**Exhibit4.2**

 

AMENDMENT NO. 1

and

WAIVER NO. 1

to

CREDIT AGREEMENT

 

AMENDMENT NO. 1 and WAIVER NO. 1 (this “Amendment”),dated as of March 26, 2002, to the Credit Agreement, dated as of November 5,2001, by and between META GROUP, INC., a Delaware corporation (the “Borrower”)and THE BANK OF NEW YORK (the “Bank”) (as amended, the “CreditAgreement”).

 

RECITALS

 

A.            Capitalizedterms used herein which are defined in the Credit Agreement shall have themeanings therein defined.

 

B.            TheBorrower has requested that the Bank (i) waive violations of certain covenantswhich have occurred prior to the date hereof, and (ii) amend certain financialcovenants for the fiscal year of the Borrower ending on December 31, 2002, and,subject to the terms and conditions set forth herein, the Bank is willing toagree to the foregoing.

 

In consideration of the covenants, conditions andagreements hereinafter set forth, and for other good and valuableconsideration, the receipt and adequacy of which are acknowledged, it is agreedas follows:

 

I.              Amendments

 

1.             Section1.1 of the Credit Agreement is amended to add the following new definitionthereto:

 

“Quarterly Net Income”:  For each fiscal quarter of the Borrower, thenet income of the Borrower and its Subsidiaries for such fiscal quarterdetermined on a consolidated basis in accordance with GAAP as of the end ofsuch fiscal quarter.

 

2.             Section4.1 of the Credit Agreement is amended and restated in its entirety, asfollows:

 

4.1.                              Subsidiaries;Capitalization.

 

As of the Effective Date,the only Subsidiaries of the Borrower are those listed on Schedule 4.1,and the authorized, issued and outstanding

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Capital Stock of the Borrower and each such Subsidiaryis as set forth on Schedule 4.1. As of the Effective Date, except as set forth on Schedule 4.1, (i) theshares of, or partnership or other interests in, each Subsidiary of theBorrower are owned beneficially and of record by the Borrower or anotherSubsidiary of the Borrower, are free and clear of all Liens, and are duly authorized,validly issued, fully paid and nonassessable, (ii) except as set forth onSchedule 4.1, none of its Subsidiaries has issued any securities convertibleinto, or options or warrants for, any common or preferred equity securitiesthereof, (iii) there are no agreements, voting trusts or understandings bindingupon the Borrower or any of its Subsidiaries with respect to the votingsecurities of the Borrower or any of its Subsidiaries or affecting in anymanner the sale, pledge, assignment or other disposition thereof, including anyright of first refusal, option, redemption, call or other right with respectthereto, whether similar or dissimilar to any of the foregoing.

 

3.             Section7.11 of the Credit Agreement is amended and restated in its entirety, as follows:

 

7.11.        FinancialCovenants

 

(a)           Leverage Ratio. The Borrowershall maintain as of the last day of each fiscal quarter ending during theperiods set forth below, a Leverage Ratio of not more than the ratios set forthbelow:

 
| **Period**                                                |   | **Ratio** |   |
|-----------------------------------------------------------|--------|-----------|--------|
| March  31, 2002                                           |   | 1.50:1.00 |   |
|                                                      |   |      |   |
| June  30, 2002                                            |   | 1.50:1.00 |   |
|                                                      |   |      |   |
| September  30, 2002                                       |   | 1.00:1.00 |   |
|                                                      |   |      |   |
| December  31, 2002 and each fiscal quarter end thereafter |   | 1.00:1.00 |   |

 

 

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(b)           Fixed Charge Coverage Ratio. TheBorrower shall maintain as of the last day of each fiscal quarter ending duringthe periods set forth below, a Fixed Charge Coverage Ratio of not less than theratios set forth below:

 
| **Period**                                                |   | **Ratio** |   |
|-----------------------------------------------------------|--------|-----------|--------|
| March  31, 2002                                           |   | 1.50:1.00 |   |
|                                                      |   |      |   |
| June  30, 2002                                            |   | 1.50:1.00 |   |
|                                                      |   |      |   |
| September  30, 2002                                       |   | 1.50:1.00 |   |
|                                                      |   |      |   |
| December  31, 2002 and each fiscal quarter end thereafter |   | 1.50:1.00 |   |

 

(c)           Minimum EBITDA.  EBITDA for each four fiscal quarterperiod of the Borrower ending during the periods set forth below shall not beless than the amounts set forth below:

 
| **Period**                                                |   | **Amount** |       |
|-----------------------------------------------------------|--------|------------|------------|
| March  31, 2002                                           |   | $          | 6,000,000  |   |
|                                                      |   |       |       |
| June  30, 2002                                            |   | $          | 8,065,000  |   |
|                                                      |   |       |       |
| September  30, 2002                                       |   | $          | 10,657,000 |   |
|                                                      |   |       |       |
| December  31, 2002 and each fiscal quarter end thereafter |   | $          | 13,000,000 |   |

