ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Senior Unsecured Credit Agreement
On
The Credit Facility will mature on
Loans under the Credit Agreement will bear interest, at the Registrant's election, at either (a) the base rate plus a margin that ranges from 0 to 55 basis points based on the Registrant's net leverage ratio, or (b) LIBOR plus a margin that ranges from 80 to 155 basis points based on the Registrant's net leverage ratio.
The Credit Agreement contains customary covenants, including but not limited to, limitations on the Registrant's ability and, in certain instances, the Registrant's subsidiaries' ability, to incur indebtedness, incur liens, make acquisitions and investments or sell or transfer assets and stock. Additionally, the Registrant may not permit its interest coverage ratio to be less than 3.0 to 1.0 or its net leverage ratio to exceed 3.75 to 1.0 on the Closing Date and thereafter. However, upon notification to the Administrative Agent, the applicable maximum permissible net leverage ratio level can be increased to 4.25 to 1.0 in connection with certain material acquisitions.
Upon the occurrence of an event of default, the Registrant's obligations under the Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the Credit Agreement, covenant defaults, certain ERISA defaults, change of control and other customary defaults.
The lenders under the Credit Agreement and their affiliates have engaged and may engage in commercial and investment banking transactions with the Registrant in the ordinary course of business, and also provide or have provided advisory and financial services to the Registrant.
The above description of the Credit Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and which is incorporated herein by reference.
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Amendment to Private Shelf Agreement
On
The above description of the Private Shelf Amendment and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the Private Shelf Amendment, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
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ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
The Credit Agreement replaces Registrant's prior
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The disclosure set forth in Item 1.01 is hereby incorporated by reference into this Item 2.03.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. 10.1 Credit Agreement dated as of December 9, 2021, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions. 10.2 Amendment No. 2 to Amended and Restated Note Purchase and Private Shelf Agreement, dated as of December 9 , 2021, between Applied and PGIM, Inc.
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