| Item 1.01 |
Entry Into Material Definitive Agreement. |
On June 9,
2022 (the “Closing Date”), Lucid Group, Inc. (the “Company”) entered into a Credit Agreement
(the “Credit Agreement”) with Bank of America, N.A., as administrative agent (the “Administrative
Agent”), as swingline lender and as an issuing bank, and each other lender and issuing bank party thereto from time to
time, governing a new $1.0 billion senior secured asset-based revolving credit facility (the “ABL Credit
Facility”), which the Company and each other borrower from time to time party thereto (the “Borrowers”)
may draw upon from time to time subject to the terms and conditions set forth therein. The ABL Credit Facility includes a $350.0
million letter of credit subfacility and a $100.0 million swingline loan subfacility. Subject to certain terms and conditions,
including obtaining such new commitments, the Company may from time to time request one or more increases in the amount of credit
commitments under the ABL Credit Facility in an aggregate amount up to the sum of $500.0 million plus certain other
amounts.
On the Closing Date, there were no borrowings
and no outstanding letters of credit under the ABL Credit Facility.
Availability
The ABL Credit
Facility has an initial aggregate principal commitment amount of up to $1.0 billion, with availability from time to time subject to
the value of the borrowing base which, subject to eligibility criteria set forth in the Credit Agreement, equals the sum of, from
time to time, (i) 85% of the eligible accounts receivable of the Loan Parties (as defined below) (other than eligible credit
card receivables and eligible investment grade accounts receivable), plus (ii) 90.0% of the eligible investment grade accounts
receivable of the Loan Parties, plus (iii) 90.0% of the eligible credit card receivables of the Loan Parties, plus (iv) the
lesser of (x) 75% of the lower of cost or market value of eligible inventory of the Loan Parties, determined on a
first-in-first-out basis and (y) 85% of the appraised net orderly liquidation value of eligible inventory of the Loan Parties
valued at the lower of cost or market value, determined on a first-in-first-out basis, plus (v) prior to the Fixed Asset Release
Date (as defined in the Credit Agreement), the lesser of (x) 75% of the lower of cost or market value of eligible machinery and
equipment of the Loan Parties and (y) 85% of the appraised net orderly liquidation value of eligible machinery and equipment of
the Loan Parties, plus (vi) prior to the Fixed Asset Release Date, 50% of the appraised fair market value of certain eligible
fee owned real property of the Loan Parties plus (vii) 100% of Eligible Cash (as defined in the Credit Agreement), minus (viii)
customary reserves and other adjustments (including with respect to the real estate component). The amount included as part of the
borrowing base pursuant to clauses (v) and (vi) above may not exceed, in the aggregate, (x) at any time prior to the second
anniversary of the Closing Date, 50% of the borrowing base and (y) from and after the second anniversary of the Closing Date, 35% of
the borrowing base.
Currency, Interest Rate and Fees
Extensions of credit under the ABL Credit
Facility may be denominated in U.S. dollars, pounds sterling, euro, Canadian dollars, Australian dollars, Swiss francs, Japanese yen and
other agreed currencies from time to time. Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to (i) for
amounts denominated in U.S. Dollars, at the Company’s option, either (A) the “Alternate Base Rate” (as defined in the Credit Agreement)
plus a margin of 0.25% to 0.75% or (B) the “Term SOFR Rate” (as defined in the Credit Agreement) (which includes
a credit spread adjustment of 10 basis points per annum) plus a margin of 1.25% to 1.75%, (ii) for amounts denominated in
Canadian dollars, at the Company’s option, either (A) the “Canadian Prime Rate” (as defined in the Credit Agreement)
plus a margin of 0.25% to 0.75% or (B) the “CDOR Rate” (as defined in the Credit Agreement) plus a margin
of 1.25% to 1.75%, (iii) for amounts denominated in pounds sterling or Swiss francs, the applicable “Alternative Currency Daily
Rate” (as defined in the Credit Agreement) plus a margin of 1.25% to 1.75% and (iv) for amounts denominated in euros,
Australian dollars, Japanese yen or any other applicable foreign currency available under the ABL Credit Facility from time to time, the
applicable “Alternative Currency Term Rate” (as defined in the Credit Agreement) plus a margin of 1.25% to 1.75%. Each
applicable margin set forth above will be determined based on average quarterly availability under the ABL Credit Facility.
