Item 1.01 Entry into a Material Definitive Agreement
On
The Purchase Agreement contains customary representations and warranties by the Company and Augusta Investments. The Purchase Agreement also contains certain covenants of the Company including maintaining its status as a reporting issuer, maintaining books and records, maintaining its properties, compliance with laws, not incurring additional indebtedness, except for liabilities for trade payables and expenses incurred in the ordinary course of business, and making certain filings to maintain and perfect the security interests of Augusta Investments under the Security Agreement (as defined below).
The Note bears interest at a rate of prime plus 3% and is for a maximum term of 12 months. The Note is secured by a first-priority, perfected security interest in all the assets of the Company pursuant to a guarantee and security agreement (the "Security Agreement") and certain deeds of trust (the "Deeds of Trust", collectively with the Purchase Agreement, the Note and the Security Agreement, the "Loan Documents") to be finalized and filed by the Company in accordance with covenants in the Purchase Agreement and the Security Agreement.
Under the terms of the Note, the following events constitute an event of default
permitting the holder of the Note to exercise remedies including accelerating
the payment of the full amount of the Note plus Interest and exercising rights
under the Security Agreement, including selling assets of the Company to satisfy
obligations under the Note: (i) the Company shall default in the payment of any
part of the principal or unpaid accrued interest on the Note for more than five
(5) days after the maturity date or at a date fixed by acceleration or
otherwise; (b) the Company shall fail to file the Deeds of Trust in accordance
with the Purchase Agreement and such failure continues for more than 10 days or
the Company shall fail to maintain perfected liens on all its assets in
accordance with the Loan Documents and such failure continues for more than 30
days; (c) any representation or warranty made or deemed made by the Company in
the Purchase Agreement or in the Security Agreement is incorrect in any material
respect on the date as of which such representation or warranty was made or
deemed made; (d) the Company fails to observe or perform (a) any covenant,
condition or agreement contained in Section 3 or (b) any other covenant,
obligation, condition or agreement contained in the Loan Documents and such
failure continues for 30 days; (e) the Company fails to pay when due any of its
material debts (other than debts arising under this Note) or any interest or
premium thereon when due (whether by scheduled maturity, acceleration, demand or
otherwise) and such failure continues after the applicable grace period, if any,
specified in the agreement or instrument relating to such debt; (f) one or more
judgments or decrees in an amount exceeding in the aggregate
The payment of the obligations of the Company under the Note is also guaranteed by each of the subsidiaries of the Company pursuant to the Security Agreement.
The Company paid Augusta Investments an origination fee of 0.5% of the amount of the Loan on the closing of the issuance of the Note pursuant to the Purchase Agreement.
The above is a summary of the material terms of the Purchase Agreement, the Note and the Security Agreement and is qualified in its entirety by the complete terms and conditions of such agreements, which are filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On
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 is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No.Name 10.1 Secured Promissory Note Purchase Agreement with Augusta Investments 10.2 Secured Promissory Note with Augusta Investments 10.3 Security Agreement with Augusta Investments 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
© Edgar Online, source