Item 1.01 Entry into a Material Definitive Agreement.
On December 21, 2018 (the
“Closing Date”), Parent entered into (i) a First Lien Credit and Guaranty Agreement, among IDO US Acquiror, Corp. (“Holdings”),
Parent, as the borrower, Merger Sub, the Company, the other guarantors party thereto, JPMorgan Chase Bank, N.A., as administrative
agent (the “Agent”), and the several banks, financial institutions, institutional investors and other entities party
thereto (the “First Lien Credit Facility”) and (ii) a Second Lien Credit and Guaranty Agreement among Parent, as the
borrower, Merger Sub, the Company, the other guarantors party thereto, UBS AG, Stamford Branch, as administrative agent, and the
several banks, financial institutions, institutional investors and other entities party thereto (the “Second Lien Credit
Facility” and, together with the First Lien Credit Facility, the “Credit Facilities”).
First Lien Credit Facility
Facilities and Maturity
.
The First Lien Credit Facility provides for a first lien term loan facility in the aggregate principal amount of $450 million due
in December 2025 and a revolving credit facility in the aggregate principal amount of $25 million due in December 2023.
Accordion
. Subject
to certain conditions, the principal amount of the First Lien Credit Facility may be increased from time to time up to an amount
of up to (x) $113 million (subject to an EBITDA grower) plus (y) additional amounts so long as, after giving effect to the incurrence
of such incremental facility and the application of proceeds thereof, the pro forma total net first lien leverage ratio is less
than or equal to 3.30:1.00.
Interest Rate
.
The first lien term loan facility bears interest at a rate equal to (i) LIBOR plus 4.50% or (ii) the base rate plus 3.50% and the
revolving credit facility bears interest at a rate equal to (i) LIBOR plus 4.00% or (ii) the base rate plus 3.00%, provided that
the interest rate of borrowings under the revolving credit facility shall be subject to a leverage-based step down to 3.75% for
LIBOR borrowings and 2.75% for base rate borrowings if the total net first lien leverage is less than or equal to 2.80:1.00.
Security
. The obligations under
the First Lien Credit Facility are guaranteed by Holdings, the Company and certain other material domestic subsidiaries of Holdings,
subject to customary exceptions, and are primarily secured subject to certain exceptions, by a first-priority security interest
in substantially all of the assets of Holdings, Parent, the Company and certain other material domestic subsidiaries of Holdings.
Voluntary Prepayment
. Parent
will have the option to voluntarily prepay outstanding loans at any time upon three business days’ prior written notice (for
LIBOR loans) or same-day written notice (for base rate loans). In addition to customary “breakage” costs with respect
to LIBOR loans, first lien term loans prepaid, refinanced, substituted or replaced by indebtedness which has a lower all-in yield
than the all-in yield under the term loans prior to the date that falls six months after the Closing Date (other than as a result
of a change of control, significant acquisition or other transformative transaction) shall be subject to a prepayment premium in
an amount equal to 1.00% of the aggregate principal amount of the first lien term loans so prepaid, refinanced, substituted or
replaced.
Financial Covenant
. Following
the first three fiscal quarters from the Closing Date, for as long as the outstanding revolving loans and swingline loans exceeds
35% of the revolving facility, the Parent’s total net first lien leverage ratio, calculated on a pro forma basis, may not
exceed 6.20:1.00.
Restrictive Covenants and Other Matters
.
The First Lien Credit Facility contains other restrictive covenants (in each case, subject to exclusions) that limit, among other
things, the ability of Parent and certain of its subsidiaries to:
|
•
|
create, incur, assume or suffer to exist, any liens,
|
|
•
|
create, incur, assume or permit to exist, directly or indirectly, any additional indebtedness,
|
|
•
|
consolidate, merge, amalgamate, liquidate, wind up or dissolve themselves,
|
|
•
|
convey, sell, lease, license, assign, transfer or otherwise dispose of all or substantially all of their assets,
|
|
•
|
make certain restricted payments,
|
|
•
|
amend or otherwise alter the terms of organizational documents and documents related to certain subordinated indebtedness,
and
|
|
•
|
enter into transactions with affiliates.
|
The First Lien Credit Facility contains certain
customary representations and warranties, affirmative covenants and events of default, including, among other things, payment defaults,
breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy,
certain events under ERISA, judgment defaults, actual or asserted failure of any material guaranty or security document supporting
the First Lien Credit Facility ceases to be in force and effect and change of control. If such an event of default occurs, the
Agent under the First Lien Credit Facility is entitled to take various actions, including all actions that a secured creditor is
permitted to take following a default, subject to the terms of the Closing Date Intercreditor Agreement (as defined in the Credit
Facilities).
Second Lien Credit Facility
Facilities and Maturity
.
The Second Lien Credit Facility provides for second lien facilities in an aggregate principal amount of $140 million and €30.688
million maturing in December 2026.
Accordion
. Subject
to certain conditions, the principal amount of the Second Lien Credit Facility may be increased from time to time up to an amount
of up to (x) $141.25 million (subject to an EBITDA grower) plus (y) additional amounts so long as, after giving effect to the incurrence
of such incremental facility and the application of proceeds thereof, the pro forma total net secured lien leverage ratio is less
than or equal to 5.40:1.00.
Interest Rate
.
The second lien facility bears interest at a rate equal to (i) LIBOR plus 8.25% or (ii) the base rate plus 7.25%.
Security
. The obligations under
the Second Lien Credit Facility are guaranteed by Holdings, the Company and certain other material domestic subsidiaries of Holdings,
subject to customary exceptions, and are primarily secured subject to certain exceptions, by a second-priority security interest
in substantially all of the assets of Holdings, Parent, the Company and certain other material domestic subsidiaries of Holdings.
Voluntary Prepayment
. Parent
will have the option to voluntarily prepay outstanding loans at any time upon three business days’ prior written notice (for
USD LIBOR loans) or four business days for Euro LIBOR loans or same-day written notice (for base rate loans). In addition to customary
“breakage” costs with respect to LIBOR loans, second lien loans prepaid, refinanced, substituted or replaced by indebtedness
which has a lower all-in yield than the all-in yield under the term loans prior to the date that falls (i) one year after the Closing
Date (other than as a result of a change of control, significant acquisition or other transformative transaction) shall be subject
to a prepayment premium in an amount equal to 2.00% of the aggregate principal amount of the second lien loans so prepaid, refinanced,
substituted or replaced, and (ii) two years after the Closing Date (other than as a result of a change of control, significant
acquisition or other transformative transaction) shall be subject to a prepayment premium in an amount equal to 1.00% of the aggregate
principal amount of the second lien loans so prepaid, refinanced, substituted or replaced.
Financial Covenant
. There is
no financial covenant under the Second Lien Credit Facility.
Restrictive Covenants and Other Matters
.
The Second Lien Credit Facility contains other restrictive covenants (in each case, subject to exclusions) that limit, among other
things, the ability of Parent and certain of its subsidiaries to:
|
•
|
create, incur, assume or suffer to exist, any liens,
|
|
•
|
create, incur, assume or permit to exist, directly or indirectly, any additional indebtedness,
|
|
•
|
consolidate, merge, amalgamate, liquidate, wind up or dissolve themselves,
|
|
•
|
convey, sell, lease, license, assign, transfer or otherwise dispose of all or substantially all of their assets,
|
|
•
|
make certain restricted payments,
|
|
•
|
amend or otherwise alter the terms of organizational documents and documents related to certain subordinated indebtedness,
and
|
|
•
|
enter into transactions with affiliates.
|
The Second Lien Credit Facility contains certain
customary representations and warranties, affirmative covenants and events of default, including, among other things, payment defaults,
breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy,
certain events under ERISA, judgment defaults, actual or asserted failure of any material guaranty or security document supporting
the Second Lien Credit Facility ceases to be in force and effect and change of control. If such an event of default occurs, the
Agent under the Second Lien Credit Facility is entitled to take various actions, including all actions that a secured creditor
is permitted to take following a default, subject to the terms of the Closing Date Intercreditor Agreement (as defined in the Credit
Facilities).
Net proceeds from the Credit
Facilities were used, among other things, to finance the Transactions (as defined in the Credit Agreements), including the Merger
Consideration (as defined below) and the refinancing of Parent’s existing credit facilities with KeyBank National Association
as administrative agent.