LegalZoom.com Inc.
07/17/2025 | Press release | Distributed by Public on 07/17/2025 14:29
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01 Entry into a Material Definitive Agreement.
On July 14, 2025, LegalZoom.com, Inc. (the "Company") entered into Amendment No. 2 (the "Amendment") to its Amended and Restated Credit Guaranty Agreement, dated as of July 2, 2021 (as amended by Amendment No. 1 to Credit Agreement, dated as of May 5, 2023, the "Existing Revolving Credit Facility," and as amended by the Amendment, the "Revolving Credit Facility"), with the Company, as borrower, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
The Amendment decreases the revolving loan commitments from $150.0 million to $100.0 million. The ability to use up to $20.0 million for letters of credit as well as borrowings on same-day notice, referred to as swingline loans, in an amount of up to $10.0 million remains unchanged. The Amendment also extends the maturity date of the revolving loan commitments from July 2, 2026 to July 14, 2030.
U.S. Dollar borrowings under the Existing Revolving Credit Facility bear interest at a rate per annum equal to, at the borrower's option, either (a) the Secured Overnight Financing Rate ("Term SOFR") plus a margin ranging from 2.00% to 1.25% or (b) a margin ranging from 1.00% to 0.25% plus the highest of (i) the administrative agent's prime rate, (ii) the Federal Funds rate plus 0.50% or (iii) one-month Term SOFR plus 1%. The interest rate margins under the Existing Revolving Credit Facility are subject to one reduction of 0.25%, a second reduction of 0.25% and further reduction of 0.25% upon achieving total net first lien leverage ratios of 3.50 to 1.00 and 2.50 to 1.00, respectively. The Amendment adds an additional reduction of 0.25% upon achieving a total net first lien leverage ratio of 1.00 to 1.00. The commitment fee under the Existing Revolving Credit Facility is initially 0.35%, subject to a reduction of 0.10% if the total net first lien leverage ratio does not exceed 3.50 to 1.00. The Amendment adds an additional reduction of 0.05% upon achieving a total first lien leverage ratio of 1.00 to 1.00.
The Amendment also removes the 0.10% credit spread adjustment to the Term SOFR benchmark for all available interest periods.
Other than the foregoing, the material terms of the Existing Revolving Credit Facility remain unchanged. As of the date of the Amendment, there are no amounts outstanding under the Revolving Credit Facility or any outstanding letters of credit and the Company is in compliance with all financial covenants.
The foregoing description of the terms of the Amendment is subject to, and qualified in its entirety by, the full text of the Amendment, a copy of which is filed hereto as Exhibit 10.1 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
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