STERICYCLE INC (Form: 8-K, Received: 03/26/2018 09:02:19)

STERICYCLE, INC.

Date: March 26, 2018

/s/ Daniel V. Ginnetti

Daniel V. Ginnetti

Executive Vice President and Chief Financial Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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) March 23, 2018

Stericycle, Inc.

(Exact name of registrant as specified in its charter)

Delaware

1-37556

36-3640402

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

28161 North Keith Drive

Lake Forest, Illinois 60045

(Address of principal executive offices including zip code)

(847) 367-5910

(Registrant’s telephone number, including area code)

Not Applicable

(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 CR 230.425)

☐	Soliciting material pursuant to Rule 425 under the Securities 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

Amendments to Debt Agreements

On March 23, 2018, Stericycle, Inc. (the “ Company ”) entered into amendments to certain of its debt agreements as described below.

First Amendment to Credit Agreement

The Company is a party to that certain Credit Agreement dated as of November 17, 2017 by and among the Company and certain of its subsidiaries named therein, Bank of America, N.A., as administrative agent, and the other financial institutions party thereto (the “ Bank Credit Agreement ”).

On March 23, 2018, the Company entered into a First Amendment to the Bank Credit Agreement (the “ Bank Credit Agreement Amendment ”). The Bank Credit Agreement Amendment amends the Bank Credit Agreement to, among other things, (i) modify the definition of Consolidated EBITDA to provide certain add-backs for any fiscal quarter ending during the period from March 31, 2018 through December 31, 2019 for purposes of determining compliance with the leverage ratio, and (ii) modify the definition of Applicable Rate to provide a new interest rate margin pursuant to which, if, at the end of any fiscal quarter, the Consolidated Leverage Ratio (as defined in the Bank Credit Agreement) is greater than or equal to 4.00 to 1.00, then the Applicable Margin will be increased (as compared to the Applicable Margin for Pricing Level IV, which remains unchanged from the Bank Credit Agreement) by 0.20% for revolving loan borrowings, by 0.25% for term loan borrowings and by 0.05% for the facility fee payable on the amount of the revolving credit facility commitments, in each case as more fully described in the below pricing grid and in the Bank Credit Agreement Amendment.


					Revolving Credit Facility						Term Facility
Level	Consolidated Leverage Ratio	Facility Fee			Eurocurrency Rate/Letter of Credit Fee			Base Rate			Eurocurrency Rate			Base Rate
I	Less than 1.75 to 1.00		0.100	%		0.900	%		0.000	%		1.000	%		0.000	%
II	Greater than or equal to 1.75 to 1.00 but less than 2.50 to 1.00		0.120	%		0.980	%		0.000	%		1.110	%		0.110	%
III	Greater than or equal to 2.50 to 1.00 but less than 3.25 to 1.00		0.150	%		1.050	%		0.050	%		1.200	%		0.200	%
IV	Greater than or equal to 3.25 to 1.00 but less than 4.00 to 1.00		0.200	%		1.175	%		0.175	%		1.375	%		0.375	%
V	Greater than or equal to 4.00 to 1.00		0.250	%		1.375	%		0.375	%		1.625	%		0.625	%

Note Purchase Agreement Amendments

The Company is a party to that certain (1) Note Purchase Agreement dated as of August 18, 2010 among the Company and the holders of notes party thereto, pursuant to which, among other things, the Company issued $225,000,000 aggregate principal amount of its 4.47% Senior Notes, Series B, due October 15, 2020, (2) First Amendment to Note Purchase Agreement dated as of August 13, 2015 among the Company and each of the institutions which is a signatory thereto, and (3) Second Amendment to Note Purchase Agreement dated as of July 28, 2017 among the Company and each of the institutions which is a signatory thereto (such Note Purchase Agreement, as amended by the amendments described in clauses (2) and (3) of this paragraph, the “ 2010 Note Purchase Agreement ”).

The Company is a party to that certain (1) Note Purchase Agreement dated as of October 22, 2012 among the Company and the holders of notes party thereto, pursuant to which, among other things, the Company issued (a) $125,000,000 aggregate principal amount of its 2.68% Senior Notes, Series A, due December 12, 2019 and (b) $125,000,000 aggregate principal amount of its 3.26% Senior Notes, Series B, due December 12, 2022, (2) First Amendment to Note Purchase Agreement dated as of August 13, 2015 among the Company and each of the institutions which is a signatory thereto, and (3) Second Amendment to Note Purchase Agreement dated as of July 28, 2017 among the Company and each of the institutions which is a signatory thereto (such Note Purchase Agreement, as amended by the amendments described in clauses (2) and (3) of this paragraph, the “ 2012 Note Purchase Agreement ”).

