TNC Tennant Co

JPMorgan Credit Facility

On April 5, 2021, Tennant Company (the “Company”) and the Foreign Subsidiary Borrowers from time to time party thereto entered into an Amended and Restated Credit Agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N. A. (“JPMorgan”), as administrative agent, U.S. Bank National Association, and HSBC Bank USA, National Association, as co-syndication agents, Bank of the West, BMO Harris Bank, N.A., and Wells Fargo Bank, National Association, as co-documentation agents, and the Lenders (including JPMorgan) from time to time party thereto. The 2021 Credit Agreement provides the Company and certain of its foreign subsidiaries access to a senior secured credit facility until April 5, 2026, consisting of a term loan facility in an amount up to $100 million and a revolving facility in an amount up to $450 million with an option to expand the revolving facility by up to $275 million, with the consent of the Lenders willing to provide additional borrowings in the form of increases to their revolving facility commitment or funding of incremental term loans. Borrowings may be denominated in U.S. dollars or certain other currencies.

The fee for committed funds under the revolving facility of the 2021 Credit Agreement ranges from an annual rate of 0.15% to 0.30%, depending on the Company’s leverage ratio. Borrowings denominated in U.S. dollars under the 2021 Credit Agreement bear interest at a rate per annum equal to (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one month period, but in any case, not less than 1%, plus, in any such case, 1.0%, plus an additional spread of 0.10% to 0.70%, depending on the Company’s leverage ratio, or (b) the LIBO Rate, as adjusted for statutory reserve requirements for eurocurrency liabilities, but in any case, not less than 0%, plus an additional spread of 1.10% to 1.70%, depending on the Company’s leverage ratio.

In connection with the 2021 Credit Agreement, the Company reaffirmed its security interest in favor of the lenders in substantially all its personal property, and pledged the stock of its domestic subsidiaries and 65% of the stock of its first tier foreign subsidiaries. The obligations under the 2021 Credit Agreement are also guaranteed by certain of the Company’s first tier domestic subsidiaries and those subsidiaries also provided a security interest in their similar personal property.

The 2021 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting the Company’s ability to incur indebtedness and liens and merge or consolidate with another entity. Further, the 2021 Credit Agreement contains the following covenants:

-        a covenant requiring the Company to maintain an indebtedness to EBITDA ratio, determined as of the end of each of its fiscal quarters, of no less  greater than 3.50 to 1.00, with certain alternative requirements for permitted acquisitions greater than $50,000,000;

-        a covenant requiring the Company to maintain an EBITDA to interest expense ratio for a period of four consecutive fiscal quarters as of the end of each quarter of no less than 3.00 to 1; and

-        a covenant restricting the Company from paying dividends or repurchasing stock if, after giving effect to such payments and assuming no default exists or would result from such payment, the Company’s leverage ratio is greater than 2.50 to 1, in such case limiting such payments to $60 million during any fiscal year.

The full terms and conditions of the credit facility are set forth in the 2021 Credit Agreement. A copy of the 2021 Credit Agreement is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

The information described above under “Item 1.01 Entry into a Material Definitive Agreement” with respect to the 2021 Credit Agreement is hereby incorporated by reference.