AIRSCULPT TECHNOLOGIES, INC. : Entering into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (Form 8-K)

Item 1.01. Conclusion of a significant definitive agreement.

On November 7, 2022, AirSculpt Technologies, Inc. (the “Registrant”) and its wholly-owned subsidiary, EBS Intermediate Parent LLC (“EBS Parent”), as guarantors, and the wholly-owned subsidiary of EBS Parent EBS Enterprises LLCas a borrower (the “Borrower”), has entered into a new credit agreement with several lenders from time to time parties thereto (the “Lenders”) and Bank of Silicon Valley, as Administrative Agent, Collateral Agent, Originating Lender and Principal Lender (the “Credit Agreement”). In accordance with the Credit Agreement, the Lenders provide the Borrower with (i) a $85.0 million aggregate principal amount of term loans and (ii) a revolving loan facility in an aggregate principal amount of up to $5.0 millionand the proceeds were used, in part, to repay the Borrower $83.6 million principal balance outstanding under its existing credit facility, evidenced by this credit and security agreement, dated October 28, 2018between the Company, certain subsidiaries of the Company, as guarantors, the lenders who are parties thereto from time to time, and First Eagle Alternative Capital Agent, Inc.as Administrative Agent and Collateral Agent, as amended (the “First Eagle Credit Facility”) maturing on October 28, 2023. No prepayment penalty was included in the repayment of the existing credit agreement.

The obligations under the credit agreement will mature on November 7, 2027. Under the terms of the credit agreement, the borrower is required to make quarterly principal repayments commencing on March 31, 2023. The borrower can make an interest choice of ABR loans or SOFR loans under the credit agreement. For outstanding ABR loans, the borrower is required to make monthly interest payments on the first business day of each month. For outstanding SOFR loans, the borrower could be required to make interest payments every one, three or six months. Each SOFR loan will bear interest at an annual rate equal to (i) the forward SOFR for the interest period (as defined in the credit agreement) plus (ii) the applicable margin. Each ABR loan will bear interest at an annual rate equal to (i) the ABR plus (ii) the applicable margin. If the total leverage ratio of the filer and its subsidiaries is equal to or greater than 1.0x and less than 2.0x, the applicable margin is 1.5% for ABR loans and 2.5% for SOFR loans . If the Borrower’s total leverage ratio is equal to or greater than 2.0x, the applicable margin is 2.0% for ABR Loans and 3.0% for SOFR Loans. If the total leverage ratio of the filer and its subsidiaries is less than 1.0x, the applicable margin is 1.0% for ABR loans and 2.0% for SOFR loans. In addition, the borrower is required to pay unused credit facility fees on the unused amount of the revolving line of credit. Initially, this commission is equal to 0.3% per year. Upon receipt of the consolidated financial statements of the Licensee and its subsidiaries for the fiscal quarter ended
March 31, 2023the rate is 0.25%, 0.3% or 0.35% for consolidated leverage ratios less than 1.0x, equal to or greater than 1.0x but less than 2.0x, or equal to or greater than 2 .0x, respectively.

The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty. Compulsory repayments are required if any indebtedness is incurred by the Registrant or its Subsidiaries (unless such indebtedness is incurred to replace or refinance obligations under the Credit Agreement, in whole or in part) or if the Individual registrant or its affiliates receive cash proceeds from an asset sale or recovery event that are not to be reinvested. In each case, 100% of the net cash proceeds must be used for the prepayment of the term loans. No prepayment fee is due for any mandatory prepayment made.

The credit agreement contains financial covenants, including (a) a leverage ratio requiring that, commencing with the period of four financial quarters ending
December 31, 2022the consolidated leverage ratio must not exceed 2.50:1.00, and (b) a consolidated fixed charge coverage ratio requiring that, as of the fiscal quarter ending December 31, 2022the ratio should not exceed 1.25:1.00.

The Credit Agreement also contains affirmative covenants customary for a transaction of this nature, including, among other things, covenants relating to (i) the maintenance of adequate financial and accounting books and records, (ii) the delivery of financial and other information, (iii) preservation of the existence of the Company and its subsidiaries, (iv) payment of taxes and debts, (v) compliance with laws, (vi) maintenance of insurance, (vii ) foreign qualification, (viii) use of proceeds, (ix) cash management system, (x) maintenance of properties, and (xi) conduct of business.

The credit agreement also contains negative clauses customary for a transaction of this nature, including, among others, clauses relating to (i) debt, (ii) liens, (iii) investments, (iv) pledges negatives, (v) dividends and restricted junior debt payments, (vi) restriction on fundamental changes, (vii) sale of assets, (viii) transactions with affiliated companies, (ix) restrictive agreements and (x) changes during the exercise.

The Credit Agreement also contains various events of default (subject to certain grace periods, to the extent applicable), including, events of default for non-payment of principal, interest or fees; breach of certain covenants; the inaccuracy of any representations or warranties in any material respect; bankruptcy or insolvency; dissolution or change of control; some dissatisfied judgments; defaults under material agreements; certain unfunded employee benefit plan liabilities; some dissatisfied judgments; certain ERISA violations; and the invalidity or unenforceability of the credit agreement. If an Event of Default occurs, the Company may be required to repay all amounts outstanding under the Credit Agreement.

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The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text thereof filed as Exhibit 10.1 to this current Report on Form 8-K and is incorporated herein. article 1.01 by reference.

Section 1.02. Termination of a Material Definitive Agreement.

In connection with entering into the credit agreement described in points 1.01 above and 2.03 below, the company has terminated the First Eagle credit facility. Under the credit agreement, the outstanding balance, accrued interest and related charges of approximately $83.8 million under the First Eagle Credit Facility was repaid with the proceeds of the borrowings under the Credit Agreement described in Sections 1.01 above.

The terms and conditions of the First Eagle credit facility are the same as the terms and conditions thereof as set forth above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Debt Term Loan — Term Loan and Revolving Credit Agreement” in the Final Prospectus (File No. 333-260067) and Current Report on Form 8-K (File No. 001-40973), which are incorporated by reference into present.

The information set out in point 1.01 above is incorporated by reference in this point 1.02.

Section 2.03. Creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant.

The information set out in point 1.01 above is incorporated by reference in this point 2.03.

Item 9.01. Financial statements and supporting documents.

(d) Exhibits

The following documents filed herewith:

Exhibit No.       Description

10.1                Credit Agreement dated as of November 7, 2022, among AirSculpt Technologies,
                  Inc., as Holdings, EBS Intermediate Parent LLC, as Intermediate Holdings, EBS
                  Enterprises LLC, as the Borrower, the several lenders from time to time party
                  hereto, and Silicon Valley Bank, as Administrative Agent, Issuing Lender and
                  Swingline Lender

104               Cover Page Interactive Data File (embedded within the Inline XBRL document)


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