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Item 1.01.
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Entry into a Material Definitive Agreement.
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On December 10, 2010, The Brink’s Company (the “Company”) entered into a $54 million continuing agreement for standby letters of credit (the “LOC Agreement”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (the “Bank”). The LOC Agreement allows the Company to request letters of credit denominated in U.S. Dollars, including “evergreen” letters of credit that include automatic renewal provisions.
Pursuant to the LOC Agreement, the Company will pay the Bank a fee based on the unused portion of the Committed Amount (as defined in the LOC Agreement), at a per annum rate of 0.375% multiplied by the difference between the total Committed Amount and the face amount of the Credits (as defined in the LOC Agreement) outstanding during the preceding calendar year, and a letter of credit fee at a per annum rate of 1.85% multiplied by the aggregate face amount of the Credits (as defined in the LOC Agreement) outstanding during the preceding calendar quarter.
The LOC Agreement contains representations, warranties, terms and conditions customary for transactions of this type. These include covenants limiting the ability of the Company and its Restricted Subsidiaries (as defined in the LOC Agreement) to (1) incur liens on their respective assets, (2) dispose of capital stock or debt of any Restricted Subsidiary, or dissolve, merge or sell all or substantially all of its assets, (3) enter into certain transactions with affiliates, (4) make acquisitions, (5) enter into sale and leaseback transactions and (6) make certain investments. The LOC Agreement also contains financial covenants that require the Company not to permit (i) its Leverage Ratio (as defined in the LOC Agreement) as of the end of each fiscal quarter to exceed 60% or (ii) its Interest Coverage Ratio (as defined in the LOC Agreement) as of the end of each fiscal quarter to be less than 3.00 to 1.00. The LOC Agreement also contains a covenant prohibiting the Company from incurring Consolidated Debt (as defined in the LOC Agreement) in an aggregate principal amount exceeding $950 million at any time outstanding.
The LOC Agreement contains certain events of default, including (1) failure to pay principal, interest or any other amount owing on any other obligation under the LOC Agreement when due, (2) material incorrectness of representations and warranties when made, (3) breach of covenants, (4) bankruptcy and insolvency of the Company, (5) entry by a court of one or more judgments against the Company or any of its Restricted Subsidiaries in the aggregate amount of at least $25 million that remain undischarged, unbonded or unstayed for 60 days after the entry thereof, (6) occurrence of a Change in Control (as defined in the LOC Agreement), (7) event of default under the Existing Credit Agreement (as defined in the LOC Agreement) and (8) any pension plan failing to meet the minimum standards under ERISA resulting in a lien, security interest or liability that has a material adverse effect (as defined in the LOC Agreement). If any event of default occurs and is continuing, the Bank may (i) declare the committed amount and other obligations then outstanding or accrued due immediately, (ii) demand the Company cash collateralize the letters of credit, procure the cancellation of the letters of credit and exercise any of the rights and remedies of a secured party with respect to collateral, (iii) notify the beneficiary or other persons that an event of default has occurred and (iv) exercise any rights and remedies available at law, in equity or otherwise to satisfy the Company’s obligations.
The Bank’s commitment under the LOC Agreement terminates on the earliest of (1) December 9, 2014, (2) at the option of the Bank, the occurrence and continuation of any event of default under the LOC Agreement or (3) written notice of termination from the Company.
The Company and its affiliates regularly engage the Bank to provide other banking services. All of these engagements are negotiated at arm’s length.
This description of the LOC Agreement is not complete and is qualified in its entirety by reference to the entire LOC Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
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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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The information required by this item is included in Item 1.01 and incorporated herein by reference.
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits
| 10.1 |
$54 Million Continuing Agreement for Standby Letters of Credit, dated as of December 10, 2010, between The Brink’s Company and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch. |