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Item 1.01.
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Entry Into a Material Definitive Agreement.
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The information provided in the Introductory Note of this Current Report on Form 8-K (this “Current Report”) is incorporated herein by
reference.
On the Closing Date, the Company entered into a credit agreement (as amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) by and among Parent, as Lead Borrower, Marlin Midco, Inc., a Delaware corporation, as Holdings, the Company and certain of its wholly owned subsidiaries, as Guarantors (Parent, Holdings, the Company and the
Guarantors are collectively referred to as the “Loan Parties”), KKR Loan Administration Services LLC, as Administrative Agent and Collateral Agent, Callodine Commercial Finance, LLC, as FILO Agent, and the financial institutions from time to
time party thereto, as Lenders.
The Credit Agreement provides for a senior secured asset-based revolving facility in an aggregate principal amount of $65.0 million (the “ABL
Facility”), a senior secured term credit facility in an aggregate principal amount of $20.0 million (the “Series A FILO Facility”), and a senior secured term credit facility in an aggregate principal amount of $15.0 million (the “Series
B FILO Facility” and, together with the Series A FILO Facility, the “FILO Facilities”).
The proceeds of the loans under the ABL Facility were used to (i) fund working capital needs and for general corporate purposes,
(ii) pay the costs related to the acquisition of Company by Parent (the “Acquisition”), (iii) repay the total outstanding indebtedness of the Company (as further described under Item 1.02 below), and (iv) pay certain transaction fees and
expenses associated with the Acquisition, the Merger and the Credit Agreement. The proceeds of the loans under the FILO Facilities were used for the purposes under (ii), (iii) and (iv) above.
The Series B FILO Facility must be repaid (x) in an
amount equal to $3.75 million on November 1, 2022 and (y) in quarterly installments, each of $1.25 million, commencing on February 1, 2023 and continuing on the first day of each calendar quarter thereafter, subject to certain liquidity conditions
to be met. Neither the ABL Facility nor the Series A FILO Facility have any amortization. To the extent not previously paid, all then-outstanding amounts under the FILO Facilities are due and payable on the maturity date of the FILO Facilities, which is two-and-a half (2.5) years from the Closing Date. Borrowings under the
ABL Facility are available beginning on the Closing Date and, to the extent not previously paid, all then-outstanding amounts under the ABL Facility are due and payable on the maturity date of the ABL Facility, which is two-and-a half
(2.5) years from the Closing Date. Both the maturity date of the ABL Facility and of the FILO Facilities shall spring to three-and-a half (3.5) years after the Closing
Date to the extent Free Cash Flow (as defined in the Credit Agreement) after the Closing Date for the Lead Borrower and the Guarantors is positive for any consecutive 8-month period as demonstrated by annual, quarterly, or monthly financial
statements delivered to the Administrative Agent. The Credit Agreement includes customary representations, warranties, covenants and events of default.
At the option of the Lead Borrower, borrowings under the ABL Facility (subject to certain limitations) bear interest at either a
base rate or at a term SOFR (both as determined with respect to the ABL Facility pursuant to the Credit Agreement), plus the applicable margin as set forth therein from time to time. At the option of the Lead Borrower, all borrowings under the FILO
Facilities, bear interest at either a base rate or at a FILO rate (both as determined with respect to the FILO Facilities pursuant to the Credit Agreement), plus the applicable margin as set forth therein from time to time. If an Event of Default
(as defined in the Credit Agreement) shall have occurred and be continuing, upon election of the required lenders, all outstanding amounts under the ABL Facility and under the ABL Facility shall bear interest at the default rate (as determined
pursuant to the Credit Agreement).
Parent and Holdings have agreed to secure all of their
obligations under the Credit Agreement by granting a first priority lien on substantially all of their assets (subject to certain exceptions
and limitations), and each of the Company, Casper Science LLC and Casper Sleep Retail LLC (collectively, the “Guarantors”) has agreed to guarantee the obligations of Holdings and Parent under the Credit Agreement and to secure the
obligations thereunder by granting a first priority lien in substantially all of such Guarantor’s assets (subject to certain exceptions and limitations).
The Credit Agreement also includes other covenants, including negative covenants that, subject to certain exceptions, limit the
Loan Parties’ ability to, among other things: (i) incur additional debt, including guarantees, (ii) create liens upon any of their property, (iii) enter into any merger, consolidation or amalgamation, liquidate, wind up or dissolve, (iv) dispose of
assets, including any notes or accounts receivable or any rights and claims associated therewith, (v) make restricted payments, including provide certain conditions to the ability of any Loan Party to pay dividends or make distributions, (vi) pay
subordinated debt, (vii) make certain investments, (viii) engage in transactions with affiliates, (ix) deposit cash into accounts or accept payments, and (xi) permit liquidity to be less than certain agreed amounts (subject to certain exceptions and
conditions allowing such amounts to be reduced).
The Credit Agreement also contains customary provisions
requiring the following mandatory prepayments (subject to certain exceptions and
limitations): (i) prepayments of the ABL Facility whenever the outstanding amounts thereunder exceed the Tranche A Loan Cap (as defined in the Credit Agreement), (ii) upon occurrence of certain specified events of defaults, failure by the borrowers
to maintain a certain level of liquidity, or ninety days before the maturity date of the ABL Facility or the FILO Facilities, (iii) 100% of the net cash proceeds from any permitted sale or issuance of equity interest of Holdings or any of its
direct or indirect parent companies or from any capital contribution to the capital of the Loan Parties, and (iv) 100% of the net cash proceeds from any of indebtedness not permitted to be incurred or issued under the Credit Agreement.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to
such agreements.
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Item 1.02.
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Termination of a Material Definitive Agreement.
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The information provided in the Introductory Note of this Current Report is incorporated herein by reference.
At the closing of the Merger, the Company repaid in full (except for existing contingent reimbursement obligations under certain existing letters of
credit which were cash collateralized or otherwise backstopped) all indebtedness and other amounts outstanding and owed under that certain credit agreement, dated as of November 10, 2020 (and as thereafter amended or supplemented, the “Wells Fargo
Credit Agreement”), by and among the Company, as borrower, certain of its subsidiaries as co-borrowers, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as Agent, L/C Issuer and Swing Line Lender, and
terminated the Wells Fargo Credit Agreement. The Company paid an aggregate of approximately $15.70 million to repay all amounts due with respect to termination of the Wells Fargo Credit Agreement. In connection with the termination of the Wells
Fargo Credit Agreement, all other related loan documents were terminated and all liens and encumbrances granted by the Company and its subsidiaries in favor of Wells Fargo Bank, National Association, as Agent, were terminated and released.
At the closing of the Merger, the Company also repaid in full all indebtedness and other amounts outstanding and owed under that certain plain english
growth capital loan and security agreement, dated as of March 1, 2019 (and as thereafter amended and supplemented, the “Growth Capital Loan Agreement”), by and among the Company, as borrower, certain of its subsidiaries as co-borrowers, the
lenders from time to time party thereto, and Triplepoint Venture Growth BDC Corp., a Maryland corporation, as Collateral Agent and Lender, and Triplepoint Capital LLC, a Delaware limited liability company, as Lender, and terminated the Growth Capital
Loan Agreement. The Company paid an aggregate of approximately $70.84 million to repay all amounts due with respect to termination of the Growth Capital Loan Agreement. In connection with the termination of the Growth Capital Loan Agreement, all
other related loan documents were terminated and all liens and encumbrances granted by the Company and its subsidiaries in favor of Triplepoint Venture Growth BDC Corp., as Collateral Agent, were terminated and released.
