EXHIBIT 10.3
VERITAS PARTICIPATION AGREEMENT
FIRST AMENDMENT
This FIRST AMENDMENT (this "Agreement") dated as of September 27, 2001,
is by and among VERITAS SOFTWARE GLOBAL CORPORATION, a Delaware corporation, as
lessee (the "Lessee", or the "Construction Agent"), the various parties thereto
from time to time, as guarantors (the "Guarantors"), XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION (formerly known as First Security Bank, National
Association), a national banking association, not individually, but solely as
the Owner Trustee under the VS Trust 2000-2 (the "Owner Trustee", the "Borrower"
or the "Lessor"), the various banks and other lending institutions which are
parties thereto from time to time as holders of certificates issued with respect
to the VS Trust 2000-2 and lenders (individually, a "Holder" or a "Lender" and
collectively "Holders" or "Lenders"), ABN AMRO BANK N.V., as agent (the "Agent")
for the Lenders and the Holders as of the date hereof signatory hereto.
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned such term in Appendix A to the Participation Agreement (as defined
below).
RECITALS:
A. The Lessee, the Guarantors, the Lessor, the Lenders, the Holders and
the Agent are parties to that certain Participation Agreement, dated as of July
28, 2000 (as amended, restated, supplemented or otherwise modified from time to
time, the "Participation Agreement"); and
B. The parties desire to amend certain provisions of the Participation
Agreement on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. Amendments. The Participation Agreement is hereby amended as follows:
(a) Clauses (i), (ii), (iii), (iv), (v) and (vi) of Section
8.3A(a) of the Participation Agreement are hereby amended by deleting
said clauses in their entirety and replacing them with the following:
(a) Information Covenants. The Credit Parties will furnish, or
cause to be furnished, to the Agent on behalf of the Lenders:
(i) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal
year of the Lessee, a consolidated balance sheet and income
statement of the Credit Parties and their Consolidated
Subsidiaries as of the end of such fiscal year, together with
related consolidated statements of operations and retained
earnings and of cash flows for such fiscal year, in each case
setting forth in comparative form consolidated figures for the
preceding fiscal year, all such financial
information described above to be in reasonable form and detail
and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent
and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except
for changes with which such accountants concur) and shall not be
limited as to the scope of the audit or qualified as to the
status of the Credit Parties and their Consolidated Subsidiaries
as a going concern or any other material qualifications or
exceptions.
(ii) Quarterly Financial Statements. As soon as
available, and in any event within 45 days after the close of
each fiscal quarter of the Credit Party (other than the fourth
fiscal quarter, in which case 90 days after the end thereof) a
consolidated balance sheet and income statement of the Credit
Parties and their Consolidated Subsidiaries as of the end of
such fiscal quarter, together with related consolidated
statements of operations and retained earnings and of cash flows
for such fiscal quarter, in each case setting forth in
comparative form consolidated figures for the corresponding
period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail
and reasonably acceptable to the Agent, and accompanied by a
certificate of the chief financial officer of the Lessee to the
effect that such quarterly financial statements fairly present
in all material respects the financial condition of the Credit
Parties and their Consolidated Subsidiaries and have been
prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments.
(iii) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 8.3A(a)(i) and
8.3A(a)(ii) above, a certificate of the chief financial officer
of the Lessee substantially in the form of Schedule
8.3A(a)(iii), (i) demonstrating compliance with the financial
covenants contained in Section 8.3(h) by calculation thereof as
of the end of each such fiscal period and (ii) stating that no
Default or Event of Default exists, or if any Default or Event
of Default does exist, specifying the nature and extent thereof
and what action the Credit Parties propose to take with respect
thereto.
(iv) Intentionally Omitted.
(v) Accountant's Certificate. Within 120 days after the
close of each fiscal year of the Lessee, a certificate of the
accountants conducting the annual audit specifying the nature
and extent of any Default or Event of Default that they have
become
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aware of in their course of review (and, if the accountants are
not aware of any Default or Event of Default, no such
certificate is required).
(vi) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to the Parent or any of its Consolidated
Subsidiaries in connection with any special audit of the books
of such Person.
(b) Clause (x) of Section 8.3A(a) of the Participation Agreement
is hereby amended by deleting said clause in its entirety and replacing
it with the following:
(x) Other Information. With reasonable promptness upon
any such request, such other instruments, agreements,
certificates, opinions, statements, documents and other
information regarding the business, operations, properties or
financial condition of a Credit Party and any of its
Consolidated Subsidiaries as the Agent or the Majority Secured
Parties from time to time may reasonably request.
