INTX Intersections, Inc.

Item 1.01 .

Entry into a Material Definitive Agreement

Amendment to Credit Agreement

On November 30, 2017 (the “Second Amendment Date”), Intersections Inc. (the “Company”), PEAK6 Investments, L.P., as Administrative Agent, and PEAK6 Ventures LLC as Term Lender entered into Amendment No. 2 to Credit Agreement (the “Amendment No. 2”) amending the Credit Agreement dated as of April 20, 2017 (as amended by that certain Amendment No. 1 to Credit Agreement dated as of July 31, 2017, the “Credit Agreement”).  Amendment No. 2 provides for a new term loan in the principal amount of $1.5 million (the “New Term Loan”).  The initial interest rate applicable to the New Term Loan is 9.99% per annum, to be adjusted annually on March 31 to 8.25% plus 1 year LIBOR.  Effective as of the Second Amendment Date, the interest rate applicable to the existing $20 million term loan also increased to 9.99% per annum, to be adjusted annually on March 31 ^st to 8.25% plus 1 year LIBOR.  The maturity date of the Credit Agreement remains April 20, 2021, and quarterly principal payments of $1.2 million will still commence on September 30, 2019.

Amendment No. 2 amends the financial covenants in the Credit Agreement.  The amended covenants require us to maintain at all times a minimum amount of cash on hand, as defined in the Credit Agreement, of  (i) the lesser of 20% of the total amount outstanding under the term loan and $3 million for the fiscal quarter ending December 31, 2017 through and including the fiscal quarter ending June 30, 2018, (ii) the lesser of 20% of the total amount outstanding under the term loan and $2.5 million for the fiscal quarter ending September 30, 2018 through and including the fiscal quarter ending September 30, 2019, and (iii) 20% of the total amount outstanding under the term loan for the fiscal quarter ending December 31, 2019 and each fiscal quarter thereafter. We are also required to comply  on a quarterly basis commencing with the quarter ending December 31, 2017 with minimum consolidated EBITDA (as defined in the Credit Agreement and adjusted for certain non-cash, non-recurring and other items, and up to $4.25 million of non-recurring charges incurred in the wind-down events) of (i) $1.5 million as of the end of the fiscal quarter ending on December 31, 2017, (ii) $1 million as of the end of each fiscal quarter ending on or after March 31, 2018 but on or prior to December 31, 2018, (iii) $1.5 million as of the end of the fiscal quarter ending March 31, 2019, and (iv) $2 million for each fiscal quarter ending on or after June 30, 2019; provided consolidated EBITDA from the immediately preceding quarter in excess of the applicable required minimum amount (the “Relevant Minimum Amount”) may be added to a current quarter to make up any shortfall and provided further that when we have not met the minimum consolidated EBITDA test for any quarter (even after including excess consolidated EBITDA for the prior quarter) the test for compliance is deferred until the end of the next quarter and we shall be deemed to be in compliance if, taking into account consolidated EBITDA in excess of the Minimum Relevant Amount from the prior quarter, consolidated EBITDA from the test quarter, and consolidated EBITDA in excess of the Minimum Relevant Amount from the subsequent quarter, we pass the minimum compliance test.  Excess consolidated EBITDA in any quarter can be counted only once for determining compliance with this covenant.

The foregoing description of Amendment No. 2 and the Credit Agreement is not complete and is subject to and qualified in its entirety by reference to the full text of Amendment No. 2, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference, and the Credit Agreement.

Replacement Warrant

In connection with Amendment No. 2, the Company issued a warrant (the “Replacement Warrant”) to PEAK6 Investments for an additional purchase price of $700,000 in cash, and PEAK6 Investments surrendered to the Company the Warrant previously issued and sold by the Company to PEAK6 dated April 20, 2017.  The Replacement Warrant provides PEAK6 with the right to purchase an aggregate of 1,500,000 shares of the Company’s common stock at an exercise price of $2.50 per share.  The Replacement Warrant is immediately exercisable, has a five-year term and shall be exercised solely by a “net share settlement” feature that requires the holder to exercise the Replacement Warrant without a cash payment upon the terms set forth therein. The Replacement Warrant includes a feature to provide for increases in the number of shares issuable upon exercise in the event of a future change of control transaction (as defined therein), with the number of increased shares based upon the time elapsed from issuance of the Replacement Warrant and the difference between the exercise price of the Replacement Warrant and the price paid in the change of control transaction, all as more fully set forth in the Replacement Warrant. The Replacement Warrant also provides for adjustments in the underlying number of shares and exercise price in the event of recapitalizations, stock splits or dividends and other corporate events.

 

The foregoing description of the Replacement Warrant is not complete and is subject to and qualified in its entirety by reference to the full text of the Replacement Warrant, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.