Page | ||||
1.DEFINITIONS AND CONSTRUCTION | 1 | |||
1.1.Definitions | 1 | |||
1.2.Accounting Terms | 1 | |||
1.3.Code | 1 | |||
1.4.Construction | 1 | |||
1.5.Schedules and Exhibits | 2 | |||
2.LOAN AND TERMS OF PAYMENT | 2 | |||
2.1.Revolver Advances | 2 | |||
2.2.Term Loan | 3 | |||
2.3.Borrowing Procedures and Settlements | 3 | |||
2.4.Payments; Reductions of Commitments; Prepayments | 8 | |||
2.5.Overadvances | 12 | |||
2.6.Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations | 12 | |||
2.7.Crediting Payments | 13 | |||
2.8.Designated Account | 13 | |||
2.9.Maintenance of Loan Account; Statements of Obligations | 14 | |||
2.10.Fees | 14 | |||
2.11.Letters of Credit | 14 | |||
2.12.LIBOR Option | 17 | |||
2.13.Capital Requirements | 19 | |||
3.CONDITIONS; TERM OF AGREEMENT | 20 | |||
3.1.Conditions Precedent to the Initial Extension of Credit | 20 | |||
3.2.Conditions Precedent to all Extensions of Credit | 20 | |||
3.3.Maturity | 20 | |||
3.4.Effect of Maturity | 20 | |||
3.5.Early Termination by Borrower | 21 |
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(continued)
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4.REPRESENTATIONS AND WARRANTIES | 21 | |||
4.1.Due Organization and Qualification; Subsidiaries | 21 | |||
4.2.Due Authorization; No Conflict | 22 | |||
4.3.Governmental Consents | 22 | |||
4.4.Binding Obligations; Perfected Liens | 22 | |||
4.5.Title to Assets; No Encumbrances | 22 | |||
4.6.Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims | 23 | |||
4.7.Litigation | 23 | |||
4.8.Compliance with Laws | 23 | |||
4.9.No Material Adverse Change | 23 | |||
4.10.Fraudulent Transfer | 24 | |||
4.11.Employee Benefits | 24 | |||
4.12.Environmental Condition | 24 | |||
4.13.Intellectual Property | 24 | |||
4.14.Leases | 24 | |||
4.15.Deposit Accounts and Securities Accounts | 24 | |||
4.16.Complete Disclosure | 25 | |||
4.17.Material Contracts | 25 | |||
4.18.Patriot Act | 25 | |||
4.19.Indebtedness | 25 | |||
4.20.Payment of Taxes | 26 | |||
4.21.Margin Stock | 26 | |||
4.22.Governmental Regulation | 26 | |||
4.23.OFAC | 26 | |||
4.24.Employee and Labor Matters | 26 | |||
4.25.Location of Equipment | 27 | |||
4.26.Inactive Subsidiaries. | 27 | |||
4.27.Existing Obligations Pertaining to Acquisitions. | 27 | |||
5.AFFIRMATIVE COVENANTS | 27 | |||
5.1.Financial Statements, Reports, Certificates | 27 |
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(continued)
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5.2.Collateral Reporting | 28 | |||
5.3.Existence | 28 | |||
5.4.Maintenance of Properties | 28 | |||
5.5.Taxes | 28 | |||
5.6.Insurance | 28 | |||
5.7.Inspection | 29 | |||
5.8.Compliance with Laws | 29 | |||
5.9.Environmental | 29 | |||
5.10.Disclosure Updates | 30 | |||
5.11.Formation of Subsidiaries | 30 | |||
5.12.Further Assurances | 30 | |||
5.13.Lender Meetings | 31 | |||
5.14.Material Contracts | 31 | |||
5.15.Location of Tangible Collateral | 31 | |||
5.16.Assignable Material Contracts | 31 | |||
5.17.Post Closing Matters | 32 | |||
6.NEGATIVE COVENANTS | 32 | |||
6.1.Indebtedness | 32 | |||
6.2.Liens | 32 | |||
6.3.Restrictions on Fundamental Changes | 32 | |||
6.4.Disposal of Assets | 33 | |||
6.5.Change Name | 33 | |||
6.6.Nature of Business | 33 | |||
6.7.Prepayments and Amendments | 33 | |||
6.8.Change of Control | 34 | |||
6.9.Restricted Junior Payments | 34 | |||
6.10.Accounting Methods | 35 | |||
6.11.Investments | 35 | |||
6.12.Transactions with Affiliates | 35 | |||
6.13.Use of Proceeds | 36 |
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7.FINANCIAL COVENANTS | 36 | |||
8.EVENTS OF DEFAULT | 38 | |||
9.RIGHTS AND REMEDIES | 39 | |||
9.1.Rights and Remedies | 39 | |||
9.2.Remedies Cumulative | 40 | |||
10.WAIVERS; INDEMNIFICATION | 40 | |||
10.1.Demand; Protest; etc | 40 | |||
