Item 1.01. Entry into a Material Definitive Agreement.
Fourth
Amendment to Muzinich Credit Agreement
On
September 28, 2021, the Company and its subsidiaries entered into the Fourth Amendment to Credit Agreement (“Amendment 4”)
with Muzinich BDC, Inc. (“Muzinich”) to that certain Credit Agreement dated February 7, 2020, among the Company, its subsidiaries
and Muzinich (the “Muzinich Credit Agreement”). Amendment 4 was executed in connection with a prepayment of the principal
balance of the Muzinich term loan in the amount of $3.7 and accrued interest thereon of $95,000 on September 28, 2021. Additionally,
the Company paid a prepayment premium of 2% of the prepayment amount or $74,000.
Under
the terms of Amendment 4, the interest rate margin was decreased from 9.25% to 8.75% when trailing twelve month Consolidated EBITDA,
as defined, excluding the US R&D tax credit, is less than or equal to $4.0 million and decreased from 8.50% to 8.00% when trailing
twelve month Consolidated EBITDA, as defined, excluding the US R&D tax credit, is greater than $4.0 million but equal to or less
than $6.3 million. Muzinich also agreed to waive compliance with the financial covenant set forth in Section 7.11(c) of the Credit Agreement
from September 28, 2021 until March 31, 2022. Section 7.11(c) requires the trailing four week average liquidity, as defined, of the Company’s
CommAgility subsidiary to be no less than $1.0 million. The waiver of this covenant may be extended upon the consent of Muzinich. Additionally,
under Amendment 4, the definition of Consolidated Interest Charges was amended to treat the aforementioned principal prepayment of $3.7
million as being made on October 1, 2020.
This
summary of the principal terms of Amendment 4, a copy of which will be filed as an exhibit to the Company’s Form 10-Q for the three
and nine months ended September 30, 2021, and incorporated herein by reference, is subject to, and qualified in its entirety by, the
full text of Amendment 4.
Amendment
No. 8 to the Loan and Security Agreement with Bank of America, N.A.
On
September 28, 2021, the Company and its subsidiaries entered into Amendment No. 8 to the Loan and Security Agreement (“Amendment
8”) with Bank of America, N.A. (“Bank of America”) to that certain Loan and Security Agreement dated as of February
16, 2017 among the Company, its subsidiaries and Bank of America (the “Bank of America Credit Agreement”) in which Bank of
America consented to the aforementioned principal prepayment of the Muzinich term loan. Additionally, Amendment 8 amends the definition
of Fixed Charge Coverage Ratio to treat the Muzinich principal prepayment as being made on October 1, 2020.
This
summary of the principal terms of Amendment 8, a copy of which will be filed as an exhibit to the Company’s Form 10-Q for the three
and nine months ended September 30, 2021, and incorporated herein by reference, is subject to, and qualified in its entirety by, the
full text of Amendment 8.