The Company is a party to that certain (1) Note Purchase Agreement dated as of April 30, 2015 among the Company and the holders of notes party thereto, (2) First Amendment to Note Purchase Agreement dated as of June 30, 2015 among the Company and each of the institutions which is a signatory thereto, pursuant to which, among other things, the Company issued (a) $200,000,000 aggregate principal amount of its 2.72% Senior Notes, Series A, due July 1, 2022 and (b) $100,000,000 aggregate principal amount of its 2.79% Senior Notes, Series B, due July 1, 2023, (3) Second Amendment to Note Purchase Agreement dated as of August 13, 2015 among the Company and each of the institutions which is a signatory thereto, and (4) Third Amendment to Note Purchase Agreement dated as of July 28, 2017 among the Company and each of the institutions which is a signatory thereto (such Note Purchase Agreement, as amended by the amendments described in clauses (2), (3) and (4) of this paragraph, the “ 2015A Note Purchase Agreement ”).

The Company is a party to that certain (1) Note Purchase Agreement dated as of October 1, 2015 among the Company and the holders of notes party thereto, pursuant to which, among other things, the Company issued (a) $150,000,000 aggregate principal amount of its 2.89% Senior Notes, Series A, due October 1, 2021 and (b) $150,000,000 aggregate principal amount of its 3.18% Senior Notes, Series B, due October 1, 2023, and (2) First Amendment to Note Purchase Agreement dated as of July 28, 2017 among the Company and the holders of notes party thereto (as so amended, the “ 2015B Note Purchase Agreement ” and, together with the 2010 Note Purchase Agreement, the 2012 Note Purchase Agreement and the 2015A Note Purchase Agreement, the “ Note Purchase Agreements ”).

On March 23, 2018, the Company entered into that certain (1) Third Amendment to the 2010 Note Purchase Agreement, (2) Third Amendment to the 2012 Note Purchase Agreement, (3) Fourth Amendment to the 2015A Note Purchase Agreement, and (4) Second Amendment to the 2015B Note Purchase Agreement (collectively, the “ NPA Amendments ” and, together with the Bank Credit Agreement Amendment, the “ Debt Agreement Amendments ”).

Each of the NPA Amendments amends its respective Note Purchase Agreement to, among other things, (i) modify the definition of Consolidated EBITDA to provide certain add-backs for any fiscal quarter ending during the period from March 31, 2018 through December 31, 2019 for purposes of determining compliance with the leverage ratio, and (ii) modify the financial covenant to provide that if, at the end of any fiscal quarter ending before or on December 31, 2019, the Unadjusted Consolidated Leverage Ratio (as defined in each NPA Amendment to exclude certain add-backs to Consolidated EBITDA added in the NPA Amendments) exceeded 3.75 to 1.00, the per annum interest rate otherwise applicable to such series of the notes shall be increased, in each case from the date that the Unadjusted Consolidated Leverage Ratio was in excess of 3.75 to 1.00 to but not including the date that the Unadjusted Consolidated Leverage Ratio is less than 3.75 to 1.00 as follows and, as more fully described in the NPA Amendments:

(a) by 0.50% if the Company has a rating of BBB or better by S&P (or an equivalent rating by another rating agency),

(b) by an additional 0.25% if the Company has a rating of BBB- by S&P (or an equivalent rating by another rating agency), for a total of 0.75% above the rate otherwise applicable to such series of notes, and

(c) by an additional 0.50% if the Company has no rating or a rating of BB+ or worse by S&P (or an equivalent rating by another rating agency), for a total of 1.25% above the rate otherwise applicable to such series of notes.

