Epiq Systems amends definitions in credit agreement, increases coupon

By Toni Weeks

San Luis Obispo, Calif., Jan. 27 – Epiq Systems, Inc. entered into the second amendment to its existing credit agreement dated Aug. 27, 2013 with KeyBank NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment modified the definitions of “consolidated EBITDA,” “consolidated net income” and “excess cash flow” in order to permit the company to add back the following charges:

• Severance and reorganization costs and expenses incurred during any trailing 12-month period that includes a fiscal quarter ending on or after Jan. 1, 2014 and on or before Dec. 31, 2014; and

• Certain fees, costs and expenses incurred by the company in connection with its previously announced review of certain strategic and financial alternatives, including potential proxy contest.

In addition, the amendment changed the applicable margin used to calculate the interest rate.

Specifically, the interest rate for term loans is now Libor plus 375 basis points.

For revolving loans, the interest rate, commitment fee and letter-of-credit fee is determined as follows:

• From the effective date of the amendment through the date on which Epiq delivers its audited consolidated financial statements and compliance certificate for the fiscal year ending Dec. 31, the interest rate will be Libor plus 375 bps, the letter-of-credit fee will be 375 bps, and the commitment fee will be 50 bps.

• Thereafter, the applicable margin for Libor loans and the LoC fee will be 325 bps to 425 bps, and the commitment fee will be 37.5 bps to 50 bps, with the actual margins based on the company’s consolidated total net leverage ratio.

Kansas City, Kan.-based Epiq Systems is a provider of technology-enabled solutions for electronic discovery, bankruptcy and class action administration.

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