FIFTH AMENDMENT TO SECOND LIEN CREDIT AGREEMENT
Exhibit 2.23
FIFTH AMENDMENT TO SECOND LIEN CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO SECOND LIEN CREDIT AGREEMENT, dated as of July 24, 2009 (this
“Amendment”), to the Existing Credit Agreement (as defined below) is made by Mitel US Holdings,
Inc. (the “Borrower”) and Mitel Networks Corporation (the “Parent”), the various financial
institutions and other Persons (as defined in the Credit Agreement referred to below) listed on the
signature pages hereof (each a “Lender” and collectively, the “Lenders”), and Xxxxxx Xxxxxxx Senior
Funding, Inc. (“MSSF”), as the Administrative Agent (in such capacity, the “Administrative Agent”).
WITNESSETH:
WHEREAS, the Borrower, the Parent, the Lenders, the Administrative Agent, and Xxxxxx Xxxxxxx
& Co. Incorporated, as the Collateral Agent (in such capacity, the “Collateral Agent”),
are all parties to the Second Lien Credit Agreement, dated as of August 16, 2007 (as amended or
otherwise modified prior to the date hereof, the “Existing
Credit Agreement”; and as
further amended by this Amendment and as the same may be further amended, supplemented, amended
and restated or otherwise modified from time to time, the “Credit Agreement”); and
WHEREAS, the Borrower has requested that the Lenders amend certain provisions of the Existing
Credit Agreement.
NOW, THEREFORE, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
SECTION 1.1 Certain Definitions. The following terms when used in
this Amendment shall have the following meanings (such meanings to be equally applicable to the
singular and plural forms thereof):
“Amendment” is defined in the preamble.
“Borrower” is defined in the preamble.
“Credit Agreement” is defined in the first recital.
“Existing Credit Agreement” is defined in the first recital.
“Fifth Amendment Effective Date” is defined in Article III.
SECTION 1.2 Defined Terms Generally. Unless otherwise defined
herein, capitalized terms used herein have the meanings provided therefore in the Existing Credit
Agreement.
ARTICLE II
AMENDMENTS
AMENDMENTS
SECTION 2.1 Amendments to Section 1.1.
SECTION 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby amended by inserting the
following definitions in the proper alphabetical order:
“Eligible Sponsor Assignee” means (x) Francisco Partners II,
L.P. and its controlled Affiliates (including offshore and parallel funds
and similar vehicles controlled by Francisco Partners II, L.P) and (y) other
Permitted Holders and their controlled Affiliates; provided, that each such
Person shall have complied with the requirements set forth in Section
11.21; and provided further that in no event shall any Obligor, any of
its Subsidiaries or any Affiliate controlled by any such Obligor or
Subsidiary be an Eligible Sponsor Assignee.
“Fifth Amendment” means the Fifth Amendment to the Second Lien
Credit Agreement, dated as of July 24, 2009, among the Borrower, the Parent,
the Lenders party thereto and the Administrative Agent.
“Fifth Amendment Effective Date” means the Fifth Amendment
Effective Date as that term is defined in the Fifth Amendment.
“Purchase Acceptance Notice” is defined in Section 11.21.
“Purchase Notice” is defined in Section 11.21.
SECTION 2.1.2. Section 1.1 of the Existing Credit Agreement is hereby amended by amending and
restating the definition of Affiliate in its entirety to read as follows:
“Affiliate” of any Person means any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person. For purposes hereof, the terms “control”, “controlled by”,
“common control with”, etc. mean the power, directly or indirectly,
to direct or cause the direction of the management and policies of a Person
(whether through the ability to exercise voting power, by contract or
otherwise).
