)           To Iris’ knowledge, there are no legal restrictions that preclude the ability to use any real property owned or leased by Iris or any Iris Subsidiary for the purposes for which it is currently being used.

 

(d)           Each of Iris and the Iris Subsidiaries has good and valid title to, or, in the case of leased properties and assets, valid leasehold or subleasehold interests in, all of its material properties and assets (other than Intellectual Property, which is covered by Section 3.13 below) used in its business, free and clear of any Liens, except for Permitted Liens.

 

SECTION 3.13.   Intellectual Property.

 

(a)           (i) To the knowledge of Iris, the conduct of the businesses of Iris and the Iris Subsidiaries has not in the last six (6) years, and does not infringe, misappropriate or otherwise violate the Intellectual Property rights of any other person (including any right to 

 

  

25

  

 

privacy), and (ii) as of the date hereof, there is no Action concerning the foregoing initiated by any person against Iris or any Iris Subsidiary pending before any Governmental Authority or, to the knowledge of Iris, threatened against Iris or any Iris Subsidiary.

 

(b)           Except as set forth on Section 3.17(a)(vii) of the Iris Disclosure Schedule, Iris or an Iris Subsidiary is the owner of the entire right, title and interest in and to the Iris Owned Intellectual Property, free and clear of all Liens other than non-exclusive licenses entered in the ordinary course of business, which by their terms do not entail the licensing or provision of any source code.  Iris or an Iris Subsidiary is entitled to use the Iris Owned Intellectual Property in the continued operation of its respective business.  “Iris Owned Intellectual Property” means each item of Intellectual Property owned by Iris or an Iris Subsidiary that is material to the business, financial condition or results of operations of Iris and the Iris Subsidiaries taken as a whole.

 

(c)           With respect to each item of Intellectual Property licensed to Iris or a Iris Subsidiary that is material to the business, financial condition or results of operations of Iris and the Iris Subsidiaries taken as a whole (“Iris Licensed Intellectual Property”), Iris or a Iris Subsidiary has a valid right to use such Iris Licensed Intellectual Property in the continued operation of its respective business.

 

(d)           The Iris Owned Intellectual Property and the Iris Licensed Intellectual Property include all of the material Intellectual Property used in connection with the operation of Iris’ and the Iris Subsidiaries’ businesses.

 

(e)           The Iris Owned Intellectual Property and, to the knowledge of Iris, the Iris Licensed Intellectual Property has not been adjudged invalid or unenforceable in whole or in part, and is currently in compliance with any and all maintenance fee and renewal payments.

 

(f)           Iris and the Iris Subsidiaries have taken commercially reasonable measures to maintain in confidence all material trade secrets and confidential information owned or used by Iris and the Iris Subsidiaries in connection with the operation of their businesses as presently conducted.  All persons who have participated in the creation or development of any of the Iris Owned Intellectual Property have executed and delivered to Iris a valid and enforceable agreement (i) providing for the non-disclosure by such person of any confidential information of Iris and (ii) providing for the assignment by such person to Iris of any Intellectual Property arising out of such person’s employment by or contract with Iris.

 

(g)           To the knowledge of Iris, no person is engaging in any activity that infringes, misappropriates or otherwise violates any Iris Owned Intellectual Property in any material respect.

 

(h)           Neither Iris nor any Iris Subsidiary is bound by or subject to any contract or agreement under which the execution of this Agreement or the consummation of the Transactions will result in (i) the grant of any license under, or the creation of any Lien on, any Intellectual Property that is owned by or licensed to Iris, any Iris Subsidiary, Parent, Greyhound or any of its Affiliates,  which such party was not bound by or subject to prior to the Closing, (ii) Iris, any Iris Subsidiary, Parent, Greyhound or any of its Affiliates being bound by or subject 

 

  

26

  

 

to any non-compete or licensing obligation, covenant not to sue, or other restriction on the operation or scope of its business, which such party was not bound by or subject to prior to the Closing, or (iii) Iris, any Iris Subsidiary, Parent, Greyhound or any of its Affiliates being obligated to (A) pay any royalties, honoraria, fees or other payments to any person in material excess of those payable by such party prior to the Closing, or (B) provide or offer any discounts or other reduced payment obligations to any person in material excess of those provided to such person prior to the Closing.

 

(i)           No Public Software forms part of, is incorporated into or is being (or has been) distributed with, in whole or in part, any Iris Product in a manner that would (A) require the licensing, disclosure or distribution of any portion of any source code of the Iris Products (other than source code that is a part of such Public Software); or (B) prohibit or limit the receipt of consideration in connection with licensing, sublicensing or distributing of any Iris Products; or (C) except as specifically permitted by Law, allow any person to decompile, disassemble or otherwise reverse-engineer any source code within (or distributed with) the Iris Products (other than source code that is a part of such Public Software); or (D) require the licensing of any Iris Products to any other person for the purpose of making derivative works.  With respect to any Public Software listed therein, Section 3.13(i) of the Iris Disclosure Schedule also identifies the underlying Public Software, the license agreement governing the use of such Public Software, where such agreements exist, the particular Iris Products in which such Public Software is present and the nature of use of such Public Software.

 

SECTION 3.14.   Taxes.  Iris and the Iris Subsidiaries have filed all United States federal, state, local and non-United States Tax returns and reports required to be filed by them and have paid and discharged all Taxes required to be paid or discharged, other than such payments as are being contested in good faith by appropriate proceedings.  All such Tax returns are true, accurate and complete in all material respects.  Neither the IRS nor any other United States or non-United States taxing authority or agency is now asserting or, to the knowledge of Iris, threatening to assert, against Iris or any Iris Subsidiary any material deficiency or claim for any Taxes or interest thereon or penalties in connection therewith.  Neither Iris nor any Iris Subsidiary has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax deemed material.  The accruals and reserves for Taxes reflected in the Most Recent Iris Balance Sheet are adequate to cover all Taxes accruable through such date (including interest and penalties, if any, thereon) in accordance with GAAP.  There are no Tax liens upon any property or assets of Iris or any of the Iris Subsidiaries except liens for current Taxes not yet due.  Neither Iris nor any of the Iris Subsidiaries is currently required to include in income any adjustment pursuant to Section 481 of the Code by reason of a voluntary change in accounting method initiated by Iris or any of the Iris Subsidiaries, and the IRS has not initiated or proposed any such adjustment or change in accounting method, in either case which adjustment or change could reasonably be expected to be material.  Neither Iris nor any Iris Subsidiary has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify under Section 355 of the Code within the past five years.  To the knowledge of Iris, neither Iris nor any of its Affiliates has taken or agreed to take any action that would prevent the Mergers from qualifying as exchanges under the provisions of Section 351 of the Code.  Iris is not aware of any agreement, plan or other circumstance that would prevent the Mergers from qualifying as exchanges under the provisions of Section 351 of the Code.

 

  

27

  

 

SECTION 3.15.   Environmental Matters.  Except as could not reasonably be expected, individually or in the aggregate, to have a Iris Material Adverse Effect:

 

(a)           none of Iris or any Iris Subsidiary has violated, or is in violation of, any Environmental Law;

 

(b)           none of the properties currently or formerly owned, leased or operated by Iris or any Iris Subsidiary (including, without limitation, soils and surface and ground waters) are contaminated with any Hazardous Substance;

 

(c)           none of Iris or any Iris Subsidiary is actually, potentially or allegedly liable for any off-site contamination by Hazardous Substances;

 

(d)           none of Iris or any Iris Subsidiary is actually, potentially or allegedly liable under any Environmental Law;

 

(e)           Iris and the Iris Subsidiaries have all permits, licenses and other authorizations necessary for each of Iris or the Iris Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted and required under any Environmental Law, and Iris and the Iris Subsidiaries have always been and are in compliance in all material respects with such permits, licenses and authorizations; and

 

(f)           neither the execution of this Agreement nor the consummation of the Transactions will require any investigation, remediation or other action with respect to Hazardous Substances, or any notice to or consent of Governmental Authorities or third parties, pursuant to any applicable Environmental Law.

 

SECTION 3.16.   Iris Board Approval; Iris Stockholder Approval.  (a)  The Iris Board, by resolutions duly adopted by unanimous vote of those voting at a meeting duly called and held and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement, the Iris Merger and the other Transactions to which it is a party are fair to and in the best interests of Iris and its stockholders, (ii) approved this Agreement, the Iris Merger and the other Transactions to which it is a party and declared their advisability, (iii) recommended that the stockholders of Iris approve and adopt this Agreement, and approve the Iris Merger and the other Transactions to which it is a party and (iv) confirmed that the Iris Stock Options will be cancelled as provided in this Agreement.

 

(b)           The only vote of the holders of any class or series of capital stock of Iris necessary to approve this Agreement, the Iris Merger and the other Transactions to which it is a party is the affirmative vote of the holders of a majority of the outstanding shares of Iris Capital Stock, voting together as single class, in favor of the approval and adoption of this Agreement and Iris Merger (the “Iris Stockholder Approval”).

 

SECTION 3.17.   Material Contracts.  (a)  Subsections (i) through (xi) of Section 3.17(a) of the Iris Disclosure Schedule list the following types of contracts and agreements to which Iris or any Iris Subsidiary is a party (such contracts and agreements as are required to be set forth in Section 3.17(a) of the Iris Disclosure Schedule being the “Material Iris Contracts”):

 

  

28

  

 

(i)           each contract and agreement which is likely to involve consideration of more than $400,000, in the aggregate, over the remaining term of such contract or agreement, other than (A) contracts with customers for the sale of products and services in the ordinary course of business and (B) contracts which are otherwise terminable upon not more than 90 days written notice by Iris or any Iris Subsidiary;

 

(ii)          all contracts and agreements evidencing outstanding Indebtedness;

 

(iii)         all leases of real property leased for the use or benefit of Iris or any Iris Subsidiary having any annual rent in excess of $200,000;

 

(iv)         all material contracts and agreements with any Governmental Authority to which Iris or any Iris Subsidiary is a party;

 

(v)          all contracts and agreements that limit, or purport to limit, the ability of Iris, any Iris Subsidiary or any controlled Affiliate of Parent (such controlled Affiliates determined immediately following the Effective Time) to compete in any line of business or with any person or entity or in any geographic area or during any period of time;

 

(vi)         all contracts for employment with the officers and directors of Iris and the Iris Subsidiaries and any other employee with annual compensation in excess of $200,000;

 

(vii)        all contracts and agreements related to the sale, licensing, development or use of material Intellectual Property to which Iris or any Iris Subsidiary is a party (which, for the avoidance of doubt, shall not include (x) any licenses of Iris Commercially Available Software, or (y) any licenses of Public Software), other than contracts with customers of Iris or any Iris Subsidiary for the sale of products and services entered in the ordinary course of business, which by their terms do not entail the licensing or provision of any source code to the customer;

 

(viii)       all contracts which provide for a covenant not to sue;

 

(ix)         each agreement or contract entered into by Iris or any Iris Subsidiary with the twenty (20) largest customers of Iris based on revenue recognized through such contracts in the last twelve (12) completed fiscal months;

 

(x)           all joint venture contracts, partnership arrangements or other agreements involving a sharing of profits, losses, costs or liabilities by Iris or any Iris Subsidiary with any third party; and

 

(xi)          all management contracts (excluding contracts for employment) and contracts with other consultants, in each case that contractually obligate Iris or any Iris Subsidiary to pay in excess of $200,000 in any given 12 month period, including any contracts involving the payment of royalties or other amounts calculated based upon the revenues or income of Iris or any Iris Subsidiary or income or revenues related to any product of Iris or any Iris Subsidiary to which Iris or any Iris Subsidiary is a party.

 

  

29

  

 

(b)       Except as could not reasonably be expected, individually or in the aggregate, to prevent or materially delay consummation of any of the Transactions or otherwise prevent or materially delay Iris from performing its obligations under this Agreement and could not reasonably be expected, individually or in the aggregate, to have an Iris Material Adverse Effect:

 

(i)         each Material Iris Contract is a legal, valid and binding agreement;

 

(ii)        none of Iris or any Iris Subsidiary has received any claim of breach or violation of, or default under, any Material Iris Contract and none of Iris or any Iris Subsidiary is in breach or violation of, or default under, any Material Iris Contract;

 

(iii)       to Iris’ knowledge, no other party is in breach or violation of, or default under, any Material Iris Contract; and

 

(iv)       neither the execution of this Agreement nor the consummation of any Transaction shall constitute a default under, give rise to cancellation rights under, or otherwise adversely affect any of the material rights of Iris or any Iris Subsidiary under any Material Iris Contract.

 

Iris has furnished or made available to Iris true and complete copies of all Material Iris Contracts, including any amendments thereto.

 

SECTION 3.18.   Insurance.  (a)  Section 3.18(a) of the Iris Disclosure Schedule sets forth, with respect to each insurance policy under which Iris or any Iris Subsidiary is currently an insured, a named insured or otherwise the principal beneficiary of coverage, (i) the names of the insurer, the principal insured and each named insured, (ii) the policy number, (iii) the period, scope and amount of coverage and (iv) the premium charged.

 

(b)           With respect to each such insurance policy:  (i) to the knowledge of Iris, the policy is legal, valid, binding and enforceable in accordance with its terms and, except for policies that have expired under their terms in the ordinary course, is in full force and effect; (ii) neither Iris nor any Iris Subsidiary is in material breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy; and (iii) to the knowledge of Iris, no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation.

 

(c)           At no time in the three years prior to the date of this Agreement has Iris or any Iris Subsidiary (i) been denied any insurance or indemnity bond coverage which it has requested, (ii) made any material reduction in the scope or amount of its insurance coverage, or (iii) received notice from any of its insurance carriers that any insurance premiums will be subject to increase in an amount materially disproportionate to the amount of the increases with respect thereto (or with respect to similar insurance) in prior years.

 

SECTION 3.19.   Certain Business Practices.  None of Iris, any Iris Subsidiary or, to Iris’ knowledge, any directors or officers, agents or employees of Iris or any Iris Subsidiary, 

 

  

30

  

 

has (i) used any funds or assets for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any payment in the nature of criminal bribery.

 

SECTION 3.20.   Interested Party Transactions.  No director, officer or other Affiliate of Iris or any Iris Subsidiary has or has had, directly or indirectly, (i) an economic interest in any person that purchases from or sells or furnishes to, Iris or any Iris Subsidiary, any goods or services other than goods and services purchased, sold or furnished in the ordinary course of business in arm’s-length business transactions; (ii) a beneficial interest in any contract or agreement disclosed in Section 3.17 of the Iris Disclosure Schedule; or (iii) any contractual or other arrangement with Iris or any Iris Subsidiary other than goods and services purchased, sold or furnished in the ordinary course of business in arm’s-length business transactions; provided, however, that ownership of no more than one percent (1%) of the outstanding voting stock of a publicly traded corporation shall not be deemed an “economic interest in any person” for purposes of this Section 3.20.  Iris and the Iris Subsidiaries have not, since December 31, 2007, (i) extended or maintained credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of Iris (excluding reimbursement of business expenses incurred in the ordinary course of business), or (ii) materially modified any term of any such extension or maintenance of credit.

 

SECTION 3.21.   Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Iris.

 

SECTION 3.22.   Operations of Parent, Greyhound Merger Sub and Iris Merger Sub.   (a)  Parent is a direct, wholly owned subsidiary of Iris, was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, has engaged in no other business activities and has conducted its operations only as contemplated by this Agreement.  Greyhound Merger Sub and Iris Merger Sub are direct, wholly owned subsidiaries of Parent, were formed solely for the purpose of engaging in the transactions contemplated by this Agreement, have engaged in no other business activities and have conducted their operations only as contemplated by this Agreement.

 

(b)           Parent is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.  Iris has heretofore furnished to Greyhound a complete and correct copy of the certificate of incorporation and the by laws of Parent.  Such certificates of incorporation and by laws are in full force and effect.  As of the date hereof, the authorized capital stock of Parent consists of 100 shares of Parent Common Stock.  Immediately prior to the Effective Time, the authorized capital stock of Parent shall consist of (i) 300,000,000 shares of Parent Common Stock and (ii) 3,000,000 shares of preferred stock, par value $0.001 per share, of which 2,000,000 shares shall be designated Parent Preferred Stock (the “Parent Closing Authorized Capital”); provided, however, that Greyhound may modify the Parent Closing Authorized Capital, so long as notice thereof is provided to Iris at least eight (8) Business Days prior to the Closing.  As of the date of this Agreement, (i) 100 shares of Parent Common Stock are issued and outstanding and owned of record and beneficially by Iris and (ii) 

 

  

31

  

 

no shares of Parent preferred stock are outstanding.  Except for the Iris Stock Option Plans, Iris has never adopted or maintained any stock option plan or other plan providing for equity compensation of any person.  Except as is contemplated by this Agreement, there are no options, warrants, calls or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of Parent or Parent to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of capital stock of, or other equity interests in, Parent.  The shares of Parent Common Stock to be issued pursuant to the Mergers in accordance with Article II (i) will be duly authorized, validly issued, fully paid and non assessable and not subject to preemptive rights created by statute, Parent’s certificate of incorporation or by-Laws or any agreement (other than the Stockholders Agreement) and (ii) will, when issued, be exempt from registration under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and applicable state securities or “blue sky” laws (“Blue Sky Laws”).  Parent has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions.  The execution and delivery of this Agreement by Parent and the consummation by Parent of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Parent are necessary to authorize this Agreement or to consummate the Transactions.  This Agreement has been duly and validly executed and delivered by Parent and, assuming due authorization, execution and delivery by the other Parties hereto, constitutes a legal, valid and binding obligation of  Parent, enforceable against Parent in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

 

(c)           The Parent Board, by resolutions duly adopted by unanimous vote of those voting at a meeting duly called and held and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement, the Mergers and the other Transactions are fair to and in the best interests of Parent and its stockholders, and (ii) approved this Agreement, the Mergers and the other Transactions and declared their advisability. The only vote of the holders of any class or series of capital stock of Parent necessary to approve this Agreement, the Mergers and the other Transactions is the affirmative vote of the holders of a majority of the outstanding shares of Parent Common Stock (the “Parent Stockholder Approval”).  Parent has delivered to each of Greyhound and Iris irrevocable written consent of its sole stockholder constituting the Parent Stockholder Approval.

 

SECTION 3.23.   Disclosure Documents.  The information supplied by Iris for inclusion in any offering memorandum or other similar disclosure document, each as used in connection with the Financing, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

SECTION 3.24.   No Other Representations.  Except for the representations and warranties set forth in this Article III, Greyhound acknowledges and agrees that no representation or warranty of any kind whatsoever, express or implied, at law or in equity, is 

 

  

32

  

 

made or shall be deemed to have been made by or on behalf of Iris to Greyhound, and Iris hereby disclaims any such representation or warranty, whether by or on behalf of Iris.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF GREYHOUND

 

Except as set forth in the Greyhound Disclosure Schedule that has been prepared by Greyhound and delivered by Greyhound to Iris in connection with the execution and delivery of this Agreement (the “Greyhound Disclosure Schedule”) (which Greyhound Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections of this Article IV, and any information disclosed in any section of the Greyhound Disclosure Schedule shall be deemed to be disclosed only for purposes of the corresponding section of this Article IV, unless it is readily apparent that the disclosure contained in such section of the Greyhound Disclosure Schedule contains enough information regarding the subject matter of other representations and warranties contained in this Article IV as to reasonably qualify or otherwise reasonably apply to such other representations and warranties), Greyhound hereby represents and warrants to Iris that:

 

SECTION 4.01.   Corporate Organization.  (a)  Each of Greyhound and each subsidiary of Greyhound (each a “Greyhound Subsidiary”) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals could not reasonably be expected, individually or in the aggregate, to prevent or materially delay consummation of any of the Transactions or otherwise prevent or materially delay Greyhound from performing its obligations under this Agreement and could not reasonably be expected, individually or in the aggregate, to have a Greyhound Material Adverse Effect (as hereinafter defined).  Each of Greyhound and each Greyhound Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that could not reasonably be expected, individually or in the aggregate, to prevent or materially delay consummation of any of the Transactions or otherwise prevent or materially delay Greyhound from performing its obligations under this Agreement and could not reasonably be expected, individually or in the aggregate, to have a Greyhound Material Adverse Effect.

