Mercury Systems, Inc. (NASDAQ:MRCY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement
On June 27, 2017, Mercury Systems, Inc. (the Company) and certain
of the Companys subsidiaries, as guarantors, entered into an
Amendment No. 1 to the Companys Credit Agreement dated May 2,
2016 (the Credit Agreement, as amended by Amendment No. 1, the
Amended Credit Agreement) with a syndicate of commercial banks
and Bank of America, N.A acting as the administrative agent. The
Amended Credit Agreement provides for a $400 million revolving
credit facility. Mercury repaid the $192.5 million remaining
principal on its term loan under the original Credit Agreement
using cash on hand. The new $400 million revolving facility
remained undrawn at the closing of the refinancing, other than
for outstanding letters of credit.
of the Companys subsidiaries, as guarantors, entered into an
Amendment No. 1 to the Companys Credit Agreement dated May 2,
2016 (the Credit Agreement, as amended by Amendment No. 1, the
Amended Credit Agreement) with a syndicate of commercial banks
and Bank of America, N.A acting as the administrative agent. The
Amended Credit Agreement provides for a $400 million revolving
credit facility. Mercury repaid the $192.5 million remaining
principal on its term loan under the original Credit Agreement
using cash on hand. The new $400 million revolving facility
remained undrawn at the closing of the refinancing, other than
for outstanding letters of credit.
Maturity
The Amended Credit Agreement has a five year maturity.
Interest Rates and Fees
Borrowings under the Amended Credit Agreement bear interest, at
the Companys option, at floating rates tied to LIBOR or the prime
rate plus an applicable percentage. The applicable percentage has
initially been set at LIBOR plus 1.375% and in future fiscal
quarters will be established to a pricing grid based on the
Companys total net leverage ratio.
the Companys option, at floating rates tied to LIBOR or the prime
rate plus an applicable percentage. The applicable percentage has
initially been set at LIBOR plus 1.375% and in future fiscal
quarters will be established to a pricing grid based on the
Companys total net leverage ratio.
In addition to interest on the aggregate outstanding principal
amounts of any borrowings, the Company will also pay a quarterly
commitment fee on the unutilized commitments under the revolving
credit facility, which fee has initially been set at 0.25% per
annum and in future fiscal quarters will be established to a
pricing grid based on the Companys total net leverage ratio. The
Company will also pay customary letter of credit and agency fees.
amounts of any borrowings, the Company will also pay a quarterly
commitment fee on the unutilized commitments under the revolving
credit facility, which fee has initially been set at 0.25% per
annum and in future fiscal quarters will be established to a
pricing grid based on the Companys total net leverage ratio. The
Company will also pay customary letter of credit and agency fees.
Covenants and Events of Default
The Amended Credit Agreement provides for customary negative
covenants, including, among other things and subject to certain
significant exceptions, restrictions on the incurrence of debt or
guarantees, the creation of liens, the making of certain
investments, loans and acquisitions, mergers and dissolutions,
the sale of assets including capital stock of subsidiaries, the
payment of dividends, the repayment or amending of junior debt,
altering the business conducted, engaging in transactions with
affiliates and entering into agreements limiting subsidiary
dividends and distributions. The Amended Credit Agreement also
requires the Company to comply with certain financial covenants,
including a quarterly minimum consolidated cash interest charge
ratio test and a quarterly maximum consolidated total net
leverage ratio test.
covenants, including, among other things and subject to certain
significant exceptions, restrictions on the incurrence of debt or
guarantees, the creation of liens, the making of certain
investments, loans and acquisitions, mergers and dissolutions,
the sale of assets including capital stock of subsidiaries, the
payment of dividends, the repayment or amending of junior debt,
altering the business conducted, engaging in transactions with
affiliates and entering into agreements limiting subsidiary
dividends and distributions. The Amended Credit Agreement also
requires the Company to comply with certain financial covenants,
including a quarterly minimum consolidated cash interest charge
ratio test and a quarterly maximum consolidated total net
leverage ratio test.
The Amended Credit Agreement also provides for customary
representations and warranties, affirmative covenants and events
of default (including, among others, the failure to make required
payments of principal and interest, certain insolvency events,
and an event of default upon a change of control). If an event of
default occurs, the lenders under the Amended Credit Agreement
will be entitled to take various actions, including the
termination of unutilized commitments, the acceleration of
amounts outstanding under the Amended Credit Agreement and all
actions permitted to be taken by a secured creditor.
representations and warranties, affirmative covenants and events
of default (including, among others, the failure to make required
payments of principal and interest, certain insolvency events,
and an event of default upon a change of control). If an event of
default occurs, the lenders under the Amended Credit Agreement
will be entitled to take various actions, including the
termination of unutilized commitments, the acceleration of
amounts outstanding under the Amended Credit Agreement and all
actions permitted to be taken by a secured creditor.