SECTION 2.1.3. Section 1.1 of the Existing Credit Agreement is hereby amended by amending and
restating the definition of Consolidated Total Debt in its entirety to read as follows:
“Consolidated Total Debt” means, on any date, in respect of the
Parent and its Subsidiaries on a consolidated basis, the sum (without
duplication) of (i) the outstanding principal amount of all Indebtedness of
the Parent and its Subsidiaries of the type referred to in
clause (a) (which, in the case of the Loans, shall be deemed to equal the average daily
clause (a) (which, in the case of the Loans, shall be deemed to equal the average daily
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amount of the Loans outstanding for the Fiscal Quarter ending on or
immediately preceding the date of determination and, for the avoidance of
doubt, will include Loans purchased by an Eligible Sponsor Assignee in
accordance with Section 11.11 unless such Loans have been
irrevocably cancelled or converted into equity), clause (b) (which,
in the case of Letter of Credit Outstandings under and as defined in the
First Lien Credit Agreement, shall (x) exclude obligations of the type
described in clause (a) of the definition of each of “Canadian
Letter of Credit Outstandings” and “U.S. Letter of Credit Outstandings”
under and as defined in the First Lien Credit Agreement and (y) be deemed to
equal the average daily amount of Letter of Credit Outstandings under and as
defined in the First Lien Credit Agreement for the Fiscal Quarter ending on
or immediately preceding the date of determination), clause
(c), clause (g) and clause (f), in each case of the definition of
“Indebtedness” and any Contingent Liability in respect of any of the
foregoing (in each case exclusive of intercompany Indebtedness between the
Parent and its Subsidiaries), plus (ii) to the extent (but only to
the extent) not permitted by clause (m) of Section 7.2.2,
Indebtedness of the type described in such clause (m), minus (iii)
cash on hand of the Parent and its Subsidiaries.
SECTION 2.1.4. Section 1.1 of the Existing Credit Agreement is hereby further amended by
amending and restating the definition of Consolidated EBITDA in its entirety to read as follows:
“Consolidated EBITDA” means, for any applicable period, the sum
of (a) Net Income; plus (b) to the extent deducted in determining
Net Income, the sum of (i) income tax expense, (ii) interest expense, (iii)
amounts attributable to the depreciation and amortization of assets, (iv)
extraordinary or unusual cash charges that are non-recurring, (v) all
non-cash charges, (vi) with respect to Consolidated EBITDA for the Parent,
amounts attributable to restructuring costs, (vii) settlement payments
arising from the Parent’s litigation settlement with Avaya Inc., and (viii)
costs and expenses incurred in connection with (A) the Transaction and (B)
any Permitted Acquisition; provided that, for purposes of this
clause (b)(viii)(B), the amount of costs and expenses relating to
any Permitted Acquisition that may be added back to Net Income pursuant to
clause (b)(viii) hereof shall not exceed an amount equal to 10% of
the purchase price for such Permitted Acquisition; minus (c) to the
extent (and only to the extent) included in determining Net Income, income
attributable to the cancellation of Indebtedness issued by an Obligor
(including as a result of a debt exchange).
SECTION 2.1.5. Section 1.1 of the Existing Credit Agreement is hereby amended by amending and
restating the definition of Eligible Assignee in its entirety to read as follows:
“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; (d) an Eligible Sponsor Assignee; or
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(e) any other Person (other than a natural Person, any Obligor, any
Affiliate of any Obligor (other than an Eligible Sponsor Assignee) or any
other Person taking direction from, or working in concert with, any Obligor
or any Affiliate of any Obligor (other than an Eligible Sponsor Assignee)).
SECTION 2.1.6. Section 1.1 of the Existing Credit Agreement is hereby further amended by
amending and restating the definition of Excess Cash Flow in its entirety to read as follows:
“Excess Cash Flow” means, for any Fiscal Year, the excess (if
any), of
(a) Consolidated EBITDA for such Fiscal Year;
over
(b)
the sum (for such Fiscal Year) of (i) Interest Expense actually paid in cash
by the Parent and its Subsidiaries, (ii) scheduled principal repayments, to the
extent actually made, of Loans pursuant to clause (b) of Section
3.1.1 and term loans pursuant to clause (c) of
Section 3.1.1 of the First Lien
Credit Agreement (in each case exclusive of repayments made from a refinancing of any
portion of such Indebtedness, or made otherwise pursuant to Section 3.1.1, or
made, directly or indirectly, in connection with a cancellation of Indebtedness of
any Obligor, including as a result of any exchange or cancellation of such
Indebtedness by such Obligor or any of its Affiliates), (iii) all income Taxes
actually paid in cash by the Parent and its Subsidiaries, (iv) Capital Expenditures
made in cash (exclusive of Capital Expenditures financed with the proceeds of
Indebtedness, equity issuances, casualty proceeds or other proceeds which are not
included in EBITDA), (v) without limiting clause (ii) above, other
voluntary prepayments of Indebtedness (exclusive of any prepayments of
revolving Indebtedness unless a corresponding reduction is made to
the commitments with respect thereto), (vi) permitted
Investments made during such
Fiscal Year, (vii) the cash portion of any consideration and related fees and
expenses actually paid in connection with a Permitted Acquisition; (viii) the
Consolidated Working Capital Adjustment for such Fiscal Year; and (ix) all cash
charges to the extent added back to Net Income pursuant to clauses (iv),
(vi) and (vii) of the definition of “Consolidated EBITDA” for
purposes of determining Consolidated EBITDA for such Fiscal Year.