 

(b)           A true and complete list of all the Greyhound Subsidiaries, together with the jurisdiction of incorporation of each Greyhound Subsidiary and the percentage of the outstanding capital stock of each Greyhound Subsidiary owned by Greyhound and each other Greyhound Subsidiary, is set forth in Section 4.01(b) of the Greyhound Disclosure Schedule.  Greyhound does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any person.

 

  

33

  

 

SECTION 4.02.   Certificate of Incorporation and By-Laws.  Greyhound has heretofore furnished to Iris a complete and correct copy of the certificate of incorporation and the by-laws or equivalent organizational documents, each as amended to date, of Greyhound and each Greyhound Subsidiary.  Such certificates of incorporation, by-laws or equivalent organizational documents are in full force and effect.  Neither Greyhound nor any Greyhound Subsidiary is in violation of any of the provisions of its certificate of incorporation, by-laws or equivalent organizational documents.

 

SECTION 4.03.   Capitalization.  (a)  The authorized capital stock of Greyhound consists of (i) 210,000,000 shares of Greyhound Common Stock, and (ii) 10,000,000 shares of Greyhound preferred stock, par value $0.01 per share, of which (x) 4,310,000 shares of Greyhound Series A Preferred Stock and (y) 700,000 shares of Greyhound Series B Preferred Stock have been authorized.  As of the date of this Agreement, (i) 100,184,585 shares of Greyhound Common Stock, 4,007,388 shares of Greyhound Series A Preferred Stock and 526,930 shares of Greyhound Series B Preferred Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable, (ii) 4,999,999 shares of Greyhound Common Stock and 199,999 shares of Greyhound Series A Preferred Stock are held in the treasury of Greyhound, (iii) no shares of Greyhound Common Stock are held by any Greyhound Subsidiaries, and (iv) 18,836,364 shares of Greyhound Common Stock are reserved for future issuance pursuant to Greyhound Stock Options and other purchase rights (together with Greyhound Stock Options, the “Greyhound Stock Awards”) granted pursuant to, and in accordance with the terms and conditions of, the Greyhound Stock Option Plan, of which Greyhound Stock Options for 12,063,624 shares of Greyhound Common Stock have been granted, as of the date hereof, pursuant to outstanding, unexercised Greyhound Stock Awards.  Except for the Greyhound Stock Option Plans, Greyhound has never adopted or maintained any stock option plan or other plan providing for equity compensation of any person.  Except as set forth in this Section 4.03, there are no options, warrants, calls or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of Greyhound or any Greyhound Subsidiary or obligating Greyhound or any Greyhound Subsidiary to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of capital stock of, or other equity interests in, Greyhound or any Greyhound Subsidiary, or obligating Greyhound to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call or other right, agreement, arrangement or commitment.  There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to Greyhound or any Greyhound Subsidiaries.  Section 4.03(a) of the Greyhound Disclosure Schedule sets forth the following information with respect to each Greyhound Stock Award outstanding as of the date of this Agreement: (i) the name of the Greyhound Stock Award recipient, or to the extent that disclosure of the name is prohibited by applicable law, a number unique to such individual; (ii) the particular plan pursuant to which such Greyhound Stock Award was granted; (iii) the number of shares and type of Greyhound Capital Stock subject to such Greyhound Stock Award; (iv) the exercise or purchase price of such Greyhound Stock Award; (v) the date on which such Greyhound Stock Award was granted; (vi) the applicable vesting schedule; and (vii) the date on which such Greyhound Stock Award expires.  Greyhound has made available to Iris accurate and complete copies of all Greyhound Plans pursuant to which Greyhound has granted the Greyhound Stock Awards that are currently outstanding and the form of all stock award agreements evidencing such Greyhound Stock Awards.  All shares of 

 

  

34

  

 

Greyhound Capital Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable.  There are no outstanding contractual obligations of Greyhound or any Greyhound Subsidiary to repurchase, redeem or otherwise acquire any shares of Greyhound Capital Stock or any capital stock of any Greyhound Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Greyhound Subsidiary or any other person.  There are no declared or accrued but unpaid dividends with respect to any shares of Greyhound Capital Stock, and Greyhound has no other capital stock authorized, issued or outstanding.  Except as contemplated hereby, there are no commitments or agreements of any character to which Greyhound is bound obligating Greyhound to accelerate the vesting of any Greyhound Stock Award as a result of the Mergers.  Except as contemplated hereby, and except for any agreement to be terminated on or prior to the Effective Time, there are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of Greyhound.  All outstanding shares of Greyhound Capital Stock, all outstanding Greyhound Stock Awards, and all outstanding shares of capital stock of each Greyhound Subsidiary have been issued and granted in compliance with (i) all applicable securities laws and other applicable Laws and (ii) all requirements set forth in applicable contracts.

 

(b)           Each outstanding share of capital stock of each Greyhound Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and each such share is owned by Greyhound or another Greyhound Subsidiary free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on Greyhound’s or any Greyhound Subsidiary’s voting rights, charges and other encumbrances of any nature whatsoever.

 

SECTION 4.04.   Authority Relative to This Agreement.  Greyhound has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions.  The execution and delivery of this Agreement by Greyhound and the consummation by Greyhound of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Greyhound are necessary to authorize this Agreement or to consummate the Transactions (other than, with respect to the Greyhound Merger, the approval and adoption of this Agreement by the holders of a majority of the then-outstanding shares of Greyhound Capital Stock, voting together as a single class, and the filing and recordation of appropriate merger documents as required by the DGCL).  This Agreement has been duly and validly executed and delivered by Greyhound and, assuming the due authorization, execution and delivery by Iris, constitutes a legal, valid and binding obligation of Greyhound, enforceable against Greyhound in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

 

SECTION 4.05.   No Conflict; Required Filings and Consents.  (a)  The execution and delivery of this Agreement by Greyhound does not, and the performance of this Agreement by Greyhound will not, (i) conflict with or violate the certificate of incorporation or by-laws or 

 

  

35

  

 

other organizational documents of Greyhound or any Greyhound Subsidiary, (ii) assuming that all consents, approvals, authorizations and other actions described in Section 4.05(b) have been obtained and all filings and obligations described in Section 4.05(b) have been made, conflict with or violate any Law applicable to Greyhound or any Greyhound Subsidiary or by which any property or asset of Greyhound or any Greyhound Subsidiary is bound or affected, or (iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien or other encumbrance on any property or asset of Greyhound or any Greyhound Subsidiary pursuant to, any Material Greyhound Contract.

 

(b)           The execution and delivery of this Agreement by Greyhound does not, and the performance of this Agreement by Greyhound and Merger Sub will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws, the pre-merger notification requirements of the HSR Act or other applicable foreign, federal or state antitrust, competition or fair trade Laws with respect to the Transactions and filing and recordation of appropriate merger documents as required by the DGCL.

 

SECTION 4.06.   Permits; Compliance.  Each of Greyhound and the Greyhound Subsidiaries is in possession of all material franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of Greyhound or the Greyhound Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the “Greyhound Permits”).  No suspension or cancellation of any of the Greyhound Permits is pending or, to the knowledge of Greyhound, threatened.  Neither Greyhound nor any Greyhound Subsidiary is in material conflict with, or in material default, breach or violation of, (a) any Law applicable to Greyhound or any Greyhound Subsidiary or by which any property or asset of Greyhound or any Greyhound Subsidiary is bound or affected, or (b) any Greyhound Permit.

 

SECTION 4.07.   Financial Statements.  (a)  Greyhound has delivered to Iris copies of consolidated financial statements (the “Greyhound Financial Statements”), as set forth in Section 4.07 of the Greyhound Disclosure Schedule, consisting of an audited balance sheet of Greyhound at December 31, 2007 and the related statements of income and cash flows for the year ended December 31, 2007, an audited balance sheet of Greyhound at December 31, 2008 and the related statements of income and cash flows for the year ended December 31, 2008, and an unaudited balance sheet of Greyhound at September 30, 2009 and the related statements of income and cash flows for the nine-month period ended September 30, 2009.  The Greyhound Financial Statements are true and correct in all material respects and were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of Greyhound and its consolidated subsidiaries as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments and the absence of footnotes).  The unaudited 

 

  

36

  

 

balance sheet of Greyhound at September 30, 2009 is referred to herein as the “Most Recent Greyhound Balance Sheet”).

 

(b)           As of the date hereof, except as and to the extent set forth on the Most Recent Greyhound Balance Sheet, including the notes thereto, neither Greyhound nor any Greyhound Subsidiary has any material liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet prepared in accordance with GAAP or in the notes thereto, except for liabilities and obligations (i) under this Agreement or (ii) incurred in the ordinary course of business consistent with past practice since the date of the Most Recent Greyhound Balance Sheet.

 

(c)            Greyhound maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP.  Greyhound and the Greyhound Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, except, in the case of each of (i) through (iv), for any deficiencies that, individually or in the aggregate, are insignificant.

 

SECTION 4.08.   Absence of Certain Changes or Events.  Since the date of the Most Recent Greyhound Balance Sheet, (a) through the date hereof, Greyhound and the Greyhound Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice, (b) there has not been any event, circumstance, change or effect that, individually or in the aggregate, constitutes, or is reasonably likely to constitute, a Greyhound Material Adverse Effect, and (c) through the date hereof, none of Greyhound or any Greyhound Subsidiary has taken any action that, if taken after the date of this Agreement, would constitute a breach of any of the covenants set forth in Section 5.02.

 

SECTION 4.09.   Absence of Litigation.  As of the date hereof, there is no Action pending or, to the knowledge of Greyhound, threatened against Greyhound or any Greyhound Subsidiary, or any property or asset of Greyhound or any Greyhound Subsidiary, before any Governmental Authority.  Neither Greyhound nor any Greyhound Subsidiary nor any material property or asset of Greyhound or any Greyhound Subsidiary is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of Greyhound, continuing investigation by, any Governmental Authority, or any order, writ, judgment, decree, determination or award of Governmental Authority.

 

SECTION 4.10.   Employee Benefit Plans.  (a)  Section 4.10(a) of the Greyhound Disclosure Schedule lists (i) all stock option, stock purchase and restricted stock, or equity incentive plans, programs or arrangements, all material “employee benefit plans” (as defined in Section 3(3) of ERISA) (whether or not subject to ERISA) and all material bonus, incentive, deferred compensation, change of control, retention, retiree medical or life insurance, supplemental retirement, severance, redundancy, termination or other benefit plans, programs or 

 

  

37

  

 

arrangements, to which Greyhound or any Greyhound Subsidiary is a party, with respect to which Greyhound or any Greyhound Subsidiary has any obligation or which are maintained, contributed to or sponsored by Greyhound or any Greyhound Subsidiary for the benefit of any current or former employee, officer or director of Greyhound or any Greyhound Subsidiary, (ii) each employment agreement that is a Material Greyhound Contract, (iii) each employee benefit plan for which Greyhound or any Greyhound Subsidiary could incur liability under Section 4069 of ERISA in the event such plan has been or were to be terminated, and (iv) any plan in respect of which Greyhound or any Greyhound Subsidiary could incur liability under Section 4212(c) of ERISA (collectively, the “Greyhound Plans”); provided that it is hereby agreed and understood that a Greyhound Plan that is not subject to United States Law (a “Non-U.S. Greyhound Plan”) shall not be deemed to be material for purposes of this Section 4.10 to the extent that Greyhound or any Greyhound Subsidiary employs or engages less than 50 individuals in the relevant national jurisdiction, unless such Greyhound Plan (x) provides for retirement, pension or termination benefits on a defined benefit basis or benefits in connection with a change of control or sale of Greyhound or any Greyhound Subsidiary or (y) is an employment agreement that is a Material Greyhound Contract.  Greyhound has made available to Greyhound a true and complete copy of (i) such Greyhound Plans, (ii) the most recently filed IRS Form 5500, if any, (iii) the most recent summary plan description for each Greyhound Plan for which a summary plan description is required by applicable law, (iv) the most recently received IRS determination letter or opinion letter, if any, issued by the IRS with respect to any Greyhound Plan that is intended to qualify under Section 401(a) of the Code, and (v) the most recently prepared actuarial report or financial statement, if any, relating to a Greyhound Plan.  Neither Greyhound nor any Greyhound Subsidiary has any express or implied commitment (i) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, (ii) to enter into any contract or agreement to provide compensation or benefits to any individual, or (iii) to modify, change or terminate any Greyhound Plan, other than with respect to a modification, change or termination (x) required by ERISA or the Code or (y) implemented in the ordinary course of business consistent with past practice  in connection with any plan year or cycle that commences on January 1, 2010.

 

(b)           Neither Greyhound nor any ERISA Affiliate of Greyhound maintains, sponsors, participates in or contributes or has any liability with respect to a Multiemployer Plan, Multiple Employer Plan, or an employee benefit plan subject to Title IV of ERISA.  None of the Greyhound Plans provides for or promises retiree medical, disability or life insurance benefits to any current or former employee, officer or director of Greyhound or any Greyhound Subsidiary (other than coverage mandated by applicable law).

 

(c)           Each Greyhound Plan is now and always has been operated in all material respects in accordance with its terms and the requirements of all applicable Laws, including, without limitation, ERISA and the Code.  Greyhound and the Greyhound Subsidiaries have, in all material respects, performed all obligations required to be performed by them under, are not in any material respect in default under or in violation of, and have no knowledge of any default or violation by any party to, any Greyhound Plan.  No Action is pending or, to the knowledge of Greyhound, threatened with respect to any Greyhound Plan (other than claims for benefits in the ordinary course) and, to the knowledge of Greyhound, no fact or event exists that could reasonably be expected to give rise to any such Action.

 

  

38

  

 

 

(d)           Each Greyhound Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has received with respect to the cycle applicable to such Greyhound Plan pursuant to Revenue Procedure 2005-66 (as amended) a favorable determination letter from the IRS covering all of the provisions applicable to the Greyhound Plan for which determination letters are currently available or an IRS prototype opinion letter exists upon which Greyhound is permitted to rely, that the Greyhound Plan is so qualified.

 

(e)           All contributions, premiums or payments required to be made with respect to any Greyhound Plan have been made on or before their due dates.  Greyhound and each Greyhound Subsidiary have made all social security contributions (including contributions to all mandatory provident fund schemes) in respect of or on behalf of all their current and former employees in accordance with applicable Law.

 

(f)           Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in connection with the termination of employment or service of any officer, employee, director, independent contractor or consultant following, or in connection with the transactions contemplated hereby) (i) entitle any current or former employee, independent contractor or consultant of Greyhound or any Greyhound Subsidiary to  any increase in severance pay upon any termination of employment after the date of this Agreement, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other obligation pursuant to, any of the Greyhound Plans, or (iii) limit or restrict the right of Greyhound or any Greyhound Subsidiary or, after the consummation of the transactions contemplated hereby, Parent, to merge, amend or terminate any of the Greyhound Plans.  None of the Greyhound Plans in effect immediately prior to the Closing would result separately or in the aggregate (including, without limitation, as a result of this Agreement or the transactions contemplated hereby) in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

 

(g)           Each Greyhound Plan or any other arrangement of Greyhound that is, or was, subject to Section 409A of the Code was administered in reasonable, good faith compliance with the requirements of Section 409A of the Code through December 31, 2008, and all Greyhound Plans subject to Section 409A of the Code that provide payment after December 31, 2008 and were in existence on such date have been amended (if applicable) to comply with the requirements of the final regulations under Section 409A.  Neither Greyhound nor any Greyhound Subsidiary (i) has an obligation to gross-up, indemnify or otherwise reimburse any person for any tax incurred by such person pursuant to Section 409A of the Code, (ii) has elected to or is required to defer payment of amounts from a foreign entity which will be subject to the provisions of Section 457A of the Code, or (iii) has any obligation to gross-up, indemnify or otherwise reimburse any person for any tax incurred by such person pursuant to Section 409A or Section 280G of the Code.

 

(h)           All directors, officers and management employees of Greyhound and the Greyhound Subsidiaries are under written obligation to Greyhound and the Greyhound Subsidiaries to maintain in confidence all confidential or proprietary information acquired by them in the course of their employment and to assign to Greyhound and the Greyhound 

 

  

39

  

 

Subsidiaries all inventions made by them within the scope of their employment during such employment and for a reasonable period thereafter.

 

(i)           In addition to the foregoing, with respect to each Non-U.S. Greyhound Plan:

 

(i)           none of the Non-U.S. Greyhound Plans provide for retirement, pension or termination benefits on a defined benefit basis;

 

(ii)           there has been no amendment to, written interpretation of or announcement (whether or not written) by Greyhound or any Greyhound Subsidiary relating to, or change in employee participation or coverage under, any Non-U.S. Greyhound Plan that would materially increase the expense of maintaining such Non-U.S. Greyhound Plan above the level of expense incurred in respect thereof for the most recent fiscal year ended prior to the date hereof; and

 

(iii)           each Non-U.S. Greyhound Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities.

 

SECTION 4.11.   Labor and Employment Matters.  (a) Neither Greyhound nor any Greyhound Subsidiary is a party to any collective bargaining agreement, collective agreement, trade union, works council agreement or other labor union contract applicable to persons employed by Greyhound or any Greyhound Subsidiary, and, there are no organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit which could affect Greyhound or any Greyhound Subsidiary; (b) there are no unfair labor practice complaints pending or threatened against Greyhound or any Greyhound Subsidiary before the National Labor Relations Board or any other Governmental Authority ; (c) Greyhound and each Greyhound Subsidiary are currently in compliance in all material respects with all Laws relating to the employment of labor, including those related to wages, hours, collective bargaining and the payment and withholding of Taxes; (d) there is no charge of discrimination in employment or employment practices, for any reason, including age, gender, race, religion or other legally protected category, which is now pending before the United States Equal Employment Opportunity Commission, or any other Governmental Authority in any jurisdiction in which the Greyhound or any Greyhound Subsidiary has employed or currently employs any Person; and (e) Greyhound has no Liability with respect to any misclassification of any Contingent Worker and no Contingent Worker has been improperly excluded from any Greyhound Plan.

 

SECTION 4.12.   Real Property; Title to Assets.  (a)  Section 4.12(a) of the Greyhound Disclosure Schedule lists each parcel of real property currently owned by Greyhound or any Greyhound Subsidiary.  Each parcel of real property owned by Greyhound or any Greyhound Subsidiary (i) is owned free and clear of all Liens, other than Permitted Liens, and (ii) is not being condemned, expropriated or otherwise taken by any public authority with or without payment of compensation therefor, nor, to the knowledge of Greyhound, has any such condemnation, expropriation or taking been proposed.

 

 

  

40

  

 

(b)           Section 4.12(b) of the Greyhound Disclosure Schedule lists the common address of each parcel of real property currently leased or subleased by Greyhound or any Greyhound Subsidiary, with the name of the lessor and the date of the lease, sublease, assignment of the lease, and each amendment to any of the foregoing (collectively, the “Greyhound Lease Documents”).  All such current leases and subleases are in full force and effect, are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default (or event which, with notice or lapse of time, or both, would constitute such a default) by Greyhound or any Greyhound Subsidiary or, to Greyhound’s knowledge, by the other party to such lease or sublease.

 

(c)           To Greyhound’s knowledge, there are no legal restrictions that preclude the ability to use any real property owned or leased by Greyhound or any Greyhound Subsidiary for the purposes for which it is currently being used.

