EXHIBIT 10.27
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment"), made and entered into as of September 4, 2001, is by and
between Xxxxxx Software, Inc., a Delaware corporation (the "Borrower"), and U.S.
Bank National Association, a national banking association (the "Bank").
RECITALS
1. The Bank and the Borrower entered into an Amended and
Restated Credit Agreement dated as of May 31, 2001 (the "Amended and Restated
Credit Agreement"); and
2. The Borrower desires to amend certain provisions of the
Amended and Restated Credit Agreement, and the Bank has agreed to make such
amendments, subject to the terms and conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
covenant and agree to be bound as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to them in the
Amended and Restated Credit Agreement, unless the context shall otherwise
require.
SECTION 2. AMENDMENTS. The Amended and Restated Credit
Agreement is hereby amended as follows:
2.1 DEFINITIONS. The definitions of "Applicable Margin",
"EBITDA" "Fixed Charge Coverage Ratio", "Interest Expense" "Revolving
Commitment Amount" and "Termination Date" contained in Section 1.2 of
the Amended and Restated Credit Agreement are amended to read in their
entireties as follows:
"Applicable Margin": With respect to each Prime Rate Tranche,
the Applicable Margin set forth in the table below as in effect from time to
time, and with respect to each Eurodollar Rate Tranche, the Applicable Margin
set forth in the table below as in effect on the first day of each Interest
Period for such Eurodollar Rate Tranche for such Interest Period; in each case,
determined based on the Cash Flow Leverage Ratio as of the end of each Cash Flow
Measurement Period:
Prime
Cash Flow Leverage Ratio Rate Eurodollar
(in each case, to 1.00) Tranches Tranches
------------------------ -------- ----------
Greater than or equal to 1.00 0.25% 1.75%
Less than 1.00 0.00% 1.50%
Notwithstanding the foregoing, the Applicable Margin shall not be adjusted for
any quarter until the tenth Business Day after receipt by the Bank of the
compliance certificate required under Section 5.1(c) for the last month of the
prior Cash Flow Measurement Period supported by financial statements required
under Section 5.1(b) for the last month of the prior Cash Flow Measurement
Period; and moreover, if the Borrower has not furnished the compliance
certificate and financial statements required under Sections 5.1(b) and 5.1(c)
for the last month of any Cash Flow Measurement Period prior to the first day of
the second month of the following fiscal quarter, the Applicable Margin shall be
calculated as if the Cash Flow Leverage Ratio as of the last day of such Cash
Flow Measurement Period were greater than 1.00 to 1.00 for the period from the
first day of such second month until up to the tenth Business Day after such
financial statements are received by the Bank.
"EBITDA": For any period of determination, the consolidated
net income of the Borrower before deductions for income taxes, Interest Expense,
Non-cash Interest Expense, depreciation and amortization, the 1999 Option
Payment, 2001 Redemption Charges, Stock Charges and the issuance of the HP
Warrant and the HCA Warrant, all as determined in accordance with GAAP.
"Fixed Charge Coverage Ratio": For any period of
determination, the ratio of the Borrower's (a) EBITDA minus cash taxes and
Capital Expenditures not financed with term debt, to (b) Interest Expense plus
mandatory principal payments on the Borrower's interest bearing Indebtedness for
the period of determination.
"Interest Expense": For any period of determination, the sum
of (a) the aggregate amount, without duplication, of interest expense determined
in accordance with GAAP, minus (b) Non-cash Interest Expense.
"Revolving Commitment Amount": $25,000,000, as the same may be
reduced from time to time pursuant to Section 2.13.
"Termination Date": The earliest of (a) September 30, 2003,
(b) the date on which the Revolving Commitment is terminated pursuant to Section
7.2 hereof, or (c) the date on which the Revolving Commitment Amount is reduced
to zero pursuant to Section 2.13 hereof.
Section 1.2 of the Amended and Restated
Credit Agreement is
further amended by adding the definitions of "Cash Flow Leverage
Ratio", "Guarantors" "Non-cash Interest Expense" and "Stock Charges"
thereto in correct alphabetical order and by deleting the definition of
"2001 Stock Charges":
"Cash Flow Leverage Ratio": As defined in Section 6.16.
