Item 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Series A Preferred Stock Purchase Agreement
On
Warrant
On the Closing Date, the Company will also issue the Purchasers a warrant to
purchase an aggregate of 4,666,667 shares of the Company's common stock, par
value
Certificate of Designations
The Series A Preferred Stock will have the powers, designations, preferences,
and other rights set forth in a Certificate of Designations of the Series A
Preferred Stock that will be filed by the Company with the Secretary of State of
the
Voting and Consent Rights
The Series A Preferred Stock will not have any voting rights or rights to
convert such preferred shares into shares of Common Stock. The Company must
obtain the prior written consent of holders of a majority of the outstanding
shares of Series A Preferred Stock for, among other things: (i) amending the
Company's organizational documents to the extent such amendment has an adverse
effect on the holders of Series A Preferred Stock, (ii) effecting any change of
control, liquidation event or merger or consolidation of the Company unless the
entirety of the applicable Series A Redemption Price (as specified below) is
paid with respect to all then issued and outstanding Series A Preferred Stock,
(iii) increasing or decreasing the number of authorized shares of Series A
Preferred Stock, (iv) making certain material acquisitions or dispositions or
entering into joint ventures or similar transactions, (v) incurring indebtedness
except for indebtedness incurred under its existing loan facilities and
agreements so long as the total amount of such indebtedness does not exceed
Dividends
The dividend rate with respect to the Series A Preferred Stock is 11.0% per annum and will compound on a quarterly basis. The dividend rate will increase by 2.0% per annum: (i) on the fifth anniversary date of the Closing Date and on each anniversary thereafter, (ii) to the extent that the Company fails to pay any dividend that is required to be paid in cash, (iii) if the Company is in material breach of its covenants under the Purchase Agreement, the Certificate of Designations or the Investor Rights Agreement (as defined below), or if the Company experiences a bankruptcy or insolvency event, or if certain other Events of Noncompliance (as defined in the Certificate of Designations) occur, (iv) in the event the Company fails to maintain a specified fixed charge dividend coverage ratio, and (v) in respect of any Series A Preferred Stock issued as curative equity in accordance with the Investor Rights Agreement (each, an "Incremental Dividend"); provided that in no event shall the dividend rate exceed 20.0%. On or prior to the second anniversary of the Closing Date, the Company may pay dividends on the Series A Preferred Stock either in cash or "in kind", through accrual to the liquidation preference of the Series A Preferred Stock or a combination thereof. Following the second anniversary of the Closing Date, dividends shall be payable only in cash. Payments of any Incremental Dividends must be made in cash.
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Ranking and Liquidation Preference
The Series A Preferred Stock ranks senior to the Common Stock with respect to
dividend rights and rights upon the voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the
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 of this current report on Form 8-K is incorporated by reference as if fully set forth herein.
Item 3.02 UNREGISTERED SALE OF EQUITY SECURITIES.
The information contained in Item 1.01 of this Current Report on Form 8-K regarding the offer and sale of the Series A Preferred Stock and the issuance of the Warrant and the underlying Common Stock is incorporated herein by reference.
The securities that will be issued pursuant to the Purchase Agreement were and will be offered, issued and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), set forth under Section 4(a)(2) of the Securities Act relating to sales by an issuer not involving any public offering and in reliance on similar exemptions under applicable state laws. The Company will rely on this exemption from registration based in part on representations made by the Purchasers in the Purchase Agreement. Neither this Current Report on Form 8-K, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein.
Item 7.01 REGULATION FD DISCLOSURES.
On
The information included in Item 7.01 of this Current Report on Form 8-K and the exhibit attached hereto are being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act, or the Exchange Act, regardless of any general incorporation language in any such filing.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
3,1 - Form of Certificate of Designations of the Company
4.1 - Form of Warrant by the Company in favor of
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10.1 - Series A Preferred Stock Purchase Agreement, dated
10.2 - Form of Investor Rights Agreement, among the Company,
10.3 - Limited Waiver to Credit Agreement, dated as of
99.1 - Press Release, dated
104 - Cover Page Interactive Data File (embedded within the Inline XBRL document).
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