 

(d)           Each of Greyhound and the Greyhound Subsidiaries has good and valid title to, or, in the case of leased properties and assets, valid leasehold or subleasehold interests in, all of its material properties and assets (other than Intellectual Property, which is covered by Section 4.13 below) used in its business, free and clear of any Liens, except for Permitted Liens.

 

SECTION 4.13.   Intellectual Property.  (a)  (i) To the knowledge of Greyhound, the conduct of the businesses of Greyhound and the Greyhound Subsidiaries has not in the last six (6) years, and does not infringe, misappropriate or otherwise violate the Intellectual Property rights of any other person (including any right to privacy), and (ii) as of the date hereof, there is no Action concerning the foregoing initiated by any person against Greyhound or any Greyhound Subsidiary pending before any Governmental Authority or, to the knowledge of Greyhound, threatened against Greyhound or any Greyhound Subsidiary.

 

(b)           Except as set forth on Section 4.17(a)(vii) of the Greyhound Disclosure Schedule, Greyhound or a Greyhound Subsidiary is the owner of the entire right, title and interest in and to the Greyhound Owned Intellectual Property, free and clear of all Liens other than non-exclusive licenses entered in the ordinary course of business, which by their terms do not entail the licensing or provision of any source code.  Greyhound or a Greyhound Subsidiary is entitled to use the Greyhound Owned Intellectual Property in the continued operation of its respective business.  “Greyhound Owned Intellectual Property” means each item of Intellectual Property owned by Greyhound or a Greyhound Subsidiary that is material to the business, financial condition or results of operations of Greyhound and the Greyhound Subsidiaries taken as a whole.

 

(c)           With respect to each item of Intellectual Property licensed to Greyhound or a Greyhound Subsidiary that is material to the business, financial condition or results of operations of Greyhound and the Greyhound Subsidiaries taken as a whole (“Greyhound Licensed Intellectual Property”), Greyhound or a Greyhound Subsidiary has a valid right to use such Greyhound Licensed Intellectual Property in the continued operation of its respective business.

 

  

41

  

 

 

(d)           The Greyhound Owned Intellectual Property and the Greyhound Licensed Intellectual Property include all of the material Intellectual Property used in connection with the operation of Greyhound’s and the Greyhound Subsidiaries’ businesses.

 

(e)           The Greyhound Owned Intellectual Property and, to the knowledge of Greyhound, the Greyhound Licensed Intellectual Property has not been adjudged invalid or unenforceable in whole or in part, and is currently in compliance with any and all maintenance fee and renewal payments.

 

(f)           Greyhound and the Greyhound Subsidiaries have taken commercially reasonable measures to maintain in confidence all material trade secrets and confidential information owned or used by Greyhound and the Greyhound Subsidiaries in connection with the operation of their businesses as presently conducted.  All persons who have participated in the creation or development of any of the Greyhound Owned Intellectual Property have executed and delivered to Greyhound a valid and enforceable agreement (i) providing for the non-disclosure by such person of any confidential information of Greyhound and (ii) providing for the assignment by such person to Greyhound of any Intellectual Property arising out of such person’s employment by or contract with Greyhound.

 

(g)           To the knowledge of Greyhound, no person is engaging in any activity that infringes, misappropriates or otherwise violates any Greyhound Owned Intellectual Property in any material respect.

 

(h)           Neither Greyhound or any Greyhound Subsidiary is bound by or subject to any contract or agreement under which the execution of this Agreement or the consummation of the Transactions will result in (i) the grant of any license under, or the creation of any Lien on, any Intellectual Property that is owned by or licensed to Greyhound or any Greyhound Subsidiary, which such party was not bound by or subject to prior to the Closing, (ii) Greyhound or any Greyhound Subsidiary being bound by or subject to any non-compete or licensing obligation, covenant not to sue, or other material restriction on the operation or scope of its business, which such party was not bound by or subject to prior to the Closing, or (iii) Greyhound or any Greyhound Subsidiary being obligated to (A) pay any royalties, honoraria, fees or other payments to any person in material excess of those payable by such party prior to the Closing, or (B) provide or offer any discounts or other reduced payment obligations to any person in material excess of those provided to such person prior to the Closing.

 

(i)           No Public Software forms part of, is incorporated into or is being (or has been) distributed with, in whole or in part, any Greyhound Product in a manner that would (A) require the licensing, disclosure or distribution of any portion of any source code of  the Greyhound Products (other than source code that is a part of such Public Software); or (B) prohibit or limit the receipt of consideration in connection with licensing, sublicensing or distributing of any Greyhound Products; or (C) except as specifically permitted by Law, allow any person to decompile, disassemble or otherwise reverse-engineer any source code within (or distributed with) the Greyhound Products (other than source code that is a part of such Public Software); or (D) require the licensing of any Greyhound Products to any other person for the purpose of making derivative works.  With respect to any Public Software listed therein, Section 4.13(i) of the Greyhound Disclosure Schedule also identifies the underlying Public 

 

  

42

  

 

Software, the license agreement governing the use of such Public Software, where such agreements exist, the particular Greyhound Products in which such Public Software is present and the nature of use of such Public Software.

 

SECTION 4.14.   Taxes.  Greyhound and the Greyhound Subsidiaries have filed all United States federal, state, local and non-United States Tax returns and reports required to be filed by them and have paid and discharged all Taxes required to be paid or discharged, other than such payments as are being contested in good faith by appropriate proceedings.  All such Tax returns are true, accurate and complete in all material respects.  Neither the IRS nor any other United States or non-United States taxing authority or agency is now asserting or, to the knowledge of Greyhound, threatening to assert, against Greyhound or any Greyhound Subsidiary any material deficiency or claim for any Taxes or interest thereon or penalties in connection therewith.  Neither Greyhound nor any Greyhound Subsidiary has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax deemed material.  The accruals and reserves for Taxes reflected in the Most Recent Greyhound Balance Sheet are adequate to cover all Taxes accruable through such date (including interest and penalties, if any, thereon) in accordance with GAAP.  There are no Tax liens upon any property or assets of Greyhound or any of the Greyhound Subsidiaries except liens for current Taxes not yet due.  Neither Greyhound nor any of the Greyhound Subsidiaries is currently required to include in income any adjustment pursuant to Section 481 of the Code by reason of a voluntary change in accounting method initiated by Greyhound or any of the Greyhound Subsidiaries, and the IRS has not initiated or proposed any such adjustment or change in accounting method, in either case which adjustment or change could reasonably be expected to be material.  Neither Greyhound nor any Greyhound Subsidiary has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify under Section 355 of the Code within the past five years.  To the knowledge of Greyhound, neither Greyhound nor any of its Affiliates has taken or agreed to take any action that would prevent the Mergers from qualifying as exchanges under the provisions of Section 351 of the Code.  Greyhound is not aware of any agreement, plan or other circumstance that would prevent the Mergers from qualifying as exchanges under the provisions of Section 351 of the Code.

 

SECTION 4.15.   Environmental Matters.  Except as could not reasonably be expected, individually or in the aggregate, to have a Greyhound Material Adverse Effect:

 

(a)           none of Greyhound or any Greyhound Subsidiary has violated, or is in violation of, any Environmental Law;

 

(b)           none of the properties currently or formerly owned, leased or operated by Greyhound or any Greyhound Subsidiary (including, without limitation, soils and surface and ground waters) are contaminated with any Hazardous Substance;

 

(c)           none of Greyhound or any Greyhound Subsidiary is actually, potentially or allegedly liable for any off-site contamination by Hazardous Substances;

 

(d)           none of Greyhound or any Greyhound Subsidiary is actually, potentially or allegedly liable under any Environmental Law;

 

  

43

  

 

(e)           Greyhound and the Greyhound Subsidiaries have all permits, licenses and other authorizations necessary for each of Greyhound or the Greyhound Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted and required under any Environmental Law and Greyhound and the Greyhound Subsidiaries have always been and are in compliance in all material respects with such permits, licenses and other authorizations; and

 

(f)           neither the execution of this Agreement nor the consummation of the Transactions will require any investigation, remediation or other action with respect to Hazardous Substances, or any notice to or consent of Governmental Authorities or third parties, pursuant to any applicable Environmental Law.

 

SECTION 4.16.   Greyhound Board Approval; Greyhound Stockholder Approval.  (a)  The Greyhound Board, by resolutions duly adopted by unanimous vote of those voting at a meeting duly called and held and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement, the Greyhound Merger and the other Transactions to which it is a party are fair to and in the best interests of Greyhound and its stockholders, (ii) approved this Agreement, the Greyhound Merger and the other Transactions and declared their advisability, (iii) recommended that the stockholders of Greyhound approve and adopt this Agreement, and approve the Greyhound Merger and the other Transactions to which it is a party and (iv) confirmed that the Greyhound Stock Options will not accelerate as a result of the this Agreement, the Greyhound Merger or the other Transactions.

 

(b)           The only vote of the holders of any class or series of capital stock of Greyhound necessary to approve this Agreement, the Greyhound Merger and the other Transactions is the affirmative vote of the holders of a majority of the outstanding shares of Greyhound Capital Stock, voting together as single class, in favor of the approval and adoption of this Agreement (the “Greyhound Stockholder Approval”).

 

SECTION 4.17.   Material Contracts.  (a)  Subsections (i) through (xi) of Section 4.17(a) of the Greyhound Disclosure Schedule list the following types of contracts and agreements to which Greyhound or any Greyhound Subsidiary is a party (such contracts, agreements and arrangements as are required to be set forth in Section 4.17(a) of the Greyhound Disclosure Schedule being the “Material Greyhound Contracts”):

 

(i)           each contract and agreement which is likely to involve consideration of more than $1,000,000, in the aggregate, over the remaining term of such contract or agreement, other than (A) contracts with customers for the sale of products and services in the ordinary course of business and (B) contracts which are otherwise terminable upon not more than 90 days written notice by Iris or any Iris Subsidiary;

 

(ii)          all contracts and agreements evidencing outstanding Indebtedness;

 

(iii)         all leases of real property leased for the use or benefit of Greyhound or any Greyhound Subsidiary having an annual rent in excess of $200,000;

 

(iv)         all material contracts and agreements with any Governmental Authority to which Greyhound or any Greyhound Subsidiary is a party;

 

  

44

  

 

(v)          all contracts and agreements that limit, or purport to limit, the ability of Greyhound, any Greyhound Subsidiary or any controlled Affiliate of Parent (such controlled Affiliates determined immediately following the Effective Time) to compete in any line of business or with any person or entity or in any geographic area or during any period of time;

 

(vi)         all contracts for employment with the officers and directors of Greyhound and the Greyhound Subsidiaries and any other employee with annual compensation in excess of $200,000;

 

(vii)        all contracts and agreements related to the sale, licensing, development or use of material Intellectual Property to which Greyhound or any Greyhound Subsidiary is a party (which, for the avoidance of doubt, shall not include (x) any licenses of Greyhound Commercially Available Software, or (y) any licenses of Public Software), other than contracts with customers of Greyhound or any Greyhound Subsidiary for the sale of products and services entered in the ordinary course of business, which by their terms do not entail the licensing or provision of any source code to the customer;

 

(viii)       all contracts which provide for a covenant not to sue;

 

(ix)         each agreement or contract entered into by Greyhound or any Greyhound Subsidiary with the twenty (20) largest customers of Greyhound based on revenue recognized through such contracts in the last twelve (12) completed fiscal months;

 

(x)          all joint venture contracts, partnership arrangements or other agreements involving a sharing of profits, losses, costs or liabilities by Greyhound or any Greyhound Subsidiary with any third party; and

 

(xi)         all management contracts (excluding contracts for employment) and contracts with other consultants, in each case that contractually obligate Greyhound or any Greyhound Subsidiary to pay in excess of $200,000 in any given 12 month period, including any contracts involving the payment of royalties or other amounts calculated based upon the revenues or income of Greyhound or any Greyhound Subsidiary or income or revenues related to any product of Greyhound or any Greyhound Subsidiary to which Greyhound or any Greyhound Subsidiary is a party.

 

(b)          Except as could not reasonably be expected, individually or in the aggregate, to prevent or materially delay consummation of any of the Transactions or otherwise prevent or materially delay Greyhound from performing its obligations under this Agreement and could not reasonably be expected, individually or in the aggregate, to have a Greyhound Material Adverse Effect:

 

(i)           each Material Greyhound Contract is a legal, valid and binding agreement;

 

(ii)           none of Greyhound or any Greyhound Subsidiary has received any claim of breach or violation of, or default under, any Material Greyhound Contract and none of 

 

  

45

  

 

Greyhound or any Greyhound Subsidiary is in breach or violation of, or default under, any Material Greyhound Contract;

 

(iii)         to Greyhound’s knowledge, no other party is in breach or violation of, or default under, any Material Greyhound Contract; and

 

(iv)         neither the execution of this Agreement nor the consummation of any Transaction shall constitute a default under, give rise to cancellation rights under, or otherwise adversely affect any of the material rights of Greyhound or any Greyhound Subsidiary under any Material Greyhound Contract.

 

Greyhound has furnished or made available to Iris true and complete copies of all Material Greyhound Contracts, including any amendments thereto.

 

SECTION 4.18.   Insurance.  (a)  Section 4.18(a) of the Greyhound Disclosure Schedule sets forth, with respect to each insurance policy under which Greyhound or any Greyhound Subsidiary is currently an insured, a named insured or otherwise the principal beneficiary of coverage, (i) the names of the insurer, the principal insured and each named insured, (ii) the policy number, (iii) the period, scope and amount of coverage and (iv) the premium charged.

 

(b)           With respect to each such insurance policy:  (i) to the knowledge of Greyhound, the policy is legal, valid, binding and enforceable in accordance with its terms and, except for policies that have expired under their terms in the ordinary course, is in full force and effect; (ii) neither Greyhound nor any Greyhound Subsidiary is in material breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy; and (iii) to the knowledge of Greyhound, no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation.

 

(c)           At no time in the three years prior to the date of this Agreement has Greyhound or any Greyhound Subsidiary (i) been denied any insurance or indemnity bond coverage which it has requested, (ii) made any material reduction in the scope or amount of its insurance coverage, or (iii) received notice from any of its insurance carriers that any insurance premiums will be subject to increase in an amount materially disproportionate to the amount of the increases with respect thereto (or with respect to similar insurance) in prior years.

 

SECTION 4.19.   Certain Business Practices.  None of Greyhound, any Greyhound Subsidiary or, to Greyhound’s knowledge, any directors or officers, agents or employees of Greyhound or any Greyhound Subsidiary, has (i) used any funds or assets for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any payment in the nature of criminal bribery.

 

  

46

  

 

SECTION 4.20.   Interested Party Transactions.  No director, officer or other Affiliate of Greyhound or any Greyhound Subsidiary has or has had, directly or indirectly, (i) an economic interest in any person that purchases from or sells or furnishes to, Greyhound or any Greyhound Subsidiary, any goods or services other than goods and services purchased, sold or furnished in the ordinary course of business in arm’s-length business transactions; (ii) a beneficial interest in any contract or agreement disclosed in Section 4.17 of the Greyhound Disclosure Schedule; or (iii) any contractual or other arrangement with Greyhound or any Greyhound Subsidiary other than goods and services purchased, sold or furnished in the ordinary course of business in arm’s-length business transactions; provided, however, that ownership of no more than one percent (1%) of the outstanding voting stock of a publicly traded corporation shall not be deemed an “economic interest in any person” for purposes of this Section 4.20.  Greyhound and the Greyhound Subsidiaries have not, since December 31, 2007, (i) extended or maintained credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of Greyhound (excluding reimbursement business expenses incurred in the ordinary course of business), or (ii) materially modified any term of any such extension or maintenance of credit.

 

SECTION 4.21.   Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Greyhound.

 

SECTION 4.22.   No Other Representations.  Except for the representations and warranties set forth in this Article IV, Iris, acknowledge and agree that no representation or warranty of any kind whatsoever, express or implied, at law or in equity, is made or shall be deemed to have been made by or on behalf of Greyhound to Iris, and Greyhound hereby disclaims any such representation or warranty, whether by or on behalf of Greyhound.

 

ARTICLE V

 

CONDUCT OF BUSINESS PENDING THE MERGER

 

SECTION 5.01.   Conduct of Business by Iris Pending the Mergers.  Iris agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.01 of the Iris Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless Greyhound shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed):

 

(i)           the businesses of Iris and the Iris Subsidiaries shall be conducted only in, and Iris and the Iris Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and

 

(ii)           Iris shall use commercially reasonable efforts to preserve substantially intact the business organization of Iris and the Iris Subsidiaries, to keep available the services of the current officers, employees and consultants of Iris and the Iris Subsidiaries and to preserve the current relationships of Iris and the Iris Subsidiaries with customers, suppliers and other persons with which Iris or any Iris Subsidiary has significant business relations.

 

  

47

  

 

 

By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Iris Disclosure Schedule, neither Iris nor any Iris Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Greyhound (which consent shall not be unreasonably withheld, conditioned or delayed):

 

(a)           amend or otherwise change its certificate of incorporation or by-laws or equivalent organizational documents;

 

(b)           issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of any Iris Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of any Iris Subsidiary or (ii) assets of Iris or any Iris Subsidiary with a value in excess of $200,000 (other than discounts or forgiveness of accounts receivable in the ordinary course of business);

 

(c)           declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for (i) dividends by any direct or indirect wholly-owned Iris Subsidiary to Iris or any other wholly-owned Iris Subsidiary and (ii) cash distributions;

 

(d)           reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the capital stock of any Iris Subsidiary;

 

(e)           (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) incur any indebtedness for borrowed money (other than pursuant to Iris’ existing borrowing facilities, as amended from time to time) or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person (other than Iris or any Iris Subsidiary), or make any loans or advances other than loans and advances to officers and employees for unreimbursed business expenses incurred in the ordinary course of business; (iii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (iv) make, authorize, or make any commitment with respect to, capital expenditures in excess of the capital expenditure forecast attached to Section 5.01(e) of the Iris Disclosure Schedule; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e) (it being acknowledged and agreed that Iris shall be permitted to extend its existing borrowing facilities as deemed necessary or reasonable by the Iris Board);

 

(f)           increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for (i) increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of 

 

  

48

  

 

Iris or any Iris Subsidiary who are not directors or officers of Iris or any Iris Subsidiary, (ii) any increase required pursuant to any Material Iris Contract set forth in Section 3.17 of the Iris Disclosure Schedule as in effect as of the date hereof or (iii) any increase in benefits required by Law, or grant any severance or termination pay to (other than pursuant to Iris’ existing severance program as in effect as of the date hereof and disclosed on Section 3.10(a) of the Iris Disclosure Schedule), or, except as required by applicable Law, enter into any employment or severance agreement with, any director, officer or other employee of Iris or of any Iris Subsidiary, or, except as required by Law, establish, adopt, enter into or amend any collective bargaining, works council, trade union, bonus, profit-sharing, thrift, incentive compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;

 

(g)          [Intentionally deleted];

 

(h)          take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures;

 

(i)           make any tax election or settle or compromise any material United States federal, state, local or non-United States income tax liability other than in the ordinary course of business in a manner consistent with past practice;

 

(j)           pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the Most Recent Iris Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice;

 

(k)          amend, modify or consent to the termination of any Material Iris Contract, or amend, waive, modify or consent to the termination of Iris’ or any Iris Subsidiary’s material rights thereunder, other than in the ordinary course of business and consistent with past practice;

 

(l)           commence or settle any Action other than in the ordinary course of business and consistent with past practice;

 

(m)         (i) permit any registration (or application for registration) of material item of Iris Owned Intellectual Property, or any material unregistered copyright or trademark included in the Iris Owned Intellectual Property, to lapse or to be abandoned, dedicated, or disclaimed, (ii) fail to maintain in confidence all material trade secrets and confidential information owned or used by Iris or any Iris Subsidiary; (iii) fail to perform or make any applicable filings, recordings or other similar actions with respect to any registration (or application for registration) of material Iris Owned Intellectual Property, or (iv) fail to pay all required fees and Taxes necessary to maintain and protect its interest in each 

 

  

49

  

 

registration (or application for registration) of material item of Iris Owned Intellectual Property;

 

(n)          except in the ordinary course of business and in a manner consistent with past practice, propose or consent to any change to the pricing of any Iris Products, or offer any discounts to any customers of Iris or any Iris Subsidiary;

 

(o)          accelerate the collection of receivables or otherwise manage working capital except in the ordinary course of business and in a manner consistent with past practice; or

 

(p)          announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

 

SECTION 5.02.   Conduct of Business by Greyhound Pending the Merger.  Greyhound agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.02 of the Greyhound Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless Iris shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed):

 

(i)           the businesses of Greyhound and the Greyhound Subsidiaries shall be conducted only in, and Greyhound and the Greyhound Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and

 

(ii)           Greyhound shall use commercially reasonable efforts to preserve substantially intact the business organization of Greyhound and the Greyhound Subsidiaries, to keep available the services of the current officers, employees and consultants of Greyhound and the Greyhound Subsidiaries and to preserve the current relationships of Greyhound and the Greyhound Subsidiaries with customers, suppliers and other persons with which Greyhound or any Greyhound Subsidiary has significant business relations.

