AMENDMENT, WAIVER AND CONSENT AGREEMENT NO. 7 February 19, 2010
Exhibit 10.2
AMENDMENT, WAIVER AND CONSENT AGREEMENT NO. 7
February 19, 2010
AMENDMENT, WAIVER AND CONSENT AGREEMENT NO. 7 (this “Amendment”) dated as of February 19,
2010, under that certain Amended and Restated Credit Agreement, dated as of September 12, 2007 (as amended, supplemented or otherwise modified from time
to time, the “Credit Agreement”; capitalized terms used herein and not defined herein shall have
the meaning set forth in the Credit Agreement), among NaviSite, Inc., a Delaware corporation (the
“Borrower”), the Subsidiary Guarantors, the Lenders, CIBC World Markets Corp., as sole lead
arranger (in such capacity, “Sole Lead Arranger”), as documentation agent (in such capacity,
“Documentation Agent”), and as bookrunner (in such capacity, “Bookrunner”), CIT Lending Services
Corporation, as syndication agent (in such capacity, “Syndication Agent”), and Canadian Imperial
Bank of Commerce, acting through its New York agency, as issuing bank (in such capacity, “Issuing
Bank”) and as administrative agent (in such capacity, “Administrative Agent”) for the Lenders and
as collateral agent (in such capacity, “Collateral Agent”) for the Secured Parties and the Issuing
Bank.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to extend credit to
Borrower pursuant to the terms and conditions set forth therein.
WHEREAS, Borrower, netASPx, LLC (“netASPx”), netASPx Acquisition, Inc. (“netASPx
Acquisition”), Network Computing Services, Inc. (“Network”) and NCS Holding Company
(“NCS”) will enter into that certain Asset Purchase Agreement with Velocity Technology Solutions II,
Inc. (“Buyer”) (the “netASPx Asset Purchase Agreement”) providing for the sale of all of the assets
owned by Borrower, netASPx, netASPx Acquisition, Network and NCS used or held for use by Borrower,
netASPx, netASPx Acquisition, Network and NCS in connection with owning and operating the netASPx
business, which is composed solely of the Xxxxxx and Kronos application management and consulting
business, for aggregate gross cash proceeds of $56.0 million, subject to a working capital
adjustment and other adjustments set forth in the netASPx Asset Purchase Agreement (the “netASPx Sale”);
WHEREAS, Section 6.06 of the Credit Agreement permits Asset Sales provided that the
aggregate consideration in respect of all Asset Sales shall not exceed $5.0 million;
WHEREAS, the aggregate consideration to be received in connection with the Sale is in excess
of the basket allowed under Section 6.06(b) of the Credit Agreement for Assets Sales that
remains unused and available for Asset Sales;
WHEREAS, Borrower has requested that the Administrative Agent and the Lenders agree, subject
to the terms and conditions of this Amendment, to waive the provisions set forth in Section
6.06 with respect to the Sale;
WHEREAS, the Asset Purchase Agreement requires that the Borrower and netASPx use commercially
reasonable efforts to obtain all consents required in connection with the netASPx Sale;
WHEREAS, the Borrower and netASPx has determined that they will not be able to obtain the
necessary consents required from third parties with respect to certain of the assets subject to the
netASPx Asset Purchase Agreement (“Consent Assets”) on or prior to the consummation of the netASPx
Sale;
WHEREAS, on the date of consummation of the netASPx Sale, the Buyer will pay in full for all
of the assets contemplated under the netASPx Sale including the Consent Assets which will be
released and sold free and clear of the Liens created by the Security Documents pursuant to
Section 6.06 of the Credit Agreement;
WHEREAS, the Buyer will require Borrower and netASPx to obtain the necessary consents for the
non-customer Consent Assets within 150 days of the date of consummation (“netASPx Post Closing Period”);
WHEREAS, the Buyer has requested that the Borrower and netASPx grant first priority liens on
the Consent Assets in favor of the Buyer during the netASPx Post-Closing Period (“netASPx Consent Liens”);
WHEREAS, Section 6.02 of the Credit Agreement prohibits the Loan Parties from
creating, incurring, assuming or permitting to exist, directly or indirectly, any Lien on any
property owned as of the Original Closing Date or thereafter acquired by it or on any income or
revenues or rights in respect of any thereof;
