BALCHEM CORP: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (Form 8-K)
Item 1.01. Conclusion of a significant definitive agreement.
corporation (“Balchem”), has entered into an amended and restated credit agreement (the “Credit Agreement”) between the following parties:
Balchem; • BCP Ingredients, Inc., a Delawarecorporation, ABERCO, INC., a Marylandcorporation, SensoryEffects, Inc., a Delawarecorporation, Albion Laboratories, Inc., a Nevadacorporation, and SensoryEffects Cereal Systems, Inc., a Delawarecorporation (each, a "Domestic Guarantor"); • JPMorgan Chase Bank, N.A., as administrative agent (the "Agent"); and • JPMorgan Chase Bank, N.A., Bank of America, N.A., Farm Credit Services of America, PCA, KeyBank National Association, and Wells Fargo Bank, National Association(each, a "Lender").
The Credit Agreement amends and reaffirms that certain Credit Agreements, dated
The following is a summary of the terms and conditions of the Credit Agreement and certain ancillary agreements and instruments contemplated therein:
• The credit agreement provides that an aggregate principal amount of up to
million (the "Senior Credit Facility") will be available through a revolving credit facility. The Senior Credit Facility will be available from time to time until the fifth anniversary of the Closing Date. The Senior Credit Facility may be split into two tranches consisting of (i) a
U.S.tranche available to Balchemin U.S.dollars only and (ii) a foreign tranche available to Balchemand certain of its foreign subsidiaries in Euros and certain other foreign alternative currencies.
• The Senior Credit Facility includes (i) a
issuance of standby letters of credit denominated in
U.S.dollars and alternative currencies (each, a "Letter of Credit") and (ii) a $10 millionsublimit for swing line loans denominated in U.S.dollars (each, a "Swing Line Loan"). Balchemmust repay each Swing Line Loanin full no later than 10 business days after such loan is made.
loans to the Senior Credit Facility and/or increase the revolving commitments under the Senior Credit Facility, subject to the satisfaction of certain conditions. The aggregate principal amount of all incremental facilities must not exceed
• Proceeds from the Senior Credit Facility which
Date were used solely to refinance certain of
Balchem'sindebtedness as of the Closing Date,
including full payment of all outstanding debts under the existing credit agreement. Proceeds from the Senior Credit Facility which
• The Senior Credit Facility will terminate and all amounts outstanding thereunder will be due and payable in full five years after the Closing Date. • The interest rates per annum applicable to the Senior Credit Facility (other than in respect of Swing Line Loans) will be, at
Balchem'soption, (i) Relevant Rate (as defined below) plus the Applicable Rate (as defined below), (ii) the Base Rate (as defined below) plus the Applicable Rate, or (iii) the Adjusted Daily Simple RFR (as defined below) plus the Applicable Rate. Each Swing Line Loanwill bear interest at the Base Rate plus the Applicable Rate for Base Rate loans. "Adjusted Daily Simple RFR" means a rate per annum equal to Adjusted Daily Simple SOFR (defined as a rate per annum equal to (a) Daily Simple SOFR plus 0.10%). "Applicable Rate" means a percentage per annum determined in accordance with the pricing grid set forth below based on Balchem'sConsolidated Net Leverage Ratio (as defined below). "Base Rate" means for any day a fluctuating rate per annum equal to the highest of (a) the NYFRB Rate plus 0.50%, (b) the Prime Rate and (c) the Adjusted Term SOFR Rate for a one-month Interest Period as published two U.S. Government SecuritiesBusiness Days prior to such day plus 1.0%. "Relevant Rate" means (i) with respect to any Term Benchmark Borrowing denominated in U.S.dollars, the Adjusted Term SOFR Rate (defined as a rate per annum equal to (a) the Term SOFR Rate for such interest period plus 0.10%), (ii) with respect to any Term Benchmark Borrowing denominated in Euros, the Adjusted EURIBOR Rate (defined as a rate per annum equal to (a) the EURIBOR Rate for such interest period multiplied by the Statutory Reserve Rate), or (iii) with respect to any RFR Borrowing denominated in Dollars, the applicable Adjusted Daily Simple RFR, as applicable. • The Applicable Rate and commitment fee for any fiscal quarter will be the applicable rate per annum set forth in the table below opposite the Consolidated Net Leverage Ratio determined as of the last day of the immediately preceding fiscal quarter. Pricing Grid Applicable Rate for Term Benchmark Consolidated Loans / RFR Applicable Net Leverage Loans / Letter Rate for Base Commitment Pricing Tier Ratio of Credit Fee Rate Loans Fee 1 < 1.00:1.00 1.00% 0% 0.15% 2 ? 1.00:1.00 but 1.125% 0.125% 0.175% < 2.00:1.00 3 ? 2.00:1.00 but 1.375% 0.375% 0.20% < 3.00:1.00 4 ? 3.00:1.00 1.625% 0.625% 0.225%