 

By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.02 of the Greyhound Disclosure Schedule, neither Greyhound nor any Greyhound Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Iris (which consent shall not be unreasonably withheld, conditioned or delayed):

 

(b)          amend or otherwise change its certificate of incorporation or by-laws or equivalent organizational documents;

 

(c)           issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of any Greyhound Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of any 

 

  

50

  

 

 

 

Greyhound Subsidiary or (ii) assets of Greyhound or any Greyhound Subsidiary with a value in excess of $500,000 (other than discounts or forgiveness of accounts receivable in the ordinary course of business);

 

(d)          declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for (i) dividends by any direct or indirect wholly owned Greyhound Subsidiary to Greyhound or any other Greyhound Subsidiary and (ii) cash distributions;

 

(e)           reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the capital stock of any Greyhound Subsidiary;

 

(f)           (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) incur any indebtedness for borrowed money (other than pursuant to Greyhound’s existing borrowing facilities, as amended from time to time) or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person (other than Greyhound or any Greyhound Subsidiary), or make any loans or advances other than loans and advances to officers and employees for unreimbursed business expenses incurred in the ordinary course of business; (iii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (iv) make, authorize, or make any commitment with respect to, capital expenditures in excess of the capital expenditure forecast attached to Section 5.02(e) of the Greyhound Disclosure Schedule; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.02(e);

 

(g)           increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for (i) increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of Greyhound or any Greyhound Subsidiary who are not directors or officers of Greyhound or any Greyhound Subsidiary, (ii) any increase required pursuant to any Material Greyhound Contract set forth in Section 4.17 of the Greyhound Disclosure Schedule as in effect as of the date hereof or (iii) any increase in benefits required by Law, or grant any severance or termination pay to (other than pursuant to Greyhound’s existing severance program as in effect as of the date hereof and disclosed on Section 4.10(a) of the Greyhound Disclosure Schedule), except as required by applicable Law, or, except are required by applicable Law, enter into any employment or severance agreement with, any director, officer or other employee of Greyhound or of any Greyhound Subsidiary, or, except as required by Law, establish, adopt, enter into or amend any collective bargaining, works council, trade union, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;

 

  

51

  

 

(h)          take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures;

 

(i)           make any tax election or settle or compromise any material United States federal, state, local or non-United States income tax liability other than in the ordinary course of business in a manner consistent with past practice;

 

(j)           pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the consolidated balance sheet of Greyhound and the Most Recent Greyhound Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice;

 

(k)           amend, modify or consent to the termination of any Material Greyhound Contract, or amend, waive, modify or consent to the termination of Greyhound’s or any Greyhound Subsidiary’s material rights thereunder, other than in the ordinary course of business and consistent with past practice; or

 

(l)           announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

 

ARTICLE VI

 

ADDITIONAL AGREEMENTS

 

SECTION 6.01.   Stockholder Approval.  (a)  Immediately following the execution of this Agreement, Iris shall obtain and file with the Secretary of Iris (with a copy to be delivered to Greyhound) the Iris Written Consent providing the Iris Stockholder Approval.  Iris shall promptly, but in no event later than ten (10) days after the date hereof: (i) mail notice to the holders of Iris Capital Stock of the Iris Stockholder Approval pursuant to and in accordance with the applicable provisions of the DGCL and its charter documents (the “Iris Stockholder Notice”); and (ii) cause the Iris Merger, the adoption of this Agreement and the Transactions be submitted to all such remaining holders of Iris Capital Stock for their approval and adoption by written consent pursuant to the Iris Stockholder Written Consent, if required by the DGCL and its charter documents.  The Board of Directors of Iris shall not alter, modify, change or revoke its unanimous approval of the Iris Merger, this Agreement and the Transactions and its unanimous recommendation to Iris Stockholders to vote in favor of the Iris Merger, adoption of this Agreement and the Transactions.

 

(b)           Immediately following the execution of this Agreement, Greyhound shall obtain and file with the Secretary of Greyhound (with a copy to be delivered to Iris) the Greyhound Written Consent providing the Greyhound Stockholder Approval.  Greyhound shall promptly, but in no event later than ten (10) days after the date hereof: (i) mail notice to the holders of Greyhound Capital Stock of the Greyhound Stockholder Approval pursuant to and in accordance with the applicable provisions of the DGCL and its charter documents (the

 

  

52

  

 

“Greyhound Stockholder Notice”); and (ii) cause the Greyhound Merger, the adoption of this Agreement and the Transactions be submitted to all such remaining holders of Greyhound Capital Stock for their approval and adoption by written consent pursuant to the Greyhound Stockholder Written Consent, if required by the DGCL and its charter documents.  The Board of Directors of Greyhound shall not alter, modify, change or revoke its unanimous approval of the Greyhound Merger, this Agreement and the Transactions and its unanimous recommendation to Greyhound Stockholders to vote in favor of the Greyhound Merger, adoption of this Agreement and the Transactions.

 

(c)           In connection with seeking to obtain the written consent of the holders of the Iris Capital Stock contemplated by paragraph (a) above and seeking to obtain the requisite approval of the holders of the Iris Capital Stock that certain payments contemplated to be made pursuant to this Agreement do not constitute “parachute payments” within the meaning of Section 280G of the Code, Iris shall prepare, and cause to be mailed promptly after the date hereof, to the holders of the Iris Capital Stock, a disclosure document including relevant information with respect to this Agreement and the Transactions (the “Iris Disclosure Document”), meeting the requirements of applicable securities Laws, the DGCL and the Code.  Iris shall deliver a draft of the Iris Disclosure Document to Greyhound promptly after the date hereof and, promptly following such delivery, Greyhound shall provide Iris its comments, if any, regarding the Iris Disclosure Document, including those portions relating to “parachute payments” within the meaning of Section 280G of the Code, and Iris shall, in good faith, incorporate such comments.  Iris shall provide a copy of the final Iris Disclosure Document to Greyhound prior to distributing it to the holders of the Iris Capital Stock.  The Iris Disclosure Document and any amendments or supplements thereto shall contain the unanimous recommendation of the Board of Directors of Iris that the holders of the Iris Capital Stock approve this Agreement, the Iris Merger and the Transactions.  The Iris Disclosure Document shall not make the approval of the Transactions contingent or otherwise conditioned on the approval of any “parachute payments” within the meaning of Section 280G of the Code.  Anything to the contrary contained herein notwithstanding, Iris shall not include in the Iris Disclosure Document and any amendments or supplements thereto any information with respect to Greyhound or its Affiliates, unless the form and content of such information shall have been approved by Greyhound prior to such inclusion.

 

(d)           In connection with seeking to obtain the written consent of the holders of the Greyhound Capital Stock contemplated by paragraph (a) above, Greyhound shall prepare, and cause to be mailed promptly after the date hereof, to the holders of the Greyhound Capital Stock, a disclosure document including relevant information with respect to this Agreement and the Transactions (the “Greyhound Disclosure Document”), meeting the requirements of applicable securities Laws, the DGCL and the Code.  Greyhound shall deliver a draft of the Greyhound Disclosure Document to Iris promptly after the date hereof and, promptly following such delivery, Iris shall provide Greyhound its comments, if any, regarding the Greyhound Disclosure Document, and Greyhound shall, in good faith, incorporate such comments.  Greyhound shall provide a copy of the final Greyhound Disclosure Document to Iris prior to distributing it to the holders of the Greyhound Capital Stock.  The Greyhound Disclosure Document and any amendments or supplements thereto shall contain the unanimous recommendation of the Board of Directors of Greyhound that the holders of the Greyhound Capital Stock approve this Agreement, the Greyhound Merger and the Transactions.  Anything

 

  

53

  

 

to the contrary contained herein notwithstanding, Greyhound shall not include in the Greyhound Disclosure Document and any amendments or supplements thereto any information with respect to Iris or its Affiliates, unless the form and content of such information shall have been approved by Iris prior to such inclusion.

 

SECTION 6.02.   Access to Information; Confidentiality.  (a)  Except as required pursuant to any confidentiality agreement or similar agreement or arrangement to which Iris or Greyhound or any of their respective subsidiaries is a party or pursuant to applicable Law, from the date of this Agreement until the Effective Time, Iris and Greyhound shall (and shall cause their respective subsidiaries to):  (i) provide to the other Party (and the other Party’s financing sources and the other Party’s and its financing sources’ respective officers, directors, employees, accountants, consultants, legal counsel, agents and other representatives, collectively, “Representatives”) access at reasonable times upon prior notice to the officers, employees, agents, properties, offices and other facilities of such Party and its subsidiaries and to the books and records thereof; and (ii) furnish promptly to the other Party such information concerning the business, properties, contracts, assets, liabilities, personnel and other aspects of such Party and its subsidiaries as the other Party or its Representatives may reasonably request.

 

(b)           All information obtained by the Parties pursuant to this Section 6.02 shall be kept confidential in accordance with the confidentiality agreement, dated May 19, 2009 (the “Confidentiality Agreement”), between GXS, Inc. and Inovis, Inc.

 

(c)           No investigation pursuant to this Section 6.02 shall affect any representation or warranty in this Agreement of any Party or any condition to the obligations of the Parties.

 

SECTION 6.03.   No Solicitation of Transactions.  Until the earlier of (i) the Effective Time, or (ii) the date of termination of this Agreement pursuant to the provisions of Section 8.01, each Party to this Agreement agrees that neither it nor any of its subsidiaries nor any of the directors, officers or employees of it or any of its subsidiaries will, and that it will cause its and its subsidiaries’ agents, advisors and other representatives (including, without limitation, any investment banker, attorney or accountant retained by it or any of its subsidiaries), not to, directly or indirectly: (a) solicit, knowingly encourage, initiate or participate in any inquiry, negotiations or discussions, or enter into any agreement, with respect to any offer or proposal to acquire all or any material part of such Party’s business, properties or technologies, or a material amount of the such Party’s capital stock (whether or not outstanding), whether by merger, purchase of assets, tender offer, license or otherwise, or effect any such transaction, (b) disclose any information to any person concerning such Party’s business, technologies or properties or afford to any person or entity access to its properties, technologies, books or records, in each instance where such disclosure or affording of access would reasonably be expected to lead to a proposal for a transaction specified in clause (a) of this Section 6.03, (c) assist or cooperate with any person to make any proposal to purchase all or any part of the such Party’s capital stock or assets of such Party, other than inventory in the ordinary course of business, or (d) enter into any agreement with any person providing for the acquisition of the such Party, whether by merger, purchase of assets, license, tender offer or otherwise.  In the event that any Party or any of such Party’s affiliates shall receive, prior to the Effective Time or the termination of this Agreement, any offer, proposal, or request, directly or indirectly, of the

 

  

54

  

 

type referenced in clause (a), (c), or (d) above, or any request for disclosure or access as referenced in clause (b) above, such Party shall immediately notify the other Party thereof, including information as to the identity of the offeror or the Party making any such offer or proposal and the specific terms of such offer or proposal, as the case may be, and such other information related thereto to which such Party has reasonable access, as the other Party may reasonably request.  The Parties agree that irreparable damage would occur in the event that the provisions of this Section 6.03 were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed by the Parties that each Party shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Section 6.03 and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which such Party may be entitled at law or in equity.

 

SECTION 6.04.   Employee Benefits Matters.  (a)  From and after the Effective Time, Parent shall cause the Surviving Corporations and their subsidiaries to honor in accordance with their terms, all contracts, agreements, arrangements, policies, plans and commitments of Greyhound, Iris and their respective subsidiaries as in effect immediately prior to the Effective Time that are applicable to any current or former employees or directors of Greyhound, Iris or their respective subsidiaries.  Employees of Greyhound, Iris and their respective subsidiaries shall receive credit for purposes of eligibility to participate and vesting (but not for benefit accruals) under any employee benefit plan, program or arrangement established or maintained by Parent, the Surviving Corporations or any of their respective subsidiaries for service accrued or deemed accrued prior to the Effective Time with Greyhound, Iris or their respective subsidiaries; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit.  In addition, Parent shall waive, or cause to be waived, any limitations on benefits relating to any pre-existing conditions to the same extent such limitations are waived under any comparable plan of Greyhound, Iris or their respective subsidiaries and recognize, for purposes of annual deductible and out-of-pocket limits under its medical and dental plans, deductible and out-of-pocket expenses paid by employees of Greyhound, Iris and their respective subsidiaries in the calendar year in which the Effective Time occurs.

 

(b)           Notwithstanding anything to the contrary contained in this Agreement, no provision under this Agreement, whether express or implied, shall (i) constitute or create an employment agreement with any employee of Parent, the Surviving Corporations or any of their Affiliates, (ii) be construed to establish, amend, or modify any benefit plan, program, agreement or arrangement or (iii) alter or limit Parent’s, the Surviving Corporations’ or any of their Affiliates’ ability to amend, modify or terminate any benefit plan, program, agreement or arrangement.  Parent, Greyhound and Iris acknowledge and agree that all provisions contained in this Agreement with respect to the employees of Greyhound, Iris or any of their Affiliates are included for the sole benefit of the Parent, Greyhound, Iris and their respective Affiliates, and that nothing in this Agreement, whether express or implied, shall create any third-party beneficiary or other rights (i) in any other person, including, any current or former employee, any participant in any existing benefit plan or arrangement of the Parent, Greyhound, Iris or their respective Affiliates or any dependent or beneficiary thereof or (ii) to continued employment with the Parent, Greyhound, Iris or any of their respective Affiliates.

 

  

55

  

 

(c)           Unless Parent directs otherwise in writing no less than five (5) Business Days prior to the Effective Time, each of Iris and Greyhound shall amend their employee benefit plans that are qualified under Section 401(a) of the Code and that contain a Code Section 401(k) cash or deferred arrangement (each, a “401(k) Plan”) in accordance with the provisions of this Section 6.04(c), which amendments may be conditioned on the consummation of the transactions contemplated by this Agreement.  Prior to the Initial Effective Time, Iris shall take all actions necessary or desirable to terminate its 401(k) Plan (the “Iris 401(k) Plan”), effective not later than the day immediately preceding the Initial Effective Time, and to amend the Iris 401(k) Plan to allow for participants thereunder to rollover loans under the Iris 401(k) Plan to an eligible retirement plan that permits such rollovers.  Prior to the Effective Time, Greyhound shall take all actions necessary or desirable to amend its 401(k) Plan (the “Greyhound 401(k) Plan”) to accept the rollover of loans from the Iris 401(k) Plan and to transfer sponsorship of the Greyhound 401(k) to Parent, effective as of the Effective Time, and Parent shall take all actions necessary or desirable to assume the sponsorship of Greyhound’s 401(k) Plan, effective as of the Effective Time.  Not later than three (3) Business Days prior to taking such actions as required by the foregoing provisions of this Section 6.04(c), each of Iris, Greyhound and Parent shall provide to the other parties for their information and review copies of all board resolutions, amendments and other documentation required to take such actions, as well as all correspondence Iris and Greyhound intend to send to the participants in the relevant 401(k) Plan regarding such actions.  Each of Iris, Greyhound and Parent shall reasonably and promptly, but in no event later than one (1) Business Day prior to the Effective Time or the Initial Effective Time, as applicable, provide the other parties with evidence reasonably acceptable to the parties not taking the required action that each 401(k) Plan has been amended as contemplated under this Section 6.04(c).  Parent shall work with both Iris and Greyhound reasonably and in good faith to effect all required or desirable 401(k) Plan amendments as contemplated by this Section 6.04(c) and to provide timely notice thereof to the affected employees by means of the correspondence reviewed by Parent.

 

SECTION 6.05.   Directors’ and Officers’ Indemnification and Insurance.  (a)  The Certificates of Incorporation and by-laws of the Surviving Corporations shall contain provisions no less favorable with respect to indemnification than are set forth in the Certificate of Incorporations of Greyhound and Iris, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Effective Time, were directors, officers, employees, fiduciaries or agents of Iris or Greyhound, unless such modification shall be required by applicable Law.  Parent shall cause the Surviving Corporations to fulfill their respective obligations under such provisions of the Surviving Corporations’ respective certificates of incorporation and by-laws.

 

(b)           In the event Parent, the Greyhound Surviving Corporation or the Iris Surviving Corporation, or any of their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors and assigns of Parent, the Greyhound Surviving Corporation or the Iris Surviving Corporation, as the case may be, or at Parent’s option, Parent, shall assume the obligations set forth in this Section 6.05.

 

  

56

  

 

(c)           Parent shall cause to be maintained in effect for six years from the Effective Time, if available, the current directors’ and officers’ liability insurance policies maintained by Greyhound and Iris (provided that Parent may (i) substitute therefor policies of at least the same coverage containing terms and conditions that are not materially less favorable or (ii) require either or both of the Surviving Corporations to obtain such coverage through a pre-paid “tail” insurance policy under their respective existing insurance policies) with respect to matters occurring prior to the Effective Time; provided, however, that in no event shall Parent be required to expend pursuant to this Section 6.05(b) more than 300% of current annual premiums paid by Iris or Greyhound, as applicable, for such insurance, it being understood that, in each case, Parent shall nevertheless be obligated to provide such coverage as may be obtained for such 300% amount.

 

SECTION 6.06.   Notification of Certain Matters.  Iris shall give prompt notice to Greyhound, and Greyhound shall give prompt notice to Iris, of (a) the occurrence, or non occurrence, of any event the occurrence, or non occurrence, of which could reasonably be expected to cause any representation or warranty of such Party contained in this Agreement to be untrue or inaccurate in any material respect such that the conditions set forth in Section 7.02 or Section 7.03, as applicable, could not reasonably be expected to be satisfied and (b) any failure of Iris, Greyhound or Merger Sub, as the case may be, to comply with or satisfy any covenant or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 6.06 shall not limit or otherwise affect the remedies available hereunder to the Party receiving such notice.

