Item 1.01
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Entry into a Material Definitive Agreement.
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364-Day Credit Agreement
On April 29, 2016, Honeywell International Inc. (“
Honeywell
”)
entered into a $1.5 billion 364-Day Credit Agreement (the “
364-Day Credit Agreement
”) with the banks, financial
institutions and other institutional lenders party thereto, Citibank, N.A., as administrative agent, JPMorgan Chase Bank, N.A.,
as syndication agent, Bank of America, N.A., Barclays Bank PLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Morgan Stanley
MUFG Loan Partners, LLC and Wells Fargo Bank, National Association, as documentation agents, and Citigroup Global Markets Inc.
and JPMorgan Chase Bank, N.A., as joint lead arrangers and co-book managers.
The 364-Day Credit Agreement is maintained for general corporate purposes.
Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than April 28, 2017, unless termination
occurs earlier pursuant to the terms of the 364-Day Credit Agreement. The 364-Day Credit Agreement does not restrict Honeywell’s
ability to pay dividends, nor does it contain financial covenants. The failure to comply with customary conditions or the occurrence
of customary events of default contained in the 364-Day Credit Agreement would prevent any further borrowings and would generally
require the repayment of any outstanding borrowings under the 364-Day Credit Agreement. Such events of default include, among other
things, (a) non-payment of 364-Day Credit Agreement debt, interest or fees; (b) non-compliance with the terms of the 364-Day Credit
Agreement covenants; (c) cross-default with other debt in certain circumstances; (d) bankruptcy or insolvency; and (e) defaults
on certain obligations under the Employee Retirement Income Security Act. Additionally, each of the lenders has the right to terminate
its commitment to lend additional funds under the 364-Day Credit Agreement if any person or group acquires beneficial ownership
of 30 percent or more of Honeywell’s voting stock, or, during any 12-month period, individuals who were directors of Honeywell
at the beginning of the period cease to constitute a majority of the board of directors, except to the extent individuals who at
the beginning of such twelve month period were replaced by individuals (x) whose election or nomination to the board of directors
was approved by a majority of remaining members of the board of directors at the time of such election or nomination or (y) who
were nominated by a majority of the remaining members of the board of directors at the time of such election or nomination and
subsequently elected as directors by shareholders of the Company.
At Honeywell’s option, advances under the 364-Day Credit Agreement
would be (1) denominated in U.S. Dollars and would bear interest at the Base Rate (as defined below) plus the Applicable Margin
minus 1.0% or (2) denominated in U.S. Dollars or in Euros and would bear interest at the Eurocurrency Rate (defined as reserve-adjusted
LIBOR or EURIBOR, as applicable), plus the Applicable Margin. Base Rate is the highest of (a) the rate of interest announced publicly
by Citibank in New York, New York, from time to time, as Citibank’s base rate, (b) 0.5% above the federal funds
rate and (c) LIBOR for a one month period (subject to a floor of zero) plus 1.00%. The Applicable Margin is based on Honeywell’s
credit default swap mid-rate spread subject to a floor and a cap based on Honeywell’s debt rating.
Honeywell has agreed to pay a commitment fee on
the aggregate unused commitment for the 364-Day Credit Agreement, based upon a grid determined by reference to
Honeywell’s non-credit enhanced long-term senior unsecured debt rating (the “
Public Debt Rating
”), in an amount equal
to 0.030% per annum if Honeywell maintains its Public Debt Rating at a level of at least A+ by Standard & Poor’s, a
Standard & Poor’s Financial Services LLC business (“
Standard & Poor’s
”), or A1
by Moody’s Investors Service, Inc. (“
Moody’s
”) (“
Level 1
”), with a step-up
to 0.040% per annum if Honeywell’s Public Debt Rating level is lower than Level 1 but at least A by Standard
& Poor’s or A2 by Moody’s (“
Level 2
”) and a further step-up to 0.060% per annum
if Honeywell’s Public Debt Rating level falls below Level 2. The 364-Day Credit Agreement is not subject to
termination based upon a decrease in Honeywell’s debt ratings or as a result of a Material Adverse Change (as defined
in the 364-Day Credit Agreement).
The foregoing description of the 364-Day Credit Agreement is not intended
to be complete and is qualified in its entirety by reference to the 364-Day Credit Agreement, a copy of which is attached hereto
as Exhibit 10.1 and is incorporated herein by reference.
Amendment No. 2 to the Five Year Credit Agreement
On April 29, 2016, Honeywell entered into Amendment No. 2 (the “
Amendment
”)
to the Amended and Restated Five Year Credit Agreement dated as of July 10, 2015, as amended by that certain Amendment No. 1 dated
as of September 30, 2015 (as so amended, the “
Credit Agreement
”), with the banks, financial institutions and
other
institutional lenders party to the Credit Agreement, Citibank, N.A.,
as administrative agent, Citibank International Limited, as swing line agent, JPMorgan Chase Bank, N.A., as syndication agent,
Bank of America, N.A., Barclays Bank PLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Morgan Stanley MUFG Loan Partners,
LLC and Wells Fargo Bank, National Association, as documentation agents, and Citigroup Global Markets Inc. and J.P. Morgan Securities
LLC, as joint lead arrangers and co-book managers. The Amendment, among other things, extends the Credit Agreement’s termination
date from July 10, 2020 to July 10, 2021.
The foregoing description of the Amendment is not intended to be complete
and is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 10.2 and is incorporated
herein by reference.