WAIVER AND AMENDMENT AGREEMENT
NO. 1
This
WAIVER AND AMENDMENT AGREEMENT NO. 1 TO THAT CERTAIN CREDIT
AGREEMENT (this “ Amendment ”) dated as of
February 5, 2009 and effective as of December 31, 2008,
among (a) HARRIS INTERACTIVE INC. (the “ Borrower
”), (b) JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
administrative agent (the “ Administrative
Agent ”) for itself and the other lenders (the “
Lenders ”) who are or may become party to the Credit
Agreement dated as of September 21, 2007 (as amended, restated,
supplemented or otherwise modified, and in effect from time to
time, the “ Credit Agreement ”) among the
Borrower, the Administrative Agent and the Lenders; and
(c) the Lenders signatory hereto.
WHEREAS , the Borrower, the Lenders and the Administrative
Agent are parties to the Credit Agreement, pursuant to which the
Lenders, upon certain terms and conditions, have agreed to make
Loans to, and the Issuing Bank, upon certain terms and conditions,
has agreed to issue Letters of Credit for the benefit of, the
Borrower;
WHEREAS, Events of Default have occurred and continue as a
result of the Borrower’s failure to comply with the covenants
contained in Section 5.2(d) of the Credit Agreement (as to
matters disclosed to the Administrative Agent and the Lenders),
Section 6.1(c) of the Credit Agreement (as a result of
intercomapny loans made to Harris Decima Inc. and to Marketshare
Limited) and Section 6.9(a) of the Credit Agreement for the period
ended December 31, 2008 and Section 6.9(b) of the Credit
Agreement for the period ended December 31, 2008
(collectively, the “ Specified Events of
Default ”);
WHEREAS, the Borrower has requested, among other things,
that the Lenders and Administrative Agent (a) waive the
Specified Events of Default, and (b) amend the Credit
Agreement as provided more fully herein below; and
WHEREAS, the Lenders and the Administrative Agent are
willing (a) to waive the Specified Events of Default, subject
to the terms, conditions and other provisions hereof, and
(b) to amend certain provisions of the Credit Agreement as
more fully provided herein;
NOW, THEREFORE, in consideration of the mutual agreements
contained in the Credit Agreement, herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms .
Capitalized terms used but not defined herein shall have the same
meanings herein as in the Credit Agreement.
Section 2. Waiver . Subject to the terms and
conditions set forth herein, the Lenders and the Administrative
Agent hereby agree to waive the Specified Events of
Default during
(but only during) the period (the “ Waiver Period
”) ending on the earliest to occur of (a) March 6,
2009 at 2 p.m. Eastern Time, (b) the occurrence after the date
hereof of any Default or Event of Default other than the Specified
Events of Default, and (c) the occurrence of any Material
Adverse Effect in the business, assets, financial condition or
prospects of the Borrower or Loan Parties other than in respect of
the Specified Events of Default and otherwise disclosed in the
Harris Financial Information (as hereinafter defined) delivered to
the Administrative Agent on January 29, 2009 and to the
Lenders on January 30, 2009. Such limited waiver shall
automatically, and without action, notice, demand or any other
occurrence, expire on and as of the end of the Waiver Period. Upon
the expiration or termination of the Waiver Period, and from and
after such time, (i) the Lenders and the Administrative Agent
shall retain all of the rights and remedies relating to the
Specified Events of Default and any other Default or Event of
Default, (ii) the Specified Events of Default shall be
reinstated and shall be in full force and effect for all periods
including periods after the Waiver Period, and (iii) any
obligation of the Lenders under the Credit Agreement shall be
subject to the terms and conditions set forth in the Credit
Agreement. As used herein, “Harris Financial
Information” means, collectively, (i) Harris Interactive
Inc. Draft Consolidated Balance Sheets for the six months ending
December 31, 2008, (ii) Harris Interactive Inc. Draft
Consolidated Statement of Operations for the six months ending
December 31, 2008, (iii) Harris Interactive Inc. Draft
Consolidated Statement of Cash Flows for the six months ending
December 31, 2008, (iv) Harris Interactive Business Plan
PowerPoint presentation dated January 29, 2009,
(v) Harris Interactive Summary of Business Plan
(July 2007 through June, 2011), (vi) Harris Financial
Forecast Yearly and Quarterly Financials 01-29-09, and
(vii) Harris Interactive Consolidated Monthly Income Statement
01-29-09, each of items (i) through (vii) inclusive
having been delivered to the Administrative Agent on
January 29, 2009 and the Lenders on January 30, 2009. The
parties intend to work in good faith to further amend the Credit
Agreement, including the financial covenants therein, on mutually
acceptable terms before the expiration of the Waiver Period, but no
party shall be under any obligation to enter into any such
amendment and any such amendment shall be subject to the agreement
of each of the parties acting in each such Person’s sole
discretion.