 

SECTION 6.07.   Further Action; Reasonable Best Efforts.  (a)  Upon the terms and subject to the conditions of this Agreement, each of the Parties shall each (i) use best efforts to make as promptly as practicable (with a target date of three business days after the date hereof) its respective filings, and thereafter make any other required submissions, under the HSR Act and (ii) use its reasonable best efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Transactions, including, without limitation, using its reasonable best efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities and parties to contracts with Iris or Greyhound or their subsidiaries as are necessary for the consummation of the Transactions and to fulfill the conditions to the Merger (it being understood that, based on the information provided by the Parties to each other, the Parties do not intend to make any antitrust or competition filing with any Governmental Authority other than their respective filings and submissions under the HSR Act and Greyhound’s UK Antitrust Filing); provided that, except as may be required in connection with the Greyhound UK Antitrust Filing, neither Greyhound nor Iris will be required by this Section 6.07 to take any action, including entering into any consent decree, hold separate orders or other arrangements, that (A) requires, before or after the Effective Time, the divestiture of any of its assets or of any of the assets of its subsidiaries or (B) limits, before or after the Effective Time, its freedom of action with respect to, or its ability to retain, any of its assets or businesses or of any of the assets or businesses of its subsidiaries.  In case, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each Party to this Agreement shall use their reasonable best efforts to take all such action.

 

  

57

  

 

(b)           Iris acknowledges that Greyhound intends to make a voluntary filing with respect to the transactions contemplated by this Agreement under the Enterprise Act 2002 (the “Greyhound UK Antitrust Filing”) and shall use its reasonable best efforts to cooperate with Greyhound in connection with such filing.

 

(c)           By way of amplification and not limitation, the Parties shall each use reasonable best efforts to give all required notices to parties to contracts and obtain all consents from such parties that may be required as a result of consummation of the Transactions.

 

SECTION 6.08.   Tax Treatment. (a)  Prior to and at the Effective Time, each Party shall use its reasonable best efforts to cause the Mergers to qualify as exchanges under the provisions of Section 351 of the Code, and shall not take any action reasonably likely to cause the Mergers not to so qualify.

 

(b)           As of the date hereof, Iris does not know of any reason why it would not be able to deliver to counsel to Greyhound, at the date of the legal opinion referred to below, certificates substantially in compliance with IRS published advance ruling guidelines, with customary exceptions and modifications thereto, to enable such firm to deliver the legal opinion contemplated by Section 7.03(e), and Iris hereby agrees to use its reasonable best efforts to deliver such certificates effective as of the date of such opinion.

 

(c)           As of the date hereof, Greyhound does not know of any reason why it would not be able to deliver to counsel to Greyhound, at the date of the legal opinion referred to below, certificates substantially in compliance with IRS published advance ruling guidelines, with customary exceptions and modifications thereto, to enable such firm to deliver the legal opinion or opinions contemplated by Section 7.03(e), and Greyhound hereby agrees to use its reasonable best efforts to deliver such certificate effective as of the date of such opinion.

 

SECTION 6.09.   Conduct of Business by Parent, Greyhound Merger Sub and Iris Merger Sub.  Prior to the Effective Time and subject to any applicable regulatory approvals, Greyhound shall cause Parent, Greyhound Merger Sub and Iris Merger Sub to (a) perform their respective obligations under this Agreement in accordance with the terms hereof and take all other actions necessary or appropriate for the consummation of the transactions contemplated by this Agreement, (b) not incur directly or indirectly any liabilities or obligations except those incurred in connection with the consummation of this Agreement and the transactions contemplated hereby, (c) not engage directly or indirectly in any business or activities of any type or kind whatsoever and not enter into any agreements or arrangements with any person or entity, or be subject to or be bound by any obligation or undertaking which is not contemplated by this Agreement and (d) not create, grant or suffer to exist any lien upon their respective properties or assets which would attach to any properties or assets of  Parent or the Surviving Companies after the Effective Time, except, in the case of (b), (c) and (d), as mutually agreed in writing between Iris and Greyhound.

 

SECTION 6.10.   Press Releases.  The initial press release relating to this Agreement shall be a joint press release the text of which has been agreed to by each of Greyhound and Iris.  Thereafter, until the Effective Time, none of the Parties shall issue any

 

  

58

  

 

press release regarding this Agreement, the Mergers or the Transactions without the prior written consent of the other Parties.

 

SECTION 6.11.   Board of Directors and Officers of Parent.  (a)  Iris shall take all such action as may be necessary (i) to cause the number of directors comprising the Board of Directors of Parent as of the Effective Time to be increased to nine members and (ii) to cause David Stanton, David Golob, Venkat Mohan, Carl Wilson, John McKenna, Gary Greenfield, the Chief Executive Officer of Greyhound, Prescott Ashe and Kevin Genda (the “Designated Directors”) to be appointed to the Board of Directors of Parent as of the Effective Time, to serve until the next annual election of directors of Parent.

 

(b)           Iris shall take all such action as may be necessary to cause those individuals identified by Greyhound at least three (3) days prior to the Effective Time to become officers of Parent from the Effective Time, serving in their respective offices, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified (the “Designated Officers”).

 

SECTION 6.12.   Stockholders Agreement; Certificate of Designation; Related Party Agreements.  (a)  Each of the Parties shall use reasonable best efforts to cause its stockholders and/or subsidiaries, as applicable, to execute a Stockholders Agreement of Parent, in the form attached hereto as Exhibit D (the “Stockholders Agreement”), to take effect at the Effective Time.

 

(b)           Iris shall cause Parent to file a certificate of amendment to its certificate of incorporation and the Certificate of Designation with the Delaware Secretary of State and shall authorize the Parent Closing Authorized Capital and establish the Parent Preferred Stock in accordance with the terms set forth in the Certificate of Designation no later than the Initial Effective Time.

 

(c)           Except as set forth in Section 6.12(c) of the Iris Disclosure Schedule, Iris shall cause to be terminated prior to, or effective upon, the Initial Effective Time, each contractual or other arrangement required to be set forth in Section 3.20 of the Iris Disclosure Schedule, with no continuing liability or obligations of Parent, the Surviving Corporations or their subsidiaries thereunder other than liability for pre-Initial Effective Time indemnification obligations.

 

(d)           Except as set forth in Section 6.12(d) of the Greyhound Disclosure Schedule, Greyhound shall cause to be terminated prior to, or effective upon, the Effective Time, each contractual or other arrangement required to be set forth in Section 4.20 of the Greyhound Disclosure Schedule, with no continuing liability or obligations of Parent, the Surviving Corporations or their subsidiaries thereunder other than liability for pre-Effective Time indemnification obligations.

 

SECTION 6.13.   Financing.  Iris shall use reasonable best efforts to, and shall cause the Iris Subsidiaries to use reasonable best efforts to, provide on a timely basis all such reasonable assistance and cooperation in connection with the Financing as may be reasonably requested by Greyhound, including (i) making senior management of Iris reasonably available

 

  

59

  

 

for customary lender meetings and “roadshow” presentations and cooperating with prospective sources of finance in performing their due diligence, (ii) subject to the Confidentiality Agreement, providing due diligence materials to potential financing sources, (iii) furnishing all financial statements and financial and other information that are reasonably required in connection with the Financing, (iv) assisting Greyhound and its financing sources in the preparation of, and executing, if applicable, an offering document and definitive transaction documents for the Financing and materials for rating agency presentations, (v) cooperating with the marketing efforts of Greyhound and its financing sources for the Financing, (vi) providing such other documents as may be reasonably requested by Greyhound in connection therewith, and (vii) facilitating the pledge of applicable collateral (including the release of any liens on the assets of Iris and the Iris Subsidiaries), if any, to provide security in connection with the Financing at and after the Closing.   Greyhound shall use reasonable best efforts to raise the Financing.  Greyhound shall promptly forward to Iris a copy of any and all definitive financing documentation (including interim drafts thereof) relating to the Financing, and keep Iris reasonably appraised of the status of the Financing.

 

SECTION 6.14.   Allocation Schedule. Iris shall deliver to Greyhound an allocation schedule (the “Allocation Schedule”), which Allocation Schedule shall be certified as complete and correct by the Chief Financial Officer of Iris as of the Closing, which shall represent that all amounts allocated to the holders of Iris Capital Stock thereunder are being distributed in accordance with Iris’ certificate of incorporation as in effect on the Closing, and which shall include, among other things, as of the Closing, a list of all Iris Stockholders and recipients of a portion of the Iris Option Payment Amount and their respective addresses, indicating the number of shares of Iris Capital Stock held by such persons (including whether such shares are Iris Class A Stock, Iris Class B Stock, Iris Class C Stock or Iris Class L Stock and the respective certificate numbers), the Pro Rata Portion applicable to each Iris Indemnifying Party, the portion of the Aggregate Iris Merger Consideration and/or Iris Option Payment Amount to be paid to each Iris Stockholder and recipient of a portion of the Iris Option Payment Amount.  Iris shall deliver the Allocation Schedule to Greyhound four (4) Business Days prior to the Closing.  Upon delivery of the Allocation Schedule to Greyhound, Iris shall provide Greyhound and its representatives with reasonable access to the employees, agreements and books and records of Iris to verify the accuracy of the information set forth in the Allocation Schedule.

 

ARTICLE VII

 

CONDITIONS TO THE MERGER

 

SECTION 7.01.   Conditions to the Obligations of Each Party.  The obligations of Iris and Greyhound to consummate the Mergers are subject to the satisfaction or waiver (where permissible) of the following conditions:

 

(a)           Iris Stockholder Approval.  This Agreement shall have been approved and adopted by the requisite affirmative vote of the holders of Iris Capital Stock in accordance with the DGCL and Iris’ certificate of incorporation.

 

  

60

  

 

(b)           Greyhound Stockholder Approval.  This Agreement shall have been approved by the requisite affirmative vote of the holders of Greyhound Capital Stock in accordance with the DGCL and Greyhound’s certificate of incorporation.

 

(c)           No Order.  Subject to Section 6.07(a), no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award (an “Order”) which is then in effect and has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger.

 

(d)           Antitrust Approvals and Waiting Periods.  Any waiting period (and any extension thereof) applicable to the consummation of the Mergers under (i) the HSR Act shall have expired or been terminated and (ii) approvals under any other foreign merger control Laws (A) the approval of which has not been identified as of the date hereof as being required for consummation of the Transactions due to incorrect or incomplete information provided by any Party (provided that no Party may assert this condition if the incorrect or incomplete information was provided by such Party) and (B) the failure of which to obtain would, individually or in the aggregate, provide a reasonable basis to conclude that Parent, Greyhound or Iris or their respective directors or officers would be subject to the risk of criminal liability, shall have been made or obtained.

 

(e)           Financing.  The Financing shall have been raised and the proceeds thereof representing the Target Financing Raise shall be available to consummate the Transactions.

 

(f)           Greyhound Maximum Indebtedness.  At least two (2) business days prior to Closing, Greyhound shall have delivered to Iris an unaudited statement, signed by the Chief Financial Officer of Greyhound, setting forth Greyhound’s estimate of the Net Debt of Greyhound immediately prior to the Effective Time (the “Greyhound Net Debt Certificate”), which estimate shall not be greater than $488,200,000 (as adjusted, the “Greyhound Net Debt Maximum”) and which statement shall be reasonably satisfactory to Iris.

 

(g)           Parent Certificate of Designation.  Parent shall have filed with the Delaware Secretary of State (i) a certificate of amendment to its certificate of incorporation authorizing the Parent Closing Authorized Capital and (ii) the Certificate of Designation.

 

SECTION 7.02.   Conditions to the Obligations of Iris.  The obligations of Iris to consummate the Iris Merger are subject to the satisfaction or waiver (where permissible) of the following additional conditions:

 

(a)           Representations and Warranties.  The representations and warranties of Greyhound contained in this Agreement shall be true and correct as of the Initial Effective Time, as though made on and as of the Initial Effective Time (except to the extent expressly made as of an earlier date, in which case of as such earlier date), except where the failure of such other representations of Greyhound to be so true and correct

 

  

61

  

 

(without giving effect to any limitation as to materiality or Greyhound Material Adverse Effect set forth therein) would not, individually or in the aggregate, have a Greyhound Material Adverse Effect.

 

(b)           Agreements and Covenants.  Greyhound shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Initial Effective Time.

 

(c)           Officer Certificate.  Greyhound shall have delivered to Iris a certificate, dated the date of the Closing, signed by the Chief Executive Officer of Greyhound, certifying as to the satisfaction of the conditions specified in Sections 7.02(a) and 7.02(b).

 

(d)           Stockholders Agreement.  The Greyhound Principal Stockholders shall have executed the Stockholders Agreement.

 

SECTION 7.03.   Conditions to the Obligations of Greyhound.  The obligations of Greyhound to consummate the Greyhound Merger is subject to the satisfaction or waiver (where permissible) of the following additional conditions:

 

(a)           Representations and Warranties.  The representations and warranties of Iris contained in this Agreement shall be true and correct as of the Effective Time, as though made on and as of the Effective Time (except to the extent expressly made as of an earlier date, in which case of as such earlier date), except where the failure of such other representations of Iris to be so true and correct (without giving effect to any limitation as to materiality or Iris Material Adverse Effect set forth therein) would not, individually or in the aggregate, have an Iris Material Adverse Effect.

 

(b)           Agreements and Covenants.  Iris shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time.

 

(c)           Officer Certificate.  Iris shall have delivered to Greyhound a certificate, dated the date of the Closing, signed by the Chief Executive Officer of Iris, certifying as to the satisfaction of the conditions specified in Sections 7.03(a) and 7.03(b).

 

(d)           [Intentionally omitted]

 

(e)           Tax Opinion.  Greyhound shall have received the opinion of Shearman & Sterling LLP, counsel to Greyhound, based upon representations of Iris and Greyhound and normal assumptions, to the effect that, for United States federal income tax purposes, the exchange of Greyhound Capital Stock for Parent Capital Stock will qualify as either an exchange under the provisions of Section 351 of the Code or a reorganization under the provisions of Section 368 of the Code.  The issuance of such opinion shall be conditioned on receipt by Shearman & Sterling LLP of representation letters from each of Greyhound and Iris as contemplated in Section 6.08 of this Agreement.  Each such representation letter shall be dated on or before the date of such opinion and shall not have been withdrawn or modified in any material respect as of the Effective Time.

 

  

62

  

 

(f)           Stockholders Agreement.  The Iris Principal Stockholders shall have executed the Stockholders Agreement.

 

(g)           Iris Maximum Indebtedness.  Iris will not have more than $144,800,000 of Net Debt reflected on the Estimated Statement, which statement shall be reasonably satisfactory to Greyhound.

 

(h)           Allocation Schedule.  Iris shall have delivered the Allocation Schedule pursuant to Section 6.14.

 

ARTICLE VIII

 

TERMINATION, AMENDMENT AND WAIVER

 

SECTION 8.01.   Termination.  This Agreement may be terminated and the Mergers and the other Transactions may be abandoned at any time prior to the Closing by action taken or authorized by the Board of Directors of the terminating party, notwithstanding any requisite approval and adoption of this Agreement and the Transactions by the stockholders of Iris, Parent and/or Greyhound, as follows:

 

(a)           by mutual written consent of Greyhound and Iris duly authorized by the Boards of Directors of Greyhound and Iris; or

 

(b)           by either Greyhound or Iris if the Closing shall not have occurred on or before  the three-month anniversary of the date hereof (which date will be automatically extended in not more than three one-month increments to the extent necessary to satisfy the condition set forth in Section 7.01(d) and so long as all other conditions have been satisfied or shall be capable of being satisfied as of the date of any such extension) (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 8.01(b) shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or

 

(c)           subject to Section 6.07(a), by either Greyhound or Iris if any Governmental Authority shall have enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of either Merger illegal or otherwise preventing or prohibiting consummation of either Merger; or

 

(d)           by Greyhound upon a breach of any representation, warranty, covenant or agreement on the part of Iris set forth in this Agreement, or if any representation or warranty of Iris shall have become untrue, in either case such that the conditions set forth in Section 7.03(a) and Section 7.03(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue (“Terminating Iris Breach”); provided, however, that, if such Terminating Iris Breach is curable by Iris by the Outside Date, then Greyhound may not terminate this Agreement under this Section 8.01(d);

 

  

63

  

 

(e)         by Iris upon a breach of any representation, warranty, covenant or agreement on the part of Greyhound set forth in this Agreement, or if any representation or warranty of Greyhound shall have become untrue, in either case such that the conditions set forth in Section 7.02(a) and Section 7.02(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue (“Terminating Greyhound Breach”); provided, however, that, if such Terminating Greyhound Breach is curable by Greyhound by the Outside Date, then Iris may not terminate this Agreement under this Section 8.01(e);

 

(f)         by Iris, at any time after the three-month anniversary of the date hereof; or

 

(g)         by Greyhound, at any time.

 

SECTION 8.02.   Effect of Termination.  In the event of the termination of this Agreement pursuant to Section 8.01, this Agreement shall forthwith become void, and there shall be no liability under this Agreement on the part of any Party (or any stockholder, director, officer, employee, agent, consultant or representative of such party), except as set forth in Section 8.03; provided, however, that the Confidentiality Agreement, this Section 8.02 and Sections 10.06, 10.10 and 10.11 shall survive any termination of this Agreement.

 

SECTION 8.03.   Fees and Expenses; Termination Fees.  (a)  Except as set forth in this Section 8.03, all Expenses (as defined below) incurred by the Parties in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the Party incurring such expenses; provided, however, that Parent shall pay all such Expenses in the event the Mergers are consummated (which expenses, to the extent invoiced prior to the Closing Date, shall be paid on the Closing Date).  “Expenses”, as used in this Agreement, shall include all reasonable out-of-pocket expenses (including, without limitation, all fees and expenses of counsel, accountants, investment bankers, experts and consultants to a Party and its Affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and all other matters related to the closing of the Mergers and the other transactions contemplated by this Agreement (and, in the case of Iris and the Iris Subsidiaries, shall include all such fees and expenses incurred by Iris and any Iris Subsidiary or on its behalf in connection with or related to the November 2009 amendments and extensions of its existing credit facilities), but shall exclude any transaction, termination or similar fee payable to GGC Administration LLC, Cerberus Partners, L.P. or Francisco Partners Management LLC or any of their respective Affiliates related thereto (“Transaction Fees”).

 

(b)           Iris agrees that if (i) (A) this Agreement is terminated pursuant to Section 8.01(b) and the condition set forth in Section 7.03(g) is not satisfied at the time of such termination, (B) this Agreement is terminated pursuant to Section 8.01(f) or (C) this Agreement is terminated pursuant to Section 8.01(d) as a result of Iris’ refusal to consummate the Mergers despite the satisfaction of all of the conditions set forth in Sections 7.01 and 7.02, and (ii) Greyhound has not materially breached its obligations pursuant to this Agreement, then Iris shall pay to Greyhound promptly (but in any event no later than two (2)  Business Days after

 

  

64

  

 

such termination) a fee of $4,700,000 (the “Iris Termination Fee”), which amount shall be payable in immediately available funds.

