Item 1.01 Entry into a Material Definitive Agreement
As previously disclosed, on
DIP Term Loan Credit Facility
In connection with the Chapter 11 Cases, on the Petition Date, the Company filed
a motion (the "DIP Motion") seeking, among other things, approval of senior
secured debtor-in-possession financing on the terms and conditions set forth in
a proposed Superpriority Secured Debtor-in-Possession Credit Agreement (the "DIP
Term Loan Credit Agreement"). On
The DIP Term Loan Credit Agreement provides for, among other things, term loans
in an aggregate amount of up to
The DIP Term Loan Credit Agreement will mature on the earliest of (i) 35 days following the Petition Date, or such later date as agreed to by the Required Lenders (as defined in the DIP Term Loan Credit Agreement), if the Final Order shall not have been entered by such date, (ii) the effective date of any Chapter 11 plan for the reorganization of any of the Company Parties, (iii) the date on which all or substantially all of the assets of the Company Parties are sold in a sale under a Chapter 11 plan or pursuant to Section 363 of the Bankruptcy Code, (iv) 180 days following the Petition Date and (v) the date that all loans become due and payable in full in accordance with the terms of the DIP Term Loan Credit Agreement, including due to acceleration upon the occurrence of an event of default.
The proceeds of the DIP Term Loan Facility will be used (i) to pay fees and
expenses in connection with the DIP Term Loan Credit Agreement and related loan
documents, (ii) for working capital of the Company Parties following
commencement of the Chapter 11 Cases, and (iii) to pay adequate protection
payments to the agents and lenders under the Pre-Petition Term Loan Credit
Agreement (as defined in the DIP Term Loan Credit Agreement) and related loan
documents, in all cases in accordance with applicable orders from the
The DIP Term Loan Credit Facility contains customary representations and warranties and affirmative and negative covenants, including, but not limited to, covenants requiring the Company Parties to timely comply with certain milestones relating to the Chapter 11 Cases and covenants regarding customary financial reporting (including rolling 13-week cash flow forecasts), certain employment matters, and limitations on incurring additional indebtedness, creating liens on assets, making investments, loans or advances, engaging in mergers, consolidations, sales of assets and acquisitions, paying dividends and distributions and making payments in respect of junior or pre-petition indebtedness, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type.
The DIP Term Loan Credit Facility also contains customary events of default,
upon the occurrence of which the obligations under the DIP Term Loan Credit
Facility may be accelerated, including, but not limited to payment defaults,
breaches of representations and warranties, covenant defaults, cross-defaults to
certain indebtedness, insolvency proceedings of certain subsidiaries, certain
events under ERISA, unstayed judgments in respect of obligations involving an
aggregate liability in excess of
The obligations under the DIP Term Loan Credit Facility are jointly and
severally guaranteed by the Guarantors and all of the obligations under such
facility, subject to certain exclusions, are secured by substantially all of the
assets of the Guarantors and
The DIP Term Loan Credit Agreement is subject to final approval by the
DIP ABL Credit Facility
In connection with the Chapter 11 Cases, on the Petition Date, the Company filed
the DIP Motion seeking, among other things, approval of senior secured
debtor-in-possession financing on the terms and conditions set forth in a
proposed Debtor-In-Possession Credit Agreement (the "DIP ABL Credit Agreement"
and, together with the DIP Term Loan Credit Agreement, the "DIP Credit
Agreements"). On
Pursuant to the terms of the DIP ABL Credit Agreement, the ABL Borrowers are
permitted to borrow and utilize revolving credit loans of up to
The DIP ABL Credit Agreement will mature on the earliest of (i) the date that is 180 days after the Petition Date, (ii) the consummation of a sale of all or substantially all of the Company Parties' assets, (iii) if the Final Order has not been entered, the date that is 35 days after the Petition Date (or such later date to which the deadline for the entry of the Final Order may be . . .
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 above in Item 1.01 under "DIP Term Loan Credit Facility" and "DIP ABL Credit Facility" is hereby incorporated into this Item 2.03 by reference.
Cautionary Note on Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements as defined
in Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended. Such statements reflect only the Company's best
assessment at this time and are indicated by words or phrases such as "goal,"
"plan," "expects," " believes," "will," "estimates," "anticipates," or similar
phrases. These forward-looking statements include all matters that are not
historical facts. They include statements regarding, among other things, the
Company's intentions, beliefs or current expectations concerning the delisting
of the Company's common stock on the NYSE American and the transition to the OTC
Pink marketplace. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that may
or may not occur in the future. Investors are cautioned that forward-looking
statements are not guarantees of future performance and that our actual results
of operations, financial condition and liquidity, and the development of the
industry in which we operate, may differ materially from these statements.
Investors should not place undue reliance on such statements. Important factors
potentially affecting performance include but are not limited to risks and
uncertainties related to the ability to confirm and consummate a plan of
reorganization; risks attendant to the bankruptcy process, including our ability
to obtain court approvals with respect to motions filed in the Chapter 11 Cases,
the outcomes of court rulings and the Chapter 11 Cases in general and the length
of time that we may be required to operate in bankruptcy; the effectiveness of
the overall restructuring activities pursuant to the Chapter 11 Cases and any
additional strategies that we may employ to address our liquidity and capital
resources; the actions and decisions of creditors, regulators and other third
parties that have an interest in the Chapter 11 Cases, which may interfere with
the ability to confirm and consummate a plan of reorganization; restrictions on
us due to the terms of the DIP Credit Agreements and restrictions imposed by the
applicable courts; potential delays in the Chapter 11 Cases due to the effects
of COVID-19; the effects of the Chapter 11 Cases on the Company and on the
interests of various constituents, including holders of the Company's common
stock; other litigation and inherent risks involved in a bankruptcy process; the
impact of COVID-19 on the global economy, our associates, our customers and our
operations, our high level of indebtedness and the availability and cost of
credit; high interest rates that increase the Company's borrowing costs or
volatility in the financial markets that could constrain liquidity and credit
availability; the inability to achieve savings and profit improvements at
targeted levels in the Company's operations or within the intended time periods;
increased competition from foreign suppliers endeavoring to sell glass
tableware, ceramic dinnerware and metalware in our core markets; global economic
conditions and the related impact on consumer spending levels; major slowdowns
or changes in trends in the retail, travel, restaurant and bar or entertainment
industries, and in the retail and foodservice channels of distribution
generally, that impact demand for our products; inability to meet the demand for
new products; material restructuring charges related to involuntary employee
terminations, facility sales or closures, or other various restructuring
activities; significant increases in per-unit costs for natural gas,
electricity, freight, corrugated packaging, and other purchased materials; our
ability to borrow under our ABL credit agreement; protracted work stoppages
related to collective bargaining agreements; increased pension expense
associated with lower returns on pension investments and increased pension
obligations; increased tax expense resulting from changes to tax laws,
regulations and evolving interpretations thereof; devaluations and other major
currency fluctuations relative to the
Item 9.01 Financial Statements and Exhibits
d) Exhibits: Exhibit No. Description
4.1 DIP Term Loan Credit Agreement, datedJune 3, 2020 4.2 DIP ABL Credit Agreement, datedJune 3, 2020 4.3 DIP Intercreditor Agreement, datedJune 3, 2020
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