Item 1.01. Entry into a Material Definitive Agreement.
On
Borrowings under the Bridge Credit Agreement bear interest at a rate determined, at the Borrower's option, based on either an alternate base rate or a LIBOR rate plus, in each case, an applicable margin that may range from 125.0 bps to 237.5 bps depending on the credit rating of the Borrower, subject to increases by 25.0 bps at 90, 180 and 270 days after the Closing Date. Based on the Borrower's current ratings, the applicable margin for LIBOR-denominated borrowings is 137.5 bps.
The Borrower will pay to each lender under the Bridge Facility a duration fee equal to 0.50%, 0.75% and 1.00% of the aggregate outstanding principal amount of such lender's loans under the Bridge Facility at 90, 180 and 270 days after the Closing Date, respectively.
If at any time until the fifth business day after the Closing Date the Borrower's credit rating from two of S&P, Moody's and Fitch falls below BBB-, Baa3 or BBB-, respectively, then (i) the applicable margin will be increased by 25.0 bps, (ii) the duration fee will increase to 1.00%, 1.50% and 2.00% at 90, 180 and 270 days after the Closing Date, respectively, and (iii) the Borrower will pay to each lender under the Bridge Facility an additional funding fee in an amount equal to 0.25% of the aggregate principal amount of such lender's loans on the Closing Date.
The Bridge Credit Agreement contains certain customary representations and
warranties, as well as certain customary affirmative and negative covenants. The
Bridge Credit Agreement's negative covenants restrict the activities of the Loan
Parties and
The financial covenants in the Bridge Credit Agreement require that the Borrower
maintains, as of the last day of each fiscal quarter (beginning with the fiscal
quarter ending
The Bridge Credit Agreement also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, ERISA events, material monetary judgments, change of control events, inability to pay debts
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as they become due, actual or asserted invalidity of guarantees and the material
inaccuracy of
The foregoing description does not purport to be complete and is subject to and is qualified in its entirety by reference to all of the provisions of the Bridge Credit Agreement, which is attached hereto as Exhibit 4.1 and incorporated herein by reference. Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein. OnJanuary 31, 2020 the Buyer completed its acquisition ofDYHC, Inc. , aDelaware corporation ("Dynetics") from theDynetics, Inc. Employee Stock Ownership Trust , as amended (which is part of theDynetics, Inc. Employee Stock Ownership Plan (the "ESOP")) (the "Seller" or the "Trust"), pursuant to the terms of the previously announced Stock Purchase Agreement, dated as ofDecember 17, 2019 (the "Purchase Agreement"), by and amongLeidos , the Buyer,Dynetics and the Seller. Pursuant to the Purchase Agreement, the Buyer purchased from the Seller all of the issued and outstanding shares of common stock ofDynetics for$1.65 billion in cash, subject to certain adjustments (the "Stock Purchase"). Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangements of a Registrant. The descriptions of the financing arrangements in Item 1.01 of this Current Report on Form 8-K are incorporated into this Item 2.03 by reference herein. Item 8.01. Other Events. OnJanuary 31, 2020 Leidos issued a press release announcing the consummation of the Stock Purchase. A copy of the press release is filed as Exhibit 99.1 and is incorporated herein by reference. --------------------------------------------------------------------------------
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are furnished with this report.
Exhibit 2.1 Stock Purchase Agreement, datedDecember 17, 2019 , by and amongLeidos Holdings, Inc. ,Leidos, Inc. ,DYHC, Inc. andDynetics, Inc. Employee Stock Ownership Trust , as amended (which is part of theDynetics, Inc. Employee Stock Ownership Plan) (previously filed as Exhibit 2.1 toLeidos Holdings, Inc.'s Current Report on Form 8-K filed onDecember 18, 2019 which is incorporated herein by reference). Exhibit 4.1 Bridge Credit Agreement, datedJanuary 31, 2020 , by and amongLeidos Holdings, Inc. ,Leidos, Inc. , as borrower, the guarantors party thereto, the lenders party thereto andCitibank, N.A ., as administrative agent. Exhibit 99.1 Press release, datedJanuary 31, 2020 . Exhibit 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
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