Sprouts Farmers Market 2014 Annual Report Download - page 97

Subject to exceptions set forth therein, the Credit Facility requires mandatory prepayments in amounts
equal to (i) 50% (reduced to 25% if net first lien leverage is less than 3.00 to 1.00 but greater than 2.50 to
1.00 and 0% if net first lien leverage is less than 2.50 to 1.00) of excess cash flow (as defined in the Credit
Facility) at the end of each fiscal year, (ii) 100% of the net cash proceeds from certain non-ordinary course
asset sales by the Company or any subsidiary guarantor (subject to certain exceptions and reinvestment
provisions) and (iii) 100% of the net cash proceeds from the issuance or incurrence of debt by the
Company or any of its subsidiaries not permitted under the Credit Facility.
Voluntary prepayments of borrowings under the Credit Facility are permitted at any time, in agreed-
upon minimum principal amounts and are not subject to premium or penalty (except LIBOR breakage
costs, if applicable).
Revolving Credit Facility
The Credit Facility includes a $60.0 million Revolving Credit Facility which matures in April 2018. The
Revolving Credit Facility includes letter of credit and $5.0 million swingline loan subfacilities. Letters of
credit issued under the facility reduce the borrowing capacity on the total facility. There are no amounts
outstanding on the Revolving Credit Facility at December 28, 2014. Letters of credit totaling $7.4 million
have been issued as of December 28, 2014 primarily to support the Company’s insurance programs.
Amounts available under the Revolving Credit Facility at December 28, 2014 totaled $52.6 million.
Interest terms on the Revolving Credit Facility are the same as the Term Loan.
The Company capitalized debt issuance costs of $1.1 million related to the Revolving Credit Facility,
which are being amortized to interest expense over the term of the Revolving Credit Facility.
Under the terms of the Credit Facility, the Company is obligated to pay a commitment fee on the
available unused amount of the Revolving Credit Facility commitments equal to 0.50% per annum.
Covenants
The Credit Facility contains financial, affirmative and negative covenants. The negative covenants
include, among other things, limitations on the Company’s ability to:
• incur additional indebtedness;
• grant additional liens;
• enter into sale-leaseback transactions;
• make loans or investments;
• merge, consolidate or enter into acquisitions;
• pay dividends or distributions;
• enter into transactions with affiliates;
• enter into new lines of business;
• modify the terms of subordinated debt or other material agreements; and
• change its fiscal year
Each of these covenants is subject to customary or agreed-upon exceptions, baskets and thresholds.
In addition, if the Company has any amounts outstanding under the Revolving Credit Facility as of the
last day of any fiscal quarter, the Revolving Credit Facility requires the borrower to maintain a ratio of
Revolving Facility Credit exposure to consolidated trailing 12-month EBITDA (as defined in the Credit
Facility) of no more than 0.75 to 1.00 as of the end of each such fiscal quarter.
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