Key Tronic Corporation Closes on New Credit Facility to Aid With Expected Growth - Seite 2

The payment and performance of the Company’s and co-borrowers’ obligations under the Credit Facility (as well as certain cash management and bank product obligations that may be owing to the Bank or its affiliates) are guaranteed by certain of the Company’s domestic subsidiaries and are secured by first-priority security interests in a substantial portion of the Company’s and co-borrowers’ and guarantors’ existing and future assets, including accounts receivable and inventory.

Generally, the interest rate applicable to loans under the Loan Agreement will be, at the Company’s option:  (i)(A) the base rate which is the highest of (1) the prime rate for the applicable day (as such rate is determined from time to time by the Bank), (2) the federal funds rate for the applicable day plus 0.50%, and (3) LIBOR for a 30-day interest period as of the applicable day plus 1.00% (provided that in no event shall the base rate be less than zero), plus the applicable interest margin for base rate loans; and (B) LIBOR rate for an applicable interest period (provided that in no event shall the LIBOR rate be less than 0.50%), plus the applicable interest margin for LIBOR rate loans.  Depending on average daily excess borrowing availability over applicable periods under the Credit Facility, applicable interest margins on: (x) base rate loans will be 1.25-1.75%; and (y) LIBOR rate loans will be 2.25-2.75%, resetting on a quarterly basis beginning in early 2021.  If there is an event of default under the Loan Agreement, all loans and other obligations will bear interest at a rate of an additional 2.00% on the otherwise applicable interest rates.  In addition to interest charges, the Company is required to pay a fee of 0.25% per annum on the unused portion of the Credit Facility, monthly in arrears.

The Company’s and co-borrowers’ right to obtain any loan or letter of credit under the Credit Facility is subject to compliance with customary funding conditions as specified in the Loan Agreement (both before and after giving effect to the applicable credit extension), including that, among other things, all representations and warranties in the Loan Agreement are accurate, no default or event of default exists, and there has been no material adverse change since the closing date.  The Bank can generally accelerate repayment and other obligations and exercise rights to collateral under the Credit Facility upon the occurrence of an event of default, including failure to timely pay principal or interest, a material inaccuracy of a representation or warranty, violation of various covenants, certain cross-defaults, the occurrence of a change in control, bankruptcy events, breach of certain loan document provisions, certain ERISA events, and the entry of certain material judgments that are not stayed within a certain time period.