Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
On
The Fourth Amended and Restated Credit Agreement provides that the Borrowers may
request an increase in the aggregate revolving commitments by up to
Under the Fourth Amended and Restated Credit Agreement, the Borrowers are required to pay certain fees, including a commitment fee of .100% to .275% (depending on the Company's leverage ratio) of the aggregate commitment, which fee is payable quarterly in arrears.
The Fourth Amended and Restated Credit Agreement contains customary affirmative and negative covenants. The affirmative covenants include financial statements, notices of material events, conduct of business, inspection of property, maintenance of insurance, compliance with laws and most favored lender obligations. The affirmative covenants also include financial covenants with a maximum leverage ratio of 3.50 to 1.00 and an interest coverage ratio equal to or greater than 3.00 to 1.00. Under the Fourth Amended and Restated Credit Agreement, the priority debt cap is measured as 20 percent of total tangible assets. The negative covenants include limitations on loans or advances, investments, and the granting of liens by the Company or its subsidiaries, as well as prohibitions on certain consolidations, mergers, sales and transfers of assets.
As was the case in the Previous Credit Agreement, the Fourth Amended and Restated Credit Agreement also contains customary events of defaults (with customary grace periods, as applicable, for certain of those events of default). If an event of default occurs, the Fourth Amended and Restated Credit Agreement provides that (i) the commitments may be terminated and (ii) the loans then outstanding may be declared due and payable. For certain events of default relating to insolvency, bankruptcy or liquidation, the commitments are automatically terminated and the loans outstanding automatically become due and payable. The full amount of the aggregate commitment may be borrowed as multicurrency loans, in Sterling, Euros, Australian Dollars, Canadian Dollars, Japanese Yen, or any other agreed currency.
As in the Previous Credit Agreement, the Fourth Amended and Restated Credit
Agreement also provides for a swingline loan sub-facility of up to
Interest rates on obligations under the Fourth Amended and Restated Credit Agreement are based on prevailing annual interest rates for Eurodollar loans or an alternative base rate, both subject to an applicable margin based on the leverage ratio. The Fourth Amended and Restated Credit Agreement also includes a competitive bid option that permits the Borrowers to request that the lenders provide bids for the interest rate that will apply to specific loans.
The Fourth Amended and Restated Credit Agreement is subject to a number of conditions, and the description of the Fourth Amended and Restated Credit Agreement herein is qualified in its entirety and is incorporated herein by reference to Exhibit 10.1.
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Item 9.01. Financial Statements and Exhibits
(d) Exhibits: Exhibit Number Description 10.1 Fourth Amended and Restated Credit Agreement, dated May 13, 2021 , by and among Franklin Electric Co., Inc., Franklin Electric B.V., JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and the lenders identified therein 101 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. 104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL
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