On December 30, 2019, Pool Corporation and certain of its subsidiaries (the Guarantors) entered into a $185,000,000 term facility (the "Term Facility") with Bank of America, N.A. (the "Lender"). The Term Facility is evidenced by a Credit Agreement (the "Credit Agreement") among the Company, as Borrower, the Guarantors and the Lender. The Term Facility matures on December 30, 2026 (the "Maturity Date"). Proceeds from the Term Facility will be used to pay down the Company's revolving credit facility, adding capacity for future share repurchases, acquisitions and growth-oriented working capital expansion. The Company may prepay amounts outstanding under the Term Facility without penalty (other than interest breakage costs), and the Term Facility will be repaid in quarterly installments of 1.250% of the Term Facility on the last business day of each quarter beginning with the first quarter of 2020. The total of the quarterly payments will be equal to 33.75% of the Term Facility with the final principal repayment equal to 66.25% of the Term Facility due on the Maturity Date. The Company may elect borrowings under the Term Facility to be base rate borrowings or Eurodollar rate borrowings. Base Rate borrowings by the Company under the Term Facility bear interest at a base rate, which is the highest of (a) the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the business day next succeeding such day plus one-half of one percent (0.50%), (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate (defined below) plus one percent (1.00%), in each case plus an applicable interest rate margin. Eurodollar Rate borrowings under the Term Facility bear interest at the Eurodollar Rate plus an applicable interest rate margin. The Eurodollar Rate is the rate per annum equal to the London Interbank Offered Rate as administered by the ICE Benchmark Administration (or any successor administrator), as published on the applicable Bloomberg screen page with a term equivalent to the applicable interest period. The applicable interest rate margins on all borrowings are based on the Company's leverage ratio and will range from 1.125% to 1.625% on Eurodollar Rate borrowings and 0.125% to 0.625% on Base Rate borrowings. At closing, the Term Facility was fully drawn with an outstanding balance of $185,000,000. The company’s obligations under the Credit Agreement are guaranteed by substantially all of its existing and future domestic subsidiaries pursuant to the Credit Agreement. The Credit Agreement contains terms and provisions (including representations, covenants and conditions) customary for transactions of this type. Financial covenants include maintenance of a maximum average total leverage ratio (average total funded debt/EBITDA) and a minimum fixed charge coverage ratio (EBITDAR/cash interest expense plus rental expense). On the last day of each fiscal quarter, maximum average total leverage ratio must be less than 3.25 to 1.00 and minimum fixed charge coverage ratio must be greater than or equal to 2.25 to 1.00. The Term Facility limits the declaration and payment of dividends on common stock to no more than 50% of the preceding year’s Net Income (as defined in the Credit Agreement), provided no default or event of default has occurred and is continuing or would result there from and the dividends are declared and paid in a manner consistent with past practice. The Company may repurchase shares of its common stock provided no default or event of default has occurred and is continuing or would result there from and maximum average total leverage ratio (determined on a pro forma basis) is less than 2.50 to 1.00. Other covenants include restrictions on the ability of the Company to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of financial covenants or any other terms of Term Facility could result in penalty payments, higher interest rates on borrowings or the acceleration of the maturities of outstanding debt.