Air Methods Corporation (NASDAQ:AIRM) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
See the disclosure contained in Item 2.03 below, which is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On April 21, 2017, the Company terminated the Third Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of August 21, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among the Company, certain of the Company’s subsidiaries, the lenders from time to time parties thereto and KeyBank National Association as administrative agent, and repaid all of the outstanding obligations under the credit facilities therein (the “Existing Credit Facilities”) with a portion of the proceeds of the Term Facility (as defined below). No material early termination penalties were incurred by the Company in connection with repaying, refinancing or retiring the Existing Credit Facilities.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Senior Credit Facilities
On April 21, 2017, the Offeror, as borrower, entered into a credit agreement (the “Credit Agreement”), among Offeror, Parent and certain subsidiaries of the Company as guarantors, the lenders from time to time parties thereto and Royal Bank of Canada as administrative agent and collateral agent, which provided at closing (i) a 7-year $1,250.0 million senior secured term loan facility (the “Term Facility”) and (ii) a 5-year $125.0 million senior secured revolving credit facility (together with the Term Facility, the “Senior Credit Facilities”.)
Loans under the Senior Credit Facilities will bear interest, at the Company’s option, at a variable rate equal to an adjusted LIBOR rate or an alternate base rate, in each case, plus a spread. Following the consummation of the Merger, the Senior Credit Facilities are now senior secured obligations of the Company.
All obligations of the Company under the Senior Credit Facilities and, at the option of the Company, under certain hedging agreements and cash management arrangements, will be jointly and severally, fully and unconditionally, guaranteed by Parent and each of the existing and future direct and indirect, material wholly-owned domestic subsidiaries of the Company (subject to customary exceptions) on an unsubordinated basis and such guarantee obligations will be secured, subject to permitted liens and other agreed upon exceptions, on a first priority basis, by a perfected security interest in substantially all of the material owned assets (subject to customary exceptions) of the Company, Parent and each such subsidiary of the Company, including all of the equity interests of the Company directly held by Parent.
The Credit Agreement contains covenants that, among other things, limit the Company’s and certain of its subsidiaries’ ability to incur, issue, assume or guarantee certain indebtedness, issue shares of disqualified or preferred stock, pay dividends on equity, make investments, grant liens, consummate certain mergers and acquisitions or consummate certain asset sales or affiliate transactions. Additionally, certain customary events of default may result in an acceleration of the Senior Credit Facilities.
Purchase and Sale of Notes
On April 13, 2017, the Offeror entered into a purchase agreement with the representatives of the several initial purchasers to which the Initial Purchasers agreed to purchase an aggregate of $500,000,000 of 8.00% Senior Notes due 2025 (the “Notes”) from the Offeror in a private placement exempt from registration under the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder, in reliance on the exemption from registration under the Securities Act provided by Rule 144A and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act.
The Notes were issued to an indenture (the “Base Indenture”), dated April 21, 2017 (the “Issue Date”) by and between the Offeror and Wilmington Trust, National Association, as trustee.
The Notes will mature on May 15, 2025. Interest on the Notes will accrue at a rate of 8.00% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing November 15, 2017. Following consummation of the Merger, and the execution of the Purchase Agreement Joinder and Supplemental Indenture described below, the Notes are now senior unsecured obligations of the Company.
The Base Indenture contains covenants that, among other things, limit the Company’s and certain of its subsidiaries’ ability to incur, issue, assume or guarantee certain indebtedness, issue shares of disqualified or preferred stock, pay dividends on equity or consummate certain asset sales or affiliate transactions. Additionally certain customary events of default may result in an acceleration of the maturity of the Notes.
