Attached files
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| EX-10 - LOAN, SECURITY AND GUARANTEE AGREEMENT - AutoWeb, Inc. | ex10-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 26,
2020
AutoWeb, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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1-34761
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33-0711569
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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400 North Ashley Drive, Suite 300
Tampa, Florida 33602-4314
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(Address
of principal executive offices) (Zip Code)
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(949) 225-4500
Registrant’s
telephone number, including area code
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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AUTO
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The Nasdaq Capital Market
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
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Emerging growth company
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☐
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
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Item
1.01
Entry
into a Material Definitive Agreement
On
March 26, 2020, the Company entered into a Loan, Security and
Guarantee Agreement (“CNC
Credit Agreement”) by and among CIT Northbridge Credit
LLC, as Agent (“Lender”), the Company, as
Borrower, and the Company’s U.S. subsidiaries Car.com, Inc.,
Autobytel, Inc., and AW GUA USA, Inc., as Guarantors
(“Company
Subsidiaries”).
The CNC
Credit Agreement provides for a $20,000,000 revolving credit
facility (“Credit
Facility”) with borrowings subject to availability
based primarily on limits of 85% of eligible billed accounts
receivable and 75% against eligible unbilled accounts receivable.
The obligations under the CNC Credit Agreement are guaranteed by
the Company Subsidiaries and secured by a first priority lien on
all of the Company’s and the Company Subsidiaries’
tangible and intangible assets. The CNC Credit Agreement has a
minimum borrowing usage requirement of $8,000,000, which will
increase to $10,000,000 on June 30, 2020, and the Company is
required to maintain a minimum of $3,000,000 of availability under
the CNC Credit Agreement.
The
interest rate per annum applicable to borrowings under the CNC
Credit Agreement will be the LIBO Rate plus 5.5%. The LIBO Rate
will be equal to the greater of (i) 1.75% and (ii) the rate
determined by the Lender to be equal to the quotient obtained by
dividing (1) the LIBO Base Rate (i.e., the rate per annum
determined by Lender to be the offered rate that appears on the
applicable Bloomberg page) for the applicable LIBOR Loan for the
applicable interest period by (2) one minus the Eurodollar Reserve
Percentage (i.e., the reserve percentage in effect under
regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve
requirement with respect to Eurocurrency funding for the applicable
LIBOR Loan for the applicable interest period). In the event
LIBOR-based rates or loans are no longer available or quoted, then
Lender and the Company may replace LIBOR with an alternate
benchmark rate (any such proposed rate, a “LIBOR Successor Rate”); provided
that if no LIBOR Successor Rate has been determined or agreed upon,
(i) the obligation of lenders to make or maintain LIBOR loans shall
be suspended, and (ii) the LIBO Base Rate component shall no longer
be utilized in determining the Base Rate. In such an event, the
Company may revoke any pending request for a borrowing based on
LIBOR loans or, failing that, will be deemed to have converted the
borrowing request into a request for a borrowing bearing interest
at the Base Rate (i.e., for any day a fluctuating rate per annum
equal to the highest of (i) the Federal Funds Rate plus 1/2 of 1%;
(ii) the rate of interest in effect for such day as publicly
announced from time to time by JPMorgan Chase Bank, N.A. as its
“prime rate” in effect for such day; and (iii) the most
recently available LIBO Base Rate (as adjusted by any minimum LIBO
Rate floor) plus 1%) plus 5.5%. Upon commencement, the interest
rate will be 7.25%.
There
is a one-time origination fee of $300,000. In addition, the Company
will pay annual fees of (i) 0.5% on any unused portion of the
Credit Facility and (ii) 0.15% of the aggregate revolver amount as
an administration fee.
Subject
to customary provisions regarding earlier termination, the CNC
Credit Agreement expires on March 26, 2023.
The CNC
Credit Agreement contains customary representations and warranties
and certain covenants that limit the ability of the Company and the
Company Subsidiaries to, among other things: (i) incur or guarantee
additional indebtedness; (ii) create or suffer to exist any liens
on Company assets; (iii) make investments or acquisitions; (iv)
dissolve, liquidate, consolidate, merge or wind-up its affairs; (v)
sell or otherwise transfer or dispose of assets; (vi) engage in
transactions with affiliates; (vii) make loans; or (viii) declare
or make distributions on its equity interest.
The CNC
Credit Agreement also contains customary events of default
including, without limitation: a breach of the representations and
warranties made in the loan documents entered into in connection
with the CNC Credit Agreement; failure to make required payments;
failure to comply with certain agreements or covenants;
cross-defaults to certain other indebtedness in excess of specified
amounts; certain events of bankruptcy and insolvency; failure to
pay certain judgments; a change in control; or any event that or
conditions exists that has a material adverse effect on the Company
or impairs the ability of the Company to perform its obligations
under the CNC Credit Agreement or the ability of the Lender or
lenders to enforce their rights under the CNC Credit Agreement. If
such an event of default occurs, the Lender would be entitled to
take various actions set forth in the CNC Credit Agreement,
including the acceleration of amounts due thereunder and all
actions permitted to be taken by a creditor.
The
foregoing description of the CNC Credit Agreement is not complete
and is qualified in its entirety by reference to the CNC Credit
Agreement, which is filed as Exhibit 10.1 to this Current Report on
Form 8-K and which is hereby incorporated by
reference.
Concurrently with
entering into the CNC Credit Agreement, the Company terminated its
Revolving Credit and Security Agreement dated April 30, 2019
(“PNC
Agreement”) by and among PNC Bank, National
Association, as Agent (“PNC”), the Company and the Company
Subsidiaries. In connection with the termination of the PNC
Agreement, the Company paid an early termination fee of $250,000 to
PNC.
The
disclosure set forth in Item 1.01 above is hereby incorporated by
reference to this Item 2.03.
(d)
Exhibits
Loan, Security and
Guarantee Agreement by and among CIT Northbridge Credit LLC, as
Agent, the Lenders Party thereto, and AutoWeb, Inc., as Borrower,
and Car.com, Inc., Autobytel, Inc., and AW GUA USA, Inc., as
Guarantors, dated March 26, 2020.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date:
March 26, 2020
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AUTOWEB,
INC.
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By:
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/s/ Glenn E.
Fuller
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Glenn
E. Fuller, Executive Vice President,
Chief
Legal Officer and Secretary
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