Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On
The Company used borrowings under the Facility to repay in full (i) the Amended
and Restated Business Loan Agreement, dated
Borrowings under the Facility bear interest at a floating rate, which will be at the Prime Rate plus 1.75%. Under the Facility, certain fees are payable by the Borrowers as set forth in the Credit Agreement.
The obligations of the Borrowers with respect to the Credit Agreement are secured by a pledge of substantially all of the personal property assets of the Borrowers, including accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in their respective subsidiaries.
The Credit Agreement contains customary affirmative and negative covenants,
including limitations on the Company's and its subsidiaries' ability to incur
additional debt, grant or permit additional liens, make investments and
acquisitions, merge or consolidate with others, dispose of assets, pay dividends
and distributions, pay subordinated indebtedness and enter into affiliate
transactions. In addition, the Credit Agreement contains financial covenants
requiring the Company on a consolidated basis to maintain, as of the last day of
each calendar month (i) a current ratio of not less than 1.0 to 1.0, (ii) a
fixed charge coverage ratio of not less than 1.0 to 1.0, (iii) a loan turnover
rate of not greater than 60, and (iv) minimum liquidity of not less than
The Credit Agreement contains customary representations and warranties of the Borrowers. These representations and warranties have been made solely for the benefit of the lender and such representations and warranties should not be relied on by any other person, including investors. In addition, such representations and warranties (i) have been qualified by disclosures made to the lenders in connection with the agreement, (ii) are subject to the materiality standards contained in the agreement which may differ from what may be viewed as material by investors and (iii) were made only as of the date of the agreement or such other date as is specified in the Credit Agreement.
The foregoing description does not constitute a complete summary of the terms of the Credit Agreement and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 10.1* Credit and Security Agreement, datedDecember 14, 2021 , by and betweenFuse Medical, Inc. , aDelaware corporation, andCPM Medical Consultants, LLC , aTexas limited liability company, as Borrowers, and CNH Finance Fund I, L.P, aDelaware limited partnership, as Lender. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. 1
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