Item 1.01 Entry into a Material Definitive Agreement.
On April 10, 2019, PAR Technology Corporation (“PAR,” “Company,” “we” or “us”) entered into a Purchase Agreement between
PAR and Jefferies LLC, (the “Initial Purchaser”), relating to its issuance and sale of $80.0 million in aggregate principal amount, including the simultaneous closing of the full exercise on April 11, 2019 of the Initial Purchaser’s option to
purchase additional notes, of 4.500% Convertible Senior Notes due 2024 (the “notes”). The notes were issued pursuant to an indenture, dated April 15, 2019, between PAR and The Bank of New York Mellon Trust Company, N.A. (“Trustee”), referred to
herein as the “Indenture.”
PAR received net proceeds from this offering, including net proceeds from the option to purchase additional notes, of
approximately $75.2 million. A portion of the proceeds were used to repay in full amounts outstanding under its Credit Agreement, dated June 5, 2018, among PAR, as borrower, with certain of its U.S. subsidiaries, and Citizens Bank, N.A., as lender
(as amended by the First Amendment thereto, dated March 4, 2019, the “Credit Agreement), which were approximately $16.1 million as of March 31, 2019, and terminate the Credit Agreement. PAR intends to use the remaining proceeds for general
corporate purposes, including funding investment in PAR’s Brink business and for other working capital needs. PAR may also use a portion of the proceeds to acquire or invest in other assets complementary to its business.
The notes are senior, unsecured obligations of PAR. The notes will pay interest at a rate equal to 4.500% per year.
Interest on the notes will be payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2019. Interest will accrue on the notes from the last date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from April 15, 2019. Unless earlier converted, redeemed or repurchased, the notes will mature on April 15, 2024.
The notes are convertible, at the option of the holder, at any time prior to the close of business on the business day
immediately preceding October 15, 2023, but only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 (and only during such calendar quarter), if the last reported sale price
of PAR’s common stock for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than 130% of the
conversion price on such trading day; (2) during the five consecutive business day period immediately after any five consecutive trading day period (the five consecutive trading day period being referred to as the ‘‘measurement period’’) in which
the trading price (as defined in the offering memorandum) per $1,000 principal amount of the notes, as determined following a request by a holder of the notes, for each trading day of the measurement period was less than 98% of the product of the
last reported sale price of PAR’s common stock and the conversion rate on such trading day; (3) upon the occurrence of certain specified corporate events; or (4) if PAR has called the notes for redemption. In addition, regardless of the foregoing
circumstances, holders may convert their notes at any time on or after October 15, 2023 until the close of business on the second business day immediately preceding the maturity date. Upon conversion, PAR will satisfy its conversion obligation by
paying or delivering, as the case may be, cash, shares of PAR common stock or a combination of cash and shares of PAR common stock, at PAR’s election.
The Indenture contains covenants that, among other things, restrict PAR’s ability to merge, consolidate or sell, or
otherwise dispose of, substantially all of its assets. These limitations are subject to a number of important qualifications and exceptions.
The Indenture contains customary Events of Default (as defined in the Indenture), including default for 30 days in the
payment when due of interest on the notes; default in the payment when due (at maturity, upon redemption or otherwise) of the principal of the notes; failure to comply with covenants and other obligations under the Indenture, including delivery of
required notices and obligations in connection with conversion, in certain cases subject to notice and grace periods; payment defaults and accelerations with respect to other indebtedness of PAR and its significant subsidiaries in the aggregate
principal amount of $10.0 million or more; failure by PAR or its significant subsidiaries to pay certain final judgments aggregating in excess of $10.0 million within 60 consecutive days of such final judgment; and specified events involving
bankruptcy, insolvency or reorganization of PAR or its significant subsidiaries.
Upon an Event of Default, the trustee or the holders of at least 25% in aggregate principal amount of the notes then
outstanding may declare all the notes to be due and payable immediately. In the case of Events of Default relating to bankruptcy, insolvency or reorganization, all outstanding notes will become due and payable immediately without further action or
notice.
A copy of the Purchase Agreement and the Indenture is attached hereto as Exhibit 10.1 and Exhibit 4.1, respectively, and
are incorporated herein by reference. The description of the notes contained in this Current Report on Form 8-K is qualified in its entirety by reference to the Indenture.
The Purchase Agreement and Indenture have been filed as exhibits to this Current Report on Form 8-K to provide security
holders with information regarding their respective terms. They are not intended to provide any other factual information about the Company. Any representations, warranties and covenants contained in these agreements were made solely for purposes
of such agreements and as of specific dates and were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties. Any representations and warranties in such agreements were
made for the purposes of allocating contractual risk between the parties to such agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those
applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof in such agreements as characterizations of the actual state of facts or condition of the Company or any of its
subsidiaries or affiliates. Moreover, information concerning the subject matter of any such representations and warranties may change after the date of such agreements, which subsequent information may or may not be fully reflected in the Company’s
public disclosures.