MOHAWK INDUSTRIES INC: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

Amendment to the Senior Credit Facility

On August 12, 2022, Mohawk Industries, Inc. (the “Company”) has entered into a fourth amendment (the “Amendment”) to its existing senior revolving credit facility (the “Senior Credit Facility”). The Amendment, among other things, (i) extended the maturity of the Senior Credit Facility by October 18, 2024 at
August 12, 2027(ii) renewed the Company’s option to extend the maturity of the Senior Credit Facility up to two times for an additional period of one year each, (iii) increased the financial safeguard clause of the coverage ratio of consolidated interest from 3.00:1.00 to 3.50:1.00, (iv) eliminated certain restrictive covenants applicable to the Company and its subsidiaries, including, but not limited to, restrictions on assignments , restricted payments and transactions with affiliated companies, and the consolidated net leverage ratio financial covenant, and (v) increased the amount available under the Senior Credit Facility for
$1,950,000,000 until October 18, 2024after which the amount available under the Senior Credit Facility will decrease to $1,485,000,000. The Amendment also allows the Company to increase commitments under the Senior Credit Facility by an aggregate amount not to exceed $600 million.

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.

term loan

Also on August 12, 2022the Company and its indirect wholly-owned subsidiary, Mohawk International Holdings S.à rl (“international mohawk“), has entered into an agreement (the “Credit Agreement”) which provides for a deferred draw term loan facility in an aggregate principal amount up to the dollar equivalent of
$800,000,000 (the “Term Loan Facility”), consisting of borrowings of up to
$575,000,000 and €220,000,000, as further described below.

The credit agreement, in force August 12, 2022was entered into by and between the Company, international mohawk, Wells Fargo Bank, National Association, as administrative agent, and the lenders parties thereto. The term loan facility may be borrowed up to twice per business day at the latest December 31, 2022, and proceeds from the term loan facility may be used to fund working capital and general corporate purposes. The principal amount of the term loan facility is to be repaid in one installment on the due date on August 12, 2024. The Company may prepay all or part of the Term Loan Facility from time to time, without premium or penalty, plus accrued and unpaid interest.

When electing the Company, WE dollar denominated loans under the Term Loan Facility will bear interest at an annual rate equal to (a) SOFR for periods of 1, 3 or 6 months, at the option of the Company, plus an applicable margin including between 0.825% and 1.50%, or (b) whichever is greater Wells Fargo Bank, National Association prime rate, the federal funds rate plus 0.5% and a daily SOFR rate plus 1.0%, plus an applicable margin of between 0.825% and 1.500%. Euro denominated loans under the Term Loan Facility will bear interest at an annual rate equal to the Euro currency rate for periods of 1, 3 or 6 months, at the option of the Company, plus a applicable margin between 0.825% and 1.500%.

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).

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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.

(d) Exhibits

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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