Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, BRPI Acquisition Co LLC, a Delaware limited liability
company ("BRPAC"), United Online, Inc., a Delaware corporation ("UOL") and YMax
Corporation, a Delaware corporation ("YMax"; and, together with BRPAC and UOL,
the "Borrowers"), indirect wholly owned subsidiaries of B. Riley Financial, Inc.
(the "Company"), in the capacity of borrowers, entered into a Credit Agreement
(the "Credit Agreement"), dated December 19, 2018, with the Banc of California,
N.A. in the capacity as administrative agent (the "Agent") and as a lender and
with the other lenders party thereto (collectively, the "Lenders"). Certain of
the Borrowers' U.S. subsidiaries are guarantors of all obligations under the
Credit Agreement and are parties to the Credit Agreement in such capacity
(collectively, the "Secured Guarantors"). In addition, the Company and B. Riley
Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of
the Company, are guarantors of the obligations under the Credit Agreement
pursuant to standalone guaranty agreements pursuant to which the shares of
outstanding membership interests of the BRPAC are pledged as collateral.
The credit facilities under the Credit Agreement, as amended by the First
Amendment to Credit Agreement and Joinder, dated February 1, 2019, consisted of:
(a) a term credit facility under which Lenders made Term Loans (as defined in
the Credit Agreement) to the Borrowers in the aggregate original principal
amount of USD $80,000,000; and (b) an optional accordion term loan credit
facility (the "Optional Loan") under which one Lender made an Optional Loan to
the Borrowers in the aggregate original principal amount of USD $10,000,000.
On December 31, 2020, the Borrowers, the Secured Guarantors, the Agent and the
Lenders, entered into the Second Amendment to Credit Agreement (the "Second
Amendment") pursuant to which, among other things, (i) the Lenders agreed to
make an new $75,000,000 term loan to the Borrowers, the proceeds of which the
Borrowers' will use to repay the outstanding principal amount of the existing
Terms Loans and Optional Loans and for other general corporate purposes, (ii)
the Borrowers were permitted to make a one-time Permitted Distribution (as
defined in the Second Amendment) in the amount of $30,000,000 on the date of the
Second Amendment, (iii) the maturity date of the new Term Loans is five (5)
years from the date of the Second Amendment, (iv) the interest rate margin was
increased as set forth in the Second Amendment, (v) the Borrowers agreed to make
mandatory prepayments of the Term Loans from a portion of the Consolidated
Excess Cash Flow (as defined in the Credit Agreement), (vi) the maximum
Consolidated Total Funded Debt Ratio (as defined in the Credit Agreement) was
increased as set forth in the Second Amendment and (vii) the Company and B.
Riley Principal Investments, LLC entered into a reaffirmation of their
guarantees of the Borrowers' obligations under the Credit Agreement.
Additionally, the Borrowers paid a commitment fee and an arrangement fee, each
based on a percentage of the aggregate commitments, in each case upon the
closing of the Second Amendment.
The foregoing description of the Second Amendment does not purport to be
complete and is qualified in its entirety by reference to the complete text of
the Second Amendment, which is incorporated herein by reference and attached
hereto as Exhibit 10.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is hereby incorporated by reference
into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Second Amendment to Credit Agreement, dated December 31, 2020
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