Item 1.01. Entry into a Material Definitive Agreement.
On
Revolving Credit Agreement
On the Closing Date, the Company entered into a Credit Agreement with
The Revolving Credit Facility replaced the Company's existing
The Revolving Credit Facility is scheduled to mature on
Borrowings under the Revolving Credit Facility will bear interest, at the
Company's option, at LIBOR or at a "base rate" equal to the greatest of the
prime rate, a rate based on the
The Company will also pay commitment fees on the average daily unused portion of total commitments under the Revolving Credit Facility at an applicable rate varying depending on the Company's corporate ratings. The applicable commitment fee rate ranges from 0.125% to 0.275%.
Under the Revolving Credit Facility, the interest rate margins and commitment
fee are subject to upward or downward adjustments if the Company achieves, or
fails to achieve, certain specified sustainability targets with respect to
greenhouse gas emission intensity reduction,
The Company is also required to pay other customary fees and costs in connection with the Revolving Credit Facility.
The Revolving Credit Agreement requires the Company to maintain, on a consolidated basis, a leverage ratio of total indebtedness to EBITDA, as defined in the Revolving Credit Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00, subject to a temporary four fiscal quarter increase in such maximum ratio to 3.75 to 1.00 following certain material acquisitions.
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The Revolving Credit Agreement contains representations and warranties, affirmative covenants and conditions precedent to borrowing usual and customary for credit agreements of this type. The Revolving Credit Agreement contains negative covenants that restrict, subject to certain exceptions, the ability of the Company and its restricted subsidiaries to:
•in the case of the Company, consolidate with or merge with or into, or sell, assign, convey, transfer, lease, or otherwise dispose of all or substantially all of the properties, rights and assets of the Company and its restricted subsidiaries, taken as a whole, to another person;
•incur, guarantee, or otherwise become liable for any indebtedness secured by a lien;
•in the case of non-guarantor restricted subsidiaries, incur, guarantee, or otherwise become liable for any unsecured indebtedness; and
•enter into sale and lease-back transactions.
The Company and its restricted subsidiaries are permitted to incur, guarantee,
or otherwise become liable for indebtedness, and to enter into sale and
lease-back transactions, that would otherwise be prohibited under the negative
covenants, in an aggregate amount equal to the greater of (x)
The Revolving Credit Agreement does not contain any covenant restricting the payment of dividends or the making of other restricted payments by the Company.
The following events are considered events of default under the Revolving Credit Agreement:
•the Company's failure to pay principal of a loan under the Revolving Credit Agreement when due;
•the Company's failure to pay (a) any interest or scheduled fees under the Revolving Credit Agreement for 5 business days after the date when due and (b) any other obligation under the Revolving Credit Agreement for 10 business days after the date when due;
•the Company's failure to comply with the leverage ratio described above;
•the failure by the Company or any of its restricted subsidiaries to comply with any other agreement under the Revolving Credit Agreement for a period of 30 days after notice of breach;
•default under any indebtedness of the Company or a guarantor subsidiary that
(a) either results from (i) failure to pay any principal of such indebtedness at
its stated final maturity or (ii) a default with respect to another obligation
under such indebtedness and such other default results in such indebtedness
becoming due and payable before its stated maturity without such indebtedness
having been discharged, cured, waived, rescinded, or annulled within 30 days and
(b) the principal amount of which aggregates
•certain events of bankruptcy, insolvency, or reorganization with respect to the Company or any of its significant subsidiaries;
•an ERISA event has occurred that would reasonably be expected to result in a material adverse effect; and
•any change of control of the Company.
If an event of default described above with respect to certain events of bankruptcy, insolvency or reorganization with respect to the Company occurs and is continuing, then the lending commitments under the Revolving Credit Agreement shall automatically terminate and the principal amount plus interest, fees, and other obligations then outstanding under the Revolving Credit Agreement will automatically become due and immediately payable and outstanding documentary credits will be required to be cash collateralized without any further action or notice. If any other event of default occurs and is continuing, then the administrative agent under the Revolving Credit Agreement may terminate the revolving commitments, require the Company to provide cash collateral for outstanding
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documentary credits, and/or accelerate the principal amount plus interest, fees, and other obligations then outstanding under the Revolving Credit Agreement to become due and immediately payable.
The lenders under the Revolving Credit Agreement and their affiliates have engaged in, and may in the future engage in, other commercial dealings in the ordinary course of business with the Company or its affiliates, including the provision of investment banking, investment management, commercial banking and cash management services, foreign exchange hedging and equipment financing and leasing services.
Term Loan Agreement
On the Closing Date, the Company entered into a Term Loan Credit Agreement by
and among the Company,
The Term Loan Agreement provides a committed loan facility (the "Term Loan
Facility") consisting of a term loan in an aggregate principal amount of up to
Item 1.02. Termination of a Material Definitive Agreement.
On the Closing Date, the Company terminated the Credit Agreement dated as of
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Agreement. The undrawn
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 under Item 1.01 of this Current Report is incorporated herein by reference.
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