(c) Section 8.3A(h) of the Participation Agreement is hereby
amended by deleting said Section in its entirety and replacing it with
the following:
(h) Financial Covenants.
(i) Leverage Ratio. The Leverage Ratio, as of the last
day of each fiscal quarter of the Lessee, shall be less than or
equal to:
(A) From and including September 30, 2001 to and
including June 30, 2002, 2.75 to 1.0;
(B) From July 1, 2002 to and including September
30, 2003, 2.50 to 1.0; and
(C) From October 1, 2003 and thereafter, 2.0 to
1.0.
(ii) EBITDA. EBITDA, for each period set forth below, as
shown on the financial statements of Credit Parties and their
Consolidated Subsidiaries delivered pursuant to Section
8.3A(a)(i), shall not be less than (i) $400,000,000 for the
twelve month period ending September 30, 2001, (ii) $500,000,000
for each twelve month period ending December 31, 2001 and Xxxxx
00, 0000, (xxx) $525,000,000 for each twelve month period ending
June 30, 2002 and September 30, 2002, and (iv) $600,000,000 for
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each twelve month period ending as of December 31, 2002 and each
March 31, June 30, September 30 and December 31 thereafter.
(iii) Quick Ratio. The Quick Ratio, as of the last day
of each fiscal quarter of the Lessee, shall be greater than or
equal to 1.20 to 1.0.
(d) Section 8.3A of the Participation Agreement is hereby
amended by inserting a new Section 8.3A(i) as follows:
(i) Annual Meeting. No later than ninety (90) days after
the end of each fiscal year of Lessee, Lessee will hold an
annual meeting with Agent, Lessor, Lenders and Holders during
which Lessee will review with Agent, Lessor, Lenders and Holders
the business plans and financial projections of the Lessee for
the then-current fiscal year.
(e) Clauses (iii) and (iv) of Section 8.3B(a) of the
Participation Agreement are hereby amended by deleting said clauses in
their entirety and replacing them with the following:
(iii) purchase money Indebtedness (including obligations
in respect of Capital Leases) hereafter incurred by a Credit
Party or any of its Consolidated Subsidiaries to finance the
purchase of fixed assets provided that (i) the total of all such
Indebtedness for all such Persons taken together incurred in any
fiscal year of Lessee shall not exceed $80,000,000, (ii) the
total of all such Indebtedness for all such Persons taken
together (including any such Indebtedness referred to in Section
8.3B(a)(ii) above) shall not exceed $160,000,000 at any one time
outstanding; (iii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iv) no
such Indebtedness shall be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time
of such refinancing;
(iv) other unsecured Indebtedness (exclusive of
Indebtedness permitted under subsection (v) and subsection (vi)
of this Section 8.3B(a)) of the Credit Parties and their
Consolidated Subsidiaries in an aggregate amount not to exceed
the sum of $725,000,000 plus twenty percent (20.0%) of Tangible
Net Worth as of the last day of the immediately preceding fiscal
quarter, on terms and conditions satisfactory in form and
substance to the Majority Secured Parties; provided, however,
the amount of Indebtedness permitted under this subsection (iv)
shall be reduced by an amount equal to the sum of (a) the
aggregate outstanding Loans, plus (b) the aggregate outstanding
Holder Advances, plus
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(c) accrued and unpaid Interest or Holder Yield due and owing on
such Loans or Holder Advances, plus (d) any other amounts due
and owing by the Lessee or the Construction Agent to any Person
under any Operative Agreement, plus (e) any Indebtedness
outstanding and all other amounts due and owing by any Credit
Party under the Minnesota Lease Financing and the Mountain View
Lease Financing, plus (f) any Indebtedness outstanding and all
other amounts due and owing by any Credit Party under the
Revolving Credit Agreement;
(f) Section 8.3B(a) of the Participation Agreement is hereby
further amended by (i) deleting the word "and" at the end of clause
(vii) of said Section; (ii) renumbering clauses (vii) and (viii) as
clauses (ix) and (x), respectively; and inserting new clauses (vii) and
(viii) as follows:
(vii) Indebtedness of a Credit Party and its
Consolidated Subsidiaries arising from the endorsement
of instruments for collection in the ordinary course of
business (other than any such Indebtedness arising under
any asset securitization program);
(viii) Indebtedness of a Credit Party and its
Consolidated Subsidiaries with respect to surety,
appeal, indemnity, performance or other similar bonds in
the ordinary course of business in an aggregate
outstanding principal amount not to exceed $50,000,000
at any time; and
(g) Section 8.3B(m) of the Participation Agreement is hereby
amended by deleting said Section in its entirety and replacing it with
the following:
(m) Sale Leasebacks. No Credit Party will, nor will it
permit any of its Consolidated Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an Operating
Lease or a Capitalized Lease, of any property (whether real,
personal or mixed), whether now owned or hereafter acquired, (a)
which such Credit Party or any of its Consolidated Subsidiaries
has sold or transferred or is to sell or transfer to a Person
which is not a Credit Party or any of its Consolidated
Subsidiaries or (b) which a Credit Party or any of its
Consolidated Subsidiaries intends to use for substantially the
same purpose as any other Property which has been sold or is to
be sold or transferred by such Credit Party or its Consolidated
Subsidiaries to another Person which is not a Credit Party or
any of its Consolidated Subsidiaries in connection with such
lease (any such transaction being a "Sale-Leaseback
Transaction"); provided, however that the Credit Parties and
their
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Consolidated Subsidiaries may enter into a Sale-Leaseback
Transaction to the extent that the aggregate amount of the sales
proceeds of the properties subject to all Sale-Leaseback
Transactions does not exceed an amount equal to the sum of
$100,000,000 plus ten percent (10.0%) of Tangible Net Worth as
of the last day of the fiscal quarter immediately preceding such
Sale-Leaseback Transaction.
