Item 2.03. Creation of a Direct Financial Obligation
of an Obligation under an Off-Balance Sheet Arrangement of the Registrant.
Credit Agreement
On July 16, 2021, Skillsoft Finance II, Inc. (“Skillsoft
Finance II”), a subsidiary of Skillsoft Corp., entered into that certain Credit Agreement (the “Credit Agreement”),
by and among Skillsoft Finance II, as borrower, Skillsoft Finance I, Inc., as holdings (“Holdings”), the lenders party thereto
and Citibank, N.A., as administrative agent and collateral agent, pursuant to which the lenders provided a $480 million term loan facility
(the “Term Loan Facility”) to Skillsoft Finance II, the proceeds of which, together with cash on hand, will be used to refinance
the existing first out term loan facility and second out term loan facility incurred by certain subsidiaries of Skillsoft Finance II.
The Term Loan Facility is scheduled to mature on July 16, 2028 (the “Maturity Date”).
The Term Loan Facility will be guaranteed by Holdings
and certain material subsidiaries of Skillsoft Finance II (collectively, the “Loan Parties”). All obligations under the Credit
Agreement, and the guarantees of those obligations, are secured by substantially all of the material assets of the Loan Parties.
Amounts outstanding under the Term Loan Facility
shall bear interest, at the option of Skillsoft Finance II, at a rate equal to (a) LIBOR (subject to a floor of 0.75%) plus 4.75% for
Eurocurrency Loans or (b) the highest of (i) the Federal Funds Effective Rate plus 1/2 of 1%, (ii) the “prime rate” quoted
by the Administrative Agent, (iii) LIBOR plus 1.00% and (iv) 1.75%, plus 3.75%.
Skillsoft Finance II is required to repay the
Term Loan Facility in quarterly installments in the amount of 1% per annum, payable on the last business day of each fiscal quarter. The
entire remaining outstanding balance of the Term Loan Facility is payable on the Maturity Date. Voluntary prepayment is permitted under
the Term Loan Facility subject to a premium of 2% for any prepayments prior to the 12 month anniversary of the Term Loan Facility.
Loan Parties are subject to various affirmative
and negative covenants and reporting obligations under the Credit Facility. These include, among others, limitations on indebtedness,
liens, sale and leaseback transactions, investments, fundamental changes, assets sales, restricted payments, affiliate transactions, and
restricted debt payments. Events of default under the Term Loan Facility include non-payment of amounts due to the lenders, violation
of covenants, materially incorrect representations, defaults under other material indebtedness, judgments and specified insolvency-related
events, certain ERISA events, and invalidity of loan or collateral documents, subject to, in certain instances, specified thresholds,
cure periods and exceptions.
The foregoing description is qualified in its
entirety by reference to the full and complete terms contained in the Credit Agreement, which is attached hereto as Exhibit 10.1 and is
incorporated herein by this reference.