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Entry into a Material Definitive Agreement
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On November
27, 2017, Proto Labs, Inc. (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”). The Credit Agreement provides the Company with a committed $30 million unsecured revolving credit facility (the “Facility”), which includes a $5 million letter of credit sub-facility.
The commitments under the Facility will expire on November 30, 2019, and any loans outstanding on such date will mature and be payable on such date
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The Company
’s obligations under the Credit Agreement are guaranteed by the Company’s domestic subsidiaries.
Loans under the Facility bear interest at a rate per annum equal to, at the election of the Company, either (i) a fluctuating rate per annum equal to daily one month LIBOR plus 1%, or (ii) a fixed rate per annum equal to LIBOR for an interest period of one, two or six months (as designated by the Company) plus 1%.
In addition, the Company will pay a commitment fee on the average daily u
nused amount of the Facility at a rate per annum equal to 0.15%.
The Credit Agreement requires the Company to maintain
, as of the last day of each fiscal quarter, (a) a consolidated total leverage ratio for the period of four consecutive fiscal quarters ending on such date of not greater than 2.00 to 1.00, and (b) consolidated EBITDA for the period of four consecutive fiscal quarters ending on such date of not less than $40,000,000. The Credit Agreement also contains other customary affirmative and negative covenants, including without limitation, covenants that restrict the right of the Company and its subsidiaries to merge, to lease, sell or otherwise dispose of any assets, to incur indebtedness, to make investments and to grant liens on their assets, all subject to customary and negotiated exceptions.
The Credit Agreement contains customary events of default, the occurrence of which would permit
Wells Fargo to terminate its commitments and accelerate loans under the Facility, including, without limitation, failure to make payments under the Facility, failure to comply with covenants in the Credit Agreement and other loan documents, cross default to other material indebtedness of the Company or any of its subsidiaries upon acceleration of such other indebtedness, failure of the Company or any of its subsidiaries to pay or discharge material judgments, bankruptcy of the Company or any of its domestic subsidiaries, and change of control of the Company.
Wells Fargo has performed and may continue to perform commercial banking and financial services for the Company and its subsidiaries for which they have received and will continue to receive customary fees.
The foregoing description of the
Credit Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Credit Agreement, a copy of which is attached hereto as
Exhibit
10
.1
and incorporated herein by reference.