asure20200420_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report: April 15, 2020

(Date of earliest event reported)

 

Asure Software, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

1-34522

74-2415696

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification Number)

 

3700 N. Capital of Texas Hwy, Suite 350, Austin, TX

78746

(Address of principal executive offices)

(Zip Code)

 

512-437-2700

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former Name or Former Address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

ASUR

Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On April 15, 2020, Asure Software, Inc. (the “Company”) entered into a Promissory Note dated April 15, 2020 (the “PPP Note”) with Pinnacle Bank as the lender (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (the "PPP Loan") offered by the U.S. Small Business Administration (the “SBA”) in a principal amount of $8,855,605 pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

 

The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt.

 

According to the terms of the Paycheck Protection Program and current guidance from the SBA and U.S. Department of Treasury, all or a portion of loans under the program may be forgiven if the PPP Loan proceeds are used for permitted expenses, as outlined in the CARES Act and related regulations, including 75% of the PPP Loan proceeds being used for payroll related costs. The amount that will be forgiven will be calculated in part with reference to the Company’s full time headcount during the eight week period following the funding of the PPP Loan. The SBA and U.S. Department of Treasury may continue to update guidance on the calculation of loan forgiveness, which updated guidance could affect the amount of the PPP Loan proceeds that could be forgiven.

 

The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Loan, or a portion of them, are not forgiven, the Company will be required to make principal and interest payments in monthly installments beginning seven months from April 2020. The PPP Note matures in two years.

 

The PPP Note includes events of default. Upon the occurrence of an event of default, the Lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the PPP Note. 

 

The foregoing description of the PPP Note does not purport to be complete and is qualified in its entirety by reference to the PPP Note filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. 

 

The disclosure set forth in Item 1.01 above related to the PPP Note is incorporated by reference into this Item 2.03.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.

 

Description

10.1

 

Promissory Note dated April 15, 2020

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ASURE SOFTWARE, INC.

 

 

 

 

 

Dated: April 21, 2020

By:

/s/ Kelyn Brannon

 

 

 

Kelyn Brannon, Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

ex_182014.htm

 

Exhibit 10.1

 

 

U.S. Small Business Administration

 

NOTE

 

 

SBA Loan #

6960867108

 

SBA Loan Name

Paycheck Protection Program Loan

 

Date

4/15/2020

 

Loan Amount

8,855,605.00

 

Interest Rate

1.00%

 

Borrower

ASURE SOFTWARE, INC.

 

Operating Company

 

 

Lender

Pinnacle Bank

 

 

 

1.     PROMISE TO PAY:

 

In return for the Loan, Borrower promises to pay to the order of Lender the amount of

Eight Million, Eight Hundred And Fifty-Five Thousand, Six Hundred And Five and 00/100 Dollars                   Dollars,

interest on the unpaid principal balance, and all other amounts required by this Note.

 

2.     DEFINITIONS:

 

"Collateral" means any property taken as security for payment of this Note or any guarantee of this Note.

 

"Guarantor" means each person or entity that signs a guarantee of payment of this Note.

 

"Loan" means the loan evidenced by this Note.

 

"Loan Documents" means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

"SBA" means the Small Business Administration, an Agency of the United States of America.

 

Page 1 of 7

 

3.     PAYMENT TERMS:

 

Borrower must make all payments at the place Lender designates. The payment terms for this Note are:

 

Maturity: This Note will mature in 2 years and 0 months from date of Note.

 

Repayment terms:

 

The interest rate is 1% per year. The interest rate may only be changed in accordance with SOP 50 10.

 

Borrower must pay principal and interest payments of $ $498,361.48 every month, beginning seven months from the month this Note is dated; payments must be made on the 15 calendar day in the months they are due.

 

Lender will apply each installment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.

 

Loan Prepayment:

 

Notwithstanding any provision in this Note to the contrary:

 

Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must:

 

a. Give Lender written notice;

 

b. Pay all accrued interest; and

 

c. If this prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days' interest from the date lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b., above.

 

If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice.

 

All remaining principal and accrued interest is due and payable 2 years and 0 months from date of Note.

 

Late Charge: If payment on this Note is more than 15 days late, Lender may charge Borrower a late fee of up to

5.0 % of the unpaid portion of the regularly scheduled payment.

 

 

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4.     DEFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:

 

A.

Fails to do anything required by this Note and other Loan Documents;

 

B.

Defaults on any other loan with Lender;

 

C.

Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds;

 

D.

Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

 

E.

Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

 

F.

Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's ability to pay this Note;

 

G.

Fails to pay any taxes when due;

 

H.

Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

I.

Has a receiver or liquidator appointed for any part of their business or property;

 

J.

Makes an assignment for the benefit of creditors;

 

K.

Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note;

 

L.

Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or

 

M.

Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note.

 

5.     LENDER'S RIGHTS IF THERE IS A DEFAULT:

 

Without notice or demand and without giving up any of its rights, Lender may:

 

A.

Require immediate payment of all amounts owing under this Note;

 

B.

Collect all amounts owing from any Borrower or Guarantor;

 

C.

File suit and obtain judgment;

 

D.

Take possession of any Collateral; or

 

E.

Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

 

6.     LENDER'S GENERAL POWERS:

 

Without notice and without Borrower's consent, Lender may:

 

A.

Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

 

B.

Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

 

C.

Release anyone obligated to pay this Note;

 

D.

Compromise, release, renew, extend or substitute any of the Collateral; and

 

E.

Take any action necessary to protect the Collateral or collect amounts owing on this Note.

 

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7.     WHEN FEDERAL LAW APPLIES:

 

When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

8.    SUCCESSORS AND ASSIGNS:

 

Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.

