RBC BEARINGS INC: entering into a material definitive agreement, terminating a material definitive arrangement, entering into the acquisition or disposal of assets, creating a direct financial obligation or an obligation under a registrant’s off-balance sheet arrangement, financial statements and supporting documents (Form 8-K)

Item 1.01 Conclusion of a Material Definitive Agreement.

At November 1, 2021 (the “Closing Date”), RBC Incorporated Bearings (the “Company”) and its subsidiary, Roller Bearing Company of America, Inc. (“RBCA”), has entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent, Guarantee Agent, Swingline Lender and Letter of Credit Issuer and other lenders party thereto. The Credit Agreement grants RBCA, as the borrower, (a) a
$ 1,300,000,000 term loan facility (the “Term Loan Facility”) and (b) a
$ 500,000,000 revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Facilities”). Amounts outstanding under the Facilities generally bear interest either, at RBCA’s option, (a) at a base rate determined by reference to the greater of (i) Wells Fargo’s prime rates, (ii) at the effective federal funds rate plus half of 1.00% and (iii) the one-month LIBOR plus 1.00% or (b) the LIBOR plus a specified margin, depending on the type of borrowing. The applicable margin is based on the consolidated ratio of total net debt to consolidated EBITDA of the Company from time to time. Currently, the Company’s margin is 0.75% for prime rate loans and 1.75% for LIBOR rate loans. The Facilities are subject to a 0.00% “LIBOR” floor and contain “hard-wired” LIBOR replacement provisions as set out in the Credit Agreement. The Term Loan Facility and the Revolving Credit Facility will mature on November 2, 2026 (the due date “). The Company may choose to prepay some or all of the outstanding balance from time to time without penalty. Beginning a full quarter after the Closing Date, the Term Loan Facility will be amortized in quarterly installments as set out below with the balance payable on the Maturity Date, unless otherwise extended in accordance with the terms of the facility. term loan:

       Date          Term Loan Facility Repayment Amount
  March 31, 2022                    1.25%
  June 30, 2022                     1.25%
September 30, 2022                  1.25%
December 31, 2022                   1.25%
  March 31, 2023                    1.25%
  June 30, 2023                     1.25%
September 30, 2023                  1.25%
December 31, 2023                   1.25%
  March 31, 2024                   1.875%
  June 30, 2024                    1.875%
September 30, 2024                 1.875%
December 31, 2024                  1.875%
  March 31, 2025                    2.50%
  June 30, 2025                     2.50%
September 30, 2025                  2.50%
December 31, 2025                   2.50%
  March 31, 2026                   3.125%
  June 30, 2026                    3.125%
September 30, 2026                 3.125%
 November 2, 2026       Remaining outstanding amounts

The credit agreement requires the Company to comply with various covenants, including the following financial covenants from the test period ending December 31, 2021: (a) a maximum Total Net Leverage Ratio of 5.50: 1.00, which maximum Total Net Leverage Ratio will decrease during certain subsequent test periods as set out in the Credit Agreement (provided that, no more once during the term of the Facilities, this maximum ratio applicable at that time may be increased by the Borrower by 0.50: 1.00 for a period of twelve (12) months after the completion of a significant acquisition) , and (b) a minimum Interest Coverage Ratio of 2.00: 1.00.

The credit agreement allows the company, among other things, to make distributions to shareholders, to redeem its shares, to incur other debts or privileges, or to acquire or dispose of assets provided that the company complies with certain requirements and limitations of the credit agreement.

                                       1

At the same time as the signing of the Credit Agreement, the following agreements were concluded:

? Guarantee by and between the Company and the national subsidiaries of RBCA (the

“Guarantee Subsidiaries”) in favor of Wells Fargo under which the Company

and the subsidiary guarantors guarantee RBCA’s obligations under the

   Credit Agreement;

? Guarantee contract by and between RBCA, the Company, the Guaranteeing Subsidiaries

and Wells Fargo Bank under which the Company, RBCA and the Subsidiary

The guarantors have granted security on substantially all of their assets to

guarantee RBCA’s obligations under the credit agreement; and

? Pledge agreement by and between RBCA, the Company, the Guarantor Subsidiaries and

Wells Fargo Bank under which the Company, RBCA and the Subsidiary

Guarantors have pledged substantially all of their assets to secure RBCA’s obligations

under the credit agreement.

The Credit Agreement, Guarantee, Collateral Agreement and Guarantee Agreement (collectively, “Contracts”) are provided to provide investors with information regarding their respective terms. They are not provided to provide investors with factual information about the Company or any other party to it. In addition, the representations, warranties and undertakings contained in the agreements were made only for the purposes of the agreements and on specific dates, were only for the benefit of the parties to the agreements and may be subject to limitations agreed to by the contractor. parties, including subject to the information exchanged between the parties within the framework of the execution of the Contracts. Representations and warranties may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing such matters as facts, and may be subject to materiality standards applicable to the contracting parties which differ from. . .