WHEREAS, Borrower has requested that the Administrative Agent and the Lenders agree, subject
to the terms and conditions of this Amendment, to waive the provisions set forth in Section
6.02 with respect to the netASPx Consent Liens;
WHEREAS, Borrower has entered into a Master Services Agreement dated January 28, 2010 between
a new customer and the Borrower to provide certain services including managed hosting services, IT
consulting services, professional services and other services (the “New Customer Agreement”);
WHEREAS, Borrower has requested that the Capital Expenditures associated with (a) the assets
sold pursuant to the netASPx Sale and the ClearBlue Vienna/San Francisco Sale (as defined below) be
excluded from the calculation of the Consolidated Fixed Charge Coverage Ratio pursuant to Section
6.10(b) and the Limitation on Capital Expenditures pursuant to Section 6.10(c) for the Test Periods
ending April 30, 2010, July 31, 2010, October 31, 2010 and January 31, 2011 and (b) the capital
equipment in connection with the New Customer Agreement be excluded from the calculation of the
Consolidated Fixed Charge Coverage Ratio pursuant to Section 6.10(b) for the Test Period ending
April 30, 2010;
WHEREAS, pursuant to Section 10.02(b) of the Credit Agreement, the consent of the
Required Lenders is necessary to effect this Amendment;
WHEREAS, the Lenders party hereto (the “Consenting Lenders”) constitute the Required Lenders
under the Credit Agreement;
WHEREAS, the Administrative Agent and Consenting Lenders are willing to so agree and to
provide such waiver pursuant to Section 10.02(b) of the Credit Agreement, subject to the
conditions set forth herein; and
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the parties hereto hereby agree as follows:
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ARTICLE ONE
CONSENT
1.01 Consent. Subject to the conditions precedent set forth in Article
Five of this Amendment, the Consenting Lenders hereby consent to the execution by the
Administrative Agent of this Amendment.
ARTICLE TWO
LIMITED WAIVER
2.01 The Consenting Lenders hereby waive the provisions of Section 6.06 of
the Credit Agreement with respect to the netASPx Sale. The consideration to be received in
connection with the netASPx Sale shall be excluded in determining the availability of the
$5,000,000 maximum aggregate consideration basket as set forth in Section 6.06(b).
2.02 The Consenting Lenders hereby waive the provisions of Section 6.02 of
the Credit Agreement with respect to any netASPx Consent Liens.
ARTICLE THREE
AMENDMENTS TO CREDIT AGREEMENT
3.01 Amendments to Credit Agreement. The Credit Agreement is hereby amended
as follows (subject to the conditions precedent set forth in Article Five of this
Amendment):
(a) The definition of “Consolidated Fixed Charges” in Section 1.01 of the
Credit Agreement is amended by (i) adding the following at the end of clause (b):
“provided that (a) in connection with the netASPx Sale (provided that the netASPx
Sale is consummated prior to April 30, 2010), the following amounts shall be
excluded from Capital Expenditures for the Test Period ending: April 30, 2010,
$1,229,787, July 31, 2010, $878,225, October 31, 2010, $653,209, and January 31,
2011, $336,516, (b) in connection with the ClearBlue Vienna/San Francisco Sale
(provided that the ClearBlue Vienna/San Francisco Sale is consummated prior to
April 30, 2010), the following amounts shall be excluded from Capital Expenditures
for the Test Period ending: April 30, 2010, $445,297, July 31, 2010, $345,566,
October 31, 2010, $363,615, and January 31, 2011, $59,952 and (c) in connection
with the New Customer Agreement, $3,300,000 shall be excluded from Capital
Expenditures for the Test Period ending April 30, 2010;”
(b) The following new definitions shall be added to Section 1.01 of the
Credit Agreement in alphabetical order:
“ClearBlue Vienna/San Francisco Sale” shall mean the sale of all of the assets
owned by Borrower, Clearblue Technologies/Vienna, Inc. (“CBT Vienna”) and Clearblue
Technologies/San Francisco, Inc. (“CBT SF”) pursuant to that certain Asset Purchase
Agreement between Borrower, CBT Vienna, CBT SF, and the buyer used or held for use
by Borrower, CBT Vienna and CBT SF for providing colocation services out of those
data centers located at (a) 000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Xxxx Xx.
