EXHIBIT 2.26
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of November 16, 1998, by and among CSG SYSTEMS, INC., a Delaware
corporation ("CSG"), and CSG SYSTEMS INTERNATIONAL, INC., a Delaware corporation
("Holdings"), as co-borrowers on a joint and several basis (each individually
being from time to time referred to herein as a "Borrower" and collectively as
the "Borrowers"), the Lenders named in the Loan Agreement (as defined below),
and PARIBAS (formerly known as Banque Paribas), not in its individual capacity
but solely in its capacity as the agent on behalf of the Lenders (in such
capacity, the "Agent").
RECITALS
A. The Borrowers, the Lenders and the Agent have entered into that
certain Loan Agreement dated as of September 18, 1997 (as amended by that
certain First Amendment to Loan Agreement dated as of November 21, 1997, and as
such may be further amended, modified, supplemented or restated from time to
time, the "Loan Agreement"), by and among the Borrowers, the Lenders and the
Agent, pursuant to which the Lenders have extended and have agreed to extend and
make available to the Borrowers certain advances of credit in accordance with
their respective Commitments and upon the terms and conditions set forth in the
Loan Agreement and the other Loan Documents.
B. The Borrowers have requested that the Lenders amend the Loan Agreement
as provided below.
C. The Lenders and the Agent are willing to accommodate the Borrowers'
requests, but only on the terms and subject to the conditions specified herein.
Capitalized terms not otherwise defined herein shall have the same meanings
given to such terms in the Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants herein set forth, and intending to be legally bound, the parties
hereto agree as follows:
1. AMENDMENTS TO LOAN AGREEMENT.
(A) AMENDMENTS TO SECTION 1.1 (DEFINED TERMS).
(I) A new defined term "Data Center Capex" is added to Section
1.1 of the Loan Agreement immediately following the defined term "Customer
Services Client," to read as follows:
" Data Center Capex" shall have the meaning set forth in SUBSECTION
8.8(B).
(II) The definition of the term "Excess Cash Flow Percentage" is
amended to delete the term "1.50:1.00" and to replace such term with
"1.75:1.00."
13.
(III) The definition of the term "Fixed Charge Coverage Ratio"
is deleted in its entirety and replaced with the following:
"Fixed Charge Coverage Ratio" means, as calculated quarterly as of the
last day of each Fiscal Quarter on a rolling four (4) quarter basis, the
ratio of (a) an amount equal to (i) Operating Cash Flow plus (ii) the
SUMMITrak/Phoenix Capex Adjustment plus (iii) the SUMMITrak/Phoenix Expense
Adjustment plus (iv) Data Center Capex made during such period to (b) Fixed
Charges.
(IV) The definition of the term "Interest Coverage Ratio" is
deleted in its entirety and replaced with the following:
"Interest Coverage Ratio" means, as calculated quarterly as of the
last day of each Fiscal Quarter on a rolling four (4) quarter basis, the
ratio of (a) an amount equal to (i) Operating Cash Flow plus (ii) the
SUMMITrak/Phoenix Capex Adjustment plus (iii) the SUMMITrak/Phoenix Expense
Adjustment plus (iv) Data Center Capex made during such period to (b) Net
Interest Expense.
(B) AMENDMENT TO SECTION 8.3 (LOANS AND INVESTMENTS). The words
"equal to $25,000,000" set forth in Subsection 8.3(d) of the Loan Agreement are
deleted and replaced with the words "up to $35,000,000."
(C) AMENDMENT TO SECTION 8.8 (CAPITAL EXPENDITURES). Section 8.8 of
the Loan Agreement is deleted in its entirety and replaced with the following:
SECTION 8.8 CAPITAL EXPENDITURES. (A) Except as otherwise provided in
Section 8.8(b), the Borrowers shall not, and shall not permit any of their
respective Subsidiaries to, make or commit to make Capital Expenditures
during any of the following Fiscal Years in excess of the following
amounts:
FISCAL YEAR CAPITAL EXPENDITURES
1998 $20,000,000
1999 $25,000,000
2000 $30,000,000
2001 and thereafter $35,000,000
plus any unutilized portion of the immediately preceding Fiscal Year's
permitted Capital Expenditures provided that any such unutilized portion
carried forward shall not for any Fiscal Year exceed $5,000,000. For
purposes of this SECTION 8.8 only, the term "Capital Expenditures" shall
mean an amount equal to "Capital Expenditures," as defined in SECTION 1.1
of this Agreement, exclusive of the amount of the SUMMITrak/Phoenix Capex
Adjustment.
(B) In addition to and without limiting the Capital Expenditures
permitted to be made pursuant to SUBSECTION 8.8(A), the Borrowers may make
Capital
14.
