Item 1.01 Entry into a Material Definitive Agreement.
On
The ABL Facility may be used for revolving credit loans and letters of credit
from time to time up to a maximum principal amount of
•
85% of eligible accounts receivable, plus
• the least of: o the sum of: ?
lesser of (i) 65% of eligible inventory valued at cost based on a first-in first-out basis (net of intercompany profits) and (ii) 85% of the net-orderly-liquidation value percentage of eligible inventory, plus
?
the least of (i) 65% of eligible in-transit inventory valued at cost based on a
first-in first-out basis (net of intercompany profits), (ii) 85% of the
net-orderly-liquidation value percentage of eligible in-transit inventory, and
(iii)
?
the lesser of (i) 65% of eligible raw material inventory valued at cost based on a first-in first-out basis (net of intercompany profits) and (ii) 85% of the net-orderly-liquidation value percentage of eligible raw material inventory
In each case, the net-orderly-liquidation value is calculated based on the lower of (i) a first-in first-out basis and (ii) market value, and is (A) net of intercompany profits, (B) net of write-ups and write-downs in value with respect to currency exchange rates and (C) consistent with most recent appraisals received and acceptable to Lender.
o
o
An amount equal to 200% of eligible accounts receivable,
minus • applicable reserves.
The ABL Facility permits both base rate borrowings and borrowings based upon
daily simple SOFR (the secured overnight financing rate administered by the
The ABL Facility matures on
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The Borrower's obligations under the ABL Facility (and certain related obligations) are (a) guaranteed by the Guarantor and each of the Company' future domestic subsidiaries is required to guarantee the ABL Facility on a senior secured basis (such guarantors and the Company, the "Loan Parties") and (b) secured by all assets of the Loan Parties, subject to certain exceptions. The liens and other security interests granted by the Loan Parties on the collateral for the benefit of the Lender under the ABL Facility are, subject to certain permitted liens, first-priority.
Cash Dominion. Under the terms of the ABL Facility, if (i) an event of default
has occurred or (ii) excess borrowing availability under the ABL Facility (based
on the lesser of
Financial Covenants. The ABL Facility contains a springing covenant requiring
that the Company's fixed charge coverage ratio be no less than 1.10 to 1.00
during any period that (i) an event of default has occurred or (ii) Excess
Availability under the ABL Facility falls below
Affirmative and Restrictive Covenants. The ABL Credit Agreement governing the ABL Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company's ability to, among other things:
•
incur additional indebtedness;
•
make investments;
•
pay dividends and make other restricted payments;
• sell certain assets; • create liens; •
consolidate, merge, sell or otherwise dispose of all or substantially all of the Company's assets; and
•
enter into transactions with affiliates.
The description of the ABL Credit Agreement and the ABL Facility set forth herein is qualified in its entirety by reference to the ABL Credit Agreement filed as Exhibit 10.1 hereto, which is 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 in Items 1.01 of this Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Second Amended and Restated Credit Agreement, dated as ofJanuary 19, 2023 , by and among theCompany, Inc. , as Borrower,Read Window Products, LLC , as Guarantor, andWells Fargo Bank, National Association , as Lender 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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