10.2.The Lender Group’s Liability for Collateral | 40 | |||
10.3.Indemnification | 40 | |||
11.NOTICES | 41 | |||
12.CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; REFERENCE PROVISION | 42 | |||
13.ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS | 44 | |||
13.1.Assignments and Participations | 44 | |||
13.2.Successors | 47 | |||
14.AMENDMENTS; WAIVERS | 47 | |||
14.1.Amendments and Waivers | 47 | |||
14.2.Replacement of Certain Lenders | 48 | |||
14.3.No Waivers; Cumulative Remedies | 49 | |||
15.AGENT; THE LENDER GROUP | 49 | |||
15.1.Appointment and Authorization of Agent | 49 | |||
15.2.Delegation of Duties | 49 | |||
15.3.Liability of Agent | 50 | |||
15.4.Reliance by Agent | 50 | |||
15.5.Notice of Default or Event of Default | 50 | |||
15.6.Credit Decision | 51 | |||
15.7.Costs and Expenses; Indemnification | 51 | |||
15.8.Agent in Individual Capacity | 52 | |||
15.9.Successor Agent | 52 | |||
15.10.Lender in Individual Capacity | 52 | |||
15.11.Collateral Matters | 53 |
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(continued)
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15.12.Restrictions on Actions by Lenders; Sharing of Payments | 53 | |||
15.13.Agency for Perfection | 54 | |||
15.14.Payments by Agent to the Lenders | 54 | |||
15.15.Concerning the Collateral and Related Loan Documents | 54 | |||
15.16.Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information | 54 | |||
15.17.Several Obligations; No Liability | 55 | |||
15.18.Co-Arranger | 55 | |||
16.WITHHOLDING TAXES | 56 | |||
17.GENERAL PROVISIONS | 58 | |||
17.1.Effectiveness | 58 | |||
17.2.Section Headings | 58 | |||
17.3.Interpretation | 58 | |||
17.4.Severability of Provisions | 58 | |||
17.5.Bank Product Providers | 58 | |||
17.6.Debtor-Creditor Relationship | 59 | |||
17.7.Counterparts; Electronic Execution | 59 | |||
17.8.Revival and Reinstatement of Obligations | 59 | |||
17.9.Confidentiality | 59 | |||
17.10.Lender Group Expenses | 60 | |||
17.11.USA PATRIOT Act | 60 | |||
17.12.Integration | 60 |
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Exhibit A-1 | Form of Assignment and Acceptance | |
Exhibit B-1 | Form of Borrowing Base Certificate | |
Exhibit B-2 | Form of Bank Product Provider Letter Agreement | |
Exhibit C-1 | Form of Compliance Certificate | |
Exhibit C-2 | Form of Credit Amount Certificate | |
Exhibit I-1 | Form of Intellectual Property Reporting Certificate | |
Exhibit L-1 | Form of LIBOR Notice | |
Schedule A-1 | Agent’s Account | |
Schedule A-2 | Authorized Persons | |
Schedule C-1 | Commitments | |
Schedule D-1 | Designated Account | |
Schedule P-1 | Permitted Investments | |
Schedule P-2 | Permitted Liens | |
Schedule 1.1 | Definitions | |
Schedule 3.1 | Conditions Precedent | |
Schedule 4.1(b) | Capitalization of Borrower; Stock Subject to Mandatory Redemption | |
Schedule 4.1(c) | Capitalization of Borrower’s Subsidiaries | |
Schedule 4.6(a) | States of Organization | |
Schedule 4.6(b) | Chief Executive Offices | |
Schedule 4.6(c) | Organizational Identification Numbers | |
Schedule 4.6(d) | Commercial Tort Claims | |
Schedule 4.7 | Litigation | |
Schedule 4.12 | Environmental Matters | |
Schedule 4.13 | Intellectual Property | |
Schedule 4.15 | Deposit Accounts and Securities Accounts | |
Schedule 4.17 | Material Contracts | |
Schedule 4.19 | Permitted Indebtedness | |
Schedule 4.25 | Locations of Equipment | |
Schedule 4.27 | Existing Obligations Pertaining to Acquisitions | |
Schedule 5.1 | Financial Statements, Reports, Certificates | |
Schedule 5.2 | Collateral Reporting | |
Schedule 6.6 | Nature of Business | |
Schedule 6.12 | RealPage Payment Processing, StarFire Media, Inc. and Credit Interfaces, Inc. Transactions |
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Date | Installment Amount | |
