Item 1.01 Entry into a Material Definitive Agreement
On October 11, 2017, Knowles Corporation (the Company) entered into a new Credit Agreement (the New Credit Facility) among the
Company and one or more of its subsidiaries designated from time to time by the Company (the Borrowing Subsidiaries and, together with the Company, the Borrowers), JPMorgan Chase Bank, N.A. (JPMorgan), Merrill
Lynch, Pierce, Fenner & Smith Incorporated (MLPFS) and Citibank, N.A. (Citibank) (collectively, the Lead Arrangers) JPMorgan as administrative agent and collateral agent (in such capacities, the
Administrative Agent) Bank of America, N.A. (BofA) and Citibank , as syndication agents (in such capacities, the Syndication Agents) and, together with the Administrative Agent, the Agents). JPMorgan,
BofA (or any of their lending affiliates) and a syndicate of other financial institutions (the Lenders) named in the Credit Agreement.
The
New Credit Facility is being used for working capital and other general corporate purposes of the Borrowers, including, without limitation, refinancing of indebtedness under the Companys Amended and Restated Credit Agreement dated as of
January 27, 2014 , as amended and restated as of December 31, 2014 and as further amended and supplemented from time to time.
All obligations
of the Borrowers (and each subsequently organized or acquired subsidiary that becomes a borrower under the Credit Facility) will be guaranteed by the Company and the Borrowers and will be secured by a perfected pledge of all the capital stock or
other equity interests (including equity interests in subsidiaries) held by the Company and the subsidiary. guarantors, which pledge, in the case of equity interests in any foreign subsidiary of the Company, will be limited to 65% of the voting
equity interests and all the
non-voting
equity interests (if any) of such foreign subsidiary.
The New Credit
Facility provides for a five-year senior secured revolving credit facility providing for borrowings by the Borrowers in an aggregate principal amount at any time outstanding not to exceed US$400,000,000. Up to US$100,000,000 of the New Credit
Facility will be available in Euro, Sterling and other currencies requested by the Company and agreed to by each Lender and up to US$50,000,000 of the New Credit Facility will be made available in the form of letters of credit denominated in
currencies approved by the Administrative Agent and the Issuing Banks as requested by the Company.
JPMorgan will make available under the New Credit
Facility a swingline facility under which the Borrowers may request and JPMorgan, at its discretion, may make short-term borrowings in US dollars in an aggregate amount outstanding at any time not to exceed US$20,000,000.
At any time during the term of the New Credit Facility, the Company will be permitted to increase the commitments under the New Credit Facility or to
establish one or more incremental term loan facilities under the New Credit Facility in an aggregate principal amount not to exceed $200,000,000 for all such incremental facilities.
Commitments under the New Credit Facility will terminate, and loans outstanding thereunder will mature, on October 11, 2022; provided, that if all the
Companys 3.25% Convertible Senior Notes Due November 1, 2021, shall not have been repaid, refinanced and/or converted to common stock of the Company by April 30, 2021, then the commitments under the New Credit Facility will
terminate, and the loans outstanding thereunder will mature, on such earlier date.
The interest rates under the New Credit Facility will be, at the
Borrowers option (1) LIBOR (or, in the case of borrowings under the New Credit Facility denominated in Euro, EURIBOR) plus the rates per annum determined from time to time based on the total leverage ratio of the Company as of the end of
and for the most recent period of four fiscal quarters for which financial statements have been delivered (the Applicable Margin); or (2) in the case of borrowings denominated in US Dollars, alternate base rate (ABR) (as
defined in the Credit Agreement) plus the Applicable Margin; provided, however, that any swingline borrowings shall bear interest at the rate applicable to ABR borrowings or, prior to the purchase of participations in such borrowings by the Lenders,
at such other rate as shall be agreed between the Company and JPMorgan as the swingline lender.
The foregoing descriptions of the new Credit Agreement
are qualified in their entirety by reference to the complete terms and conditions of such documents. A copy of the new Credit Agreement is filed herewith as Exhibit 10.1.