 

(d)           Minimum Quarterly Net Income.  Quarterly Net Income for each fiscal quarterperiod of the Borrower ending during the periods set forth below shall not beless than the amounts set forth below:

 
| **Period**                                                |   | **Amount** |       |
|-----------------------------------------------------------|--------|------------|------------|
| March  31, 2002                                           |   | $          | (1,500,000 | ) |
|                                                      |   |       |       |
| June  30, 2002                                            |   | $          | 1,000,000  |   |
|                                                      |   |       |       |
| September  30, 2002                                       |   | $          | 1,400,000  |   |
|                                                      |   |       |       |
| December  31, 2002 and each fiscal quarter end thereafter |   | $          | 1,500,000  |   |

 

II.            Waivers

 

1.             Compliancewith the provisions of Section 7.11(a) of the Credit Agreement is irrevocablywaived with respect to the fiscal quarter ended on December 31, 2001.

 

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2.             Compliancewith the provisions of Section 7.11(b) of the Credit Agreement is irrevocablywaived with respect to the fiscal quarter ended on December 31, 2001.

 

III.           Miscellaneous

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1.             (a)The waiver provisions contained in Part II of this Amendment shall be deemedeffective as of December 31, 2001, and (b) the remaining provisions of thisAmendment shall be deemed effective as of the date of this Amendment, in eachcase upon receipt by the Bank of (i) counterparts of this Amendment, dulyexecuted by the Borrower, (ii) payment by the Borrower of a $25,000 fee to theBank, and (iii) payment of all of the Bank’s expenses (including the reasonablefees and disbursements of Special Counsel) in connection herewith.

 

2.             Inorder to induce the Bank to execute this Amendment, the Borrower hereby (i)certifies that, immediately after giving effect to this Amendment, allrepresentations and warranties contained in the Credit Agreement are true andcorrect in all material respects as of the date hereof, and that, except forthe events that are waived herein, no Default or Event of Default exists underthe Credit Agreement, (ii) reaffirms and admits the validity and enforceabilityof the Loan Documents and its obligations thereunder, and (iii) agrees andadmits that it has no valid defenses to or offsets against any of itsobligations under the Loan Documents as of the date hereof.

 

3.             Inall other respects, the Credit Agreement and the other Loan Documents shallremain in full force and effect, and no waiver contained herein with respect toany certain time period or any certain Section of the Credit Agreement shall bedeemed to be a waiver with respect to any other time period or any otherSection of the Credit Agreement.

 

4.             ThisAmendment may be executed in any number of counterparts, each of which shall bean original and all of which shall constitute one agreement.  It shall not be necessary in making proof ofthis Amendment to produce or account for more than one counterpart containingthe signature of the party to be charged.

 

5.             ThisAmendment is being delivered in and is intended to be performed in the State ofNew York and shall be construed and is enforceable in accordance with, andshall be governed by, the internal laws of the State of New York without regardto principles of conflict of laws.

 

6.             ThisAmendment shall be subject to such conditions and limitations as are specifiedherein, and the rights of the parties under the Credit Agreement and the otherLoan Documents shall be otherwise unaffected.

 

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IN WITNESS WHEREOF, the parties have caused thisAmendment to be duly executed as of the date first written above.

 
|   |                 |                    |
|--------|----------------------|-------------------------|
|   | META GROUP, INC.     |
|   |                 |                    |
|   |                 |                    |
|   | By:                  | /s/ John A. Piontkowski |   |
|   | Name:                | John A. Piontkowski     |   |
|   | Title:               | Chief Financial Officer |   |
|   |                 |                    |
|   |                 |                    |
|   | THE BANK OF NEW YORK |
|   |                 |                    |
|   |                 |                    |
|   | By:                  | /s/ Mark J. Sicinski    |   |
|   |                 | Mark J. Sicinski,       |
|   |                 | Vice President          |
|        |                      |                         |  |  |

 

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Schedule 4.1

 

1.                                       MG(Bermuda) Ltd.

2.                                       METAGroup Australia Holdings PTY. Limited

3.                                       Cenntinum PTE LTD.

4.                                       1422722Ontario Inc.

5.                                       MetaGroup AG

6.                                       MetaGroup France S.A.

 

**Authorized, issued and outstanding Capital Stockof the Borrower and each such Subsidiary**

 
| **Borrower/Subsdiary**                     |   | **Issued and  outstanding Capital Stock** |
|--------------------------------------------|--------|-------------------------------------------|
| MG (Bermuda) Ltd.                          |   |                                      |
| META Group Australia Holdings PTY, Limited |   |                                      |
| Cenntinum PTE LTD.                         |   |                                      |
| 1422722 Ontario Inc.                       |   |                                      |
| Meta Group AG                              |   |                                      |
| Meta Group France S.A.                     |   |                                      |

 

Description of securities convertible into, or optionsor warrants for, any common or preferred equity securities of its Subsidiaries:

 

45,742 Stock Options in Meta Group AG.