Item 1.01.
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Entry into a Material Definitive Agreement.
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On July 1, 2016, Thermo Fisher Scientific
Inc. (the Company) entered into (i) a $2.0 billion Bridge Credit Agreement, (ii) a $2.0 billion Term Loan Agreement, and (iii) a $2.5 billion Revolving Credit Agreement, each as defined and further described below. Capitalized terms used
in this Form 8-K and not defined herein shall have the meanings ascribed to them in each of the respective Credit Agreements (as defined below), which are attached to this Form 8-K as Exhibits 10.1, 10.2, and 10.3.
Bridge Credit Agreement
The
Bridge Credit Agreement (Bridge Credit Agreement) is a 364-day senior unsecured bridge loan facility in the principal amount of up to $2.0 billion (the Bridge Commitments), among the Company, each lender from time to time
party thereto, and JPMorgan Chase Bank, N.A. as Administrative Agent. The availability of the Bridge Commitments is conditioned upon, among other things, confirmation that the acquisition by the Company of FEI Company (FEI) pursuant to
that certain Agreement and Plan of Merger, dated as of May 26, 2016, among the Company, Polpis Merger Sub Co. and FEI (the Acquisition) has been consummated, or will be consummated substantially simultaneously with the extension of the
Loans under the Bridge Credit Agreement.
The proceeds of the Loans may be used to fund, in whole or in part, the Acquisition, including
repayment of indebtedness of FEI and all or a portion of the transaction costs incurred by the Company and its Subsidiaries in connection therewith. If no Default or Event of Default has occurred, (i) each Eurocurrency Rate Loan shall bear
interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period
plus
a margin of 1.000% to 1.750% based on the Companys Debt Ratings and
(ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate
plus
a margin of 0.000% to 0.750% based on the
Companys Debt Ratings.
Beginning on July 25, 2016 and continuing through the date on which the Loans are advanced, or the
termination of the Bridge Commitments, the Company shall pay a ticking fee equal to a rate between 0.100% and 0.250% per year based on the Companys Debt Ratings times the actual daily aggregate amount of the Bridge Commitments. The ticking fee
is earned, due and payable on the earlier of the date the Loans are advanced and the date the Bridge Commitments are terminated. The Company has also agreed to pay a funding fee equal to 0.50% of the aggregate amounts of the Loans funded and a
duration fee on each of the 90th, 180th and 270th day after the funding of the Loans in an amount equal to 0.50%, 0.75%, and 1.00%, respectively, of the aggregate amount of the Loans outstanding at the time.
The Bridge Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. The
negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, dispositions of property and transactions with affiliates. The Bridge Credit Agreement also requires that the Company maintain a
consolidated indebtedness to consolidated EBITDA ratio of no greater than 4.5 to 1.0 for the first two consecutive quarters after the Loans are advanced, with such ratio stepping down to 4.0 to 1.0 for each fiscal quarter thereafter, and a minimum
interest coverage ratio of 3.0 to 1.0 as at the last day of any fiscal quarter.
Term Loan Agreement
The Term Loan Credit Agreement (the Term Loan Agreement) is a 3-year senior unsecured term loan facility in the principal amount of
up to $2.0 billion (the Term Commitments), among the Company, the other Borrowers party thereto, each lender from time to time party thereto, and JPMorgan
Chase Bank, N.A., as Administrative Agent. The availability of the Term Commitments is conditioned upon, among other things, confirmation that the Acquisition has been consummated, or will
be consummated substantially simultaneously with the extension of the Loans under the Term Loan Agreement.
The proceeds of the Loans may
be used to fund, in whole or in part, the Acquisition, including repayment of indebtedness of FEI and all or a portion of the transaction costs incurred by the Company and its subsidiaries in connection therewith. The principal of the Loans
shall be repaid quarterly, on the last business day of March, June, September and December of each year (beginning on the first such date to occur after the Loans are advanced) in an amount equal to 2.5% of the Loans during the first four quarters,
and 5% of the Loans during the remaining eight quarters, with the balance of the principal being due on the third anniversary of the Closing Date. If no Default or Event of Default has occurred, (i) each Eurocurrency Rate Loan shall bear
interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period
plus
a margin of 1.000% to 1.750% based on the Companys Debt Ratings and
(ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate
plus
a margin of 0.000% to 0.750% based on the
Companys Debt Ratings. In addition, the Company has agreed to pay a commitment fee equal to a rate between 0.100% and 0.275% per year based on the Companys Debt Ratings times the actual daily amount of the Term Commitments quarterly in
arrears on the last business day of each March, June, September and December, commencing with the first such date to occur after the date that is 60 days after July 1, 2016, and continuing until termination of the Term Commitments or the Loans are
advanced to the Company.