"Guarantors": Xxxxxx Software USA, Inc., a Delaware
corporation, Xxxxxx Technologies, Inc., a Delaware corporation, and any other
Persons or entities that may, from time to time, execute and deliver to the Bank
a guaranty of the Borrower's indebtedness under this Agreement.
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"Non-cash Interest Expense": For any period of determination,
the sum of (a) amortization of OID on the Senior Subordinated Convertible Note,
plus (b) amortization of debt issuance costs associated with the Senior
Subordinated Convertible Note, plus (c) accretion of put warrants associated
with the Senior Subordinated Convertible Notes.
"Stock Charges": All compensation expenses related to or
arising from the Borrower's issuance to employees or contractors of options to
purchase shares of Common Stock and expenses related to or arising from the
issuance to employees of "Phantom Stock" in association with foreign employee
retirement plans.
2.2 REPORTING. Sections 5.1(a), 5.1(b), 5.1(d) and 5.1(i) are
amended to read in their entireties as follows:
(a) As soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, (i) the financial statements of the
Borrower consisting of at least consolidated and consolidating statements of
income, cash flow and stockholders' equity, and a consolidated and consolidating
balance sheet as at the end of such year, prepared in accordance with GAAP on a
consistent basis, setting forth in each case in comparative form corresponding
figures from the previous fiscal year end, audited by Price Waterhouse Coopers
or other independent certified public accountants of recognized national
standing selected by the Borrower and acceptable to the Bank, together with any
management letters, management reports or other supplementary comments or
reports to the Borrower or its board of directors furnished by such accountants.
(b) As soon as available and in any event within 30 days after
the end of each month, unaudited consolidated and consolidating statements of
income, cash flow and stockholders' equity for the Borrower for such month and
for the period from the beginning of such fiscal year to the end of such month,
and a consolidated and consolidating balance sheet of the Borrower as at the end
of such month, prepared in accordance with GAAP on a consistent basis, setting
forth in comparative form figures for the corresponding period for the preceding
fiscal year, accompanied by a certificate signed by the chief financial officer
of the Borrower stating that such financial statements present fairly the
financial condition of the Borrower, subject to year-end audit adjustments.
(d) As soon as practicable and in any event not later than 90
days after the beginning of each fiscal year of the Borrower, statements of
forecasted income and cash flow for the Borrower for each fiscal quarter in such
fiscal year and a forecasted balance sheet of the Borrower, all such forecasted
statements to be on a consolidated and consolidating basis, together with
supporting assumptions, as at the end of each fiscal quarter, all in reasonable
detail and reasonably satisfactory in scope to the Bank.
(i) As soon as practicable and in any event within 10 days
after the end of each quarter, a Borrowing Base Certificate, signed by the chief
financial officer of the Borrower, reporting the Borrowing Base as of the last
day of the month just ended, provided that, in the event the Borrower requests
an Advance under this Agreement, the Borrower shall submit with
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such request, a Borrowing Base Certificate as of the last day of the most recent
month end signed by the chief financial officer of the Borrower and the Borrower
shall submit a Borrowing Base Certificate, so signed, as of the last day of each
month as soon as practicable and in any event within 10 days after the end of
each month until all outstanding Advances are repaid.
2.3 MERGER. Section 6.1 of the Amended and Restated
Credit
Agreement is amended by (i) deleting therefrom the phrase "$3,000,000
or 15% of Tangible Net Worth" and inserting in its place "$10,000,000
or 20% of Tangible Net Worth" and (ii) by adding the following at the
end thereof, before the period:
"; provided, further, that so long as Total Revolving
Outstandings are zero, the Borrower may proceed with any merger not
otherwise allowed under (a) or (b) of this Section 6.1 so long as it is
the surviving entity, but if the Borrower does so, the Bank need not
make any Advances under this Agreement unless it consents to any such
merger in writing within 30 days after such merger".
