U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 22, 2007
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GREATBATCH, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-16137 16-1531026
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
9645 Wehrle Drive, Clarence, New York 14031
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 759-6901
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Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425).
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240 14a-12).
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)).
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)).
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Item 1.01 Entry into and Termination of Material Definitive Agreements
and 1.02 ------------------------------------------------------------
On May 22, 2007, Greatbatch Ltd. (the "Borrower") entered into
a credit agreement with the financial institutions identified
therein as lenders and Manufacturers and Traders Trust Company
("M&T"), as the administrative agent (the "2007 Credit
Agreement"). The 2007 Credit Agreement is guaranteed by
Greatbatch, Inc. (the "Greatbatch"), the Borrower's ultimate
parent, WGL Intermediate Holdings, Inc. ("Holdings"), the
Borrower's direct parent, the Borrower's U.S. subsidiaries and
those foreign subsidiaries of the Borrower as designated by
the Borrower from time to time or as are required under the
2007 Credit Agreement. The 2007 Credit Agreement replaces the
three-year $50 million Second Amended and Restated Credit
Agreement, dated as of May 31, 2005, by and among Greatbatch
Ltd., the lenders party thereto and Manufacturers and Traders
Trust Company, as administrative agent (the "2005 Credit
Agreement").
The 2007 Credit Agreement provides for a new $235 million
secured revolving credit facility with a letter of credit
subfacility in an aggregate amount equal to $15 million and a
swingline subfacility in an aggregate amount equal to $15
million. The 2007 Credit Agreement has an initial maturity
date of May 22, 2012 and permits one extension by the Borrower
to April 1, 2013, provided, that no default or event of
default has occurred and is continuing on the date of the
extension and the Borrower has paid an extension fee to the
lenders. The 2007 Credit Agreement also contains an increase
provision that would make up to an additional $100 million
available for borrowing provided the increased portion could
be fully syndicated at a later date among existing or new
lenders.
Loans (other than swing loans) under the 2007 Credit Agreement
will bear interest at the Borrower's option either at: (i) the
higher of (a) M&T's prime rate in effect from time to time and
(b) the federal funds effective rate in effect from time to
time plus 0.5%, plus the applicable margin for such loans,
which ranges between 0.000% and (1.250%), based on the senior
leverage ratio or (ii) the applicable London interbank offered
rate divided by a number equal to 1.00 minus the maximum
aggregate reserve requirement which is imposed on member banks
of the Federal Reserve System against "Euro-currency
Liabilities" as defined in Regulation D, plus the applicable
margin for such loans, which ranges between 1.000% and 2.000%,
based on the senior leverage ratio. Swing loans under the 2007
Credit Agreement will bear interest at the higher of (a) M&T's
prime rate in effect from time to time and (b) the federal
funds effective rate in effect from time to time plus 0.5%,
plus the applicable margin for such loans, which ranges
between 0.000% and (1.250%), based on the senior leverage
ratio. The Borrower will pay a commitment fee, quarterly in
arrears, during the term of the 2007 Credit Agreement which
varies between 0.250% and 0.125% depending on the Borrower's
senior leverage ratio. The commitment fee is currently set at
0.125% or $293,750 per annum payable quarterly in arrears.
The 2007 Credit Agreement contains customary representations
and warranties as well as customary affirmative and negative
covenants. Negative covenants include, among others,
limitations on the incurrence of indebtedness by the Borrower
or the Borrower's subsidiaries, limitations on the incurrence
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of liens and licensing of the Borrower's intellectual
property, limitations on investments made by the Borrower and
restrictions on certain payments by the Borrower.
The 2007 Credit Agreement also contains the following
restrictive covenants, which may be waived with the written
consent of the Majority Lenders (as defined in the 2007 Credit
Agreement):
(1) Except to the extent paid for by common equity of
Greatbatch or paid for out of cash on hand, limits the amount
paid for new acquisitions to $100 million (excluding
Greatbatch's previously announced acquisition of Enpath
Medical, Inc.);
(2) Limits repurchases of Greatbatch's stock to $60 million;
and
(3) Limits payments to holders of Greatbatch's 2 1/4%
Convertible Subordinated Debentures due 2013 issued in May
2003 (the "2003 Debentures") upon the exercise of any holder's
put rights under the 2003 Debentures and payments to holders
upon conversion of Greatbatch's 2 1/4% Convertible
Subordinated Debentures due 2013 (the "2007 Debentures") under
the net share settlement feature of the 2007 Debentures to $53
million.
In addition, the 2007 Credit Agreement requires that
Greatbatch, Holdings, the Borrower and their subsidiaries, on
a consolidated basis, maintain a ratio of adjusted EBITDA to
interest expense calculated as of the last day of any fiscal
quarter of not greater than 3.00 to 1.00, and a total leverage
ratio of not greater than 5.00 to 1.00 from May 22, 2007
through September 29, 2009 and not greater than 4.50 to 1.00
from September 30, 2009 and thereafter.
The 2007 Credit Agreement contains customary events of
default. Upon the occurrence and during the continuance of an
event of default, a majority of the lenders may declare the
outstanding advances and all other obligations under the 2007
Credit Agreement immediately due and payable.
The description of the 2007 Credit Agreement contained herein
is qualified in its entirety by reference to the 2007 Credit
Agreement, a copy of which is filed herewith as Exhibit 10.1
and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
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Under an Off-Balance Sheet Arrangement of a Registrant.
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See Item 1.01 above, which is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
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(c) Exhibits
10.1 Credit Agreement by and among Greatbatch Ltd., the
financial institutions identified therein as lenders,
and Manufacturers and Traders Trust Company, as the
administrative agent, dated as of May 22, 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
GREATBATCH, INC.
Dated: May 25, 2007
By /s/ Marco F. Benedetti
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Marco F. Benedetti
Corporate Controller
(Principal Accounting Officer)
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EXHIBIT DESCRIPTION
NUMBER -----------
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10.1 Credit Agreement by and among Greatbatch Ltd., the financial
institutions identified therein as lenders, and Manufacturers
and Traders Trust Company, as the administrative agent, dated
as of May 22, 2007.
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