Item 1.01. Entry into a Material Definitive Agreement.
The disclosure provided in Item 2.03 of this report with respect to the Credit Agreement is hereby incorporated by reference into this Item 1.01.
Item 1.02 Termination of a Material Definitive Agreement.
The disclosure provided in Item 2.03 of this report with respect to the Existing Credit Agreement is hereby incorporated by reference into this Item 1.02.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
Amended and Restated Credit Agreement
The Company entered into an Amended and Restated Credit Agreement, dated as of
The Credit Agreement provides for a term loan facility under which the Company
has outstanding term loans in an aggregate principal amount of
The proceeds of the Term Loan Facility and loans under the Revolving Credit Facility were used, on the closing date under the Credit Agreement, to refinance the loans and other credit extensions that were made under the Existing Credit Agreement (see "Amendment and Restatement of Existing Credit Agreement" below) and the loans under the Revolving Credit Facility will be used for general corporate purposes, including permitted stock repurchases, permitted investments, including acquisitions, and all other lawful corporate purposes, and to refinance certain indebtedness of any business acquired in a permitted acquisition.
At the Company's option, any loan under the Credit Agreement (other than
Swingline Loans) that is made to it or certain designated borrowers under the
Revolving Credit Facility will bear interest at a "Base Rate" or "Eurocurrency
Rate" or, for loans denominated in British pounds sterling, the Sterling
Overnight Index Average Reference Rate ("SONIA"), plus in each case, an
applicable margin that will fluctuate (the "Applicable Rate"). The Base Rate is
defined as the highest of (a) the
The Applicable Rate for Base Rate Loans and Eurocurrency Rate Loans (or any alternative currency loans) depends on the Consolidated Leverage Ratio (as defined in the Credit Agreement) for the Company and its subsidiaries as set forth in the most recent compliance certificate received by the administrative agent. The Applicable Rate for Base Rate Loans is between 0.100% and 0.500% and the Applicable Rate for Eurocurrency Rate/SONIA Daily Rate is between 1.100% and 1.500%. The facility fee also depends on the Consolidated Leverage Ratio and is between 0.150% and 0.250%. Based on the current Consolidated Leverage Ratio, the initial pricing under the Credit Agreement is set at an Applicable Rate of 1.30% for Eurocurrency Rate/SONIA Daily Rate Loans and 0.30% for Base Rate Loans, and the facility fee is set at a rate of 0.20% times the actual daily amount of the Revolving Credit
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Facility regardless of usage, in each case until the Company's next quarterly compliance certificate is delivered. The Credit Agreement includes provisions permitting the Company, in consultation with one or more lenders selected by the Company, to establish key performance indicators ("KPIs") with respect to certain environmental, social and governance targets of the Company and its subsidiaries and upon the effectiveness of any such amendment, the KPIs will be used, together with the pricing grid, to determine pricing under the Credit Agreement.
The Credit Agreement provides that certain initial designated borrower subsidiaries of the Company are eligible to borrow under the Revolving Credit Facility. The Company may designate additional subsidiaries as designated borrowers subject to the sole discretion of the requisite lenders under the Revolving Credit Facility and the administrative agent.
The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and all of its material domestic subsidiaries and are and will be guaranteed by certain subsidiaries of the Company, excluding certain excluded subsidiaries pursuant to the Credit Agreement.
Excluded subsidiaries include, among others, (i)(a) subsidiaries that as of the end of the then most recently ended fiscal quarter of the Company for the period of four consecutive fiscal quarters then ended contributed five percent (5%) or less of the Company's and its subsidiaries' consolidated revenues (adjusted to eliminate the effect of intercompany transactions) for such period, or (b) the consolidated total assets reflected on the balance sheet of such subsidiary as of the end of such fiscal quarter were five percent (5.0%) or less or of the Company's and its subsidiaries' consolidated total assets (adjusted to eliminate intercompany transactions) as of such date, or (ii) any subsidiary of the Company if such subsidiary of the Company providing a guaranty could result in actual or potential adverse tax consequence to the Company and its subsidiaries.
The Credit Agreement contains customary affirmative covenants for facilities of this type, including, among others, covenants pertaining to the delivery of financial statements; notices of default and certain other material events; payment of obligations; preservation of corporate existence, rights, privileges, permits, licenses, franchises and intellectual property; maintenance of property and insurance and compliance with laws. The Credit Agreement contains customary negative covenants for facilities of this type, including, among others, limitations on the incurrence of liens, investments and indebtedness; mergers and certain other fundamental changes; dispositions of assets; restricted payments; changes in the Company's line of business; transactions with affiliates and burdensome agreements.
The Credit Agreement contains a financial covenant requiring maintenance of a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00 as of the end of any fiscal quarter.
The Credit Agreement contains a financial covenant requiring maintenance of a
maximum Consolidated Leverage Ratio of 4.25 to 1.00 in any fiscal quarter ending
before
The Credit Agreement contains default provisions customary for facilities of this type, which are subject to customary grace periods and materiality thresholds, including, among others, defaults related to payment failures, failure to comply with covenants, material misrepresentations, defaults under other material indebtedness, insolvency proceedings, inability to pay debts, material judgments, certain events related to pension plans, the invalidity or revocation of any loan document of the Company or any subsidiary that becomes a guarantor as described above, a "change of control" of the Company or certain material regulatory actions. If an event of default occurs under the Credit Agreement, the lenders may, among other things, terminate the commitments to extend credit under the Revolving Credit Facility and declare immediately payable all borrowings under the Credit Agreement.
The Credit Agreement provides that the Company will repay to the lenders the aggregate principal amount of all Term Loan Facility borrowings in quarterly principal installments on the last business day of each fiscal quarter
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commencing
The foregoing description of the Credit Agreement is only a summary, does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Credit Agreement attached as Exhibit 10.1 and incorporated herein by reference.
Amendment and Restatement of Existing Credit Facilities
In connection with the Company's entry into the Credit Agreement, the Company's
existing Credit Agreement, dated as of
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