UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 15, 2011
Progress Software Corporation
(Exact name of registrant as specified in its charter)
Commission file number: 0-19417
| |
|
|
|
| Massachusetts
|
|
04-2746201 |
| (State or other jurisdiction of
|
|
(I.R.S. employer |
| incorporation or organization)
|
|
identification no.) |
14 Oak Park
Bedford, Massachusetts 01730
(Address of principal executive offices, including zip code)
(781) 280-4000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
|
|
|
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
|
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
|
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 1.01. Entry into a Material Definitive Agreement
On August 15, 2011, Progress Software Corporation (“Progress”) entered into a Credit Agreement
(the “Credit Agreement”) with each of the lenders party thereto (the “Lenders”), JPMorgan Chase
Bank, N.A., as Administrative Agent, Wells Fargo Bank, N.A. and RBS Citizens, N.A., as Syndication
Agents, and J.P. Morgan Securities LLC, as Sole Bookrunner and Sole Lead Arranger, providing for an
unsecured revolving credit facility in an amount of up to $150.0 million, which may be increased by
up to an additional $75 million if the existing or additional lenders are willing to make such
increased commitments. The revolving credit facility has sublimits for swing line loans up to $20.0
million and for the issuance of standby letters of credit in a face amount up to $25.0 million.
Progress expects to use the revolving credit facility for general corporate purposes, including
acquisitions of other businesses, and may also use it for working capital.
Interest rates for the revolving credit facility are determined at the option of Progress and
would range from 1.25% to 1.75% above the Eurodollar rate for Eurodollar-based borrowings or would
range from 0.25% to 0.75% above the defined base rate for base rate borrowings, in each case based
upon Progress’ leverage ratio. Additionally, Progress may borrow certain foreign currencies at
rates set in the same range above the respective London interbank offered interest rates for those
currencies, based on Progress’ leverage ratio. A quarterly commitment fee on the undrawn portion
of the revolving credit facility is required, ranging from 0.25% to 0.35% per annum, based upon
Progress’ leverage ratio. At closing of the revolving credit facility, the applicable interest
rate and commitment fee would be at the lowest rate in each range.
Revolving loans may be borrowed, repaid and reborrowed until August 15, 2016, at which time
all amounts borrowed must be repaid. Accrued interest on the loans is payable quarterly in arrears
with respect to base rate loans and at the end of each interest rate period (or at each three month
interval in the case of loans with interest periods greater than three months) with respect to
LIBOR rate loans. Progress may prepay the loans or terminate or reduce the commitments in whole or
in part at any time, without premium or penalty, subject to certain conditions and reimbursement of
certain costs in the case of LIBOR rate loans.
Future material domestic subsidiaries of Progress will be required to guaranty Progress’
obligations under the Credit Agreement.
The Credit Agreement contains customary affirmative and negative covenants, including
covenants that limit or restrict Progress and its subsidiaries’ ability to, among other things,
grant liens, make investments, make acquisitions, incur indebtedness, merge or consolidate, dispose
of assets, pay dividends or make distributions, repurchase stock, change the nature of its
business, enter into certain transactions with affiliates and enter into burdensome agreements, in
each case subject to customary exceptions for a credit facility of this size and type. Progress is
also required to maintain compliance with a consolidated interest coverage ratio and a consolidated
leverage ratio.
The Credit Agreement includes customary events of default that include, among other things,
non-payment defaults, covenant defaults, inaccuracy of representations and warranties, cross
default to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults,
ERISA defaults and a change of control default. The occurrence of an event of default could result
in the acceleration of the obligations under the Credit Agreement. Under certain circumstances, a
default interest rate will apply on all obligations during the existence of an event of default
under the Credit Agreement at a per annum rate equal to 2.00% above the applicable interest rate.
A copy of the Credit Agreement is attached as Exhibit 10.1 to this Current Report and is
incorporated by reference herein. The above description is qualified in its entirety by reference
to such exhibit.
-2-