SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this Amendment), dated as of December 19, 2013, is made by and among NCI, INC., a Delaware corporation (the Company), NCI INFORMATION SYSTEMS, INCORPORATED, a Virginia corporation (NCI Virginia), KARTA TECHNOLOGIES, INC., a Texas corporation (Karta), and ADVANCEMED CORPORATION, a Virginia corporation (AdvanceMed, and together with the Company, NCI Virginia, Karta and each other Subsidiary that becomes a party to the Loan Agreement (as such term is defined below) from time to time in accordance with the provisions set forth therein, collectively, the Borrowers, and individually, a Borrower), the Lenders (as defined below) party hereto, and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (in such capacity, the Administrative Agent), as Issuing Bank and as Swingline Lender.
RECITALS
WHEREAS, the Borrowers, the several banks and other financial institutions from time to time party thereto (the Lenders) and the Administrative Agent are parties to the Amended and Restated Loan and Security Agreement, dated as of December 13, 2010, as amended by the Waiver, dated as of November 7, 2012, by and among the Borrowers, the Lenders party thereto and the Administrative Agent, as amended by the Waiver and Amendment to Amended and Restated Loan and Security Agreement, dated as of December 31, 2012, by and among the Borrowers, the Lenders party thereto and the Administrative Agent (as further amended, modified or supplemented from time to time, the Loan Agreement);
WHEREAS, the Borrowers have requested that the Lenders and the Administrative Agent agree to amend certain provisions of the Loan Agreement; and
WHEREAS, the Lenders and the Administrative Agent have agreed to do so, subject to the terms and conditions of this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:
AGREEMENT
1. Incorporation of Recitals. The Recitals hereto are incorporated herein by reference to the same extent and with the same force and effect as if fully set forth herein. Capitalized terms defined in the Loan Agreement shall have the same defined meanings when such terms are used herein.
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows:
(a) The following definition is hereby added to Section 1 of the Loan Agreement in the proper alphabetical order, to read in its entirety as follows:
Second Amendment Effective Date shall mean the date on which the conditions precedent to the Second Amendment to Amended and Restated Loan and Security Agreement, dated as of December 19, 2013, by and among the Borrowers, the Lenders party thereto and the Administrative Agent, are satisfied as determined by the Administrative Agent.
(b) The definition of Applicable Margin contained in Section 1 of the Loan Agreement is amended to read in its entirety as follows:
Applicable Margin shall mean the applicable percentage corresponding to the Funded Debt Ratio set forth below, as calculated by the Administrative Agent. The Applicable Margin on the Second Amendment Effective Date for (a) Revolving Loans that are LIBOR Loans or Index Rate Loans, and Swingline Loans that are Index Rate Loans shall be 2.10%, and (b) Revolving Loans and Swingline Loans that are Base Rate Loans shall be 2.10%. The Applicable Margin will be adjusted on a quarterly basis in accordance with the table set forth below:
Funded Debt Ratio | Applicable Margin for Revolving LIBOR Loans and Index Rate Loans and for Swingline Index Rate Loans | Applicable Margin for Revolving and Swingline Base Rate Loans | ||||||
Less than 1.00 to 1. | 2.10 | % | 2.10 | % | ||||
Equal to or greater than 1.00 to 1, and less than to 1.75 to 1. | 2.35 | % | 2.35 | % | ||||
Equal to or greater than 1.75 to 1, and less than to 2.50 to 1. | 2.60 | % | 2.60 | % | ||||
Equal to or greater than 2.50 to 1. | 3.10 | % | 3.10 | % |
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The Applicable Margin will be adjusted to the percentage corresponding to the applicable Funded Debt Ratio in effect as of the last day of each fiscal quarter of the Company. The adjustment will become effective as of the first day of the calendar month next succeeding delivery to the Administrative Agent of the Companys consolidated financial statements for the last month of each fiscal quarter pursuant to Section 5.8, commencing with the fiscal quarter of the Company ending December 31, 2013. No decrease in the Applicable Margin shall become effective if, at such time, any Event of Default has occurred and is continuing until such time as such Event of Default is cured or waived in accordance with the terms of this Agreement and no other Events of Default have occurred and are continuing. If the Companys financial statements are not delivered to the Administrative Agent within the specified time periods, the Applicable Margin may be increased, at the option of the Administrative Agent, or upon written notice from the Required Lenders to the Administrative Agent and the Company, to the highest applicable percentage above, to be effective from the date on which the statements were due through the date on which such financial statements are delivered to the Administrative Agent, whereupon the Applicable Margin shall again be adjusted to the applicable percentage corresponding to the Funded Debt Ratio in effect as of the last day of such fiscal quarter of the Company; provided, further, that in the event that any financial statements delivered pursuant to Section 5.8 is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an Applicable Period) than the Applicable Margin applied for such Applicable Period, and only in such case, then the Borrowers shall (i) immediately deliver to the Administrative Agent corrected financial statements for such Applicable Period, (ii) immediately determine the Applicable Margin for such Applicable Period based upon the corrected statements and (iii) promptly pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.23. The provisions of this definition are in addition to rights of the Administrative Agent and Lenders with respect to Section 2.11 and Section 9.
