Item 1.01 Entry Into a Material Definitive Agreement.
Amendment to Senior Secured Asset-Based Credit Facility
On
The Amendment extends the maturity date of the Credit Agreement to the earlier
of (i)
The Amendment also modifies the interest rates under the Credit Agreement. Previously in the Credit Agreement, interest rates were based, at the Company's election, on either the LIBOR Rate or the Base Rate, as defined in the Credit Agreement, plus a spread over the index. The Amendment replaces the LIBOR Rate with Daily Simple SOFR and Term SOFR. Both SOFR options include a credit spread adjustment of 0.10%. The applicable spreads for the Credit Agreement did not change. In addition, the Amendment reduced the unused line fees the Company will pay from 0.25% per annum to 0.20% per annum.
The Amendment also modifies the Borrowing Base and certain components of the Borrowing Base, which is used to determine the amount of availability under the revolving credit facility under the Amended Agreement. The Amended Agreement contains a requirement that we meet a 1:1 fixed-charge coverage ratio (FCCR), applicable only if Excess Availability (as defined in the Amended Agreement) falls below 10% of the Line Cap. The Amended Agreement permits us to pay dividends only if at the time of payment (i) no default has occurred or is continuing (or would result from such payment) under the Amended Agreement, and (ii) (x) pro forma Excess Availability (as defined in the Amended Agreement) is equal to or exceeds 20% of the Line Cap or (y) pro forma Excess Availability is equal to or exceeds 15% of the Line Cap and our fixed-charge coverage ratio is greater than or equal to 1:1 on a pro forma basis.
The foregoing summary of the Amendment is qualified in its entirety to the complete text of the Amendment, which will be filed as an exhibit to the Company's Form 10-Q for the third quarter of 2022.
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 above is incorporate by reference into this Item 2.03.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. Description of Exhibit 101 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. 104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.
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