(h) Appendix A to the Participation Agreement is hereby amended
by deleting clause (vii) of the defined term "Permitted Investments" in
its entirety and replacing it with the following:
(vii) Investments in any other Person, provided that the
aggregate outstanding amount of all such Investments shall not
exceed an amount equal to the sum of $175,000,000 plus ten
percent (10.0%) of Tangible Net Worth as of the last day of the
immediately preceding fiscal quarter; and
(i) Appendix A to the Participation Agreement is hereby further
amended by (i) deleting the word "and" at the end of clause (j) of the
defined term "Permitted Liens"; (ii) renumbering clause (k) of such
definition as clause (l); and (iii) inserting a new clause (k) to such
definition as follows:
(l) additional Liens provided that the Indebtedness
secured thereby is permitted under Section 8.3B(a) to the
Participation Agreement and the aggregate principal amount of
the Indebtedness secured thereby does not exceed an amount equal
to the sum of $100,000,000 plus ten percent (10.0%) of Tangible
Net Worth as of the last day of the immediately preceding fiscal
quarter; and
(j) Appendix A to the Participation Agreement is hereby further
amended by deleting the defined term "Revolving Credit Agreement" in its
entirety and replacing it with the following:
"Revolving Credit Agreement" means the Amended and
Restated Revolving Credit Agreement dated as of September 27,
2001 among the Lessee, the various parties thereto from time to
time as guarantors, the Administrative Agent for the Lenders,
the "Documentation Agent" thereunder and the "Syndication Agent"
thereunder, together with any Exhibits and Schedules thereto.
(k) Appendix A to the Participation Agreement is hereby further
amended by inserting the new defined term "Tangible Net Worth" as
follows:
"Tangible Net Worth" means, as of any date, shareholders' equity
or net worth of the Credit Parties and their Consolidated Subsidiaries
on a consolidated basis minus goodwill, patents, trade names,
trademarks, copyrights, franchises, organizational expense, deferred
expenses and other assets in each case as are shown as "intangible
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assets" on a balance sheet of the Credit Parties and their Consolidated
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP.
2. Representation and Warranties. Each Credit Party hereby represents
and warrants to the Agent, the Lessor, the Lenders and the Holders that the
following are true and correct on the date of this Agreement and that, after
giving effect to the amendments set forth in Section 1 above, the following will
be true and correct on the Effective Date (as defined below);
(a) The representations and warranties of the Credit Parties set
forth in Section 6 of the Participation Agreement and in the other
Operative Documents are true and correct in all material respects as if
made on such date (except for representations and warranties expressly
made as of a specified date, which shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) Each of the Operative Documents to which any Credit Party is
a party is in full force and effect as to such Credit Party.
3. Effective Date. The amendments effected by Section 1 above shall
become effective as of the date of this Agreement (the "Effective Date"),
subject to (a) receipt by McGuireWoods LLP ("MW"), counsel to the Agent, of a
copy of this Agreement duly executed by the Lessee, each Guarantor, the Majority
Secured Parties, the Lessor and the Agent, and (b) receipt by the Agent, on
behalf of each individual Lender and Holder that executes this Amendment and
delivers an executed copy of this Amendment to MW on or prior to the Effective
Date, of a non-refundable amendment fee payable to each such Person in an amount
equal to 0.10% of each such Person's respective Commitment or Holder Commitment,
as applicable.