(c) The definition of Commitment Termination Date contained in Section 1 of the Loan Agreement is amended to read in its entirety as follows:
Commitment Termination Date shall mean the earliest of (i) January 31, 2017, (ii) the date on which the Revolving Commitments are terminated pursuant to Section 2.20 and (iii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise), and any extension or extensions thereof granted by all of the Lenders.
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(d) Clause (b) of the definition of Permitted Acquisitions contained in Section 1 of the Loan Agreement is amended to read in its entirety as follows:
(b) the Target has Permitted Acquisition EBITDA for the twelve month period ending as of the most recent fiscal quarter end prior to the acquisition date in an amount (i) greater than $0 and (ii) not exceeding EBITDA of the Company and its Subsidiaries (not including the Target) for such period,
(e) Clause (g) of the definition of Permitted Acquisition contained in Section 1 of the Loan Agreement is amended so that the reference to $50,000,000 shall be a reference to $100,000,000.
(f) The reference to 30 days in Section 5.8(a) is amended to be a reference to 45 days.
(g) The reference to 30 days in Section 5.8(g) is amended to be a reference to 45 days.
(h) The reference to $3,000,000 in clause (c)(ii) of Section 6.6 is amended to be a reference to $4,000,000.
(i) Except as specifically modified by this Amendment, the terms and provisions of the Loan Agreement are ratified and confirmed by the parties hereto and remain in full force and effect.
(j) Each of the Borrowers, the Administrative Agent and each Lender agrees that, after the Amendment Effective Date (as hereinafter defined), each reference in the Loan Documents to the Loan Agreement shall be deemed to be a reference to the Loan Agreement as amended hereby.
3. No Implied Waivers. Each of the Borrowers acknowledges and agrees that this Amendment shall not constitute a waiver, express or implied, of any Default, Event of Default, covenant, term or provision of the Loan Agreement or any other Loan Document, nor shall it create any obligation, express or implied, on the part of the Administrative Agent or any Lender to waive, or to consent to any amendment of, any existing or future Default, Event of Default or violation of any covenant, term or provision of any Loan Document. The Administrative Agent and the Lenders shall be entitled to require strict compliance by the Borrowers with the Loan Documents, and nothing herein shall be deemed to establish a course of action or a course of dealing with respect to requests by the Company or any Borrower for waivers or amendments of any Default, Event of Default, covenant, term or provision of any Loan Document.
4. Effectiveness of Amendment. This Amendment and the amendments contained herein shall become effective on the date (the Amendment Effective Date) when each of the conditions set forth below shall have been fulfilled to the satisfaction of the Administrative Agent:
(a) The Administrative Agent shall have received counterparts of this Amendment and all other Loan Documents or other documents, instruments and certificates required hereby or thereby (collectively, the Modification Documents), each duly executed and delivered on behalf of the Borrower and the other Loan Parties parties thereto, as applicable.
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(b) No event shall have occurred and be continuing that constitutes an Event of Default, or that would constitute an Event of Default but for the requirement that notice be given or that a period of time elapse, or both.
(c) All representations and warranties of the Borrowers contained in the Loan Agreement shall be true and correct in all material respects (or, if qualified by materiality, in all respects) at the Amendment Effective Date as if made on and as of such Amendment Effective Date (except that any representation or warranty relating to any financial statements shall be deemed to be applicable to the financial statements most recently delivered to the Administrative Agent in accordance with the provisions of the Loan Documents).
(d) The Borrowers shall have delivered to the Administrative Agent (1) certified copies of evidence of all corporate and company actions taken by the Borrowers to authorize the execution and delivery of the Modification Documents, (2) certified copies of any amendments to the articles or certificate of incorporation, organization or formation, bylaws, partnership certificate and operating agreement of the Borrowers since the date of the Loan Agreement, (3) a certificate of incumbency for the officers or other authorized agents or partners of the Borrowers executing the Modification Documents and (4) such additional supporting documents as the Administrative Agent or counsel for the Administrative Agent reasonably may request.
(e) The Borrowers shall have paid the fees and expenses required to be paid by Section 9 of this Amendment.
(f) All documents delivered pursuant to the Modification Documents must be of form and substance satisfactory to the Administrative Agent and its counsel, and all legal matters incident to this Amendment must be satisfactory to the Administrative Agents counsel.
5. Amendment Only; No Novation; Modification of Loan Documents. Each of the Borrowers acknowledges and agrees that this Amendment and the other Modification Documents only amend the terms of the Loan Agreement and the other Loan Documents and do not constitute a novation, and each of the Borrowers ratifies and confirms the terms and provisions of, and its obligations under, the Loan Agreement and the other Loan Documents in all respects. Each of the Borrowers acknowledges and agrees that each reference in the Loan Documents to any particular Loan Document shall be deemed to be a reference to such Loan Document as amended by this Amendment and the other Modification Documents. To the extent of a conflict between the terms of any Loan Document and the terms of this Amendment, the terms of this Amendment shall control.