000
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and (b) 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000, Suites 200 and 201 and roof
space for aggregate gross cash proceeds of $5.3 million.
“New Customer Agreement” shall mean the Master Services Agreement dated January 28,
2010 between a new customer and the Borrower to provide certain services including
managed hosting services, IT consulting services, professional services and other
services.
“netASPx Sale” shall mean the sale of all of the assets owned by Borrower, netASPx,
LLC (“netASPx”), netASPx Acquisition, Inc. (“netASPx Acquisition”), Network
Computing Services, Inc. (“Network”) and NCS Holding Company (“NCS”) used or held
for use by Borrower, netASPx, netASPx Acquisition, Network and NCS in connection
with owning and operating the netASPx business, which is composed solely of the
Xxxxxx and Kronos application management and consulting business, for aggregate
gross cash proceeds of $56.0 million, subject to a working capital adjustment or
other adjustments, pursuant to that certain Asset Purchase Agreement with Velocity
Technology Solutions II, Inc.”
(c) Section 6.10(c) is amended by inserting the following at the end of the
proviso as a new sentence:
“Notwithstanding anything to the foregoing, the following amounts shall be excluded
from Capital Expenditures for the Fiscal Year ending July 31, 2010: (a) in
connection with the netASPx Sale (provided that the netASPx Sale is consummated
prior to April 30, 2010), $878,225 and (b) in connection with the ClearBlue
Vienna/San Francisco Sale (provided that the ClearBlue Vienna/San Francisco Sale is
consummated prior to April 30, 2010), $345,566.”
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties. The representations and warranties of
the Loan Parties contained in Article III of the Credit Agreement are true and correct in all
material respects on and as of the date hereof as though made on and as of this date (other than
representations and warranties which by their terms relate to an earlier date).
4.02 No Default or Event of Default. Both immediately before and after
giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
4.03 Authorization; Enforceability. Each Loan Party has the power and
authority to execute, deliver and perform its obligations under this Amendment and has taken all
necessary corporate or other action to authorize the execution, delivery and performance by it of
this Amendment.
4.04 Execution. This Amendment has been duly executed and delivered by each
Loan Party and constitutes a legal, valid and binding obligation of such person, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
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4.05 No Conflicts. The execution, delivery and performance of this Amendment
by each Loan Party (i) will not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, (ii) will not violate any Requirement of Law
applicable to such Loan Party and (iii) will not violate or result in a default under any indenture
or other material agreement or instrument binding upon such Loan Party or its assets, or give rise
to a right thereunder to require any payment to be made by such Loan Party or give rise to a right
of, or result in, termination, cancellation or acceleration of any material obligation thereunder.
ARTICLE FIVE
CONDITIONS PRECEDENT TO EFFECTIVENESS
The Amendment shall become effective on the date (the “Amendment No. 7 Effective Date”) when
the following conditions precedent shall have been satisfied:
5.01 Execution by Loan Parties. Borrower shall have delivered to the
Administrative Agent (or its counsel) a copy of this Amendment manually executed and delivered by
each Loan Party (which may be transmitted by facsimile or by email).
5.02 Execution by Consenting Lenders and Agents. The Administrative Agent
(or its counsel) shall have received from each Consenting Lender and each of the other parties
hereto a counterpart of this Amendment executed on behalf of such party (which may be transmitted
by facsimile or by email).
5.03 Consent Fee. As consideration for the Administrative Agent’s and
Consenting Lenders’ execution and delivery of this Amendment, Borrower shall pay to the
Administrative Agent in immediately available funds on or before the Amendment No. 7 Effective
Date, for the ratable benefit of the Consenting Lenders, a consent fee equal to 0.25% of the
aggregate principal amount of the Term Loans and Revolving Commitments of such Consenting Lender
after giving pro forma effect to the mandatory prepayment of Term Loans pursuant to Section 7.03
below (“Consent Fee”). This Consent Fee shall be deemed fully earned upon the execution and
delivery of this Amendment by all parties hereto, and shall be nonrefundable upon receipt by the
Administrative Agent.
