Point.360 8-K 2010
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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:
Item 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
On January 29, 2010, Point.360 (the “Company”) and Bank of America, N.A. (the “Bank”) agreed to terminate the Amended and Restated Standard Loan Agreement dated August 25, 2009 (the “Agreement”). The Agreement provided until October 31, 2010 up to $5 million of revolving credit based on eligible accounts receivable, which amount was reduced to $1 million and $0.5 million pursuant to November 12, 2009 and January 29, 2010 forbearance Agreements (the “Forbearances”) between the Company and Bank.
The reduction of credit availability pursuant to the Forbearances was due to the Company’s failure to meet minimum fixed charge ratio covenant requirements as of September 30 and December 31, 2009. The termination reflects the Company’s desire to avoid the continuing costs associated with the Agreement that has solely been used for a $0.5 million standby letter of credit. The $0.5 million standby letter of credit created pursuant to the Agreement must be replaced or fully collateralized by cash by March 31, 2010.
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.