 

9.     GENERAL PROVISIONS:

 

A.

All individuals and entities signing this Note are jointly and severally liable.

 

B.

Borrower waives all suretyship defenses.

 

C.

Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral.

 

D.

Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

 

E.

Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

 

F.

If any part of this Note is unenforceable, all other parts remain in effect.

 

G.

To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

 

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10.     STATE-SPECIFIC PROVISIONS:

 

 

The following provision applies when a borrower is a resident of WISCONSIN:

Each Borrower who is married represents that this obligation is incurred in the interest of his or her marriage or family.

 

The following Confession of Judgment provision applies when a borrower is a resident of DELAWARE: WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. In addition to any other remedies Lender may possess, Borrower knowingly, voluntarily and intentionally authorizes any attorney to appear on behalf of Borrower, from time to time, in any court of record possessing jurisdiction over this Note and to waive issuance and service of process and to confess judgment in favor of Lender against Borrower, for the unpaid principal, accrued interest, accrued charges, reasonable attorney fees and court costs and such other amount due under this Note.

 

The following Confession of Judgment provision applies when a borrower is a resident of MARYLAND:

WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. Borrower authorizes an attorney to appear in a court of record and confess judgment, without process, against Borrower in favor of Lender for all indebtedness owed in connection with the loan, including but not limited to service charges, other charges and reasonable attorney's fees.

 

The following Confession of Judgment provision applies when a borrower is a resident of OHIO:

WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. In addition to any other remedies Lender may possess, Borrower knowingly, voluntarily and intentionally authorizes any attorney to appear on behalf of Borrower, from time to time, in any court of record possessing jurisdiction over this Note and to waive issuance and service of process and to confess judgment in favor of Lender against Borrower, for the unpaid principal, accrued interest, accrued charges, reasonable attorney fees and court costs and such other amount due under this Note.

 

WARNING: BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF THE COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.

 

The following Confession of Judgment provision applies when a borrower is a resident of PENNSYLVANIA:

WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. Borrower irrevocably authorizes and empowers the prothonotary, any attorney or any clerk of any court of record, upon default, to appear for and confess judgment against Borrower for such sums as are due and/or may become due under this Note including costs of suit, without stay of execution, and for attorney's fees and costs as set forth in this Note and knowingly, voluntarily and intentionally waives any and all rights Borrower may have to notice and hearing under the state and federal laws prior to entry of a judgment. To the extent permitted by law, Borrower releases all errors in such proceedings. If a copy of this Note, verified by or on behalf of the holder shall have been filed in such action, it shall not be necessary to file the original Note as a warrant of attorney. The authority and power to appear for and confess judgment against Borrower shall not be exhausted by the initial exercise thereof and may be exercised as often as the holder shall find it necessary and desirable and this Note shall be a sufficient warrant for such authority and power.

 

The following Confession of Judgment provision applies when a borrower is a resident of VIRGINIA:

IMPORTANT NOTICE: THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE. WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. In addition to any other remedies Lender may possess, Borrower knowingly, voluntarily and intentionally authorizes to appear on behalf of Borrower, from time to time, in the District Court of Alexandria, Virginia and to waive issuance and service of process and to confess judgment in favor of Lender against Borrower, for the unpaid principal, accrued interest, accrued charges, reasonable attorney fees and court costs and such other amount due under this Note.

 

The following Oral Agreements Disclaimer provision applies when the borrower is a resident of MISSOURI:

Oral or unexecuted agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable, regardless of the legal theory upon which it is based that is in any way related to the credit agreement. To protect you (Borrowers(s)) and us (Creditor) from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it.

 

 

 

Page 5 of 7

 

10.     STATE-SPECIFIC PROVISIONS (CONTINUED):

 

 

The following Oral Agreements Disclaimer provision applies when the borrower is a resident of OREGON:

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY [BENEFICIARY]/ US CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY GRANTOR'S/BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY [AN AUTHORIZED REPRESENTATIVE OF BENEFICIARY]/US TO BE ENFORCEABLE.

 

The following Oral Agreements Disclaimer provision applies when the borrower is a resident of WASHINGTON:

Oral agreements or oral commitments to loan money, extend credit, or to forbear from enforcing repayment of a debt are not enforceable under Washington law.

 

The following provision applies when the borrower is a resident of ALASKA:

The Mortgagor or Trustor (Borrower) is personally obligated and fully liable for the amount due under the Note. The Mortgagee or Beneficiary (Lender) has the right to sue on the Note and obtain a personal judgment against the Mortgagor or Trustor for the satisfaction of the amount due under the Note either before or after a judicial foreclosure of the Mortgage or Deed of Trust as under AS 09.45.170-09.45.220.

 

The following Oral Agreements Disclaimer provision applies when the borrower is a resident of IOWA:

IMPORTANT: READ BEFORE SIGNING. The terms of this agreement should be read carefully because only those terms in writing are enforceable. No other terms or oral promises not contained in this written contract may be legally enforced. You may change the terms of this agreement only by another written agreement.

 

The following Oral Agreements Disclaimer provision applies when the borrower is a resident of UTAH:

This is a final expression of the agreement between the creditor and debtor and the written agreement may not be contradicted by evidence of any alleged oral agreement.

 

 

 

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11.     BORROWER'S NAME(S) AND SIGNATURE(S):

 

 

By signing below, each individual or entity becomes obligated under this Note as Borrower.

 

 

DocuSigned by:

     
       
 

4/15/2020

 

Signature of Authorized Representative of Borrower/Borrower

 

Date

 
       
       
       

KELYN BRANNON

 

CFO

 

Name of Authorized Representative of Borrower

 

Title

 
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       

 

 

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