SEVCON, INC. (NASDAQ:SEV) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
| Entry into a Material Definitive Agreement. |
On May 22, 2017, Sevcon, Inc. (the Company) entered into a loan
agreement (the Loan Agreement) with FrontFour Capital Group, LLC
(the Lender), to which the Lender made a commitment to the
Company to provide an unsecured term loan in the principal amount
of $10 million dollars (the Term Loan). The period of the Lenders
commitment under the Loan Agreement began on the date the Company
entered into the Loan Agreement, and terminates on (i) August 22,
2017, or (ii) if the Company chooses to request an extension,
November 22, 2017. The Company paid a commitment fee to the
Lender of $450,000. If the Company elects to extend the
commitment period, it will be required to pay the Lender an
additional $150,000 extension fee.
Under the Loan Agreement, the Lender agrees to advance the full
amount of the Term Loan to the Company in up to three
disbursements on the date or dates requested by the Company
within the commitment period. The interest rate on amounts
borrowed under the Loan Agreement will be 10% per annum.
The Term Loan, which will be pari passu with the Companys
existing senior credit facility with Banca Del Monte Dei Paschi
Di Siena S.p.A., will mature and be repayable in full one year
from the first date on which the Company requests a disbursement
from the Lender under the Loan Agreement; provided that maturity
would accelerate upon an event of default, a change of control,
or the Companys repayment of all amounts due under the Banca Del
Monte Dei Paschi Di Siena S.p.A. credit facility. The Loan
Agreement provides for mandatory prepayment in the event that the
Company receives net cash proceeds from an equity issuance, in an
amount equal to such net cash proceeds. The Loan Agreement also
provides for voluntary prepayment at any time without penalty.
The Loan Agreement imposes customary limitations on the Companys
ability to, among other things, dispose of certain assets other
than the sale of inventory in the ordinary course, incur liens,
incur additional indebtedness, and engage in transactions with
affiliates.
The Loan Agreement provides for events of default customary for
credit facilities of this type, including, but not limited to,
bankruptcy, non-payment, breach of covenants, and insolvency.
Upon an event of default, the interest rate would be increased
and the Lender may elect a number of remedies including, but not
limited to declaring all obligations (including principal,
interest and expenses) immediately due and payable.
| Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure under Item 1.01 is incorporated herein by
reference.
About SEVCON, INC. (NASDAQ:SEV)
Sevcon, Inc. designs and sells motor controllers for zero emission electric and hybrid vehicles (EVs), under the Sevcon name. The Company operates through two segments: electronic controls and capacitors. The electronic controls segment produces microprocessor-based control systems for zero emission and hybrid electric vehicles. The capacitor segment produces metalized film capacitors for sale to electronic equipment manufacturers. Its controls are used to vary the speed and movement of vehicles. The Company’s customers are manufacturers of on and off-road vehicles, including cars, trucks, buses, motorcycles, fork lift trucks, aerial lifts, mining vehicles, airport tractors and other electrically powered vehicles. Its products and accessories for two wheel pure EVs, four wheel pure EVs, hybrid vehicles and industrial electric vehicles include alternating current (AC) controllers, direct current (DC) controllers, battery chargers, DC/DC converters, displays and power steering. SEVCON, INC. (NASDAQ:SEV) Recent Trading Information
SEVCON, INC. (NASDAQ:SEV) closed its last trading session down -0.22 at 15.92 with 5,467 shares trading hands.
