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On April 18, 2017, Telos Corporation (the "Company") entered into a Second Amendment to Credit Agreement ("Second Amendment"), by and among the Company, as borrower, Xacta Corporation, ubIQuity.com, Inc., and Teloworks, Inc., as guarantors (together, the "Guarantors"), Enlightenment Capital Solutions Fund II, L.P., as agent (the "Agent"), and the lenders party thereto (the "Lenders"), in order to amend that certain Credit Agreement (the "Credit Agreement"), dated January 25, 2017, as previously amended by that certain First Amendment to Credit Agreement, dated February 23, 2017 (the "First Amendment", together with Second Amendment and the Credit Agreement, the "Amended Credit Agreement").
The Second Amendment incorporates the parties' agreement to subordinate certain debt owed by the Company to JP Charitable Foundation ("JPCF") and Porter Foundation Switzerland ("PFS") and to redeem all outstanding shares of the Series A-1 Redeemable Preferred Stock and the Series A-2 Redeemable Preferred Stock (together, the "Senior Preferred Stock"), including those owned by Mr. John R.C. Porter and his affiliates, for an aggregate purchase price of $2,112,000. Under the original terms of the Credit Agreement, as amended by the First Amendment, the Company was required to pay in full all outstanding amounts owed to JPCF and PFS, and to redeem a portion of the Senior Preferred Stock not held by Mr. Porter or his affiliates.
In connection with the Second Amendment and that subordination of debt, on April 18, 2017, the Company also entered into (a) a Subordination and Intercreditor Agreement (the "JPCF Intercreditor Agreement") among JPCF, the Company, the Guarantors, and the Agent, (b) a Subordination and Intercreditor Agreement among PFS, the Company, the Guarantors, and the Agent (together with JPCF Intercreditor Agreement, the "Intercreditor Agreements"), (c) a First Amendment to Subordinated Loan Agreement (the "JCPF First Amendment") between the Company and JPCF, in order to amend that certain Subordinated Loan Agreement, dated March 31, 2015 (as amended by the JCPF First Amendment, the "JPCF Amended Subordinated Agreement"), and (d) a First Amendment to Subordinated Loan Agreement (the "PFS First Amendment") between the Company and PFS, in order to amend that certain Subordinated Loan Agreement, dated March 31, 2015 (as amended by the PFS First Amendment, the "PFS Amended Subordinated Agreement, and together with the JPCF Amended Subordinated Agreement, the "Amended Subordinated Agreements").
Under the terms of each of the Intercreditor Agreements, JPCF and PFS, respectively, agree that the Amended Subordinated Agreements and the Amended Notes (as defined below) are fully subordinated to the Amended Credit Agreement and related documents, and that required payments, if any, under the Amended Subordinated Agreements and the Amended Notes are permitted only if certain conditions specified under the Amended Credit Agreement and the Intercreditor Agreements are met.
On April 18, 2017, the Company also entered into an Amended and Restated Subordinated Promissory Note by the Company in favor of JPCF in the principal amount of $1,250,000 (the "JCPF Amended Note") and an Amended and Restated Subordinated Promissory Note by the Company in favor of PFS in the principal amount of $1,250,000 (together with the JCPF Amended Note, the "Amended Notes"), in order to amend and restate those certain Subordinated Promissory Notes, dated March 31, 2015. Each of the Amended Notes reduces the interest rate from twelve percent to six percent per annum, to be accrued, and extends the maturity date from July 1, 2017 to July 25, 2022. All other terms remain in full force and effect.
A copy of the Second Amendment is attached hereto as Exhibit 4.1 and is incorporated herein by reference. A copy of each of the Intercreditor Agreements is attached hereto as Exhibit 4.2 and 4.3, respectively, and is incorporated by reference. A copy of each of the JCPF First Amendment and the PFS First Amendment is attached hereto as Exhibit 4.4 and Exhibit 4.5, respectively, and is incorporated herein by reference. A copy of each of the Amended Notes is attached hereto as Exhibit 4.6 and Exhibit 4.7, respectively, and is incorporated by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the attached Second Amendment, the Intercreditor Agreements, the JCPF First Amendment, the PFS First Amendment, and the Amended Notes.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
