MEA » Topics » Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

This excerpt taken from the MEA 8-K filed Jul 28, 2009.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided above in response to Item 1.01 is hereby incorporated by reference into this Item 2.03.





This excerpt taken from the MEA 8-K filed Mar 5, 2009.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided above in response to Item 1.01 is hereby incorporated by reference into this Item 2.03.





This excerpt taken from the MEA 8-K filed May 5, 2008.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 1, 2008, the Company completed the issuance of notes and warrants pursuant to the Securities Purchase Agreement (the "Securities Purchase Agreement") dated as of April 23, 2008, as amended on May 1, 2008, among the Company and the purchasers named therein (the "Note Purchasers") attached as Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed April 24, 2008 (the "Prior Filing"). The Securities Purchase Agreement provides for the sale by the Company to the Note Purchasers of $100,000,000 of Senior Unsecured Convertible Notes (the "Notes") convertible into shares of Common Stock (the "Note Shares"). The Note Purchasers also received a total of 250,000 warrants ("Warrants") for shares of Common Stock (the "Warrant Shares") at an exercise price of $14.00 per share (subject to adjustment) with a term of six years. The initial conversion price of the Notes is $14.00 per share. The Notes bear interest at 7% per annum, payable in cash, and mature in April 2028. In addition, the Notes contain (i) an optional repurchase right exercisable by the Note Purchasers on the sixth, eighth and twelfth anniversary of the date of issuance of the Notes, whereby each Note Purchaser has the right to require the Company to redeem the Notes under certain circumstances, and (ii) an optional redemption right exercisable by the Company beginning on the third anniversary of the date of issuance of the Notes and ending on the day immediately prior to the sixth anniversary of the date of issuance of the Notes, whereby the Company has the option but not the obligation to redeem the Notes at a redemption price equal to 150% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest thereon, limited to 30% of the aggregate principal amount of the Notes as of the issuance date, and from and after the sixth anniversary of the date of issuance of the Notes, the Company has the option to redeem any or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest thereon. The Notes also contain (i) certain repurchase requirements upon a change of control, (ii) make whole provisions upon a change of control, (iii) "weighted average" anti-dilution protection, subject to certain exceptions, (iv) an interest make-whole provision in the event that the Note Purchasers are forced to convert their Notes between the third and sixth anniversary of the date of issuance of the Notes whereby the Note Purchasers would receive the present value (using a 3.5% discount rate) of the interest they would have earned should their Notes so converted had been outstanding from such forced conversion date through the sixth anniversary of the date of issuance of the Notes, and (v) a debt incurrence covenant which would limit the ability of the Corporation to incur additional debt, under certain circumstances. As a result of certain rules of the American Stock Exchange, the Company expects to seek stockholder approval for the right to issue more than 20% of the Company’s outstanding common stock under certain terms of the Notes at its next annual meeting of stockholders. The amendment to the Securities Purchase Agreement substituted an amended form of the Note for the form of Note attached to the Securities Purchase Agreement and attached to the Prior Filing as Exhibit 10.2, and modified the Company's obligations under the Securities Purchase Agreement to pay certain legal fees of the Note Purchasers. The above description of the terms of the Notes is qualified in its entirety by the amended form of Note, which is being filed as Exhibit 10.3 to this Current Report on Form 8-K.

In connection with the Securities Purchase Agreement, the Company and the Note Purchasers entered into a Registration Rights Agreement, dated as of April 23, 2008, and the Company agreed to file a registration statement to register the resale of the Note Shares and the Warrant Shares within 45 days of the effective date of the registration statement filed for the shares issued in the Company’s private placement of equity of April 9, 2008 (the "Equity Placement"), provided that the Company will include the Note Shares and the Warrant Shares in the registration statement to be filed in connection with the Equity Placement upon receipt of the requisite consent of the investors therein, and to use commercially reasonable efforts to cause the registration statement to be declared effective within 90 days (or 120 days upon receipt of comments from the SEC) from the effective date of the registration statement filed for the shares issued in the Equity Placement, subject to the Company’s right to delay such obligations under certain circumstances. In the event the Company fails to meet its obligations, it will be subject to customary penalties.

The Company used approximately $69,000,000 of the net proceeds from the offering to finance the Acquisition described in Item 2.01 above. The remainder of the proceeds will be used for future acquisitions and working capital purposes relating to prior or future acquisitions.