Section 3. Amendments to the Credit
Agreement, Schedules and
Exhibits .
(a)
Amendments to the Credit Agreement . The Credit Agreement is
hereby amended in its entirety and replaced with the document
attached hereto as Annex I .
(b)
Amendments to the Schedules to the Credit Agreement .
Schedule 2.1 and Schedule 3.11 to the Credit Agreement is
hereby amended in their entirety and replaced with the
Schedule 2.1 and Schedule 3.11 attached hereto as
Annex II .
(c)
Amendments to the Exhibits to the Credit Agreement
.
(i) Exhibit A
to the Credit Agreement is hereby deleted and replaced in its
entirety with Exhibit A attached hereto as Annex III
.
(ii) Exhibit C-3
to the Credit Agreement is hereby deleted and replaced in its
entirety with Exhibit C-3 attached hereto as Annex IV
.
(iii) Exhibit E
to the Credit Agreement is hereby deleted and replaced in its
entirety with Exhibit E attached hereto as Annex V
.
(iv) Exhibit G
to the Credit Agreement is hereby deleted and replaced in its
entirety with Exhibit G attached hereto as Annex VI
.
Section 4. Affirmation and
Acknowledgment of the
Borrower . The Borrower hereby ratifies and confirms
all of its Obligations to the Lenders, Issuing Bank and the
Administrative Agent, including, without limitation, the Loans, and
the Borrower hereby affirms its absolute and unconditional promise
to pay to the Lenders, the Issuing Bank and the Administrative
Agent the Loans and all other amounts due under the Credit
Agreement as amended hereby. The Borrower hereby confirms that the
Obligations are secured pursuant to the Collateral Documents and
pursuant to all other instruments and documents executed and
delivered by the Borrower as security for the
Obligations.
Section 5. Joinder to Guaranty Agreement . GSBC
Ohio Corporation, an Ohio corporation, is hereby added as a party
to the Guaranty Agreement and shall be included within the term
“Guarantor” as used therein. GSBC Ohio Corporation
hereby agrees to be bound by all of the terms and conditions of the
Guaranty Agreement, in all respects as if GSBC Ohio Corporation was
an original signatory thereto, and as a result thereof, absolutely,
unconditionally and irrevocably, jointly and severally, guarantees
to the Administrative Agent and the Lenders the full and punctual
payment when due (whether at stated maturity, by required
pre-payment, by acceleration or otherwise), as well as the
performance, of all Obligations including all such which would
become due but for the operation of the automatic stay pursuant to
§362(a) of the Federal Bankruptcy Code and the operation of
§§502(b) and 506(b) of the Federal Bankruptcy Code and
accruing after the commencement of a proceeding under any other
insolvency or similar laws of any jurisdiction at the rate or rates
provided in the Loan Documents.
Section 6. Representations and
Warranties . Each Loan Party hereby represents and
warrants to the Lenders and Administrative Agent as
follows:
(a) The
execution and delivery by such Loan Party of this Amendment and the
Loan Documents to which it is a party, and the performance by such
Loan Party of its obligations and agreements under this Amendment,
the Credit Agreement as amended hereby, and the other Loan
Documents, are within the corporate authority of such Loan Party,
have been duly authorized by all necessary corporate proceedings on
behalf of such Loan Party, and do not and will not contravene any
provision of law, statute, rule or regulation to which such Loan
Party is subject or any of such Loan Party’s charter, other
incorporation papers, by-laws or any stock provision or any
amendment thereof or of any agreement or other instrument binding
upon such Loan Party.
