Item 1.01 Entry into a Material Definitive Agreement.
On
Term Loan Facility
On
The Term Loan Facility provides for a "first in, last out" term loan in an
amount equal to
The proceeds of the FILO Term Loan and the DDTL will be used, among other things, for working capital and other general corporate purposes.
Amounts borrowed under the FILO Term Loan will be repaid in quarterly
installments at a rate of 1.25% per quarter based on the original principal
amount of the FILO Term Loan, commencing with the fiscal quarter beginning on or
about
Amounts borrowed under the Term Loan Facility will bear interest at a variable rate indexed to LIBOR plus a pricing margin ranging from 8.00% to 8.25% per annum, as determined in accordance with the provisions of the Term Loan Facility based on EBITDA, as of any date of determination, for the most recently ended twelve month period. Interest payments under the Term Loan Facility are due on the first day of each calendar month.
The Term Loan Facility is subject to a borrowing base which is calculated based on specified percentages of eligible inventory, credit card receivables, intellectual property and, after the advance of the DDTL, the lesser of the amount of the tax refund claim under the CARES Act and the outstanding amount of the DDTL.
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The Term Loan Facility requires the Borrower to maintain minimum excess
availability of at least the greater of (i)
The Term Loan Facility includes customary events of default that, include among other things, non-payment defaults, inaccuracy of representations and warranties, covenant defaults, cross-default to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults, ERISA defaults, structural defaults under the loan documents and a change of control default. The occurrence of an event of default could result in the acceleration of the obligations under the Term Loan Facility. Under certain circumstances, a default interest rate will apply on any amount payable under the Term Loan Facility during the existence of an event of default at a per annum rate equal to 2.00% above the applicable interest rate for any principal and 2.00% above the rate applicable for base rate loans for any other interest.
Borrower is also obligated to pay other customary closing fees, arrangement fees and administration fees for a credit facility of this size and type.
All obligations under the Term Loan Facility are guaranteed by the Loan Parties (other than the Borrower) and secured by (a) a second priority lien on, substantially all of the Loan Parties' working capital assets, including cash, accounts receivable, and inventory, and (b) a first priority lien on, substantially all of the Loan Parties' non-working capital assets, including intellectual property, and the tax refund payable to the Company pursuant to the CARES Act, in each case, subject to certain permitted liens. . . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
A copy of the Company's press release announcing the New Term Loan Credit Agreement and the ABL Facility Amendment is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, except as shall otherwise be expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statement and Exhibits.
(d) Exhibits Exhibit No. Description of Exhibit 10.1$140,000,000 Asset-Based Term Loan Agreement, datedJanuary 13, 2021 . 10.2 Second Amendment to Second Amended and Restated$250,000,000 Asset-Based Loan Credit Agreement, datedJanuary 13, 2021 . 99.1 Press Release ofExpress, Inc. , datedJanuary 14, 2021 . 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. 5
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