4. Miscellaneous.
(a) Except as specifically waived and amended above, the
Participation Agreement and each of the Appendices, Schedules and
Exhibits thereto shall remain in full force and effect and the
Participation Agreement is hereby ratified and confirmed in all
respects.
(b) Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(c) This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute
one agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
5. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its proper and duly authorized officer as of the
date first written above.
VERITAS SOFTWARE GLOBAL CORPORATION,
as Lessee
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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Title: Treasurer
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VERITAS SOFTWARE CORPORATION,
as a Guarantor
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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Title: Treasurer
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VERITAS OPERATING CORPORATION,
as a Guarantor
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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Title: Treasurer
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VERITAS SOFTWARE TECHNOLOGY CORPORATION,
as a Guarantor
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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Title: Treasurer
--------------------------------------------
VERITAS SOFTWARE TECHNOLOGY HOLDING CORPORATION,
as a Guarantor
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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Title: Treasurer
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ABN AMRO BANK N.V.,
as Administrative Agent and as a Lender
By: /s/ XXXXX XXXXXXX-XXXXXXX
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Name: Xxxxx Xxxxxxx-Xxxxxxx
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Title: Group Vice President
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By: /s/ XXXXXXXXX XXXXX
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Name: Xxxxxxxxx Xxxxx
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Title: Assistant Vice President
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CREDIT SUISSE FIRST BOSTON,
as a Lender and as Documentation Agent
By: /s/ XXXXXX XXXX
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Name: Xxxxxx Xxxx
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Title: Director
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By: /s/ XXXX XXXXX
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Name: Xxxx Xxxxx
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Title: Asst. Vice President
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CREDIT LYONNAIS LOS ANGELES BRANCH,
as a Lender and as Syndication Agent
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: Senior Vice President & Manager
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THE FUJI BANK, LTD., as a Lender
By: /s/ XXXXXXXX XXXXXX
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Name: Xxxxxxxx Xxxxxx
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Title: Senior Vice President and Group Head
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AIB INTERNATIONAL FINANCE, as a Lender
By: /s/ XXXXX X'XXXXX
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Name: Xxxxx X'Xxxxx
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Title: Director
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DEUTSCHE BANK AG NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH, as a Lender
By: /s/ XXXXXXXXX X. XXXX
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Name: Xxxxxxxxx X. Xxxx
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Title: Vice President
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By: /s/ XXXXXXXXX XXXXX
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Name: Xxxxxxxxx Xxxxx
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Title: Vice President
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SUMITOMO MITSUI BANKING CORPORATION
f/k/a the Sumitomo Bank, Limited, as a Lender
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
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Title: Vice President and Manager
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COMERICA BANK - CALIFORNIA, as a Lender
By: /s/ XXXXXX X. WAYS
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Name: Xxxxxx X. Ways
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Title: Assistant Vice President
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FLEET NATIONAL BANK, as a Lender
By: /s/ XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
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Title: Vice President
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XXXXX FARGO BANK N.A., as a Lender
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By:
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Name:
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Title:
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FBTC LEASING CORP., as a Lender
By: /s/ XXXXXX XXXX
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Name: Xxxxxx Xxxx
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Title: Vice President
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KEYBANK NATIONAL ASSOCIATION, as a Lender
By: /s/ XXXXXX XXXXXXXX
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Name: Xxxxxx Xxxxxxxx
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Title: Vice President
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BNP PARIBAS, as a Lender
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. XxXxxx
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Title: Director
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By: /s/ H. HIRO EBIHARA
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Name: H. Hiro Ebihara
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Title: Associate
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THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as a Lender
By: /s/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
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Title: Senior Vice President & Senior Manager
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XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
(formerly known as First Security Bank, National
Association), not individually, bus solely as the
Owner Trustee under the VS Trust 2000-2
By:
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Name:
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Title:
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ABN AMRO LEASING, INC., as a Holder
By: /s/ XXXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxxx X. XxXxxxxxx
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Title: Vice President
CREDIT SUISSE LEASING 92A, L.P.,
as a Holder
By: /s/ XXXXXXX O'DAY
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Name: Xxxxxxx O'Day
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Title: Director
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By: /s/ XXXX XXXXXXXXXX-XXXXX
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Name: Xxxx Xxxxxxxxxx-Xxxxx
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Title: Director
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CREDIT LYONNAIS LEASING CORPORATION, as a Holder
By: /s/ X.X. XXXXXXXX
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Name: X.X. Xxxxxxxx
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Title: President
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FBTC LEASING CORP., as a Holder
By: /s/ XXXXXX XXXX
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Name: Xxxxxx Xxxx
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Title: Vice President
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