Item 1.01 Entry into a Material Definitive
Agreement
.
In connection with the consummation of the Transaction (as defined below), on December 7, 2018 (the “
Incremental Effective Date
”), EnerSys, a Delaware corporation (the “
Company
”) and certain of
its subsidiaries entered into an Incremental Term Loan Lender Joinder Agreement, Increase Agreement and First Amendment to Credit Agreement (the “
Amendment
”)
with Bank of America, N.A., as administrative agent, and the lenders party thereto. The Amendment amends the Credit Agreement, dated as of August 4, 2017 (the “
Existing
Credit Agreement
”), by and among the Company, the other borrowers from time to time party thereto, the guarantors party thereto, Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer, and the
lenders party thereto, and provides for (i) incremental term loans in the amount of (x) US$200,000,000 (the “
Incremental Term A-1 Loan
”) and (y)
CAN$133,050,000 (the “
Incremental Term A-2 Loan
” and together with the Incremental Term A-1 Loan, the “
Incremental Term Loans
”), (ii) an increase to the aggregate revolving commitments under the Existing Credit Agreement from $600,000,000 to $700,000,000, and (iii) certain other modifications to the Existing
Credit Agreement.
Each of the Incremental Term A-1 Loan and the Incremental Term A-2 Loan will mature on September 30, 2022. Interest rates for the
Incremental Term Loans are based on the following pricing grid:
Pricing
Level
|
Consolidated Total
Net Leverage Ratio
|
Eurocurrency
Rate Loans
|
Base
Rate/Canadian
Prime Rate Loans
|
1
|
< 2.00 to 1.00
|
1.25%
|
0.25%
|
2
|
>
2.00 to 1.00 but
< 2.50 to 1.00
|
1.50%
|
0.50%
|
3
|
>
2.50 to 1.00 but
< 3.25 to 1.00
|
1.75%
|
0.75%
|
4
|
>
3.25 to 1.00
|
2.00%
|
1.00%
|
The proceeds of the Incremental Term Loans shall be used, among other things, to fund the Transaction and to pay fees and expenses related
thereto.
The foregoing summary of the Amendment does not
purport to be complete and is subject to, and qualified in its entirety by, the full text of the
Amendment, a copy of which is attached as Exhibit 10.1, and which is incorporated herein by reference.