Exhibit 10.1

 

SECOND AMENDMENT

TO

LOAN AGREEMENT

 

This Second Amendment to Amended and Restated Revolving Line of Credit Loan
Agreement and Security Agreement, dated as of February 27, 2004, is entered into
by and among Integral Systems, Inc., a Maryland corporation (“Integral”), SAT
Corporation, Inc., a California corporation (“SAT” and together with Integral,
collectively the “Borrower”), and Bank of America, N.A. (the “Lender”) (said
Amendment being referred to herein as “this Amendment”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower and Lender entered into that certain Amended and Restated
Revolving Line of Credit Loan Agreement and Security Agreement, dated as of
August 31, 2001, as amended by that certain First Modification to Amended and
Restated Revolving Line of Credit Loan Agreement and Security Agreement, dated
as of February 3, 2003 (as so amended, the “Loan Agreement”); and

 

WHEREAS, Borrower and Lender have agreed to amend the Loan Agreement as provided
herein;

 

NOW THEREFORE, in consideration of the terms and conditions set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows (capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed thereto as set forth in the Loan Agreement):

 

SECTION 1. Amendment to Loan Agreement. Effective as of the date hereof, the
Loan Agreement is hereby amended as follows:

 

1.1 The definition of “Ending Date” in Section 1.1 of the Loan Agreement is
hereby deleted in its entirety and the following is substituted therefor:

 

“Ending Date” means February 28, 2006.

 

1.2 Section 6.11.c of the Loan Agreement is hereby deleted in its entirety and
the following is substituted therefor:

 

c. Semi-Annual Financial Statements. As soon as available after the close of
each of the Borrower’s second and fourth fiscal quarters, copies of Borrower’s
consolidated financial statements as filed with the Securities and Exchange
Commission for the period then ending. The financial statements shall be
provided no later than sixty (60) days after

 

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the close of each second quarter and ninety (90) days after the close of each
fourth quarter. The financial statements shall be prepared in accordance with
GAAP consistently applied. The financial statements shall include a consolidated
balance sheet, including all of Borrower’s subsidiaries, and a profit and loss
statement as of the end of such fiscal quarter, a cash flow statement and copies
of Form 10-Q or any other SEC filings.

 

1.3 Section 6.13 of the Loan Agreement is hereby deleted in its entirety and the
following is substituted therefor:

 

6.13 Financial Covenants. Maintain:

 

a. Funded Debt to EBITDA. A maximum ratio of Funded Debt to EBITDA, less current
period capitalized software development costs, of 3.0 to 1.0.

 

b. Fixed Charge Coverage Ratio. A minimum Fixed Charge Coverage Ratio of 1.25 to
1.0.

 

Compliance with the financial covenants above will be measured on a semi-annual
basis at the end of the second and fourth fiscal quarter of Borrower on a
rolling four fiscal quarter basis.

 

1.4 The preamble to Article 7 of the Loan Agreement is hereby deleted in its
entirety and the following is substituted therefore:

 

Until all obligations of Borrower under this Agreement and the other Loan
Documents are paid in full and performed, Borrower covenants and agrees that it
shall not, unless the Lender otherwise consents in advance in writing and such
consent is not unreasonably withheld or unduly delayed:

 

1.5 Section 7.3 of the Loan Agreement is hereby deleted in its entirety and the
following is substituted therefor:

 

7.3 Fundamental Changes. Amend its Articles or Certificate of Incorporation by
any amendment which would adversely affect Borrower’s ability to perform or
comply with any of the terms, conditions or agreements to be performed or
complied with by Borrower hereunder or to perform any of the transactions
contemplated hereby; change its name, ownership or management; convert its
organizational form into another entity form or establish any new entity to
perform the business or similar business of Borrower; reorganize, consolidate or
merge with any other corporation; or expend more than Ten Million and No/100
($10,000,000.00) to purchase, lease or otherwise acquire all or substantially
all of the assets of any other entity, including shares of stock of other
corporations,

 

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except as otherwise noted herein and except that Borrower may own notes and
other receivables acquired in the ordinary course of business.

 

SECTION 2. Representations and Warranties.

 

2.1 Borrower hereby represents and warrants that (i) it has full power and
authority to execute and deliver this Amendment and to perform its obligations
hereunder, (ii) it has taken all corporate action necessary for the execution
and delivery by it of this Amendment and the performance by it of its
obligations hereunder, and (iii) this Amendment constitutes its valid and
binding obligation enforceable against it in accordance with its terms except to
the extent enforceability may be subject to bankruptcy, insolvency, moratorium
and other similar laws affecting the rights of creditors generally or the
application of principles of equity, whether in an action at law or proceeding
in equity.

 

SECTION 3. Waiver; Reference to and Effect Upon the Loan Agreement.

