Item 1.01 Entry into a Material Definitive Agreement.
On January 22, 2021, Synopsys, Inc. ("Synopsys") entered into a Fourth Extension
and Amendment Agreement, which amends and restates Synopsys' previous credit
agreement, dated as of November 28, 2016 (as amended and restated, the "Credit
Agreement"). Synopsys' outstanding borrowings under the previous credit
agreement, which as of January 22, 2021 consisted of term loans in the aggregate
principal amount of $97.5 million, are carried over under the Credit Agreement.
The Credit Agreement extends the termination date of the existing $650 million
senior unsecured revolving credit facility from November 28, 2021 to January 22,
2024, which may be further extended in Synopsys' option. The outstanding term
loans under the Credit Agreement will continue to amortize in quarterly
installments with the balance due at maturity on November 28, 2021. The Credit
Agreement also provides an uncommitted incremental loan facility of up to
$150 million in the aggregate principal amount.
The Credit Agreement contains financial covenants requiring that Synopsys
maintain a maximum Consolidated Leverage Ratio and a minimum Consolidated
Interest Coverage Ratio (each as defined in the Credit Agreement, with levels
set forth therein), as well as other non-financial covenants. Interest will
accrue on the revolving loans at a floating rate based on, at Synopsys'
election, (i) the Adjusted Eurodollar Rate (as defined in the Credit Agreement)
or (ii) the greatest of (a) the NYFRB Rate (as defined in the Credit Agreement)
plus 0.50%, (b) the one-month Adjusted Eurodollar Rate plus 1% and (c) the prime
rate quoted by the Wall Street Journal (such greatest rate, the "ABR"), in each
case, plus an applicable margin. The applicable margin with respect to the
revolving loans for (i) Eurodollar Rate based loans ranges from 1.000% to 1.175%
and (ii) ABR based loans ranges from 0.000% to 0.175%, in each case exclusive of
facility fee, and may increase or decrease based on Synopsys' Consolidated
Leverage Ratio. Synopsys is also required to pay a facility fee on the entire
portion of the revolving credit facility ranging from 0.125% to 0.200% based on
Synopsys' Consolidated Leverage Ratio on the daily amount of the revolving
commitment. Interest will accrue on the term loans at a floating rate based on,
at Synopsys' election, (i) the Eurodollar Rate or (ii) ABR, in each case, plus
an applicable margin. The applicable margin with respect to term loans for
(i) Eurodollar Rate based loans ranges from 1.125% to 1.375% and (ii) ABR-based
loans ranges from 0.125% to 0.375%, and may increase or decrease based on
Synopsys' Consolidated Leverage Ratio.
The Credit Agreement contains customary events of default, including payment
failures; failure to comply with covenants; failure to satisfy other obligations
under the Credit Agreement or related documents; inaccurate representations and
warranties; defaults in respect of other material indebtedness; bankruptcy,
insolvency and inability to pay debts when due; material judgments; material
ERISA defaults; and the invalidity of any guaranty agreement. If any event of
default under the Credit Agreement occurs, the Administrative Agent (as defined
in the Credit Agreement) or the other lenders under the Credit Agreement may
terminate their respective commitments and declare immediately due all
borrowings under the Credit Agreement.
The foregoing summary of the Credit Agreement is not complete and is qualified
in its entirety by reference to the Credit Agreement (a conformed copy of which
is filed as Exhibit 10.1 to this Current Report on Form 8-K).
Item 2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information included under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference herein.
--------------------------------------------------------------------------------
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Exhibit Title
10.1 Conformed Credit Agreement, as amended and restated pursuant to that
certain Fourth Extension and Amendment Agreement, dated January 22,
2021, among Synopsys as Borrower, the Lenders parties thereto and
JPMorgan Chase Bank, N.A., as administrative agent for the lenders.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses