UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 17, 2007
L-1 IDENTITY SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-21559 02-08087887
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification no.)
177 BROAD STREET, STAMFORD, CONNECTICUT 06901
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (203) 504-1100
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 17, 2007, L-1 Identity Solutions, Inc. (the "Company") completed
an offering of $175 million aggregate principal amount of its 3.75% Convertible
Senior Notes due 2027 (the "Notes") pursuant to a purchase agreement, dated May
10, 2007 (the "Purchase Agreement"), by and among the Company, L-1 Identity
Solutions Operating Company and Bear, Stearns & Co. Inc. and Banc of America
Securities LLC, as representatives (the "Representatives") of the several
initial purchasers named therein (the "Initial Purchasers"). A copy of the
Purchase Agreement, which was previously disclosed in the Company's Form 8-K
filed on May 11, 2007, is attached to this Form 8-K as Exhibit 10.1. The $175
million aggregate principal amount of the Notes includes Notes issued in
connection with the exercise in full by the Initial Purchasers of their option
to purchase an additional $25 million aggregate principal amount of the Notes.
The aggregate discount received by the Initial Purchasers was approximately $4.8
million in connection with the offering of the Notes.
The Initial Purchasers and their affiliates have engaged in, or may in
the future engage in, investment banking, commercial banking, corporate trust,
financial services and other commercial dealings in the ordinary course of
business with the Company. They have received and may in the future receive
customary fees and commissions for these transactions. In particular, affiliates
of Bear, Stearns & Co. and Banc of America Securities LLC are parties to the
Company's October 19, 2006 credit agreement as lenders, agents and arrangers.
The spouse of the Company's Executive Vice President, Corporate Communications
is a partner and senior investment banker at Bear, Stearns involved with the
engagement.
The Notes and the shares of the Company's common stock, par value
$0.001 per share ("Common Stock"), issuable in certain circumstances upon
conversion of the Notes have not been registered under the Securities Act of
1933, as amended (the "Securities Act"). The Company offered and sold the Notes
to the Initial Purchasers in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act. The Initial Purchasers then sold
the Notes to qualified institutional buyers pursuant to the exemption from
registration provided by Rule 144A under the Securities Act. The Company relied
on these exemptions from registration based in part on representations made by
the Initial Purchasers in the Purchase Agreement.
The Notes are governed by an indenture, dated May 17, 2007 (the
"Indenture"), between the Company and The Bank of New York, as trustee. A copy
of the Indenture is attached to this Form 8-K as Exhibit 4.1 and the description
of the Indenture and the Notes in this report are summaries and are qualified in
their entirety by the terms of the Indenture and the Notes, respectively.
The Notes will be convertible only under certain circumstances, as
described below. If, at the time of conversion, the daily volume-weighted
average price per share for a 25 trading day period calculated in accordance
with the Indenture (as defined in greater detail in the Indenture, "VWAP") of
Common Stock is less than or equal to $32.00 per share, which is referred to as
the base conversion price, the Notes will be convertible into 31.25 shares of
common stock per $1,000 principal amount of the Notes, subject to adjustment
upon the occurrence of certain events. If, at the time of conversion, the VWAP
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of the Common Stock exceeds the base conversion price of $32.00 per share, the
conversion rate will be determined pursuant to a formula resulting in holders'
receipt of up to an additional 14 shares of Common Stock per $1,000 principal
amount of the Notes, subject to adjustment upon the occurrence of certain events
and determined as set forth in the Indenture. The Notes are convertible until
the close of business on the second business day immediately preceding May 15,
2027, in multiples of $1,000 in principal amount, at the option of the holder
under the following circumstances: (1) during the five business-day period after
any five consecutive trading day period (the "measurement period") in which the
trading price per Note for each day of such measurement period was less than 98%
of the product of the last reported sale price of Common Stock and the
applicable conversion rate for such trading day; (2) during any fiscal quarter
after June 30, 2007, if the last reported sale price of Common Stock for 20 or
more trading days in a period of 30 consecutive trading days ending on the last
trading day of the immediately preceding calendar quarter is greater than or
equal to 130% of the base conversion price on the related trading day; (3) if
the Company calls any or all of the Notes for redemption; and (4) upon the
occurrence of specified corporate transactions described in the Indenture. Upon
conversion, the Company has the right to deliver shares of Common Stock based
upon the applicable conversion rate, or a combination of cash and shares of
Common Stock, if any, based on a daily conversion value as described above
calculated on a proportionate basis for each trading day of a 25 trading-day
observation period. In the event of a fundamental change as specified in the
Indenture, the Company will increase the conversion rate by a number of
additional shares of Common Stock specified in the Indenture, or, in lieu
thereof, the Company may in certain circumstances elect to adjust the conversion
rate and related conversion obligation so that the Notes will become convertible
into shares of the acquiring or surviving company.
The Notes bear interest at a rate of 3.75% per year payable
semiannually in arrears in cash on May 15 and November 15 of each year,
beginning November 15, 2007. The Notes will mature on May 15, 2027, unless
earlier converted, redeemed or repurchased. The Company may redeem the notes at
its option, in whole or in part, on or after May 20, 2012, subject to prior
notice as provided in the Indenture. The redemption price during that period
will be equal to the principal amount of the notes to be redeemed, plus any
accrued and unpaid interest.