 

(c)           Greyhound agrees that if (i) (A) this Agreement is terminated pursuant to Section 8.01(b) and the condition set forth in Section 7.01(f) is not satisfied at the time of such termination, (B) this Agreement is terminated pursuant to Section 8.01(g) or (C) this Agreement is terminated pursuant to Section 8.01(e) as a result of Greyhound’s refusal to consummate the Mergers despite the satisfaction of all of the conditions set forth in Sections 7.01 and 7.03, and (ii) Iris has not materially breached its obligations pursuant to this Agreement, then Greyhound shall pay to Iris promptly (but in any event no later than two (2) Business Days after such termination) a fee of $12,500,000 (the “Greyhound Net Debt or Convenience Termination Fee”), which amount shall be payable in immediately available funds;

 

(d)           Greyhound agrees that if (i) this Agreement is terminated pursuant to Section 8.01(b), (ii) no amount is payable pursuant to Section 8.03(b) or Section 8.03(c), (iii) the condition set forth in Section 7.01(e) is not satisfied, (iv) Greyhound has complied in all material respects with its obligations pursuant to Section 6.13, and (v) Iris has not materially breached is obligations pursuant to this Agreement, then Greyhound shall pay to Iris a fee of $7,500,000 (if such termination occurs on or prior to the 90-day anniversary of the date hereof) or $10,000,000 (if such termination occurs during the period beginning on the 91-day anniversary of the date hereof and ending on the 180-day anniversary of the date hereof) (the “Greyhound Financing Termination Fee”), plus the reimbursement of up to $3,250,000 of documented out-of-pocket fees and expenses incurred by Iris in connection with any further extension of its existing credit facility after the date hereof (provided, however, that such expense reimbursement obligation will not apply in the event that (x) Greyhound terminates this Agreement during the two Business day period following Iris's delivery on or prior to February 28, 2010 of an estimate of such fees and expenses or (y) Iris fails to deliver such estimate on or prior to February 28, 2010), which amounts shall be payable in immediately available funds.  Such Greyhound Financing Termination Fee shall be paid in four equal quarterly payments (each equal to 25% of the Greyhound Financing Termination Fee), with the first quarterly payment due promptly (but in any event no later than two (2) Business Days after such termination) following such termination, the second payment due on the three-month anniversary of such termination, the third payment due on the six-month anniversary of such termination and the fourth, and final, payment due on the nine-month anniversary of such termination.

 

(e)           Greyhound agrees that if (i) this Agreement is terminated pursuant to Section 8.01(b) or Section 8.01(c) (as a result of an action by a Governmental Authority for the purpose of enforcing the competition laws of any jurisdiction), (ii) no amount is payable pursuant to Section 8.03(b), 8.03(c) or 8.03(d), (iii) the condition set forth in Section 7.01(d)(i) is not satisfied (unless such failure is related to the matters described in Section 8.03(e)(iii) of the Greyhound Disclosure Schedule) and (iv) Iris has not materially breached is obligations pursuant to this Agreement, then Greyhound shall pay to Iris, a fee of $3,750,000 (the “Greyhound Antitrust Termination Fee” and, together with the Greyhound Net Debt or Convenience Termination Fee, the Greyhound Financing Termination Fee, each a “Greyhound Termination Fee”, and together with the Iris Termination Fee, each a “Termination Fee”) plus the reimbursement of up to $3,250,000 of documented out-of-pocket fees and expenses incurred by Iris in connection with any further extension of its existing credit facility after the date hereof

 

  

65

  

 

(provided, however, that such expense reimbursement obligation will not apply in the event that (x) Greyhound terminates this Agreement during the two Business day period following Iris's delivery on or prior to February 28, 2010 of an estimate of such fees and expenses or (y) Iris fails to deliver such estimate on or prior to February 28, 2010), which amounts shall be payable in immediately available funds.  Such Greyhound Antitrust Termination Fee shall be paid in four equal quarterly payments (each equal to 25% of the Greyhound Antitrust Termination Fee), with the first quarterly payment due promptly (but in any event no later than two (2) Business Days after such termination) following such termination, the second payment due on the three-month anniversary of such termination, the third payment due on the six-month anniversary of such termination and the fourth, and final, payment due on the nine-month anniversary of such termination.

 

(f)           Each of Greyhound and Iris acknowledges that the agreements contained in this Section 8.03 are an integral part of the transactions contemplated by this Agreement.  In the event that Greyhound or Iris, as the case may be, shall fail to pay the Greyhound Termination Fee or Iris Termination Fee, respectively, and, in order to obtain such payment, the other Party commences a suit that results in a judgment against Greyhound or Iris, as applicable, for the amounts set forth in this Section 8.03, then Greyhound or Iris, as applicable, shall pay to the prevailing Party its costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit,  together with interest on such unpaid Termination Fee, commencing on the date that such Termination Fee became due, at a rate equal to the rate of interest publicly announced by U.S. Bank National Association, from time to time, in The City of New York, as such bank’s Prime Rate plus 1.00%.  The Parties agree that, notwithstanding any provision of this Agreement to the contrary, the payments provided for in this Section 8.03 shall be the sole and exclusive remedies, at law or in equity, or otherwise, of the Parties against the other Parties or any of their respective former, current or future general or limited partners, shareholders, managers, members, directors, officers, employees or Affiliates or their Representatives (collectively, with respect to any Party, such Party’s “Related Parties”) for any loss suffered as a result of the failure of the Mergers to be consummated or for a breach or failure to perform hereunder or otherwise (with respect to any Party, such Party’s “Damages”) and such remedies shall be limited to the sums stipulated in this Section 8.03 regardless of the circumstances giving rise to such termination.

 

(g)           Notwithstanding anything herein to the contrary:  (i) the maximum aggregate liability of a Party for the Damages of any other Party (inclusive of the Termination Fee, if any, payable by such first Party to such second Party), shall be limited to an amount equal to the Termination Fee, if any, payable by such first Party to such second Party plus any amounts that become payable by such first Party to such second Party under Section 8.03(f) (such first Party’s, “Liability Limitation” with respect to such second Party); (ii) in no event shall any Party or any of its respective Affiliates seek from another Party (x) any Damages in excess of the Liability Limitation of the second party vis-a-vis the first party or (y) any other recovery, judgment, or damages of any kind, including equitable relief or consequential, indirect, or punitive damages, against Related Parties of such second Party in connection with this Agreement or the Merger; and (iii) each Party hereby acknowledges and agrees that it has no right of recovery against, and no personal liability shall attach to, in each case with respect to such Party’s Damages, any other Party’s Related Parties, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of such second Party against

 

  

66

  

 

any Related Party of such second Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise, except for such first Party’s right, if any, to recover a Termination Fee or Damages from such second Party or, if applicable, subject to the Liability Limitation of such second Party vis-a-vis such first Party, from such second Party.

 

SECTION 8.04.   Amendment.  Subject to applicable Law, this Agreement may be amended by the Parties by action taken by or on behalf of their respective Boards of Directors at any time prior to the Effective Time; provided, however, that, after the approval and adoption of this Agreement and the Transactions by the stockholders of Greyhound or Iris, no amendment may be made that would reduce the amount or change the type of consideration into which each Greyhound Share or Iris Share, respectively, shall be converted upon consummation of the Merger, without the further approval or adoption of such amendment by the stockholders of Greyhound or Iris, as applicable.  This Agreement may not be amended except by an instrument in writing signed by each of the Parties.

 

SECTION 8.05.   Waiver.  At any time prior to the Effective Time, any Party may (a) extend the time for the performance of any obligation or other act of any other Party, (b) waive any inaccuracy in the representations and warranties of any other Party contained herein or in any document delivered pursuant hereto and (c) waive compliance with any agreement of any other Party or any condition to its own obligations contained herein.  Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the Party or Parties to be bound thereby.

 

ARTICLE IX

 

INDEMNIFICATION

 

SECTION 9.01.   Survival of Representations and Warranties.  The representations and warranties of the Parties contained in this Agreement shall survive the Closing for a period of twelve (12) months after the Closing; provided, however, that the representations and warranties in Section 3.03(a) (Capitalization), 3.04 (Authority Relative to this Agreement), Section 3.21 (Brokers), Section 4.03(a) (Capitalization), 4.04 (Authority Relative to this Agreement), and Section 4.21 (Brokers) (all of such representations and warranties the “Special Representations”) shall survive until fifteen (15) days after the last day of the applicable statute of limitations period relating thereto; provided further that any claim made with reasonable specificity by the Party seeking to be indemnified within the time periods set forth in this Section 9.01 shall survive until such claim is finally and fully resolved.

SECTION 9.02.    Indemnification by Iris Stockholders.  From and after the Initial Effective Time, each Iris Stockholder and, solely with respect to any indemnification obligation that is subject to the Cap Amount, each recipient of a portion of the Iris Option Payment Amount as of the Initial Effective Time (the “Iris Indemnifying Parties”), on a several and not joint basis (in proportion to their respective Pro Rata Portion with respect to indemnification obligations that are subject to the Cap Amount and in proportion to their respective Shareholder Pro Rata Portion with respect to any other indemnification obligation), hereby agrees to indemnify and hold Parent and its Subsidiaries and their respective officers, directors, employees, agents,

 

  

67

  

 

successors and assigns (each, a “Parent Indemnified Party”) harmless for and against all losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys’ and consultants’ fees and expenses) (hereinafter, a “Loss”) suffered or incurred by any such Parent Indemnified Party arising out of or resulting from (i) the breach of (A) any representation or warranty made by Iris contained in this Agreement or (B) any covenant made by Iris contained in this Agreement other than any such breach of a covenant that is material, intentional and knowing (i.e. the fact that such action constitutes a breach of a covenant is within the knowledge of Iris at the time of such breach), and (ii) any Iris Excluded Liability Matters.

 

SECTION 9.03.   Indemnification by Parent.  From and after the Effective Time, Parent (the “Parent Indemnifying Party”) hereby agrees to indemnify and hold the Iris Stockholders and their officers, directors, employees, agents, successors and assigns (each, an “Iris Indemnified Party”) harmless for and against any and all Losses suffered or incurred by any such Iris Indemnified Party arising out of or resulting from:  (i) (i) the breach of (A) any representation or warranty made by Greyhound contained in this Agreement or (B) any covenant made by Greyhound contained in this Agreement other than any such breach of a covenant that is material, intentional and knowing (i.e. the fact that such action constitutes a breach of a covenant is within the knowledge of Greyhound at the time of such breach), and (ii) Parent Excluded Liability Matters.

 

SECTION 9.04.   Indemnification Procedures.  (a)  No claim may be asserted nor may any Action be commenced against any Indemnifying Party, unless written notice of such claim or action is received by Parent, in the case of a claim or action in which indemnification may be sought from the Parent, and the Iris Stockholder Representative, in the case of a claim or action in which indemnification may be sought from the Iris Indemnifying Parties, describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or Action on or prior to the date on which the representation, warranty, covenant or agreement on which such claim or Action is based ceases to survive as set forth in Section 9.01, irrespective of whether the subject matter of such claim or action shall have occurred before or after such date.

 

(b)           Pursuant to the terms of the Escrow Agreement, the Escrow Fund shall be available to compensate the Parent Indemnified Parties for any claims by such parties against the Iris Minority Holders for any Losses suffered or incurred by them and for which they are entitled to recovery under this Article VIII.

 

(c)           Notwithstanding anything to the contrary contained in this Agreement:  (i) the Iris Indemnifying Parties shall not be liable for any claim for indemnification pursuant to Section 9.02(i) and the Parent Indemnifying Party shall not be liable for any claim for indemnification pursuant to Section 9.03(i), unless and until the aggregate amount of indemnifiable Losses which may be recovered pursuant to Section 9.02(i) or Section 9.03(i), as applicable, equals or exceeds $1,750,000, after which such Indemnifying Party shall be liable only for those Losses in excess of $1,750,000; (ii) the maximum amount of indemnifiable Losses which may be recovered from the Iris Indemnifying Parties arising out of or resulting from the causes set forth in Section 9.02(i), and the maximum amount of indemnifiable Losses which may be recovered from the Parent Indemnifying Party arising out of or resulting from the causes set forth in or Section 9.03(i), shall each be an amount equal to the Cap Amount; (iii) no Party shall have

 

  

68

  

 

any liability under any provision of this Agreement for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement; and (iv) no Iris Indemnifying Party shall have any liability under any provision of this Agreement or as a result of the Transactions in excess of such Iris Indemnifying Party’s pro rata portion of the Aggregate Iris Merger Consideration (and in the form thereof, whether cash or Parent equity) plus, in the case of GGC, the amount of any Transaction Fees paid to GGC Administration, LLC or its Affiliates and in the case of Cerberus, the amount of any Transaction Fees paid to Cerberus Partners, L.P. or its Affiliates.

 

(d)           Any indemnification of the Parent Indemnified Parties pursuant to Section 9.02(i) with respect to the first $5,000,000 of payments pursuant thereto shall be effected by cancellation (based on identical proportions of Parent Preferred Stock and Parent Common Stock to the proportions in which such shares were issued to the applicable Iris Indemnifying Party as part of the merger consideration, and at the Parent Common Stock Value or Parent Preferred Stock Value, as applicable) of a portion of the shares of Parent Capital Stock issued to the Iris Indemnifying Parties.  Any indemnification of the Iris Indemnified Parties pursuant to Section 9.03(i) with respect to the first $5,000,000 of payments pursuant thereto shall be effected by delivery (based on identical proportions of Parent Common Stock and Parent Preferred Stock in which such shares were issued to the applicable Iris Indemnified Party as part of the merger consideration, and at the Parent Common Base Amount or Parent Preferred Base Amount, as applicable) of additional Parent Capital Stock.  Any other indemnification of the Iris Indemnified Parties, and any other indemnification of the Parent Indemnified Parties, shall be effected in cash; provided, however, that any such indemnification of the Parent Indemnified Parties shall be effected in the manner set forth in the first sentence of this Section 9.04(d) (disregarding the $5,000,000 cap therein) with respect to (i) any Iris Indemnifying Party that has no further obligation to make cash payments pursuant to the parenthetical set forth in Section 9.04(c)(iv) (but which still has remaining capacity pursuant to such parenthetical to effect payments by means of the cancellation of stock) and (ii) GGC and/or Cerberus, as applicable, to the extent that GGC or Cerberus, as applicable, has remaining capacity pursuant to such parenthetical to effect payments by means of the cancellation of stock but has no capacity to effect payment in the form of cash (ignoring, solely for the purpose of this clause (ii), the GGC or Cerberus-related Transaction Fees, as the case may be) (it being understood, for avoidance of doubt, that neither GGC nor Cerberus shall have any cash indemnification obligation arising out of the inclusion of Transaction Fees in the limitation set forth in Section 9.04(c)(iv) unless and until all of the Parent Capital Stock issued to GGC or Cerberus, as applicable, shall have been cancelled in respect of its indemnification obligations hereunder).

 

(e)            For all purposes of this Article IX, “Losses” shall be adjusted for, and net of (i) any insurance or other recoveries actually paid to the Indemnified Party or its Affiliates in connection with the facts giving rise to the right of indemnification (net of the amount of any premium increases and recovery costs from any amounts recovered by the Indemnified Party or its Affiliates for purposes of adjustment to the amount of any Losses) and (ii) any Tax benefit realized by the Indemnified Party or its Affiliates arising in connection with the accrual, incurrence or payment of any such Losses.

 

  

69

  

 

SECTION 9.05.   Notice of Loss; Third Party Claims.  (a)  An Iris Indemnified Party shall give Parent and a Parent Indemnified Party shall give the Iris Stockholder Representative notice of any matter which such Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement, promptly following such determination, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises; provided, however, that the failure to provide such notice shall not release the applicable Indemnifying Party from any of their obligations under this Article IX except to the extent that such failure results in a detriment to the applicable Indemnifying Party.

 

(b)           If an Indemnified Party shall receive notice of any Action, audit, claim, demand or assessment (each, a “Third Party Claim”) against it which may give rise to a claim for Loss under this Article IX, within 30 days of the receipt of such notice, the Indemnified Party, if an Iris Indemnified Party, shall give Parent, and if a Parent Indemnified Party, shall give Stockholder Representative, notice of such Third Party Claim; provided, however, that the failure to provide such notice shall not release the applicable Indemnifying Party from any of their obligations under this Article IX except to the extent that such failure results in a detriment to applicable Indemnifying Party.  Parent shall control the defense of any Third Party Claim against it, and shall be entitled to assume and control the defense of any Third Party Claim against another Indemnified Party at Parent’s expense and through counsel of its choice if it gives notice of its intention to do so to the Iris Stockholder Representative within 15 days of the receipt of notice of such Third Party Claim.  If Parent elects to undertake any such defense against a Third Party Claim, the Indemnified Party may participate in such defense at its own expense.  The Indemnified Party shall cooperate with Parent in such defense and make available to Parent, at such Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party.  If Parent elects to direct the defense of any such claim or proceeding, the Indemnified Party shall not pay, or permit to be paid, any part of such Third Party Claim unless Parent consents in writing to such payment or unless Parent withdraws from the defense of such Third Party Claim liability or unless a final judgment from which no appeal may be taken by or on behalf of the applicable Indemnifying Party is entered against the Indemnified Party for such Third Party Claim.  Parent shall have the right in its sole discretion to settle, any such Third Party Claim so long as such settlement includes an unconditional release of the Indemnified Parties; provided, however, that except with the prior written consent of the Iris Stockholder Representative, no settlement of any such Third Party Claim shall be solely determinative of the amount of Losses relating to such matter.

 

SECTION 9.06.   Remedies.  The Parties acknowledge and agree that following the Closing, the indemnification provisions of Section 9.02 and Section 9.03 shall be the sole and exclusive remedies of the Greyhound Stockholders and Iris Stockholders for any breach of the representations and warranties in this Agreement and for any failure to perform and comply with any covenants and agreements in this Agreement or in any way relating to the Transactions (whether based on breach of contract, tort or any other legal theory); provided, however, that nothing in this Agreement shall be deemed to prevent or restrict the bringing or maintenance of any claim or Action to the extent that the same shall have been the result of intentional or knowing fraud or intentional misrepresentation by any such person.

 

  

70

  

 

SECTION 9.07.   Iris Stockholder Representative.  (a)  Each of the Iris Stockholders (by virtue of their adoption of this Agreement and/or acceptance of its portion of the Aggregate Iris Merger Consideration) hereby appoints CCG Investment Fund, L.P. and Cerberus Institutional Partners, L.P. as its agent and attorney-in-fact, as the Iris Stockholder Representative for and on behalf of the Iris Stockholders to give and receive notices and communications, to authorize payment to Parent Indemnified Parties from the Escrow Account in satisfaction of claims by any Parent Indemnified Party, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to claims, and to take all other actions that are either (i) necessary or appropriate in the judgment of the Iris Stockholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement or the Escrow Agreement.  Such agency may be changed by the Iris Stockholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Iris Stockholder Representative may not be removed unless each of the Iris Indemnifying Parties consent.  The Iris Stockholder Representative may resign upon thirty (30) days prior written notice to Parent and the Iris Stockholders.  A vacancy in the position of the Iris Stockholder Representative may be filled by the holders of a majority in interest of the shares of Parent Capital Stock held by the Iris Indemnifying Parties.  No bond shall be required of the Iris Stockholder Representative, and the Iris Stockholder Representative shall not receive any compensation for its services.  Notices or communications to or from the Iris Stockholder Representative shall constitute notice to or from the Iris Stockholders.  Any action taken by the Stockholder Representative hereunder shall require the joint written consent of each of CCG Investment Fund, L.P. and Cerberus Institutional Partners, L.P., and references to the Stockholder Representative herein shall be construed accordingly.

 

(b)           In connection with this Agreement, the Escrow Agreement, and any instrument, agreement or document relating hereto, and in exercising or failing to exercise all or any of the powers conferred upon the Iris Stockholder Representative hereunder (i) the Iris Stockholder Representative shall incur no responsibility whatsoever to any Iris Stockholders by reason of any error in judgment or other act or omission performed or omitted hereunder, or in connection with the Escrow Agreement or any such other agreement, instrument or document, excepting only responsibility for any act or failure to act which represents willful misconduct, and (ii) the Iris Stockholder Representative shall be entitled to rely on the advice of counsel, public accountants or other independent experts experienced in the matter at issue, and any error in judgment or other act or omission of the Iris Stockholder Representative pursuant to such advice shall in no event subject the Iris Stockholder Representative to liability of any Iris Stockholder.  Each Iris Indemnifying Party shall indemnify and reimburse, pro rata based upon such Iris Indemnifying Party’s Pro Rata Portion, the Iris Stockholder Representative against all losses, damages, liabilities, claims, obligations, costs and expenses, including reasonable attorneys’, accountants’ and other experts’ fees and the amount of any judgment against them, of any nature whatsoever (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claims whatsoever), arising out of or in connection with any act or omission of the Iris Stockholder Representative hereunder or under the Escrow Agreement.  The foregoing indemnification shall not apply only in the event of any action or proceeding which finally adjudicates the liability of the Iris Stockholder Representative hereunder for its willful misconduct.  In the event of any indemnification hereunder, upon written notice from the Iris

 

  

71

  

 

Stockholder Representative to the Iris Indemnifying Parties, each Iris Indemnifying Party shall promptly deliver to the Iris Stockholder Representative full payment of its ratable share of the amount of such deficiency based upon such Iris Indemnifying Party’s Pro Rata Portion.  All of the indemnities, immunities and powers granted to the Iris Stockholder Representative under this Agreement shall survive the Effective Time and /or any termination of this Agreement.

