STRAN & COMPANY, INC. : entering into a material definitive agreement, creating a direct financial obligation or an obligation under an off-balance sheet arrangement of a holder, other events, financial statements and exhibits (Form 8-K)
Item 1.01 Conclusion of a Material Definitive Agreement.
The amount available under the line of credit is the lesser of:
The loan bears interest at the prime rate plus 0.5% per annum. The Company must repay the interest on the loan proceeds on a monthly basis. The loan is expected to continue for 12 months, subject to the lender’s application rights and the outstanding positive and other obligations of the company under the loan documents, as summarized below.
The Company may freely draw on the Loan subject to the Lender’s right to demand full repayment of the Loan at any time. Late payments are subject to a 5% late fee. In the event of non-repayment of the loan after the Lender has requested full repayment, the interest rate will increase by 10%. The ticket can be prepaid at any time without penalty. The lender can assign the note without the consent of the company.
Under the terms of the guarantee agreement and other loan documents, the Company has given the lender a first ranking security interest in all of its assets, whether held now and in the future, as security for the full repayment of the loan. The lender may file Uniform Commercial Code financing statements with any jurisdiction and with sufficient descriptions of the property to complete its security over all current and future assets of the company. In the event of default of the loan, the lender can expedite the repayment of the loan, take possession of the assets of the company, assign a receiver over the assets of the company and assert other rights over the assets of the company as a creditor. guaranteed. The Company shall pay all reasonable legal fees and expenses of the Lender incurred in enforcing its rights under the Loan Documents.
Under the Loan Agreement, the Company is required to continue its current business of outsourced marketing solutions and, without the prior consent of the Lender, will not acquire in whole or in part any other company or business and will not engage in any other business or open other locations, and will use the loan proceeds only for the general and ordinary operations of its business and for the following purposes: general working capital for accounts receivable and inventory purchases.
The loan is also subject to continuing positive obligations of the company, including punctual repayment of the loan amount, keeping proper books and records in accordance with the opinion of
The loan is further subject to the following financial requirements: (a) Debt service coverage ratio: cash flows should be calculated on an annual basis of at least 1.20 times EBITDA less cash taxes , distributions, dividends, shareholder withdrawals in any form and CAPEX divided by all expected principal payments on all debts plus cash interest payments made on all debts; (b) Minimum
The Company may not also contract any additional debt, guaranteed or not, except in the normal course of business; make loans or advances to third parties or guarantee the obligations of third parties, except certain ordinary advances to employees or ordinary customer credit terms; make investments; acquire a business; make capital expenditures, except in the ordinary course of business; sell any material asset, except in the ordinary course of business; grant security or mortgages on its property or assets.
The above summary of the loan agreement, note and guarantee. . .
Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
As a result of the loan, under the loan documents, the company became obligated to assume a direct financial obligation from the
Item 8.01 Other Events.
Item 9.01 Financial statements and supporting documents.
(d) Exhibits Exhibit No. Description of Exhibit 10.1 Revolving Demand Line of Credit Loan Agreement, dated
November 22, 2021, by and between Stran & Company, Inc.and Salem Five Cents Savings Bank10.2 Revolving Demand Line of Credit Note, dated November 22, 2021, by Stran & Company, Inc.in favor of Salem Five Cents Savings Bank10.3 Security Agreement, dated November 22, 2021, by and between Stran & Company, Inc.in favor of Salem Five Cents Savings Bank10.4 Warehouseman's Waiver, dated November 4, 2021and executed November 22, 2021, by and among Harte Hanks Response Management/ Boston, Inc., Stran & Company, Inc.and Salem Five Cents Savings Bank99.1 Press Release dated November 22, 20213
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