Item 1.01 Entry into a Material Definitive Agreement.
Seventh Amendment to Loan and Security Agreement and Secured Convertible Special
Loan Promissory Note.
On December 30, 2019, Creative Realities, Inc. (the "Company") entered into a
Seventh Amendment to Loan and Security Agreement (the "Seventh Amendment") with
its subsidiaries and Slipstream Communications, LLC ("Lender"). Pursuant to the
Seventh Amendment, Lender made a $2,000,000.00 loan to the Company (the "Special
Loan") under the terms of the Company's existing Loan and Security Agreement
with Lender (as amended by the Seventh Amendment, the "Loan Agreement"). The
Company used $1,100,000.00 of the Special Loan proceeds to extinguish an
approximately $2,700,000.00 accrued expense owed by the Company and its
subsidiary, ConeXus World Global, LLC, to a vendor.
The Special Loan is evidenced by a Secured Convertible Special Loan Promissory
Note (the "Note"). The Note bears simple interest at 8% per annum, of which 6%
is payable in cash (the "Interest and 2% is payable in kind as additional
principal under the Note ("Additional Principal"), which is payable monthly
commencing February 1, 2020. The entire unpaid principal balance of the Note
(including the Additional Principal) together with all accrued but unpaid
interest is due on June 30, 2021 (the "Maturity Date"). The Company may prepay
the Note, in whole or in part, at any time and from time to time, without
penalty or premium. The principal (including the Additional Principal) and
accrued but unpaid interest will be converted into a new class of senior
preferred stock of the Company upon any event of default or in the event that
the Company does not refinance the Note prior to October 1, 2020, with such
class of senior preferred stock of the Company to be created in advance of such
conversion, having those rights and preferences set forth in the Loan Agreement
and as otherwise agreed to by the Company and Lender.
The Seventh Amendment and the Note are filed as Exhibits 10.1 and 10.2 to this
report, respectively, and the foregoing descriptions are qualified in their
entirety by reference thereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Seventh Amendment to Loan and Security Agreement dated December 30,
2019 by and among the Company, its subsidiaries and Slipstream
Communications, LLC.
10.2 Secured Convertible Special Loan Promissory Note dated December 30,
2019 issued by the Company to Slipstream Communications, LLC.
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