Item 1.01 Entry into a Material Definitive Agreement.
The information set forth below under Items 2.01 and 2.03 is hereby incorporated into this Item 1.01 by reference.
Amendments to Existing Debt Agreements
The Company entered into amendments to its: (i) Fourth Amended and Restated
Credit Agreement, dated
The foregoing description of the amendments does not purport to be complete and is qualified in its entirety by reference to the text of the amendments, which are attached hereto as Exhibits 10.3, 10.4 and 10.5 and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Purchase Agreement
On
Pursuant to the terms of the Purchase Agreement, on
Prior to the Sale,
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The Purchase Agreement contains customary representations and warranties with respect to MSA Worldwide and its subsidiaries and the Buyer. Pursuant to the Purchase Agreement, MSA Jacksonville and the Buyer will each indemnify the other for breaches of representations and warranties and breaches of covenants, subject to certain limitations as set forth in the Purchase Agreement.
As a result of the transaction, the Company will remove all Specified Liabilities from its balance sheet.
The foregoing description of the transactions to be consummated pursuant to the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to specific terms and conditions of the Purchase Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
A copy of the Purchase Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about the parties. In particular, the Purchase Agreement contains representations, warranties and covenants that were made as of specific dates and only for the benefit of the parties to the Purchase Agreement and are qualified by information included in confidential disclosure schedules. Moreover, certain representations, warranties and covenants in the Purchase Agreement were made for the purpose of allocating risk between the parties rather than establishing matters as facts. Accordingly, the representations, warranties and covenants in the Purchase Agreement should not be relied upon as characterizations of the actual state of facts about the parties to the agreement.
Forward-Looking Statements
This report may contain (and verbal statements made by MSA®
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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.
Credit Agreement
On
Borrowings under the Credit Agreement may bear interest at a rate based upon either a "Base Rate" or a "Adjusted Term SOFR Rate," plus an adder based upon the Company's net leverage ratio (as defined in the Credit Agreement):
• The "Base Rate" is calculated on a daily basis as the highest of a prime rate, an overnight bank funding rate plus 0.5% per annum, or Daily Simple SOFR plus 1%. The Base Rate cannot be less than zero. The adder ranges from zero to 1%. • The "Adjusted SOFR Term Rate" is calculated as provided in the Credit Agreement. The adder ranges from 0.875% to 2.00%.
Interest based upon the Base Rate is payable quarterly on the first day of January, April, July and October. Interest based upon the Adjusted Term SOFR Rate is payable on the last day of the selected interest period, unless that interest period exceeds three months, in which case it is also payable on the 90th day of the selected interest period. "SOFR" refers to the Secured Overnight Financing Rate.
The Credit Agreement contains customary representations and warranties,
covenants and events of default substantially the same as the Existing Credit
Agreement. The Credit Agreement requires the Company to comply with specified
financial covenants, including a requirement to maintain a minimum fixed charges
coverage ratio of not less than 1.50 to 1.00 and a net leverage ratio not to
exceed 3.75 to 1.00 during an initial 12-month period, stepping down to 3.50 to
1.00 thereafter (or not to exceed 4.00 to 1.00 during the three calendar
quarters including, and following, certain specified acquisitions); in each case
calculated on the basis of the trailing four fiscal quarters. The net leverage
ratio is defined as consolidated indebtedness less unencumbered cash exceeding
• incur additional indebtedness or issue guarantees; • create or incur liens; • make loans and investments; • make acquisitions; • transfer or sell assets; • enter into transactions with affiliated parties; • make changes in its or its subsidiaries' organizational documents that are materially adverse to the lenders; and • modify the nature of the Company's or its subsidiaries' business;
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subject to certain exceptions and limitations, including carve-outs and baskets, set forth in the Credit Agreement. The Credit Agreement also contains certain customary events of default, including defaults triggered by a change of control or defaults on other debt. Under the Credit Agreement, a change in control occurs if a person or group of persons acting in concert acquires beneficial ownership of 50% or more of the outstanding voting stock 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 specific terms and conditions of the Credit Agreement, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits No. Description 10.1 Membership Interest Purchase Agreement, datedJanuary 5, 2023 , by and amongMSA Worldwide, LLC , aPennsylvania limited liability company,Mine Safety Appliances Company, LLC , aPennsylvania limited liability company,Sag Main Holdings, LLC , aDelaware limited liability company, andMSA Safety Jacksonville Manufacturing LLC , aPennsylvania limited liability company.* 10.2 Credit Agreement, datedJanuary 5, 2023 , by and among the Company, as borrower, various Company subsidiaries, as guarantors, various financial institutions, as lenders, andPNC Bank, National Association , as administrative agent. 10.3 Amendments to Fourth Amended and Restated Credit Agreement, datedMay 24, 2021 , as amended, among the Company, the other Borrowers party thereto, the Guarantors party thereto, the Lenders party thereto andPNC Bank, National Association , as Administrative Agent. 10.4 Amendment No. 1 and Consent to Third Amended and Restated Multicurrency Note Purchase and Private Shelf Agreement, dated as ofDecember 30, 2022 , amongMSA Safety Incorporated , each of the Guarantors signatory hereto,PGIM, INC. and each of the holders of Notes. 10.5 Amendment No. 1 and Consent to Second Amended and RestatedMaster Note Facility, dated as ofDecember 30, 2022 , amongMSA Safety Incorporated , each of the Guarantors signatory hereto,NYL Investors LLC and each of the holders of Notes. 99.1 Pro Forma Unaudited Condensed Consolidated Financial Statements. 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)
* The exhibits and schedules to this agreement have been omitted. A copy of the
omitted exhibits and schedules will be provided to the Securities and Exchange
Commission upon request.
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