(b) This
Amendment, the Credit Agreement as amended hereby, and the other
Loan Documents constitute legal, valid and binding obligations of
such Loan Party, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights.
(c) No
approval or consent of, or filing with, any governmental agency or
authority is required to make valid and legally binding the
execution, delivery or performance by such Loan Party of this
Amendment, the Credit Agreement as amended hereby, or the other
Loan Documents other than for the UCC filings and filings with the
Patent and Trademark Office for the perfection of the
Administrative Agent’s Liens contemplated by the Collateral
Documents.
(d) The
representations and warranties contained in Article III of the
Credit Agreement are true and correct at and as of the date made
and as of the date hereof, except to the extent (i) of changes
resulting from transactions contemplated or permitted by this
Amendment, the Credit Agreement and the other Loan Documents,
(ii) relating to the representation contained in Section
3.4(b) of the Credit Agreement, and (iii) relating to
representations that expressly relate to an earlier
date.
(e) Such
Loan Party has performed and complied in all material respects with
all terms and conditions herein required to be performed or
complied with by it prior to or at the time hereof, and as of the
date hereof, after giving effect to the provisions hereof, there
exists no Event of Default or Default.
Section 7. Release . In order to induce the
Administrative Agent and the Lenders to enter into this Amendment,
each Loan Party acknowledges and agrees that: (a) such Loan
Party does not have any claim or cause of action against the
Administrative Agent, the Issuing Bank or any Lender (or any of its
respective directors, officers, employees or agents); (b) such
Loan Party does not have any offset right, counterclaim or defense
of any kind against any of its respective obligations, indebtedness
or liabilities to the Administrative Agent, the Issuing Bank or any
Lender; and (c) the Administrative Agent, the Issuing Bank and
each Lender have heretofore properly performed and satisfied in a
timely manner all of its obligations to the Loan Parties. Each Loan
Party wishes to eliminate any possibility that any past conditions,
acts, omissions, events, circumstances or matters would impair or
otherwise adversely affect the Administrative Agent’s, the
Issuing Bank’s or any Lender’s rights, interests,
contracts, collateral security or remedies. Therefore, each Loan
Party unconditionally releases, waives and forever discharges
(i) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the Administrative Agent, the Issuing
Bank or any Lender to such Loan Party, except the obligations to be
performed by any Administrative Agent, the Issuing Bank or any
Lender on or after the date hereof as expressly stated in this
Amendment, the Credit Agreement and the other Loan Documents, and
(ii) all claims, offsets, causes of action, suits or defenses
of any kind whatsoever (if any), whether arising at law or in
equity, whether known or unknown, which such Loan Party might
otherwise have against the Administrative Agent, the Issuing Bank,
any Lender or any of its directors, officers, employees or agents,
in either
case
(i) or (ii), on account of any past or presently existing
condition, act, omission, event, contract, liability, obligation,
indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.
Section 8. Conditions to
Effectiveness . This Amendment shall become effective
subject to:
(a) the
receipt by the Administrative Agent (or its counsel) from each of
the Borrower, the Administrative Agent and the Required Lenders, of
either (i) an original counterpart of this Amendment signed on
behalf of such party or (ii) written evidence satisfactory to
the Administrative Agent (which may include telecopy transmission
of a signed signature page of this Amendment) that such party has
signed a counterpart of this Amendment;
(b) the
receipt by the Administrative Agent (or its counsel) of either
(i) an original counterpart of the Pledge Agreement signed on
behalf of the parties signatory thereto or (ii) written evidence
satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of the Pledge
Agreement) that such party has signed a counterpart of the Pledge
Agreement. The Administrative Agent shall have received all
certificates representing such Equity Interests of all domestic
subsidiaries pledged under the Pledge Agreement, accompanied by
instruments of transfer and undated stock powers endorsed in blank,
each in form and substance satisfactory to the Administrative
Agent; and the Borrower shall have taken all steps necessary under
applicable United States law to perfect the Lien of the
Administrative Agent in such Equity Interests;
(c) the
receipt by the Administrative Agent of either (i) an original
counterpart of the Security Agreement signed on behalf of each of
the grantors party thereto or (ii) written evidence
satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of the Security
Agreement) that such party has signed a counterpart of the Security
