| Item 1.01. | Entry in to a Material Definitive Agreement. |
On June 24, 2021 (the “Conversion Effective Date”), NCR Corporation (referred to herein as the “Company”, “we” or “our”) entered into an Incremental Revolving Facility Agreement (TLA-2 Conversion) (the “Incremental Revolving Conversion Agreement”), with the Guarantor and the Foreign Borrowers (each as defined below) party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as the administrative agent (in such capacity, the “Administrative Agent”). Pursuant to the Incremental Revolving Conversion Agreement, term loan A loans outstanding under the Company’s existing amended and restated credit agreement (the “Credit Agreement”) in a principal amount of $200 million were converted into an equal principal amount of senior secured incremental revolving credit commitments (the “Incremental Revolving Commitments”). The Incremental Revolving Conversion Agreement also amended and restated the Credit Agreement as set forth in exhibit A thereto (the “Amended and Restated Credit Agreement”) to reflect, among other things, the Incremental Revolving Commitments, the Incremental TLA Facility (as defined below) and the Replacement Revolving Commitments (as defined below).
The terms of the Incremental Revolving Commitments are identical to the terms of the commitments under the Replacement Revolving Facility (as defined below) (together with the Incremental Revolving Commitments, the “Revolving Facility” and the loans thereunder, the “Revolving Loans”). Up to $400 million of the Revolving Facility will be available to be borrowed by certain of the Company’s foreign subsidiaries (the “Foreign Borrowers”) in U.S. Dollars, Euros and British Pounds Sterling to provide flexibility to fund ongoing operations, including foreign operations. Any borrowings by the Foreign Borrowers under the Revolving Facility will be guaranteed and secured by the Company and one or more of our wholly owned domestic subsidiaries (the “Guarantor”) to the same extent as borrowings by the Company.
On June 21, 2021 (the “Acquisition Effective Date), we, the Guarantor, the Foreign Borrowers and the Administrative Agent entered into a reaffirmation agreement (the “Reaffirmation Agreement”), pursuant to which we and the Guarantor reaffirmed the security interests and we, the Guarantor and the Foreign Borrowers reaffirmed the guarantees, in each case, granted in favor of the Administrative Agent pursuant to the collateral agreement.
Representations, Warranties, Covenants and Events of Default
The Amended and Restated Credit Agreement contains customary representations and warranties, affirmative covenants, and restrictive covenants. The restrictive covenants limit our and our subsidiaries’ ability to, among other things, incur indebtedness, create liens on our or their assets, engage in fundamental changes, make investments, sell or otherwise dispose of assets, engage in sale-leaseback transactions, make restricted payments, repay subordinated indebtedness, engage in certain transactions with affiliates and enter into agreements restricting the ability of our subsidiaries to make distributions to us or incur liens on their assets.
The Amended and Restated Credit Agreement also contains a financial covenant with respect to the Revolving Facility and the Incremental TLA Facility that does not permit us to allow our leverage ratio to exceed (i) in the case of any fiscal quarter ending on or prior to December 31, 2021, 5.50 to 1.00, (ii) in the case of any fiscal quarter ending after December 31, 2021 and on or prior to September 30, 2022, 5.25 to 1.00 and (iii) in the case of any fiscal quarter ending on or after December 31, 2022, 4.75 to 1.00. We have the option to elect to increase the maximum permitted leverage ratio with respect to periods described in the foregoing clause (iii) to 5.00 to 1.00 in connection with the consummation of any Material Acquisition (as defined in the Amended and Restated Credit Agreement) for the four fiscal quarters ending after the date such Material Acquisition is consummated.
The Amended and Restated Credit Agreement also contains customary events of default including, among other things, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments, cross-defaults to material indebtedness and change of control. The occurrence of an event of default could result in the termination of commitments under the Revolving Facility, the acceleration of all outstanding amounts under the Amended and Restated Credit Agreement and the requirement to cash collateralize outstanding letters of credit.