Guarantees and Security
The Companys obligations under the Amended Credit Agreement are
guaranteed by certain of the Companys material domestic
wholly-owned restricted subsidiaries (the Guarantors). The
obligations of both the Company and the Guarantors are secured by
a perfected security interest in substantially all of the assets
of the Company and the Guarantors, in each case, now owned or
later acquired, including a pledge of all of the capital stock of
substantially all of the Companys domestic wholly-owned
restricted subsidiaries and 65% of the capital stock of certain
of its foreign restricted subsidiaries, subject in each case to
the exclusion of certain assets and additional exceptions.
guaranteed by certain of the Companys material domestic
wholly-owned restricted subsidiaries (the Guarantors). The
obligations of both the Company and the Guarantors are secured by
a perfected security interest in substantially all of the assets
of the Company and the Guarantors, in each case, now owned or
later acquired, including a pledge of all of the capital stock of
substantially all of the Companys domestic wholly-owned
restricted subsidiaries and 65% of the capital stock of certain
of its foreign restricted subsidiaries, subject in each case to
the exclusion of certain assets and additional exceptions.
The foregoing description of the Amended Credit Agreement does
not purport to be complete and is qualified in its entirety by
reference to the full text of the Amendment No. 1, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated by reference into this Item 1.01.
not purport to be complete and is qualified in its entirety by
reference to the full text of the Amendment No. 1, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
On June 27, 2017 the Company and certain of the Companys
subsidiaries entered into an Amendment No. 1 to the Companys
Credit Agreement dated May 2, 2016 (the Credit Agreement, as
amended by Amendment No. 1, the Amended Credit Agreement) with
a syndicate of commercial banks and Bank of America, N.A acting
as the administrative agent. Reference is made to Item 1.01 of
this Current Report on Form 8-K for a summary of the Amended
Credit Agreement.
subsidiaries entered into an Amendment No. 1 to the Companys
Credit Agreement dated May 2, 2016 (the Credit Agreement, as
amended by Amendment No. 1, the Amended Credit Agreement) with
a syndicate of commercial banks and Bank of America, N.A acting
as the administrative agent. Reference is made to Item 1.01 of
this Current Report on Form 8-K for a summary of the Amended
Credit Agreement.
Item 7.01 Regulation FD Disclosure
On June 27, 2017, the Company issued a press release announcing
the Amendment No. 1 to the Companys Credit Agreement. The press
release is furnished as Exhibit 99.1 hereto. The information
provided in Item 7.01 of this Current Report on Form 8-K and in
the attached Exhibit 99.1 shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the Exchange Act), or otherwise subject to the
liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing.
the Amendment No. 1 to the Companys Credit Agreement. The press
release is furnished as Exhibit 99.1 hereto. The information
provided in Item 7.01 of this Current Report on Form 8-K and in
the attached Exhibit 99.1 shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the Exchange Act), or otherwise subject to the
liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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10.1
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Amendment No. 1 to Credit Agreement, dated June 27,
2017, among Mercury Systems, Inc., the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent |
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99.1
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Press release, dated June 27, 2017, of Mercury
Systems, Inc. |
MERCURY SYSTEMS INC ExhibitEX-10.1 2 secedgaramendmentno1tocr.htm EXHIBIT 10.1 secedgaramendmentno1tocr
AMENDMENT NO. 1
This AMENDMENT NO. 1 dated as of June 27,…To view the full exhibit click here About Mercury Systems, Inc. (NASDAQ:MRCY)
Mercury Systems, Inc. is a commercial provider of secure processing subsystems designed and made in the United States. The Company’s solutions support a range of defense and intelligence programs. Its technologies include embedded processing modules and subsystems, radio frequency (RF) and microwave multi-function assemblies, as well as subsystems, and RF and microwave components. It designs and builds RF and microwave components and subsystems for the electronic warfare (EW), signals intelligence (SIGINT) and other communications requirements and applications. It offers analyst services and systems engineering support, consulting, maintenance and other support, testing and installation. It designs, markets and sells software and middleware environments for the development and execution of signal and image processing applications on a range of heterogeneous and multi-computing platforms. It also offers solutions in mission computing, safety-critical avionics and platform management.