 

3.1 Except as specifically amended or waived above, the Loan Agreement shall
remain in full force and effect and is hereby ratified and confirmed.

 

3.2 Except as specifically provided above, the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of Lender under the Loan Agreement, nor constitute an amendment
of any provision of the Loan Agreement, except as specifically set forth herein.
Upon the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import
shall mean and be a reference to the Loan Agreement as amended hereby. Upon the
effectiveness of this Amendment, each reference in any “Loan Document” (as
defined in the Loan Agreement as amended hereby) to the Loan Agreement shall
mean the Loan Agreement as amended hereby.

 

SECTION 4. Fees and Expenses. Borrower shall pay all reasonable fees, costs and
expenses (including, without limitation, reasonable attorneys’ fees, costs and
expenses) incurred by Lender in connection with the preparation, negotiation,
execution and delivery of this Amendment.

 

SECTION 5. Release. Borrower, on behalf of itself and its agents,
representatives, attorneys, successors and assigns, hereby releases and forever
discharges Lender and its agents, representatives, partners, directors,
officers, attorneys, employees, affiliates, parents, subsidiaries, stockholders,
predecessors, successors and assigns of and from any and all claims, setoffs,
counterclaims, demands, liabilities, suits, actions and causes of action of any
kind, nature or description whatsoever, whether or not now known, that Borrower
has, ever had or claimed to have had against Lender from the beginning of time
to and including the date hereof.

 

Lender, on behalf of itself and its agents, representatives, attorneys,
successors and assigns, hereby releases and forever discharges Borrower and its
agents, representatives, partners, directors, officers, attorneys, employees,
affiliates, parents, subsidiaries, stockholders,

 

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predecessors, successors and assigns of and from any and all claims, setoffs,
counterclaims, demands, liabilities, suits, actions and causes of action of any
kind, nature or description whatsoever, whether or not now known, that Lender
has, ever had or claimed to have had against Borrower from the beginning of time
to and including the date hereof.

 

SECTION 6. Governing Law; Arbitration. This Amendment shall be governed by,
construed under and enforced in accordance with the laws of the Commonwealth of
Virginia without giving effect to its conflict of laws principles. Provisions of
the Loan Agreement specifying that certain disputes between the Borrower and the
Lender shall be resolved by binding arbitration are incorporated into this
Amendment by reference and shall have the same force and effect as if fully set
forth in this Amendment.

 

SECTION 7. Section Titles. The section titles contained in this Amendment are
and shall be without substance, meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.

 

SECTION 8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the
parties hereto as of the day and year first above written.

 

INTEGRAL SYSTEMS, INC., a Maryland corporation By:   /s/    

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Name:

 

Elaine M. Parfitt

Title:

 

Chief Financial Officer

 

SAT CORPORATION, INC., a California corporation By:   /s/    

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Name:

 

Elaine M. Parfitt

Title:

 

Vice President and Chief Financial Officer

 

BANK OF AMERICA, N.A.

By:   /s/    

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Name:

 

Michael O. Brannan

   

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Title:

 

Sr. Vice President

   

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STATE OF MARYLAND             )

CITY/COUNTY OF CHARLES     ) To wit:

 

I, the undersigned, a Notary Public in and for the City/County and State
aforesaid, do hereby certify that Elaine M. Parfitt, Chief Financial Officer of
Integral Systems, Inc., whose name is signed to the foregoing Second Amendment
to Loan Agreement, appeared before me this 27th day of February 2004, and
acknowledged that the foregoing is her true act and deed.

 

[SEAL]

      /s/        

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Notary Public

 

My Commission Expires: April 26, 2006

 

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STATE OF MARYLAND             )

CITY/COUNTY OF CHARLES    ) To wit:

 

I, the undersigned, a Notary Public in and for the City/County and State
aforesaid, do hereby certify that Elaine M. Parfitt, Vice President and Chief
Financial Officer of SAT Corporation, Inc., whose name is signed to the
foregoing Second Amendment to Loan Agreement, appeared before me this 27th day
of February 2004, and acknowledged that the foregoing is her true act and deed.

 

[SEAL]

      /s/        

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Notary Public

 

My Commission Expires: April 26, 2006

 

STATE OF MARYLAND                         )

CITY/COUNTY OF MONTGOMERY     ) To wit:

 

I, the undersigned, a Notary Public in and for the City/County and State
aforesaid, do hereby certify that Michael O. Brannan, a Senior Vice President of
Bank of America, N.A., whose name is signed to the foregoing Second Amendment to
Loan Agreement, appeared before me this 3rd day of March 2004, and acknowledged
that the foregoing is his/her true act and deed.

 

[SEAL]

      /s/        

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Notary Public

 

My Commission Expires: November 6, 2007

 

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