SECTION 2.2 Amendments to Article XI. Article XI of the Existing Credit Agreement is
amended as follows:
SECTION 2.2.1 Clause (a) of Section 11.11 of the Existing Credit
Agreement is hereby amended by deleting the word “and” at the end of subclause
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(ii) thereof, by replacing the period (“.”) at the end of subclause (iii) with “; and”, and by
inserting a new subclause (iv) to read as follows:
“(iv) no assignment may be made hereunder to an Eligible Sponsor Assignee unless
such assignment complies with Section 11.21 hereof.”
SECTION 2.2.2 Section 11.11 of the Existing Credit Agreement is hereby amended by inserting a
new clause (h) immediately following clause (g) which shall read as follows:
(h) Any term or provision of this Agreement to the contrary notwithstanding, for
purposes of determining the Required Lenders in connection with any vote, consent or other
determination relating to any Loan Document which requires consent or other approval of
the Required Lenders, each Eligible Sponsor Assignee hereby irrevocably agrees that its
votes, consents or determinations shall be (and for all such purposes shall be deemed to
be) cast or made (or withheld) ratably in the same proportions (determined by reference to
percentages of the aggregate Total Exposure Amount) as the votes or determinations cast or
made (or withheld) by all other Lenders that are not Eligible Sponsor Assignees. For the
avoidance of doubt, the foregoing shall not apply to any vote, consent or other
determination described in clauses (a) through (g) of Section 11.1
and which requires either the consent of all Lenders or the consent of each affected
Lender.
SECTION 2.2.3 Article XI of the Existing Credit Agreement is further amended by inserting a
new Section 11.21 immediately following Section 11.20 which shall read as follows:
SECTION 11.21 Assignment to Eligible Sponsor Assignee. Any term or provision
of Section 11.11 to the contrary notwithstanding, no assignment may be made to an
Eligible Sponsor Assignee unless such assignment has been made in compliance with the
following terms and conditions:
(a)
The Eligible Sponsor Assignee shall provide each Lender with not less than 3 Business
Days irrevocable notice (such notice, the “Purchase Notice”) of its desire to purchase Loans
from the Lenders, which Purchase Notice shall state the purchase price the Eligible
Sponsor Assignee is willing to pay for such Loans (which purchase
price may be at a discount to
par) and the maximum aggregate principal amount of Loans the Eligible Sponsor Assignee is
willing to purchase and other terms and conditions (including with respect to information) of
such purchase.
(b)
To the extent that a Lender desires to sell all or part of its Loans to an Eligible
Sponsor Assignee, then such Lender shall provide a
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written notice to the applicable Eligible Sponsor Assignee (such response
being the “Purchase Acceptance Notice”) not less than 3 Business
Days prior to the purchase date set out in the related Purchase Notice. Any
Lender that does not send a Purchase Acceptance Notice within the above
timeframe will not participate in any related sale and any Lender that does
provide a Purchase Acceptance Notice within the above timeframe shall
proceed with the sale in accordance with the terms set out in the Purchase
Notice on a pro rata basis as described in (c) and (d) below.
(c)
Pursuant to any applicable Purchase Notice, the Eligible Sponsor
Assignee’s offer to purchase Loans shall be made on a pro rata basis to Lenders
on the same terms and conditions as set forth in such Purchase Notice.
