Section 1.01 Entering into a Material Definitive Agreement.
Amendment to the Senior Credit Facility
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Company’s Senior Credit Facility Amendment, which is attached as Exhibit 10.1 to this current Report on Form 8-K and is incorporated herein by reference.
The credit agreement, in force
When electing the Company,
The Company also pays a commitment fee to lenders under the Term Loan Facility on the average amount by which the lenders’ total commitments exceed the utilization of the Term Loan Facility, ranging from 0.080% to 0.200% per year. The applicable margins and commitment fee are determined based on the Company’s consolidated net leverage ratio or its senior unsecured debt rating (or, if not available, the credit family rating). companies) that results in the lowest applicable margins and commitment fee (with applicable margins and commitment fee increasing as this ratio increases or these ratings decrease, as the case may be).
The Company may use the proceeds from the Term Loan Facility to fund its ongoing working capital requirements and other general corporate needs.
The obligations of the Company and its subsidiaries with respect to the term loan facility are unsecured.
All of the Company’s obligations under the term loan facility are guaranteed by the guarantors of the national subsidiaries party to the term loan facility.
The Term Loan Facility contains certain positive and negative covenants which impose restrictions on the financial and business operations of the Company, including restrictions on liens, indebtedness, fundamental changes, changes in the nature of the business of the society. Many of these limitations are subject to numerous exceptions. The Company is also required to maintain a consolidated interest coverage ratio of at least 3.5 to 1.0 on the last day of any fiscal quarter.
The Term Loan Facility also contains customary representations and warranties.
The term loan facility contains events of default customary for this type of financing, including a cross-default clause and a cross-acceleration clause of certain other significant indebtedness of the Company. Upon the occurrence of an Event of Default, outstanding obligations under the Term Loan Facility may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to the Company, the Company is obligated to repay outstanding borrowings under the term loan facility.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, which is attached as Schedule 10.2 to this current Report on Form 8-K and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a
Off-balance sheet arrangement of a registrant.
The information described in item 1.01 above “Conclusion of a Material Definitive Agreement” is incorporated herein by reference.
Item 9.01 Financial statements and supporting documents.
The documents included as attachments to this current report on Form 8-K are filed solely to provide information about their terms, are not intended to provide factual or other information about the company or the other parties to the agreements, and should not be relied upon by investors for any other purpose.
10.1 Fourth Amendment to Second Amended and Restated Credit Agreement, dated as of
August 12, 2022, by and among the Company and certain of its subsidiaries, as borrowers, Wells Fargo Bank, National Association, as administrative agent, swing line lender, and an L/C issuer, and the other lenders party thereto. 10.2 Credit Agreement, dated as of August 12, 2022, by and among the Company and Mohawk International, as borrowers, certain of its subsidiaries, as guarantors, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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