All of the Purchasers represented that they were "accredited investors," as that term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"), and the sale of the Notes and Warrants was made in reliance on exemptions provided by Regulation D and Section 4(2) of the Securities Act.

In connection with the private placement, the Company incurred expenses which included, without limitation, commissions to the placement agent, legal and accounting fees, and other miscellaneous expenses, of approximately $5.3 million.

The Company did not use any form of advertising or general solicitation in connection with the sale of the Notes and the Warrants. The Notes, the Warrants, the Note Shares and the Warrant Shares will be non-transferable in the absence of an effective registration statement under the Securities Act, or an available exemption therefrom, and all certificates will be imprinted with a restrictive legend to that effect.
A press release regarding, among other things, the transaction is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.





This excerpt taken from the MEA 8-K filed Apr 24, 2008.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") dated as of April 23, 2008, among the Company and the purchasers named therein (the "Note Purchasers"). The Securities Purchase Agreement provides for the sale by the Company to the Note Purchasers of $100,000 of Senior Unsecured Convertible Notes (the "Notes") convertible into shares of common stock, par value $0.001 (the "Note Shares"), of the Company. Purchasers also received a total of 250,000 warrants ("Warrants") for shares of the Company’s common stock at an exercise price of $14.00 per share (subject to adjustment) with a term of six years. The initial conversion price of the Notes is $14.00 per share. The Notes will bear interest at 7% per annum, payable in cash, and will mature in April 2028. In addition, the Notes contain (i) an optional repurchase right exercisable by the Note Purchasers on the sixth, eighth and twelfth anniversary of the date of issuance of the Notes, whereby each Note Purchaser will have the right to require the Company to redeem the Notes under certain circumstances, and (iii) an optional redemption right exercisable by the Company beginning on the third anniversary of the date of issuance of the Notes and ending on the day immediately prior to the sixth anniversary of the date of issuance of the Notes, whereby the Company shall have the option but not the obligation to redeem the Notes at a redemption price equal to 150% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest thereon, limited to 30% of the aggregate principal amount of the Notes as of the issuance date, and from and after the sixth anniversary of the date of issuance of the Notes, the Company shall the option to redeem any or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest thereon. The Notes also contain (i) certain repurchase requirements upon a change of control, (ii) make whole provisions upon a change of control, (iii) "weighted average" anti-dilution protection, subject to certain exceptions, (iv) an interest make whole provision in the event that the Note Purchasers are forced to convert their Notes between the third and sixth anniversary of the date of issuance of the Notes whereby the Note Purchasers would receive the present value (using a 3.5% discount rate) of the interest they would have earned should their Notes so converted had been outstanding from such forced conversion date through the sixth anniversary of the date of issuance of the Notes, and (v) a debt incurrence covenant which would limit the ability of the Corporation to incur debt, under certain circumstances. The transactions contemplated by the Securities Purchase Agreement are expected to close promptly, subject to customary closing conditions, including approval of the listing of the Note Shares on the American Stock Exchange. As a result of certain rules of the American Stock Exchange, the Company expects to seek stockholder approval for the right to issue more than 20% of the Company’s outstanding common stock pursuant to the terms of the Notes at its next annual meeting of stockholders.

On April 24, 2008, the Company issued a press release announcing, among other things, its entry into a binding Securities Purchase Agreement and describing the transactions contemplated thereby. The full text of the press release is attached hereto as Exhibit 99.1.

All of the Purchasers represented that they were "accredited investors," as that term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"), and the sale of the Notes and Warrants was made in reliance on exemptions provided by Regulation D and Section 4(2) of the Securities Act.

In connection with the Securities Purchase Agreement, the Company and the Note Purchasers entered into a Registration Rights Agreement, dated as of April 23, 2008, and the Company agreed to file a registration statement to register the resale of the Shares within 45 days of the effective date of the registration statement filed for the shares issued in the Company’s private placement of equity of April 9, 2008 (the "Equity Placement"), subject to the Note Shares and shares underlying the Warrants to be issued being included in the registration statement to be filed in connection with the Equity Placement, and to use commercially reasonable efforts to cause the registration statement to be declared effective within 90 days (or 120 days upon receipt of comments from the SEC), subject to the Company’s right to delay such obligations under certain circumstances. In the event the Company fails to meet its obligations, it will be subject to customary penalties.

