Smart Sand Inc.
09/09/2024 | Press release | Distributed by Public on 09/09/2024 06:06
Material Agreement Form 8 K
Item 1.01 Entry into a Material Definitive Agreement.
On September 3, 2024, Smart Sand, Inc. (the "Company") entered into a new five-year senior secured asset-based credit facility (the "ABL Credit Facility") pursuant to: (i) a credit agreement among the Company, the subsidiary borrowers and guarantors party thereto, First-Citizens Bank & Trust Company, as issuing bank, swingline lender and agent, and certain other lenders from time to time party thereto (the "Credit Agreement"); and (ii) a guarantee and collateral agreement among the Company, the subsidiary borrowers and guarantors party thereto and First-Citizens Bank & Trust Company, as agent (the "Security Agreement").
The ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30.0 million, subject to a borrowing base comprised of eligible inventory and accounts receivable (subject to certain reserves and customary conditions). Approximately $1.0 million was drawn on the ABL Credit Facility at closing and an additional $29.0 million remains available under the initial borrowing base. Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable margin of 2.75% plus the secured overnight financing rate (SOFR).
All obligations under the ABL Credit Facility are guaranteed on a senior basis by our wholly-owned domestic subsidiaries, subject to certain exceptions, and are secured, subject to permitted liens and other exceptions (which exceptions include all of our owned real estate and sand reserves), by a first-priority security interest in our assets.
The ABL Credit Facility contains a number of covenants that, among other things, restrict our ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and dispose of assets. In addition, the ABL Credit Facility requires us in certain limited circumstances to maintain a minimum fixed charge coverage ratio of 1.1 to 1.0. The ABL Credit Facility also contains certain affirmative covenants and events of default customary for facilities of this type.
The above summary does not purport to be a complete description of the Credit Agreement and Security Agreement and is qualified in its entirety by the contents of the Credit Agreement and Security Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K.