On June 3, 2019 (the “Closing Date”) Fox Factory Holding Corp. (the “Company”, “us” or “we”), obtained a $250 million credit facility (the “Credit Facility”) led by Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the “Agent”) for a group of lenders (collectively, the “Lenders”). The Credit Facility provides for revolving loans, swing line loans and letters of credit (the “Revolving Line of Credit”) up to a maximum aggregate amount of $250 million (the “Revolving Loan Commitment”). The Credit Facility was established under a Credit Agreement entered into among the Company, the Agent and the Lenders dated June 3, 2019 (the “Credit Agreement”). All amounts outstanding under the Revolving Line of Credit will become due on June 3, 2024, which is the maturity date of loans advanced under the Revolving Line of Credit and the termination date of the Revolving Loan Commitment. Approximately $89.6 million of the Revolving Loan Commitment was advanced on the Closing Date and the proceeds thereof used in part to refinance certain indebtedness of the Company to its Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of May 11, 2016, between the Company and certain of its subsidiaries, as borrowers, and the lenders from time to time parties thereto and SunTrust Bank, as administrative agent (as previously amended, the “Prior Financing Agreement”) and to pay fees and expenses incurred in connection with the Credit Agreement. Future advances under the Revolving Line of Credit, will be used to finance working capital, capital expenditures and other general corporate purposes of the Company (including to fund acquisitions of additional businesses, permitted distributions and loans by the Company to its subsidiaries).

The Company may borrow, prepay and reborrow principal under the Revolving Line of Credit from time to time during its term. Advances under the Revolving Line of Credit can be either Eurodollar rate loans or base rate loans. Eurodollar rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to the London Interbank Offered Rate plus a margin ranging from 1.00% to 1.50%. Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the Agent as its “prime rate”, and (iii) Eurodollar Rate plus 1.00%, plus a margin ranging from 0% to 0.50%.

The Company will pay to the Agent on a quarterly basis, for the account of each Lender in accordance with its applicable percentage of the Revolving Loan Commitment, a commitment fee equal to the product of (i) a rate ranging from 0.20% to 0.35% per annum, based on its consolidated net leverage ratio, times (ii) the actual daily amount by which the Revolving Loan Commitment exceeds the sum of (A) the outstanding amount of revolving loans plus (B) the outstanding amount of letter of credit obligations, subject to adjustment. The Company will pay to the Agent on a quarterly basis, for the account of each Lender in accordance with its applicable percentage of the Revolving Loan Commitment, a letter of credit fee equal to a rate ranging from 1.00% to 1.50%, based on its consolidated net leverage amount, times the daily amount available to be drawn under such letters of credit.

The Revolving Line of Credit is secured by all of the assets of the Company and its domestic subsidiaries, including all of the Company’s and its domestic subsidiaries’ equity interests in their domestic subsidiaries, to a Guaranty and Security Agreement dated as of June 3, 2019 between the Company and its domestic subsidiaries, on one hand, and the Agent for the benefit of the Lenders, on the other hand (the “Security Agreement”).

Upon the occurrence of an event of default under the Credit Agreement, the Revolving Loan Commitment may be terminated, and all outstanding revolving loans and other obligations under the Credit Agreement may become immediately due and payable and any letters of credit then outstanding may be required to be cash collateralized, and the Agent and the Lenders may exercise any rights or remedies available to them under the Credit Agreement, the Security Agreement or any other documents delivered in connection therewith. Any such event may materially impair the Company’s ability to conduct its business.

The Company used approximately $89.6 million of Revolving Loan Commitment to pay all amounts outstanding under the Prior Financing Agreement as described in Section 1, Item 1.02 below and to pay the closing costs.

The foregoing brief description of the Credit Agreement is not meant to be exhaustive and is qualified in its entirety by the Credit Agreement itself, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Section 1 Registrant’s Business and Operations

Item 1.02 Termination of a Material Definitive Agreement.

Simultaneously with entering into the Credit Agreement, on June 3, 2019, the Company terminated the Prior Financing Agreement and repaid all outstanding amounts owing thereunder. The Prior Financing Agreement, originally dated as of May 11, 2016, was a $175 million secured credit facility (including incremental loans and commitments subsequent to May 11, 2016) with SunTrust Bank as agent for the lenders party thereto. The Prior Financing Agreement provided for a $100 million revolving line of credit commitment and a $75 million term loan. The Prior Financing Agreement was secured by all of the assets of the Company, including all of its equity interests in its domestic subsidiaries. As of June 3, 2019, the total amount of principal and accrued interest and fees outstanding under the Prior Financing Agreement was approximately $88.9 million. A copy of the Prior Financing Agreement was filed as Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 16, 2016.

Section 2 Financial Information

The information set forth in Item 1.01 above with respect to the Credit Agreement is incorporated herein in its entirety.

Section 8 Other Events

Item 8.01 Other Events.

On June 3, 2019, the Company issued a press release announcing its entry into the Credit Agreement, a copy of which is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Section 9 Financial Statements and Exhibits.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished herewith:

FOX FACTORY HOLDING CORP Exhibit
EX-10.1 2 exhibit101revisedcreditagr.htm EXHIBIT 10.1 Exhibit Exhibit 10.1CREDIT AGREEMENTDated as of June 3,…
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About Fox Factory Holding Corp. (NASDAQ:FOXF)

Fox Factory Holding Corp. designs, engineers, manufactures and markets performance ride dynamics products for customers across the world. The Company’s brand ride dynamics products are used primarily on bicycles (bikes), side-by-side vehicles (Side-by-Sides), on-road vehicles with off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, and motorcycles. The Company’s brands include FOX, FOX RACING SHOX and RACE FACE. The Company offers front fork and rear suspension products designed for cross-country, trail, all-mountain, free-ride and downhill riding primarily for the mountain bike market. Its mountain bike products are sold in various series, including Performance series, Performance Elite series and Factory series. It also offers suspension systems. Its suspension component products in the powered vehicle category range from two inch aluminum bolt-on shocks to its position sensitive internal bypass shocks.