ARTICLE SIX
AFFIRMATION AND ACKNOWLEDGMENT
6.01 Acknowledgment and Affirmation. Each Loan Party hereby (i) expressly
acknowledges and affirms the terms of the Credit Agreement and the other Loan Documents, (ii)
ratifies and affirms after giving effect to this Amendment its obligations under the Loan Documents
(including guarantees and security agreements) executed by such Loan Party and (iii) after giving
effect to this Amendment, acknowledges, renews and extends its continued liability under all such
Loan Documents and agrees such Loan Documents remain in full force and effect.
6.02 Enforceability. Each Loan Party further confirms that each Loan
Document to which it is a party is and shall continue to be in full force and effect and the same
are hereby ratified and confirmed in all respects.
6.03 Course of Dealing. Each Loan Party hereby acknowledges and agrees that
the acceptance by the Administrative Agent, each Lender and each other Agent of this Amendment
shall not
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be construed in any manner to establish any course of dealing on any Agent’s or Lender’s part,
including the providing of any notice or the requesting of any acknowledgment not otherwise
expressly provided for in any Loan Document with respect to any future amendment, waiver,
supplement or other modification to any Loan Document or any arrangement contemplated by any Loan
Document.
ARTICLE SEVEN
COVENANTS AND MISCELLANEOUS PROVISIONS
7.01 Asset Purchase Agreement. Prior to entering into the netASPx Asset
Purchase Agreement, the Borrower shall deliver a final execution copy of the netASPx Asset Purchase
Agreement (together with all exhibits and schedules thereto) to the Administrative Agent and the
Borrower shall not enter into the netASPx Asset Purchase Agreement unless the netASPx Asset
Purchase Agreement is reasonably satisfactory to the Administrative Agent.
7.02 Costs and Expenses. Borrower shall pay all reasonable, documented
out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Amendment and the documentation contemplated hereby, including the
reasonable fees and out-of-pocket expenses of Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel for the
Administrative Agent with respect thereto.
7.03 Mandatory Prepayment. Borrower acknowledges and agrees that, within 5
Business Days following the receipt of the Net Cash Proceeds from the netASPx Sale, Borrower shall
make pursuant to Section 2.10(c) of the Credit Agreement mandatory prepayments of the Term
Loans and in accordance with Section 2.10(h) and (i) of the Credit Agreement in an
amount equal to 100% of the Net Cash Proceeds from the netASPx Sale.
7.04 Meeting with Lenders; Financial Models. The Borrower shall (a) no later
than April 30, 2010, furnish to the Administrative Agent and each Lender a full financial model for
Borrower in form reasonably satisfactory to the Administrative Agent, but to include balance
sheets, statements of income and sources and uses of cash, for (i) each month of such fiscal year
prepared in detail and (ii) each fiscal year thereafter, through and including the fiscal year in
which the Final Maturity Date occurs, prepared in summary form, in each case, with appropriate
presentation and discussion of the principal assumptions upon which such budgets are based,
accompanied by the statement of a Financial Officer of Borrower to the effect that the financial
model of Borrower is a reasonable estimate for the periods covered thereby and, promptly when
available, any significant revisions of such financial model and (b) hold a meeting no later than
May 30, 2010 (at a mutually agreeable location, venue and time or, at the option of the
Administrative Agent, by conference call, the costs of such venue or call to be paid by Borrower)
with all Lenders who choose to attend such meeting, at which meeting shall be reviewed the proposed
covenant levels pursuant to Section 6.10 of the Credit Agreement.
7.05 Prepayment Premium. If Borrower shall repay any Term Loans or the
Revolving Loans (and in connection therewith terminating the related Revolving Commitments) in each
case, other than any mandatory prepayments thereof pursuant to Section 2.10(c) (Asset Sales), (f)
(Casualty Events) or (g) (Excess Cash Flow) prior to September 30, 2010, the Borrower shall, at the
time of such repayment, pay the Lenders a prepayment premium equal to 0.75% of the aggregate
principal amount of the Term Loans and/or Revolving Loans so repaid plus, without duplication, the
amount of Revolving Commitments terminated in connection with such repayment.
