MARATHON DIGITAL HOLDINGS, INC. ITEM 1.01 Entry into a Material Definitive Agreement
On
Initial Term: Termination is onAugust 5, 2024 . Availability: The RLOC shall be made available from time to time to the Company for periodic draws (provided no event of default then exists) from its closing date up to and including the termination date of the Agreement. Origination 0.35% of the Loan Commitment to the Bank (or$350,000 ); due at Fee: RLOC closing (and on each anniversary if the RLOC continues for more than one year).
Unused 0.25% per annum of the portion of the unused Loan Commitment, Commitment Fee: payable monthly in arrears.
Renewal: The RLOC may be renewed annually by agreement between the Bank
and the Company, subject to (without limitation): (i) Company
makes a request for renewal, in writing, no less than sixty (60)
days prior to the then current maturity date, (ii) no event of
default then exists, (iii) Company provides all necessary
documentation to extend the RLOC, (iv) Company has paid all
applicable fees related to the loan renewal, and (v) the Bank has
approved such extension request according to its internal credit
policies as determined by the Bank in its sole and absolute
discretion.
Interest Interest only to be paid monthly, with principal all due at Rate and maturity. The interest rate is defined as the higher of (i) the Payments: Floor Rate and (ii) Prime Rate plus the Applicable Margin. "Floor
Rate" shall mean, as of any date of determination: (a) five and
one-quarter percent (5.25%) for any days during an Interest Period
the LTV Ratio is less than forty percent (40%), (b) six percent
(6.00%) for any days during an Interest Period the LTV Ratio is
greater than or equal to forty percent (40%) and less than
fifty-five percent (55%), and (c) six and three-quarter percent
(6.75%) for any day. The Applicable Margin means at any time: (a)
one and one-quarter percent (1.25%) for any days during an Interest
Period the LTV Ratio is less than forty (40%), (b) two percent
(2.00%) for any days during an Interest Period the LTV Ratio is
greater than or equal to 40% and less than fifty-five percent (55%),
and (c) two and three-quarter percent (2.75%) for any days during an
Interest Period the LTV Ratio is greater than or equal to fifty-five
percent (55%).
Collateral: The RLOC will be secured by a pledge of a sufficient amount of
Company's right, title and interest in and to bitcoin stored in a
custody account for the benefit of the Bank (the "Collateral
Account"). the Bank will establish a Collateral Account with a
regulated custodial entity (the "Custodian") that has been approved
by the Bank. the Bank and Custodian will have a custodial agreement
to perfect the security interest in the pledged Collateral Account
which, among other things, allows for 1) the Bank to monitor the
balance of the Collateral Account and 2) allows the Bank to have
exclusive control over the Collateral Account including liquidation
of the collateral in the event of Company's default under the terms
of the RLOC. the Bank may also file a UCC financing statement on the
pledged collateral.
Minimum At origination, the Company must ensure the Collateral Account
Advance balance has sufficient bitcoin to cause a Loan to Value (the "LTV")
Rate: ratio of 65% (or less) ("Minimum Advance Rate") on the unpaid
principal balance of the RLOC. If at any time the LTV ratio exceeds
75%, the Company must bring the rate of advance to the Minimum
Advance Rate.
Covenants: The Company must maintain a minimum adjusted net worth of
$350,000,000 . The Company must maintain a minimum liquidity of$25,000,000 .
On that same date, the Company entered into a Term Credit and Security Agreement ("Term Loan Agreement") and Term Credit Note with the Bank with the following terms:
Initial Term: Termination is on
Availability: Up to
Closing Date (the "Initial Draw"), and $50,000,000.00 to be made,
at Borrower's request, on or before April 25, 2023 (the "Delayed
Draw"), and subject to satisfaction of the conditions set forth in
the Term Loan Agreement.
Fees: An origination fee of $150,000.00 and a contingent draw fee in the
amount of $250,000.00 (the, "Contingent Draw Fee") upon the
execution of the Term Loan Agreement. This Contingent Draw Fee will
be refunded to the Company if it borrows the Delayed Draw by no
later than November 25, 2022 .
Interest Rate Interest, which shall be due on the principal amount of the loan, and Payments: at the higher of 5.75% and the Prime Rate plus 1.75%, only to be
paid monthly, with principal all due at maturity.
Collateral: The Term Loan will be secured by a pledge of a sufficient amount of
Company's right, title and interest in and to bitcoin stored in a
custody account for the benefit of the Bank (the "Collateral
Account"). the Bank will establish a Collateral Account with a
regulated custodial entity (the "Custodian") that has been approved
by the Bank. the Bank and Custodian will have a custodial agreement
to perfect the security interest in the pledged Collateral Account
which, among other things, allows for 1) the Bank to monitor the
balance of the Collateral Account and 2) allows the Bank to have
exclusive control over the Collateral Account including liquidation
of the collateral in the event of Company's default under the terms
of the Term Loan. the Bank may also file a UCC financing statement
on the pledged collateral.
Covenants: The Company must maintain a minimum adjusted net worth of
$350,000,000 . The Company must maintain a minimum liquidity of
$25,000,000 .
ITEM 2.03 Creation of a Direct Financial Obligation.
See Item 1.01 above.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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