| Item 1.01 | Entry into a Material Definitive Agreement. |
Third Amended and Restated Master Loan and Security Agreement
OP SPE Borrower Parent, LLC (“SPE”), as borrower, OP SPE PHX1, LLC (“PHX1”), as borrower, and OP SPE TPA1, LLC (“TPA1”), as borrower, each an indirect wholly owned subsidiary of Offerpad Solutions Inc. (the “Company”), entered into a Third Amended and Restated Master Loan and Security Agreement (the “SPE Amendment”), dated as of June 7, 2022, which amends and restates that certain Second Amended and Restated Master Loan and Security Agreement, dated as of June 23, 2021, by and among SPE, PHX1, TPA1, Citibank, N.A., as lender, and Wells Fargo Bank, N.A., as calculation agent and paying agent.
The SPE Amendment, among other things, (i) amends provisions relating to interest rates to transition calculations from the London Interbank Offered Rate (LIBOR) plus an applicable margin to the Secured Overnight Financing Rate (SOFR) plus an applicable margin and (ii) extends the maturity date from August 25, 2022 to June 7, 2024. In connection with the SPE Amendment, the borrowing capacity under the facility was increased from $400.0 million to $600.0 million.
The foregoing does not purport to be a complete description of the terms of the SPE Amendment and such description is qualified in its entirety by reference to the SPE Amendment, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Chief Operating Officer Transition
Effective June 2, 2022, Stephen Johnson, the Company’s former Chief Operating Officer, transitioned to the role of Chief Strategy Officer to further support the Company’s strategic efforts and priorities.
CFO and CLO Amended and Restated Employment Agreements
Effective June 6, 2022, the Company entered into amended and restated employment agreements (each, an “Employment Agreement”) with Michael Burnett and Benjamin Aronovitch, the Company’s Chief Financial Officer and Chief Legal Officer, respectively. The material terms and conditions of the Employment Agreements are summarized below.
The term of employment under the Employment Agreements is for one year, and will automatically renew for successive one-year periods, unless either party provides at least 45 days of advance written notice of the party’s intention not to renew the then-current term. Pursuant to the Employment Agreements, Messrs. Burnett and Aronovitch are entitled to receive annual base salaries of $400,000 and $375,000, respectively, pro-rated for partial years of employment and subject to annual review and increase by the Board or a subcommittee thereof in its discretion. In addition, they are eligible to earn annual cash performance bonuses, based on the achievement of individual and/or Company performance goals established by the Board, and targeted at 75% of their then-current annual base salary. The payment of any annual bonus, to the extent any such bonus becomes payable, will be made no later than March 15 of the calendar year following the calendar year for which the Board certifies in writing that performance goals have been met; any such payment will be contingent upon the executives’ continued employment through the last day of the applicable calendar year.
In addition, Messrs. Burnett and Aronovitch are eligible to receive equity-based compensation awards as determined by the Board (or a subcommittee thereof) from time to time. Messrs. Burnett and Aronovitch also are eligible to participate in the health and welfare benefit plans and programs maintained by us for the benefit of our employees, as well as the paid-time-off programs maintained by us for the benefit of our executives generally.
Under the Employment Agreements, on a termination of the employment of Messrs. Burnett or Aronovitch by the Company without “Cause”, by the executive for “Good Reason” (each, as defined in the Employment Agreements) or by reason of a non-renewal of the term by the Company (each, a “Qualifying Termination”), the executive is eligible to receive the following severance payments and benefits:
| | (i) | (A) an amount equal to the executive’s then-current annual base salary, payable in substantially equal installments in accordance with the Company’s normal payroll practices over 12 months following the date of termination; or (B) if such Qualifying Termination occurs within the period commencing three months prior to and ending one year following the date on which a Change in Control (as defined in the 2021 Plan) is consummated (a “CIC Termination”), an amount |
