Item 1.01 Entry Into a Material Definitive Agreement Credit Agreement
Credit Agreement
On February 12, 2019, Owens & Minor, Inc. (the “Company”) entered into a Fourth Amendment to Credit Agreement (the “Fourth Amendment”), by and among O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC (the “Borrowers”), the Company and each other domestic subsidiary of the Company party thereto from time to time as guarantors (collectively, the “Guarantors” and, together with the Borrowers, the “Credit Parties”), Bank of America, N.A., as successor administrative agent (the “Administrative Agent”), as administrative agent for the Term B Facility (the “Term B Facility Agent”), and as collateral agent for the Secured Parties (the “Collateral Agent”), the other agents party thereto and a syndicate of financial institutions specified therein. The Fourth Amendment amends and restates the Credit Agreement, dated as of July 27, 2017 (as previously amended, the “Credit Agreement”), by and among the Borrowers, the Company, the Administrative Agent and the other agents party thereto and the syndicate of financial institutions specified therein. The Fourth Amendment implements the following principal changes to the Credit Agreement: reduces the revolving loan facility to $400 million (from $600 million); amends the leverage and interest coverage financial covenants (through the maturity date of the Credit Agreement) and the definition of EBITDA; adds an anti-cash hoarding covenant; amends certain negative covenants, including a reduction of certain baskets for restricted payments, prepayments of junior debt, asset sales and investments; and removes the incremental facility.
The foregoing description of the Fourth Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Fourth Amendment attached hereto as Exhibit 10.1, which is incorporated herein by reference.
Guaranty and Security and Pledge Agreement
On February 12, 2019, in connection with the Fourth Amendment, O&M Byram Holdings, GP, Byram Holdings I, Inc., Byram Healthcare Centers, Inc., Owens & Minor International Logistics, Inc. (collectively, the “Joining Subsidiaries”) and the existing Guarantors entered into a Restated Guaranty Agreement (the “Guaranty”) pursuant to which the Joining Subsidiaries became guarantors of the Borrowers’ obligations under the Credit Agreement.
The Joining Subsidiaries also joined the existing Security and Pledge Agreement, dated as of April 30, 2018 (the “Security Agreement”), pursuant to which they granted to the Collateral Agent on behalf of the holders of the Company’s outstanding 3.875% Senior Notes due 2021 and 4.375% Senior Notes due 2024 (the “Notes”), the Trustee (as defined below) and the other secured parties under the Credit Agreement and the Notes, liens on (a) all present and future shares of capital stock owned by the Joining Subsidiaries in the Joining Subsidiaries’ present and future subsidiaries (limited, in the case of controlled foreign corporations, to a pledge of 65% of the voting capital stock of each first-tier foreign subsidiary of each Joining Subsidiary) and (b) all present and future personal property and assets of the Joining Subsidiaries, in each case, subject to certain exceptions, as security for indebtedness and obligations of the Credit Parties under the Credit Agreement and the obligations of the Company and the guarantors under the Notes.
The foregoing description of each of the Guaranty and the Security Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Guaranty attached hereto as Exhibit 10.2, which is incorporated herein by reference, and the Security Agreement, which was filed as Exhibit 10.2 to the Company’s Current Report on Form8-K filed on May 4, 2018).
Supplemental Indenture
On February 12, 2019, (i) in connection with entering into the Fourth Amendment and (ii) as required by the Indenture, dated as of September 14, 2016, among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee (the “Trustee”), the Company, the Joining Subsidiaries and the Trustee entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”), pursuant to which the Joining Subsidiaries became guarantors of the Company’s obligations under the Notes.
