Channell Commercial 8-K 2007
Washington, DC 20549
Date of Report (Date of earliest event reported): May 16, 2007
Registrants telephone number, including area code: (951) 719-2600
(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 (see General Instruction A.2):
communications pursuant to Rule 425 under the Securities Act
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Item 1.01. Entry into a Material Definitive Agreement
On May 16, 2007, Channell Bushman Pty Ltd and its controlled entities (collectively referred to as Channell Bushman Group), which are subsidiaries of Channell Commercial Corporation (Channell Commercial), entered into a new loan and security agreement (the Loan and Security Agreement) with National Australia Bank Limited (NAB) that amended and superseded the previous loan and security agreement between Channell Bushman Group and NAB (the Previous Agreement). The Loan and Security Agreement extends the expiration date of the revolving credit facility and the master asset finance agreement facility from April 30, 2007 until July 31, 2007, but otherwise generally contains the same borrowing limits as the Previous Agreement. In addition, upon specified circumstances in connection with a refinancing and/or equity raising, the facilities that expire on July 31, 2007 may be extended for an additional thirty days, through August 30, 2007.
The Loan and Security Agreement includes the following facilities: a term loan that expires on July 31, 2009; a revolving credit facility with maximum borrowings of AUD$3,200,000 that expires on July 31, 2007; a facility to fund future earn-out payments to the sellers of Bushman Tanks that expires on July 31, 2008; a capital expenditure facility that expires on July 31, 2008; and a master asset finance agreement facility that expires on 31, July 2007. The loans under the Loan and Security Agreement are secured by all the assets of Channell Bushman Group.
The Loan and Security Agreement contains various operating covenants that impose limitations on Channell Bushman Groups ability, among other things, to merge or consolidate, sell assets except in the ordinary course of business, and pay dividends. The Loan and Security Agreement also provides that the bank will seek additional support from Channell Commercial if there is further deterioration and contains a subjective acceleration clause should Channell Bushman Group come into a default, which allows the bank to terminate the Loan and Security Agreement and require any outstanding obligations to be repaid.
The foregoing description is qualified in its entirety by the terms of the Loan and Security Agreement, a copy of which is filed hereto as Exhibit 10.1.
Item 9.01. Financial Statements and Exhibits
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.