All obligations under the First Lien Credit Agreement are guaranteed on a senior secured basis by our wholly owned domestic subsidiaries, subject to certain exceptions, and secured, subject to permitted liens and other exceptions, by a first-priority security interest in our fixed asset collateral and a second priority interest in our current asset collateral.
The First Lien Credit Agreement also contains certain affirmative covenants and events of default, including an event of default upon a change in control.
The foregoing description of the terms of the First Lien Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the First Lien Credit Agreement, a copy of which is filed as Exhibit 10.1 and incorporated herein by reference.
ABL Revolving Credit Agreement
On March 4, 2021, we entered into a revolving credit agreement (the “ABL Revolving Credit Agreement”) for a five-year, secured, asset-based revolving credit facility with the lenders named in the ABL Revolving Credit Agreement and Citibank, N.A., as administrative agent and collateral agent. The ABL Revolving Credit Agreement provides for non-amortizing revolving loans in an aggregate principal amount of up to $500 million, subject to a borrowing base consisting of, among other things, inventory and sales receivables (subject to certain reserves).
Borrowings under the ABL Revolving Credit Agreement bear interest at a rate per annum equal to an applicable margin, plus, at our option, either a base rate or a LIBOR rate. The applicable margin is generally determined based on our average specified excess availability during the immediately preceding fiscal quarter as a percentage of the maximum borrowing amount under the facility, and is between 0.25% and 0.75% for base rate loans and between 1.25% and 1.75% for LIBOR loans. We will also be required to pay a commitment fee of between 0.25% and 0.375% in respect of the undrawn portion of the commitments, which is generally based on average daily usage of the facility during the immediately preceding fiscal quarter.
The ABL Revolving Credit Agreement contains covenants that, among other things, limit our ability to: grant liens on our assets, enter into certain investments, incur indebtedness, consummate fundamental change transactions, dispose of our assets, make certain restricted payments, enter into certain transactions with affiliates, enter into certain restrictive agreements, make prepayments on and amendments to certain types of junior indebtedness and make changes to our fiscal year. Each of these limitations are subject to various conditions. In addition, the ABL Revolving Credit Agreement requires us to maintain a minimum fixed charge coverage ratio of 1.0:1.0 if specified excess availability under the facility is less than the greater of 10% of the maximum borrowing amount and $31.25 million for a certain period of time.
All obligations under the ABL Revolving Credit Agreement are guaranteed on a senior secured basis by our wholly owned domestic subsidiaries, subject to certain exceptions, and secured, subject to permitted liens and other exceptions, by a perfected first-priority security interest our current asset collateral and second-priority interests in our fixed asset collateral.
The ABL Revolving Credit Agreement also contains certain affirmative covenants and events of default, including an event of default upon a change in control.