Item 1.01.
Entry into a Material Definitive Agreement.
As further described under Item 2.01 below, on January 19, 2017 (the Closing Date), Synchronoss Technologies, Inc., a Delaware corporation (Parent), completed the previously announced acquisition of Intralinks Holdings, Inc., a Delaware corporation (Intralinks or the Company), pursuant to the Agreement and Plan of Merger (Merger Agreement), dated December 5, 2016, by and among Parent, GL Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (Merger Sub), and Intralinks.
In connection with the completion of the acquisition of Intralinks, Parent entered into a new senior secured credit agreement, dated as of January 19, 2017 (the Credit Agreement), among, inter alia, Parent, the lending institutions from time to time parties thereto, and Goldman Sachs Bank USA, as administrative agent, collateral agent, swingline lender and a letter of credit issuer. The Parents obligations under the Credit Agreement are guaranteed by certain of Parents subsidiaries (including Intralinks) and secured by substantially all of the assets of Parent and the guarantors.
The term loan lenders under the Credit Agreement have advanced to Parent senior secured term loans in an aggregate principal amount of $900 million with a maturity date of January 19, 2024 (the Term Facility). The revolving lenders under the Credit Agreement have provided Parent with a revolving credit facility of up to $200 million with a maturity date of January 19, 2022 (the Revolving Facility). The term loans under the Term Facility will amortize at 1% per annum in equal quarterly installments with the balance payable on the final maturity date. The proceeds of the Term Facility are being used to finance a portion of the cash consideration in the Offer and the Merger (as such terms are defined below), to refinance certain existing indebtedness of Parent and Intralinks (or its subsidiaries) and to pay fees and expenses related thereto. The Revolving Facility includes borrowing capacity available for letters of credit and for borrowings on same-day notice under swingline loans, and borrowing thereunder may be used for working capital and other general corporate purposes.
Loans under the Term Facility bear interest at a rate equal to, at Parents option, the adjusted LIBOR rate for an applicable interest period or an alternate base rate, in each case, plus an applicable margin of 2.75% or 1.75%, respectively. The revolving loans under the Revolving Facility initially bear interest at a rate equal to, at Parents option, the adjusted LIBOR rate or an alternate base rate, in each case, plus an applicable margin of 2.50% or 1.50%, respectively, subject to step-downs based on Parents ratio of first lien secured debt to adjusted EBITDA.
Subject to certain customary exceptions, loans under the Term Facility are subject to mandatory prepayments in amounts equal to: (1) 100% of the net cash proceeds from any non-ordinary course sale or other disposition of assets (including as a result of casualty or condemnation) by Parent or its restricted subsidiaries subject to customary reinvestment provisions and certain other exceptions; (2) 100% of the net cash proceeds from incurrences of debt (other than permitted debt); and (3) a customary annual excess cash flow sweep at levels based on Parents then applicable ratio of first lien secured debt to adjusted EBITDA.
The Credit Agreement contains a number of customary affirmative and negative covenants and events of default, which, among other things, restrict the ability of Parent and its subsidiaries to incur debt, allow liens on assets, make investments, pay dividends or prepay certain other debt. The Credit Agreement also requires Parent to comply with certain financial maintenance covenants, including a total gross leverage ratio and an interest charge coverage ratio.
Certain of the lenders under the Credit Agreement, or their affiliates, have provided, and may in the future from time to time provide, certain commercial and investment banking, financial advisory and other services in the ordinary course of business for the registrant and its affiliates, for which they have in the past and may in the future receive customary fees and commissions.
The foregoing description of the Credit Agreement is not complete and is qualified in its entirety by reference to the Credit Agreement, which will be filed with the Securities and Exchange Commission as an exhibit to Parents Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2017 and is incorporated by reference herein.