In connection with the private placement, the Company incurred expenses which included, without limitation, commissions to the placement agent, legal and accounting fees, and other miscellaneous expenses, of approximately $4.6 million.

The Company intends to use approximately $69,000,000 of the net proceeds from the offering to finance the Acquisition described in Item 1.01 above and the remainder of the proceeds will be used for future acquisitions and working capital purposes relating to prior or future acquisitions.

The Company did not use any form of advertising or general solicitation in connection with the sale of the Notes and the Warrants. The Notes and the Warrants and the shares of common stock underlying the Notes and the Warrants will be non-transferable in the absence of an effective registration statement under the Securities Act, or an available exemption therefrom, and all certificates will be imprinted with a restrictive legend to that effect.





This excerpt taken from the MEA 8-K filed Mar 28, 2008.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On March 24, 2008, the Company entered into the Third Amendment the "Amendment") to the Amended and Restated Loan and Security Agreement dated as of July 3, 2007 (the "Loan Agreement") among the Company and several of its subsidiaries (the "Borrowers") and Wells Fargo Foothill, Inc., as arranger and administrative agent, and the institutional lenders party thereto (the "Lenders"). The Amendment provides for an increase in the maximum amount available under the Loan Agreement to $100,000,000, including $78,000,000 under the revolving credit facility. The Amendment also resets the Company's minimum "EBITDA" and maximum capital expenditure covenants. The remaining material terms of the Loan Agreement remain unchanged by the Amendment. On March 28, 2008, the Company issued a press release announcing, among other things, its entry into the Amendment. The full text of the press release is attached hereto as Exhibit 99.1.


The description of the Amendment in this Current Report on Form 8-K does not purport to be complete and is qualified in its entirety by reference to the text of the Amendment filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.





This excerpt taken from the MEA 8-K filed Jan 29, 2008.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On January 25, 2008, the Company entered into an amendment (the "Amendment") to its Financing Agreement (the "Financing Agreement") with Ableco Finance, LLC providing for an additional term loan in the amount of $17.15 million maturing in 2013. The loan is guaranteed by the Company's subsidiaries and bears interest at (a) (i) the greater of 7.5% per annum and the "Reference Rate" (a rate determined by reference to the prime rate) plus (ii) 3.5% or (b) at the Company’s election, (i) the greater of 4.5% per annum and the current LIBOR rate plus (ii) 6.5%. The Amendment also modifies certain restrictions set forth in the Financing Agreement to allow for the terms of the acquisitions described in Item 2.01 above and an adjustment to an EBITDA covenant. The proceeds of the new term loan provided a portion of the consideration for the acquisitions described in Item 2.01 above.

The above description of the terms of the Amendment to the Financing Agreement is qualified in its entirety by the Amendment, which is being filed as Exhibit 10.3 to this Current Report on Form 8-K.





This excerpt taken from the MEA 8-K filed Jul 5, 2007.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Ableco Financing Agreement

On July 3, 2007, Metalico, Inc. (the "Company") entered into a Financing Agreement (the "Financing Agreement") with Ableco Finance, LLC ("Ableco"). The Financing Agreement provides for two term loans in the respective amounts of up to $32 million and $18 million, both maturing in six years, and is guaranteed by certain of the Company's subsidiaries. Each loan bears interest at (a) (i) the greater of 7.5% per annum and the "Reference Rate" (a rate determined by reference to the prime rate) plus (ii) 3.5% or (b) at the Company’s election, the current LIBOR rate plus 6.5%. Pursuant to the Financing Agreement, the Company will be subject to certain operating covenants and will be restricted from, among other things, paying cash dividends, repurchasing its common stock, and entering into certain transactions without the prior consent of Ableco and other lenders at such time as they may become party to the Financing Agreement. In addition, the Financing Agreement contains certain financial covenants, including leverage ratio, debt-to-EBITDA ratio, fixed charge coverage ratio, and capital expenditure covenants. Obligations under the Financing Agreement are secured by substantially all of the Company’s assets. Liens in favor of Ableco are subordinated to liens in favor of Foothill provided under the Loan Agreement described below.

