Document:

exv10w34

Exhibit 10.34

FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

          This First Amendment to Note Purchase Agreement dated as of January 20, 2009 and
effective as of December 31, 2008 (this “Amendment”), is entered into by and between RealPage,
Inc., a Delaware corporation located at 4000 International Parkway, Carrollton, TX 75007 (the
“Company”), and HV Capital Investors, L.L.C., a Michigan limited liability company located at 7
West Square Lake Road, Suite 122, Bloomfield Hills, Michigan 48302 (“Investor”). All capitalized
terms not defined in this Amendment have the meaning set forth under the Note Purchase Agreement
dated August 1, 2008 between the parties to this Amendment (the “Note Purchase Agreement”).

          1. Purpose. Pursuant to the Note Purchase Agreement, the Company issued the Note to Investor
and entered into the Ancillary Agreements with Investor. The Company and Investor have entered
into this Amendment to amend certain terms and conditions of the Note Purchase Agreement as set
forth in this Amendment.

          2. Amendment.

	 	2.1	 	Negative Covenants.

	 	2.1.1	 	The following shall be added as Section 8.8.12
of the Note Purchase Agreement:
	 
	 	 	 	“8.8.12 So long as any Subordinated Promissory Notes of the Company
dated December 31, 2008 (the “Subordinated Notes”) remain outstanding,
the Company may make any Quarterly Payments or Additional Payments
(each as defined in the Subordinated Notes) or any other payments
otherwise permitted thereunder (“Subordinated Note Payments”) only if,
both before and after giving pro forma effect to any such Subordinated
Note Payment, the Company: (i) is not in default under this Agreement
or any Ancillary Agreement; (ii) maintains (measured as of the end of
the most recent month) a ratio of Funded Debt minus Excess Cash to
EBITDA of not more than 3.0 to 1.0. For purposes of this Section
8.8.12(ii), “EBITDA” shall mean net income, plus interest expense,
plus Income Taxes (hereinafter defined), plus depreciation, plus
amortization, plus stock based compensation, plus non cash non
recurring expenses for purchase accounting adjustment for deferred
revenue, plus non cash non recurring expenses for an impairment charge
on an asset, measured on an annualized trailing twelve (12) month
basis; (iii) is in compliance with the terms of the loan agreement, as
may be amended, with the Senior Lender; and (iv) the Average Cash
Balance must be at least Three Million Dollars ($3,000,000) prior to
making any payment
under the Subordinated Notes. “Average Cash Balance” means the three
(3) month average of cash as shown on the monthly balance

 

 

	 	 	 	sheet required to be delivered to Investor. For purposes of this Subsection
8.8.12 only, Funded Debt shall not include the outstanding amount due
by the Company under the Subordinated Notes.”
	 
	 	2.1.2	 	The following shall be added as Section 8.8.13
of the Note Purchase Agreement:
	 
	 	 	 	“8.8.13 Subordinated Debt Payment may only be made if the amount of
such Subordinated Debt Payment, plus the sum of all other Subordinated
Debt Payments made on or after October 1, 2008, would not exceed
Cumulative Net Cash Flow plus One Million Dollars ($1,000,000).
“Cumulative Net Cash Flow” means EBITDA, less interest expense, less
Capital Expenditures, less payment under any Funded Debt, less
payments under Purchase Obligations, less Income Taxes paid, measured
on a cumulative basis for the period beginning on October 1, 2008 and
ending on the last day of the month before the date of any proposed
Subordinated Note Payment. “Capital Expenditures” shall mean any
amounts paid in respect of any purchase or other acquisition for value
of fixed or capital assets; provided that in no event shall Capital
Expenditures include amounts expended in respect of normal repair and
maintenance of plant facilities, machinery, fixtures and other like
capital assets utilized in the ordinary conduct of business (to the
extent such amounts would not be capitalized in preparing a balance
sheet determined in accordance with GAAP). “Purchase Obligations”
means any future payments that are due to previous owners of companies
acquired by the Company, including but not limited to, escrow payments
and earn-out payments. “Income Taxes” shall mean for any period the
aggregate amount of taxes based on the income or profits of the
Company for such period, determined in accordance with GAAP.”