Item 1.02 Termination of a Material Definitive Agreement.

At the closing date, the Company (a) reimbursed the unpaid amounts under its existing credit agreement on April 24, 2015 (as modified by amendment n ° 1 dated January 31, 2019 and amendment n ° 2 dated September 21, 2021) with Wells Fargo Bank, National Association, as Administrative Agent, Guarantee Agent, Swingline Lender and Letter of Credit Issuer, and the other lenders party thereto, and (b) terminated the existing Credit Agreement and related Guarantee, the Guarantee Agreement , the Pledge Contract and ancillary agreements. No early termination indemnity has been incurred by the Company. The terminated credit agreement was due to expire on January 31, 2024. The terminated credit agreement and the related collateral, collateral agreement and collateral agreement are shown in Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, of the company’s current report on Form 8-K filed. April 28, 2015
and are incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposal of Assets.

On the closing date, the Company completed the acquisition of ABB Asea Brown Boveri Ltd ABB’s mechanical power transmission division operated under the “Dodge” brand in accordance with the terms of the Purchase Agreement (as defined in Section 1.01, “Entering into a Significant Final Agreement” of the Company’s current report on the filed 8-K form July 26, 2021). The foregoing is qualified in its entirety by reference to the Purchase Agreement. The information set out in Section 1.01 “Entering into a Material Definitive Agreement” of the Company’s current report on the filed Form 8-K July 26, 2021 is incorporated herein by reference.

                                       2

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement.

On the Closing Date, the Company drew on $ 1.3 billion Term facility to pay a portion of the purchase price for the acquisition described in Item 2.01 “Completion of the Acquisition or Disposition of Assets” above. See section 1.01 “Participation in a Material Definitive Agreement” above. The descriptions of the Credit Agreement, the Guarantee, the Guarantee Agreement and the Pledge Agreement set out in section 1.01 above are incorporated by reference in response to this section 2.03.

Item 9.01 Financial statements and supporting documents.

(a) Financial statements of acquired businesses.

The financial information to be filed with respect to the acquired business disclosed in Item 2.01 above was filed as part of the company’s current report on Form 8-K filed on September 20, 2021.

(b) Pro Forma Financial Information.

The pro forma financial information to be filed with respect to the acquired business described in Item 2.01 above was filed as part of the Company’s current report on Form 8-K filed on September 20, 2021.

(d) Exhibits

Exhibit 10.1 Credit agreement, dated November 1, 2021, by and among Roller Bearing Company of America, Inc. as a borrower, RBC Incorporated Bearings, Wells Fargo Bank, National Association, as Administrative Agent, Guarantee Agent, Swingline Lender and Letter of Credit Issuer, and various lenders who are parties thereto.

Exhibit 10.2 Warranty, dated November 1, 2021, by and among RBC Incorporated Bearings and the subsidiary guarantors who are parties to it in favor of Wells Fargo Bank, National Association, as a guarantee agent.

Exhibit 10.3 Guarantee contract, dated November 1, 2021, by and among Roller Bearing Company of America, Inc., RBC Incorporated Bearings, the subsidiary guarantors who are parties to it and Wells Fargo Bank, National Association, as Guarantee Agent for its own benefit and for the benefit of the Guaranteed Parties.

Exhibit 10.4 Pledge agreement, dated November 1, 2021, by and among Roller Bearing Company of America, Inc., RBC Incorporated Bearings, the subsidiary constituents which are parties to it and Wells Fargo Bank, National Association, as Guarantee Agent for the benefit of the Guaranteed Parties.

Article 9.01. Financial statements and supporting documents.

Exhibits



Exhibit
Number                                   Description
10.1         Credit Agreement, dated November 1, 2021, by and among Roller Bearing
           Company of America, Inc. as Borrower, RBC Bearings Incorporated, Wells
           Fargo Bank, National Association, as Administrative Agent, Collateral
           Agent, Swingline Lender and Letter of Credit Issuer, and various
           Lenders party thereto.
10.2         Guarantee, dated November 1, 2021, by and among RBC Bearings
           Incorporated and the subsidiary guarantors party thereto in favor of
           Wells Fargo Bank, National Association, as Collateral Agent.
10.3         Security Agreement, dated November 1, 2021, by and among Roller
           Bearing Company of America, Inc., RBC Bearings Incorporated, the
           subsidiary guarantors party thereto and Wells Fargo Bank, National
           Association, as Collateral Agent for its benefit and the benefit of the
           Secured Parties.
10.4         Pledge Agreement, dated November 1, 2021, by and among Roller Bearing
           Company of America, Inc., RBC Bearings Incorporated, the subsidiary
           pledgors party thereto and Wells Fargo Bank, National Association, as
           Collateral Agent for the benefit of the Secured Parties.
104        Cover page interactive data file (embedded within the inline XBRL
           document).




                                       3

© Edgar online, source Previews