 

(c)           A decision, act, consent or instruction of the Iris Stockholder Representative, shall constitute a decision of the Iris Stockholders and shall be final, binding and conclusive upon the Iris Stockholders; and the Escrow Agent and the Parties may rely upon any such decision, act, consent or instruction of the Iris Stockholder Representative as being the decision, act, consent or instruction of the Iris Stockholders.  The Parties are hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Iris Stockholder Representative.

 

ARTICLE X

 

GENERAL PROVISIONS

 

SECTION 10.01.   Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be effective when delivered in person, when sent by telecopier (confirmed received) or five days after sent by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.01):

 

if to Greyhound:

 

GXS Holdings, Inc.

100 Edison Park Drive

Gaithersburg, MD 20878

Attention:  General Counsel

Facsimile:  (301) 340-5840

with a copy to:

 

Shearman & Sterling LLP

525 Market Street, Suite 1500

San Francisco, CA 94105

Attention: Michael J. Kennedy and Steve L. Camahort

Facsimile No.: (415) 616-1199

if to Iris:

 

Inovis International, Inc.

11720 AmberPark Drive, Suite 400

Alpharetta, GA 30009

Attention:  Sean Feeney

Facsimile No.: (404) 467-3730

  

72

  

 

with a copy to:

 

Kirkland & Ellis LLP

555 California Street

San Francisco, CA 94104

Attention:  Gary M. Holihan P.C. and Jeremy M. Veit

Facsimile No.:  (415) 439-1500

if to Parent, Iris Merger Sub or Greyhound Merger Sub (prior to Closing):

 

Inovis International, Inc.

11720 AmberPark Drive, Suite 400

Alpharetta, GA 30009

Attention:  Sean Feeney

Facsimile No.: (404) 467-3730

with copies to:

 

GXS Holdings, Inc.

100 Edison Park Drive

Gaithersburg, MD 20878

Attention:  General Counsel

Facsimile:  (301) 340-5840

Shearman & Sterling LLP

525 Market Street, Suite 1500

San Francisco, CA 94105

Attention: Michael J. Kennedy and Steve L. Camahort

Facsimile No.: (415) 616-1199

And

Kirkland & Ellis LLP

555 California Street

San Francisco, CA 94104

Attention:  Gary M. Holihan P.C. and Jeremy M. Veit

Facsimile No.:  (415) 439-1500

And, following Closing:

 

GXS Holdings, Inc.

100 Edison Park Drive

Gaithersburg, MD 20878

Attention:  General Counsel

Facsimile:  (301) 340-5840

  

73

  

With a copy to:

Shearman & Sterling LLP

525 Market Street, Suite 1500

San Francisco, CA 94105

Attention: Michael J. Kennedy and Steve L. Camahort

Telephone No.: (415) 616-1100

Facsimile No.: (415) 616-1199

 

if to the Iris Stockholder Representative:

 

CCG Investment Fund, L.P.

One Embarcadero Center, 39th Floor

San Francisco, CA 94111

Attention:  Prescott Ashe

Facsimile:  (415) 983-2701

and

Cerberus Institutional Partners, L.P.

299 Park Ave, 23rd Floor

New York, NY 10171

Fax: 646-885-3012

Attention:  Paul Lusardi

with a copy to:

 

Kirkland & Ellis LLP

555 California Street

San Francisco, CA 94104

Attention:  Gary M. Holihan P.C. and Jeremy M. Veit

Facsimile No.:  (415) 439-1500

and

Schulte Roth & Zabel

919 Third Avenue

New York, NY 10022

Attention:  Robert Loper

Facsimile:  (212) 593-5955

SECTION 10.02.   Certain Definitions.  (a)  For purposes of this Agreement:

 

“Affiliate” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.

 

  

74

  

 

“Aggregate Iris Merger Consideration” means the sum of (i) Aggregate Iris Cash Merger Consideration, (ii) Aggregate Iris Common Consideration, and (iii) Aggregate Iris Preferred Consideration.

 

“Aggregate Iris Cash Merger Consideration” means $79,200,000 minus the Iris Option Payment Amount, plus the amount of any Reinvestment Proceeds, as adjusted pursuant to Section 2.06.

 

“Aggregate Iris Common Consideration” means that number of shares of Parent Common Stock equal to the quotient of (i) the product of (A) the Iris Common Percentage multiplied by (B) the sum of the number of shares of Parent Common Stock issued to the Greyhound Stockholders pursuant to Article II and the number of shares of the Parent Common Stock issuable upon outstanding options, warrants and other rights exercisable therefor (excluding the Greyhound Substitute SAR) divided by (ii) the amount by which 1 exceeds the Iris Common Percentage.

 

“Aggregate Iris Preferred Consideration” means that number of shares of Parent Preferred Stock equal to the quotient of (i) the product of (A) the Iris Preferred Percentage multiplied by (B) the sum of the number of shares of Parent Preferred Stock issued to the Greyhound Stockholders pursuant to Article II and the number of shares of the Parent Preferred Stock issuable upon outstanding options, warrants and other rights exercisable therefor (excluding the Greyhound Substitute SAR) divided by (ii) the amount by which 1 exceeds the Iris Preferred Percentage.

 

“Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which banks in San Francisco, California are required or authorized by Law to be closed.

 

“Cap Amount” means $15,800,000.

 

“Cash” means all cash (excluding restricted cash and net of issued but uncleared checks and drafts) and cash equivalents, in each case determined in accordance with GAAP.

 

“Cerberus” means either or both of Cerberus Institutional Partners, L.P. and/or Cerberus Institutional Partners (America), L.P., as the context may require.

 

“Certificate of Designation” means the certificate of designation, preferences, and rights of the Parent Preferred Stock in the form set forth as Exhibit E.

 

“control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise.

 

“Environmental Laws” means as in existence and in effect on or prior to the Effective Time any United States federal, state or local or non United States laws relating

 

  

75

  

 

to:  (i) releases or threatened releases of Hazardous Substances or materials containing Hazardous Substances; (ii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances or materials containing Hazardous Substances; or (iii) pollution or protection of the environment, occupational health and safety or natural resources.

 

“Escrow Amount” means an amount equal to the Indemnity Escrow Amount plus the Working Capital Escrow Amount.

 

“Financing” means debt financing in an aggregate amount at least equal to $750,000,000 pursuant to (i) the proposal letters dated as of December 2, 2009 from Barclays Capital Inc. to Greyhound (copies of which have been provided to Iris) or (ii) if such financing is not available, any such alternative financing as Greyhound, in its sole discretion, shall pursue.

 

“GE PIK Notes” means those certain 14.20% Senior Subordinated Notes due 2017 issued pursuant to that certain Purchase Agreement dated as of October 5, 2007 between Greyhound and General Electric Capital Corporation.

 

“GGC” means any, some or all of CCG Investment Fund, L.P., CCG Associates – QP, LLC, CCG Investment Fund-AI, LP, CCG AV, LLC – Series A, CCG AV, LLC – Series C and/or CCG CI, LLC, as the context may require.

 

“Greyhound Capital Stock” means the Greyhound Common Stock, Greyhound Series A Preferred Stock and the Greyhound Series B Preferred Stock.

 

“Greyhound Commercially Available Software” means commercially available software that (i) is not incorporated into any Greyhound Product, (ii) has not been customized or modified for Greyhound or any Greyhound Subsidiary, and (iii) is subject to an agreement containing standard terms and conditions that were not negotiated by Greyhound or any Greyhound Subsidiary.

 

“Greyhound Common Stock” means the common stock of Greyhound, par value $0.01 per share.

 

“Greyhound Material Adverse Effect” means any event, circumstance, change or effect that is or is reasonably likely to be materially adverse to (i) the business, financial condition, assets, liabilities or results of operations of Greyhound and the Greyhound Subsidiaries taken as a whole or (ii) the ability of Greyhound to consummate the transactions contemplated by this Agreement; provided, however, that the foregoing shall not include any event, circumstance, change or effect resulting from (A) changes in general economic conditions or changes in financial or securities markets in general, (B) general changes in the industries in which Greyhound and the Greyhound Subsidiaries operate, (C) any change or prospective change in any Law, (D) any interpretation thereof, any change in GAAP, or any interpretation thereof, (E) the execution of this Agreement or the announcement thereof or (F) changes caused by acts of terrorism or war (whether or not declared) or other calamity, crisis or geopolitical event occurring after the date of this Agreement, provided, however, in the case of each

 

  

76

  

 

of clauses (A), (B), (C), (D) and (F), except those changes that adversely affect Greyhound and the Greyhound Subsidiaries to a greater extent than they affect other entities operating in the industries in which Greyhound and the Greyhound Subsidiaries operate.

 

“Greyhound Option Exchange Ratio” means the Greyhound Common Merger Consideration.

 

“Greyhound Products” means all products, software or service offerings (i) that are currently operated, sold, licensed, distributed or otherwise provided by Greyhound or any Greyhound Subsidiary or (ii) that were previously operated, sold, licensed, distributed or otherwise provided by Greyhound or any Greyhound Subsidiary for which Greyhound or any Greyhound Subsidiary has any current maintenance, support or other material obligation.

 

“Greyhound SAR Common Exchange Ratio” means the Greyhound Common Merger Consideration.

 

“Greyhound SAR Preferred Exchange Ratio” means the Greyhound Series B Preferred Merger Consideration.

 

“Greyhound Series A Preferred Stock” means the Series A preferred stock of Greyhound, par value $0.01 per share.

 

“Greyhound Series B Preferred Stock” means the Series B participating preferred stock of Greyhound, par value $0.01 per share.

 

“Hazardous Substances” means:  (i) those substances as to which liability or standards of conduct may be imposed under the following United States federal statutes and their state counterparts, as each may be amended from time to time, and all regulations thereunder:  the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated biphenyls, asbestos and radon; and (v) any other contaminant, substance, material or waste regulated by any Governmental Authority pursuant to any Environmental Law because of its hazardous or deleterious properties or characteristics.

 

“Indebtedness” as applied to any person means (without duplication) (a) all indebtedness of such person for borrowed money or indebtedness issued or incurred in substitution or exchange for or to refinance any such indebtedness for borrowed money, (b) all indebtedness of such person evidenced by bonds, debentures, notes or other similar instruments or debt securities, (c) all indebtedness of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even though the rights and remedies of seller or lender under such agreement in the event of default are limited to repossession or sale of such property)

 

  

77

  

 

other than equipment leases entered into in the ordinary course of business, (d) all indebtedness of such person for the deferred purchase price of property or services (other than accounts payable incurred in the ordinary course of business) or secured by a purchase money mortgage or other Lien to secure all or part of the purchase price of the property subject to such Lien other than equipment leases entered into in the ordinary course of business, (e) any liability of such person in respect of banker’s acceptances or unreimbursed letters of credit or similar facilities (excluding, for avoidance of doubt, any outstanding but undrawn letters of credit incurred in the ordinary course of business), (f) any unpaid cash settlement obligations under any interest rate, currency or other hedging agreement or derivative contract, net of any obligations to such person thereunder, (g) all interest, fees, prepayment premiums and other expenses owed with respect to the indebtedness referred to in clauses (a) through (f) above, (h) all indebtedness referred to in clauses (a) through (f) above 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 it has otherwise assured a creditor against loss, and (i) any change of control payments or prepayment premiums, penalties, charges or equivalents thereof with respect to the indebtedness referred to in clauses (a) through (f) above (other than any portion thereof to be settled in whole or in part by delivery of a portion of the merger consideration specified in Article II hereof), which are required to be paid prior to, on or otherwise in connection with the Closing or the payment of which would become due and payable solely as a result of the Closing.

 

“Indemnifying Party” means the Iris Indemnifying Parties and Parent Indemnifying Party as the content requires.

 

“Indemnity Escrow Amount” means an amount equal to the Iris Minority Holders’ Pro Rata Portion of $10,800,000, which amount shall be set forth on the Allocation Schedule.

 

“Intellectual Property” means:  (i) United States, non-United States and international patents, patent applications and statutory invention registrations; (ii) trademarks, service marks, trade dress, logos, trade names, corporate names and other source identifiers, and registrations and applications for registration thereof; (iii) copyrightable works, copyrights, and registrations and applications for registration thereof; and (iv) confidential and proprietary information, including trade secrets and know-how.

 

“Iris Capital Stock” means the Iris Class A Stock, the Iris Class B Stock, the Iris Class C Stock and the Iris Class L Stock.

 

“Iris Class A Cash Merger Consideration” means (a) that portion of the Aggregate Iris Cash Merger Consideration allocated to the Iris Class A Stock as set forth in the Allocation Schedule, divided by (b) the number of shares of Iris Class A Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class A Merger Consideration pursuant to Article II.

 

“Iris Class A Merger Consideration” means the Iris Class A Cash Consideration and the Iris Class A Share Merger Consideration.

 

  

78

  

 

 

“Iris Class A Share Merger Consideration” means (a) the number of shares of Parent Preferred Stock and Parent Common Stock allocated to the Iris Class A Stock set forth in the Allocation Schedule divided by (b) the number of shares of iris Class A Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class A Merger Consideration pursuant to Article II.

 

“Iris Class A Stock” means the Class A common stock of Iris, par value $0.00001 per share.

 

“Iris Class B Cash Merger Consideration” means (a) that portion of the Aggregate Iris Cash Merger Consideration allocated to the Iris Class B Stock as set forth in the Allocation Schedule, divided by (b) the number of shares of Iris Class B Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class B Merger Consideration pursuant to Article II.

 

“Iris Class B Merger Consideration” means the Iris Class B Cash Consideration and the Iris Class B Share Merger Consideration.

 

“Iris Class B Share Merger Consideration” means (a) the number of shares of Parent Preferred Stock and Parent Common Stock allocated to the Iris Class B Stock set forth in the Allocation Schedule divided by (b) the number of shares of iris Class B Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class B Merger Consideration pursuant to Article II.

 

“Iris Class B Stock” means the Class B common stock of Iris, par value $0.00001 per share.

 

“Iris Class C Cash Merger Consideration” means (a) that portion of the Aggregate Iris Cash Merger Consideration allocated to the Iris Class C Stock as set forth in the Allocation Schedule, divided by (b) the number of shares of Iris Class C Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class C Merger Consideration pursuant to Article II.

 

“Iris Class C Merger Consideration” means the Iris Class C Cash Consideration and the Iris Class C Share Merger Consideration.

 

“Iris Class C Share Merger Consideration” means (a) the number of shares of Parent Preferred Stock and Parent Common Stock allocated to the Iris Class C Stock set forth in the Allocation Schedule divided by (b) the number of shares of iris Class C Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class C Merger Consideration pursuant to Article II.

 

“Iris Class C Stock” means the Class C common stock of Iris, par value $0.00001 per share.

 

  

79

  

 

“Iris Class L Cash Merger Consideration” means (a) that portion of the Aggregate Iris Cash Merger Consideration allocated to the Iris Class L Stock as set forth in the Allocation Schedule, divided by (b) the number of shares of Iris Class L Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class L Merger Consideration pursuant to Article II.

 

“Iris Class L Merger Consideration” means the Iris Class L Cash Consideration and the Iris Class L Share Merger Consideration.

 

“Iris Class L Share Merger Consideration” means (a) the number of shares of Parent Preferred Stock and Parent Common Stock allocated to the Iris Class L Stock set forth in the Allocation Schedule divided by (b) the number of shares of iris Class L Stock outstanding as of immediately prior to the Iris Merger and entitled to receive the Iris Class L Merger Consideration pursuant to Article II.

 

“Iris Class L Stock” means the Class L common stock of Iris, par value $0.00001 per share.

 

“Iris Commercially Available Software” means commercially available software that (i) is not incorporated into any Iris Product, (ii) has not been customized or modified for Iris or any Iris Subsidiary, and (iii) is subject to an agreement containing standard terms and conditions that were not negotiated by Iris or any Iris Subsidiary.

 

“Iris Excluded Liability Matters” means any Loss suffered or incurred by a Parent Indemnified Party arising out of, or resulting from: (i)  any breach of the Special Representations made by Iris; (ii) any understatement of Net Debt that is not remedied pursuant to Section 2.06; (iii) (A) any bonus, change of control, severance, consulting or similar payment to directors, officers or employees of Iris or any Iris Subsidiary that is made payable as a result of the consummation of the transactions contemplated by this Agreement (either alone or in conjunction with subsequent events) pursuant to a contract in existence on or prior to the Closing Date (other than any such contract that is disclosed in the Iris Disclosure Schedule), (B) any payment required to be made to Messrs. Feeney and/or Williams in respect of the arrangement described in items 2(d) and 2(e) of Section 3.08 of the Iris Disclosure Schedule, to the extent such payments exceed $1,000,000 and/or (C) any obligation of Iris or any Iris Subsidiary to gross-up, indemnify or otherwise reimburse any person for any tax incurred by such person pursuant to Section 280G of the Code (whether or not disclosed in the Iris Disclosure Schedule); (iv) any inaccuracies in the Allocation Schedule and (v) any material, intentional and knowing breach (i.e. the fact that such action constitutes a breach of a covenant is within the knowledge of Iris at the time of such breach) of any covenant made by Iris contained in this Agreement.

 

“Iris Material Adverse Effect” means any event, circumstance, change or effect that is or is reasonably likely to be materially adverse to (i) the business, financial condition, assets, liabilities or results of operations of Iris and the Iris Subsidiaries taken as a whole or (ii) the ability of Iris to consummate the transactions contemplated by this Agreement; provided, however, that the foregoing shall not include any event,

 

  

80

  

 

circumstance, change or effect resulting from (A) changes in general economic conditions or changes in financial or securities markets in general, (B) general changes in the industries in which Iris and the Iris Subsidiaries operate, (C) any change or prospective change in any Law, (D) any interpretation thereof, any change in GAAP, or any interpretation thereof, (E) the execution of this Agreement or the announcement thereof, (F) any action taken by (or at the written request of) Parent, Greyhound or any of their Affiliates or (G) changes caused by acts of terrorism or war (whether or not declared) or other calamity, crisis or geopolitical event occurring after the date of this Agreement; provided, however, in the case of each of clauses (A), (B), (C), (D) and (F), except those changes that adversely affect Iris and the Iris Subsidiaries to a greater extent than they affect other entities operating in the industries in which Iris and the Iris Subsidiaries operate.

 

“Iris Minority Holders” means (a) the Iris Stockholders other than the Iris Principal Stockholders and (b) the holders of Iris Stock Options that are cancelled in exchange for a cash payment as contemplated by Section 2.05(b).

 

“Iris Products” means all products, software or service offerings (i) that are currently operated, sold, licensed, distributed or otherwise provided by Iris or any Iris Subsidiary or (ii) that were previously operated, sold, licensed, distributed or otherwise provided by Iris or any Iris Subsidiary for which Iris or any Iris Subsidiary has any current maintenance, support or other material obligation.

 

“knowledge of Iris” means the actual knowledge of any executive officer or director of Iris.

 

“knowledge of Greyhound” means the actual knowledge of any executive officer or director of Greyhound.

