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| ITEM 1.01 | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
On February 22, 2023, Rimini Street, Inc. (the “Company”) entered into Amendment No. 4 (the “Amendment”) to that certain Credit Agreement dated as of July 2, 2021, as amended by Amendment No. 1 thereto dated July 20, 2021, Amendment No. 2 thereto dated January 14, 2022, and Amendment No. 3 thereto dated May 31, 2022 (as amended, restated, modified or supplemented from time to time, the “Credit Agreement”), among, inter alia, the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto and Capital One, National Association, as a lender and administrative agent.
The Amendment implemented certain changes in the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”). On February 28, 2023, effective date of the Amendment, the Company will have a choice of interest rates between (a) Adjusted Term SOFR and (b) Base Rate, in each case plus an applicable margin. The applicable margin remains the same as the existing Credit Agreement and is based on the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and whether the Company elects Adjusted Term SOFR (ranging from 1.75 to 2.50%) or Base Rate (ranging from 0.75 to 1.50%).
In addition, the Amendment amended the definition of Consolidated EBITDA to provide an addback for the fourth fiscal quarter of 2022, and any period including such quarter, that costs and legal fees and expenses incurred by the Company in connection with its ongoing litigation with Oracle up to $10 million can be added back, increasing the applicable calculation of the Consolidated EBITDA.
Based on voluntary prepayments made to date under the Credit Agreement, the Company currently has $40 million in incremental borrowings available for future use at rates of (i) Adjusted Term SOFR, plus an applicable margin (ranging from 1.75 to 2.50%), or (ii) Base Rate, plus an applicable margin (ranging from 0.75 to 1.50%), under the same terms and maturity date as other borrowings under the Credit Agreement. This amount available is $5 million higher than when the Credit Agreement first became effective on July 2, 2021.
The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
The representations, warranties and covenants contained in the Amendment and in the Credit Agreement were made only for the Credit Agreement, as amended, and as of the specific dates, were solely for the benefit of the parties thereto, may have been used for purposes of allocating risk between each party rather than establishing matters of fact, may be subject to a contractual standard of materiality different from that generally applicable to investors and may be subject to qualifications and limitations and schedules agreed upon by the parties in connection with the negotiated terms. Accordingly, the Amendment is incorporated herein by reference only to provide investors with information regarding the terms of the Amendment and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.