Item 1.01 Entry into a Material Definitive Agreement
On
The 2022 Credit Agreement currently makes available facilities in an aggregate
amount of
•$10 million 5-year revolving credit facility, which we refer to as the 2022 revolver; and •$65 million 5-year term loan facility, which we refer to as the 2022 term loan facility.
Letters of credit may be issued by
In addition, under the 2022 Credit Agreement, the Borrower may request, and the
lenders have the right, but not the obligation to, increase the 2022 revolver or
add an additional term loan facility by an aggregate amount (for all such
increases) not to exceed
Proceeds from the 2022 term loan facility and corporate cash were used to pay in full all outstanding debt and expenses under the 2019 Credit Agreement, and the 2022 revolver may be used to fund working capital and for general corporate purposes.
The maturity date for the 2022 revolver and 2022 term loan facility is
Interest on the loans under the 2022 Credit Agreement is equal to daily simple
SOFR, term SOFR or a base rate, plus an applicable margin. The applicable margin
is between 250bps and 300bps for daily simple SOFR and term SOFR loans (plus a
SOFR adjustment between 10bps and 25bps), and between 150bps and 200bps for base
rate loans. The applicable margin fluctuates based on the ratio of debt under
the 2022 Credit Agreement to the Company's consolidated software revenue. The
Borrower may elect one-, three- or six-month interest periods in connection with
term SOFR. The base rate is equal to the higher of
The principal amount of the 2022 term loan facility amortizes at a rate of 2.5% per year for the first two years and 5% for the last three years, payable in equal quarterly installments. Additional principal payments are due in certain circumstances, and subject to certain limitation, upon a sale of assets or upon receipt of proceeds of casualty insurance or condemnation.
The 2022 Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants. The affirmative covenants require the Company to provide the lenders with certain financial statements, budgets, compliance certificates and other documents and reports and to comply with certain laws. The negative covenants restrict the Company's ability to incur additional indebtedness, create additional liens on its assets, make certain investments, dispose of its assets or engage in a merger or other similar transaction or engage in transactions with affiliates, subject, in each case, to the various exceptions and conditions described in the 2022 Credit Agreement. The negative covenants further restrict the Company's ability to make certain restricted payments, including the payment of dividends in certain limited circumstances.
The 2022 Credit Agreement also contains three financial covenants, measured on a
consolidated basis. First, there must be liquidity (availability under the 2022
revolver, plus unrestricted cash) that is more than the greater of (1)
--------------------------------------------------------------------------------
The 2022 Credit Agreement also includes certain customary events of default. If an event of default occurs and is continuing, the lenders are entitled to take various actions, including the acceleration of the maturity of all loans and to take all actions permitted to be taken by a secured creditor with respect to the collateral for the 2022 Credit Agreement and under applicable law.
As under the 2019 Credit Agreement, the obligations under the 2022 Credit Agreement are secured by:
• substantially all of the tangible and intangible assets of the Company and its material subsidiaries, except for client funds, client funds accounts (as such terms are defined in the 2022 Credit Agreement) and existing real estate, and • the capital stock of the Company's material subsidiaries.
Under the 2019 Credit Agreement, the Borrower and certain of its subsidiaries
were co-borrowers, with the Company as the guarantor. By contrast, under the
2022 Credit Agreement,
The foregoing description of the 2022 Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the 2022 Credit Agreement, which is filed herewith as Exhibit 10.1, 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 disclosed in Item 1.01 above is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Credit Agreement, dated as ofDecember 29, 2022 , amongAvidXchange, Inc. , the Lenders named therein,KeyBank National Association , as Administrative Agent and Issuing Lender, andKeyBanc Capital Markets Inc. , as Joint Lead Arranger and SoleBooker Runner . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
--------------------------------------------------------------------------------
© Edgar Online, source