Foothill Loan Agreement

On July 3, 2007, the Company, together with certain of its direct and indirect subsidiaries, entered into an Amended and Restated Loan and Security Agreement (the "Loan Agreement") with Wells Fargo Foothill, Inc. ("Foothill"). The new six-year facility consists of senior secured credit facilities in the aggregate amount of $85 million, including a $63 million revolving line of credit (the "Revolver"), an $8 million machinery and equipment term loan facility, a $2 million capital expenditure term loan facility, and a $12 million equipment finance term line. The Revolver provides for revolving loans which, in the aggregate, are not to exceed the lesser of $63 million or a "Borrowing Base" amount based on specified percentages of eligible accounts receivable and inventory and bears interest at the "Base Rate" (a rate determined by reference to the prime rate) plus .25% or, at the Company’s election, the current LIBOR rate plus 2%. Each of the term loans bears interest at the Base Rate plus .25% or, at the Company’s election, the current LIBOR rate plus 2.25%. The Company also has the right to request in increase in the aggregate principal amount of the Foothill facilities of an additional $15 million, subject to increased commitments from the lenders party to the Loan Agreement. Pursuant to the Loan Agreement, the Company will be subject to certain operating covenants and will be restricted from, among other things, paying cash dividends, repurchasing its common stock over certain stated thresholds, and entering into certain transactions without the prior consent of Foothill and other lenders at such time as they may become party to the Loan Agreement. In addition, the Loan Agreement contains certain financial covenants, including minimum EBITDA, fixed charge coverage ratio, and capital expenditure covenants. Obligations under the Loan Agreement are secured by substantially all of the Company’s assets.

The proceeds of the Financing Agreement and the Loan Agreement are to be used for present and future acquisitions, working capital, and general corporate purposes.

The above descriptions of the terms of the Financing Agreement and the Loan Agreement are qualified in their entirety by the Financing Agreement and the Loan Agreement, which are being filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K.

On July 5, 2007, the Company issued the press release attached to this Current Report on Form 8-K as Exhibit 99.1.





This excerpt taken from the MEA 8-K filed Jun 4, 2007.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 31, 2007, the Company entered into the Seventeenth Amendment and Consent (the "Amendment") to the Loan and Security Agreement dated as of May 31, 2001 (the "Loan Agreement") among the Company and several of its subsidiaries (the "Borrowers") and Wells Fargo Foothill, Inc. (the "Lender"). The Amendment provides for an increase in the maximum amount available under the Loan Agreement to $40,000,000, including $32,000,000 under the revolving credit facility. The closing of the Amendment formalizes the first portion of the Lender's previously announced approval of an increase in such maximum amount to $50,000,000. The Amendment increases the advance rate for inventory under the Loan Agreement's borrowing base formula to (a) 70% from the May 31, 2007 through and including August 29, 2007; (b) 65% from the August 30, 2007 through and including November 27, 2007; and (c) 60% at all times thereafter. The Amendment also provides for additional draws of previously repaid amounts under the Loan Agreement's term loan facilities and consents to the Company's acquisition of Transact Corporation to the extent such consent may be required. The remaining material terms of the Loan Agreement remain unchanged by the Amendment.





The information furnished in this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.


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.

         
    Metalico, Inc.
          
June 4, 2006   By:   Carlos E. Aguero
       
        Name: Carlos E. Aguero
        Title: Chairman, President and Chief Executive Officer
This excerpt taken from the MEA 8-K filed Apr 11, 2006.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On April 11, 2006, but effective as of April 10, 2006, Metalico, Inc. (the "Company"), amended its secured revolving credit facility pursuant to the Twelfth Amendment and Consent (the "Amendment") to the Loan and Security Agreement dated as of May 31, 2001 (the "Loan Agreement") among the Company and several of its subsidiaries (the "Borrowers") and Wells Fargo Foothill, Inc. (the "Lender"). The Amendment provides for the activation of an additional $7,500,000 in borrowing availability, subject to the existing borrowing base formula, increasing the maximum amount available under the Loan Agreement to $35,000,000. The Amendment also provides for issuance of a new term loan under the Loan Agreement in the principal amount of $1,260,000, included in the maximum available amount stated above but maturing on April 10, 2007, and consents to the acquisition of certain real property near Syracuse, New York and the potential sale of certain other assets of the Company. The Lender's consent to these actions does not obligate the Company to consummate them. The remaining material terms of the Loan Agreement remain unchanged by the Amendment.





The information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.


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.

         
    Metalico, Inc.
          
April 11, 2006   By:   Carlos E. Aguero
       
        Name: Carlos E. Aguero
        Title: Chairman, President and Chief Executive Officer

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