Item 1.01 - Entry into a Material Definitive Agreement
Paycheck Protection Program Loan
On
The Loan is evidenced by a Paycheck Protection Program Term Note, dated as of
The proceeds of the Loan may only be used for payroll expenses, rent, utilities, mortgage interests, and interest on other pre-existing indebtedness (the "permissible purposes"). In order to obtain full or partial forgiveness of the Loan, the Company must request forgiveness and must provide satisfactory documentation in accordance with applicable SBA guidelines. The Company will be obligated to repay any portion of the principal amount of the Note that is not forgiven, together with interest accrued and accruing thereon at the rate set forth above, until such unforgiven portion is paid in full. The Company intends to use the Loan proceeds for permissible purposes only and to apply for forgiveness of the Loan in accordance with the terms of the CARES Act; however, the Company can provide no assurances that it will be eligible for forgiveness of the Loan, in whole or in part.
Under the terms of the CARES Act, the Loan, and interest accrued thereon, is forgivable, partially or in full, if certain conditions are met. The most significant of the conditions are: •only amounts expended for permissible purposes during the eight week period following Loan disbursement onApril 29, 2020 are eligible for loan forgiveness; •of the total amount of expenditures for which forgiveness can be granted, at least 75% must be for payroll expenses, or a proportionate reduction of the maximum loan forgiveness amount will occur; and •if there are reductions in headcount (or employee compensation is reduced by more than 25%) during the eight week period, a further reduction of the maximum loan forgiveness amount will occur.
The foregoing is only a summary of certain provisions of the Note and is qualified in its entirety by the full text of the Note, which is attached to this Current Report on Form 8-K as Exhibits 10.1 and incorporated herein by reference.
2
--------------------------------------------------------------------------------
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Reference is made to the disclosure under Item 1.01 above which is hereby incorporated in this Item 2.03 by reference.
Item 9.01 - Financial Statements and Exhibits
(d) The following exhibit is filed herewith: Exhibit Number Description 10.1 Paycheck Protection Program Term Note, datedApril 28, 2020 , betweenA.M. Castle & Co. andPNC Bank, National Association 3
--------------------------------------------------------------------------------
© Edgar Online, source