The Notes are the Company's senior unsecured obligations and will rank
in right of payment equally with the Company's senior indebtedness, effectively
subordinated to any of the Company's secured indebtedness to the extent of the
value of collateral securing such indebtedness and structurally subordinated to
all of the liabilities and preferred stock of the Company's subsidiaries. The
Notes could become immediately due and payable upon the occurrence of customary
events of default, including insolvency events, cross-default events involving
$15 million or more, and failure to make payments required under the Notes or to
convert the Notes pursuant to their terms
In connection with the closing of the sale of the Notes, the Company
entered into a registration rights agreement, dated as of May 17, 2007, with the
Representatives (the "Registration Rights Agreement"). Under the Registration
Rights Agreement, the Company has agreed to use its commercially reasonable
efforts to file a shelf registration statement covering resales of the Notes and
Common Stock issuable upon the conversion of the Notes within 120 days, and
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cause it to become effective under the Securities Act no later than 210 days,
after the original date of issuance of the Notes and to deliver registered
shares of Common Stock upon conversion of the Notes. Subject to certain rights
to suspend use of the shelf registration statement, the Company agreed to use
its commercially reasonable efforts to keep the shelf registration statement
effective after its effective date until the earlier of (1) the resale of all
Notes and Common Stock issuable upon conversion of the Notes in accordance with
the shelf registration statement, (2) the expiration of the holding period
applicable to the Notes and Common Stock issuable upon conversion of the Notes
under Rule 144(k) under the Securities Act, (3) the date on which all Notes and
Common Stock issuable upon conversion of the Notes are freely transferable by
persons who are not affiliates of the Company without registration under the
Securities Act or (4) the date on which all Notes and Common Stock issuable upon
conversion of the Notes cease to be outstanding. The Company will be required to
pay additional interest, subject to some limitations, to the holders of the
Notes if it fails to comply with its obligation to register the Notes and the
Common Stock issuable upon conversion of the Notes. A copy of the Registration
Rights Agreement is attached to this Form 8-K as Exhibit 4.3 and this
description is a summary and is qualified in its entirety by the terms of the
Registration Rights Agreement.
On May 10, 2007, the Company also entered into a prepaid forward share
purchase transaction with one of the Initial Purchasers. Pursuant to this
transaction, the Company agreed to purchase approximately 3.5 million shares of
Common Stock. Upon consummation of the offering of the Notes, the Company
prepaid the counterparty to the prepaid forward transaction approximately $70
million for the shares, which are to be delivered to the Company over a
settlement period of 25 consecutive trading days commencing 28 trading days
prior to May 21, 2012. The transaction is subject to early settlement or
settlement with alternative consideration in the event of certain significant
corporate transactions such as a change in control. A copy of the confirmation
of the prepaid forward share purchase transaction (the "Confirmation"), which
was previously disclosed in the Company's Form 8-K filed on May 11, 2007, is
attached to this Form 8-K as Exhibit 10.2 and this description is a summary and
is qualified in its entirety by the terms of the Confirmation.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information required by Item 2.03 is contained in Item 1.01 and is
incorporated herein by reference.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The information required by Item 3.02 is contained in Item 1.01 and is
incorporated herein by reference.
ITEM 8.01. OTHER EVENTS.
On May 17, 2007, the Company issued the press release filed herewith as
Exhibit 99.1 and incorporated herein by reference.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No. Description
----------- -----------
4.1 Indenture related to the Convertible Senior Notes due 2027,
dated as May 17, 2007, between L-1 Identity Solutions, Inc.
and The Bank of New York, as trustee (including form of 3.75%
Convertible Senior Notes due 2027).
4.2 Form of 3.75% Convertible Senior Notes due 2027 (included as
Exhibit A to Exhibit 4.1 hereto).
4.3 Registration Rights Agreement, dated as of May 17, 2007, by
and among L-1 Identity Solutions, Inc. and Bear, Stearns & Co.
Inc. and Banc of America Securities LLC, as representatives of
the initial purchasers.
10.1 Purchase Agreement, dated as of May 10, 2007, by and among L-1
Identity Solutions, Inc., L-1 Identity Solutions Operating
Company and Bear, Stearns & Co. Inc. and Banc of America
Securities LLC, as representatives of the initial purchasers.
10.2 Confirmation, dated May 10, 2007, between L-1 Identity
Solutions, Inc. and Bear, Stearns International Limited.
99.1 Press Release dated May 17, 2007.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 22, 2007
L-1 IDENTITY SOLUTIONS, INC.
By: /s/ James A. DePalma
-------------------------------
James A. DePalma
Executive Vice President, Chief
Financial Officer and Treasurer
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Indenture related to the Convertible Senior Notes due 2027,
dated as May 17, 2007, between L-1 Identity Solutions, Inc.
and The Bank of New York, as trustee (including form of 3.75%
Convertible Senior Notes due 2027).
4.2 Form of 3.75% Convertible Senior Notes due 2027 (included as
Exhibit A to Exhibit 4.1 hereto).
4.3 Registration Rights Agreement, dated as of May 17, 2007,
between L-1 Identity Solutions, Inc. and Bear, Stearns & Co.
Inc. and Banc of America Securities LLC, as representatives of
the initial purchasers.
10.1 Purchase Agreement, dated as of May 10, 2007, by and among L-1
Identity Solutions, Inc., L-1 Identity Solutions Operating
Company and Bear, Stearns & Co. Inc. and Banc of America
Securities LLC, as representatives of the initial purchasers.
10.2 Confirmation, dated May 10, 2007, between L-1 Identity
Solutions, Inc. and Bear, Stearns International Limited.
99.1 Press Release dated May 17, 2007
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