(d)
In the event that any Lender declines to assign its Loans, in whole or
in part, to the Eligible Sponsor Assignee then, notwithstanding clause (c)
above, to the extent (but only to the extent) any such Lender has so declined to
assign its Loans, the Eligible Sponsor Assignee may offer to purchase additional
Loans, on a pro rata basis and on the same terms (including with respect to
information) as set forth in the original Purchase Notice, from those Lenders
that have agreed to assign Loans to the Eligible Sponsor Assignee pursuant to
such Purchase Notice.
(e)
Any purchase by or assignment to an Eligible Sponsor Assignee of Loans
shall be effected pursuant to a Lender Assignment Agreement, which shall include
an express consent and acknowledgement by such Eligible Sponsor Assignee of its
obligations pursuant to clause (h) of Section 11.11.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
CONDITIONS TO EFFECTIVENESS
SECTION 3.1 Conditions to Effectiveness. This Amendment shall
become effective upon the prior or simultaneous satisfaction of each of the following conditions
in a manner reasonably satisfactory to the Administrative Agent (the date when all such conditions
are so satisfied being the “Fifth Amendment Effective Date”):
SECTION 3.1.1. Counterparts. The Administrative Agent shall have received
counterparts to this Amendment, executed by the Borrower and the Required Lenders.
SECTION 3.1.2. Certificate of Authorized Officer. The Borrower shall have delivered a
certificate of Authorized Officers, solely in their capacity as Authorized Officers of the
Borrower, certifying that, both immediately before and after giving effect to this Amendment on
the Fifth Amendment Effective Date, the statements set forth in Article IV hereof are true and
correct.
SECTION 3.1.3. First Lien Credit Agreement. The Borrower shall have
delivered to the First Lien Agent a letter, substantially in the form of Annex II
hereto, pursuant
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to which the Borrower shall have notified the First Lien Agent of the substance of this Amendment
and shall irrevocably offer, for purposes of the First Lien Credit Agreement, to calculate
“Consolidated EBITDA” and “Excess Cash Flow”, as defined in the First Lien Credit Agreement,
consistent with the manner in which such terms shall be calculated under the Second Lien Credit
Agreement, after giving effect to the modifications made pursuant to Section 2.1.4 and Section
2.1.5 hereof.
SECTION 3.1.4. Obligor Acknowledgment and Consent. The Parent and each Obligor (other
than the Borrower and the Parent) shall execute and deliver an Acknowledgment and Consent in
substantially the form of Annex I hereto.
SECTION 3.1.5. Legal Matters. All legal matters incident to this Amendment shall be
satisfactory to the Administrative Agent and its counsel.
SECTION 3.2 Payment of Expenses. The Borrower shall have paid all
reasonable fees, costs and expenses of the Agent in connection with the preparation, execution and
delivery of this Amendment and the administration of the Credit Agreement, including without
limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Amendment, the Borrower represents and warrants to
the Lenders and the Administrative Agent as set forth below:
SECTION 4.1 Representations and Warranties, No Event of Default.
The representations and warranties contained herein, in Article VI of the Credit Agreement and in
each other Loan Document, including any certificate or other writing delivered by or on behalf of
any Obligor to any Secured Party in connection with this Amendment are true and correct in all
material respects both immediately before and after giving effect to this Amendment (except that
any representation and warranty expressly made as of a specific date shall be true and correct only
as of such specific date), and both immediately before and after giving effect to this Amendment no
Default or Event of Default shall have occurred, assuming effectiveness of this Amendment, and be
continuing or would result from this Amendment becoming effective in accordance with its terms.
SECTION 4.2 Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by each Obligor of this Amendment, the Credit Agreement and
each other Loan Document executed or to be executed by it are in each case within such Person’s
powers, have been duly authorized by all necessary action, and do not (a) contravene any (i)
Obligor’s Organic Documents, (ii) court decree or order binding on or affecting any Obligor or
(iii) law or governmental regulation binding on or affecting any Obligor; or (b) result in (i) or
require the creation or imposition of any Lien on any Obligor’s properties (except as permitted by
the Credit Agreement) or (ii) a default under any material contractual restriction binding on or
affecting any Obligor.