Other Related Matters

The representations, warranties and covenants of each of the parties contained in the Debt Agreement Amendments have been made solely for the benefit of the parties to the applicable documents. In addition, such representations, warranties and covenants (i) have been made only for purposes of the Debt Agreement Amendments, (ii) have been qualified by confidential disclosures made by the parties in connection with the Debt Agreement Amendments, (iii) are subject to materiality qualifications contained in the Debt Agreement Amendments that may differ from what may be viewed as material by investors, (iv) were made only as of the date of the Debt Agreement Amendments or such other date as is specified in the Debt Agreement Amendments and (v) have been included in the Debt Agreement Amendments for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Accordingly, the Debt Agreement Amendments are included with this filing only to provide investors with information regarding the terms of the Debt Agreement Amendments, and not to provide investors with any other factual information regarding the parties or their respective businesses. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Debt Agreement Amendments, which subsequent information may or may not be fully reflected in the public disclosures by the parties or their subsidiaries. The Debt Agreement Amendments should not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q and other documents that such party files with the U.S. Securities and Exchange Commission.

The foregoing summary of the Debt Agreement Amendments does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Debt Agreement Amendments attached as Exhibits 10.1 to 10.5 and incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

The following exhibits are filed with this report:


No.		Description

10.1		First Amendment, dated as of March 23, 2018, to the Credit Agreement dated as of November 17, 2017, entered into by Stericycle, Inc. and certain of its subsidiaries as borrowers, Bank of America, N.A., as administrative agent and the financial institutions from time to time party thereto*

10.2		Third Amendment, dated as of March 23, 2018, to the Note Purchase Agreement dated as of August 18, 2010, as amended, entered into by Stericycle, Inc. and the holders of the notes party thereto*

10.3		Third Amendment, dated as of March 23, 2018, to the Note Purchase Agreement dated as of October 22, 2012, as amended, entered into by Stericycle, Inc. and the holders of the notes party thereto*



10.4		Fourth Amendment, dated as of March 23, 2018, to the Note Purchase Agreement dated as of April 30, 2015, as amended, entered into by Stericycle, Inc. and the holders of the notes party thereto*

10.5		Second Amendment, dated as of March 23, 2018, to the Note Purchase Agreement dated as of October 1, 2015, entered into by Stericycle, Inc. and the holders of the notes party thereto*

*	The Company agrees to furnish supplementally a copy of any omitted exhibit or appendix to the Securities and Exchange Commission upon request.

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 hereunto duly authorized.

Exhibit 10.1

EXECUTION VERSION

STERICYCLE, INC.

FIRST AMENDMENT

This FIRST AMENDMENT , dated as of March 23, 2018 (this “ Amendment ”), is entered into by and among STERICYCLE, INC. , a Delaware corporation (the “ Company ”), the Subsidiaries of the Company signatory hereto (collectively, the “ Subsidiary Loan Parties ”), the Lenders (as defined below) signatory hereto and BANK OF AMERICA, N.A. , as administrative agent (in such capacity, the “ Administrative Agent ”) under that certain Credit Agreement, dated as of November 17, 2017 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “ Credit Agreement ”), among the Company, the financial institutions from time to time party thereto as lenders (the “ Lenders ”) or as “L/C Issuers”, the Subsidiaries of the Company party thereto as “Designated Borrowers”, and the Administrative Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

W I T N E S S E T H

WHEREAS, the Company has requested that the Lenders and the Administrative Agent amend the Credit Agreement as set forth herein; and

WHEREAS, the Administrative Agent and the Lenders have agreed, on the terms and conditions set forth below, to so amend the Credit Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the parties hereto hereby agrees as follows:

1. Amendments to Credit Agreement . Subject to the satisfaction of the conditions precedent set forth in Section 2 hereof:

(a) The definition of “ Applicable Rate ” in Section 1.01 is amended to (i) delete the first reference therein to “Pricing Level IV” and insert “Pricing Level V” in lieu thereof and (ii) delete the pricing grid therein and insert the following in lieu thereof:


			Revolving Credit Facility		Term Facility
Level	Consolidated Leverage Ratio	Facility Fee	Eurocurrency Rate/Letter of Credit Fee	Base Rate	Eurocurrency Rate	Base Rate
I	Less than 1.75 to 1.00	0.100%	0.900%	0.000%	1.000%	0.000%

II	Greater than or equal to 1.75 to 1.00 but less than 2.50 to 1.00	0.120%	0.980%	0.000%	1.110%	0.110%

III	Greater than or equal to 2.50 to 1.00 but less than 3.25 to 1.00	0.150%	1.050%	0.050%	1.200%	0.200%

IV	Greater than or equal to 3.25 to 1.00 but less than 4.00 to 1.00	0.200%	1.175%	0.175%	1.375%	0.375%

