ITEM 1.01 Entry into a Material Definitive Agreement
On
Amounts outstanding under the credit facility generally bear interest at the prime rate or SOFR plus a specified margin, depending on the type of borrowing being made. The applicable margin is based on the Company's consolidated ratio of net debt to adjusted EBITDA from time to time. Currently, the Company's margin is 2.375% for SOFR rate loans.
The term loan portion of the credit facility requires quarterly principal
payments of (i)
A commitment fee is payable on the unused portion of the revolving credit facility based on the Company's consolidated ratio of net debt to adjusted EBITDA from time to time. Currently, the commitment fee is 0.30%.
The Credit Agreement requires the Company to comply with various covenants, including among other things, financial covenants to maintain the following:
a. A ratio of consolidated net debt to adjusted EBITDA not to exceed 3.50 to 1. b. A consolidated fixed charge coverage ratio not less than 1.25 to 1.
The Credit Agreement allows the Company to, among other things, make distributions to shareholders, repurchase its stock, incur other debt or liens, or acquire or dispose of assets provided the Company complies with certain requirements and limitations of the Credit Agreement.
The Company's obligations under the Credit Agreement are secured by the Security Agreement, which provides for a pledge of substantially all assets of the Company and its subsidiaries.
On
The Credit Agreement and the Security Agreement (collectively, the "Agreements") are provided to give investors information regarding their respective terms, not to give investors factual information about the Company or any other parties thereto. In addition, the representations, warranties, and covenants contained in the Agreements were made only for purposes of those Agreements and as of specific dates, were solely for the benefit of the parties to those Agreements and may be subject to limitations agreed by the contracting parties, including being qualified by disclosures exchanged between the parties in connection with the execution of the Agreements. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Agreements instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under these Agreements and should not view the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company.
The Company maintains a variety of relationships with several of the lenders that are parties to the Credit Agreement, including comprehensive banking services that involve most of the Company's treasury receipt and disbursement operations, foreign currency borrowing arrangements, letter of credit and foreign exchange needs.
The above summary of the Credit Agreement is qualified in its entirety by reference to the full text of the Credit Agreement, a complete copy of which is filed herewith as Exhibit 10.1 and is hereby incorporated by reference in response to this Item 1.01.
The above summary of the Security Agreement is qualified in its entirety by reference to the full text of the Security Agreement, a complete copy of which is filed herewith as Exhibit 10.2 and is hereby incorporated by reference in response to this Item 1.01.
2
ITEM 1.02 Termination of a Material Definitive Agreement
On
The Existing Credit Agreement included a
The Company's loan covenants under the Existing Credit Agreement required the Company to maintain a senior net leverage ratio not to exceed 4.25 to 1 and a fixed charge coverage ratio to be not less than 1.25 to 1.
The Existing Swap Agreement had an original notional amount of
The Company maintains a variety of relationships with several of the lenders that were parties to the Existing Credit Agreement, including comprehensive banking services that involve most of the Company's treasury receipt and disbursement operations, foreign currency borrowing arrangements, letter of credit and foreign exchange needs.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
See Item 1.01 "Entry into a Material Definitive Agreement" above. The descriptions of the Credit Agreement and the Security Agreement set forth under Item 1.01 above are hereby incorporated by reference in their entirety in response to this Item 2.03.
ITEM 8.01 Other Events
On
3
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits Exhibit Credit Agreement, dated as ofJune 16, 2023 among The Eastern 10.1 Company as Borrower, the Lenders signatory thereto andTD Bank, N.A ., as Administrative Agent. Exhibit Security Agreement, dated as ofJune 16, 2023 among The Eastern 10.2 Company as Borrower, the Lenders signatory thereto andTD Bank, N.A , as Administrative Agent. Exhibit Company Press Release datedJune 20, 2023 . 99.1 4
© Edgar Online, source