Loan is less than the specified covenant testing threshold, and continuing until either (a) no default has occurred and is continuing under the Loan Documents or (b) availability under
the Term Loan is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days, respectively (the
Covenant Testing Period
), the Company is required to maintain a minimum fixed charge
coverage ratio of at least 0.91:1.00 (the
Required Minimum Fixed Charge Coverage Ratio
). The Required Minimum Fixed Charge Coverage Ratio is measured on the last day of each calendar month during the Covenant Testing Period (each
a
Calculation Date
), and is calculated using the minimum fixed charge coverage ratio for the twelve (12) consecutive months ending on each Calculation Date. The Loan Parties are required to maintain an initial total net
leverage ratio of 9.00:1.00, which ratio steps down each fiscal quarter of the Company resulting in a requirement that the Loan Parties maintain a total net leverage ratio of 3.50:1.00 for the fiscal quarter ending June 30, 2021, and each
fiscal quarter ending thereafter.
The amounts owed under the 2019 Credit Agreement may be accelerated upon the occurrence of certain
events of default customary for facilities for similarly rated borrowers.
The above description of the 2019 Credit Agreement is qualified
in its entirety by reference to the complete terms and conditions of the 2019 Credit Agreement, which will be filed as an exhibit to Holdcos Quarterly Report on Form
10-Q
for the quarter ending
March 31, 2019.
First Amendment to Credit Agreement and Joinder Agreement
On March 8, 2019, the Company entered into a First Amendment to Credit Agreement and Joinder Agreement dated as of March 8, 2019 (the
2019 First Amendment
), among the Company, as a borrower, Pioneer Surgical Technology, Inc. (
Pioneer Surgical
), a wholly-owned subsidiary of the Company, as a borrower, the other loan parties thereto as
guarantors, JP Morgan Chase Bank, N.A., as lender (together with the various financial institutions as in the future may become parties thereto) and as administrative agent for the Lenders. The 2019 First Amendment amended that certain Credit
Agreement dated as of June 5, 2018 (the
2018 Credit Agreement
), among the Company, Pioneer Surgical, the other loan parties thereto as guarantors, JP Morgan Chase Bank, N.A., as lender (together with the various financial
institutions as in the future may become parties thereto) and as administrative agent by: (i) reducing the aggregate revolving commitments available to the Company and Pioneer Surgical from $100 million to $75 million;
(ii) joining Holdco and Paradigm, and its domestic subsidiaries as guarantors and loan parties to the 2018 Credit Agreement; (iii) permitting the Term Loan; and (iv) making certain other changes to the 2018 Credit Agreement consistent
with the foregoing including pro rata reductions to certain thresholds that were based on the aggregate commitments under the 2018 Credit Agreement.
The lenders and their affiliates under the 2018 Credit Agreement have various other relationships with the Company involving the provision of
financial services, including depository banking services, cash management and credit cards.
The above description of the 2019 First
Amendment is qualified in its entirety by reference to the complete terms and conditions of the 2019 First Amendment, which will be filed as an exhibit to Holdcos Quarterly Report on Form
10-Q
for the
quarter ending March 31, 2019
.
Item 2.01.
|
Completion of Acquisition or Disposition of Assets.
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On March 8, 2019, pursuant to the Master Transaction Agreement, the Transaction was consummated and became effective as of the effective
time of the Merger (the
Effective Time
). As a result of the Transaction, among other things, Holdco became the ultimate parent of the Company and Paradigm and each of their respective subsidiaries. The Transaction and the Master
Transaction Agreement were previously described in the Registration Statement and the Proxy Statement/Prospectus.
Pursuant to the Master
Transaction Agreement: (i) each share of common stock, par value $0.001 per share, of the Company issued and outstanding immediately prior to the Effective time (other than shares held by the Company as treasury shares or by Holdco or Merger
Sub immediately prior to the Effective Time, which were automatically cancelled and ceased to exist) were converted automatically into one fully paid and
non-assessable
share of Holdco common stock, par value
$0.001 per share; (ii) each share of Series A convertible preferred stock, par value $0.001 per share, of the Company issued and outstanding immediately prior to the Effective Time (other than shares held by the Company as treasury shares or by
Holdco or Merger Sub immediately prior to the Effective Time, which were automatically cancelled and ceased to exist) were converted automatically into one fully paid and
non-assessable
share of Series A
convertible preferred stock, par value $0.001 per share, of Holdco; and (iii) each stock option and restricted stock award granted by the Company was converted into a stock option or restricted stock award, as applicable, of Holdco with respect
to an equivalent number of shares of Holdco common stock on the same terms and conditions as were applicable prior to the closing.