V	Greater than or equal to 4.00 to 1.00	0.250%	1.375%	0.375%	1.625%	0.625%

(b) The definition of “ Consolidated EBITDA ” in Section 1.01 is amended to add a new clause (a)(xi) to such definition that reads as follows:

and (xi) solely for purposes of determining compliance with Section 7.11 for any fiscal quarter ending during the period from March 31, 2018 through December 31, 2019 (and for no other purposes hereunder, including, without limitation, for determination of the “Applicable Rate”), up to $200,000,000 in the aggregate in any four-fiscal quarter period of cash charges associated with (A) implementation of the Company’s Business Transformation and Operational Optimization Expenses (each, as described in the Company’s Form 10-K for the fiscal year ended December 31, 2017), (B) internal control remediation, accounting pronouncements and related professional and consulting expenses, (C) legal and settlement related expenses and (D) up to $25,000,000 of other cash charges

2. Conditions to Effectiveness . The provisions of Section 1 of this Amendment shall be deemed to have become effective as of the date of this Amendment, but such effectiveness shall be expressly conditioned upon the following:

(a) the Administrative Agent’s receipt of counterparts of this Amendment, duly executed and delivered on behalf of each of the Company, each Subsidiary Loan Party and the Required Lenders;

(b) the Company having paid the fees in the amounts and at the times specified in the letter agreement, dated as of March 1, 2018, between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “ Amendment Fee Letter ”), which fees shall be deemed fully earned and due on the effective date and shall be non-refundable;

(c) satisfactory evidence of substantially contemporaneous amendments in form and substance satisfactory to the Administrative Agent, including amendments in substance parallel to those in Section 1 of this Amendment, with respect to (x) the 2010 Note Purchase Agreement, (y) the 2012 Note Purchase Agreement, and (z) the 2015 Note Purchase Agreement; and

(d) unless waived by the Administrative Agent, the Company having paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to the date hereof.

3. Representations and Warranties . Each Loan Party hereby represents and warrants that:

(a) This Amendment has been duly executed and delivered by each Loan Party that is party hereto. This Amendment constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms (except, in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, examinership or similar laws affecting creditors’ rights generally and by principles of equity);

(b) Each Loan Party (i) is duly organized or formed, validly existing and in good standing (if applicable in such Loan Party’s jurisdiction of incorporation or organization) under the Laws of the jurisdiction of its incorporation or organization and (ii) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to execute, deliver and perform its obligations under this Amendment;

(c) The execution, delivery and performance by each Loan Party of this Amendment have been duly authorized by all necessary corporate or other organizational action, and do not and will not (i) contravene the terms of any of such Person’s Organization Documents; (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (A) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (B) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (iii) violate any Law;

(d) No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Amendment;

(e) No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Amendment; and

(f) The representations and warranties contained in Article V of the Credit Agreement and the other Loan Documents are true and correct in all material respects (except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects) on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects) as of such earlier date and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 thereof shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 thereof.

4. Governing Law; Jurisdiction; Waiver of Jury Trial; Etc . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK. This Amendment shall be further subject to the provisions of Sections 10.14 and 10.15 of the Credit Agreement.

5. Counterparts; Integration; Effectiveness . This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment, together with the Amendment Fee Letter and the other Loan Documents, constitutes the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment.

6. Severability . If any provision of this Amendment is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

7. Effect . Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import shall mean and be a reference to the Credit Agreement as modified hereby and each reference in the other Loan Documents to the Credit Agreement, “thereunder,” “thereof,” or words of like import shall mean and be a reference to the Credit Agreement as modified hereby. This Amendment shall constitute a Loan Document for purposes of the Credit Agreement.

8. Reaffirmation . Except as specifically modified by this Amendment, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed.

9. Guarantors . Each Guarantor hereby consents to this Amendment and reaffirms the terms and conditions of each Guaranty and each other Loan Document executed by it and acknowledges and agrees that each and every such Guaranty and other Loan Document executed by such Guarantor in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.

[Remainder of this page intentionally left blank; signature pages follow]

IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to be executed and delivered by a duly authorized officer on the date first above written.


BANK OF AMERICA, N.A. , as Administrative Agent

By:		/s/ Ronaldo Naval


Name:		Ronaldo Naval
Title:		Vice President

BANK OF AMERICA, N.A. , as a Lender, an L/C Issuer and Swing Line Lender



By:		/s/ Matthew N. Walt


Name:		Matthew N. Walt
Title:		Director

Stericycle, Inc.