| Item 1.01. | Entry into a Material Definitive Agreement. |
Effective May 24, 2019, Meridian Bioscience, Inc., an Ohio corporation (“Meridian” or the “Company”), together with certain of its subsidiaries, entered into a $125 million Revolving Credit Facility Credit Agreement (the “Credit Agreement”) with PNC Bank, National Association, as administrative agent (“PNC”), PNC Markets LLC, as joint lead arranger and sole bookrunner, and Fifth Third Bank, as joint lead arranger and syndication agent (“Fifth Third”). The Credit Agreement replaces the Company’s Loan and Security Agreement dated as of August 1, 2007 among Meridian, Meridian Bioscience Corporation, Omega Technologies, Inc., Meridian Life Science, Inc., and Fifth Third, as amended. The Credit Agreement makes available to the Company a revolving credit facility in an aggregate principal amount not to exceed $125 million, which will expire in May 2024 (the “Revolving Credit Facility”). PNC and Fifth Third are committed lenders under the Credit Agreement. Meridian’s obligations under the Revolving Credit Facility will be guaranteed by all of Meridian’s material wholly-owned domestic subsidiaries, and such guarantors will pledge substantially all their assets as collateral under the Revolving Credit Facility.
The Revolving Credit Facility allows the Company to establish: (i) additional incremental term loans (the “Incremental Term Loans”); and (ii) additional revolving credit loans (the “Incremental Revolving Credit Loans”; and together with the Incremental Term Loans, the “Incremental Loans”). The total aggregate principal amount of all Incremental Loans is not to exceed $100 million, and each Incremental Loan must not be less than a minimum principal amount of $5 million, or if less, the remaining amount permitted pursuant to the total aggregate principal amount limitation of $100 million.
Borrowings under the Revolving Credit Facility bear interest at a fluctuating rate equal to, at the Company’s option, either: (i) a base rate determined by reference to the highest of the federal funds rate plus 0.50%, the prime rate as determined by the administrative agent, or the daily LIBOR rate plus 1.00%, in each case, plus an applicable margin as determined under the Credit Agreement; or (ii) the LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing, plus an applicable margin as determined under the Credit Agreement and subject to a floor of 0.00%. In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Credit Facility a 0.30% commitment fee in respect of the commitments of each such lender under the Revolving Credit Facility, which percentage may be subject to one or more reductions based on the Company’s leverage ratio.
The Credit Agreement contains customary representations, warranties and conditions to borrowing and customary affirmative and negative covenants, which include, but are not limited to, covenants that limit or restrict Meridian’s ability to incur indebtedness and other obligations, grant liens to secure obligations, make investments, merge or consolidate, and dispose of assets outside the ordinary course of business, in each case subject to customary exceptions for credit facilities of this size and type.
