| Item 1.01 | Entry into a Definitive Material Agreement. |
On June 30, 2022, Pyxus International, Inc. (the “Company”) and certain subsidiaries of the Company, including the Company’s subsidiaries in Malawi, Tanzania and Zambia (the “African Subsidiaries”), entered into the Fourth Amendment and Restatement Agreement dated as of June 27, 2022 (the “Agreement”) with Eastern and Southern African Trade and Development Bank (“TDB”) to amend and restate the Third Amendment and Restatement Agreement dated August 12, 2021 among them. The Agreement sets forth the terms that govern the foreign seasonal lines of credit of each of the African Subsidiaries with TDB and supersedes the prior terms in effect. The Agreement provides for a lending commitment with respect to the line of credit of the Company’s Malawi subsidiary of $100.0 million, a lending commitment with respect to the line of credit of the Company’s Tanzania subsidiary of $70.0 million, and a lending commitment with respect to the line of credit of the Company’s Zambia subsidiary of $15.0 million, in each case with current borrowing availability reduced by the amount of outstanding loans borrowed under the respective existing line of credit with TDB. Existing outstanding loans under the Agreement bear interest at LIBOR plus 6% and new loans made under the Agreement will bear interest at LIBOR plus 5.5%. The Agreement terminates on June 30, 2024, unless terminated sooner at TDB’s discretion on June 30, 2023. The terms of the Agreement may also be modified at TDB’s discretion on that date. Borrowings under the Agreement are due upon the termination of the Agreement.
Pursuant to the Agreement, each of the Company and its subsidiaries, Pyxus Parent, Inc. and Pyxus Holdings, Inc., guarantee the obligations of the African Subsidiaries under the Agreement. In addition, the Agreement provides that obligations of each African Subsidiary under the Agreement are secured by a first priority pledge of:
| | • | | tobacco purchased by that African Subsidiary that is financed by TDB; |
| | • | | intercompany receivables arising from the sale of the tobacco financed by TDB; |
| | • | | customer receivables arising from the sale of the tobacco financed by TDB; and |
| | • | | such African Subsidiary’s local collection account receiving customer payments for purchases of tobacco financed by TDB. |
The Agreement also requires Alliance One International, LLC, a subsidiary of the Company, to pledge customer receivables arising from the sale of the tobacco financed by TDB and pledge its collection accounts designated for receiving customer payments for purchases of tobacco financed by TDB.
The Agreement contains affirmative and negative covenants (subject, in each case, to customary and other exceptions and qualifications), including covenants that limit the ability of the African Subsidiaries to, among other things:
| | • | | Incur additional indebtedness (including guarantees and other contingent obligations); |
| | • | | Sell or otherwise dispose of property or assets; |
| | • | | Maintain a specified amount of pledged accounts receivable and inventory; |
| | • | | Make changes in the nature of its business; |
