Knoll: Entry Into A Material Definitive Agreement
The following excerpt is from the company's SEC filing
The Amended Credit Agreement provides for a $500 million credit facility that matures in five years, consisting of a revolving commitment in the amount of $300 million and a term loan commitment in the amount of $200 million. The Amended Credit Agreement also includes an option to increase the size of the revolving credit facility or incur incremental term loans by up to an additional $200 million, subject to the satisfaction of certain terms and conditions. As of May 20, 2014 (the closing of the transaction), there was approximately $127 million outstanding under the revolving credit facility and $200 million outstanding under the term loan. Borrowings under the revolving credit facility may be repaid at any time, but no later than the maturity date on May 20, 2019. The Company retains the right to terminate or reduce the size of the revolving credit facility at any time. Borrowings under the term loan facility amortize in equal quarterly installments of $2,500,000, with the remaining borrowings due on the maturity date.
Interest on revolving credit and term loans will accrue, at the Companys election, at (i) the Eurocurrency Rate (as defined in the Amended Credit Agreement), plus additional percentage points based on the Companys leverage ratio or (ii) the Base Rate (a rate based on the higher of (a) the prime rate announced from time-to-time by Bank of America, N.A., (b) the Federal Reserve Systems federal funds rate, plus .50% or (c) the Eurocurrency Rate plus 1.00%; Base Rate is defined in detail in the Amended Credit Agreement), plus additional percentage points based on the Companys leverage ratio.
The Amended Credit Agreement requires the Company to comply with various affirmative and negative covenants, including without limitation (i) covenants to maintain a minimum specified interest coverage ratio and maximum specified net leverage ratio, and (ii) covenants that prevent or restrict the Companys ability to pay dividends, engage in certain mergers or acquisitions, make certain investments or loans, incur future indebtedness, engage in sale-leaseback transactions, alter its capital structure or line of business, prepay subordinated indebtedness, engage in certain transactions with affiliates and sell stock or assets.
Repayments under the Amended Credit Agreement can be accelerated by the lenders upon the occurrence of certain events of default, including, without limitation, a failure to pay any principal, interest or other amounts in respect of loans when due, breach by the Company (or its subsidiaries) of any of the covenants or representations contained in the Amended Credit Agreement or related loan documents, failure of the Company (or its material subsidiaries) to pay any amounts owed with respect to other significant indebtedness of the Company or such subsidiary, or a bankruptcy event with respect to the Company or any of its material subsidiaries.
The indebtedness incurred under the Amended Credit Agreement is secured by substantially all of the Companys tangible and intangible assets, including, without limitation, the Companys intellectual property. The Companys direct and indirect wholly-owned domestic subsidiaries, Knoll Overseas, Inc., Spinneybeck Enterprises, Inc., Edelman Leather, LLC, Holly Hunt Enterprises, Inc., HHM2, LLC, Richard Schultz Design, LLC and Knoll Middle East, LLC, have also guaranteed the Companys obligations under the Amended Credit Agreement and pledged substantially all of their tangible and intangible assets as security for their obligations under such guarantee. As additional security for the indebtedness incurred under the Amended Credit Agreement, the Company, Knoll Overseas, Inc., Spinneybeck Enterprises, Inc., Holly Hunt Enterprises, Inc. and Edelman Leather, LLC have pledged the equity of certain of their U.S. subsidiaries and a portion of the equity of certain of their first-tier international subsidiaries, as applicable.
The above summary of the Amended Credit Agreement is qualified in its entirety by reference to the full text of the Amended Credit Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1, and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 7.01. Regulation FD Disclosure
The Companys Chief Executive Officer, Andrew B. Cogan, and Chief Financial Officer, Craig B. Spray, will meet with certain stockholders and investors during the second quarter of 2014. The materials used in connection with these meetings will be posted on Knolls website at www.knoll.com under the heading Second Quarter 2014 Investor Presentation.
Item 9.01. Financial Statements and Exhibits
10.1 Second Amended and Restated Credit Agreement, dated as of May 20, 2014, among Knoll, Inc., certain of the domestic subsidiaries of Knoll, Inc., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and the other lenders party thereto (including the Schedules and Exhibits thereto).
99.1 Press Release, dated May 20, 2014.
Second Amended and Restated Credit Agreement, dated as of May 20, 2014, among Knoll, Inc., certain of the domestic subsidiaries of Knoll, Inc., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and the other lenders party thereto (including the Schedules and Exhibits thereto).
Press Release, dated May 20, 2014.
The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.
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Other recent filings from the company include the following:
Knoll, Inc. Third Quarter 2014 Investor Presentation Andrew Cogan, Ceo Craig Spray, Svp & Cfo July 22, 2014 - July 22, 2014