Item 1.01. Entry into a Material Definitive Agreement.
On
The Credit Agreement provides for the following: (i) term loan facility in an
aggregate principal amount of
Pursuant to the terms of the Credit Agreement, the per annum interest rate of the Term Loan is variable based on the one-month secured overnight financing rate ("SOFR") plus 2.35%, subject to a minimum SOFR of 2.00%. However, the Term Loan issued on the Closing Date has a per annum interest rate of 6.217%, which was fixed with respect to the entire principal amount as a result of an interest rate swap agreement entered into between the Company and Pinnacle on the Closing Date in accordance with the terms of the Credit Agreement.
The Company will begin making monthly interest only payments on the Term Loan
beginning on
The proceeds of the Term Note along with certain cash on hand of the Company
were used to repay in its entirety the one-year Secured Promissory Note (the
"Newswire Note") issued to
The Company currently has no plans to utilize the Revolving LOC but may do so in
the future. If the Company does utilize any funds under the Revolving LOC, the
funds will bear interest at a per annum rate equal to the then current SOFR plus
2.05%. Pinnacle's commitment to fund under the Revolving LOC terminates on
The Credit Agreement contains the following financial covenants, which commence
with fiscal quarter ending
The Credit Agreement also contains customary affirmative covenants for a transaction of this nature, including, among other things, covenants relating to (i) maintenance of adequate financial and accounting books and records, (ii) delivery of financial statements and other information, (iii) preservation of existence of the Company and subsidiaries, (iv) payment of taxes and claims, (v) compliance with laws, (vi) maintenance of insurance, (vii) foreign qualification, (viii) use of proceeds, (ix) cash management system, (x) maintenance of properties, and (xi) conduct of business.
The Credit Agreement also contains customary negative covenants for a transaction of this nature, including, among other things, covenants relating to (i) debt, (ii) liens, (iii) investments, (iv) negative pledges, (v) dividends and other debt payments, (vi) restriction on fundamental changes, (vii) sale of assets, (viii) transactions with affiliates, (ix) restrictive agreements, and (x) changes in fiscal year.
The Credit Agreement also contains various Events of Default (subject to certain grace periods, to the extent applicable), including, among other things, Events of Default for the nonpayment of principal, interest or fees; breach of certain covenants; inaccuracy of the representations or warranties in any material respect; bankruptcy or insolvency; dissolution or change of control; certain unsatisfied judgments; defaults under material agreements; certain unfunded liabilities under employee benefit plans; certain unsatisfied judgments; certain ERISA violations; and the invalidity or unenforceability of the Credit Agreement. If an Event of Default occurs, the Company may be required to repay all amounts outstanding under the Credit Agreement.
The Term Loan and any advances under the Revolving LOC are secured by a first priority lien and security interest to the benefit of Pinnacle in the Event of Default on all of the Company's current or future assets and each of the Guarantor's current or future assets.
The above description of the Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Credit Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
The information regarding the Company's entry into the Credit Agreement provided under Item 1.01 above is hereby incorporated by reference.
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Item 7.01 Regulation FD Disclosure.
On
The information in this Item 7.01 on Form 8-K and in Exhibit 99.1 is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in filings under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description Credit Agreement, datedMarch 20, 2023 , by and amongIssuer Direct 4.1* Corporation, Pinnacle Bank and the other loan parties party thereto. 99.1 Press Release, datedMarch 22, 2023 . 104 Cover Page Interactive Data File (formatted as inline XBRL) * The schedules to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules to theSecurities and Exchange Commission on a supplemental basis upon its request. 3
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