STERICYCLE INC: Entering into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation or Obligation under a Registrant’s Off-Balance Sheet Arrangement (Form 8-K)
Article 1.01. The conclusion of an important definitive agreement.
The information provided in Section 2.03 of this report relating to the Credit Agreement is hereby incorporated by reference in this Section 1.01.
Item 1.02 Termination of a Material Definitive Agreement.
The information provided in Section 2.03 of this report relating to the Existing Credit Agreement is hereby incorporated by reference in this Section 1.02.
Article 2.03. Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant.
Amended and updated credit agreement
The Company has entered into an amended and restated credit agreement dated
The credit agreement provides for a term loan facility under which the Company has term loans outstanding in an aggregate principal amount of
The proceeds of the term loan facility and loans under the revolving credit facility have been used, on the closing date under the credit agreement, to refinance the loans and other credit extensions that have been made. under the existing credit agreement (see “Amendment and Credit” below) and loans under the revolving credit facility will be used for general corporate purposes, including authorized share buybacks , authorized investments, including acquisitions, and all other legal purposes of the business, and to refinance certain indebtedness of any business acquired in a permitted acquisition.
At the Company’s option, any loan under the Credit Agreement (other than the Swingline Loans) granted to it or certain borrowers designated under the Revolving Credit Facility will bear interest at a “Base Rate” or “Eurodevise Rate”. Or, for loans denominated in pounds sterling, the Sterling Overnight Index Average Reference Rate (“SONIA”), plus in each case an applicable margin which fluctuates (the “Applicable Rate”). The base rate is defined as the higher of (a) the
The Rate Applicable to Base Rate Loans and Eurocurrency Rate Loans (or any loan in alternative currencies) depends on the Consolidated Leverage Ratio (as defined in the Credit Agreement) for the Company and its subsidiaries as indicated in the most recent certificate of conformity received by the administrative officer. The Applicable Rate for Base Rate Loans is between 0.1% and 0.500% and the Applicable Rate for the Eurocurrency Rate / SONIA Daily Rate is between 1.100% and 1.500%. The facility fee also depends on the consolidated leverage ratio and is between 0.150% and 0.250%. On the basis of the current Consolidated Leverage Ratio, the initial pricing under the Credit Agreement is set at an Applicable Rate of 1.30% for Loans at Eurocurrency / SONIA Daily Rate and of 0.30% for Loans at Base Rate, and the facility fee is set at a rate of 0.20% times the actual daily amount of the Revolving Credit
Installation regardless of use, in each case until the Company’s next quarterly certificate of compliance is issued. The Credit Agreement includes provisions enabling the Company, in consultation with one or more lenders selected by the Company, to establish key performance indicators (“KPIs”) in relation to certain environmental, social and governance objectives of the Company. Company and its subsidiaries and based on the entry into force of such an amendment, the KPIs will be used, together with the pricing grid, to determine the prices under the Credit Agreement.
The credit agreement provides that certain designated original borrowing subsidiaries of the Company are eligible to borrow under the revolving credit facility. The Company may designate additional subsidiaries as Designated Borrowers at the sole discretion of the lenders required under the Revolving Credit Facility and the Administrative Agent.
The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and all of its significant domestic subsidiaries and are and will be guaranteed by certain subsidiaries of the Company, excluding certain excluded subsidiaries under of the credit agreement.
Excluded subsidiaries include, among others, (i) (a) subsidiaries which, at the end of the last fiscal quarter of the Company for the period of four consecutive fiscal quarters thereafter, contributed five percent (5%) or less than the consolidated income of the Company and its subsidiaries (adjusted to eliminate the effect of intercompany transactions) for that period, or (b) the total consolidated assets reflected in the balance sheet of that subsidiary at the end of that period. fiscal quarter was five percent (5.0%) or less or of the total consolidated assets of the Company and its subsidiaries (adjusted to eliminate intercompany transactions) on that date, or (ii) any subsidiary of the Company if this subsidiary of the Company providing a guarantee could lead to one or possible unfavorable tax consequences for the Company and its subsidiaries.
The credit agreement contains covenants customary for facilities of this type, including, but not limited to, covenants relating to the delivery of financial statements; notices of default and certain other material events; payment of obligations; preservation of the existence, rights, privileges, permits, licenses, franchises and intellectual property of the company; maintenance of property and insurance and compliance with the law. The credit agreement contains customary covenants for facilities of this type, including, but not limited to, limitations on the taking of liens, investments and indebtedness; mergers and certain other fundamental changes; asset disposals; restricted payments; changes in the Company’s industry; transactions with affiliates and binding agreements.
The credit agreement contains a financial clause requiring the maintenance of a minimum consolidated interest coverage ratio (as defined in the credit agreement) of 3.00 to 1.00 at the end of any fiscal quarter.
The credit agreement contains a financial commitment requiring the maintenance of a maximum consolidated leverage ratio of 4.25 to 1.00 during any fiscal quarter ending before
The credit agreement contains customary default provisions for facilities of this type, which are subject to customary grace periods and materiality thresholds, including, but not limited to, defaults related to payment defaults, non-compliance commitments, material misrepresentation, defaults on other material debts, insolvency proceedings, inability to pay debts, material judgments, certain events relating to pension plans, disability or revocation of any document of loan of the Company or any subsidiary which becomes guarantor as described above, a “change of control” of the Company or certain material regulatory actions. If an event of default arises under the Credit Agreement, lenders may, among other things, terminate credit commitments under the Revolving Credit Facility and immediately declare all borrowings due under the Credit Agreement due. credit.
The Credit Agreement provides that the Company will repay to Lenders the full principal amount of all borrowings under the Term Loan Facility in quarterly principal payments on the last business day of each fiscal quarter.
The foregoing description of the Credit Agreement is only a summary, does not purport to be complete, and is subject and qualified in its entirety by the full text of the Credit Agreement attached as Exhibit 10.1 and incorporated herein by reference.
Modification and restatement of existing credit facilities
In the context of the conclusion by the Company of the Credit Agreement, the Company’s existing Credit Agreement, dated
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