Article 1.01. The conclusion of an important definitive agreement.
Term credit agreement
The term loan bears interest at an annual rate based on LIBOR plus an interest margin of 2.50% subject to a LIBOR floor of 0.50% (with a reduction in the interest margin if RHI obtains a specified public enterprise family rating). LIBOR is a variable interest rate that resets periodically during the term of the term loan. At the date of the loan, the rate was set at the LIBOR floor of 0.50% plus 2.50% and the Term Loan was issued at a discount of 0.50% from its nominal value. The term credit agreement contains customary provisions regarding the future transition of LIBOR.
The proceeds of the term loan should be used for general business purposes. In addition, a portion of the proceeds should be used to pay the principal amount of outstanding convertible notes of RH which opt for early conversion. From
The term credit agreement also contains an accordion clause under which RHI may request to add one or more additional term loan facilities or to increase any then existing credit facility by an aggregate principal amount. going up to
All obligations under the term loan are guaranteed by certain national subsidiaries of RHI. In addition, RHI and these subsidiaries have provided security over substantially all of their assets (subject to customary and other exceptions) to secure the term loan. Substantially all of the collateral securing the term loan also secures the loans and other credit extensions under the Amended and Restated Twelfth Credit Agreement, dated
Borrowings under the term loan agreement may be prepaid in whole or in part at any time, subject to a prepayment premium of 1.0% in the event the facility is prepaid. or reassessed within six months of the term loan closing date. Agreement.
The term credit agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on the granting of certain liens, limitations on granting certain loans or investments, limitations on the commitment of additional debts, restricted payment limitations limiting the payment of dividends and certain other transactions and distributions, limitations on transactions with affiliates, as well as other restrictions and limitations similar to those commonly found in credit type agreements. and similar in size, but provides unlimited exceptions for indebtedness, granting of privileges and making investments, dividend payments, and large junior debt payments, subject to passing ratio tests specified leverage.
The term credit agreement does not contain a financial maintenance clause.
The term credit agreement contains the usual representations and warranties, events of default and other terms and conditions customary for a term credit agreement.
The above description is a summary of certain terms of the Term Credit Agreement and is qualified in its entirety by reference to the Term Credit Agreement, which is attached as Exhibit 10.1 herein and is incorporated herein by reference. present by reference.
Article 2.03. Creation of a direct financial obligation or obligation under and
Off-Balance Sheet Arrangement of a Registrant.
The disclosure under item 1.01 above is incorporated herein by reference.
Article 7.01. FD Regulation Disclosure.
Information provided with this report under this Section 7.01, including Exhibit 99.1, will not be considered “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act “), Or otherwise subject to the responsibilities of this section, nor shall it be deemed to be incorporated by reference in any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stipulated by specific reference in such deposit.
This current report on Form 8-K contains forward-looking statements within the meaning of federal securities laws, including, without limitation, statements regarding the terms and conditions of the credit term loan agreement and of the agreement between creditors, the potential cost of capital made available to RH subsidiaries under this Term Credit Agreement, the interest rate associated with the Term Loan, the period during which the Term Loan may remain default, the potential use of the proceeds of the amounts borrowed under the Term Credit Agreement, the terms and restrictions contained in the term loan agreement and the ability of the parties to the loan to comply with the terms and conditions of the loan agreement term and the creditors’ agreement from time to time. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “if”, “anticipate”, “estimate”, “expect”, “plan”, “plan”, “intend”, “believe”, “can” , “May”, “should,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future events. We cannot assure you that future developments that concern us will be those we anticipated. Significant risks and uncertainties that could cause actual results to differ materially from our expectations include, among other things, risks and uncertainties relating to the overall level of indebtedness that we incur, the terms and conditions of any debt financing, including including the term credit agreement, the risks and uncertainties regarding the use of the proceeds of any debt financing, including the term credit agreement, the risks and uncertainties associated with our decisions regarding the allocation and use of capital, the risks and uncertainties associated with fluctuations in interest rates, the risks and uncertainties as to whether the financial performance of the Company meets expectations, and other risks and uncertainties disclosed in the sections entitled “Risk Factors “And” Management’s analysis and analysis of the financial position and operating results “in the annual report HR Department on Form 10-K most recently filed with the
Article 9.01. Financial statements and supporting documents.
(d) Exhibits. Exhibit No. Description 10.1 Term Loan Credit Agreement dated as of
October 20, 2021, by and among Restoration Hardware, Inc.as the borrower, the lenders party thereto and Bank of America, N.A. as administrative agent and collateral agent. 99.1 Press Release dated October 25, 2021announcing the completion of the debt financing in connection with the Term Loan Credit Agreement. 104 Cover Page Interactive Data File--the cover page XBRL tags are embedded within the Inline XBRL document.
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