6. Successors and Assigns. This Amendment shall be binding upon the Borrowers, the Lenders and the Administrative Agent and their respective successors and assigns, and shall inure to their successors and assigns.
7. No Further Amendments. Nothing in this Amendment, the other Modification Documents or any prior amendment to the Loan Documents shall require the Administrative Agent or any Lender to grant any further amendments to the terms of the Loan Documents. Each of the Borrowers acknowledges and agrees that there are no defenses, counterclaims or setoffs against any of their respective obligations under the Loan Documents.
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8. Representations and Warranties. Each Borrower represents and warrants that each of this Amendment and each of the other Modification Documents has been duly authorized, executed and delivered by it in accordance with resolutions adopted by its board of directors or comparable managing body. All other representations and warranties made by the Borrowers in the Loan Documents are incorporated by reference in this Amendment and are deemed to have been repeated as of the date of this Amendment with the same force and effect as if set forth in this Amendment, except that any representation or warranty relating to any financial statements shall be deemed to be applicable to the financial statements most recently delivered to the Administrative Agent in accordance with the provisions of the Loan Documents. The Borrowers represent and warrant to the Administrative Agent, the Lenders, the Issuing Bank and the Swingline Lender that, after giving effect to the terms of this Amendment and the other Modification Documents, no Default nor Event of Default has occurred and been continuing.
9. Fees and Expenses. In consideration of the amendments to the Loan Agreement and the other Loan Documents set forth herein and in the other Modification Documents, the Borrowers jointly and severally agree to pay to the Administrative Agent or the Arranger, for the ratable benefit of each Lender executing and delivering this Amendment (pro rata according to the respective Revolving Credit Percentages of the relevant Lenders), on the Amendment Effective Date, a nonrefundable amendment fee equal to 0.125% of the Aggregate Revolving Commitments as of the Amendment Effective Date. The Borrowers hereby confirm their joint and several obligations under Section 11.3(a) of the Loan Agreement to pay all reasonable, out-of-pocket fees and expenses of the Administrative Agent and the Arranger in connection with this Amendment and the other Modification Documents, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and the Arranger.
10. Confirmation of Lien. Each Borrower hereby acknowledges and agrees that the Collateral is and shall remain in all respects subject to the lien, charge and encumbrance of the Loan Agreement and the other Loan Documents and nothing herein contained, and nothing done pursuant hereto, shall adversely affect or be construed to adversely affect the lien, charge or encumbrance of, or conveyance effected by the Loans or the Loan Documents or the priority thereof over other liens, charges, encumbrances or conveyances.
11. Severability. Any provision of this Amendment held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12. Governing Law. This Amendment shall be construed in accordance with and be governed by the laws (without giving effect to the conflict of law principles thereof) of the Commonwealth of Virginia.
13. Counterparts. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by telecopy or by email, in pdf format), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. It shall not be necessary that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on more than one counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed by their respective duly authorized representatives all as of the day and year first above written.
BORROWERS: | ||
NCI, INC., a Delaware corporation | ||
By: | /s/ Jon L. Frank | |
Name: | Jon L. Frank | |
Title: | Vice President, Controller | |
NCI INFORMATION SYSTEMS, INCORPORATED, a Virginia corporation | ||
By: | /s/ Jon L. Frank | |
Name: | Jon L. Frank | |
Title: | Vice President, Controller | |
KARTA TECHNOLOGIES, INC., a Texas corporation | ||
By: | /s/ Jon L. Frank | |
Name: | Jon L. Frank | |
Title: | Vice President, Controller | |
ADVANCEMED CORPORATION, a Virginia corporation | ||
By: | /s/ Jon L. Frank | |
Name: | Jon L. Frank | |
Title: | Vice President, Controller |
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ADMINISTRATIVE AGENT: | ||
SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent, Issuing Bank and Swingline Lender | ||
By: | /s/ Heather N. Nemeroff | |
Name: | Heather N. Nemeroff | |
Vice President |
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LENDER: | ||
SUNTRUST BANK, a Georgia banking corporation, as a Lender | ||
By: | /s/ Heather N. Nemeroff | |
Heather N. Nemeroff | ||
Vice President |
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LENDER: | ||
CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered bank, as a Lender | ||
By: | /s/ Tracy Van Riper | |
Tracy Van Riper | ||
Senior Vice President |
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LENDER: | ||
BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, as a Lender | ||
By: | /s/ James E. Davis | |
James E. Davis | ||
Senior Vice President |
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LENDER: | ||
CAPITAL ONE NATIONAL ASSOCIATION, a national banking association | ||
By: | /s/ Joseph C. Costa | |
Joseph C. Costa | ||
Senior Vice President |