Item 1.01 Entry into a Material Definitive Agreement.
On
The Credit Facility is subject to a borrowing base calculated using a formula
based upon eligible receivables and inventory, and at the Company's election,
eligible real property, minus certain reserves. The Company did not draw down
any commitments under the Credit Facility upon closing. Proceeds of the Credit
Facility will be used for general corporate purposes. The Credit Facility
includes a
Borrowings under the Credit Facility will bear interest at an index based on LIBOR (which will not be less than 0.00%) or, at the option of the Company, the Base Rate (defined as the highest of (a) the Truist prime rate, (b) the Federal Funds Rate plus 0.50%, (c) one-month LIBOR plus 1.00%, and (d) 0.00%), plus, in either case, an applicable margin based on the Company's average usage level under the facility. Such applicable margin for LIBOR-based borrowings fluctuates between 1.00%-1.50% and was 1.00% at the time of closing, and such applicable margin for Base Rate borrowings fluctuates between 0.00%-0.50%, and was 0.00% at closing. An unused line fee shall be payable quarterly in respect of the total amount of the unutilized Lenders' commitments and short-notice borrowings under the Credit Facility. Letter of credit fees at the applicable margin on the average undrawn and unreimbursed amount of letters of credit shall be payable quarterly and a facing fee of 0.125% shall be payable quarterly for the stated amount of each letter of credit. The Company is also required to pay certain fees to the administrative agent under the Credit Facility. The Credit Agreement provides for the transition from LIBOR to SOFR and does not require an amendment in connection with such transition.
The Credit Facility contains customary covenants, including a financial covenant which requires the Company to maintain a minimum fixed charge coverage ratio of 1.00:1.00 at the end of each fiscal quarter in which the covenant has been triggered, reporting requirements and events of default. The Credit Facility is secured by substantially all assets of the Company and its subsidiaries guaranteeing the Credit Facility, including (i) pledges of 100% of the stock or other equity interest of each domestic subsidiary that is directly owned by such entity and (ii) 65% of the stock or other equity interest of each foreign subsidiary that is directly owned by such entity, in each case subject to customary exceptions.
The foregoing description of the Credit Facility is only a summary and is qualified in its entirety by reference to the Credit Agreement, a copy of which will be filed as Exhibit 10.1 hereto.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Please refer to the description of the Credit Facility disclosed in Item 1.01 above.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are included with this Current Report on Form 8-K:
Exhibit No. Exhibit Title or Description 10.1 Third Amended and Restated Credit Agreement, dated as ofDecember 16, 2021 , by and among the Company, certain domestic and Canadian subsidiaries party thereto, the Lenders, and Agent. 104 Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document 2
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