The Term Loan Agreement contains customary representations and warranties, as well as affirmative and negative
covenants. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, dispositions of property and transactions with affiliates. The Term Loan Agreement also requires that the Company
maintain a consolidated indebtedness to consolidated EBITDA ratio of no greater than 4.5 to 1.0 for the first two consecutive quarters after the Loans are advanced, with such ratio stepping down to 4.0 to 1.0 for the two immediately following fiscal
quarters and then stepping down to 3.5 to 1.0 each fiscal quarter thereafter. After the consolidated leverage ratio has stepped down to 3.5 to 1.0, and has been tested for at least one quarter, at the Companys election, within 30 days after a
Qualified Acquisition, the permitted leverage ratio may be increased to 4.5 to 1.0, with the same successive step downs as detailed above. The Term Loan Agreement also requires a minimum interest coverage ratio of 3.0 to 1.0 as at the last day of
any fiscal quarter.
Revolving Credit Agreement
The Revolving Credit Agreement (Revolving Credit Agreement and collectively with the Bridge Credit Agreement and Term Loan
Agreement, the Credit Agreements) is a 5-year senior unsecured revolving facility in the principal amount of up to $2.5 billion (the Revolving Commitments), among the Company, certain Subsidiaries of the Company from time to
time party thereto as Designated Borrowers, each lender from time to time party thereto, Bank of America, N.A., as Administrative Agent, and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A., and certain other lenders acting in
such capacity from time to time, as L/C Issuers and Swing Line Lenders. The Revolving Credit Agreement replaced the Companys existing $1.5 billion five-year revolving credit agreement (the Prior Credit Agreement).
The proceeds of the Loans may be used to repay all obligations under the Prior Credit Agreement and for working capital purposes, capital
expenditures, acquisitions, repurchases of stock, debentures and
other securities, the refinancing of present and future debt and other general corporate purposes. If no Default or Event of Default has occurred, (i) each Eurocurrency Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period
plus
a margin of 0.900% to 1.475% based on the Companys Debt Ratings and
(ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate
plus
a margin of 0.000% to 0.450% based on the
Companys Debt Ratings, and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate
plus
a margin of 0.000% to 0.475% based
on the Companys Debt Ratings. In addition, the Company has agreed to pay a facility fee equal to a rate between 0.100% and 0.275% per year based on the Companys Debt Ratings times the actual daily amount of the Revolving Commitments
quarterly in arrears on the last business day of each March, June, September and December, commencing with the first such date to occur after July 1, 2016.
The Revolving Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. The negative
covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, dispositions of property and transactions with affiliates. The Revolving Credit Agreement also requires that the Company maintain a
consolidated indebtedness to consolidated EBITDA ratio of no greater than 3.5 to 1.0 as of the last day of any fiscal quarter prior to the closing date of the Acquisition. On and after the date that the Acquisition closes (the Acquisition
Closing Date), the permitted consolidated leverage ratio will be 4.5 to 1.0 for the first two consecutive quarters, with such ratio stepping down to 4.0 to 1.0 for two immediately following fiscal quarters and then stepping down to 3.5 to 1.0
each fiscal quarter thereafter. In addition, from and after the earlier of the Acquisition Closing Date and termination of the Acquisition, within 30 days after a Qualified Acquisition, the permitted leverage ratio may be increased to 4.5 to 1.0,
with the same successive step downs as detailed above. The Revolving Credit Agreement also requires a minimum interest coverage ratio of 3.0 to 1.0 as at the last day of any fiscal quarter.
The foregoing description of the Credit Agreements does not purport to be a complete statement of the parties rights under any such
agreement and is qualified in its entirety by reference to the full text of each Credit Agreement (including exhibits), which are filed as Exhibit 10.1, 10.2, and 10.3 hereto.
In the ordinary course of business, certain of the lenders under each of the Credit Agreements and their affiliates have provided, and may in
the future provide, investment banking, commercial banking, cash management, foreign exchange or other financial services to the Company for which they have received compensation and may receive compensation in the future.