AARON’S COMPANY, INC. : entering into a material definitive agreement, completing the acquisition or disposal of assets, creating a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant, financial statements and parts (Form 8-K )
Section 1.01 Entering into a Material Definitive Agreement.
unsecured term loan facility (the “Term Loan”) and a
The Borrower shall have the right from time to time to request to increase the covenants under the Revolving Facility or to increase any existing term loan or to establish one or more new additional term loans (the “Additional Facilities”) ). The aggregate principal amount of all such additional facilities cannot exceed the greater of the following amounts:
Borrowings under the Revolving Credit Facility and the Term Loan bear interest at an annual rate equal, at the borrower’s option, to (i) the forward-looking forward rate based on the guaranteed overnight rate (” SOFR”) plus an applicable margin of between 1.50% and 2.25%, based on the Company’s total net debt to EBITDA ratio (as defined in the credit facility), or (ii) the rate of basis plus an applicable margin, 1.00% less than the applicable margin for SOFR loans.
Maturity and amortization
Loans and commitments under the Revolving Facility mature or terminate on
The term loan is amortized in quarterly installments, beginning on
The Borrower’s obligations under the Credit Facility are jointly and severally guaranteed by the Company and certain of its existing and future direct and indirect commitments.
Obligations under the Credit Facility are currently unsecured. In the event that the total net debt to EBITDA ratio exceeds 1.50 to 1.00 at the end of any period of four consecutive fiscal quarters (a “Credit Facility Triggering Event”), the Borrower , the company and the other guarantors will be required to provide an enforceable first lien on substantially all of their respective assets, excluding certain customary excluded assets. If a Credit Facility Trigger Event occurs, the liens securing the obligations under the Credit Facility will be equal to the liens securing the obligations under the Franchise Facility (as defined below).
Certain covenants and events of default
The credit facility contains customary financial covenants, including (a) a maximum total net debt to EBITDA ratio of 2.75 to 1.00 and (b) a minimum fixed charge coverage ratio (as defined in the credit facility) from 1.75 to 1.00. Subject to the terms and conditions of the Credit Facility, upon the occurrence of a Qualifying Acquisition (as defined in the Credit Facility), (a) the Total Net Debt to EBITDA ratio may be temporarily increased to 3:00 at 1:00 for a period of four fiscal quarters and (b) the ratio of total net debt to EBITDA, with respect to a credit facility trigger event, may be temporarily increased at 2:00 to 1 :00 for a period of three fiscal quarters and 1.75 to 1:00 a.m. for a fiscal quarter thereafter, in each case, beginning with the fiscal quarter in which such qualifying acquisition occurs.
In addition, the Credit Facility contains a number of customary negative covenants that, among other matters and subject to certain exceptions, will restrict the Company's ability and the ability of its restricted subsidiaries to: • incur additional indebtedness; • pay dividends and other distributions; • make investments, loans and advances; • engage in transactions with affiliates; • sell assets or otherwise dispose of property or assets; • alter the business conducted; • conduct mergers and engage in other fundamental changes; • prepay, redeem or repurchase certain debt; and • grant liens.
The Credit Facility also contains certain customary representations and warranties, covenants and default provisions.
The foregoing description of the Credit Facility does not purport to be complete and is qualified in its entirety by the full text of the Credit Facility, a copy of which is filed as Schedule 10.1 hereto and is incorporated herein by reference. .
loan facility agreement
The Franchise Facility functions as a security by the Borrower, the Company and certain of its existing and future direct and indirect customers.
Interest Rate . . .
Item 2.01 Completion of Acquisition or Disposal of Assets.
The agreement is further described in item 1.01 of the company’s current report on Form 8-K filed with the
The Company financed the total cash purchase price of approximately
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a
Off-balance sheet arrangement of a registrant.
The information under Section 1.01 is incorporated herein by reference.
Item 9.01 Financial statements and supporting documents.
(a) Financial statements of acquired businesses.
The financial statements required by this Item 9.01(a) of Form 8-K shall be filed by amendment to this current report on Form 8-K no later than 71 calendar days after the date on which such current report on Form 8-K is due. be filed.
(b) Pro forma financial information.
The financial information required by this Item 9.01(b) of Form 8-K shall be filed by amendment to this current report on Form 8-K no later than 71 calendar days after the date on which such current report on Form 8-K is due. be filed.
(d) Exhibits. Exhibit No. Description 2.1 Stock Purchase Agreement, dated as of
February 23, 2022, by and among Aaron's Retail Solutions, LLC, Interbond Enterprises, Inc., the Sellers named therein and Michael Perlman, in his capacity as the Sellers' Representative thereunder (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SECon February 23, 2022).* 10.1 Credit Agreement, dated as of April 1, 2022, among Aaron's, LLC, as the borrower, The Aaron's Company, Inc., the several banks and other financial institutions from time to time party thereto and Truist Bank, in its capacity as administrative agent.* 10.2 Loan Facility Agreement and Guaranty, dated as of April 1, 2022, among Aaron's, LLC, as the sponsor, The Aaron's Company, Inc., the several banks and other financial institutions from time to time party thereto and Truist Bank, in its capacity as servicer.* 99.1 Press release dated April 1, 2022104 Cover Page Interactive Data File (embedded within the Inline XBRL document). * Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Companyagrees to furnish supplementally to the SECa copy of any omitted schedule or exhibit upon request.
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