 

“Lien” means any mortgage, pledge, lien, license, security interest, conditional and installment sale agreement, encumbrance, charge or other claim of third parties of any kind, including, without limitation, any easement, right of way or other encumbrance to title, or any option, right of first refusal, or right of first offer.

 

“Net Debt” as applied to any person, means the principal amount of Indebtedness (but does not include, for the avoidance of doubt, any unpaid Expenses, original issue discount in connection with the Financing or accrued but unpaid interest thereon, but does include any associated termination fees or prepayment penalties associated therewith) of such person less the Cash (plus all previously paid Expenses and less any unpaid Transaction Fees) of such person; provided, however, that for purposes of Section 7.01(f), the Net Debt of Greyhound shall exclude (i) the amount (the “Target Financing Raise”), if any, by which the proceeds of the Financing received by Greyhound or one or more of its subsidiaries prior to the Closing exceeds $524,600,000, (ii) the GE PIK Notes as in effect as of the date hereof (including any further accretion thereon) and (iii) the Indebtedness described in Section 10.02 of the Greyhound Disclosure Schedule.

 

  

81

  

 

“Parent Common Base Amount” means the value of a share of Parent Common Stock assuming an equity value of Parent equal to $702,231,520, it being understood that the Parent Common Base Amount does not represent an estimate by the Parties of the fair market value of the Parent Common Stock.

 

“Parent Preferred Base Amount” means the value of a share of Parent Preferred Stock assuming an equity value of Parent equal to $702,231,520, it being understood that the Parent Preferred Base Amount does not represent an estimate by the Parties of the fair market value of the Parent Preferred Stock.

 

“Parent Excluded Liability Matters” means any Loss suffered or incurred by an Iris Indemnified Party arising out of, or resulting from:  (i) the breach of the Special Representations made by Greyhound; (ii) any Indebtedness of Greyhound or any Greyhound Subsidiary as of immediately prior to the Closing Date not disclosed on the Greyhound Net Debt Certificate; (iii) (A) any bonus, change of control, severance, consulting or similar payment to directors, officers or employees of Greyhound or any Greyhound Subsidiary that is made payable as a result of the consummation of the transactions contemplated by this Agreement (either alone or in conjunction with subsequent events) pursuant to a contract in existence on or prior to the Closing Date (other than any such contract that is disclosed in the Greyhound Disclosure Schedule) and/or (B) any obligation of Greyhound or any Greyhound Subsidiary to gross-up, indemnify or otherwise reimburse any person for any tax incurred by such person pursuant to Section 280G of the Code (whether or not disclosed in the Greyhound Disclosure Schedule); (iv) any failure of Parent to perform or comply with the agreement set forth in the proviso in the first sentence of Section 8.03(a); and (v) any material, intentional and knowing breach (i.e. the fact that such action constitutes a breach of a covenant is within the knowledge of Greyhound at the time of such breach) of any covenant made by Greyhound contained in this Agreement.

 

“Parent Preferred Stock” means the Series A preferred stock, par value $0.001 per share, of Parent, having the terms set forth in the Certificate of Designation.

 

“Permitted Liens” means:  (i) Liens for current taxes and assessments not yet past due; (ii) inchoate mechanics’ and materialmen’s Liens for construction in progress; (iii) workmen’s, repairmen’s, warehousemen’s, landlord’s and carriers’ Liens arising in the ordinary course of business consistent with past practice; (iv) all matters of record, Liens and other imperfections of title and encumbrances which in the aggregate are not substantial in amount or do not materially detract from the value or interfere with the present use of the property subject thereto or affected thereby, and (v) zoning, building and other applicable land use restrictions.

 

“person” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

 

  

82

  

 

“Public Software” means any freeware, shareware, open source software (e.g., Linux) or software that is distributed under similar licensing or distribution models.  For the avoidance of doubt, “Public Software” includes, without limitation, software licensed or distributed under any of the following licenses or distribution models (or licenses or distribution models similar thereto):  (i) the GNU General Public License (GPL) or Lesser/Library GPL (LGPL); (ii) the Artistic License (e.g., PERL); (iii) the Mozilla Public License; (iv) the Netscape Public License; (v) the Sun Community Source License (SCSL); (vi) the Sun Industry Standards Source License (SISSL); (vii) the BSD License; (viii) Red Hat Linux; (ix) the Apache License; and (x) any other license or distribution model described by the Open Source Initiative as set forth on www.opensource.org.

 

“Pro Rata Portion” means with respect to each person that is an Iris Indemnifying Party, the quotient of (i) the aggregate amount of the value of the Aggregate Iris Merger Consideration and Iris Option Payment Amount payable to such person with respect to its Iris Capital Stock pursuant to Section 2.02 (based on the Parent Common Base Amount and the Parent Preferred Base Amount) and pursuant to Section 2.05, divided by (ii) the aggregate amounts of the value of the Aggregate Iris Merger Consideration and Iris Option Payment Amount payable to all Iris Indemnifying Parties pursuant to Section 2.02 and Section 2.05, collectively.

 

“Shareholder Pro Rata Portion” means with respect to each person that is a holder of Iris Capital Stock immediately prior to the Initial Effective Time, the quotient of (i) the aggregate amount of the value of the Aggregate Iris Merger Consideration payable to such person with respect to its Iris Capital Stock pursuant to Section 2.02 (based on the Parent Common Base Amount and the Parent Preferred Base Amount), divided by (ii) the aggregate amount of the value of the Aggregate Iris Merger Consideration payable to all such holders pursuant to Section 2.02.

 

“subsidiary” or “subsidiaries” of any person means any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that person or one or more of the other subsidiaries of that person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any person or one or more subsidiaries of that person or a combination thereof.  For purposes hereof, a person or persons shall be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such person or persons shall be allocated a majority of partnership, limited liability company, association or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, limited liability company, association or other business entity.

 

“Taxes” shall mean any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax

 

  

83

  

 

and additional amounts imposed with respect thereto) imposed by any Governmental Authority or taxing authority, including, without limitation:  taxes or other charges on or with respect to income, franchise, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; license, registration and documentation fees; and customers’ duties, tariffs and similar charges.

 

“Working Capital” means, as of any date, (a) the account receivables (net of allowance) and pre-paid expenses (excluding prepaid debt issuance costs and financing fees) of Iris minus (b) the accounts payable, accrued expenses and deferred revenue of Iris, all determined in accordance with GAAP applied on a basis consistent with the Most Recent Iris Balance Sheet, and as set forth on Schedule 2.06(a).

 

“Working Capital Escrow Amount” means an amount equal to the Iris Minority Holders’ Pro Rata Portion of $1,600,000, which amount shall be set forth on the Allocation Schedule.

 

(b)           The following terms have the meaning set forth in the Sections set forth below:

 

	
Defined Term

	
Location of Definition

	  	  
	
401(k) Plan

	
§ 6.04(c)

	
Action

	
§ 3.09

	
Agreement 

	
Preamble

	
Allocation Schedule

	
§ 6.14

	
Alternate Financing 

	
§ 6.13(b)

	
Blue Sky Laws 

	
§ 3.03(c)

	
Certificates

	
§ 2.03(b)

	
Certificates of Merger

	
§ 1.02(b)

	
Closing

	
§ 1.03

	
Code

	
Recitals

	
Commitment Letter 

	
§ 4.22

	
Confidentiality Agreement

	
§ 6.02(b)

	
Contingent Worker 

	
§ 3.11

	
Damages

	
§ 8.03(f)

	
Designated Directors 

	
§ 6.11

	
Designated Officers 

	
§ 6.11

	
DGCL 

	
Recitals

	
Dissenting Shares

	
§ 2.07(a)

	
ECRA

	
§ 3.05(b)

	
Effective Time

	
§ 1.02(b)

	
ERISA 

	
§ 3.10(a)

	
Escrow Agent 

	
§ 2.09

	
Escrow Agreement 

	
§ 2.09

	
Exchange Agent

	
§ 2.03(a)

 

  

84

  

 

	
Defined Term

	
Location of Definition

	 	 
	
Exchange Fund 

	
§ 2.03(a)

	
Expenses

	
§ 8.03(a)

	
Final Release Date

	
§ 2.09

	
Financing

	
§ 4.22

	
GAAP

	
§ 3.07(a)

	
Governmental Authority 

	
§ 3.05(b)

	
Greyhound

	
Preamble

	
Greyhound 401(k) Plan 

	
§ 6.04(c)

	
Greyhound Antitrust Termination Fee

	
8.03(e)

	
Greyhound Board 

	
Recitals

	
Greyhound Board Recommendation

	
§ 6.02(c)

	
Greyhound Certificate of Merger

	
§ 1.02(b)

	
Greyhound Common Merger Consideration 

	
§ 2.01(a)

	
Greyhound Common Percentage 

	
Recitals

	
Greyhound Common Shares 

	
§ 2.01(a)

	
Greyhound Disclosure Document 

	
§ 6.01(d)

	
Greyhound Disclosure Schedule

	
Article IV

	
Greyhound Financial Statements

	
§ 4.07(a)

	
Greyhound Financing Termination Fee 

	
8.03(d)

	
Greyhound Lease Documents 

	
§ 4.12(b)

	
Greyhound Licensed Intellectual Property 

	
§ 4.13(c)

	
Greyhound Merger 

	
Recitals

	
Greyhound Merger Consideration 

	
§ 2.01(c)

	
Greyhound Merger Sub 

	
Preamble

	
Greyhound Net Debt or Convenience Termination Fee

	
§ 8.03(c)

	
Greyhound Net Debt Certificate 

	
§ 7.01(f)

	
Greyhound Owned Intellectual Property

	
§ 4.13(b)

	
Greyhound Permits

	
§ 4.06

	
Greyhound Plans

	
§ 4.10(a)

	
Greyhound Preferred Percentage 

	
Recitals

	
Greyhound Principal Stockholders

	
Recitals

	
Greyhound SAR

	
§ 2.05(c)

	
Greyhound Series A Preferred Merger Consideration

	
§ 2.01(b)

	
Greyhound Series A Preferred Shares 

	
§ 2.01(b)

	
Greyhound Series B Preferred Merger Consideration

	
§ 2.01(c)

	
Greyhound Series B Preferred Shares 

	
§ 2.01(c)

	
Greyhound Shares

	
§ 2.01(c)

	
Greyhound Stock Awards

	
§ 4.03(a)

	
Greyhound Stock Options 

	
§ 2.05(a)

	
Greyhound Stock Option Plan

	
§ 2.05(a)

	
Greyhound Stockholder 

	
§ 2.03(b)

	
Greyhound Stockholder Approval 

	
§ 4.16(b)

	
Greyhound Substitute Option

	
§ 2.05(a)

	
Greyhound Substitute SAR

	
§ 2.05(c)

 

  

85

  

 

	
Defined Term

	
Location of Definition

	 	 
	
Greyhound Subsidiary

	
§ 4.01(a)

	
Greyhound Support Agreements

	
Recitals

	
Greyhound Surviving Corporation

	
§ 1.02(a)

	
Greyhound Termination Fee 

	
§ 8.03(e)

	
Greyhound Written Consent

	
Recitals

	
HSR Act 

	
§ 3.05(b)

	
Initial Effective Time 

	
§ 1.01(b)

	
Iris

	
Preamble

	
Iris 401(k) Plan  

	
§ 6.04(c)

	
Iris Board

	
Recitals

	
Iris Board Recommendation

	
§ 6.02(b)

	
Iris Certificate of Merger 

	
§ 1.01(b)

	
Iris Class A Shares

	
§ 2.02(a)

	
Iris Class B Shares 

	
§ 2.02(b)

	
Iris Class C Shares

	
§ 2.02(c)

	
Iris Class L Shares 

	
§ 2.02(d)

	
Iris Common Percentage

	
Recitals

	
Iris Disclosure Document 

	
§ 6.01(b)

	
Iris Disclosure Schedule

	
Article III

	
Iris Financial Statements

	
§ 3.07(a)

	
Iris Indemnified Party

	
§ 9.03

	
Iris Indemnifying Party 

	
§ 9.02

	
Iris Lease Documents 

	
§ 3.12(b)

	
Iris Licensed Intellectual Property

	
§ 3.13(c)

	
Iris Merger 

	
Recitals

	
Iris Merger Consideration

	
§ 2.02(d)

	
Iris Merger Sub 

	
Preamble

	
Iris Net Debt Certificate  

	
§ 7.03(g)

	
Iris Option Payment Amount 

	
§ 2.05(b)

	
Iris Owned Intellectual Property 

	
§ 3.13(b)

	
Iris Permits 

	
§ 3.06

	
Iris Plans 

	
§ 3.10(a)

	
Iris Preferred Percentage  

	
Recitals

	
Iris Principal Stockholders

	
Recitals

	
Iris Restricted Stock Award 

	
§ 3.03(a)

	
Iris Shares

	
§ 2.02(d)

	
Iris Stock Awards 

	
§ 3.03(a)

	
Iris Stock Options 

	
§ 2.05(b)

	
Iris Stock Option Plans 

	
§ 2.05(b)

	
Iris Stockholder  

	
§ 2.03(b)

	
Iris Stockholder Approval 

	
§ 3.16(b)

	
Iris Stockholder Notice 

	
§ 6.01(a)

	
Iris Stockholder Representative

	
Recitals

	
Iris Subsidiary 

	
§ 3.01(a)

 

  

86

  

 

	
Defined Term

	
Location of Definition

	 	 
	
Iris Support Agreements 

	
Recitals

	
Iris Surviving Corporation 

	
§ 1.01(a)

	
Iris Termination Fee 

	
§ 8.03(b)

	
Iris Written Consent

	
Recitals

	
IRS  

	
§ 3.10(a)

	
Law 

	
§ 3.05(a)

	
Liability Limitation 

	
§ 8.03(g)

	
Material Greyhound Contracts 

	
§ 4.17(a)

	
Material Iris Contracts

	
§ 3.17(a)

	
Mergers

	
Recitals

	
Most Recent Greyhound Balance Sheet 

	
§ 4.07(a)

	
Most Recent Iris Balance Sheet 

	
§ 3.07(a)

	
Multiemployer Plan

	
§ 3.10(b)

	
Multiple Employer Plan 

	
§ 3.10(b)

	
Non-U.S. Greyhound Plan

	
§ 3.10

	
Non-U.S. Iris Plan 

	
§ 3.10

	
Order

	
§ 7.01(c)

	
Parent 

	
Preamble

	
Parent Board  

	
Recitals

	
Parent Capital Stock

	
Recitals

	
Parent Closing Authorized Capital  

	
§ 3.22(b)

	
Parent Common Stock 

	
Recitals

	
Parent Indemnified Party

	
§ 9.02

	
Parent Indemnifying Party 

	
§ 9.03

	
Parties or Party

	
Recitals

	
Reinvestment Holders

	
§ 2.05(b)

	
Reinvestment Proceeds

	
§ 2.05(b)

	
Related Parties

	
§ 8.03(f)

	
Representatives

	
§ 6.02(a)

	
Special Losses

	
§ 9.01

	
Special Representations

	
§ 9.01

	
Stockholders Agreement

	
§ 6.12

	
Support Agreements

	
Recitals

	
Surviving Corporations 

	
§ 1.02(a)

	
Terminating Greyhound Breach 

	
§ 8.01(e)

	
Terminating Iris Breach

	
§ 8.01(d)

	
Termination Fee 

	
§ 8.03(e)

	
Third Party Claim  

	
§ 9.05(b)

	
Transaction Fees

	
§ 8.03(a)

	
Transactions 

	
Recitals

	
Working Capital Release Date

	
§ 2.09

  

87

  

 

SECTION 10.03.   Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.

 

SECTION 10.04.   Entire Agreement; Assignment.  This Agreement and the Support Agreements constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede, except as set forth in Sections 6.02(b), all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof.  This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise) by any Party without the consent of the other Parties; provided, however, that Greyhound and, following the Closing, Parent and the Surviving Corporations, may assign its rights pursuant to this Agreement, including its rights to indemnification, to any of its financing sources as collateral security without the prior written consent of the other Parties.  Following the Closing, Parent and each of the Surviving Corporations may assign this Agreement and its rights and obligations hereunder in connection with any merger or consolidation involving Parent, the Surviving Corporations or any of their respective subsidiaries or in connection with any sale of stock or assets of Parent, the Surviving Corporations or any of their respective subsidiaries or any other disposition in whole or in part of Parent, the Surviving Corporations or any of their respective subsidiaries.

 

SECTION 10.05.   Parties in Interest.  This Agreement shall be binding upon and inure solely to the benefit of each Party, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, other than as specifically provided in Section 6.05 and Article IX (which are intended to be for the benefit of the persons covered thereby and may be enforced by such persons).

 

SECTION 10.06.   Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State.  The Parties hereby (a) submit to the exclusive jurisdiction of any state or federal court sitting in the State of Delaware for the purpose of any Action arising out of or relating to this Agreement brought by any Party, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the Transactions may not be enforced in or by any of the above-named courts.

 

SECTION 10.07.   Headings.  The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

  

88

  

 

SECTION 10.08.   Counterparts.  This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

SECTION 10.09.   No Strict Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and the Parties waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

 

SECTION 10.10.   WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS.  EACH OF THE PARTIES (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.

 

SECTION 10.11.   No Specific Performance.  Each of the Parties hereby acknowledges and agrees that it is not entitled to enforce specifically the terms and provision of this Agreement except to enforce any Party’s rights pursuant to 6.02(b) hereof.

 

[remainder of page intentionally left blank]

 

  

89

  

 

IN WITNESS WHEREOF, Greyhound, Iris, Parent, Greyhound Merger Sub, Iris Merger Sub and, with respect to Articles II, IX and X only, CCG Investment Fund, L.P. and Cerberus Institutional Partners, L.P., as Iris Stockholder Representative, have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

 

	
GXS HOLDINGS, INC.

	 
	 	 
	 	 	 	 
	By:	/s/ David R. Golob	 
	Name: 	David R. Golob	 
	Title:	Director	 

 

 

	
INOVIS INTERNATIONAL, INC.

	 
	 	 
	 	 	 	 
	By:	/s/ Sean Feeney	 
	Name: 	Sean Feeney	 
	Title:	President and Chief Executive Officer	 

 

 

	
GRIRIS HOLDING COMPANY, INC.

	 
	 	 
	 	 	 	 
	By:	/s/ Sean Feeney	 
	Name: 	Sean Feeney	 
	Title:	President and Chief Executive Officer	 

 

 

	

GREYHOUND MERGER SUB, INC.

	 
	 	 
	 	 	 	 
	By:	/s/ Sean Feeney	 
	Name: 	Sean Feeney	 
	Title:	President and Chief Executive Officer	 

 

 

	

IRIS MERGER SUB, INC.

	 
	 	 
	 	 	 	 
	By:	/s/ Sean Feeney	 
	Name: 	Sean Feeney	 
	Title:	President and Chief Executive Officer	 

 

 

 

SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER

 

  

  

  

 

	

CCG INVESTMENT FUND, L.P.

	 
	 	 
	 	 	 	 
	By:	/s/ David Dominik	 
	Name: 	David Dominik	 
	Title:	Managing Director	 

 

 

	

CERBERUS INSTITUTIONAL PARTNERS, L.P.

	 
	 	 
	 	 	 	 
	By:	/s/ Seth P. Plattus	 
	Name: 	Seth P. Plattus	 
	Title:	Special Managing Director	 

 

  

  

  

 

Schedule I

Iris Principal Stockholders

CCG Investment Fund, L.P.

CCG Associates – QP, LLC

CCG Investment Fund-AI, LP

CCG AV, LLC – Series A

CCG AV, LLC – Series C

CCG CI, LLC

Cerberus Institutional Partners, L.P.

Cerberus Institutional Partners (America), L.P.

  

  

  

 

Schedule II

Greyhound Principal Stockholders

Global Acquisition Holding Company

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]