Atrion Corporation, a developer and manufacturer of products used primarily for medical applications, entered into a credit agreement with Wells Fargo Bank, National Association, as lender. The credit agreement provides for a $75 million revolving credit facility with an uncommitted feature allowing for the company to request increases to the revolving credit commitment of up to $50 million in the aggregate.
The credit agreement replaces the Loan and Security Agreement dated November 12, 1999, as amended, by and among the company, Atrion Medical Products, Inc., Halkey-Roberts Corporation, Quest Medical, Inc., AlaTenn Pipeline Company, Inc., Atrion Leasing Company, Inc., Atrion International, Inc., and SouthTrust Bank, National Association, which was terminated on February 28, 2017.
The credit agreement will mature on February 28, 2022. Borrowings under the credit agreement will bear interest at a rate per annum equal to an agreed applicable margin plus, at company’s election, a prime rate equivalent equal to the Base Rate, a LIBOR Rate or a LIBOR Market Index Rate. For purposes of the credit agreement, Base Rate is defined as the highest of (a) the rate of interest per annum publicly announced from time to time by Wells Fargo as its prime rate, (b) the Federal Funds Rate plus 0.50% and (c) the LIBOR Market Index Rate plus 1%. LIBOR Market Index Rate means the daily floating LIBOR Rate for an interest period of one month. For borrowings that bear interest at the Base Rate, the applicable margin ranges from 0% to 0.75%.
For borrowings that bear interest at the LIBOR Rate and the LIBOR Market Index Rate, the applicable margin ranges from 0.875% to 1.75%. The credit agreement also provides for a commitment fee applicable to the unused portion of the revolving credit facility ranging from 0.05% to 0.20%, payable in arrears on the last business day of each calendar quarter.
The payment and performance of the obligations under the credit agreement are guaranteed by the company’s subsidiaries, Atrion Medical Products, Inc., Halkey-Roberts Corporation, Quest Medical, Inc., Atrion Leasing Company, LLC and AlaTenn Pipeline Company, LLC (collectively, the Subsidiaries), each of which has executed and delivered a Guaranty Agreement with Wells Fargo, dated as of February 28, 2017.
As provided in a Collateral Agreement dated as of February 28, 2017, by and among the company, the Subsidiaries and Wells Fargo, the obligations under the credit agreement are secured by a continuing security interest in the receivables, certain equipment, inventory, supporting obligations, and books and records relating to any of the foregoing of the company and the Subsidiaries.
In addition to the company’s ongoing relationship with Wells Fargo under the credit agreement, the company has a commercial banking relationship with Wells Fargo, and Wells Fargo has from time to time provided advisory and other services to the company for which it has received customary fees.