2.4 SALE OF ASSETS. Section 6.2 of the Amended and Restated
Credit Agreement is amended by deleting therefrom the phrase
"$3,000,000 or 15% of Tangible Net Worth" and inserting in its place
"$5,000,000 or 15% of Tangible Net Worth".
2.5 CAPITAL EXPENDITURES. Section 6.8 of the Amended and
Restated Credit Agreement is amended to read in its entirety as
follows:
Section 6.8 Capital Expenditures The Borrower will not make
Capital Expenditures in any fiscal year in excess of $30,000,000.
2.6 INVESTMENTS. Section 6.9 of the Amended and Restated
Credit Agreement is amended (i) by amending subsection (h) by deleting
therefrom the phrase "$3,000,000 or 15% of Tangible Net Worth" and
inserting in its place "$10,000,000 or 20% of Tangible Net Worth", and
(ii) by adding the following new subsections (k) and (l) immediately
following subsection (j):
(k) Investments in the form of loans or credit extended to
Subsidiaries formed after the Closing Date so long as the total of all such
Investments does not violate any other restriction in this Agreement.
(l) Any other Investments of the type allowed under Section
6.9(h) in excess of the amount allowed therein so long as Total Revolving
Outstandings are zero, but if the Borrower makes any such Investment, the Bank
need not make any Advances under this Agreement unless it consents to any such
Investment in writing within 30 days after the Borrower makes any such
Investment.
2.7 LEASES. Section 6.13 of the Amended and Restated Credit
Agreement is amended by deleting therefrom the dollar amount
"$24,000,000" and inserting in its place "$25,000,000".
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2.8 INTEREST COVERAGE RATIO. Section 6.14 of the Amended and
Restated Credit Agreement is amended to read in its entirety as
follows:
Section 6.14 Interest Coverage Ratio. The Borrower will not
permit the ratio, as of the last day of any Interest Coverage Measurement
Period, of (a) its EBITDA for such Interest Coverage Measurement Period to (b)
its Interest Expense for such Interest Coverage Measurement Period to be less
than 3.00 to 1.00.
2.9 FIXED CHARGE COVERAGE RATIO. Section 6.15 of the Amended
and Restated Credit Agreement is amended to read in its entirety as
follows:
Section 6.15 Fixed Charge Coverage Ratio. The Borrower will
not permit its Fixed Charge Coverage Ratio to be less than 2.00 to 1.0 at the
end of any fiscal quarter of the Borrower for the four consecutive fiscal
quarters then ended.
2.10 CASH FLOW LEVERAGE RATIO. Section 6.16 of the Amended and
Restated Credit Agreement is amended to read in its entirety as
follows:
Section 6.16. Cash Flow Leverage Ratio. The Borrower will not
permit, as of the end of any fiscal quarter, the ratio of (a) all Indebtedness
outstanding as of such date on which interest is charged, accrued or deemed
incurred pursuant to GAAP, to (b) Net Cash Flow for the Cash Flow Measurement
Period ended on such date (the "Cash Flow Leverage Ratio") to exceed 1.50 to
1.00.
2.11 EVENTS OF DEFAULT. Sections 7.1(e) and 7.1(l) of the
Amended and Restated Credit Agreement are amended to read in their
entireties as follows:
(e) Reserved.
(l) Reserved.
2.12 EXHIBITS. Exhibits A, B and E to the Amended and Restated
Credit Agreement are deleted and Exhibits A, B, and C hereto are
substituted in their places as Exhibits A, B and E, respectively.
SECTION 3. EFFECTIVENESS OF AMENDMENTS. The amendments
contained in this Amendment shall become effective upon delivery by the Borrower
of, and compliance by the Borrower with, the following:
3.1 This Amendment and the Revolving Note in the form of
Exhibit C hereto (the "New Revolving Note"), each duly executed by the
Borrower.
