MODIVCARE INC: Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Registrant Arrangement, Financial Statements and Supporting Documentation (Form 8-K)

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under a

           Off-Balance Sheet Arrangement of a Registrant.

At February 3, 2022, ModivCare Inc. (the “Company”) has entered into a credit agreement (the “credit agreement”) with JPMorgan Chase Bank, North America., as administrative agent, swing line lender and issuing bank, Wells Fargo Bank, National Associationas an issuing bank, Truist Bank and Wells Fargo Bank, National Associationas co-syndication agents, Deutsche Bank AG New York Branch, Bank of America, North America., Bank of RegionsBank of Montreal and Capital One, National Associationas co-documentation agents, and JPMorgan Chase Bank, North America.,
Trust Securities, Inc. and Wells Fargo Securities, LLC, as joint bookrunners and lead arrangers, and the other lender parties thereto. The Credit Agreement provides the Company with a senior secured revolving credit facility (the “Senior Credit Facility”) in the aggregate principal amount of $325.0 million. It is possible to increase the amount of the senior credit facility or to obtain additional term loans for a total amount of up to $175.0 million, plus an unlimited amount as long as the pro forma guaranteed net leverage ratio does not exceed 3.50:1.00, as described below. The Senior Credit Facility includes sub-limits for swingline loans, letters of credit and alternative currency loans of up to $25.0 million, $60.0 million and $75.0 million, respectively. The Company has not drawn any amount on the senior credit facility at the closing of the credit agreement. At closing, the Company had $22.8 million outstanding letters of credit under the senior credit facility. The proceeds of the Senior Credit Facility may be used (i) to finance the working capital needs of the Company and its subsidiaries and (ii) for the general needs of the Company and its subsidiaries (including to finance capital expenditures, authorized acquisitions and investments) . The Senior Credit Facility replaces the Company’s Revolving Credit Facility under the Amended and Restated Credit and Security Agreement, dated 2nd August 2013 (as amended, modified, supplemented or extended), between the Company, the guarantors who are sometimes parties thereto, the lenders who are sometimes parties thereto and Bank of America, North America., as administrative agent, online lender and issuer of letters of credit, which was terminated concurrently with the entering into of the credit agreement by the company.

Under the Senior Credit Facility, the Company has the ability to request an increase in the amount of the Senior Credit Facility or to obtain additional term loans from time to time (substantially on the same terms as that apply to existing facilities) in an aggregate amount of up to $175.0 million, plus an unlimited amount so long as the pro forma secured net leverage ratio does not exceed 3.50:1.00, with either additional covenants from the lenders under the Credit Agreement at that time or new covenants financial institutions approved by the Company and the Administrative Agent (whose approval shall not be unreasonably withheld), so long as at the time of such increase no default or event of default exists, the representations and warranties of the Company set forth in the credit agreement are true and correct in all respects and the Company is in pro forma compliance with the financial covenants of the credit agreement. The Company may not be able to access additional funds under this increase option as no lender is required to participate in any such increase under the Senior Credit Facility.

The Senior Credit Facility matures on February 3, 2027. The Company may prepay all or part of the Senior Credit Facility, at any time without premium or penalty, subject to the reimbursement of the breakage and redeployment costs of the lenders related to the prepayments of the Term Benchmark loans or the RFR loans, each as defined in the Credit Agreement. The unused portion of the commitments under the Senior Credit Facility may be irrevocably reduced or terminated by the Company at any time without penalty.

Interest on the outstanding principal amount of the loans accrues at an annual rate equal to the alternative base rate, the adjusted forward SOFR rate, the adjusted simple daily SOFR rate, the adjusted EURIBOR rate or the adjusted simple daily SONIA rate, depending on the case and each as defined in the credit agreement, in each case, plus an applicable margin. The applicable margin ranges from 1.75% to 3.50% in the case of Reference Term Loans or RFR Loans, each as defined in the Credit Agreement, and from 0.75% to 2.50% in in the case of alternative base rate loans, in each case, based on the total net leverage ratio of the Company as defined in the credit agreement. Interest on Loans is payable quarterly in arrears, in the case of Alternate Base Rate Loans, on the last day of the relevant interest period, in the case of the Reference Term Loan, and monthly in arrears in the case of RFR loans. In addition, the Company is required to pay quarterly commitment fees based on a percentage of the unused portion of the revolving credit facility and quarterly letter of credit fees based on a percentage of the maximum amount available to be drawn under of each outstanding letter of credit. . The commitment fee and the letter of credit fee vary from 0.30% to 0.50% and from 1.75% to 3.50%, respectively, in each case, depending on the total net leverage ratio of the society.

The credit agreement contains customary representations and warranties, positive and negative clauses and events of default. The covenants include restrictions on the Company’s ability to, among other things, incur additional debt, create liens, make investments, give guarantees, pay dividends, sell assets and merge and consolidate. The Company is subject to financial covenants, including covenants relating to total net indebtedness and interest coverage.

————————————————– ——————————

The obligations of the Company under the Senior Credit Facility are guaranteed by all present and future material national subsidiaries of the Company, excluding certain material national subsidiaries which are excluded from guarantee under the terms of the Credit Agreement. . The obligations of the Company under the Senior Credit Facility and the obligations of each guarantor under its guarantee are secured by a first lien on substantially all of the respective assets of the Company or such guarantor. If an Event of Default occurs, the Required Lenders may require the Administrative Agent to declare all outstanding principal and any accrued and unpaid interest and all fees and expenses under the Senior Credit Facility immediately due and payable. All amounts outstanding under the Senior Credit Facility will automatically become due and payable upon commencement of any bankruptcy, insolvency or similar proceeding. The Credit Agreement also contains a cross-default with respect to any indebtedness of the Company the principal amount of which exceeds $40 million.

The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is attached as Schedule 10.1 hereto and incorporated herein by reference.

Section 9.01. Financial statements and supporting documents.

(d)     Exhibits

Exhibit No. Description

   10.1*         Credit Agreement dated as of February 3, 2022, among ModivCare Inc.,
               the co-syndication agents party thereto, the co-documentation agents
               party thereto, the lenders party thereto and JPMorgan Chase Bank,
               N.A., as Administrative Agent.

    104        The cover page from this Current Report on Form 8-K, formatted as
               Inline XBRL.

* Certain appendices and exhibits have been omitted in accordance with SK Rule 601(a)(5). Descriptions of schedules and omitted exhibits are contained in the credit agreement. ModivCare hereby agrees to provide a copy of any attachments or exhibits omitted from the SECOND on demand.

                                       2

————————————————– ——————————

© Edgar Online, source Previews