• If a certificate of conformity is not issued by the due date, then, on request
of the Required Lenders, Pricing Tier 4 in the pricing grid set forth above shall apply as of the first business day after the date on which such Compliance Certificate was required to have been delivered and shall continue to apply until the first business day immediately following the date on which such Compliance Certificate is delivered.
• If an Event of Default has occurred and is continuing, then at the request of
the Required Lenders, Pricing Tier 4 in the pricing grid set forth above shall apply solely during the period within which the event of default has occurred and is continuing.
• A commitment fee of an annual percentage determined in accordance with the
pricing grid set forth above, based on the Consolidated Net Leverage Ratio, will be payable on the actual daily unused portions of the Senior Credit Facility. The commitment fee will be payable quarterly in arrears on the fifteenth day following the end of each quarter. Swing Line Loans are not considered utilization of the Senior Credit Facility for purposes of calculating the commitment fee.
• Letter of credit fees will be payable on the maximum amount available at
drawn under each Letter of Credit at a rate per annum equal to the Applicable Rate (in accordance with the pricing grid set forth above) times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit. The Letter of Credit fees will be payable quarterly in arrears on the fifteenth day following the end of each quarter.
• Other than calculations relating to interest at the base rate at times when
the Base Rate is based on the prime rate (which will be made on the basis of actual number of days elapsed in a 365/366 day year), all calculations of interest and fees will be made on the basis of actual number of days elapsed in a 360-day year.
• The Senior Credit Facility is generally guaranteed by each of the
direct and indirect domestic subsidiary of
Balchemand, to the extent no adverse tax consequences would result, foreign subsidiary of Balchem(collectively, the "Guarantors"). Such guarantees are guarantees of payment and not of collection.
• Subject to certain exceptions, as security for obligations under the
Lenders validate and perfect first ranking liens and security interests in the
(the “Security”): (a) all Accounts; (b) any Money; (c) all movable property
Paper; (d) Commercial tort claims; (e) all copyrights; (f) all copyrights
Licenses; (g) all deposit accounts; (h) all Documents; (i) all Equipment; (j)
all light fixtures; (k) all general intangibles; (l) all Instruments; (mall
Inventory; (n) all investment property; (o) all letter of credit rights; (p)
all patents; (q) all patent licenses; (r) all Pledged Shares; (s)all
trademark licenses; (w) all Goods; and (x) all memberships and products (such as
these terms are defined in the guarantee and pledge agreement) of all or part of . . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under a
Off-Balance Sheet Arrangement of a Registrant.
The information contained in section 1.01 concerning
Item 9.01. Financial statements and supporting documents.
(d) Exhibits. Exhibit Number Description
4.1 Amended and Restated Credit Agreement, dated as of
July 27, 2022, among Balchem, the Domestic Guarantors, the Agent, and the Lenders 4.2 Amended and Restated Security and Pledge Agreement, dated as of July 27, 2022, among Balchem, the Domestic Guarantors and the Agent 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) Forward-Looking Statements
Any statement in this Form 8-K, including exhibits filed and furnished herewith, regarding the future expectations, plans and prospects of
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