On June 30, 2023 (the "Closing Date"), Myriad Genetics, Inc. (the "Company") reported to have entered into a Credit Agreement (the "Credit Agreement") with the lenders from time to time party thereto ("Lenders"), certain of the Company’s domestic subsidiaries party thereto (the "Guarantors"), and JP Morgan Chase Bank, N.A., as Administrative Agent (in such capacity, "Administrative Agent") and as Issuing Bank, consisting of a revolving credit facility in an initial maximum principal amount of $90,000,000, with an option to increase the maximum principal amount by up to $25,000,000 (the "Credit Facility") (Filing, 8-K, Myriad Genetics, JUL 6, 2023, View Source [SID1234633085]). Availability under the Credit Facility is subject to a borrowing base, which is the lesser of (a) 85% of the Company’s and the Guarantors’ eligible accounts receivable plus certain cash maintained with the Administrative Agent in an amount up to $20,000,000 minus any reserves established by the Administrative Agent in accordance with the Credit Agreement and (b) the aggregate amount of cash collections from eligible accounts of the Company and the Guarantors for the 60 consecutive days most recently ended. The proceeds of the Credit Facility were or will be used for the working capital needs and general corporate purposes of the Company and its subsidiaries, including, without limitation, consummating permitted acquisitions and refinancing existing indebtedness.
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The Credit Facility matures on June 30, 2026. Loans outstanding under the Credit Facility will bear interest at a rate per annum equal to, at the option of the Company, either (a) the greater of (i) the daily Prime Rate, (ii) the daily NYFRB Rate plus 0.50%, and (iii) the monthly Adjusted Term SOFR Rate plus 1.00% (the "ABR") plus an applicable margin ranging from 1.00% to 1.50% depending on the aggregate average unused availability under the Credit Facility during the prior quarter or (b) term SOFR for a tenor of one, three or six months (at the Company’s election) plus 0.10% (the "Adjusted Term SOFR Rate") plus an applicable margin ranging from 2.00% to 2.50% depending on the average unused availability under the Credit Facility during the prior quarter, with an ABR floor of 1.00% and an Adjusted Term SOFR Rate floor of 0.00%.
The Company may elect to prepay all or any portion of the amounts owed prior to the Maturity Date without premium or penalty. The Credit Facility is also subject to customary mandatory prepayments with the proceeds of unpermitted indebtedness and upon the occurrence of an over-advance. Voluntary and mandatory prepayments and all other payments of the Credit Facility must be accompanied by payment of accrued interest on the principal amount repaid or prepaid.
Pursuant to the Credit Agreement, the obligations of the Company are guaranteed by the Guarantors. The obligations of the Company and the Guarantors under the Credit Agreement and under bank products and swap obligations owing by them to any Lender or its affiliates are secured by substantially all of the assets of the Company and its subsidiaries under a Pledge and Security Agreement entered into with the Administrative Agent (the "Security Agreement").
The Credit Agreement requires the Company and the Guarantors, on a consolidated basis, to comply with a minimum liquidity and minimum availability test at all times before achieving a fixed charge coverage ratio of 1.0 to 1.0 and thereafter, to maintain a fixed charge coverage ratio of 1.0 to 1.0 until achieving availability under the Credit Facility of greater than the greater of (a) $10,625,000 and (b) 12.5% of the lesser of the maximum commitment amount and the borrowing base for a period of 30 consecutive days. In addition, the Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements. The Credit Agreement includes a number of customary events of default, including, among other things, nonpayment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and the occurrence of a change of control. If any event of default occurs (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Credit Facility may become due and payable immediately.
The foregoing description of the Credit Agreement and the Security Agreement is qualified in its entirety by reference to the complete terms and conditions of the Credit Agreement and the Security Agreement, which are filed as Exhibit 10.1 and 10.2, respectively, to this Current Report on Form 8-K.