December 31, 2009, March 31, 2010, June 30, 2010 and September 30, 2010 | $1,312,500 | |
December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011 | $1,750,000 | |
December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012 | $1,837,500 | |
December 31, 2012 and March 31, 2013 | $1,925,000 | |
Maturity Date | Unpaid Principal Balance |
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7. | FINANCIAL COVENANTS. |
Applicable Ratio | Applicable Period | |
1.225:1.00 | For the 3 month period ending September 30, 2009 | |
1.225:1.00 | For the 4 month period ending October 31, 2009 | |
1.225:1.00 | For the 5 month period ending November 30, 2009 | |
1.225:1.00 | For the 6 month period ending December 31, 2009 | |
1.225:1.00 | For the 7 month period ending January 31, 2010 | |
1.225:1.00 | For the 8 month period ending February 28, 2010 | |
1.225:1.00 | For the 9 month period ending March 31, 2010 | |
1.225:1.00 | For the 10 month period ending April 30, 2010 | |
1.225:1.00 | For the 11 month period ending May 31, 2010 | |
1.225:1.00 | For the 12 month period ending June 30, 2010 and for each 12-month period ending on the last day of a month thereafter through and including August 31, 2010 | |
1.25:1.00 | For the 12 month period ending September 30, 2010 and for each 12-month period ending on the last day of a month thereafter |
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Applicable Amount | Applicable Date | |
2.25:1.00 | The last day of each month ending during the period from and including September 30, 2009 and through and including December 31, 2009 | |
2.00:1.00 | The last day of each month ending during the period from and including March 31, 2010 and through and including June 30, 2010 | |
1.85:1.00 | The last day of each month ending during the period from and including September 30, 2010 and through and including December 31, 2010 | |
1.60:1.00 | The last day of each month ending during the period from and including March 31, 2011 and through and including June 30, 2011 | |
1.35:1.00 | September 30, 2011 and the last day of each month ending thereafter |
Fiscal Year 2009 | Fiscal Year 2010 | Fiscal Year 2011 | Fiscal Year 2012 | |||||||||
$10,000,000 | $ | 12,000,000 | $ | 13,200,000 | $ | 14,400,000 |
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If to Borrower: | REALPAGE, INC. | |
4000 International Parkway | ||
Carrollton, Texas 75007 | ||
Attn: General Counsel | ||
Fax No. (972) 820-3932 | ||
with copies to: | WILSON SONSINI GOODRICH & ROSATI, PROFESSIONAL CORPORATION | |
900 South Capital of Texas Hwy. | ||
Las Cimas IV, Fifth Floor | ||
Austin, Texas 78746-5546 | ||
Attn: Paul Tobias | ||
Fax No. (512) 338-5499 | ||
If to Agent: | WELLS FARGO FOOTHILL, LLC | |
2450 Colorado Ave., Suite 3000W | ||
Santa Monica, California 90404 | ||
Attn: Technology Finance Division Manager | ||
Fax No. (350) 453-7413 | ||
�� | ||
with copies to: | GOLDBERG KOHN BELL BLACK ROSENBLOOM & MORITZ, LTD. | |
55 East Monroe Street, Suite 3300 | ||
Chicago, Illinois 60603 | ||
Attn: Gary Zussman, Esq. | ||
Fax No. (312) 332-2196 |
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REALPAGE, INC., a Delaware corporation | ||||
By: | /s/ Timothy J. Barker | |||
Title: Executive Vice President and Chief Financial Officer | ||||
WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as Agent and as a Lender | ||||
By: | /s/ Terri Wesolik | |||
Title: Vice President | ||||
COMERICA BANK, a Texas Banking Association, as a Lender | ||||
By: | /s/ David Whiting | |||
Title: Senior Vice President | ||||
Schedule A-1 — Page 1
Schedule A-2 — Page 1
Lender | Revolver Commitment | Term Loan | Total Commitment | |||||||||
Wells Fargo Foothill, LLC | $ | 6,250,000 | $ | 23,750,000 | $ | 30,000,000 | ||||||
Comerica Bank | $ | 3,750,000 | $ | 11,250,000 | $ | 15,000,000 | ||||||
