Item 1.01. Entry Into a Material Definitive Agreement.
364-Day Credit Agreement (the “Credit Agreement”), with
Fargo Bank, National Association
The Credit Agreement provides a
term loan credit facility with a maturity date of
use the proceeds of loans under the Credit Agreement (a) to repay its
(i) obligations under its commercial paper program, (ii) other short term credit
facilities and (iii) maturing long-term debt obligations, (b) for general
corporate purposes of the Company and its subsidiaries in the ordinary course of
business, including for working capital, capital expenditure and other lawful
corporate purposes and (c) to fund certain permitted acquisitions and other
Rates for borrowing under the Credit Agreement are based, at the Company’s
election, upon whether the borrowing is a Term SOFR loan or a Base Rate loan.
Term SOFR loans will bear interest at an adjusted term secured overnight
financing rate (“SOFR”) (calculated based on one-month, three-month or six-month
term SOFR as of a specified date, plus an adjustment of 0.10%) plus an
applicable margin of 1.125%. Base Rate loans will bear interest at a rate per
annum equal to the sum of (1) the greatest of (a) the prime rate, (b) the
York Federal Reserve Bank
a one-month interest period plus 1%, and (2) an applicable margin of 0.125%. In
addition, under the terms of the Credit Agreement, the Company agrees to pay the
lenders a 0.10% ticking fee in respect of unfunded term loan commitments.
The Credit Agreement contains representations and affirmative, negative and
financial covenants usual and customary for agreements of this type, including
among others covenants that place conditions upon the Company’s ability to merge
or consolidate with other companies, sell any material part of its business or
property, and incur liens. The Credit Agreement includes a covenant that the
Company will not permit its debt to capitalization ratio to exceed 0.65 at the
last day of any fiscal quarter. For purposes of calculating the debt to
capitalization ratio, the Company’s capitalization means the sum of (a) its net
worth, (b) its indebtedness, and (c) 50% of the aggregate after-tax amount of
non-cash charges directly arising from any ceiling test impairment occurring on
clause (c) may not exceed $400.0 million.
The Credit Agreement contains a cross-default provision whereby the failure by
the Company or any of its significant subsidiaries to make payments under other
borrowing arrangements aggregating
certain events affecting those other borrowing arrangements, could trigger an
obligation to repay any amounts outstanding under the committed credit
facilities. The Credit Agreement also contains additional customary events of
default including, without limitation, payment defaults, material inaccuracy of
representations and warranties, covenant defaults, certain bankruptcy and
insolvency events, certain judgment defaults, certain defaults relating to
nullification or revocation of the Credit Agreement, change in control and
certain ERISA events.
In the event of a default by the Company under the Credit Agreement, including a
cross-default by the Company or any of its significant subsidiaries, the lenders
may terminate the commitments made under the Credit Agreement and declare any
principal amount then outstanding, and all accrued interest and other amounts
payable by the Company under the Credit Agreement, to be immediately due and
In addition to the Credit Agreement, the Company maintains individual
uncommitted or discretionary lines of credit with a number of financial
institutions, including certain parties to the Credit Agreement, for general
corporate purposes. Other financial institutions may also provide the Company
with uncommitted or discretionary lines of credit in the future. In addition, in
the ordinary course of their respective businesses, certain lenders under the
Credit Agreement, or their affiliates, perform, or may in the future perform,
financial services for the Company or its affiliates, including investment
banking, underwriting, lending, commercial banking, trust and other
administrative and advisory services.
The foregoing description of the Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to the Credit Agreement,
a copy of which has been filed as Exhibit 10.1 hereto and is expressly
incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information described in Item 1.01 relating to the Credit Agreement is
hereby incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 10.1 364-Day Credit Agreement, dated as of
June 30, 2022, among the Company, the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 3
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