Company’s consolidated leverage ratio. The Company shall pay an unused line fee between one-tenth percentage point (0.10%) and a quarter percentage point (0.25%) depending on the Company’s usage of the Revolving Facility.
Voluntary Prepayments. The Company may make voluntarily prepayments to the Term Loan Facility or the Revolving Facility, in whole or in part without premium or penalty, subject to the terms of the Credit Agreement.
Amortization and Final Maturity. The Company is required to make quarterly payments on the Term Loan Facility. Each quarterly payment is each equal to 1.25% of the original principal amount of the Term Loan Facility on the closing date, with the balance due in full on the fifth anniversary of the closing date.
Guarantees and Security. The obligations under the Credit Agreement are unsecured. Loans made under the Credit Agreement are guaranteed by the Company’s material domestic subsidiaries. As of the date hereof, each of AEI Subsidiary, LLC, LumaSense Technologies Holdings, Inc., LumaSense Technologies, Inc., Artesyn and Astec America LLC have executed the Credit Agreement as guarantors, pursuant to which they have each guaranteed the Company’s obligations under the Credit Agreement.
Certain Covenants and Events of Default.
The Credit Agreement also contains customary representations and warranties, affirmative covenants, negative covenants and provisions relating to events of default. If an event of default occurs, the Lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement. The Credit Agreement also includes a financial covenant pursuant to which the consolidated leverage ratio, measured at the end of each fiscal quarter for the most recently completed four fiscal quarters of the Company, shall not exceed 3.50 to 1.00 for the most recently completed four fiscal quarters of the Company, stepping down to 3.00 to 1.00 on September 30, 2021.
The foregoing summary of the Credit Agreement is not complete and is qualified in its entirety by reference to the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Termination of Bank of America N.A. Loan Agreement
On September 10, 2019, in connection with the Company’s entry into the Credit Agreement, the Company terminated its loan agreement with BOA, dated as of July 28, 2017, as amended, which provided the Company with a revolving line of credit of up to $150.0 million, subject to certain funding conditions, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 21, 2019 (the “BOA Loan Agreement”). At the time of termination, there were no borrowings outstanding under the BOA Loan Agreement.
The foregoing summary of the BOA Loan Agreement is not complete and is qualified in its entirety by reference to the BOA Loan Agreement. A copy of the BOA Loan Agreement was filed as Exhibit 10.1 to the Current Report on Form 8-K that the Company filed with the SEC on July 31, 2017, and a copy of the First Amendment to the BOA Loan Agreement was filed as Exhibit 10.2 to the Current Report on Form 8-K that the Company filed with the SEC on December 21, 2017.
Item 8.01 Other Events.
On September 10, 2019, the Company issued a press release announcing the consummation of the transactions contemplated by the Acquisition Agreement, as well as the Company’s entry into the Credit Agreement, which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment within 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.