Agreement;
(d) the
receipt by the Administrative Agent of either (i) an original
counterpart of the Guaranty Agreement signed on behalf of GSBC Ohio
Corporation in the form attached hereto as Annex VII or
(ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page
of the Guaranty Agreement) that such party has signed a counterpart
of the Guaranty Agreement;
(e) the
receipt by the Administrative Agent of either (i) an original
counterpart of the Patent Security Agreement signed on behalf of
each of the Loan Parties party thereto or (ii) written evidence
satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of the Patent
Security Agreement) that such party has signed a counterpart of the
Patent Security Agreement;
(f) the
receipt by the Administrative Agent of either (i) an original
counterpart of the Trademark Security Agreement signed on behalf of
each of the Loan Parties party thereto or (ii) written evidence
satisfactory to the Administrative Agent (which may
include
telecopy
transmission of a signed signature page of the Trademark Security
Agreement) that such party has signed a counterpart of the
Trademark Security Agreement;
(g) the
receipt by the Administrative Agent of either (i) an original
counterpart of the Perfection Certificates signed on behalf of each
of the Loan Parties party thereto or (ii) written evidence
satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of the Perfection
Certificates) that such party has signed a counterpart of the
Perfection Certificates;
(h) the
receipt by the Administrative Agent of the results of a search of
the UCC filings (or equivalent filings), in addition to tax Lien,
judgment Lien, bankruptcy and litigation searches made with respect
to each Loan Party, together with copies of the financing
statements and other filings (or similar documents) disclosed by
such searches, and accompanied by evidence satisfactory to the
Administrative Agent that the Liens indicated in any such financing
statement and other filings (or similar document) are Permitted
Encumbrances or have been released or will be released
substantially simultaneously with execution of this
Amendment;
(i) the
receipt by the Administrative Agent of evidence, in form and
substance satisfactory to the Administrative Agent, that
appropriate UCC (or equivalent) financing statements have been duly
filed in such office or offices as may be necessary or, in the
opinion of Administrative Agent, desirable, to perfect the
Administrative Agent’s Liens in and to the
Collateral;
(j) the
receipt by the Administrative Agent of evidence, in form and
substance satisfactory to the Administrative Agent, of the
submission for filing of the Trademark Security Agreement and
Patent Security Agreement in the appropriate governmental
office;
(k) the
receipt by the Administrative Agent of a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated
the Amendment Agreement No. 1 Effective Date) of Harris Beach
PLLC, counsel for the Borrower, covering such matters relating to
the Borrower, the Loan Parties, this Amendment, the joinder of GSBC
Ohio Corporation to the Guaranty Agreement and the Collateral
Documents as the Administrative Agent shall reasonably
request;
(l) the
receipt by the Administrative Agent of such documents, resolutions
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of the Loan Parties, the authorization of the entering
into and execution of this Amendment and the other Loan Documents,
the granting of a security interest to the Administrative Agent, on
behalf of the Lenders, in the Collateral, the pledging of the
Equity Interests by the parties signatory to the Pledge Agreement,
and any other legal matters relating to the Loan Parties, this
Amendment or the other Loan Documents, all in form and substance
satisfactory to the Administrative Agent and its
counsel;
(m) the
receipt by the Administrative Agent of all fees due and payable to
the Administrative Agent and the Lenders in immediately available
funds;
(n) the
payment of all reasonable legal fees and disbursements for which
invoices have been presented which have been incurred or sustained
by the Administrative Agent in connection with this Amendment and
the Credit Agreement, the Loan Documents and any other related
documents executed and/or delivered in connection therewith;
and
(o) the
delivery to the Administrative Agent of such other items,
documents, agreements, items or actions as the Administrative Agent
may reasonably request.
Section 9. Miscellaneous
Provisions .
(a) Except
as otherwise expressly provided by this Amendment, all of the
terms, conditions and provisions of the Credit Agreement shall
remain the same. It is declared and agreed by each of the parties
hereto that the Credit Agreement, as amended hereby, shall continue
in full force and effect, and that this Amendment and the Credit
Agreement shall be read and construed as one instrument.
(b) This
Amendment shall be construed in accordance with and governed by the
internal law of the State of New York (including
Section 5-1401 and Section 5-1402 of the General
Obligations laws of the State of New York).
