Item 1.01. Entry into a Material Definitive Agreement.
Fourth Amendment to Amended and Restated Credit Agreement
On April 20, 2016, ARC Group Worldwide, Inc. (the “Company”) entered into the Fourth Amendment to the Amended and Restated Credit Agreement (the “Citizens Fourth Amendment”), with Citizens Bank, N.A. and Capital One, National Association, dated November 10, 2014, as amended on March 30, 2016, May 11, 2015, and December 23, 2014 (as so amended, the “Amended and Restated Credit Agreement”).
The Citizens Fourth Amendment includes the following material amendments to the Amended and Restated Credit Agreement:
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Maintains the Company’s existing pricing grid, while establishing the Applicable Rates for Base Rate Loans and Eurocurrency Rate Loans (as such terms are defined in the Amended and Restated Credit Agreement) at 3.50% and 4.50%, respectively, if the Company’s total leverage ratio exceeds 4.00:1.00;
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Modifies the minimum fixed charge coverage ratio, maximum total leverage ratio, and maximum senior leverage ratio in line with the Company’s current financial expectations;
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Reduces mandatory principal payments for the remainder of the Amended and Restated Credit Agreement term;
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Adjusts mandatory prepayments that will be required upon the completion of asset sales or sale leaseback transactions, with the amount of prepayments to be determined based upon achievement of certain leverage ratios; and
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Establishment of mandatory prepayments on December 15, 2016, to be calculated and based upon a percentage of the principal outstanding as of such date.
The foregoing description of the Citizens Fourth Amendment does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the document. The Citizens Fourth Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Second Amendment to Subordinated Loan Agreement
On April 20, 2016, the Company entered into the Second Amendment to the Subordinated Loan Agreement with McLarty Capital Partners SBIC, L.P. (“McLarty Second Amendment”), dated November 10, 2014, as amended December 23, 2014 (as so amended, the “Subordinated Loan Agreement”).
The McLarty Second Amendment includes the following material amendments to the Subordinated Loan Agreement:
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Modifies the minimum fixed charge coverage ratio and maximum total leverage ratio in line with the Company’s current financial expectations; and
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Establishes mandatory prepayments that will be required upon the completion of asset sales or sale-leaseback transactions, with the amount of the prepayments to be determined based upon achievement of certain leverage ratios.
The foregoing description of the McLarty Second Amendment does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the document. The McLarty Second Amendment is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
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