All Lenders | $ | 10,000,000 | $ | 35,000,000 | $ | 45,000,000 |
Schedule C-1 — Page 1
Schedule D-1 — Page 1
Schedule 1.1 — Page 1
Schedule 1.1 — Page 2
“Level II”:
Schedule 1.1 — Page 3
Level | Senior Leverage Ratio Calculation | Base Rate Margin | ||
I | If the Senior Leverage Ratio is less than 1.0:1.0 | 4.50 percentage points | ||
II | If the Senior Leverage Ratio is greater than or equal to 1.0:1.0 | 5.00 percentage points |
Schedule 1.1 — Page 4
Schedule 1.1 — Page 5
Schedule 1.1 — Page 6
(i) | extraordinary or non-recurring gains, | ||
(ii) | interest income, | ||
(iii) | gains on sales of assets, and | ||
(iv) | any non-cash purchase accounting adjustments made in connection with any Permitted Acquisition to the extent such adjustments increase Borrower’s and its Subsidiaries’ consolidated net earnings, |
Level | Senior Leverage Ratio Calculation | LIBOR Rate Margin | ||
I | If the Senior Leverage Ratio is less 1.0:1.0 | 4.50 percentage points | ||
II | If the Senior Leverage Ratio is greater than or equal to 1.0:1.0 | 5.00 percentage points |
Schedule 3.1 — Page 1
Agreement and the other Loan Documents to which Borrower is a party, (ii) authorizing specific officers of Borrower to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of Borrower; |
Schedule 3.1 — Page 2
audited financial statements for Borrower’s fiscal year ended December 31, 2008) and verification of Borrower’s representations and warranties to Lender Group, the results of which shall be satisfactory to Agent, and (ii) a review of Material Contracts; |
Schedule 3.1 — Page 3
as soon as available, but in any event within 30 days (or 45 days with respect to the last month of a fiscal quarter) after the end of each month during each of Borrower’s fiscal years | (a) an unaudited consolidated balance sheet, income statement, statement of cash flow, and statement of shareholder’s equity covering Borrower’s and its Subsidiaries’ operations during such period and compared to the prior period and plan, together with, for each month that is the last month of a fiscal quarter, a corresponding detailed discussion and analysis of results from management, and (b) Compliance Certificate along with, for each month for which the financial covenants set forth in Sections 7(a) and | |
(b) are required to be tested in accordance with the terms of such Sections, the underlying calculations in detail reasonably acceptable to Agent, including the calculations to arrive at EBITDA to the extent applicable. | ||
as soon as available, but in any event within 120 days after the end of each of Borrower’s fiscal years | (c) consolidated financial statements of Borrower and its Subsidiaries for each such fiscal year, audited by independent certified public accountants reasonably acceptable to Agent and certified, without any qualifications (including any (A) “going concern” or like qualification or exception, (B) qualification or exception as to the scope of such audit, or (C) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 4.16), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, statement of cash flow, and statement of shareholder’s equity and, if prepared, such accountants’ letter to management), (d) consolidating financial statements of Borrower and its Subsidiaries for each such fiscal year, and (e) Compliance Certificate along with the underlying calculations in detail reasonably acceptable to Agent, including the calculations to arrive at EBITDA to the extent applicable. | |
as soon as available, but in any event within 10 Business Days after the delivery of the consolidated audited financial statements of Borrower and its Subsidiaries for each of Borrower’s fiscal years, commencing with the fiscal year ending December 31, 2010 (but in any event within 135 days after the end of each such fiscal year) | (f) a detailed calculation of Excess Cash Flow. |