Expenditures up to an aggregate amount of $20,000,000 in the aggregate for
both of Fiscal Years 1999 and 2000 for the sole purpose of constructing
(including site acquisition and preparation) and equipping (including
capitalized software) a new data center for the Borrowers (the additional
Capital Expenditures permitted pursuant to this subsection (b) being
referred to herein as the "Data Center Capex").
(D) AMENDMENT TO SECTION 8.9 (RESTRICTED PAYMENTS). Section 8.9 of
the Loan Agreement is deleted in its entirety and replaced with the following:
SECTION 8.9 RESTRICTED PAYMENTS. Unless the Borrowers shall have
delivered to the Agent in accordance with SUBSECTION 7.1(D) a Compliance
Certificate certifying that (a) the Leverage Ratio as calculated as of the
last day of the immediately preceding Fiscal Quarter is less than 1.50 and
(b) no Default or Event of Default shall have occurred and be continuing,
Holdings shall not, and shall not suffer or permit any of its Subsidiaries
(other than a wholly-owned Subsidiary) to, declare or make any dividend
payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its
Stock (provided that Holdings may declare and pay a dividend payable solely
in shares of common stock of Holdings and cash in lieu of any fractional
shares resulting from such dividend payment), or purchase, redeem or
otherwise acquire for value any shares of its Stock or any warrants, rights
or options to acquire such shares, now or hereafter outstanding; provided,
however, that Holdings from time to time (i) may repurchase its Stock from
the public at fair market value in an aggregate amount for all such
transactions not to exceed $20,000,000 and (ii) may re-purchase shares of
"Restricted Stock" and "Performance Stock" sold pursuant to the CSG
Employee Stock Purchase Plan from a holder of such Stock whose employment
with Holdings and its Subsidiaries has terminated; provided that the
repurchase price paid for any such Restricted Stock or Performance Stock
shall not exceed, in the case of Performance Stock, the purchase price
initially paid by such Person for such Performance Stock or, in the case of
Restricted Stock, the higher of the purchase price initially paid by such
Person for such Restricted Stock or the Book Value (as defined in the
applicable purchase agreement) of such Restricted Stock.
2. LIMITED AMENDMENT; FULL FORCE AND EFFECT. Each of the amendments set
forth in this Amendment shall be limited precisely as written and shall not be
deemed (a) to be an amendment, consent or waiver of any other term or condition
of the Loan Agreement or the other Loan Documents, to prejudice any right or
remedy which the Agent or the Lenders may now have or may have in the future
under or in connection with the Loan Agreement or the other Loan Documents or
(b) to be a consent to any future amendment, consent or waiver or departure from
the terms and conditions of the Loan Agreement or the other Loan Documents.
This Amendment shall be construed in connection with and as part of the Loan
Documents, and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein waived or amended,
are hereby ratified and confirmed and shall remain in full force and effect.
15.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and the
Lenders to enter into this Amendment, each of the Borrowers hereby jointly and
severally represents and warrants to each Lender and the Agent as follows:
(A) CORPORATE POWER AND AUTHORITY. Each of the Borrowers has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated hereby. The certificates of
incorporation and bylaws of each of the Borrowers have not been amended since
September 18, 1997.
(B) AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance hereof have been duly authorized by all necessary
corporate action on the part of the Borrowers.
(C) NO CONFLICT. The execution and delivery by the Borrowers of this
Amendment and the performance by the Borrowers of the Loan Agreement as amended
hereby do not and will not contravene (i) any law or regulation binding on or
affecting either Borrower or any of its Subsidiaries, (ii) the certificate of
incorporation or by-laws of either Borrower or its Subsidiaries, (iii) any
order, judgment or decree of any court or other agency of government binding on
either Borrower or its Subsidiaries or (iv) any contractual restriction binding
on or affecting either Borrower or its Subsidiaries.
(D) GOVERNMENTAL CONSENTS, FILINGS. The execution, delivery and
performance by the Borrowers of this Amendment and the performance by the
Borrowers of the Loan Agreement as amended hereby do not and will not require
any authorization or approval of, or other action by, or notice to or filing
with any Governmental Authority or regulatory body or the consent of any third
party which has not yet been obtained.
(E) BINDING OBLIGATION. This Amendment has been duly executed and
delivered by each of the Borrowers and is the binding obligation of each of the
Borrowers, enforceable against each of them in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and
equitable principles relating to or affecting creditors' rights generally.
