Item 1.01.
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Entry into a Material Definitive Agreement.
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Credit Agreement
On September 22, 2021, in connection with the Merger, W. R. Grace & Co.-Conn. (“Grace
Conn”), a subsidiary of the Company, entered into a senior secured credit agreement (the “New Credit Agreement”), among Parent and Grace Conn, as borrowers,
W. R. Grace Midco Holdings LLC (“Holdings”), as Holdings, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the lenders party thereto.
The New Credit Agreement provides for (i) a $1.25 billion term loan to Parent (the “New
Term Loan Facility”), maturing on the earlier of (a) September 22, 2028 and (b) March 16, 2027 if on such day at least $150 million of Parent’s 4.875% senior secured notes due 2027 (the “2027 Secured Notes”) or Grace Conn’s 4.875% senior notes due 2027 (the “Existing 2027 Notes”) (or any permitted refinancing thereof with a
maturity earlier than 91 days after the seventh anniversary of the closing of the Merger) remain outstanding and (ii) a $450 million revolving credit facility (the “New Revolving
Facility”), maturing on the earlier of (a) September 22, 2026 or (b) July 2, 2024 if on such day any of Parent’s 5.625% senior secured notes due 2024 (the “2024 Secured
Notes” and, together with the 2027 Secured Notes, the “New Secured Notes”) or Grace Conn’s 5.625% 2024 Senior Notes (the “Existing 2024 Notes” and, together with the Existing 2027 Notes, the “Existing Notes”) (or any permitted refinancing thereof with a
maturity earlier than 91 days after the fifth anniversary of the closing of the Merger) remain outstanding.
The obligations and guarantees of the borrowers and guarantors, including those of the Company (referred to together as the “loan parties”), under the New Credit Agreement are secured by a first-priority lien on substantially all of the assets of the loan parties, including the assets of the Company, subject to customary
exceptions. Accordingly, the guarantees of the obligations under the New Credit Agreement are effectively senior to any unsecured indebtedness of the loan parties, including the Company, to the extent of the value of the assets securing the
guarantees.
The proceeds of borrowings under the New Term Loan Facility and New Revolving Facility are permitted to be used at the Effective Time to pay, directly or
indirectly, a portion of the aggregate Merger Consideration and to pay fees and expenses related thereto. The proceeds of the New Term Loan Facility may also be used to consummate the Refinancing (as defined below).
At Parent’s election, borrowings under the New Credit Agreement denominated in U.S. Dollars bear interest at (i) a base rate or (ii) an adjusted LIBOR
rate for the applicable interest period; in either case, plus an applicable margin.
The New Credit Agreement includes certain representations and warranties, affirmative and negative covenants and events of default, all of which apply to
the Company, that are usual and customary for an agreement of this type.
The foregoing is a summary description of the New Credit Agreement and does not purport to be complete.
Secured Notes Indenture
On September 22, 2021, the Company entered into an indenture (the “Secured Notes
Indenture”), among Parent, as issuer, the Company, certain other of Parent’s direct and indirect domestic wholly-owned subsidiaries and Holdings, as guarantors (the “Guarantors”)
and Wilmington Trust, National Association, as trustee (the “Secured Notes Trustee”) and as collateral agent (the “Secured Notes Collateral Agent”), pursuant to which Parent issued the New Secured Notes.
The obligations and guarantees of Parent and the Guarantors, including those of the Company, under the New Secured Notes are secured by a first-priority
lien on substantially all of the assets of Parent and the Guarantors, including the assets of the Company, subject to customary exceptions. The liens securing the obligations and guarantees of Parent and the Guarantors, including those of the
Company, under the New Secured Notes rank equally and ratably with the liens securing the obligations and guarantees of such entities under the New Credit Agreement. Accordingly, the guarantees of the New Secured Notes are effectively senior to any
unsecured indebtedness of the Guarantors to the extent of the value of the assets of the Guarantors securing the guarantees.
The Secured Notes Indenture contains covenants that, among other things, limit the ability of Parent and the Guarantors to merge or consolidate with any
other entity or sell or convey all or substantially all of their assets, create, incur or assume certain liens, dispose of assets that serve as collateral to secure the New Secured Notes, enter into sale and leaseback transactions with respect to
principal properties, and require Parent to provide certain information to the Secured Notes Trustee and holders of the New Secured Notes. The Secured Notes Indenture provides for customary events of default.
The foregoing is a summary description of the Secured Notes Indenture and does not purport to be complete.
Unsecured Notes Supplemental Indenture
On September 22, 2021, the Company entered into a first supplemental indenture (the “Unsecured Notes Supplemental Indenture”), among the
Company, the other Guarantors and Wilmington Trust, National Association, as trustee (the “Unsecured Notes Trustee”), to the indenture, dated as of August 25, 2021 (as
modified by the Unsecured Notes Supplemental Indenture, the “Unsecured Notes Indenture”), between Parent, as issuer, and the Unsecured Notes Trustee, pursuant to which
Parent issued $1,155,000,000 aggregate principal amount of its 5.625% senior notes due August 15, 2029 (the “Unsecured Notes”).
Pursuant to the Unsecured Notes Supplemental Indenture, the Company and the other Guarantors guarantee the obligations of Parent under the Unsecured
Notes on an unsecured basis, subject to customary exceptions.
The Unsecured Notes Indenture contains covenants that, among other things, limit the ability of Holdings, Parent and Holdings’ restricted subsidiaries
(including the Company) to incur additional debt or issue certain preferred shares, incur liens or use assets as security in other transactions, make certain distributions, investments and other restricted payments and merge or consolidate or sell,
transfer, lease or otherwise dispose of all or substantially all of the assets of Parent and its restricted subsidiaries and require Parent to provide certain information to the Unsecured Notes Trustee and holders of the Unsecured Notes. In addition,
if Parent or any of its restricted subsidiaries (including the Company) sells certain assets, under certain circumstances Parent may be required to offer to purchase the Unsecured Notes at 100% of their aggregate principal amount plus accrued and
unpaid interest thereon, if any, to, but excluding, the date of purchase. These covenants are subject to a number of important customary qualifications and limitations. The Unsecured Notes Indenture provides for customary events of default.
The foregoing is a summary description of the Unsecured Notes Supplemental Indenture and does not purport to be complete.