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SECTION 4.3 Government Approval, Regulation, etc. No authorization
or approval or other action by, and no notice to or filing with, any Governmental Authority or
other Person (other than those that have been, or on the Fifth Amendment Effective Date will be,
duly obtained or made and which are, or on the Fifth Amendment Effective Date will be, in full
force and effect) is required for the consummation of this Amendment or the Credit Agreement or the
due execution, delivery or performance by any Obligor of this Amendment, the Credit Agreement or
any other Loan Document to which it is a party.
SECTION 4.4 Validity, etc. This Amendment, the Credit Agreement
and each other Loan Document to which any Obligor is a party constitutes the legal, valid and
binding obligations of such Obligor, enforceable against such Obligor in accordance with their
respective terms except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by
principles of equity.
ARTICLE V
CONTINUED EFFECTIVENESS OF CREDIT AGREEMENT
CONTINUED EFFECTIVENESS OF CREDIT AGREEMENT
SECTION 5.1 Continued Effectiveness of Credit Agreement. The
Borrower hereby (a) confirms and agrees that each Loan Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects
except that on and after the Fifth Amendment Effective Date all references in any such Loan
Document to the “Credit Agreement,” “thereto,” “thereof,” “thereunder” or words of like import
referring to the Credit Agreement shall mean the Credit Agreement as amended by this Amendment, and
(b) confirms and agrees that to the extent that any such Loan Document purports to assign or pledge
to the Collateral Agent, or grant to the Collateral Agent, a Lien on any collateral as security for
the Obligations of the Borrower from time to time existing in respect of the Credit Agreement and
the Loan Documents, such pledge, assignment and/or grant of a Lien is ratified and confirmed in all
respects.
ARTICLE VI
MISCELLANEOUS
MISCELLANEOUS
SECTION 6.1 Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, each of which when executed and delivered shall be an
original and all of which shall constitute together one and the same agreement. Delivery of an
executed counterpart of a signature page to this Amendment by facsimile (or other electronic
transmission) shall be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 6.2 Cross-References. References in this Amendment to any Article or Section
are, unless otherwise specified, to such Article or Section of this Amendment.
SECTION 6.3 Governing Law. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
SECTION 6.4 Loan Document Pursuant to Credit Agreement. This Amendment constitutes a
“Loan Document” under the Credit Agreement. Accordingly, it shall
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be an Event of Default under the Credit Agreement if (a) any representation or warranty made by an
Obligor under or in connection with this Amendment shall have been untrue, false or misleading in
any material respect when made, or (b) an Obligor shall fail to perform or observe any term,
covenant or agreement contained in this Amendment.
SECTION 6.5 No Waiver. This Amendment is not, and shall not be
deemed to be, a waiver of or consent to any Event of Default, event with which the giving of notice
or lapse of time or both may result in an Event of Default, or other non-compliance now existing or
hereafter arising under the Credit Agreement and the other Loan Documents.
SECTION 6.6 Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns.
SECTION 6.7 WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH PERSON IN CONNECTION THEREWITH. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE OTHER PARTIES ENTERING INTO THIS AMENDMENT. EACH
PARTY HERETO 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 THE FOREGOING WAIVER.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written.
| MITEL NETWORKS CORPORATION | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||||
| Name: | ||||||
| Title: | General Counsel and Corporate Secretary | |||||
| MITEL US HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||||
| Name: | ||||||
| Title: | Secretary | |||||
[SIGNATURE PAGE TO FIFTH AMENDMENT]
| XXXXXX XXXXXXX SENIOR
FUNDING, INC., as Administrative Agent and as a Lender |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | Vice President | |||
[SIGNATURE PAGE TO FIFTH AMENDMENT]
| Ziff Brother Asset Management LP | ||||||
| [NAME OF LENDER] | ||||||
| By: | /s/ Xxxxx Xxxx
|
|||||
| Name: | Xxxxx Xxxx | |||||
| Title: | Vice President, Xxxxxx Holdings Inc, its General Partner |
|||||
[SIGNATURE PAGE TO FIFTH AMENDMENT]
