Item 1.01. Entry Into a Material Definitive Agreement
On
The Amended and Restated Credit Agreement amends and restates the Company's
amended first lien credit and guarantee agreement with
Subject to the satisfaction of certain criteria, the Company will be able to
increase the facility by an amount equal to the sum of (i) the greater of
Borrowings under the New Credit Facility bear interest at a rate equal to, at the Company's option, either (a) a base rate equal to the greatest of (i) the administrative agent's prime rate; (ii) the federal funds effective rate plus 1/2 of 1.0% and (iii) one month LIBOR plus 1.0% (subject to a 1.00% floor), plus 1.00% or LIBOR (subject to a 0.00% floor) plus 2.00%. The interest rate margins under the New Credit Facility are subject to one reduction of 0.25% and a further reduction of 0.25% upon achieving total net first lien leverage ratios of 3.50 to 1.00 and 2.50 to 1.00, respectively.
The Company is required to pay a commitment fee in respect of unutilized commitments under the New Credit Facility. The commitment fee is, initially, 0.35% per annum. The commitment fee is subject to one reduction of 0.10% upon achieving a total net first lien leverage ratio of 3.50 to 1.00. The Company is also required to pay customary letter of credit fees and agency fees.
The Company has the option to voluntarily repay outstanding loans at any time without premium or penalty, other than customary "breakage" costs with respect to LIBOR loans. There is no scheduled amortization under the New Credit Facility. The principal amount outstanding is due and payable in full at maturity, five years from the closing date of the New Credit Facility.
Obligations under the New Credit Facility are guaranteed by the Company's existing and future direct and indirect material wholly-owned domestic subsidiaries, subject to certain exceptions. The New Credit Facility is secured by a first-priority security interest in substantially all of the assets of the borrower and the guarantors, subject to certain exceptions.
The New Credit Facility contains a number of covenants that, among other things and subject to certain exceptions, restrict the Company's ability and the ability of the Company's restricted subsidiaries to: incur additional indebtedness and guarantee indebtedness; create or incur liens; pay dividends and distributions or repurchase capital stock; merge, liquidate and make asset sales; change lines of business; change the Company's fiscal year; incur restrictions on the Company's subsidiaries' ability to make distributions and create liens; modify the Company's organizational documents; make investments, loans and advances; and enter into certain transactions with affiliates.
The New Credit Facility requires compliance with a total net first lien leverage ratio of 4.50 to 1.00, or the Financial Covenant. The Financial Covenant will be tested at quarter-end only if the total principal amount of all revolving loans, swingline loans and drawn letters of credit that have not been reimbursed exceeds 35% of the total commitments under the New Credit Facility on the last day of such fiscal quarter.
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The New Credit Facility also contains certain customary affirmative covenants and events of default for facilities of this type, including relating to a change of control. If an event of default occurs, the lenders under the New Credit Facility will be entitled to take various actions, including the acceleration of amounts due under the New Credit Facility and all actions permitted to be taken by secured creditors under applicable law.
The foregoing description of the Amended and Restated Credit Agreement does not
purport to be complete and is subject to, and qualified in its entirety by, the
full text of the Amended and Restated Credit Agreement. The Amended and Restated
Credit Agreement will be filed as an exhibit to the Company's Form 10-Q for the
quarter ended
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 of this current report on Form 8-K is incorporated by reference herein.
Item 5.03 Amendments to Articles of Incorporation or Bylaws
Amendment and Restatement of Certificate of Incorporation
On
Amendment and Restatement of Bylaws
Effective as of
Please see the description of the Restated Certificate and the Restated Bylaws
in the section titled "Description of Capital Stock" in the final prospectus the
Company filed with the
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 3.1 Amended and Restated Certificate of Incorporation ofLegalZoom.com, Inc. 3.2(1) Amended and Restated Bylaws ofLegalZoom.com, Inc.
(1) Previously filed as Exhibit 3.4 to the Company's Registration Statement on
Form S-1, as amended (File No. 333-256803), filed with the Securities and
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