Item 1.01 Entry into a Material Definitive Agreement.
On
The Credit Agreement amends and restates the Company's and MMI's prior
The Credit Agreement provides for a new senior secured credit facility in an
aggregate principal amount of
US Dollar borrowings under the credit facility bear interest, at the option of MMI, at a fluctuating base rate plus a margin or at a eurocurrency rate plus a margin. Canadian Dollar borrowings under the credit facility bear interest, at the option of MMI, at a fluctuating base rate plus a margin or at CDOR (as defined in the Credit Agreement) plus a margin. Borrowings denominated in currencies other than US and Canadian Dollars bear interest at either (i) the applicable Alternative Currency Term Rate, including EURIBOR for loans in Euros, BBSY for loans in Australian Dollars, STIBOR for loans in Swedish Krone or (ii) the applicable Alternative Currency Daily Rate, including SONIA for loans in Sterling, plus, in each case, a margin (each capitalized term in this sentence not otherwise defined herein having the meaning assigned to it in the Credit Agreement).
The margin applicable to any Borrowing is determined by MMI's Leverage Ratio (as defined in the Credit Agreement). A commitment fee equal to a percentage of the aggregate amount of the lenders' unused revolving commitments, a delayed draw term loan non-use fee equal to a percentage of the aggregate amount of the lenders' unused delayed draw commitments, and a letter of credit fee on the undrawn amount of each letter of credit issued under the letter of credit subfacility, are paid quarterly and on either the maturity date or, in the case of the non-use fee, the DDTL Expiration Date.
The term loan facility will amortize in equal quarterly installments due on the last day of each fiscal quarter, commencing with the first full fiscal quarter after the Closing Date, in an aggregate annual amount equal to 2.50% of the original aggregate principal amount of the term loan facility, with the balance, plus any accrued interest, due and payable on the fifth anniversary of the Closing Date. The delayed draw term loan facility will amortize in quarterly installments due on the last day of each fiscal quarter, commencing with the first full fiscal quarter after each delayed draw term loan borrowing in an amount equal to 0.625% of the original aggregate principal amount of such borrowing, with the balance, plus any accrued interest, due and payable on the fifth anniversary of the Closing Date. MMI is required to make mandatory prepayments with respect to the term loan facility and delayed draw term loan facility in amounts equal to 100% of all net cash proceeds of debt issuances not otherwise permitted by the Credit Agreement and certain non-ordinary course asset sales and dispositions, subject to customary reinvestment rights and certain exceptions.
The Credit Agreement contains representations, warranties and covenants that are customary for agreements of this type and, with certain exceptions, are substantially similar to those contained in the Previous Credit Agreement. Among other things,
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the covenants in the Credit Agreement limit the ability of the Company and its subsidiaries to, with certain exceptions: incur indebtedness; grant liens; engage in certain mergers, consolidations, acquisitions and dispositions; make restricted payments; and enter into certain transactions with affiliates. The Credit Agreement also requires MMI to satisfy certain financial covenants: (i) a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00; and (ii) a maximum Secured Leverage Ratio (as defined in the Credit Agreement) of Funded Secured Debt less Unrestricted Cash to Pro Forma EBITDA (each as defined in the Credit Agreement) of 3.75 to 1.00, which may be adjusted to 4.25 to 1.00 for a four consecutive fiscal quarter period in connection with certain qualified acquisitions, subject to the terms and conditions contained in the Credit Agreement.
The Credit Agreement also contains certain customary events of default, including, but not limited to, the failure to make required payments; bankruptcy and other insolvency events; the failure to perform certain covenants; the material breach of a representation or warranty; non-payment of certain other indebtedness; the entry of undischarged judgments against the Company or any subsidiary for the payment of material uninsured amounts; the invalidity of the Company guarantee or any subsidiary guaranty; and a change of control of the Company.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, a copy of which is attached as Exhibit 10.1 hereto and is 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 provided in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description Exhibit 10.1 Eighth Amended and Restated Credit Agreement, dated as ofOctober 21, 2021 , amongMiddleby Marshall Inc. ,The Middleby Corporation , the Subsidiary Borrowers named therein, the lenders named therein andBank of America, N.A ., as administrative agent for the lenders. Exhibit 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
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