Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of a Registrant.
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On February 7, 2019 (the
Closing Date), CONMED Corporation, a New York corporation (CONMED), as a borrower, entered into a sixth amended and restated credit agreement (the Credit Agreement), among CONMED, the foreign subsidiary borrowers
from time to time party thereto, the several lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement comprises commitments from 14 financial institutions. The Credit Agreement permits
CONMED to designate foreign subsidiaries as additional borrowers and CONMED has designated Linvatec Nederland B.V., a subsidiary of CONMED organized under Dutch law, as an additional borrower under the Credit Agreement. The Credit Agreement amends
and restates a credit agreement dated as of January 4, 2016. As of December 31, 2018, there were approximately $456.4 million in borrowings outstanding under the prior credit agreement.
The Credit Agreement provides CONMED with the following secured credit facilities (the Facilities): (a) a $485.0 million
U.S. dollar revolving credit facility, (b) a $100.0 million multicurrency revolving credit facility, (c) a $150.0 million term loan facility and (d) a $115.0 million delayed draw term loan facility. The proceeds of the
$150.0 million term loan facility were drawn and used on the Closing Date to repay amounts outstanding under the prior credit agreement and to pay fees and expenses related to the Credit Agreement. In addition, CONMED borrowed $247 million
under the U.S. dollar revolving credit facility on the Closing Date, with the proceeds used to repay the remaining amounts outstanding under the prior credit agreement. Subject to certain conditions, loans under the delayed draw term loan facility
may be drawn in connection with the closing of the previously announced acquisition by CONMED of all of the issued and outstanding common stock of Palmerton Holdings, Inc., a New York corporation, and all of the issued and outstanding equity
securities of Buffalo Filter LLC, a Delaware limited liability company (the Acquisition).
The revolving credit facilities
will terminate and the loans outstanding under the term loan facility will mature on the earlier of (i) February 7, 2024 and (ii) the date that is 91 days prior to the earliest scheduled maturity date of CONMEDs 2.625%
Convertible Senior Notes due 2024 issued on January 29, 2019 (if, as of such date, more than $150,000,000 in aggregate principal amount of such convertible notes (or any refinancing thereof) remains outstanding), at which time all amounts
outstanding under the revolving credit facilities and the term loan facility will be due payable. If undrawn, the commitments to provide the delayed draw term loans will expire on the earlier of the closing date of the Acquisition and March 20,
2019. If drawn, the delayed draw term loans will mature and be due and payable on the same date as loans under the term loan facility and will otherwise be treated as a single tranche of term loans with the loans under the term loan facility.
The Facilities will bear interest at variable rates depending on CONMEDs consolidated senior secured leverage ratio (as defined in the
Credit Agreement), calculated according to a base rate or a Eurocurrency rate plus an applicable margin, as the case may be. Initially, the applicable margin for base rate loans is 0.875% and for Eurocurrency rate loans is 1.875%. CONMED must pay
commitment fees on the revolving credit facilities quarterly in arrears at rates dependent on CONMEDs consolidated senior secured leverage ratio. Initially, the commitment fee rate is 0.30%. CONMED must also pay commitment fees on the delayed
draw term loan commitments at a rate of 0.30%, payable on the earlier of the funding of the delayed draw term loans and the termination of the commitments to provide the delayed draw term loans. The applicable margins and commitment fee rates remain
at the initial levels until certain specified adjustment dates and will thereafter fluctuate depending on CONMEDs consolidated senior secured leverage ratio.
Borrowings under the Credit Agreement are secured by assets and rights of CONMED and certain of its subsidiaries. The Credit Agreement
contains customary covenants for transactions of this type, including three financial covenants: (i) a consolidated senior secured leverage ratio, as defined in the Credit Agreement, that must initially be maintained at a level of not greater
than 4.25 to 1.00, with step-downs to 4.00 to 1.00 on December 31, 2019, and 3.75 to 1.00 on December 31, 2020, with certain
step-ups
available at the election of CONMED in the event of a material
acquisition, as defined in the Credit Agreement; (ii) a consolidated total leverage ratio, as defined