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Item 1.01.
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Entry into a Material Definitive Agreement.
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Asset-Based Lending Credit Agreement
As described in Item 2.03 below, on March 2, 2020, the Company and its direct and indirect subsidiaries entered into an amended and restated asset-based lending facility with BMO Harris Bank N.A. The disclosure provided in Item 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
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Item 1.02.
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Termination of a Material Definitive Agreement
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Term Loan Credit Agreement
On March 2, 2020, the Company repaid in full and terminated the previously disclosed credit agreement dated as of February 28, 2019, as amended from time to time (the “Term Loan Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent and Lender, Elliott Associates, L.P. and Elliott International, L.P, as Lenders, and BMO Capital Markets Corp., as Lead Arranger and Book Runner.
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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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Asset-Based Lending Credit Agreement
On March 2, 2020, the Company and its direct and indirect domestic subsidiaries entered into an amended and restated credit agreement (the “ABL Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Lender, Letter of Credit Issuer and Swing Line Lender (the “ABL Credit Facility”).
The ABL Credit Facility consists of a $50.0 million asset-based revolving line of credit subject to a $10.0 million commitment block, of which up to (i) $1.0 million may be used for Swing Line Loans (as defined in the ABL Credit Agreement), and (ii) $13.0 million may be used for letters of credit. The ABL Credit Facility matures on April 1, 2021. Advances under the Company’s ABL Credit Facility bear interest at either: (a) the LIBOR Rate (as defined in the ABL Credit Agreement), plus an applicable margin of 4.00%; or (b) the Base Rate (as defined in the ABL Credit Agreement), plus an applicable margin of 3.00%.
The obligations under the Company’s ABL Credit Agreement are guaranteed by each of its domestic subsidiaries pursuant to a guaranty included in the ABL Credit Agreement. As security for the Company’s and its domestic subsidiaries’ obligations under the ABL Credit Agreement, each of the Company and its domestic subsidiaries have granted a first priority lien on substantially all its domestic subsidiaries’ tangible and intangible personal property, including accounts receivable, equipment (including rolling stock and aircraft) and the capital stock of certain of the Company’s direct and indirect subsidiaries.
The ABL Credit Agreement contains a minimum fixed charge coverage ratio financial covenant that must be maintained when excess availability falls below a specified amount. In addition, the ABL Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The ABL Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the ABL Credit Agreement to be in full force and effect, and a change of control of the Company’s business.