Item 1.01. Entry into a Material Definitive Agreement.
On May 15, 2017, Lamar Media Corp. (Lamar Media), a wholly owned subsidiary of Lamar Advertising Company (Lamar Advertising or the
Company), entered into a Third Restatement Agreement (the Third Restatement Agreement) with Lamar Advertising, certain of Lamar Medias subsidiaries as Guarantors, JPMorgan Chase Bank, N.A. as Administrative Agent and
the Lenders named therein, under which the parties agreed to amend and restate Lamar Medias existing senior credit facility (the Existing Credit Agreement) on the terms set forth in the Third Amended and Restated Credit Agreement
attached as Exhibit A to the Third Restatement Agreement (such Third Amended and Restated Credit Agreement together with the Third Restatement Agreement being herein referred to as the Amended Senior Credit Agreement; all capitalized
words used herein without definition have the meanings assigned in the Amended Senior Credit Agreement).
Pursuant to the Amended Senior Credit Agreement,
all outstanding term A loans under the Existing Credit Agreement are repaid in full and all existing revolving commitments under the Existing Credit Agreement are terminated. The Amended Senior Credit Agreement establishes in favor of Lamar Media
(i) a new $450 million aggregate principal amount senior secured Revolving Credit Commitment, which will mature on May 15, 2022, (ii) a new $450 million Term A Loan facility, which will mature on May 15, 2022, and
(iii) an incremental facility pursuant to which Lamar Media may incur additional term loan tranches or increase its revolving credit facility subject to pro forma compliance with the Secured Debt Ratio (as defined below) financial maintenance
covenant. The Amended Senior Credit Agreement also makes certain other changes to the Existing Credit Agreement.
Lamar Media borrowed all
$450 million in Term A Loans on May 15, 2017. The net loan proceeds, together with borrowings under the revolving portion of the senior credit facility and cash on hand, were used to repay all outstanding amounts under the Existing Credit
Agreement.
The Term A Loans will begin amortizing on September 30, 2017 in quarterly installments paid on such date and on each
December 31, March 31, June 30 and September 30, thereafter, as follows:
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Principal Payment Date
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Principal Amount
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September 30, 2017 - June 30, 2019
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$
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5,625,000
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September 30, 2019 - June 30, 2020
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$
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8,437,500
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September 30, 2020 - March 31, 2022
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$
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16,875,000
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Term A Loan Maturity Date
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$
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253,125,000
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For each Borrowing of Term A Loans, Lamar Media can elect whether such Term A Loans bear interest at (i) the Adjusted
Base Rate plus (a) .75%, or (b) .50% at any time that the Total Debt Ratio is less than 3.25 to 1 as of the last day of the most recently ended fiscal quarter for which Lamar Media has delivered financial statements, or (ii) the Adjusted LIBO
Rate plus (a) 1.75%, or (b) 1.50% at any time that the Total Debt Ratio is less than 3.25 to 1 as of the last day of the most recently ended fiscal quarter for which Lamar Media has delivered financial statements.
Under the Amended Senior Credit Agreement, the Total Debt Ratio is, as of any date, the ratio of (a) all Indebtedness (including Subordinated
Indebtedness and any convertible debt) of Lamar Advertising and its Subsidiaries (other than any Unrestricted Subsidiary) (determined on a consolidated basis without duplication in accordance with GAAP) on such date, minus, the lesser of (x)
$150,000,000 and (y) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media, and its Restricted Subsidiaries determined on a consolidated basis with GAAP as of such date to (b) EBITDA for the
period of four consecutive fiscal quarters ending on or most recently ended prior to such date.
In addition, under the Amended Senior Credit Agreement, Lamar Media is required to maintain a Secured Debt Ratio
no higher than 3.00 to 1, where Secured Debt Ratio is defined as follows: as of any date, the ratio of (i) all Indebtedness of Lamar Advertising, Lamar Media and the Restricted Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP) on such date that is secured by any liens on any assets of Lamar Advertising, Lamar Media or any Restricted Subsidiary,
minus
the lesser of (a) $150,000,000 and (b) the aggregate amount of
unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as of such date, to (ii) EBITDA for the period of four consecutive quarters
ending on or most recently ended prior to such date for which financial statements are available or were required to be delivered under the Amended Senior Credit Agreement.
The amended definition of EBITDA in the Amended Senior Credit Agreement is as follows: EBITDA means, for any period, operating income
for Lamar Advertising and its Subsidiaries (other than any Unrestricted Subsidiary) (determined on a consolidated basis without duplication in accordance with GAAP) for such period (calculated (A) before (i) taxes, (ii) Interest Expense,
(iii) depreciation, (iv) amortization, (v) any other
non-cash
income or charges accrued for such period, (vi) charges and expenses in connection with the Transactions, any actual or proposed
acquisition, disposition or Investment (excluding, in each case, purchases and sales of advertising space and operating assets in the ordinary course of business) and any actual or proposed offering of securities, incurrence or repayment of
Indebtedness (or amendment to any agreement relating to Indebtedness), including any refinancing thereof, or recapitalization and (vii) any loss or gain relating to amounts paid or earned in cash prior to the stated settlement date of any
Swap Agreement that has been reflected in operating income for such period) and (B) after giving effect to the amount of cost savings, operating expense reductions and other operating improvements or synergies projected by Lamar Media in good
faith to be realized as a result of any Acquisition, Investment, merger, amalgamation or Disposition within 18 months of any such Acquisition, Investment, merger, amalgamation or Disposition, net of the amount of actual benefits realized during such
period from such action;
provided
, (a) the aggregate amount for all such cost savings, operating expense reductions and other operating improvements or synergies shall not exceed an amount equal to 15% of EBITDA for the applicable four
quarter period and (b) any such adjustment to EBITDA may only take into account cost savings, operating expense reductions and other operating improvements or synergies that are (I) directly attributable to such Acquisition, Investment,
merger, amalgamation or Disposition, (II) expected to have a continuing impact on Lamar Media and its Restricted Subsidiaries and (III) factually supportable, in each case all as certified by the chief financial officer of Lamar Media) on
behalf of Lamar Media, and excluding (except to the extent received or paid in cash by Lamar Advertising or any of its Subsidiaries (other than any Unrestricted Subsidiary) income or loss attributable to equity in Affiliates for such period),
excluding any extraordinary and unusual gains or losses during such period, and excluding the proceeds of any Casualty Events and Dispositions. For purposes hereof, the effect thereon of any adjustments required under Statement of Financial
Accounting Standards No. 141R shall be excluded.
Under certain circumstances detailed in the Amended Senior Credit Agreement, notwithstanding the
foregoing, if during any period for which EBITDA is being determined Lamar Advertising shall have consummated any Acquisition or Disposition, then EBITDA shall be determined on a pro forma basis as if such Acquisition or Disposition had been made or
consummated on the first day of such period.
The foregoing description of the Amended Senior Credit Agreement, is qualified in its entirety by reference
to the complete text of the Amended Senior Credit Agreement, which is filed as Exhibit 10.1 to this report and incorporated herein by reference.
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