FRANKLIN COVEY CO. (NYSE:FC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01Entry into a Material Definitive Agreement
On August 17, 2018, Franklin Covey Co. (the Company) entered into the Ninth Modification Agreement to its existing amended and restated secured credit agreement (the Restated Credit Agreement) with JPMorgan Chase Bank, N.A. (the Lender). The Lender also provides the majority of the Company's day-to-day banking services.
The purpose of the Ninth Modification Agreement is to extend the maturity date of the Restated Credit Agreement from March 31, 2020 to March 31, 2021.
The Ninth Modification Agreement preserves existing debt covenants that include (i) a Funded Debt to EBITDAR ratio of less than 3.0 to 1.0; (ii) a Fixed Charge Coverage ratio greater than 1.15 to 1.0; (iii) an annual limit on capital expenditures (excluding capitalized curriculum development) of $8.0 million; and (iv) consolidated accounts receivable must exceed 150 percent of the outstanding borrowings on the revolving line of credit. The other key terms and conditions of the Ninth Modification Agreement are substantially the same as those defined in the Restated Credit Agreement and subsequent modifications. The Restated Credit Agreement was described in the Company's Form 8-K filed on March 17, 2011, which information is incorporated by reference herein.
In connection with the Ninth Modification Agreement, the Company and certain of its subsidiaries entered into a new Consent and Agreement of Guarantor.
The foregoing description of the Ninth Modification to the Restated Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Ninth Modification Agreement to the Restated Credit Agreement and the Consent and Agreement of Guarantor, which are filed as Exhibits 10.1 and 10.2 attached hereto.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement |
On August 17, 2018, the Company and certain of its subsidiaries entered into the Ninth Modification Agreement and Consent and Agreement of Guarantor with its primary Lender as described above in Item 1.01. The information in Item 1.01 is incorporated by reference herein.
| Item 9.01 |
Financial Statements and Exhibits |
| 10.1 |
Ninth Modification Agreement by and among JPMorgan Chase Bank, N.A., Franklin Covey Co., and the subsidiary guarantors signatory thereto, dated August 17, 2018. |
| 10.2 |
Consent and Agreement of Guarantor by and between JPMorgan Chase Bank, N.A., Franklin Covey Co., and the subsidiary guarantors signatory thereto, dated August 17, 2018. |
FRANKLIN COVEY CO ExhibitEX-10.1 2 exhibit10_1.htm EXHIBIT 10.1 NINTH MODIFICATION AGREEMENT Exhibit 10.1 NINTH MODIFICATION AGREEMENT This NINTH MODIFICATION AGREEMENT (the “Agreement”) is made effective as of August 17,…To view the full exhibit click here
About FRANKLIN COVEY CO. (NYSE:FC)
Franklin Covey Co. is a global company specializing in performance improvement. The Company’s segments are Direct Offices, Strategic Markets, Education practice and International Licensees. The Direct Offices segment consists of its geographic sales offices that serve the United States and Canada, its international sales offices located in Japan, the United Kingdom and Australia, and its public programs group. The Strategic Markets segment includes its government services office, the Sales Performance practice, the Customer Loyalty practice, and a new Global 50 group, which is specifically focused on sales to large, multi-national organizations. The Education practice segment consists of its domestic and international Education practice operations, which are centered on sales to educational institutions, such as elementary schools, high schools, and colleges and universities. The International Licensees segment consists of its international licensees’ royalty revenues.