Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Investment Advisory Agreement
On
The foregoing description of the New Barings BDC Advisory Agreement, as set forth in this Item 1.01, is a summary only and is qualified in its entirety by reference to the text of the New Barings BDC Advisory Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Credit Support Agreement
On
• The Credit Support Agreement covers all of the investments acquired by the
Company from Sierra in the Merger and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new investments) of any of the investments acquired by the Company from Sierra in the Merger (collectively, the "Reference Portfolio").
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• The Adviser has an obligation to provide credit support to the Company in an
amount equal to the excess of (1) the aggregate realized and unrealized losses on the Reference Portfolio less (2) the aggregate realized and unrealized gains on the Reference Portfolio, in each case from the date of the closing of the Merger through the Designated Settlement Date (up to a$100.0 million cap) (such amount, the "Covered Losses"). For purposes of the Credit Support Agreement, "Designated Settlement Date" means the earlier of (1)April 1, 2032 and (2) the date on which the entire Reference Portfolio has been realized or written off. No credit support is required to be made by the Adviser to the Company under the Credit Support Agreement if the aggregate realized and unrealized gains on the Reference Portfolio exceed realized and unrealized losses of the Reference Portfolio on the Designated Settlement Date.
• The Adviser will settle any credit support obligation under the Credit Support
Agreement as follows. If the Covered Losses are greater than$0.00 , then, in satisfaction of the Adviser's obligation set forth in the Credit Support Agreement, the Adviser will irrevocably waive during the Waiver Period (as defined below) (1) the incentive fees payable under the New Barings BDC Advisory Agreement (including any incentive fee calculated on an annual basis during the Waiver Period), and (2) in the event that Covered Losses exceed such incentive fee, the base management fees payable under the New Barings BDC Advisory Agreement. The "Waiver Period" means the four quarterly measurement periods immediately following the quarter in which the Designated Settlement Date occurs. If the Covered Losses exceed the aggregate amount of incentive fees and base management fees waived by the Adviser during the Waiver Period, then, on the date on which the last incentive fee or base management fee payment would otherwise be due during the Waiver Period, the Adviser shall make a cash payment to the Company equal to the positive difference between the Covered Losses and the aggregate amount of incentive fees and base management fees previously waived by the Adviser during the Waiver Period.
• The Credit Support Agreement and the rights of the Company thereunder shall
automatically terminate if the Adviser (or an affiliate of the Adviser) ceases to serve as the investment adviser to the Company or any successor thereto, other than as a result of the voluntary termination by the Adviser of its investment advisory agreement with the Company. In the event of such a voluntary termination by the Adviser of the then-current investment advisory agreement with the Company, the Adviser will remain obligated to provide the credit support contemplated by the Credit Support Agreement. In the event of a non-voluntary termination of the advisory agreement or its expiration (due to non-renewal by the Board of Directors of the Company (the "Board")), the Adviser will have no obligations under the Credit Support Agreement.
The Credit Support Agreement is intended to give stockholders of the combined company downside protection from net cumulative realized and unrealized losses . . .
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information in this Current Report on Form 8-K set forth under the Introductory Note and under Item 1.01 is incorporated by reference into this Item 2.01.
As described above, the Merger closed on
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The Board affirms its commitment to purchase in open-market transactions,
pursuant to Rule 10b-18 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and subject to the Company's compliance with its covenant
and regulatory requirements, shares of Company Common Stock in an aggregate
amount of up to
The foregoing description of the Merger Agreement is a summary only and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is incorporated by reference as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective immediately after the closing of the Merger, the Board increased the
size of the Board from eight directors to 10 directors and appointed
The appointment of
Item 7.01. Regulation FD Disclosure.
On
The information furnished pursuant to this Item 7.01, including the related
exhibit, shall not be deemed "filed" for purposes of the Exchange Act or
otherwise subject to the liabilities of such section, nor shall such information
or exhibits be deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing by
the Company with the
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Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses or funds acquired
The information required by Item 9.01(a) of Form 8-K, including the financial
statements required pursuant to Rule 6-11 of Regulation S-X, was previously
included or incorporated by reference in the Company's prospectus dated
(d) Exhibits Exhibit No. Description 2.1* Agreement and Plan of Merger, dated as ofSeptember 21, 2021 , by and amongBarings BDC, Inc. ,Mercury Acquisition Sub, Inc. , Sierra Income Corporation andBarings LLC (Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed onSeptember 22, 2021 ). 10.1 Second Amended and Restated Investment Advisory Agreement, datedFebruary 25, 2022 , by and betweenBarings BDC, Inc. andBarings LLC . 10.2* Credit Support Agreement, datedFebruary 25, 2022 , by and betweenBarings BDC, Inc. andBarings LLC . 99.1 Press Release, datedFebruary 25, 2022 .
* Exhibits and/or schedules to this Exhibit have been omitted in accordance with
Item 601(b)(2) of Regulation S-K or Item 601(b)(10) of Regulation S-K, as
applicable. The registrant agrees to furnish supplementally a copy of all
omitted exhibits and schedules to the
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