Item 1.01 Entry into a Material Definitive Agreement.
Effective as of
Borrowings under the Revolving Credit Facility are subject to certain financial covenants and ratios as set forth in the Business Loan Agreement and bear interest at a rate equal to the prime rate plus 0.50%. The Company may prepay without penalty all or a portion of the amount owed to the Senior Lender. The Business Loan Agreement includes various financial and other covenants with which the Company has to comply in order to maintain borrowing availability, including maintaining required minimum liquidity amount and minimum asset coverage ratio.
Other covenants include, but are not limited to, covenants limiting or restricting the Company's ability to incur indebtedness, incur liens, enter into mergers or consolidations involving debt, dispose of assets, make loans and investments and pay dividends. The Business Loan Agreement also contains customary events of default including, but not limited to, payment defaults, covenant defaults, cross-defaults to other indebtedness, inaccuracy of representations and warranties, bankruptcy and insolvency events, defects in the Senior Lender's security interest, change in control events and material adverse change. The occurrence of an event of default could result in the acceleration of all obligations of the Company to the Senior Lender with respect to indebtedness, whether under the Business Loan Agreement or otherwise.
In connection with the Business Loan Agreement, the Company also entered into the following additional agreements with the Senior Lender effective as of the Closing Date: (i) Commercial Security Agreement (the "Commercial Security Agreement") pursuant to which the Company granted a continuing security interest in all of the Company's assets to the Senior Lender, and (ii) an Assignment of Deposit Account agreement, including by certain subsidiaries of the Company.
The foregoing description of the Business Loan Agreement, the Commercial Security Agreement and the Promissory Note is a summary only, does not purport to be complete and is qualified in its entirety by reference to the full texts of the Business Loan Agreement, the Commercial Security Agreement and the Promissory Note which are filed as Exhibits 10.1, 10.2 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
In connection with the execution of the Revolving Credit Facility, the holders
of the Company's 8.5% Senior Secured Convertible Notes (the "Subordinated
Lenders") in the aggregate principal amount of
In connection with the extension of the Subordinated Notes,
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 in Item 1.01 above is incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 4.1* Promissory Note, dated as ofJune 2, 2021 , issued by the Company toEast West Bank . 10.1* Business Loan Agreement, dated as ofJune 2, 2021 , between the Company andEast West Bank . 10.2* Commercial Security Agreement, dated as ofJune 2, 2021 , between the Company andEast West Bank . * Filed herewith. 2
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