(c) This
Amendment shall constitute a Loan Document under the Credit
Agreement and all obligations included in this Amendment
(including, without limitation, all obligations for the payment of
principal, interest, fees and other amounts and expenses) shall
constitute Obligations under the Credit Agreement and be secured by
the Collateral Documents securing the Obligations.
(d) Any
failure by the Borrower or the Loan Parties to comply with any of
the terms and conditions of this Amendment shall constitute an
immediate Event of Default.
(e) This
Amendment may be executed in any number of counterparts, each of
which shall constitute an original, but all such counterparts shall
together constitute but one contract. In making proof of this
Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against
which enforcement hereof is sought. Delivery of an executed
counterpart of a signature page of this Amendment by telecopy or
other electronic method of transmission shall be effective as
delivery of a manually executed counterpart of this
Amendment.
(f) The
Borrower hereby agrees to pay to the Administrative Agent, on
demand by the Administrative Agent, all reasonable out-of-pocket
costs and expenses incurred or sustained by the Administrative
Agent in connection with the preparation of this Amendment and any
documentation executed in connection with this Amendment (including
reasonable legal fees).
[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first written above.
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HARRIS
INTERACTIVE INC.
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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JPMORGAN
CHASE BANK, NATIONAL
ASSOCIATION, as
Administrative Agent
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By:
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/s/ Thomas C.
Strasenburgh
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Name:
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Thomas C.
Strasenburgh
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Title:
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Vice
President
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JPMORGAN
CHASE BANK, NATIONAL
ASSOCIATION, as Lender
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By:
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/s/ Thomas C.
Strasenburgh
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Name:
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Thomas C.
Strasenburgh
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Title:
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Vice
President
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MANUFACTURERS AND TRADERS TRUST
COMPANY, as Lender
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By:
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/s/ Brett
Rawlings
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Name:
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Brett
Rawlings
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Title:
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Assistant Vice
President
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NATIONAL
CITY BANK, as Lender
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By:
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/s/ John P.
Wojcik
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Name:
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John P.
Wojcik
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Title:
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Vice
President
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HSBC BANK
USA, NATIONAL
ASSOCIATION, as Lender
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By:
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/s/ Joseph M.
Koenig
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Name:
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Joseph M.
Koenig
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Title:
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Vice
President
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Loan Parties’
Acknowledgement
Each
of the undersigned Loan Parties hereby (a) acknowledges and
consents to the foregoing Amendment and the Borrower’s
execution thereof; (b) joins the foregoing Amendment for the
sole purpose of consenting to and being bound by the provisions of
Sections 6 and 7 thereof; (c) ratifies and confirms all of
their respective obligations and liabilities under the Loan
Documents to which any of them is a party and ratifies and confirms
that such obligations and liabilities extend to and continue in
effect with respect to, and continue to guarantee and secure, as
applicable, the Obligations of each other Loan Party under the Loan
Documents; (d) acknowledges and confirms that the liens and
security interests granted pursuant to the Loan Documents are valid
and perfected first priority liens and security interests (subject
only to Permitted Encumbrances, the filing of UCC financing
statements by the Administrative Agent and approved by the
Administrative Agent and the Loan Parties for filing in applicable
jurisdictions, and the filing of the Trademark Security Agreement
and Patent Security Agreement by the Administrative Agent) that
secure all of the Obligations on and after the date hereof; and
(e) acknowledges, affirms and agrees that, as of the date
hereof, such Loan Party does not have any defense, claim, cause of
action, counterclaim, offset or right of recoupment of any kind or
nature against any of their respective obligations, indebtedness or
liabilities to the Administrative Agent, the Issuing Bank or any
Lender.
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Loan
Parties :
HARRIS INTERACTIVE INTERNATIONAL
INC.
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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WIRTHLIN
WORLDWIDE, LLC
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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THE WIRTHLIN
GROUP INTERNATIONAL,
L.L.C.
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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LOUIS HARRIS
& ASSOCIATES, INC.
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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HARRIS
INTERACTIVE ASIA, LLC
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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GSBC OHIO
CORPORATION
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By:
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/s/ Deborah
Rieger-Paganis
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Deborah
Rieger-Paganis
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Interim Chief
Financial Officer
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