Schedule 5.1 - Page 1
as soon as available, but in any event within 30 days before the start of each of Borrower’s fiscal years, | (g) copies of Borrower’s Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion, for the forthcoming 3 years, quarter by quarter , and for the forthcoming fiscal year, month by month, certified by the chief financial officer of Borrower as being such officer’s good faith estimate of the financial performance of Borrower during the period covered thereby. | |
if and when filed by Borrower, | (h) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports, and (i) any other filings made by Borrower with the SEC. | |
promptly, but in any event within 5 days after Borrower has knowledge of any event or condition that constitutes a Default or an Event of Default, | (j) notice of such event or condition and a statement of the curative action that the Borrower proposes to take with respect thereto. | |
promptly after the commencement thereof, but in any event within 5 days after the service of process with respect thereto on Borrower or any of its Subsidiaries, | (k) notice of all actions, suits, or proceedings brought by or against Borrower or any of its Subsidiaries before any Governmental Authority which reasonably could be expected to result in a Material Adverse Change. | |
upon the request of Agent, | (l) any other information reasonably requested relating to the financial condition of Borrower or its Subsidiaries. |
Schedule 5.1 — Page 2
Monthly (not later than the 20th day of each month) | (a) a Credit Amount Certificate, | |
(b) a Borrowing Base Certificate, | ||
(c) a summary aging report of Borrower’s Accounts and accounts payable, | ||
(d) a report summarizing the following (i) Recurring Revenue by recurring revenue type and product for the prior month, and (ii) Recurring Revenue by recurring revenue type and product for the trailing twelve months, | ||
(e) bank statement(s) or screen shot(s) showing the cash balances of the Borrower and its Subsidiaries as of the end of the prior week and an indication of the cash that is Qualified Cash, and | ||
(f) a detailed report regarding Borrower’s and its Subsidiaries’ cash and Cash Equivalents, including an indication of which accounts constitute Qualified Cash. | ||
Quarterly (no later than the last day of the month 45 days following the end of each fiscal quarter) | (g) IP Reporting Certificate, including a detailed list of the Required Disclosure Set, | |
(h) copies of (i) each Material Contract entered into since the delivery of the previous Compliance Certificate, and (ii) each material amendment or modification of any Material Contract entered into since the delivery of the previous Compliance Certificate, | ||
(i) a list of any Material Contracts terminated since the delivery of the previous Compliance Certificate, | ||
(j) a certificate regarding the payment of Earn-outs during the prior fiscal quarter, and | ||
(k) attrition data by recurring revenue type for the prior fiscal quarter and trailing twelve month period consistent with what was previously provided. | ||
At least once per fiscal year, | (l) a list of Borrower’s shareholders and the percentage ownership of Borrower’s Stock owned by each such shareholder. | |
Promptly after receipt thereof | (m) any notice of redemption received by Borrower from the requisite number of shareholders required to effect a mandatory redemption under Borrower’s Governing Documents. | |
Upon request by Agent | (n) Such other reports, including but not limited to a summary aging of the Borrower’s Accounts, and a summary aging, by vendor, of Borrower’s accounts payable, and any book overdrafts, and as to accrued but unpaid taxes, the Collateral or the financial condition of Borrower and its Subsidiaries, as Agent may reasonably request. |