Cadence Bank, as a lender, Webster Bank, National Association, as a lender, Synovus Bank, as a lender, CP7 Warming Bag, LP, as a lender and the other lenders party from time to time thereto (collectively, the “Lenders”) by entry into that certain Tenth Amendment to Credit Agreement and Joinder, dated November 3, by and among the Company, the Company’s subsidiaries, Plastic Tripod, Inc., the subsidiary guarantors party thereto, Regions Bank, as administrative agent for the lenders, collateral agent for the lenders, a lender, swingline lender and issuance bank, Cadence Bank, as a lender, Webster Bank, National Association, as a lender, Synovus Bank, as a lender, CP7 Warming Back, LP as a lender and the other lenders party from time to time thereto.
The Credit Agreement provides for a revolving line of credit in the amount of $4,000,000 (which includes a $1,500,000 letter of credit sublimit and a $2,500,000 swingline sublimit that reduce availability of the revolving loans) (the “Revolving Loans”). In addition, $58,574,929.48 in term loans (the “Term Loan’) and $10,000,000 under a delayed draw term loan (the “Delayed Draw Term Loan”) were outstanding under the Credit Agreement as of November 3, 2021 (together with the Revolving Loans, the “Loans”).
The interest rates per annum applicable to the Loans (other than the Delayed Draw Term Loan) are set at a fixed rate (i) from November 3, 2021 through June 15, 2023, 4.75% per annum and (ii) from and after June 16, 2023, 6.75% per annum, subject to the implementation of the default rate (i.e., 2.00% per annum above the fixed rate) in accordance with the Credit Agreement. The Delayed Draw Term Loan does not bear interest on the unpaid principal amount thereof. Interest is payable (x)(i) generally on the last day of each interest period selected for LIBOR loans, but in any event, not less frequently than every three months, and (ii) on the last business day of each quarter for base rate loans and (y) at final maturity. The principal amount of the Term Loan must be repaid quarterly in an amount of $813,000, commencing on December 31, 2021 and continuing at the end of each calendar quarter occurring prior to June 15, 2024 (the “Maturity Date”), with a final payment of any remaining outstanding principal amount and accrued interest on the Term Loan due and payable on the Maturity Date. The entire remaining outstanding principal amount on the Delayed Draw Term Loan is due and payable on the Maturity Date. The Borrowers are also required to pay a fee on the unused portion of the revolving credit facility equal to 0.375% per annum.
The Loans (other than the Delayed Draw Term Loan) may be voluntarily prepaid at any time without premium or penalty. Revolving loans may be borrowed, repaid and reborrowed from time to time in accordance with the terms and conditions of the Credit Agreement. The Borrowers are required to repay the Loans upon receipt of net proceeds upon the disposition of certain property and upon incurrence of indebtedness not permitted by the Credit Agreement. In addition, the Borrowers are required to make mandatory prepayments annually of an amount equal to 50% of the consolidated excess cash flow.
The obligations are secured by substantially all of the assets of the Borrowers and the Guarantors. The Credit Agreement contains customary covenants that limit the Borrowers’ and the Guarantors’ ability to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, make dividends and distributions, enter into burdensome agreements, use the proceeds of the Loans in contravention to the Credit Agreement, change the nature of their businesses, make fundamental changes, make prepayments on subordinated debt, change their fiscal year, change their organizational documents and make payments of management fees, in each case subject to certain thresholds and exceptions.
The Credit Agreement also contains financial covenants which require the Borrowers and the Guarantors to:
(a) maintain a quarterly consolidated senior lease-adjusted leverage greater than (i) 6.50 to 1.00 as of the end of the fiscal quarter ending on or about March 31, 2022, (ii) 6.25 to 1.00 as of the end of the fiscal quarter ending on or about June 30, 2022, (iii) 6.00 to 1.00 as of the end of the fiscal quarter ending on or about September 30, 2022, (iv) 5.75 to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2022, (v) 5.50 to 1.00 as of the end of the fiscal quarter ending on or about March 31, 2023, (vi) 5.25 to 1.00 as of the end of the fiscal quarter ending on or about June 30, 2023, and (vii) 5.00 to 1.00 as of the end of the fiscal quarter ending on or about September 30, 2023 and the end of each fiscal quarter thereafter;
(b) maintain a quarterly minimum fixed charge coverage ratio of 1.30:1.00 commencing with the fiscal quarter ending on or about March 31, 2022;
7