Item 1.01 Entry into a Material Definitive Agreement.
On
The proceeds of the Term Loan were used by the Company to purchase a commercial
office building and associated property in
The Loans bear interest at the Company's option at: (a) the Base Rate, which is
the highest of (i) the rate of interest published by The Wall Street Journal,
from time to time, as the "
The Company is required to pay a commitment fee equal to 0.5% times the daily average unused portion of the RCF.
The Agreement requires the Company to maintain a Leverage Ratio, determined as of the last day of each quarter for the four-fiscal quarter period ending on the date of determination, of no more than 3.50 to 1.00. The Agreement also requires the Company to maintain a Debt Service Coverage Ratio of no less than 1.25 to 1.00 determined as of the last day of each quarter for the four-fiscal quarter period ending on the date of determination.
Other than with respect to the Special Dividend (as defined in the Agreement), the Agreement restricts the Company's ability to make dividends to stockholders if a default or an event of default (as defined in the Agreement) exists or would result from such distribution and if the Company is not in pro forma compliance with the financial covenants. In addition, the Agreement contains various covenants that may limit, among other things, the Company's ability to incur indebtedness, grant liens, make investments, repay or amend the terms of certain other indebtedness, merge or consolidate, sell assets, and engage in transactions with affiliates.
The foregoing summary of the Agreement and the Notes is qualified in its entirety by the Agreement and Notes, which will be filed with the Company's next quarterly report on Form 10-Q.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
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