FTE NETWORKS, INC. (OTCMKTS:FTNW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On February 12, 2019, FTE Networks, Inc. (“FTE”) and certain of its wholly-owned subsidiaries (collectively, the “Company”) entered into Amendment No. 4 (the “Fourth Amendment”) to that certain credit agreement, by and among with Jus-Com, Inc., an Indiana corporation and subsidiary of FTE (Jus-Com), certain Credit Parties (as defined therein), Lateral Juscom Feeder LLC (“Lateral”) and several lenders party thereto (together with Lateral, the “Lenders”) dated October 28, 2015 (as amended, the “Credit Agreement”) to provide for $12,631,578.90 in delayed draw loans (the “Term Loans”). The Term Loans mature on March 31, 2019 and bear an interest rate of 16% per annum, payable quarterly in arrears to the terms of the Credit Agreement. In addition, the Company and the Lenders have agreed to enter into a restructuring support agreement, in form and substance acceptable to the Lenders in their sole discretion, on or prior to February 28, 2019. The Fourth Amendment is deemed to be part of the Credit Agreement and an obligation of the Company thereunder.
In addition to customary terms and conditions applicable to a term loan under the Credit Agreement, the Fourth Amendment also provides for (i) amendments to Fred Sacramone and Brian McMahon’s respective employment agreements with Benchmark Builders, Inc., a New York corporation and subsidiary of FTE.; (ii) the issuance of a promissory to Fred Sacramone in the principal amount of $1,000,000 (the “Sacramone Note”), which note matures on March 31, 2019 and bears an interest rate of 12% per annum; and (iii) the appointment of a finance transformation officer.
The foregoing description of the Fourth Amendment does not purport to be complete and is qualified in its entirety by reference to the following, each of which is incorporated herein by reference: (i) the Amendment No. 4 to Credit Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K, (ii) the Credit Agreement filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on November 3, 2015, (iii) Amendment No. 3 to the Credit Agreement filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K on April 25, 2017 and (iv) the Company’s Current Reports on Form 8-K filed with the SEC on November 3, 2015, November 17, 2015, December 4, 2015 and April 25, 2017.
Item 2.03 Creation of a Direct Financial Obligation
To the extent applicable, the information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
In connection with the Fourth Amendment set forth in Item 1.01 above, FTE issued an aggregate of 1,698,580 shares of FTE common stock to the Lenders (the “Fourth Amendment Shares”). The issuance of the Fourth Amendment Shares by FTE to the Lenders was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as the offer and sale of the Fourth Amendment Shares does not involve a public offering of FTE’s common stock. FTE has determined that the Lenders are “accredited investors” within the meaning of Rule 501(a) under the Securities Act. The certificate or book-entry designations representing the Fourth Amendment Shares will bear appropriate legends to the effect that such securities have not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of an effective registration statement under the Securities Act and applicable state securities laws or an exemption from registration thereunder.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
FTE Networks, Inc. Exhibit
EX-10.1 2 ex10-1.htm EXECUTION VERSION AMENDMENT NO. 4 TO CREDIT AGREEMENT AMENDMENT NO. 4 TO CREDIT AGREEMENT dated as of February 12,…
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About FTE NETWORKS, INC. (OTCMKTS:FTNW)
FTE Networks, Inc., (FTE Networks) is a provider of international and regional telecommunications and technology systems, and infrastructure services. The Company’s segments are Telecommunications and Staffing. It also offers managed information technology, telecommunications services, subscriber-based services and staffing solutions through its subsidiaries, Jus-Com, Inc. (doing business as FTE Network Services), FTE Wireless, LLC and Focus Venture Partners, Inc. (doing business as FVP Worx). Its services include engineering consulting, design, installation, maintenance and emergency response in various categories, including cabling, equipment installation and configuration, rack and stack, wiring build-outs, infrastructure build-outs, direct current power installation, online service provider/Internet service provider fiber placement, fiber cable splicing and testing. In the wireless space, it provides engineering, design, installation and upgrade of wireless communications networks.