7.06 Effect of Amendment. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise
affect the rights or
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remedies of the Lenders, the Administrative Agent or the Collateral Agent under the Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or
any other provision of the Credit Agreement or of any other Loan Document, all of which are
ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein
shall be deemed to entitle Borrower to a consent to, or a waiver, amendment, modification or other
change of, any of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other Loan Document in similar or different circumstances.
7.07 Headings. The various headings of this Amendment are inserted for
convenience only and shall not affect the meaning or interpretation of this Amendment or any
provisions hereof.
7.08 Execution in Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement. Delivery of an executed counterpart
by facsimile or email shall be effective as delivery of a manually executed counterpart.
7.09 Cooperation; Other Documents. At all times following the execution of
this Amendment, each Loan Party shall execute and deliver to the Lenders and the Administrative
Agent, or shall cause to be executed and delivered to the Lenders and the Administrative Agent, and
shall do or cause to be done all such other acts and things as any of the Lenders and the
Administrative Agent may reasonably deem to be necessary or desirable to confirm their obligations
under the Loan Documents.
7.010 Governing Law. This Amendment shall be construed in accordance with
and governed by the law of the State of New York, without regard to conflicts of law principles
that would require the application of the laws of another jurisdiction.
7.011 Release. In further consideration of the Consenting Lenders’ execution
of this Amendment, each Loan Party hereby releases the Administrative Agent, the Collateral Agent
and each Lender and each of their respective affiliates, officers, employees, directors, agents and
attorneys (collectively, the “Releasees”) from any and all claims, demands, liabilities,
responsibilities, disputes, causes of action (whether at law or equity) and obligations of every
kind or nature whatsoever, whether liquidated or unliquidated, known or unknown, matured or
unmatured, fixed or contingent that any Loan Party may have against the Releasees which arise from
or in any way relate to the Credit Agreement, Obligations and/or Secured Obligations, any
Collateral, any Loan Document, any documents, agreements, dealings or other matters in connection
with or relating to any of the Loan Documents, and any third parties liable in whole or in part for
the Obligations or Secured Obligations, in each case to the extent arising (x) on or prior to the
date hereof or (y) out of, or relating to, actions, dealings or matters occurring on or prior to
the date hereof (including, without limitation, any actions or inactions which any of the Releasees
may have taken or omitted to take prior to the date hereof).
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed by
their respective officers hereunder duly authorized as of the date and year first
above written.
| NAVISITE, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Chief Financial Officer | |||
| AVASTA, INC. CLEARBLUE TECHNOLOGIES MANAGEMENT, INC. CLEARBLUE TECHNOLOGIES/CHICAGO-XXXXX, INC. CLEARBLUE TECHNOLOGIES/LAS VEGAS, INC. CLEARBLUE TECHNOLOGIES/LOS ANGELES, INC. CLEARBLUE TECHNOLOGIES/OAK BROOK, INC. CLEARBLUE TECHNOLOGIES/VIENNA, INC. CLEARBLUE TECHNOLOGIES/DALLAS, INC. CLEARBLUE TECHNOLOGIES/NEW YORK, INC. CLEARBLUE TECHNOLOGIES/SAN FRANCISCO, INC. CLEARBLUE TECHNOLOGIES/SANTA XXXXX, INC. CONXION CORPORATION INTREPID ACQUISITION CORP. LEXINGTON ACQUISITION CORP. XXXXXXXXXX.XXX, INC. SUREBRIDGE ACQUISITION CORP. SUREBRIDGE SERVICES, INC. AMERICA’S JOB EXCHANGE, INC. (FORMERLY KNOWN AS NAVISITE ACQUISITION SUBSIDIARY, INC.) JUPITER HOSTING, INC. 1100 TECHNOLOGIES, INC. ALABANZA, INC. (FORMERLY KNOWN AS NAVI ACQUISITION CORP.) NETASPX, LLC NETASPX ACQUISITION, INC. NCS HOLDING COMPANY NETWORK COMPUTING SERVICES, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Chief Financial Officer | |||
| CANADIAN IMPERIAL BANK OF COMMERCE, acting through its New York Agency, as Administrative Agent and Collateral Agent |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Executive Director | |||