     3. Miscellaneous.

     3.1 Counterparts. This Amendment may be executed in two or more
counterparts (including by facsimile transmission), each of which shall be deemed an
original, but all of which together shall constitute one and the same Amendment.

     3.2 Original Agreement. Except to the extent modified by this
Amendment, the terms and conditions of the Note Purchase Agreement will remain
unchanged and shall continue in full force and effect.

     3.3 Governing Law. This Amendment and all actions arising out of or in
connection with this Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflicts of law
provisions of the State of Delaware or of any other state.

 

 

Signature page to First Amendment to Note Purchase Agreement 

between HV Capital Investors, LLC and RealPage, Inc.

dated December 31, 2008

     IN WITNESS WHEREOF, the parties have caused this First Amendment to Note Purchase Agreement to
be duly executed and delivered by their proper and duly authorized officers as of the date and year
first written above.

	 	 	 	 	 
	 	RealPage, Inc.

 	 
	 	By:  	/s/ Timothy J. Barker
 	 
	 	 	Name:  	Timothy J. Barker 	 
	 	 	Title:  	CFO 	 
	 
	 	HV Capital Investors, L.L.C.

By: GWH Management, LLC

Its: Manager

 	 
	 	By:  	/s/ Glennon Healey
 	 
	 	 	Glennon W. Healey 	 
	 	 	Its: Managerexv10w35

Exhibit 10.35

UNSECURED SUBORDINATED PROMISSORY NOTE

			
	 	 	 
	$
	 	Carrollton, Texas
	 
	 	December 31, 2008

RIGHTS OF THE HOLDER TO RECEIVE PAYMENT ARE SUBJECT AND SUBORDINATE TO THE PRIOR PAYMENT OF ALL
OBLIGATIONS OF THE CORPORATION TO COMERICA BANK, N.A. (“COMERICA”), PURSUANT TO THE TERMS OF A
SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH, AS WELL AS BEING SUBORINDATE TO THE PRIOR PAYMENT OF
ALL OBLIGATIONS OF THE CORPORATION TO HV CAPITAL INVESTORS, L.L.C., PURSUANT TO THE TERMS HEREOF.
THIS SUBORDINATED PROMISSORY NOTE SHALL AT ALL TIMES BE UNSECURED.

     RealPage, Inc., a Delaware corporation (the “Corporation”) hereby promises to pay to
the order of            (the “Holder”), its successors and assigns, in lawful money of
the United States of America, the lesser of            dollars ($     ) or the principal balance
outstanding under this Subordinated Promissory Note (the “Promissory Note”), together with accrued
and unpaid interest thereon, at the rate or rates set forth below, on the dates and in the amounts
set forth below, and in any event, on the Maturity Date (as defined below).

     For purposes of this Promissory Note, the “Maturity Date” shall mean the earlier of
(i) immediately prior to the closing of the Corporation’s initial public offering of its common
stock pursuant to an effective registration statement under the Securities Act of 1933, as amended,
(ii) immediately prior to the consummation of (A) any merger or consolidation of the Corporation
into or with another corporation or other similar transaction or series of related transactions in
which the Corporation’s stockholders of record (or their affiliates) as constituted immediately
prior to such transaction or series of related transactions will not, immediately after such
transaction or series of related transactions, beneficially own (as determined pursuant to Rule
13d-3 of the Securities Exchange Act of 1934, as amended) at least a majority of the voting power
of the surviving or acquiring entity, or (B) the sale of all or substantially all the assets of the
Corporation, or (iii) October 1, 2012.

     The unpaid principal amount of this Promissory Note shall bear interest at a rate per annum
equal to eight percent (8.0%) calculated on the basis of a 365 day year and the actual number of
days elapsed. If any interest is determined to be in excess of the then legal maximum rate, then
that portion of each interest payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the principal of the obligations
evidenced by this Promissory Note.

