LANNETT COMPANY,INC. (NYSE: LCI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed in the Current Report on Form8-K for Lannett Company,Inc. (“Lannett”) filed on December2, 2015, Lannett entered into a credit and guaranty agreement (the “Credit and Guaranty Agreement”) among certain of its wholly-owned domestic subsidiaries, as guarantors (the “Lannett Guarantors”), Morgan Stanley Senior Funding,Inc. (“Morgan Stanley”), as administrative agent and collateral agent, and the lenders party thereto providing for a secured credit facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility consists of a term loan facility providing for Tranche A term loans (the “Term A Loans”), a term loan facility providing for Tranche B term loans and a revolving credit facility providing for revolving loans.
On June17, 2016, Lannett entered into Amendment No.1 to the Credit and Guaranty Agreement (“Amendment No.1”) among Lannett, as the borrower, Morgan Stanley, in its capacity as administrative agent, and each incremental term lender party thereto. to Amendment No.1, Lannett was provided an incremental term loan. Also on June17, 2016, Lannett entered into Amendment No.2 to the Credit and Guaranty Agreement among Lannett, as the borrower, Morgan Stanley, in its capacity as administrative agent, and each lender party thereto, whereby the lenders under the Credit and Guaranty Agreement consented to the use of the proceeds of the incremental term loan to repurchase certain senior notes.
On December10, 2018, Lannett entered into Amendment No.3 to the Credit and Guaranty Agreement (“Amendment No.3”) among Lannett, as borrower, Morgan Stanley, as administrative agent and collateral agent, and the lenders party thereto. to Amendment No.3, the Secured Net Leverage Ratio applicable to the financial leverage ratio covenant shall be increased from 3:25:1.00 to 4.25:1.00 as of December31, 2019 and prior to September30, 2020, and then to 4:00:1:00 as of September30, 2020. In exchange, Lannett agreed to include a minimum liquidity covenant of $75 million, a 25 basis point increase to the interest rate margin paid on the Term A Loans and pay a consent fee equal to 50 basis points, paid only to consenting lenders.
The foregoing description ofAmendmentNo.3 does not purport to be complete and is qualified in its entirety by reference to the full text ofAmendmentNo.3 which is filed as Exhibit10.52 to this Current Report on Form8-K and incorporated herein by reference.
Item 1.01. Other Events.
On December11, 2018, Lannett issued a press release announcing the amendments to the Credit and Guaranty Agreement, as disclosed in Item 1.01 hereof. A copy of this press release is attached hereto as Exhibit99.1 and incorporated herein by reference.
