AVID TECHNOLOGY, INC. (NASDAQ:AVID) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On May 10, 2018, Avid Technology, Inc. (the “Company”), its subsidiary, Avid Technology Worldwide, Inc. (“Avid Worldwide”), Cerberus Business Finance, LLC, as collateral and administrative agent, and the lenders party thereto entered into a fourth amendment (the “Fourth Amendment”) to their existing agreement, dated February 26, 2016, as amended (the “Financing Agreement”), between the Company, Avid Worldwide, Cerberus Business Finance, LLC, as collateral and administrative agent, and the lenders party thereto.
The Fourth Amendment extends the maturity of the current term loan under the Financing Agreement to May 10, 2023. It also increases the amount of the term loan facility from $105 million to $127.5 million, and increases the amount of the revolving loan facility from $10 million to $22.5 million. On the closing date, the Company drew down the incremental borrowings of $22.5 million under the term loan facility.
The Fourth Amendment modifies the covenant requiring the Company to maintain a Leverage Ratio (defined, via the Fourth Amendment, to mean the ratio of (a) consolidated total funded indebtedness to (b) consolidated EBITDA) such that following the effective date of the Fourth Amendment, the Company is required to maintain a Leverage Ratio of no greater than 3.00:1.00 for each of the three quarters ending June 30, 2018 through December 31, 2018, respectively, 2.50:1.00 for each of the four quarters ending March 31, 2019 through December 31, 2019, respectively, 2.25:1.00 for each of the five quarters ending March 31, 2020 through March 31, 2021, respectively, 2.00:1.00 for each of the seven quarters ending June 30, 2021 through December 31, 2022, respectively, and 1.50:1.00 for the quarter ending March 31, 2023.
Under the terms of the Fourth Amendment, interest accrues on outstanding borrowings at a rate of either the LIBOR Rate (as defined in the Financing Agreement) plus 6.625% or a Reference Rate (as defined in the Financing Agreement) plus 5.625%, at the option of the Company. Prior to the effective date of the Fourth Amendment, the applicable margin with respect to the LIBOR Rate was 6.75%.
The Fourth Amendment also modifies the schedule for required repayments of the term loan, as follows: (i) $1,437,500 is required to be repaid on June 30, 2018, (ii) $318,750 is required to be repaid on the last day of each quarter from September 30, 2018 through June 30, 2020, (iii) $796,875 is required to be repaid on the last day of each quarter from July 1, 2020 through June 30, 2021, and (iv) $1,593,750 is required to be repaid on the last day of each quarter from July 1, 2021 through May 10, 2023.
The Fourth Amendment also removes a provision from the Financing Agreement that would have accelerated the maturity of the term loan to May 15, 2020 if the Company’s convertible notes due June 2020 were not repaid or refinanced by such date. The Fourth Amendment also increases the amount of convertible notes the Company may purchase from $15 million to $40 million.
The foregoing description is qualified in its entirety by reference to the Amendment, which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this Item 2.03 is included in Item 1.01 above and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
AVID TECHNOLOGY, INC. ExhibitEX-10.1 2 exhibit101.htm EXHIBIT 10.1 Exhibit Exhibit 10.1AMENDMENT NO. 4TO FINANCING AGREEMENTAMENDMENT NO. 4 TO FINANCING AGREEMENT,…To view the full exhibit click
About AVID TECHNOLOGY, INC. (NASDAQ:AVID)
Avid Technology, Inc. is a provider of an open and integrated technology platform, along with applications and services that enable the creation, distribution and monetization of audio and video content. The Company develops, markets, sells and supports software and hardware for digital media content production, management, secured content storage and distribution. The Company’s products are used in production and post-production facilities; film studios; network, affiliate, independent and cable television stations; recording studios; live-sound performance venues; advertising agencies; government and educational institutions; corporate communication departments, and by independent video and audio creative professionals, as well as aspiring professionals and enthusiasts. Projects produced using its products include feature films, television programs, live events, news broadcasts, commercials, music, video and other digital media content. AVID TECHNOLOGY, INC. (NASDAQ:AVID) Recent Trading Information
AVID TECHNOLOGY, INC. (NASDAQ:AVID) closed its last trading session up +0.04 at 5.08 with shares trading hands.