     Except as otherwise provided herein, the principal amount of this Promissory Note shall be
payable in sixteen (16) consecutive quarterly payments (“Quarterly Payments”) and each
payment shall be in the amount of $       plus all accrued and unpaid interest thereon.
Each payment shall be payable on the first business day of each quarter commencing on January 1,
2009 and continuing until the Maturity Date, at which time all outstanding principal and

 

 

accrued and unpaid interest shall be due and payable in full. Notwithstanding the foregoing,
any or all of the quarterly payments described in this paragraph may be deferred at the sole and
absolute discretion of the Board of Directors of the Corporation. Any quarterly payment so
deferred shall be due and payable on the Maturity Date.

     The foregoing notwithstanding, in the event that this Note has not been paid in full and the
Corporation fails to close the initial public offering of its common stock pursuant to an effective
registration statement under the Securities Act of 1933, as amended, on or before September 30,
2009, then the Corporation shall be obligated to pay to the Holder, in addition to the unpaid
principal and interest otherwise payable hereunder, an amount equal to $           (“Additional
Payment”), which Additional Payment shall not bear interest and shall be due and payable upon
the Maturity Date.

     The indebtedness of the Corporation evidenced by this Promissory Note, including the
principal, interest and Additional Payment (collectively, “Subordinated Debt”) shall be
fully subordinated and junior in all respects, including the right of payment to its obligations to
HV Capital Investors, L.L.C. or its assignee (“Senior Lender”), whether direct or indirect,
absolute or contingent, joint or several, secured or unsecured, due or to become due, now existing
or later arising and whatever the amount and however evidenced in connection with the collateral of
the Corporation (the “Senior Obligations”). OTHER THAN FOR QUARTERLY PAYMENTS AND
ADDITIONAL PAYMENTS, WHICH THE CORPORATION MAY MAKE SUBJECT SO LONG AS AN EVENT OF DEFAULT DOES NOT
EXIST UNDER THE SENIOR OBLIGATIONS (INCLUDING ANY DOCUMENTS EVIDENCING SUCH SENIOR OBLIGATIONS) OR
ANY OBLIGATIONS OF THE CORPORATION TO COMERICA OR WOULD NOT EXIST AFTER GIVING EFFECT TO SUCH
PAYMENTS, UNTIL THE IRREVOCABLE PAYMENT AND PERFORMANCE OF THE SENIOR OBLIGATIONS, NO PAYMENTS MAY
BE MADE OF THE PRINCIPAL OF, OR INTEREST ON, THIS PROMISSORY NOTE. In the event of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or any liquidation or winding up of or relating to the
Corporation, whether voluntary or involuntary, all such obligations to Senior Lender shall be
entitled to be paid in full before any payment shall be made on account of the principal or
interest or Additional Payment, on the Promissory Note. The indebtedness of the Corporation
evidenced by this Promissory Note is not, and shall not be, a secured obligation of the Corporation
or otherwise evidenced by any security agreement between the Corporation and the Holder.

     Except for payment of the Quarterly Payments and Additional Payments in accordance herewith,
Holder will not ask for, demand, sue for, take, receive or retain from the Corporation, and the
Corporation shall not pay, by setoff or in any other manner, payment of all or any part of the
indebtedness owing under this Promissory Note.

     SO LONG AS ANY OF THE SENIOR OBLIGATIONS REMAIN UNPAID, UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT UNDER THE SENIOR OBLIGATIONS (INCLUDING ANY DOCUMENTS EVIDENCING THE SENIOR OBLIGATIONS) OR
ANY OBLIGATIONS OF THE CORPORATION TO COMERICA, IN EACH CASE EITHER BEFORE OR AFTER GIVING AFFECT
TO ANY QUARTERLY PAYMENTS OR ADDITIONAL PAYMENTS DUE HEREUNDER

 

 

(EACH A “BLOCKAGE DEFAULT”), HOLDER MAY NOT ASK FOR, DEMAND, SUE FOR, TAKE, RECEIVE OR RETAIN
FROM THE CORPORATION, AND THE CORPORATION SHALL NOT PAY, BY SETOFF OR IN ANY OTHER MANNER, ANY
QUARTERLY PAYMENTS OR ADDITIONAL PAYMENTS UNTIL SUCH TIME AS HOLDER AND THE CORPORATION HAVE
RECEIVED WRITTEN NOTICE FROM SENIOR LENDER THAT SUCH PAYMENTS MAY AGAIN BE MADE.

     Except as otherwise set forth herein, the Corporation agrees, and Holder by accepting this
Promissory Note agrees, that: (A) the obligations evidenced by this Promissory Note are
subordinated in right of payment in full of all of the Senior Obligations; (B) the subordination is
for the benefit of the Senior Lender and Senior Lender shall be deemed to have acquired the Senior
Obligations in reliance upon the covenants and provisions contained in this Promissory Note; (C)
except for payment of the Quarterly Payments and Additional Payments that may be made so long as a
Blockage Default does not exist, should any payment, distribution or security, or proceeds of such
payment, distribution or security (including without limitation, any Quarterly Payments or
Additional Payments made to Holder after the occurrence of a Blockage Default), be received by
Holder upon or with respect to this Promissory Note prior to the satisfaction in full of the Senior
Obligations, Holder shall immediately deliver same to the Senior Lender in the form received
(except for endorsement or assignment by Holder where required by the Senior Lender), for
application on the Senior Obligations (whether or not then due and in such order of maturity as
Senior Lender elects) and, until so delivered, the same shall be held in trust by Holder as the
property of the Senior Lender; (D) no revision to any provision of this Promissory Note applicable
or relevant to the subordination of this Note to the Senior Obligations shall be made or become
effective until approved in writing by the Senior Lender; and (E) Senior Lender shall have no
obligation to deliver to Holder any notice of an Event of Default or Blockage Default and failure
by Senior Lender to deliver any such notice to Holder shall not affect Holder’s obligation to hold
in trust any funds received by Holder from the Corporation after the occurrence of such Event of
Default or Blockage Default.

     Upon any distribution (whether cash, securities or other property, by setoff or otherwise) to
creditors of the Corporation in a liquidation or dissolution of the Corporation or in bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the Corporation or its
property: (A) Senior Lender shall be entitled to payment in full of all Senior Obligations with
respect to the Senior Lender (including interest after the commencement of any such proceedings at
the rates specified for the applicable indebtedness) to the date of payment of the applicable
Senior Obligations before Holder shall be entitled to receive any payment of any obligations with
respect to this Promissory Note; and (B) until all Senior Obligations are indefeasibly paid in
full, any distribution to which Holder would be entitled shall be made to Senior Lender.

     No right of Senior Lender to enforce the subordination of the indebtedness evidenced by this
Note shall be impaired by any act or failure to act by the Corporation or by its failure to comply
with the terms and conditions of this Promissory Note. Senior Lender shall be deemed a third party
beneficiary of this Promissory Note for purposes of enforcing the terms of hereof.

 

 

     This Promissory Note may be prepaid in whole or in part at any time, without premium or
penalty.

     In the event that the Corporation shall fail to pay when due any principal or interest on this
Promissory Note, then if such payment of principal or interest is not made within 5 days of the due
date, then the Holder may declare all obligations (including without limitation, outstanding
principal and accrued and unpaid interest thereon) under this Promissory Note to be immediately due
and payable without presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived.

     This Promissory Note is being delivered in, is intended to be performed in, shall be construed
and interpreted in accordance with, and be governed by the internal laws of, the State of Texas,
without regard to principles of conflict of laws.

     This Promissory Note may only be amended, modified or terminated by an agreement in writing
signed by the party to be charged. This Promissory Note shall be binding upon the heirs, executors,
administrators, successors and assigns of the Corporation and inure to the benefit of the Holder
and its permitted successors, endorsees and assigns.

[SIGNATURE PAGE TO FOLLOW]

 

 

	 	 	 	 	 
	 	REALPAGE, INC.

 	 
	 	By:  	

 	 
	 	 	Stephen T. Winn 	 
	 	 	Chief Executive Officer

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