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| Item 1.01 |
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Entry into a Material Definitive Agreement. |
Credit Facility
On April 29, 2011 (the “Closing Date ”), Verint Systems Inc. (the “Company”) (i) entered into a Credit Agreement (the
“Credit Agreement”) with, among others, the lenders from time to time party thereto (the “Lenders”)
and Credit Suisse AG, as administrative agent and collateral agent for the Lenders (in such
capacities, the “Agent”) and (ii) terminated that certain credit agreement dated May 25, 2007 (as
amended, supplemented or otherwise modified from time to time, the “Prior Facility”) with, among
others, the lenders from time to time party thereto (the “Prior Lenders”) and Credit Suisse AG, as
successor administrative agent for the Prior Lenders.
The Credit Agreement provides for
$770 million of secured senior credit facilities, comprised of a $600 million term loan
under a six and a half-year term loan facility (maturing October 2017) (the “Term Loan
Facility”) and a $170 million five-year revolving credit facility
(maturing April 2016) (the “Revolving Credit Facility”), subject to increase
(up to a maximum increase of $300 million) and reduction from time to time according to the terms of the Credit Agreement. Amounts borrowed under
the Revolving Credit Facility may be borrowed, repaid, and reborrowed until the maturity date
thereof. Amounts borrowed and repaid under the Term Loan Facility may not be reborrowed.
As of the Closing Date, the Company had no outstanding borrowings under the Revolving Credit
Facility.
Loans under the Credit Agreement will bear interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or shorter, at the end
of any interest period, at a per annum rate of, at the Company’s election:
(a) in the case of Eurodollar loans, the Adjusted LIBO Rate plus 3.25% (or if the Company’s
corporate ratings are at least BB- and Ba3 or better, 3.00%). The “Adjusted LIBO Rate” is the
greater of (i) 1.25% per annum and (ii) the product of (x) the LIBO Rate (as defined in the Credit
Agreement) and (y) Statutory Reserves (as defined in the Credit Agreement), and
(b) in the case of Base Rate loans, the Base Rate plus 2.25% (or if the Company’s corporate
ratings are at least BB- and Ba3 or better, 2.00%). The “Base Rate” is the greatest of (i) the Agent’s prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit
Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one month interest period plus 1.00%.
The Company has agreed to pay a commitment fee with respect to undrawn availability under the
Revolving Credit Facility, payable quarterly, at a rate of 0.50% per annum, and customary
administrative agent fees and fees in respect of letters of credit.
The Company’s obligations under the Credit Agreement are guaranteed, substantially similar to the
Prior Facility, by substantially all of the Company’s domestic subsidiaries, and secured,
substantially similar to the Prior Facility, by a security interest in substantially all assets of
the Company and the guarantor subsidiaries, subject to certain exceptions detailed in the Credit
Agreement and related ancillary documentation.
The Credit Agreement contains customary affirmative and negative covenants for credit facilities of
this type substantially similar to those in the Prior Facility, including limitations on the
Company and its subsidiaries with respect to indebtedness, liens, nature of business, investments
and loans, distributions, acquisitions, dispositions of assets, sale-leaseback transactions and
transactions with affiliates. The Credit Agreement also contains a financial covenant that
requires the Company to maintain, on a consolidated basis, a Consolidated Total Debt to
Consolidated EBITDA (each as defined in the Credit Agreement) leverage ratio until July 31, 2013 of
less than or equal to 5.00 to 1.00 and thereafter of 4.50 to 1.00. The limitations imposed by the
covenants are subject to certain important exceptions detailed in the Credit Agreement.
The Credit Agreement provides for customary events of default with corresponding grace periods
substantially similar to those in the Prior Facility, including failure to pay principal or
interest under the Credit Agreement when due, failure to comply with covenants, any representation
or warranty made by the Company proving to be inaccurate in any material respect, defaults under
certain other indebtedness of the Company or its subsidiaries, a Change of Control (as defined in
the Credit Agreement) of the Company, and certain insolvency or receivership events affecting the
Company or its significant subsidiaries. Upon an event of default, all obligations of the
Company owing under the Credit Agreement may be declared immediately due and payable, and the
Lenders’ commitments to make loans under the Credit Agreement may be terminated.
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Certain of the Lenders party to the Credit Agreement, and their respective affiliates, have
performed, and may in the future perform for the Company and its subsidiaries, various commercial
banking, investment banking, underwriting and other financial advisory services, for which they
have received, or may receive, customary fees and expense reimbursements.
The foregoing description of the Credit Agreement and related matters, including covenants and
events of default, is not complete and is qualified in its entirety by reference to the Credit
Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
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| Item 1.02 |
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Termination of a Material Definitive Agreement. |
The information referred to in “Item 1.01 Entry into
a Material Definitive Agreement” above related to the Prior Facility is hereby incorporated by reference herein.
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| Item 2.03 |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information referred to in “Item 1.01 Entry into
a Material Definitive Agreement” is hereby incorporated by reference herein.
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| Item 9.01 |
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Financial Statements and Exhibits. |
(d) Exhibits.
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| Exhibit |
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Description |
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10.1 |
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Credit Agreement dated as of April 29, 2011 among the Company, as
Borrower, the Lenders and the Agent. |
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