In addition to paying interest on outstanding
principal under the ABL Credit Facility, the Borrowers are required to pay a quarterly commitment fee to the lenders under the ABL Credit
Facility in respect of the unutilized revolving commitments thereunder at a commitment fee rate equal to 0.25% per annum. The Borrowers
will also pay customary letter of credit fees.
Maturity
Borrowings under
the ABL Credit Facility mature, and commitments thereunder terminate, on the earlier of (i) June 9, 2027 and (ii) the date that is
91 days prior to the stated maturity date of certain material debt for borrowed money incurred by any of the Borrowers or their
restricted subsidiaries in an aggregate principal amount of not less than $500.0 million.
Prepayments
If at any time the sum of the outstanding
amounts under the ABL Credit Facility exceed the lesser of (i) the borrowing base and (ii) the aggregate revolving commitments under the
ABL Credit Facility (such lesser amount, the “Line Cap”), the Company is required to repay outstanding loans and/or
cash collateralize letters of credit in an aggregate amount equal to such excess.
Guarantees and Security
The obligations under
ABL Credit Facility are guaranteed by the Company, each other Borrower, if any, and certain other domestic subsidiaries of the Company
(collectively, the “Loan Parties”). Obligations under the ABL Credit Facility, and the guarantees of those obligations,
are initially secured by a perfected first-priority security interest in substantially all assets of the Loan Parties, subject to certain
exceptions, including the exclusion of intellectual property.
Certain Covenants and Events of Default
Prior to the date
on which (i) the fixed charge coverage ratio is greater than 1.00 to 1.00 for at least two consecutive fiscal quarters, in each
case on a trailing four fiscal quarter basis, and (ii) the Company has elected to cause the fixed charge ratio covenant to
become effective (the “FCCR Covenant Trigger Date”), the Borrowers are required to maintain
“Liquidity” (as defined in the Credit Agreement) at all times of at least the dollar equivalent of $1.0 billion.
Following the FCCR Covenant Trigger Date, if “Specified Availability” (as defined in the Credit Agreement) is less than
the greater of (A) $62.5 million and (B) 12.5% of the Line Cap (a “Compliance Period Trigger Event”), the
Company is required to comply with a minimum fixed charge coverage ratio of at least 1.00 to 1.00 as of the end of (x) the last
quarter immediately preceding the occurrence of such Compliance Period Trigger Event and (y) each subsequent fiscal quarter during
such Compliance Period (as defined in the Credit Agreement), and must continue to comply with such minimum fixed charge coverage ratio
covenant until Specified Availability is greater than or equal to the greater of (x) $62.5 million and (y) 12.5% of the Line
Cap for at least 20 consecutive calendar days.
The Credit
Agreement contains customary affirmative covenants, including financial statement reporting requirements and delivery of borrowing
base certificates. The Credit Agreement also contains customary negative covenants that limit the ability of the Company and its
restricted subsidiaries to, among other things, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase
stock, dispose of assets (including dispositions of material intellectual property), consummate acquisitions or other investments,
prepay certain debt, engage in transactions with affiliates, engage in sale and leaseback transactions, consummate mergers and other
fundamental changes, enter in to restrictive agreements or modify their organizational documents.
The Credit
Agreement contains customary events of default (subject to certain exceptions, thresholds and grace periods), such as the failure to
pay obligations when due, initiation of bankruptcy or insolvency proceedings, defaults on certain other indebtedness, change of
control events, ERISA events, material breach of representations and warranties, failure to perform or observe covenants, material
judgements, and invalidity of security interests or guarantees or other obligations. Upon an event of default, the lenders may,
subject to certain cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral.
The foregoing description of the terms of
the Credit Agreement is not a complete description thereof and is qualified in its entirety by the full text of such agreement which is
filed as Exhibit 10.1 hereto and incorporated herein by reference.