(F) ABSENCE OF DEFAULT AND MODIFICATION OF AGREEMENTS WITH OTHER
CREDITORS. After giving effect to this Amendment, no event has occurred and is
continuing or will result from the consummation of the transactions contemplated
by this Amendment that would constitute an Event of Default as defined in the
Loan Agreement. Neither Borrower has modified any agreement with any creditor
of such Person other than (i) by this Amendment and (ii) modifications of
agreements with trade creditors made in the ordinary course of business.
(G) RESTATEMENT OF REPRESENTATIONS AND WARRANTIES IN LOAN AGREEMENT.
Each Borrower, with respect to the representations and warranties set forth in
ARTICLE 5 of the Loan Agreement, represents and warrants that each of such
representations and warranties is true, correct and complete as of the date of
this Amendment (except to the extent such representations and warranties
expressly relate to another date or as specifically described therein).
16.
4. REAFFIRMATION. Each Borrower hereby reaffirms its obligations under
each Loan Document to which it is a party.
5. EFFECTIVENESS. This Amendment shall be effective upon the execution
and delivery to the Agent of a copy of this Amendment by each Borrower, the
Agent and by Lenders representing Required Lenders.
6. MISCELLANEOUS.
(A) REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS. On and after the date on which this Amendment is effective in
accordance with SECTION 5 hereof, each reference in the Loan Agreement or the
other Loan Documents to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to such agreement after
giving effect hereto.
(B) HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(C) APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
(D) COUNTERPARTS. This Amendment may be executed in counterparts,
each of which when so executed shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[INTENTIONALLY BLANK]
17.
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
BORROWERS:
CSG SYSTEMS, INC., a Delaware corporation
By: /s/ G. A. Parker
--------------------------------------
Name: Greg A. Parker
Title: CFO
CSG SYSTEMS INTERNATIONAL, INC., a Delaware
corporation
By: /s/ G. A. Parker
--------------------------------------
Name: Greg A. Parker
Title: CFO
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
AGENT: PARIBAS
By: /s/ Robert N. Pinkerton
-----------------------------------------
Printed Name: Robert N. Pinkerton
---------------------------------
Title: Director
----------------------------------------
By: _________________________________________
Printed Name:_________________________________
Title:________________________________________
LENDERS: PARIBAS
By: /s/ Robert N. Pinkerton
-----------------------------------------
Printed Name: Robert N. Pinkerton
---------------------------------
Title: Director
----------------------------------------
By: _________________________________________
Printed Name:_________________________________
Title:________________________________________
NORWEST BANK COLORADO, N.A.
By: /s/ Darlene A. Evans for Kertin Punt
------------------------------------------
Printed Name: Darlene A. Evans
----------------------------------
Title: Vice President
-----------------------------------------
BANK OF MONTREAL
By: _________________________________________
Printed Name:_________________________________
Title:________________________________________
THE FUJI BANK LIMITED, LOS ANGELES AGENCY
By: /s/ Masahito Fukuda
-----------------------------------------
Printed Name: Masahito Fukuda
---------------------------------
Title: Joint General Manager
----------------------------------------
19.
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Stender E. Sweeney
---------------------------------------------
Printed Name: Stender E. Sweeney
-------------------------------------
Title: Assistant Vice President
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NATIONAL CITY BANK
By: /s/ Wilmer J. Jacobs
---------------------------------------------
Printed Name: Wilmer J. Jacobs
-------------------------------------
Title: Officer
------------------------------------------
CREDITANSTALT CORPORATE FINANCE, INC.
By: _____________________________________________
Printed Name:_____________________________________
Title:____________________________________________
BANK OF HAWAII
By: /s/ Bernadine M. Havertine
---------------------------------------------
Printed Name: Bernadine M. Havertine
-------------------------------------
Title: Corporate Banking Officer
--------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert Ivosevich
---------------------------------------------
Printed Name: Robert Ivosevich
-------------------------------------
Title: Senior Vice President
--------------------------------------------
THE LONG-TERM CREDIT BANK OF JAPAN, LTD. LOS
ANGELES AGENCY
By: /s/ Noboru Akahane
---------------------------------------------
Printed Name: Noboru Akahane
-------------------------------------
Title: Deputy General Manager
--------------------------------------------
BANQUE NATIONALE DE PARIS
By: /s/ Clive Bettles
---------------------------------------------
Printed Name: Clive Bettles
-------------------------------------
20
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
Title: SVP & Manager
--------------------------------------------
By: /s/ Janice S. H. Ho
---------------------------------------------
Printed Name: Janice S. H. Ho
-------------------------------------
Title: Vice President
--------------------------------------------
BBL (USA) CAPITAL CORP.
By: _____________________________________________
Printed Name:_____________________________________
Title:____________________________________________
21
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES