Other Terms
The New Facility contains a number of affirmative, negative and reporting covenants, as well as financial maintenance covenants pursuant to which LMI is required (a) to be in quarterly compliance, measured on a trailing four quarter basis, with a Total Net Leverage Ratio (as defined in the Credit Agreement) of 4.00 to 1.00 through the quarter ending December 31, 2023 and 3.50 to 1.00 thereafter and (b) to maintain an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00:1.00 for each fiscal quarter. Upon an event of default, the Administrative Agent will have the right to declare the loans and other obligations outstanding under the New Facility immediately due and payable and all commitments immediately terminated.
The New Facility is guaranteed by the Company and certain of the Company’s subsidiaries.
Certain of the Lenders and certain of their affiliates have performed investment banking, financial advisory, commercial lending and underwriting services for the Company, LMI, their subsidiaries and respective affiliates, from time to time, for which such Lenders and their affiliates have received customary fees and expenses. These parties may, from time to time, engage in transactions with, and perform services for the Company, LMI, their subsidiaries or their respective affiliates in the ordinary course of their business.
| Item 1.02 | Termination of a Material Definitive Agreement |
In connection with the Refinancing, effective as of December 2, 2022, LMI has satisfied and discharged all obligations under, and terminated, the Old Facility, except for obligations that pursuant to the express terms of the Old Facility survive payment of the obligations.
The Old Facility consisted of a $200.0 million five-year term loan agreement that was scheduled to mature on June 27, 2024. As of December 2, 2022, after giving effect to the New Facility, there were no amounts outstanding under the Old Facility and LMI incurred no termination penalties in connection with the early termination of the Old Facility.
Certain of the lenders under the Old Facility and certain of their affiliates have performed investment banking, commercial lending and underwriting services for the Company, LMI, their subsidiaries and respective affiliates, from time to time, for which such lenders and their affiliates have received customary fees and expenses. These parties may, from time to time, engage in transactions with, and perform services for the Company, LMI, their subsidiaries or their respective affiliates in the ordinary course of their business.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
On December 5, 2022, the Company issued a press release announcing that it proposes to offer (the “Offering”), subject to market conditions and other factors, $500.0 million in aggregate principal amount of convertible senior notes due 2027 (the “Notes”). The Company expects to grant to the initial purchasers of the Notes an option to purchase up to an additional $75.0 million in aggregate principal amount of the Notes (the “Option Notes”). The Notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The Company’s board of directors has authorized the repurchase of up to $150.0 million in aggregate amount of its common stock under certain circumstances. The Company expects to use up to $75.0 million of the net proceeds from the Offering to repurchase shares of the Company’s common stock from purchasers of the Notes in privately negotiated transactions effected with or through one of the initial purchasers or its affiliate. In addition, the Company’s board of directors has authorized additional repurchases of common stock in an amount up to $75.0 million out of the remaining proceeds from the Offering, including any proceeds from the Option Notes, in privately negotiated transactions, open market purchases or otherwise, in accordance with applicable federal and state securities laws and regulations.