3.2 A copy of the resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery and performance of this
Amendment and the New
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Revolving Note certified as true and accurate by its Secretary or
Assistant Secretary, along with a certification by such Secretary or
Assistant Secretary (i) certifying that there has been no amendment to
the Certificate of Incorporation or Bylaws of the Borrower since true
and accurate copies of the same were delivered to the Bank with a
certificate of the Secretary of the Borrower dated May 31, 2001 except
for an amendment to the Certificate of Incorporation increasing the
Borrower's authorized shares (with a copy thereof attached to the
certification), and (ii) identifying each officer of the Borrower
authorized to execute this Amendment, the New Revolving Note and any
other instrument or agreement executed by the Borrower in connection
with this Amendment (collectively, the "Amendment Documents"), and
certifying as to specimens of such officer's signature and such
officer's incumbency in such offices as such officer holds.
3.3 Certified copies of all documents evidencing any necessary
corporate action, consent or governmental or regulatory approval (if
any) with respect to this Amendment.
3.4 A good standing certificate for the Borrower and each
Guarantor from the jurisdiction of their respective incorporations
issued not more than 30 days prior to the date of this Amendment.
3.5 The Borrower shall have paid the Bank an amendment fee of
$10,000.
3.6 A guaranty in form and substance reasonably satisfactory
to the Bank, duly executed by each Guarantor.
3.7 A copy of the resolutions of the Board of Directors of the
each Guarantor authorizing the execution, delivery and performance of
its Guaranty certified as true and accurate by its Secretary or
Assistant Secretary, along with a certification by such Secretary or
Assistant Secretary (i) attaching a true and correct copy of the
Certificate or Articles of Incorporation and Bylaws and all amendments
thereto of such Guarantor, and (ii) identifying each officer of the
Guarantor authorized to execute the Guaranty and certifying as to
specimens of such officer's signature and such officer's incumbency in
such offices as such officer holds.
3.8 The Borrower shall have satisfied such other conditions as
specified by the Bank, including payment of all unpaid legal fees and
expenses incurred by the Bank through the date of this Amendment in
connection with the Amended and Restated Credit Agreement and the
Amendment Documents.
SECTION 4. REPRESENTATIONS, WARRANTIES, AUTHORITY, NO ADVERSE
CLAIM.
4.1 REASSERTION OF REPRESENTATIONS AND WARRANTIES, NO DEFAULT.
The Borrower hereby represents that on and as of the date hereof and
after giving effect to this Amendment (a) all of the representations
and warranties contained in the Amended and Restated Credit Agreement
are true, correct and complete in all respects as of the date hereof as
though made on and as of such date, except for changes permitted by the
terms
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of the Amended and Restated Credit Agreement, and (b) there will exist
no Default or Event of Default under the Amended and Restated Credit
Agreement as amended by this Amendment on such date which has not been
waived by the Bank.
4.2 AUTHORITY, NO CONFLICT, NO CONSENT REQUIRED. The Borrower
represents and warrants that the Borrower has the power and legal right
and authority to enter into the Amendment Documents and has duly
authorized as appropriate the execution and delivery of the Amendment
Documents and other agreements and documents executed and delivered by
the Borrower in connection herewith or therewith by proper corporate,
and none of the Amendment Documents nor the agreements contained herein
or therein contravenes or constitutes a default under any agreement,
instrument or indenture to which the Borrower is a party or a signatory
or a provision of the Borrower's Certificate of Incorporation, Bylaws
or any other agreement or requirement of law, or result in the
imposition of any Lien on any of its property under any agreement
binding on or applicable to the Borrower or any of its property except,
if any, in favor of the Bank. The Borrower represents and warrants that
no consent, approval or authorization of or registration or declaration
with any Person, including but not limited to any governmental
authority, is required in connection with the execution and delivery by
the Borrower of the Amendment Documents or other agreements and
documents executed and delivered by the Borrower in connection
therewith or the performance of obligations of the Borrower therein
described, except for those which the Borrower has obtained or provided
and as to which the Borrower has delivered certified copies of
documents evidencing each such action to the Bank.
