Item 1.01 Entry into a Material Definitive Agreement
2021-1 Senior Notes
On September 29, 2021, Driven Brands Funding, LLC and Driven Brands Canada Funding Corporation (wholly-owned subsidiaries of Driven Brands Holdings Inc. (the “Company”)) (together, the “Co-Issuers”), issued $450 million Series 2021-1 Fixed Rate Senior Notes, Class A-2 (the “2021-1 Senior Notes”). The 2021-1 Senior Notes bear interest at a rate of 2.791%, have an anticipated repayment date of October 20, 2028 and a legal maturity date of October 20, 2051. The 2021-1 Senior Notes are secured by substantially all assets of the Co-Issuers and are guaranteed by the Securitization Entities (as defined in the Base Indenture). The 2021-1 Senior Notes were issued pursuant to the Base Indenture (as defined below) and a series supplement to the Base Indenture dated as of September 29, 2021 (the “Series 2021-1 Supplement”).
The foregoing description of the Series 2021-1 Supplement is qualified in its entirety by reference to the full text of the Series 2021-1 Supplement, which is incorporated herein by reference to Exhibit 4.1 to this Current Report on Form 8-K.
Amendment No. 8 to the Amended and Restated Base Indenture
On September 29, 2021, the Co-Issuers entered into the Amendment No. 8 (“Amendment No. 8 to Base Indenture”) to the Amended and Restated Base Indenture, dated as of April 24, 2018 (as amended by Amendment No. 1 to the Base Indenture, dated as of March 19, 2019, Amendment No. 2 to the Base Indenture, dated as of June 15, 2019, Amendment No. 3 to the Base Indenture, dated as of September 17, 2019, Amendment No. 4 to the Base Indenture, dated as of July 6, 2020, Amendment No. 5 to the Base Indenture, dated as of December 14, 2020, Amendment No. 6 to the Base Indenture, dated as of March 30, 2021, and Amendment No. 7 to the Base Indenture, dated as of March 30, 2021, is herein called the “Base Indenture”), among the Co-Issuers and Citibank, N.A., as trustee and securities intermediary.
Amendment No. 8 to Base Indenture amended the Base Indenture by (i) replacing the definitions of “Adjusted EBITDA” and “Run Rate Adjusted EBITDA” in their entirety with the definition of “Parent Adjusted EBITDA” and amending or replacing certain related definitions and related provisions to conform to the definition of “EBITDA” in the Credit Agreement, dated as of May 27, 2021, by and among Driven Holdings, LLC (“Parent”), as borrower, the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Parent Credit Agreement”), (ii) amending the “Driven Brands Leverage Ratio” and related provisions to test at the level of Parent and its consolidated subsidiaries and to expressly provide that each Manager, in accordance with the applicable Managing Standard, may further amend the definition of “Driven Brands Leverage Ratio” with the consent of the Control Party, including, without limitation, in connection with any change of control, (iii) removing the ability of the Trustee to make distributions on Definitive Notes by check, so that all distributions on all Series of Notes will be made by wire transfer, and (iv) making other amendments consistent with and in furtherance of the foregoing, including to the definitions of “Driven Brands Entity,” “Non-Securitization Entities” and “Parent”.
The foregoing description of Amendment No. 8 to Base Indenture is qualified in its entirety by reference to the full text of Amendment No. 8 to Base Indenture, which is incorporated herein by reference to Exhibit 4.2 to this Current Report on Form 8-K.
Amendment No. 4 to the Amended and Restated Management Agreement
On September 29, 2021, Driven Brands Funding, LLC, Driven Funding Holdco, LLC, certain subsidiaries of Driven Brands Funding, LLC party thereto, Take 5 LLC, Take 5 Oil Change, LLC, Driven Brands, Inc., as manager, and Citibank, N.A., as trustee, entered into the Amendment No. 4 (“Amendment No. 4 to U.S. Management Agreement”) to the Amended and Restated Management Agreement, dated as of April 24, 2018 (as amended by the Amendment and Joinder to Management Agreement, dated as of October 4, 2019, the Amendment and Joinder to the Amended and Restated Management Agreement, dated as of July 6, 2020, and the Amendment No. 3 to the Amended and Restated Management Agreement, dated as of March 30, 2021, the “U.S. Management Agreement”), among Driven Brands Funding, LLC, Driven Funding Holdco, LLC, certain subsidiaries of Driven Brands Funding, LLC party thereto, Take 5 LLC, Take 5 Oil Change, LLC, certain Sub-managers party thereto, Driven Brands, Inc., as manager, and Citibank, N.A., as trustee.
