Item 1.01. Conclusion of a significant definitive agreement.
On
The Company’s borrowings under the Credit Facility bear interest at a variable rate determined as an annual rate equal to 3.50 percentage points above the greater of (i) the secured simple overnight rate (SOFR) applicable daily and (ii) 0.25%. In addition, under the terms of the credit facility, the Company has also agreed to pay the lender an unused commitment fee on a quarterly basis, calculated as 0.30% multiplied by the daily average of the unused commitment.
The Credit Agreement contains positive, negative and financial representations and warranties and covenants customary and customary for agreements of this type, including, among other things, covenants which prohibit, subject to certain specified exceptions, the ability of the company to merge or consolidate with other companies, sell any material part of its assets, incur other debts, incur liens on its assets, make investments or loans to third parties other than authorized investments and authorized loans, and declare any distributions or dividends other than certain authorized distributions. The credit agreement includes the following financial covenants: (i) a tangible net worth clause which obligates the company to maintain a tangible net worth
Events of default under the Credit Agreement which entitle the Lender to exercise its remedies, including acceleration of payment of principal and interest on the Credit Facility, include, among others: (i) default of payment of principal or interest on the Credit Facility, (ii) default by the Company of any other obligation, condition, covenant or other provision under the Credit Agreement and related documents, (iii) failure by the Company to pay any material debt or obligation owed to a third party or an affiliate, or the failure by the Company to perform any agreement with a third party or an affiliate that would have a material adverse effect on the Company and its subsidiaries taken as a whole, (iv) the sale of all or substantially all of the assets of the Company to a third party, (v) various events of bankruptcy and insolvency, and (vi) any material adverse change of the Company and its subsidiaries , taken as a whole, or their business, assets, operations, management, ownership, business, conditions (financial or otherwise) or the Lender’s guarantee that the Lender reasonably believes to have a material adverse effect on the Lender’s guarantee, the Company and its subsidiaries, taken as a whole, or their business, assets, operations or condition (financial or otherwise) or the ability of the Company to repay its debts.
In connection with entering into the Credit Facility, the Company and each of its subsidiaries that guarantee the Credit Facility entered into a General Security Agreement, dated
The foregoing description of the Credit Agreement, Guarantee Agreement and Credit Facility does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, the
Section 2.03. Creation of a Direct Financial Obligation or an Obligation under a
Off-Balance Sheet Arrangement of a Registrant.
The information set out in item 1.01 above regarding the Credit Facility is incorporated herein by reference.
Item 8.01. Other Events.
The Company issued a press release announcing the Company’s entry into the Credit Facility. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01. Financial statements and supporting documents.
(d) Exhibits Exhibit Number Description of Exhibit 10.1 Credit Agreement, datedJune 27, 2022 , by and betweenRand Capital Corporation , as borrower, and M&T Bank, as lender. 10.2 RevolvingLine Note , datedJune 27, 2022 , byRand Capital Corporation , as borrower. 10.3 Addendum to Line of Credit Note, datedJune 27, 2022 , byRand Capital Corporation , as borrower. 10.4 Variable Rate Rider (Daily Simple SOFR), datedJune 27, 2022 , byRand Capital Corporation , as borrower. 10.5 General Security Agreement, datedJune 27, 2022 , byRand Capital Corporation and each of the subsidiaries listed therein, as debtors, in favor ofManufacturers and Traders Trust Company , as the secured party. 99.1 Press Release, datedJune 27, 2022 .
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