4.3 NO ADVERSE CLAIM. The Borrower warrants, acknowledges and
agrees that no events have been taken place and no circumstances exist
at the date hereof which would give the Borrower a basis to assert a
defense, offset or counterclaim to any claim of the Bank with respect
to the Borrower's obligations under the Amended and Restated Credit
Agreement as amended by this Amendment.
SECTION 5. AFFIRMATION OF AMENDED AND RESTATED CREDIT
AGREEMENT, FURTHER REFERENCES. The Bank and the Borrower each acknowledge and
affirm that the Amended and Restated Credit Agreement, as hereby amended, is
hereby ratified and confirmed in all respects and all terms, conditions and
provisions of the Amended and Restated Credit Agreement, except as amended by
this Amendment, shall remain unmodified and in full force and effect. All
references in any document or instrument to the Amended and Restated Credit
Agreement are hereby amended and shall refer to the Amended and Restated Credit
Agreement as amended by this Amendment.
SECTION 6. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This
Amendment, from and after the date hereof, embodies the entire agreement and
understanding between the parties hereto and supersedes and has merged into this
Amendment all prior oral and written agreements on the same subjects by and
between the parties hereto with the effect that this Amendment, shall control
with respect to the specific subjects hereof and thereof.
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SECTION 7. SEVERABILITY. Whenever possible, each provision of
this Amendment and the other Amendment Documents and any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be interpreted in such manner as to be effective, valid and
enforceable under the applicable law of any jurisdiction, but, if any provision
of this Amendment, the other Amendment Documents or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be held to be prohibited, invalid or unenforceable under the
applicable law, such provision shall be ineffective in such jurisdiction only to
the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Amendment, the other Amendment Documents or any
other statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto in such jurisdiction, or affecting the effectiveness,
validity or enforceability of such provision in any other jurisdiction.
SECTION 8. SUCCESSORS. The Amendment Documents shall be
binding upon the Borrower and the Bank and their respective successors and
assigns, and shall inure to the benefit of the Borrower and the Bank and the
successors and assigns of the Bank.
SECTION 9. LEGAL EXPENSES. The Borrower agrees to reimburse
the Bank, upon execution of this Amendment, for all reasonable out-of-pocket
expenses (including attorney' fees and legal expenses of Xxxxxx & Xxxxxxx LLP,
counsel for the Bank) incurred in connection with the Amended and Restated
Credit Agreement, including in connection with the negotiation, preparation and
execution of the Amendment Documents and all other documents negotiated,
prepared and executed in connection with the Amendment Documents, and in
enforcing the obligations of the Borrower under the Amendment Documents, and to
pay and save the Bank harmless from all liability for, any stamp or other taxes
which may be payable with respect to the execution or delivery of the Amendment
Documents, which obligations of the Borrower shall survive any termination of
the Amended and Restated Credit Agreement.
SECTION 10. HEADINGS. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.
SECTION 11. COUNTERPARTS. The Amendment Documents may be
executed in several counterparts as deemed necessary or convenient, each of
which, when so executed, shall be deemed an original, provided that all such
counterparts shall be regarded as one and the same document, and either party to
the Amendment Documents may execute any such agreement by executing a
counterpart of such agreement.
SECTION 12. GOVERNING LAW. THE AMENDMENT DOCUMENTS SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.
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SECTION 13. RELEASE OF SECURITY INTEREST. On the effective
date of this Amendment and upon compliance with all conditions set forth in
Section 3 of this Amendment, the Bank hereby terminates and releases its
security interest in all and any of the assets of the Borrower, including,
without limitation, any security interests arising under the Amended and
Restated Security Agreement dated as of May 31, 2001, the Second Amended and
Restated Collateral Assignment of Copyrights and the Second Amended and Restated
Collateral Assignment of Trademarks, each dated as of May 31, 2001. The Bank
will file such termination statements and related documents as reasonably
required to terminate all UCC, Copyright and U.S. Patent and Trademark Office
filings, at the expensed of the Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date and year first above written.
BORROWER:
XXXXXX SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Title: Chief Financial Officer
BANK:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
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Title: Senior Vice President
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